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Bans on Credit Card Surcharges Face First Amendment Challenges

August 7, 2017

Authors

Bryan Cave, Vanessa Fulton, Stanton Koppel and Seyi Iwarere

Bans on Credit Card Surcharges Face First Amendment Challenges

August 7, 2017

by: Bryan Cave, Vanessa Fulton, Stanton Koppel and Seyi Iwarere

State laws that prohibit retailers from charging customers a surcharge for using a credit card are being challenged on First Amendment grounds.

For more than four decades, California’s Song-Beverly Credit Card Act of 1971 prohibited retailers from charging credit card customers such a surcharge. In Italian Colors Restaurant, et al. v. Harris, 99 F.Supp.3d 1199 (E.D. Cal. 2015), a federal judge ruled that the law unconstitutionally limits retailers’ freedom of speech. The California attorney general appealed, and the case is set for oral argument before the Ninth Circuit Court of Appeals on August 17.

The outcome may be influenced by the U.S. Supreme Court’s decision in March of this year in Expressions Hair Design v. Schneiderman, 137 S. Ct. 1144 (2017), that a similar New York ban on credit card surcharges implicates the First Amendment. That case has been remanded to the Second Circuit to determine whether the ban

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DOJ Puts Website Accessibility Regulations on Inactive List

DOJ Puts Website Accessibility Regulations on Inactive List

July 25, 2017

by: Bryan Cave, Merrit Jones, Heather Goldman, Rodney Page, Steven Stimell, Jennifer Dempsey and William Wortel

Retailers and other businesses that have been waiting for the Department of Justice (“DOJ”) to promulgate regulations concerning website accessibility under Title III of the Americans with Disabilities Act (the “ADA”) will now have to wait a lot longer. Eight years after the DOJ began the rulemaking process on this issue, it has now listed the rulemaking as “inactive.”

Federal agencies typically provide public notice of the regulations that are under development twice a year in the Unified Regulatory Agenda. The first Agenda was issued by the Trump Administration on July 20, 2017, and contains noteworthy changes from the last Agenda issued by the Obama Administration.

For the first time, the Agenda breaks down all agency regulatory actions into three categories: active, long-term, or inactive. While the Agenda does not define these terms, only the active and long-term matters receive a description and projected deadlines. The inactive matters appear in a

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Ninth Circuit Reconsiders, Nixes Deceptive Labeling Claim Against Gerber

July 21, 2017

Authors

Bryan Cave, Merrit Jones and Vanessa Fulton

Ninth Circuit Reconsiders, Nixes Deceptive Labeling Claim Against Gerber

July 21, 2017

by: Bryan Cave, Merrit Jones and Vanessa Fulton

Baby food maker Gerber has scored a partial victory in a false labeling would be class action. The Ninth Circuit in Bruton v. Gerber Prods. Co., Case No. 15-15174, has reversed itself and thrown out a deceptive labeling claim based on the plaintiff’s lack of evidence that reasonable consumers would be deceived.

Plaintiff Natalia Bruton filed the putative class action against Gerber Product Co. alleging that labels on certain baby food products included claims about nutrient and sugar content that were impermissible under Food and Drug Administration (FDA) regulations that prohibit such claims on products intended for children less than 2 years old. Bruton did not allege that the labels were false, but that the lack of such claims on competitors’ products (in compliance with FDA regulations) made Gerber’s labels likely to mislead the public into believing that Gerber’s products were healthier.

As we reported in a previous

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Website Accessibility Update: California Federal Court Denies Hobby Lobby’s Motion to Dismiss

Website Accessibility Update: California Federal Court Denies Hobby Lobby’s Motion to Dismiss

July 3, 2017

by: Bryan Cave, Merrit Jones, Heather Goldman, Rodney Page, Steven Stimell, Jennifer Dempsey and William Wortel

Another website accessibility decision against a retailer, this time involving Hobby Lobby Stores, Inc. in the Central District of California, highlights the uncertainty of the law and of litigating such cases while courts continue to reach different conclusions.

In Gorecki v. Hobby Lobby Stores, Inc., Case No. 2:17-cv-01131-JFW-SK (C.D. Cal. June 15, 2017), the district court denied Hobby Lobby’s motion to dismiss and held that the retailer’s website constitutes a “public accommodation” under Title III of the Americans With Disabilities Act (“ADA”).  In so holding, the court noted that the website allows consumers to purchase products, search for store locations, view special pricing offers, obtain coupons, and purchase gift cards.

