The Advertising Disputes & Litigation and Consumer Protection Committees’ RECENT LITIGATION DEVELOPMENTS Quarterly Report [Cases from April 1 to June 30, 2015] Prepared for the ADL and CP Committees by Dan Blynn, Shahin Rothermel, Laura Arredondo-Santisteban, and Sam Boro of Venable LLP; Sherrie Schiavetti, Katie Riley, Donnelly McDowell, Devon Winkles, and Jennifer Rodden of Kelley Drye & Warren LLP; Dale Giali, Andrea Weiss, and Elizabeth Crepps of Mayer Brown LLP; Douglas Brown and Samantha Duke of Rumberger, Kirk & Caldwell, P.A.; Darren McCartney of Chad A. Walters, P.A.; Eugene Benick of NOVA Business Law Group; Heather Goldman of Bryan Cave LLP; Camille Calman of Davis Wright Tremaine LLP; Lauren Valkenaar of Norton Rose Fulbright LLP; Hal Hodes and Linda Bean of the National Advertising Division; Peter Farnese of Beshada Farnese LLP; Tiffany Ge of Frost Brown Todd LLC; Jeremy A. Schachter of Kilpatrick Townsend & Stockton LLP; Erik King of Lockheed Martin; Mike Sherling, Judicial Law Clerk, Maryland Court of Special Appeals, and Gregory Roseboro II, Attorney at Law. RECENT DECISIONS Lanham Act and Other Competitor Actions The U.S. Court of Appeals for the Fourth Circuit affirms the district court’s award of summary judgment in favor of the defendant on the basis that the plaintiff had not presented sufficient evidence to establish a Lanham Act claim. The case involved allegedly false advertising claims based upon an advertisement placed in a trade magazine by the defendant cautioning purchasers about suppliers misrepresenting products made from leather scraps as leather. The case also involved the defendant’ statements regarding the term “bonded leather.” Addressing the plaintiff’s argument on literal falsity by implication, the Fourth Circuit rejected the plaintiff’s claim premised on the theory that consumers would reach a conclusion based on reading other articles in the trade magazine to determine that the plaintiff was the only one marketing a product like the one described in the advertisement. The court also rejected the plaintiff’s argument regarding the defendant’s opinion that the term “bonded leather” was “bound to confuse consumers.” The Fourth Circuit held that the term “bound to confuse” was only an opinion, not a representation of fact, and thus not actionable under the Lanham Act. (Design Resources, Inc. v. Leather Indus. of Am., -- F.3d --, No. 14-1990, 2015 WL 3775712 (4th Cir. June 18, 2015)). The U.S. District Court for the Eastern District of Missouri grants in part and denies in part defendant Nestle Purina Petcare Company’s motion to dismiss the plaintiff’s lawsuit alleging violations of the Lanham Act, the Connecticut Unfair Trade Practices Act, the Connecticut Unfair Sales Practices Act, and Connecticut common law. Plaintiff claimed that Purina has engaged in false advertising practices for ten of its pet food brands on television, in print, on its website, and on its packaging, by claiming various meats and seafood as main ingredients when, in reality, those ingredients are only a tiny fraction of the product. The court held that the plaintiff sufficiently alleged the falsity or misleading nature of Purina’s challenged advertisement for each of the 1

challenged products, but some of the theories under which the plaintiff alleged false advertising violations did not meet federal pleading standards; those portions of the plaintiff’s claims were dismissed with leave to amend. In reaching its decision, the court stated that these claims center on a determination of what a reasonable consumer would believe, and the Second Circuit requires courts to consider extrinsic evidence of consumer impact when determining whether a reasonable consumer would be misled. As a result, the court explained, whether an advertisement is deceptive “is generally a question of fact which requires consideration and weighing of evidence from both sides and therefore usually cannot be resolved through a motion to dismiss.” (Blue Buffalo Co. Ltd. v. Nestle Purina Petcare Co., No. 4:15 CV 384, 2015 WL 3645262 (E.D. Mo. June 10, 2015)). The U.S. District Court for the Western District of Washington, in a Lanham Act suit between yarn manufacturers, grants the defendant’s motion for judgment as a matter of law. Plaintiff alleged that defendant falsely stated on its website the purported results of a lab analysis on the fiber content of the plaintiff’s milk yarn product. However, the court ruled that the plaintiff failed to put forth evidence at trial that its declining sales were actually linked to the defendant’s website posting. Absent this evidence, the court ruled that the plaintiff failed to establish a claim for Lanham Act false advertising. (Cascade Yarns, Inc. v. Knitting Fever, Inc., No. 10-cv-861, 2015 WL 3407882 (W.D. Wash. May 27, 2015)). The U.S. District Court for the Central District of California grants defendant Shannon Packaging Co.’s motion for summary judgment in an action brought pursuant to the Lanham Act, and California’s consumer protection statutes. This suit involves competing manufacturers of polyethylene bags and laminated products for military and electronics. Plaintiff’s product is the only one approved to be used in Defense Department contracts that require a particular specification, MIL–PRF–81705 Type III. Plaintiff challenged the defendant’s representation that its competing product is “[d]esigned to meet the performance of MIL–PRF–81705 Type III” as misleading because the defendant’s product was not listed as an approved product, was not “military grade,” and, therefore, had not been subjected to the military test method or to the performance requirements of the specification. In granting the defendant’s motion for summary judgment as to the false advertising claim, the court found that the mere fact that the defendant’s product was not listed as a government-qualified product did not make the advertising clam literally false. In other words, “[d]esigned to meet” was not the same as “meets the standard.” Plaintiff’s claims under California state law similarly were rejected because plaintiff had not proven a predicate violation. (Caltex Plastics, Inc. v. Shannon Packaging Co., 2015 WL 3407889, No. 2:13–cv–06611 (C.D. Cal. May 27, 2015)). The U.S. District Court for the Southern District of New York denies plaintiff Procter & Gamble’s (“P&G”) motion for leave to amend its complaint. Plaintiff sued defendant Hello Products, LLC, for false advertising pursuant to Section 43(a) of the Lanham Act, and deceptive acts and practices and false advertising in violation of New York statutes, based on the defendant’s claim that its Hello toothpaste was “99% natural.” Plaintiff alleged that these claims were false because a significant portion of the toothpaste’s ingredients had been processed extensively and chemically. Defendant stipulated to a preliminary injunction barring the claim and began using the phrase “naturally friendly” instead. Plaintiff sought to add the new phrase as a challenged phrase in an amended complaint. The court denied the motion because the plaintiff unduly delayed, and knew of the “naturally friendly” phrase at least a month before the deadline to amend, but waited to file until

2

another ten months after the deadline. The court also found that the amendment would cause prejudice because it would have to reopen fact discovery and delay expert discovery. (Procter & Gamble v. Hello Prods., LLC, No. 14-cv-649, 2015 WL 2408523 (S.D.N.Y. May 20, 2015)). The U.S. District Court for the District of Massachusetts, in a Lanham Act false advertising suit between vacuum cleaner manufacturers, denies defendant Dyson’s partial motion to dismiss plaintiff Euro-Pro’s injunctive relief claims. The court rejected Dyson’s argument that its voluntary discontinuance of the advertising claims at issue mooted Euro-Pro’s claims for injunctive relief. It ruled that Euro-Pro plausibly alleged that Dyson’s wrongful conduct was ongoing. (Euro-Pro Operating LLC v. Dyson Inc., No. 14-cv-13720, 2015 WL 2226264 (D. Mass. May 12, 2015)). The U.S. District Court for the Northern District of Illinois denies defendant Central Illinois Manufacturing Company’s motion to dismiss plaintiff Champion Laboratories’ claims of false advertising in violation of the Lanham Act and the Illinois Deceptive Trade Practices Act. The parties are the two main producers of fuel dispensing filters in the United States. According to the plaintiff, the parties’ products are distinguishable on the basis of composition – the plaintiff’s filters are made mostly from cellulose, whereas the defendant’s filters are made mostly from microglass. The court rejected the defendant’s motion to dismiss the plaintiff’s four claims of false advertising. The first claim was that the defendant’s filters do not “return to full flow as with competitor’s filters.” The court denied the motion to dismiss on that point, holding that the plaintiff sufficiently alleged that its filters also did not return to full flow, and it was unclear whether the defendant was drawing a comparison to the plaintiff’s filters, especially because the parties are apparently the two main options in the product market. The court also denied the motion as to the second claim that certain tests showed the defendant’s filters retaining more particulates than other filters, because the plaintiff pled that the tests are neither industry accepted nor a valid measure of a filter’s performance. The third claim compared cost savings between cellulose and microglass models. Even though the models were both the defendant’s, that was not immediately clear, and the court ruled that a reasonable consumer may not understand the defendant to be comparing its own products to suggest that a cellulose model is more expensive. The fourth claim related to the defendant’s microglass filters’ purported dirt-holding capacity as compared to cellulose filters. Defendant did not dispute that the industry rating of microglass filters contradicted this claim, and again, the court could not conclude whether the defendant was comparing its products to the plaintiff’s products at the dismissal stage. The court also denied the defendant’s motion to strike reference to a prior consent decree between the parties because the consent decree was public. (Champion Labs., Inc. v. Cent. Illinois Mfg. Co., No. 14 CV 9754, 2015 WL 2208198 (N.D. Ill. May 8, 2015)). The U.S. Court of Appeals for the Ninth Circuit affirms the district court’s order granting a new trial and excluding evidence of damages in a false advertising case. The district court ordered the new trial because of an erroneous jury instruction permitting a presumption of injury under the Lanham Act. The district court determined that the case involved neither a direct comparative advertising campaign nor a binary market, both situations where the presumption could apply. The district court also excluded the introduction of damage evidence from the appellant because the appellant had failed to properly disclose the theories and evidence in accordance with Fed. R. Civ. P. 26, and rejected the appellant’s argument that this was just supplementation. (Munchkin, Inc. v. Playtex Products, LLC, No. 13-56214, 2015 WL 1771270 (9th Cir. Apr. 20, 2015)).

3

The United States District Court for the Eastern District of Missouri, in a Lanham Act suit between pet food manufacturers and their advertising agencies, denies the motion to dismiss of two defendant-advertising agencies responsible for designing the website at issue and creating the content comprising the false advertising. Despite a lack of legal authority on the topic, the court concluded that advertising and public relations agencies can be held liable for Lanham Act false advertising, even when they lack knowledge of falsity, where they actively participate in preparing the advertisements. The court also ruled that Fed. R. Civ. P. 9(b)’s heightened pleading standards do not apply to Lanham Act false advertising claims where proof of fraud is not a prerequisite to establishing liability. (Nestlé Purina Petcare Co. v. Blue Buffalo Co., No. 4:14-cv-859, 2015 WL 1782661 (E.D. Mo. Apr. 20, 2015)). The U.S. District Court for the Western District of Washington, in a Lanham Act false advertising action, grants in part and denies in part cross motions for summary judgment between two yarn manufacturers arising out of claims that the defendant mislabeled the country of origin on certain of its yarn products. As to the plaintiffs’ monetary claims, the court granted summary judgment in favor of the defendant. The court found that no presumption of harm exists in the Ninth Circuit for non-comparative false advertising, and that the plaintiff failed to establish actual injury necessary to otherwise recover monetary damages under the Lanham Act. As to the plaintiffs’ injunctive claims, the court denied most of them as moot upon finding that the defendant irrefutably and totally had corrected the challenged advertising prior to the lawsuit. However, the court allowed one of the plaintiffs’ injunctive claims to proceed to trial to determine whether the alleged mislabeling was ongoing. (Cascade Yarns, Inc. v. Knitting Fever, Inc., No. 10-cv-861, 2015 WL 1735517 (W.D. Wash. Apr. 15, 2015)). The U.S. District Court for the Southern District of Florida denies the plaintiffs’ motion for temporary and preliminary injunctive relief relating to the defendant’s alleged violation of the Lanham Act arising out of online articles published by the defendant that criticized the plaintiffs’ use of “Enbrel” to treat various conditions such as stroke and Alzheimer’s disease. The court held that the plaintiffs failed to establish the four elements necessary to obtain a preliminary injunction against the defendant. Specifically, the court explained that the plaintiffs did not demonstrate a substantial likelihood that they will prevail on the merits with respect to their Lanham Act claim. The court noted that the alleged misrepresentation must be made “in commercial advertising or promotion” to be actionable, and found that the articles at issue proposed no commercial transaction, were not conceded to be advertisements, and the defendant had no economic motivation for writing them. (Tobinick v. Novella, No. 9:14-CV-80781, 2015 WL 1526196 (S.D. Fl. April 2, 2015)). State Consumer Protection Laws The Appellate Court of Illinois affirms the trial court’s ruling, but modifies it to reflect that the dismissal of part of one count was without prejudice, and remands. Plaintiff, a doctoral graduate of a school of podiatric medicine filed suit against the school after he was unable to obtain a placement into any residency program. His complaint stems from his frustration with the shortage of residency slots available compared to the number of podiatry school graduates. The complaint takes the form of alleging a bait-and-switch, alleging fraud, fraudulent concealment, intentional misrepresentation, and negligent misrepresentation. Plaintiff alleged that, in deciding to attend the school, he relied on

4

the school’s catalog, which included the statement that there was “unprecedented opportunity for new doctors of podiatric medicine.” The catalog did not note that there was a surplus of podiatric graduates compared to the number of available residencies. When the plaintiff started school, there were only nine surplus students, but by the time he graduated, there were 191 surplus students. The plaintiff also alleged that he could not have reasonably discovered this shortage prior to enrollment. In dismissing the claims, the court noted that statements about “unprecedented,” and in some places, “limitless” opportunity in the field of podiatric medicine could not form the basis of a fraud claim, because they are merely “puffing.” Fraud claims must relate to an existing or past state of affairs, so that projections of future events generally will not support a fraud-related claim. However, the court noted that the school’s failure to disclose the residency shortage and its decision to bring up postgraduate opportunities in its recruitment materials suggested that the school viewed such opportunities as material to prospective students’ decisions about whether to enroll. On remand, the plaintiff may be able to allege adequately that the school had a statutory duty to disclose the fact that successful completion of the program did not ensure placement in the necessary residency. In short, “half-truths” may support a claim of fraudulent concealment, and the school may have owed a duty to disclose material facts regarding the availability of postgraduate residencies. A person may not enter into a transaction with his eyes closed to available information, but a failure to investigate the reliability of a representation is not fatal when the statements create a false sense of security and the defendant has superior knowledge. (Abazari v. Rosalind Franklin Univ. of Med. and Science, 2015 Ill. App. (2d) 140952 (Ill. App. Ct. June 29, 2015)). The U.S. Court of Appeals for the Eleventh Circuit Court of Appeals affirms the district court’s order granting Florida State University’s (“FSU”) motion for summary judgment against a student seeking a doctoral degree in sport’s psychology. The plaintiff alleged that he had completed two years of the sports psychology program as part as a “respecialization” program, but was denied an opportunity to enter into a new “combined program,” which replaced the respecialization program he originally began. Plaintiff alleged violations of the Florida Deceptive and Unfair Trade Practices Act and breach of contract. The trial court granted FSU’s motion for summary judgment on the contract claim, reasoning that the doctrine of sovereign immunity was not waived because the alleged written contract did not require FSU to admit the plaintiff to a “combined Ph.D. program.” The Eleventh Circuit also affirmed the trial court’s ruling that any tort claim was barred by sovereign immunity because the plaintiff failed to establish that he presented the claim within three years of the cause of action arising. (Williams v. Becker, No. 14-10806, 2015 WL 3915615 (11th Cir. June 26, 2015)). The U.S. District Court for the Northern District of West Virginia dismisses the Plaintiff’s complaint without prejudice. Plaintiff’s complaint alleged both federal and state law claims against the defendants for false advertising, defamation, and portraying him in a false light by connecting him to a bank robbery that had been committed in West Virginia in 2010. The court dismissed the federal claims for lack of subject matter jurisdiction, holding that (1) the criminal statute of false advertising could not be the basis of jurisdiction in a civil case; (2) there is no private cause of action under the Federal Trade Commission Act; (3) the plaintiff alleged no facts to support a claim for a Lanham Act violation; (4) the plaintiff alleged no facts to support a claim under the Program Fraud Civil Remedies Act; and (5) the plaintiff alleged no facts to support a claim for violation of the Local Rules and Federal Rules of Civil Procedure. The Court dismissed the state law claims because

