Advertising Law - May 2014

by Manatt, Phelps & Phillips, LLP
Contact

In This Issue:

  • Schwarzenegger Sues Over Publicity Rights
  • Vermont Passes GMO Labeling Law
  • OBA Accountability Program Makes First Governmental Referral
  • California Data Broker Bill Advances

Schwarzenegger Sues Over Publicity Rights

The Governator has filed a $10 million suit alleging that Nevada-based Arnold Nutrition Group “brazenly stole[] and exploited” his likeness to market its products in violation of his right of publicity.

According to the complaint, Arnold Schwarzenegger “would never endorse or affiliate himself with any fitness or nutritional product without first undertaking rigorous research, testing and due diligence to ensure that the product is healthy and helpful to athletes and the general public.”

Schwarzenegger was never contacted by the company, he claimed, which has engaged in “shameful conduct” and “is committing a fraud on the public.”

The former governor and Mr. Universe filed his complaint in California state court claiming unfair competition and a violation of his publicity rights, seeking $10 million in damages.

Why it matters: While governor, Schwarzenegger signed into law an expansion of publicity rights for celebrities in the state. He has also sued to enforce his rights when a bobblehead doll version of himself, complete with machine gun, was put on the market. That case settled.

Vermont Passes GMO Labeling Law

Vermont became the first state to enact labeling legislation for genetically modified organisms. The labeling requirement will take effect on July 1, 2016.

Although Connecticut and Maine previously enacted GMO labeling requirements, the laws in those states are not triggered until a specific number of neighboring states have enacted similar legislation.

Pursuant to Vermont’s law, fresh produce and processed foods offered for retail sale in the state must include special labeling if they are entirely or partially produced by genetic engineering. Fresh produce that contains ingredients enhanced by genetic engineering must carry a label designating them as “produced with genetic engineering.” Processed foods that contain one or more genetically engineered ingredients must include “partially produced with genetic engineering” or “may be produced with genetic engineering” or “produced with genetic engineering.”

In addition to mandating the genetic engineering label, the bill also prohibits GMO foods from concurrently using labels like “natural,” “naturally made,” “naturally grown,” or “any words of similar import that would have a tendency to mislead a consumer.”

Excluded from the law’s coverage: meat or dairy products made from animals that were fed with genetically engineered ingredients or consumed genetically engineered feed. Restaurants are also exempt.

The state’s Attorney General has the authority to promulgate regulations and enforce the law. Violations of the law could lead to fines of up to $1,000 per day, per product.

Anticipating a legal challenge from the food industry, Vermont legislators built a $1.5 million legal fund into the law to pay for any “costs or liabilities” related to the legislation.

To read Vermont’s law, click here

Why it matters: Now that Vermont has taken the leap and enacted legislation without a triggering event, will other states follow? GMO labeling laws are currently pending in 23 other states, including California and New York. Other states may take a wait-and-see approach, as the food industry has vowed to challenge the law in court.

OBA Accountability Program Makes First Governmental Referral

The Online Interest-Based Advertising Accountability Program made its first referral to a government agency, by passing along information to the Consumer Financial Protection Bureau about SunTrust Bank’s refusal to participate in the Program.

Launched in 2011, the Accountability Program enforces the ad industry’s Self-Regulatory Principles for Online Behavioral Advertising. The OBA principles – developed by an industry coalition – require companies to provide consumers with notice and an opt-out mechanism when a third party collects their information and when an ad is based on that data.

While examining the Web site for SunTrust Bank Inc., the Accountability Program observed “what appeared to be third parties known to be engaged in collecting consumers’ web browsing activity in order to serve them interest-based ads.” However, the site was not providing real-time notice to consumers of the data collection or providing a way to opt out.

The Accountability Program sent SunTrust a letter of inquiry. But the Bank “declined repeatedly” to participate in the inquiry, writing, “Our institution is monitored by a sizeable number of both federal and state agencies and is subject to regulatory exams and reviews on an ongoing basis. Complying with these demands consumes all of our allocated resources.”

The Accountability Program then referred the Bank to the CFPB. “Pursuant to its policies and procedures, the Accountability Program has discretion to refer any company that refuses to participate to the appropriate government agency, in this case the Consumer Financial Protection Bureau,” the regulatory group said.

To read the Program’s press release about the referral, click here.

Why it matters: During its three years of enforcement, the Accountability Program has concluded 32 inquiries, all of which until now, were closed with 100 percent industry compliance. The referral of SunTrust Bank marks the first time that the CFPB has been notified.

California Data Broker Bill Advances

Could California beat federal lawmakers to the punch when it comes to regulating data brokers?

Although federal lawmakers have spent months investigating, issuing reports, and discussing possible data broker related legislation, the California Senate recently approved a bill requiring online data brokers who sell consumer information to provide an opt-out mechanism and consumer access to the data.

S.B. 1348 would give California consumers the right to review the information owned by a data broker and request that it be permanently removed within 10 days. Once removed, the information could not be reposted or sold to a third party.

The proposal passed the Senate in a 24-to-8 vote and now moves to the State Assembly for consideration.

The proposed law – which would cover data collected as of Jan. 1, 2015 – includes a private right of action with damages of $1,000 per violation, plus attorneys’ fees.

Backed by privacy rights groups, the bill faces opposition from entities such as the California Chamber of Commerce and the Direct Marketing Association.

To read S.B. 1348, click here

Why it matters: Data brokers have been in the spotlight and have faced potential regulation for several months. After conducting a yearlong investigation, Sen. Jay Rockefeller (D-W.Va.) released a report, in which he claimed to be “revolted” by some of the industry’s practices. A second report from the Government Accountability Office recently recommended that federal legislation be passed to create baseline privacy rules for data collection, sale, and use, which has led many to speculate that regulation of the industry is a matter of when, not if. But with no actual movement by Congress, California could step in with its own law.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Manatt, Phelps & Phillips, LLP | Attorney Advertising

Written by:

Manatt, Phelps & Phillips, LLP
Contact
more
less

Manatt, Phelps & Phillips, LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.