The court also relied on Department of Justice (“DOJ”) regulations requiring public accommodations to use auxiliary aids and services to “communicate effectively” with disabled customers.

This decision was issued only two days after a federal judge in the Southern

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New York City Follows Trend in Passing Predictive Scheduling Law for Retail

June 27, 2017

Authors

Bryan Cave and Traci Choi

New York City Follows Trend in Passing Predictive Scheduling Law for Retail

June 27, 2017

by: Bryan Cave and Traci Choi

New York City has enacted a law banning “on-call scheduling” for retail employees. The law takes effect on November 26, 2017.

With “on-call scheduling,” an employer requires an employee to be available to work, to contact the employer, or to wait to be contacted by the employer to determine whether the employee must report to work.

New York City’s new law, Local Law § 20-1251 (Int. No. 1387-A), prohibits retail employers from cancelling, changing, or adding work shifts within 72 hours of the start of the shift. Retail employees may, however, request time off and switch shifts with their co-workers.  Employers can revise employees’ work schedules with less than 72 hours’ notice under limited circumstances.

Retail employers must also: (1) post employees’ schedule 72 hours before the beginning of the scheduled hours of work; (2) provide upon request a written copy of employee’s schedule for any week worked within

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Retailer Loses ADA Website Accessibility Trial

Retailer Loses ADA Website Accessibility Trial

June 20, 2017

by: Bryan Cave, Heather Goldman, Merrit Jones, Rodney Page, Steven Stimell, William Wortel and Jennifer Dempsey

Retailers with both physical locations and a website should take note that a United States District Court has held that Winn-Dixie violated Title III of the Americans with Disabilities Act (“ADA”) because its website was inaccessible to the visually impaired plaintiff.

The Court’s decision in Gil v. Winn-Dixie Stores, Inc., No. 16-cv-23020, Dkt. No. 63 (S.D. Fla. June 13, 2017) is significant for a number of reasons.  First, Gil appears to be the first website accessibility lawsuit to go to trial.

Second, despite the fact that Winn-Dixie does not conduct sales through its website, the Court found that the website was “heavily integrated” with the physical store locations because customers can use the website to access digital coupons, find store locations, and refill prescriptions through the website.

Third, the Court considered the cost of making Winn-Dixie’s website accessible in light of the total cost to launch and upgrade a website. While the

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FDA Delays Implementing Nutrition and Supplement Facts Label Rules

June 16, 2017

Authors

Bryan Cave, Brandon Neuschafer, Merili Seale and Merrit Jones

FDA Delays Implementing Nutrition and Supplement Facts Label Rules

June 16, 2017

by: Bryan Cave, Brandon Neuschafer, Merili Seale and Merrit Jones

The FDA has announced that it is delaying implementation of the Nutrition Facts and Supplement Facts Label and Serving Size final rules.  As we previously reported, the rules were finalized in May 2016 and initially set a general compliance date of July 26, 2018, although manufacturers with annual food sales of less than $10 million were given an additional year to comply.

The FDA did not elaborate on the new timeframe for implementation, but stated in a revised online guidance that it will provide details of the extension through a Federal Register Notice at a later time.

The rules require a revamped Nutrition Facts format that would increase the type size of certain nutrition information, require mandatory declarations for “added sugars,” Vitamin D and potassium, impose a new definition of “dietary fiber,” and revise serving sizes for certain food products.

The FDA explained that the extension was in response to

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Unicorn-Themed Drinks Spawn Trademark Dispute Between Coffee Retailers

June 9, 2017

Authors

Bryan Cave, Erick Schroeder, Steven Alagna and Nick Williamson

Unicorn-Themed Drinks Spawn Trademark Dispute Between Coffee Retailers

June 9, 2017

by: Bryan Cave, Erick Schroeder, Steven Alagna and Nick Williamson

While the mythical unicorn is a rare creature, it has recently become a marketing phenomenon, with the unicorn’s rainbow-laden powers being harnessed to sell unicorn-themed products that can cover you from literally head to toe, i.e., from makeup (such as “Unicorn Snot®”, a glitter gel) to slippers and even a toilet spray made with “unicorn farts” (Squatty Potty’s “Unicorn Gold®”). Perhaps inevitably, brand owners have begun to battle over who can lay claim to a unicorn trademark. And this includes drinks that sound like coffee (but largely are not).