5

complete diversity did not exist between the plaintiff and each and every defendant. (Juste v. McDonald Restaurant Corp., No. 3:15-cv-54, 2015 WL 3939669 (N.D. W.V. June 26, 2015)). The U.S. District Court for the Central District of California grants in part and denies in part defendant’s motion to dismiss the complaint or, in the alternative, to strike portions of it. The complaint alleged violations of California’s Consumers Legal Remedies Act (“CLRA”), Vehicle Code, Unfair Competition Law (“UCL”), Song-Beverly Consumer Warranty Act, and fraud and deceit. Plaintiff alleged that she purchased a used vehicle from CarMax that failed to meet certification requirements under California law and became defective shortly after purchase, and that CarMax failed to complete the necessary repairs in accordance with its express and implied warranties. The defendant’s motion to dismiss the CLRA claim was denied because the court found that (1) the allegations that CarMax falsely represented the character or quality of the car were sufficient to state a claim under the CLRA, and (2) the allegations that the plaintiff relied on the representations in purchasing the car, which was a purchase she would not otherwise have made, were sufficient as a theory of damages under the CLRA. As such, the court also denied the defendant’s motion to dismiss the UCL claim predicated on the alleged violation of the CLRA. The court, however, granted the defendant’s motion to dismiss the Vehicle Code claim because the plaintiff received a Certificate of Quality Inspection listing all of the components inspected on the vehicle, and the statute does not require that the report list the results of the inspections. The court, therefore, also granted the motion to dismiss the UCL and fraud claims dependent on that Vehicle Code violation. The court found that the plaintiff had alleged a viable UCL claim predicated on a violation of Vehicle Code, which requires disclosure of a car’s prior status as a rental car. The court found that the plaintiff had not sufficiently alleged an advertisement of the car was made without disclosure of the car’s prior rental vehicle status, and granted leave to amend the UCL and fraud claims premised on the violation of the Vehicle Code. The motion to dismiss was denied as to the plaintiff’s breach of implied warranty claim because of his allegations that the car had problems, which were not fixed by the repairs that CarMax undertook. But, the motion was granted without prejudice as to the breach of express warranty claim, with the court finding that the complaint did not provide any information as to the terms of any such warranty or how they were breached. CarMax’s requests to strike portions of the complaint dealing with punitive damages were deemed moot because the fraud claim had been dismissed without prejudice; the remaining requests to strike were denied. (Malone v. CarMax Auto Superstores CA, LLC, No. 12-cv-08978, 2015 WL 3889157 (C.D. Cal. June 23, 2015)). The U.S. District Court for the Eastern District of California grants the plaintiff’s motion to remand the case to state court for lack of federal diversity jurisdiction. Plaintiff alleged that defendant vehicle dealership Carmax Auto Superstores California, LLC (“Carmax”) violated California’s Consumer Legal Remedies Act and Unfair Competition Law by advertising and selling a car as “certified” and “CarMax Quality Certified” without providing her with a completed inspection report identifying what CarMax inspected. The amount in controversy was the key issue in determining federal subject matter jurisdiction. Because the plaintiff’s complaint was unclear as to the aggregate damages sought, it was the defendant’s burden to prove that the amount sought likely exceeded $75,000. The court found that the rescission damages amount was the amount that the plaintiff financed for buying the car, not including interest over time ($17,918.58). As far as punitive damages, the mere possibility of such damages was not enough to push the amount over the $75,000 threshold. The court also found that Carmax overestimated the value of the plaintiff’s requested

6

injunctive relief, thus, Carmax failed to meet its burden on that issue. Finally, the court found that Carmax failed to show that the amount of attorneys’ fees potentially recoverable by plaintiff in this case would push the amount in controversy over the threshold because the value of the car was so much less than the expected fees amount claimed by Carmax. The court, therefore, granted plaintiff’s motion to remand the case to state court because the amount in controversy requirement for federal diversity jurisdiction was not satisfied. (Diaz v. Carmax Auto Superstores California, LLC, No. 1:15-CV-00523 (E.D. Cal. June 16, 2015)). The U.S. Court of Appeal for the Eleventh Circuit affirms a judgment based on a jury verdict finding the defendants liable for breach of contract, fraud, and violations of the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”). The plaintiff – the Democratic Republic of Congo (“DRC”) – contracted with the defendant for service related to the repair and replacement of certain parts on the president’s aircraft. The repairs and parts replacement, however, were not performed as contracted and the DRC sued. The case went to trial and the jury returned a verdict finding that the defendant breached the contract, committed fraud, and violated the FDUTPA. The defendant appealed various aspects of the judgment, including jurisdiction and its liability under FDUTPA. Focusing on the FDUTPA, the defendant argued that the DRC lacked standing under the statute because it was not a “consumer.” However, the court found, based on the 2001 amendments to the statute, that the Florida Legislature intended that the FDUTPA apply to individuals, businesses, or “any other group or combination” – which included sovereign governments. The court also found the DRC was acting as a private airline when it contracted with the defendants. The defendant also argued that the jury erred in finding it liable under the FDUTPA because the DRC were too sophisticated to fall for the alleged “deceit.” The court disagreed, finding that, unlike in the case of common law fraud, there was no need to prove subjective reliance. The defendant also argued the plaintiff’s expert used an improper measure of damages under the FDUTPA, but the court found it accorded with the law. The court held that the plaintiff must prove the difference in value between what was promised and what was delivered, unless the product was truly worthless, in which case the plaintiff could recover the full value. Here, the court found the latter applied and the plaintiff was entitled to the full price it paid to the defendant. Finally, the court rejected the defendants’ argument that the FDUTPA award was an improper double recovery because the same line item damages were awarded under the fraud and breach of contract causes of action. The court found that a plaintiff may recover damages on two claims stemming from the same conduct if the total does not exceed actual damages. Because the fraud and breach of contract awards did not make the plaintiff whole, it was permissible to supplement those recoveries with FDUTPA damages. (Democratic Rep. of the Congo v. Air Capital Group, LLC, No. 14-11243, 2015 WL 3619452 (11th Cir. June 11, 2015)). The Florida District Court of Appeal affirms in part and reverses in part a trial court’s order granting defendant Better Business Bureau’s motion to dismiss plaintiff Caribbean Cruise Line, Inc.’s complaint alleging defamation and violation of Florida’s Deceptive and Unfair Trade Practices Act (“FDUTPA”) arising out of the plaintiff’s “F” rating issued by the defendant. Defendant’s motion sought dismissal based on First Amendment protections for pure opinion and on the theory that FDUTPA does not allow actions for damages by non-consumers. The court affirmed dismissal of the defamation count but reversed the dismissal of the FDUTPA count, finding that the FDUTPA allegations were not protected by the First Amendment and that the defendant did not have to be a consumer to seek relief under FDUTPA. Instead, the Court held that any person, consumer or not, could bring an action for damages for deception or unfairness under FDUTPA after the 2001

7

amendments to the statute. Those amendments specifically removed the word “consumer” from the section of the Act providing for a private right of action, and added the broader word “person” in its place. (Caribbean Cruise Line, Inc. v. Better Bus. Bureau of Palm Beach Cnty., Inc., No. 4D133916, 2015 WL 3480114 (Fla. 4th DCA June 3, 2015)). The California Court of Appeal affirms the trial court’s order sustaining, without leave to amend, the defendants’ demurrers and entering a judgment of dismissal. Plaintiff filed a putative class action complaint alleging violations of the California Unfair Competition Law and False Advertising Law, and common law fraudulent concealment. Plaintiff’s claims were based on the premise that, although the defendants do not fall within the literal definition of a “health care service plan” as defined in the California Health & Safety Code due to the level of risk they assumed, they effectively operated as a health care service plan without obtaining the license required by the California Knox-Keene Health Care Service Plan Act of 1975 (“Knox-Keene Act”), and without meeting the regulatory mandates required of health care service plans. The trial court, relying on the doctrine of judicial abstention, sustained without leave to amend the demurrers filed by the defendants and entered a judgment of dismissal. Plaintiff appealed from the judgment, which included an order awarding the defendants costs, and argued that defendants were required to have a license under the Knox-Keene Act because they accepted a level of “global risk” that transforms them from a medical “risk-bearing organization” to a “health care service plan” under the act. The appellate court affirmed the trial court’s decision, noting that neither the Knox-Keene Act nor the regulations adopted by the California Department of Managed Health Care (“DMHC”) defines the level of risk that would cause a medical entity like the defendants to become a de facto health care service plan. The appellate court agreed with the trial judge that the determination of an acceptable risk level is a regulatory decision involving complex economic policy considerations that should be made by the DMHC, the regulatory agency tasked with interpreting and enforcing the Knox-Keene Act, and, therefore, the trial court acted within its discretion in invoking the abstention doctrine as to the statutory causes of action, but not as to the plaintiff’s common law cause of action for fraudulent concealment. However, the appellate court found that the plaintiff failed to plead a claim for fraudulent concealment and failed to demonstrate how the complaint could be amended to cure the defects. As such, the court affirmed the judgment of dismissal, including the order awarding costs to defendants. (Hambrick v. Healthcare Partners Med. Grp., Inc., 2015 WL 3457257) (Cal. App. June 1, 2015)). The U.S. District Court for the District of Maryland grants defendant Ourisman Chevrolet of Bowie Inc.’s motion for summary judgment in action alleging violations of Maryland’s Consumer Protection Act and common law fraud. Plaintiff had purchased a car from the defendant-dealership contingent on the financing being approved by the defendant’s arranged lender. Plaintiff was unable to satisfy the lender’s requirements and was forced to return the new car and pay for improvements made to the car she traded in. Plaintiff’s Maryland Consumer Protection Act claim ultimately failed because she could not establish reliance on any misrepresentation, as the evidence showed that the plaintiff understood the sale was contingent on financing. Plaintiff’s fraud claim failed for the same reason. (Sterling v. Ourisman Chevrolet of Bowie Inc., 2015 WL 2213708 (D. Md. May 8, 2015)). The U.S. District Court for the District of Massachusetts denies the defendant’s motion to dismiss plaintiff iLab Solutions’ claim alleging violations of Massachusetts consumer protection law because the plaintiff alleged a sufficient connection between the Commonwealth of Massachusetts and the

8

alleged unfair or deceptive conduct. The Massachusetts-based plaintiff alleged that the defendant, a Virginia company, copied material from the plaintiff’s website and made false and misleading statements on its own website, causing the plaintiff to lose business and additional harm. Of the five counts alleged in the complaint, the defendant moved to dismiss only the state unfair or deceptive acts or practices claim. The statute at issue, M.G.L.A. 93A § 11, requires that the unfair or deceptive conduct “primarily and substantially” take place in Massachusetts. Plaintiff alleged not only that it was a Massachusetts company, but also that defendant committed infringing acts and false advertising in Massachusetts, transacted business generally in Massachusetts, and used its website to target Massachusetts customers. At the pleading stage before discovery, and in accordance with applicable case law, the court held that such allegations were enough to deny defendant’s motion to dismiss. (iLab Solutions LLC v. Idea Elan, LLC, No. 14-CV-14267, 2015 WL 1505698 (D. Mass. Apr. 1, 2015)). Consumer Class Actions The U.S. District Court for the District of New Jersey grants in part and denies in part the defendant’s motion to dismiss. Plaintiff, a Florida resident, alleged the defendant Samsung marketed and advertised its “Chromebook” as having a Universal Serial Bus (USB) 3.0 SuperSpeed port even though the laptop did not in fact have that USB port. The plaintiff brought a purported class action lawsuit alleging, among other things, violations of the consumer protection statutes of Florida and New Jersey, and common law fraud and misrepresentation. The court first rejected the defendant’s argument that the plaintiff lacked standing to bring New Jersey claims because he was a Florida resident, finding that he satisfied Article III. For the statutory fraud claim, the court found that Florida law would apply and the complaint stated a claim for a violation of the Florida consumer protection act. The court dismissed the New Jersey statutory claims, finding that Florida bears the most significant relationship to the claim. The court, however, denied the motion to dismiss as to most of the other claims finding they were sufficiently pled. (Miller v. Samsung Elecs. Am., Inc., No. 14-4076, 2015 WL 3965608 (D.N.J. June 29, 2015)). The U.S. District Court for the District of New Jersey grants the defendants’ motion to dismiss the plaintiffs’ class action claims for violations of various consumer fraud state laws. Plaintiffs alleged that defendants, manufacturers and distributors of prescription eye medications, engaged in unfair and illegal business practices by marketing eye drops that deliver unnecessarily large drops, which result in consumers purchasing more medication than they require. The court dismissed the claims for lack of standing because the plaintiffs’ theory of economic damages was not sufficient to confer standing. The court stated that merely asserting violations of certain statutes is not sufficient to demonstrate an injury-in-fact for purposes of establishing standing under Article III. The court further explained that there are typically two theories of economic harm associated with consumer fraud actions – benefit-of-the-bargain and out-of-pocket expenses – and the plaintiffs in this case failed to premise their standing on either of these two theories. The court found that the plaintiffs neither alleged that defendants somehow induced them to purchase the medications by misrepresenting or concealing any information, nor claimed that the medications were ineffective for their prescribed use and that they paid a premium for the medications. (Cottrell v. Alcon Labs., Inc., No. 14-5859, 2015 WL 3889367 (D.N.J. June 24, 2015)).

9

The U.S. Court of Appeals for the Ninth Circuit vacates certification of a California consumer class in an action against Supple LLC, alleging misrepresentations regarding a dietary supplement containing glucosamine hydrochloride and chondroitin sulfate. Plaintiff alleged that the defendant misrepresented the product as being clinically proven effective to treat joint pain. The district court certified a class finding that common issues of law and fact predominated. The Ninth Circuit reversed. It held that, in a false advertising case, “it is critical that the misrepresentation in question be made to all of the class members,” but the record presented on the class certification motion did not meet that standard, as it did not support that determination that “all of the class members saw or otherwise received the misrepresentation.” (Cabral v. Supple LLC, -- Fed. Appx --, No. 13-55943, 2015 WL 3855142 (9th Cir. June 23, 2015)). The U.S. Court of Appeals for the Fourth Circuit affirms the dismissal of a consolidated class action complaint against GNC and Rite Aid, alleging that the companies misrepresented the effectiveness of certain dietary supplements. Plaintiffs bought joint supplements produced and sold by GNC and Rite Aid, which contained glucosamine and chondroitin. Plaintiffs alleged that the companies violated several state consumer protection laws by marketing these supplements as promoting healthy joints, even though many scientific studies have shown that those compounds are no more effective than a placebo in treating osteoarthritis symptoms. The court granted the defendants’ motion to dismiss because, although the plaintiffs alleged that the claims were literally false, they failed to allege that all scientists reasonably agree that the ingredients used in the supplements were ineffective in providing the advertised joint health benefits. Plaintiffs alleged that the health representations on the supplements’ packaging were false because “the vast weight of competent and reliable scientific evidence” indicates that glucosamine and chondroitin do not provide the promised health benefits. The cited studies involved only arthritic patients, but the plaintiffs claimed that experts concluded that the findings were fair “proxies” for ingredient effectiveness in non-arthritic patients as well. The Fourth Circuit affirmed the dismissal, holding that to state a false advertising claim on a literally false theory under the California, Illinois, Florida, Ohio, New York, New Jersey, and Pennsylvania consumer protection statutes, plaintiffs must allege that all reasonable experts in the field agree that the representations are false. As the court explained, marketing statements accurately describing findings of qualified and reasonable scientific experts are not literally false by law. The court noted that the plaintiffs never pleaded a “misleading” false advertising theory, nor amended their complaint to allege that “any reasonable expert would conclude from the cited studies that glucosamine and chondroitin do not improve joint health in non-arthritic consumers,” despite the district court’s express approval to so amend. The court further found that the plaintiffs thereby conceded that at least some reasonable experts believe that the compounds can provide the advertised symptom relief. Furthermore, the court noted that most of the products at issue contained additional purportedly active ingredients that the cited studies did not address, so the complaint was also defective because it failed to allege that all the active ingredients contained in the products were incapable of providing the advertised benefits. (In re GNC Corp., No. 14-1724 (4th Cir. June 19, 2015)). The U.S. District court for the Western District of Arkansas grants in part and denies in part defendant ConAgra Foods’ motion to dismiss a putative class action. Plaintiffs sued ConAgra under the Arkansas Deceptive Trade Practices Act (“ADPTA”) and Arkansas Food, Drug, and Cosmetic Act (“AFDCA”) for labeling Hunt’s canned tomatoes as “100% natural” and “free of artificial ingredients and preservatives,” when, allegedly, there were chemical preservatives present. The

