#bumble | #tinder | #pof AD-ttorneys@law – July 2020 #3 | BakerHostetler

Bumble Settles over Multistate Dating Lawsuit

Company allegedly renewed services without consent

All the Young Dudes

For a while there, online dating was beginning to look IRLish. Like a singles bar overrun with boorish straight guys, some online dating apps developed a bit of a bad reputation. The rap on the apps? Men were coming to dominate online dating activity and were often indulging in sexist or outright abusive behavior.

Enter Whitney Wolfe, creator of Bumble, a dating app purportedly designed to address some of the malignant masculinity at play in the industry.

Bad Dates

Among heterosexual users, Bumble allows contact to be initiated only by women who reach out to men. Other features, such as photo verification, worked to trim fake profiles and eliminate ghosting. In short order, Bumble developed a large, highly engaged base of women users.

Despite its progressive vibe, Bumble has received some negative attention. In fall 2018, the company had a brush with a class action in the Southern District of New York alleging violations of New York’s Dating Services Law, with the plaintiff accusing Bumble of denying consumer refund requests. That case was dropped rather quickly, with both parties walking away before the year ended.

The Takeaway

But while the New York case was still breathing, another class action was launched in California’s Northern District alleging similar facts. In this case, the plaintiffs alleged violations of Cali’s Dating Service and Auto Renew codes. Bumble, the complaint read, adopted “uniform practices of renewing consumers’ subscriptions without their consent and knowledge, making it difficult for consumers to cancel their subscriptions, and denying refunds.”

The complaint was later amended to include accusations under New York’s Dating Services Law.

Again, the parties walked away from the suit, but not before hammering out a settlement. A nationwide class of dating service plaintiffs will receive somewhere between $21 and $44 for their pains; a class of California auto-renewal plaintiffs will receive between $43 and $85 for theirs. The deal, which has received preliminary approval, amounts to about $22.5 million. Bumble also agreed to a year-and-a-half injunction and promised to change its terms and conditions.

Federal Trade Commission Sends Social Media Bot Dossier to Congress

Report gives good background, but admits to FTC’s limitations

Chain of Events

By July 2020, when Congress received a report on “social media bots” from the Federal Trade Commission (FTC or Commission), the regulatory agency had already punished online social media influence company Devumi.

In October 2019, the Commission accused Devumi of “the sale of fake indicators of social media influence,” which are “important metrics that businesses and individuals use in making hiring, investing, purchasing, licensing, and viewing decisions.” According to the Commission, Devumi had sold tens of thousands of fake Twitter, YouTube, and LinkedIn accounts to customers who wanted a boost in their online popularity metrics. Specifically, they sold the services of these fake accounts, which could be used to react positively to the customer’s profile or posts.

The settlement wrapped up last year, hitting the company’s founder with a $2.5 million judgment and banning the enterprise from selling “social media influence to users of third-party social media platforms” and from making misrepresentations, or assisting others in doing so, “about the social media influence of any person or entity.”

Crusade Genealogy

But by the time the FTC launched its case against Devumi, celebrated as its “first-ever complaint challenging the sale of fake indicators of social media influence,” Devumi had already been given a whupping by New York Attorney General Letitia James and Florida Attorney General Ashley Moody for the same behavior. James’ investigation had kicked off in 2018. “[The] Attorney General … today announced a precedent-setting settlement over the sale of fake followers, ‘likes,’ and views on social media platforms, including Twitter and YouTube, using fake activity from false accounts,” her press release read. We covered that announcement back in the day. Surely the work of the attorneys general inspired the FTC.

But, of course, by the time the respective attorneys general began their investigation, they were drawing on an excellent report published in 2018 by The New York Times, which first uncovered Devumi’s illicit behavior.

Two and a half years after an exposé, Congress receives a report. Why didn’t Congress just buy a paper copy of the Times when the article came out and pass it around the floor?

If our take seems a tad cynical, it’s because we believe that fake online accounts are a pressing issue — they threaten the integrity of online advertising and the marketing community. It’s time for positive action in the form of proactive legislation — rather than a series of reactions like the ones that led to Congress’ curiosity about the issue and the resultant report that provides answers our representatives should have been familiar with in the first place.

The Takeaway

The report is fine, for the record. It’s exactly what the Senate Committee on Appropriations asked for: a description of “the growing social media bot market,” “the use of social media bots in online advertising” and “a discussion of how their use might constitute a deceptive practice.” There’s plenty of good information in the report, which is a truly short (five-page) summary.

