Hunton Retail Law Resource

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

FDA Scratches Out Shionogi’s Misleading Labeling on its Children’s Head Lice Lotion

On April 1, 2016, the Food & Drug Administration (“FDA”) hit Shionogi & Co. Ltd. with a warning letter stating that it had mislabeled its Ulesifa children’s head lice lotion because the labeling failed to inform patients that it should not be used on children under six months old and that it does not eliminate lice eggs. The labeling was in Shionogi & Co.’s recently issued customer co-pay assistance voucher that offered patients discounts to bring their co-pays down to $10. The FDA acknowledged that the voucher’s fine print stated it was only indicated for children over six months of age, but the FDA said that was not enough to avoid mislabeling violations. The agency requested that Shionogi & Co. cease the mislabeling immediately and submit a written response within two weeks.

FDA Amped Up its Dietary Supplement Enforcement

On March 31, 2016, the FDA sent several warning letters to various dietary supplement makers, including Texas-based Swagger Supps, Line One Nutrition, Inc., Xcel Sports Nutrition, LLC, and m4 Nutrition Companies, LLC; North Carolina-based NutraClipse, Inc.; New York-based Total Body Nutrition, LLC; and Arkansas-based Chaotic Labz for selling supplements with methylsynephrine, a chemical that does not qualify as a dietary ingredient on FDA’s Generally Recognized as Safe list. Methylsynephrine, also known as oxilofrine, is banned by most major world sports leagues and associations, including the U.S. Anti-Doping Agency, Major League Baseball and the National Football League, due to its strong stimulant properties. The agency demanded that the supplement makers cease distribution immediately and submit a written response within two weeks.

General Mills’ Progresso Soup Ads Lukewarm After NAD Challenge

Following a challenge by Campbell Soup Company, the National Advertising Division (“NAD”) required General Mills to substantiate claims made in four television ads suggesting that ingredients in its Progresso-brand soups are sourced from farms in Vineland, New Jersey. The ads, which open on picturesque farmland, state that Vineland, NJ is the “Home of Progresso.” After its review, NAD agreed that General Mills had a reasonable basis to support its claims that Vineland is the “home” of Progresso, but suggests General Mills discontinue its “unqualified claim” that Vineland is where all its Progresso Light soups are made. NAD’s determination allows General Mills to modify the ads to remove the unsubstantiated claims.

Dealers Exhausting VW in New Class Action over Emissions Test Cheating Software

Volkswagen faces class action allegations from three family-owned dealerships in Florida and Illinois saying that the company purposefully defrauded its dealers by installing software across its diesel fleet since at least the 2008 model year, designed to cheat state emissions testing standards. The “defeat devices” trick emissions programs into believing the vehicle passes, when it actually emits up to 40 times state and federal standards. The dealers allege that VW’s U.S. affiliate knew of the software hack and intentionally kept it from dealers since at least 2014. The complaint claims that dealers’ lost profits and franchise value reductions are due to VW’s decision to withhold this information, which ultimately caused a sharp decrease in both the value of the cars and the VW brand, and increased dealer costs to try to sell the offending vehicles.

FTC Sees Clear Violations of its Contact Lens Rules

FTC Staff issued 45 letters to contact lens prescribers, warning of potential violations of the Contact Lens Rule for (1) failing to provide patients with their prescription after a fitting, (2) requiring patients to pay an additional fee and sign a waiver to release the prescription to the patient, or (3) forcing patients to buy their contact lenses through the prescriber. Similarly, the agency issued ten letters to contact lens sellers, warning of violations for dispensing prescription lenses either without a valid prescription or without verifying the prescription with prescribers. The Contact Lens Rule, promulgated in 2004 in response to congressional mandate in 2003, was intended to allow consumers to comparison shop for contact lenses and encourage sellers to compete on quality and price, all while guaranteeing those sales follow a valid prescription. The FTC warned that violations result in civil penalties of up to $16,000 per violation.