“truly tiny” disclaimer at bottom of website didn’t prevent factual issue on misleadingness

Lemberg Law, LLC v. eGeneration
Marketing, Inc., 2020 WL 2813177, No. 18-cv-570 (CSH) (D. Conn. May 29, 2020)

Lemberg sued eGeneration
for running stopcollections.org, a site engaged in “matching lawyers who focus
their practice on filing claims under the federal Fair Debt Collection
Practices Act (“FDCPA”) with consumers who are interested in engaging a lawyer
for assistance with such a claim.” Lemberg is a Connecticut consumer law firm that
represents clients in FDCPA cases. eGeneration isn’t a law firm, but allegedly
“holds itself out” as a provider of legal services for FDCPA claims.” Its site
“offers ‘100% free legal consultation’ relating to debt collectors and
harassment” its advertising was allegedly “specifically designed to deceive and
mislead consumers into believing that Defendants are lawyers and/or are
providing legal services in relation to FDCPA claims.” Lemberg sued for
violation of the Lanham Act and the Connecticut Unfair Trade Practices Act (CUTPA).
The court allowed the claims to proceed, but required Lemberg to get a separate
lawyer for trial rather than representing itself. 

Defendants argued
that their site’s “plain-language statements” expressly disclosed that “Website
operators are not lawyers and the Website connects users with independent
lawyers who provide free consultations.”
 

Along with the facts
above, Lemberg alleged that
 

• “When a consumer
searches for “debt harassment” on http://www.google.com, a paid ad for Defendants’
Website appears above any other search results, advertising ‘Debt Collection
Harassment Speak With A Lawyer Free.’ ”

• Defendants
advertise their Website in a Google paid ad which states “Harassment From Bill
Collectors Contact Our Debt Lawyers Now … Get up to $1,000 per violation. ….”

• Consumers can
submit a request for consultation without scrolling below the fold at the
bottom of the page. However, scrolling will reveal the bold print “FDCPA legal
representation is completely free regardless of whether you win or lose your
case.” Moreover, “[t]he burden of payment to the attorney will fall on the debt
collector if they [sic] are found guilty of a violation.”

• The bottom of the
website says: “Connect with a Lawyer.”

• The very bottom of
the website has the sole and “inconspicuous disclaimer” – “in a font size that
is significantly smaller than the rest of the text on the Website” – that
“Stopcollections.org is not a lawyer or a law firm,” and “not an attorney
referral service.” Rather, “[i]t is an advertising service paid for by the
lawyers and advocates whose names are provided in response to user requests.”
 

Lemberg alleged that
the site headline and the Google ad headline, “Contact Our Debt Lawyers Now,”
intentionally “lure[ ] a prospective customer into believing that he/she is
dealing with a law firm when that is not in fact the case.” The photo on the
front page of “a man and a woman in professional attire [i.e., business suits]
further impresses upon the visitor that the website belongs to a law firm
licensed to offer legal advice.”
 

Further, Lemberg
alleged that defendants were violating state rules on lawyer advertising, and
solicited Lemberg to become a recipient of eGeneration’s “lead generation
services.”
 

Defendants argued
that “a Lanham Act false advertising claim fails when an advertisement’s
truthful language, including that contained in a disclaimer, dispels any
misimpression it is alleged to give.” They relied on Pernod Ricard USA, LLC v.
Bacardi U.S.A., Inc., 653 F.3d 241 (3d Cir. 2011), for the propositions that (1)
“unambiguous plain language can warrant disposing of a false advertising claim
as a matter of law” and (2) “explicit clarifying language can be dispositive as
to whether an advertisement is ‘misleading’ under Section 43(a)(1).” They
argued that their site stated “in no uncertain terms” that EMI “is not a lawyer
or law firm” and that “interested users are contacted by ‘an independent lawyer
or advocate’ to evaluate their potential FDCPA claims,” so it could not mislead
a reasonable consumer.
 

Defendants also
relied on Forschner Group, Inc. v. Arrow Trading Co., Inc., 30 F.3d 348 (2d
Cir. 1994), which overturned a district court finding that the use of the
phrase “Swiss Army knife” in connection with its poorly-crafted
Chinese-manufactured knife was false advertising. Despite a consumer survey
showing deception, the Second Circuit relied on the fact that the main blade of
the knives was marked “STAINLESS/CHINA” and the packaging expressly stated,
“Made in China.”
 

Defendants argued that
“truthful disclaimers and explanations on the Website cannot be disregarded
because of their placement or font size,” so whether they were conspicuous or
not didn’t matter. Anyway, it’s fine to make consumers scroll down and to use
fine print/the bottom of pages.  
 

