NEWSLETTER: Advertising, Marketing & Promotions, Fall 2010
Dear Clients, Colleagues and Friends,
Fall is finally in the air! Leaves are piling up and people are getting ready for Thanksgiving and the winter holidays. On the legal front, there have been a number of important developments that require action by early December, including compliance with California's new automatic renewal law (December 1, 2010) and submitting comments to the FTC on its new proposed Green Guides (December 10, 2010). On the litigation front, the dual POM/FTC litigation challenging the FTC's new enforcement direction on health claims promises to be actions worth watching. The multi-state enforcement action against Publishers Clearinghouse confirms that regulators will continue to bring enforcement actions against sweepstakes mailers. These, and other timely topics, are discussed in this newsletter.
As always, if you would like to discuss any of these developments, have concerns about their impact on your business or marketing campaign, or have any questions about the legal aspects of advertising and promotional marketing, please feel free to give us a call.
IN THIS ISSUE
Andrew Lustigman and Adam Solomon Speaking at This Year's PMA Law Conference
Andrew Lustigman and Adam Solomon will speak at the 32nd Annual Promotion Marketing Law Conference in Chicago, IL on November 17-18, 2010. Andrew will participate as a panelist in a session entitled How Far Can/Should You Go With Your Promotion. Adam will host a roundtable that will discuss the latest developments in postal regulations and enforcement.
PMA's Annual Promotion Marketing Law Conference is a state of the art event with a complete and in-depth explanation of the things you need to know to comply with the fast changing world of promotion and advertising laws, regulations and litigation.
We hope that you will have the opportunity to support us and our talk as well as the chance to sit in on some of the other wonderful sessions given over the course of the two days.
Recent and Upcoming Presentations on Social Media by Jonathan I. Ezor
Olshan Special Counsel Jonathan I. Ezor continues his frequent presentations on the business and legal aspects of social media.
Jonathan was a panelist on Facebook best practices for small business at the Fair Media Council's Connection Day on Long Island on Friday, October 29th. On Wednesday, November 3, Jonathan presented on ethical issues of social media for American Lawyer Media's Social Media Risk and Rewards conference at the Harvard Club in New York City. Jonathan served as the co-chair of the Long Island site for the national Social Media Day of Service. 18 not-for-profit organizations serving Long Island were paired with 10-15 social media professionals who volunteered to provide individualized and group training on methods and strategies for using social media to help the community. Jonathan also gave a seminar on the unique legal and other risks faced by not-for-profits when they utilize social media.
For information on how you can manage the risks and maximize the rewards of social media, please contact Jonathan and the other attorneys of Olshan's Internet law practice group.
STAY IN TOUCH
FTC'S Proposed Revisions to "Green Guides" - Deadline for Comments December 10, 2010
In October 2010, the FTC issued its proposed revisions to its Guides for the Use of Environmental Marketing Claims, commonly known as the "Green Guides." The proposed Guides would supplement the Green Guides that have remained unchanged since the late 1990s. The proposed Guides include changes designed to strengthen the FTC's guidance on those marketing claims that are already addressed in the current Guides as well as to provide new guidance on marketing claims that were not common when the Guides were last reviewed. The guidance they provide includes: 1) general principles that apply to all environmental marketing claims; 2) how consumers are likely to interpret particular claims and how marketers can substantiate these claims; and 3) how marketers can qualify their claims to avoid deceiving consumers. Comments must be received by December 10, 2010.
California's Negative Option Law to Take Effect December 1, 2010
California's new auto renewal legislation takes effect on December 1, 2010. It is critically important that marketers who rely upon advance consent for continuity offers and review their enrollment programs to ensure that they are in compliance. This is particularly important given the state's aggressive plaintiff's bar.
New Guidelines for Contests on Twitter
Businesses, organizations, and even some creative individuals have hosted contests through their respective Twitter profiles. Contests on Twitter may offer prizes for tweeting a particular update, for following a particular user, or for posting updates with a specific hashtag. If you've been thinking about hosting a contest using your Twitter profile, be sure to follow any and all accompanying guidelines.
Connecticut Attorney General and Others Challenge BBB Rating System
According to published reports, in response to a controversial business practice by the Better Business Bureau (BBB) in which higher grades are given to businesses that pay for accreditation the Connecticut Attorney General, has threatened legal action. This is in addition to a recent lawsuit challenging the practice as well as a 20/20 news story.
Florida Settles With Rebate Offerors
Companies utilizing rebates should consider the new settlement the Florida Attorney General reached with Systemax and its subsidiaries, Tigerdirect and Onrebate, over allegations the companies failed to pay advertised rebates to consumers. Consumer complaints reported that the rebate programs were very difficult to navigate and often led to consumers giving up their rights to rebates.
The settlement specifically requires Systemax and its subsidiaries to process rebates in the time advertised and to initiate procedures that allow for the proper handling of rebate submissions. Additionally, pursuant to the settlement agreement, in which the defendants admitted no wrongdoing, the Attorney General's Office will dismiss the complaint and will be reimbursed $200,000 in attorneys' fees and costs, and donate $100,000 to the Florida Alliance of Boys and Girls Clubs. View the settlement.
