Sherwin-Williams and PPG Settle FTC Charges That They Misled Consumers to Believe Their Paints Were Free of Potentially Harmful Volatile Organic Compounds

 

The Sherwin-Williams Company and PPG Architectural Finishes, Inc., have agreed to settle Federal Trade Commission charges that they misled consumers to believe that some of their paints are free of potentially harmful chemicals known as volatile organic compounds (VOCs).

The two companies agreed to settlements with the FTC requiring them to stop making the allegedly deceptive claim that their Dutch Boy Refresh and Pure Performance interior paints, respectively, contain “zero” volatile organic compounds.  According to the agency, while this may be true for the uncolored “base” paints, it is not true for tinted paint, which typically has much higher levels of the compounds, and which consumers usually buy.

VOCs are carbon-containing compounds that easily evaporate at room temperatures.  Some VOCs can be harmful to human health and the environment.  Historically interior paints, which are the subject of the FTC’s cases against Sherwin-Williams and PPG, have contained significant levels of VOCs.

The FTC’s administrative complaints against Sherwin-Williams and PPG charge the companies with violating the FTC Act by making false and unsubstantiated claims that that their paints contain “zero VOCs” after tinting.

Sherwin-Williams and PPG make their “zero-VOC” claims through a variety of media, including brochures, point-of-purchase marketing, product labels, and the Internet.  Some of these materials are disseminated to independent distributors.  The FTC contends that consumers likely reasonably interpret the companies’ “zero-VOC” claims as applying to the final product – tinted paint, which is made by adding color to a base paint to produce the final color the customer desires; and that they understand the claims to mean that the paint has no VOCs or only a “trace amount” of VOCs.

According to the FTC, however, in many instances, both Sherwin-Williams’s Dutch Boy Refresh and PPG’s Pure Performance paints contain more than trace levels of VOCs after the base paint is tinted. The complaints also charge the companies with distributing promotional materials that provided independent retailers with the means to deceptively advertise that the companies’ paints contain zero VOCs.

The proposed consent orders settling the FTC’s charges are the same for both Sherwin-Williams and PPG.  First, they prohibit the companies from claiming that their paints contain “zero VOCs,” unless, after tinting, they have a VOC level of zero grams per liter, or the companies have competent and reliable scientific evidence that the paint contains no more than trace levels of VOCs.  The definition of “trace” comes from the “trace amount” test included in the FTC’s recently released updated Green Guides for environmental marketing claims.

Alternately, the orders would allow the companies to clearly and prominently disclose that the “zero VOC” claims apply only to the base paint, and that depending on the consumer’s color choice, the VOC level may rise.  In cases where the tinted paint’s VOC level could be 50 grams per liter or more, the proposed orders require the companies to disclose that the VOC level may increase “significantly” or “up to [the highest possible VOC level after tinting].”  In addition, the orders prohibit the companies from making any VOC claim or other environmental claim unless it is true and not misleading, and unless the companies have competent scientific evidence to back it up.

Finally, the proposed orders prohibit both Sherwin-Williams and PPG from providing anyone, including independent retailers or distributors, with the means of making any of the prohibited deceptive claims.  The orders also would require the companies to send letters to retailers requiring them to remove all ads for the covered paints that have “zero VOC” claims and putting corrective stickers on current paint cans making these claims.

 

Information for Consumers and Business

According to the recently revised Green Guides to environmental marketing, which the FTC issued earlier this month, companies sometimes claim that their products are “free of” a chemical or other ingredient that may be an environmental concern.  When marketers say a product is “free of” an ingredient, the product must not contain the ingredient or have only a trace amount.  The “trace amount” test is met if:  1) the level of the ingredient is less than that which would be found as an acknowledged trace contaminant or background level; 2) the ingredient’s presence does not cause material harm that consumers typically associate with it; and 3) the ingredient has not been added intentionally.

