Hunton Retail Law Resource

This past week, several consumer protection actions made headlines that affect the retail industry.

NAD Recommends Kauai Coffee Discontinue and Modify Compost Claims

This week, NAD released their recommendations in their review of Kauai Coffee’s environmental claims for their single-serve coffee pod products. Kauai Coffee’s ads claim that the pods are “100% compostable,” but fail to clearly disclose that the pods are certified compostable only in industrial composting facilities, and are not suitable for home composting. While the pods are certified compostable by the Biodegradable Products Institute (“BPI”), BPI specified in its certification of the pods that they will disintegrate “swiftly and safely in a professionally managed composting facility.” NAD recommended that Kauai Coffee discontinue certain claims, and modify others to include the qualifying language: “Compostable in industrial facilities. Check locally, as these do not exist in many communities. Not certified for backyard composting.” Kauai Coffee said it will comply with NAD’s recommendations.

NAD Recommends Discontinuing Claims in Almond Milk Advertising Dispute

In response to a challenge by WhiteWave Foods, the maker of Silk products, the NAD reviewed advertising by Blue Diamond Growers for its Almond Breeze almond milk stating that the products are made with “the best almonds.” NAD agreed with Blue Diamond’s assertion that these claims were mere puffery, as the word “best” was not used in a comparative context. NAD did recommend that Blue Diamond discontinue the claim that Almond Breeze is “the only almond milk made with California-grown, Blue Diamond almonds,” as Blue Diamond could not establish that their products were the only almond milk products made with Blue Diamond almonds. Blue Diamond said that the company “appreciates the opportunity to participate in the self-regulatory process and thanks NAD for its efforts in resolving this matter.”

Settlement Approved in Kmart Data Breach Case

On Friday, May 19, 2017, a district court judge approved a $5.2 million settlement between Kmart Corp. and a class of banks stemming from a 2014 data breach, with a caveat that the ruling was subject to the judge’s review of certain settlement distributions. U.S. District Judge John Z. Lee of the Northern District of Illinois granted final approval of the settlement, but cautioned that he wanted to see the spreadsheet of the exact payments to the 178 financial institutions that were forced to reimburse Kmart customers after the data breach. The final settlement splits the class into two tiers: one of banks that held Visa-branded cards and all others in the second group. Judge Lee will review payments to the second tier.