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It’s Going Down for Real: The Highs and Lows of Celebrity Endorsements

/ Washington Journal of Law, Technology & Arts / Leave a comment
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By: Enny Olaleye

On January 18, 2023, prominent rapper Flo Rida, known for hits like, “Right Round,” “GDFR (Going Down for Real),” and “Low,” emerged victorious in his $82.6 million breach of contract lawsuit against the popular energy drink company Celsius Holdings Inc. Flo Rida, whose real name is Tramar Dillard, and his production company, Strong Arm Productions brought suit against Celsius Holdings Inc. In the suit, he claims the company had violated the terms of their 2014 endorsement deal and fraudulently hid information from Dillard during the time of partnership, which ended in 2018, and the court ultimately agreed. 

In the complaint, Dillard’s legal team stated that, “as a music industry superstar and international icon with millions of digital followers, Flo Rida played an instrumental role as the worldwide brand ambassador and launched a new era for Celsius brand development, growth, and expansion.” This statement raises questions about celebrity endorsements and the level of involvement celebrities actually undertake in these deals with multi-billion-dollar companies. 

Thus, the question arises: “What actually is an endorsement deal?” 

An endorsement deal is a contract between a company and a (typically well-known) celebrity who grants the company permission to use his or her name and reputation to advertise a product or service. After the contract is signed, the company compensates the endorser (celebrity) to promote the company’s product or services.  The contract lists the explicit terms and conditions of the endorsement for the celebrity, such as how or where the celebrity should advertise the product, or restrictions on how the celebrity uses the product or service in public. For the period of time defined in the contract, the company commits to providing the endorser with the product at their request free of charge as part of the compensation. 

From the company-standpoint, the primary goal of an endorsement agreement is to increase brand awareness and product revenue. Companies are able to increase brand awareness and product sales without associating their product with a particular celebrity, but by taking advantage of the popularity of their own spokesperson. On the other hand, companies are sometimes able to solidify their brand awareness with unknown individuals who later become popular from the brand awareness. For example, popular brand figures such as “Jake from State Farm,” and “Flo from Progressive,” have led to successful brand campaigns for their respective companies by becoming nationally recognized over time and gaining their own fame—even leading to celebrities dressing up as them for Halloween. 

However, from a celebrity standpoint, considering whether to endorse a product is a bit more complicated.   How involved a celebrity wants to be in the endorsement depends on a variety of factors like their level of desire to increase personal brand exposure, their desire to increase net worth, or their genuine personal  interest in cultivating and investing in the product itself. Today,  the prevalence of influencers and celebrities featured in television commercials and posting products on their social media pages is ubiquitous, whether it’s to increase their brand exposure or simply cut a check is less obvious. Further, it’s becoming more common to see celebrity-company combinations, such as Ryan Reynolds and Mint Mobile  or Flo Rida and Celsius, who enter into endorsement deals as co-owners or stakeholders, permitting them to retain a portion of the product revenue, while simultaneously using their celebrity to endorse the product. 

Although celebrity endorsements have been proven to increase product revenue and awareness, as well as build product credibility, there are still drawbacks companies must consider. First and foremost, celebrities do not work for free. Securing a celebrity endorsement is expensive for companies. Additionally, as product revenue increases celebrities often expect to be paid more, reasoning that the increase in profit directly correlates with their endorsement. In fact, most celebrities ensure companies expressly include this provision in the endorsement agreement before proceeding with the partnership. 

With respect to Dillard’s suit against Celsius, his team claimed such a provision was “specifically contemplated in terms of the agreement, that ‘as Celsius profited in the future, additional compensation would be paid to Dillard by Celsius in the form of shares of company stock and ongoing royalties.’” Further, his legal team claimed that “from ‘a financial perspective,’ Celsius ‘exponentially increased product revenues and sales, attracted key investors, and upgraded its financial status upon partnering with Dillard starting in 2014—all of which ultimately led to the important transition into the Nasdaq market in mid-2017.’” In response, Celsius’ legal team claimed that they did not owe Dillard any additional financial compensation, provided that “the amount of royalties he [Dillard] was entitled to on the products did not exceed the stock revenue he had already been paid. In addition, any increase in Celsius’ stock value occurred after Dillard’s contract expired and therefore Celsius does not owe him any additional compensation.”  