The court was not
particularly impressed. As prior cases have said, a “disclaimer or
contradictory claim placed in an ad will not remedy an ad, which is misleading,
per se.” Also, “a footnote or disclaimer that purports to change the apparent
meaning of the claims and render them literally truthful, but which is so
inconspicuously located or in such fine print that readers tend to overlook it,
will not remedy the misleading nature of the claims.”
 

Pernod Ricard was distinguishable on the facts (and
nonbinding). The front label clearly stated that it was a “Puerto Rican Rum,”
and the “Havana Club rum” actually “ha[d] a Cuban heritage and, therefore,
depicting such a heritage [was] not deceptive.” The “ambiguity” here was
greater, creating a factual dispute that couldn’t be resolved on a motion to dismiss.
“While a disclaimer may be so plain, clear and conspicuous as to bar a claim as
a matter of law, this is not [always] the case.” As the court summarized, the
case law, “[t]o be effective, a disclaimer must be sufficiently bold and clear
to dispel any conflicting false conclusions.”

Here, it would be
reasonable for a consumer, noting the large headline toward the bottom of the
page, “Connect with a Lawyer,” to overlook the significantly smaller disclaimer
in tiny font at the very bottom of the page that the site “is not a lawyer or
law firm” and “not an attorney referral service.” Indeed, it was plausible that
“even if a consumer read the disclaimer, he or she might become confused by the
instruction, ‘[t]o find out the attorney or advocate in your area who is
responsible for the advertisement, click here’” and think that they were revealing
the names of the attorneys who own the website because they are “responsible
for the advertisement.” 

The court also noted
that the link at the top of the site to the privacy policy and disclaimer was
in “truly tiny font” in contrast with the bold opportunity to “Get Started” in
obtaining an FDCPA attorney. “[A] reasonable consumer, plagued by debt
collectors and eager to ‘Get Help,’ might fail to click on that tiny link,
which is arguably not noticeable in that it is printed in white ink against a
navy blue background.”
 

Thus, both because
of the minimal visibility of the disclaimer here and because there was no
arguably true alternate interpretation (the site is not really owned by
lawyers and has no “lawyer heritage”) justifying tolerance for the message, Pernod
Ricard
was distinguishable. The court pointed out that Pernod Ricard
expressly declined to resolve what would happen if the statement of geographic
origin was in “fine print.”
 

Likewise, whether
the photo of a man and woman dressed in “professional attire” appeared to be
lawyers in the absence of briefcases, books, legal pads, etc., that was also a
question of fact to be considered in the overall context of the site. The
website says in bold print, “Connect with a Lawyer.” Moreover, directly next to
the image, it says, “Receive a 100% FREE legal consultation.” There was no
explicit label to the contrary.
 

CUTPA bars “unfair
or deceptive acts or practices in the conduct of any trade or commerce.” Along
with the Lanham Act allegations, Lemberg alleged that Section 7.2 of the
Connecticut Rules of Professional Conduct mandates that any advertisement for
legal services “shall include the name of at least one lawyer admitted in
Connecticut responsible for [the ad’s] contents” and that “soliciting cases for
third party attorneys” was illegal under state law and thus “unfair.”
 

Unfairness considers
“(1) [w]hether the practice, without necessarily having been previously
considered unlawful, offends public policy as it has been established by statutes,
the common law, or otherwise—in other words, is it within at least the penumbra
of some common law, statutory or other established concept of unfairness; (2)
whether it is immoral, unethical, oppressive or unscrupulous; [and] (3) whether
it causes substantial injury to consumers, [competitors or other
businesspersons].” The Connecticut Supreme Court has expressly held that
entrepreneurial aspects of the practice of law, such as attorney advertising,
fall well within scope of CUTPA.
 

Given the Lanham Act
discussion above, confusion was properly alleged.
 

Defendants argued purported
violations of the Connecticut Rules of Professional Conduct couldn’t form the predicate
of any cause of action, including under CUTPA. But the claim here was based on more
than such a violation; the parties agreed that defendants weren’t attorneys and
couldn’t be personally subject to those Rules. Mere references to the Rules
didn’t take the CUTPA claim out of the court’s jurisdiction. L
emberg also referred
to Connecticut and similar state laws that prohibit one “not admitted as an
attorney in this state” from soliciting another person to “cause an action for
damages to be instituted” in return for compensation from that person or his
attorney. This at least showed conduct that might be viewed as offending public
policy – falling “within at least the penumbra of … [an] established concept
of unfairness.”

However, given the
need to preserve the integrity of the trial process, Lemberg Law would need to
find separate counsel for trial. “This will allow Lemberg Law to have the
benefit of Attorney Lemberg’s litigation skills and diligence in the
preliminary phases of the case, but prevent the potential taint of him acting
as both advocate and witness at trial.”

 

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