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During the successful campaign for Proposition 64 in California, reformers cited as an example of the sort of the “shakedown lawsuit” they hoped to eliminate a suit in which Bill Lerach’s class action firm demanded money from lock maker Kwikset because its product was marked “Made in U.S.A.” but included screws made in Taiwan. Nonetheless, the California Supreme Court has now ruled 5-2 that the proposition does not ban such suits after all, because consumers can claim to be injured by the arguable mislabeling, even though nothing was defective about the lock. Dissenting Justice Ming Chin, joined by Carol Corrigan, pointed out that to get around the Proposition 64 limit all that consumers “now have to allege is that they would not have bought the mislabeled product,” and that this “cannot be what the electorate intended” in voting for the measure. [L.A. Times, CJAC, earlier here, here, etc.]

Relatedly or otherwise: Glenn Reynolds interviews University of Tennessee law professor Ben Barton about his new book The Lawyer-Judge Bias in the American Legal System (“Virtually all American judges are former lawyers. This book argues that these lawyer-judges instinctively favor the legal profession in their decisions and that this bias has far-reaching and deleterious effects on American law.”)

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January 24 roundup

by Walter Olson on January 24, 2011

  • Trouble with hunting bad/burdensome regulations: most of them have entrenched advocates [NY Times] “Obama — the Great Deregulator?” [Jeff Jacoby, Boston Globe]. Earlier here and here;
  • Now we find out: tax hikes on outsourcing in 9/11 compensation bill infuriate India, were never vetted by Hill tax panels [PoL; more on Easter eggs in bill] Law firm that advertises for 9/11 dust clients is fan of Sen. Gillibrand [Stoll]
  • France will stop censoring some historical images of smokers in ads [NY Times]
  • “2010: The Year of the Angry, Company-Suing Plaintiff” [WSJ Law Blog] “The most sued companies in America” [Fox Business, counting federal-court suits only]
  • Death by drunk driving: As bad as purposeful murder? Worse? [Greenfield]
  • EPA gets specific on its plans to advance “environmental justice,” combat disparate racial impact in project siting, etc. [WLF, Popeo, earlier here, here, here, etc.]
  • Winners of Chamber’s “Most Ridiculous Lawsuits of 2010″ competition [US Chamber ILR]
  • “If the FCC had regulated the Internet” [Jack Shafer, Slate]

Church & Dwight, of Arm & Hammer fame, has sued Clorox over comparative advertising of its “Fresh Step” litter brand. At issue is whether the comparison is scientific, per the WSJ Law Blog’s account:

“But cats do not talk, and it is widely understood in the scientific community that cat perception of malodor is materially different than human perception,” the lawsuit said. “Thus, it is not possible scientifically to determine whether cats view one substance to be more or less malodorous than another substance.”

More: Popehat.

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Sponsored by Reps. Jared Polis (D-Colo.) and Jason Chaffetz (R-Utah), it would OK some now-banned health claims about food. “A few years ago, for example, the Food and Drug Administration sent warning letters to orchards that had boasted that tart cherries contained antioxidants, anti-inflammatory agents and other beneficial properties…. All such activities, in the FDA’s words, ’cause your products to be drugs.’” [Vincent Carroll, Denver Post]

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“Because [Harrah's] ads did not explicitly state that the $15 ["birthday cash"] vouchers could not be redeemed until after 8 a.m. on the days in question, tens of thousands of recipients are entitled to $100 each in damages — a potential $8 million hit to the casino giant’s bottom line.” [AP/NYT]

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August 11 roundup

by Walter Olson on August 11, 2010

  • General Mills sends lawyers after local “My Dough Girl” Bakery [Consumerist via Amy Alkon]
  • But he can reapply in five years: “Lawyer Takes Plea in Case Over His Hardball Litigation Tactics, Will Be Disbarred” [ABA Journal, California]
  • “Shame on Elie Wiesel” for threatening a lawsuit over his fictionalization in a stage play [Terry Teachout]
  • State AGs dive into HIPAA and health privacy enforcement [Nicastro, Health Leaders Media]
  • More highlights from Daniel Okrent book on Prohibition [Tabarrok]
  • Denver school board investment fiasco [Popehat]
  • Russell Jackson on the Yoo-Hoo chocolate beverage class action [Consumer Class Actions and Mass Torts, earlier]
  • California court rules state’s Moscone (“little Norris-LaGuardia”) Act unconstitutional [Workplace Prof]

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Declan McCullagh at CNet and Jim Harper at Cato warn about a proposed bill sponsored by Rep. Bobby Rush (D-Ill.) that could impose significant regulatory burdens and legal risks on many small businesses, websites and even individuals that gather information about customers or other persons. The bill is presently titled the “Building Effective Strategies To Promote Responsibility Accountability Choice Transparency Innovation Consumer Expectations and Safeguards Act, or BEST PRACTICES Act of 2010.”

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Although the company president says the California-based chain has “basically bombard[ed]” its customers with notifications about its price increase to 99.99 cents an item, class action lawyers say it’s unfair and misleading. [L.A. Times] One reader is reminded of the words of Lionel Hutz: “Mr. Simpson, this is the most blatant case of fraudulent advertising since my suit against the film, ‘The Never-Ending Story.’”

P.S. Orange County attorney Dan Callahan, described as having filed one of the suits, looks to be the same Daniel Callahan of Callahan and Blaine who has appeared in these columns twice before.

