Tag Archive for 'false advertising'

If You Drank Red Bull and Didn’t Get Wings, You May Have a Legal Claim

Everyone knows the slogan: “Red Bull Gives You Wings.” Most people would consider this slogan to be comical and would never expected to actually grow wings. But one man decided this was false advertising. Since he drank Red Bull and didn’t get wings, he was determined to make Red Bull pay.

Red-BullBenjamin Careathers sued Red Bull for false advertising. He complained he has been drinking the energy drink for 10 years and has never gained wings or improved his mind or athletic ability.

A Red Bull spokesman stated that the company “maintains its marketing and labeling have always been truthful and accurate, and denies any and all wrongdoing or liability.” However, to avoid a time-consuming trial and immense funds to fight the claim, Red Bull decided to settle the case.

They agreed to a settlement of $13 million, including $6.5 for a fund to reimburse those who have purchased a Red Bull (estimated 1.4 million customers) between January 1, 2002, and October 3, 2014. The settlement  is yet to be approved by the U.S. District Court of the Southern District of New York. The hearing will occur on May 1 2015. If approved, Red Bull will have to hand over $6.5 million to a fund for consumers to collect their share.

Comical and ridiculous? Absolutely. But there’s nothing funny about a $13 million settlement. This case proves just how careful you have to be when involved in an advertising campaign. As a consumer, if you didn’t get wings from drinking a Red Bull, you can go online and submit a claim now!

Foodie Wars in California

Northern District of California: The Food Court?

With dozens of potential class action lawsuits pursued by California plaintiffs’ attorneys against food producers, the time might be right to call the Northern District Court of California a “Food Court.” As artificial and bizarre as these lawsuits might seem to the food manufacturers and the business community, these cases do address a real concern for consumers: the issue of false advertising.

Food Lawsuits

How Might These Cases Benefit Consumers?

The cases are about drawing a line between 1) effective product marketing and 2) promoting false claims or omitting essential information on food product labels. Some of these cases may benefit the consumer public by doing the following:

  • Ensuring food labeling standards comply with consumer protection statutes
  • Clarifying health benefits that appropriate labels may contain
  • Setting precedents for further protection of consumer public
  • Addressing manufacturing defect issues in food production
  • Amplifying FDA mechanisms for enforcing its regulations

What are Some Potential Defenses?

It seems reasonable that food manufacturers might simply amend their labeling tactics. By improving labeling, they may minimize future litigation costs. In the meantime, they do have a number of defenses to offer in the face of current litigation. For example, they can claim that the plaintiffs lack standing to bring such cases, or they may claim that certain federal laws preempt the applicable consumer protections laws.

What’s the Plaintiffs’ Position?

The plaintiffs in the foodie wars essentially challenge the legitimacy of healthy-sounding food labels. Several specific complaints brought by consumers include the following:

  • A label claiming that juice contains “evaporated cane juice” obscures the fact that juice actually contains sugar, misleading consumers.
  • An “All natural” ice-cream label omits ice-cream’s alkalized cocoa content from the description.
  • Labels claiming chocolates to be a “source” of antioxidants may violate FDA regulations.
  • “Sugar free” gum label omits a “not reduced calorie food” warning.
  • Yogurt labels describing probiotic and digestive benefits are excessive and should be modified.

The Bigger Picture

Many consumers with special health needs turn to food labels for critical information. With advances in healthcare (or so we hope…) and earlier diagnosis in health conditions, many “label-conscious” consumers rely on labels not so much out of some bizarre foodie whim (well, may be just a little…), but from a need to address their special needs and conditions. While selling a product successfully is no doubt every honest seller’s dream, the U.S. has a profound history of snake oil salesmen pitching cure-all quackery to a gullible consumer. When health is at stake, food labels should not be an unmonitored playground for clever marketing schemes.

FTC Puts The Brakes On Deceptive Online Acai Berry Advertisements

Man, and just when I pumped all my money into those acai berries.  Now how am I supposed to lose those extra pounds before swimsuit season?

