Stay ADvised: What's New This Week, September 14
In This Issue:
- FTC Turns Down the Volume on Hearing Aid Manufacturer
- Vitamin C Is No Defense Against NAD's Review
- Plaintiff's Apple Lawsuit May Be Left to Spoil
- Where's the Beef? For Vegans, It's on the Same Grill as Burger King's Impossible Burgers
FTC Turns Down the Volume on Hearing Aid Manufacturer
The FTC continues to keep a watchful eye—and ear—on unlawful schemes to profit from COVID-19. Hearing aid provider Elite Hearing Centers of America received an August 19 warning letter from the Federal Trade Commission (FTC) regarding claims in newspapers and on social media the FTC alleges falsely imply that consumers could be eligible for government stimulus money by purchasing the company's hearing aids.
The company advertised, among other claims, that its products were tied to the: "COVID-19 HEALTHCARE STIMULUS PROGRAM"; advised customers they could "Receive up to $3,000 through our HEALTHCARE STIMULUS PROGRAM. Must register by July 31"; and depicted the Great Seal of the United States appearing next to the headline "FREE HEARING AIDS." All of this constituted deceptive claims prohibited by Section 5(a) of the FTC Act, according to the letter, as the company was not authorized by the federal government to provide assistance under the CARES Act.
To remedy the situation, the FTC instructed Elite Hearing Centers of America to immediately cease making any false or misleading representations and to respond with the actions taken to address the Commission's concerns. Further, the FTC advised the company to remediate any harm that might have been caused to consumers affected by Elite Hearing Centers of America's false ads.
The FTC, as well as state governments across the country, have ticked up scrutiny of COVID-related claims tying products to misrepresentations about stimulus programs—particularly those targeted at potentially vulnerable groups. Companies should stay vigilant and mindful of their claims, lest they fall within the cross-hairs of state and federal enforcement agencies targeting modern snake-oil pitches in the pandemic era.
Vitamin C Is No Defense Against NAD's Review
Many of us swear by Vitamin C for a cold (despite an arguable dearth of evidence), but for COVID-19, maybe not so much. NAD continues its self-monitoring quest to tie immunity-support claims to COVID-19, whether or not the advertiser expressly did the same.
Here, the advertiser made it easy for NAD which charged that Infinity Superfoods deceptively touted its Vitamin C-loaded Infinity-C product as just what the doctor ordered to treat or even cure COVID-19. NAD's prescription called for the company to discontinue the advertising in question on social media and in blog posts.
NAD opened the Challenge as part of its routine monitoring program, after noting a social media post with the headline: "The Link Between Vitamin C and the Coronavirus." The ensuing copy went on to claim how some hospitals in New York City were "treating patients who test positive for COVID-19 with large doses of vitamin C."
To NAD, this, along with other posts by Infinity Superfoods, implied that the company's Infinity-C product could protect consumers against COVID-19. NAD pointed out that neither the CDC nor FDA have approved any vaccine, drug, or other over the counter product to treat or prevent COVID-19. Along with the FTC and FDA, NAD has investigated dozens of express and implied claims made by health supplement companies that their products are a way to fight the novel coronavirus.
Infinity Superfoods said it would agree with NAD's recommendations, which included discontinuing the social media and blog posts in question, as well as modifying others to avoid implying its product was a treatment or cure.
NAD has been a vocal force during the pandemic (even where an advertiser's claims are less clear than those at issue here), joining the FTC and the FTC in their fight to prevent consumer deception during these unusual times.
Plaintiff's Apple Lawsuit May Be Left to Spoil
It appears there will be no second (or in this case third) helping for a California plaintiff after a federal judge hearing the case indicated that she will not allow another amended complaint against Mott's LLP. Those comments came from U.S. District Judge Beth Freeman during a hearing on a motion to dismiss from attorneys for the food company.
