Posts By Shook, Hardy & Bacon L.L.P.

While the Federal Trade Commission (FTC) considers comments submitted by stakeholders to its proposed advertising endorsement guideline amendments, industry and blogging interests have reportedly expressed concerns about their ambiguity and suggested that voluntary ethical standards would best police the practice of “social media marketing.” The FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising, last updated in 1980, if applied to bloggers who are paid to endorse products or services, would require bloggers to substantiate their product performance claims without specifying the proof needed to satisfy the claim. The amended guidance would also require disclosure of compensation arrangements, ranging from product coupons and cash payments to free products or services and pay-per-click links to sites that sell the product. According to a news source, if the guideline amendments are adopted later in 2009, violators could face FTC stop orders, restitution to customers or civil penalties. See The Associated Press, June…

President Barack Obama (D) has been urged by health organizations, nutrition experts and physicians to sign an executive order creating a Presidential Commission on Healthy Weights, Healthy Lives to take on the nation’s escalating rates of obesity. In a June 22, 2009, letter to the president, signatories suggested that the United Kingdom’s anti-obesity campaign could act as a model. “The increased rates of obesity will negate many of our nation’s investments in health care and could actually condemn youths to shorter life spans than their parents,” the letter stated. “Each year, obesity causes tens of thousands of premature deaths and tens of billions of dollars in avoidable medical costs. Obesity also leads to heart-wrenching psychosocial problems, such as difficulty making friends, stigmatization, and discrimination in employment.” Groups that signed the letter included the Center for Science in the Public Interest (CSPI), American Diabetes Association, American Public Health Association, National Consumers…

A University of Louisville neurologist has published a report questioning the safety of farmed fish that are fed cattle byproducts, which could allegedly present a risk of transmitting mad cow disease to humans. Robert P. Friedland, et al, “Bovine Spongiform Encephalopathy and Aquaculture,” Journal of Alzheimer’s Disease (June 2009). Friedland and his co-authors have urged government regulators to ban feeding cow meat or bone meal to fish until the safety of this common practice can be confirmed. “We have not proven that it’s possible for fish to transmit the disease to humans,” Friedland was quoted as saying. “Still, we believe that out of reasonable caution for public health, the practice of feeding rendered cows to fish should be prohibited. Fish do very well in the seas without eating cows.” Although no cases of mad cow disease have been linked to eating farmed fish, the report claims that this does not…

The Investor Environmental Health Network has issued a report urging federal regulators to change shareholder reporting requirements to close loopholes that are allowing corporations to use nanotechnologies without disclosing their potential long-term risks to investors. Titled “Bridging the Credibility Gap, Eight Corporate Liability Accounting Loopholes That Regulators Must Close,” the report explores two case studies, asbestos and nanotechnology, to show how Securities and Exchange Commission (SEC) rules allow companies to underreport or fail to report product risks and liabilities until after they have become targets of litigation and may be on the verge of bankruptcy. The network describes itself as an organization that encourages companies through dialogue and shareholder resolutions “to adopt policies to continually and systematically reduce and eliminate the toxic chemicals in their products.” Its members and advisory panel include groups such as the As You Sow Foundation, Sierra Club Mutual Funds, Friends of the Earth, and Campaign for…

The American Medical Association (AMA) has reportedly voted against a policy that would describe obesity as a disability, citing concerns over patient care and litigation. In particular, some AMA members noted that a disability designation might curb the willingness of physicians to openly discuss weight issues with their patients. “If obesity is designated as a disability, physicians could be sued or reprimanded for discrimination under the Americans with Disabilities Act if a patient takes offense at the physician discussing obesity,” stated the resolution adopted at AMA’s recent annual meeting. See The Associated Press and ABC News, June 18, 2009. Meanwhile, the Obesity Action Coalition (OAC) has issued a statement calling for a continued discussion around this topic, urging physicians to take a proactive approach to obesity with their patients. “The determination of obesity should be based on scientific and medical factual data and not fear of litigation,” OAC said in…

