Hunton Retail Law Resource

The Ninth Circuit Court of Appeals recently affirmed the dismissal of a putative class action lawsuit brought by a consumer who claimed that The Kroger Company supermarkets falsely advertised its spreadable fruit product containing fruit-based sweeteners as “Just Fruit.” 

The FTC announced a settlement with Cycra, Inc., a manufacturer of motocross and ATV parts, and the company’s owner for falsely claiming their products were made in the USA while importing parts from Asia and Europe. The proposed consent order imposes an $872,577 judgment and requires the respondents to comply with the FTC’s requirements for marketing products as made or assembled in the United States.

Nearly 700 companies (670 to be exact) are recipients of a letter from the Federal Trade Commission, putting the companies on formal notice that failing to have proper substantiation for health claims (the Substantiation Notice) or engaging in misleading use of testimonials or endorsements (the Endorsement Notice) could result in civil penalties.

As our nation transitions into a “post-pandemic world,” consumers are now more than ever looking for new and convenient ways to get quality healthcare services. So much so that a 2020 survey conducted by ICSC[1], a trade group of retail property owners, found that almost 7 out of 10 adults visit a healthcare provider in a shopping center or outdoor strip mall. The movement coined as “medtail” is a growing trend across the nation where healthcare providers are moving from the large traditional community hospitals into more convenient retail spaces. The rise of medtail, coupled with the growth of online shopping and the ever decreasing need for brick and mortar retail locations, has many landlords now considering healthcare service providers as tenants in their retail location. Adding healthcare services to a retail center provides many benefits, but landlords should keep these few things in mind as they look to repurpose their traditional retail space.

It has been two years since the Supreme Court handed down its opinion in Ford Motor Co. v. Montana Eighth Jud. Dist. Ct., 141 S. Ct. 1017 (2021), holding that Ford could be subject to personal jurisdiction in Minnesota and Montana because the suit “related to” the company’s contacts with the states, even though there was not a causal relationship between Ford’s contacts with the forum and plaintiffs’ claims. The Court’s ruling clarified its decisions in Bristol-Myers Squibb Co. v. Superior Ct. of California, San Francisco Cnty., 137 S. Ct. 1773, 1780 (2017) and Daimler AG v. Bauman, 134 S. Ct. 746, 749 (2014), which held that for state courts to exercise specific jurisdiction, the suit must “arise out of or relate to the defendant’s contacts with the forum.” As Justice Kagan explained, “[t]he first half of that standard asks about causation; but the back half, after the ‘or,' contemplates that some relationships will support jurisdiction without a causal showing.” Ford at 1026. Because claimants alleged a defective Ford vehicle caused the crashes and harm at issue, and “Ford had systematically served a market in Montana and Minnesota for the very vehicles that the plaintiffs allege malfunctioned and injured them in those States,” there was a strong “relationship among the defendant, the forum, and the litigation” such that Ford could be subject to personal jurisdiction in those states. Id. at 1028.

On March 23, 2023, the FTC issued a notice of proposed rulemaking aimed at deceptive and unfair practices involving recurring charges for automatically renewing subscriptions and memberships. The proposed rule is part of a broader FTC initiative designed to crack down on “dark pattern” tactics that retailers employ to aid in customer acquisition and retention, among other things. Difficult cancellation procedures for subscription-based services are one such tactic identified as problematic by the FTC and targeted by the new proposed rule.

On March 16, 2023, the Federal Trade Commission announced it issued orders to eight social media and video streaming platforms seeking Special Reports on how the platforms review and monitor commercial advertising to detect, prevent and reduce deceptive advertisements, including those related to fraudulent healthcare products, financial scams and the sale of fake goods. The FTC sent the orders pursuant to its resolution directing the FTC to use all available compulsory process to inquire into this topic, and using the FTC’s Section 6(b) authority, which authorizes the FTC to conduct studies that do not have a specific law enforcement purpose.

In February 2023, the US Environmental Protection Agency (EPA)’s Office of Enforcement and Compliance Assurance (OECA) quietly released a Compliance Advisory “What You Need to Know about Producing, Distributing, or Selling Pesticide Devices.” The advisory follows on the heels of similar advisories and provides information to the regulated community about requirements for pesticide devices under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) in order to promote compliance. EPA issued this advisory in response to a “significant increase” in the number of pesticide devices being sold or distributed in the US in which EPA has found “substantial non-compliance” with FIFRA requirements. EPA has also experienced a high volume of inquiries from companies and other regulators seeking clarification about pesticide device requirements. The advisory suggests that EPA remains poised to continue taking enforcement actions against companies that import, distribute or sell pesticide devices that do not comply with FIFRA’s requirements.

The New York Attorney General’s Office (OAG) recently announced several proposed rules are intended to combat price gouging in New York during state emergencies. The OAG promulgated the rules pursuant to its authority under New York General Business Law 396-r, which makes it unlawful to sell goods and services “vital and necessary for the health, safety and welfare of consumers or the general public” at an “unconscionably excessive price” during “any abnormal disruption of the market.” The statute defines an abnormal disruption of the market as “any change . . . resulting from stress of weather, convulsion of nature, failure or shortage of electric power or other source of energy, strike, civil disorder, war, military action, national or local emergency, or other cause . . . which results in the declaration of a state of emergency.” N.Y. Gen. Bus. Law § 396-r(2).  

Electric vehicles (EVs) are becoming increasingly popular, especially with rising gas prices over the past year. EVs now make up roughly three percent (3%) of the global vehicle fleet, up from one percent (1%) at the end of 2020. Last year, President Biden announced a lofty goal for EVs to make up fifty percent (50%) of all vehicles sold in the United States by 2030. The Bipartisan Infrastructure Law, signed by President Biden in November 2021, invests billions of dollars in EV chargers to create accessible charging stations for electric vehicles, and the Inflation Reduction Act passed by Congress in August 2022 provides incentives and tax credits to encourage Americans to purchase EVs.