FTC Rejects Do Not E-Mail Registry

Brightmail, a supplier of anti-spam products, reports that spam now accounts for 64 percent of total internet e-mail, up from 49 percent a year ago. When Congress passed the CAN SPAM Act of 2003 last December, it required the Federal Trade Commission to evaluate the creation of a national do not e-mail registry, which in theory would allow individuals to opt out of receiving unsolicited commercial e-mail. Earlier this month, the FTC reported to Congress that the proposed registry is a bad idea because it would not reduce spam. The FTC took the position anti-spam efforts should focus on the creation of an authentication system that would allow for the improved screening of e-mail. While the recently-implemented National Do Not Call Registry has proven popular and successful in stopping unwanted telemarketing calls, the FTC asserted that the same sort of system would not effectively combat spam. Congress probably will concur with the FTC that a private sector anti-spam solution holds more promise than a government-sponsored opt out list.

Leatherman Snipped for “Made in the U.S.A.” Claims
A strict but little known California law, Business and Professions Code section 17533.7, bars merchants from advertising or labeling their wares as “Made in the U.S.A.” when the product or any component part “has been entirely or substantially made, manufactured, or produced outside of the United States.” After a trial, Judge Victoria Chaney of the Los Angeles County Superior Court found that Leatherman Tool Group Inc., the Oregon-based manufacturer of compact multi-purpose tools, labeled 22 of its products as “Made in the U.S.A.” even though some of the parts came from other countries. Unless overturned on appeal, the $13 million judgment against Leatherman will benefit Californians who purchased the company's products since 1997.

KFC’s Health Claims Don’t Fly
KFC Corporation settled FTC charges of deceptive advertising. In a national television ad, KFC claimed that it is healthier to eat two fried chicken breasts than to eat a Burger King Whopper. The FTC said that, while the chicken breasts do have slightly less total fat and saturated fat than a Whopper, they have more than three times the trans fat and cholesterol, more than twice the sodium, and more calories. In another ad, KFC falsely represented that eating its chicken is compatible with low carbohydrate weight-loss programs, asserted the FTC. The settlement prohibits KFC from making claims about the health benefits of its chicken products unless the claims are true and KFC can substantiate them with competent and reliable scientific evidence. Two of the five FTC commissioners suggested that a monetary fine against KFC would have been appropriate.

Private Plaintiffs Target Chicken Producers
The California Court of Appeal reinstated a deceptive advertising claim against Tyson Foods, a poultry supplier. The Physicians Committee for Responsible Medicine, which describes itself as a nonprofit health advocacy organization, alleged that Tyson deceptively advertised its chicken products as “all natural” when in fact Tyson raised its chickens in a “factory farm” system. The court ruled that California Senate Bill 515, enacted in 2003, facilitated the prosecution of false advertising suits such that the claim against Tyson should be allowed to proceed. The case will now return to San Francisco Superior Court, which has yet to rule on the merits of the claim.

A similar case against another poultry supplier has taken roost in Los Angeles Superior Court. The plaintiff alleges that Empire Kosher Chicken overstated the weight of its chickens and misled the public about the quality of their diet.

Macy’s and PETCO Pay for Overcharging
In two separate cases, California district attorneys teamed up to tag retailers with hefty fines for allegedly selling products at higher than advertised prices. Macy’s West, Inc. and PETCO will pay $1.6 million and $850,000, respectively, to settle the charges. These cases illustrate the complexity and importance of matching price promotions with the data in cash register systems.

Sacramento DA Busts “Booty” Suppliers
The Sacramento County District Attorney settled a labeling dispute with Robert’s American Gourmet Foods and Keystone Food Products, the makers of “Pirate’s Booty” and other snack foods. The defendants allegedly understated the amount of fat in their products and will pay a total of $80,000 in penalties and costs.

Turlock Furniture Store Penalized
The Stanislaus County District Attorney obtained a $21,000 civil judgment against Mattress N More #3, a Turlock furniture store. According to the DA, the retailer falsely advertised rebuilt mattresses as new and improperly removed labels from upholstered furniture and bedding.