The U.S. Consumer Product Safety Commission (CPSC) and Peloton Interactive, Inc. (Peloton) are clashing over whether the media, technology, and fitness company should issue a recall of its treadmill, the Peloton Tread+. The disagreement came to a head on Saturday, April 17, when the CPSC and Peloton issued competing statements after failing to agree on language to be used in a joint announcement regarding the Tread+. This dispute raises the question, “What now?”
Category: Consumer Fraud and Protection
Considerations from the ABA’s Best Practices for Litigation Funding
The exact dollar amount that third-party investors infuse in U.S. lawsuits every year is unknown, but conservative estimates begin around $2.3 billion, with agreement that the industry has room to grow. With the ongoing pandemic stretching litigation timelines and straining budgets, the litigation funding industry remains highly active. Despite the importance of litigation funding to all parties involved (lawyers, plaintiffs, and defendants), regulation varies by state, and litigation funders are largely left to self-regulate.
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“Vanilla” Milk Claims Continue to Sour as Southern District of New York Dismisses Putative Class Action Complaint
As we discussed in a previous post, the Northern District of California recently dismissed a plaintiff’s claim that the term “vanilla” was misleading on the label of a soymilk product. The Southern District of New York has now similarly dismissed a putative class action complaint alleging that a “vanilla” almond milk product was labeled in a way that misled customers.
In Wynn v. Topco Associates, LLC, No. 19-cv-11104, Plaintiffs alleged that Defendant’s use of the word “vanilla” on the label of its almond milk product – “Vanilla Almost Milk” – falsely communicated to consumers that the beverage’s flavor was derived entirely from real vanilla, when in fact the product includes non-vanilla flavorings. Plaintiffs claimed, among other things, that this violated the New York General Business Law (NYGBL).
Online Retailers Beware: Texas Supreme Court to Consider Whether Amazon Is a “Seller”
The Texas Supreme Court is set to determine whether Amazon can be considered a “seller,” and thus held liable, for a defective product sold through its website, in the case of McMillan v. Amazon.com, Inc., No. 20-20108, 2020 WL 7417454, at *1 (5th Cir. Dec. 18, 2020), certified question accepted (Jan. 8, 2021).
Amazon.com Inc. is the nation’s largest online retailer, selling and shipping millions of products every day. With the COVID-19 pandemic altering shopping habits, Amazon has become even more ubiquitous than ever. While many stores and online retailers struggled in 2020, Amazon’s sales skyrocketed 37% to a record $96.2 billion in the third quarter of 2020. But what happens when a product purchased from Amazon harms a customer? Can Amazon be held liable even if it has no role in designing or manufacturing the product? Courts across the country are grappling with this question, which undoubtedly will impact online retailers like Amazon for years to come.
Northern District of California Sours Plaintiff’s Claims against “Vanilla” Soymilk Maker
The Northern District of California recently dismissed a Plaintiff’s claim that the term “vanilla” was misleading on the label of a soymilk product, but left the proverbial door open for the filing of an amended pleading.
In Clark v. Westbrae Natural, Inc., Case No. 20-cv-03221, Plaintiff alleged that Defendant’s use of the word “vanilla” on the label of its organic unsweetened soymilk misrepresented to consumers that the product’s vanilla flavor was derived exclusively from the vanilla bean plant. Gas chromatography‒mass spectrometry analyses showed that the flavor came from a non-vanilla source. Plaintiff alleged he would not have purchased the product had he realized the flavor was not derived from the vanilla bean, and asserted claims under California’s Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act. He argued that the product should be labeled “artificially flavored.”
California Court of Appeal Finds Amazon Is Not Shielded from Liability for Defective Product Sold Through Its Website
In a decision that may impact future e-commerce, the California Court of Appeal held in Bolger v. Amazon.com, LLC that under California law, Amazon could be strictly liable for an allegedly defective battery manufactured by a third-party and sold on its website. The Court further found Amazon was not immune from liability under the Communications Decency Act. The Court reversed the trial court’s grant of summary judgment in favor of Amazon.