 

The FTC has a new consumer education publication called “Before You Buy Paint” that specifically addresses “free of” claims as related to paint products. Other information about shopping green can be found on the FTC’s website, including a post on the agency’s Business Blog page.

Dr Pepper Snapple named in class action and accused of misleading consumers

Dr Pepper Snapple Group Inc, the maker of 7UP, was sued on Thursday for allegedly misleading consumers over the supposed health benefits of an antioxidant it uses in some varieties of the soft drink.

The Center for Science in the Public Interest, an advocacy group for food safety and nutrition, said the company’s advertising and packaging suggest that the drinks contain antioxidants from blackberries, cherries, cranberries, pomegranates and raspberries, rather than added Vitamin E.

According to the National Cancer Institute, antioxidants help protect cells from damage caused by free radicals, which are unstable molecules associated with cancer

As alleged in the complaint, in December 2008, the U.S. Food and Drug Administration objected to labeling in which Coca-Cola Co described its now-discontinued Diet Coke Plus drink as “Diet Coke with Vitamins & Minerals.” The FDA told the world’s largest soft-drink maker it “does not consider it appropriate to fortify snack foods such as carbonated beverages.”

Dr Pepper Snapple launched 7UP Cherry Antioxidant in 2009. It also sells a diet version of that product, as well as 7UP Mixed Berry Antioxidant and Diet 7UP Mixed Berry Antioxidant.

Pennsylvania Mutual Life Insurance Company named in class action for failure to pay full amount of annual policy dividends

 

The class action lawsuit was brought on behalf of a class of participating (or “par”) policyholders of Defendant Pennsylvania Mutual Life Insurance Company (“Penn Mutual” or the “Company”) and seeks damages and/or equitable relief for Penn Mutual’s breaches of contract, including the implied covenants of good faith and fair dealing, and for violations of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (the “Consumer Protection Law”) for its alleged deceptive acts or practices, for failing to pay the full amount of annual policy dividends out of divisible surplus that are due to Plaintiffs and the Class under their contracts, which divisible surplus includes all surplus (or profits) in excess of the maximum limit defined by 40 P.S. § 614 (the “excess surplus”)

Lancome sued for false advertising of anti-aging creams and serums

The class action lawsuit alleges that Lancome engaged in a pattern of unfair, untrue, and misleading advertising, marketing, and sales practices in regards to its anti-aging creams and serums marketed under the trade names: “Genifique, “Renergie, “Absolue.” “Visionnarie, and “High Resolution” (collectively “Lancome Anti-Aging Products”).

As alleged in the complaint, Lancome earned substantial profits by misleading Plaintiff and members of the Class with various claims, including but not limited to the following: Genifique “boots the activity of genes and stimulates the production of youth proteins;” and promising “visibly younger skin in 7 days.” Such statements are made across the Lancome anti-aging product line.

Defendants misleadingly assert that their products are superior over lesser-priced wrinkle creams are based on purported breakthrough scientific discoveries of unique formulas that penetrate deeply into skin and turn back the hands of time and boost the activity of the consumer’s genes.

On September 7, 2012, the Food & Drug Administration (“FDA”) issued a warning letter to Lancome

Based on [our] review, your products Genifique Youth Activating Concentrate, Genefique [sic] Eye Youth Activating Eye Concentrate, Genefique Cream Serum Youth Activating Cream Serum, Genifique Repair Youth Activating Nigh Cream, Absolue Precious Cells Advanced Regenerating and Reconstructing Cream SPF 15 Sunscreen, Absolue Eye Precious Cells Advanced Regenerating and Reconstructing Eye Cream, Absolue Night Precious Cells Advanced Regenerating and Reconstructing Night Cream, and Renergie Microlift Eye R.A.R.E Intense Repositioning Eye Lifter appear to be promoted for uses that cause these products to be drugs under section 201(g)(1)(C) of the Federal Food, Drug, and Cosmetic Act (the Act) [21 U.S.0 §321(g)(1)(C)].

