Consumer-Law-Greenman-Fall05

Consumer-Law-Greenman-Fall05 - 1 Federal Trade Commission...

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Federal Trade Commission Act "unfair or deceptive act or practice" Illegal if tendency or capacity to deceive Traditionally to protect the ignorant and unwary ( Charles of the Ritz ) New Standard ( Cliffdale Assoc. ) (less protective than before): 1) Representation, omission or practice that 2) Is likely to mislead consumers acting reasonably in circumstance 3) And it is material (likely to affect choice of product). Advertisements Deceptive claim doesn't have to be verbal ( Standard Oil ) a) if say/imply scientifically proven superior, prob. need RCT b) if say product is superior, must have reasonable basis to support c) puffing=vague, very subjective, no proof needed ( Sterling Drug ) Unfair Practice Actual substantial consumer injury AND Hard to avoid AND not outweighed by benefits = Basically cost-benefit analysis of disclosure ( In re Harvester Int'l ) Remedies : by FTC * Cease and Desist: On appeal, fact finding by FTC if supported by evidence = conclusive (if have actual or implied knowledge that act is prohibited) Max $10,000 per violation Amount determined by culpability, history of prior violations, ability to pay, effect on ability to do business, etc. . (NOT consumer restitution) * Rule Making: Must do rule-making if changing law to give notice ( Ford v. FTC ) Can't do rule-making if not rationally related to "problem" (rule to refund tuition if no proper screening: Katherine Gibbs ) Must cause substantial injury to consumers AND * Corrective Remedies: corrective future advertising ( Warner Lambert ) * Consumer Restitution: § 19: can include refund $, damages, etc. . ONLY IF EITHER 1) violate FTC rule OR 2) violate cease & desist order by an act that reasonable person would have known was dishonest or fraudulent NO punitive damages Not used much (only one case: Glenn Turner ) 1
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Problems w/ court involvement: Judicial precedent trumps FTC interpretation of Act TROs: if weighing equities and chance of success in public interest Normally for false advertising Not required to also have admin proceedings (§ 19- Singer ) NO PRIVATE RIGHT OF ACTION ( Holloway ) 1) Would burden defendants will multiple, frivolous suits 2) Private parties don't have FTC expertise 3) Wouldn't always serve public interest Exception: Guernsey **Always look at State Little FTCs!! SALES PRACTICES Federal Regulations Door-to-Door Sales : 16 CFR § 429.1 Except if buyer initiates (and emergency or asks for home visit) or done all by phone or mailer if insurance/stocks/real property Receipt/contract in same language negotiated **Notice that it may be cancelled within 3 days Must also tell consumer orally of that right
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This note was uploaded on 04/04/2008 for the course LAW ALL taught by Professor Multiple during the Fall '06 term at NYU.

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Consumer-Law-Greenman-Fall05 - 1 Federal Trade Commission...

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