Rebecca Tushnet

Kandel v. Dr. Dennis
Gross Skincare, LLC, 2024 WL 965621, No. 23-cv-01967 (ER) (S.D.N.Y. Mar. 5,
2024)

Similar
California litigation at a later stage. Kandel alleged that Gross Skincare deceptively
labeled and advertised its skincare products as containing collagen when, in
fact, they do not.

“Collagen is a
protein found exclusively in humans and animals that has been linked to
youthful skin, hair, and nails. It is composed of thousands of amino acids
intertwined in a specific, unique sequence. Without being sequenced this way,
amino acids do not confer the same benefits as collagen.” The products at issue
are uniformly branded with the phrase “C + Collagen.” The list of ingredients
includes “Collagen Amino Acids”; some products also feature the term “collagen
amino acids” in a separate section on the package titled “What It Is”/“What’s
In It For You.”

one of the packages at issue: C + Collagen Deep Cream

One side of each package
also contains a small symbol indicating that the product is vegan—making “collagen”
content impossible. Gross Skincare allegedly knows that consumers will pay more
for skincare products that contain collagen and intends for consumers to infer
from the “Collagen” branding that the products do so.

blue lines/arrows added by court to highlight relevant terms

NY GBL claims were
sufficiently alleged. Gross Skincare argued that the “C + Collagen” phrase didn’t
imply that the products contain collagen, but instead that the Vitamin C in the
products increases natural production of collagen in the user’s skin. It
claimed that the rest of the package clarified that the products contain
“collagen amino acids” and are vegan. Because of the label “vegan,” it argued, a
reasonable consumer would understand that they do not contain collagen.

This interpretation of
“C + Collagen” was “certainly less intuitive than Kandel’s.” Even considered as
a whole, the complaint alleged misleadingness. The use of “collagen amino acids”
“likely only reaffirms that collagen is an ingredient” and was itself arguably
confusing; the label did nothing to explain it.

Even if one accepts
Gross Skincare’s definition of “collagen amino acids” as “the building blocks
of collagen,” the court did not assume that a reasonable consumer understands
that collagen is a protein composed of amino acids. So too with “vegan.” Even
if the consumer noticed this small symbol, they’d have to know that collagen
comes exclusively from animals.  This
certainly couldn’t be assumed on a motion to dismiss.

Breach of warranty
and unjust enrichment claims under New York law, however, failed, as well as
claims on behalf of a nationwide class.

Kandel did have
standing as to four products she didn’t buy but that contained the same alleged
misrepresentations.

from Blogger http://tushnet.blogspot.com/2024/03/reasonable-consumers-arent-required-to.html

Montgomery v. Stanley
Black & Decker, Inc., 2024 WL 939151, No. 23-735-cv (2d Cir. Mar. 5, 2024)

Plaintiffs sued
defendant (Craftsman) for deceptive business practice claims under both the New
York General Business Law (NYGBL), and the Virginia Consumer Protection Act
(VCPA), as well as asserting warranty and common law claims. They alleged that the
“Peak HP” labeling on the packaging of Craftsman vacuums is misleading because
the vacuums are unable to achieve the advertised horsepower. The District Court
dismissed the complaint because the dagger or asterisk symbol next to the “Peak
HP” label directs the consumer to fine print explaining that “Peak HP” is the
horsepower achieved in laboratory testing, not ordinary use. The court of
appeals affirmed.

Based on the entire
packaging, a reasonable consumer would not be misled because of the fine print
explanation. Plaintiffs didn’t allege the “Peak HP” label was false, and though
their interpretation was one reasonable one, the fine-print meaning was also
reasonable, and the dagger/asterisk “would alert a reasonable consumer to the
fact that certain caveats may apply to the ‘Peak HP’ designation.” Just because
it was in fine print didn’t mean it couldn’t clarify an ambiguous label. There
were no allegations that a consumer couldn’t see it or that its terms were
confusing.

from Blogger http://tushnet.blogspot.com/2024/03/second-circuit-affirms-holding-that.html

State of N.Y. v. Arm
or Ally, LLC, 2024 WL 756474, No. 22-CV-6124 (JMF) (S.D.N.Y. Feb. 23, 2024)

The AG sued sellers
of “unfinished frames and receivers” — also known as “80% lowers” or “receiver
blanks” —designed to evade restrictions on gun sales. The court explains the
allegations:

A “frame” is the core part of a handgun or pistol, and a “receiver” is
the core part of a rifle, shotgun, or other long gun. An “unfinished” frame or
receiver requires an extra step to be rendered usable: usually the drilling of
a few required holes or the filing of excess plastic.

