I think everyone has used the phrase now and then, “hey, that’s false advertising.” Probably when you’ve gone to a store after seeing an advertisement and find either the store is out of the product or they are charging a higher price than advertised. People use the phrase “bait and switch” to describe that situation. Now don’t get me wrong, some businesses do that, and they do it intentionally. Other businesses, well, it may have just been an honest mistake by the business or the company that printed the advertisement.
WHAT IS FALSE ADVERTISING?
The general legal meaning of false advertising is when a person or a business has published an advertisement that is inaccurate, misleading or deceptive. Also, business published the advertisement with intent to deceive, or published it ignoring information it knew (or should have known) that renders the advertisement deceptive. If the advertisement would not deceive a reasonable consumer, the lawsuit should fail. Class action lawsuits often involve false advertising claims. These are lawsuits where one or two people (the class representatives) sue on behalf of a lot of people (the class) who may have also been harmed by the advertising. These cases typically make a lot of money, often millions, for the attorneys. But the harmed consumer often recover very little. But the class actions do often cause the businesses to change how they advertise. Some of these claims are just ridiculous, like the one against lumber sellers claiming that advertising a piece of lumber as a “4 x 4” is false because the piece of wood actually measures a little less than that. You can read about that lawsuit here, which was ultimately dismissed. Another similar suit is the one against Starbucks claiming its cold drinks had too much ice and not enough liquid – the false advertising was Starbucks saying that you are receiving a 12 ounce drink. The Judge’s comments in dismissing that suit are pretty funny. Read them here.
WHAT LAWS GOVERN FALSE ADVERTISING CLAIMS?
There are so many different “laws” that can come into play that I cannot touch on them all. Federal law has numerous laws that regulate advertising, like these here. The Federal Trade Commission Act is the most well-known. Connecticut has many statutes that touch on false advertising, but the most well-known is Connecticut’s Unfair Trade Practices Act (lawyers like to call it CUTPA). That statute, that we’ve written about here, protects consumers and business to business conduct. So, if a competitor is falsely advertising product just to harm your business, you may have rights under CUTPA. CUTPA is the primary basis for the lawsuit against certain gun makers and sellers arising out of the awful Sandy Hook school shooting only a few miles from our office. That case alleged that the gun makers deceptively advertised their products. Other New England states, like Massachusetts (Chapter 93A) and New Hampshire (the NH statute is 358-A:2), also have laws to protect consumers and businesses from deceptive advertising claims. In addition to statutes, the “common law,” or judge-made law (versus laws made by legislatures) also provides relief for victims of false advertising claims. The common law of negligent misrepresentation and fraud provide a basis to sue. But the statutes I have mentioned are more attractive because a plaintiff can recover attorney’s fees, punitive damages. A plaintiff can also seek an injunction under those statutes to stop the offending party from continuing to do the bad acts, which you really cannot get under the common law.
WHAT ABOUT THE CLASSIFIED AD AT THE TOP OF THE POST TO SELL THE FARM?
Well, I just love that advertisement. You’d never see something like that today (the ad is from 1859). Because people are just too afraid of lawsuits and everyone knows to be careful what you put in an ad. Let’s analyze it and see how it might turn into a false advertising claim.
The advertisement says it is “valuable farm” of about 130 acres. What makes it valuable? Good soil? Maybe the farmer’s efforts made it valuable, and after you buy it and don’t have a green thumb, it has no value. The advertisement then states that the farm yields the “best quality of hay annually.” Wow. Now that could be called just plain “puffery” which means no one would ever believe it. And businesses don’t get int trouble for just puffing (but attorneys do get into trouble because there are specific advertising rules for lawyers). The advertisement also emphatically states that there is “no waste land on the place.” Interesting. Then the advertisement states that the farm produces 40-50 tons of the “best hay.” If the person placing the advertisement was truthful, based on all the facts he/she knew or should have known, then the ad is not false. But if the owner knew that the farm only produced 25 tons of hay each year, and someone bought the farm based on this advertisement, well, off to court we go…..