AD-ttorneys@law – December 29, 2021

Alerts / December 29, 2021

In This Issue:

Plaintiffs’ Bar Waves Another Maddening Flag at Olé

Repeat of Cali origin case makes New York claims

Qué Pasó?

Back in May, we covered a case that raised a bushel of interesting questions about origin claims.

The case, Juan De Dios Rodriguez v. Olé Mexican Foods, was filed in late 2020 in the Central District of California, and on its surface, it seemed straightforward.

Rodriguez took umbrage at the packaging of several of Georgia-based Olé Mexican Foods’ products. Despite the “Made in the USA” tag on the front of the products, the other tags — “El Sabor de Mexico!” (“A Taste of Mexico!”), the brand name “La Banderita,” the use of the word “authentic” and the Spanish phrase “Tortillas de Maiz” — led him to believe that the tortillas in question had been baked in Mexico. It was, he alleged, deceptive advertising, plain and simple.

Contexto el Rey

Olé fired back with a motion to dismiss in short order, just a month after the complaint was filed. The company argued that reasonable consumers would make no mistake regarding the origin of the tortillas, pointing out that the packaging made no specific geographic claims, disclosed the “USA” origin of the products and “merely evoke[d] the cuisine, culture, history, people, spirit, or feeling of a country or a place.”

Not so fast, replied the court in an order every marketing department should pay attention to.

The court found that a reasonable consumer might be led into mistaking the origin of the tortillas given “the context of the whole label or advertisement.” The court noted that there was “a probability that a significant portion . . . of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled,” particularly in light of the conflicting front-of-package references to Mexico and Mexican culture and the back-of-package “Made in the USA” claim.

The motion to dismiss was denied.

The Takeaway

The contextual nature of the alleged deception is the most important issue, of course; that “Made in the USA” tag didn’t win Olé a get-out-of-court card. Instead, it was overshadowed by the other messaging. There’s also a larger question of “authenticity”; the family that runs the company boasts deep roots in Mexico, and as minority representation increases in the cultural landscape, new arguments may emerge regarding the blurred lines between “origin” and “heritage.”

But here’s an even scarier takeaway: The same counsel that represents Rodriguez in this ongoing case just filed another, all-too-similar case in the Western District of New York.

Perhaps the legal challenges raised against Olé haven’t taken on the dimensions of the Mars Confectionary series of class actions we’ve been chawing on about for more than a year. But it should worry Olé and any other company that leans on an aesthetic based on the iconography of another culture. Olé is still battling the first case in court, and now it has another to contend with in a new jurisdiction.

Stay tuned.

Campbell’s Juices Attacked for Sugary Sweetness

But does failure to mention harmful effects neutralize health claims?

Is This Any Way to Wrap Up the Holidays?

If you’ve ever even glancingly worried about your waistline, blood pressure, blood sugar or cholesterol levels, stay away from Kyle Banta Yoshida’s class action against the Campbell Soup Company, filed last month in the Northern District of California.

It’s filled with a litany of the harms caused by sugar-sweetened beverages. “Individuals who consumed 1 or more soft drinks per day,” the complaint states, “. . . had a 48% higher prevalence of metabolic syndrome than infrequent consumers, those who drank less than 1 soft drink per day.” Metabolic syndrome, if you didn’t know, boasts symptoms “including high blood fats and triglycerides, high cholesterol, high blood pressure, and extra body fat, especially in the belly.”

Alongside metabolic disease, the complaint draws connections between sugar-sweetened drinks and cardio disease, liver malfunctions, diabetes and something called “all-cause mortality.”

That’s where we stopped reading.

I Coulda Hadda ...

Yoshida is targeting a line of Campbell’s Juice Blends drinks, which he claims contain between 10 and 28 grams of sugar, depending on the individual flavor (we’re talking “acai mixed berry,” “berry bliss,” “orange carrot,” “healthy greens” and other flavors).

Because Campbell’s claims that the juices “BOOST YOUR MORNING NUTRITION” — not to mention that one of the flavors is named “healthy greens” — Yoshida alleges the company is misleading consumers by omitting the negative effects of sugar on human health. Yoshida and his proposed class are charging Campbell’s with violations of Cali’s unfair competition law, false advertising law and Consumers Legal Remedies Act.    

The Takeaway

The interesting question in this case: Does failing to mention or address alleged negative health effects of sugary fluids render the existing health claims misleading?

If the ingredients of the drinks confer some health benefit, perhaps the change required is simply an acknowledgment of the alleged harms that can be caused by sugar-sweetened drinks — an interpretation that would have large-scale ramifications for companies that produce “healthy” foods.

Fake Debt Collectors Use Robocalls to Trawl for Victims

The FTC banned them, but will that stop future shady innovation?

Check the Receipts

People go to extremes to get out from under debt.

Check out these extreme strategies — people rent themselves out as billboards, or throw out their air conditioners or dine exclusively on ramen noodles.

