Marketing + Consumer Protection

Consumer Protection 

 States have "Little FTC Acts" to protect consumer from unfair methods of competition and unfair/deceptive actions  

• (I.e. deceptive advertising) 

These statutes make it easier for consumers to recover 

• No intent required (unlike fraud) 

• It often isn't worth pursuing a fraud or contract claim because transaction amount is small 

  • Since consumer protection issues often impact class of consumers, Little FTC Acts incentivize bringing suit by offering recovery of multiple damages/attorney fees 

Who is a consumer for the purpose of these statutes? 

• depends on statutory definitions, but typically the term is construed broadly 

Deceptive Advertising 

• Companies must maintain data supporting advertising claims 

• Whether company intended to deceive consumers is immaterial 

McNeil-PPC, Inc. v. Pfizer Inc., 351 F. Supp. 2d 226 (S.D.N.Y. 2005) 

Shaulis v. Nordstrom, 865 F.3d 1 (1st Cir. 2017) 

Deceptive Labeling 

• Companies must label items accurately 

Wyoming v. Procter & Gamble Company, 210 F. Supp. 3d 1137 (D. Minn. 2016) 

• Example of how a consumer can be defined broadly – even though the cities were direct purchasers of the wipes, they were still harmed by the deceptive labeling and were able to take action 

Massachusetts Consumer Protection Statute: M.G.L. Ch. 93A 

Section 2 prohibits: 

1. Unfair methods of competition 

2. Unfair or deceptive acts/practices 

• Covers only actions undertaken in the conduct of any trade or commerce 

  • Trade and commerce defined broadly 

    • Include sale, rent, or least of services, property, securities, & other things of value 

Section 9 regulates: 

• Consumer transactions – business-to-consumer 

  • Does not apply within companies (partner-to-partner, employee-employer) 

Plaintiffs must prove: 

1. They are a consumer who was involved in trade/commerce 

2. Send 30-day demand letter – outlining claim, harm, demand for relief 

3. Defendant's actions were unfair or deceptive 

4. Suffered injury as a result of unfair or deceptive actions 

Potential remedies: 

• Actual damages and attorney's fees, if plaintiff successfully proves elements above 

• Double or treble damages, if plaintiff proves that defendant's conduct was willful or knowing 

• Injunction (if court deems necessary and proper) 

• Reasonable settlement offer caveat 

Section 11: 

• Deals with commercial transactions (I.e. business to business) 

  • provides a cause of action to businesses engaged in trade or commerce for unfair methods of competition and unfair or deceptive acts or practices. 

Plaintiff must prove: 

1. Business engaged in trade or commerce 

2. Defendant engaged in unfair method of competition 

3. Primarily and substantially in MA 

4. Defendant's actions caused plaintiff to lose money or property 

Potential remedies 

• Amount of actual damages 

• Double or treble damages if conduct proves willful 

• Injunction if it deems to be necessary and proper 

…  

Corporate Free Speech: Politics 

• Some Constitutional rights apply to corporations 

• First Amendment: "Congress shall make no law abridging the freedom of speech" and corporations enjoy the right 

Citizens United v. Federal Election Commission, 558 U.S. 310 (2010) 

• Held that statute limiting corporate speech in run-up to elections was unconstitutional because it limited free speech 

• Statute needed to pass strict scrutiny – gov needs to show that statute served a compelling interest and was narrowly tailored to achieve that interest 

  • Majority: "No sufficient gov interest justifies limits on political speech of nonprofit or for-profit corporations 

• Following Citizens United, corporations may spend unlimited money on political speech, provided they don't coordinate w a candidate 

Corporate Free Speech: Public Accommodations 

• 13 years after Citizens United was decided, Supreme Court decided 303 Creative LLC 

303 Creative LLC v. Elenis, 600 U.S. 570 (2023) 

• Held that public accommodations law requiring expressive speech violates the First Amendment 

• Statute cannot force or compel a company to engage in expressive speech against its will 

Public accommodations law: law prohibiting discrimination in a place of public accommodation (I.e. a place open to the public) 

• Critics say that 303 Creative created a First Amendment "right to discriminate" 

• Others claim holding is narrow insofar as it's limited to "expressive" speech and doesn't permit discrimination on basis of membership in a protected class 

  • In order to fall within the protection offered by 303 Creative, a business must object to the speech, not the person