10

court determined that the plaintiffs’ AFDCA claims were not preempted by the federal Food, Drug & Cosmetic Act because the FDA has failed to define “natural” or take formal procedures to regulate use of the term. ConAgra alleged these claims should be dismissed because the pleadings only alleged a diminution of value, rather than actual damages under the ADTPA. The court, sua sponte, determined that a safe-harbor provision in the ADPTA applied because the misbranding of foods is regulated by the Arkansas Board of Health and the FDA. Therefore, no private cause of action existed under the ADPTA, and the claim was dismissed with prejudice. Finally, the court determined that even though the class representative had not purchased the product at issue in the litigation, he had properly plead standing since the product he purchased was similarly misrepresented and, thus, his claims could continue on that basis. (Gabriele v. ConAgra Foods Inc., No. 5:14-CV-05183, 2015 WL 3904386 (W.D. Ark. June 15, 2015)). The U.S. Court of Appeals for the Eighth Circuit affirms the district court’s dismissal of the plaintiff’s class action lawsuit for failure to meet the predominance requirement. Plaintiff, a California resident, sued H & R Block, a Missouri-based corporation, on behalf of himself and a putative nationwide class, alleging violations of the Missouri Merchandising Practices Act (“MMPA”). In 2011, H & R Block began passing along to consumers a “Tax Preparer Compliance Fee” intended to cover the costs of a new IRS regulation requiring tax preparers to pass a certification exam. Plaintiff argued that the fee charged by H&R Block exceeded the cost of complying with the regulation and was actually a deceptive profit-making scheme. The district court analyzed the claims under the U.S. Constitution’s Full Faith and Credit and Due Process clauses, and concluded that the proposed class did not meet the “predominance” requirement of Rule 23 because each individual class member’s claim would be governed by the law of that class member’s home state – i.e., where the fee was paid. Plaintiff appealed, arguing that the district court had abused its discretion. The Eighth Circuit, mindful of the “longstanding principle of judicial restraint counseling against unnecessarily deciding constitutional issues,” affirmed the district court’s decision but on other grounds. Because the plaintiff had brought the claim under the MMPA, the court examined whether the claims of out-of-state potential class members were “in trade or commerce . . . in or from the state of Missouri,” as required by the MMPA. The court held that there was no connection between the out-of-state transactions and Missouri. Because each class member would be covered by his or her own state’s consumer protection statute, common questions of law would not predominate over individual questions of law and, therefore, the class should not be certified. (Perras v. H & R Block, No. 14–2892, 2015 WL 3775418 (8th Cir. June 18, 2015)). The U.S. District Court for the Northern District of Illinois grants defendant CVS Pharmacy, Inc.’s motion to dismiss in a putative false advertising class action suit. Plaintiff claimed that CVS deceptively labeled its “Whey Protein Powder” as pure whey protein powder and as containing “26 grams of high-quality protein per serving,” when, in fact, the product allegedly was not 100% whey and contained other, inferior proteins. Plaintiff alleged that CVS utilized “protein-spiking” to increase the protein content of the product as measured by the approved method for determining protein content. The court first found that the plaintiff’s primary claims were preempted by the Federal Food, Drug, and Cosmetic Act (“FDCA”), as amended by the National Labeling and Education Act (“NLEA”). The NLEA prohibits states from making product labeling requirements for protein that differ from those prescribed by statute and the FDA. Current federal labeling requirements do not make companies distinguish between sources of protein. The court found significant the fact that the FDA previously had considered and rejected a proposal to restrict quality

11

and source claims on labeling subject to the protein’s quality. In attempting to distinguish his claims from those made in a similar case, Turek v. Gen. Mills, Inc., 662 F.3d 423 (7th Cir. 2011), the plaintiff alleged deception only with respect to the front label. However, the term “labeling” includes all printed material accompanying a product, including the front label. Thus, because the plaintiff’s claims would require CVS to differentiate whey protein from other sources of protein in its product, those claims were preempted by the FDCA. Plaintiff alleged several non-preempted claims: omission of ingredients from the front label; breach of warranty; and unjust enrichment. The court found that, as a matter of law, the product label was not misleading – even though it prominently displayed one ingredient, whey protein, and not other notable ingredients – because the label also prominently displayed the words “vanilla” and “Naturally & Artificially Flavored Drink Mix.” As such, the content of the label did not have the capacity to deceive such that a person would believe that the product was “pure whey protein.” The court dismissed the breach of warranty claim because assertions of “high quality” are viewed as puffing rather than express warranties. Finally, the unjust enrichment claim failed because, under Illinois law, a plaintiff cannot succeed where the facts underlying the claim are the same allegedly deceptive statements and claims that are preempted by federal law. In dismissing the suit without prejudice, the court gave plaintiff one month to file an amended complain that addressed the above concerns or added plaintiffs who could pursue other non-Illinois state law claims. (Gubala v. CVS Pharmacy, Inc., No. 14 C 9039, 2015 WL 3777627 (N.D. Ill. June 16, 2015)). The U.S. District Court for the District of Massachusetts grants in part and denies in part the defendant’s motion to dismiss claims that defendant-manufacturers of antidepressants violated the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”), and Massachusetts’ and Washington’s consumer protection acts. The suit involves the efficacy of two antidepressants designed to treat major depressive disorder (“MDD”) in children. Plaintiffs alleged that the defendant withheld information about negative efficacy studies of the drugs. The court granted the defendant’s motion to dismiss the RICO claims with regards to one plaintiff for lack of standing, as she failed to allege that the drug was ineffective as to her daughter. The court denied dismissal as to the second plaintiff because she made sufficient allegations that the drug was ineffective for pediatric and adolescent MDD, meaning it was ineffective as to her daughter. The plaintiffs also alleged that the injury was the result of the denial of the opportunity to make a fully informed decision before purchasing the drug and that they would not have bought the drug if they had known about the negative efficacy studies. The Court rejected this argument under the Massachusetts act, finding that the plaintiff failed to plead an economic injury rather than an “abstract” denial of opportunity to make an informed decision. In addition, the court denied the defendant’s motion to dismiss under the Washington Consumer Protection Act because the plaintiff adequately alleged that the defendant’s deception directly caused an overvaluation of the drugs resulting in payments for the drugs that would not have occurred otherwise, sufficiently pleading injury under the Washington act. (In re Celexa & Lexapro Mktg. & Sales Practices Litig., No. 14-13848, 2015 WL 3751422 (D. Mass. June 15, 2015).) The U.S. District Court for the District of New Jersey denies the putative class plaintiffs’ renewed motion for class certification, because the plaintiffs, again, failed to meet their burden of proving a reasonably objective method of ascertaining class membership that simultaneously would provide the defendants the ability to challenge class membership while also protecting true class members from dilution of their recovery by fraudulent submissions. Plaintiffs alleged that the defendants’ sale

12

of a margarita mix as “all natural” violated various consumer protection laws because the mix purported to be all natural, while containing sodium benzoate. Plaintiffs argued that submission of sworn affidavits by putative class members put through a screening process by a claims management company would provide the necessary objective standards to ascertain the members of the class. The court rejected this argument for several reasons, including that (1) the affidavit required sworn statements about the details of the purchase, including purchase date, price, location, and other information, which not even the plaintiffs themselves could provide; (2) the second level of review included identification about the product that was easily identifiable through a web search and, therefore, easily fabricated; and (3) the plaintiffs’ own expert testified in his deposition that “if it’s someone’s intention to beat the system . . . they probably can do it.” The court also rejected the plaintiffs’ argument that the defendants had no right to challenge the class membership because their liability was based upon the amount of their sales and not the identity of the purchasers; the court reasoned that even assuming this is true, the absent class members have a right to an objectively accurate ascertainment of class membership to prevent dilution of their claims. (Bellow v. Beam Global Spirits & Wine, Inc., No. 11-5149, 2015 WL 3613723 (D.N.J. June 9, 2015). The California Court of Appeal affirms the trial court’s order sustaining Neutrogena’s demurrer to the plaintiffs’ complaint without leave to amend, and granting its motion for judgment on the pleadings. Plaintiffs filed a purported class action lawsuit alleging that Neutrogena’s sunscreen products were misleadingly labeled and marketed in violation of California consumer protection statutes. Plaintiffs alleged that Neutrogena misleadingly labeled its products with the descriptions “sunblock,” “waterproof,” and “sweatproof,” terms that the Food and Drug Administration (“FDA”) prohibited in a regulation published on June 17, 2011, with a compliance date of December 17, 2012. Plaintiffs contended that Neutrogena was liable for marketing products that bore these terms before the December 17, 2012 compliance date. In addition one of the plaintiffs alleged that sunscreens with a sun protection factor (“SPF”) value greater than 50 (“SPF 50+”) misled consumers about their benefits, and sought an order that Neutrogena modify its labels and alter its advertising. The appellate court affirmed the trial court’s holding that the plaintiffs’ claims both were expressly and impliedly preempted by the federal Food, Drug, and Cosmetic Act and implementing FDA regulations. (Eckler v. Neutrogena Corp., 2015 WL 3563574 (Cal. App. June 9, 2015)). The U.S. Court of Appeals for the Eleventh Circuit holds that the district court properly denied class certification in a putative false advertising class action. Specifically, the district court did not abuse its discretion in determining that the proposed class of dietary supplement purchasers failed to satisfy the requirement of Fed. R. Civ. P. 23 that the proposed class be clearly ascertainable. Plaintiff’s proposal to use the advertiser’s “sales data” did not explain how the data would aid class-member identification. To satisfy the ascertainability requirement, a plaintiff is required to demonstrate that a defendant’s records are, in fact, useful for identification purposes, and that identification will be administratively feasible. Similarly, the district court acted within its discretion by rejecting class member self-identification via affidavit. The court noted that the plaintiff might have satisfied the ascertainability requirement through his proposal of identifying class members by subpoenaing the retailers for their records. However, the appellate court noted that the district court correctly rejected this approach because the plaintiff only raised the theory in his motion to alter or amend and, instead, should have proposed the method in his class certification papers. (Karhu v. Vital Pharms., Inc., -- Fed. Appx. --, 2015 WL 3560722 (11th Cir. June 9, 2015)).

13

The U.S. District Court for the Northern District of California grants defendant Nature’s Path Foods’ motion to dismiss a third amended complaint (with leave to amend) and motion to stay the false advertising consumer class action while appeals in two other food false advertising cases are pending. Plaintiff alleged that the defendant’s cereal products are slack-filled, falsely labeled “low sodium,” contain sugar under the deceptive name “evaporated cane juice,” and fail to disclose the use of chemical preservatives. (The court previously had stayed the evaporated cane juice claim based on FDA’s on-going review of the common or usual name of the ingredient.) As to the “low sodium” claim, the court granted the motion to dismiss, finding that the complaint does not contain sufficient allegations to determine whether a prima facie violation of the federal “low sodium” regulations was asserted properly. Defendant separately moved to stay based on two pending Ninth Circuit appeals, one (Jones v. ConAgra) relating to denial of class certification and the other (Brazil v. Dole Packaged Foods) relating to summary judgment in favor of the defendant. The appeals address issues of general applicability to food false advertising consumer class actions, but not the specific issues relating to the particular products or labeling statements at issue in this case. Nevertheless, the court agreed that “guidance from the Ninth Circuit” with respect to “food labeling claims under California’s UCL, FAL, and CLRA . . . would aid in the orderly, just resolution of this case.” Proceeding forward without that guidance could prove very inefficient. Plaintiff’s concern with the delay is insufficient because she “does not . . . identify any harm . . . other than frustrating her natural desire to move her case along.” Given all of that – plus the fact that the evaporated cane juice claim already was stayed – the court stayed the case pending the outcome of the appeals. (Leonhart v. Nature’s Path Foods, Inc., No. 13cv492, 2015 WL 3548212 (N.D. Cal. June 5, 2015)). The U.S. District Court for the District of New Jersey denies without prejudice the plaintiffs’ motion for leave to file a second amended class action complaint. Plaintiffs alleged that defendant LG Electronics U.S.A., Inc. had fraudulently misled consumers regarding the functionality of certain of its cellular telephones, specifically with regard to available internal storage space and the ability to store “Apps” on removable media. In response to the defendant’s motion to dismiss the first amended complaint, the plaintiffs’ proposed second amended complaint (“PSAC”) sought to swap out the class representatives as well as modify the causes of action. Plaintiffs’ PSAC alleged: (i) violation of the New Jersey Consumer Fraud Act based on fraud by omission; (ii) common law fraud by omission; and (iii) unjust enrichment. Defendant opposed Plaintiffs’ motion to amend on the basis that the PSAC would be vulnerable to dismissal and, therefore, would be futile. In denying the plaintiffs’ motion to amend, the court found that the plaintiffs had not pled facts sufficient to establish how the alleged omissions were material to the class representative’s decision to purchase an LG phone. The court also found that New Jersey does not recognize unjust enrichment as an independent tort cause of action. (Liebler v. LG Elecs. U.S.A., Inc., No. 14-cv-03500, 2015 WL 3561590 (D.N.J. June 4, 2015)). The U.S. District Court for the Northern District of California grants in part and denies in part the plaintiffs’ motion for partial summary judgment in a false advertising case against defendant The Hain Celestial Group, Inc. Plaintiff alleged that the defendant mis-labeled 167 of its cosmetics products as “organic” when the products did not contain at least 70% organic ingredients as required by the California Organic Products Act (“COPA”). The court previously had certified plaintiff classes for each of the two product lines being challenged. Plaintiffs moved for partial summary judgment with respect to whether the products were subject to COPA as “cosmetics.” The court agreed with the plaintiffs – based primarily on the defendant’s responses to discovery – that the

14

challenged products were cosmetics under California’s Sherman Food, Drug and Cosmetic law. Defendant argued that the products are “soaps” and, therefore, not within the definition of cosmetics. Applying the FDCA’s definition of soap (in the absence of a Sherman Law definition), the court rejected the defendant’s asserted definition of soap (products that “foam and cleanse”) and ruled that the vast majority of the challenged products are not “soap,” and are not outside COPA’s cosmetics provisions. In making the ruling, the court, again, held the defendant to its discovery responses, i.e., the deposition testimony of its Fed. R. Civ. P. 30(b)(6) witness that the products are not soap, even though the witness later submitted a declaration opposing the partial summary judgment motion, and clarifying and changing his position on the soap issue. Defendant further argued that 25 of the products were also drugs and, therefore, should be excluded from COPA’s cosmetics rules based on preemption flowing from the FDCA’s regulation of drugs. The court disagreed, citing the Ninth Circuit’s recent decision in Astiana v. Hain Celestial: “under Astiana, the FDCA does not preempt the plaintiffs’ California-law claims as they relate to Hain’s cosmetic products that are also ‘federally registered drugs.’” The court concluded that “a product can be simultaneously regulated under California law as both a drug and a cosmetic; a drug is not ipso facto exempt from COPA’s organic-labeling rules.” Based on the answers to these issues, the court entered partial summary judgment for the plaintiffs that 147 of the challenged products are cosmetics, regardless of whether they are also drugs. The court further issued partial summary judgment for the plaintiffs that none of the disputed products is a soap. (Brown v. Hain Celestial Group, Inc., No. 3:11cv3082, 2015 WL 3466255 (N.D. Cal. May 30, 2015)). The U.S. District Court for the Eastern District of Pennsylvania grants defendant Volvo Car UK Limited’s (“VCUK”) motion to dismiss the for lack of personal jurisdiction. Plaintiff brought a putative class action against Volvo Car Corporation (“VCC”) and two of its subsidiaries, Volvo Cars of North America, Inc. and VCUK, alleging violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, breach of warranties, and other similar claims. Plaintiff’s claims were based on her allegation that Volvo marketed certain vehicles as having a type of safety equipment on all passenger doors, when, in fact, they did not. VCUK stated in a declaration that the court did not have personal jurisdiction over it because, among other reasons, VCUK only distributes vehicles in the United Kingdom, does not own property or engage in business in the United States, and does not target its website to Pennsylvania or U.S. residents. Plaintiff amended her complaint, the court set a timeline for the defendants to respond, and the court later stayed the case pending the result of a related state court action. Plaintiff, then, argued that VCUK waived its jurisdictional challenge because it failed to renew its motion based on a deadline set before the court ruled on the motion to stay. The court, however, found that VCUK was not required to file a redundant motion to dismiss after plaintiff filed her amended complaint which did not contain any new allegations concerning personal jurisdiction. The court held that the plaintiff failed to contradict VCUK’s declaration regarding its lack of contacts with Pennsylvania. Furthermore, the court found that the parent VCC’s contacts with Pennsylvania could not be imputed to VCUK through an alter ego theory because, even though VCUK is wholly owned by, shares a common brand with, and appears to share some management employees and act as a “marketing arm” for VCC, no evidence existed that VCC exercised more than a normal degree of control over VCUK. The court, therefore, granted VCUK’s motion to dismiss for lack of personal jurisdiction, with prejudice. (Webb v. Volvo Cars of N.A., LLC, No. 13-CV-02394, 2015 WL 3444237 (E.D. Pa. May 29, 2015)).

