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COVID-19 comes to an end – Extension of Limitation

In view of the outbreak of COVID-19 pandemic in March 2020, the Supreme Court of India by an order dated March 27, 2020 extended the period of limitation prescribed under the general law or special laws with effect from March 15, 2020 till further orders.

On March 5, 2021 the Supreme Court reviewed its decision and observed that in view of the changing scenario relating to the pandemic, the extension of limitation has served its purpose and should come to an end.

Accordingly, by an Order dated March 8, 2021 (https://main.sci.gov.in/supremecourt/2020/10787/10787_2020_31_1501_26732_Judgement_08-Mar-2021.pdf) the Supreme Court has directed that in computing the period of limitation for any suit, appeal, application or proceeding, the period from March 15, 2020 till March 14, 2021 shall stand excluded. Consequently, the balance period of limitation remaining as on March 15, 2020, if any, shall become available with effect from March 15, 2021.

In cases where the limitation have expired during the excluded period, all persons shall have a limitation period of 90 days from March 15, 2021. The Supreme Court also clarified that this order shall apply to limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.

2020 Advertising Law Year in Review

While 2020 was an eventful year in the world of advertising law, it feels wrong to begin any type of “year in review” without acknowledging the global events of this year, and the challenges they have brought to every individual in one way or another. In our role, we are often in a position of criticizing or defending from criticism the marketers who create the content at the center of our work. But, right now, we would like to take a moment to celebrate and congratulate them for a year spent capturing the tone of the times with sensitivity, insight, and just the right amount of humor, including the challenges of working from home, our newfound sense of responsibility in not going anywhere, the importance of uplifting and supporting each other, and the fact that we can’t wait to end our relationship with 2020. And, amidst all the challenges, we would like to remind everyone that 2020 also brought us Some Good News.

We look forward to a better 2021, and to seeing those of our readers who are old friends in person again and meeting others for the first time. In the meantime, let’s talk about this year’s key developments in advertising law…

Class Actions

The appellate courts didn’t skip a beat this year, issuing several important decisions in the world of class actions:

In California, we saw several unsuccessful attempts to rescue otherwise deficient pleadings by adding allegations related to consumer surveys that purported to show consumers were misled by a defendant’s advertising. Time and time again, in dismissing claims related to Mott’s applesauceGhirardelli baking chips, and Westbrae soymilk, the Northern District of California reaffirmed that consumer surveys alone do not make plausible an allegation that reasonable consumers are misled where the complaint has not otherwise plausibly alleged deception.

Every year brings its own set of new and ever more creative theories of false advertising. This year was no different, with decisions that resolved a plethora of interesting (albeit unsuccessful) allegations of deception:

  • In a case against SeaWorld, the Northern District of California found the (human) plaintiffs failed to demonstrate standing to defend the rights of orca whales via false advertising claims.
  • The District of Vermont dismissed false advertising claims from a consumer disappointed that Ben & Jerry’s ice cream is allegedly not, in fact, made exclusively from milk sourced from “happy cows” and “Caring Dairy” farms.
  • The Southern District of New York reminded us that claims that a seller’s products are “premium” or “the best” are mere puffery, and certainly cannot be used as a backdoor to complain about Starbucks’s alleged use of pesticides.
  • While condemning the exploitation of children in the cocoa bean supply chain, the First Circuit affirmed a series of decisions holding that chocolate companies’ failure to disclose information about upstream labor abuses on product packaging did not constitute unfair or deceptive business practices under Massachusetts law.
  • The Eastern District of New York threw out another cocoa claim, finding plaintiffs failed to plead that the labeling of Oreo cookies with the statement “Always Made With Real Cocoa” was deceptive, where plaintiffs did not dispute that Oreos do contain cocoa, but rather took issue with the fact that the cocoa was allegedly refined through an alkalizing process.
  • The Seventh Circuit affirmed the dismissal on summary judgment of claims that Fruit of the Earth’s aloe vera products were deceptively labeled as “Aloe Vera 100% Gel” and “100% Pure Aloe Vera Gel. ” The Court found (among other things) that plaintiffs failed to demonstrate that consumers interpreted these claims to mean these products were of “high quality” or “especially effective,” and the inclusion of stabilizers and preservatives in the products did not make these claims deceptive.
  • The Second Circuit affirmed the dismissal of claims that Dunkin’s “Angus Steak”  products were deceptively marketed to cause consumers to believe they contained an “intact” piece of meat, when they were actually ground beef patties with additives. The Court noted that the ads at issue included zoomed-in images clearly showing the beef patty, and reasonable consumers purchasing a $2-4 grab-and-go sandwich would not be misled into thinking they were purchasing an unadulterated, intact piece of meat.
  • The Southern District of Florida found that Burger King’s promise of a non-meat patty in its plant-based “Impossible Burger ” did not constitute a promise that the burger would be prepared separately from meat items. The court took it a step further, also granting Burger King’s motion to deny class certification at this early pleading stage, crediting Burger King’s argument that each consumer has different personal preferences for the preparation of his or her food.
  • In a case against Church & Dwight, plaintiffs alleged that the number of “loads” stated on OxiClean stain remover labels  is deceptive because, for some purposes other than a typical load of laundry, more than one load’s worth of product should be used. The court granted Church & Dwight’s motion to dismiss, concluding that plaintiffs failed to plausibly allege a reasonable consumer would be deceived by the labels. The court agreed with defendant’s arguments that reasonable consumers are not likely to be misled by the challenged claims given the disclosures made by the OxiClean labels. Proskauer represented Church & Dwight in this matter.

