Proof Requirement To establish that an advertisement is false, a PLAINTIFF must prove five things: 1 a false statement of fact has been made about the advertiser’s own or another person’
Trang 1CROSS REFERENCE
Administrative Law and Procedure.
FAIR HOUSING ACT OF 1968
The Fair Housing Act of 1968 (FHA) (42 U.S.C
A §§ 3601-3631) is also known as Title VIII of
theCIVIL RIGHTSAct of 1968 Congress passed the
act in an effort to impose a comprehensive
solution to the problem of unlawful
DISCRIMINA-TION in housing based on race, color, sex,
national origin, or RELIGION The Fair Housing
Act has become a central feature of modern civil
rights enforcement, enabling persons in the
protected classes to rent or own residential
property in areas that were previously segregated
THE DEPARTMENT OF HOUSING AND URBAN
DEVELOP-MENT (HUD) is charged with enforcement of
the act It issues regulations and institutes
investigations into discriminatory housing
practices
The passage of the Fair Housing Act came
after the failure of two earlier federal initiatives
A 1962EXECUTIVE ORDERdirected all departments
of the EXECUTIVE BRANCH to take appropriate
action to prevent discrimination in all
fede-rally administered housing programs The Civil
Rights Act of 1964 contained language in Title
VI that prohibited housing discrimination in
any program receiving federal financial
assis-tance Although Title VI provided that a
recipient of funding who was found in violation
could be prevented from continuing receipt of
governmental assistance, this sanction was
rarely used
The Fair Housing Act prohibits
discrimina-tory conduct by a variety of legal entities The act
defines “person” to include one or more
indi-viduals, corporations, partnerships, associations,
labor organizations, legal representatives, mutual
companies, joint-stock companies, trusts,
unin-corporated organizations, trustees, receivers, and
fiduciaries In addition, municipalities, local
government units, cities and federal agencies
are subject to the law
The act explicitly defines a list of prohibited
practices involving housing, including sales,
rentals, advertising, and financing Its primary
prohibition makes it unlawful to refuse to sell,
rent to, orNEGOTIATEwith any person because of
that person’s race, color, religion, sex, familial
status, handicap, or national origin The Fair
Housing Amendments Act of 1988 added
exten-sive provisions that apply to discrimination
against disabled persons and families with children 18 years of age and under
It is illegal under the Fair Housing Act to discriminate in the sale or rental of a dwelling because of the DISABILITY of (1) the buyer or renter, (2) a person who will reside in the dwelling after it is sold or rented, or (3) any person associated with the buyer or renter It is not illegal, however, to refuse to rent or sell housing to an individual, with or without a disabling condition, whose TENANCY would constitute a direct threat to the health or safety
of other individuals or whose tenancy would result in substantial physical damage to the property of others Newly constructed multi-family dwellings must be designed so that the public and common-use portions are accessible
to people with disabilities
The Fair Housing Act also prohibits discrim-inatory advertising practices in the sale or rental
of housing Advertising may not disclose a
“preference, limitation or discrimination” based
on any of the protected categories of persons
The media company that runs an offensive advertisement or other statement may be held liable, as may the advertiser Subtle advertising strategies, such as the selective use of minority-identified media for the marketing of segregated and overpriced housing to minorities, and the use of code words, such as“exclusive” neighbor-hood, in the text of the realty classified advertise-ments, violate the act The law reaches unpub-lished statements including discriminatory expressions and conduct, such as a landlord’s instruction to his rental agent, superintendent, or other employees that they should either not rent
to blacks or that they should give a preference to whites or certain ethnic groups
The law makes it illegal for an owner or his agent to represent to any member of any statutorily protected class that a dwelling is unavailable for inspection, rental, or sale, when,
in fact, it actually is available The act has been found to have been violated by a realty firm that posted “sold” signs on the lawns of a white neighborhood in an attempt to discourage minorities from purchasing houses in the neighborhood
The Fair Housing Act also sought to end a practice called “blockbusting:” the practice by realtors of frightening homeowners by telling them that people who are members of a particular race, religion, or other protected class
FAIR HOUSING ACT OF 1968 329
Trang 2are moving into their neighborhood and that they should expect a decline in the value of their property The purpose of this scheme is to get homeowners to sell out at a deflated price In alleged BLOCKBUSTING cases, the courts have focused on what was heard, rather than what was said Even in the absence of wrongful intent