But the last two pages are taken up with a reiteration of the Devumi case and slight references to three similar actions. The Commission does a fine job of demonstrating how these cases “apply the FTC’s clear but flexible mandate, as the nation’s consumer protection agency, to protect people from deceptive and unfair practices in the marketplace” and demonstrate the Commission’s ability to “adapt to changing business and consumer behavior as well as to new forms of advertising.”

But it also outlines its own limitations: “The Commission’s legal authority to counteract the spread of ‘bad’ social media bots is thus powered but also constrained by the FTC Act,” the FTC writes, “pursuant to which we would need to show in any given case that the use of such bots constitute a deceptive or unfair practice in or affecting commerce.” Each possible violation must be “analyzed on a case-by-case basis.”

The FTC ends the report with a promise to dig up these cases, but you don’t need a slice of lemon to reveal the invisible subtext: Picking off companies that abuse social media bots for fun and profit one at a time will not solve the problem. It’s up to Congress to develop proactive, systemic solutions.

Williams-Sonoma Inks Made-in-USA Settlement with the FTC

Company allegedly kept making claims despite promises to the Commish

Once upon a Mattress

It was the sort of stupid oversight that would cause any product manager to set their hair on fire.

Back in 2018, concerned consumers who purchased Pottery Barn Teen-branded mattress pads filed complaints with the FTC. According to their missives, the pads had been promoted by the company as “Crafted in America from local and imported materials.” Unfortunately, the annoying, wide-gauge tags attached to the pads said, clearly and in all caps, “Made in China.”

It was so straightforward a mistake that it may have provoked the FTC to feel pity for Williams-Sonoma, owner of Pottery Barn brands. The Commission closed its inquiry after Williams-Sonoma removed the offending origin claims, discovered that the mistake was “an isolated instance of human error” and made a commitment to “a multi-step verification process to prevent deceptive country-of-origin claims.”

That wasn’t so bad, was it?

Poking the Bear

Just a year later, however, the FTC received additional reports claiming that Williams-Sonoma brands “continued to disseminate advertisements and promotional materials, including through its website and social media platforms, which deceptively claimed certain categories of Williams-Sonoma products were all or virtually all made in the United States.”

Yikes.

The response was predictable (and understandable). In its complaint, lodged in its own docket, the Commission alleged that Williams-Sonoma had made deceptive made-in-the-USA (MUSA) claims about its Goldtouch Bakeware, Rejuvenation-branded lighting and hardware products, and Pottery Barn Teen- and Pottery Barn Kids-branded products. All the products in question, the Commission claimed, “are wholly imported, or contain significant imported materials or components.”

The Takeaway

There probably wasn’t much room for Williams-Sonoma to argue about the charges; when a MUSA complaint is filed by the FTC, the jig is more or less up. The agreed-to settlement carried a $1 million sting, a mandate barring the company from making unqualified made-in-the-USA claims without proof, and requirements of clear and conspicuous disclosure of the background of qualified claims.

Nonetheless, we want to know exactly how the initial human error occurred — and how further mistakes slipped by the company despite the promised verification process. Whatever happened to cause this double snafu should provide object lessons for marketers and product managers (and anyone caught in between).

Supreme Court Revs Up for Second TCPA Review

Circuit court chaos on autodialer definition will hopefully be tamed

Pinstripes Aflame

It’s hard to imagine the folks at the U.S. Chamber of Commerce flipping out about anything, but they’re probably losing it right now.

In 2018 and 2020, the Chamber, along with a number of other business association signatories, shot off letters to the Federal Communications Commission (FCC) asking for clarity — specifically, clarity on the definition of automatic telephone dialing systems (ATDS), a key component of the Telephone Consumer Protection Act (TCPA).

Why was this important to them? The petitioners claimed that TCPA lawsuits were increasing rapidly because the FCC, in a 2015 order, defined ATDS in an overly broad way. And they were sick of the lawsuits.

Hop into the DeLorean …

Now, to the definition — here’s what we wrote back in 2018 and 2020:

The [TCPA] defines ATDS to mean “equipment which has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator; and to dial such numbers.” The petition states that the Omnibus Order broadly defined “capacity” so that devices that might be modified in the future to store or generate numbers and dial them were subject to TCPA litigation, even if they were not currently configured to do so.

The petitioners urged the FCC to restore random or sequential dialing, not mere storage, to its pride of place as the Logos of TCPA interpretation.

