Articles Posted in False Advertising

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Deceptive and misleading advertising, deaths and heart attacks are among the claims in lawsuits filed against energy drink makers.

Energy%20Drinks%2048725117-001.jpgVermont, Washington and Oregon have sued Living Essentials, makers of 5-Hour Energy for “deceptive and misleading” advertising. 5-Hour Energy claims include “hours of energy, no crash later” and apparently Attorneys General of those three states do not agree. It is likely that other states will join and file lawsuits in the near future.

If you bought one or more cans of Red Bull in the last 12 years, and it failed to “Give You Wings”, you may file a claim to receive your settlement of $10 cash or $15 worth of Red Bull products. The makers of Red Bull agreed to a $13 Million settlement with US consumers to settle a class action lawsuit alleging that promises of increased performance and concentration fell short of delivering more effectiveness than a cup of coffee.

The Red Bull settlement is awaiting U.S. District Court approval. Red Bull does not admit any wrongdoing. Watch for settlement application forms online, no proof of purchase is required.

Six adverse reports of energy drinks have been entered into the Food and Drug Administration’s voluntary reporting system. FDA spokeswoman Shelly Burgess states that it is not clear whether the drinks caused or even contributed to the five reported deaths and one reported heart attack. She goes on to say “…that’s why we’re taking this seriously and looking into it.”

Most recently, the family of 14 year old Anais Fournier sued Monster Energy Drinks. Anais died after consuming two 24 ounce Monster Energy drinks within 24 hours. The last one shortly before her death which the autopsy attributed to cardiac arrhythmia due to caffeine toxicity.
48 ounces of Monster Energy contains almost the same amount of caffeine as 14 cans of Coca-Cola, approximately 480 milligrams.

In a statement, Monster said they believed they were not responsible for the girl’s death and would vigorously defend itself.

On a final note, the Attorney General of New Your issued subpoenas in July to Monster, PepsiCo (makers of AMP), and 5-Hour Energy’s Living Essentials. The AG is seeking information about the companies’ advertising and marketing practices.

Bottom line, if any company makes claims in its advertising, it better have proof to back up those claims, preferably before going to court.
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Imagine having the ability to predict future medical conditions based on a DNA test. Armed with this sort of information, people would know to be particularly aware of heart disease, diabetes and high cholesterol and could take steps to protect themselves against developing such conditions.

Genetic%20Testing%2055993888-001.jpgEssentially, that’s what was promised by 23andMe, a Mountain View, California company that’s been in existence since about 2007. Advertising on television, radio and the Internet promised consumers the ability to gain valuable knowledge about their personal health risks. The company marketed a $99 DNA test kit. Customers merely had to send a saliva sample the company. After analysis, 23andMe would provide a detailed report that people could use to safeguard themselves against certain health risks.

However, a San Diego woman by the name of Lisa Casey recently filed a lawsuit in the U.S. District Court alleging that the company’s results were actually “meaningless.” Moreover, the complaint states that the DNA is being added to a company database and that the data is subsequently being made available to researchers.

As Casey’s attorney puts it, the company’s efforts are “a very thinly disguised way of getting people to pay them to build a DNA database.” The complaint seeks damages on behalf of many thousands of 23andMe customers who were misled by what the filing terms the company’s false advertising.

The lawsuit isn’t the only roadblock that 23andMe is currently facing. Almost simultaneously with the lawsuit filing, the company received a letter from the Food and Drug Administration. In the letter, the company is accused of making medically related claims that have not been vetted by the department. It’s not the first time 23andMe has received warnings from the federal government. In fact, the FDA has been lodging complaints against the company since 2010, alleging that they have not proven that their testing yields accurate results. The administration fears harm as a result of misinformation provided by the company. Concerns that the procedure could be construed as the practice of medicine have caused the FDA to essentially shut down 23andMe pending a satisfactory response to the letter, available HERE.
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Over more than 40 years in business, Trader Joe’s has developed a reputation as a unique grocery store where customers can purchase exclusive items like Organic Hummus Dip and Milk Chocolate Covered Potato Chips. The company operates in 30 U.S. states with about 400 stores. Because Trader Joe’s can’t be found on everywhere, they have been able to enhance their reputation as a distinct and unusual retailer. An inherent part of the Trader Joe’s experience is the trade dress in their stores. Their South Pacific theme is considered by the company and its customers to be an indispensable part of shopping there.