by the real estate salesman, or explicit reference
to a protected class, liability will attach if the reasonable homeowner believes that the sales-man is trading on his assumed fear of minorities
to stimulate that homeowner to list his house for sale
Although the primary focus of the law is to protect prospective renters and buyers of real estate, the Fair Housing Act also protects real estate agents who are members of the protected classes Real estate brokerages may not set different fees for membership in multiple listing services, and may not deny or limit benefits accruing to members in real estate brokers’ organizations In addition, brokerages may not establish geographic boundaries, office location, or residence requirements for access to, or membership in, any real estate-related organization, based on an individual’s membership in any of the statutorily protected categories
Congress worked to identify all components
of the housing industry that might discriminate against persons in the protected classes This explains why the Fair Housing Act governs the housing financing industry Banks and financial institutions may not discriminate when financ-ing the purchase, construction, improvement, repair, or maintenance of a house This section
of the act also applies to the selling, brokering,
or appraising of residential real estate
Despite the apparent breadth of the law, Congress did exempt several classes of defen-dants from coverage It does not apply to single-family homeowners if they sell or rent their homes without the use of a real estate agent or other person who is in the business of selling and renting homes In addition, the homeowner must not use advertising that indicates a discriminatory preference This exemption applies to only one sale within a 24-month period Multiple-family homeowners are ex-empt if no more than four families reside in a dwelling, including the owner The act also grants exemptions to religious organizations, private clubs, and senior citizens, subject to some limitations
The provisions of the Fair Housing Act may
be enforced by HUD and through“pattern and practice” lawsuits brought by the attorney general A person who alleges discrimination may file a complaint with HUD If the depart-ment believes that the claim has merit, the matter will be referred to an administrative law judge for a hearing The judge is empow-ered to award actual damages, equitable relief, and attorneys’ fees to thePREVAILING PARTY The judge also may assess civil penalties against the violators, which can range from $25,000 to
$50,000 The judge may not award PUNITIVE DAMAGES nor require AFFIRMATIVE ACTION of the violator, however In addition, a private citizen may also file a civil lawsuit in federal court against the alleged violator of the act Finally, the attorney general may file a civil lawsuit when there is evidence of a pattern or practice
by the alleged violator that extends beyond one
or two victims When the attorney general prevails in these types of lawsuits, the act allows the awarding of injunctive relief and monetary damages to theAGGRIEVED PARTY In addition, the court may assess civil penalties against the violator up to $50,000 for a first violation and
up to $100,000 for any subsequent violation
FURTHER READINGS Justice Department Civil Rights Division The Fair Housing Act of 1968 Sec 800 [42 U.S.C 3601 –3631] Available online at http://www.usdoj.gov/crt/housing/title8.php; website home page: http://www.usdoj.gov (accessed July
23, 2009).
Russell, Marcia L 2004 Fair Housing Chicago, IL: Dearborn.
Sidney, Mara S 2003 Unfair Housing: How National Policy Shapes Community Action Lawrence: Univ Press of Kansas.
FAIR LABOR STANDARDS ACT The Fair Labor Standards Act of 1938 (29 U.S C.A § 201 et seq.) was federal legislation enacted
in 1938 by Congress, pursuant to its power under theCOMMERCE CLAUSE, that mandated aMINIMUM WAGE and maximum 40-hour work week for employees of those businesses engaged in inter-state commerce
Popularly known as the “Wages and Hours Law,” the Fair Labor Standards Act was one of a number of statutes making up the NEW DEAL program of the presidential administration of FRANKLIN DELANO ROOSEVELT Aside from setting a maximum number of hours that a person could work for the minimum wage, it also established
330 FAIR LABOR STANDARDS ACT
Trang 3the right of the eligible worker to at least“time
and a half”—or one and one-half times the
customary pay—for those hours worked in
excess of the statutory maximum
Other provisions of the act forbade the use
of workers under the age of 16 in most jobs and
prohibited the use of workers under the age of
18 in those occupations deemed dangerous
The act was also responsible for the creation of
the Wage and Hour Division of the LABOR
DEPARTMENT
Over the years, the Fair Labor Standards Act
has been subject to amendment but continues
to play an integral role in the U.S workplace
CROSS REFERENCES
Employment Law; Labor Department.
