NEWSLETTER: Advertising, Marketing & Promotions, Summer 2011
Dear Clients, Colleagues and Friends,
Olshan Frome Wolosky LLP forms Advertising, Marketing & Promotions Group.
We are pleased to announce the formation of Olshan's Advertising, Marketing & Promotions Department. Joining Olshan to head this new practice is Andrew B. Lustigman. His colleagues Scott A. Shaffer and Adam Z. Solomon also join Olshan as partners while Sheldon S. Lustigman and Jonathan I. Ezor join Olshan as Of Counsel. The group previously comprised The Lustigman Firm, P.C.
The group has a nationally recognized practice and is known for structuring unique and groundbreaking promotions as well as defending regulatory investigations and litigation. The group also frequently prosecutes and defends competitor challenges in federal court and before the National Advertising Division of the Better Business Bureau. The group joins Olshan's premier 80-plus attorney corporate, litigation, intellectual property, real estate, bankruptcy and related practices.
Below are selected developments of interest to those involved in advertising and promotional marketing matters. 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 contact us.
IN THIS ISSUE
BUZZ AT THE ADVERTISING, MARKETING & PROMOTIONS LAW GROUP
Andrew Lustigman and Adam Solomon have been named by Chambers USA as two of the top attorneys nationally in the Advertising: Transactional & Regulatory section of the 2011 Guide.
Andrew Lustigman, who has been recognized in Chambers four years in a row, was cited by clients as "the one guy in the industry to go to. Every single issue in advertising, compliance, litigation, whatever, he does it all, and he does it well." Adam Solomon is praised for his expertise in sweepstakes and contest laws.
Andrew Lustigman and Jonathan I. Ezor were recently featured in two Mobile Marketer articles about cases brought against Google involving smartphone privacy and data collection. The first article discussed the class action suit brought against Google by users of its Android operating system based on alleged location tracking. The second article focused on allegations that Google has been collecting users' personal information and sharing it with its application developers without the users' knowledge or consent.
Jonathan I. Ezor, was the featured source for a Mobile Marketer article discussing the proposed sale of patents owned by Nortel (now proceeding through a bankruptcy). The piece discusses a reported approval by the Department of Justice of Google's participation in the auction of the Nortel patents over the objection of mobile device competitors, and its potential impact on mobile marketing.
Jonathan I. Ezor recently published his article, Busting Blocks: Revisiting 47 U.S.C. § 230 to Address the Lack of Effective Legal Recourse for Wrongful Inclusion in Spam Filters, in the University of Richmond Journal of Law and Technology (JOLT).
STAY IN TOUCH
FCC CRAMMING ENFORCEMENT ADVISORY AND PLANS TO PROPOSE NEW REGULATIONS
The Federal Communications Commission has issued an Enforcement Advisory on cramming after announcing four Notices of Apparent Liability. The FCC issued the Enforcement Advisory to warn carriers that the agency will not tolerate cramming and to emphasize to all who might be involved in such activities that they may face very severe penalties. On June 20, 2011, FCC Chairman Julius Genachowski announced plans to propose new rules to increase transparency and disclosure on phone bills.
FTC TO REVISE DOT COM DISCLOSURE GUIDE - COMMENT DEADLINE AUGUST 10, 2011
The Federal Trade Commission will be revising the "Dot Com Disclosures: Information About Online Advertising," which advises businesses how federal advertising law applies to marketing and sales on the Internet. The Dot Com Disclosures Guide, initially published in 2000, has provided concrete guidance to marketers and attorneys with respect to placement of disclosures and proper use of hyperlinks. The Guide emphasizes that the same consumer protection laws apply to marketers whether they operate online or not and illustrates how online marketers should provide clear and conspicuous disclosures of information that consumers need to make informed online purchasing decisions. It also discusses how the traditional factors used to evaluate whether disclosures are likely to be clear and conspicuous apply in the context of online advertising.
SUPREME COURT ENFORCES CLASS ACTION PRECLUSION ARBITRATION PROVISION IN CONSUMER CONTRACTS
In AT&T Mobility LLC v. Concepcion , a class action brought by cellular telephone customers against AT&T wireless, the United States Supreme Court affirmed that the arbitration dispute resolution remedy with a class action waiver set forth in the parties' contract was enforceable. Under the arbitration provision, plaintiffs could not arbitrate their claims on a class wide basis. Disagreeing with the lower courts who found that such an agreement would be unconscionable under state law, the Supreme Court reversed. Instead, the Court found that the Federal Arbitration Act, which reflects a liberal federal policy in favor of arbitration, trumped state law to the contrary. The Court found that the arbitration provision was enforceable and would bar class-wide relief.
False advertising claims against marketers on an individualized basis typically involve disputes over only a few dollars. However, claims on a potential class basis can result in significant exposure. Given the holding in Concepcion, marketers should consider the availability of alternative dispute resolution procedures with class action waivers in their contractual agreements with customers. Marketers, however, should not expect that a blanket mandatory arbitration requirement will automatically result in enforcement of the arbitration provision. Rather, marketers should detail consumer-friendly dispute resolution opportunities for a customer to resolve a claim cheaply and expeditiously on an individualized basis and to make sure that an arbitration component is fair and reasonable.