Trademarks%2047837347-001.jpgTrader Joe’s has not officially expanded across America’s border with Canada. One devotee of the brand, Michael Hallat, lamented the fact that he could get his Trader Joe’s fix only by driving from his home in Vancouver, Canada to a store in Bellingham, Washington. The trip involved a lengthy wait to cross the border in both directions and travel time was usually 3 to 4 hours round trip.

Hallat looked for a way to make the experience a little easier, bring Trader Joe’s goods to other Canadians and perhaps turn a profit. He began buying up Trader Joe’s wares in large quantities. In a little more than two years, he managed to spend hundreds of thousands of dollars at the store, bringing the merchandise back across the Canadian border to sell at his own retail store, which he called “Pirate Joe’s”. With a modest markup on the original price of the goods, Hallat was soon making good on his idea of turning a profit on the resold wares.

While Hallat’s customers may have been enjoying the ability to get Trader Joe’s items without crossing the border, Trader Joe’s itself was less than amused. They quickly filed a lawsuit alleging trademark infringement and false advertising.

At this point, Hallat dropped the “P” from the name of his store making it “Irate Joe’s”.

The suit was filed in the U.S. District Court in Seattle, but was recently thrown out by a judge who said that the court did not have jurisdiction in Canada. For now, Hallat triumphs in this matter, but it seems clear that Trader Joe’s is unlikely to allow this unauthorized use of their trademarks to continue.
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As technology evolves and society relies more and more on the Internet for work and play, scam artists seem to dream up increasingly creative ways to derive a profit from it. Most regular Internet users have become familiar with the term “cybersquatting” in recent years. This nefarious online activity involves a company or individual who registers a domain with a name that is confusingly similar to a legitimate website. Administrators use the sham websites to elicit personal information and money from unwitting users. The result is big time profits for the criminals and big time headaches for their victims.

http.www%2051883498-001.jpgRecently, federal courts decided in favor of Facebook against several defendants who had registered domains with confusingly similar names. The websites, examples of which included Dacebook.com and Facebooll.com took advantage of the most frequently made typographical errors users enter when searching for Facebook. In addition to having similar titles, many of the websites also copied the Facebook look and interface to further convince users that they had landed at the legitimate Facebook website.

Facebook executives filed the complaint against the typosquatters in 2011. The judge ordered that the defendants should pay Facebook a combined total of some $2.8 million in damages. Moreover, the infringing domains must be turned over to Facebook, making it possible for the social networking giant to redirect users with poor typing skills to the Internet destination they actually wanted to reach. The defendants in the case are also prevented from continuing to register domain names that are confusingly similar to Facebook’s. A lawyer working on behalf of Facebook notes that “we are pleased with the court’s recommendation.” In addition, he foresees a continued vigorous defense in support of Facebook’s intellectual property.

Facebook is not the first company to rely on the 1999 Anticybersquatting Act. Other recognizable companies like Microsoft have used the act in the past to protect their online presence and reputation. As commerce continues to rely on the Internet in an ever increasing amount, it seems clear that this law will be put to the test on many occasions in the future.

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Another chapter recently opened in the Facebook lawsuit chronicle. The plot of this latest litigious episode pits the popular social media site against a large class of angry litigants.

A comprehensive research study is the apparent catalyst of controversy. Authored by Tilburg University researcher Arnold Roosendaal, the report revealed that Facebook uses its famous “Like” button to track unsuspecting web surfers’ online activity. CLICK HERE to download report.

facebook%20like%20button.jpgThe piece also posited that Facebook discerns member identities via cookies that are covertly installed while users visit sites that display the “Like” icon. IP addresses thereby obtained are purportedly used to track Facebook members’ online activity.

Further research disclosed that similar cookies are also installed on non-members’ computers by sites that feature the “Facebook Connect” login platform. Intercepted data is then used to track subsequent visits to participating sites.

Personal privacy is the crux of the most recent Facebook litigation. The plaintiffs (California residents Ryan Ung, Chi Cheng and Alice Rosen ) assert that Facebook violated the reasonable expectation of privacy in one’s personal web-browsing history.

Another Facebook lawsuit was recently dismissed with leave to refile. The suit alleged that Facebook surreptitiously transmitted users’ personal data to online marketers via embedded header codes. Virtual advertisers obtained Facebook users’ names, ages, gender, and other personal data without prior user consent. This practice was in clear violation of Facebook’s stated privacy rules.

Yet another case in the long line of social media lawsuits against Facebook is on appeal to the Ninth Circuit. The Plaintiff-appellants are protesting a Facebook lawsuit settlement stemming from Facebook’s unauthorized dissemination of members’ e-commerce transactions.