In April, caffeine aficionados found it was nearly impossible to avoid Starbucks’ limited-time promotion of its Unicorn Frappuccino. Purple and turquoise, and made of créme frappuccino syrup, milk, ice, mango syrup and “whipped cream-sprinkled pink and blue fairy powders,” the reportedly coffee-less drink was heavily promoted. One Brooklyn-based coffee and juice bar, however, was not enchanted by Starbucks’ frappe.

The End

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Retailers and Other Food Importers Must Ensure Food They Import Meets U.S. Safety Standards

May 30, 2017

Authors

Bryan Cave, Merrit Jones and Brandon Neuschafer

Retailers and Other Food Importers Must Ensure Food They Import Meets U.S. Safety Standards

May 30, 2017

by: Bryan Cave, Merrit Jones and Brandon Neuschafer

Requirements take effect today under the FDA’s new Foreign Supplier Verification Program (FSVP), which makes retailers and other businesses that import food into the United States responsible for verifying that the food has been produced in a manner that meets applicable U.S. safety standards.

FSVP is one of the seven foundational rules of the FDA’s Food Safety Modernization Act (FSMA), the most sweeping reform of our food safety laws in more than 70 years. It aims to ensure the U.S. food supply is safe by shifting the focus from responding to contamination to preventing it.

A central tenet of the FSVP is that the same preventive food safety standards should apply to all food consumed in the U.S., regardless of where the food is produced. The FSVP therefore requires that importers have a program in place to verify that their foreign suppliers are producing food in a manner that satisfies

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Arizona Employers Prepare to Implement New Paid Sick Time Law

May 22, 2017

Authors

Bryan Cave, Jay Zweig and Melissa Costello

Arizona Employers Prepare to Implement New Paid Sick Time Law

May 22, 2017

by: Bryan Cave, Jay Zweig and Melissa Costello

After surviving a legal challenge rejected by the Arizona Supreme Court, Arizona’s $10 minimum wage enacted under Proposition 206 is already in effect, and the sick leave portion of the law takes effect in July. For many companies, this will require new paid time off and sick leave policies, or at least revisions to their existing policies.

With enactment of Proposition 206, Arizona joins other states with sick leave laws, including Illinois, California, Oregon, Washington, Massachusetts, Vermont, and Washington, D.C. As previously reported by the Retail Law blog, the Illinois law took effect in January 2017.

The Arizona law generally applies to all Arizona employees; it makes no distinction between salaried, hourly, full-time, part-time, temporary or seasonal employees. All employees must accrue one hour of paid sick time for every 30 hours worked.

Paid sick leave can be used for medical care of a mental or physical illness, injury

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Avoid Potential Liability for Violating Laws Related to Email Marketing

May 19, 2017

Authors

Bryan Cave, Christopher Achatz and John Bush

Avoid Potential Liability for Violating Laws Related to Email Marketing

May 19, 2017

by: Bryan Cave, Christopher Achatz and John Bush

Email is an important marketing tool for retailers, who should be aware of federal and state laws regulating its commercial use. Since its enactment in 2003, the Controlling the Assault of Non-Solicited Pornography and Marketing (“CAN-SPAM”) Act has attempted to curb the number of unwanted emails and impose some rules on a largely unregulated frontier. When followed, CAN-SPAM Act’s restrictions give email recipients some control over their inboxes and also maintain fairness in how emails present themselves. Failure to follow the CAN-SPAM Act can lead to penalties of up to

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FDA’s Delay in Implementing Calorie Labeling Law Leaves Fate Uncertain

May 12, 2017

Authors

Bryan Cave and Merrit Jones

FDA’s Delay in Implementing Calorie Labeling Law Leaves Fate Uncertain

May 12, 2017

by: Bryan Cave and Merrit Jones

The latest delay by the Food and Drug Administration (FDA) in implementing new calorie labeling rules gives restaurants and food retailers a little breathing room. Originally set for May 5, the agency pushed back the deadline a second time, now requiring compliance by May 2018.

Seven years ago, the menu labeling law was passed as Section 4205 of the Affordable Care Act (ACA), and the FDA has been working on the details ever since.  Its final rule requiring calorie labeling requires restaurants and “similar retail food establishments” (such as convenience stores, grocery stores, concession stands, and food takeout or delivery establishments) that are part of a chain of 20 or more locations and that sell substantially the same menu items to, among other things, post the following on menus and menu boards:

  • calorie information;
  • a succinct statement on suggested daily caloric intake; and
  • a statement that written nutrition
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Ninth Circuit Revives Baby Food False Advertising Class Action

May 1, 2017

Authors

Bryan Cave and Merrit Jones

Ninth Circuit Revives Baby Food False Advertising Class Action

May 1, 2017

by: Bryan Cave and Merrit Jones

The Ninth Circuit has revived a proposed class action against Gerber, saying the mother who sued it for labeling its sugar-laden baby food as “natural” only had to prove the labels were misleading, not necessarily false. “Even technically correct labels can be misleading,” the panel wrote in an unpublished order reversing the district court’s dismissal of the putative class action.

