Posted on April 16, 2026 by rtushnet

29th Annual BTLJ-BCLT Spring Symposium: Origins, Evolution,
and Possible Futures of the 1976 Copyright Act

Panel 2: The Role of the Author and the Acquisition and
Duration of Their Rights

Molly Van Houweling, UC Berkeley Law (Moderator)

Tyler Ochoa, Santa Clara School of Law: why do we have
formalities? Path dependence is one big explanation for registration, notice,
deposit. If © is designed to incentivize exploitation, then formalities make
sense—if you’re willing to create the work regardless, no point in ©; you should
do something to claim that © was important to the creation (or distribution).
Utilitarian view expressed in 1909 Act. Deposit and registration required for
lawsuit in 1909, not pre-publication as in early republic. Domestic manufacturing
clause.

1976 Act didn’t make huge changes in its initial form:
notice was required for all copies published anywhere in the world, not just in
the US, to avoid public domain: an expansion of the notice rule. UCC: notice substituted
for other formalities. Failure to affix proper notice placed work in PD,
subject to a cure provision. Manufacturing clause was kept, but sunsetted. Deposit/registration
required to sue. Biggest single change in 1976 Act was duration. 85% of registered
works went into public domain after 28 years, though musical works and motion
pictures were heavily renewed (about 2/3). Books: 7%.

No works that received life+75 under the 76 Act have
expired. The only works to enter the PD under the Act are pre-76 works that
hadn’t yet been published or registered and were still unpublished as of 2002. And
there’s still 45 years to go b/c of term extension.

Post-76 change gets most rid of the formalities that were preserved.
BCIA: mandatory notice eliminated Mar. 1, 1989. Manufacturing clause expired; registration
no longer required for foreign works to sue, though statutory damages/attorneys’
fees still require registration but there’s no technical violation of Berne b/c
neither of those are required. VARA gives us something couched in the language
of moral rights for the first time, but it requires single/limited edition
(requires it to be signed/consecutively numbered, which is a formality). Automatic
renewal; copyright restoration; CTEA term extension.

David Nimmer, UCLA School of Law: we have never known which
works will still be popular several decades from now. Congress wanted to
eliminate the Fred Fisher doctrine allowing assignment in advance of
renewal rights. But it wanted to handle contributions to collective/joint
works. That required more drafting.

How did that work? Winnie the Pooh termination: The current
owner did a recission and regrant, all in one transaction. Nimmer argued that,
before they got into that room, there was a termination right, and the
agreement was an “agreement to the contrary” that was ineffective to override
that termination right. He lost (but thinks he was right, and I definitely see
his point). Congress could have allowed this, but the statute is categorical
(w/the slight exception of renegotiating with the current owner once the
termination notice has been sent). It’s not that he didn’t have authority to
sign a contract. But the Supremacy Clause says that termination may be effected
notwithstanding any agreement to the contrary. Fred Fisher has been
resurrected.

What should we do? All we need are 2 changes: (1) voluntary
nature of termination/all of the hoops to jump through make it practically
impossible without counsel, and not easy even then. Termination should become
automatic. (2) Congress should re-pass the provision about “any agreement” and
say it really means it.

Robert Brauneis, GW Law: When does creative work get
recognized as authorship? Most obvious exclusion doctrine is WFH; direction of
76 Act is really complicated there. It could be read as author-friendly only in
relationship to the “instance and expense” test developed after the grand
bargain was penned.

Other doctrines about recognizing creative work as central:
fixation; derivative work authorship; joint/co-authorship. Under 1909 Act,
phonorecord wasn’t fixation b/c not human perceptible, nor was choreographic
work fixed in a visual record. The Office then adopted that requirement for
deposit—registration had to be by visual notation and that forms the boundaries
of the registered work. Many composers who don’t notate end up never being
recognized as authors of the musical works they composed, especially in blues
and folk genres.

That changes in terms of using recordings for fixation. But
recordings are easier to pass back and forth b/t coauthors; it’s still possible
for composers to lose out, but the average number of composers credited has
grown a lot—Glynn Lunney says it’s more than doubled in a few decades; Emma
Perot said it starts taking off in the 1990s and picks up speed. Possibly some
is performers added as a condition of performance; others added because of
fears of liability; sampling may also have added composers. Lunney suggests
that each songwriter is becoming less productive.

More optimistic possibility: when he investigated “A Little
Bird Told Me” from 1949, there was a composer of basic melody/lyrics, there was
a lot of collaboration—singer Paula Watson and backup singers went over to his
house and worked up new lyrics, a new bassline, a new arrangement & hummed
introduction. But the “composer” was singly credited, leaving nothing but
session payments for the other collaborators. Today, the others who contributed
might have gotten a composition credit. A vanishingly small percentage of
revenues today comes from sheet music; the authorship of the recorded version
is much more collaborative; the rise in credits may not be less productive songwriters
or overreaching of performers, but at least partly that more of the creative
contributors are being recognized as authors, and the musical work recognized
is “thicker” in that it contains more of the elements that make the work a hit.

1978 is when the legal change of the Act takes effect, and then
there’s a change in form of deposit: by the 80s, 80% of applications are
accompanied by phonorecord deposits. [What an interesting story!]

Copyright in unauthorized derivative works: the creators are
doing something that authors do, but may not be recognized as authors.
Protection doesn’t extend to unlawfully used material, and arrangements made
for cover version can’t be ©d without permission of original © owner. Melville
Nimmer argued that the first provision was inherited from 1909 Act; current
edition of treatise says that the statute was ambiguous and the decisions
contradictory, and Silbey/Samuelson argue that the text didn’t provide for
forfeiture of © in newly added content, making the 76 Act an innovation.

Joint work: Intent to combine is required; designed to
overrule precedents allowing music publishers to create joint works by
combining music and lyrics written independently, but read much more broadly. Comment
in legislative materials: Desirable to reduce as far as possible the situations
in which a work is a joint work. Courts seem to have taken that to heart, including
both in the 9th and 2nd circuits. Resulting problem:
dominant creator gets sole ownership when other creators were consciously and
intentionally creatively involved—denying authorship status to the creative
work that authors do. Litman: courts erase the contributions of “inconvenient”
co-creators.

Is the 76 Act to blame, or the courts resisting something outlined
in the statute? More of the blame is on judges than on the language in his
view.

Peter DiCola, Northwestern Pritzker School of Law: Reforms
of the Act did not, and could not, meaningfully help authors given what else
was about to happen, that is, consolidation, here in the music industry. Most conversations
he has, people think he’s talking about Taylor Swift. But he thinks of the bell
curve: a distribution of musicians—Swift is not representative. The industry
has literally made sure that some things she’s done will never be possible for
any other musician again.

Market demand determines copyright payout. But market demand
is also shaped by concentration among companies that deliver content; in the US
4 have 97% of market share in streaming music. 3 major publishers and 3 labels,
down from 7 even in past decades. Independent sector claims are often
misleading (Spotify claims to send a lot of revenue to them) b/c an artist’s
vanity label can be claimed as an indie but distributed by a major. And they’re
parts of larger conglomerates. Composers and songwriters/recording artists face
very large entities with lots of bargaining power. Recording contracts have
become more structurally exploitative—shift to 360 deals where labels “participate”
in revenue of artist in other endeavors like tours & t-shirts. Labels have moved
to contractual agreement against re-recording, so Swift will be the last unless
we restrict those contracts.

Biggest story now: consolidation of entities that retail or
deliver music. Wal-Mart used its power to control both pricing and content. Now
big companies are negotiating with big companies: oligopolies selling through
oligopolies. That’s why Spotify, YouTube, Apple and Amazon are subject to
increasing scrutiny and discontent by musicians. © can only deliver economic
benefits based on structure of markets into which authors sell. Demand isn’t
enough: the market structure is categorically different now from the market
structure in 1976: twin oligarchies; tech companies may be willing to sell
music at a loss to keep people on the platforms, which hasn’t happened before;
Act wasn’t designed w/that kind of music in mind.

Along with antitrust, you could have more default rules
prohibiting contracting around. Draft legislation: allowing sectoral bargaining
for musicians against streaming companies. Could create authors’ rights to
access data about how their works are exploited; transparency in accounting
practices.

Biggest new hole in authors’ rights: Spotify’s policy
starting 2023 is that they don’t pay royalties on tracks that get less than
1000 streams in the last 12 months. Perlmutter referred to streaming as a huge
success compared to the litigation against filesharing, but now we see what happens:
having music on Spotify means agreeing that your less successful tracks
won’t get any royalties. How do we know what’s happened to the © system? It’s
opaque! Don’t take Spotify’s word for it.