FAIR MARKET VALUE
The amount for which real property or personal
property would be sold in a voluntary transaction
between a buyer and seller, neither of whom is
under any obligation to buy or sell
The customary test of fair market value in
real estate transactions is the price that a buyer
is willing, but is not under any duty, to pay for a
particular property to an owner who is willing,
but not obligated, to sell
Various factors can have an effect on the fair
market value of real estate, including the uses to
which the property has been adapted and the
demand for similar property Fair market value
can also be referred to as fair cash value or fair
value
FAIR-TRADE LAWS
State statutes enacted in the first half of the
twentieth century permitting manufacturers to set
minimum, maximum, or actual selling prices for
their products, and thus to prevent retailers from
selling products at very low prices
Manufacturers have an interest in
establish-ing and maintainestablish-ing GOOD WILL toward their
products This means assuring consumers that
the manufacturers’ goods are quality products
Good will is promoted by advertising and other
sales efforts Manufacturers in the early 1900s
believed that commanding minimum retail
prices was necessary to preserve good will, and
that uncontrolled price-cutting by retailers
would be detrimental to good will Specifically,
manufacturers feared that consumers would
become skeptical if a particular retailer began to sell for a lower price a product that had had a relatively consistent price over the years: the lower price would undercut any claim by the manufacturer that the higher price was neces-sary to maintain the product’s quality, and purchasers at the higher price would feel cheated
The Great Depression following the STOCK MARKET crash of 1929 started a movement toward state involvement in product price controls State lawmakers believed that allowing manufacturers to dictate resale prices to retailers would help stabilize price levels and markets
In 1931 California became the first state to pass fair-trade laws These laws made it legal for
a manufacturer to enter an agreement whereby the purchasing retailer, the signor, could resell a product only at a prescribed minimum price In
1933 California amended these laws to make such an agreement binding on nonsignors The amendments made minimum-price agreements enforceable against any retailer who had knowledge of another retailer’s agreement with the manufacturer
The setting of minimum resale prices, which state fair-trade laws legalized, was precisely the sort of vertical PRICE-FIXING that the federal SHERMAN ANTI-TRUST ACTof 1890 (15 U.S.C.A § 1) had been intended to prohibit While the courts wrestled with the conflicting state and federal laws, Congress passed first the Miller-Tydings Act (50 Stat 693[Aug 17, 1935]), which amended the Sherman Act to exempt state fair-trade laws, and then the McGuire Act (66 Stat 632 [1952]), which allowed states to pass fair-trade laws making minimum price agreements enforceable against nonsignors as well
After the enactment of Miller-Tydings and McGuire, state fair-trade laws and federal antitrust laws were no longer in conflict, and
as many as 45 states enacted fair-trade laws
As time passed, though, state courts whittled away at the fair-trade laws, often finding them
to be in violation of the state’s constitution The perceived importance of allowing manufac-turers to set minimum prices deteriorated as it became evident that the laws were harming the free market In 1975 Congress, with support of the Ford administration, passed the Consumer Goods Pricing Act (Pub L No 94-145), which repealed the Miller-Tydings and McGuire Acts,
FAIR-TRADE LAWS 331
Trang 4putting state fair-trade laws back within the prohibitions of the Sherman Act
In the early twenty-first century, the com-puter and electronics industries face retail price-cutting issues Volume discount retailers sell name brand computers and electronics at prices far below those initially established in the market With fair-trade laws off the books, retailers and the market determine at what prices goods will be sold
FURTHER READINGS Areeda, Phillip, Louis Kaplow, and Aaron S Edlin 2004.
Antitrust Analysis: Problems, Text, Cases 6th ed.
Frederick: Aspen.
Posner, Richard A 2001 Antitrust Law Chicago: Univ of Chicago Press.
Tucker, Albert 2006 “Fair Enough? Big Business, Mass Markets and Fretting Farmers ” New Internationalist
395 (November 1).
FAIRNESS DOCTRINE The doctrine that imposes affirmative responsibil-ities on a broadcaster to provide coverage of issues
of public importance that is adequate and fairly reflects differing viewpoints In fulfilling its fairness doctrine obligations, a broadcaster must provide free time for the presentation of opposing views if a paid sponsor is unavailable and must initiate programming on public issues if no one else seeks
to do so
Between the 1940s and 1980s, federal regu-lators attempted to guarantee that the broadcast-ing industry would act fairly The controversial policy adopted to further that attempt was called the fairness doctrine The fairness doc-trine was not a statute, but a set of rules and regulations that imposed controls on the content of the broadcasting media It viewed radio and television as not merely industries but servants of the PUBLIC INTEREST Enforced
by theFEDERAL COMMUNICATIONS COMMISSION(FCC), the fairness doctrine had two main tenets:
Broadcasters had to cover controversial issues, and they had to carry contrasting viewpoints
on such issues Opponents of the doctrine, chiefly the media themselves, called it unconsti-tutional Although it survived court challenges, the fairness doctrine was abolished in 1987 by deregulators in the FCC who deemed it out-dated, misguided, and ultimately unfair Its demise left responsibility for fairness entirely to the media
The fairness doctrine grew out of early regulation of the radio industry As the medium
of radio expanded in the 1920s, its chaotic growth caused problems: For one, broadcasters often overlapped on each other’s radio frequen-cies In 1927 Congress imposed regulation with its passage of the Radio Act (47 U.S.C.A § 81
et seq.) This landmark law established the Federal Radio Commission (FRC), reestablished
in 1934 as the Federal Communications Com-mission Empowered to allocate frequencies among broadcasters, the FRC essentially
decid-ed who could broadcast, and its mandate to do
so contained the seeds of the fairness doctrine The commission was not only to divvy up the limited number of bands on the radio dial; Congress said it was to do so according to public “convenience, interest, or necessity.” Radio was seen as a kind of public trust: Individual stations had to meet public expecta-tions in return for access to the nation’s airwaves
In 1949 the first clear definition of the fairness doctrine emerged The FCC said, in its Report on Editorializing, “[T]he public interest requires ample play for the free and fair competition of opposing views, and the com-mission believes that the principle applies
to all discussion of issues of importance to the public.” The doctrine had two parts: it required broadcasters (1) to cover vital controversial issues in the community and (2) to provide a reasonable opportunity for the presentation of contrasting viewpoints In time, additional rules were added The so-called personal attack rule required broadcasters to allow opportunity for rebuttal to personal attacks made during the discussion of controversial issues The“political editorializing” rule held that broadcasters who endorsed a candidate for political office had to give the candidate’s opponent a reasonable opportunity to respond
Enforcement was controversial Complaints alleging violations of the fairness doctrine were
to be filed with the FCC by individuals and organizations, such as political parties and unions Upon review of the complaint, the FCC could take punitive action that included refusing to renew broadcasting licenses Not surprisingly, radio and TV station owners resented this regulatory power They grumbled that the print media never had to bear such burdens The fairness doctrine, they argued,
332 FAIRNESS DOCTRINE
Trang 5infringed upon theirFIRST AMENDMENTrights By
the late 1960s, a First Amendment challenge
reached the U.S Supreme Court, in Red Lion
Broadcasting Co v FCC, 395 U.S 367, 89 S Ct
1794, 23 L Ed 2d 371 (1969) The Court
upheld the constitutionality of the doctrine in a
decision that only added to the controversy The
print and broadcast media were inherently
different, it ruled In the broadcast media, the
Court said, “it is the right of the viewers and
listeners, not the right of the broadcasters,
which is paramount it is the right of the
public to receive suitable access to social,
political, esthetic, moral, and other ideas and
experiences which is crucial here.”
