This posting was written by John W. Arden.
The U.S. Supreme Court has refused to review the Ninth Circuit’s application of the “single publication rule” to an allegedly unauthorized endorsement posted on a website in 2003, effectively barring on statute of limitations grounds Chuck Yeager’s claims brought under California right of privacy and publicity laws and the federal Lanham Act. The high court today denied the petition for certiorari
in Yeager v. Bowlin
, Docket No. 12-1047, filed February 22, 2013.
In 2008, well known pilot Yeager brought an action against Connie and Ed Bowlin, claiming that statements on their “Aviation Autographs” website violated California’s common law right of privacy and right of publicity statute and that the use of his name, likeness, and identity to market memorabilia violated the Lanham Act. The federal district court in Sacramento dismissed the claims, applying the single publication rule, holding that the claims accrued in 2003, and concluding that the claims were time-barred.
In an opinion addressing the California claims, the Ninth Circuit ruled that there was no evidence in the record that the Bowlins added or changed any statements about Yeager after October 2003 and thus the right of privacy and publicity claims were barred by the two-year statute of limitations.
In a separate unpublished memorandum decision, the Ninth Circuit held that Yeager’s Lanham Act false endorsement claim also was barred by the single-publication rule. The appeals court acknowledged that it had not resolved whether a statute of limitations defense applies to claims under the Lanham Act, which are of “equitable character.” However, the court declined to address the issue on the theory that Yeager waived this argument by failing to raise it in the district court in his opposition to a defense motion for summary judgment.
The single publication rule limits tort claims premised on mass communication to the original publication date. While created to apply to print publications, the single publication rule also governs publications on the Internet, according to the appeals court. “In print and on the internet, statements are generally considered ‘published’ when they are first made available to the public.”
Under the single publication rule, the statute of limitations is reset when a statement is republished. A statement in a printed publication is republished when it is reprinted in something that is not part of the same “single integrated publication.” One general rule is that a statement is republished when it is repeated or recirculated to a new audience. As previously held by the Ninth Circuit, website operators did not republish a statement by simply continuing to host the website.
Yeager argued that the website was republished—and the statute of limitations restarted—every time the website was added to or revised, even if the new content did not reference or depict Yeager. The Ninth Circuit disagreed. “We reject Yeager’s argument and hold that, under California law, a statement on a website is not republished unless the statement itself is substantively altered or added to, or the website is directed to a new audience.”
In his petition for review, Yeager asked: “Does California’s single-publication rule govern the accrual of a Lanham Act claim arising from a web-based merchant’s refusal to remove a celebrity’s unauthorized endorsement from a merchant’s website?”
This posting was written by Jody Coultas, Editor of CCH Unfair Trade Practices Law.
The federal district court in New York City declined to enjoin food distributor Kangadis Food Inc. from selling refined olive oil labeled as "100% Pure Olive Oil" (North American Olive Oil Association v. Kangadis Food Inc.,
April 25, 2013, Rakoff, J.). However, the court ordered Kangadis to provide reasonable notice to potential consumers of its past mislabeling.
NAOOA, a trade organization that represents the olive oil industry, filed suit against Kangadis for allegedly falsely and deceptively marketing its olive oil and "100% Pure," when it actually contained an industrially-processed oil produced from olive pits, skins, and pulp called Pomace, in violation of the Lanham Act and New York General Business Law.
Kangadis admitted that its "100% Pure Olive Oil" product contained only olive-Pomace oil. On April 12, the court preliminarily enjoined Kangadis from labeling products containing Pomaceas "100% Pure Olive Oil" and from selling any product containing Pomace without including the ingredient on the label. NAOAA asked the court to enjoin Kangadis from selling 100% refined olive oil as "100% Pure Olive Oil" as Kagadis alleged it currently sold.
In order to obtain a preliminary injunction, the party must show irreparable harm and either a likelihood of success on the merits or sufficiently serous questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping toward the party requesting the injunction.
NAOAA was able to demonstrate that it would suffer irreparable harm absent an injunction, according to the court. Under the Lanham Act, NAOAA needed to show that the parties were competitors in the olive oil market and there was a logical causal connection between the false advertising and its own sales position. The parties were clearly competitors in the olive oil market, and Kangadis’ false marketing of the cheaper Pomace oil as pure olive oil would harm other sellers. The labeling also induced consumers to purchase a lower quality product, which could lead consumers to lose faith in the olive oil market as a whole.
