Hunton Retail Law Resource

One of the biggest recent trends in retail may be slowing down.

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

FTC Used Car Lot Sweep Finds 70 Percent Compliance with New “Buyers Guide”

Last month, the FTC announced the results of its compliance sweep of 94 car dealerships in 20 cities across the country, conducted after the FTC’s amended Used Car Rule (the “Rule”) took effect earlier this year. The revised Rule requires dealers to display a revised “Buyers Guide” containing warranty and other important information—such as a new description of an “As Is” sale—on the window of each used car offered for sale. According to the FTC, 70 percent of the 2,300 vehicles inspected displayed a buyer’s guide; over half of those with the guide displayed the updated version. As a follow-up, the FTC sent letters to each dealership inspected, detailing their findings and providing businesses with guidance material to help aid in compliance.

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

District Judge Boots Putative Class Action Against L.L. Bean

A federal district judge has dismissed an attempted class action against L.L. Bean involving the company’s long-standing no-questions-asked warranty policy. In February 2018, L.L. Bean announced that it was changing its policy to limit customers’ return period to one year, while committing to “work with our customers to reach a fair solution” if a problem arises more than a year after purchase. The plaintiff alleged that changing the warranty violated both the Magnusson-Moss Act and Illinois state law as an anticipatory repudiation of the guarantee. But the District Judge ruled that plaintiff neither alleged an injury nor had he stated a claim for which relief could be granted.

Over the past year Hunton & Williams LLP (now Hunton Andrews Kurth LLP) has released articles discussing reform efforts related to the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) and the Consumer Financial Protection Bureau (“CFPB”), which was created as a brand-new, start-up independent agency under Dodd-Frank. The first article was a discussion about the questions of the constitutionality of the CFPB due to its arguably unchecked authority to exercise executive power through the CFPB’s investigative and enforcement authority ...

From the outset it was clear that Mr. Mulvaney’s tenure as acting director of the CFPB would be a political flashpoint. His contentious appointment set the stage for a potential sea change in the agency’s enforcement and rulemaking agenda. Many anticipated that the former South Carolina congressman and current director of the Office of Management and Budget would completely overhaul the CFPB. After only three months on the job, Acting Director Mulvaney has already made several moves indicative of his intent to temper the aggressive stances taken by his predecessor, Richard ...

On July 10, 2017, in a 775-page release, the Consumer Financial Protection Bureau (“CFPB”) issued its long-awaited final arbitration rule (“Arbitration Rule”) pertaining to consumer finance contracts. The Arbitration Rule, which until now was in the comment stage with its final issuance in question, largely mirrors the proposed rule from May 2016, with a few modifications. The Arbitration Rule is important for three reasons: (1) it prohibits consumer finance companies from relying on class action waivers to block class action lawsuits; (2) it prohibits the inclusion ...

On July 11, 2017, the Consumer Financial Protection Bureau (“CFPB”) adopted a final rule that bars financial firms from forcing consumers into mandatory arbitration clauses as a condition of opening an account.

As with other areas of the law, the recent presidential election will present both challenges and opportunities for retailers concerned with financial and securities regulation. While President-elect Trump did not articulate his views on financial services regulation on the campaign trail in any detailed manner, he did suggest that the Dodd-Frank Act should be repealed as it has increased costs for businesses, impeded economic growth and severely reduced lending without any clear benefits to investors or consumers.

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

Regulatory Actions

FTC Releases Newly Approved Energy Labeling Rules, Considering Other Changes

The FTC has approved changes to the Energy Labeling Rule, which it says are designed to improve access to energy labels and the labeling for refrigerators, ceiling fans, central air conditioners and water heaters. The labeling is designed to help consumers understand the energy cost of consumer products and make it easier for consumers to compare different product models.

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

FTC Issues Closing Letter in Bedrock “Made in USA” Labeling Investigation

On June 16, 2016, the FTC issued a closing letter in its investigation of Bedrock Manufacturing Company, the parent of Filson and Shinola. The FTC had raised concerns regarding Bedrock’s unqualified use of the phrases “Made in USA” and “Built in USA.” Despite using these labels, many of Shinola and Filson’s products were made with materials mostly or entirely sourced from outside of the US. The FTC closed its investigation as a result of Bedrock’s self-imposed corrective actions, including replacing hangtags and information cards for various products, updating employee training materials and advertising materials, and changing labelling integrated on the products themselves.

This week, the following consumer protection actions made headlines:

Litigation

Claims Dismissed in San Francisco Soda Suit

A federal judge dismissed several constitutional claims in a suit against the city of San Francisco over its ban on ads for sugary drinks, because the ordinance has since been repealed. Both San Francisco and the plaintiffs, including the American Beverage Association and other trade groups, asked the judge to dismiss the free speech and due process violation claims from the original complaint. Although the advertising component of the ordinance was repealed in December, the suit continues over a new ordinance, set to take effect on July 25, 2016, that requires ads for soda and other sugary drinks to display a mandatory health warning. The judge previously declined to enjoin the ordinance, saying that it was not likely for the plaintiffs to succeed on their First Amendment claim under the rational basis test for commercial speech.

On August 4, 2014, the Office of the Comptroller of the Currency (the “OCC”) of the US Department of the Treasury issued new guidance outlining sound banking practices related to consumer debt sales to third-party debt buyers. The bulletin sets forth the OCC’s expectations for banks that engage in debt-sale arrangements and applies to all OCC-supervised banks.