Hunton Retail Law Resource

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

NARB Permits Unilever’s Challenge of Colgate Palmolive’s Tom’s of Maine “Natural” Claims

The National Advertising Review Board (“NARB”), the appellate body of the advertising industry’s self-regulation system, upheld Unilever’s challenge regarding the truthfulness of Colgate Palmolive’s claims for Tom’s of Maine antiperspirant, despite the fact that the challenged claims were the subject of a court-ordered settlement in class action litigation. Unilever had challenged claims that Tom’s is “Naturally Dry,” “It really works. Naturally,” and “meets our stewardship model for safe, effective and natural” before the NAD. Colgate argued that the challenge should be dismissed based on NAD procedures for providing closure where the challenged claims are subject to pending litigation. The NARB found that the settlement order did not make any findings with respect to the claims challenged by Unilever, and that NAD’s exercise of jurisdiction posed no danger of conflicting court findings.

FTC Charges Online Marketing Scheme with Deceiving Shoppers

The FTC has charged a group of online marketers who allegedly deceptively advertised “free trials” and “free” products via Internet, TV and email solicitations to lure customers into purchasing cooking gadgets, golf equipment and online subscription services. The marketers advertising free trials and products but failed to clearly disclose that consumers would be charged if they failed to cancel. According to the FTC’s complaint, the defendants gathered credit card information from consumers to cover the costs of shipping and handling and then used this information to charge the consumers for products and services without their consent, and misrepresented their return, refund and cancellation policies. The FTC’s complaint was filed in the U.S. District Court for the Southern District of California.

Campbell’s Healthy Soup Labeling Suit Dismissed

A judge in the U.S. District Court for the Southern District of California has dismissed a proposed class action alleging that Campbell Soup Co. misrepresented some of their soups as healthy despite the presence of artificial trans fats that are believed to cause heart disease and other health problems. The court ruled that because the USDA approved the label at issue, the putative class’s mislabeling claims are “expressly preempted by federal law” and explained that the plaintiffs’ claims were preempted because they would impose additional or different requirements than the Poultry Products Inspection Act and the Federal Meat Inspection Act.