Q: are these mostly music-specific?

Brauneis: On coauthorship, there are field-specific
practices and many are affected by the law/not in line with the caselaw.

Nimmer: ProCD v. Zeidenberg was bad—circumvented © law;
contracts prohibiting soundalikes are systematically trying to defeat the right
to make soundalikes, and we should also be hostile to them.

DiCola: we could elevate the negative space of 114(b) into
the right of the public.

Ginsburg: who deserves the blame for the exclusion of
inconvenient co-authors? It’s the judges! The statute only says intent to merge
contributions, not intent to be co-authors. Master mind reasoning is
nonsensical! Doctrinally, this is wrong, but it does have the merit of getting
rid of the inconvenient co-contributors. If you apply the statute as written,
how do you decide who is enough of a contributor to be an author? Should ideas
be enough? [I think editing is the classic difficult case unless you bring in
reasoning about the social meaning of various roles, and that just helps you
with the editor, not with the dramaturg in the next case.]

Brauneis: the courts don’t feel competent to modify the rule
that co-authors get equal shares to allocate ownership, so they need to find a
rule to prevent people like Jefri Aalmuhammed from being authors. We would have
to confront unequal shares—or say that if you didn’t plan for the situation you
have to live with the default rule. Both Aalmuhammed & the Second Circuit
case are about motion picture companies refusing to do things that they should
have done (getting WFH agreements in place).

Ochoa: could have said that everyone in the credits is a
co-author, but everyone else signed a WFH agreement, so Aalmuhammed only gets a
1/1000 share, but it made no sense for the Second Circuit to say that the
director isn’t a coauthor.

from Blogger https://tushnet.blogspot.com/2026/04/29th-annual-btlj-bclt-spring-symposium_16.html

Posted in Uncategorized | Tagged , , | Leave a comment

29th Annual BTLJ-BCLT Spring Symposium: Origins, Evolution, and Possible Futures of the 1976 Copyright Act: Origins of the Copyright Act

Posted on April 16, 2026 by rtushnet

29th Annual BTLJ-BCLT Spring Symposium: Origins, Evolution,
and Possible Futures of the 1976 Copyright Act

[apologies—seriously delayed flight means my notetaking will
be bad.]

Panel 1: Origins of the 1976 Copyright Act

Peter Menell, UC Berkeley Law (Speaker and Moderator): Copyright
revision was extensive process of negotiation, occurring alongside movement for
racial equality. Some view this as a product of back rooms (shows a picture
with only white guys in it). 60s and 70s weren’t the kind of “swamp” we have now.
Many studies on historical, philosophical, comparative, economic, and other aspects
of ©. Recommendations for broad rights in order to deal with the possibility
that “a particular use which may seem to have little or no economic impact on
the author’s rights today can assume tremendous importance in times to come.”
Importantly, removed general limits on nonprofit uses despite concerns of
librarians and educators.

Hollywood didn’t “run the table”—there was some movement to
protect authors. Work made for hire renegotiated, and termination of transfers
made inalienable, but not a huge shift in favor of authors. What about device
manufacturers, users, and consumers? Complex interactions, during which computer
software emerged. Not overbearing powerful interest groups running the show so
much as carefully constructed balances that didn’t substantively favor content
owners as much as we might think—no public performance right for sound
recordings, because user groups—radio stations and cover artists—got the better
of them. Likewise, the glass is half full for device manufacturers, libraries,
scholars and teachers on fair use. Scientific publishers were able to block
more generous photocopying rules. Jukebox manufacturers got a favorable rule on
device royalties—a dying industry, which was part of their argument. 601:
printers/organized labor got the manufacturing clause, though it sunsetted. And
on cable, cable operators did pretty well. [This is pretty much Jessica Litman’s
account in Digital
Copyright, framed differently: interest groups that were organized and
showed up got exceptions for themselves, but the “balance” was only for those
groups; if they didn’t show up then their rights/interests weren’t considered.]

1976 Act was built for a gatekeeper/clearance ecosystem that
was quickly disrupted by the Betamax and then the internet. Sometimes the
system worked, sometimes not.

Jessica Litman, Michigan Law: Menell describes a continuous
sequence of Copyright Office research and review, and then 9 years in Congress
during which its proposal mostly survives. She sees more discontinuity. Office
sought to do initial drafting relatively insulated from pressure from copyright
bar and came up with what it believed would be wise; the © bar hated it and the
Office pushed the restart button, encouraging negotiation between groups on the
substance and in many instances the language of the revised proposal. The
Office kept pretty good control of the drafting pen most of the time during the
initial years, and the records of that process, including meetings hosted by LoC,
are extremely useful for figuring out what the language was supposed to mean at
the time.

Beyond academic interest, what does the intended meaning
have to do with the meaning now? There are lots of reasons why that intended
meaning might not be much help. Legislative history was seen in the 60s and
70s, and even 80s, as a crucial statutory interpretation tool, and now that’s
not the case. Even ignoring that: Congress has made more than 70 amendments
over the past 50 years; the crafters of those amendments paid little heed to
what the earlier language meant/was intended to mean. And the malleable meaning
of particular words is important: “copy” means something in 2026 than in 1966.

What we learn about original intended meaning of the words
is of limited use if we’re trying to figure out what the statute means today. These
explorations are useful especially for illustrating legislative process, and
the history/structure of music, publishing, and consumer electronic businesses
as well as teaching in schools and churches, but they don’t necessarily yield
citable authority on what the statute “really” means.

Argument: the drafting process is hostile to outsiders who
weren’t invited (sometimes b/c they didn’t exist yet). More recently interested
in what happened among insiders and whether they got what they wanted.
Assumptions about how the law and the world worked that didn’t necessarily hold:
future-proofing did require assumptions. There were assumptions about how the
parties would treat each other going forward; broken expectations can radically
change the balance of what the insiders believed they were agreeing to do.

There were assumptions about law & world that didn’t
prove out. They assumed the future would not be sharply distinct—didn’t
anticipate breathtaking consolidation of entertainment industry; assumed that
computers would continue to be niche devices used by scientists/students; didn’t
anticipate consequences of networked computing. Even though they talked about
the terrible danger of unlicensed personal uses, they figured they’d be a
continuing annoyance rather than existential threat. Thus they didn’t have a
statutory instruction on contributory infringement. One reason Sony came
out the way it did was the prospect of making Sony pay statutory damages for every
third-party infringement.

Unanticipated change in law: the definition of WFH and
details of terminations of transfer were settled in April 1965 as the result of
hard bargaining among book publishers, music publishers, songwriters, and
author group. At the time, courts didn’t treat independent contractors’ works
as WFH; creation of work was subject to implied agreement to transfer © to
commissioning party. Didn’t need a signed writing b/c federal © had not yet
attached on creation. Only significance was then that after the original 28
years applied, the creator could apply for renewal; but since most works weren’t
renewed, this wasn’t all that important. The grand compromise on termination
and WFH definition was negotiated against this background, adding categories of
WFH made by independent contractors to definition. They insisted that any
change by Congress would require renegotiation from the ground up, so very little
changed.

But then the 9th and 2nd Circuit
decided cases about independent contractors and found they should be WFH by
confusing or conflating the line of cases holding that employers were the legal
authors w/the line of cases holding that independent contractors implicitly
agreed to copyright transfers. Implicitly, publishers promised that if
authors gave initial period of exclusivity and waited and jumped through all
the hoops they’d get their rights back. But the promises made in negotiations were
never binding or enforceable—no legal authority to bind publishing companies
years later. So if statutory language was susceptible of more than one
interpretation, it’s hard to blame a publisher from exploiting that ambiguity.
So they did! When served a termination notice, publishing companies asserted
that they could keep collecting royalties for all previous versions of a song
using the derivative works exception to termination. And the Supreme Court agreed.
Publishers then argued, against proposed amendment, that the statute had
created vested rights from the beginning that couldn’t constitutionally be taken.

It’s hard to think about moral enforceability when the
individuals who need to keep the promises are different from the individuals
who made the promises. In practice, an author who wants to exercise her
termination rights has to jump through hoops and then be prepared to engage
in litigation.

Other examples of broken promises exist. What’s the point?
We can find out how various interests believed the statute would work, and
compare that to our current world, but it’s hard to leverage our understanding of
intended application to persuade courts to agree with it today given all the
amendments and broken promises.