Although the fairness doctrine remained in
effect for almost two more decades following
Red Lion, the 1980s saw its abolishment
Antiregulatory fervor in the administration of
PresidentRONALD REAGANbrought about its end
The administration, which staffed the FCC with
its appointees, favored little or no restrictions
on the broadcast industry In its 1985 Fairness
Report (102 F.C.C.2d 145), the FCC announced
that the doctrine hurt the public interest and
violated the First Amendment Moreover,
technology had changed: with the advent of
multiple channels on cable television, no longer
could broadcasting be seen as a limited
re-source Two years later, in August 1987, the
commission abolished the doctrine by a 4–0
vote, intending to extend to radio and television
the same First Amendment protections
guaran-teed to the print media Congress had tried to
stop the FCC from killing the fairness doctrine
Two months earlier, it had sent President
Reagan the Fairness in Broadcasting Act of
1987 (S 742, 100th Cong., 1st Sess [1987]),
which would have codified the doctrine in
federal law The president vetoed it
President Reagan’s veto of the 1987
con-gressional bill to establish the fairness doctrine
as law did not end the controversy, however
Even into the early 2000s, proponents
contin-ued to call for its reinstatement
FURTHER READINGS
Barron, Jerome A 1989 “What Does the Fairness Doctrine
Controversy Really Mean? ” Hastings Communications/
Entertainment Law Journal 12 (winter).
Hall, Roland F.L 1994 “The Fairness Doctrine and the First
Amendment: Phoenix Rising ” Mercer Law Review 45
(winter).
Harowitz, Linda 1989 “Laying the Fairness Doctrine to Rest: Was the Doctrine ’s Elimination Really Fair?”
George Washington Law Review 58 (June).
Hazlett, Thomas W., and David W Sosa 1997 “Was the Fairness Doctrine a ‘Chilling Effect’? Evidence from the Postderegulation Radio Market ” Journal of Legal Studies 26 (January) Available online at http://papers.
ssrn.com/sol3/papers.cfm?abstract_id=10146; website home page: http://papers.ssrn.com (accessed September
2, 2009).
Leweke, Robert W 2001 “Rules without a Home: FCC Enforcement of the Personal Attack and Political Editorial Rules ” Communication Law and Policy 6 (autumn).
