Claims that timeshare exit services are legal and effective were not puffery

Bluegreen Vacations Unlimited, Inc. v. Timeshare Lawyers P.A., 2021 WL 3552175, No. 20-24681-Civ-Scola (S.D. Fla. Aug. 11, 2021)

Another timeshare versus timeshare exit false advertising case. Marketing Defendants allegedly falsely advertise timeshare exit services by promoting a legitimate process to exit timeshare contracts. The Marketing Defendants allegedly advertise their services on the Third-Party Marketing Defendants’ websites that rate various timeshare exit companies. The Lawyer Defendants allegedly execute a letter directed to Bluegreen that is intended to “cut off any communication between Bluegreen and the Bluegreen timeshare owners, and constitutes the entirety of the ‘service’ the Lawyer Defendants perform.” And the Credit Repair Defendants allegedly manipulate the timeshare owners’ credit reports and remove negative trade lines related to the timeshare owner’s default on the timeshare contracts and file false police reports claiming identify theft on behalf of timeshare owners to discourage credit bureaus from reporting negative information.

This opinion considered only the marketing defendants. First, the court rejected the argument that Rule 9(b) applied to the false advertising claims. Noting only that local courts “tend to apply Rule 8 when addressing motions to dismiss claims under the Lanham Act,” the court followed that trend. And it found that the particularity requirements of Rule 9(b) do not apply to the FDUPTA claims. Under FDUPTA, “the proscription against unfair and deceptive acts and practices sweeps far more broadly than the doctrine of fraud or negligent misrepresentation, which asks only whether a representation was technically accurate in all material respects.” And because “FDUTPA’s elements are more particularized than those of common law fraud,” Rule 9(b)’s concerns with subjecting defendants to unfounded allegations of fraud are lessened by the required specificity. Because “FDUTPA claims seek a remedy for conduct distinct from traditional common law torts such as fraud[,]” “the uniqueness of the cause of action place[s] it outside the ambit of Rule 9(b).”

So too with tortious interference.

There is in general a division among courts on the pleading standard for state consumer protection claims; I wonder if there's any correlation between whether the defendants are, in the court's perception, ordinary advertisers, and the results.

Bluegreen also stated a claim for Lanham Act false advertising by alleging that the Marketing Defendants falsely claimed their services were legal and effective: “Our team at Timeshare Compliance as has a proven track record of persuading developers to exit timeshare contracts. We will remove all liability from your timeshare contract.” They advertised a “proprietary strategy of resolving timeshare contracts,” which was allegedly “to trick timeshare owners to withhold payments to Bluegreen and to hide their fraud through credit repair services and letters from lawyers falsely affirming the legality of the Marketing Defendant’s services.” Their cold calls allegedly said that “TSC’s service permits the Bluegreen owner to safely stop payments to Bluegreen” and that “the Bluegreen owner is guaranteed to receive a legal release from their timeshare obligation.” Evidence of misleadingness or of specific timeshare owners fooled by the scheme wasn’t required at this stage.

This wasn’t puffery/opinion: Claims about “a 100% guarantee and top ratings, as well as advertisements that owners would not be liable at all under the timeshare contracts could constitute facts on which a consumer may rely.”

The other claims survived too.