In Bruton v. Gerber Food Products Co., Case No. 5:12-cv-02412-LHK, the plaintiff alleged that labels on certain Gerber baby food products included claims about nutrient and sugar content that were impermissible under Food and Drug Administration regulations incorporated into California law. She challenged the labels that describe the food as “excellent source,” “good source,” “as healthy as fresh,” “no added sugar” and “natural.” The products include a variety of snack foods that allegedly mislead consumers about being good sources of vitamins C and E, iron and zinc, and support “healthy

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Businesses Beat Lawsuits Alleging Website Terms Violate New Jersey Law

April 24, 2017

Authors

Bryan Cave, Maria Vathis, Patrick McKey and Carol Osborne

Businesses Beat Lawsuits Alleging Website Terms Violate New Jersey Law

April 24, 2017

by: Bryan Cave, Maria Vathis, Patrick McKey and Carol Osborne

Every retailer that does business in New Jersey needs to know about New Jersey’s Truth in Consumer Contract, Warranty and Notice Act (“TCCWNA”), which was passed in 1981 to protect the rights of consumers from allegedly deceptive practices in consumer contracts, warranties, notices and signs. Recently, however, the TCCWNA has been the basis of a flurry of pre-suit demand letters to retailers and class action lawsuits filed in state and federal courts in New Jersey.

The TCCWNA’s prohibition of the use of certain terms or disclaimers in warranties, consumer contracts, and other consumer-facing  materials  has been interpreted to include language typically used by retailers in their websites’ terms and conditions, rules of use, on social media, and in contracts – such as commonly used provisions seeking to hold the retailer harmless/limit liability, requiring the customer to assume risks, provisions waiving certain fees and costs, and cost-shifting language.  A general

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Think Your Market Is Global? Then Global Consumer Regulators Likely Are Watching Your Business

April 14, 2017

Authors

Bryan Cave and Doug Thompson

Think Your Market Is Global? Then Global Consumer Regulators Likely Are Watching Your Business

April 14, 2017

by: Bryan Cave and Doug Thompson

 

Advances in internet technologies, global social media platforms, and inventory order management and shipping delivery systems have revolutionized our businesses. Shopping-at-home and catalog sales, markets most retailers never would have considered as recently as 20 years ago, are now vibrant. Your business now may have customers in many different countries. You should be aware of the growing collaboration among the consumer watchdogs across the world, because those regulators may well be aware of your business through consumer complaints.

econsumer.gov is a site sponsored by the International Consumer Protection and Enforcement Network (ICPEN) and supported by the U.S. Federal Trade Commission (FTC) as well as approximately 35 other countries’ consumer regulators. The site provides consumer education and publishes trends regarding consumer fraud complaints. As the tag line of the site reveals, it also is a portal for the collection of global consumer fraud complaints: “Report international scams

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Beware of Making Unsubstantiated Anti-Aging Claims

April 7, 2017

Authors

Bryan Cave, David Zetoony and Mary Longenbaker

Beware of Making Unsubstantiated Anti-Aging Claims

April 7, 2017

by: Bryan Cave, David Zetoony and Mary Longenbaker

Manufacturers, distributors, and retailers often tout the anti-aging effects of certain cosmetics and nutritional supplements. Of course, the term “anti-aging” is not intended to literally mean that a product prevents aging. To the contrary, it is understood by both the industry and consumers as describing a product that is designed to mitigate, mask, or soften certain cosmetic indicators that come with age. These typically include wrinkles, discoloration, greying of the hair, or a loss of skin firmness.

Anti-aging litigation has proven popular with the plaintiffs’ bar. In the past five years, there have been at least 31 class action complaints filed alleging deceptive advertising of anti-aging products, and at least 10 enforcement actions brought by the Federal Trade Commission (FTC).

Often such putative class actions allege that advertising which touts a product’s anti-aging properties is deceptive and misleading to consumers. Typically, complaints over anti-aging claims lack affirmative evidence that a

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