Legal Library: Cases and Proceedings

The Federal Trade Commission has brought lawsuits against three current and former high-level distributors – so-called “Wellness Advocates” – of the Utah-based multi-level marketing company doTERRA International, LLC, for making claims that the company’s essential oils and dietary supplements could treat, prevent, or cure COVID-19. The distributors, all current or former healthcare practitioners, made the claims in a series of webinars in early 2022 and touted their medical expertise in recommending the products.

The three complaints, filed by the Department of Justice on behalf of the FTC, allege that the defendants made numerous claims about the ability of various doTERRA products to prevent, treat, or cure COVID-19, in violation of the FTC Act and the COVID-19 Consumer Protection Act.

The Federal Trade Commission has brought lawsuits against three current and former high-level distributors – so-called “Wellness Advocates” – of the Utah-based multi-level marketing company doTERRA International, LLC, for making claims that the company’s essential oils and dietary supplements could treat, prevent, or cure COVID-19. The distributors, all current or former healthcare practitioners, made the claims in a series of webinars in early 2022 and touted their medical expertise in recommending the products.

The three complaints, filed by the Department of Justice on behalf of the FTC, allege that the defendants made numerous claims about the ability of various doTERRA products to prevent, treat, or cure COVID-19, in violation of the FTC Act and the COVID-19 Consumer Protection Act.

The Federal Trade Commission has brought lawsuits against three current and former high-level distributors – so-called “Wellness Advocates” – of the Utah-based multi-level marketing company doTERRA International, LLC, for making claims that the company’s essential oils and dietary supplements could treat, prevent, or cure COVID-19. The distributors, all current or former healthcare practitioners, made the claims in a series of webinars in early 2022 and touted their medical expertise in recommending the products.

The three complaints, filed by the Department of Justice on behalf of the FTC, allege that the defendants made numerous claims about the ability of various doTERRA products to prevent, treat, or cure COVID-19, in violation of the FTC Act and the COVID-19 Consumer Protection Act.

In November 2022, the FTC and seven state attorneys general sued Google LLC and iHeartMedia, Inc. for airing nearly 29,000 deceptive endorsements by radio personalities promoting their use of and experience with Google’s Pixel 4 phone in 2019 and 2020. The proposed FTC orders and the state judgments settling the allegations bar Google and iHeartMedia from similar misrepresentations, and the state judgments also require them to pay $9.4 million in penalties.

The Federal Trade Commission is taking action against the online alcohol marketplace Drizly and its CEO James Cory Rellas over allegations that the company’s security failures led to a data breach exposing the personal information of about 2.5 million consumers.

The Federal Trade Commission sued Superior Products International II, Inc., and its principal Joseph Pritchett, alleging they make false or unsubstantiated R-value and energy savings claims about their architectural coatings products. In July 2020, the FTC sued four companies that sell paint products used to coat buildings and homes, alleging that they deceived consumers about their products’ insulation and energy-savings capabilities. In complaints filed in federal court, the FTC charged that the companies falsely overstated the R-value ratings of the coatings, making deceptive statements about heat flow and insulating power.  The FTC announced a summary judgment against the defendants in November 2022.

The Federal Trade Commission sued Electrowarmth Products, LLC and its owner, Daniel W. Grindle, alleging that they falsely claimed the heated fabric mattress pads they sell for truck bunks were made in the USA. The FTC charged Grindle and Electrowarmth with violating the Textile Act and the Federal Trade Commission Act. According to the complaint, Grindle and Electrowarmth violated these acts by labeling and advertising the origin of the textiles used in their products as the United States, when these textile fiber products were wholly imported from China. The proposed order prohibits Grindle and Electrowarmth from making any country-of-origin claim about a product or service unless the claim is not misleading and they have a reasonable basis that substantiates their claim. It also requires Grindle and Electrowarmth to make certain disclosures about the country of origin of any product subject to the Textile Fiber Products Identification Act, and to provide compliance reports. The FTC announced approval of the final order in October 2022.