FALSE ADVERTISING
“Any advertising or promotion that misrepresents the nature, characteristics, qualities or geographic origin of goods, services or commercial activities”
(Lanham Act, 15 U.S.C.A § 1125(a))
Proof Requirement
To establish that an advertisement is false, a PLAINTIFF must prove five things: (1) a false statement of fact has been made about the advertiser’s own or another person’s goods, services, or commercial activity; (2) the state-ment either deceives or has the potential to deceive a substantial portion of its targeted audience; (3) the deception is also likely to affect the purchasing decisions of its audience;
(4) the advertising involves goods or services in interstate commerce; and (5) the deception has either resulted in or is likely to result in injury
to the plaintiff The most heavily weighed factor
is the advertisement’s potential to injure a customer The injury is usually attributed to money the consumer lost through a purchase that would not have been made had the advertisement not been misleading False state-ments can be defined in two ways: those that are false on their face and those that are implicitly false
Development of Regulations
One early attempt to create advertising industry standards was made in 1911 when the trade journal Printer’s Ink proposed that false adver-tising be classified as a crime As a result, false advertising became a MISDEMEANORin 44 states
Statutes were based on the model statute suggested by Printer’s Ink These statutes are still in effect; however, they are rarely used because it requires proving that the false advertising exists BEYOND A REASONABLE DOUBT, a difficult standard to meet
FALSE ADVERTISING 333
Trang 6In place of the Printer’s Ink statute, states adopted the Uniform Deceptive Trade Practices Act of 1964 (revised 1966), which lists a dozen different items that are prohibited in the advertising trade The only remedy available under this act is injunctive relief—a court order that admonishes the guilty party for its actions—which may explain the low number
of states that have adopted it (As of 2003, only
12 states have adopted the statute in some form.) Other states have different statutes regarding false advertising Most of these statutes require the courts to interpret state laws using federal guidelines provided by the FEDERAL TRADE COMMISSION (FTC) According to the FTC, which amended its standards to help regulate cigarette labeling, three elements are necessary to show that an advertisement is false
or unfair The ad has to offend PUBLIC POLICY;
be immoral, unethical, oppressive, or unscru-pulous; and substantially injure consumers
Types of False Advertising
Regulations in the early 2000s define three main acts that constitute false advertising: failure to disclose, flawed and insignificant research, and product DISPARAGEMENT The majority of these regulations are outlined in the LANHAM ACT of
1946 (15 U.S.C.A § 1051 et seq), which contains the statutes that govern trademark law in the United States
Failure to Disclose It is considered false advertising under the Lanham Act if a represen-tation is “untrue as a result of the failure to disclose a material fact.” Therefore, false advertising can come from both misstatements and partially correct statements that are mis-leading because they do not disclose something the consumer should know The Trademark Law Revision Act of 1988, which added several amendments to the Lanham Act, left creation of the line between sufficient and insufficient disclosure to the discretion of the courts
American Home Products Corp v Johnson &
Johnson, 654 F Supp 568, S.D.N.Y 1987, is an example of how the courts use their discretion
in determining when a disclosure is insufficient
In this case, Johnson and Johnson advertised a drug by comparing its side effects to those of a similar American Home Products drug, leaving out a few of its own side effects in the process
Although the Lanham Act does not require full
disclosure, the court held the DEFENDANT to a higher standard and ruled the advertisement misleading because of the potential health risks
it posed to consumers
Flawed and Insignificant Research Advertise-ments based on flawed and insignificant research are defined under section 43(a) of the Lanham Act as “representations found to be unsupported by accepted authority or research
or which are contradicted by prevailing author-ity or research.” These advertisements are false
on their face
Alpo Pet Foods v Ralston Purina Co., 913 F.2d 958 (D.C Cir 1990), shows how basing advertising claims on statistically insignificant test results provides sufficient grounds for a false advertising claim In this case, the Ralston Purina Company claimed that its dog food was benefi-cial for dogs with canine hip dysplasia, demon-strating the claims with studies and tests Alpo Pet Foods brought a claim of false advertising against Purina, saying that the test results could not support the claims made in the advertise-ments Upon looking at the evidence and the way the tests were conducted by Purina, the court ruled not only that the test results were insignificant but also that the methods used to conduct the tests were inadequate and the results could therefore not support Purina’s claims Product Disparagement Product disparage-ment involves discrediting a competitor’s prod-uct The 1988 amendment to the Lanham Act extends claims for false advertising to misre-presentations about another’s products
Trademark Infringement
Trademark INFRINGEMENT is similar to product disparagement, and is described in section 32(1)
of the Lanham Act This section states that:
anyone who shall, without the consent of the registrant—(a) use in commerce any repro-duction, COUNTERFEIT, copy or COLORABLE
imitation of a registered mark in connection with the sale, offering for sale, distribution or advertising of any goods or services or in connection with which such use is likely to cause confusion, or cause mistake, or to deceive shall be liable in aCIVIL ACTIONby the registrant
A trademark is a symbol, phrase, or some other device that distinguishes ownership of a product or service A trademark also stands as a
334 FALSE ADVERTISING
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rely on TRADEMARKSwhen making purchases If
one company adopts a trademark similar to a
competing company, the public may think the
trademark’s owner either sponsored or
ap-proved the use of the trademark Therefore,
the reputation of the original holder of the
trademark is compromised and consumers are