Useful process lessons: Even when it was new, the 76 Act
looked better on paper than it turned out to work in the world. Latent
assumptions/promises were weak points that could be and were exploited. Authors
aren’t doing well: earning less and fewer choices than they once had. It may be
that the late 1970s/early 1980s was a halcyon era, but things have changed. If
we want authors to have a stronger hand to play, that’s a really difficult
problem. EU takes this seriously and has made unsuccessful efforts in that
direction; it’s definitely not a fix it and forget it problem.

The negotiations that gave rise to the revision bill were
intense but respectful—trying together to build a workable © act even as they
sought advantage. Hard to recognize that world now in the viper pit that is the
current © bar.

It turns out to be really important who the Register is.
True even though we don’t have much control over who that will be. Barbara Ringer:
it’s important for the Register to be able to stand up to all the copyright lawyers
for the various interests.

Jane Ginsburg, Columbia Law School

Influence of international law: American exceptionalism was
the pre-history, but international norms pervaded the drafting of the 76 Act—Barbara
Ringer was very proud of this—shifting from publisher to author as focus.

Universal Copyright Convention/formalities. We made our own
international order allowing our 28 year initial term and formalities, but
agreeing to reciprocal protection and restricting manufacturing clause so it
didn’t preclude copyright for foreign authors’ works. Remaining outside Berne
was annoying though.

Comparative law/duration/formalities. Each step made it
easier to move toward compliance with the broader Berne regime. UCC revised:
Registration, deposit, and domestic manufacturer were no longer required as
long as the foreign proprietor complied w/a simplified notice requirement—a two-tier
system allowed draconian formalities at home so long as foreign works had the
easier system. But that’s unstable: why restrict domestic authors that way
while the burden on foreign authors was much lighter? Rule of shorter term also
created grumbling: foreign reciprocity was limited by our shorter term.

Misunderstanding about foreign law might have affected WFH
status. Claim was that movie studios needed status of author to own all rights
abroad. Assumed that foreign nations would accept this divestment of
individuals; but France’s highest court spurned our characterization of film
producers as authors and gave indefeasible rights to directors against
colorization. s

Persistence of American exceptionalism: jukebox exemption;
mechanical rights; moral rights; formalities; works made for hire.

Menell: how do we incorporate interests of people who weren’t
in the room b/c their industries didn’t exist/how do we have a rule of law
without a rule of interpretation? Judges who aren’t experts will struggle w/©.

Litman: in the 70s and 80s judges found legislative history
useful. To the extent it wasn’t read by legislators voting, it’s a bit odd to
consider it, but we now have a statute that very clearly wasn’t written by
legislators—maybe that’s the result of delegation to the Office; doesn’t matter
for this purpose. Judges today figure that their job is to look at the text and
judicial decisions construing the text. That’s a rule of interpretation; she
may not think it’s the wisest rule, but that’s up for debate.

Ginsburg: The rule was that you looked at legislative
history when the statute was unclear; the statutory text was never irrelevant!
Even aware of its corruptibility/process issues, the text isn’t always clear
and judges need help; one place to find that help is the rich legislative
history of the Act, possibly less corrupt than some others. But the legislative
history of subsequent amendments might be a bit dodgy.

Menell: even strict textualists say that they interpret the
statute as of the time the words were put into law, so understanding context
remains important. Cox will cause more confusion, but that goes to how
our democracy is evolving. Strict textualism is being used by judges who weren’t
that sympathetic to the project in the first place.

Tyler Ochoa: © is not the best tool to make up for the
near-complete lack of enforcement of antitrust law in the entertainment industry.
What were the assumptions about competition and antitrust in the 70s?

Litman: we had many record labels, publishers, studios
competing with each other. Blackmun was on the Court and antitrust was almost a
constitutional imperative. That’s all changed, so the power dynamics aren’t what
they expected.

Menell: network economic theory wasn’t yet developed.
Concentration today has benefits to consumers through network effects that
weren’t perceived at the time: Spotify is concentrated but has big benefits to
consumers.

Litman (in response to Q): International compliance is an
excuse. If we’d wanted harmonization, we’d have reduced the term of WFH rather
than doing what we did.

Ginsburg: it’s true that the rule of the shorter term kept
the 20 years from US authors in Europe, but Litman is right that our term for WFH
(75 from publication) was already as long as the extended term in Europe. There
were plausible int’l trade reasons for the extension, but zero copyright
reasons.

from Blogger https://tushnet.blogspot.com/2026/04/29th-annual-btlj-bclt-spring-symposium.html

Posted in Uncategorized | Tagged , | Leave a comment

FTC mostly succeeds in avoiding dismissal of claims against Uber; states must replead

Posted on April 15, 2026 by rtushnet

Federal Trade Comm’n v. Uber Technol., Inc., 2026 WL 976077,
No. 25-cv-03477-JST (N.D. Cal. Apr. 10, 2026)

Since November 2021, Uber has offered a subscription plan
called Uber One, typically $9.99 a month or $96 annually with automatic
charging and renewal. The Uber One subscription promises a “$0 Delivery Fee on
eligible food, groceries, and more,” other benefits, and the option to
“[c]ancel anytime without fees or penalties.” Other marketing claims include
that consumers in the United States “[s]ave $25 every month” on average. “Uber
uses consumers’ payment information to charge for Uber One, for which some consumers
report they never signed up and have no idea why they were charged.”

The FTC alleged that members seeking to cancel their Uber
One subscriptions must “take at least 12 to 32 actions,” including sometimes
“calling [Uber’s] customer support to cancel, where they experience long wait
times and significant delays.”

After navigating through several
different screens in the app, consumers encounter a button called “End
membership.” Members who click the button must answer a survey about why they
seek to cancel, with follow-up questions that vary according to their stated
reason. Throughout the process, the button to continue towards cancellation is
black with gray or white font (in contrast to the button for keeping Uber One,
which is white), and its position relative to other options changes,
potentially misleading consumers who might tap the same position on the screen
in an unsuccessful attempt to continue cancellation.

“For a significant part of the relevant time period, [the]
End Membership button was not visible to any consumers in the final 48 hours of
their billing cycle.” Even when they could see it, the app made it more
difficult for them to cancel, offering a screen stating that they can keep
their memberships active in exchange for savings of “$25 each month.” “[M]any”
consumers who tried to decline were looped back to a cancellation survey even
when they pressed the button that should have worked and didn’t succeed in
cancelling.

The $25 savings screen, presented to consumers attempting to
cancel within 48 hours of a new billing period, notifies consumers that their
“next scheduled payment may be in process” and directs them to contact support.
The FTC alleged that, “[i]n fact, Uber always charged consumers before the
supposed billing date and never processed cancellations concluded via the
in-app cancellation flow in the final 48-hour window.”

Moreover, “Uber did not provide any contact information for
‘support’ or give any guidance on where to navigate within the app to find
‘support’ for the vast majority of the relevant time period, and only offered
the information after receiving notice of the FTC’s investigation.”

Finding where to contact “support”
in the app requires navigating to and scrolling to the bottom of several more
screens. Members must navigate to a support page, enter a complaint, and then
re-navigate to the same page from an earlier screen to view the chat window
through which a customer service representative may respond to the cancellation
request. However, “even consumers who have found their way to the cancellation
support queue have often been unable to promptly cancel or avoid being charged
due to excessively long hold times: consumers often report waiting hours or up
to a full day to receive a response from Uber, and that they were already
billed for the next payment in the interim.” For consumers who reach customer
service and cancel during this 48-hour window, Uber confirms cancellation and
states that the consumer will not be charged after cancelling, but in fact,
Uber always charges these users for one additional month.

Enact click-to-cancel now!

Also, while some materials note that cancellation is “with
no additional fees” or “without fees or penalties,” elsewhere Uber discloses in
fine print that members must cancel up to 48 hours before the membership
renewal date “[t]o avoid charges.”

The FTC sued, along with 22 states, alleging violations of Section
5(a) of the Federal Trade Commission Act, 15 U.S.C. § 45(a), and numerous state
laws; violation of the Restore Online Shoppers’ Confidence Act, including
failure to provide disclosures of required terms and failure to obtain express
informed consent before charges, and failure to provide simple mechanisms for
stopping recurring charges. The court mostly upheld the federal claims but
wanted more detail on the state law claims, dismissing them without prejudice.

FTC Act: First, the court didn’t resolve whether Rule 9(b)
applied because even if it did, the FTC pled with sufficient particularity.