15

The U.S. District Court for the District of New Jersey grants defendant Brother International Corp.’s motion for summary judgment in a putative class action suit. The suit alleged that Brother designed its printers and color ink cartridges in such a way that all color cartridges would signal “toner life end” nearly simultaneously, even though only one cartridge may be exhausted and the others could print additional pages. The court analyzed plaintiffs’ claims under the consumer protection statutes of their respective states – the New Jersey Consumer Fraud Act (“NJCFA”); the Indiana Deceptive Consumer Sales Act (“IDCSA”); the Illinois Consumer Fraud and Deceptive Business Practices Act (“ILCFA”); and the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”). Each plaintiff stated that he or she had incurred additional costs by purchasing replacement color toner cartridges before the used cartridges had printed their advertised page counts. In its summary judgment motion, Brother asserted that the plaintiffs lacked standing under Article III and the various state statutes because they failed to allege an ascertainable loss or concrete injury. The court considered Article III standing and the state claims in the same analysis. To attempt to show an injury, each plaintiff relied on printer diagnostic reports that purported to show the “average coverage” for each of the four toner cartridges currently installed in the printer and the number of color pages printed. Brother materials stated that each cartridge could print 1,500 pages at 5% print coverage. Plaintiffs asserted that they were able to extrapolate whether the cartridges achieved their advertised page counts at a known average coverage from the diagnostic data. Fatal to the plaintiffs’ claims, however, was the uncontroverted evidence that showed that the “average coverage” number resets to zero when a new cartridge is inserted. Plaintiffs provided average coverage data for the current cartridge but did not have historical average coverage data. Thus, the plaintiffs could not rely on the average coverage data to show that their used cartridges did not meet the advertised page counts. This precluded a precise estimate of loss, which, in turn, resulted in summary judgment against the plaintiffs’ under the statutes. There were several secondary holdings as well. First, the court determined that the ILCFA, the IDCSA, and the FDUTPA presented conflicts with the NJCFA. Looking to New Jersey’s choice-of-law rules and the Restatement (Second) of Conflict of Laws § 148, the court found that the out-of-state plaintiffs’ claims were governed by their respective states’ laws because their states had the most significant relationship to the claims. The court observed that little weight attached to the place where the deceptive statements were made (New Jersey) and the fact that Brother’s website requires users to submit to New Jersey law. In analyzing, the Indiana plaintiff’s claims under the IDCSA, the court’s analysis differed slightly from that discussed above, due to the more stringent requirements of the Indiana act. The IDCSA requires a plaintiff to give notice of an uncured deceptive act to a defendant prior to suit, unless the defendant committed “an incurable deceptive act,” that is, “a deceptive act done by a supplier as part of a scheme, artifice, or device with intent to defraud or mislead.” Additionally, omissions and failures to disclose known material facts are not deceptive acts under the IDCSA. Because the Indiana plaintiff did not provide notice to Brother, she was required to show that Brother intended to mislead consumers. Not only was the record devoid of manifestations of intent, the only intent alleged in the complaint was Brother’s alleged intent to conceal facts – a nonactionable claim under the IDCSA. Because summary judgment was granted against the individual plaintiffs, their motion for class certification was not considered. (Dicuio v. Brother Int’l Corp., No. CIV. A. 11-1447, 2015 WL 3403144 (D.N.J. May 27, 2015)). The U.S. District Court for the Central District of California grants in part defendant PH Beauty Labs Inc.’s motion to dismiss. Plaintiff bought claims under California’s consumer protection statutes against the manufacturer of a skin care line, claiming the products failed to provide the advertised benefits of “regenerating skin cells” and decreasing wrinkles. Defendant moved to 16

dismiss the claims brought under California’s False Advertising Law and Consumer Legal Remedies Act, arguing that the plaintiff purchased the product outside the limitations period. The court agreed, finding that limitations period ran from the first, not last, date of purchase, and the continuing violation doctrine did not apply when the harm would have been apparent after the first purchase. Defendant also succeeded in getting the court to dismiss the California Unfair Competition Law claims, arguing that California does not allow “substantiation” claims to be brought by private consumers. (Marshall v. PH Beauty Labs, Inc., No. CV 15-02101, 2015 WL 3407906 (C.D. Cal. May 27, 2015)). The U.S. District Court for the Central District of California grants the plaintiff’s motion for class certification. Plaintiff brought a class action lawsuit against defendant J.C. Penny Corp., alleging false advertisement of prices and asserting violations of California’s Unfair Competition Law, False Advertising Law, and Consumers legal Remedies Act. The court, first, rejected the defendant’s objection to the plaintiff’s expert and held that “this is not a dispute that must be resolved at this time to determine whether there was a common pattern and practice that could affect the class as a whole.” The court, then, evaluated the Fed. R. Civ. P. 23 requirements and certified a class of “[a]ll persons who, while in the State of California and between November 5, 2010 and January 31, 2012 purchased from JCPenney one or more private or exclusive branded items of apparel or accessories advertised at a discount of at least 30% off of the stated ‘original’ or ‘regular’ price . . .” (Spann v. J.C. Penny Corp., No. SA CV 12-0215, 2015 WL 3478038 (C.D. Cal. May 18, 2015)). The U.S. District Court for the Northern District of Illinois grants in part and denies in part the defendants’ motion to dismiss. Plaintiffs brought a class action lawsuit alleging that the defendants engaged in fraudulent and deceptive trade practices in connection with the marketing and advertising of their rye whiskey. Plaintiffs alleged that the defendants marketed their brand of whiskey as an artisanal, craft whiskey produced on a small farm in Vermont from certified organic rye grown on site, when, in reality, neither the product nor the ingredients used in making the product are from the Vermont farm. Plaintiffs asserted violations of the Vermont Consumer Fraud Act, the Illinois Consumer Fraud and Deceptive Trade Practices Act (“ICFA”), and the Illinois Uniform Deceptive Trade Practices Act (“IDTPA”). In opposition to the defendants’ motion to dismiss, the plaintiffs conceded that their claim under the Vermont Consumer Fraud Act must be dismissed for lack of standing because they are Illinois residents who purchased the products in Illinois. The court, thus, dismissed that claim. The court also dismissed the IDTPA claim and held that the only remedy under IDTPA is injunctive relief and plaintiffs failed to allege facts showing that they will suffer future harm. The court denied the motion to dismiss as to the ICFA claim, finding that the plaintiffs alleged sufficient facts regarding an actual deception. (Aliano v. WhistlePig, LLC, No. 14 C 10148, 2015 WL 2399354 (N.D. Ill. May 18, 2015). The U.S. District Court for the Northern District of California grants the defendant-supplement company’s motion to dismiss. Plaintiff filed a putative class action complaint alleging that the defendant’s labeling of its protein powder products is misleading because, according to “scientific tests” performed for the plaintiff, the actual amount of protein contained in the products is lower than the amount advertised. Defendant sought dismissal of the complaint, arguing that each of the plaintiff’s causes of action is preempted by the federal Food, Drug and Cosmetic Act (“FDCA”). Defendant argued that each of claims is preempted because they seek to impose obligations on the defendant that conflict with those set forth in the FDCA. The court granted the defendant’s motion holding that: (1) to the extent plaintiff’s causes of action are based on the claim that the defendant 17

has misrepresented the amount of protein in the Supplement Facts, they are preempted, as the claims seek to base liability on the defendant’s failure to employ a testing procedure not imposed by or contained in any federal regulation, and, indeed, is a challenge to the very method allowed by the FDA; and (2) the plaintiff’s remaining claims are preempted for the reason that the plaintiff has failed to allege the testing he employed in order to determine the amount of protein and amino acids in the products and to determine which ingredients are or are not contained therein complies with the “12-sample” testing method required by federal regulations. (Mee v. I A Nutrition, Inc., 2015 WL 2251303 (N.D. Cal. complaint filed on May 13, 2015)). The U.S. District Court for the District of Massachusetts accepts and adopts the Magistrate Judge’s Report and Recommendation denying defendant Blue Diamond Growers’ motion to transfer or, in the alternative, stay the proceedings. Plaintiff brought a putative class action alleging, among other things, that the defendant violated Massachusetts consumer protection laws, and violated state and federal laws regarding mislabeled and misbranded food products. More specifically, the packaging for the defendant’s products contained “All Natural” claims and included “Evaporated Cane Juice” on the ingredients list. Defendant moved to transfer the litigation to the Northern District of California where the defendant resides. The court denied the motion because one of the defendant’s primary reasons for transfer – the fact that it was already litigating similar claims in California – was no longer true. Furthermore, the plaintiff lived in Massachusetts; the putative class was limited to Massachusetts; the products were bought there; and Massachusetts law would apply. These factors all weighed against transfer. (Vass v. Blue Diamond Growers, No. 14-cv- 13610, 2015 WL 2226260 (D. Mass. May 12, 2015)). The U.S. District Court for the Northern District of California denies the plaintiff’s motion for class certification, and denies the defendants’ motion for dismissal or judgment on the pleadings. Plaintiff, seeking to represent a nationwide class, alleged that the defendants developed a “non-retail but technically superior version” of a game for promotional purposes, and, then, sold a retail version that was “less advanced.” Plaintiff’s complaint alleged, among other things, violations of California’s Consumer Legal Remedies Act, Unfair Competition Law, and False Advertising Law, fraud in the inducement, and negligent misrepresentation. The court refused to certify the class on ascertainability grounds. More specifically, the court explained that it was impossible to identify the proposed class members because no one could identify exactly where and when a potential class member possibly was exposed to the demo version of the game. The court also denied the defendant’s motion to dismiss on the grounds that the game’s End Use License Agreement contains binding arbitration and class action waiver provisions. The court determined that this case does not fall within the End Use License Agreement because the agreement was limited to only actions concerning the “online features of [its] games and products,” not the actual game. (Perrine v. Sega of Am., Inc., No. 13-cv-01962, 2015 WL 2227846 (N.D. Cal. May 12, 2015)). The U.S. District Court for the District of Minnesota adopts in its entirety the Magistrate Judge’s Report and Recommendation granting in part and denying in part defendant Best Buy’s motion to dismiss a putative class action. Plaintiff purchased a television from Best Buy, which he claimed Best Buy falsely marketed as an LED TV when it was, in fact, an LED-lit LCD TV. According to the plaintiff, this allowed Best Buy to charge a price premium. The court dismissed the plaintiff’s claims under Minnesota’s consumer fraud statutes for lack of standing because plaintiff lived in Massachusetts and bought the TV there; his claims under the Massachusetts consumer protection

18

statute, however, survived. Plaintiff argued that he could challenge Best Buy’s sales of similar models of TVs because they were essentially the same TVs in different sizes; he also argued that he could challenge advertisements he never saw. The court relied on horizontal stare decisis to dismiss those claims, while acknowledging that courts in other jurisdictions permitted such claims. The court rejected Best Buy’s argument that it should dismiss the plaintiff’s claims for injunctive relief, holding that plaintiff had alleged sufficient facts about the threat of future harm to him to survive a motion to dismiss. The court also rejected Best Buy’s arguments that the complaint lacked sufficient specificity under Fed. R. Civ. P. 9(b) and failed to state a claim under the Twombly / Iqbal standard. The court held that plaintiff had sufficiently alleged that he was damaged because the price he paid for the television was allegedly more than it was worth. (Ferrari v. Best Buy Co., Inc., No. 14-cv2956, 2015 WL 2242128 (D. Minn. May 12, 2015)). The U.S. District Court for the Middle District of Florida dismisses a class-action complaint, which alleged, among other things, violations of the federal Magnuson Moss Warranty Act (“MMWA”), Florida’s Deceptive and Unfair Trade Practices Act, and the New Jersey Consumer Fraud Act, and negligent misrepresentation and fraud. Plaintiffs alleged that defendant BMW of North America advertised its “Mini-Cooper” vehicles with inflated fuel economy ratings and that the plaintiffs relied upon these ratings in deciding to purchase their Mini-Cooper. Plaintiffs also sought certification of a nationwide class and a subclass of Florida purchasers. BMW filed a motion to dismiss on several grounds, including that the EPA estimates were not guarantees and FTC regulations preempt the plaintiffs’ claims. The court granted BMW’s motion on the grounds that federal law expressly states that, although car manufacturers must provide estimated fuel economy information and FTC regulations provide requirements for how this information is to be presented, federal law also expressly states that such information is an estimate and not a warranty. Plaintiffs’ complaint contained no allegations showing that BMW failed to comply with the federal regulations and, therefore, the court dismissed the complaint with leave to amend. (Jarvis v. BMW of N. Am., LLC, No. 2:14-cv-654, 2015 WL 2201690 (M.D. Fla. May 11, 2015)). The U.S. District Court for the Southern District of California grants in part and denies in part defendant Jos. A. Bank Clothiers, Inc.’s motion for judgment on the pleadings based on the plaintiffs’ first amended complaint (the “Complaint”), which alleged that Jos. A. Bank holds perpetual sales and continuously misrepresents that its merchandise is being offered at a discount. Plaintiffs’ Complaint alleged violations of California’s Unfair Competition Law and Consumer Legal Remedies Act, and sought both restitution and injunctive relief. Jos. A. Bank sought dismissal of the Complaint on grounds that Plaintiffs had failed to establish entitlement to a remedy. The court denied Jos. A. Bank’s motion with regard to the plaintiffs’ entitlement to restitution, holding that it was “plausible that the amount Plaintiffs paid Jos. A. Bank exceed[ed] the value of what they received.” The court, however, granted Jos. A. Bank’s Motion with regard to injunctive relief holding, in part, that the plaintiffs had not made a showing that there was “a realistic threat that, in the future, they will rely on Jos. A. Bank’s allegedly misleading pricing practices to their detriment.” (Lucas v. Jos. A. Bank Clothiers, Inc., No. 14-cv-1631, 2015 WL 2213169 (May 8, 2015)). The U.S. District Court for the Southern District of New York grants in part and denies in part defendant Hain Celestial’s motion to dismiss a consumer class action complaint alleging that “Earth’s Best” brand food, body care, and home care products were misleadingly labeled as

19

“organic,” “natural,” or “all natural.” Plaintiffs challenged 47 non-organic ingredients in 74 products labeled as “organic,” and 72 alleged non-natural ingredients in 15 products labeled as “natural” or “all natural.” The two named plaintiffs allegedly purchased only 11 of those products, but sued on behalf of purchasers of all falsely labeled Earth’s Best products including “but not limited to” the 89 products identified in the complaint. Defendant asserted that challenges to organic labeling are preempted under the federal Organic Foods Production Act of 1990 (“OFPA”). Rejecting the Eighth Circuit’s decision in In re Aurora Dairy Corp., the court allowed consumer challenges to the certification of organic products by certifying agents. The court found that such claims do not directly and positively conflict with OFPA and, therefore, there is no conflict preemption. Among other things, the challenges here seek to enforce the OFPA standards, not impose other standards. “The mere presence of a risk of judicial interpretive divergence” as to the OFPA standards “cannot be repugnant to congressional objectives, because [OFPA] . . . provisions show that Congress contemplated some degree of divergence.” The court further ruled that the organic claims were sufficiently pled and consistent with the FDA’s interpretation of OFPA and, in any event, the defendant was unable to show – at the pleading stage – that its products fit within its interpretation of OFPA. The court also rejected the defendant’s argument that the organic claims fall within the primary jurisdiction of the USDA. The court further ruled that – even if the plaintiffs are unable to define “natural” generally – the natural claims were sufficiently pled because the allegations, “if true, establish that ‘natural’ representations were plausibly misleading to a reasonable consumer, misled Plaintiffs, and caused Plaintiffs harm” (i.e., a price premium). Without deciding its applicability, the court found the allegations complied with Fed. R. Civ. P. 9(b)’s particularity requirement. The breach of warranty claims also survived. But, the court dismissed claims based on unidentified products. And, because there was no special relationship or privity between the plaintiffs and defendant, the court dismissed the New York negligence and negligent misrepresentation claims. (Segedie v. Hain Celestial Group, Inc., No. 7:14-CV-5029, 2015 WL 2168374 (S.D.N.Y. May 07, 2015)). The U.S. District Court for the Northern District of California grants in part and denies in part the defendant’s motion to dismiss a class action complaint. Plaintiff brought a claim based on the labeling of the defendant’s bread products, claiming that the labels deceptively suggested that the bread products were “natural,” and somehow more healthy and wholesome despite the fact that they contain, among other things, the chemical azodicarbonamide (“ADA”). Plaintiff alleged violations of California’s consumer protection statutes. The court dismissed the plaintiff’s claims, finding that they were not pled with particularity – namely with the myriad of representations and products at issue the plaintiff failed to attribute the actual misrepresentation to the product. The court also granted the motion to dismiss for products not purchased by the plaintiff, and the claim for injunctive relief because the plaintiff failed to establish a real and immediate threat of repeated injury. The court further dismissed the California Legal Remedies Act claim, finding the pre-suit notice letter deficient. (Romero v. Flowers Bakeries, LLC, No. 5:14-cv-05189, 2015 WL 2125004 (N.D. Cal. May 6, 2015)). The California Court of Appeal affirms the trial court’s judgment granting final approval to a proposed class action settlement agreement. Plaintiff filed a putative class action against defendants McCormick & Schmick’s Seafood Restaurants, Inc. and its parent company, Landry’s, Inc. Plaintiff alleged that the defendants misrepresented items on its menu as “Kobe” beef. After obtaining preliminary approval a classwide settlement, the appellant-objector filed objections to the proposed

