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Stay ADvised: What's New This Week, May 10

05.14.21
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In This Issue:

Courtroom Drama Is on Between Feuding TV Networks

A rival network is suing Court TV for false advertising under the Lanham Act and New York's General Business Law, alleging that Court TV falsely and repeatedly promoted itself as the only television network offering full live coverage of a range of courtroom trials. Such advertising has caused irreparable harm to its business and reputation, alleges the perhaps lesser-known Law&Crime Network.

Contrary to Court TV's statements of exclusivity, the rival network complains that it, too, offers live coverage of the touted courtroom proceedings. Specifically, the complaint alleges that Court TV deceptively claimed to be "the only multi-platform network devoted to live, gavel-to-gavel coverage, in-depth legal reporting and expert analysis of the nation's most important and compelling trials."

The complaint alleges "Court TV's misrepresentations hit a tipping point" when it falsely represented that it was the only network providing live coverage of the Derek Chauvin trial, although Law&Crime was also streaming live coverage. According to Law&Crime, the advertising caused "distribution partners" to contact plaintiff's network to inquire whether it would cover live proceedings as planned, and Law&Crime was forced to explain that "of course, Court TV was not the only outlet covering the trial live."

Law&Crime sent Court TV a cease and desist letter objecting to the alleged false advertising, to which Court TV responded with assurances that it had "modified its promotional materials accordingly." Nonetheless, shortly thereafter, the network issued another press release promoting the same false exclusive coverage.

Law&Crime claims that Court TV's misrepresentations are "egregious" considering that for the Derek Chauvin trial, Court TV was tasked with the "somewhat random designation" of distributing the live courtroom feed to all TV networks. Court TV's misrepresentations "exploit" this duty, claims plaintiff. The complaint further charges that these statements are likely to mislead and deceive viewers and are "dangerous" because they could lead viewers to believe that Court TV is the only way they can access live trial coverage.

Law&Crime's complaint goes on to claim that Court TV misrepresented its market share to minimize the competitor's launch and subsequent success. They are "motivated to mislead the marketplace" and minimize Law&Crime's success, alleges plaintiff, who adds that Court TV was only relaunched in 2019 following a 10-year hiatus when Law&Crime's network successfully launched.

Key Takeaways

The real question is, if this case goes to trial, will Law&Crime Network and Court TV offer "live, gavel-to-gavel" coverage of their courtroom drama? Stay tuned to find out.

Desperately Seeking Transparency: ANA Sends Out Call to Investigate Programmatic Digital Advertising

Addressing what it views as one of the most vexing (and expensive) problems plaguing the digital advertising industry, the Association of National Advertisers (ANA) will conduct a comprehensive study to analyze the programmatic advertising marketplace. Its goal is to review this vital—but far from trouble-free—method of purchasing digital ad inventory via automated platforms, in order to enable brands to better understand the digital supply chain and make their media buying spend more productive. To that end, ANA has put out a Request for Proposal (RFP) seeking qualified consultants to conduct the study.

Programmatic advertising allows brands to reach audiences via sophisticated strategies with digital ad buys. At its best, it streamlines the ad buying process and provides access to a wide range of inventory. Programmatic advertising accounts for a whooping almost $150 billion in ad spend worldwide and more than 70 percent of all digital advertising spend.

Nonetheless, ANA says that the programmatic advertising marketplace is plagued by a lack of transparency, uneven accountability, and a supply chain notable for its "mind-numbing complexity." Accordingly, the oldest and largest advertising industry trade association has decided to step in and put out a call for a study that is intended to facilitate solutions to some of the biggest concerns with this media buying method.

Goals of the ANA's study include:

  • Identifying wasteful spending in order to eliminate it and drive brand growth.
  • Making the digital supply chain "highly transparent."
  • Instituting long-term, sustainable solutions for these issues.
  • Improving the ability of marketers to make decisions about use of programmatic advertising.

ANA notes that other studies of the programmatic marketplace have been conducted but says its study would be the first to tackle the issue comprehensively, delving into transparency and accountability issues across all programmatic trading platforms and taking an end-to-end approach, examining the process from advertiser to publisher to audience. ANA indicated that it intends to examine not only the "Open Web" but all programmatic trading mechanisms, including so-called "walled gardens."

Key Takeaways

With programmatic advertising growing by leaps and bounds, the ANA's announcement reflects a perception by brands that there is an urgent need to address a confusing digital supply chain. As the ANA put it in the RFP: "Brands have heard too many excuses about why transparency is not possible and need to understand if those excuses are legitimate and whether they can be resolved to ensure full transparency. And this needs to be done now."

Second Time Is the Charm for Class Certification in "Natural" False Ad Suit Against Tom's of Maine

In a development that seems like déjà vu in more ways than one, Judge Kimba Wood in the Southern District of New York has certified three classes of plaintiffs in a suit claiming that Colgate-Palmolive Co. and its subsidiary Tom's of Maine Inc. falsely advertised its toothpaste and deodorant products as "natural."

This is the second attempt for plaintiffs, whose original motion for certification of a national class was denied because plaintiffs had failed to show that common questions predominated within the class. Plaintiffs dropped their bid for a national class, and the court has now certified three narrow classes of plaintiffs in each of New York, California, and Florida, finding that common issues predominate with respect to their claims under state deceptive acts or practices and false advertising laws.

