Stay ADvised: 2026, Issue 3

In This Issue:

• Washington CEMA Update: Proposed Legislative Response to Surge in Email Marketing Litigation
• USDA Food Labeling Rule Tightening "Product of USA" Claims Now Effective
• GameStop Targeted With Consumer Suit Over Alleged Digital Property Rights Transparency Law Violations
• NAD Flags Risks in Broad Fee and Pricing Claims
• Lidl's Food May Be Fresh, But Its Pricing Claims Are Stale, Finds NAD

Washington CEMA Update: Proposed Legislative Response to Surge in Email Marketing Litigation

Two companion bills pending in the Washington Legislature—SB 5976 and HB 2274—would make targeted but significant changes to Washington's Commercial Electronic Mail Act (CEMA). The bills come against the backdrop of an unprecedented surge in CEMA class actions following a 2025 Washington Supreme Court decision that interpreted CEMA's prohibition on "false or misleading" subject lines far more broadly than many companies had anticipated.

That decision opened the door to a wave of lawsuits challenging common promotional email practices—particularly subject lines creating urgency around sales deadlines (e.g., "last chance," "ends tonight," or "final day") even where similar promotions were later extended or repeated. Since the ruling, more than 30 class actions have been filed across industries, driven in part by CEMA's private right of action and statutory damages of up to $500 per email (with potential trebling under the Consumer Protection Act), creating outsized exposure for routine email campaigns.

SB 5976 and HB 2274 appear to be designed to recalibrate CEMA in response to this litigation trend. Both bills would replace the current "false or misleading" subject-line standard with a more objective test focused on whether a subject line would be likely to mislead a reasonable recipient about a fact material to the transaction. The bills also would revise CEMA's remedies framework and repeal the provision that automatically treats CEMA violations as per se violations of Washington's Consumer Protection Act—changes that could materially reduce class-action leverage.

These measures could be meaningful amendments to Washington’s email marketing law. Companies that rely on promotional email campaigns—particularly those using urgency-based messaging—should closely monitor these developments as Washington lawmakers consider whether and how to rein in the current wave of CEMA litigation.

USDA Food Labeling Rule Tightening "Product of USA" Claims Now Effective

If the chicken you ate came with a "Product of USA" label, you can be more certain than ever that the chicken was born, raised, slaughtered, and processed in the USA. As of January 1, 2026, the USDA rule tightening requirements for making "Product of USA" or "Made in USA" claims on certain meat, poultry, and egg products is effective. Advertisers who voluntarily use these claims must now comply with the rule's more stringent requirements for making domestic country of origin claims.

Under the enhanced rule, brands may add the "Product of USA" or "Made in USA" claim on products regulated by USDA's Food Safety and Inspection Service (FSIS) (meat, poultry, and eggs) only if the animals from which those products are derived were born, raised, slaughtered, and processed in the United States. This represents a significant change from the prior framework, which allowed products to bear the "Product of USA" label even if some production steps—such as where the animal was raised—occurred outside the U.S., so long as the final meat processing was domestic.

The rule also imposes stricter requirements for products that contain multiple ingredients. FSIS-regulated components (such as meat, poultry, or egg ingredients) must meet the new criteria that they be sourced in the U.S. end-to-end, but even any product ingredients outside the FSIS's purview must still be of U.S. origin in order for the product to bear an unqualified "Product of USA" or "Made in USA" claim. Where a product does not meet these criteria, businesses may instead use other voluntary U.S. origin claims, provided those accurately describe the specific production or processing steps that occurred in the U.S. – for example, "processed in the United States," "sliced and packaged in the United States" or "made with chicken born and raised in the United States." While businesses are not obligated to include the label on their products, all voluntary labels must comply with the rule, which includes significant recordkeeping of birth, processing locations, and more.

Key Takeaways. The updated labeling rule reflects not only a growing consumer interest in American-made and local foods, but also comports with USDA's reported consumer expectations that a food labeled as "Product of the USA" reflects a product that's been fully raised and processed domestically to avoid being misleading, or consider a qualified claim that accurately reflects the steps completed in the U.S. Further, advertisers should expect scrutiny on such claims. As we approach the 250th birthday of the United States, and as we wrote about here, a multitude of brands will find ways to market around this milestone. Given the exacting substantiation standards required to support these claims and the dynamic nature of supply chains, awareness of the litigation and enforcement landscape will help companies manage risk as the big American birthday party gets going.

GameStop Targeted With Consumer Suit Over Alleged Digital Property Rights Transparency Law Violations

Video game retailer GameStop has been hit with a proposed class action lawsuit alleging that it is misleading consumers into thinking they're purchasing ownership of a video game when, in fact, the company is only granting a revocable license to access the content. This amounts to a bait-and-switch tactic that violates California's Digital Property Rights Transparency Law (DPRT), which requires sellers of covered digital content to disclose the licensing nature of digital game transactions.

The DPRT, which went into effect on January 1, 2025, makes it unlawful for sellers of digital goods, including video games, to advertise those goods with the word "buy" or "purchase" or with any term denoting an ownership interest unless they either: (1) obtain the buyer's affirmative acknowledgement that the transaction grants a license rather than ownership, and that access may be revoked; or (2) clearly and conspicuously disclose prior to completion of the transaction, that the consumer is purchasing a license and not ownership of the digital good, along with access to the applicable terms that provide full details on the license.