Ultimately, when cultivating celebrity endorsement agreements or simply contracts of any kind, it’s important to complete due diligence, where both parties must undertake all precautions while drafting and reviewing the contract, in hopes of avoiding litigation, drawing bad publicity to the client and ensure the nature and use of the product is not breaching any legal provisions. 

Spicy Lawsuit May Lead to Sweet Payout: Fireball Class-Action

/ Washington Journal of Law, Technology & Arts / 1 Comment
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By: Nicholas Neathamer

Known for its slogan, “Tastes Like Heaven, Burns Like Hell,” Fireball Cinnamon Whisky is a popular liquor with a sweet taste and a spicy, cinnamon aftertaste. The mixture of Canadian whisky, cinnamon flavoring, and sweeteners is produced by the Sazerac Company, and shots of the alcohol are sold in distinctive 50 milliliter bottles around the world. But to the dismay of at least one customer, that distinctive packaging has recently been used with only minor changes to sell shots of Fireball Cinnamon, a beverage that does not contain any whisky but rather is a flavored malt beverage (FMB) containing only half of the alcohol by volume as its whisky counterpart. Anna Marquez, that spurned purchaser of the FMB variant, has filed a class-action lawsuit in the United States District Court for the Northern District of Illinois against Sazerac Company, Inc.

Marquez seeks to certify two classes of Fireball Cinnamon purchasers for the lawsuit. The first consists of purchasers in Illinois, her home state, while the second consists of those from eleven other states: North Dakota, Wyoming, Idaho, Alaska, Iowa, Mississippi, Arkansas, Kansas, Arizona, South Carolina and Utah. Marquez’s complaint lists a variety of claims, including violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, various state consumer fraud acts, breaches of express and implied warranties, negligent misrepresentation, fraud, and unjust enrichment. While these claims contain different elements, they collectively boil down to one main premise: by using near-identical packaging, Sazerac has deceived whisky-seeking consumers into purchasing a flavored malt beverage at whisky-level prices.

Aside from the one-word change in its name, Fireball Cinnamon (the FMB) has nearly identical packaging as Fireball Cinnamon Whisky. Both come in 50 mL, identically-colored bottles with a red cap and yellow label, and both drinks have an amber color. Both feature the brand’s red devil on their labels, sandwiched by the words “RED” and “HOT.” Combined, the similarities allegedly caused Marquez to mistake Fireball Cinnamon for Fireball Cinnamon Whisky, as well as pay more than she would have had she realized that it did not contain distilled spirits of any kind. To this point, Marquez claims that the similarities have allowed Sazerac to take advantage of “consumers’ cognitive shortcuts made at the point-of-sale.” The only other differentiation in Fireball Cinnamon’s packaging is a statement of the beverage’s composition in the smallest allowable font, stating that it is a “Malt Beverage with Natural Whisky & Other Flavors and Caramel Color.” Even this description is misleading, as it can easily be misinterpreted as meaning that Fireball Cinnamon contains whisky, when in fact it only contains whisky flavoring. 

Many may wonder why this matters. After all, haven’t consumers been happily enjoying Fireball Cinnamon’s familiar taste and getting buzzed regardless? Aside from the general principle that consumers should be able to have reasonable confidence in distinguishing between products they purchase, one point that Marquez’s complaint fails to elaborate on thoroughly is its argument that the false and misleading representations have allowed Fireball Cinnamon to be “sold at a premium price” of $0.99 per 50 mL bottle. While it may not sound like a steep price, this is far above the average price of malt-based beverages. In fact, as of December 2022, the average price per 50 mL of all malt-based beverages in the United States is only $0.1834. This means that consumers are paying over five times more for Fireball Cinnamon than beverages of similar composition. And while one could argue that shoppers are willing to spend this higher price, such an argument fails when considering the fact that many purchasers may be mistaking the FMB for Fireball Cinnamon Whisky. 

