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Public Forums Underway in California Consumer Privacy Act Rulemaking

January 14, 2019

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The California Consumer Privacy Act (“CCPA”), was passed last summer as a compromise to avoid a highly restrictive privacy regime slated to appear on the November 2018 ballot in California.  Amidst much controversy and debate, the California Attorney General’s Office is set to draft implementing regulations for the new law.  As part of that process, six public rulemaking workshops have been scheduled for the public to provide comments and voice concerns.  The first  took place on January 8, 2019 in San Francisco and was attended by a cross-section of trade associations and privacy advocacy groups.  Although the public comments covered a variety of topics, a few themes emerged:

  • Industry groups want to more closely align the CCPA’s provisions with other privacy regulations such as the European Union’s General Data Protection Regulation (“GDPR”). Many businesses have already undertaken the Herculean task of coming into compliance with the EU law.  They

California Court Grants Nonsuit in Website Accessibility Trial

A California court has dismissed a website accessibility case shortly after commencing trial, issuing a sua sponte nonsuit on grounds that the defendant credit union’s website is not subject to the ADA.

Martinez v. San Diego Credit Union, San Diego Superior Court Case No. 37-2017-00024673, would have been the only known website accessibility lawsuit to go to trial in the state of California. Instead, after commencing trial, the Court ordered the parties to submit trial briefs, inquired whether the parties would object to the Court issuing a sua sponte ruling at the outset of the case, and then granted the nonsuit.  In so ruling, the Court advised the parties that it agreed with the defendant credit union’s position that the complaint failed to state facts sufficient to constitute a cause of action, and that it wished to save plaintiff’s counsel the expense of flying its expert witness from the East

California Joins States Banning Flame Retardants; San Francisco Ban to Take Effect in 2019

November 16, 2018

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California Governor Jerry Brown has signed into law a ban on flame retardants in certain household products. Starting January 1, 2020, it will be prohibited to sell or distribute children’s products, mattresses, and upholstered furniture that contain flame retardants in concentrations above 1,000 parts per million (ppm) in the state of California.

In addition to banning the sale of products containing flame retardants, the law requires the International Sleep Products Association to survey mattress producers every three years to determine what materials are being used to meet flammability standards.

The Bureau of Electronic and Appliance Repair, Home Furnishings, and Thermal Insulation is authorized to enforce the new law and adopt implementing rules and regulations.

In passing the bill, the Legislature cited evidence that flame retardants do little to increase fire safety, and expressed concerns about the link between flame retardants and various health problems, such as developmental problems in children

FDA Provides Guidance for New Nutrition and Supplement Facts Labels

On November 5, the FDA released non-binding guidance intended to answer questions related to Nutrition Facts and Supplement Facts Label and Serving Size final rules. As we previously reported, the rules were finalized in May 2016 and initially set a general compliance date of July 2018. The FDA has extended that deadline to January 1, 2020 for manufacturers with $10 million or more in annual food sales. Manufacturers with less than $10 million in annual food sales have an extra year to comply, until January 1, 2021.

The May 2016 rules require a revamped Nutrition Facts label that, among other things,

  • Increases the type size of certain nutrition information.
  • Requires declaring actual amount, in addition to percent Daily Value, of vitamin D, calcium, iron and potassium.
  • Requires declaring “Added sugars,” in grams and as percent Daily Value.
  • Updates the list of nutrients that are required or permitted.
  • Removes “Calories from

DOJ Says Online Businesses Have “Flexibility” in How to Make Websites Accessible

As we reported in June, a bi-partisan assembly of 103 members of the House of Representatives wrote a letter to Attorney General Jeff Sessions and asked the Department of Justice (“DOJ”) to “state publicly that private legal action under the ADA with respect to websites is unfair and violates basic due process principles in the absence of clear statutory authority and issuance by the department of a final rule establishing website accessibility standards.” That letter urged the DOJ to “provide guidance and clarity with regard to website accessibility under the … ADA.”

On September 25, the DOJ responded to that letter. While the response does not directly address the members’ questions, it does state that the DOJ “is evaluating whether promulgating specific web accessibility standards through regulations is necessary and appropriate to ensure compliance with the ADA.”

The letter also provides some guidance that could prove useful to retailers

California Passes Amendments to Consumer Privacy Act

California Governor Brown recently signed into law SB 1121, which amends the California Consumer Privacy Act of 2018 to provide much-needed relief to retailers and other businesses that collect consumer information. The amendments take effect immediately.

The California Retailers Association (CRA) worked successfully with other business leaders as part of the Privacy Coalition to secure passage and signature of SB 1121, and will continue to work on a more comprehensive clean-up bill in 2019.

