Hunton Retail Law Resource

As detailed in our recent client alert, the Securities and Exchange Commission (“SEC”) recently proposed or adopted several rules of interest to retailers, particularly those that are publicly traded. They concern (1) final rules modernizing the definition of “smaller reporting company” (“SRC”), (2) final rules implementing the use of Inline eXtensible Business Reporting Language (“XBRL”) and (3) proposed rules amending the SEC’s whistleblower program.

What is California’s Proposition 65?

California’s Safe Drinking Water and Toxic Enforcement Act of 1986 (“Prop 65”) is one of the most onerous chemical right-to-know statutes in the nation. It prohibits businesses with 10 or more employees, including businesses that merely ship products into California, from exposing people in California to listed chemicals without providing a “clear and reasonable” warning.

Why Should I Care?

Bringing a Prop 65 action is relatively easy and lucrative for private plaintiffs and their counsel. In 2017, there were nearly 700 cases settled with defendants paying more than $25,000,000 in plaintiffs’ attorneys fees and penalties. This does not include defense counsel fees, business interruption and other costs to comply.

As posted on the Hunton Employment & Labor Perspectives blog, many in the labor community are familiar with the Machinists Union’s (“Union”) long running effort to unionize Boeing’s South Carolina-based 787 Dreamliner manufacturing facility. After failing in two previous attempts to organize the entire facility, the Union recently won a bid to organize a “micro-unit” limited to a group of flight line technicians and inspectors. The Regional Director’s decision to approve the Union’s proposed bargaining unit took most labor practitioners by surprise, given the NLRB’s recent decision in PCC Structurals overturning the controversial Specialty Healthcare standard that facilitated the formation of micro-units. In PCC Structurals, the NLRB rejected the Specialty Healthcare test and reaffirmed that in reviewing representation petitions, the NLRB cannot limit its analysis to the interests of employees in the proposed bargaining group and instead must make a “meaningful” evaluation of the interests of those excluded from the group.

On July 3, 2018, Governor David Ige of Hawaii signed SB 2571 into law, banning the sale or distribution of any “SPF sunscreen protection personal care product” that contains chemicals oxybenzone or octinoxate without a prescription issued by a licensed healthcare provider. “SPF sunscreen protection personal care product” is broadly defined to include, without limitation, any lotion, paste, balm, ointment, cream, solid stick applicator, brush applicator, roll-on applicator, aerosol spray, non-aerosol spray pump, and automated and manual mist spray. The ban, which Governor Ige indicated is intended to protect marine ecosystems including coral reefs, will go into effect on January 1, 2021. Estimates indicate that at least 70 percent of sunscreen products contain oxybenzone or octinoxate.

As website accessibility lawsuits continue to surge, places of public accommodation oftentimes battle multiple lawsuits filed by different plaintiffs represented by different attorneys. Even after entering into private settlements, which include detailed website remediation plans, defendants may continue to be the target of these lawsuits by copycat plaintiffs. The Eleventh Circuit recently addressed this dynamic head-on, and held that a private settlement entered into by Hooters and a first-filed plaintiff did not moot a nearly identical, later-filed website accessibility lawsuit by a different plaintiff. This case underscores the importance of quickly remediating website accessibility issues, as well as taking care to draft settlement agreements to maximize arguments that future lawsuits are barred.

As reported on Hunton’s Privacy and Information Security Law blog, on June 28, 2018, the Governor of California signed AB 375, the California Consumer Privacy Act of 2018 (the “Act”). The Act introduces key privacy requirements for businesses, and was passed quickly by California lawmakers in an effort to remove a ballot initiative of the same name from the November 6, 2018, statewide ballot. We previously reported on the relevant ballot initiative. The Act will take effect January 1, 2020.

This past week, several consumer actions made headlines that affect the retail industry.

District Judge Boots Putative Class Action Against L.L. Bean

A federal district judge has dismissed an attempted class action against L.L. Bean involving the company’s long-standing no-questions-asked warranty policy. In February 2018, L.L. Bean announced that it was changing its policy to limit customers’ return period to one year, while committing to “work with our customers to reach a fair solution” if a problem arises more than a year after purchase. The plaintiff alleged that changing the warranty violated both the Magnusson-Moss Act and Illinois state law as an anticipatory repudiation of the guarantee. But the District Judge ruled that plaintiff neither alleged an injury nor had he stated a claim for which relief could be granted.

It has been a quiet month in the world of recalls with only 13 product recalls issued in June. Still, other CPSC-related news is noteworthy.

Last month, the U.S. Senate confirmed President Trump’s appointment of Dana Baiocco to serve as a CPSC commissioner. If political ideology translates into voting trends on consumer safety issues—and it may not—Baiocco’s appointment creates a potential 2-2 voting “tie” at the CPSC, with two Republican and two Democratic commissioners. Now, Trump seeks to add a third Republican to the CPSC. On June 4, 2018, Trump nominated Peter Feldman to be a commissioner. Feldman is senior counsel to the U.S. Senate Committee on Commerce, Science and Transportation, and therefore advises on consumer protection, product safety, data and privacy issues. If confirmed, Feldman will complete the remainder of former Commissioner Joe Mohorovic’s term, which expires in October 2019. Feldman’s confirmation would mean that for the first time in nearly 12 years, Republican appointees would outnumber Democratic appointees at the CPSC. 

As reported on Hunton's Blockchain Legal Resource blog, in the race to develop blockchain technology, companies are increasingly devoting capital to creating proprietary blockchain solutions. A search of the U.S. Patent & Trademark Office (“USPTO”) as of today returns 355 patent applications that contain either “blockchain” or “distributed ledger” in the abstract. Patents are being filed related to a wide variety of industries and applications, including supply chain management, autonomous deliveries, energy networks, electronic health records, 3D printing, travel itinerary management, data security and securing rights to digital media.

On June 25, 2018, the Supreme Court upheld a Second Circuit opinion that American Express did not violate antitrust law by prohibiting merchants from encouraging customers to use non-American Express credit cards. As part of their agreements with American Express, merchants were required not to steer customers to use non-American Express credit cards (merchants could still express a preference for cash, checks or debit cards). The state of Ohio, the United States, and several other states brought suit alleging that these “anti-steering” provisions violated Section 1 of ...