According to the Wall Street Journal, Twitter and Google also admit to tracking web users’ surfing activities without the prior activation of a widget or icon. Google and Facebook both claimed to “anonymize” such compiled data, however.

Such assertions are akin to a former President’s admission of having smoked marijuana without inhaling. Why would social network sites expend considerable resources to furtively capture personal identifying data – to accomplishing nothing except its nullification by “anonymization?”

The online community must actively oppose practices that compromise personal security through pervasive invasions of individual privacy. Given the overall litigious climate in contemporary American society, social media lawsuits may be the most effective ammunition in the battle against Big Brother.

Indisputably, the internet’s vast commercial and informational capabilities serve many beneficial functions. Effective checks and balances are essential, however. Moderation is the best means of maintaining the best balance between personal and pecuniary freedoms.
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A lawsuit has been filed in the New York courts by Manhattan mom, Nicole Imprescia, against a posh, private preschool for not doing enough to prepare her four-year-old daughter, Lucia, for an Ivy League education.

Preschool.jpgCharging $19,000 a year for tuition, the York Avenue Preschool promises to provide Upper East Side children with a custom-tailored, age-appropriate education in art, music, physical activities and language. Imprescia claims the school’s laid-back teaching style caused them to fail in delivering on their promises. She says this could have sabotaged Lucia’s opportunity to be accepted into an elite private school and thus irrevocably hindered her chance to be accepted into a top U.S. college.

Although the year-round school offers its young pupils access to teachers with master’s degrees in early childhood education, the curriculum is largely the same as any preschool classroom – learning the alphabet, singing songs and finger painting – except for the French lessons given to the four-year-old children.

Imprescia claims her daughter wasn’t properly prepared for the standardized Educational Records Bureau (ERB) entrance test used by highly-competitive private elementary schools in New York City, including Dalton, Chapin and Spence. Instead, Lucia and her peers were taught their colors and shapes.

The Imprescia family lawyer is equating the situation to theft and false advertising, saying Imprescia was duped into believing the thousands of dollars would be money well spent on a first-class education. Imprescia says her daughter was forced to mingle with two-year-olds and basically spent her days playing instead of learning. She pulled her daughter out of the school less than one month after enrolling in the fall of 2010.

Imprescia is seeking class action status for the lawsuit. The case has also sparked widespread debate in media outlets and online about the cost versus the quality of an elite education and the high expectations that are being placed on very young children to succeed.

York Avenue officials released their own statement to the media, saying these are the first charges brought against the preschool in its 30-year history and that they hope Lucia has found a school that better fits her needs.

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As hard as it might be, try to imagine a phony (yet official looking) law enforcement officer showing up on your doorstep to collect a debt. Using official looking documents, he intimidates you into making payment, surrendering property in lieu of payment, or “Summons” you to court. The court isn’t actually a court, but looks like one complete with someone who looks like a judge presiding over your “Case”.

badges.jpgThose are some of the allegations against Unicredit America Inc., an Erie PA based debt collector.

Pennsylvania Attorney General Tom Corbett filed a consumer protection lawsuit against Unicredit America Inc. The lawsuit accuses Unicredit of using deceptive tactics to mislead, confuse or coerce consumers. These tactics include the use of fake “hearings” allegedly held in a company office that was decorated to look like a courtroom.

In conjunction with the lawsuit, the Attorney General’s Office has also filed a petition for special and preliminary injunction. The injunction seeks court action to freeze all Unicredit assets; prohibit the company from engaging in any debt collection; immediately cease all bogus hearings or depositions; and to provide detailed information about company bank accounts, assets and business records.

“This is an unconscionable attempt to use fake court proceedings to deceive, mislead or frighten consumers into making payments or surrendering valuables to Unicredit without following lawful procedures for debt collection,” Corbett said. “Consumers also allegedly received dubious ‘hearing notices’ and letters – often hand-delivered by individuals who appear to be Sheriff Deputies – which implied they would be taken into custody by the Sheriff if they failed to appear at the phony court for ‘hearings’ or ‘depositions’.”

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When Craig Kleffman received 11 email messages offering broadband phone services from Vonage and noticed that they came from a variety of domain names, he found a lawyer and filed a lawsuit. Kleffman felt that these emails were spam (also known as junk emails) and as such a violation of a California spam law that prohibits marketers from sending messages with misleading headers.

spam%202.jpgWhile the emails might be annoying, the California Supreme Court ruled this week that they were not spam, and did not violate California law.

Justice Ming W. Chin wrote on behalf of a unanimous court: “We find that a single e-mail with an accurate and traceable domain name neither contains nor is accompanied by ‘misrepresented … header information’ … merely because its domain name … is ‘random,’ ‘varied,’ ‘garbled’ and ‘nonsensical’ when viewed in conjunction with domain names used in other e-mails.”

