
Donald M. Pepe
Partner
732-568-8370 dpepe@sh-law.comPartner
732-568-8370 dpepe@sh-law.comFalse advertising continues to be a problem in our society despite a myriad of laws against it. The primary reason for the difficulty rests with the inventive methods advertisers use to skirt the law. A number of methods produce the same results as false advertising, but either avoid violating the letter of the law or do so in a way that is largely unenforceable.
A variety of federal and state laws seek to prevent false advertising.
Section 43(a) of the Lanham Act gives perhaps the most thorough guidance in a federal context. In order to prove a case of false advertising, the plaintiff must prove the following five elements:
One of the many methods advertisers employ that can result in accusations of false advertising is pricing-based deceptions, of which there are several distinct species.
An interesting false advertising claim based on allegedly deceptive pricing was recently brought against high-end retailer Neiman Marcus Group in a class action lawsuit. The case presents a prime example of the difficulties encountered in precisely defining actionable false advertising under the law. Even if Neiman Marcus is ultimately vindicated under the letter of the law, such advertising methods, which clearly have the ability to deceive, raise moral issues worthy of King Solomon.
The Neiman Marcus Group owns a chain of stores called Last Call, which boast in advertising the sale of off-season or excess clothing for discounts. The recent class action suit alleges that Last Call sold clothing that never appeared in a normal Neiman Marcus store, but still used a “compared to” strategy on the tag to contrast the discounted price with the putative full retail price. There is evidence that clothing sales at the outlet rose faster than the industry average, which lends some credence to the case, but it is possible that the case will fail because the customers who bought the clothing did so freely, assuming the piece of clothing acquired was worth the bottom line price on the tag, negating any real injury to the class. How the court comes down will set a precedent that will clarify this area of law going forward.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
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No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
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