Likelihood of Success on Merits
The court declined to issue the requested injunction because the NAOAA could not show a likelihood of success on the merits of its Lanham Act false advertising claims. It was clear that Kangadis violated federal and state standards by selling refilled oil as "100% Pure Olive Oil." However, NAOAA failed to seek direct enforcement of the standards, which are either nonbinding or unenforceable through a private action. NAOAA also could not show that a reasonable consumer’s understanding of olive oil aligned with the standards. A consumer could view 100% Olive Oil as being silent on whether it was virgin or refined.
Balance of Hardships
There also was a lack of evidence of the balance of hardships to support NAOAA’s New York General Business Law false advertising claims, according to the court. To state a claim, NAOAA had to show that Kangadis’s act was consumer-oriented, material deceptive, and injured NAOAA. Although there was sufficient evidence to litgate whether Kangadis violated the New York law, NAOAA failed to show that the balance of hardships tipped in favor of an injunction. Althougth false advertising may hurt competitors in the market, it was unclear to what extent the market would be harmed.
The court granted NAOAA’s request for a notice to consumers regarding Kangadis’ past mislabeling of products containing Pomace. NAOAA was able to show to show that the labeling claims were literally false and actually misleading to consumers. The balance of hardships and public interest also tipped in favor of an injunction. Therefore, Kangadis was required to provide reasonable notice of its mislabeling.
NAOAA was ordered to post bond in order to adequately compensate Kangadis in the event the injunction was issued in error.
This posting was written by John W. Arden.
The British Columbia Law Institute (BCLI) is soliciting public comments on its recently-issued consultation paper
recommending that the province enact franchise legislation similar to existing franchise laws in Alberta, Manitoba, New Brunswick, Ontario, and Prince Edward Island.
The BCLI intends its “Consultation Paper on a Franchise Act for British Columbia” to be “a catalyst for an informed discussion about franchise regulation in BC.” After consideration of responses received, BCLI will produce a report with final recommendations and draft legislation.
The consultation paper recommends, among other items, that:
British Columbia should enact franchise legislation.
Franchise legislation should be modeled generally on the Uniform Franchises Act and the Uniform Disclosure Documents Regulation.
Franchise legislation should not provide for mandatory mediation on the demand of one party of the franchise agreement.
Legislation should require presale disclosure of information to prospective franchisees.
A franchisor may request and receive a fully refundable deposit before delivering a disclosure document.
A disclosure document must state whether or not an exclusive territory is granted under the franchise.
A disclosure document must state whether the franchisor reserves the right to directly market goods or services.
An action for misrepresentation should extend to misleading or inaccurate financial or earnings projections.
A franchisor should be able to use “wrap around” disclosure documents prepared in compliance with laws of another jurisdiction with additional information required by British Columbia.
There should be a presumption of reliance by a franchisee on a disclosure document.
The institute is requesting comment from franchisors, franchises, business and consumer organizations, and the general public.
Comments, which will be accepted through September 30, 2013, may be submitted by email at email@example.com; by fax at 604-822-0144, and by mail at British Columbia Law Institute, 1822 East Mall, University of British Columbia, Vancouver, BC, Canada V6T 1Z1.
This posting was written by Jody Coultas, Contributor to Wolters Kluwer Antitrust Law Daily.
A gun dealer failed to state Sherman Act, Section 1 or Lanham Act commercial disparagement claims against the Village of Norridge, Illinois, stemming from a change in an ordinance that may force the gun dealer to close up shop, according to the federal district court in Chicago (Kole v. Village of Norridge
, April 19, 2013, Durkin, T.).
The gun dealer entered into an agreement with the Village in which he agreed to sell guns only over the Internet in return for a license to operate the business in the Village. A revised ordinance terminated gun store licenses altogether and bans gun stores from the Village. Once the agreement and its three-year exemption from the revised ordinance expires, the gun dealer may be forced to close up shop, or at least relocate their business outside the Village.
The gun dealer failed to allege a conspiracy, agreement, or other concerted action to restrain trade in violation of Section 1 of the Sherman Act, according to the court. The Village and its trustees were one entity. Although a single firm’s restraints may directly affect prices and have the same economic effect as concerted action might have, there can be no liability under Section 1 in the absence of agreement.
Statements made by a Village trustee did not run afoul of the Lanham Act commercial disparagement section, according to the court. One trustee stated to a local newspaper that "the one current Village weapons dealer licensee has agreed that it will cease doing business in the village no later than April, 30, 2013." The gun dealer argued that the statement was commercial disparagement because it false and harmed business because the statement suggested to potential customers that it would soon go out of business.
The Lanham Act section prohibiting commercial disparagement applies only to statements used in commerce and made in commercial advertising or promotion. The statement also did not support the gun dealer’s Illinois Deceptive Trade Practices Act claim.
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