Personalized sales pitches as "advertising"

Larocca v. Creig Northrop Team, P.C., 94 A.3d 197, No. 0766 (Md. Ct. Spec. App. June 25, 2014)

Plaintiffs alleged violations of Maryland’s Secondary Mortgage Loan Law, which governs certain types of mortgage-related false advertising.  The court had to interpret what the SMLL meant by “advertise.”  The general commercial law stated:

“Advertisement” means the publication, dissemination, or circulation of any oral or written matter, including labeling, which directly or indirectly tends to induce a person to enter into an obligation, sign a contract, or acquire title or interest in any merchandise, real property, intangibles, or service.

Advertising, the court concluded, involved “some method of communication to the public,” but wasn’t strictly limited to widespread communications.  Dissemination of information to smaller groups could still suffice, which would include the allegations of two plaintiffs that they first met one of the individual defendants at an open house.  Personalized sales pitches, the court specifically ruled, could be covered.

Indirect ads are also covered—ads not carried out by the defendant, but intentionally caused by it.  In a similar case, plaintiff-homeowners alleged that manufacturers of allegedly defective plywood falsely advertised it as suitable for roofs.  Though the manufacturers advertised to homebuilders, not to homebuyers, and though the consumer protection statute was intended to apply to consumers and not commercial buyers, Maryland’s highest court ruled that “[i]t is quite possible that a deceptive trade practice committed by someone who is not the seller would so infect the sale or offer for sale to a consumer that the law would deem the practice to have been committed ‘in’ the sale or offer for sale.”  However, where the manufacturers had no influence over or other involvement in the sale, they weren’t liable.  Applied here, the question was whether any defendant entity indirectly advertised by, through “some arrangement,” having another defendant actively advertise on its behalf. This was a question of fact.