Fendi Trademark Counterfeiting Suit Settled for $10 Million - Luxury Daily
Apparel and accessories designer Fendi settled a trademark counterfeiting suit against Burlington Coat Factory Warehouse for a payment of more than $10 million. The lawsuit was filed in New York's federal district court, one of several trademark counterfeiting suits brought by Fendi since 2006. The designer brand charged Burlington Coat Factory with selling counterfeit versions of its branded products. The Luxury Daily article discussing the settlement includes analysis by Andrew Lustigman.
Popular Web Forum Forced to Stop Charging Customers to Expedite Review of Abusive Postings
Thirty-four state Attorneys General have reached an agreement with website Topix.com to improve the site's handling of abusive and inappropriate posts, including banning the site from charging users a $19.99 fee to expedite the review of their complaints. This settlement comes in response to a consumer outcry over Topix's handling of abusive posts, especially those targeting minors.
Competing "POM" FTC Lawsuits Filed
The Federal Trade Commission and the marketer of POM Wonderful are waging competing legal actions against each other regarding the POM's ability to make certain health claims without obtaining prior FDA approval and possessing certain levels of substantiation. Both actions follow the FTC's recent enforcement actions against Iovate and Nestle relating to those companies' health claims.
Publishers Clearinghouse Signs New Consent Judgment With 32 State Attorneys General and District of Columbia
Publishers Clearinghouse has signed a new consent judgment with thirty-two states and the District of Columbia that beefs up the company's 2000/2001 thirty-three state agreement. The new agreement contains a number of important limitations and compliance obligations not typically contained in consent orders.
The most recent investigation raised concerns that PCH was not complying with the earlier agreement and that consumers were still unclear about the nature and language of some of the company's sweepstakes promotional mailings. The new agreement adds additional provisions to address these issues. Notably, PCH will be required to conduct more robust surveys to make certain that consumers understand that their odds of winning a sweepstakes prize do not increase with the purchase of any of PCH's products. In addition, the agreement provides limitations on the number of customer-only sweepstakes. Furthermore, the agreement restricts the use of certain terms and devices, including listing of order history and entries, pre-checked boxes, separation of sweepstakes entry and product ordering information, and the use of the terms in advertising such as the "key code," guarantee as it relates to a sweepstakes prize, winner selection committee or winner search party, and board of judges.
Split Decision in Appeal of NY "Amazon Tax" Case
On November 4, 2010, the Appellate Division (1st Department) of the New York State Supreme Court issued an opinion in the so-called Amazon Tax case (described previously in our blog and here). In its opinion, the Appellate Division revived some (but not all) of the previously dismissed claims of Amazon.com and Overstock.com. The dispute goes on.
Oklahoma Enacts New Rules Regarding Use Tax on Mail-Order Sales
Other states are jumping in on the online tax bandwagon. On August 26, 2010, the Oklahoma Tax Commission enacted emergency regulations under state law HB 2359, a new law that includes sales tax obligations for out-of-state retailers, which went into effect on July 1, 2010.
Advertising Agency Targeted in First Settlement Under FTC's Endorsement Guides
In its first announced enforcement action arising out last year's revised Guides Concerning the Use of Endorsements and Testimonials in Advertising, the FTC has agreed to settle a case brought against Reverb Communications, a P.R. agency. The case arose out of allegations that Reverb employees posted positive reviews on Apple's iTunes store of videogames developed by Reverb's clients and sold via iTunes, without disclosing that the reviews were on behalf of paid clients. (The FTC had previously warned Ann Taylor about a possible Guides violation, but took no enforcement action.)
Advanced Consent Marketing on the Internet
Online marketing plans and sales arrangements that allow consumers to consent in advance to receive and pay for goods or services in the future on a continuing or periodic basis are convenient and beneficial to both consumers and marketers. While these programs offer consumers the ability to try various programs and the opportunity to obtain significant discounts, their ease of enrollment and lack of usage has created a storm of controversy. With recent regulatory actions and proposed legislative changes, continued use of advanced consent plans on the Internet requires awareness of all legal developments.
Mobile Marketing Law Update: The Hits Keep Coming
While mobile marketing continues to develop significantly given the primary importance consumers place on the devices coupled with their tremendous advances in technology, the law in this area continues to lag. Marketers and their lawyers are finding that the regulatory guidance and enforcement relating to this technology is emanating not out of Washington, but rather out of the state of Florida and through the workings of a few class action attorneys who are otherwise establishing nationwide standards.
Andrew Lustigman and Sheldon Lustigman Named to New York Super Lawyers - 2010 Metro Edition
Andrew B. Lustigman and Sheldon S. Lustigman have been named by New York Super Lawyers - 2010 Metro Edition as two of the top attorneys in their advertising law practice area. Andrew and Sheldon have been selected for inclusion into the New York Super Lawyers - Metro Edition multiple times.
Super Lawyers is a comprehensive and diverse listing of outstanding attorneys, representing a wide range of practice areas, firm sizes and geographic locations. Only 5 percent of the lawyers in each state or region are named Super Lawyers. Law & Politics performs the polling, research and selection of Super Lawyers in a process designed to identify lawyers who have attained a high degree of peer recognition and professional achievement.
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This newsletter is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.
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Originally published by The Lustigman Firm, P.C. and has been re-branded and edited to conform and to correct certain references.