Legal Library: Cases and Proceedings

In April 2021, the FTC charged St. Louis-based chiropractor Eric Anthony Nepute and his company Quickwork LLC with violating the COVID-19 Consumer Protection Act and the Federal Trade Commission Act, by deceptively marketing products containing vitamin D and zinc as scientifically proven to treat or prevent COVID-19. This is the first such case in which the agency has sought civil penalties.

Online children’s education company Age of Learning, Inc., which operates ABCmouse, will pay $10 million and change its negative option marketing and billing practices to settle Federal Trade Commission charges that it made misrepresentations about cancellations and failed to disclose important information to consumers, leading tens of thousands of people to be renewed and charged for memberships without proper consent.  The complaint also alleges the Southern California-based company unfairly billed ABCmouse users without their authorization and made it difficult for consumers to cancel their memberships, preventing consumers from avoiding additional charges. In April 2021, the FTC announced it was sending $9.7 million in refunds to defrauded consumers.

The FTC's administrative complaint against Impax charges that in 2010, Impax and Endo Pharmaceuticals Inc. illegally agreed that Impax would not compete by marketing a generic version of Endo’s Opana ER until January 2013. In exchange, Endo paid Impax more than $112 million.

Endo agreed to settle these charges in a stipulated order entered in federal court. See FTC v. Allergan plc, and Watson Laboratories, Inc. et al.

The Commission’s 2019 opinion held that the FTC staff had proven that the agreement between Impax and Endo Pharmaceuticals Inc. violated Section 5 of the Federal Trade Commission Act. The Commission’s opinion reversed Chief Administrative Law Judge D. Michael Chappell’s initial decision.

In April 2021, the U.S. Court of Appeals for the Fifth Circuit upheld the Commission’s opinion.

Wine and spirits maker E. & J. Gallo Winery has agreed to divest several product lines and remove certain others from its asset purchase agreement with competitor Constellation Brands, Inc. to settle Federal Trade Commission charges that their proposed $1.7 billion transaction would violate federal antitrust law. The complaint alleges that unremedied, the proposed acquisition would eliminate head-to-head competition between Gallo and Constellation and thereby was likely to substantially lessen competition in the United States for six types of wine-and-spirits products: entry-level on-premise sparkling wine, low-priced sparkling wine, low-priced brandy, low-priced port, low-priced sherry, and high color concentrates.The FTC announced approval of the final order in April 2021.

The Federal Trade Commission, along with 46 agencies from 38 states and the District of Columbia, has stopped a massive telefunding operation that bombarded 67 million consumers with 1.3 billion deceptive charitable fundraising calls (mostly illegal robocalls). The defendants collected more than $110 million using their deceptive solicitations. Associated Community Services (ACS) and a number of related defendants have agreed to settle charges by the FTC and state agencies that they duped generous Americans into donating to charities that failed to provide the services they promised.

The FTC sued the operators of a mobile banking app, alleging that they falsely promised users high interest rates on their accounts and “24/7” access to their funds.

Online fashion retailer Fashion Nova will pay $9.3 million to settle Federal Trade Commission charges that it didn’t properly notify consumers and give them the chance to cancel their orders when it failed to ship merchandise in a timely manner, and that it illegally used gift cards to compensate consumers for unshipped merchandise instead of providing refunds.

The Federal Trade Commission has issued an administrative complaint and authorized an action to block the proposed merger of Jefferson Health and Albert Einstein Healthcare Network, two leading providers of inpatient general acute care hospital services and inpatient acute rehabilitation services in both Philadelphia County and Montgomery County, Pennsylvania. The proposed merger would eliminate the robust competition between Jefferson and Einstein for inclusion in health insurance companies’ hospital networks to the detriment of patients. The Commission vote to issue the administrative complaint and to authorize staff to seek a temporary restraining order and preliminary injunction was 4-0-1, with Chairman Joseph J. Simons recused.  The Commission vote to voluntarily dismiss its appeal to the Third Circuit of the district court decision declining to preliminarily enjoin the merger of Thomas Jefferson University and Albert Einstein Healthcare Network was 4-0.

Tapjoy, operator of an advertising platform within mobile gaming apps, has settled Federal Trade Commission allegations that it failed to provide in-game rewards promised to users for completing advertising offers.

In December 2020, the FTC announced its first law enforcement crackdown on deceptive claims in the growing market for cannabidiol (CBD) products. The Commission took action against six sellers of CBD-containing products for allegedly making a wide range of scientifically unsupported claims about their ability to treat serious health conditions, including cancer, heart disease, hypertension, Alzheimer’s disease, and others. A summary of the proposed orders settling the agency’s respective complaint is provided below. The FTC announced final approval of all six orders in March 2021.