20

settlement, arguing that definition of the class and the released parties was overbroad, and that the notice requirement was insufficient to bind the absent class. The trial court overruled the objections and the appellate court affirmed, holding that the notice complied with due process requirements. The court also determined that the special notice requirements of the California Consumers Legal Remedies Act (“CLRA”) did not apply because the complaint alleged a violation of the CLRA only as the predicate “unlawful” business practice under the plaintiff’s Unfair Competition Law (“UCL”) cause of action and not as a separate cause of action. (Flannery v. McCormick & Schmick’s Seafood Restaurants, Inc., 2015 WL 1937444 (Cal. App. Apr. 29, 2015)). The U.S. District Court for the Northern District of Florida denies in most respects the defendant’s motion to dismiss a false labeling/advertising case filed by consumers against Wal-Mart alleging that Wal-Mart misleadingly labeled its pomegranate–cranberry juice as “100% Juice.” Plaintiffs conceded that the product was 100% juice, just not 100% pomegranate-cranberry juice. The thrust of the motion to dismiss was a preemption argument based upon federal labeling requirements. Initially, the court held that the plaintiffs had Article III standing based on the allegations that the consumers paid more for the allegedly mislabeled product. The court held that an “inflated price” theory was sufficient to allege injury under Article III at the motion to dismiss stage. The court distinguished the cases cited by the defendants on the grounds that, in those cases, the plaintiffs alleged that the product was unsafe, but did not allege that they suffered any physical or emotional injury, or that the product did not work. The preemption claim was based upon the federal Food, Drug and Cosmetic Act (“FDCA”). Plaintiffs argued that the product was mislabeled under the “common or usual name” because the designation was arguably misleading, implying a greater content of cranberry juice than actually was present even though the label used the term “flavor” and included in the description “blend.” The court concluded that whether the label was misleading was likely a jury issue because of potentially different interpretations of what the label meant. The court held that neither the FDCA nor Florida Food Safety Act (“FFSA”) preempted the claim because the claim did not impose a different standard than the FDCA. The court also held that, to the extent the claims sought to assert a broader theory than compliance with the federal standard, it would be preempted. Further, the court struck the plaintiffs’ claims for punitive and treble damages as not being authorized under the theories advanced. (Reynolds v. Wal-Mart Stores, Inc., No. 4:14cv381, 2015 WL 1879615 (N.D. Fla. Apr. 23, 2015)). The U.S. District Court for the Northern District of Illinois denies defendant Earth, Inc.’s motion to dismiss the plaintiff’s class action claims for breach of express warranty, unjust enrichment, and consumer fraud. Plaintiff alleged that the defendant’s product, the “Exer-Walk” shoe, does not provide the health benefits represented. Plaintiff claimed that numerous studies and scientific research prove that shoes like the Exer-Walk provide no health benefits whatsoever. Earth, Inc. moved to dismiss the breach of express warranty claim for lack of pre-suit notice. The court held that the “actual knowledge” exception applies to excuse the plaintiff’s failure to provide direct notice. The court explained that the Illinois Uniform Commercial Code governs this claim and that a buyer alleging a breach of warranty must notify the seller of the breach “within a reasonable time after he discovers” it, unless an exception to this pre-suit notice applies. In this case, the court stated that the actual knowledge exception applied because the plaintiff alleged that Earth, Inc. had actual knowledge that its Exer-Walk shoes did not provide the promised health benefits Earth, Inc. (Hedges v. Earth, Inc., No. 14 C 9858, 2015 WL 1843029 (N.D. Ill. Apr. 21, 2015)).

21

The U.S. District Court for the Northern District of Illinois grants and denies in part the defendantcar manufacturer’s motion to dismiss a putative class action alleging misrepresentations regarding technology in 2014 “Infiniti Q50” automobiles. Plaintiffs are consumers who claim violations of the Illinois Consumer Fraud Act following their purchases of automobiles based on the defendant’s alleged misrepresentations that the vehicles included “InTouch” technology. Defendant argued this claim was not sufficient pled because there was no allegation that the defendant intended consumers to rely on misrepresentations regarding the car’s software, or that the statements were made before the purchase. The court disagreed, finding that sufficient details were included to outline the alleged fraud and dates were give that would allow the inference that consumers heard the false advertising prior to buying the car. Finally, the court held that the plaintiffs’ statement that they paid more than the actual value of the car was sufficient to plead proximate cause and damages. The Illinois Consumer Fraud Act claim survived dismissal. (L. Zingerman, D.D.S., P.C. v. Nissan North Am., Inc., No. 14-C-7835, 2015 WL 1840952 (N.D. Ill. Apr. 20, 2015)). The U.S. District Court for the Eastern District of California grants in part the defendant’s motion to dismiss the class action complaint. The plaintiff alleged that he purchased an application called “Ignition” from the defendant, which was advertised as “one app to control all your information,” manage files, expand on iPad’s possibilities, and “to be more productive.” Plaintiff claimed that he was not warned that further fees may apply to ensure uninterrupted usage of the application. He also claimed that the defendant posted notice on its website informing customers that they would no longer have access to their computers through the remote access feature without purchasing a premium upgrade. Plaintiff contended that the defendant improperly induced thousands of other consumers either to discontinue usage of the app or pay a substantial yearly fee. Plaintiff alleged violations of California’s consumer protection statutes. Defendant moved to dismiss, arguing that the heightened pleading standard of Fed. R. Civ. P. 9(b) applied. The court granted the motion with respect to the misrepresentation and omission that subsequent business decisions would render the app obsolete. The court denied the motion with respect to the omission claim regarding the failure to warn that additional fees may be imposed after purchase. (Handy v. LogMein, Inc., No. 1:14-cv01355, 2015 WL 1729681 (E.D. Cal. Apr. 15, 2015)). The U.S. Court of Appeals for the Ninth Circuit reverses and remands the district court’s decision to dismiss the plaintiff’s claims against the defendant-manufacturer of cosmetics, alleging violations of California’s unfair competition and false advertising laws. Defendant labeled its products “all natural” and “pure, natural & organic,” which the plaintiff alleged was misleading because they contained synthetic ingredients such as benzyl alcohol and airplane antifreeze. Plaintiff filed a putative nationwide class action, alleging that they had been duped into purchasing the defendant’s cosmetics and that those cosmetics were not natural at all, but allegedly contained “synthetic and artificial ingredients ranging from benzyl alcohol to airplane anti-freeze.” Plaintiff claimed that she likely would not have purchased the defendant’s cosmetics at market prices had she been aware of their synthetic and artificial contents. She brought claims under the federal Magnuson-Moss Warranty Act and California’s consumer protection laws. The district court dismissed the complaint, but the Ninth Circuit reversed. The Ninth Circuit found that, while the primary jurisdiction doctrine applied and that the FDA, not the courts, must determine in the first instance what the challenged labeling statement means and how it should be used, the case should have been stayed rather than dismissed. The Ninth Circuit also held that the Federal Food, Drug & Cosmetics

22

Act did not expressly preempt the plaintiffs’ claims challenging the use of the term “natural.” (Astiana v. Hain Celestial Group, Inc., No. 12-17596, 2015 WL 1600205 (9th Cir. Apr. 10, 2015)). The U.S. District Court for the District of New Jersey grants defendant Gerber Products Company’s motion to compel the production of medical records of the children of the named plaintiffs in a class action alleging that defendant falsely advertised the health benefits of probiotics in baby formula and cereal. Plaintiffs had refused to produce the medical records in response to document requests, objecting that they were irrelevant and privileged. Defendant moved to compel, arguing that the medical records were relevant to class certification and that the plaintiffs had waived any applicable privileges from production (e.g., right to privacy, physician-patient privilege) by putting into play the medical history of their children. Relying on the three-factor test set forth in Cavallaro v. Jamco Prop. Mgmt., the court agreed with the defendant and held that the plaintiffs waived any applicable privileges. First, the court found there was a legitimate need for the records because they may show the actual effectiveness of the products’ immune system health attributes. Second, the court found that the records were relevant because the effectiveness of the products was at issue and the records also may disclose conditions that would impact the effectiveness of the products. Third, the court found that there is no other objective source for the information. (In re Gerber Probiotic Sales Prac. Litig., -- F.R.D. --, No. 2:12cv835, 2015 WL 1611800 (D.N.J. Apr. 9, 2015)). The U.S. District Court for the Northern District of California grants in part and denies in part defendant Hain Celestial Group’s motion to dismiss a putative class action challenging the package labeling for its “Sunflower Dream Drink,” which represents the product as “all natural.” Plaintiff noted that the ingredient list included such ingredients as tricalcium phosphate, xanthan gum, vitamin A palmitate, folic acid, and vitamins D2, and alleged that reasonable consumers would expect the product to have only natural ingredients. Plaintiff brought claims on behalf of a nationwide class under California’s Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act. Defendant argued that plaintiff did not have standing to challenge the labeling on “substantially similar” products that she did not buy, but the court disagreed. However, the court agreed with the defendant that the plaintiff lacked standing for injunctive relief, because she would not buy defendant’s product again in reliance on the “all natural” claims, and dismissed the claim for injunctive relief without leave to amend. The court also denied the defendant’s motion to dismiss on the grounds of lack of plausibility under the Twombly and Iqbal standard, finding that a reasonable consumer might believe that an “all natural” product contained only natural ingredients and might not refer to the ingredients panel. The court also rejected the defendant’s argument that the complaint lacked sufficient specificity under Fed. R. Civ. P. 9(b). (Anderson v. Hain Celestial Group, Inc., No. 5:14–cv–03895, 2015 WL 744279 (N.D. Cal. Apr. 8, 2015)). The U.S. District Court for the Southern District of California denies defendants Citizens of Humanity, LLC and Macy’s, Inc.’s motion to dismiss a putative class action alleging violations of California’s Consumer Legal Remedies Act, Unfair Competition Law, and False advertising Law. Specifically, the plaintiffs alleged that the defendants’ jeans were marked with a “Made in the U.S.A.” country of origin designation when the products actually contain various component parts, including the fabric, thread, buttons, subcomponents of the zipper assembly, and/or rivets, manufactured outside of the United States. Defendants argued that False Advertising Law claim is preempted by the FTC Act and the Federal Textile Fiber Products Identification Act (“TFPIA”), and violates the dormant commerce clause. The court concluded that the claim is not preempted by the

23

FTC regulations because it is not impossible to comply with both laws, nor does California’s law stand as an obstacle to accomplishing the FTC regulations’ objectives. The court noted that, while complying with California’s Made in USA standard may not be convenient for manufacturers and retailers who wish to use a simple, unqualified “Made in the U.S.A.” label, such compliance is not impossible. Accordingly, because California’s standard permits the use of qualified labels, it is not preempted by TFPIA. Finally, the court held that the False Advertising Law permits the use of qualified labels and, thus, does not violate the dormant commerce clause. The court held that “[m]anufacturers and retailers can comply with California and federal law by using a qualified label on their products. It would not be impossible, or even difficult, to comply with the two laws at the same time. Manufacturers who choose, on their own, not to use one qualified label throughout the country must use a different label for products sold in California.” (Clark v. Citizens of Humanity, LLC, -- F. Supp. 3d --, 2015 WL 1600679 (S.D. Cal. Apr. 8, 2015)). The U.S. District Court for Northern District of California denies defendant Pre-Paid Legal Services, Inc. dba LegalShield’s motion for leave to file a motion for reconsideration of the court's order denying LegalShield’s motion to compel arbitration. Plaintiff filed a putative class action alleging that LegalShield, a company that provides pre-paid legal services, violated California consumer laws by automatically charging recurring payments to California consumers without sufficient consent or disclosure. LegalShield argued that the contract it formed with the plaintiff requires that he arbitrate his disputes against LegalShield individually. Plaintiff, however, argued that he never agreed or “assented” to arbitration. The court agreed with the plaintiff and denied LegalShield's motion under the Federal Arbitration Act to compel arbitration. In doing so, the court concluded that, because the plaintiff never manifested assent to the arbitration agreement either online (by simply purchasing the LegalShield subscription) or later on (after receiving a mailed copy of LegalShield's membership contract), he is not bound to its terms. LegalShield asked the court to reconsider that decision, arguing that the court did not consider relevant contract language and, regardless of that language, newly discovered facts show that the plaintiff, in fact, did agree to arbitrate. The court rejected each of these arguments and held that LegalShield’s positions did not warrant reconsideration. (Savetsky v. Pre-Paid Legal Services, Inc., 2015 WL 1519066 (N.D. Cal. Apr. 3, 2015)). The U.S. Judicial Panel on Multidistrict Litigation denies a California plaintiff’s motion to centralize two competing class actions pending before the Northern District of California and District of Massachusetts. The actions involve marketing practices concerning nutritional supplements made with Testofen, a fenugreek seed extract, and in particular, the defendants’ representation that Testofen is clinically proven to boost free testosterone levels. Noting that there are only two actions pending, and the actions share only one common defendant, the court denied the motion and concluded that centralization will not serve the convenience of the parties and witnesses, or further the just and efficient conduct of the litigation. The limited overlap with respect to the marketing and sales practices of a single defendant did not warrant centralization. (In re Testofen Mktg. and Sales Pracs. Litig., -- F. Supp. 3d --, 2015 WL 1519032 (J.P.M.L. Apr. 1, 2015)). State Attorneys General Litigation Decisions The U.S. District Court for the District of Vermont grants in part and denies in part defendant State of Vermont’s motion to dismiss a complaint filed by plaintiffs Grocery Manufacturers Association and four other industry associations challenging the constitutionality of Vermont’s GMO labeling

24

law, and denies the plaintiffs’ motion for preliminary injunction. The challenged law, Act 120, was signed into law in May 2014 and will be enforceable effective July 2016. Act 120 requires certain manufacturers to label food products that contain genetically engineered ingredients (the “Disclosure Requirement”), and prohibits certain manufacturers from labeling genetically-engineered foods with the words “natural,” “naturally made,” “naturally grown,” “all natural,” or with “any words of similar import” (the “Natural Restriction”). Plaintiffs alleged that the Disclosure Requirement violates the First Amendment, that the Natural Restriction violates the First Amendment and is impermissibly vague in violation of the First and Fifth Amendments, that the Act violates the Commerce Clause, and that the Act is expressly preempted or conflict-preempted by various federal laws and, thus, violates the Supremacy Clause of the U.S. Constitution. In ruling on the defendant’s motion to dismiss, the court held that: (1) the Act’s Disclosure Requirement is prohibited by the First Amendment because the defendant lacks sufficient scientific evidence of harm to consumers to compel this type of commercial speech; (2) the Natural Restriction is likewise prohibited by the First Amendment because the defendant lacks sufficient evidence to ban the use of “natural” as misleading; (3) the claim that the Disclosure Requirement violates the Commerce Clause must be dismissed because there are too few other states that have passed similar laws, so there does not exist a risk of a “patchwork” of inconsistent state laws; (4) the Natural Restriction violates the Commerce Clause because it is a Vermont-only law that restricts the use of the term “natural” in signage and advertising outside of Vermont and on the Internet; (5) the Natural Restriction’s application to “any words of similar import” is void-for-vagueness under the First and Fifth Amendments because the restriction fails to provide fair notice of what is prohibited; (6) the Act is not preempted by the Federal Food, Drug, and Cosmetic Act or the Nutrition Labeling and Education Act because the plaintiffs failed to establish that the Disclosure Requirement is “not identical” to any mandatory labeling requirement; and (7) the Disclosure Requirement and Natural Restriction are expressly preempted by the Federal Meat Inspection Act (“FMIA”) and Poultry Products Inspection Act (“PPIA”) because they create state requirements that are “in addition to, or different than” the requirements under the FMIA and PPIA, which have no such requirements or limits. Further, the plaintiffs’ preliminary injunction sought to stop the Act from going into effect in July 2016 as scheduled. The court analyzed the motion only as to the claims for which the plaintiffs had demonstrated a likelihood of success: the First Amendment challenge to the Natural Restriction, the void-for-vagueness challenge to the restriction on “any words of similar import,” and the FMIA and PPIA preemption challenge to the Act. The court denied the injunction request because it found that, as to these claims, the plaintiffs had not shown a risk of “irreparable harm” to the members of the various industry associations. The court concluded there was no showing that any of the members would have to “make material changes in the way they conduct business,” or actually used “natural” or “words of similar import” in advertising and labeling of GMO products. (Grocery Mfrs. Ass’n v. Sorrell, No. 14-cv-117, 2015 WL 1931142 (D. Vt. Apr. 27, 2015)). Federal Trade Commission (FTC) Litigation Decisions The U.S. District Court for the District of Nevada grants the FTC’s motion for a preliminary injunction, asset freeze, and appointment of a temporary receiver against Health Formulas, LLC and related entities and individuals. The substantive violations that the court enjoined included offering free trial programs, which improperly required the customer to affirmatively cancel their participation in the “continuity programs to purchase weight loss products.” The allegations also included charges of deceptive “up-selling” additional products through negative option plans that