This step is,
according to one of the defendants, “ridiculously easy” and can be done by an
amateur in under an hour with only basic tools. Some of the defendants make it
even easier by shipping their products in a “jig,” a plastic setting that
enables a customer to easily convert an unfinished frame or receiver into a
firearm. As one defendant said to customers when linking to an instructional
video: “There’s no complicated setup because the jig that came with your slide
keeps everything properly aligned as you make simple cuts with the included
drill bits. Wait, it can’t be that simple? Yes, it is.”

The completed
products are allegedly functionally and visually indistinguishable from frames
or receivers one could buy at a gun store, but they are effectively untraceable
because manufacturers, distributers, and purchasers generally do not comply
with the registration and serialization requirements applicable to “firearms,”
making them “ghost guns.” Lawmakers in New York City and New York State banned
the sale of unfinished frames and receivers in 2020 and 2022, respectively.

During the relevant
time period, defendants allegedly marketed and sold unfinished frames and
receivers “directly to consumers without following any of the federal or state
laws and regulations that apply to the sale of guns, and in particular without
conducting a background check, placing a serial number on the gun, or entering
it into a federal database so that it can be traced back to its source if used
in a crime.” Defendants made at least 100,000 shipments to consumers in New
York not registered as federal firearms licensees (FFL), including undercover
agents employed by the State. Defendants who had federal firearms licenses had
access to, but did not use, the National Instant Criminal Background Check
System before selling unfinished frames and receivers to New York consumers,
while some defendants weren’t licensed to sell firearms at all.

The advertising bit:
Defendants allegedly misled New York customers into “believing that unfinished
frames and receivers are legal workarounds to New York’s gun control laws, as
well as federal law.” Defendants’ websites claimed, among other things, that
unfinished frames and receivers could be sold and purchased with “No FFL
Required,” could “be shipped straight to a customer’s home without an FFL,” were
“not subject to the same regulations as any other complete firearm[s],” were
“completely unregistered and legal,” allowed consumers to “build a completely
legal handgun without any ‘government oversight’ ” and to “legally own a
firearm that does not have to be ‘registered,’ ” were “[a]pproved” by the ATF, and
were considered by the government to be mere “pieces of metal and/or plastic
and not guns.”

Among other claims,
the AG brought NYGBL Sections 349 and 350 claims against them. Defendants
contended that marketing unfinished frames and receivers as “legal” was
protected by the First Amendment. It was not.

First, the marketing
was commercial speech: “NO FFL Required!” came in the midst of other
advertising language, such as “Various colors available,” and “no RED TAPE …
NO Registering … No Transfer fees … Ships right to your door.” Labeling
unfinished frames and receivers as “ATF Approved” on sales websites or touting “Ban
Reversed on All of Our Products!” next to pictures of unfinished frames and
receivers constituted proposing a commercial transaction.

I assume because
Sections 349 and 350 don’t themselves make the sales illegal, the court didn’t
point to the part of Central Hudson that makes clear that ads for
unlawful products can simply be banned. But that part also says that false or
misleading ads can simply be banned.

And that was
sufficiently alleged: Defendants allegedly continued to market unfinished
frames and receivers as “legal” to New York consumers even after the State and
New York City banned the sale or possession of ghost guns. The complaint
plausibly alleged that at least some defendants knowingly evaded federal and
state laws. On Halloween Day in 2022, one defendant posted a facetious photo of
one of its products dressed as a “ghost gun,” showing that it understood that
“its unfinished frame and receiver products have only one use — to make
untraceable ghost guns.” Various other defendants allegedly touted the
“untraceable” and “unregistered” nature of ghost guns as a major selling point.

a ghost gun–get it?

The defendants
mostly argued that their statements were merely “expressions of legal opinion.”
The question is whether the customer “understood [the statement] merely as an
expression of opinion.” Nat’l Conversion Corp. v. Cedar Bldg. Corp., 23 N.Y.2d
621, 628 (1969) (finding it important that the “tenant’s lawyer was persuaded
not to verify” the truth of the landlords’ statements about the law on account
of the landlords’ authority and the certainty with which they spoke); see also
Lukowsky v. Shalit, 110 A.D.2d 563, 567-68 (1st Dep’t 1985) (“[A]
misrepresentation of law is actionable if the representation is made by an
individual possessing superior knowledge.”). Defendants marketed their
unfinished frames and receivers as “completely” legal “from a position of
superior knowledge as established merchants in the gun industry.”

from Blogger http://tushnet.blogspot.com/2024/02/falsely-advertising-ghost-guns-as-legal.html