Filed in U.S. District Court for the Northern District of California, in the lawsuit against the subsidiary of Dr Pepper Snapple Group Inc. the plaintiff claimed that the company falsely advertised its applesauce and apple juice as "natural" while the products contained trace amounts of pesticides. Plaintiff Hawyuan Yu's lawsuit took issue with Mott's labeling that stated its products are made from "all natural ingredients" and are "natural" though they contain trace amounts of acetamiprid—a synthetic pesticide the plaintiff claimed is linked to environmental harm.
In its motion to dismiss the case, Dr Pepper argued that the plaintiff's complaint failed to show that a reasonable consumer would believe products on the shelf labeled as "natural" would contain no traces of pesticides. For their part, plaintiff's attorneys pointed to consumer surveys cited in the amended complaint that showed respondents said a "natural" label on packaged and processed foods means that "no toxic pesticides were used."
At the hearing, Judge Freeman was not shy about her skepticism concerning what the surveys actually revealed. In particular, the judge pointed out that the surveys questioned consumers about their perception of how the apples are grown, rather than the final product purchased on grocery store shelves. While many surveys in false ad cases showing consumers may believe a particular theory, she asserted, courts still find them to be implausible.
In an attempt to preserve their case, plaintiff's attorneys suggested the remedy of again amending the complaint, this time with surveys that would more closely examine whether consumers believe products containing trace levels of synthetic pesticides are "natural." However, Judge Freeman did not appear to have an appetite for that.
"I'm not familiar with any situation to grant leave to amend to go out and conduct evidence," Judge Freeman said. "You're asking me to give you six to eight months to design a survey ... I'm not familiar with any case that allows the creation of evidence to beat back the futility argument." Judge Freeman has not yet issued a ruling on the arguments.
FDA's current definition of what constitutes "natural" on food labeling means "that nothing artificial or synthetic (including all color additives regardless of source) has been included in, or has been added to, a food that would not normally be expected to be in that food." However, FDA also notes that the current policy does not thoroughly address food production methods and are currently conducting a more thorough review of the use of the term "natural."
Where's the Beef? For Vegans, It's on the Same Grill as Burger King's Impossible Burgers
Is it really possible to eat a meatless burger cooked on the same grill as a Whopper? That's the question plaintiffs are hoping an appeals court will take up after their class action complaint was cooked by a federal district court in July.
Filed in U.S. District Court for the Southern District of Florida on behalf of himself and others, Phillip William's lawsuit claimed that Burger King mislead consumers when the fast food chain flame broiled meat-free Impossible Whoppers on the same grill as beef and chicken. This, said the plaintiffs, turned Burger King's tag line "100% Whopper 0% Beef" marketing the Impossible Burger into a deceptive representation.
"Impossible" patties are made from plants, certified as Kosher and Halal, and would be a suitable part of a diet that avoids consuming foods that contain animal by-products. That is, only if they are cooked in a manner that maintained the "0% Beef" quality as advertised by Burger King, at least according to the plaintiffs. By cooking Impossible Whoppers on the same grill as traditional meat-based products, the plaintiffs claimed that Burger King's advertised meat-free patty was actually covered in meat by-products.
The lawsuit further claimed that plaintiffs and other consumers paid a premium for the meat-free option at Burger King, but would have passed on the product had they known the Impossible Whopper was contaminated with meat by-products. The lawsuit sought class action status to represent not only the seven named plaintiffs but also any other similarly affected consumers who purchased Impossible Whoppers under the impression the product was completely meat-free.
Those arguments were a little over-done for the district court judge hearing the matter, who threw out plaintiffs' case, in part because the plaintiffs admitted that they did not ask about the cooking method nor did they request a different preparation method to satisfy their dietary requirements. The court further found that plaintiffs' claims were too individualized to warrant class action certification. However, it appears that plaintiffs have the stomach to go on, and appealed that ruling to the 11th Circuit U.S. Court of Appeals.
Be careful what you claim is the moral, whether as an advertiser or a putative class-action plaintiff. This case may serve as a roadmap to enable both sides to "steer" clear.