Another reason to care is that Sazerac’s tactics allow them to sell beverages where they previously could not. Many states heavily restrict where distilled spirits and liquors above a certain ABV can be sold, typically only allowing products such as Fireball Cinnamon Whisky shot bottles to be purchased in liquor stores. Meanwhile, by introducing the malt-based Fireball Cinnamon that contains a lower ABV, Sazerac is able to sell its products in a variety of locations that are able to sell beers, wine, and malt-based beverages. This includes being able to sell Fireball Cinnamon shot bottles in many grocery stores and gas stations, and Sazerac itself touts that the company is now able to sell the FMB in approximately 170,000 additional stores in the United States. If whisky-seeking consumers continue to be deceived into purchasing Fireball Cinnamon at these locations where hard liquors are not allowed, it may provide Sazerac an unfair advantage in both sales and brand recognition. 

While we will have to wait to see whether Marquez is able to certify the two classes of purchasers and prevail on any of her claims in federal court, the issue of deception in marketing and packaging is made clear by Sazerac’s two beverages in question. The clever similarities in the packaging of Fireball Cinnamon Whisky and Fireball Cinnamon and the success of the FMB in grocery stores demonstrate that despite how sophisticated we may like to consider ourselves as consumers, companies are still able to take advantage of our lack of time and our desire for convenience. No matter the outcome, this case may cause shoppers to take a second look at what they toss into their shopping carts. 

The Space Regulation Race: Modernizing Space Law for Modern Industry

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By: Cooper Cuene

“We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard . . .”

  • President John F. Kennedy, Address at Rice University on the Nation’s Space Effort (1962)

“Gotta go to space. Yeah. Gotta go to space.”

  • Space Core, Portal 2 (2011)

50 years after the success of Apollo 11, the United States is returning to the Moon. Following the success of the first mission of NASA’s Artemis program, the stage has been set for American astronauts to venture beyond low earth orbit for the first time in decades. The landscape of space flight, however, is much different and the industry far more crowded than the days of the Apollo program. As NASA prepares its missions to the Moon and eventually beyond to Mars, an environment crowded with other stakeholders both public and private awaits it. Inevitably, zero-gravity disputes will arise between these stakeholders, but when they do, what forums and rules are used to resolve them?

To put it gently, the law governing space is far from concrete. The majority of international space law is laid out in a small handful of treaties with the most important being the United Nations Outer Space Treaty. Counting 109 nations among its signatories, the treaty’s provisions are an international consensus. That being said, reading the Outer Space Treaty makes it clear that the agreement is a product of the Cold War and may not be suitable for the increasing number of public and private stakeholders that participate in today’s space industry. Notably, the treaty’s terms read more closely to principles than well-defined regulations. Examples of the treaty’s terms are “outer space shall be free for exploration and use for all states” and “astronauts shall be regarded as the envoys of mankind.” A nice sentiment, to be sure, but not the clear regulations needed to manage the growing space industry.

One area where this lack of regulation could prove especially damaging is the growing problem of space debris. While international regulations lag behind the lightning quick pace of private spaceflight, the debris left behind by those flights has accumulated in low earth orbit, defined as the range between 160 and 1000 kilometers above earth’s surface. SpaceX, for example, recently lost 40 Starlink satellites as a result of a solar flare. While those satellites reentered Earth’s atmosphere and burned up, plenty of other junk has taken up a concerning amount of space in lower earth orbit where active satellites normally reside. Much of the debris is harmless, but the FAA has so far failed to implement a meaningful regulatory regime to govern the creation and disposal of this kind of space junk.

