The gaming industry is increasingly becoming a target for consumer class actions, as plaintiffs’ attorneys are scrutinizing the marketing and performance claims of gaming PCs and accessories.  However, gaming companies are not without recourse.  Recent legal decisions demonstrate that courts are willing to dismiss cases where plaintiffs fail to provide specific facts that support their allegations.  For instance, Judge Paul L. Maloney of the Western District of Michigan dismissed a putative class action lawsuit against Lenovo which alleged the computers do not live up to their a ..read more

In today’s market, eco-friendly claims can serve as a tool for companies looking to attract environmentally conscious consumers.  However, this surge in green marketing has also caught the attention of the plaintiffs’ bar, which is increasingly scrutinizing these claims for lucrative opportunities in potential lawsuits.  As demonstrated by recent legal actions, companies must tread carefully to avoid the pitfalls of greenwashing and the ensuing legal challenges.  In one such action, the Northern District of California affirmed its refusal to dispose of claims challenging the use ..read more

While class actions centered around “natural” claims remain popular with the plaintiffs’ bar, this past year has seen some growing skepticism from courts towards such lawsuits, particularly where plaintiffs fail to adequately explain what is deceptive about the term. In January, Judge Kimba M. Wood of the Southern District of New York granted summary judgment to Colgate-Palmolive and its subsidiary Tom’s of Maine in a putative class action challenging the use of the term “natural” on Tom’s toothpaste and deodorant products.  De Lacour v. Colgate-Palmolive Co., No.16-cv-8364 (S.D.N.Y. Jan ..read more

Many brands have reformulated beloved products with “cleaner” ingredients, while others have curated a special selection of “clean” products to offer their customers.  Advertisers’ efforts, however, can run into trouble if consumers reasonably believe the “clean” labeling does not match what is contained in the product.  Sephora recently faced this issue in a purported class action challenging its “Clean at Sephora” seal.  However, Judge David Hurd of the Northern District of New York dismissed the claims, finding the plaintiff had failed to adequately allege what exactly a reas ..read more

In line with prior precedent, the Second Circuit recently affirmed that the product label for Whole Foods’ fish oil softgel product did not deceptively misstate the quantity of Omega-3s it contained.  Foster v. Whole Foods Market Group, Inc., No. 23-285-cv (2d Cir. Dec. 8, 2023).  The Court found that because the front label was merely ambiguous, rather than misleading, the challenged claim was not deceptive because reference to the back label would quickly dispel the plaintiff’s alleged confusion. In Foster, the plaintiff alleged she was deceived into believing Whole Foods’ fish oil ..read more

While there might not be such a thing as a free lunch, Subway in 2016 texted a consumer that she could receive a free bag of chips with any purchase.  The text let the consumer know she could respond STOP to opt out of the texts, which she did.  Despite Subway responding that the consumer had been unsubscribed, several days later Subway texted the consumer again with a link to another promotional offer.  The consumer sued on behalf of a putative class for alleged violations of the federal Telephone Consumer Protection Act.  The district court dismissed the complaint and, la ..read more

While speaking at the annual conference of the National Advertising Division on September 19, 2023, the Federal Trade Commission (“FTC”) announced a generative AI (“AI”) policy that is consistent with Chairwoman Khan’s focus on the perceived harms to consumers from large technology companies, fully embracing a plan to regulate AI swiftly, aggressively, and proactively. Read the full post on Proskauer’s Minding Your Business blog ..read more

This past Friday, the Second Circuit reversed a lower court’s denial of a motion to compel arbitration in a putative consumer class action against fintech company Klarna.  Edmundson v. Klarna,  Inc., Case No. 22-557-cv (2d Cir. Nov. 3, 2023). The panel upheld the enforceability of Klarna’s “click-wrap” mandatory arbitration provision incorporated in Klarna’s terms and conditions.  This precedential decision comes amid a surge in putative class actions targeting online services including, for example, subscription programs subject to state auto-renewal laws. For companies that ha ..read more

This week the FTC announced that it finalized its revisions to the Endorsement Guides, which give advertisers guidance on ensuring that their use of endorsements or testimonials complies with the FTC Act. At the same time, the FTC also announced an updated accompanying guidance document, “FTC’s Endorsement Guides: What People are Asking.” While the revised Endorsement Guides still require advertisers to comply with the requirements we previously discussed in our On Notice series, they feature several key additions addressing technological changes in how advertising is conducted, and advertiser ..read more

Judge Richard Seeborg of the Northern District of California recently dismissed a putative class action alleging that Sprout Foods’s nutritional claims on its baby and toddler food labels misled consumers into believing that the products provide physical health benefits.  In their complaint, plaintiffs alleged that the products are “harmful both nutritionally and developmentally” due to allegedly high levels of free sugars. In rejecting these claims, the Court found that plaintiffs’ allegations were based on speculative research findings and hypothetical scenarios, which did not adequatel ..read more