Just kidding, we all know the key to weight loss is and always has been magic.

In all seriousness though, if you haven’t heard the news already about the latest Federal Trade Commission crackdown, then you might be surprised to hear that the FTC has just succeeded in permanently shutting down those annoying acai berry pop-up ads you see online.  The ads usually were fashioned to look like official news reports and contained logos from well-known news organizations including ABC, FOX News, CNN and so forth – an example to your right.  The advertisement exalted the miracles of the acai berry as a natural weight loss solution.

And looking at the ads, it’s easy to see how people would be fooled into thinking the claims in them were pure truth rather than puffery.  That, of course, was also the FTC’s problem with them and about nine months ago the agency began putting their plan to stop these deceptive practices into action.  Fast forward nine months later and the FTC has entered into settlement agreements with six acai berry marketers to stop the sneaky ads and also to pay damages of $500,000 under a federal false advertising statute.

Personally I’m quite glad to see these acai berry advertisers go down.  In all honesty, even I was fooled the first time one of these ads popped up on my screen.  The illusion was all the more convincing in my case since at the time I was also browsing through a legitimate news site and assumed the ad was a special report.  Thus you can probably see why they were probably a bad thing.

Though, interestingly enough some in the blogosphere seem to be opposed to the FTC’s actions.  Their main beef seems to be that they think the FTC’s restrictions on the acai berry advertisers violate the First Amendment’s freedom of speech protection.  As we all know, the First Amendment does indeed grant anyone, even businesses, the right to say what they want.  Therefore, this sub-group of people (who probably also hold stock in acai berries) believe that by the FTC cracking down on how these advertisers present their information, it in fact infringes upon their First Amendment rights.

Wow, some people can be real whack-jobs, huh?  Fortunately though, none of the comments I’ve read so far have been crazy enough to argue that the ads aren’t in violation of federal false advertisement laws, because for the reason that, well, they clearly are.

Under current federal law, false advertising comes in two flavors: fraudulent content, which is when the statements made in an ad are false beyond mere marketing puffery, and deceptive practices, which is when the ads are presented in a way that will trick consumers into think it’s something else other than an advertisement.

The acai berry ads clearly fall into the latter category, and arguably also the first, but let’s not split hairs about whether or not acai berries can really help a person lose weight.  The acai berry ads were designed to look like news articles.  The ads had headlines and even author bylines, the formatting and fonts look like they were ripped straight out of CNN, not to mention all the legitimate news organization logos all over the place.  To any objective person the ads at first blush would seem like real news stories and not advertisements.  Therefore, they’re deceptive ads.

But back to the original question, did the FTC violate these advertiser’s first amendment rights?  Well, the answer is still no.  This will be a good lesson to any people out there who are thinking about launch ad campaigns similar to the acai berries.  That’s because while it’s true the First Amendment protect one’s freedom of speech, when that speech is commercial in nature, than the speech may be regulated if it is found to be false or deceptive.

See the beautiful circle here?  Because the acai berry advertisements are clearly deceptive under federal law, then the ads aren’t afforded First Amendment protection.  But let’s just say for argument sake that they aren’t deceptive.  Even in that circumstance the government still has a right to restrict commercial speech if the government can prove that the restriction would serve a substantial government interest, directly advance that interest, and the restriction itself isn’t beyond what’s necessary to advance that government interest.

Now I won’t bore you with a long dissertation of what is a “substantial government interest”, but suffice to say that if you’re running a business, an easier way to think about how you advertise is that you better not say anything fraudulent or deceptive because it’s pretty easy for the government to restrict commercial speech.

Breaking News: Nutella is Not Health Food

In case you’re one of the unfortunate souls who has never tasted or (gasp!) heard of Nutella, I’m going to give you a minute to go to the nearest grocery store, buy some, and taste it. Go ahead. I’ll be here when you get back.


