Tuesday, June 02, 2020

"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 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. Lemberg 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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