The FTC alleged that Uber’s representation “that consumers
may cancel their subscription services at any time with no additional fees” was
false because cancellation within 48 hours of the next billing period causes
consumers to incur “additional fees” of $9.99 a month or $96 a year. That is, “Uber
forces consumers who wish to cancel their subscription to resubscribe for a
billing period that has not yet begun and whose benefits they have not yet
begun to enjoy. Plaintiff’s theory that advance payment for a subscription that
is no longer desired constitutes an ‘additional fee’ is intuitively colorable
and Uber provides no authority to the contrary.”

That Uber occasionally, in fine print, warns consumers to
cancel before the final 48 hours of the billing period didn’t prevent
misleadingness. First, those disclaimers didn’t appear until, at the earliest, the
checkout screen for Uber One; earlier in the enrollment flow Uber promises not
to charge “additional fees” at cancellation. And fine-print 48-hour-window
disclosure was plausibly insufficient to alter the “net impression” created by
Uber’s statements that no additional fees are charged. This was additionally
supported by allegations that, for trial period subscriptions, Uber bills
consumers before the stated billing date—the end of the trial period; that some
consumers who were told their subscriptions had been cancelled continued to
receive charges for additional months; and that the 48-hour window is expressed
in hours, but the billing “date” isn’t, “obfuscating the cutoff for consumers
to cancel without incurring a fee.” 

However, the FTC didn’t entirely allege the falsity of the
claim that Uber One members would “save $25 every month” even though many
members do not do so. It was not sufficient that “Uber’s savings claim assumes
that the subscription is free; the purported savings does not subtract any
costs.” The complaint didn’t allege that $25 was not in fact the average
savings enjoyed by Uber One members, even though it alleged several categories
of members whose savings fall significantly below $25 a month. And one of the
savings representations in the cancellation flow used “could,” which “communicates
a possible but uncertain outcome,” along with clarifying that “[e]stimated
savings do not include membership price.”

The FTC alleged that the $25 savings representation in the
enrollment flow was misleading because it didn’t account for the cost of the
subscription and didn’t disclose that; the enrollment flow was plausibly more
significant than the cancellation flow. “Because it is possible that reasonable
consumers would assume that projected savings account for the subscription cost
and Uber has not shown otherwise, the Court will not dismiss this claim.”

The FTC also failed to plausibly allege the
falsity/misleadingness of the claim that Uber One members receive “$0 delivery
fees.” Uber plainly advertised $0 delivery fees on eligible orders. True,
it was apparently “somewhat difficult to ascertain” which orders are in fact
“eligible,” requiring a geographic radius, a participating store, and an order
minimum that might vary based on the storefront, but “eligible” was “a clear
qualifier signaling that only orders meeting certain criteria will qualify for
$0 delivery fees. Even if a reasonable consumer may not know which orders will
qualify, no reasonable consumer would assume that all orders do so.” Unless no
orders were deemed “eligible,” that’s not deceptive.

ROSCA: ROSCA applies to “transaction[s] effected on the
Internet through a negative option feature.” A “[n]egative option feature” is “a
provision under which the customer’s silence or failure to take an affirmative
action to reject goods or services or to cancel the agreement is interpreted by
the seller as acceptance of the offer.” Uber’s briefing omitted the key phrase “or
to cancel the agreement” in quoting the law, damaging its credibility and
refuting its argument that ROSCA didn’t apply because users do not sign up
for Uber One through silence or failure to take action.

The complaint alleged that a number of consumers were
enrolled in Uber One without their knowledge or consent, which would “unquestionably”
constitute a negative option feature.

But even for the others, the ROSCA violations were
plausible. The negative option feature arose after sign-up, when consumers in
free trials were “automatically enrolled in and charged for an Uber One
subscription’ before the end of their free trial period.” There was also
automatic renewal by default, a “textbook example of a negative option
feature.” “Indeed, a free-to-pay conversion like Uber’s is explicitly
identified in ROSCA as employing a negative option feature.”

It was plausible that Uber violated ROSCA by “fail[ing] to
clearly and conspicuously disclose before obtaining consumers’ billing
information all material transaction terms,” including (1) the recurring nature
of Uber One; (2) the “true benefits and savings of an Uber subscription,” (3)
the timing of charges; and (4) the method of cancellation.

ROSCA requires disclosure of “all material terms of the
transaction before obtaining the consumer’s billing information.” But, in all
or nearly all cases, consumers sign up for Uber One after providing billing
information to use Uber for a single ride or delivery. The FTC’s argument that
there was a per se violation of ROSCA in the timing of the disclosures,
regardless of their sufficiency, was plausible. Even if companies can give
consumers the option to autofill billing information on file, “ROSCA requires
that consumers be given that choice after the disclosures.” In the current
purchase flow, the terms show on the same screen that says Uber will charge
their preexisting payment method. “Consumers consent to the use of that billing
information only in the limited sense that they decline to select the ‘switch’
option to input different billing information.” The result here “might be
different if Uber were to give consumers the option to autofill their existing
payment information or otherwise affirmatively opt-in to its use.”

Failure to disclose material terms: Although each enrollment
method had some kind of notice that Uber One members will incur recurring
monthly charges, the FTC alleged that these notices are “in much smaller,
lighter, and less prominent font than any other claims on” the same screens.
ROSCA requires clear and conspicuous disclosures based both on “visual aspects”
of the purported disclosure and the “context” of the transaction. The claim was
plausible given the font, and the court was also sympathetic to the FTC’s
argument that the “context” of the transaction weighs against the clarity and
conspicuousness of the disclosures “because many plaintiffs are enrolled via
unsolicited push notifications, pop-ups, and advertisements that appear when
they are trying to secure a ride or place a delivery. Courts have observed that
consumers do not expect to be enrolled in a subscription when making a one-time
purchase, and therefore have little reason to look for fine print notifying
them of the subscription.”

Some marketing materials also apparently “obfuscate[d] Uber
One’s nature as a recurring subscription service.” E.g., “Love Uber One? Get
50% off 1 year / Save on your Uber One membership” “could mislead a consumer
into believing they are already subscribed to Uber One and are merely being
offered the chance to continue using Uber at a lower rate.” So too when the app
directed a consumer attempting to book a ride to a popup asking them to sign up
for Uber One or to “cancel”: “a consumer might believe they must sign up for
Uber One or risk cancelling the ride request.”

It was also plausible that Uber failed to clearly and
conspicuously disclose the timing of subscription fee charges. Its disclosures were
(1) in fine print and (2) plausibly inaccurate, because, as Uber admitted, it
charges consumers 48 hours prior to the stated billing date. Thus, “Uber’s
disclosure of such dates is not only unhelpful but actively deceptive.” The
court also found the timing disclosures “potentially difficult to read given
the small size of a smartphone screen.”

And it was plausible that Uber failed to disclose the
separate and more onerous method of cancellation consumers seeking to cancel
their subscriptions within 48 hours of their renewal date had to use. Uber
argued that it always said that users should cancel “in the app.” But, the
court noted, “in the app” “provides little guidance given how thoroughly the
cancellation button is buried within the app.” Also, “users within the 48-hour
window actually cannot cancel within the app, but must instead contact customer
service (although that process can be initiated through the app).” “Thus,
Uber’s only purported attempt to disclose the cancellation method does not in
fact tell users how to cancel.”

The FTC further alleged that Uber didn’t disclose the true
benefits and savings: “save $25” could be misleading “insofar as a reasonable
consumer believes it to include the subscription price.”

ROSCA also requires that a seller obtain a consumer’s
“express informed consent” before charging the consumer. A consumer provides
express informed consent if “(1) the website provides reasonably conspicuous
notice of the terms to which the consumer will be bound; and (2) the consumer
takes some action, such as clicking a button or checking a box, that
unambiguously manifests his or her assent to those terms.”

The complaint alleged that some consumers who were charged
never signed up at all, and that “others took action to revoke their consent
and were charged again anyway, either because of the unreasonably long wait
times in the support chat queue or despite the fact that they appeared to have
successfully cancelled their subscription.” The FTC wasn’t required to
affirmatively plead the precise number of consumers affected by each issue. And
Uber’s alleged failure to sufficiently disclose material information would also
defeat informed consent. In addition, the FTC alleged that consumers consented
to free trial terms under which they will not be charged until the trial ended,
only to be charged before that time.

