Alerts

AD-ttorneys@law – November 19, 2019

Alerts / November 19, 2019

In This Issue:

Smells Like Mean Spirit?

Bargain airline sued over Shortcut Security line

Bare Boned

If your company’s brand is all about the bargain, you can expect some to identify your company with cheaper services and the exclusion of certain benefits. Spirit Airlines, however, compounded its bargain-fare image by charging what many consider to be high rates for every possible amenity from baggage weight to seat assignments, and even for what many consider to be the God-given right of carry-on luggage.

This approach may have been a sound business decision by the numbers, but it earned plenty of passenger ire: Spirit, for a couple of years, was racking up record numbers of customer complaints before the U.S. Department of Transportation. It even became a running joke on Trevor Noah’s The Daily Show.

It’s Making Me Wait

Still, Spirit can’t seem to catch a break.

Earlier this month, the company was sued by one Cintya Larios Guzman, a Virginia resident who booked a flight on Spirit from Los Angeles International to Dulles International.

Seeking to avoid the “general mayhem that accompanies flying out of LAX,” – her words, not ours – Larios Guzman claims to have paid an extra $8 to Spirit for a special “Shortcut Security” option. According to the suit, the option is presented by Spirit in its marketing “as a way to bypass the normal airport security line for a person who is running late or just does not want to stand in the normal security line.”

Larios Guzman claims that once she checked in and headed toward the security checkpoint, she asked a Transportation Security Administration (TSA) worker where Spirit’s “shortcut” line was. The employee told her that no such line existed, and she would have to join the general security queue.

The Takeaway

“Apart from almost missing her flight,” the suit claims, “Plaintiff also suffered monetary damages as a result of Spirit’s advertising and sale of the ‘Shortcut Security’ option when no such ‘Shortcut Security’ was available.”

The suit alleges common-law breach of contract claims, unjust enrichment claims, and violations of Florida’s Deceptive and Unfair Trade Practices Act against Spirit due to the purported offering of the Shortcut Security option. Larios Guzman is also asking for an injunction to keep Spirit from offering the shortcut in the future to other potential passengers.

The suit alleges, “It is the TSA that controls the security access to an airport and unless a person has the TSA ‘precheck’ designation, they must go through the same general TSA security line as passengers who did not purchase any ‘Shortcut Security’ service.” It will be interesting to see how Spirit justifies the promotion and advertising of the Shortcut Security service in response to the plaintiff’s suit and allegations that only the TSA can shorten security check times through its own process. Nevertheless, this suit will serve as another reminder to businesses that the promotion and advertising of valuable and rare benefits to their customers can certainly garner business, but such services must be compliant and ultimately possible, to avoid risk of a lawsuit.

NARB Shuts Down Goya’s Claim of ‘Puerto Rico’s Favorite’

Ronzoni owner prevails in dispute over “unsupported” ad tag

Boricua Battle

When last we left Goya Foods and its rival and 800-pound pasta gorilla Riviana Foods (manufacturer of Ronzoni pastas), the branding titans were locked in a struggle over who had bragging rights to prominence in the Puerto Rico marketplace. Goya had taken to using the tag “La pasta favorita de Puerto Rico” (“Puerto Rico’s favorite pasta”) for its Excelsior pasta brand, and that rubbed Riviana the wrong way.

As we explained back in April 2019, the relatively modest size of Puerto Rico gives the lie to its cultural and economic influence: The Puerto Rican diaspora is the second-largest Hispanic community in the United States, and as such accounts for serious market share. As a result, Riviana wasn’t going to allow Goya to claim the moniker “Puerto Rico’s favorite” without a fight.

Hinchado

It’s a fight that Riviana gave Goya by putting this issue before the National Advertising Division (NAD). In our last report, we outlined how NAD rejected Goya’s claim that its tag was “classic puffery.” Crucially, NAD rejected its argument that “fanciful” language surrounding the tag undercut the need to justify the claim through objective measures.

NAD sided with Riviana and recommended that Goya spike the claim because it offered no data to support it. Goya, feeling ornery, decided to appeal the ruling to the National Advertising Review Board (NARB), which ruled in October 2019 that the tag was “an objective preference claim that requires substantiation.”