It is also the second time Tom's of Maine has faced similar allegations of false advertising. The company settled a lawsuit alleging false advertising of natural claims for the same products in 2015.

Plaintiffs allege that Colgate and Tom's of Maine deceptively marketed 17 kinds of deodorant and 34 flavors of toothpaste as natural when the products actually contain "synthetic and highly chemically processed ingredients." Plaintiffs allege this false and misleading claim led them to purchase the products at a premium. The product packaging used the term "natural" on front of pack but did not use the term "all natural."

The judge dismissed several arguments raised by Colgate and Tom's against certification. First, Colgate and Tom's argued that the named plaintiffs lacked standing to pursue claims regarding Tom's toothpaste because none of them allege they purchased toothpaste during the putative class period and were damaged by such a purchase, and because the toothpaste and deodorant contain different ingredients. The court disagreed, finding that the relevant point was plaintiffs' allegation that each of the products was marketed as "natural" and that they paid a premium because the ingredients were not natural, regardless of what those other ingredients were. That allegation was the same whether it pertained to deodorant or toothpaste.

The court also dismissed Colgate's and Tom's argument that the plaintiffs' claims were not typical of the class because the prior settlement barred their claims. The court found that settlement was not a bar to class certification because, despite similarities in both cases, the current suit raised claims pertaining to redesigned product packaging which was released after the earlier settlement. Therefore, the claims did not arise from the "identical factual predicate" as the prior case.

The court also easily turned back Tom's challenge to class certification on the grounds that consumers may not remember when they bought a product. As the judge pointed out, other courts have noted that requiring proof of purchase to identify proposed class members would "render class actions…almost impossible to bring."

The court also rejected Colgate's and Tom's argument that the consumers hadn't shown that a class action is the superior method for dealing with their claims. In particular, the companies pointed to the "full money back guarantee" that Tom's offers to dissatisfied customers. The court found that because the money-back guarantee is a nonadjudicative form of redress, it can't effectuate the punitive remedies and purposes of the state laws involved in the dispute. As the court noted, "[i]ndeed, consumers may not even realize that the guarantee exists."

While the court certified most claims, it found individual questions predominated in New York's express warranty claim because New York inquires whether each buyer knew of the truth or falsity of the statements, unlike the objective reasonable person standard required by the consumer protection statutes.

Key Takeaways

It is becoming harder to defeat class certification across product lines where comparable advertising messages are used for those product lines, despite the fact that there may be differences in purchasing habits between the products sold under like advertising.

Judge Burns Proposed Settlement in Coppertone "Mineral-Based" Sunscreen False Ad Suit

The parties to a lawsuit alleging Coppertone falsely advertised its "mineral-based" sunscreen are going back to the drawing board after a California federal judge in the Northern District of California refused to approve a $2.25 million settlement, finding the terms of the proposed settlement deficient and overbroad.

The proposed settlement would have resolved allegations that Bayer Healthcare and Beiersdorf falsely marketed multiple Coppertone sunscreen products as "mineral-based" when true mineral-based sunscreen does not contain any chemical ingredients, as Coppertone's does. Plaintiffs alleged that the misleading marketing sought to take advantage of consumers' desire for mineral-based sunscreens because of concerns about the deleterious effects of chemical sunscreen products.

Under the terms of the proposed settlement, plaintiffs who purchased "mineral-based" Coppertone sunscreen would have received $2.50 per each bottle of "mineral based" Coppertone products they bought. The defendants had already discontinued "mineral based" labeling and under the settlement agreed that if they should reintroduce the label between now and the end of 2023, the labels would accurately represent the contents and active ingredients.

But the settlement will not proceed until the parties cure what Judge Nathanael Cousins called serious deficiencies that prevent him from approving a settlement that is not "fundamentally fair, adequate, and reasonable." To begin with, the court noted that the scope of the release of claims is not specific enough and contains "sweeping language."

The court directed the parties to narrow the scope of the release to be more specific about the claims being released and to specify that the settlement only applies to claims about the purchase of Coppertone sunscreen products that contain a "mineral-based" label. The judge found the language defining the "released parties" to be too broad as well, emphasizing that the class members must be able to ascertain which party is released from future claims.

The court also directed the parties to more fully explain how no collusion or conflict of interest exists between Bayer or counsel and the entity chosen as the cy pres beneficiary. The parties said they selected the charity Look Good Feel Better, which helps cancer survivors, because mineral-based sunscreens are often purchased by consumers concerned about links between chemical sunscreens and cancer.

But although the parties said they were "not aware of any connection" between Look Good Feel Better and the attorneys in the case, and though Bayer was one of many companies who supported the charity in the past, Judge Cousins said the parties had to "clearly explain how no collusion or conflict of interest exists."

Judge Cousins also requested more information in the form of comparable market bids and costs incurred for administration for similar cases to support the estimated notice and claims administration costs which accounted for 23 percent of the entire settlement fund. The court similarly requested information from comparable cases to support the request for payment of one-third of the settlement funds in attorneys' fees, which departs from the 9th Circuit's 25 percent benchmark.

Finally, the court asked that the parties provide more information supporting the proposed class notice, including whether reaching the estimated minimum of 70 percent of class members was typical and other ways to reach more than 70 percent of the class members.

Key Takeaways

The Northern District of California remains one of the toughest courts in which to obtain approval of class settlements. Addressing each of the factors for approval requires attention to detail and substantial support.

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