Hunton Retail Law Resource

This past week, several consumer and self-regulatory actions made headlines that affect the retail industry.

Court Dismisses ‘Made in USA’ Claims against Citizens of Humanity

A California federal judge dismissed claims against Citizens of Humanity alleging that it falsely labeled its products as “Made in the USA.” While plaintiffs alleged that the fabric, thread, buttons and other components were foreign-made, the court found that this was not enough to satisfy California’s standard, allowing the use of “Made in the USA” labels on products containing 5 to 10 percent of foreign materials. Significantly, the court applied the 5 to 10 percent standard found in the California rule despite the fact that the products at issue had been purchased prior to the rule’s enactments. The court also dismissed claims under the Unfair Competition Law and California Legal Remedies Act, finding that the plaintiffs failed to plead with particularity. 

Mercedes Defeats “Cheat Device” Claims

A New Jersey federal judge found that car owners lack standing to bring a suit against Mercedes alleging that their diesel cars use “cheat devices” to cheat on emissions tests. The court held that plaintiffs lacked Article III standing because their injuries were not traceable to the defendants’ representations. The dismissal was without prejudice and counsel for plaintiffs indicated that they would amend the complaint to address the court’s concerns.

Sports Drink Maker Must Ditch Certain Claims Suggesting Gatorade Is Artificial

The National Advertising Division (“NAD”) has recommended that BA Sports Nutrition discontinue certain advertising claims related to its BodyArmor sports drinks. The claims at issue were challenged by Stokely Van-Camp, Inc., maker of Gatorade, who asserted that the BodyArmor advertisements conveyed the message that Gatorade is artificial.  NAD concluded that a reasonable consumer could believe the unsupported message that Gatorade’s Thirst Quencher is made with artificial flavors, sweeteners and colors.

Advertiser to Discontinue Claims Related to Habit-Breaking Wristband

NAD has recommended that Behavior Technology Group Inc. discontinue all challenged claims related to its “Pavlok” device, a wristband that is intended to help break bad habits through electric stimulus. Behavior Technology Group relied on evidence including scientific studies and aversion studies. However, NAD recommended Behavior Technology Group discontinue claims that Pavlok helps consumers quit smoking, nail-biting, unhealthy eating, overspending and more.

Skechers Ad Pulled for Portraying Child in Unsafe Situation

Skechers announced that it would discontinue a broadcast spot after the Children Advertising Review Unit (“CARU”) raised concerns over a depiction of activities that might be unsafe for children. Under CARU guidelines, advertisers should not portray children in unsafe situations. The Skechers spot at issue showed a boy leaping over a concrete bench, cartwheeling in mid-air next to a concrete staircase with a metal bannister and somersaulting across a wet floor.

Dave & Buster’s Discontinues Ad for Free Video Games

Dave & Buster’s has discontinued an advertisement that claims children can play the video games “Luigi’s Mansion” and “Mario Kart Arcade Grand Prix” for free, when in fact the offer requires a $10 purchase. The advertisement was pulled after CARU found that $10 is a substantial charge and would not be considered “free” by either the child or an accompanying adult.