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The plaintiffs said to avoid embarrassment, they consented to the broadcast of their extreme beer-pong skills only in Denmark. Unfortunately, the ad went viral. [THR, Esq.]

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July 13 roundup

by Walter Olson on July 13, 2010

  • Wal-Mart spending millions to fight $7,000 OSHA fine? Not so paradoxical when you think about it [Coyote]
  • Proliferation of product recalls, as with warnings, can result in consumer fatigue and inattention [WaPo via PoL]
  • Settlement said to be near between casino and gambler who lost $127 million [WSJ, UPI, earlier]
  • “Think Globally, Sue Locally: Out-of-Court Tactics Employed by Plaintiffs, Their Lawyers, and Their Advocates in Transnational Tort Cases” [study, PDF and press release; Jonathan Drimmer for US Chamber, related WSJ]
  • “End of an Era? Another Crunch Berries Case Dismissed” [Lowering the Bar, California Civil Justice, earlier on "froot" cases here, here, etc.]
  • New Jersey: “School legal costs are a killer” [Rayner, Daily Record]
  • ABA Journal profiles Ted Frank;
  • We’re the ones who write the laws around here, not you legislators: Washington Supreme Court strikes down med-mal notice law [SeattlePI.com]

“Timothy Dahl, 35, is suing Yoo-Hoo’s parent company, the Dr Pepper Snapple Group, in federal court because he claims the product’s ‘good for you’ ad slogan is simply not truthful.” The suit is an intended class action. [Gothamist, New York Post, Legal Blog Watch] We’ve covered the many “froot” class action suits alleging that CrunchBerries, Froot Loops, etc. are not particularly healthy things to eat; at least one suit has similarly assailed Cocoa Puffs.

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Something about fruit-flavored snack foods seems to get the class-action lawyers going. A Brooklyn woman is now suing General Mills, saying its Fruit Roll-Ups, popular with kids, are not as healthy as buyers might think from its marketing. [California Civil Justice Blog, Reuters, New York Daily News]

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Want to get a local potato chip company to sponsor the scoreboard at your high school athletic field? Washington may soon be making that decision for you. Adam Cassandra of CNSNews.com quotes me in this piece on the federal government’s deepening involvement in school food issues, and the price it brings in local control.

I’ve got a new post up (my first, in fact) at Cato at Liberty taking issue with my friends at the Competitive Enterprise Institute over their petition to the Federal Trade Commission asking it to investigate General Motors’s ridiculous bailout ad campaign.

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Lowering the Bar has details on the latest California case alleging fraud. Food Liability Law Blog wonders whether it and the related Crunchberry suit will make for an “endless loop” of courtroom activity. Earlier here, etc.

P.S. Don’t miss our funny reader comments on this one.

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Funny warnings from Antenna Direct of Missouri [Consumerist] And Australian prawns (shrimp) are sold with a reassurance that the accompanying promotional material is “not implicitly or explicitly directed at minors, excluded persons, or vulnerable or disadvantaged groups.” [Hey, What Did I Miss? (Institute for Public Affairs)]

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Legal notice advertisements announce the $35 million giveaway over alleged mismarketing of the Activia and DanActive brands. [New Jersey Lawsuit Reform Alliance] NJLRA’s Ann Marie McDonald:

I eat Dannon yogurt products fairly regularly. I haven’t been dissatisfied yet. It’s difficult to assess whether my body’s defenses have been strengthened by the product itself or the placebo effect. I doubt a $35,000,000 asterisk will make that any clearer. Nevertheless, I’d still be able to participate in this lawsuit, even though I don’t feel deceived and suffered no adverse [effects] from using it.

Earlier coverage here, here, and here.

Some 60,000 cell-phone users who had signed up to receive “promotional messages” from Nextones.com in order to get a free ringtone got just such a text message on January 18, 2006 advertising a cell-phone-related Stephen King book. This resulted in a class action that was thrown out on the grounds that plaintiffs had agreed to “terms and conditions” permitting such cell-phone advertising; moreover, the federal law prohibiting the use of an automatic telephone dialing system applied only to systems that dialed numbers randomly or sequentially, and the defendants were operating off of a list of opt-in telephone numbers.

The Ninth Circuit reversed. The issue, it said, was not whether phone numbers were sequentially dialed, but whether the equipment used could hypothetically sequentially dial telephone numbers. It also held that there was a disputed issue of fact whether King’s publisher, Simon & Schuster, counted as an “affiliate.”

Faced with the prospect of going to trial and the risk of $500 to $1500 damages assessed for each call (i.e., $30 to $90 million in damages) defendants have settled. There is a settlement fund of $10 million established, plaintiffs can submit claims that will pay $175 (or a pro rata amount if the fund is exhausted) and plaintiffs’ attorneys will ask for $2.725 million from that fund.

This is superficially all well and good, but if the claim response is the all-too-typical 1%, the attorneys may well collect 27 times as much as the class will get. Indeed, assuming that $1 million for notice and administration disappears from the fund, the full $10 million won’t be paid out unless over half the class signs up. There is also a mysterious $250,000 “cy pres” award whose destination is not specified in the notice or in the settlement.

If you’re a class member who received the text message in 2006, congratulations, you can get free money: fill out a claim form before September 20 (and kudos to the parties for allowing claimants to do it online); if you’re a class member who has concerns about the settlement, contact me.

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