Consumer Sues Pyrex Maker for False Made-in-the-States Claims
New class actions pick up where the FTC left off
Tempest in a Ten-Piece Glass Meal Prep Set
We love false made-in-the-USA claim narratives. They get our juices flowing — patriotism paired with opportunism makes us crazy. And yet it’s a perennial subject; there’s always a new case to tackle.
But this time around we have a different take on the story. It’s less about the underlying accusations and more about how the legal landscape has changed.
Back in January, Pyrex got hit with a Federal Trade Commission complaint targeting made-in-the-USA violations. In essence, the FTC accused the iconic kitchen-and-home-product manufacturer of claiming that its products were made in the United States at the same time some of its product line was being produced in China. “Instant Brands faced increased demand for its glass measuring cups in the early days of the COVID-19 pandemic, when consumer interest in home baking spiked,” the FTC noted in its press release describing its suit. “By early 2021, the company was not able to meet the demand for certain measuring cup sets sold on Amazon with cups produced in the United States. From March 2021 to May 2022, Instant Brands produced some Pyrex cups in China.”
The Commission alleged that Pyrex never altered its made-in-the-USA claims for the entire time this manufacturing took place overseas. An agreement was quickly struck between the regulator and Pyrex that basically required the company to knock it off (see the announcement for the application of FTC’s principles to the case) while leveling a judgment of $129,416—a drop in the tempered glass bucket as far as a brand like Pyrex is concerned.
Lifting the Lid
The fact that the FTC received any money as part of an initial made-in-the-USA settlement is a relatively new development. Prior to the new made-in-the-USA rule, which went into effect in 2021, the FTC couldn’t receive any monetary penalties unless a company under order then went and violated that order. In other words, only two-time offenders were generally subject to monetary judgments. As any reader of this newsletter is well aware, the FTC’s ability to seek equitable monetary relief under Section 5 of the FTC Act has been constrained by the Supreme Court’s ruling in AMG Capital Management, so it’s no surprise that the Commission is leaning on rules such as this one that do allow for monetary relief.
The class action bar has had no such issues, however. Enter Salisbury, MD’s, own Rose Jenkins.
Jenkins tapped the infamous Snack Dragon firm (Sheehan & Associates, for the uninitiated among you) and filed a tagalong class action in February accusing Pyrex of a raft of charges, including violations of the Maryland Consumer Protection Act, various state consumer fraud acts, negligent misrepresentation, fraud, and unjust enrichment.
Her case will sound familiar to Snack Dragon fans: Because consumers like Jenkins purchased Pyrex’s ostensibly “made in the USA” products at a patriotic premium, they’ve suffered harm.
And, true to form, Snack Dragon lays it on thick, quoting an anthropologist, who states that Pyrex products have “come to be storehouses of memories which help tell stories of people’s lives.”
The Takeaway
So today’s lesson has less to do with the Commission’s made-in-the-USA guidelines, which you should totally read, and more to do with how consumers are stepping into the gap in the hopes of punishing companies for false USA origin claims.
That doesn’t mean Jenkins’ case is a surefire win—there are several issues that make victory less than 100 percent likely. For instance, can she prove that people bought Pyrex because it claimed American pedigree, or did they buy it just because they were familiar with the brand, as many Americans have been since childhood?
We’ll see how the case sorts out, but for now, we will be on the lookout for more disputes like this one that follow FTC settlements.
Will Morbid Graveyard Robocalls Open the Gates of TCPA Hell?
District court says its protections don’t extend to cell phones...RUN
Behold a Pale Rider
Q3M Insurance Solutions sure knows how to make itself popular.
It’s one thing to be a company that offers telemarketing services, but it’s something else entirely to be a telemarketing company selling burial insurance.
Anyway, according to a complaint filed back in 2022, plaintiff Heather Gaker entered a sweepstakes that turned out to be a ruse designed to sweep her phone number into the clutches of telemarketers. Gaker claims that one of those companies, Q3M, began inundating her “with telemarketing calls during the early months of 2020...[relating] to burial or ‘final expense’ insurance, which Gaker found to be morbid and unsettling.”
The complaint, filed in the Western District of North Carolina, alleged violations of the Telephone Consumer Protection Act; Gaker claimed she had been registered with the National Do Not Call Registry.