25

were not conspicuously disclosed and limiting the effect of the “cancellation.” The complaint further alleged that the defendants falsely advertised the weight loss potential of Pure Green Coffee Bean Plus products and deceptively promised that consumers would “burn fat without diet or exercise.” The complaint lastly alleged violations of the FTC’s Telemarketing Sales Rule by initiating outbound calls to consumers who objected to those calls. The court first determined that most of the defendants had engaged in a common enterprise. Regarding the issuance of the preliminary injunction, the court held that the government had a lower threshold to meet than a private party – it only needs to show a likelihood of success on the merits and that the balance of the equities support the FTC’s position. The court emphasized the failure to disclose the material terms and conditions of the offer. However, the court did not adopt the FTC’s position that the defendants must show competent and reliable scientific evidence to substantiate health claims. The court found that the FTC was likely to prevail on the unsubstantiated advertising claims because the defendants had no evidence to substantiate its health claims. The court found that the FTC did not establish evidence that each defendant violated the TRO. Nevertheless, the court enjoined all of the relevant defendants reasoning that the FTC would likely prevail under the common enterprise theory. The court concluded that the public equities in protecting consumers outweighed the private interest involved. The court also found that the individual defendants were subject to personal liability for injunctive relief based upon their direct participation in the deceptive acts, and their positions of control. The court further found that the individual defendants were personally liable for monetary relief because of their knowledge or indifference to the truth regarding the fraudulent purchase. The fact that one of the individual defendants conceded that “everyone cancels” and that 2.2 months were the average time period to cancel was considered particularly important by the court. (FTC v. Health Formulas, LLC, No. 2:14-cv-01649, 2015 WL 2130504 (D. Nev. May 6, 2015)). The U.S. District Court for the Eastern District of New York grants the FTC’s motion for summary judgment against an individual defendant, Jason Abraham, the founder, owner, and chief executive officer of Instant Response Systems, LLC, (“IRS”) which marketed emergency pendants that connected consumers with emergency services. In Count I of the complaint, the FTC asserted violations of Section 5 of the FTC Act for deceptive representations regarding amounts owed by consumers. Counts II, III, and IV of the complaint alleged violations of the Telemarketing Sales Rule by use of misrepresentations to consumers, as well as threats and making calls to consumers whose numbers were registered on the National Do Not Call Registry. Count V alleged violations of the unordered merchandise statute, 39 U.S.C. § 3009. The court found that the undisputed facts established that defendant used a Philippines’ call service that provided leads without screening the names to see if they were on the National Do Not Call Registry. The court found a pattern of billing consumers for the emergency pendants that had not been ordered, and threatening suit and, in at least one instance, falsely claiming that the company’s representatives were lawyers who would have the consumers arrested for “theft” if they did not pay their bill. The court found the defendant personally liable on all counts, and ordered injunctive relief and restitution in the amount of $3.4 million based upon IRS’s gross revenue. The court reasoned that the defendant was aware of the wrongful acts and had the power to control the company’s employees. (FTC v. Instant Response Sys., LLC, No. 13 Civ. 00976, 2015 WL 1650914 (E.D.N.Y. Apr. 14, 2015)).

26

National Advertising Division (NAD) Decisions The NAD has recommended that TyraTech, Inc. discontinue challenged performance and efficacy claims for the company’s homeopathic “Vamousse Lice Treatment,” including the claim that its lice treatment product “Kills 100% of lice and eggs in 15 minutes.” NAD determined, however, that the advertiser provided a reasonable basis for its “pesticide free” claims. The claims were challenged by Sanofi Pasteur, Inc., maker of a competing prescription lice treatment product. NAD determined that the advertiser’s health-related performance claims should be held to the same substantiation standards as other health claims, and should support its claims with “human clinical trials that are methodologically sound and statistically significant to the 95% confidence level with results that translate into meaningful benefits for consumers.” Applying that standard, NAD determined that the advertiser’s in vitro tests were insufficient to support its efficacy claims. However, NAD found that the advertiser provided a reasonable basis for its “pesticide free” claims. It also determined that the advertiser’s use of the term “pesticide,” in the context in which it appeared in the challenged advertising, did not reasonably convey a comparative safety message. (TyraTech, Inc. (Vamousse Lice Treatment and Vamousse Lice Prevention Products), NAD Report No. 5854 (June 17, 2015)). The NAD has recommended that Cosmederm Bioscience, Inc. discontinue advertising claims for the company’s “TriCalm” over-the-counter (OTC) anti-itch product, following a challenge by Chattem, Inc., the maker of “Cortizone-10,” a topical analgesic. Cosmederm has said it will appeal NAD’s decision to the National Advertising Review Board (NARB). The challenged claims included “Most over the counter topical itch relievers don’t give you the relief you need” and “5X MORE EFFECTIVE than hydrocortisone 1% at reducing itch.* *Head-to-head comparison of Topical Hydrocortisone 1% and TriCalm in a cowhage-induced itch model.” NAD determined that the advertiser’s evidence didn’t support the challenged claims. It noted that the product was not tested according to consumer-use directions and was tested on itches that were induced, as opposed to naturally occurring. In addition, neither of the key studies offered by the advertiser tested older populations, who were featured in its advertising, or was conducted during the winter. Following its review of the evidence in the record, NAD recommended that the advertiser discontinue the challenged claims. (Cosmerderm Biosciences, Inc. (TriCalm), NAD Report No. 5853 (June 10, 2015)). The NAD has recommended that the Institute for Vibrant Living discontinue a wide range of express claims and testimonials for the company’s “Alleviate” dietary supplements. The claims at issue were challenged by the Council for Responsible Nutrition (CRN), which files challenges with the NAD regarding advertising of dietary supplements in an effort to encourage manufacturers to provide substantiation for their advertising claims to an objective third party for review and evaluation. Alleviate is formulated with white willow bark extract, Boswellia serrata gum extract, ginger root powder, hyaluronic acid, and Vitamin C, and is promoted by the advertiser as relieving joint pain and improving joint function and cardiovascular health. The advertiser argued that all of its claims were supported by competent and reliable competent evidence in the form of randomized, placebo-controlled human trials, in vitro and animal studies on the ingredients in Alleviate dietary supplements. The challenger maintained that many of the ingredient studies submitted by the advertiser fail to match the dosage, formulation, and administrative route of the ingredients found in Alleviate. Following its review of the evidence in the record, NAD determined that the advertiser had established a reasonable basis for its claim “You also get an ancient herbal medicine that’s been

27

proven by recent research,” if used in the context that the ingredients in Alleviate may relieve pain in the knee and back caused by inflammation. NAD also found that the advertiser could support a claim that the Vitamin C in Alleviate supports “antioxidant protection against free radical damage.” NAD recommended the advertiser modify or discontinue all other challenged claims. (Institute For Vibrant Living (Alleviate), NAD Report No. 5852 (June 10, 2015)). The NAD has recommended that Vogue, International, Inc., modify product names and related claims for certain shampoos and conditioners to avoid conveying the message that one exotic ingredient in each product provides a particular benefit. The product names, including, including “Renewing Argan Oil of Morocco Shampoo,” “Anti-Breakage Keratin Oil Shampoo,” “Nourishing Coconut Milk Shampoo,” and “Thick & Full Biotin & Collagen Shampoo,” were challenged by Unilever United States, Inc. Unilever argued that Vogue placed the exotic ingredients adjacent to performance benefits in a manner that implied that the ingredient is present in the product at a level that provides the claimed benefit. Unilever submitted the results of a consumer perception survey in support of its position that the product names and packaging conveyed a misleading message. NAD, however, had concerns about the reliability of the survey and independently reviewed the product names and packaging, using its own expertise to determine the messages conveyed. Following its review, NAD determined that the product names made the unsupported express claims that the exotic ingredients provided the promoted benefit. NAD noted in its decision that it is “cognizant of the burden placed upon an advertiser when a recommendation impacts . . . product names and is reluctant to recommend a product name change in the absence of extrinsic evidence of consumer confusion.” However, NAD noted, such extrinsic evidence isn’t required when the product name itself makes an unsupported claim. NAD recommended that the advertiser modify its product names to make it clear that the product ingredients, taken together, provide the claimed benefits – “Renewing Shampoo with Argan Oil,” for example, or “Nourishing Shampoo with Coconut Milk.” (Vogue Int’l, Inc. (OGX Shampoos and Conditioners), NAD Report No. 5844 (May 8, 2015)). The NAD found that Comcast Cable Communications, LLC, could support claims that its “Xfinity” service “gives you the fastest, most reliable Internet,” but recommended that it modify certain claims to more accurately characterize information from the FCC report, “Measuring Broadband America.” The claims at issue were challenged by CenturyLink, Inc. In this case, NAD examined claims made in a television commercial depicting a fictional CenturyLink salesman telling a potential customer that CenturyLink gives you “kinda good Internet.” The potential customer replies that “the FCC Report shows you don’t deliver the speeds you advertise. Xfinity does.” as the following super appeared onscreen: “Based on 2014 Measuring Broadband America Report.” The challenger did not take issue with the advertiser’s reliance on the FCC report or with its findings that Comcast delivers all its advertised speeds at all hours of the day. Rather, it contended that the advertisement failed to accurately characterize the FCC Report’s findings as to the actual speeds delivered by CenturyLink. NAD agreed, and recommended that the advertiser discontinue the unqualified claim “CenturyLink doesn’t deliver” the speeds it advertises. However, nothing in the decision prevents Comcast from making an appropriately qualified claim of superior speed performance based upon the FCC Report. (Comcast Communications, Inc. (XFINITY Internet Services), NAD Report No. 5842 (May 6, 2015)). The NAD has determined that Berry Plastics Corporation can support properly qualified comparative superiority claims for the company’s “Versalite” polypropylene cups. The challenged claims,

28

including that the cups are “fully recyclable” and “environmentally responsible,” were challenged by Dart Container Corporation, a competing manufacturer of single-use foodservice products. The challenger argued that the Federal Trade Commission (“FTC”) only permits marketers to make unqualified recycling claims on their materials when recycling facilities are available to 60 percent of consumers or communities where the item is sold. It contended that the advertiser did not provide sufficient evidence to meet the FTC’s recyclability criteria and that Versalite cups are not actually collected and recycled. The challenger also argued that Versalite cups are made of a form of plastic that does not recycle like standard polypropylene, stating that during the recycling sorting process they are likely discarded to a landfill. The key issue before NAD was whether Berry Plastics reasonably established that its Versalite cups would be treated as “non-bottle rigid polypropylene” in the real-world recycling stream where its products are marketed or sold. The advertiser submitted physical specimens of #5 polypropylene cups, including Versalite cups, rigidity testing results conducted on its product, industry definitions of “rigid plastics,” and its confidential patent application. The advertiser also relied on a report by Moore Recycling Associates, which stated that 61.1 percent of the U.S. population had access to facilities that would recycle its type of plastic, as well as verification testing showing that its products would be sorted like standard polypropylene products. NAD determined that the advertiser established a reasonable basis for its unqualified recyclable claims. NAD, however, recommended that the advertiser modify certain uses of its “environmental responsibility” claims to indicate more clearly those attributes that make it an environmentally responsible product. (Berry Plastics Corporation (Versalite Polypropylene Cups), NAD Report No. 5835 (Apr. 22, 2015)). The NAD has recommended that The Clorox Company discontinue certain comparative performance claims for “Clorox Regular Liquid Bleach.” The claims at issue were challenged by Church & Dwight Co., Inc., maker of “OxiClean White Revive.” The advertiser has said it will appeal NAD’s decision to the National Advertising Review Board. Church & Dwight took issue with the express claim “Eliminates stains better than OxiClean.” The claim appeared in conjunction with depictions of a “tough” spaghetti stain. The issue before NAD was whether the advertiser’s failure to pre-soak before testing OxiClean WR, in accordance with the product’s use instructions for “tough” stains such as the one depicted in the advertisement, was a material flaw in the advertiser’s testing. The advertiser stressed that the challenger markets OxiClean WR as a through-the-wash stain removal solution and, as a result, all of its comparative product performance testing was conducted through-the-wash and pursuant to industry standards. The challenger contended that its directions for use include through-the-wash instructions, but also separately instruct that users “PreSoak heavily stained or soiled loads in 1 scoop of OxiClean for 6 hours . . . FOR BEST RESULTS.” NAD took issue with the advertiser’s failure to pre-soak any of the test swatches for any period of time. Given that the OxiClean WR label recommends a pre-soak for tough stains, NAD determined that the advertiser’s through-the-wash testing was materially flawed and insufficiently reliable to support the advertiser’s unqualified superior stain removal claim. Accordingly, NAD recommended that the demonstrations featured in the challenged advertisement, as well as the claim “Eliminates stains better than OxiClean,” be discontinued. NAD noted that its decision does not prevent the advertiser from promoting other benefits of its product, including the fact that pre-soaking is not required. (The Clorox Company (Clorox Regular Liquid Bleach), NAD Report No. 5834 (Apr. 22, 2015)).

29

The NAD has determined that Helen of Troy Limited can support certain claims for the company’s “PUR” water filter pitcher, but recommended that it discontinue other claims. The claims at issue were challenged by The Clorox Company, maker of competing “Brita” water filter pitchers. The challenged advertising included the video depiction of a fictional water critic. He praises the PUR pitcher, which “reduces 14 contaminants,” but is visibly disappointed with the Brita pitcher, which “reduces only 6 contaminants.” The character becomes increasingly animated, snapping his glasses in half to represent half the number of contaminants. He, then, offers the tagline, “In summary, my review is ‘No PUR filter? No Stars!’” NAD considered whether the commercial conveyed the implied messages that Brita water filter pitchers have no value or are ineffective, and that PUR pitchers have overall superior filtration. The advertiser agreed that claims about the number of contaminants filtered by the PUR and Brita water filter pitchers required substantiation and provided purported substantiation. NAD noted that the character was clearly humorous and used exaggerated speech and movements in his comparison. However, the advertising compared specific and objectively provable information about the two pitchers – the number of contaminants they filter from water. NAD was concerned that, in comparing the Brita water filter pitcher to half a pair of glasses, a consumer reasonably could take away the message that reducing half the contaminants provides little or no value to consumers, like half of a pair of glasses. NAD determined that the tagline “No PUR filter? No Stars!” standing alone may be puffery. However, when made alongside specific attributes about a competing product, it might convey the message that the competing product provides no value. There was no evidence in the record that the Brita water filter pitcher is generally ineffective because it filters less different contaminants than PUR. For these reasons, NAD recommended that the advertiser discontinue claims that the Brita water filter pitcher gets “No Stars” in a context in which it is comparing specific attributes of the two products so as to avoid conveying the unsupported message that Brita water filter pitchers are useless. (Helen of Troy Limited (PUR Water Filter), NAD Report No. 5833 (Apr. 21, 2015)).