As we previously reported, the Act grants consumers various rights with regard to their personal information held by businesses, including:

  • The right to request that a business provide it with specific information the business has collected about them, including categories of information sold, and third parties to whom information is sold.
  • The right to request deletion of personal information the business has collected about the consumer. The business must comply unless one

California Amends Slack Fill Law to Provide Additional Exemptions

Governor Jerry Brown recently signed into law Assembly Bill 2632, which amended California’s slack fill statute to create several exemptions. This amendment will be an additional hurdle to the plaintiff bar, which has been flooding the courts with slack fill related lawsuits in recent years. These lawsuits, typically filed as class actions, allege that product packaging is misleading to the extent it contains nonfunctional empty space, known as slack fill, which causes consumers to believe they are receiving more of the product than they actually are.

The new law, which will amend California Business and Professions Code Sections 12606 and 12606.2, includes the following key changes:

  • The amended law exempts packaging sold in a mode of commerce that “does not allow the consumer to view or handle the physical container or product.” It could be argued that this exempts online sales.
  • The amended law exempts product packaging that clearly

End of the Road for Mike and Ike Slack Fill Case

End of the Road for Mike and Ike Slack Fill Case

August 17, 2018

Authored by: Bryan Cave, Sarah Burwick and Robert Boone

In another victory for a candy manufacturer, a federal court in Missouri denied class certification earlier this month, effectively ending the plaintiff’s attempt to seek damages on a class-wide basis for all consumers of Hot Tamales and Mike and Ike candies.

The lawsuit, White v. Just Born, alleged that boxes of the candy were underfilled, leaving unusable empty space, known as “slack fill,” that deceived the consumer into thinking he was receiving more candy than was actually in the package. The plaintiff sought certification of a Missouri class, and two multi-state unjust enrichment classes, on the theory that the actual value of the candy was less than the consumers paid for it.

The court declined to certify all three classes, ruling that proving class-wide violation of Missouri’s Merchandising Practices Act “will involve predominantly individual inquiries as to whether each class member purchased the candy.” Because most consumers purchase this type

States Start to Enforce Online Sales Tax Laws, Look to Tax Marketplace Providers

Since the Supreme Court’s landmark decision in South Dakota v. Wayfair, more than half of the states with sales tax have rapidly taken steps to begin collecting sales tax from out-of-state retailers, with 24 of the 45 states with a sales tax in various stages of requiring out-of-state retailers to collect.

As we previously reported, in Wayfair, the Supreme court ruled that internet retailers can be required to collect sales and use tax in states in which they lack a physical presence, overturning 26 years of precedent barring states from taxing out-of-state sellers.

Some states, like Massachusetts, are already enforcing laws they had on the books, while others will start on October 1, the beginning of the fiscal year for many states, or January 1 .  A number of states are still in the process of formulating their respective remote collection laws, while others are delaying enactment to provide

Retailers Face Flood of Class Actions Related to “Off the Clock” Work

August 16, 2018

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“Off the clock” work may prove costly, as retailers battle a flood of putative class actions based on claims that employees were not compensated for required work duties.

Recently, the parties in Samantha Jones v. Abercrombie & Fitch Trading Co. filed a joint motion seeking preliminary approval of a class action settlement for $9.6 million.  The plaintiffs alleged that the retailer failed to compensate them for time employees spent calling in to the stores. California law requires employers to pay the equivalent of at least two hours of work to employees who report to work.  Class counsel argued the employees effectively reported to work when the retailer required the employees to call ahead of their scheduled shifts.

Abercrombie argued employees had no private right to bring their claims for reporting pay time claims under either PAGA or the Unfair Competition Law.  Abercrombie also disputed class certification, on the grounds the employees’ practice

New York Court Takes Critical View of Slack Fill Claims

As we have previously reported, slack fill litigation remains on the rise, with plaintiffs continuing to file consumer lawsuits – typically putative class actions – alleging food packaging is deceptive because it contains empty space, or nonfunctional slack fill, thereby disguising the amount of product in the package.

While some federal courts in Missouri and California have allowed these claims to advance past the pleading stage, one federal court in New York recently took a harsher stance and granted the defendant’s motion to dismiss.

The lawsuit, Daniel v. Tootsie Roll Industries, LLC, claimed that the manufacturer of Junior Mints tricked consumers into overpaying for the candy by leaving more than one-third of its boxes full of empty space, known as “slack fill.”

