Hunton Retail Law Resource

This past week, the following regulatory and consumer actions made headlines:

National Advertising Division Weighs in on “Scary Bleach” Claims

After a challenge by The Clorox Company, the National Advertising Division (“NAD”) recommended that Church & Dwight, the maker of OxiClean White Revive non-chlorine bleach, modify its television ad campaign suggesting that chlorine bleach could be “scary.” The commercials in question highlighted garment care labels directing consumers to “use only non-chlorine bleach, when needed,” thus implying that Chlorox’s product was damaging to the kinds of white garments depicted in the ads. The NAD found that Church & Dwight was required to provide a reasonable basis for its use of care labels in its ads, particularly advertising claims that denigrated Chlorox’s product. This decision followed on a 2014 NAD recommendation that Church & Dwight avoid conveying the unsupported message that chlorine bleach is damaging to white garments.

NAD Recommends Changes to Mucinex Ad, Says Ad Not Disparaging

In response to a challenge by Procter & Gamble, maker of DayQuil LiquiCaps, the NAD found that Reckitt Benckiser should clarify comparative statements in ads for Mucinex Fast-Max Liquid Gels regarding Mucinex’s mucus-fighting properties. The key issue before NAD was whether Reckitt Benckiser’s claims drew a comparison between a broader line of Procter & Gamble’s products or only a liquid gel to liquid gel comparison. The NAD determined that the commercial clearly conveyed only a comparison between Mucinex Fast-Max Liquid Gels and DayQuil LiquiCaps; however, the NAD recommended that Reckitt Benckiser modify its claim that Mucinex Fast-Max Liquid Gels is the “only cold and flu liquid gel that is max strength and fights mucus” to expressly state that this comparison was limited to nationally-branded over-the-counter liquid gel products, given the existence of a private-label product containing the same active medicines in the same dosage amounts.

Tito’s “Handmade” Vodka Suit Moves to Mediation

Fifth Generation, Inc., maker of Tito’s Handmade Vodka, will engage in court-ordered mediation for one of several lawsuits alleging that the company engages in deceptive business practices. In a proposed class action in the Northern District of New York, a consumer claims that Fifth Generation has deceived consumers by labelling Tito’s vodka as “handmade,” despite allegedly being produced in an automated process at high volumes. Fifth Generation’s motion to dismiss was denied in January.

FTC Files Suit Against Office Supply Chains for Targeting Nonprofits and Small Businesses

The Federal Trade Commission has alleged that two separate office supply groups have tricked nonprofits and small businesses into paying for office supplies they did not order. The FTC brought suit against one office supply group in California and a second group in Maryland. In the California case, the FTC alleged that the defendants tricked customers into paying for merchandise that was never ordered, billed for multiple shipments when only one shipment was ever ordered or sent, and generally failed to disclose quantity, pricing and general contract terms of the sale.

In the Maryland case, the FTC claimed that defendants engaged in deceptive tactics to make sales, including making representations that customers had done business with defendants in the past when no business relationship actually existed. Additionally, defendants’ sales representatives often failed to state that the purpose of phone calls were to make sales.

Defendants in both cases have been charged with violating the FTC Act, the Telemarketing Sales Rule and the Unordered Merchandise Statute. The judges in both cases have temporarily frozen the assets of defendants.

Dannon, General Mills Win False Advertising Suits Against Chobani

Two rulings from the Northern District of New York have enjoined Chobani from making certain claims in its advertisements. Both Dannon and General Mills, the manufacturer of Yoplait yogurt, brought claims against Chobani for false advertising. Chobani had an advertisement which highlighted certain ingredients listed on its competitors’ yogurt ingredient lists. The ad pointed out that certain ingredients in its competitors brands are “used to kill bugs” and contain chlorine. The court held that these claims were “literally false by necessary implication,” because although none of the words in the advertisement were untrue, the necessary context falsely indicated that the Dannon and Yoplait yogurts were dangerous to consumers.