He continued: “An e-mail with an accurate and traceable domain name, makes no affirmative representation or statement of fact that is false.”

And concluded: “…we hold that, on the undisputed facts of this case, sending commercial e-mail advertisements from multiple domain names for the purpose of bypassing spam filters is not unlawful under section 17529.5(a)(2).”

The ruling (which may be viewed HERE) will likely make it more difficult for internet users to sue email marketers in California, which has an anti-spam law that is broader than the federal Can-Spam law. Generally, the federal law (which bars individuals from suing for spam violations) overrules most state spam laws. There’s an exception for state laws to be used when dealing with fraud.
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The website Yelp has been accused of trying to extort money from companies. The company is a customer review website and the class action lawsuit filed in court states that Yelp is extorting companies through high pressure sales tactics. The lawsuit, filed in Los Angeles federal court, alleges unfair business practices.

yelp%20logo.jpgThe lawsuit states that employees from Yelp contact the businesses that are listed on the website and request or demand that the company makes monthly payments to Yelp in order to have the negative reviews removed or modified. Yelp allows users to post favorable or negative customer reviews on the website about local businesses.

The law firms filing suit state that many of the businesses that have reviews from customers and are contacted by Yelp are small companies. The companies feel they have no choice to pay in order to protect further harm on their businesses.

However, the question that the lawsuit needs to answer is whether or not Yelp is offering to run a positive advertisement for the company above the negative reviews or if the company is offering to remove those reviews for a payment. If it is the second, this could be considered extortion since the payoffs to Yelp prevent the website from doing harm to the business.

The lawsuit is based on the California Unfair Competition Law, which dates to 1933 and is a broad law covering a large number of unfair business practices including any type of untrue or misleading advertising.

Cats and Dogs Animal Hospital is the plaintiff in the case. The veterinary hospital asked Yelp to remove false and defamatory review from the listings at the website. The website reviewed to remove the review, but the company’s sale representative called the veterinary hospital numerous times demanding that the hospital pay a hefty $300 payment in order to have the negative reviews hidden or removed from the website.

According to the lawsuit filed, a sales person contacted the hospital and stated that if a one year advertising subscription was purchased that the website would “Hide negative reviews on the Cats and Dogs Yelp.com listing page, or place them lower on the listing page.”

Further, it promised the animal hospital that if it purchased this type of subscription, no negative ads would appear in Google or other search engines. The hospital would also be able to choose a tagline and choose the order in which customer reviews appeared on Yelp.com.

Although the hospital is named the plaintiff in the case, the law firm handling the lawsuit has heard from numerous other small business owners who claim to have experienced the same type of extortion.

Vince Sollitto, vice president of Yelp states that the allegations are false and that many businesses advertise on Yelp when they have negative and positive reviews on the site.
Yelp is one of the largest customer review websites in the world. Each month more than 26 million people read and use the user generated content. The website contains more than eight million reviews.

On a related note, a recent article on TechCrunch.com states that Yelp owners walked away from a Google buyout offer worth over half a Billion dollars in December 2009.
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New York and 14 other states are filing suit against the company Amgen Inc, the largest biotechnology company in the world. The claim is that the company devised and used a nationwide kickback scheme to boost the sale of drugs. The company, along with AmerisourceBergen Corp, is charged with providing medical providers with a kickback for increasing sales of the company’s product Aranesp, an anemia medication.

bribery4.jpgIn order to accomplish this, the companies encouraged medical providers to invoice third party payers for Aranesp, including Medicaid, says New York Attorney General Andrew Cuomo. The rewards included retreats and other services.

Aranesp is the third largest drug in sales for the company, producing some $3.1 billion in sales. The company lost sales since 2006 (at which time the product was the company’s top sales maker) due to the discovery of a link to increased rates of heart attack and death in kidney patients. Aranesp has sold more than $11 billion since its first sales in 2001. The FDA has approved the product to treat anemia associated with renal failure and chemotherapy induced anemia.

David Polk, who is the spokesman for Amgen, states that the allegations are without merit. The U.S. Department of Justice issued a subpoena of AmerisourceBergen, who claims they are cooperating fully with the demands.

Other jurisdictions that are joining in the law suit include the District of Columbia, Florida, Hawaii, Illinois, Indiana, Louisiana, Massachusetts, Michigan, Nevada, New Hampshire, Tennessee and Virginia. The case was filed in a Massachusetts court.