The NAD has determined that Bayer Healthcare LLC can support a range of advertising claims for the company’s “Claritin” and “Claritin-D” products, including that Claritin-D begins to work in 30 minutes. However, NAD has recommended that the company discontinue other claims, including the claim that no other allergy product “works faster” than Claritin-D and the implied claim that Nasacort “takes up to a week” to begin working. Bayer has said it will appeal NAD’s recommendation regarding its “works faster” claim to the NARB. Chattem, the challenger, is appealing NAD’s finding regarding the claim that Claritin-D “starts to work on allergies in 30 minutes.” The challenger argued that the advertising at issue confuses the various benefits provided by different drugs and, as a result, conveys unsupported messages about which products provide which benefits at what times. NAD determined that the individual express claims made in the advertiser’s television commercial, that “Nasacort . . . could take up to a week to feel maximum nasal symptom relief,” and that “Claritin-D . . . starts to work on allergies in 30 minutes,” were literally true and supported. At the same time, NAD determined that, because of the way the claims were presented, the commercial conveyed an unsupported message that Nasacort can take “up to a week” to provide any appreciable nasal symptom relief. NAD also noted that there was no comparative onset-of-action testing in the record. Given the absence of such support, NAD recommended that the advertiser discontinue the express claim that “Nothing works faster than Claritin-D.” Regarding the advertiser’s free standing insert for Claritin, NAD found that the claim “Nasal and Eye Allergy Symptoms? Claritin is the ONLY #1 Doctor Recommended Non-Drowsy

30

Allergy Brand that Relieves Both,” was supported, however it recommended that the advertiser clearly and conspicuously disclose the symptoms that are referenced in the claim. NAD also determined that the claim “#1 Doctor Recommended” was supported by a large-scale physician survey. It also found that the advertising did not convey the message that Claritin treats nasal congestion – a symptom not explicitly mentioned in the advertisement. NAD recommended that the advertiser either discontinue the claim that Nasacort does not treat ocular allergy symptoms, or limit its claim to the fact that Nasacort is not indicated for ocular allergy symptoms. (Bayer Healthcare, LLC (Claritin and Claritin-D), NAD Report No. 5829 (Apr. 8, 2015)). The NAD has determined that the Proctor & Gamble Co. can support certain claims for “Crest Sensi-Stop Strips,” which are designed to address tooth sensitivity. However, NAD has recommended that the advertiser discontinue the claim “1 Strip, 10 minutes, 1 month,” and modify product packaging to clearly disclose that a single strip may not provide complete relief to some consumers. The advertising at issue was challenged by GlaxoSmithKline Consumer Healthcare. Following its review of the evidence in the record, NAD determined that the advertiser was able to support its claims that Crest Sensi-Stop Strips provide “immediate relief” and worked “up to 30 days” with competent and reliable scientific evidence. NAD recommended, however, that the disclosure used to qualify the “up to 30 days” claim – “others reported relief for shorter periods” – be made more clear and conspicuous and in closer proximity to the claim it qualifies. NAD also found that the advertiser could support the claims that the product is a “Breakthrough way to help stop sensitivity” and “Get sensitivity relief like never before.” NAD did not recommend that the name “Crest Sensi-Stop Strip” be changed, but was concerned that the messages conveyed by the claim, “1 Strip, 10 minutes, 1 month,” could not be limited by a disclosure effectively. NAD determined that the claim conveyed a message of instantaneous and complete relief. NAD noted that any disclosure that additional applications of the product might be necessary for additional relief would contradict that message. Accordingly, NAD recommended that the advertiser discontinue the claim “1 Strip, 10 minutes, 1 month” and recommended that product packaging and other advertising be modified to disclose that a single strip may not provide complete relief. (Procter & Gamble Company (Crest Sensi-Stop Strips), NAD Report No. 5828 (Apr. 8, 2015)).

RECENT FILINGS Lanham Act and Other Competitor Actions Safari Programs, Inc. filed suit in the U.S. District Court for the Southern District of Florida against Quercia, Inc. and Collecta International Limited, sellers of animal figurines. Safari alleged violations of the Lanham Act as well as Florida common law false advertising. In particular, Safari accused the defendants of misappropriating trade secrets, falsely claiming that they are one of the world’s largest makers of toy animal figurines catering to the toy specialty marketed for over 30 years, and making misleading claims about the geographic origin of Collecta products, which are made in China or Hong Kong. (Safari Programs, Inc. v. Collecta Int’l Ltd., No. 1:15-CV-22132 (S.D. Fla. complaint filed June 4, 2015)). Lanham Act action filed in the U.S. District Court for the Central District of California by Musclepharm Corporation (“MPC”) against PhD Fitness LLC d/b/a JYM Supplement Science,

31

alleging that the defendant falsely maligned MPC and MPC’s products by describing MPC as “unscrupulous,” and alleging that it engages in “protein spiking.” The complaint further alleges that the defendant published videos on YouTube and content on social media that deceives consumers into thinking that MPC’s products are inferior to the defendants or of inadequate value. (Musclepharm Corp. v. Stoppani, et al., No. 15-cv-04025 (C.D. Cal. complaint filed on May 28, 2015)). Other Federal Advertising and Labeling Law Litigation Complaint filed in the U.S. District Court for the Northern District of Illinois against Walmart, Inc. Plaintiff is a Native American-owned arts and crafts organization that manufactures, distributes, and sells authentic Native American arts, crafts, and jewelry from its store and nationwide over the Internet. Plaintiff claims that defendant deceptively marketed, advertised, labeled, and promoted its “Brinley Co. Sterling Silver and Enamel Bead Dreamcatcher Drop Earrings” as Native American designed and handmade. Plaintiff requested proof that the earrings in question were, in fact, designed and handmade by Native Americans, but the defendant did not respond to its request. Thus, based on its information and belief, the plaintiff alleged in its complaint that the earrings were mass-produced by non-Indian labor, and were neither handmade by Native Americans nor designed by a Native American. This alleged conduct, according to the plaintiff, violates the Indian Arts and Crafts Act of 1990 and the Indian Arts and Crafts Enforcement Act of 2000. (Native Am. Arts, Inc. v. Walmart, Inc., No. 1:15-cv-04026 (N.D. Ill. complaint filed on May 6, 2015)). Consumer Class Actions Putative class action filed against Loec Inc., Lorillard Technologies, Inc., and Lorillard Tobacco Co. removed to the U.S. District Court for the Central District of California. Plaintiffs allege violations of California’s Consumer Legal Remedies Act, Unfair Competition Law, and False Advertising Law, as well as breach of express warranty. In particular, the plaintiffs allege that the defendants falsely advertise the “BLU” brand of electronic cigarettes as “safer” and “healthier” than traditional cigarettes, even though e-cigarettes purportedly contain disease-causing substances that are dangerous to human health. Plaintiff also alleges that the defendants falsely imply that consumers can use e-cigarettes in locations such as in airplanes, nightclubs, and bars. (Diek, et al. v. Loec Inc., No. 8:15-cv-01026 (C.D. Cal. complaint removed on June 26, 2015)). Putative nationwide class action filed in the U.S. District Court for the Eastern District of New York against the Hershey Company, alleging that “Ice Breakers Ice Cubes” products are sold with misleading non-functional slack-fill. Plaintiffs allege violations of Section 403(d) of the federal Food, Drug & Cosmetic Act and state laws prohibiting misbranded food. According to the plaintiffs, each package of the product contains only 40 pieces of gum, even though the actual capacity of the container is approximately 60 pieces of gum. (Hu, et al. v. The Hershey Co., No. 1:15-CV-03741 (E.D.N.Y. complaint filed on June 26, 2015)). Putative nationwide class filed against Basic Research, LLC in the U.S. District Court for the Southern District of New York, alleging claims for violations the Utah Consumer Sales Practices Act, among other laws. Plaintiff alleges that the defendants’ claims that their diet pill, nicknamed the “Cupcake Diet,” can cause substantial weight loss, block the absorption of calories, and reshape bodies are false. According to the plaintiff, the defendants are “scam artists” who have been

32

involved in numerous diet pill scams and are subject to an FTC injunction, and are using similar tactics to falsely represent the efficacy of this product and that its efficacy is supported by published clinical studies. (Spence, et al. v. Basic Research, LLC et al., No. 1:15-cv-04945 (N.D.N.Y. complaint filed on June 24, 2015)). Putative nationwide class action filed in the U.S. District Court for the Southern District of New York against WWF Operating Co. alleging violations of New York law prohibiting unfair and deceptive practices and false advertising. According to the complaint, the defendant purposefully misrepresented that its almond milk labeled products are made primarily from almonds by using such marketing claims as “almondmilk” and “PureAlmond” when, in reality, the products only contain two percent almonds. Plaintiff further alleges that, while the defendant toned down its messaging and eliminated the “PureAlmond” claims, its current statements also misleadingly emphasize the almond content of the products. (Karacsony, et al. v. WWF Operating Co., No. 15cv-04870 (S.D.N.Y. complaint filed on June 23, 2015)). Putative nationwide class action filed in the U.S. District Court for the Central District of California against Hewlett Packard Co., alleging violations of California’s Consumer Legal Remedies Act and Unfair Competition Law. According to the complaint, the defendant falsely advertised that certain printers were equipped with the “HP Smart Install” feature designed to allow easy software installation of the printers, but that feature was actually disabled. Plaintiff allege that installation was actually quite difficult and that an insert to the package stated that “The Smart Install feature is now disabled by default.” (Wolf, et al. v. Hewlett Packard Co., No. 15-cv-01221 (C.D. Cal. complaint filed on June 22, 2015)). Putative class action filed in the U.S. District Court for the Central District of California against Kohl’s Department Stores, alleging violations of the California Consumer Legal Remedies Act, Unfair Competition Law, and the False Advertising Law. Plaintiff claims that Kohl’s falsely advertised original prices, regular prices, and price discounts for its apparel and other merchandise. Plaintiff alleges that the existence, nature, and amount of price discounts were misrepresented because the referenced former retail prices were fabricated and did not reflect prevailing market prices. (Russell, et al v. Kohl’s Dep’t Stores, Inc., No. 5:15-CV-01143 (C.D. Cal. complaint filed June 11, 2015)). Putative California-only class filed against Monsanto Company and alleging violation of the California False Advertising Law, removed from California Superior Court (Los Angeles County) to the U.S. District for the Central District of California. Plaintiffs allege that defendant’s statement on its “Roundup” products that the product targets an enzyme found in plants but not in people or pets is false and misleading. According to the complaint, the enzymes that are affected by the active ingredient in Roundup are also found in bacteria that live in the stomachs of both people and animals, and harming these bacteria may cause adverse health effects. (Mirzaie, et al. v. Monsanto Company, et al., No. 2:15-cv-04361 (C.D. Cal. complaint removed on June 9. 2015)). Putative Florida-only class filed against Tamko Building Products, Inc. in the U.S. District Court for the Middle District of Florida, alleging, among other things, violation of the Florida Deceptive and Unfair Trade Practices Act, fraudulent concealment, and negligent misrepresentation. According to the complaint, the defendant misrepresented that the roof shingles it manufactured had a 30-year

33

“useful life” and complied with applicable industry standards and building codes. Plaintiff alleges that the shingles do not have a 30-year life, but are defective because they do not contain the required amount of asphalt and, therefore, crack and blister leading to property damage of the structures on which they are installed. (Hummel, et al. v. Tamko Building Products, Inc., No. 6:15cv-00910 (M.D. Fla. complaint filed on June 5, 2015)). Putative nationwide class filed in the U.S. District Court for the Southern District of New York against Blue Diamond Growers and WWF Operating Company, alleging fraud, unjust enrichment, and violations of New York’s General Business Law and other similar state laws. Plaintiffs claim that the defendants falsely label their products to imply that the products are primarily made of almonds, rather than being made with various types of thickening agents, such as locust bean gum, gellan gum, xanthan gum, and carrageenan, and contain only 2% almonds. (Albert, et al. v. Blue Diamond Growers, et al., No. 1:15-cv-4087 (S.D.N.Y. complaint filed on May 28, 2015)). Putative nationwide class action, with California and Oklahoma subclasses, filed against The Jewelry Channel, Inc. USA d/b/a/ Liquidation Channel in the U.S. District Court for the Central District of California, alleging intentional and negligent misrepresentation, unjust enrichment, and violation of the Oklahoma Consumer Protection Act and the California False Advertising Law, Consumers Legal Remedies Act, and Unfair Competition Law. Plaintiffs claim that the defendant misleadingly advertises its products by comparing the price it charges with an artificially inflated “estimated retail value.” Specifically, the plaintiffs allege that the defendant fabricates a high estimated retail value that does not reflect the price at which the products are sold in any market and then uses that number to create the impression that the defendant is selling the product at a highly discounted rate to deceive consumers. (Kabbash, et al. v. The Jewelry Channel, Inc. USA d/b/a Liquidation Channel, No. 2:15-CV-04007 (C.D. Cal. complaint filed May 28, 2015)). Putative nationwide class action filed against Target Corporation in the U.S. District Court for the Central District of California, alleging unjust enrichment and violation of the California’s False Advertising Law, Unfair Competition Law, and Consumers Legal Remedies Act. According to the complaint, the defendant’s Ginkgo Biloba herbal supplement product is mislabeled because testing by the New York Attorney General’s Office using DNA barcoding revealed that the product did not include the named herb and, in some cases, contained additional ingredients not disclosed on the label. Plaintiff further alleges that the product is falsely labeled because scientific evidence does not support claims that the herb provides benefits related to cognitive function as claimed on the label. (Gomez, et al. v. Target Corp., No. 2:15-CV-03977 (C.D. Cal. complaint filed on May 27, 2015)). Putative California class filed in the U.S. District Court for the Southern District of New York against Kind, LLC, alleging, among other things, intentional misrepresentation, negligent misrepresentation, and violations of the California Consumer Legal Remedies Act, Unfair Competition Law, and the False Advertising Law. Plaintiff claims that Kind represents its bar products as “healthy” or “all natural” even though those products do not comply with federal requirements for use of the nutrient content claim “healthy” on a food label or contain artificial ingredients or synthetic substances, including but not limited to one or more of the following ingredients: Natural (Fruit) Flavor, Glucose or Glucose Syrup, Palm Kernel Oil, Soy Lecithin, Soy Protein Isolate, and Vegetable Glycerin. (Cavanagh, et al. v. Kind, LLC, No. 1:15-cv-4064 (S.D.N.Y. complaint filed on May 27, 2015)).

34

Putative class action seeking certification of nationwide, New York-only, and California-only classes filed against Inko’s Tea, LLC and Wholesome Tea Company, LLC, alleging violations of the New York General Business Law, California’s Consumer Legal Remedies Act, Unfair Competition Law, and False Advertising Law, the Florida Deceptive and Unfair Trade Practices Act, the New Jersey Consumer Fraud Act, the Illinois Consumer Fraud and Deceptive Business Practices Act, and the Michigan Consumer Protection Act. Plaintiffs claim that the defendants falsely advertise “Inko’s White Tea” ready-to-drink tea products as “100% Natural” and “100% All Natural,” when, in reality, the products contain ascorbic acid – a non-natural and chemically processed ingredient. (Collazo, et al. v. Inko’s Tea, LLC, et al., No. 1:15-cv-3070 (E.D.N.Y. complaint filed on May 27, 2015)). Putative class action filed against Spark Energy, LLC in the U.S. District Court for the Northern District of California, alleging violations of California’s Unfair Competition Law and False Advertising Law, common law fraud, and negligent misrepresentation. Plaintiffs claim that the defendant engages in fraudulent and deceptive bait-and-switch sales practices in connection with its electric and gas supply offerings. More specifically, the plaintiffs claim that the defendant, through its sales representatives, falsely represents to potential customers (who are often low-income earners, the elderly, and non-English speaking persons) that, if they switched to Spark from their local, regulated utilities or other energy suppliers, they would receive a low introductory rate on their energy bills, followed by competitive, market-based rates and savings on their energy bills. In reality, the plaintiffs claim that after customers switch to Spark, Spark unilaterally and without justification raises their rates, which, the plaintiffs claim, constitutes a misleading and deceptive baitand-switch scheme. The plaintiffs also claim that Spark’s sales representatives use high pressure, “strong-arm tactics” and make every effort to confuse, mislead, and dupe vulnerable consumers. According to the plaintiffs, Spark’s misleading sales tactics include representing to customers that their regulated utility is going out of business and they must switch, representing they are employees of the regulated utility trying to help customers get cheaper rates, and/or showing potential customers false and deceptive price-comparison charts depicting the regulated utility rates versus Spark rates. (Smith, et al. v. Spark Energy, LLC, No. 3:15-CV-02326 (N.D. Cal. complaint filed on May 22, 2015)). Putative class action filed against Aqua Lung America, Inc. in the U.S. District Court for the Southern District of California, alleging violations of California’s Unfair Competition Law and False Advertising Law. According to the plaintiffs, the defendant markets, distributes, and repairs “Suunto”-branded dive computers, which are used by scuba divers to provide information critical to the diver’s safety, including information about the depth of the dive, the dive time, water temperature, safety stops, stop depths and time for required decompression, air tank pressure, and estimated remaining air time (“Dive Computers”). Plaintiffs purchased the Dive Computers expecting them to function properly and display accurate information; however, the plaintiffs claim that the Dive Computers’ software and/or hardware is defective and often malfunctions. Plaintiffs further claim that the defendant, as an authorized repair facility for the Dive Computers, is aware of the defective software and/or hardware in the Dive Computers, yet it does not warn consumers or even the Consumer Product Safety Commission of the alleged defects. Instead, according to the plaintiffs, “the defendant continues to expressly and impliedly represent that the Dive Computers are well-designed, properly manufactured, and safe for their intended use.” The plaintiffs claim that the defendant’s omissions resulted in the plaintiffs’ purchasing a product that is “dangerous and does not

