Tag: manufacturers

Lemon Laws: Potentially a Sour Future for Manufacturers of Autonomous Vehicles

lemon lawsLemon laws have existed for several decades to protect consumers from permanently defected vehicles. Though they may vary state to state, lemon laws generally require manufacturers to replace or reimburse consumers for vehicles that have either undergone three to four unsuccessful repairs within two to four years or were out of use due to repairs for more than 30 days within the shorter of one year or warranty. Additionally, courts have generally required that the defect under repair is the same defect each time. In other words, repairs for a transmission, power steering, brakes, and suspension cannot be grouped together to satisfy the limit.

New technology often brings new challenges to the legal arena, and autonomous vehicles are taking center stage. Autonomous vehicles present a unique scenario regarding the applicability of lemon laws. Unlike hardware, software updates are frequent, and even major software updates can occur several times a year. Current semi-autonomous vehicles, like Tesla’s, have received updates that have significantly affected vehicle functionality. When first released, Tesla vehicles were traditional, albeit all-electric, cars, but after an over-the-air update (OTA), Tesla has given certain vehicle models the ability to utilize an “autopilot” feature. The autopilot feature allows the driver to release control of the vehicle in certain conditions, and the vehicle can, among other things, switch lanes, brake, and change speeds. Consumer demand and a shifting automotive landscape indicate that autonomous vehicle technology will continue to gain traction.

It would not be surprising if the lemon laws of the future hold manufacturers of semi-autonomous and autonomous vehicles to more stringent standards.

Automotive repair has traditionally involved taking a vehicle to a mechanic for issues with “hardware.” Yet, unsurprisingly, the laws have not anticipated the impact software has upon the functionality of such vehicles. Say, for example, a Tesla or other similarly-equipped vehicle with similar semi-autonomous or autonomous features, has a consistent and specific software bug that requires more than four updates to fix in over a two-year period. There is a line-drawing problem, which forces the industry and legislators to grapple with several questions. What constitutes a repair? Is the vehicle subject to replacement or reimbursement from the manufacturer? If the software bugs exist on the entire platform of vehicles, are all of the vehicles subject to recall, or is the public expected to wait for a software fix to come in an OTA update?

Recently, in late June, Tesla seemed to answer such a question. The company settled a claim with an individual over issues he had with his newly purchased Model X SUV. At the beginning of the Model X’s rollout, it was plagued with several issues involving its falcon-winged doors and auto-parking software features. Given his frustration, the individual filed a lemon law claim against Tesla, after which Tesla agreed to repurchase his $160,000 vehicle. Yet, around the same time the company settled the lemon law claims, it rolled out an OTA software update that fixed the issues. So, it might be the case that companies are not expecting consumers to wait for an OTA software update if they are willing to repurchase vehicles, even with a remedy via update in the works.

While the recently-settled Tesla claim involved luxury features, the company has been subject to investigations involving at least two fatalities in connection with its autopilot feature. These circumstances are clearly far more troubling, and they help illustrate the importance of ensuring that autonomous vehicles are performing safely.

Autonomous and semi-autonomous vehicle manufactures are taking control away from drivers, and it is currently unclear what role lemon laws should play in the presence of such circumstances. It may be necessary for legislatures to revisit existing lemon laws to include non-traditional repairs such as OTA software updates to incentivize better care on the part of manufacturers. Ultimately, it would not be surprising if the lemon laws of the future hold manufacturers of semi-autonomous and autonomous vehicles to more stringent standards.

ARTICLE BY Fermin M. Mendez of Varnum LLP
This article was co-written by Paul Albarran, a summer associate at Varnum in 2016. Paul is currently a student at University of Notre Dame Law School.
© 2016 Varnum LLP

New Updated FTC Care Labeling Rules: “Do’s and Don’ts”

Sheppard Mullin 2012

The Federal Trade Commission (“FTC”) enforces federal labeling requirements that require manufacturers, importers, sellers and distributors of certain textile and wool clothing  to accurately label their products. For example, FTC rules require that manufacturers indicate the country of origin and fiber content in their clothing. In addition, the Care Labeling Rule requires that manufacturers and importers attach “care labels” to garments and certain piece goods.

Navigating these various labeling requirements can be tricky. On May 5, 2014, the FTC amendment of the labeling rules, known as the Textile Rules, became effective.