deceived and confused by false advertising
In determining whether there is a likelihood
of confusion under the Lanham Act, the courts
use the Polaroid test, which includes eight
factors established in Polaroid Corp v Polara
Electronics Corp., 287 F 2d 492 (2nd Cir 1961)
They are the strength of the plaintiff’s mark,
similarity of uses, proximity of the products,
likelihood that the prior owner will expand into
the domain of the other, actual confusion,
defendant’s good or BAD FAITH in using the
plaintiff’s mark, quality of the junior user’s
product, and sophistication of consumers
These eight factors do not all have to be
satisfied to prove a case; the major factor the
courts focus on is the potential to confuse
consumers
The Polaroid test is for cases that involve
commercial exploitation When an advertising
dispute involvesFIRST AMENDMENTviolations, the
issue at hand is often the use ofPARODY
Parody
For parody cases, a balancing test that is more
useful than the Polaroid test was established by
Cliffs Notes v Bantam Doubleday Dell Publishing
Group, 886 F.2d 490 (2nd Cir 1989) The court
held that Bantam’s production of Spy Notes, which
was a parody of Cliffs Notes study guides, was not a
violation of the Lanham Act because Bantam
clearly conveyed in advertising that Spy Notes was
a parody Therefore, there was no confusion As a
result, the balancing test used by the court in Cliffs
Notes requires that “a parody must convey two
simultaneous—and contradictory—messages:
that it is the original, but also that it is not the
original and is instead a parody.” If a parody does
not have both messages, it is likely to confuse the
consumers
Another claim involving parody is the 1995
case of Hormel Foods Corp v Jim Henson
Productions, 73 F.3d 497 (2nd Cir 1996) In this
case, Hormel brought Jim Henson Productions
to court for trademark infringement and false
advertising under the Lanham Act At the time
the case was initiated, Henson was producing the movie Muppet Treasure Island with a new character: an exotic wild boar named Spa’am
Henson’s intention was to make the audience laugh at the intended parody between the Muppet’s wild boar and Hormel’s tame lun-cheon meat
Hormel’s claims of false advertising and trademark infringement under the Lanham Act and its common-law claims of trademark dilution and deceptive practices were all denied
by the court for several reasons, the main one being that Henson had clearly, in all his advertising, identified Spa’am as a character from a Muppet motion picture This usage was not confusing under the Polaroid test and therefore was not a solid basis for a false advertising or trademark infringement claim
Henson’s usage also satisfied the balancing test requirements set up by Cliffs Notes
Remedies for False Advertising
Had Hormel won its claim against Henson, three remedies would have been available to it:
injunctive relief, corrective advertising, and damages
Injunctive Relief Injunctive relief is granted by the courts upon the SATISFACTION of two requirements First, a plaintiff must demon-strate a “likelihood of deception or confusion
on the part of the buying public caused by a product’s false or misleading description or advertising” (Alpo) Second, a plaintiff must demonstrate that an “irreparable harm” has been inflicted, even if such harm is a decrease in sales that cannot be completely attributed to a defendant’s false advertising It is virtually impossible to prove that sales can or will be damaged; therefore, the plaintiff only has to establish that there exists a causal relationship between a decline in its sales and a competitor’s false advertising Furthermore, if a competitor specifically names the plaintiff’s product in a false or misleading advertisement, the harm will
be presumed (McNeilab, Inc v American Home Products Corp., 848 F.2d 34 [2nd Cir 1988])
Corrective Advertising Corrective advertising can be ruled in two different ways First, and most commonly, the court can require a defendant to launch a corrective advertising campaign and to make an affirmative, correct-ing statement in that campaign For example, in Alpo, the court required Purina to distribute a
FALSE ADVERTISING 335
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Second, the courts can award a plaintiff monetary damages so that the plaintiff can conduct a corrective advertising campaign to counter the defendant’s false advertisements
For example, in U-Haul International v Jartran, Inc., 793 F.2d 1034 (9th Cir 1986), the plain-tiff, U-Haul International, was awarded $13.6 million—the cost of its corrective advertising campaign
Damages To collect damages, the plaintiff generally has to show either that some con-sumers were actually deceived or that the defendant used the false advertising in bad faith Four types of damages are awarded for false advertising: profits the plaintiff loses when sales are diverted to the false advertiser; profits lost by the plaintiff on sales made at prices reduced as a demonstrated result of the false advertising; the cost of any advertising that actually and reasonably responds to the defen-dant’s offending advertisements; and quantifi-able harm to the plaintiff’s GOOD WILL to the extent that complete and corrective advertising has not repaired that harm (Alpo)
Consumer Protection
Although most false advertising claims brought against advertisers are by competitors, consu-mers can also file such claims No hard-and-fast rules exist for all consumer-initiated cases;
courts deal with claims brought by consumers
on more of a case-by-case basis than they do with claims brought by competitors The issues surrounding consumer rights were discussed during the drafting of the 1988 Trademark Law Revision Act, but were not resolved
In cases where consumers have sued, they have most often been held to the same standards
as competitors: They need to show that they have
a reasonable interest in order to be protected
This standard was demonstrated by the CLASS ACTIONlawsuit of Maguire v Sandy Mac, 138 F.R
D 444 (D.N.J 1991) In that case, the class included both resellers, who had purchased a ham product from the defendant, and consu-mers, who had ultimately bought the ham products The lawsuit claimed that the defendant sold ham products falsely represented as meeting U.S DEPARTMENT OF AGRICULTURE standards The court ruled for the plaintiffs, saying that “the plaintiff and the proposed class, the consumers,
have a reasonable interest in being protected from criminal misrepresentations.”
