Hunton Retail Law Resource

Several consumer actions affecting the retail industry have made headlines since the New Year.

FTC Issues Multi-Level Marketing Guidance

On January 4, 2018, the FTC issued updated business guidance to multi-level marketers (“MLMs”) to assist organizations in understanding and complying with the law. The FAQ-style guidelines address how core consumer protection principles apply with equal force to MLMs’ interactions with its own current and prospective participants, especially with regard to the compensation structures that MLMs are famous for. The FTC highlights several distinct MLM practices, explaining how each related to the FTC’s regulatory power and focus, and provides advice on how MLMs could best avoid running afoul of the law.

In an article published in Internet Retailer on January 11, 2018, Hunton & Williams LLP’s Insurance lawyers Syed Ahmad, Lorelie (Lorie) Masters and Katie Miller discuss the risks retailers face when using smartphone-reliant technology and contactless payment systems, including ransomware attacks and other security breaches, and the insurance coverage necessary to address these potential risks.

The Initial Coin Offering (“ICO”) market exploded in 2017 with almost $4 billion of investments. Securities regulators in the United States have responded first with a series of public warnings and, more recently, by bringing enforcement actions against promoters of ICOs and other digital currency investments. We survey some of the recent regulatory developments in this rapidly evolving field.

On January 8, 2018, the FTC announced an agreement with electronic toy manufacturer, VTech Electronics Limited and its U.S. subsidiary, settling charges that VTech violated the Children’s Online Privacy Protection Act (“COPPA”) by collecting personal information from hundreds of thousands of children without providing direct notice or obtaining their parent’s consent, and failing to take reasonable steps to secure the data it collected. Under the agreement, VTech will (1) pay a $650,000 civil penalty; (2) implement a comprehensive data security program, subject to ...

A reflection on 2017 reveals several highlights showing that the CPSC is in a transition phase.

The CPSC’s composition has changed and will continue to do so. At the beginning of 2017, the agency was led by three Democrats and two Republicans. In October, Republican Commissioner Joseph Mohorovic resigned his seat to return to the private sector. Thus, the CPSC now has four commissioners: three Democrats and one Republican. But the Democrats’ grip on the agency will soon slip. Indeed, after the election of President Trump, Republican Commissioner Ann Marie Buerkle became the CPSC chair. Further, President Trump has nominated a private-sector lawyer named Dana Baiocco to replace Commissioner Marietta Robinson, a Democrat whose term has expired. Further, an additional Republican nominee is expected to fill Mohorovic’s resignation. Thus, 2018 will likely see a Republican majority leading the CSPC for the first time in over a decade.

On January 3, 2018, in Italian Colors Restaurant v. Becerra, the Ninth Circuit found unconstitutional a California law barring retailers from imposing surcharges on customers using credit cards. The ruling has important implications for retailers operating in California and potentially for retailers operating in several other states with similar bans on credit card surcharges.

If 2017 is any indication, the new year will bring a fresh cascade of changes—both announced and unannounced, anticipated and unanticipated—in the business immigration landscape. Few, if any, of these changes are expected to be good news for U.S. businesses and the foreign workers they employ.

In 2017, while much of the news media focused on the Trump Administration’s draconian changes to practices and policies that affected the undocumented—including ending the DACA Dreamer program, shutting down Temporary Protected Status for citizens of countries ravished by war and natural disaster, and aggressively enforcing at the southern border and in “sensitive” locations such as churches, courthouses and homeless shelters—relatively less attention has been paid to the steady, incremental erosion of rights and options for legal immigrants, particularly those who are sponsored for work by U.S. employers, under the Administration’s April 2017 “Buy American/Hire American” executive order. There is no doubt that such restrictions to the legal immigration system will continue to cause business uncertainty and disruption in 2018. Here’s what to expect.

In a recent article published in Law360, Hunton & Williams LLP attorneys Walter Andrews, Malcolm Weiss and Paul Moura discuss two recent decisions in Tree Top Inc. v. Starr Indem. & Liab. Co., No. 1:15-CV-03155-SMJ, 2017 WL 5664718 (E.D. Wash. Nov. 21, 2017). There, the Eastern District of Washington rejected an insurer's attempt to escape insurance coverage for a Proposition 65 lawsuit filed against juice-maker, Tree Top Inc. 

Recently, the Securities and Exchange Commission (“SEC”) allowed Apple Inc. to exclude a shareholder proposal from its proxy statement that requested that Apple “produce a report assessing the climate benefits and feasibility of adopting store-wide requirements for having all retail locations implement a policy on keeping entrance doors closed when climate control (especially air-conditioning during warm months) is in use.” 

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

Department Stores Settle False Discount Claims

Ann Taylor and its parent company, Ann Inc., have entered into settlements amounting to approximately $6.1 million in two unrelated cases alleging false discounts. Ann Inc. settled allegations that it offered misleading “discounts” on clothes sold through its Ann Taylor Factory and LOFT stores. According to the complaint, the stores claimed to sell goods “marked down” from prices that never actually applied to the goods in question.

The Neiman Marcus Group LLC also has reportedly reached a settlement over similar claims; details of this settlement currently are not available to the public.