Care labels, which can influence consumers’ purchasing decisions more than labels indicating fiber content or country of origin or manufacture, are important to carefully consider.

“Do’s” for Clothing Manufacturers and Importers:

Place all care labels permanently, securely and visibly, so that consumers can easily see or locate them prior to purchase. Ensure that labels will remain legible not just at the point of sale, but throughout the lifecycle of the product.

Include a washing or drycleaning instruction (or both) if either method is safe for the product. If a product can be neither washed nor drycleaned, the label must state “Do not wash – Do not dry clean.” A simple “dryclean” instruction is acceptable in most cases, unless “any part of the drycleaning process would harm the product.” In that case, more specificity is required (e.g., “Professionally Dryclean” or “Dryclean. No Steam.”).

Indicate whether the product is to be washed by machine or by hand. The FTC has stated that water temperature settings must be indicated if “regular use of hot water will harm the product.” Similarly, if using chlorine bleach will harm the product, whereas other bleaches will not, the label must state “Only non-chlorine bleach, when needed.” The appropriate label in the event that no bleach is safe to use is “Do not bleach.”

State how to dry the product and how to iron it, if the product requires regular ironing. Temperature settings for drying and ironing are not needed unless the “regular use of high temperature will harm the product.”

If selling a garment with multiple pieces, only one label is required if the same instructions apply to all parts of the garment, and if the garment is sold as a single unit. The label should be attached to the “major piece” of the garment. In the event that the garment is not sold as a single unit, or if the instructions differ from one part of the garment to the next, then each separate piece of the garment needs its own care label.

If the garment cannot be cleaned without damaging the garment, potential customers must be warned on the label. It is imperative that following the care labeling instructions does not ordinarily lead to product damage. Along these lines, labels must inform consumers not to engage in certain procedures that they may erroneously but reasonably assume are acceptable, given the instructions of the label. For example, if a label indicates that clothes can be washed, a reasonable consumer might infer that the product can also be safely ironed. If these understandable assumption is incorrect, the FTC has stated that the label must indicate the risks involved.

One should always have a “reasonable basis” for everything written on a care labeling instruction. If a piece of clothing indicates that it cannot safely be ironed, there must be some proof (based upon experience, industry expertise or testing) known to the manufacturer or importer that ironing the clothing would cause damage. The FTC has alternatively stated that the manufacturer or importer must have “reliable evidence” to support all warnings or instructions on product labels. Guesswork is insufficient. However, what constitutes “reliable evidence” or a “reasonable basis” does depend on the circumstances. It is incumbent on manufacturers conducting tests to ensure that the results of any tests conducted on only one portion of multi-part garments do, in fact, have applicability to the entire garment.

Importers must ensure that these labels are placed on products before they sell them in the United States. It is not necessary for the labels to be attached as the products enter the country, however. Domestic manufacturers similarly must ensure that care labels are placed on finished products prior to sale.

“Don’ts” for Clothing Manufacturers and Importers:

Certain kinds of exempt apparel, including gloves, hats, and shoes, do not require care labels. Many items are also excluded from the care labeling requirements, including handkerchiefs, belts, suspenders, neckties, or non-woven garments made for one-time use. For piece goods sold for making apparel at home, it is not necessary to include care labeling instructions for any “marked manufacturers’ remnants of up to 10 yards when the fiber content is not known and cannot be determined easily.” These items are exempted from the Care Labeling Rule.

Garments custom-made from fabrics provided by consumers, or products sold directly to institutional buyers for commercial use (e.g., uniforms sold to Office Depot for use by clerks during business hours, and not purchased directly by the clerks), do not require care labels. This also includes items that the consumer may ask to be added to the garment (e.g. lining or buttons).

Use non-standard terms on labels. The FTC recommends, but does not expressly require, that manufacturers ensure that any terms they use on labels are in accord with the definitions in the Rule’s Appendix A glossary, where applicable. For example, the term “Warm” applies to initial water temperature ranging from 87 to 111 degrees F [31 to 44 degrees C]; “Hot” is from 112 to 145 degrees F [45 to 63 degrees C]; and “Cold” is up to 86 degrees F [30 degrees C].

*Gregg Re Summer Associate contributed to this article.

Article By:

Theodore C. Max
Of:
Sheppard, Mullin, Richter & Hampton LLP