The FTC sued Harley-Davidson and Westinghouse outdoor generator maker MWE Investments, LLC for illegally restricting customers’ right to repair their purchased products. The complaints charge that the companies’ warranties included terms that conveyed the warranty is void if customers use independent dealers for parts or repairs. The FTC ordered the companies to fix warranties by removing illegal terms and recognizing the right to repair.

The FTC sued Harley-Davidson and Westinghouse outdoor generator maker MWE Investments, LLC for illegally restricting customers’ right to repair their purchased products. The complaints charge that the companies’ warranties included terms that conveyed the warranty is void if customers use independent dealers for parts or repairs. The FTC ordered the companies to fix warranties by removing illegal terms and recognizing the right to repair.

The FTC imposed strict limits on JAB Consumer Partners’ future acquisitions of specialty and emergency veterinary clinics as a condition of JAB’s proposed $1.65 billion acquisition of VIPW, LLC, the parent of Ethos, an owner and operator of specialty and emergency veterinary clinics. The Commission alleged that the acquisition was likely to be anticompetitive in four geographic markets, ordering divestitures for various types of veterinary care in and around Richmond, Virginia, in and around the Washington DC Metro Area, particularly for customers to the southeast in Virginia and Maryland, in and around Denver, Colorado, and in and around downtown San Francisco, California. The Commission finalized the order in October 2022.

In October 2022, a Latvian payment processor and its former CEO agreed to settle the FTC’s complaint against them. The complaint alleged that they engaged in unlawful conduct that enabled a deceptive “free trial” offer scheme by U.S.-based defendants. In September 2024, the FTC returned more than $2.8 million to consumer deceived by the scheme.

The Federal Trade Commission filed suit against the operators of the online store Glowyy for failing to deliver on promises that they could quickly ship products like face masks, sanitizer, and other personal protective equipment (PPE) related to the coronavirus pandemic.

The lawsuit alleges that the company violated the FTC’s Mail, Internet and Telephone Order Rule (Mail Order Rule), which requires that companies notify consumers of shipping delays in a timely manner and give consumers the chance to cancel orders and receive prompt refunds.

The Federal Trade Commission referred a complaint to the Department of Justice alleging that Adam J. Harmon and two companies he controls falsely told consumers that personal protective equipment they marketed during the pandemic, as well as light fixtures they sold, were made in the United States. The complaint alleged that Harmon and ALG made numerous false and misleading claims that their PPE products were all or virtually all made in the United States, even though the products were wholly imported, or incorporated significant imported materials or subcomponents. The defendants also falsely stated that their products were U.S.-origin respirators, certified by the National Institute for Occupational Safety (NIOSH). Under the proposed order, Harmon and his companies must: stop making deceptive U.S.-origin labeling and advertising claims, provide substantiation for all Made in USA and COVID-19-related claims, and pay a $157.683.37 civil penalty.

In May 2021, the FTC filed a complaint against Kushly Industries LLC and its CEO, Cody Alt, for allegedly marketing products containing cannabidiol (CBD) using unsubstantiated health and establishment claims. According to the complaint Kushly sold a variety of CBD products to the public through its website, kushly.com, and social media platforms from January 2019 to August 2020. The FTC order announced at the same time as the complaint banned the company and Alt from the alleged illegal conduct. The Commission approved the final order in July 2021. In August 2022, the FTC announced it was returning almost $21,000 to defrauded consumers.

In September 2019, the FTC announced a complaint against the operators of two student loan debt relief schemes, and a financing company that assisted them, with bilking millions of dollars from consumers. The FTC alleged Manhattan Beach Ventures and Equitable Acceptance Corporation and Student Advocates Team, and the financing company that assisted them illegally charged upfront fees that the companies led consumers to believe went towards their student loans, and falsely promised that their services would permanently lower or even eliminate their loan payments or balances. On August 18, 2022, the FTC it was sending more than $822,000 back to defrauded consumers.