Hunton Retail Law Resource

Over the last two years, courtesy of a once-a-century pandemic, government-mandated business closures, nationwide stay-at-home orders, and—unprecedented—disruptions to the global supply chain have illuminated, previously unknown, vulnerabilities across a whole host of industries. Would anyone have seriously questioned the viability of office space two years ago? Now, inflation, in keeping with the recent chaos, may be upending the viability of another tried-and-tested institution: the supply contract.

The SEC instituted settlement proceedings against Kim Kardashian on Monday, alleging that the reality television star and entrepreneur violated the SEC’s anti-touting statute when she failed to disclose compensation that she received in exchange for an Instagram post endorsing cryptocurrency tokens.  The promotion, which Kardashian posted to her Instagram account on June 13, 2021, encouraged her 225 million followers to visit a website operated by EthereumMax, an online company that offers and sells digital “Emax tokens.” Kardashian’s Instagram post included an “#AD” hashtag, but failed to disclose that she received $250,000 from EthereumMax in exchange for the promotion.

In the past year, the FTC has promoted consumers’ so-called “right to repair.” In particular, the FTC has focused on the “Anti-Tying Rule” of the Magnuson-Moss Warranty Act (the “MMWA”), which limits manufacturers’ ability to steer consumers to manufacturer-affiliated repair shops. Plaintiffs’ firms have taken notice, filing a spate of class actions based on purported violations of the Anti-Tying Rule. These same firms have also filed a spate of consumer class actions against retailers alleging violations of the MMWA’s “Pre-Sale Availability Rule.” Manufacturers and retailers should confirm they are complying with the MMWA and state law.

The FTC unanimously agreed to an enforcement action against American textile manufacturer Electrowarmth Products, LLC and the company’s owner for deceptively marketing its heated “bunk warmer” mattress pads products as Made in the USA. According to the FTC’s complaint, Electrowarmth’s products, while marked as being domestically made, were wholly manufactured and packaged in China, thus violating the Textile Act and the FTC’s Textile Rule. While the proposed settlement agreement contains an $815,000 monetary judgment, payment of the redress amount is suspended upon the defendants’ inability to pay.

The Federal Trade Commission and six states have filed suit against Roomster Corp. and two corporate executives, accusing the residential rental listing platform of using fake reviews and unverified listings to generate tens of millions of dollars in business. According to the complaint, these practices often occur at the expense of vulnerable customers who rely on Roomster to find safe low-cost housing within expensive housing markets.

In an August 2022 decision, the California Court of Appeal, Second Appellate District, held that retail websites without any connection to a physical space, such as a brick-and-mortar store, do not constitute “places of public accommodation” and, thus, are not within the purview of Title III of the American with Disabilities Act (“ADA”) or the Unruh Civil Rights Act (the “Unruh Act”). 

In a case sure to send retail pharmacy corporate-types scurrying to board room meetings to ensure their bases are covered, a Northern District of California federal judge held that Walgreens’ Co.’s 15 year-long pattern of filling opioid prescriptions for customers without performing adequate due diligence as to the medical legitimacy of the prescription substantially contributed to the opioid crisis in San Francisco. As a result, Walgreens must—to a degree later to be decided in court—abate the opioid crisis in San Francisco that it helped to create. While the scope of Walgreen’s court-mandated abatement is not yet known, the fact that a retail pharmacy was held to be at least partially liable for the down-the-line harm stemming from its customers’ misuse of the prescriptions it fills is a headline holding, carrying with it the potential to raise the stakes of the everyday retail pharmacy work of filling prescriptions. In good news for other retail pharmacies generally and for Walgreens retail pharmacies in other states, the holding turned on two hinges that could swing the door of liability shut in other scenarios: 1) the habitual, 15 year-long practice of San Francisco Walgreens of skirting the due diligence required of them under the federal Controlled Substances Act (“CSA”), and 2) the application of California-specific nuisance law that many other states have yet to apply in the same way.

CARU, the Children’s Advertising Review Unit of BBB National programs, issued a compliance warning last week reminding industry that the self-regulating body on children’s advertising and privacy intends to enforce its advertising guidelines in the metaverse, just like in the real world.

On August 23, 2022, the Federal Trade Commission announced it is seeking additional public comment on “how children are affected by digital advertising and marketing messages that may blur the line between ads and entertainment” in conjunction with its “Protecting Kids from Stealth Advertising in Digital Media” event on October 19, 2022. The event will focus on manipulative marketing practices targeted towards children, particularly those related to influencer marketing and online games.

The public can comment on this topic and related issues until November ...

On August 24, 2022, California Attorney General Rob Bonta announced the Office of the Attorney General’s (“OAG’s”) first settlement of a California Consumer Privacy Act (“CCPA”) enforcement action, against Sephora, Inc.