2020 also brought a series of “white” non-chocolate claims, with lawsuits filed against numerous confection makers alleging their “white”-labeled sugary goods deceived reasonable consumers into thinking the products contain white chocolate, when they do not. The candy gods (i.e., federal district courts) so far have not looked favorably on these claims, dismissing claims against Nestle Toll House’s Premier White MorselsGhirardelli’s Premium Classic White baking chips, and Hershey’s Kit Kat White bars.

However, taking the cake for largest number of class actions filed regarding a single word is almost certainly the category of allegedly deceptive “vanilla” claims, alleging that defendants’ “vanilla”-labeled products contain flavoring ingredients that do not come from vanilla beans. Claims against Wegmans vanilla ice creamWestbrae Natural’s Organic Unsweetened Vanilla Soymilk and Blue Diamond’s vanilla almond milk have been dismissed already, and we expect many more will follow.

Lanham Act

In a year involving a good deal of Supreme Court drama, false advertising (and trademark) law did not go ignored at the highest court in the land:

  • In Romag Fasteners v. Fossil, 140 S.Ct. 1492 (2020), the Court unanimously held that a Lanham Act plaintiff can recover the defendant’s profits without proof the defendant acted willfully.  That being said, willfulness will still be an important part of Lanham Act cases moving forward, as the Court indicated it is a relevant factor for disgorgement (plus, a showing of willfulness can entitle a plaintiff to a presumption of consumer confusion).

Several circuit courts issued notable Lanham Act decisions this year as well:

  • In the great beer battle of 2020, the Seventh Circuit reversed a district court’s decision preliminarily enjoining Anheuser-Busch from advertising that Bud Light has “no corn syrup” whereas Molson Coors’s competing Miller Lite and Coors Lite beers are “made with” or “brewed with” corn syrup.
  • The Fifth Circuit vacated a disgorgement and corrective advertising award in a case involving windshield water repellant, concluding that the plaintiff failed to show the defendant’s profits were attributable to its false advertising, and that corrective advertising constituted an unsupported windfall.
  • The Ninth Circuit affirmed the dismissal of PragerU’s false advertising suit against YouTube and Google, concluding that YouTube’s content restrictions and statements about its moderation policies did not constitute commercial speech sufficient to support a Lanham Act claim.

As for notable district court decisions from the past year:

  • We are closely following the ongoing dispute between Chanel and The RealReal over the latter’s alleged sale of counterfeit Chanel bags.  While the court dismissed Chanel’s trademark infringement claim, it declined to dismiss Chanel’s false advertising claim premised on The RealReal’s marketing claims that the products it resells are “100%” authentic.

Regulatory

The FTC’s Green Guides have become increasingly relevant to advertisers over the past few years as consumer demand for “green” products increases. This past year saw a few challenges in this space. Whether it becomes a focus for the FTC itself remains to be seen, but we anticipate this may be an area that attracts consumer class actions in the wake of an attention-grabbing NPR investigation. Watch this space.

This was a busy year in the self-regulatory space, with the National Advertising Division closing well over 100 cases. Stay tuned—and make sure you’re subscribed to our blog—for our upcoming “NAD Year in Review” deep-dive into notable cases and trends from this past year at NAD and NARB.

