What Is a PFAS, and Why Should I Care? Part III – California’s Proposition 65

In Part I and Part II of this blog series, we introduced and discussed per- and polyfluoroalkyl substances (PFAS), commonly referred to as “forever chemicals,” which have been recent targets of consumer class actions and regulatory enforcement due to their alleged human health risks. As a quick refresher, PFAS includes a class of more than 4,700 man-made chemical compounds used in a wide range of products – including cosmetics, food packaging, textiles, carpeting and nonstick cookware – due to their water- and stain-resistant properties. PFAS do not easily break down and therefore persist in the environment. While we previously covered legislation that would phase out or ban PFAS in such products over the coming years, several of these chemicals currently are subject to consumer product warning requirements under California’s Safe Drinking Water and Toxic Enforcement Act of 1986 – commonly known as Proposition 65. 

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Don’t Miss Special Guests at This Year’s BakerHostetler Advertising and Privacy Forum

In a little over five weeks (on June 14), you can join BakerHostetler’s subject matter experts along with special speakers from the FTC and NAD. You’ll also hear from one of our new partners, Daniel Kaufman, who spent 20-plus years at the FTC, including as acting director of the Bureau of Consumer Protection in early 2021, and will share his unique perspective of being both inside and outside the agency.

This daylong event, which will provide CLE credit (including ethics), will be held at the landmark National Press Club building in Washington, D.C. Spend the day in an intimate setting with other in-house colleagues engaging with nearly two dozen speakers covering a broad array of cutting-edge, need-to-know topics, including an update on recent developments regarding the FTC, dark patterns, data security and state privacy laws, class action litigation, and, of course, the metaverse, NFTs and cryptocurrency.

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A Deeper Dive into the FTC’s Proposed Changes to the Telemarketing Sales Rule and the Continued Interest in Negative Option Programs

At last week’s public Federal Trade Commission (FTC) meeting, the commissioners unanimously voted for possible changes to the Telemarketing Sales Rule (TSR). Given the intense interest in FTC rulemaking and the important role the TSR plays in FTC enforcement, we thought this warranted a closer look.

 First off, this is a very different rulemaking process than what we have been discussing recently. In the past few months, the agency initiated two Mag-Moss rulemakings, one on imposter fraud and one on earnings claims. And all signs indicate that the agency will initiate rulemaking on some as-yet-undefined privacy issues once (and if) Alvaro Bedoya gets confirmed as the fifth commissioner. Those three rulemakings utilize Mag-Moss rulemaking procedures that are quite cumbersome. It is the default rulemaking process that the FTC must use in the absence of other congressional authority.

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What’s Going on at the FTC? New Employee Survey Raises Issues If You Are Engaging with the Agency

A recent survey of FTC employees put forward some interesting numbers. In 2020, FTC staff were asked if their senior leaders “maintain high standards of honesty and integrity” and 87 percent answered positively. In November 2021, the same staff were asked the same question and the positive responses dropped by 34 points to 53 percent. When staff were asked whether they have a high level of respect for senior leaders, positive responses dropped by 35 points. Do senior leaders inspire motivation and commitment? Down from 80 percent to 42 percent. Not a rousing vote of confidence. We are here to break this down for you – in particular, what it means for companies appearing before the FTC.

For those who aren’t familiar with the Federal Employee Viewpoint Survey (FEVS), it is a large, annual survey of the federal workforce. For at least the past decade, the FTC has ranked exceedingly high in job satisfaction and views of senior leadership for medium-sized agencies, regardless of the party in charge. The agency is often number one or number two in most key categories. At this time, survey results from other agencies have not been published, so we do not yet know the rankings. But a review of the raw data looks quite troubling, and pretty much guarantees that the overall ranking of the FTC among agencies will plummet. There is quite simply no way to polish this thing.

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The 10th Public Commission Meeting – Talking About Telemarketing, AMG and, Yes, Dream Incubation

We made it to the 10th public commission meeting. Now, one person who didn’t make it to the meeting today (or at least did not appear on the main screen) was Alvaro Bedoya. We had heard that his confirmation vote to become the fifth commissioner was going to happen this week, but apparently a few high-profile COVID-19 cases caused a delay in his vote. Because of a partisan divide on his nomination, his vote was likely going to require a tie-breaking vote from Vice President Harris.

