Hunton Retail Law Resource

At a June 16, 2020 hearing, the US Senate Committee on Commerce, Science and Transportation considered President Trump’s nomination of Nancy Beck to the CPSC.  In March, Trump announced his nomination of Dr. Beck to be Chairman and Commissioner of the CPSC.  The CPSC currently consists of two Republican appointees and two Democratic appointees with one of the Democratic appointees—Robert Adler—serving as Acting Chairman.  This month’s committee hearing included tough questions from Democrats and Republicans about how Dr. Beck would prevent unauthorized releases of confidential business information held by CPSC – a problem that has plagued the agency recently.  Dr. Beck was also quizzed about her prior experience as the Senior Director for Science Policy at the American Chemistry Council, which is a chemical industry lobbyist group.  Senate Democrats have expressed opposition to Dr. Beck’s confirmation as well as one Senate Republican on the committee – Shelley Moore Capito (R-WV).  If every Democrat on the committee plus Senator Capito oppose the nomination, then the committee’s vote count is at a 13-13 tie, signaling that the nomination may not proceed to a full Senate floor vote.

Due to the novel coronavirus (COVID-19), many San Francisco businesses have closed in order to contain the spread of the pandemic, resulting in declining revenues and widespread business interruption. These economic conditions have led to employee layoffs across San Francisco. As San Francisco employers work to restore their business operations in the wake of COVID-19, they should be aware of new rules that may affect how they rebuild their workforce.

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In April 2020, the National Advertising Division (NAD) rolled out a Fast-Track SWIFT option (“Single Well-defined Issue Fast Track”) for certain cases under review. The new SWIFT track expedites the process for single-issue disputes that do not require complex evidence or argument and meet certain parameters. On June 10, the NAD published its first trio of SWIFT decisions that illustrate what participants can expect from the new process.

One novel feature of the 2020 proxy season has been the surge in virtual shareholder meetings. For example, one provider of virtual meeting services reported four times as many virtual shareholder meetings as last year. Although the rise in virtual meetings this year resulted from safety precautions surrounding COVID-19, after weighing the benefits and becoming more comfortable with conducting business remotely, it is likely that many companies will continue to use virtual shareholder meetings or hybrid in-person and virtual meetings in the future.

On Monday, the US Supreme Court agreed to consider whether a provision in an arbitration agreement that exempts certain claims from arbitration negates an otherwise clear and unmistakable delegation of questions of arbitrability to an arbitrator. It is a question on which circuits have been divided. On one hand, some courts have found that the gateway question of arbitrability—whether the claims fall within the scope of the carve-out provision—is for the arbitrator to decide. On the other, some courts have found that, where there is a carve-out provision, there is no clear and unmistakable evidence of the parties’ intent to delegate questions of arbitrability to an arbitrator, and questions of arbitrability are to be decided by the court. Undoubtedly, resolution is necessary.

Should you have to pay to see CPSC’s adopted safety standards?  That is the question raised by a lawsuit filed in the Third Circuit this month, which challenges the CPSC’s adoption of mandatory safety standards for consumer products that are not available for free to the public.  The American Society for Testing and Materials (“ASTM”) is a well-recognized independent organization that develops consensus-based, voluntary standards for children’s products.  In 2019, ASTM updated its safety specifications for infant bath seats, which includes changes to labeling, product performance, and safety testing (ASTM F1967-19).  The CPSC later promulgated an agency rule adopting the updated ASTM standard as legally binding on infant bath seat manufacturers (16 C.F.R. § 1215).  On behalf of a new mother, a civil rights group filed a petition with the U.S. Court of Appeals for the Third Circuit pursuant to 15 U.S.C. § 2060 challenging the CPSC’s rule.  The mother claims that she asked the CPSC for a copy of the standard and the CPSC instead directed her to buy a copy from ASTM.  ASTM charges $56 for a copy of the standard—almost double the price of an infant bath seat.  The petition asks the Third Circuit to vacate the rule, order the CPSC to make any binding standard freely accessible to the public whenever the CPSC proposes to promulgate a new rule, and order the CPSC to make any binding standard freely accessible to the public permanently after the CPSC adopts it in a final rule.

According to U.S. Census Bureau estimates, retail sales plummeted 16.4% in April 2020. As state and local governments across the country begin to lift or ease Stay at Home Orders and business closures, retailers reopening their doors are grappling with how to protect their employees’ health and reassure customers that it is safe to shop.

A consumer advisory issued on June 1, 2020 by the United States Environmental Protection Agency (EPA) clarifies which hard-surface disinfectant products may legally make claims regarding expected efficacy against the COVID-19 virus. The advisory, titled “What You Need to Know Regarding Products Making Claims to Kill the Coronavirus Causing COVID-19,” also warns retailers of potential enforcement actions if they sell non-compliant products.

The COVID-19 pandemic has driven a large shift toward online retail transactions. In April of 2020, nonstore sales, mostly conducted through e-commerce, increased by nearly 30 percent while overall retail sales in the US are down 16 percent year over year, according to the Department of Commerce. The recent flood of e-commerce has left unprepared retailers struggling to fulfill orders, as they currently lack the requisite warehouse space and other supply chain capabilities. At the same time, other retailers have been forced into bankruptcy as a result of COVID-related closures. The changing needs of retailers who are adopting e-commerce strategies and the market exits of others are altering the industry’s real estate footprint.

COVID-19 has had an unprecedented effect on the retail industry across the United States, as many retailers grapple with government mandates that either require closure or impose stringent restrictions on being open, employment and supply chain disruptions, and an overall decline in consumer demand as market conditions remain volatile and unemployment rates continue to rise. The devastating consequences of the coronavirus began to come into focus at the same time many companies were preparing to issue quarterly or annual results and convene investor calls.