Delicious, isn’t it? Now, I understand that some people don’t like Nutella. They suffer from an unfortunate condition that psychiatrists refer to as “being wrong.” I can only imagine that it was one of those wrong people who brought this lawsuit (also reported here – requires registration, and here).

I’ll get serious now. A lawsuit, filed in a federal court in San Diego, alleges that the maker of Nutella engaged in false advertising, because it allegedly suggested that its product is a nutritious, balanced breakfast for children. Now, as delicious as Nutella is, I don’t think anybody would mistake it for a weight loss product. It is approximately 70% saturated fat and sugar, by weight. It’s definitely something to be enjoyed in moderation.

Looking at the label on a Nutella container, I don’t see anything implying that the stuff is diet food. Nonetheless, the lawsuit alleges that the named plaintiff in this class action bought the product after seeing a commercial that depicted mothers serving it to their children for breakfast, and declaring it to be healthy and nutritious.

She claims to have been “shocked” (SHOCKED!) when she found out that Nutella is not particularly healthy. I guess seeing the creamy chocolate goodness when she opened the jar didn’t clue her in.

This blog recently discussed a story concerning Taco Bell, and a lawsuit claiming that they shouldn’t call their taco filling “beef” because it’s allegedly less than 50% beef by weight. Now, if that turns out to be true, a case can be made that calling the product “beef” or “meat” without any qualifiers might be slightly misleading.

But simply showing people eating your product (the intended use of the product), as the offending Nutella commercials do, doesn’t seem like it could be in any way construed as a nutritional claim. If they had made commercials saying Nutella will help you lose weight, cure baldness, treat cancer, or that it can be molded into a working artificial heart, there might be a case for false advertising.

So, this individual case looks like it’s probably not going to go anywhere.

One silly case shouldn’t give the impression that false advertising isn’t a real thing that can cause real harm, however. As with any form of fraud, false advertising can cost its victims huge amounts of money, and can sometimes endanger their health, especially when a worthless or dangerous product is advertised as a medication or dietary supplement. Any statement in advertisement which is false, deceptive, or misleading can be grounds for a false advertising claim. It doesn’t matter if the victim was actually harmed, nor does it matter if the falsehood was deliberate.

This is a very strict standard – even a false claim that was included in an advertisement unintentionally, and causes nobody any harm, is illegal. And, generally, I think rules like this exist for a very good reason. If some advertisers were left to their own devices, it’s certain that they would mislead consumers. And if falsehoods that don’t directly harm the consumer, or which are accidental, aren’t illegal, some unscrupulous advertisers would be constantly pushing the envelope.

An absolute blanket prohibition for any and all false statements of fact in advertisements (leaving room for subjective statements of opinion, and “sales puffing”), encourages advertisers to scrupulously vet every factual claim made in an advertisement, since even accidental falsehoods are actionable.

This should, in theory, greatly reduce the number of instances of false advertising in the first place, making valid lawsuits for false advertising fairly rare.

On another note, the plaintiff in this case apparently declined to take advantage of another hard-won consumer protection: nutrition and ingredient labels on food. Look at every single packaged food product sold in stores. Notice the ingredient and nutrition information printed somewhere on the label? Do you think the makers of fried pork rinds put accurate nutritional information on their packages out of the kindness of their hearts? I didn’t think so. The FDA mandates that certain nutritional information be placed on the labels of packaged food. Nutella is presumably no exception. While compliance with labeling laws is no excuse for false advertising (if it did actually occur in this case), it does case some suspicion on the mother’s claim that she was “shocked” to learn that Nutella wasn’t healthy.

On the other hand, if Nutella did produce an advertisement suggesting that it had health benefits, or even indirectly suggesting that it wasn’t mostly sugar and fat, this plaintiff might have a case. And while I agree that litigation is probably the best way to redress serious violations of one’s legal rights, it should not be the first option you think of when you have a problem.

Who is Harmed By Taco Bell’s Alleged False Advertising?

Wow, I’ve eaten some bad things in the past, but this most recent (alleged) revelation about Taco Bell has got to take the cake for (alleged) worst food product to eat.

