Category: First Amendment
Two (Out of Three) Thumbs Down: Divided Ninth Circuit Panel Rules Rigged Product Reviews Can Be Actionable False Advertising
When you’re in the market for a fresh haircut or a new restaurant, innumerable business and product reviews are available to guide you towards a cleaner trim or tastier takeout. But what happens when the reviewer is not an impartial arbiter, but a less-than-honest broker disguising a financial interest in the service or product they’re applauding? And can a reviewer be held liable for false advertising if the reviews are secretly paid product placements?
Increasingly, consumers base their purchase decisions on facts about a company or its product that have nothing to do with the performance or quality of the product itself. For example, does the manufacturer treat its workforce fairly? Is it a responsible steward of the environment? What are its stances on social issues like abortion or LGBTQ rights? To which parties or candidates does it (or its officers) donate? All of these facts—and countless others—are “material” to many consumers in the sense that they affect (or even dictate) purchase decisions. Indeed, in recent years, ethical, moral, and political concerns like these have led to countless instances of boycotts and other forms of consumer speech—a welcome sign of a healthy body politic and liberal democracy.
Last year, Arkansas enacted a “Truth in Labeling” law that placed restrictions on companies’ ability to label edible products with the term “meat” and other meat-related words. Arkansas Act 501 took effect July 24, 2019.
Food and beverage advertising, like other forms of speech, is usually entitled to First Amendment protection – even if it may not always enjoy the same caliber of protection as, for example, journalism or political speech. See, e.g., Sorrell v. IMS Health, Inc., 564 U.S. 552, 557 (2011) (“Speech in aid of pharmaceutical marketing . . . is a form of expression protected by the Free Speech Clause of the First Amendment.”)
Last month, Misbranded co-editors Josh Kipnees, Jonah Knobler, and Jane Metcalf presented a live-streamed webinar via Bloomberg Law titled “Hot Topics in Consumer False Advertising Litigation.” The free hour-long webinar, now available on demand, covers the following subjects, some of which should be familiar to regular readers of this blog:
- “Natural” / “no artificial ingredients” claims
- “No preservatives” claims
- Ingredient claims (“made with [X]”)
- Geographic origin claims (e.g., “Made in the USA”)
- Slack-fill claims
- Claims involving nondisclosure of morally troubling/offensive facts
- What’s next in consumer false advertising litigation?
We encourage you to check it out (and obtain some CLE credit in the process).
This is an exciting time for manufacturers on guard against compelled disclosures in their product labeling or advertising. Late last June, the Supreme Court decided National Institute of Family & Life Advocates v. Becerra, 138 S. Ct. 2361 (2018) (“NIFLA”), an abortion case with potentially far-reaching effects on the law of compelled commercial speech more generally. However, as lower courts begin to interpret and apply NIFLA in the context of product disclosures, major uncertainties remain.