In a 44-page decision, U.S. District Judge Naomi Reice Buchwald of the Southern District of New York found plaintiffs did not allege a viable claim for consumer fraud

FDA to Modernize Food Identity Standards, Starting With Dairy Products

FDA Commissioner Scott Gottlieb has announced that the FDA is undertaking a comprehensive review of food standards of identity to ensure food labels are truthful and not misleading.  No doubt that for some this announcement is a long overdue response to rapidly evolving innovation in the food production sector that continues to challenge standards for truthful and non-misleading food labeling.

The FDA intends to focus first on standards of identity for dairy products.  In his statement, Gottlieb discusses the highly controversial topic regarding plant-based alternatives and the standard of identity for “milk,” e.g., soy, almond, etc.  These plant-based alternatives “are not the food that has been standardized under the name ‘milk’ and which has been known to the American public as ‘milk’ long before the 1938 Federal Food, Drug, and Cosmetic Act (FD&C Act) was established,” Gottlieb says.   He goes on to suggest that these plant-based products are creating

Seattle Ban on Plastic Straws and Utensils Takes Effect

Seattle Ban on Plastic Straws and Utensils Takes Effect

July 20, 2018

Authored by: Bryan Cave and Merrit Jones

Seattle’s ban on plastic straws and utensils took effect on July 1, after the expiration of an exemption in a 2008 law requiring one-time-use food-service items to be compostable or recyclable.  The ban applies to food service businesses, including restaurants, delis, coffee shops, food trucks, cafeterias, and grocery stores.

Instead of providing plastic straws and utensils, on request, businesses may provide approved compostable alternatives for dine-in service, and compostable or recyclable take-out packaging. Though compostable plastic straws are allowed, environmental groups advocate using compostable paper-based straws. Flexible plastic straws can be provided to customers who need a straw because of medical reasons.

The law imposes fines of $250 on businesses that fail to comply. Other U.S. cities have considered similar bans on plastic straws. A similar ban in San Francisco passed a committee vote on Monday, and goes before the full board next week.

Seattle banned the use of Styrofoam packaging

INTA Offers Guide for Combating Counterfeit Sales

INTA Offers Guide for Combating Counterfeit Sales

July 20, 2018

Authored by: Bryan Cave and Katie Green

As retailers continue to battle the escalating problem of counterfeit products, The International Trademark Association (INTA) has released a guide titled Addressing the Sale of Counterfeits on the Internet.  The guide is the product of INTA’s Anti-Counterfeiting committee and aims to further the organization’s continuing efforts to curb the problem of online sales of counterfeit goods.

According to a 2017 impact study commissioned by INTA and cited in the guide, the global value of counterfeit and pirated goods was estimated to be $1.13 trillion in 2013 and is projected to reach $1.9-$2.8 trillion in 2022. Counterfeit sales not only harm businesses, but pose a risk to public health and safety and often fund criminal organizations.

INTA’s guide includes updated and expanded best practices for search websites, online market places, PSPs, trademark owners, and social media, logistics, and registry companies. The guide also includes the following key recommendations:

  • Search advertising

Supreme Court Holds American Express’s Antisteering Rules Don’t Violate Antitrust Laws

On June 25, 2018 the Supreme Court ruled, in a 5-4 decision, that American Express’s antisteering rules do not violate federal antitrust laws. In reaching this conclusion the Court determined that, for two-sided markets like credit cards, both sides of the platform must be analyzed when determining whether a practice has an anticompetitive effect. Because Ohio and the other states challenging American Express’s antisteering rules had focused only on the price increase on the merchant side of the two-sided market, and ignored the impact on cardholders, they did not carry their burden of showing that the antisteering rules resulted in anticompetitive pricing, i.e., that the antisteering rules had an adverse effect on the market as a whole. Specifically, the plaintiffs had not accounted for the consumer side of the market, which the Court found must be considered in determining the competitive impact of American Express’s antisteering rules.

At issue in

Battle Heats Up Concerning Regulatory Jurisdiction Over Cultured Meat Products

The next wave of emerging agricultural biotechnology is set for its first regulatory showdown. Cell-cultured meat (“CCM”) allows your steak to be grown in a lab by replicating animal cells.  Some CCM products are even created using synthetic products derived from plants, insects, and other non-animal proteins.  No matter the type of culture used, CCM products are created without animals born, raised, and slaughtered in the traditional manner.  Advocates of this emerging industry have coined the term “clean meat,” but many in the conventional meat food industry feel it should not be called “meat” at all.

On February 9, 2018, the U.S. Cattlemen’s Association (“USCA”) filed a petition with the U.S. Department of Agriculture (“USDA”) requesting that USDA invoke its jurisdiction over CCM and mandate that such products not be allowed to use “meat” or “beef” in their labeling.  Indeed, the USCA asserts that such terms should be associated

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