Another way consumers are protected is by state laws on deceptive trade practices Some state laws define these practices as showing goods or services with the intention of not actually selling them as advertised In Affrunti v Village Ford Sales, 232 Ill App 3d 704, 597 N.E.2d 1242 (3rd Dist Ct App 1992), a consumer filed a lawsuit against an automobile dealership that sold him a car for more money than it was actually advertised for Ronald Affrunti went to Village Ford Sales, a used-car lot, and looked at a blue 1986 Celebrity with 29,000 miles on the odometer The car did not have a sticker price, so he asked the salesman, Fred Galaraza, for a price Galaraza answered that he would have to check in his office After showing Affrunti several other used cars, and without going to his office, Galaraza quoted a price of $8,600 for the Celebrity Affrunti and Galaraza settled on a final price of $8,524, which included a trade-in and a discount for a front-end alignment Upon returning home, Affrunti came across an advertisement by Village Ford Sales for a 1986 blue Celebrity with 29,999 miles
on the odometer for $6,995 Affrunti called the dealership Galaraza checked and said,“By God, it’s the same!” Affrunti asked to redo the deal based on the advertised price Galaraza put him
on hold When Galaraza came back on the line,
he said the car in the ad had been sent to auction, and they could not redo the deal because it was not the same car
At trial, the sales manager testified that prices listed in advertisements are not necessarily the listed cars’ actual prices; dealers can sell the cars for higher prices After hearing the evidence, the judge ruled that the dealer had an obligation to inform the plaintiff of the advertised price of the car, and awarded Affrunti the difference between the purchase price and the advertised price, which amounted to $1,529 On appeal, the Illinois Appellate Court ruled that “the defen-dant’s failure to disclose the advertised sale price constituted deceptive conduct under the CON-SUMER FRAUDAct.” The appellate court also added attorneys’ fees to Affrunti’s award, bringing the total up to $1,937.50
FURTHER READINGS Bangert, Sharon J., Robert A Cook, and Joseph D Looney.
2002 “Unfair and Deceptive Advertising of Consumer Credit ” The Maryland Bar Journal 35 (March-April).
336 FALSE ADVERTISING
Trang 9Edelstein, Jeffrey S 1996 False Advertising and the Law:
Coping with Today’s Challenges New York: Practising
Law Institute.
Ippolito, Pauline M., and Janis K Pappalardo 2003.
Nutrition and Health Advertising: Evidence from Food
Advertising, 1977–1997 New York: Nova Science.
Jacobs-Meadway, Roberta 1995 “False Advertising.”
Amer-ican Law Institute-AmerAmer-ican Bar Association C122
(April 3).
Leighton, Richard J 2002 “Using (and Not Using) the
Hearsay Rules to Admit and Exclude Surveys in
Lanham Act False Advertising and Trademark Cases ”
Trademark Reporter 92 (November-December).
“Nextel Sues Verizon Wireless for False Ads.” Forbes
(September 23, 2003).
Postel, Theodore 1993 “Consumer Fraud Act: False
Advertising of Used Cars ” Chicago Daily Law Bulletin
(February 5).
Reddy, Anitha 2003 “Nike Settles With Activist in
False-Advertising Claim ” Washington Post (September 13).
CROSS REFERENCE
Injunction.
FALSE ARREST
A tort (a civil wrong) that consists of an unlawful
restraint of an individual’s personal liberty or
freedom of movement by another purporting to act
according to the law
The term false arrest is sometimes used
interchangeably with that of the tort of FALSE
IMPRISONMENT, and a false arrest is one method of
committing a falseIMPRISONMENT A false arrest
must be perpetrated by one who asserts that he
or she is acting pursuant to legal authority,
whereas a false imprisonment is any unlawful
confinement For example, if a sheriff arrests a
person without any PROBABLE CAUSE or
reason-able basis, the sheriff has committed the torts of
false arrest and false imprisonment The sheriff
has acted under the assumption of legal
authority to deprive a person unlawfully of his
or her liberty of movement If, however, a driver
refuses to allow a passenger to depart from a
vehicle, the driver has committed the tort of
false imprisonment because he or she unlawfully
restrains freedom of movement The driver has
not committed false arrest, however, since he
or she is not claiming to act under legal
authority A person who knowingly gives
police false information in order to have
someone arrested has committed the tort of
MALICIOUS PROSECUTION
An action can be instituted for the damages
ensuing from false arrest, such as loss of salary
while imprisoned, or injury to reputation that
results in aPECUNIARYloss to the victim Ill will
and MALICE are not elements of the tort, but if these factors are proven, PUNITIVE DAMAGES can
be awarded in addition to COMPENSATORY DAMAGESor NOMINAL DAMAGES
FALSE DEMONSTRATION
An inaccurate or erroneous description of an individual or item in a written instrument
With respect to TESTAMENTARY gifts, where the description of an individual or item in a will
is partly true and partly false, in the event that the true portion describes the subject or object
of the gift with adequate certainty, the untrue part may be rejected under the doctrine of false demonstration, and the gift upheld and enforced
FALSE IMPRISONMENT The illegal confinement of one individual against his or her will by another individual in such a manner as to violate the confined individual’s right to be free from restraint of movement
To recover damages for false imprisonment,
an individual must be confined to a substantial degree, with her or his freedom of movement totally restrained Interfering with or obstruct-ing an individual’s freedom to go where she or