Space agencies and Non-governmental organizations (NGOs) have begun to step up and propose regulations where Congress and other international bodies have failed to take action. The Inter-Agency Space Debris Coordination Committee (IADC), for example, is a coalition of space administrations that seeks to publish guidance on how to avoid the creation of space debris. While various government space agencies typically follow the rules suggested by the IADC, the same can’t be said about private spaceflight companies. Moreover, efforts to give IADC guidance the force of law is met (unsurprisingly) by pushback by both private spaceflight companies and nations that are opposed to new regulations on their own space agencies. A failure to curtail the creation of space junk could jeopardize future space missions as well as traditional flight and even people on the ground. While the IADC guidelines are a start, without true government action to create regulatory boundaries for private spaceflight companies, we risk an unregulated and dangerous environment in low-earth orbit.

So, what happens when a space-related commercial dispute occurs? As of now, there’s no good answer to that question. Like the other areas of space law discussed above, the UN’s Convention on International Liability for Damage Caused by Space Objects, or simply the Liability Convention, governs dispute resolution at a high level. However, the Liability Convention has only been invoked once, after a Russian spacecraft scattered a load of radioactive material over Canada. Hopefully, this won’t be the type of dispute that becomes common going forward. 

Existing commercial litigation doesn’t give us many answers either. Cases so far have involved government contract and intellectual property disputes within the space industry rather than cases that are unique to space. Both law firms and the government alike have generally embedded any space law attorneys within larger aerospace practice groups, again with the most common disputes centering around patents on satellites and rockets. In contrast to the sluggish pace of legal innovation in the US, the UAE has made efforts to establish a dedicated space court in Dubai for handling disputes ranging from collisions between spacecraft to litigation over satellite purchases. Only time will tell which approach wins out, but regardless of where space law begins to take shape, it will be an area of law ripe for innovation in the decades to come. 

Alice in Algorithm-land: Legal recourse for victims of content-recommendation rabbit holes

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By: Cameron Eldridge

There was a time early on in the social media landscape when all anyone would be able to tell about you based on the content of your feed was who you followed: friends, family, preferred news networks, favorite tv shows, or bands. However, content-recommendation algorithms, which were once only used for advertising, are now the backbone of social media platforms, determining what users see and when they see it. 

The content-recommendation algorithms used by Facebook, Instagram, Twitter, and Tiktok have one goal: maximizing user engagement, which means showing users whatever will keep them looking. This can benefit users when liking one video of an adorable baby animal means they get fed more. But it can also be dangerous, when a single interaction with content about mental illness or a terrorist organization can trigger the algorithm to send users spiraling down a rabbit hole, slowly distorting how they view themselves and how they interact with the world. Unfortunately, due to Section 230, when users find themselves or their loved ones have been victims of these rabbit holes they’re often left with no one to legally blame.  

Shattering the Section 230 shield

Section 230(c)(1) of the Communications Decency Act immunizes “interactive computer services” like social media platforms for publishing content created by another party. Historically, Section 230 has served as a shield protecting social media platforms from any and all liability for harmful videos, comments, and posts made on their platforms. So when a Louisiana teen’s family sues Meta because she killed herself after being fed content about suicide and self-harm, or when the family of a ten-year-old who choked themselves to death while participating in TikTok challenge sues Tiktok, the companies can avoid any consequences. If victims of the algorithm want any chance at holding social media platforms accountable, they’ll need a more creative legal strategy than content-based attacks.

A flaw in the design

A recent products liability claim against Meta brought by the Social Media Victims Law Center on behalf of plaintiff Alexis Spence is attempting to hold Instagram accountable by arguing that Instagram’s feed and explore features are defective by design. Spence, who was eleven years old when she first started using Instagram, and now at twenty years old suffers from severe mental illness, claims that these design features of the Instagram app are the but-for cause of her injuries. While it is too early to tell how Spence’s case will pan out, there is some supporting precedent in another recent case, Lemmon v. Snap, Inc. The court in this case held Snapchat liable for foreseeable injuries resulting from its ‘speed filter,’ another design-based claim. 

