Manatt, Phelps & Phillips, LLP

Consumer Protection

Governmental Investigations and Regulatory Litigation
In today’s competitive environment, attempts to influence customers are taking place in many platforms – whether in the Internet, in blogs, in social media outlets, in “traditional” media like broadcast or print, or even through word-of-mouth.  Yet, due to the financial collapse in 2008 and the growing cynicism of business self-regulation, today’s environment is pro-consumer and pro-enforcement, and the desire to regulation and law enforcement is at a peak.   As a result, business policies and practices concerning advertising, marketing, privacy, and other consumer protection issues are under heightened scrutiny.

Thus, issues relating to deceptive or unfair advertising, the appropriateness of marketing practices, privacy of consumer personal and health information, and compliance with federal and state consumer and trade regulations necessarily must capture the attention of senior management.

The Federal Trade Commission is the governmental agency at the forefront of regulating marketing practices and investigating allegations of unfair or deceptive advertising.  Its jurisdiction is wide-ranging, and its civil enforcement muscle is extensive, ranging from monetary penalties to equitable injunctions, including disgorgement and bans.  Individual liability is also common.  And, the FTC can refer matters to the Department of Justice for criminal prosecution.  Industries impacted by the FTC touch every industry sector of the economy, from e-commerce and technology, to financial services, to health care, to retail, to food, and to consumer products and services. 

The consumer protection laws and regulations involving the FTC are broad, and include:

• Spam and commercial e-mailing
• Solicitation on electronic mail, through facsimile, and by telephone
• Comparative advertising
• Substantiation of advertising claims
• Endorsement and testimonials in advertising
• Pricing
• Use of the terms “free” and “rebate”
• Infomercials
• Guarantees and warranties
• “Made in the U.S.A.” label
• Multi-level marketing
• Contests, sweepstakes, and games of chance
• Consumer credit (including credit reporting, credit billing, and truth-in-lending)
• Debt collection
• Franchise and business opportunities
• Telemarketing
• Mail orders
• Group-specific target marketing (e.g., children, senior citizens, Hispanic citizens)
• Advertising and consumer regulations in specific industries (e.g., food, alcohol,
  medical products, funeral, jewelry, motor vehicles, retail food stores, drugs)
• Labeling (e.g., clothing, appliances, cosmetics, drugs, food, furs,
  hazardous substances, tires)
• Data security and identity theft
• Privacy

Regulations and investigations involving consumer protection do not stop at the federal level, however.  Each state, through its attorney general or department of consumer affairs, enforces unfair trade practice laws through their so-called “Little FTC Acts,” which enable an attorney general or state official to investigate allegations of deceptive or unfair practices, initiate lawsuits or other state proceedings, enter into settlements, consent decrees, or assurances of voluntary compliance.  Indeed, such law enforcement actions can take place in concert with the FTC or other law enforcement agencies.

Manatt’s experience before the Federal Trade Commission
No other law firm in the country has handled as many FTC and state attorneys general investigations and enforcement actions as Manatt over the last few years.  We have defended many clients in response to highly sensitive Civil Investigative Demands and other inquiries, and have an excellent record of resolving such actions amicably with the Commission, by either convincing the Commission that enforcement proceedings should not be initiated or negotiating favorable settlements on our client’s behalf.  In the few instances where we have not been able to negotiate a favorable settlement, our litigation team has been effective in mounting a strong defense. In fact, Manatt attorneys have served as defense counsel on some of the highest-profile FTC cases in recent years. 

In addition to our strong substantive knowledge of the consumer protection laws, we have a keen knowledge of how the Commission works and the factors it considers in deciding whether to initiate enforcement.  Many former Manatt attorneys currently work at the Commission, and Manatt also has several former FTC attorneys, including a former Director of the Southeast Regional Office.