And that’s where things got weird.
Are We All Doomed?!
We cover TCPA cases all the time, and they’re fairly predictable. Aside from occasional wranglings over the definition of the underlying technology, they generally hold few surprises.
Well…
Ruling on Q3M’s motion to dismiss, the court held that the TCPA “purposely protected only ‘residential telephone subscribers’” and the cell phone users were not protected by the registry. The court fleshed out its argument by maintaining that “[c]ell phones do not present the same concerns as residential telephones. The Eleventh Circuit noted the distinctions between a cell phone and residential phone in accordance with the statutory purpose of the TCPA.”
There it was—a question about the underlying technology. But this time, it concerned the phone that was receiving the call, not the robocaller itself. Under this decision, the cell phone, which is now the mainstay of voice communication in the U.S., would be wide open to attack by telemarketers.
The Takeaway
“The authority rests with Congress,” the order concludes, “to amend the TCPA and bring cell phones within its protections.”
The decision isn’t simply unexpected; it’s unorthodox. First, it flies in the face of the Federal Communications Commission’s own interpretation of the Act, which has, for twenty years, maintained that cell phones were covered by its protections.
But, notably, it isn’t the first decision taking this decidedly textualist view of the TCPA. The opinion also cites a decision from the Eleventh Circuit to make the case.
Cell phones account for more than 70 percent of phone use in the United States; if this trend of cases is adopted by other circuits, traditional TCPA enforcement will be a thing of the past. Thus far, this train of thought is still the minority, but it bears further watching.
So, just in case, gather your ammunition, start nailing boards over the windows, and we’ll head down to the grocery store to stock up on milk, butter, and ramen noodles. We may have to wait this one out.
Just please let us back in?
Irish Butter Brand Sued Over Tainted Adjective
Oruna Foods faces a marketing purity test, but is the allegation specific enough?
More Immunotoxic Spread on Your Toast?
To hear it from Brooklyn, NY’s Carolyn Winans, Oruna Foods’ Kerrygold brand Pure Irish Butter has got something to hide. Namely, PFAS.
PFAS—or per- and polyfluoroalkyl substances—are responsible for a litany of potential health woes, according to Winans’ complaint against Oruna filed in late February. “PFAS have been shown to have a number of toxicological effects in laboratory studies and have been associated with thyroid disorders, immunotoxicity effects, and various cancers in epidemiology studies,” she states, quoting a study. “In fact, scientists are studying—and are extremely concerned about—how PFAS affect human health.”
How Much Purity Is in My Butter?
The problem, for Winans, is right there in the name of the product.
“Defendant intentionally uses the words ‘PURE IRISH BUTTER,’ among others,” she says, “to drive sales and increase profits, including by targeting health-conscious consumers who reasonably believe that the Products are free from artificial ingredients, including chemical ingredients which are known to be harmful to human health.” Despite the use of the word “pure,” however, “the Products actually contain PFAS—a category of man-made chemicals with a toxic, persistent, and bioaccumulative nature which are associated with numerous health concerns.”
The bulk of the complaint is taken up with a lengthy description of the horrors of PFAS. We will spare you further details.
But, according to Winans, the “purity” of the butter is a misrepresentation, and health-conscious consumers are being harmed in the pocketbook because of the extra price they’re paying for a product tainted by supposedly harmful man-made gunk.
Winans is suing for violations of the New York Deceptive Trade Practices Act and various state warranty laws as well as negligent misrepresentation and unjust enrichment.
The Takeaway
In the ad-lawniverse, we’re accustomed to seeing suits regarding the ingredients listed—or not listed—on product packaging. We’ve covered too many of them to count. Does the candy contain real vanilla, or a cheap substitute? Did the front of the package represent a minor ingredient as a major component of the food when it only exists in trace amounts?
And so on.
But with Winans’ suit, language itself is under threat. “Pure” is a benign adjective that might describe Irish butter in several different senses—for instance, whether the process that makes Irish butter was rigorously followed during manufacturing.
