Hunton Retail Law Resource

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

District Judge Boots Putative Class Action Against L.L. Bean

A federal district judge has dismissed an attempted class action against L.L. Bean involving the company’s long-standing no-questions-asked warranty policy. In February 2018, L.L. Bean announced that it was changing its policy to limit customers’ return period to one year, while committing to “work with our customers to reach a fair solution” if a problem arises more than a year after purchase. The plaintiff alleged that changing the warranty violated both the Magnusson-Moss Act and Illinois state law as an anticipatory repudiation of the guarantee. But the District Judge ruled that plaintiff neither alleged an injury nor had he stated a claim for which relief could be granted.

It has been a quiet month in the world of recalls with only 13 product recalls issued in June. Still, other CPSC-related news is noteworthy.

Last month, the U.S. Senate confirmed President Trump’s appointment of Dana Baiocco to serve as a CPSC commissioner. If political ideology translates into voting trends on consumer safety issues—and it may not—Baiocco’s appointment creates a potential 2-2 voting “tie” at the CPSC, with two Republican and two Democratic commissioners. Now, Trump seeks to add a third Republican to the CPSC. On June 4, 2018, Trump nominated Peter Feldman to be a commissioner. Feldman is senior counsel to the U.S. Senate Committee on Commerce, Science and Transportation, and therefore advises on consumer protection, product safety, data and privacy issues. If confirmed, Feldman will complete the remainder of former Commissioner Joe Mohorovic’s term, which expires in October 2019. Feldman’s confirmation would mean that for the first time in nearly 12 years, Republican appointees would outnumber Democratic appointees at the CPSC. 

As reported on Hunton's Blockchain Legal Resource blog, in the race to develop blockchain technology, companies are increasingly devoting capital to creating proprietary blockchain solutions. A search of the U.S. Patent & Trademark Office (“USPTO”) as of today returns 355 patent applications that contain either “blockchain” or “distributed ledger” in the abstract. Patents are being filed related to a wide variety of industries and applications, including supply chain management, autonomous deliveries, energy networks, electronic health records, 3D printing, travel itinerary management, data security and securing rights to digital media.

On June 25, 2018, the Supreme Court upheld a Second Circuit opinion that American Express did not violate antitrust law by prohibiting merchants from encouraging customers to use non-American Express credit cards. As part of their agreements with American Express, merchants were required not to steer customers to use non-American Express credit cards (merchants could still express a preference for cash, checks or debit cards). The state of Ohio, the United States, and several other states brought suit alleging that these “anti-steering” provisions violated Section 1 of ...

These past two weeks, several consumer actions made headlines that affect the retail industry.

FTC: Come One, Come All to Discussion of 21^st Century Impacts

On June 20, 2018, the Federal Trade Commission announced that it will hold public hearings on competition and consumer protection in the 21st Century. The FTC is looking to assess whether competition and consumer protection laws must change due to recent economic changes, evolving business practices, technological advancements and international developments. According to the FTC, the hearings may identify areas for enforcement and policy guidance, including improvements to the FTC’s investigation and law enforcement processes, as well as areas that warrant additional study. The FTC is soliciting public comments until August 20, 2018, on a variety of related topics; the hearings are set to take place from September 2018 to January 2019.

Over the past year Hunton & Williams LLP (now Hunton Andrews Kurth LLP) has released articles discussing reform efforts related to the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) and the Consumer Financial Protection Bureau (“CFPB”), which was created as a brand-new, start-up independent agency under Dodd-Frank. The first article was a discussion about the questions of the constitutionality of the CFPB due to its arguably unchecked authority to exercise executive power through the CFPB’s investigative and enforcement authority ...

Oregon’s Fair Work Week Act (also known as Oregon’s predictive scheduling law) (the “Act”) is proceeding full speed ahead and will add significant challenges and costs for retailers. The majority of the Act goes into effect on July 1, 2018. Following similar ordinances regulating employee hours passed at municipal levels in Emeryville, California; New York City; San Francisco; San Jose; Seattle; and Washington, D.C., Oregon becomes the latest jurisdiction and the first state to enact a predictive scheduling law. 

In a 5-4 decision with major implications for e-commerce retailers, the Supreme Court has closed the “online sales tax loophole” by holding that a state may collect sales tax from out-of-state sellers that do not maintain a physical presence in the state. The decision, South Dakota v. Wayfair, Inc. et al., No. 17-494, 585 U.S. __ (2018), overturns two prior Supreme Court cases holding that an out-of-state seller’s duty to collect and remit tax to a consumer’s home state depended on whether the seller had a physical presence in that state. The Court found that this “Physical ...

Hunton Andrews Kurth restructuring partner J.R. Smith joins the latest installment of Debtwire's Middle Market Podcast to discuss challenges faced by the restaurant industry, particularly the casual dining franchise space.

On June 11, 2018, the United States Supreme Court ruled that American Pipe tolling does not extend to follow-on class actions brought after the statute of limitations period has run. This decision resolves a split between circuit courts over the question of whether a putative class member can rely on American Pipe to toll applicable statute of limitations to file a new class action in lieu of promptly joining an existing suit or filing an individual action. The Court held that “American Pipe tolls the statutes of limitations during the pendency of a putative class action, allowing unnamed class members to join the action individually or file individual claims. But American Pipe does not permit the maintenance of a follow-on class action past expiration of the statute of limitations.” China Agritech, Inc. v. Resh, --- S. Ct. ---, 2018 WL 2767565, at *3 (2018).