FTC Settlement Over “Made in the USA”

FTC v. Chemence, Inc.

Factual Allegations:

  • “Made in USA” or “Proudly Made in USA” are claims made for glue products, such as Kwik Fix, Hammer Tite, and Krylex
  • Approximately 55% of the costs of the chemical inputs is attributable to imported chemicals that are essential to the glues’ function
  • The defendant assisted others in deceiving consumers by distributing marketing materials to private-label sellers and third-party websites

Disposition:

  • Settled for stipulation order for permanent injunction and monetary judgment of $200,000
  • Order permits qualified “Made in USA” claims if it includes conspicuous disclosure about the extent to which the product contains foreign parts, ingredients, and/or processing

 

JPC Notifies Industry of Current SAG‐AFTRA Commercials Contract Interpretive Disagreements

Stock” Materials

  • SAG brings claims related to stock footage, photography, and/or music
  • JPC: contract does not apply to footage produced outside scope of agreement

Made for Advertising Purposes

  • SAG brings claims over whether stock was “made for any advertising purposes”
    • Meaning it would be covered by SAG
  • JPC/SAG: release language which allows for advertising is not dispositive

Social Media Wavier

  • SAG brings claims arguing waiver not available for new productions and previously produced footage
    • JPC disagrees

 

$925,000 Settlement Where Disclaimer Wasn’t Enough to Remedy False Ad

L.A., Riverside and San Diego Counties v. Liberty Mutual

Factual Allegations:

  • National TV ads focused exclusively on the consumer benefits of Liberty Mutual’s “Accident Forgiveness” car insurance program
  • California prohibits the offering of accident forgiveness in auto insurance policies
  • DAs alleged that the “not available in CA” disclaimer on the screen for 3-4 seconds was not sufficient clear and conspicuous disclosure
  • DAs alleged ads “could convey an overall impression that California consumers would receive this benefit as part of Liberty Mutual car insurance” 

Disposition:

  • Injunction. Liberty Mutual has to pay $830,000 in civil penalties and $95,000 for “agency investigative costs”

 

Another FTC Settlement Over (In Part) Failure to Disclose Connection

FTC v. Neenah’s Supple Beverages

Factual Allegations:

  • Company sells a liquid and powdered beverage that purports in advertising to relieve pain
  • Company failed to disclose that the “expert” attesting to the efficacy of the product was the wife of company owner
  • Implies expert opinion was impartial

Disposition:

  • Settling with FTC under consent order
  • Company will pay $285,000 to the agency, which would suspend a $150 million judgment and will cease marketing the product

 

Court Dismisses False Advertising Claims As “Unreasonable”

Galanis v. Starbucks

Factual Allegation:

  • If Starbucks advertises an “iced” drink as containing 24 fluid ounces, the drink “should have 24 ounces of fluid plus ice

Holding:

  • A reasonable consumer would expect the advertised amount of the beverage includes both ice and tea
  • Helped that the website menu directly stated that the drinks are served “over ice” and included “ice” as an ingredient
  • Helped that the menu stated that “fluid ounces” where described container sizes
  • “Fluid ounces” is a measurement of a drink’s volume, not a description of a drink’s contents