Representative matters by Manatt attorneys in matters before the FTC  include:

• Defense of CVS Caremark Corporation in joint FTC and HHS investigations  concerning privacy and data security breach
• Defense of marketer of dietary supplements in FTC litigation concerning  allegations of deceptive/unfair advertising and marketing practices
• Representation of principal of dietary supplements company in FTC negotiations
• Defense of financial institutions - - including lenders, banks, and vendors - - in  several FTC investigations concerning compliance with industry laws and  regulations; privacy and data security issues; lending discrimination, and  deceptive/unfair advertising and marketing practices
• Defense of mortgage lenders in FTC investigations relating to their submission of  data pursuant to the Home Mortgage Disclosure Act (HMDA)
• Defense of debt collection companies in FTC investigations for violations of the Fair Debt Collection Practices Act
• Defense of Internet marketing company in FTC investigation concerning allegations of deceptive/unfair advertising and marketing practices
• Defense of smokeless tobacco company in FTC investigation concerning  regulatory compliance
• Representation of Burger King in FTC inquiry concerning the role of advertising  and marketing on childhood obesity

Manatt’s Experience with State Attorneys General
Manatt has represented clients in of individual and multistate proceedings brought by the state Attorneys General. We understand the nuances and intricacies of managing state Attorney General investigations.  Similar to our FTC experience, our professionals are often successful in persuading state Attorneys General not to file formal actions against our clients.  In situations where action has commenced, our attorneys are successful in negotiating reasonable settlements.

Manatt attorneys share over 50 years experience in the area of consumer protection involving state Attorneys General.  They have substantial relations with state AG offices nationally through their connections with the National Association of Attorneys General (“NAAG”).  In fact, one of our attorneys was awarded the NAAG’s Marvin Award, which is given, at most, to five Assistant Attorneys General per year for outstanding leadership and experience.  These attorneys have also conducted training programs for state AGs.

Below are examples that reflect our deep background in individual and multistate proceedings:

• Defense of owner of L.A. Weight Loss in consumer protection litigation by the Pennsylvania Attorney General and investigations by the Attorneys General of New York, Missouri, Maryland, Connecticut, and Florida
• Defense of pharmaceutical company in investigation by New York Attorney  General concerning rebates and other consumer protection matters
• Defense of automobile dealership marketing company in multi-state investigation  being led by the Attorneys General of Georgia and Idaho concerning allegations  of deceptive/unfair advertising and marketing practices
• Defense of financial institutions - - including lenders, banks, and vendors - - in  several state attorney general and regulatory investigations concerning  compliance with industry laws and regulations; privacy and data security issues;  lending discrimination, and deceptive/unfair advertising and marketing  practices
• Defense of debt collection agencies in investigations concerning unfair and deceptive business practices by the New York and Pennsylvania Attorneys General
• Defense of CVS in investigation by California Attorney General concerning  allegations of deceptive/unfair advertising and marketing practices

Diversity at Manatt

Manatt considers diversity to be a fundamental component of our institutional identity. As a law firm, we have a professional responsibility, and as individuals, we have a personal responsibility to our respective communities. Incorporating diversity into our culture allows us to enhance the high-quality, creativity and excellence in legal services that our clients have come to expect.

Manatt has invested a significant amount of human and financial resources in our own diversity program. Our philosophy is simple: include women and minority lawyers at all levels of Firm leadership and promote diversity in the legal profession through our support and active involvement in various minority civic and bar organizations.

The mix of our minority and women attorneys has consistently exceeded the national average among the country's top law firms. Our talented mix includes minority and women lawyers serving as heads of offices, members of the firm's Board of Directors and management team, and chairs of some of the firm's most important practice groups.

Inclusive Culture
Our progressive culture allows us to maintain a growing mix of women and minority lawyers, and the results illustrate this commitment.  The American Lawyer ranked our Firm 29th (in the top 12%) on its Diversity Scorecard for the largest 250 law firms in the country for 2009.  Multi Cultural Law Magazine included our Firm on its 2008 lists of the Top 100 Law Firms for Diversity, Top 25 Law Firms for Asian Americans/Pacific Islanders, and Top 25 Law Firms for Openly Gay/Lesbian Americans.

