Hunton Retail Law Resource

In a continued effort to implement the policy change announced by President Obama on December 17, 2014, to engage and empower the Cuban people, the Office of Foreign Assets Control (“OFAC”) has announced additional amendments to the Cuban Assets Control Regulations. These amendments, which went into effect on October 17, 2016, constitute the sixth time that the various sets of regulations governing Cuba have been amended.

The following consumer protection actions made headlines this week:

Mylan Reaches $465 Million Settlement Over Medicaid Classification

On October 7, 2016, Mylan Inc. announced that it had agreed to pay $465 million to resolve a DOJ investigation into Mylan's classification of EpiPen as a generic drug that resulted in Medicaid and Medicare receiving a significantly smaller rebate on every prescription since 2007. The DOJ, on behalf of the Centers for Medicare & Medicaid Services (“CMS”), investigated whether EpiPen should have been classified as a "branded" drug, which would have given CMS at least a 23.1 percent rebate, as compared to the 13.1 percent rebate CMS received for Mylan's self-classification of EpiPen as a generic drug. Mylan believed that although the injector pen device was patented, the relevant consideration for CMS classification is that the active ingredient in EpiPen is off-patent. The DOJ agreement resolves the government’s classification concerns, but does not address potential private class action litigation.

Recently, the EEOC has announced the approval of a revised EEO-1 report (“Revised Report”), applying to the 2017 calendar year with the first report due by March 31, 2018. In addition to the disclosures required by the current EEO-1 report, the Revised Report will require employers with 100 or more employees to provide compensation data and the number of hours worked by employees across 12 separate pay bands, categorized by gender, race and ethnicity. The current EEO-1 report only collects data regarding the number of employees categorized by gender, race and ethnicity in 10 different job groupings.

The following consumer protection actions made headlines this week:

Self-Regulatory

Zeltiq’s CoolSculpt Claims Referred to FTC and FDA

On October 5, 2016, the NAD referred advertising claims from Zeltiq Aesthetics, Inc., to the FTC and the U.S. Food and Drug Administration (“FDA”) for Zeltiq’s “CoolSculpting Cryolipolysis Body Contouring System,” a medical device that, according to the advertiser, uses a cooling treatment to target fat cells beneath the skin. The device is FDA approved, and the NAD found that the claims that the product is “FDA-cleared” and would result in a “slimmer you” were supported. However, the NAD recommended that Zeltiq add further disclosures about how the product works. Zeltiq said that it would comply with most, but not all, of NAD’s recommendations; per NAD procedure, the matter will be referred to the FTC and FDA.

Much ado about lithium-ion batteries. If you have watched the news, you have seen that certain smartphones have been recalled due to fire and burn hazards posed by the phones’ lithium-ion batteries. While this recall is important, it is not unique. This year alone, at least nine other companies have issued recalls due to problems with lithium-ion batteries. These recalls include video baby monitors, batteries in laptop computers, batteries in flashlights and other battery packs. Not to mention last year’s slew of recalls over the most popular holiday gift – the hoverboard. While there are advantages to lithium-ion batteries, such as their recharge capability and their low memory effect, there are risks to using them in household electronic devices. Manufacturers must assess these risks when rolling products out to the public. Companies could not only face an expensive recall, but also a potential shift in public perception of the quality of its devices that could have repercussions long after the initial recall is over.

On October 3, 2016, Amazon announced that it will eliminate most incentivized reviews – reviews written by customers in exchange for free or discounted products – except those reviews facilitated through the Amazon Vine program. Amazon, which has always banned compensated reviews, previously had allowed businesses to offer free samples to customers in exchange for reviews, as long as customers disclosed the fact of the incentive. In theory, customers receiving free products should have provided unbiased reviews; a recent study, however, showed the average rating for ...

This past week, several consumer actions made headlines:

Claims Against Advertisers for the Misuse of “Natural” Gain Traction

Claims that Nature’s Bounty's “natural” menopause remedy is ineffective and contains synthetic ingredients and lead survived a motion to dismiss and may proceed as a class action, according to a judge in the Eastern District of New York. The named plaintiff accuses Nature’s Bounty of advertising its black cohosh menopause remedy as “natural” and “nonsynthetic”; she also alleges that the effectiveness of the remedy is not supported by scientific evidence. A key issue before the court was whether a reasonable consumer would assume that the product – labeled as “natural” with a disclaimer that it contains “other ingredients” – contained only natural ingredients. The court found that a reasonable consumer would make this assumption and allowed the plaintiff’s advertising claims to proceed on that basis.

The first blow to the recent expansive application of the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act (“TCCWNA”) was struck by a federal court in California last month. In Candelario v. Rip Curl, Inc., the Central District of California granted a motion to dismiss a complaint alleging a TCCWNA violation of website terms and conditions because the plaintiff lacked Article III standing. The plaintiff has appealed the decision to the Ninth Circuit.

This past week, several regulatory and self-regulatory enforcement actions made headlines:

FTC Settles with NutraClick Over Deceptive Billing Practices

The FTC has settled claims that supplement maker NutraClick engaged in deceptive billing practices. According to the FTC, NutraClick offered “free” samples through its website, but consumers who ordered these samples were then enrolled into a membership program with monthly bills of $29.99 - $79.99. Over 70,000 people registered complaints about these practices with the FTC.

This past week, several consumer actions made headlines:

General Mills Faces Potential Class Action Over Health Claims of Sugary Foods

General Mills has been sued in the Northern District of California over claims that it has put misleading labels on a number of its products. According to the complaint, labels with phrases such as “whole grains” and “fiber” are deceptive “because they are incompatible with the significant dangers of the excessive added sugar.” General Mills and other large food companies have been facing similar suits over labelling recently, including a lawsuit over the protein content of its “Cheerios Protein” brand.