The Takeaway

Of interest: It’s impossible to know for sure, but from NARB’s press release, it seems that part of Goya’s argument was a claim that the Spanish term favorita carried a different meaning than the English favorite:

“With respect to dictionary definitions,” NARB wrote, “the panel concluded that the Spanish definition offered by the advertiser is consistent with the English definitions cited by the challenger – they all show that ‘favorite’ conveys a message of preference.”

And there’s the central message: No matter what language you write it in, “favorite” is an objective claim that needs support. Goya says that although it is disappointed in the result, “It will comply with the ruling and discontinue the use of ‘La pasta favorita de Puerto Rico’ in connection with Goya’s EXCELSIOR-brand pasta.”

ICYMI: FTC Summarizes Existing Influencer Rules

“New” guidance document will likely disappoint watchdog groups

Come Again?

How many ways can you say the same thing before you go stark raving mad? Ask the folks over at the Federal Trade Commission (FTC).

Earlier this month, the FTC released a new guidance document for online influencers imaginatively titled “Advertising Disclosures Guidance for Online Influencers.”

And you’ve heard most of these guidelines before. “The new publication summarizes the FTC’s existing guidance in this area,” the FTC writes, “including the FTC’s Endorsement Guides and a 2017 question-and-answer document produced by staff.”

(Note: Let us be clear about something. Regardless of the lack of new information, if you are an influencer, or someone who’s working with influencers, you should read the document for reasons that are obvious at this point. And read it again before your next endorsement, whether you were paid for it or not.)

Chronicles

While there doesn’t appear to be any novel legal insight here, there’s history behind this latest effort.

We’ve covered it before, of course: Truth In Advertising Inc.’s (TINA) ongoing campaign to motivate the FTC into action over influencer misbehavior. The watchdog group has been writing letters to the FTC outlining ad violations for more than two years now; it claims to have found “more than 1,400 examples [of violations] across … 20 influencers collectively promoting more than 500 companies.”

And despite FTC letters warning influencers about their infractions, TINA’s continuing complaint is that the FTC isn’t doing much of anything else, which it expressed in its March letter: “It has now been almost two years since the FTC initially notified these influencers of their obligation to refrain from actively deceiving their social media followers,” the letter states. “Yet all but one of them have continued to mislead their fan base … by refusing to consistently and appropriately disclose their material connections to the brands they are promoting.”

The Takeaway

This latest guide document comes after months of pressure from watchdog groups and continued influencer misbehavior. However, it is unlikely watchdog groups such as TINA will be completely satisfied with this new FTC guidance, as this renewed guidance does not demonstrate a planned or current uptick in FTC enforcement.

Nonetheless, online influence is now a recognized commodity. With each passing quarter, it becomes more well-defined and monitored. And as the online influence community continues to grow in prominence, the FTC will likely feel continued pressure to bring more enforcement actions.

It’s hard to imagine how the guidelines could be made any clearer – and eventually the FTC will have to assume that repeat offenders are simply ignoring the rules or can’t understand them in some fundamental way.

So we say to everybody who’s part of this arrangement – influencers, companies and the platforms that connect them – saddle up. You need to embrace an ongoing, thorough, soup-to-nuts evaluation of your adverts, guided by competent and knowledgeable counsel. Or you might be unpleasantly surprised when the FTC finally loses its patience and brings additional enforcement actions against companies and influencers that fail to abide by the FTC guidance.

Check Out Our Latest Blog Posts

Refine CCPA Compliance Plan with the Regulations in Mind

We previously announced the publication of the first set of proposed regulations that will implement the California Consumer Privacy Act (CCPA), which goes into effect January 1, 2020. Partner Alan Friel has authored an article published by OneTrust DataGuidance that details how the proposed regulations – and a half dozen amendments to the CCPA that recently became law – impact CCPA compliance. A copy of the article is available here. The proposed regulations are available here and an initial statement of reasons that explain the thinking behind the proposed regulations is available here. The attorney general is currently taking written comments on the proposed regulations until December 6. BakerHostetler is preparing comments to file for specific clients, as well as a set of aggregate comments that reflect our clients’ concerns more generally. If you would like to contribute comments or would like assistance in crafting custom comments, contact the author.

Baker & Hostetler LLP publications are intended to inform our clients and other friends of the firm about current legal developments of general interest. They should not be construed as legal advice, and readers should not act upon the information contained in these publications without professional counsel. The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you written information about our qualifications and experience.