Lawyers who cited fake AI cases face some real sanctions this time:

-Disqualified from the case

-Ordered to provide copy of sanctions order to all
clients, opposing counsel, and judge in every pending case and every attorney in their firm

-Referred to state bar for discipline. The order is chock full of good quotes from the court:

"[Making up citations] demands substantially greater accountability than the reprimands and modest fines that have become common as courts confront this form of AI misuse."

Elon Musk was sued today in a class action brought by signers of his America PAC petition "giveaway."

They say Elon fraudulently advertised that winners would be chosen randomly, when really they were pre-selected. They allege that signers provided personal information as consideration for participating in the lottery, which was not conducted as promised, and that Musk benefited from the collection of personal information for political and commercial use.

Marketers: you should not discuss legal/regulatory issues by email without including counsel on those emails.

Here's an example of how this can go wrong:

Bayer is facing a false advertising class action about One-A-Day multivitamins, which it advertised as being "natural."

1/ Plaintiffs say the products are not "natural" because they include ingredients like D-biotin, and potassium iodide.

Bayer could not dismiss the claims, and last week, the court certified the class.

You can have the best-drafted Terms of Service in the world, but if they just sit passively at the bottom of your site, you will not be able to enforce them.

It's as if you had no terms at all.

For ecom brands, the TOS is your first line of defense against consumer lawsuits. 1/ Having badly drafted and insufficiently presented terms is the biggest and most common mistake I see online brands make.

That's primarily because, done correctly, you can completely eliminate class action exposure.

Today, Hershey's was sued in a false advertising class action.

Florida consumers say they were deceived because Reese's pumpkins don't actually have jack-o-lantern faces on them: Same for the ghosts, bats, and footballs:

Valve is suing a law firm that it accuses of coordinating a fraudulent mass arbitration scheme to force big settlements by leveraging astronomical arbitration filing fees.

The complaint includes a leaked presentation from the law firm to litigation funders.

Posted in full below I will include each slide in order here, but the gist is this:

Business prefer individual arbitration as an alternative to dealing with class actions. Or at least they usually do.

Here is the lawsuit Nina Agdal filed against Dillon Danis today. Let's take a look: She's suing under the federal revenge porn statute for posting a photo of her "depicting full frontal nudity" as part of a "campaign of cyber harassment":

Where's the beef?

Burger King can't dismiss a false advertising case over its Whopper pictures.

Consumers alleged they wouldn't have bought the Whoppers if they knew the real beef amount.

Today, the court denied Burger King's bid to end the case early.

Let's take a look: Burger King argued that food in ads "has always been styled to make it look as appetizing as possible."

"That is hardly news; reasonable consumers viewing food advertising know it innately."

The court didn't buy it:

Today, the FTC announced updates to its Endorsement Guides (the rules about disclosing connections between creators and brands).

I will go through the new additions in more detail in another thread, but here are a few specific Q&A examples from the FTC that jumped out at me: 🧵 Adding #ad or similar disclosure in the caption of a TikTok is not enough; it needs to be overlaid in the video itself:

Fake guru and pyramid schemer Jay Noland must pay $7.3M in an FTC case alleging he wouldn't stop pyramid scheming.

Noland claimed he was a multi-millionaire, but the court found "he had a negative net worth" and "was unable to identify a time he ever had a positive net worth." Noland illegally ran 2 pyramid schemes, called Success By Health and VOZ travel.

He told the public they could make "more than $1 million each month" following his system.

Unsurprisingly, "very few consumers consumers made any money, and most lost significant sums."

When does trolling go too far?

When, like Joseph Bourabah, you're charged with cyberstalking.

Among other things, Bourabah harassed his victims by creating fake Eventbrite events at their homes.

Evidence in the case includes this meme he posted (with his own face) to his FB: The US Attorney's Office says that over 18 months, Bourabah committed over 1,000 acts of online harassment against 31 victims, including by creating fake Craigslist ads offering free items and pets for sale (which were taken), and hiring unwanted car towing services.

If you sell a product that you say "promotes a sense of clarity and focus," you may need supporting scientific evidence to prove it, if challenged by your customers.