Defendants’ misleading conduct has resulted in consumers paying a premium price for Defendants’ products. There are readily available moisturizers and creams sold for substantially lower prices that Plaintiff and the proposed Class did not purchase because they were misled to believe Defendants’ Lancome Anti-Aging Products provide a unique benefit and results over the lower priced creams and serums.

In reality, however, upon information and belief, Defendants’ products contain substantially the same ingredients and provide no superior results or benefits when compared to  the lower priced creams and serums. Thus, Defendants have engorged themselves with profits based upon their untrue and misleading practices to the detriment of consumers.

Ford named in class action over defects in the continuously variable transmissions of the Freestyle and Mercury Montego

The class action lawsuit was brought on behalf all persons in the United States who purchased or leased, not for resale, any 2005 through 2007 Ford Freestyle or 2005 through 2001 Mercury Montego vehicles equipped with a continuously variable transmission (“CVT” or “CVT Transmission manufactured, distributed, and sold by Ford Motor Company (Defendant”)

As alleged in the complaint, beginning in 2005 Defendant knew or should have known that the Class Vehicles and their CVT Transmission contain one or more design and manufacturing defects that causes them to prematurely breakdown and suffer mechanical failure (”the CVT Defect” or “CVT Transmission Defect”).

A continuously variable transmission is a type of automatic transmission that allegedly provides more useable power, better fuel economy and a smoother driving experience than a traditional automatic transmission. Unlike traditional transmissions, a continuously variable transmission uses a system of pulleys with metal belt or chain running between them which enables the engine to run at its most efficient revolutions per minute (RPM) for a range of vehicle speeds.

When premature breakdown and mechanical failure occurs, the affected Class Vehicles are no longer safe to operate and require repairs costing thousands of dollars.  Furthermore, due to the nature of the CVT Transmission Defect, consumers have frequently experienced and will continue to experience unexpected and premature CVT Transmission failure while driving. CVT Transmission failure while driving results in unsafe conditions, including but not limited to loss of forward propulsion, significant delays in acceleration, loud noises coming from the CVT Transmission, Class Vehicles operating in emergency running mode, drivers receiving error messages, stalling, and the inability to use the reverse gear.

These conditions present safety hazard due to the sudden and unexpected transmission failure that Class Vehicles can experience while in operation. The Class Vehicles and their CVT Transmissions can fail, suddenly and unexpectedly, at any time and 4 under any driving condition or speed. Further, sudden loss of forward propulsion and delayed acceleration can have serious effects on handling, stability, acceleration, and maintenance of speed. These conditions and risks can thereby contribute to traffic accidents which can result in personal injury or death.

As alleged, since 2005, Ford has known that the CVT Transmissions were defectively designed, assembled, and manufactured. Rather than alerting Class Members of this safety hazard and offering to repair the Class Vehicles, Ford has concealed this problem from its customers at the time of purchase or lease and thereafter.

Because Ford will not notify Class Members that the CVT Transmission is defective, Plaintiff and Class Members (as well as members of the general public) are subjected to dangerous driving conditions that often occur without warning. As a result of the CVT Transmission Defect, Ford, through its dealers, has also profited by selling replacement parts to Class Members.

As a result of the CVT Transmission Defect contained in the Vehicles, Plaintiff and the Class Members have been harmed and have suffered actual damages in that the Class Vehicles and their CVT Transmissions have failed or are substantially certain to fail during their expected useful life.

See the Complaint here: Ford CVT

BMW named in class action over alleged failure of “Shift-by-Wire” gearshift systems

BMW 7-Series automobiles, model years 2002-2008 (the “Vehicles”) have push-buttons (“Start/Stop” button) to control starting and stopping the engine, and “Shift-by-Wire” gearshift systems controlled by a lever behind the steering wheel. Shift-by-Wire gearshift systems replace the traditional mechanical connection (e.g., cable or linkage) between the gearshift and automatic transmission with n electronic connection controlled by a computer module. The computer module is also referred to by BMW as a “serial bus system.”