But surely the victims of one telemarketing scam took things a little too far. According to the Federal Trade Commission, these consumers started making payments on debts that they had already paid off.

The consumers were contacted by the (allegedly) predatory National Landmark Logistics, a South Carolina-based robocalling debt collector, whose representatives left “deceptive messages claiming consumers faced imminent legal action — lawsuits or even arrest — for unpaid debts.”

This despite the fact that in some cases, the debts had already been resolved, or didn’t exist at all.

Drag Net

National Landmark was drawn into a wide net cast in 2020 by the commission and an embarrassment (we believe that’s the plural) of federal and state authorities. The prosaically named Operation Corrupt Collector cracked down on debt collectors who used abusive and threatening tactics to collect on debts that they had no right to collect on (including, yes, the nonexistent ones).

The problem is significant: The joint operation included 50 enforcement actions by the commission, including several against collectors like National Landmark that took a buckshot approach to robocalling technology. Their logic? If you make huge numbers of calls, you’ll find enough people who will respond to your outrageous fabrications to justify the cost.

The callers posed as lawyers or arbitrators, “and used consumers’ personal information to convince consumers the threats were real.”

The Takeaway

Like others before it, National Landmark is now banned from the debt collection industry. The company was also required to fork over $12 million in cash as well as cars and real estate.

Typically, robocallers are snagged for selling legitimate services or goods with the help of a problematic technology. But National Landmark and its ilk represent a new wrinkle in robocall violations: the use of personal data to perpetuate a scam through the robocalling campaign.

As high-quality personal data becomes more available, we can expect scams that were once tightly targeted to become weaponized by mass messaging. A brave new world for the aspiring fraudster.

Subscription Add-Ons Provide Growth in Constricted Markets

But each new service is a compliance risk unto itself


The New York Times is on a roll. Most paper-and-ink news institutions are struggling to get by in the Internet age (and seriously, haven’t they had quite a while to adjust at this point?). But not the Times.

Sources report that the Old Gray Lady boasts nearly 8.5 million subscriptions — 7.6 million of which are digital. This alone would demonstrate astounding success in today’s media industry. But beneath the hood, it’s the add-on subscriptions that are fueling excitement for the Times’ future as a digital platform.

All the Apps That Fit

The Times, informed without doubt by a shrewd understanding of its subscriber demographic, has added three subscription services that are, quite simply, booming.

NYT Cooking and New York Times Games cleverly leverage the newspaper’s legacy offerings — its recipes and the famed crossword puzzle. Wirecutter, a review site purchased by the Times in 2016, was a popular and respected site prior to its acquisition; it can now leverage its parent company’s incredible scope and reputation for probity (even if the reviews are independent).

While appealing to existing Times subscribers, each attracts its own audience, which in turn drives new subscriptions to the company’s journalistic core.

The Takeaway

In a cutthroat Internet ecosystem, building services out from solid but secondary assets and capabilities is a smart way to grow. But after all the cheerleading, allow us a Debbie Downer moment.

Businesses must remember that new services, which incur new charges and serve up new content and capabilities, require their own consent requests and separate legal notices. It may be tempting to piggyback new offerings on top of existing user agreements, but failing to treat every add-on as a service in its own right is asking for trouble.

Check Out Our Latest Blog Posts

Dreaming of Ads for Sugarplums

Leading into the long holiday weekend, we on the BakerHostetler Advertising, Marketing & Digital Media team have lots to be thankful for. Our newest partner, Daniel, has really helped remind us how much we enjoy blogging. As we are pushing off the pandemic languishing, one of our resolutions is to commit to more consistent posts in the new year. But it’s Thursday, Christmas Eve eve. We could write about the CFPB probe into Buy Now Pay Later products or the drama brewing at the FDIC over CFPB actions. But I would rather talk about the holidays and food, as the seasonal spirit is beginning to take over and these things make me happy. It’s just that kind of a day.

Why Everyone Is Talking About a Rarely Invoked Rule – the FTC’s Health Breach Notification Rule

Back in September, the Federal Trade Commission (FTC) issued (by a 3-2 vote) a policy statement (the Statement) regarding the oft-forgotten Health Breach Notification Rule (the Rule). I was at the FTC when the Statement was released and have since joined BakerHostetler. Around the time I joined BakerHostetler, my new colleague Melissa Hewitt published an informative blog about the Statement and what it could mean for non-HIPAA covered health apps. Now that the dust has settled, we thought it would be a good time to do a deeper dive into the Rule and provide some food for thought regarding compliance with it.

What Is a Rule-A-Palooza – Another Public Federal Trade Commission Meeting

I used to read a lot of TV show recaps that were touted as “We watch so you don’t have to.” Little did I know that same concept would apply to these new public meetings of the Federal Trade Commission (FTC) and that I would be the one recapping. The meetings aren’t quite must-see TV, but I keep coming back for more – much like at the Caesar’s Palace buffet.

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