Proctor & Gamble's Diaper Blowout

We have to wonder who is advising P&G on its Pampers Dry Max public relations debacle. P&G revamped its wildly popular Pampers Swaddlers and Cruisers diapers, officially introducing its Dry Max product back in March. (This makeover leaves us scratching our heads anyway. It's akin to the periodic "improvements" we see in cat food. "New flavor, more meat, etc." Whose cats are complaining?)

In any case, soon after the switch, parents started complaining about "chemical burns," "red welts," and "oozing rashes." See here for a good summary of the situation. Pampers apparently responded to parents' complaints by assuring them that the diapers hadn't changed in any material way (then why the big relaunch?) and that their children's diaper rashes were related, not to the new diapers but, perhaps, to their diapering skills. Uh-oh.

If you are trying to really, really anger a mother, criticize---however gently---her care for her young child. Given that it's 2010, readers can probably guess what happened next. The Facebook group Pampers bring back the OLD CRUISERS/SWADDLERS sprang up. This morning it had just shy of 7,000 members.

Then, it got ugly. The concerned parents went on the offensive, e-mailing P&G, contacting local media outlets, contacting the Consumer Protection Safety Commission, and posting, posting, posting---all of which resulted in the mainstream media picking up the story and running with it. And P&G geared up to respond to the media coverage.

Last week, P&G released statements calling the reports of problems "completely false," the CPSC opened an investigation of the issue, Health Canada, the Canadian equivalent, announced that it had done the same, and--no surprise here---the plaintiffs' class action bar got busy.

Now, for P&G to maintain that its own extensive testing shows no evidence of a link between the rashes and the new diapers is one thing. But, to issue a statement that the concerns are "rumors . . . being perpetuated by a small number of parents, some of whom are unhappy that we replaced our older Cruisers and Swaddlers products while others support competitive products and the use of cloth diapers" seems just a wee bit over the top.

Anyone who has ever cared for a small infant, let alone one who is screaming bloody murder at every diaper change, would almost certainly devote his or her precious free time to something like, oh, sleeping or showering, and not trying to topple an iconic product for kicks.

We'll be interested to see how this all shakes out, particularly because P&G is picking up more bad press for this than Johnson & Johnson did for its recall of Infant and Children's Tylenol and Motrin earlier this month. The bad press, by the way, includes the somewhat dubious claim that the brouhaha caused last week's Wall Street chaos. Perhaps the lesson here is not to cross a fiercely protective, sleep-deprived population with access to the Internet.

Friday News of the Inane: New Jersey Lawyers Should Chain Selves to Desks

It's been awhile, but we've been prompted to post again, thanks to a New Jersey Ethics Opinion that issued last week. The ABA Law Journal has a good summary here and also provides to links to several bloggers who have already commented on the opinion.

We'd just like to add the following: Really? Clients will be unable to reach their lawyers if the lawyers don't maintain a physical office and a receptionist? Guess how many of our clients have ever dropped by? Right. None.

If in-house counsel or a business person needs to reach us, he or she generally calls or e-mails one of us. The beauty of modern technology is that we can forward our office lines to our smartphones and be reached by phone or e-mail anywhere we happen to be (e.g., at a CLE, in the car, attending a preschool field trip to a plant nursery, or what have you). One cannot exactly pick up a "bona fide" office and put it in one's pocket, New Jersey.

Wasn't this the Plot of "You've Got Mail"?

Last week, Walmart announced that it would pre-sell ten hardcover books (expected to be best sellers) at the rock bottom price of $9.99. Within hours, Amazon matched; Walmart responded by lowering its price to $8.99; Amazon followed suit; and Target woke up from its afternoon nap and matched. Walmart, not to be outdone, lowered its price to $8.98. (Yesterday, Sears unveiled its Keep America Reading Program to take advantage of the price war, a piece of pure marketing genius.)

Thoughtful readers may think they can just wait another week or so and let one of the big boxes pay them to buy these titles. But, it looks like the race to the bottom might hit a road block.

