Hunton Retail Law Resource

Consumer class actions are on the minds of virtually all consumer product manufacturers and service providers. Class actions based on privacy and consumer protection statutes are increasing at a remarkable rate, and can be a challenge to predict, budget and defend, given the difficulty in valuing consumer privacy rights. In an article, “Second Circuit Reminds Consumer Product Companies That Insurance Options Exist for Big Data Blunders and Privacy Faux Pas,” published in FC&S Legal’s Eye on the Experts column, Hunton lawyers Syed S. Ahmad, Neil K. Gilman and Paul T. Moura ...

The tidal wave of New Jersey Truth-in-Consumer Contract, Warranty and Notice Act (“TCCWNA”) claims just swept up a novel argument: a class complaint against Facebook, Inc. argues that the popular social media site’s terms of use is subject to TCCWNA because Facebook profits from users’ personal information and intellectual property.

President Obama signed the Frank R. Lautenberg Chemical Safety for the 21st Century Act (“Lautenberg Act”) into law in June 2016, amending the core provisions of the Toxic Substances Control Act (“TSCA”) for the first time in nearly 40 years. Last month, Hunton & Williams detailed how the Lautenberg Act considerably broadens the Environmental Protection Agency’s (“EPA’s”) authority to evaluate chemical safety and regulate use of chemicals in all stages of the supply chain, including manufacturing, distribution and retail sale. Within six months, EPA must select at least 10 chemical substances and begin risk evaluations on them. EPA must also classify chemicals – including those currently in the retail supply chain – as “high priority” or “low priority” for review, and begin risk evaluations on 20 high priority chemicals within the next three and a half years.

This past week, several consumer protection and regulatory actions made headlines:

Technology

Volkswagen to Pay an Additional $86 Million to California

On July 6, California Attorney General Kamala Harris announced that Volkswagen (“VW”) will pay the state an additional $86 million in a second partial settlement over VW’s emissions “defeat devices.” This civil penalty sum is the largest amount ever recovered by California from an automaker, and comes on the heels of the recently announced $14.7 billion settlement negotiated by the EPA and the FTC over the German automaker’s emissions-cheating scandal. The $86 million is part of a total $603 million VW has agreed to pay to resolve consumer-protection claims with 46 jurisdictions. As part of the settlement, VW agreed to strict injunctive terms, including prohibitions on false advertising and affirmative disclosure of defeat devices.

If you live in an urban environment, you have likely seen food trucks on city streets, in parking lots or at any number of local events. The mobile food industry has grown significantly over the last few years and, with that growth, vendors and their brick-and-mortar competition have been faced with a changing regulatory landscape. 

This past week, several consumer protection and regulatory actions made headlines:

FTC Announces Substantial Maximum Civil Penalties Increases Due to “Catch-Up” Cost-of-Living Adjustment

Pursuant to the Federal Civil Penalties Inflation Adjustment Act of 2015, the FTC has approved new maximum civil penalties for 16 law provisions governed by the Agency. Many of the maximum penalties had not been adjusted in decades and are increasing substantially under the statutorily mandated “catch up” cost-of-living adjustment.

For many consumers, online reviews play a role in the decision to make any purchase. Before making dinner reservations, choosing a hotel, hiring a service provider or even buying a toaster, consumers often look to online reviews as an assessment of the product, service or experience they want to buy. In a market where a negative online review or rating from a dissatisfied customer can influence countless other potential buyers — not just people the dissatisfied customer knows in real life — companies have a strong incentive to maintain a positive reputation online. However, in a desire to separate themselves from the competition with strong reviews, some companies have taken the race for positive online reviews too far, and the Federal Trade Commission is watching.

Recently, Washington D.C. councilmembers unanimously voted to increase the city’s minimum wage to $15.00 an hour by the year 2020 for non-tipped hourly workers, many of whom work in the retail industry. The news comes just before Washington D.C. is scheduled to increase its minimum wage rate from $10.50 an hour to $11.50 an hour on July 1, 2016. The move makes D.C. the third jurisdiction behind California and New York to increase minimum wages to $15.00 an hour.

A recent change to the U.S. regulations governing the Cuban embargo has expanded the categories of Cuban-origin products that may be imported into the U.S. Additional textiles and textile articles and, for the first time, coffee, have joined the list of Cuban-origin products authorized to be imported into the U.S. Such products, however, must be produced by Cuban entrepreneurs and the U.S. importer must receive satisfactory documentation of such producer’s independence from the Cuban government.

On June 28, 2016, in two related settlements, German auto-manufacturer, Volkswagen AG (“VW”), has agreed to pay $14.7 billion to resolve allegations that the company cheated diesel emissions tests for nearly 500,000 2.0 liter diesel vehicles sold over six years. One settlement partially resolves EPA allegations for alleged violations of the Clean Air Act’s federal emissions standard; the other partially resolves FTC claims that VW violated the FTC Act by deceptively and unfairly advertising its “clean diesel” vehicles. VW also will pay damages to 44 states, Washington, D.C., and Puerto Rico. The announced settlements do not resolve pending civil claims concerning VW’s 3.0 liter diesel vehicles, or potential criminal liability.