As alleged in the complaint, the Shift-by-Wire system is a component of the overall electronically controlled transmission system of the Vehicles. The Vehicles’ electronically controlled automatic transmission system is designed to automatically shift the Vehicle into Park under a variety of conditions, including after the driver has pressed the “Start/Stop” button to turn the engine off, and when the “Park” button on the gearshift lever has been engaged.

Additionally, a subset of these Vehicles was equipped with a “Comfort Access System,” (“CAS”), which allows a driver to start the Vehicle without inserting the key device into the ignition; instead the CAS remotely senses the presence of the key device and enables the “Start/Stop” button. The key device can then be inserted into the ignition, or not, at the driver’s option.

Many consumers have reported problems with the Vehicles’ electronically controlled transmission system. For example, after pressing the “Start/Stop” button to turn the engine off, the Vehicle appears to be in Park but, in fact, remains in Neutral and, in some instances, shifts into Reverse and the Vehicle starts to roll away after the driver has exited believing that the Vehicle is in Park.

There are approximately 122,000 BMW 7-Series model year 2002-2008 automobiles equipped with “Start/Stop” buttons and “Shift-by-Wire” gearshift systems which are at risk for the rollaway problem because of BMW’s defective electronically controlled transmission system. An estimated subset of 45,000 of these Vehicles were equipped with CAS. The issue is so significant that the Office of Defect Investigations (“ODI”) of the National Highway Transportation Administration (“NHTSA”) opened a Preliminary Evaluation in August 2011 (NHTSA Action Number PE 11-025), which was recently upgraded to an Engineering Analysis in April 2012 (NHTSA Action Number EA12-002), to further study the problem. According to the NHTSA issued investigation summary (the “NHTSA Report”), the agency has reviewed more than 50 complaints about the problem, including reports of at least sixteen crashes, with at least five crashes resulting in injuries.

CLASS:  All persons or entities who purchased or leased new or used model year 2002-2008 BMW 7-Series vehicles (“the Vehicles”) between the period 2001 through the present that are equipped with push-button ignition and electronically controlled transmission system with a “Shift-by-Wire” gearshift system.

Capital One Bank named in class action over alleged deceptive practices regarding “0%” balance transfer offers

The class action lawsuit was brought by credit card holders of Capital One Bank (USA), N.A. (“Cap One”) seeking redress for the damages caused by Cap One’s breach of its standard form cardholder agreements, and its deceptive representations and omissions surrounding its “0%” balance transfer offers.

As alleged, prior to the point in time when a Cap One cardholder accepts a Cap One balance transfer offer (which are further described below), the cardholder receives a monthly account statement from Cap One which, among other things, identifies a cardholder’s “New Balance.” The New Balance is comprised of several components, including any purchases made during that month (“new purchases”), any outstanding balance left from the previous month, and any interest charges or other fees.

Under the terms of Cap One’s standard form customer agreement, Cap One cardholders have 25 days after the close of each billing cycle in which to pay their New Balance without incurring interest on new purchases made during that billing cycle. This 25-day period is referred to as the “Grace Period” in Cap One’s standard cardholder agreements. If the cardholder pays the New Balance in full within the Grace Period, the contract specifies that the cardholder will not be assessed interest, and no interest charges will appear on the cardholder’s next monthly statement. For cardholders who regularly pay their monthly statements in full, the amount of their purchases during that month (“new purchases”) and their New Balances will be the same. Such cardholders will never incur a monthly interest charge as long as they continue to pay their New Balance each month.

Conversely, the cardholder agreement provides that cardholders who pay less than their New Balance within the Grace Period will be charged interest. Such interest charges will show up on the cardholder’s next monthly statement.

Cap One monthly statements contain a chart listing various segments of the total balance owed on the cardholder’s account. One segment in this chart shows the “purchase balance subject to interest rate” (“purchase balance”). The “purchase balance” is the cumulative total of new purchases that were not paid in full when due, plus interest and fees, and less payments. Cardholders who regularly pay their accounts in full and on time will have a zero purchase balance, and accordingly, will not be assessed interest. Cardholders who do not pay their accounts in full will be charged interest on the entire amount of their purchase balance.