The FTC wasn’t seeking civil penalties under the FTC Act,
only under ROSCA, and that’s ok. “[B]efore commencing” any civil action seeking
civil penalties, the FTC must provide written notification to and undertake
consultation with the Attorney General. Although the complaint didn’t allege
that this consultation had occurred, it wasn’t required to plead that; a
presumption of regularity applied. (FWIW, though the DOJ has lost the benefit of that presumption, my guess is that the FTC lawyers knew what they were doing.) “If Uber believes that the FTC has failed to
comply with [this requirement], it can seek that information during discovery.”

Uber also argued that the plaintiffs failed to plead the
requisite knowledge under ROSCA or state statutes, but they did. Under ROSCA,
“a business can be liable only if it either knew that the act was unlawful or
if it should have known the act was unlawful.”

The allegations were sufficient, including the existence of “more
than a dozen actions against other companies under the FTC Act and ROSCA,
including for failing to have simple cancellation mechanisms and charging
consumers without authorization,” “a public outpouring of complaints about
unauthorized charges and difficulty cancelling Uber’s subscription services,”;
internal testing conducted by Uber reflecting significant customer confusion
regarding the cancellation process; “employee discussions of the problems with
Uber’s disclosures,”; and even Uber’s “receipt of a letter from the FTC in
September 2024 probing about Uber’s subscription programs, including enrollment
and cancellation mechanisms and compliance with ROSCA.” Uber didn’t provide an
interpretation of the statute and then explain why its conduct complied with
that interpretation or otherwise defeat the plausibility of its knowledge.

The state plaintiffs had Article III standing for some
claims, but needed more specific description of the elements of the state law
claims.

“When a state sues to vindicate its own direct sovereign or
proprietary interests, it need only meet Article III’s standing requirements.” When
they assert parens patriae standing, they must also “[1] ‘allege injury to a
sufficiently substantial segment of its population,’ [2] ‘articulate an
interest apart from the interests of particular private parties,’ and
‘express[es] a quasi-sovereign interest.’ ”

Uber’s alleged violations of the FTC Act, ROSCA, and state
statutes didn’t itself interfere with states’ sovereign “power to create and
enforce a legal code.” But states also have a sovereign interest “in protecting
their marketplaces” from deceptive practices, because “[f]raudulent market
conduct has the capacity to degrade faith in the state, chill economic
activity, and deter participation in the market.” The complaint sufficiently
alleged the latter harm, describing “a public outpouring of complaints” and
“significant customer confusion” and explaining that “[c]onsumer confidence is
essential to the growth of online commerce” and that “the Internet must provide
consumers with clear, accurate information.”

For parens patriae standing, one “helpful indication” was whether
the injury to citizens “is one that the State, if it could, would likely
attempt to address through its sovereign lawmaking powers.” Given that the
plaintiff states “have in fact addressed the alleged injury by enacting the
consumer protection statutes under which they sue,” they had an interest in the
economic well-being of state citizenry, apart from private parties. But it was
disputed whether they alleged injury to sufficiently substantial segments of
their populations. Allegations that Uber has enrolled more than 28.7 million
consumers into Uber One subscriptions weren’t enough without knowing how many
lived in the plaintiff states. Thus, they failed to allege parens patriae
standing.

Still, they had authority to sue, and to sue in federal
court. But the relevant counts didn’t plead the elements of any state law
claim. “A cursory listing of [several] states’ statutes is insufficient to
satisfy Twombly and Iqbal’s pleading requirements.”

from Blogger https://tushnet.blogspot.com/2026/04/ftc-mostly-succeeds-in-avoiding.html

Posted in Uncategorized | Tagged , , | Leave a comment

A thin record prevents ruling on a thin copyright

Posted on April 10, 2026 by rtushnet

Viann’K Mansur LLC v. Estiloisabella LLC, 2026 WL 952416, No.
H-23-2914 (S.D. Tex. Feb. 26, 2026)

“The parties in this case sell elaborate ball gowns for
quinceanera parties, the celebration of a Latin American girl’s fifteenth
birthday.” Defendant Etilolsabella LLC, formed by a former employee of
plaintiff, allegedly began advertising and selling copies of its “Leonora
Dress” (a light blue gown with pink floral surface designs) and “Golden Train
Dress” (a crimson gown with gold sequin appliques). Defendant Etilolsabella
LLC’s social media accounts featured posts depicting allegedly infringing
dresses advertised with various derivatives of “#viannkmansurexclusive.” Defendants
argued that they acted in the reasonable belief that they had authority to use
the mark due to various permissions plaintiff had previously given.

Copyright: “[W]hen comparators are not overwhelmingly
identical or exact matches or the differences edge beyond the superficial,
summary judgment is not appropriate because a reasonable juror could find no
infringement.” Here, the parties agreed that the only protectable elements of plaintiff’s
dresses were the surface design elements—the placement and shape of the sequin
or floral appliques that adorn the dresses. The record didn’t show the Leonora dress
and the accused dress with enough clarity to enable a substantial similarity
analysis. An individual defendant expressly testified that “[i]t’s not exactly
the same dress” and that the differences related to the floral appliques, which
were the only protectable elements of the Leonora Dress.

plaintiff’s Leonora dress
accused use

accused use

accused use

Meanwhile, the Golden Train dress and the accused dress designs were

far from identical. The Golden Train Dress has single-pointed crenelated edging with deep negative space and additional sequinning on the flounce layers on the sides of the dress. The allegedly infringing dress, on the other hand, has much thicker double-pointed edging with wide scalloped edges and while there is additional sequinning on the train itself, the layered flounces appear unadorned. In other words, these dresses are not “so overwhelmingly identical that no reasonable juror could reach a different conclusion.”

Plaintiff’s Golden Train closeup

Plaintiff’s Golden Train

Defendant’s accused dress

On likely confusion, there were factual issues despite the use of a similar hashtag to an inherently distinctive mark. On intent, given that “[d]efendants paid taxes, rent, and electricity bills on behalf of the Viann’K Mansur brand, … there is a genuine dispute as to whether Defendants had a good faith belief, even if mistaken, that they had permission to use the Viann’K Mansur name.” And there was no evidence of actual confusion. One of defendant’s customers testified that, although she considered making an appointment with Plaintiff, she decided instead to purchase a dress from Defendants after viewing Defendants’ social media post,” but her “conscious choice of Defendants’ brand over Plaintiff’s brand implies her actual awareness of two distinct brands.” And these were “relatively expensive items of custom clothing and purchasing one requires making an in-person appointment with the seller.”

The court didn’t discuss the false advertising claims separately.

from Blogger https://tushnet.blogspot.com/2026/04/a-thin-record-prevents-ruling-on-thin.html

Posted in Uncategorized | Tagged , | Leave a comment

Reading list: The Vanishing Enforcer: Consumer Protection in an Era of Dual Retrenchment

Posted on April 9, 2026 by rtushnet

Alisher Juzgenbayev,
The Vanishing Enforcer: Consumer Protection in an Era of Dual Retrenchment,
120
Nw. U. L. Rev.
1449
(2026).

Abstract

Recent developments, including reductions in the federal workforce,
effective suspension of certain enforcement activities, and attempted
centralization of independent agency rulemaking in the White House, have
significantly weakened administrative agencies. This administrative
retrenchment is concerning as private enforcement of a number of
consumer protection statutes has been simultaneously curtailed through
the Supreme Court’s decisions in Spokeo, Inc. v. Robins and TransUnion
LLC v. Ramirez, which dramatically narrowed plaintiffs’ standing. These
decisions rely in part on a vision of strong executive authority,
positing that broad private standing conflicts with an Article II
framework where a politically accountable President faithfully
implements laws and exercises coordinated enforcement discretion. When
the Executive interprets this discretion so expansively as to
effectively nullify enforcement of federal statutory schemes, Congress
retains few tools to engage in meaningful lawmaking to advance policies
across different domains. The Fair Debt Collection Practices Act (FDCPA)
and the Consumer Financial Protection Bureau (CFPB) offer a telling
case study: as courts have systematically restricted private
enforcement, particularly class actions, they have channeled enforcement
toward the CFPB—theoretically positioning the agency to address
systemic violations through enforcement, monitoring, and information
gathering. While individual consumers may still access state courts or
raise FDCPA violations defensively, addressing systemic violations
requires robust administrative enforcement if the Article II
justification for restricting private standing is to remain coherent.
The possibility for such enforcement now faces mounting challenges from
increased politicization of enforcement, executive disempowerment of
agencies, and growing judicial skepticism about the propriety of
independent agencies and their investigative and interpretative
authority. The risk is that some consumer protection statutes will
become effectively unenforceable as neither private litigation nor state
alternatives can adequately fill the resulting enforcement gap.

from Blogger https://tushnet.blogspot.com/2026/04/reading-list-vanishing-enforcer.html

Posted in Uncategorized | Tagged , , , | Leave a comment

prefacing statements with “allegedly” or calling them “estimates” doesn’t make them nonfalsifiable opinion

Posted on April 9, 2026 by rtushnet

V Shred, LLC v. Kramer, 2026 WL 895614, No.
2:25-cv-01341-CDS-DJA (D. Nev. Apr. 1, 2026)

V Shred is a health and wellness company specializing in
“online exercise training programs, exercise apparel, and nutritional
supplements.”