Another promising strategy that is currently being tested is an attack against the recommendation algorithm itself. Next month the question of whether Section 230 should protect platforms when they make targeted recommendations of information, or only protect platforms when they engage in traditional editorial functions like publishing or withdrawing content, will be raised in front of the Supreme Court by University of Washington Law Professor Eric Schnapper in Gonzalez v. Google. 

Gonzalez is brought on behalf of Nohemi Gonzalez, a 23-year-old U.S. citizen who was studying in Paris in November 2015, when he was murdered in one of a series of violent ISIS attacks that resulted in the deaths of over a hundred people. The complaint alleges that YouTube not only unknowingly published hundreds of ISIS recruitment videos but also affirmatively recommended those videos to users and that these recommendations go beyond the traditional editorial functions of a publisher which Section 230 textually protects. 

Many in the tech world fear that alterations to Section 230 protections like those Gonzalez seeks to make would render the existence of social media platforms legally impossible. How would apps like TikTok, which is based almost entirely on its content-recommendation algorithm, continue to function if they could be held liable for its every consequence? A ruling against Google would certainly change social media platforms as we know them, but it may also force them to take more responsibility for the kind of rabbit holes they’re sending users down. While this would pose a financial and logistical burden, it’s one that tech companies like Meta and Google probably can and should bear. 

Apple AirTags – Stalking made easy in the age of convenience

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Photo Credit: Zachary Zylak

By: Kayleigh McNiel

Marketed as a means of locating lost or stolen items, Apple AirTags are a convenient and affordable tool for tracking down your lost keys, misplaced luggage, and even your ex-partner. Weighing less than half an ounce, these small tracking devices fit in the palm of your hand and can be easily hidden inside backpacks, purses, and vehicles without arousing the owner’s suspicion. 

Reports of AirTag stalking began emerging almost immediately upon their release in April of 2021. Apple’s assurances that AirTag’s built-in abuse prevention features would protect against “unwanted tracking” have fallen woefully short of the reality that these $29 devices are increasingly being used to monitor, surveil and stalk women across the country.

The Wrong Tool in the Wrong Hands – Women Are Being Targeted with AirTags

Through an expansive review of 150 police reports involving Apple AirTags from eight law enforcement agencies across the nation, an investigative report by Motherboard confirmed the disturbing truth. One third of the reports were filed by women who received notifications that they were being tracked by someone else’s AirTag. The majority of these cases involved women being stalked by a current or former partner. Of the 150 reports reviewed by Motherboard, less than half involved people using their own AirTags to find their lost or stolen property.   

AirTags pose a significant danger to victims of domestic violence and have been used in at least two grisly murders. In January 2022, Heidi Moon, a 43-year-old mother from Akron, Ohio, was shot and killed by her abusive ex-boyfriend who tracked her movements using an AirTag hidden in the back seat of her car. In June 2022, Andre Smith, a 26-year-old Indianapolis man, died after he was repeatedly run over by his girlfriend after she found him at a bar with another woman by tracking him with an AirTag.

It’s not just domestic violence victims who are in danger. Stories are emerging on social media of women discovering AirTags under their license plate covers or receiving notifications that they are being tracked after traveling in public places. One woman’s viral TikTok describes how she received repeated notifications that an unknown device was tracking her after visiting a Walmart in Texas. Unable to locate the device, she tried unsuccessfully to disable it, and continued receiving notifications even after she turned off the location services and Bluetooth on all of her Apple devices.   

In January 2022, Sports Illustrated Swimsuit model Book Nader discovered that a stranger slipped an Apple AirTag into her coat pocket while she was sitting in a restaurant. The device tracked her location for hours before the built-in safety mechanism triggered a notification sent to her phone. 

One Georgia woman, Anna Mahaney, began receiving the alerts after going to a shopping mall but was unable to locate the tracker. When she tried to disable the device, she received an error message that it was unable to connect to the server. She immediately went to an Apple Store for help and was told that no beep sounded because the owner of the AirTag had apparently tracked her until she got home and then disabled it. 