Numerous times every year, Cap One solicits its cardholder base to take 0% balance transfers. Cap One markets the balance transfers as a “chance to save” – a means for the cardholder to pay offhigher interest loans owed to other creditors. Cap One promises that these balance transfers will carry 0% interest for six or twelve months. To accept a balance transfer offer, all a cardholder has to do is use one of the “convenience checks” which corne attached to the offer. Cap One promises that it will segregate the transferred balance from other segments of the cardholder’s account. The balance transfer comes at a cost: Cap One charges the cardholder a fee of2%-3% of the total balance transferred.

Unbeknownst to Plaintiff and Classes, however, once a cardholder accepts Cap One’s “0% interest” balance transfer offer, Cap One unilaterally, and in breach of the cardholder agreement, eliminates the Grace Period and begins charging interest on all new purchases from the date of the balance transfer forward.

Cap One did not disclose that it would eliminate the Grace Period for cardholders who accepted Cap One’s 0% balance transfer offers and subject them to high interest charges. Cap One did not disclose that the only way for these cardholders to avoid interest charges on new purchases once they accepted a 0% balance transfer offer was to pay the full amount of these purchases plus the full amount of the balance transfer – in the same month that the cardholder accepted the balance transfer, even though the promotional period on the 0% offer was for 6 or 12 months. Cap One did not disclose that, by accepting the 0% offer, customers would be put to the choice of either paying interest on their new purchases, thereby losing the benefit of the Grace Period; or, immediately repaying the transferred balance in full, thereby losing the benefit of the balance transfer (for which the cardholder paid a 2%-3% fee). Contrary to the simple “chance to save” that Cap One represented the balance transfer would provide, and that cardholders paid for, many cardholders who accepted these offers found themselves worse off than they were beforehand.

This unilateral elimination of the Grace Period upon accepting Cap One’s 0% promotional balance transfer offer violates the cardholder agreement. Further, by unilaterally changing the terms regarding repayment of outstanding balances, Cap One violated the federalCredit Card Accountability, Responsibility and Disclosure Act (“CARD Act”).

This was not the only way in which Cap One violated the CARD Act through its balance transfer offers. Under the CARD Act, credit card companies are required to apply any  amount over the cardholder’s minimum payment to card balances subject to higher interest rates, before they apply any portion of the payment to lower interest balances. Here, however, Cap One allocated amounts above a cardholder’s minimum payment to the 0% transferred balance segment, instead of to segments carrying a higher interest rate. This practice violated the CARD Act.

As a result of Cap One’s breach of the cardholder agreement, Plaintiff and the Classes were subjected to unnecessary interest charges and paid fees to Cap One to transfer balances for a benefit they did not receive.

Class:  All Cap One cardholders with addresses in the United States who paid a fee for a 0% balance transfer pursuant to a Cap One balance transfer promotion, who were later charged interest on new purchases during the promotional period, despite paying their new purchases or purchase balances in full.

Vital Pharmaceuticals, Inc, named in class action over deceptive marketing practices of its energy supplements

Vital Pharmaceuticals sells a variety of energy supplements under the brand name of Redline® (the “Product”), which, as alleged in the complaint, are dangerous, sold pursuant to deceptive and unfair practices, and not fit for their intended purpose.

The Product is intended to safely provide energy. However, it instead causes adverse health effects. Plaintiff, and all other similarly situated consumers, did not bargain for adverse health effects in exchange for their payment of the purchase price.

Several adverse reactions have been reported from consumers who have purchased and ingested the Product, including, but not limited to, chills, excessive sweating, vomiting, convulsions, chest pain, and rapid heartbeat. Consumers of the Product, including Plaintiff, have been hospitalized after consuming the Product.