Despite our progress and diversity success, we can do better.  Our challenge extends far beyond exceeding national averages.  Our plan cannot succeed if we focus only on recruiting minority and women attorneys.  The true challenge and measure for achieving success lies in creating and preserving an inclusive environment where our minority and women lawyers will stay, progress, prosper and succeed.  We have implemented a formal diversity program designed to enhance our recruiting and retention of diverse attorneys through an executive mentoring program intended to cultivate personally and professionally meaningful relationships between our diverse lawyers and our partners. 

Our commitment to diversity exists in a living document – a plan – that is concrete, easy to understand and publicly available.  The plan demonstrates to every law school student, lateral associate candidate, lateral partner candidate, recruiter, existing client, and potential client that we are serious about creating a workplace that mirrors the breadth of the communities where we and our clients live and work.

We focus on the following key areas to accomplish our mission.

Targeted Recruitment Effort
At Manatt, recruiting women and minority attorneys does not end on law school campuses. Our recruiting efforts focus on locating talented women and minority lawyers at all levels. At law schools, we seek out and interview students who share our core values in ways shaped and enhanced by their own experience. Manatt's 2005 Summer Program was the most diverse in the Firm's history. Our nine 2005 Summer Associates included two African-American students, three Hispanic students, one Asian-American student and three Caucasian students. Five of these nine students were women.

Mentoring as a Cornerstone
Minority attorneys who join Manatt as new or lateral hires immediately become the focus of a mentoring program. They are paired with senior attorneys who take an active role in encouraging their career development. Mentors actively work with their protégés, helping them form business plans and involving them in firm-wide marketing and development opportunities. Management holds mentors accountable for their roles and their protégés' progress at the Firm, including reviewing their efforts as part of the evaluation and compensation process.

Access to Opportunity
Success is a matter of talent and opportunity. At Manatt, we believe that the key to retaining talented minority attorneys -- and therefore the key to the success of our diversity efforts -- is providing a distinctive experience that offers clear access to professional accomplishment. We provide women and minority attorneys with important responsibilities and leadership opportunities in client development activities, complex litigation, large transactional matters and high-profile community and civic organizations. We also encourage and support minority and women attorneys who take leadership positions within the firm and outside in the community at large.

Long-Term Commitment
We challenge ourselves to make our young lawyers feel valued, involved and invested in the future of the firm. We know that they will eventually occupy the most important financial, management and executive positions at Manatt. Our professionals thrive in an atmosphere that encourages and supports responsibility, ambition, and entrepreneurship. We offer true opportunity equal to individual commitment to success and advancement. That's the history of opportunity at Manatt, where professionals with talent and drive are rewarded with a nurturing, dynamic and energizing climate.

Promoting Diversity
Promoting diversity in the legal profession requires both an investment of money and time. Our women and minority attorneys are prominently involved and hold leadership positions in some of the most important minority civic and bar organizations in the country including:

• Asian Americans of Equality
• Asian Pacific American Legal Center
• Black Entertainment and Sports Lawyers Association
• California Association of Black Lawyers
• California Black Chamber of Commerce
• California Women's Law Center
• Chilean Association of Attorneys
• D.C. Commission on Asian & Pacific Islander Affairs
• Hispanic National Bar Association
• Inner City Law Center
• International Human Rights Committee of the Association of the Bar of City of New York
• Korean American Bar Association
• Korean American Coalition
• L.A. Conservation Corps
• La Raza Galeria Posada
• Legal Aid Foundation of Los Angeles
• Los Angeles Urban League
• National Asian Pacific American Bar Association
• NOW Legal Defense & Education Fund Board
• Southern California Chinese Lawyers Association
• The Association of Women in International Trade
• Women Lawyers Association
• Women's Bar Association of District of Columbia
• Women's Forum of Washington D.C.