Federal appeals court blocks Cuomo’s limits on religious gatherings in New York

The US Court of Appeals for the Second Circuit ruled Monday that New York Governor Andrew Cuomo’s restrictions on the number of attendees at religious gatherings were likely to be a violation of the Free Exercise Clause of the First Amendment. The Court enjoined the state from enforcing these limits, put in place to address the spread of COVID-19 in areas with the highest prevalence.

Governor Cuomo issued an executive order in October that categorized areas into “zones,” which were assigned colors corresponding to their COVID-19 rates. In all zones, a capacity limit was imposed on houses of worship, but not on essential businesses.

These measures were reviewed by the Supreme Court in late November, and it held similarly that the executive order be blocked because the plaintiffs, including Agudath Israel of America and the Roman Catholic Diocese of Brooklyn, New York, were likely to succeed in challenging these measures once the case was fully litigated.

The Second Circuit took particular issue with the separate identification of houses of worship for certain restrictions. It found the classification of essential businesses versus non-essential businesses, which also have different restrictions, to be “questionable” in some cases. It pointed to the fact that Cuomo “has not asserted that his categorization of businesses as ‘essential’ or ‘non-essential’ was based on any assessment of COVID-19 transmission risk.” Particularly, Cuomo failed to cite data supporting his belief that places of worship have greater transmission rates.

Donald Trump Law

Trump Continues to Fight for the End of DACA

Ever since President Obama signed DACA, The Deferred Action for Childhood Arrivals program, it has received constant beratement from Republicans and conservative activists. One of the most common criticisms of DACA is that President Obama did not have the legal right to sign it.

Deferred Action for Childhood Arrivals (DACA) is an American immigration policy that allows some individuals with unlawful presence in the United States after being brought to the country as children to receive a renewable two-year period of deferred action from deportation and become eligible for a work permit in the U.S. To be eligible for the program, recipients cannot have felonies or serious misdemeanors on their records. Unlike the proposed DREAM Act, DACA does not provide a path to citizenship for recipients, known as Dreamers. The policy, an executive branch memorandum, was announced by President Barack Obama on June 15, 2012. U.S. Citizenship and Immigration Services (USCIS) began accepting applications for the program on August 15, 2012.

DACA is essentially immigration policy, something the White House does not possess the power to make. Congress is explicitly given the power to legislate immigration policy in Article 1 Section 8 of the Constitution. No such power is given to the Executive. This is a point that President Trump has emphasized multiple times, most recently tweeting, “President Obama never had the legal right to sign DACA, and he indicated so at the time of signing. But In any event, how can he have the right to sign and I don’t have the right to ‘unsigned.’ Totally illegal document which would actually give the President new powers.”

The President also tweeted, “The Immigration Law Institute’s Christopher Hajec says, ‘The Supreme Court has to look st whether DACA is lawful. What they are looking at now is whether Trump’s recision of DACA is lawful. Must consider lawfulness of DACA itself. Looks very odd that President Trump doesn’t have the discretion to end the program that President Obama began in his discretion. That program was unlawful to begin with. I think it’s very unlikely that the SCOTUS is going to issue an order reinstating what it believes is an unlawful program. DACA Is unlawful,’” In response to a report by the Immigration Law Institute’s Christopher Hajec that claimed President Obama’s actions were illegal.

President Trump campaigned on ending DACA, something that has proven extremely difficult. In 2017 the President released a plan to phase out the program, but was blocked by the federal courts. The case is now heading to the Supreme Court and will be heard in October. In response to this President Trump tweeted, “DACA will be going before the Supreme Court. It is a document that even President Obama didn’t feel he had the legal right to sign – he signed it anyway! Rest assured that if the SC does what all say it must, based on the law, a bipartisan deal will be made to the benefit of all!”

In August 2018, USCIS estimated there were 699,350 active DACA recipients residing in the United States. Immigration researchers estimate the population to be between 690,000 and 800,000 people.

DACA’s fate is currently up in the air. President Trump is confident the Supreme Court will rule in his favor, and they very well might. The court’s conservative lean could be enough to secure a huge victory for the president. However, the Supreme Court has been reluctant to touch the topic. In February of 2018 the Supreme Court refused to hear the White House’s appeal to a lower court ruling prohibiting the president from suspending the program. Although, this ruling came before Justice Brett Kavanaugh replaced Justice Anthony Kennedy and secured a conservative majority on the court.

Whatever the outcome, this case will likely be a defining moment for the Trump administration, and could effect the President’s 2020 reelection as the court’s decision will likely be released in early to mid 2020.