Bionatrol Health, LLC. The proposed administrative order prohibits the respondents from making certain prevention, treatment, or safety claims about dietary supplements, foods, and drugs without human clinical testing to substantiate the claims. It also requires competent and reliable scientific evidence for other health-related product claims, and prohibits the respondents from misrepresenting the cost of any good or service and from charging consumers without their express, informed consent. It requires the corporate respondents and individual respondent Marcello Torre to pay $20,000 to the FTC and to notify consumers of the order.

In December 2020, the FTC announced its first law enforcement crackdown on deceptive claims in the growing market for cannabidiol (CBD) products. The Commission took action against six sellers of CBD-containing products for allegedly making a wide range of scientifically unsupported claims about their ability to treat serious health conditions, including cancer, heart disease, hypertension, Alzheimer’s disease, and others. A summary of the proposed orders settling the agency’s respective complaint can be found on the FTC’s website as a link to each case. The FTC announced final approval of all six orders in March 2021.

CBD Meds, Inc. The proposed administrative order prohibits the respondents from making certain prevention, treatment, or safety claims about dietary supplements, foods, and drugs, unless they have the human clinical testing to substantiate the claims. More broadly, it requires them to have competent and reliable scientific evidence when making any other health-related product claims. It requires the respondents to notify consumers of the Commission’s order.

In December 2020, the FTC announced its first law enforcement crackdown on deceptive claims in the growing market for cannabidiol (CBD) products. The Commission took action against six sellers of CBD-containing products for allegedly making a wide range of scientifically unsupported claims about their ability to treat serious health conditions, including cancer, heart disease, hypertension, Alzheimer’s disease, and others. A summary of the proposed orders settling the agency’s respective complaints can be found on the FTC’s website as a link to each case. The FTC announced final approval of all six orders in March 2021.

Epichouse LLC. The proposed administrative order prohibits the respondents from making certain prevention, treatment, or safety claims about dietary supplements, foods, and drugs, unless they have the human clinical testing to substantiate the claims. It requires them to have competent and reliable scientific evidence when making any other health-related product claims. It requires the respondents to pay $30,000 to the FTC and notify consumers of the Commission’s order.

In December 2020, the FTC announced its first law enforcement crackdown on deceptive claims in the growing market for cannabidiol (CBD) products. The Commission took action against six sellers of CBD-containing products for allegedly making a wide range of scientifically unsupported claims about their ability to treat serious health conditions, including cancer, heart disease, hypertension, Alzheimer’s disease, and others. A summary of the proposed orders settling the agency’s respective complaint is provided below. The FTC announced final approval of all six orders in March 2021.

HempmeCBD. The proposed administrative order prohibits the respondents from making certain prevention, treatment, or safety claims about dietary supplements, foods, and drugs, unless they have the human clinical testing to substantiate the claims. It also requires them to have competent and reliable scientific evidence when making any other health-related product claims. It requires the respondents to pay the FTC $36,254 and to notify consumers of the Commission’s order.

In December 2020, the FTC announced its first law enforcement crackdown on deceptive claims in the growing market for cannabidiol (CBD) products. The Commission took action against six sellers of CBD-containing products for allegedly making a wide range of scientifically unsupported claims about their ability to treat serious health conditions, including cancer, heart disease, hypertension, Alzheimer’s disease, and others. A summary of the proposed orders settling the agency’s respective complaint is provided below. The FTC announced final approval of all six orders in March 2021.

Reef Industries, Inc. The proposed administrative order prohibits the respondents from making certain prevention, treatment, or safety claims about dietary supplements, foods, and drugs, unless they have the human clinical testing to substantiate the claims. More broadly, it requires them to have competent and reliable scientific evidence when making any other health-related product claims. It requires them to pay the FTC $85,000 and notify consumers of the Commission’s order.

In December 2020, the FTC announced its first law enforcement crackdown on deceptive claims in the growing market for cannabidiol (CBD) products. The Commission took action against six sellers of CBD-containing products for allegedly making a wide range of scientifically unsupported claims about their ability to treat serious health conditions, including cancer, heart disease, hypertension, Alzheimer’s disease, and others. A summary of the proposed orders settling the agency’s respective complaint is provided below. The FTC announced final approval of all six orders in March 2021.

Steves Distributing, LLC. The proposed administrative order prohibits the respondents from making certain prevention, treatment, or safety claims about dietary supplements, foods, and drugs, unless they have the human clinical testing to substantiate the claims. More broadly, it requires them to have competent and reliable scientific evidence when making any other health-related product claims. It requires the respondents to pay the FTC $75,000 and notify consumers of the Commission’s order.