Since then, the circuit courts have been chucking mud into the ATDS waters with alarming regularity, issuing a series of mutually opposing opinions. The individual cases are too numerous to detail here, but to summarize: The D.C. Circuit cut the order down to size in 2018; that same year, the Third Circuit killed off another TCPA class action; in October 2019, the Ninth Circuit expressed confusion over the act’s language and remanded a case relying on a more capacious understanding of ATDS technology; in January of this year, the Eleventh Circuit affirmed a lower court’s ruling that contradicted the Ninth’s.

But, after all this, it seems the long-suffering folks at the Chamber are finally getting what they’ve been waiting for, even if it isn’t coming from the FCC. Facebook v. Duguid, a TCPA class action that started off in California’s Northern District and rose to the Ninth Circuit Court of Appeals, was granted cert by the Supreme Court.

The Takeaway

In the original case, Facebook was sued under the TCPA by Noah Duguid for a series of text messages, although he claimed that he had never used Facebook or consented to the messages. The Ninth Circuit ruled in favor of an expansive definition of an ATDS, holding that Facebook’s texts were sent from an autodialer. Facebook took the case to the Supremes.

“[T]he Ninth Circuit adopted a counter-textual and expansive definition of an ATDS that encompasses any device that can store and automatically dial telephone numbers — even if that device cannot store or produce them ‘using a random or sequential number generator,’ as the statutory definition requires,” the Court wrote in its summary. “That holding — which conflicts with the Third and D.C. Circuits — sweeps into the TCPA’s prohibition almost any call or text made from any modern smartphone.”

The question before the Court: “Whether the definition of ATDS in the TCPA encompasses any device that can ‘store’ and ‘automatically dial’ telephone numbers, even if the device does not ‘us[e] a random or sequential number generator.’”

The long wait is over. Let’s hope the Court clears up the issue once and for all.

Plaintiffs Steamed over Made-in-USA Tea Claims

New class action calls out Bigelow for pushing unpatriotic tea

We’re Number … 35?!

We never really thought about it before — we’re coffee people, all right? — but the United States doesn’t really make tea.

We’re just not situated for it. According to Tea Association of the U.S.A., most tea is produced 3,000-7,000 feet above sea level in regions “situated between the Tropics of Cancer and Capricorn in mineral-rich and acidic soil.”

We’re as “America #1!!!” as the next guy, but the rest of the world wins this one.

American Bucolic

Except … there is one tea plantation in the United States. The Charleston Tea Plantation (CTG), located in Charleston, South Carolina, is a storied enterprise with roots going back to the 18th century; its most recent owner, Bigelow Tea Co., purchased its share in 2003. It’s a beautiful property — check it out.

Now, just because Bigelow owns the tea garden doesn’t mean it uses the tea that’s grown there for its own products. CTG has its own brand lines, as its FAQ attests: “Bigelow Teas are not made from any of the tea leaves grown or harvested here at the Charleston Tea Plantation. Charleston Tea Plantation Teas are the only teas made from the tea leaves produced by the Camellia Sinensis plants grown in the fields of the Charleston Tea Plantation.”

The Takeaway

That sentence — along with several others made by CTG and Bigelow itself — landed Bigelow its own class action suit.

According to a complaint filed in California’s Central District in mid-July, Bigelow has been slapping Made-in-the-USA claims on its packaging, despite the fact that it does not use the tea made on the only plantation in the country. The alleged offending tags are straightforward: “Manufactured in the USA 100% American family owned” and “America’s classic.”

The individual charges are as diverse as Bigelow’s tea brands and include several California state code violations under the California Consumer Legal Remedies Act, False Advertising Law, Unfair Competition Law, and Breach of Express and Implied Warranty.

Bigelow has yet to respond in the docket.

It is interesting to note that many of the links to CTG’s various pages provided in the complaint are anchored at a different domain name — charlestonteaplantation.com. While these links now resolve to pages on CTG’s website, the change may be a response to the suit.

We’ll keep you posted.

Check Out Our Latest Blog Posts

DOJ Takes a Stance on Section 230 Reform that Could Place Additional Burdens on Online Platforms

The Department of Justice recently outlined proposed reforms to Section 230 of the Communications Decency Act of 1996. Section 230 has been in place since the early days of the Internet and protects online platforms from liability for certain third-party posts. It has recently become a point of contention between Big Tech and the Trump Administration. Read more here.

Context Matters: An ‘Established Business Relationship’ Can Be Created During a ‘Telephone Solicitation,’ Thus Preventing Subsequent Calls from Violating the TCPA

A federal court has ruled that an “established business relationship” can be created during a call, even if that call is a “telephone solicitation” that violates the Telephone Consumer Protection Act (TCPA). Charvat v. Southard Corp., No. 2:18-cv-190 (S.D. Ohio). Read more here.


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