Today, the American Booksellers Association sent the Justice Department a letter, asking the Antitrust Division to investigate this price war, which it called "illegal predatory pricing that is damaging to the book industry and harmful to consumers."

It'll be interesting to see what comes of this. According to this NYT

piece, the publishing industry as a whole is concerned about the possible ramifications; but it seems to us that most of the impact is sure to be felt by independent bookstores.

Would the Antitrust Division actually define the marketplace in such a way that Walmart and Politics and Prose (for example) would be deemed competitors?

But Could They Countersign by Facsimile?

From the Small Business Law Blog, comes this piece on the unenforceability of contracts written in blood. It seems that the multi-million dollar Stanford International Bank Ponzi scheme was formalized by a blood oath ceremony. NYT coverage here.

According to Stanford's CFO's plea agreement , Allen Stanford entered into the blood oath with the head of Antigua’s Financial Services Regulatory Commission (FSRC) and another FSCR employee to bind them to an agreement to not examine false investment reports that Stanford filed in exchange for regular cash bribes.

The lurid blood ceremony seems extraneous, to say the least; the cash was probably sufficient to ensure performance.

What's the old saw? Never write when you can speak; never speak when you can nod; never nod when you can wink. We guess no one ever told Stanford never seal your illegal deal in blood.

Judging a Digitized Book Settlement by its Cover

We've followed the brouhaha surrounding the proposed settlement of the Google digitized books class action with some interest. (A pdf of the 2005 complaint filed by the Authors Guild can be found at eff.org.)

A Washington Post editorial has good summary of the settlement here.

Earlier, this month, the William Morris Agency advised its clients to object to the proposed settlement, and a flurry of letters, rebuttals, and rebuttals of rebuttals flew between William Morris and the Authors Guild. See coverage here, here, here, and here.

It's no real surprise that literary agents, publishers, and authors have concerns about the potential effect of the settlement. The dueling correspondence between Willaim Morris and the Authors Guild focuses on protecting the rights of authors.

It's not even a surprise that the Justice Department is investigating the settlement, citing possible antitrust concerns.

To us, the surprise was the news that Microsoft, Amazon, and Yahoo plan to join the Open Book Alliance, a coalition of nonprofits, individual authors, and libraries that is forming to oppose the settlement.

Notice Pleading Restoration Act of 2009: Back to the Future

From the BLT and PrawfsBlawg, we learn that Senator Arlen Specter has fired up the DeLorean in effort to re-relax recently tightened pleading standards under Rule 12(b)(6). The good senator has introduced legislation that would return the pleading standard to that established under Conley v. Gibson, decided in 1957.

Consider this post our "short and plain statement" with regard to the proposed act.

Oh, Baby

It's been several weeks since we've posted. What can we say? Work, summer weather, and a lack of interesting (to us, at least) news have conspired against us.

Today we finally were moved to post after reading the Honorable Anita Brody's (E.D. Pa) decision granting class certification in McDonough v. Toys "R" Us.

Judge Brody's decision is of interest because the subclasses it certifies allege that Babies "R" Us (of which Toys "R" Us is the parent) conspired with makers of pricy baby products to restrict competition in violation of federal antitrust laws. In certifying the class, the court applied Leegan Creative Leather Products, the 2007 Supreme Court case that held vertical price restraints are not per se illegal but must be evaluated by the court under the "rule of reason."

Also interesting is that the court relied on testimony of economic experts to determine that the plaintiffs satisfied their Rule 23 burden under In re: Hydrogen Peroxide Antitrust Litigation, a fairly recent Third Circuit decision that clarified that more than a threshold showing is required for certification.

The nature of the claims, the costs of the products at issue (Peg Perego and Maclaren strollers, Britax carseats, the BabyBjorn carrier, Medela breastpumps, and Kidsline bedding), and the potential size of the class lead us to believe this case bears watching.