Proskauer on Advertising Law
Proskauer on Advertising Law

New York Federal Court Latest to Dismiss Outlet Pricing Class Action

Last month, Judge Valerie Caproni of the Southern District of New York dismissed with prejudice a putative deceptive pricing class action filed against Burberry.  This is the first decision within the Second Circuit to determine whether shoppers claiming to have been victimized by discount price advertising in outlet stores have suffered actual injury for purposes of Article III standing.

During the past few years, there has been a virtual explosion of consumer class action lawsuits asserting claims against retailers for allegedly fraudulent outlet store price discount advertising.  The crux of these claims is that the retailer, through the use of “Was,” “MSRP,” “Compare at” or similar terms on price tags or in store signage, usually at outlet stores, has misled shoppers into believing they are getting a bargain, when they are not.  The lawsuits generally do not claim the items purchased were not worth the price paid for them. Continue Reading

Justice (and Lunch) is Served: Second Circuit Holds that Food Truck Branded with Ethnic Slurs is Entitled to First Amendment Protection

In a recently issued decision, the Second Circuit held that a food truck could not be excluded from a New York State lunch program solely because the truck and the food it sells was branded using ethnic slurs.  Wandering Dago, Inc. v. Destito et al.  This case is an early example of how the Supreme Court’s 2017 decision in Matal v. Tam (which involved an Asian-American band’s trademark application for “The Slants”) may impact advertisers who wish to engage in controversial branding in connection with a government-related activity or event. Continue Reading

New Trial Ordered Where Jury’s Verdict Didn’t “Gel”

Last summer, we reported on a bizarre verdict in which an Illinois jury levied a $150 million punitive damages award against AbbVie, Inc., the drug company behind AndroGel, without awarding any compensatory damages.  As predicted, the punitive damages award was recently vacated.  Finding that the jury’s findings were “logically incompatible,” the Court vacated the punitive damages award, and ordered a new trial on plaintiff’s claim for fraudulent misrepresentation and damages relating to that claim. Continue Reading

Third Circuit Splits with the Seventh Over Standing To Sue For Alleged Inefficient Design of Eye Drop Dispenser

In a surprising decision and split with the Seventh Circuit, the Third Circuit recently held that plaintiffs have standing to sue for unfair trade practices under the theory that a manufacturer is obligated to optimize the number of eye drop doses in a container of a fixed volume, even if there is no alleged misrepresentation as to the number of doses in the product. Cottrell v. Alcon Labs. The Third Circuit suggested that claims based on such a theory may be addressed in a 12(b)(6) motion, or on preemption grounds, but that such grounds are separate from a standing analysis. Continue Reading

Second Circuit Dismisses Claims of Would-Be Ad-Blockers

On November 22, 2017, the Second Circuit in Heskiaoff v. Sling Media affirmed the dismissal of a class action complaint against Sling Media that alleged deceptive business practices in connection with Sling’s introduction of advertisements into its television streaming service.  In a summary order, the panel affirmed the district court’s holding that the complaint and proposed amendments to the complaint failed to plausibly allege a violation of New York General Business Law Section 349 because plaintiffs failed to point to any affirmative statement or omission made by Sling Media that would have misled a reasonable consumer into believing that the service would never include advertisements. Continue Reading

Court Says “Lights Out” on UL Certification Lanham Act Claim

Last week, a federal judge in Manhattan examined the intersection of false advertising and trademark infringement law in connection with the alleged misuse of a certification mark, and found the plaintiff to be entitled to neither body of law as a means to stop a competitor from advertising its products as “UL Certified.”  The court granted a motion to dismiss a Lanham Act claim that alleged the defendant’s light switches were falsely labelled as meeting the Underwriters Laboratories (“UL”) safety certification standard.  Board-Tech Elec. Co. v. Eaton Elec. Holdings LLC.  This case sheds light on how courts treat false advertising claims based on alleged non-compliance with an awarded certification marking. Continue Reading

New Jersey Supreme Court Announces Last Call for TCCWNA Happy Hour

In recent years, creative plaintiff-side class action attorneys in New Jersey have attempted to seek relief under the Truth in Consumer Contract, Warranty and Notice Act (“TCCWNA”), which allows for $100 in statutory damages per violation to “aggrieved consumers” when terms in certain contracts or other writings violate a “clearly established legal right of a consumer or responsibility of a seller.” N.J. Stat. Ann. § 56:12-14 et seq.  Although the TCCWNA has been around since the 1980s, it has only recently been employed by named plaintiffs in putative class actions, most likely in an attempt to circumvent the ascertainable loss and causation requirements of New Jersey’s Consumer Fraud Act (“CFA”) and because the prospect of $100 per violation greatly exceeds actual damages in many cases.  Thankfully for defendants, a recent New Jersey Supreme Court decision, Dugan v. TGI Fridays, Inc., makes it more difficult to certify class actions brought under the TCCWNA and circumscribes the type of “clearly established legal right[s]” that may form the basis of a TCCWNA claim. Continue Reading

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