For the record, we’re against the inclusion of unhealthy ingredients in food products, or in any products for that matter. But is “pure” a worthy beachhead for a lawsuit? If it is, then there are many more opportunities for the plaintiffs’ bar to exploit adjectives that the Food and Drug Administration has yet to define. Oruna Foods may take some solace in the fact that they didn’t say “100 percent pure.” In looking at “natural” and “organic” cases, defending this kind of lawsuit is much more difficult when a company has affirmatively represented the product is 100 percent defined by its adjective of choice.
So, dear reader, ask yourself: What words are safe for food companies to use? “Natural” is already under attack. Is “wholesome” next?
At the end of the day, will manufacturers only be able to label their products as “food,” and nothing else?
Costco Misses a Chance to Escape to Federal Court...
…but snatches away the argument that started the suit
Float Like a Butterfly
Alright. Let’s get the twists and turns in this case out of the way, right up front.
Plaintiff Monica Zortea sued monster global retailer Costco in an Alleghany County, PA, Court of Common Pleas in July for violations of the Magnuson-Moss Warranty Act. The big-boxer tried to absorb the punch, claiming that the Class Action Fairness Act allowed the case to be removed to the Western District of Pennsylvania. On the surface, it was a showdown between the powers of MMWA and CAFA; which should apply?
The exact interplay between the two acts has yet to be spelled out. The Third Circuit, which reviews appeals from Pennsylvania Western, has never ruled on the issue, which has been addressed in separate decisions that favor either act in two other circuit courts.
The district court in this case dodged the issue, noting in its order that Zortea’s suit failed to meet the MMWA’s filing requirements.
Pyrrhic
“Without 100 named plaintiffs, the MMWA claim is not cognizable,” the court wrote. “Absent a cognizable claim, the district court has no subject matter jurisdiction over the claim. Therefore, Ms. Zortea and the putative class could not have filed their claim under [the] MMWA...and there would be no basis for Costco to remove the state-filed case to federal court.”
And thus the case was remanded to Alleghany County.
But forum hunting aside, the facts of the underlying case are what are actually interesting.
“In her Complaint,” the court maintained, “Ms. Zortea alleges that Costco violated the MMWA’s Pre-Sale Availability Rule by not providing consumers with pre-sale access to written warranties.” Instead, the company allegedly advanced its own protection plans, co-branded with a major U.S. insurer, while concealing the warranties offered by the product manufacturers.
The current case, headed back to the county, will require some reorientation: Removal was blocked, and remand was granted.
The Takeaway
The plaintiff claims that Costco’s actions violate the MMWA’s pre-sale availability rule. The complaint states, “The pre-sale availability rule guarantees consumers an opportunity to be fully informed about warranty terms and conditions so they may choose a product with the best combination of price, features, and warranty coverage to meet their individual needs.”
It’s unclear how far this case will go and what the result will be, but until a consensus takes shape, it might be safest to make the existence of manufacturers’ warranties manifest in a clear and conspicuous way during the sales process. Until we know more, that’s an easy way to ensure you don’t end up on the business end of the MMWA.
Who Will Guard the Guardians?
NAD, that’s who...but who guards NAD?
Head
It’s a question as old as (and most likely older than) Plato’s Republic: Who will keep an eye on those who are keeping an eye on the common good? Who will guard the guardians? Who will police the police?
Many of us put trust in the not-for-profit organizations that monitor some specific aspect of our community life. Like the One Health Certification Foundation, which maintains the eponymous “systems-based, industry-developed animal care program that is verified by the USDA.” The certification is open to farmers and others who care for animals, offering a five-part program emphasizing disease prevention, animal welfare, veterinary care, environmental impact. and responsible use of antibiotics.
So far, so good. But what happens when fellow nonprofits decide to take such an organization to task for not meeting their preferred standards of animal care?
Mixed Bag of Feed
In this case, the OHC was taken before the National Advertising Division by two other do-gooders: the non-profit American Society for the Prevention of Cruelty to Animals and the Antibiotic Resistance Action Center, an academic organization. Requiring an objective forum within which to grind their axes, they hauled OHC before NAD.
Unsurprisingly, given the scope of OHC’s certification standards and the stated position of the ASPCA, the watchdog plaintiffs raised several claims. The two challengers cited OHC for faulty general animal welfare claims, superlative claims, claims about antibiotic use, and environmental claims, among other claims.
