9th Circuit rules failure to recognize labeled ads as such “implausible”

Novation Ventures, LLC v. J.G. Wentworth Co., No. 16-55289, 2017
WL 4711477 (9th Cir. Oct. 19, 2017)
District
court opinion discussed here
. The court of appeals affirmed the dismissal
of this case against J.G. Wentworth arguing that its use of different names to
advertise structured settlement products, creating the appearance of
competition but allowing Wentworth to charge higher prices/driving competitors
further down in search results, was misleading and anticompetitive.  Novation failed to allege antitrust injury;
merely having a harder time competing isn’t actionable, and any harm to
consumers would have made it easier for Novation to compete on price. Also, “the
whole advertising market was open to Novation—that market was not Google alone,
and, at any rate, Novation could compete for Google advertising.”
And here’s a quote that defense lawyers will like a lot: “the
assertion that consumers are not wise enough to recognize labeled
advertisements for what they are, or to scroll down farther than the first
three entries they see, is itself not plausible.”  This indicates why the false advertising
claim was doomed; Novation didn’t plead any literally or implicitly false
statement by the ads, only that the separate entities didn’t advertise their
affiliations. And it was implausible that consumers seeking to sell future payments from structured settlements would fail
to exercise a relatively high degree of care in considering ads from structured
settlement companies.

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