A recent Second Circuit opinion in a false advertising case about essential oil ads shows why. A class of consumers sued Young Living for false advertising after feeling misled by statements such as "promotes a feeling of calm," "helps to maintain energy levels," and that the products were "therapeutic-grade."

They said those claims weren't scientifically proven.

Trouble at the revived legendary automaker De Tomaso: new CEO Ryan Berris sued partner and financier Norman Choi today.

Berris says Choi "cut corners ... conjure[d] false financial statements, and misled the discerning customers" of the revamped brand. Berris asserts claims for breach of his employment agreement, wrongful termination, corporate waste, defamation, and tortious interference.

Has your brand made more than 200 sales and at least $5k annual gross rev on Amazon or another marketplace?

Starting June 27, you'll need to disclose more information to the marketplaces and your customers, thanks to the INFORM Act.

Here's what you need to know: The federal Integrity, Notification, and Fairness in Online Market Retail Marketplaces for Consumers Act (INFORM) is meant to help combat ecom fraud and counterfeit sales via marketplaces.

It requires marketplaces to conduct due diligence on "high-volume third-party sellers."

Shaq was sued today in a class action about his Astrals NFT project.

The lawsuit says the Astrals Project tokens and NFTs were unregistered securities, and "the Astrals project was O'Neal's brainchild, which he personally developed."

He is the only named defendant. The plaintiff says shack promoted Astrals NFTs "claiming that the Astrals team would not stop until the price of Astrals NFTs reached thirty $SOL"

A new lawsuit against Beachbody accuses the MLM of misclassifying its California "coaches" as independent contractors when they're really employees.

The complaint references this guidance from BB training materials that "restricts how Coaches can discuss their own income": It's actually decent guidance for all coaches.

Any earnings claims—even those implied through so-called "lifestyle claims"—must be true and reflect typical expected results.

If they don't, the ads must clearly and conspicuously disclose what those typical expected results are.

I've tweeted a bunch recently about ecommerce brands sued in class actions for deceptive pricing.

One thing they all have in common: no enforceable class action waiver in their TOS.

That's no coincidence—plaintiffs' lawyers scour the web for stores without them.

Example: 👇 Here's a cart from a recent lawsuit.

Notice there's no checkbox to agree to the TOS; there's only small-font wording about it, placed after I see the "Submit Order" button.

Most courts would say that's not enough to bind me to arbitration, even if there's a clause in the TOS.

Lot of requests to discuss the legal issues with Mikayla Noguiera's controversial L'oreal ad on TikTok.

Let's look at this from an FTC compliance standpoint: To recap, Mikayla uploaded a video reviewing the L'Oreal Telescopic Life mascara.

It appears to be sponsored content.

It also looks like she applied fake lashes to exaggerate the mascara's effects, which led to a surge of backlash.
2/

YouTube star Bradley Martyn is suing influencer Noelle Leyva (both pictured), who hired him to grow her Instagram and OnlyFans pages.

He says she breached their contract by not paying him 25-30% of net earnings from her pages and brand deals.

He's seeking over $1,000,000.
1/ Martyn alleges that, as part of the agreement, his "team" would:

-Run backend management of her OnlyFans
-Respond to messages
-Handle legal disputes for her (?!?!), and
-Seek branding deals for her.

Coors has agreed to pay $9.5M to settle a false advertising case about their Vizzy dard seltzers.

Vizzy's labels and ads said it was made "with Antioxidant Vitamin C from acerola superfruit."

Plaintiffs said that misleadingly implies the boozy drinks are healthy. Plaintiffs say they saw ads like the one below, which boast about Vizzy's antioxidants, and relied on them when deciding to make their purchases.

They say they wouldn't have bought the drinks, or would have paid less, if they knew the drinks didn't have health benefits.

Online education platform Mindvalley was sued today for unlawful subscription billing practices—an area that continues to be a hotbed for class action litigation.

Here's how your subscription business can avoid being next:

1/ 1) Make sure that your terms of service contain an enforceable arbitration clause with a class action waiver.

Writing this in a way that courts will enforce is only half the battle—you also need to present it such that you can prove the customer gave affirmative consent.

2/