Defendant had and has actual knowledge of the Product’s shortcomings, but has failed to act to adequately warn consumers of the unfitness of the Product, the extreme adverse side effects associated with the Product, or provide adequate relief to the putative Class of consumers who purchased the Product.

Plaintiff contends that the Product does not work as impliedly warranted and as a result, misleads consumes into purchasing it under fraudulent circumstances.

Class: All United States persons who, within the applicable statute of limitations purchased the REDLINE® Product, for personal use and not resale.

General Mills named in class action over sale of foods containing Genetically Modified Organisms

According to the complaint, Defendant General Mills has made false, misleading statements that are likely to deceive reasonable consumers.

Defendant has mistakenly or misleadingly represented that its Nature Valley® granola bars are “100% Natural” (the “Product”), when in fact, they are not, because they contain Genetically Modified Organisms (“GMOs”).

Defendant manufacturers, markets, advertises, and sells the Product in at least thirty (30) different varieties/flavors, including, but not limited to the following varieties, which contain GMOs in the form of Yellow Corn Flour, Soy Flour, and/or Soy Lecithin: a) Nature Valley® Dark Chocolate Peanut Butter Crunchy granola bars; and  b) Nature Valley® Oats and Honey Crunchy granola bars.

The labeling and packaging for Defendant’s Nature Valley® Dark Chocolate Peanut Butter Crunchy Granola Bars, shows the “100% Natural statement and the GMO based ingredients as Yellow Corn Flour, Soy Flour, and/or Soy Lecithin.

The labeling and packaging for Defendant’s Nature Valley® Oats and Honey Crunchy Granola Bars, shows the “100% Natural statement and the GMO based ingredients as Yellow Corn Flour, Soy Flour, and/or Soy Lecithin.

Defendant’s “100% Natural” statement prominently displayed on the Product’s packaging and/or labeling is false, misleading, and likely to deceive reasonable consumers, such as Plaintiff and members of the Class, because the Product is not “100% Natural,” due to the presence of GMOs in the Product.

GMOs are plants that grow from seeds in which DNA splicing has been used to place genes from another source into a plant. Contrary to Defendant’s express or implied representations, the Product uses plants or plant derivatives grown or created from GMOs.

Arctic Zero named in class action for allegedly misrepresenting calorie count in frozen desserts.

This action seeks to remedy the unfair, deceptive, and unlawful business practices of Arctic Zero arising from the marketing and sales of Arctic Zero-brand frozen desserts (the “Products”) from 2009 to the present (the “Class Period”).

Arctic Zero manufactures, sells, and distributes the Products using a marketing and advertising campaign that is centered around claims that the Products contain all natural ingredients and are ultra-low calorie (150 calories per pint and 85 calories per bar).

As alleged, Arctic Zero’s advertising and marketing campaign is false and misleading because the Products contain as many as double the calories advertised and unnatural synthetic ingredients.

Plaintiff relied on Defendant’s misrepresentations that the Products are ultra-low calorie and contained only natural ingredients when purchasing the Products in California, Utah, and Colorado. Based on Defendant’s misrepresentations, Plaintiff and the Class were induced into paying a premium price for non-premium products. By relying on the representations that the Products contain all natural ingredients and are ultra-low calorie,

Plaintiff suffered injury by purchasing the Products at inflated premium prices. Plaintiff did not receive the benefit of the bargain when she purchased the Products. Instead, she received a product that, in direct contradiction to Defendant’s representations, contained as many as two times the calories advertised and unnatural synthetic ingredients.

On August 20, 2012, the Today Show’s National Investigative Correspondent, Jeff Rossen, reported the results of a number of low calorie desserts the Today Show had tested for caloric content at EMSL Analytical, Inc. (“EMSL”), a food laboratory. The show tested Vanilla Maple and Chocolate Peanut Butter flavored pints of Arctic Zero and found the products contained far more calories than reported on the nutrition facts and PDP. The Vanilla Maple flavor had 46% more calories than advertised, and the Chocolate Peanut Butter flavor had 68% more calories than advertised.