35

function as advertised.” (Huntzinger, et al. v. Aqua Lung America, Inc., No. 3:15-CV-01146 (S.D. Cal. complaint filed on May 21, 2015)). Putative nationwide, New York-only, and California-only classes filed in the U.S. District Court for the Eastern District of New York against Abbott Laboratories, Inc., alleging violation New York’s General Business Law, and California’s Unfair Competition Law, False Advertising Law, Consumer Legal Remedies Act, and Organic Products Act. Plaintiffs claim that Abbott falsely advertises that its “Similac Advance Organic Infant Formula” is “organic,” when, in fact, more than half of its ingredients, including sodium selenite and taurine, are allegedly “prohibited” in organic foods. (Marentette, et al. v. Abbott Labs., Inc., No. 1:15-cv-2837 (E.D.N.Y. complaint filed on May 15, 2015)). Putative statewide class action filed in the U.S. District Court for the District of Massachusetts against Exergen Corp. alleging violations of California’s Consumer Legal Remedies Act and Unfair Competition Law. According to the complaint, the defendant falsely claimed that its “Exergen Temporal Thermometer” was “MADE IN U.S.A.,” notwithstanding that more than a de minimus amount of the component parts were made in foreign jurisdictions. (Piro, et al. v. Exergen Corp., No. 15-cv-11834 (D. Mass. complaint filed on May 12, 2015)). Putative Florida-only class action filed in the U.S. District Court for the Southern District of Florida against Ateeco, Inc., alleging violations of the Florida Deceptive and Unfair Trade Practices Act. Plaintiff claims that Ateeco misrepresents the nutritional information on the labels of its pierogi products by failing to use the correct serving size (i.e., declaring a serving size smaller than the Reference Amount Customarily Consumed) or by failing to declare the high amount of sodium. (Steinberg, et al. v. Ateeco, Inc., No. 0:15-cv-60973 (S.D. Fla. complaint filed on May 11, 2015)). Putative class action filed in the U.S. District Court for the Northern District of California against Fitbit, Inc., alleging, among other things, violations of California’s Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act, and the federal Magnuson-Moss Warranty Act, as well as common law fraud and negligent misrepresentation. Plaintiff claims that the defendant misleadingly advertises its product as having a sleep-tracking function that can track how long the user sleeps and the quality of that sleep. According to the plaintiff, a study has shown the sleep-tracking function cannot perform as advertised and provides inaccurate results. (Brickman, et al. v. Fitbit, Inc., No. 3:15-CV-2077 (N.D. Cal. complaint filed on May 8, 2015)). Putative class action filed in the U.S. District Court for the Northern District of Ohio against PPG Industries, Inc., PPG Architectural Finishes, Inc., and PPG Architectural Coatings, LLC, alleging violations of various state consumer protection laws. Plaintiffs claim that the defendants made false and misleading representations in the marketing campaign for their line of “Olympic Rescue It!” branded resurfacing products. According to the plaintiffs, the defendants marketed the products as “being of the highest quality, capable of resurfacing, sealing, and waterproofing all in one product.” Further, the defendants claimed that the products provided the “Best Protection” and “lasting results you’ll be proud to enjoy,” and the defendants encouraged customers to use Rescue It products instead of replacing decking or other surfaces. Plaintiffs alleged that, contrary to the defendant’s marketing claims, the products were “plagued by design flaws that cause them to fail to adhere properly to the underlying decking or concrete material, causing the Rescue It Products to routinely

36

peel, crack, and bubble, and causing damage to the property to which they are applied.” (Traxler, et al. v. PPG Indus., Inc., No. 1:15-cv-00912-DAP (N.D. Ohio complaint filed on May 8, 2015)). Putative nationwide class action filed in the U.S. District Court for the District of Nevada against Top Rank, Inc., Mayweather Promotions LLC, Robert Arum, Emmanuel “Manny” Pacquiao, and Floyd “Money” Mayweather, Jr., alleging, among other things, violations of the Nevada Deceptive Trade Practices Act. Plaintiff claims that the defendants failed to disclose material facts relating to the pay-per-view showing of the professional boxing match between defendants Pacquiao and Mayweather. Specifically, plaintiff alleges that all defendants knew that Pacquiao had a rotator cuff injury, so the match would not be between “two able-bodied, healthy professional fighters” as advertised. (Neidl, et al. v. Top Rank, Inc., et al., No. 2:15-CV-00849 (D. Nev. complaint filed May 6, 2015)). Putative class action filed in the U.S. District Court for the Northern District of California against Wal-Mart Stores, Inc., alleging violations of the California Unfair Competition Law and False Advertising Law, violation of the Tennessee Consumer Protection Act, and unjust enrichment. Plaintiff claims, based on a study conducted by the New York Attorney General’s Office, which tested the herbal supplement products sold under Wal-Mart’s store-brand that Wal-Mart falsely marketed and sold these herbal supplements. According to the plaintiff, the study revealed that the herbal supplements tested did not contain DNA from the named ingredients and many contained contaminants not listed on the label, posing a risk to consumer health. (Owens, et al. v. Wal-Mart Stores, Inc., No. 3:15-CV-01870 (N.D. Cal. complaint filed Apr. 24, 2015)). Putative nationwide class action filed in the U.S. District Court for the Eastern District of New York against ConAgra Foods, Inc., alleging violations of state consumer protection laws, negligent misrepresentation, breach of contract, fraud, and unjust enrichment. Plaintiff alleges that the defendant’s packaging for “Slim Jim” brand food products falsely advertises the amount of actual product contained in each box. According to the complaint, each box contains less product than the packaging implies, and each individual food product is smaller than the “actual size” depicted on the box. (Lam, et al. v. ConAgra Foods, Inc., No. 1:15-cv-02334 (E.D.N.Y. complaint filed Apr. 23, 2015)). Putative California-only class action filed in the U.S. District Court for the Southern District of California against Kind LLC, alleging violations of California’s Consumers Legal Remedies Act, False Advertising Law, and Unfair Competition Law, as well as breach of express warranty. Plaintiffs allege that certain Kind snack products’ labels contain conspicuous false or misleading claims that the products are “all natural” and “non GMO.” According to the complaint, the defendant uses synthetic, highly processed additives, such as soy protein isolate, soy lecithin, and canola oil, which are not “all natural” and are sourced from genetically modified crops. Plaintiffs claim that defendants violate California’s Unfair Competition Law in part by violating several other laws, including the Federal Food Drug and Cosmetic Act (FDCA), California’s Sherman Law (which incorporates federal food labeling regulations pursuant to the FDCA), and FDA regulations governing claims related to fiber, trans fats, antioxidants, the word “healthy,” and the term “plus” (or “+”) especially in connection with protein content claims. Among other sources, the complaint cites a letter Kind recently received from the FDA warning Kind of misbranding violations on some of its product labels. Plaintiffs claim that consumers often rely on the “all natural” and “non GMO” claims when buying Kind products, and regardless of their motivation for buying, Kind harmed

37

consumers by charging a higher price it was able to command based on the “all natural” and “non GMO” representations. (Bustamante, et al. v. Kind LLC, No. 3:15-cv-00891 (S.D. Cal. complaint filed Apr. 22, 2015)). Putative class action filed in the U.S. District Court for Southern District of New York against Tommie Copper Inc., alleging violations of New York’s Deceptive Trade Practices Law and Iowa’s Private Right of Action for Consumer Frauds Act, as well as breach of express warranty, negligent misrepresentation, and unjust enrichment. Plaintiff claims that the defendant made false and misleading claims concerning the alleged skin and health benefits of its “copper-infused” athletic apparel, including the ability to provide relief from aches and pains and a faster recovery period. (Potzner, et al. v. Tommie Copper Inc., No. 15-cv-03183 (S.D.N.Y. complaint filed Apr. 22, 2015)). Putative statewide class action removed to the U.S. District Court for the Middle District of Florida from Florida Circuit Court (Pinellas County) against Bank of America Corp. and FIA Card Services, N.A., alleging violations of the Florida False Advertising Statute. According to the complaint, the defendants disseminated misleading advertising in connection with their marketing of the “BankAmericard Travel Rewards Program.” Plaintiff alleges that the defendants falsely implied that they would receive a minimum cash credit of one percent or one penny on each dollar spent when the program actually failed to provide such credits. Plaintiff further alleges that the defendants refused to disclose how the value of rewards was calculated. (Argentine, et al. v. Bank of America Corp., et al., No. 15-cv-00957 (M.D. Fla. complaint removed on Apr. 22, 2015)). Putative California-only class action filed in California Superior Court (Los Angeles County) against Monsanto Co., alleging false and misleading advertising in violation of California’s consumer protection laws. Plaintiffs allege that the defendant falsely claimed in the labeling of its “Roundup” weed killer product that the active ingredient “targets an enzyme found in plants but not in people or animals.” According to the plaintiffs, that statement is false because the particular enzyme targeted is found in “gut bacteria” in both humans and pets. (Mirzaie, et al. v. Monsanto Co., No. BC578942 (Cal. Super. Ct. complaint filed Apr. 20, 2015)). Putative nationwide class filed against KIND, LLC in the U.S. District Court for the Central District of California, alleging negligent misrepresentation and violations of the California Consumers Legal Remedies Act, False Advertising Law, and Unfair Competition Law. Plaintiff claims that KIND misleadingly labels it snack bars with the terms “healthy,” “plus,” “+,” “good source of fiber,” and “no trans fat,” despite the fact that the products do not meet the criteria for use of those terms under the federal Food, Drug, and Cosmetic Act. Plaintiff claims that these terms deceive consumers into believing the products are both healthier than the products actually are and healthier than other available products. (Kaufer, et al. v. KIND, LLC, No. 2:15-CV-02878 (C.D. Cal. complaint filed on Apr. 17, 2015)). Putative class action filed against BHH, LLC, Van Hauser, LLC and E. Mishan and Sons Inc. in the U.S. District Court for the Northern District of Ohio, alleging, among other things, violations of the Ohio Consumer Sales Practices Act, and common law fraud. Plaintiff claims that the defendants made statements about its “electromagnetic ultrasonic pest repeller” without competent and reliable scientific evidence to substantiate the claims. According to the plaintiff, the defendants falsely represented that their product uses ultrasonic signals that would repel pests and rodents when, in

38

fact, the defendants “had reason to know that their claims and representations about the essential purpose of the product were false and contrary to scientific evidence.” (Steigerwald, et al. v. BHH, LLC, et al., No. 1:15-CV-00741 (N.D. Ohio complaint filed on Apr. 16, 2015)). Putative nationwide class action filed against KAO USA Inc. in the U.S. District Court for the Eastern District of New York, alleging violations of New York’s General Business Law, New Jersey’s Consumer Fraud Act, California’s Consumer Legal Remedies Act, Unfair Competition Law, and False Advertising Law, Illinois’s Consumer Fraud and Deceptive Business Practices Act, Florida’s Deceptive and Unfair Trade Practices Act, Michigan’s Consumer Protection Act, and negligent misrepresentation and common law fraud. Plaintiffs claim that the defendant falsely represented and advertised the net weight of its antiperspirant and deodorant products in order to induce consumers to purchase them. Plaintiffs allege a significant portion of the deodorant is embedded under a plastic platform and inaccessible to consumers. In addition, plaintiffs claim that the defendant uses slack filled packaging to mislead consumers about the volume of the product. (Chong, et al. v. KAO USA, Inc., No. 1:15-CV-02131 (E.D.N.Y. complaint filed on April 14, 2015)). Putative class action filed against Wal-Mart Stores, Inc. and National Vision, Inc. in the U.S. District Court for the Northern District of California, alleging violations of California’s Unfair Competition Law and Consumer Legal Remedies Act, and common law conversion. Plaintiffs claim that the defendants misrepresented consumers’ responsibility for payment under vision insurance plans. According to plaintiffs, in Wal-Mart Vision Centers and Sam’s Club Optical stores in California, defendants knowingly overcharged consumers for eye care goods and services by misrepresenting the amount of consumers’ insurance benefits, and charging both the consumer and the insurance company for the same goods or services. Plaintiffs allege that the defendants failed to credit consumers’ insurance benefits fully, because the defendants allegedly should have applied discounts in line with the defendants’ representations in advertising and sales, and in line with the defendants’ contracts with insurance companies as “in-network” eye care providers. (Vancleave, et al. v. WalMart Stores, Inc., et al., No. 1:15-cv-01657 (N.D. Cal. complaint filed on Apr. 10, 2015)). Putative California-only class action filed against Snack Factory, LLC in the U.S. District Court for the Northern District of California, alleging violation of California’s Consumer Legal Remedies Act, Unfair Competition Law, and False Advertising Law. Plaintiff claims that Snack Factory falsely advertises its “Pretzel Crisps” products as “All Natural,” as the products contain unnatural, synthetic, artificial, and/or genetically modified ingredients, such as maltodextrin. (Dedrick, et al. v. Snack Factory, LLC, No. 3:15-cv-1605 (N.D. Cal. complaint filed on Apr. 8, 2015)). Putative nationwide class action filed against Natural & Tasty LLC in the U.S. District Court for the Southern District of Florida, alleging violation of the Florida Deceptive and Unfair Trade Practices Act. Plaintiff claims that Natural & Tasty falsely advertises that its “Goldbaum’s Quinoa Crisps” products are “All Natural” and “GMO Free,” as the products contain unnatural, synthetic, artificial, and/or genetically modified ingredients. (Slavinski, et al. v. Natural & Tasty LLC, No. 9:15-cv80451 (S.D. Fla. complaint filed on Apr. 7, 2015)). Putative Missouri-only class action filed against Knudsen & Sons, Inc. in Missouri Circuit Court (City of St. Louis), alleging claims for violation of the Missouri Merchandising Practices Act and unjust enrichment, removed to the U.S. District Court for the Eastern District of Missouri. Plaintiff

39

alleges that the defendant falsely advertised its juice as containing 100% blueberry and pomegranate juice when, in fact, it is a blend of four juices. According to the complaint, the label displays the statements “Blueberry Pomegranate” and “100% Juice” more prominently than the statement describing the product as a juice blend, thereby misleading consumers. (McNamee, et al. v. Knudsen & Sons, Inc., No. 4:15-cv-00572 (E.D. Mo. Complaint removed on Apr. 3, 2015)). Putative class action filed against Costco Wholesale Corporation in the U.S. District Court for the Southern District of California., alleging violations of California’s Unfair Competition Law and Consumer Legal Remedies act. Plaintiffs claim that the defendant made false and misleading representations in the marketing campaign for its “TruNature Ginkgo Biloba with Vinpocetine” supplement. According to the plaintiffs, the defendant falsely represents on the front of the TruNature Ginkgo label that the Product “supports alertness & memory,” and on the side of the label that “Ginkgo Biloba can help with mental clarity and memory” and “it also helps maintain healthy blood flow to the brain to assist mental clarity and memory, especially occasional mild memory problems associated with aging.” Plaintiffs allege, however, that there is no support for any assertion that ginkgo biloba and vinpocetine supplementation provide any mental clarity, or memory or mental alertness benefits. (Korolshteyn, et al. v. Costco Wholesale Corp., No. 3:15-CV-00709 (S.D. Cal., complaint filed on April 1, 2015)). Putative nationwide class action filed in the U.S. District Court for the Eastern District of New York against Snyder’s-Lance, Inc., alleging violations of New York’s General Business Law and North Carolina’s Unfair and Deceptive Trade Practices Act. According to the complaint, the defendant misrepresented that its snack products sold under the “Cape Cod,” “Snyder’s of Hanover,” and “EatSmart” brands were “All Natural.” Plaintiffs allege that these products were not actually “All Natural” because they contained ingredients derived from genetically-modified organisms (GMOs) such as canola oil. (McDonough, et al. v. Snyder’s-Lance, Inc., No. 15-cv-01751 (E.D.N.Y. complaint filed on Apr. 1, 2015)).

40