INCREASING REGULATORY SCRUTINY OF DIETARY SUPPLEMENT MANUFACTURERS AND MARKETERS
The Food and Drug Administration (FDA) and Federal Trade Commission (FTC) share jurisdiction over consumer health products such as dietary supplements. In recent actions against dietary supplement marketers and manufacturers both agencies have demonstrated that they intend to employ their enforcement powers. These actions highlight the need for those involved with such products to ensure that the products are manufactured in accordance with current good manufacturing practices, are safe and not adulterated, and that any health claims are properly substantiated. This article explores these evolving obligations.
ILLINOIS AND CONNECTICUT GOVERNORS SIGN "AMAZON TAX" BILLS INTO LAW
States are exploring a variety of methods to improve their collection of tax revenues from purchases made by their residents from out-of-state online and mail-order retailers. Illinois and Connecticut have become the latest states to enact such laws. The new laws follow the model that New York State set with its so-called Amazon Tax (currently in the midst of a court challenge): it extends the definition of "nexus," presence for sales tax liability purposes, to include in-state members of a retailer's affiliate program. Both states' laws go into effect on July 1, 2011. Accordingly, publishers and affiliate marketers alike must now be prepared to comply with these laws and to adjust their business practices accordingly. Indeed with the increasing enactment of the "Amazon Tax" laws, retailers should start preparing for what appears to be the inevitable - the obligation to collect and remit sales tax to states across the country even though they do not have a physical presence in the state.
INDIANA DO NOT CALL LIST EXTENDS TO INCLUDE MOBILE NUMBERS
Indiana Governor Mitch Daniels signed into law House Enrolled Act 1273, which allows consumers to register their cell phone numbers, prepaid wireless calling, and Internet-enabled VOIP services with the state's existing Do Not Call registry. The law goes into effect immediately.
While federal law prohibits calls using auto dialers to cell phones and Indiana regulations currently forbid "Robo Calls," i.e., the delivery of pre-recorded messages made by auto-dialers, the new Indiana law will extend the definition of a "call" so as to include the sending of a texts, photos, images, and multimedia messages - all common forms of cell phone communication - to Indiana mobile devices.
FTC ARGUES FOR EXPANSIVE INTERPRETATION OF TELEMARKETING LAW
These days, class-action lawsuits for illegal telemarketing calls are popping up like weeds or flowers (depending on your perspective) in a spring garden. The statute in question, the Telephone Consumer Protection Act, or TCPA, holds not only the caller responsible for illegal calls, but in some cases, the party on whose behalf the call was made. With penalties running as high as $1,500 per illegal call and autodialers capable of making thousands of calls an hour, TCPA class actions have the potential to bankrupt all but the best-heeled of companies.
The question of the moment that courts all over the country are being asked to decide is how far liability can be stretched under the TCPA. Plaintiffs are arguing for the broadest possible definition of "on behalf of", so that virtually anyone who benefits from the telemarketing, no matter how far up or down the chain they are, should be on the hook for up to $1,500 per call. Defendants obviously want a narrower definition of liability.
The FTC recently released a public comment to its sister agency, the FCC, on the subject. Predictably, the FTC wants a broad standard of liability that extends to what it labels "the ultimate seller." According to the FTC, a telemarketing call should be considered "on behalf of" an entity if the entity simply benefits from the telemarketing call.
NINTH CIRCUIT FINDS AN ELECTRONIC RECEIPT IS NOT "PRINTED" FOR FACTA PURPOSES
The Ninth Circuit Court of Appeals ruled in Simonoff v. Expedia, Inc. that an email receipt displayed on a computer screen is not an electronically printed receipt under the Fair and Accurate Credit Transactions Act (FACTA). While the decision is limited in its context to finding non-liability under that specific federal statute, the court's rationale may spell trouble for businesses that rely upon electronic mail to satisfy a physical "print" requirement.
ARTIST CLAIMS COPYRIGHTS TO MIKE TYSON'S FACIAL TATTOO
A Missouri tattoo artist named S. Victor Whitmill sued the studio that produced the eagerly anticipated movie "The Hangover II" because the movie and its promotional materials include reproductions of the tattoo that Whitmill inked onto the face of boxer-turned-thespian Mike Tyson. Whitmill asked a Missouri for a preliminary injunction to delay the release of the movie to 3,600 theaters. On May 24th, his request was denied. The court did not immediately provide and explanation for its decision. Still, the lawsuit will proceed with Whitmill seeking monetary relief. Whitmill claims copyright infringement for the depiction of the tattoo, and also reserved the right to add a libel claim after he sees the movie because he heard that the tattoo artist shown in the movie was depicted as crazy and that will somehow make viewers think he is crazy.
We strive to stay on top of all relevant legal issues to provide our clients with the most effective and efficient legal advice. If you find any legal marketing news of interest, send it to us!
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