Hunton Retail Law Resource

The Department of Justice’s (“DOJ’s”) often criticized rulemaking delays have resulted in no new website accessibility rules for places of public accommodation to receive notice of and implement. Notwithstanding the obvious due process concerns raised by these delays, more and more website accessibility cases are being threatened and filed every day. Most, not unexpectedly, settle. Winn-Dixie did not, and what happened next is worth a closer look.

This past week, several regulatory and self-regulatory actions made headlines that affect the retail industry.

As reported on Hunton's Employment and Labor Law Perspectives blog, over the past eight years, the NLRB has been unusually aggressive with its policymaking. Hunton & Williams' Labor and Employment partners Ryan A. Glasgow and Kurt G. Larkin discuss the current state of labor law, the NLRB and how it might change under the current administration.

Watch the 5-minute video.

On June 13, 2017, Judge Andrea R. Wood of the Northern District of Illinois dismissed with prejudice a putative consumer class action filed against Barnes & Noble. The case was first filed after Barnes & Noble’s September 2012 announcement that “skimmers” had tampered with PIN pad terminals in 63 of its stores and exposed payment card information. The court had previously dismissed the plaintiffs’ original complaint without prejudice for failure to establish Article III standing. After the Seventh Circuit’s decision in Remijas v. Neiman Marcus Group, the plaintiffs filed an almost identical amended complaint that alleged the same causes of action and virtually identical facts. Although the court found that the first amended complaint sufficiently alleged Article III standing, the plaintiffs nevertheless failed to plead a viable claim. The court therefore dismissed the first amended complaint under Rule 12(b)(6). 

On June 19, 2017, the United States Supreme Court announced important constitutional limitations on state courts’ ability to exercise specific jurisdiction over nonresidents’ claims against out-of-state defendants. The Court’s nearly unanimous decision in Bristol-Myers v. Superior Court, 582 U.S. (2017) has potentially far-reaching implications for companies facing claims brought by nonresident and resident plaintiffs in states in which those companies are neither incorporated nor maintain their principal place of business. In holding that mere joinder of nonresident plaintiffs’ claims with those of resident plaintiffs does not permit a state court to exercise specific jurisdiction over an out-of-state defendant, the Court’s decision is the latest in a trend of important personal jurisdiction decisions rendered by the high court in recent years which provide companies with significant constitutional protections in terms of where plaintiffs may force companies to litigate.

This past week, several regulatory and self-regulatory consumer protection actions made headlines affecting the retail industry.

FDA Continues to Reverse Course on Obama-Era Food Label Regulations

After delaying the Menu Labeling Rule effective date to May 7, 2018, the FDA also has indefinitely delayed the launch of changes to the Nutrition Facts labels. These updates, which include information regarding added sugars and emphasized caloric counts, originally were planned to go into effect in July 2018. Despite the delay, a number of manufacturers already have rolled out new labels.

Measuring your costs against the competition is an important tool for staying competitive and minding the bottom line. Benchmarking studies performed by outside consultants are an increasingly common way for businesses to gain insight into how their contracts stack up against others' in the industry. In an age where retailers rely on outside vendors to provide many integral functions, making sure you are getting the best deal matters.

This past week, several consumer actions took place that affect the retail industry.

Trader Joe’s Catches a Winner in Tuna Can Underfilling Litigation

A California judge has granted Trader Joe’s motion to dismiss in the case In re: Trader Joe’s Tuna Litigation, 2:16-cv-01371, in the U.S. District Court for the Central District of California, where plaintiffs had alleged fraud, breach of warranty and other claims for the company’s alleged underfilling of its cans of tuna as prescribed by the U.S. Food and Drug Administration.

According to the court’s order, plaintiffs improperly made claims under the Federal Food, Drug and Cosmetic Act, which does not allow for a private right of action.

“Consequently, the theory underlying plaintiffs’ state law claims depends entirely on an FDA regulation,” the court wrote. “Plaintiffs’ state law claims are in reality claims violations of an FDA regulation, and therefore, the FDCA prohibits plaintiffs from bringing them.”

This case was a consolidation of a number of similar cases filed in California, Illinois and New York. The court’s order does give plaintiffs a month to amend their lawsuit should they wish to refile.

At the end of May, President Trump unveiled his latest proposed budget blueprint for 2018. The proposed budget contains significant funding cuts for many government programs, including more than a 25 percent cut to the Supplemental Nutrition Assistance Program (“SNAP”), formerly known as the Food Stamp Program.

May’s 30 recalls—more than any month thus far in 2017—cover furniture, toys, appliances, lithium batteries, recreational vehicles, kitchen gadgets and more. Conspicuously absent so far from the list are fidget spinners, the now viral children’s toy making headlines recently for choking-related dangers. Retailers catching up to the hot demand should keep an eye on those warnings to see if they convert into recall activity in case the gadget is deemed worthy of a market exit that rivals the pace of its entry. In light of the CPSC’s willingness to impose penalties on retailers who sell recalled items, retailers should take stock of their recall plans of action.

This past week, several consumer actions made headlines that affect the retail industry.

FTC Jumps to Consumers' Defense in Trampoline Marketing Deception

On May 31, 2017, brothers Son Le and Bao Le agreed to settle FTC charges that their trampoline marketing deceived consumers by directing them to review websites that were not, but claimed to be, independent, and by failing to disclose financial interests when posting online product endorsements. The Le brothers created fictitious trampoline experts, including "Trampoline Safety of America" and the "Bureau of Trampoline Review," and built fake websites with fake expert reviews to induce customers to buy their trampolines. The administrative consent order prevents the Le brothers from engaging in such deceptive behavior and requires clear and conspicuous disclosure of any material connections between the reviewer and the product. 

On May 26, 2017, Alcoa Community Federal Credit Union (“Alcoa”), on behalf of itself, credit unions, banks and other financial institutions, filed a nationwide class action against Chipotle Mexican Grill, Inc. (“Chipotle”). The case arises from a breach of customer payment card data. The putative class consists of all such financial institutions that issued payment cards, or were involved with card-issuing services, for customers who made purchases at Chipotle from March 1, 2017, to the present. Plaintiffs allege a number of “inadequate data security measures,” including Chipotle’s decision not to implement EMV technology. 

On June 1, 2017, the new Cybersecurity Law went into effect in China. This post takes stock of (1) which measures have been passed so far, (2) which ones go into effect on June 1 and (3) which ones are in progress but have yet to be promulgated.

If you are a retailer, you may have policies and procedures in place regarding who can speak on behalf of your company. Such policies may generally instruct employees not to speak to the press as a representative of the company, and to direct all media inquiries to a particular person or department. Similarly, if you are a retailer, you may have a policy in place that instructs employees to forward any reference requests to your human resources department. These commonplace policies allow retailers to control their public image and protect employee privacy, among other benefits. But, according to a recent decision by a National Labor Relations Board (“NLRB”) administrative law judge (“ALJ”), such policies may violate the National Labor Relations Act (“NLRA”) by interfering with, restraining or coercing employees in their right to engage in concerted activity.