Starbucks Ads are Up to Puff, For Now

Pity the puff – so often cited as a reason why an advertising statement is not a claim, yet so rarely with success. And just by way of a quick review, a puff is an advertising statement that is so subjective or vague that consumers would not expect the advertiser to have actual evidence to support the claim. So it’s ironic that a company that takes its coffee as seriously as Starbucks does was able to prevail on a puffing defense. But that’s what just happened in the U.S. Court of Appeals for the Second Circuit, leaving plaintiff’s class action counsel no doubt feeling like they’d just spilled hot coffee on their laps.

Here’s the tall-sized version of the tale: Plaintiff’s counsel took issue with a number of statements Starbucks had proudly made about its coffee, including the “Best coffee for the Best You,” “Starbucks or Nothing” and “Heart, soul, craft, pride, love; you won’t find that in any other cup of coffee.” Why the angst, you might wonder? Did plaintiff’s vente extra hot, decaf chai latte with soy and 1 1/2 pumps of vanilla come with an extra 1/2 pump of vanilla? Or did plaintiff find a bad bean in the bunch? Neither, exactly. It turns out that humans are not the only ones who love Starbucks. Pests do too. Or maybe they were there for the free Wi-Fi. In any case, they were unwelcome guests. And so Starbucks resorted to pesticides, such as dichlorovinyl dimethyl phosphate, to drive them out. Plaintiff alleged that the use of such purportedly harmful pesticides (to people, not to the pests) was inconsistent with Starbucks’ statements that its coffee was the best and that it had pride in its coffee. As plaintiff’s counsel put it before the Second Circuit, a company that boasts that its coffee is “watched over by us … from the farm to you” would never be served near pesticides. (Though perhaps a company that so lovingly watches over its coffee would also not want it to be served near pests.)

The Second Circuit poured cold brew over plaintiff’s claims, agreeing with the lower court that consumers would view such vague statements as an “expression of the seller’s opinion only,” rather than a claim for which there was substantiation. The court, though, added an extra shot to its rebuke, finding that even if some of the statements were specific enough to constitute a claim, “no reasonable consumer would believe that these statements communicate anything about the use of pesticide[s] in Starbucks’ stores.” Any claims in the statement, the court continued, were limited to how Starbucks prepares and sources its coffee and the quality of its ingredients.

The decision, no doubt, left Starbucks wanting to award the panel multiple bonus stars, but there’s an important takeaway here for all of us, even if you’re not a coffee drinker. Parties are increasingly seeking to use general corporate statements about the care they take in sourcing, producing or selling their products as a vehicle to launch misleading advertising attacks on corporate practices that they view as harmful to the environment or people’s health. Such cases are on the rise both in court and at the National Advertising Division. Starbucks and the puff won this round, but consider vetting such corporate goodwill statements carefully, and also consider, as you would for any ad, the context as a whole. Doing so might keep your company’s statements from being roasted by plaintiff’s counsel.

Angry AG accuses Game App of violating COPPA             

Late last month, the New Mexico attorney general launched a suit against Rovio Entertainment, developer of the very popular Angry Birds mobile games, alleging that Rovio’s information collection practices violated the Children’s Online Privacy Protection Act. By way of a refresher (and New Mexico apparently thought Rovio needed one), COPPA prohibits the online collection of personal information from children under the age of 13. Websites that collect personal information are divided into three categories for purposes of COPPA compliance. First, if you’re a general audience online site, you only have to comply with COPPA if you specifically know that you are collecting information from someone who is under 13, and compliance in this case can include restricting that individual’s access to your site and deleting her or his personal information. Second, mixed-audience sites that target children but do not have children as their primary audience must collect age information and then either obtain parental consent for children under the age of 13 or redirect those individuals someplace where personal information is not collected. And finally, online sites with an audience of children under the age of 13 must obtain parental consent before collecting personal information from those individuals. Got it?

So, back to Angry Birds. The New Mexico complaint reads like a primer on what not to do as far as trying to avoid a COPPA compliance problem. First, the company became piggish when it came to avoiding COPPA. It crafted a privacy policy that required users to represent that they are at least 13 and asked that if users are under 13 they not provide the company with personal data. The company then asked to be contacted if someone believes he or she holds personal data of someone under the age of 13.

The state argues that this policy does not inoculate the company against COPPA responsibility because it defies the reality of what the company knows as far as its actual audience. The state argues that, at a minimum, Angry Birds is a mixed-audience site (and we’ll confess to having played the games a time or two ourselves), but that Rovio does not even comply with the COPPA requirements for mixed-audience sites because it does not engage in any age screening.

Second, Rovio’s own words and actions came back to roost when it came to whether children are a target audience for the site. The specific allegations are too numerous to mention here, but we’ll list just a few and you’ll get the idea. Under a heading called “Rovio for parents,” Rovio wrote, “Kids love playing our games” and “so many young kids gravitate toward[] our titles.” The company also merchandized its games to younger children, including with fast-food kids’ meals, plush toys, lunchboxes, child-sized costumes and animated movies, for which one star noted that the target audience was kids 5 to 10 years old.

Finally, the complaint alleges that Rovio uses embedded software development kits to track and learn more about children playing the games in order to use the collected personal information to monetize them and send targeted ads.

We’ll keep an eagle eye on this case as it develops. Gaming in particular can be a difficult area for COPPA compliance, as so many of us are “young at heart” when it comes to games, making it tricky to get compliance just right. Marketers should be sure to take a look not just at their online sites but also at what they say about them and how they license the trademarks they hold.

Data Selling Class Action Tries Novel Gloss on Right to Publicity Laws

By now, we all are used to hearing reports about some aggrieved celebrity who feels his or her name or likeness has been used by an advertiser without permission and seeks millions of dollars in damages under one or more state right of publicity laws. We rarely hear, however, about such issues when they involve lowly common folks, such as yours truly, perhaps in part because advertisers don’t often seek to use such names and likenesses, and even if they did, there may not be much value assigned to the use of a name or likeness of a noncelebrity beyond the statutory minimum. (DM me, though, if you want me to sell you my rights.) But what if a company appropriated the names or likenesses of tens of thousands of ordinary folks and the statutory minimum damages were $1,000 per violation? Now we’re talking the kind of real money that makes class action attorneys sit up and take notice.

That brings us to the creative approach to such laws recently employed in an Illinois class action lawsuit filed against Hearst Communications, publisher of various magazines, including Good Housekeeping. Like many companies, Hearst monetizes its customer lists and – we assume – provides notice of that fact in its privacy disclosures. All good so far, but the Illinois Right of Publicity Act requires “written consent” before a person’s identity can be used for commercial purposes. Commercial purpose is further defined as “the public use or holding out of an individual’s identity” for purposes including the offering for sale of goods or services or the advertising of goods or services. Allegedly (and perhaps not surprisingly), Hearst has not been obtaining the written consent of subscribers to Good Housekeeping and its other publications. And this, the lawsuit alleges, violates Illinois’ Right to Publicity Act.

Now typically, right of publicity laws have been thought to cover scenarios such as using photos, without consent, of a celebrity enjoying an advertiser’s product or service, which is, pursuant to the language of the statute, an unabashedly public use of the person’s identity. Whether the act’s prohibition covers the sale of a mailing list to another advertiser is a different question entirely. The case bears close watching, however, because a decision by the court that Illinois’ Right of Publicity Act covers such conduct has potentially far-reaching consequences for the monetization of consumer data not only in Illinois but also in other states with similar statutes.