Happy Saturday – And happy Thanksgiving! I’m looking forward to some family time and all of the Thanksgiving food, except for turkey. I think turkey is overrated. It’s fine, but it’s a bottom-tier holiday food for me.
Here’s what I’ve been paying attention to over the last seven days:
New Lawsuits
- One day before the FTC voted unanimously to seek public comment regarding whether to modify or expand the scope of the Business Opportunity Rule, it announced that it sued and reached a settlement with Kevin David and his affiliated companies for violating the Biz Op Rule, the Consumer Review Fairness Act, Section 5 of the FTC Act, and prior commission determinations in connection with the defendants’ “Amazon Automation” services and crypto investment opportunities.
The proposed stipulated order enters a judgment of almost $53 million, which will be partially suspended (due to inability to pay) after the defendants pay $2.6 million.
The defendants allegedly violated so many of the FTC’s rules that the FTC compared them to an everything bagel.
There’s a lot to dig into regarding the aggressive marketing tactics and practices that the defendants used here, and that last link above is worth a read for anyone offering coaching, automated services, or or any opportunities marketed using earnings claims.
Long story short, you may want have counsel look over your business practices and your ads if they look like this:
For a 90-second tip about earnings claims, check out my most recent Instagram video, in case you missed it.
- Activewear brand Lilia’s Active is being sued by an influencer marketing agency for failing to pay over $150k in invoices.
The agency also accuses Lilia’s Active of “accepting orders … without any intent of honoring or fulfilling those orders.”
- Following FTX’s dramatic implosion, SBF and several celebrities who endorsed FTX (including Tom Brady, Gisele, Shaq, Steph Curry, and Larry David) face a class action for various securities law violations.
Some have asked why the celebrities appearing in FTX ads are potentially on the hook. Part of the reason is that, as the Complaint lays out, “although Defendants disclosed their partnerships with the FTX Entities, they have never disclosed the nature, scope, and amount of compensation they personally received in exchange for the promotion of the Deceptive FTX Platform,” which the SEC requires.
This, like the recent SEC settlement with Kim Kardashian over her Ethereum Max promotions, is a good reminder regarding the SEC disclosure requirements that go beyond those what the FTC requires in the context of promoting securities. So keep them in mind if you engage celebrities (or anyone else) to promote crypto projects on social media.
- Speaking of crypto debacles, Bitcoin Latinum faces another investor lawsuit, and this one doesn’t mince words:
Legal News
- Hormel Foods reached a settlement with the Animal Legal Defense Fund regarding Hormel’s allegedly false advertising of its “Natural Choice” brand of meats.
ALDF alleged that calling those products “natural” was misleading because the animals were fed hormones and antibiotics, and the meats contain artificial preservatives.
This case is yet another example of why I strongly recommend that anyone advertising any product using the word “natural” to have those ads carefully reviewed by counsel.
That single word has fueled countless lawsuits in recent years, and a judge might not think it means the same thing that you think it means.
- This is an interesting look at whether Twitter would enjoy Section 230 immunity in litigation arising out of the scores of fake tweets from imposter accounts that received verification badges under the new pay-to-play “Twitter Blue” subscription system.
- Tom Petty’s estate is considering suing Arizona GOP gubernatorial candidate Kari Lake for using “I Won’t Back Down” without permission in her social media posts.
- Elizabeth Holmes is going to prison for 11 years for the Theranos fraud.
Off topic:
If you’re a chess player and want to have a game with me, add me on chess.com!
Thanks for making it this far. Have a great weekend!
-Rob
Happy Saturday – What a week it’s been. Crypto is imploding, Elon is being Elon, and Season 3 of Love is Blind concluded. It’s a lot to take in.
My goal with this newsletter is to share with you some of the things I read as I stay on top of current issues and trends for my clients.
If you were forwarded this from a friend, please click here to subscribe for free, and consider sharing it with someone who might like to see it.
Here’s what I’ve been paying attention to over the last seven days:
New Lawsuits
- EDM producer 3LAU, who famously generated more than $11M in revenue through selling his Ultraviolet album as an NFT, is being sued by Luna Aura, a singer who contributed to the track Walk Away. She claims 3LAU never paid her any portion of that revenue, despite their contract, which she alleges entitles her to royalties from those sales.
