Statement isn’t literally false when plaintiff can’t definitely be identified from it

Service Jewelry Repair, Inc. v. Cumulus Broadcasting, LLC, 2015
WL 7112334, No. 14–cv–1901 (M.D. Tenn. Nov. 13, 2015)
 
Service Jewelry provides jewelry sales and services; from
2010-2014, it promoted its products on a local radio station, WWTN-FM, by
buying ads from the station’s owner, Cumulus. 
Cumulus sells ad time to many Nashville-area businesses, including
thirteen different jewelry sales and services companies. This action sprang
from a May-July 2014 campaign by Service.
 
The campaign was prompted by an investigative news report on
WSMV–TV, the Nashville NBC-affiliated television station, which questioned the
manner in which a major competitor of Service Jewelry, Genesis Diamonds, graded
the quality of its diamond products. In response, Service decided to run a
series of on-air ads highlighting the report and directing consumers to Service
Jewelry for assistance if they had concerns regarding the quality of their
diamonds. The spots included pre-recorded advertisements and live radio
endorsements by a WWTN radio personality, DelGiorno.  Service Jewelry provided DelGiorno with a
list of talking points about the investigation and about how people might have
been misled or gotten diamonds that were “hugely overgraded,” contrasted to
Service Jewelry’s honesty.
 
To better understand the context of these talking points, DelGiorno
reviewed a video of the investigative report, but didn’t conduct an independent
investigation into the truth or falsity of the allegations made about Genesis
in the video, and Service didn’t ask him or Cumulus to refrain from using
Genesis’ name.  The contract didn’t
impose obligations on content aired by Cumulus outside of paid ads or require Cumulus
to use only language provided by Service Jewelry in the pre-recorded
advertisements and live endorsements.
 
The first few live endorsements (out of a total of 16) didn’t
mention Genesis by name.  Service Jewelry’s
CEO then emailed DelGiorno, writing:
 
Genesis, once again, is advertising
that “if you find a certified diamond that is similar to ours for a cheaper
price, we will give you ours for free.” We want to take this guy completely
down for this. I would like for you to add to your talking points, something to
the effect, that we would like for anyone to take him up on this offer.
 
DelGiorno then mentioned Genesis by name in four live
endorsements for Service Jewelry.  But
Genesis was another of Cumulus’ advertisers, and a Genesis representative
objected.  Cumulus agreed to air
apologies for these endorsements:
 
We at WTN want to apologize for
some very negative and unfair comments about Genesis [D]iamonds made during a
series of advertisements by our host, Michael DelGiorno. Michael has apologized
to the staff at Genesis for reading a commercial by a competitor which included
some very strong and disparaging comments. We are proud to be associated with
Genesis Diamonds and hold them in the highest regard. Genesis has a strong and
positive reputation …. You don’t get to that level without doing business the
right way, with integrity, superior products and unmatched customer service. We
wish them years of continued success.
 
DelGiorno’s personal apology was similar, and included the
statement: “To be honest, I did not do my own investigation about Genesis. I
was given some commercial copy by the other jeweler and I relied entirely on
the information provided in doing the commercials.… I should never have made
such serious comments about another business in town, especially without doing
my own homework.”  These were on the
station’s website and DelGiorno read his apology 14 times on air.  WWTN-FM continued to air other ads for
Service Jewelry that didn’t refer to Genesis; Service Jewelry had an upaid
invoice of nearly $13,000 when it cancelled all its ad business with Cumulus.
 
Service Jewelry sued for (1) breach of contract; (2)
defamation; (3) violations of the Tennessee Consumer Protection Act (TCPA); and
(4) false advertising under the Lanham Act. 
As evidence of its damages, it submitted a declaration indicating that a
“[r]eputation for honesty is of primary importance in the jewelry industry,” and
that the apologies “harmed Service Jewelry’s reputation and standing in the
community and in the industry, … [leading] to actual financial damages,
including significant costs and expenses in attempting to set the record straight.”
It presented no consumer surveys or market research demonstrating consumers’
reaction to the apologies.
 
False advertising: First, the court found that the
statements in the apologies weren’t literally false.  Service Jewelry apparently challenged the
attribution of DelGiorno’s statements about Genesis to Service Jewelry as well
as the labeling of those statements as “untrue,” “unfair,” “derogatory,” and
“disparaging.”  The apologies referred to
“another jeweler in town” who gave DelGiorno “some commercial copy” containing
the information on which he relied in commenting about Genesis, and also said
that “a commercial by a competitor” was the subject of the Apologies. “None of
these statements are literally false. The Apologies do not actually attribute
the content in the commercials that were the subject of the Apologies to the
other jeweler referenced”—dubious, but all right, but here’s the bit that goes
against most Lanham Act cases:  Also, the
apologies didn’t name Service Jewelry. Listeners would have to remember the
advertiser’s identity from a month prior, and would have to “infer that all
negative statements were provided to Mr. DelGiorno by that jeweler.” Usually,
if there’s one competitor to whom a comparison clearly points, given other
facts about the industry, that’s deemed a reference to that competitor.  Plus, DelGiorno’s statement that he “relied
entirely” on Service Jewelry’s information could have multiple meanings—it could
mean that the statements came from a script, or that he based his statements on
information Service Jewelry provided.  “Based
on the ambiguity in the language and the degree to which the listener must
integrate statements in the Apologies with prior knowledge of Service Jewelry’s
advertising, the court cannot conclude that the portions of the Apologies that
allegedly attributed Mr. DelGiorno’s statements about Genesis to Service
Jewelry were literally false.”
 
As for the characterization of the statements about Genesis
as “unfair,” “derogatory,” and “disparaging,” those were unverifiable
statements of opinion.  The use of “untrue”
was also too ambiguous, since it was combined with “untrue or unfair.”  “A listener could also understand this
language to mean, however, that Mr. DelGiorno simply did not know whether his
statements about Genesis were untrue, whether they were only unfair, or whether
they were both untrue and unfair.”  Service
Jewelry didn’t show evidence of actual consumer deception, so it couldn’t
prevail. 
 
Its defamation claim failed for the same reason: there was
no evidence that Service Jewelry’s reputation was injured or that it suffered
damages.  Its sole declaration on the
subject contained just the sort of “[c]onclusory statements unadorned with
supporting facts [that] are insufficient to establish a factual dispute that
will defeat summary judgment.” The TCPA bars “unfair or deceptive acts or
practices affecting the conduct of any trade or commerce,” including
“[d]isparaging the goods, services or business of another by false or
misleading representations of fact.”  But
it too requires damages, specifically an ascertainable loss of money or
property. 
 
The court also found that the apologies didn’t breach any
contractual term.

from Blogger http://ift.tt/1NDQmsp

Advertisements
This entry was posted in Uncategorized and tagged , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s