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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

Coffee Defendants Likely To Seek Stay of Prop. 65 Action Following OEHHA’s Proposal to Exempt Coffee From Cancer Warning Requirement

July 3, 2018

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Defendants in the Proposition 65 case against Starbucks and numerous other coffee manufacturers and retailers have indicated that they intend to file a motion to stay that action following a proposal by the California agency that administers Prop. 65 to exempt coffee from the cancer warning requirement for certain types of exposures.

Judge Elihu Berle has issued an order in Council for Education and Research on Toxics v. Starbucks, et al., Los Angeles Superior Court Case No. BC435759, setting a hearing date on defendants’ contemplated request for a stay of the action for July 31 – the same day as the hearing on the plaintiff’s motion seeking a permanent injunction which could potentially result in defendants being required to sell their coffee products with a Prop. 65 warning in California.

On June 15, California’s Office of Environmental Health Hazard Assessment (OEHHA) issued a notice of proposed rulemaking to exempt

California Enacts Sweeping Privacy Legislation Concerning Consumers’ Personal Information

California enacted privacy legislation yesterday that is the first of its kind in the United States and moves California law closer to the protections afforded in the European Union by the General Data Protection Regulation (GDPR).  The law also creates a private right of action to pursue a lawsuit against a company arising out of a breach of personal information, which will likely give rise to a substantial increase in data breach lawsuits in California. There is a lot to unpack in this new piece of legislation, which spans 28 pages and will engender various regulations before its January 2020 effective date.  The new law forestalls possibly more onerous requirements from a citizen ballot initiative.

Following is a breakdown of the new California Consumer Privacy Act of 2018.

How is this like the GDPR?

Like the GDPR, the California law defines “personal information” far more broadly than seen before in the

Eleventh Circuit Holds Prior Settlement Does Not Render New Website Accessibility Case Moot

The Eleventh Circuit Court of Appeals has held that a prior settlement agreement, pursuant to which a defendant has agreed to improve website accessibility, does not necessarily render moot a new website accessibility lawsuit.

In Haynes v. Hooters of America, LLC, Case No. 17-13170 (11th Cir. June 19, 2018), the Court of Appeals concluded that the “plaintiff’s claims are not moot” as a result of a settlement agreement between Hooters and a different plaintiff in an almost identical prior lawsuit that required Hooters to improve accessibility of its website within 12 months.

As we previously reported, the district court had granted Hooters’ motion to dismiss the action, on grounds that Hooters was in the process of actively implementing a remediation plan for its website, and therefore the prior agreement rendered the new ADA action moot.

The Eleventh Circuit rejected this argument, however, and held that “this case is

Supreme Court Overturns Quill, Holds States Can Tax Online Retailers Without Physical Presence

In a highly anticipated decision, the U.S. Supreme Court has ruled in South Dakota v. Wayfair, Inc., 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.

As we previously reported, South Dakota brought the suit, acknowledging that its position defies the Supreme Court’s holding in the 1992 case Quill Corp v. North Dakota, by arguing that the development of the internet and ensuing growth in online shopping necessitate reconsideration of the requirement that a business have a physical presence within a state in order to be subject to that state’s sales tax collection obligations.

By a 5-4 vote, the court found for South Dakota, holding that the state’s 2016 law mandating that certain out-of-state sellers collect and remit tax regardless of whether they had a physical

WARNING: New Proposition 65 Warning Requirements Take Effect August 30, 2018

Retailers and manufacturers should take steps now to ensure they are compliant with the new California Proposition 65 warning regulations that take effect on August 30, 2018.

Proposition 65 prohibits retailers and manufacturers from knowingly and intentionally exposing California consumers to a chemical known to the State of California to cause cancer or developmental or reproductive harm without first providing a “clear and reasonable warning.”  (Cal. Health & Safety Code § 25249.6.) The regulations provide examples of “safe harbor” warnings that are deemed to be clear and reasonable under the new amendments. Notably, the use of the specific “safe harbor” warnings included in the regulations is not actually required. Retailers and manufacturers can use any clear and reasonable warning; however, using the examples provided ensures that the warning is sufficient.

As we previously reported, amendments to the warning regulations were issued in August 2016. The 2016 and the more

Website Accessibility Guidelines Get Update; California Court Limits Penalties to One Visit

An update has been published to the Web Content Accessibility Guidelines (WCAG) 2.0, the standards that have been applied by many courts in the absence of website accessibility regulations by the Department of Justice.

The new version, named WCAG 2.1, was published on June 5 by the World Wide Web Consortium (W3C), an industry group of website accessibility experts.

WCAG 2.1 amends the prior standards, which were issued in 2008, by adding 17 additional criteria to address accessibility barriers.  The updates are mainly related to mobile devices and disabilities that affect vision and cognitive function.

For example, WCAG 2.0 did not expressly address mobile applications, although many of the same criteria for website accessibility was also applicable to mobile apps. WCAG 2.1 provides additional guidance concerning accessibility of mobile apps, including:

  • user interactions using touch,
  • handling more complex gestures, and
  • avoiding unintended activation of an interface.

FDA Extends Date for Compliance with New Nutrition Facts Label; Menu Labeling Rules Take Effect

The FDA has extended the date for compliance with the 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 26, 2018. Manufacturers with annual food sales of less than $10 million were given an additional year to comply.

The FDA has now issued a Federal Register notice extending the compliance dates by “approximately 1.5 years.”

The Nutrition Facts labeling rules:

  • Require an updated “Nutrition Facts” label with dual-column labeling for certain containers;
  • Require mandatory declarations for “added sugars” in grams and as a percentage of Daily Value (% DV);
  • Update the list of declared nutrients. Disclosure of vitamin D and potassium will be required. Calcium and iron will continue to be required. Vitamins A and C will no longer be required but can be included on a voluntary basis.
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