affiliation claim true when sent out to consumers can't be false endorsement

Klayman v. Judicial Watch, Inc., --- F.4th ----, 2021 WL 3233953, No. 19-7105 (D.C. Cir. 2021)

Larry Klayman founded and ran the conservative activist group Judicial Watch, but the relationship ended badly in 2003. “During the fifteen years of ensuing litigation, Klayman lost several claims at summary judgment and then lost the remaining claims after a jury trial. The jury ultimately awarded Judicial Watch $2.3 million.” The court of appeals affirmed.

Based on the trial evidence: “Klayman’s time at Judicial Watch came to a close after a meeting in May 2003 with two Judicial Watch officers,” at which he showed them his then-wife’s divorce complaint and admitted he was pursuing a romantic relationship with a Judicial Watch employee. “Negotiations over Klayman’s departure ensued over the next several months. Meanwhile, in September 2003, Judicial Watch began preparing its October newsletter, which was mailed to donors along with a cover letter signed by Klayman as Judicial Watch’s ‘Chairman and General Counsel.’ After Klayman reviewed the newsletter, Judicial Watch sent it to the printer.”

They executed a severance agreement while the newsletter was at the printer; Klayman agreed to resign effective Sept. 19, 2003.

Klayman alleged, among other things, that the newsletter was a false endorsement or advertisement under the Lanham Act because it identified him as “Chairman and General Counsel” after he had left Judicial Watch. The court of appeals affirmed the rejection of this claim. “There was no genuine dispute of material fact that Klayman authorized the use of his name in the newsletter, so it was neither a false endorsement nor a false advertisement…. As proven by his handwritten edits on a draft, Klayman edited the newsletter at issue, which Judicial Watch approved for printing while Klayman still worked there.”

Klayman argued that he didn’t authorize the use of his name after he left, but the Lanham Act focuses on “false or misleading statements of fact at the time they were made.” When Judicial Watch wrote the newsletter identifying Klayman as “Chairman and General Counsel,” that’s what he was. “His subsequent resignation does not render the newsletter a false endorsement or advertisement.”

[Note that if they’d continued to call him that in material they distributed after he was gone, the cases could counsel a different result on this particular issue—you generally can’t continue an active ad campaign after it becomes false. And some cases even require products on shelves to be altered if their labels become false, which makes sense as a consumer-protective measure;  but even those cases probably wouldn’t require reaching out to consumers who’d already taken the products home, as these newsletters were. First Amendment considerations, too, could play a role in the court’s conclusion, though that might be in some tension with the Lanham Act counterclaims the jury heard about Klayman’s subsequent fights with Judicial Watch.]

Lanham Act counterclaims: evidence of Klayman’s forced resignation and name-calling of his ex-wife was relevant to Judicial Watch’s Lanham Act unfair competition counterclaim, which alleged that Klayman falsely represented in his Saving Judicial Watch campaign that he left Judicial Watch to run for U.S. Senate. Evidence about his forced resignation was introduced to prove falsity, and the court of appeals agreed that the risk of prejudice didn’t outweigh its probative value. [I have questions about whether the First Amendment really allows a Lanham Act false advertising claim about an advocacy organization slapfight, but unfortunately neither side had an incentive to press this point.]

Klayman also argued that the district court failed to properly instruct the jury on Judicial Watch’s trademark infringement claims alleging infringement of “Judicial Watch” and “Because No One is Above the Law.” Klayman argued that the court erred by failing to instruct the jury that likelihood of confusion requires confusion by an “appreciable number” of consumers. But the instructions, viewed as a whole, fairly presented the applicable standard, based on a model instruction. (The court noted that it had never actually adopted a particular multifactor test, though it had cited other circuits’ with approval.) “Neither our sister circuits nor the model instruction mention the number of consumers likely to be confused. No instruction on the number of consumers was required for the district court to fairly present the applicable legal principles on the confusion element.” [I have my doubts about this too—not needing to mention a “number” is not the same thing as not needing to meet some requirement of substantiality, or even nontriviality. Suppose the jury is absolutely convinced that confusion is likely among .5% of relevant consumers. What should it do?]