FTC Advertising Law Compliance

Recent Enforcement by California District Attorney’s Offices

General News & Firm Announcements   |   Friday, January 25, 2019

Over twenty District Attorney’s Offices in California are joining together on key enforcement issues. These “task forces” have been sending letters to companies to collectively provide notice of a potential action or to request documents and information. If you are targeted, experienced counsel can assist with strategy and working to get the most efficient resolution. Notably, our law firm has handled multiple investigations and enforcement matters with groups of District Attorneys.

District Attorney’s Groups

Consumer Protection and Environmental Divisions for the following District Attorney’s Offices have joined together for issues involving purported false or misleading “environmental” claims: Santa Cruz, Amador, Butte, Calaveras, Colusa, El Dorado, Fresno, Humboldt, Lake, Madera, Merced, Monterey, Napa, Sacramento, Santa Barbara, Shasta, Solano, Sutter, Tehama, Tuolumne, Yuba, Alameda, and Stanislaus.

Likewise, District Attorney’s Offices in the following counties have formed a “Consumer Protection Task Force” targeting marketing and sales of nutritional supplements and medical devices in California, seeking out cases involving purported misleading advertisements, adulterated ingredients, and unfair business practices related to sale of supplements: Alameda, Marin, Monterey, Napa, Santa Clara, Santa Cruz, Solano, Sonoma, and Orange. 

District Attorney’s Offices have further joined together in cases involving billing disclosures (including for Restore Online Shoppers’ Confidence Act (ROSCA)-type issues) and California’s Automatic Renewal Law (CARL), which requires clear and conspicuous disclosures for subscription billing and the opportunity to cancel by email or online where an offer is made online. In fact, District Attorney’s Offices have referred to their alliance as the California Automatic Renewal Task Force, which enforces the CARL.

Complaints to District Attorney’s Offices can be initiated by consumers, competitors, or even the District Attorney’s Offices themselves.

Consumer Protection and Environmental Claims

In particular, over the past couple of years, District Attorney’s Offices have targeted companies making consumer-facing “environmental” claims, including in advertising, labels, and packaging, under California Business and Professions Code Sections 17508, 17580, 17580.5, 17200, and/or 17500.

Specifically, Business and Professions Code Section 17580 et seq. mandates substantiation for “environmental” advertising claims for consumer goods, such as statements that goods are “environmental choice,” “ecologically friendly,” “earth friendly,” “environmentally friendly,” “ecologically sound,” “environmentally sound,” “environmentally safe,” “ecologically safe,” “environmentally lite,” or “green product.”

These California laws also refer to Federal Trade Commission Guidelines for Environmental Marketing Claims (“FTC Guidelines”), which apply to consumer goods as well as business-to-business (B2B) transactions; while these FTC Guidelines were issued in 1992 and last updated in 2012, they contain several examples that are still pertinent in marketing, advertising, and even creating a defense to an enforcement action. For instance, the FTC Guidelines have examples for businesses making claims that products are “recycled,” when comparative claims are made, and when disclosures are needed. The FTC Guidelines also caution against making overly general “eco-friendly” or “green” claims, warn that even technically truthful and substantiated claims can be unlawfully deceiving, and recommend keeping substantiation up to date.

District Attorney’s Offices will often request evidence to substantiate advertising claims, including claims that (1) purport to be based on factual, objective, or clinical evidence, (2) compare the product’s effectiveness or safety to other brands, or (3) purport to be based on any fact. In addition, Business and Professions Code Section 17508 is typically cited to request substantiation (i.e., competent and reliable scientific evidence) for advertising claims.

Settlements for these types of cases can range from a couple thousand dollars up to over a million dollars. For example, a group of District Attorney’s Offices sought over $1.5 million against Amazon last year for allegedly mislabeling plastic products as “biodegradable” and “compostable”; and there have been similar claims against companies selling other plastic products such as coffee pods and plastic bags.

How to Respond to a District Attorney Request?

A District Attorney’s action, especially where groups of California District Attorney’s Offices have decided to all work together, can be a very serious matter. If you get a letter, complaint, or other notice of enforcement action, experienced counsel can assist with formulating a strategy to preserve and compile responsive documents and information, working with specific District Attorney’s Offices on potentially private settlement, getting any necessary extensions of time to respond, analyzing and strategizing about your case and application to applicable laws, and working on any follow up responses. Our firm has handled multiple matters with this group of District Attorneys, and we would be happy to talk to you if you are the subject of an investigation.

 

This entry was posted on Friday, January 25, 2019 and is filed under FTC Advertising Law Compliance, Internet Law News.






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