As reported in our Ad Law News and Views newsletter, Kelley Drye’s Advertising Law practice posted 106 updates on consumer protection trends, issues, and developments to this blog in 2017. Here are some of the most popular:

• New Lawsuit Highlights Risks of Using User-Generated Content
• FTC Announces $1.3 Million Settlement in Negative Option Case
• Read This Before Scanning A Driver's License In New Jersey
• FTC Staff Reminds Brands and Influencers About Disclosure Requirements
• "OK, Google. Send a Letter to the CPSC”: Privacy Groups Request Recall of Google Home Mini
• New NAD Decision Addresses Product Reviews
• Judge Upholds FTC Staff Opinion that Avatar Calls are Prerecorded Messages under TSR
• Instagram Announces a New Tool for Influencers
• EU Data Protection Authority Issues GDPR Action Plan, Swiss Sign Privacy Deal with U.S.
• Don’t Like Negative Reviews? Read This Before You Delete Them
• More Regulators Focus on Price Comparisons
• CIT Adds New Requirements for ‘Assembled in USA’ Claims Analysis
• How Not to Get Burned by “First” Claims
• NAD Gives Bill of Good Health to Dietary Supplement Immunity Claims
• Court Relies on Due Process Argument to Dismiss Website Accessibility Suit

2018 Advertising and Privacy Law Webinar Series

Please join Kelley Drye in 2018 as we continue our well attended Advertising and Privacy Law Webinar Series. Like our in-person events, this series gives key updates and provides practical tips to address issues faced by counsel as well as CLE credit. This webinar series will start again in February 2018. Please revisit the 2017 webinars here.

The case is Palomino v. Facebook, Inc., No. 16-cv-4230-HSG (N.D. Cal.). The plaintiffs claimed that Facebook’s terms of use contained provisions purporting to “disclaim liability” for willful misconduct, and to “bar claims for personal and economic injury and punitive damages” and “for deceptive and fraudulent conduct.” Whether provisions like this actually violate the TCCWNA is a matter of dispute in other cases pending in state and federal courts in New Jersey and elsewhere. Judge Haywood S. Gilliam held that he did not have to reach that question, however, because Facebook’s enforceable choice-of-law clause favoring California law precluded the plaintiff, a New Jersey resident, from suing under his home state’s consumer protection laws.

California’s test for enforcing a choice-of-law clause, set forth by the California Supreme Court in Washington Mut. Bank, F.A. v. Superior Court, 24 Cal. 4^th 906, 916 (2001), begins by asking whether the chosen state has a substantial relationship to the parties or their transaction or, if not, whether there is any other reasonable basis for the choice. If the answer to either question is yes, a plaintiff seeking to avoid application of the contractual choice must establish both “that the chosen law is contrary to a fundamental policy” of the alternative state and that the alternative state “has a materially greater interest in the determination of the particular issue.” Facebook easily cleared the burden-shifting hurdle because it is headquartered in California. Plaintiffs then failed to meet their burden because they “failed to show that California’s consumer protection law,” which itself precludes a wide array of false and deceptive practices and “aim[s] to accomplish the same end,” is “contrary to New Jersey policy.” That California’s law “affords different rights and remedies” is immaterial because “[c]ourts should not refrain from applying the chosen law merely because this would lead to a different result.”

The decision’s caveats are important, but the bottom line is that non-New Jersey choice-of-law clauses, applied by online retailers outside New Jersey, may preclude TCCWNA claims.

Many retailers recently have scrutinized their website terms with the TCCWNA in mind, and the pace of new TCCWNA lawsuits has significantly slowed. As for past liability, major national retailers have had motions to dismiss TCCWNA cases fully briefed for several months now. Both the plaintiffs’ and defense bar in New Jersey had hoped to end 2016 with some clarity about the TCCWNA’s contours. Unfortunately, that clarity has not yet come.

Two judges have dismissed TCCWNA claims for lack of Article III standing, citing the Supreme Court’s recent decision in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), that a plaintiff cannot sue in federal court without having suffered “concrete and particularized” harm. Neither court reached the merits of the plaintiffs’ TCCWNA claims. The more recent of the two Spokeo dismissals came in October, and the plaintiff immediately appealed to the Third Circuit.

The Third Circuit already has another TCCWNA case before it, fully briefed. In November, the Third Circuit certified two questions arising from that appeal to the New Jersey Supreme Court that are relevant to several pending motions to dismiss: (1) Is a consumer who received a contract that does not comply with a particular state regulation, but who has not suffered any adverse consequences from that noncompliance, an “aggrieved consumer” able to sue under the TCCWNA? (2) Does a violation of that regulation alone constitute violation of a “clearly established legal right” and thus provide a basis for relief under the TCCWNA?

The New Jersey Supreme Court has not yet said whether it will rule on those questions, but that Court definitely will rule later this year on two other TCCWNA cases alleging that restaurants violated the law by not clearly posting prices on drink menus and, in one case, charging different prices for the same drink, depending upon whether the drink was served at a table or at the bar.

Those appellate goings-on may be impacting the District Court’s consideration of the other pending motions to dismiss. In early December, the judge presiding over a TCCWNA terms-of-use case against a major retailer “administratively terminated” that company’s motion to dismiss and effectively stayed the case pending the outcome of the two Third Circuit appeals. No other district judges have taken that step, but motions to dismiss several other significant TCCWNA cases remain sub judice before them.

Decisions in those cases still could come at any time, but it also is possible that retailers must wait until the New Jersey Supreme Court and/or Third Circuit decides the TCCWNA cases before them — possibly not until late 2017 — before we learn how easy, or difficult, it is for plaintiffs to sue under this problematic law.