If you haven’t been watching of the news, surfing the internet, or reading the newspapers, then you may be comatose or some kind of spelling bee champion because this story is all over the place.

A couple of weeks ago, a California woman filed a lawsuit against the taco fast food giant accusing Taco Bell of not actually including beef in their beef tacos, burrito, chalupas, and whatever the heck else passes for Mexican food over there, but rather “taco meat filling.”

What is taco meat filling you ask?  Well if you’re to believe the plaintiff’s complaint, it’s a combination of “water, isolated oat product, wheat oats, soy lecithin, maltodrextrin, anti-dusting agent, autolyzed yeast extract, modified corn starch, sodium phosphate,” and other long mad scientist-sounding words.  Oh and beef, too.  I forgot to mention that amongst all the other stuff the plaintiff alleges is in Taco Bell’s beef, there’s also some beef in there.  How silly of me.

This, believe it or not friends, is exactly the heart of plaintiff’s beef (ba da bum) with Taco Bell.  She accuse the company of only putting a little above 20 percent beef in there beef products and argues that the company shouldn’t be allowed to call their meat filling beef because it’s a fraudulent statement.

Now as you can imagine, Taco Bell hasn’t taken kindly to these accusation.  However, rather than try to take the high road on this and handle the case discretely, apparently the marketing geniuses over there have decided to come out with guns-a-blazing and attack the lawsuit head-on with a full out media blitz.  The company has taken out hilarious full page ads in newspapers proclaiming their product’s beefiness.  And to further ensure that their message is heard by more than the four people left in the country who are still reading newspapers, Taco Bell also released an equally cringe-inducing and sure-to-go-viral YouTube video where Taco Bell President Greg Creed expounds upon the authenticity of the company’s beef.

The reason this public relation blitz is an odd and bad move on Taco Bell’s part is that by fighting the plaintiff’s lawsuit so vehemently and publicly, the company ensures that the lawsuit becomes more well-known than it would’ve been if they had just shut up, filed an answer, and released the usual public admonishment denouncing the lawsuit.  Instead, the lawsuit now has traction and is currently creating a logging jam on the internet.  It was also a bad move because for many people, fighting the lawsuit so adamantly can often create the impression that the lawsuit may actually have some validity behind.

Now to be fair, Taco Bell’s very vocal response was probably due to a fear that a smaller answer would’ve led to a drop in sales.  The company probably also didn’t want to watch their taco brand go the way of their fried chicken brand and forever fall into the realm of (alleged) urban legend.  I can see it now, three-breasted 50 lbs chickens clucking along peacefully next to 18-foot tall cattle.

But seriously though myths aside, this is one lawsuit where despite the growing public outcry against Taco Bell, I’m finding it hard to find any basis that would give this lawsuit any reason to continue existing, other than money of course.

You see the problem with this lawsuit (and lawsuits of this kind in general) is that the only real claim of harm lies in false advertising.  Specifically in this case, it’s that the plaintiff and all Taco Bell consumers who went to Taco Bell and bought beef tacos believed that the filling contained 100 percent beef.

Let’s assume for a moment that the plaintiff’s claim is completely true.  What would be the harm other than the deceit?  The beef itself isn’t poisonous or causing any harm to anyone who eats it, aside from probably being really unhealthy for you.  Sure, the product doesn’t contain 100 percent beef, but short of some new discovery about the beef filling’s contents, under FDA guidelines Taco Bell would still be in compliance.

The harm is in the fact that the plaintiff says Taco Bell shouldn’t call their product beef because it’s not all beef.  But take a moment and go to your pantry or refrigerator and pull out anything from it and look at the ingredients.  Chances are that your cereal, macaroni and cheese, canned vegetables, and anything else you might find in there doesn’t contain a hundred percent of anything.

Now I’m not saying that Taco Bell is completely in the right here; but when you go to Taco Bell or any major fast food chain, are you really expecting to get the freshest and best ingredients in the world?

Probably not.