The U.S. attorney for the Western District of Missouri has announced that a Nevada company and its owners entered guilty pleas in federal court “to distributing a tainted ingredient used to make pet food, which resulted in a nationwide recall of pet food and the death and serious illness of countless pets across the United States in 2007.” Sally Qing Miller, her husband Stephen Miller and their company Chemnutra, Inc. reportedly pleaded guilty to some of the charges in a February 2008 indictment, admitting that “melamine was substituted wholly or in part for the protein requirement of the wheat gluten” they imported from China and distributed in the United States and Canada and that “the labeling of wheat gluten was false and misleading.” The Millers are apparently each subject to a sentence of up to two years in prison without parole, fines of up to $200,000 and an order of…

A New Jersey Superior Court judge has denied insurers’ request for summary judgment in a case brought by Taco Bell Restaurant franchisees seeking “protection from the consequences of publicity about contaminated food served at restaurants.” In re: Quick Service Mgmt., Inc. v. Underwriters of Lloyds, No. 4861-07 (N.J. Super. Ct., decided June 12, 2009). The court also granted plaintiffs’ motion for partial summary judgment as to coverage. According to the court, the franchisees specifically sought insurance in 1999 to protect against revenue losses from food contamination outbreaks. They purchased “Food Borne Illness” and “Trade Name Restoration, Loss of Business Income and Incident Response Insurance for Food Borne Illness” policies from defendants. The latter policy, which was in force in 2006-2007, apparently contained an “Aggregate Supplier Incident Sublimit” of $0, and plaintiffs claimed that no one explained that the sublimit would exclude coverage previously provided under the former policy, which had been…

Consumers who sued the company that makes Van’s brand frozen waffles and a number of retailers, alleging that the calorie and nutrition information on the packaging did not accurately reflect what was in the products, have filed a motion to certify a nationwide class. Hodes v. Van’s Int’l Foods, No. 09-01530 (C.D. Cal., motion filed June 15, 2009). Additional information about the complaint appears in issue 295 of this Update. According to the motion, the defendants have filed motions to dismiss since the suit was filed in March 2009, and thus, no discovery has taken place. The named plaintiffs discuss how their complaint fulfills class certification requirements, contending that all class members were injured in the same way, that is, “they purchased Van’s waffles products in the belief that the waffles had the nutritional value represented by the labeling.” The plaintiffs argue that no conflicts of laws issues arise because they…

The Nebraska Department of Agriculture has reportedly quarantined 42 herds involved in an ongoing bovine tuberculosis outbreak, which the department says may have already spread to Colorado and South Dakota because animals from quarantined herds were sold to cattle producers in those states. Transmitted through contact and respiration, bovine tuberculosis is easily transmitted within herds and in rare cases can be transmitted to humans who work directly with the animals or who consume unpasteurized milk and cheese. The U.S. Department of Agriculture (USDA) is apparently collaborating with state officials to determine the source and extent of the outbreak. Greg Ibach, director of the Nebraska Department of Agriculture, predicts that the quarantine, which includes approximately 15,000 cattle, is likely to continue growing in the weeks ahead because investigators are still tracking down the animals that may have had contact with an infected herd over the last two years. “It’s important to…

Connecticut Attorney General Richard Blumenthal has reportedly launched an investigation into chemical and packaging lobbyists who allegedly sought to thwart regulation banning the use of bisphenol A (BPA) in baby bottles, infant food jars and other products. Blumenthal is seeking details about a series of joint trade association meetings held in April and May 2009, during which industry officials purportedly discussed a public relations strategy to counter efforts to regulate BPA. According to Blumenthal, this “apparent campaign” aimed to use “fear tactics, political manipulation, and misleading marketing” to stymie BPA legislation pending in several state and local governments, including Connecticut. The attorney general has also called on the North American Metal Packaging Alliance (NAMPA) and other key stakeholders to denounce these efforts. “Colluding in a campaign of confusion and concealment – potentially endangering children and pregnant women – is appalling and possibly illegal,” Blumenthal was quoted as saying. “We are…

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