False Advertising

News & Analysis as of

CFPB Fines Online Mortgage Company And Its Owner For Alleged Deceptive Rate Advertising

On August 12, the CFPB announced a consent order with a nonbank mortgage lender, its affiliated appraisal management company (AMC), and the individual owner of both companies to resolve allegations that the lender deceptively...more

$3.5 Million Cactus Juice Settlement Should be a Warning to Advertisers

In this health-conscious age, consumers are always on the lookout for new products which will improve wellness and quality of life. Marketers attuned to this trend may be tempted to increase sales by extolling the virtues of...more

Oregon, Washington, Vermont Join 33 States Suing over 5-Hour Energy Drink

Oregon, Washington State and Vermont say the slogans for 5-Hour Energy drink are hype that is misleading. Last week the Attorneys General of all three states filed lawsuits against the drink’s maker, Living Essentials LLC and...more

Ninth Circuit Holds State AG Credit Card Add-On Suits Belong In State Court

On August 1, the U.S. Court of Appeals for the Ninth Circuit held that neither the federal question statute nor the Class Action Fairness Act provide a federal district court with subject matter jurisdiction over the Hawaii...more

How Not To Market Your Business Online (Even If It Works): Claims Against Fake Review Sites And Stolen Obituary Photos Survive...

Despite celebrity endorsements from the likes of Dennis Miller and Alan Thicke, all that glitters isn’t gold when it comes to the marketing of precious metal investments. In March 2014, American Bullion, Inc., which is in the...more

What a Tangled Web We Weave, When First We Practice to Deceive: Second Circuit Holds that “Deliberate Deception” Creates Legal...

On July 29, the Second Circuit clarified its view that, in a two-player market, willfully deceptive advertising – even non-comparative advertising – creates a legal presumption of consumer confusion and injury, applicable to...more

Two Consumer Class Actions Settle for (Mostly) Nominal Amounts Per Plaintiff

Two recent false advertising class action settlements illustrate some of the myriad ways to structure settlements, and also reflect the real risks of these lawsuits when early-stage efforts to dismiss them are...more

Second Circuit Issues Decisions on Lanham Act False Advertising Case

On July 29, 2014, the Second Circuit decided a Lanham Act false advertising case that clarified the circuit’s jurisprudence on demonstrating consumer confusion and competitive injury. In Merck Eprova AG v. Gnosis S.P.A. and...more

Advertising Law - July 2014 #4

COPPA Gets Parental Consent Updates - With changes that should make it easier to develop child-directed apps, the Federal Trade Commission recently updated its guidance for verifying parental consent under the...more

Advertising Law - July 2014 #3

Suit Seeks To Include E-Mail Address Under Song-Beverly Protections - First zip codes, now e-mail addresses? According to a new complaint filed in California federal court against Express Fashion Apparel, LLC,...more

Creating Fake Customer Reviews Site Could Be False Advertising and Trade Libel

As evidenced by the success and robust market capitalization of the consumer review site Yelp, Internet users are increasingly turning to "regular people" as a lodestar for whether to purchase goods or services. This is...more

False Advertising, Section 75-1.1, and A Seven-Figure Verdict

In a recent federal case, section 75-1.1 made the difference between the plaintiff recovering nothing and recovering almost two million dollars. This outcome underscores two key features of section 75-1.1...more

Labeling Laws for the Food and Beverage Industry – Unfair Competition and Mislabeled Products

In a recent unanimous U.S. Supreme Court ruling, the court opened the door for private parties, including competitors, to bring false advertising and misrepresentation claims under the Lanham Act even if the product labels...more

L’Oréal Smooths Things Over With FTC, Reaches Proposed Settlement Regarding Anti-Aging Claims For Its Skin Care Products

On June 30, the Federal Trade Commission announced that it had reached a proposed settlement with L’Oréal USA, Inc. related to the Commission’s investigation of anti-aging claims made in advertisements for Lancôme Génifique...more

Too Good To Be True: FTC’s Crackdown On L’Occitane’s Body Slimming Almond Extracts

L’Occitane Inc’s advertisements for its topically-applied body sculpting almond extracts seemed straightforward: “Almond Shaping Delight 3 out of 4 women saw firmer, lifted skin. This luxuriously lightweight massage gel...more

Advertising Law - July 2014

Online Reviews Not Sufficient To Support Ad Claim, NAD Rules - While recognizing the benefits of using new sources of information, the National Advertising Division (NAD) decided that an advertiser’s use of aggregated...more

Recent SCOTUS Decisions in Intellectual Property Cases

The U.S. Supreme Court heard a landmark number of intellectual property cases during its 2013-2014 term. Below is a summary of recent decisions issued in 2014....more

Supreme Court: FDCA Compliance Does Not Bar Lanham Act Claims

POM Wonderful LLC v. Coca-Cola Co. - In a unanimous decision, the Supreme Court of the United States reversed the U.S. Court of Appeals for the Ninth Circuit ruling that the Food, Drug, and Cosmetic Act (FDCA) and its...more

Pom v. Coke Will Impact Financial Services Too

Law 360, New York (June 23, 2014, 11:22 AM ET)--Legal and compliance departments, take note: the U.S. Supreme Court’s recent decision in Pom Wonderful LLC v.Coca-Cola Co. confirms that even i fan institution’s conduct meets...more

POM Wonderful Decision: Companies Cannot Rely on FDCA for Protection from False Advertising Liability

The US Supreme Court allows private parties to bring Lanham Act claims challenging product labels that otherwise satisfy the Food, Drug, and Cosmetic Act. In a battle of the beverages, the Supreme Court recently...more

Policyholder Observer

Encryption Flaw "Heartbleed" Creates Data Risk: How Insurance Can Stanch the Bleeding - In early April, news broke of an encryption flaw named “Heartbleed” that exposed companies to data breaches for over two and one...more

Advertising Law - June 2014 #4

Don’t Forget: FTC Settlement Over Memory Claims - The marketers of the BrainStrong dietary supplement – which claimed to improve adult memory and prevent cognitive decline – reached a settlement with the Federal Trade...more

POM v. Coca-Cola Further Dilutes Consumer Class Action Claims for Deceptive Labeling

The Supreme Court's recent decision in POM Wonderful LLC v. Coca-Cola Company could have redefined the consumer class action landscape with respect to claims for the deceptive labeling of food products. Instead, the decision...more

Supreme Court Opens Door to Food and Beverage Label Challenges Under Lanham Act

The United States Supreme Court paved the way on June 12 for competitors to challenge FDA-regulated food and beverage labels under the Lanham Act. The Court's opinion in POM Wonderful LLC v. The Coca-Cola Co, is the latest...more

VitaminsOnline.com Files False Advertising Action Over Competitor's Online Dietary Supplement Offerings and Claims

On May 6, 2014 VitaminsOnline, Inc., a Delaware corporation (“VOI”), filed a complaint against Dynamic Industries, LLC, a Nevada limited liability company, and Christopher Wilson, a resident of Georgia (collectively...more

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