- The Pennsylvania Attorney General has sued Fluent for deceptive lead-gen tactics, such as allegedly tricking consumers into providing “consent” to use of personal information by Fluent’s “marketing partners.”
- Off-grid vehicle maker Living Vehicle is suing influencers who claim LV’s trailers contained high levels of toxic chemicals, including “very high formaldehyde” that caused illness and rendered the trailers uninhabitable.
Living Vehicle says it has the evidence to prove there are no such chemicals in its trailers, so it’s suing the influencers for trade libel and business disparagement.
This week, Living Vehicle filed its motion for a preliminary injunction to prevent the influencers from making any additional claims about purported chemicals.
- Men’s Journal is being sued for copyright infringement for using a photo it allegedly found on the internet to advertise a shirt, without clearing the rights to said photo.
Legal News
- Obnoxious Instagram “personality” Jay Mazini is going to prison for running a Ponzi scheme.
“This multi-million dollar case is a reminder for anyone thinking of investing: Be skeptical of any investments with larger than life promises, because if it sounds too good to be true, it probably is,” IRS-CI Special Agent-in-Charge Fattorusso said in a statement.
- Twitter won yet another account termination case, for the same reasons as usual (i.e., Section 230 and Twitter’s TOS).
- Speaking of Twitter, their recent high-level departures have caught the FTC’s attention.
- And speaking of the FTC, they will meet next week to vote on whether to initiate rulemaking that would expand the Business Opportunity Rule to cover “business and e-commerce coaching and work-from-home offers.”
Off topic:
Here’s my favorite quote shouted in a moment of victory that I can think of: https://www.youtube.com/watch?v=gKQOXYB2cd8. Both an inquisitive and exclamatory statement at once, it defies categorization.
Thanks for making it this far. Have a great weekend!
-Rob
Happy Saturday, and Happy Halloween!
This year, I’m dressing up as Waluigi. He’s always been my favorite Mario character, and I already look a lot like him in real life, so I’m excited to dress in overalls and WAA at people a lot.
This installment is a bit shorter than normal. Not every week is full of interesting tidbits, but this way you can get back to your weekend sooner.Anyway, my goal with this newsletter is to share with you some of the things I read as I stay on top of current issues and trends for my clients.
If you were forwarded this email from a friend, please click here to subscribe for free, and consider sharing it with someone who might like to see it.
Here’s what I’ve been paying attention to over the last seven days:
New Lawsuits
- The maker of Jeeter weed pre-rolls is facing a class action brought by California consumers who claim the product doesn’t have as much THC as advertised.
- A talent management company is suing a beauty product brand and its CEO for over $100k in unpaid invoices related influencer marketing services.
- A model who lost a lawsuit against Twitter for copyright infringement has amended her complaint to add a defendant with one of the racier names I’ve seen on a pleading.
I can only imagine appearing in court for that defendant. “Good morning, your honor, John Smith appearing for defendant….uh, the other defendant.”
Legal News
- Smashburger ran ads saying its “Trible Double” hamburgers contained “double the beef,” but consumers in a class action said those burgers had the same amount of beef, just split across two patties, and they wouldn’t have bought the burgers if they knew the truth.
Smashburger has agreed to pay $5.5M to settle the case. - A seller of novelty drinking glasses with bullets embedded them must pay $3M to their competitor, who sued under the Lanham Act for false advertising because the losing competitor advertised the glasses as being “Made in the USA,” when in reality, the glasses themselves were made in China, but the bullets were glued to the glass in the U.S.
- Section 230 shielded TikTok from liability for the popular but incredibly risky (and in some cases fatal) “Blackout Challenge.” The mother of a child who died participating in the challenge sought to hold TikTok liable under products liability and negligence theories.
She argued that TikTok had a duty to prevent its algorithm from recommending potentially deadly content to kids, and TikTok’s algorithmic recommendations are effectively TikTok’s own publication of content. But the court ruled that the algorithm simply promotes the work of others, so Section 230 shields the platform from liability. - This is a good overview of some of the potential revisions to the FTC’s endorsement guides.
- Here is a quick high-level rundown of some of the issues to keep in mind if you run giveaways as part of your web3/crypto projects.
Off topic:
Every year, I buy the new Call of Duty release and expect it to be different in some real way, and every year, it’s pretty much the same thing. But I bought it again this year. If you did too, and you want to hop in a game some time, send me a message so we can connect.
Thanks for making it this far. Have a great weekend!
-Rob