The surprise portion of the meeting was brought to you by the Telemarketing Sales Rule (TSR), which is a broad rule that regulates what telemarketers can and cannot do with respect to contacting consumers and also sets payment restrictions for the sale of goods and services made through telemarketing calls. As important background, the TSR generally just addresses calls that companies make to consumers, not business-to-business (B2B) calls (though there are a few substantive areas where B2B calls are also covered). And for those unfamiliar with AMG, it is a Supreme Court decision from April 2021 that dramatically limited the ability of the FTC to get equitable monetary relief in federal court. We have discussed it a lot here, but lately, new FTC leadership hasn’t said all that much about it.

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The FTC’s Website Redesign – Broken Links, Missing Content and Broken Dreams

Whether you are an FTC fan or foe, we can all agree that one of the agency’s crown jewels is its consumer and business education program. For decades, this program has provided information that has helped consumers protect themselves and has provided businesses with important information and guidance to inform their decision making. And probably the most precious of these jewels is the FTC Business Blog.

For well over a decade, this blog has been the go-to place for those of us who advise companies about recent FTC developments and for businesses that want to stay on top of what’s going on at the agency. The analysis is always spot-on, and material is presented in a way that is unique, entertaining and sometimes just laugh-out-loud funny. This is the blog that explained the importance of compliance with the Fair Credit Reporting Act (FCRA) by comparing it to everyone’s favorite Village People song, YMCA.

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What’s in a Label – Three Takeaways from the FTC’s First Enforcement Action Brought Under the New Made in the USA Rule

Last year, the Federal Trade Commission (FTC) finalized a new rule (Rule) that would allow the agency to seek civil penalties in matters where a company made a false and unqualified Made in the USA (MUSA) claim on product labels. In the rulemaking process, however, the FTC developed a very broad definition of “labels,” which led at least one commissioner to dissent because that definition “exceeds our statutory grant of rulemaking authority.” (The definition is broad and states that labeling includes “any materials . . . that are disseminated in print or by electronic means, and that solicit the purchase of such product or service by mail, telephone, electronic mail, or some other method.”)

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Bamboozling Part II: The FTC Brings Back Retro Penalty Offense Letters like Bell Bottoms and Big Hair

What do bamboo fabric and green claims have to do with toys, weight loss, car rentals and fur coats? Sounds like the start of a Dad joke, but unfortunately this is no laughing matter. It is the FTC reaching back to bygone eras for help in getting money in its enforcement cases. Much virtual ink was spilled in fall 2021 when the FTC sent Notice of Penalty Offense letters to 1,800 companies warning them of the possibility of civil penalties if they engaged in certain practices that the agency had – many, many years ago – deemed deceptive or unfair. If you need a quick refresher, take a look here and here and here.

For a second act, which to be clear no one was clamoring for, the FTC is now taking us back to the 1970s. Tucked in the back of a recent press release announcing the agency’s latest bamboo cases was a paragraph that stated, “In conjunction with this announcement, the FTC is reviving additional Notices of Penalty Offenses that were issued in the 1970s or 1980s but remain valid and relevant today. These notices cover, for example, textiles, energy savings, fur products, home improvement products, auto rentals, bait and switch, toys, and weight reduction. Businesses in these industries should familiarize themselves with the Commission’s determinations in these areas.”

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Bamboozling – Part I: Do Green Claims Require a Life Cycle Analysis?

Textile industry – Sock woven machinery

The title of this series is an homage to the great Lesley Fair, who launched and authors many of the best of the FTC’s business blogs and who coined this term in her blog reviewing 2013 cases on the same topic. But we are here today to talk about the most recent settlements involving textiles labeled “made from bamboo.” And in homage to bamboo as the world’s fastest-growing plant, we will “stalk up” on blogs for the week based on this case, as there is a lot to chop down here. But we do not want to bury today’s lessons in excessive leaves; the first takeaway is that apparel and home goods retailers everywhere should fertilize their compliance programs and root out any made-from-bamboo textile claims that may be germinating on websites. The broader issue is whether all brands should reassess their general green claims to make sure they are appropriately qualified.

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The Rubber Hits the Road to the Tune of $10 Million – FTC and Illinois Sue an Auto Dealership

Not many people enjoy sitting in a car dealership spending hours evaluating or making a costly purchase, but it’s far more frustrating when the dealership allegedly engages in practices that face the ire of law enforcement.

A recent case announced by the Federal Trade Commission (FTC) is important for many reasons. First, it’s a helpful example of some of the new strategic approaches taken by the FTC after the Supreme Court’s decision in AMG. Second, it’s a helpful example of some of the priorities of the current FTC. And third, the allegations are quite serious and raise important equity issues. It is also a record-setter; at $10 million, it is the largest settlement for any FTC auto lending case.

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