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Several years ago, Top Surgeons, Inc., a marketing company owned by brothers Benjamin and Michael Omidi, began a 1-800-Get-Thin advertising campaign. With the ads, the Omidi brothers claimed that they could help people—I’m sorry I can’t help myself—Omidi the fatty. The ads were for the Lap-Band procedure and allegedly lulled people into a false sense of security about the risks associated with it by not providing proper warnings. People calling the number would be referred to participating Los Angeles clinics affiliated with Top Surgeons and the Omidi brothers. Unsurprisingly, some people who went through with the procedure sustained serious injuries. Even less surprisingly, a false advertising class action was filed as a result. Faitro et al. v. Top Surgeons et al. was brought in Keep reading . . .
The Los Angeles Clippers are in the news again, this time for an ill-advised promotional text message marketing campaign. Fans filed a class action suit against the pro basketball team in February, 2013, after the team sent them text messages without the fans’ express written consent to receive them, in violation of the Telephone Consumer Protection Act (TCPA). The case was brought in the Central District of California and captioned Friedman v. LAC Basketball Club, Inc., 2:13-cv-00818-CBM-AN. In the complaint, it was alleged that while attending a Clippers game, plaintiffs learned they could send messages directly to the scoreboard from their phone by texting a designated number. The announcement alerting them of this fact, however, did not disclose that the Clippers would store the numbers Keep reading . . .
Win for FTC Equals Win for Marketers: The Positive Implications of FTC v. BurnLounge for Direct Sellers
In FTC v. BurnLounge—after providing a crash course on pyramid schemes and how to properly distinguish a pyramid from a legit multi-level marketing (MLM) operation—the Ninth Circuit upheld the district court’s finding that BurnLounge’s business constituted an illegal pyramid scheme in violation of Section 5(a) of the Federal Trade Commission Act. In doing so, however, the court was careful to make clear that internal sales (i.e. sales of products to recruits) are properly classified as sales to “ultimate users” and, thus, do not by themselves constitute a pyramid scheme. This aspect of the court’s decision is a big victory for direct sellers, who rely on and are motivated by sales to downstream recruits but whose primary motivation is for the sales of products versus merely signing Keep reading . . .