Apple’s haphazard release of these button-sized trackers, with near complete disregard for the danger they pose to the public, has resulted in a recent federal class action lawsuit filed by two California women who were stalked by men using AirTags. One plaintiff, identified only as Jane Doe, was tracked by her ex-husband who hid an AirTag in their child’s backpack. The other plaintiff, Lauren Hughes, fled her home and moved into a hotel after being stalked and threatened by a man she dated for only three months. After she began receiving notifications that an AirTag was tracking her, Hughes found one in the wheel well of her back tire. 

The plaintiffs in Hughes et al v. Apple, Inc., 3:22-cv-07668, say Apple ignored the warnings from advocates and put the safety of consumers and the general public at risk by “revolutionizing the scope, breadth, and ease of location-based stalking.” 

The Tech Behind the Tags – Insufficient Safety Warnings and a Lack of Prevention

AirTags work by establishing a Bluetooth connection with nearby Apple devices. Once connected, it uses that device’s GPS and internet connection to transmit the AirTag’s location to the iCloud where users can track it via the Find My app. With a vast network of more than 1.8 billion Apple devices worldwide, AirTags can essentially track anyone, anywhere.  

While the accuracy of Bluetooth tracking can vary, newer iPhone devices (models 11 and up) come equipped with ultra-wide broadband technology that allows AirTag owners to use Precision Tracking to get within feet of its location. 

In its initial release in April 2021, Apple included minimal safety measures including alerts that inform iPhone users if someone else’s AirTag had been traveling with them.Additionally, AirTags chime if separated from its owner after three days. 

When someone discovers an AirTag and taps it with their iPhone, it tells them only the information the owner allows. If an AirTag has been separated from its owner for somewhere between eight and twenty-four hours, it begins chirping regularly. By then, the AirTag owner may have already been able to track their target for hours, learning where they live, work, or go to school. The chirp is only about 60 decibels which is the average sound level of a restaurant or office. This sound is easy to muffle especially if the AirTag is hidden under a car license plate or in a wheel well. This quiet alarm is the only automatic protection against stalking Apple can provide to those who do not have an iPhone. 

Apple did eventually release an app that Android users can download to scan for rogue AirTags, but it requires Android users to know about AirTag tracking and then manually scan for the devices. With only 2.4 stars, many complain that it is ineffective and does not provide enough information.  

In response to the wave of criticism and reports of stalking and harassment, Apple has begun to increase these safety measures in piecemeal updates, which so far have failed to resolve the problem. Just three months after its release, Apple shortened the amount of time it takes for AirTags to chime if separated from its owner; from three days to somewhere between eight and twenty-four hours. But it’s easy to register an AirTag, and then disable it before the target begins receiving notifications.

Our Legal Systems Are Not Prepared to Protect Victims From AirTag Stalking.

Our criminal and civil legal systems are painfully slow to respond to the way technology has changed the way we engage with our families and communities and how we experience harm in those relationships. One of the biggest challenges victims face in reporting AirTag stalking is that many police departments and Courts do not even know what AirTags are or how they can be used to harass and stalk women.

In some states, it is not even a crime to monitor someone’s movements with a tracking device like an AirTag without their knowledge or consent. At least 26 states and the District of Columbia have some kind of law prohibiting the tracking of others without their knowledge. While 11 of these states, including Washington, incorporate this into their stalking statutes, nine others (Delaware, Illinois, Michigan, Oregon, Rhode Island, Tennessee, Texas, Utah and Wisconsin) only prohibit the use of location-tracking devices on motor vehicles without the owner’s consent. These state laws do nothing to protect against AirTags being placed in your bag or purse. These laws also don’t protect those who share a vehicle with their abuser, since the other party is also technically the owner of the vehicle. 

Many states are rapidly seeing the need to beef up their laws in response to AirTags. The Attorneys General of both New York and Pennsylvania have issued consumer protection alerts warning people about the dangers of AirTags. But much more needs to be done.

The fact that Apple released this product without considering the disproportionate impact it would have on the safety of women across the globe shows a clear lack of diversity in Apple’s design and manufacturing process.