Plaintiff avers that GameStop sells digital copies of video games on its website without conspicuously disclosing that the "purchase" of the game is the grant of a license or putting consumers on notice that they are getting a revocable license. The complaint further avers that GameStop's UX and purchasing process is misleading and gives the impression that consumers' digital purchase gives them the same ownership rights they would get when purchasing a physical copy, including by using an "Add to Cart" button and a "People Also Bought" sidebar.

The issue matters, says plaintiff, because a license grants a far different type of ownership interest than a purchase, and usually in GameStop's case, consumers purchase "a non-exclusive, non-transferable, revocable" license to access the game, which the video game company maintains at its "sole discretion." The complaint alleges that California passed the DPRT out of concern for "consumers losing access to content" in response to a class action lawsuit filed against Ubisoft after it removed a popular video game, causing millions to lose access to the game.

Key Takeaways. This lawsuit is one of several filed recently alleging violations of California's DPRT law. Sellers of covered "digital goods" should take notice and review websites relative to "buy" and "purchase" language and incorporate the necessary acknowledgements and disclosures to comply. Further, the GameStop complaint layers in "dark pattern"-type allegations detailing how the website experience allegedly creates a misleading impression of ownership more broadly. Although it is too early to say whether a court would agree with plaintiff's description, industry stakeholders may wish to assess against their own website user experiences.

NAD Flags Risks in Broad Fee and Pricing Claims

BBB National Programs' National Advertising Division (NAD) recently took a close look at broad pricing claims in a challenge between competing 401(k) providers, Human Interest and Guideline. The decision is a useful reminder that expansive fee-savings claims are difficult to substantiate even when supported by detailed disclosures.

At issue were several of Guideline's advertising claims suggesting significant fee savings. One claim touted "Up to 6x less in fees." NAD found that this was a broad pricing claim that consumers would reasonably understand to mean they would pay substantially lower fees overall than with competing providers. While Guideline based the claim on certain asset-based fees under specific circumstances, the claim itself did not limit the comparison to those fees or explain that other fees still applied. NAD also emphasized that the referenced "industry average" reflected a narrow, fact-specific scenario and would not apply to all businesses. As a result, NAD concluded that the claim conveyed a broader savings message than the evidence supported and that the accompanying disclosures could not cure that mismatch.

NAD reached a similar conclusion with Guideline's claim that "The estimated total cost for our managed portfolios can be under 0.15%." Even though some customers could achieve a 0.15% asset-based fee, NAD found that the claim communicated an all-in pricing message that did not account for additional fees. Because the claim suggested broad applicability and total cost, NAD recommended that it be discontinued.

Finally, NAD reviewed Guideline's claim that it offers "4x Lower Asset Fees than Human Interest." Although the advertiser showed that some customers would pay significantly lower fees, NAD found the comparison misleading because the two companies use materially different pricing models, making a simple multiplier comparison inappropriate. NAD again emphasized that lengthy footnotes did not sufficiently qualify the headline claim's broad message.

Bottom Line. Broad pricing and fee-savings claims remain high risk. When pricing varies by customer, fee type, or plan structure—or when competitors use different pricing models—headline claims suggesting dramatic or across-the-board savings are likely to overstate what consumers can expect. NAD continues to stress that disclosures cannot rescue a pricing claim whose net impression is broader than what the underlying data can support.

Lidl's Food May Be Fresh, But Its Pricing Claims Are Stale, Finds NAD

On a pricing claims streak, NAD next weighed in on stale comparative pricing claims in a challenge between competing supermarket chains.

Advertiser Ahold Delhaize USA (Food Lion, Stop & Shop, and Giant) challenged pricing claims made by Lidl US. Ahold argued that Lidl's price comparison, claiming 25–30% savings (or specific dollar savings) compared to Ahold banners, arguing that the claims continued to run weeks or months after the underlying price checks were made and therefore no longer reflected current prices.

Although NAD found that Lidl's price comparisons were generally accurate at the time they were made, it concluded that many of the claims were stale by the time they were disseminated. Based on record evidence that Ahold updates prices weekly, NAD determined—consistent with a prior decision involving Wegmans—that seven days was a reasonable period to keep price comparisons current on these facts, while emphasizing that this is not a per se rule and depends on the pricing practices of the parties and consumer expectations. NAD also found that Lidl's disclosure identifying the date of comparison did not cure the issue, because it failed to dispel the strong net impression of present-day savings and was not consistently clear or conspicuous.

NAD also addressed whether Lidl's comparisons should reflect Ahold's free loyalty-program pricing. While NAD did not require Lidl to use loyalty pricing, it concluded that the exclusion of loyalty discounts—used by a majority of Ahold customers—was material information. NAD recommended that Lidl clearly disclose whether its comparisons are to base prices or to loyalty-discounted prices to avoid consumer confusion.

Finally, NAD recommended discontinuation of Lidl's claims that consumers could save on the "exact same basket." Because those claims compared Lidl private-label items to national brands sold by Ahold (and, in some cases, different quantities), NAD concluded that the phrase "exact same" conveyed an apples-to-apples identity that was not supported. The decision underscores that while comparative advertising may compare similar products, advertisers should avoid language that promises identity unless the products truly are the same.

Bottom line for advertisers: Comparative pricing claims must be genuinely current, clearly disclose what prices are being compared (including whether loyalty discounts are excluded), and avoid "apples-to-apples" language like the "exact same" unless the products, prices, and timing of the comparison truly match.