Kramer is a social media influencer with millions of
followers who promotes “online exercise training programs, exercise apparel,
and nutritional supplements” and allegedly directly competes with V Shred.

V Shred sued for Lanham Act false advertising, alleging
among other things that Kramer uses the catch phrase “Fuck V Shred” on his
social media profiles as “a discount code consumers can use” for products
promoted by Kramer.

The court found that the complaint alleged some provably false
statements, while others weren’t identified specifically enough (though the
court granted leave to amend).

As to a video titled “Mini Golf With V Shred in Las Vegas,”
it was not enough to allege that this was false because V Shred was not present
or in any way associated with the video. “Here, there was no unauthorized use
of an image, but rather there was merely a tagline reference to V Shred. The
leap from using a tagline to arguing that it equates to promoting the
defendant’s products is not plausible. Here, as alleged, there were no products
offered for sale and V Shred was not even discussed in the video.” Dismissed
with prejudice.

As to an appearance on the “TSL Time” podcast, Kramer allegedly
falsely stated “the company of V Shred isn’t owned by a health and wellness
company. It’s owned by a marketing agency. Just a bunch of marketing dudes”; he
also allegedly stated that V Shred “is a ‘cancer,’ ” “sells ‘crash diets,’ ”
that “[principal] Sant is an ‘actor’ who ‘doesn’t know what the fuck he’s talk
about,’ ” and that he plans to “knock the legs out from under [V Shred] because
they are a garbage company.”  He also allegedly
falsely stated that V Shred has “1,200 or 1,300 complaints filed with the
Better Business Bureau this past year alone.”

Kramer argued that his statements about ownership were
nonfalsifiable opinion, and that his claims about the BBB complaints were an
estimate “based on memory.” The court found that both statements were
falsifiable, and because he allegedly promoted his own products instead, they
could be a commercial advertisement. The “estimate” defense “is essentially an
admission that the BBB statements were indeed demonstrably false.”

Finally, Kramer allegedly posted a video stating that “they
only pay their coaches $9 per client.” V Shred alleged this statement was false
because they pay their coaches different amounts for different types of plans.
The qualifier “allegedly” did not save this statement from falsifiability. This
was also plausibly an ad; Kramer spent 58 of the 93-second video criticizing V
Shred before promoting his own company and attempting to recruit customers,
including that he will pay his coaches “double the market standard.”

from Blogger https://tushnet.blogspot.com/2026/04/prefacing-statements-with-allegedly-or.html

Posted in Uncategorized | Tagged | Leave a comment

two cases reach opposite results over whether “health” claims are misleading if products are lead-contaminated

Posted on April 8, 2026 by rtushnet

Lopez v. Mead Johnson Nutrition Co., 2026 WL 788492, No.
24-cv-03573-HSG (N.D. Cal. Mar. 20, 2026)

Lopez alleged that Mead infant formulas’ packaging contains
deceptive statements that imply that they are generally nutritious and have “no
detrimental, harmful, or genetically engineered ingredients.” For example, the
challenged labels state that the formulas are “brain building” or “support[ ]
brain… development,” and are “recommended” or “trusted” by experts and
pediatricians. Others contain statements that the formulas promote immune
health, bone health; eye health; were inspired by breast milk; and do not
contain artificial colors, flavors, sweeteners, or growth hormones. But independent
testing allegedly revealed a presence of arsenic, cadmium, or lead in each of
the formulas, and that other infant formulas may be manufactured without
detectable levels of heavy metals. She also alleged that consumer surveys
revealed that people would expect a company to test for those substances and
disclose whether “detectable levels” were found, and that consumers would
understand the formulas’ packaging to imply there were no heavy metals.  

The court disagreed, although it rejected Mead’s primary
jurisdiction argument and arguments that Lopez couldn’t sue over products with
different ingredients from those she purchased (there are milk-based, soy-based
or amino-based options), because they were substantially similar in the
relevant characteristics to the products she did purchase.  

Lopez did fail to plead that damages would insufficiently
compensate her for the alleged overpayment, so her restitution and disgorgement
claims failed.

More importantly, her UCL,
FAL, and CLRA claims failed. She didn’t allege that any of Mead’s claims
were literally false, but rather that “each challenged statement speaks
directly to the quality and nutritional benefits of the Products” without
mentioning the potential presence of heavy metals. “[T]his argument is based on
implausible assertions about what a reasonable consumer would understand the
challenged representation to say about the Products…. There is nothing that
logically connects an expert’s recommendation or the presence of certain
substances in an infant formula with the absence of some other substance.” [Would
an expert really recommend feeding a baby cadmium and lead?]

The survey didn’t help. Over 91 percent of a subset of
parents answered “yes” to the questions “Do you expect a company to test for
arsenic, cadmium, lead, and/or mercury in infant formula that will be fed to
infants?” and “Would you expect a company to disclose if there were detectible
levels, or risk, of arsenic, cadmium, lead, and/or mercury in an infant
formula?” And 77 percent of consumers would not “expect arsenic, cadmium, lead,
and/or mercury in the infant formula” after seeing the label. “But these
generalized questions to an undisclosed number of people, detached from any
legal standard, fail to support the plausibility of Plaintiff’s reasonable
consumer allegation.”

Nor did Lopez plead that Mead has a “duty to disclose”
because the suppressed facts are “contrary to a representation actually made by
the defendant.” The challenged statements read together didn’t represent that
the products didn’t contain any detectable levels of heavy metals. “It is not
enough for the disclosure to only provide more information about the product.”
This defeated all the claims.

Meanwhile: The Court directed defense counsel to show cause why
they should not be sanctioned for including a non-existent quotation from
Becerra v. Dr Pepper/Seven Up, Inc., 945 F.3d 1225 (9th Cir. 2019). The
required response indicated that the quote was actually from a district court case
that cited Becerra whose citation was inadvertently deleted. The filing included
a screenshot purporting to show that counsel had previously accessed that district
court case on Westlaw and specifically disavowed any generative AI use, which
was clearly part of the court’s suspicions. “Counsel for Mead Johnson
apologizes for the mistake and has informed Mead Johnson of both this error and
the Court’s Order.”  

Pellegrino v. Procter & Gamble Co., 2026 WL 880573, No.
23-CV-10631 (KMK) (S.D.N.Y. Mar. 31, 2026)

Plaintiffs brought claims under New York General Business
Law §§ 349 and 350, New York Agriculture and Markets Law § 199-a, and
negligence per se based on P&G’s marketing of Metamucil, a psyllium fiber
supplement.

Plaintiffs alleged that “[t]he labels on the Products
suggest … that [they] are generally healthy and safe for consumption and
provide specific health benefits ….” and that they “have been inspected and
sealed to ensure each is safe for human consumption” and free from tampering.
P&G’s website has a dedicated “Product Safety” section, which discusses the
“rigorous safety process” it uses “to analyze every ingredient” used in its
products and claims to “go beyond regulatory compliance to ensure every
ingredient’s safety through a four-step, science-based process” used by various
regulatory agencies, including “US FDA, [the] EPA, the EU, the WHO, and
others.” P&G “reassures consumers it ‘define[s] the safe range of every
ingredient’ by ‘apply[ing] the same science-based approach as regulatory
agencies around the world.’ ” The website specifically states that it does not
use “[h]eavy metals” such as “[a]rsenic, [l]ead, [and] [c]hromium” as
ingredients in its products.

But the products allegedly “contain dangerous amounts of the
heavy metal lead[,]” supported by the results of “[i]ndependent laboratory
testing completed in July 2023 by an ISO-accredited laboratory.” P&G
allegedly knew this since 2021, when “Consumer Lab published a report
concerning the lead content of various psyllium fiber supplements, showing up
to 14.6 μg of lead per serving in Metamucil Sugar Free Orange Flavored.”