he wishes does not constitute false IMPRISON-MENT For example, if Bob enters a room, and Anne prevents him from leaving through one exit but does not prevent him from leaving the way he came in, Bob has not been falsely imprisoned An accidental or inadvertent con-finement, such as when someone is mistakenly locked in a room, also does not constitute false imprisonment; the individual who caused the confinement must have intended the restraint
False imprisonment often involves the use
of physical force, but such force is not required
The threat of force or arrest, or a belief on the part of the person being restrained that force will be used, is sufficient The restraint can also
be imposed by physical barriers or through unreasonable duress imposed on the person being restrained For example, suppose a shopper is in a room with a security guard, who is questioning her about items she may have taken from the store If the guard makes statements leading the shopper to believe that she could face arrest if she attempts to leave, the shopper may have a reasonable belief that she is being restrained from leaving, even if no actual
FALSE IMPRISONMENT 337
Trang 10force or physical barriers are being used to restrain her The shopper, depending on the other facts of the case, may therefore have a claim for false imprisonment False imprison-ment has thus sometimes been found in situations where a storekeeper detained an individual to investigate whether the individual shoplifted merchandise Owing to increasing concerns over SHOPLIFTING, many states have adopted laws that allow store personnel to detain a customer suspected of shoplifting for the purpose of investigating the situation
California law, for example, provides that “[a]
merchant may detain a person for aREASONABLE TIME for the purpose of conducting an investi-gation whenever the merchant hasPROBABLE CAUSEto believe the person is attempting to unlawfully take or has unlawfully taken mer-chandise” (Cal Penal Code § 490.5 [West 1996])
FALSE ARRESTis a type of false imprisonment
in which the individual being held mistakenly believes that the individual restraining him or her possesses the legal authority to do so A law enforcement officer will not be liable for false arrest where he or she has probable cause for an arrest The arresting officer bears the burden of showing that his or her actions were supported
by probable cause Probable cause exists when the facts and the circumstances known by the officer at the time of arrest lead the officer to reasonably believe that a crime has been committed and that the person arrested com-mitted the crime Thus, suppose that a police officer has learned that a man in his forties with
a red beard and a baseball cap has stolen a car
The officer sees a man matching this description
on the street and detains him for questioning about theTHEFT The officer will not be liable for false arrest, even if it is later determined that the man she stopped did not steal the car, because she had probable cause to detain him
An individual alleging false imprisonment may sue for damages for the interference with her or his right to move freely An individual who has suffered no actual damages as a result
of an illegal confinement may be awarded NOMINAL DAMAGESin recognition of the invasion
of rights caused by the defendant’s wrongful conduct A PLAINTIFF who has suffered injuries and can offer proof of them can be
compensat-ed for physical injuries, mental suffering, loss of earnings, and attorneys’ fees If the confinement
involvedMALICEor extreme or needless violence,
a plaintiff may also be awarded PUNITIVE DAMAGES
An individual whose conduct constitutes the tort of false imprisonment might also be charged with committing the crime of KIDNAP-PING, since the same pattern of conduct may provide grounds for both However, kidnapping may require that other facts be shown, such as the removal of the victim from one place to another
False imprisonment may constitute a crimi-nal offense in most jurisdictions, with the law providing that a fine or imprisonment, or both,
be imposed upon conviction
FURTHER READINGS Bedau, Hugo Adam 2003 “Causes and Consequences of Wrongful Convictions: An Essay-Review ” Current (March/April).
Hare, Jamie 1997 The Fight for Innocence Portsmouth, VA: Jamie S Hare.
Scheck, Barry C., and Peter J Neufeld 2002 “Toward the Formation of ‘Innocence Commissions’ in America.” Judicature 86 (September-October) Available online at http://www.nacdl-legnet.org/sl_docs.nsf/issues/ inncomm/$FILE/Judicature_Scheck&Neufeld.pdf; web-site home page: http://www.nacdl-legnet.org (accessed July 23, 2009).
FALSE PERSONATION The crime of falsely assuming the identity of another to gain a benefit or avoid an expense The crime of falsely assuming the identity of another person in order to gain a benefit or cause harm to the other person can be referred to as false personation or false IMPERSONATION False personation laws have been enacted at both the state and federal levels to protect the dignity, reputation, and economic well-being of the individual being impersonated Further, these statutes deter criminals by discouraging the impersonator’s pursuit of benefits
A false impersonator need not alter her or his voice, wear a disguise, or otherwise change her or his characteristics or appearance in order
to be found guilty False personation simply involves passing oneself off as another person For example, an individual who misrepresents herself to be someone else in order to wrongfully cash that person’s paycheck com-mits false personation
The person impersonated must be real, not FICTITIOUS If a police officer pulls a driver over
338 FALSE PERSONATION