And, unsurprisingly, given both the scope of OHC’s certification standards and NAD’s own quite finicky values, the results were mixed. OHC got NAD’s blessing for its assertions that its standards creation process was impartial and was not affected by “by industry stakeholders, as well as any connections between OHC’s leadership and the meat industry.”
Likewise, NAD swatted off concerns about OHC’s name. “Based on the plain language of the name “One Health,” NAD concluded that the name did not convey an expressly false message of association with any organization or principles, or, for that matter, any provable claim at all.”
But on a passel of other claims, NAD took OHC out for a ride. “The challenger took issue with OHC’s general animal welfare claims of ‘Responsible Animal Care,’ and others,” NAD wrote, “including for example that OHC ‘enables farmers and producers to prioritize animal health and welfare while working toward safe, responsible, and transparent animal care.’” Because OHC is selling a certification program, this claim conveyed “a message that certified products have met higher animal welfare standards compared to the rest of the industry.”
Likewise, NAD objected to the claim that “Consumer facing companies [that adopt the OHC program] will be seen as leaders in assuring that animals raised in their supply chain are raised using responsible animal care practices.”
The Takeaway
Although several other allegedly unsupported claims met NAD’s axe, OHC was determined to appeal the negative results. And with good reason; other NAD/NARB precedent goes against the principle stated here that a certification must reflect practices that “exceed industry standards.” Putting aside the difficulty of determining what is “industry standard” (unsurprisingly, ASPCA has a different perspective on that than OHC), why shouldn’t a certificate represent whatever it claims to represent? Consumers understand that certification programs aren’t a monolith. Certification programs reflect a variety of standards, which in and of themselves are meant to respond to the variety of consumer preference. So long as a certificate discloses what it represents and can substantiate that those criteria are material to whatever the area is, then all that matters is that the companies certified are actually meeting that standard. Fortunately for OHC, it will have another opportunity to make this argument before the NARB, the NAD appeal body.
Register for Our Upcoming Webinar
The Federal Trade Commission's New Health Product Compliance Guidance
Join Randy Shaheen and Daniel Kaufman as they discuss the Federal Trade Commission’s new Health Products Compliance Guidance. During this webinar, they will share their insights about the new Guidance, highlight areas of particular importance for anyone involved in marketing or analyzing health claims, and explain how this new document differs from the agency’s two-decade-old Dietary Supplement Guidance.
Check Out Our Latest Blog Posts
BBB National Programs 2022 Annual Report Highlights NAD Trends to Watch
We always look forward to the thoughtful and data-rich report National Advertising Division (NAD) issues each year summarizing the work it has accomplished in the past year. Some of the data can be a bit difficult to parse, as some numbers are reported in cases decided in the prior year, while other numbers are reported in cases filed. Nonetheless, it is always an impressive compilation and highlights many of the trends in case filings as well as dispositions, and it is a good indicator of the state of self-regulation.
The Podcast You Didn’t Know You Were Missing – AD Nauseam
It’s not every day that we get to announce new content created especially for advertising and marketing enthusiasts who just can’t get enough about legal issues in advertising and the latest from the Federal Trade Commission and the National Advertising Division. With that, we are proud to launch AD Nauseam, a new podcast series from some of the same people who post regularly to this blog.
The Year of the Green – Upcoming FTC Workshop on Recyclable Claims
Late last year, the Federal Trade Commission (FTC) announced it was examining the Guides for the Use of Environmental Marketing Claims, better known as the Green Guides. Consumer and industry interest in green marketing is through the roof these days, and the FTC just announced that it will host a workshop specifically focused on recyclability issues.
Folks Might Be Chicken to Use Green Seals After Reading This NAD Case
Last week, we blogged about an environmental ESG NAD challenge brought by an advocacy group; this week features a blog about an animal welfare ESG NAD challenge also brought by an advocacy group.
FDA Launches New Directory of Ingredients Used in Products Marketed as Dietary Supplements
On March 6, the FDA announced the launch of its new “Dietary Supplement Ingredient Directory.” According to the FDA, the directory is “a one-stop shop of ingredient information that was previously found on different FDA webpages.” It will allow users to search for information on ingredients in dietary supplements and quickly find links to agency actions and communications. Concurrently, FDA is retiring the existing “FDA Dietary Supplement Ingredient Advisory List.”
[View source.]