P&G argued that plaintiffs didn’t allege facts
sufficient to show that the products they purchased actually contained
dangerous amounts of lead. The court agreed in part; it didn’t think there was
enough detail in most of the independent testing allegations.

“To validly assert an injury under a price-premium theory, a
plaintiff must ‘allege[ ] facts demonstrating it is at least plausible that a
plaintiff purchased a misbranded product.’ ” Plaintiffs can test the products
they personally purchased, but “[c]aselaw in this Circuit recognizes … that
it may not always be possible to test the actual product purchased by a
plaintiff.”

John v. Whole Foods Mktg. Grp., 858 F.3d 732 (2d Cir. 2017),
accepted the results of a third-party investigation, which found the
defendant’s pre-packaged foods were mislabeled 89% of the time. “[T]he samples
in the independent investigation included the particular type of products that
the plaintiff bought from the two store locations where he bought the products
during the same time period in which the plaintiff made his purchases.” John
requires plaintiffs to “meaningfully link the results of their independent
testing to the product actually purchased.” This can be done, for example, “by
showing that the mislabeling was systematic and routine.”  Relevant factors include temporal proximity, geographic
proximity of the testing to the plaintiff’s purchases, the number of samples
tested, and the name and testing methodology of the tester. “The pleading also
should disclose the number of samples tested, and the testing should involve
more than a small number.”

Only one plaintiff’s claims survived this inquiry. The court
declined to dismiss those claims on the grounds that plaintiffs didn’t show
that the amount of lead was dangerous: what constitutes too much lead is a fact
question, and plaintiffs alleged that “[t]here is no level of exposure to lead
that is known to be without harmful effects” and “[t]here is no known safe
blood lead concentration.”

P&G argued that “[s]everal of the representations
Plaintiffs challenge are structure/function claims that are authorized by the
[Federal Food, Drug, and Cosmetics Act (the “FDCA”),]” which “expressly
preempts Plaintiffs’ attempt to attack these structure/function claims as
deceptive under state law.” The Second Circuit hasn’t weighed in on the
relevant preemption provision, but the court here applied the rule that “there
are two ways plaintiffs may escape preemption under that provision: (1) if
their claims seek to impose requirements that are identical to those imposed by
the FDCA; or (2) if the requirements plaintiffs seek to impose are not with
respect to the sort described in [that part of the statute].”

Plaintiffs do not assert that
Defendant failed to adhere to the labeling requirements posed by the FDCA, nor
do they quarrel with the effectiveness of the Products or the primary
ingredients that are in the Products. Instead, Plaintiffs claim that the representations
Defendant made about the Products are false and misleading because the Products
contain undisclosed amounts of lead….  Because “Plaintiffs’ argument is that the
representations Defendant has made about its Products are false and misleading,
… Plaintiffs do not attempt to impose any additional requirements on
Defendant other than those already imposed by the [FDCA].”  

The issue wasn’t whether the structure/function claims were
false in the abstract, but whether these products were contaminated with lead.

Stating a claim under GBL §§ 349 and 350: Plaintiffs alleged
that various statements on the Products’ packaging “suggest to reasonable
consumers that the Products are generally healthy and safe for consumption[ ]
and provide specific health benefits,” but these “statements and suggestions
… are false and misleading because the Products’ high lead content means the
Products are, in fact, neither healthy nor safe for regular consumption.”

P&G argued that the challenged statements didn’t explicitly
say the Products are healthy and safe for consumption and “courts have rejected
efforts like Plaintiffs’ to ‘allege[ ] that a consumer will read a true
statement on a package and will then … assume things about the products other
than what the statement actually says.’ ”

But the reasonable consumer test is usually a question of
fact unless a plaintiff’s proposed reading is “patently implausible and
unrealistic.” So the court proceeded to evaluate specific package statements.

“#1 Doctor Recommended Brand”: Bates v. Abbott Lab’ys, 727
F. Supp. 3d 194 (N.D.N.Y. 2024), aff’d, No. 24-CV-919, 2025 WL 65668 (2d Cir.
Jan. 10, 2025) (summary order), rejected an argument “#1 Doctor Recommended
Brand” was actionable under the GBL because the product—a nutrition drink—had added
sugar. But “[a] consumer who agrees that any added sugar in a nutrition drink
undermines its health benefits can obtain that information from the label,”
which listed sugar as an ingredient, so “#1 Doctor Recommended Brand” was not
misleading. But “the deception alleged here is different in kind than that
alleged in Bates, both in terms of the scope of the omission (some
disclosure about the sugar versus none about the lead) and the danger presented
by the ingredient at issue (lead versus sugar). And, this difference is
dispositive because the complete failure to mention the presence of a harmful
substance such as lead makes any claim about the Products’ brand being doctor
recommended plausibly misleading since it suggests that ‘the Products have been
evaluated and approved by doctors as healthy and safe when taken as directed.’”

However, it was not plausible that claims that the packaging
was tamper-evident misled reasonable consumers by “reassur[ing] [them] that a
product is free from toxic adulterants like lead.” This wasn’t a case about
tampering.

So too with the “Better Choices for Life” statement that
appears as part of the American Diabetes Association seal on the packaging. When
viewed in context of the logo in which it appears, no reasonable consumer could
read “Better Choices for Life” as anything other than an endorsement by the
American Diabetes Association.

“Helps Support: Appetite Control* … [and] Digestive
Health*”: Even though the challenged statement refers to “the specific effects
of consuming fiber” and not the overall ingredients, deceptiveness was a fact
question.

Omission: P&G argued that, because a March 2021 Consumer
Lab report revealed that lead was found in various Metamucil products, plaintiffs
couldn’t allege that its presence was “material information” that was
exclusively within P&G’s control. Some courts interpreting NY law have gone
so far as to require plaintiffs to plausibly allege they “could not ‘reasonably
have obtained the [omitted] information[,]’ ” with “[o]ne example—though not
the only example—of how to meet that standard is if the defendant ‘alone
possesses [the omitted] information.’ ” Figuring out whether the information
was discoverable by a reasonable consumer would require factual development.

from Blogger https://tushnet.blogspot.com/2026/04/two-cases-reach-opposite-results-over.html

Posted in Uncategorized | Tagged , | Leave a comment

“carbon neutral” not plausibly misleading where D bought offsets from 3d-party certifiers, despite methodological disputes

Posted on April 8, 2026 by rtushnet

Bell v. R.J. Reynolds Vapor Co., 2026 WL 915295, No.
25-cv-04521-TLT (N.D. Cal. Feb. 20, 2026)

Bell brought the usual
California claims based on RJR’s alleged misrepresentation of its products’
carbon neutrality. The court dismissed the complaint.

RJR labeled its Vuse as the “first carbon neutral vape brand,”
based on the purchase of carbon-offset credits created from projects that aimed
to reduce their carbon emissions. RJR purchased credits through certification
by third-party organizations such as Verra and Vertis, mostly reforestation and
forest protection projects between 2021 and 2024. Bell alleged that these
projects “do not provide genuine, additional carbon reductions” because
“forestry activities that would have occurred anyway” or lands were “already at
minimal risk of deforestation.” The complaint alleged both consumer surveys and
confirmation of the lack of impact through publicly available data, news
reports, project documentation, satellite imagery, and third-party evaluations.

Bell’s price premium theory properly alleged standing, but
that was it. There’s no statutory definition of “carbon neutrality.” “Merriam-Webster
provides a dual definition for the term as (1) having or resulting in no net
addition of carbon dioxide to the atmosphere; or (2) counterbalancing the
emission of carbon dioxide with carbon-offsets.” And plaintiffs failed to plausibly
allege that a reasonable consumer would adopt an interpretation that carbon
neutrality must mean no additional carbon emissions to the atmosphere and that RJR
must have conducted an independent, primary-source verification of the
carbon-offset project. RJR truthfully disclosed its reliance on the third-party
verification. “The third parties are allegedly independent organizations that
have operated for decades and manage leading standards in the global carbon
market.” Though Bell disagreed, disagreements over “statistical methodology and
study design” are generally insufficient to allege a materially false statement.
Although Bell alleged consumer surveys and studies showing that a significant
portion of consumers prefer carbon-neutral products, the complaint failed to
plausibly allege how these consumers would reject third-party certifications. “Given
the complexity of carbon emission and the fact that Defendants explicitly
described achieving carbon neutrality through third-party certifications that
further described how underlying projects achieve offsetting carbon emission,
the Court finds that a reasonable consumer would not view Defendants’ conduct
as inherently counterfactual nor unreasonable.”

from Blogger https://tushnet.blogspot.com/2026/04/carbon-neutral-not-plausibly-misleading.html

Posted in Uncategorized | Tagged , | Leave a comment

the continuing merger of TM and the right of publicity: court can’t tell the defenses apart

Posted on April 8, 2026 by rtushnet

Upper Deck Co. v. Pixels.com LLC, No. 3:24-cv-00923-BAS-DEB,
2026 WL 776227 (S.D. Cal. March 19, 2026)

Eric
Goldman’s discussion. Upper Deck makes sports memorabilia (including sports
player trading cards), and has exclusive licensing agreements with various
athletes, including famous basketball player Michael Jordan, to use their
names, images, and likenesses. Pixels is an online company, selling
print-on-demand décor, photographs, wall art, prints, and other similar
products. Pixel allows people to upload images and to sell physical prints of
those images on its sites. Those included framed prints of Upper Deck’s trading
cards featuring Jordan, and other prints displaying Jordan’s likeness. Upper
Deck sued for false affiliation/endorsement, false advertising, and unfair
competition; trademark dilution; trademark infringement; and right of publicity
claims. The court mostly allowed the claims to proceed, with some subtractions.

Those subtractions included the dilution claim: Upper Deck’s
registered hologram mark was not sufficiently famous among the general
consuming public. However, trademark infringement claims based on the use of
(non-hologram) reproductions of the hologram mark survived, despite Pixels’
argument that the one product containing the Upper Deck Hologram Mark listed on
its website was never actually sold. Also, a copy of the 1986-87 Fleer Michael
Jordan Rookie Card was sold at an auction for $840,000, while the framed print
of that card offered for sale on Pixels’ website was priced at $70.

The same result occurred for Lanham Act false advertising
and false affiliation claims based on Pixels’ advertisement and sale of
products displaying Jordan’s trademarks on its website.

False advertising: The court found that Upper Deck
identified a “false statement of fact” by Pixels in a “commercial advertisement
about its own or another’s product,” via Pixels’ advertising of products
containing Jordan’s trademarks on its website. The court analogized to the use
of a kosher certification mark, which doesn’t seem to be analogous in
materiality terms. Also, “the fact that some of the images are accompanied by
the names of the persons uploading the images on Pixels website does not
undermine the misleading nature of Pixels’ use of Jordan’s trademarks in
advertising its products.” No further explanation.  

False association: “To establish proximate cause for false
association claims, it is sufficient to demonstrate misuse of the relevant mark
is likely to cause consumer confusion.” No materiality or harm requirement.

Upper Deck, as licensee for Jordan’s publicity rights, was
also able to bring its publicity rights claims, including a publicity rights
violation as a predicate violation for UCL claims (if there was no adequate
remedy at law).

There were statute of limitations issues. The analogous
limitations period for Lanham Act violations in California is four years; two
years for the common law right of publicity; and four years for the statutory
right of publicity, statutory unfair competition, and common law unfair
competition. The specific images that fall within those time frames could be
addressed by motions in limine.

I often tell my students that courts interpret the federal
and state dilution laws as closely together as they can (with the partial
exception of fame) because no one wants to do two dilution analyses, no matter
whether the laws are written differently. I predicted that this would also
become true of post-JDI Rogers/right of publicity defenses and here I am
proven right: Apparently unable to recognize that, in theory, Rogers is
the Ninth Circuit test for First Amendment limits on trademark and
transformativeness is the Ninth Circuit test for First Amendment limits on the
right of publicity, the court here rejects them both because Pixels is
supposedly making trademark use of Upper Deck’s marks (that is, the basis
recognized by JDI, but until now not part of transformativeness). And it
does so because … Upper Deck’s trademarks, including Michael Jordan’s likeness,
appear in the images and are thus serving as source indicators. “The pictures
and photographs of Jordan displayed in Pixels’ products at issue in this action
are source-identifying insofar as they contain Jordan’s Marks.” Bad reasoning
all around. Pixels could still argue expressive use “insofar as it is relevant
to the likelihood of confusion analysis at trial.” But ROP violations don’t
require confusion—so I guess Pixels just loses?

CDA 230: Pixels is a “publisher or speaker” for advertising
and curating content on its websites, but not for selling and distributing
physical products. “Pixels does not create the illicit images of products
uploaded and displayed on its site, and Pixels’ website search engine and
content filtering tools do not contribute to the creation of those products.”
This gets rid of display-only ROP and other state law violations (because the
Ninth Circuit says state-law ROP claims aren’t exempted IP claims), but keeps
the rest (e.g., claims based on Pixels’ contracting with vendors to manufacture
and ship products, facilitating product returns, and offering a money-back
guarantee).

from Blogger https://tushnet.blogspot.com/2026/04/the-continuing-merger-of-tm-and-right.html

Posted in Uncategorized | Tagged , , | Leave a comment

Washington Supreme Court rejects private standing for discount misrepresentations

Posted on April 8, 2026 by rtushnet

Montes v. Sparc Group LLC, 2026 WL 900481, No. 104162-4, —
P.3d —-, 2026 WL 900481 (Wash. Apr. 2, 2026)

Interpreting the Washington Consumer Protection Act, the state
supreme court held, over a dissent, that buying products that are falsely
advertised as discounted doesn’t cause actionable injury if the products aren’t
worth less than was paid for them. This answered a question certified by the 9th
Circuit. (California law is otherwise.)

“Any person who is injured in his or her business or
property” may sue to enforce the CPA. Only economic losses count as injuries to
“business or property” under the CPA—noneconomic losses, such as “personal
injury, ‘mental distress, embarrassment, and inconvenience,’ ” do not
count. 

Montes alleged that she purchased $6.00 leggings at their
advertised $6.00 price because they were discounted from the advertised regular
price of $12.50; but in fact the leggings had rarely sold for $12.50. Since she
received the product she sought to obtain, and didn’t allege that its non-price
qualities differed from those advertised, she had no claim even if the reason
for her purchase was that the seller misrepresented the product’s price
history.

The court rejected three theories of injury: (1) the class “would
not have purchased the items at the prices they paid had they known the items
had not been regularly offered at the higher list price” (the “purchase price”
theory); (2) they didn’t receive the benefit of the bargain: they “did not
enjoy the actual discounts Aéropostale represented and promised them”; and (3) the
deceptive pricing scheme inflated demand, which in turn inflated prices: “[b]ut
for the false advertising scheme, Aéropostale would have had to charge less
money for its products in order to enjoy the same level of demand for its
products.”  These were just disappointed
expectations. “Without more, the mere fact of a retail transaction does not
imply economic loss.”

The majority followed the New Jersey Supreme Court: “even
though Aéropostale’s alleged practices violated the state’s CFA, even though
those practices violated a specific state regulation barring false discount
advertising, and even though New Jersey consumer protection law recognizes the
purchase price and benefit of the bargain theories of loss, plaintiffs failed
to establish that the violation caused an ascertainable loss under either of
those theories.” The AG could act, but not a private plaintiff.

And the complaint’s allegations didn’t support the theory
that the deceptive pricing scheme inflated the market price of the leggings she
bought. Plaintiff conceded the leggings had the monetary value that she paid
for them: “the Leggings that Ms. Montes received had an actual value of between
$5.00 and $6.00—the price range Aéropostale regularly offered them for sale.”

The dissent would have read the CPA more broadly. Montes could
establish injury through a “price premium” theory by proving that the deceptive
or misleading price history artificially increased demand for the leggings,
causing an increase in the product’s market price. “The Ninth Circuit does not
ask us whether Montes will prevail in her CPA claim, specifically whether she
can quantify and prove damages. The majority imports a requirement for such
proof into its injury analysis and in doing so narrows the scope of cognizable
injuries under the CPA”:

Taking the allegations in the
complaint as true, Montes would not have spent $6 on this pair of leggings if
she had known the product’s true price history. To view this as a pure
causation question would “render absurd conclusions” because it is Aéropostale’s
affirmative misrepresentation that led Montes to purchase the leggings, and it
is the purchase itself that constitutes a cognizable injury in these
circumstances. Stated differently, Montes’s property interest was diminished
because Aéropostale’s misrepresentation prevented her from, for instance,
spending $6 elsewhere on another item; she is not required to prove that the
leggings are not worth $6.

from Blogger https://tushnet.blogspot.com/2026/04/washington-supreme-court-rejects.html

Posted in Uncategorized | Tagged , | Leave a comment