Jury Verdict Sets Record in False Advertising Case
It was a banner year in 2022 for false advertising lawsuits, including one of the largest jury verdicts in modern history.
In September 2022, Monster Energy Company was awarded nearly $293 million by a California federal jury, with the possibility of punitive and enhanced damages being added as well. At issue were alleged false claims by the defendants as to the ingredients in its energy drink Bang.
“We are grateful for the jury delivering what we believe is the largest Lanham Act jury trial award in U.S. history,” Monster’s attorney told Law360.
Shortly before the Monster Energy outcome, another large Lanham Act award was handed down, this one in Delaware in CareDx, Inc. v. Natera, Inc., D. Del., No. 19-cv-662. That case involved alleged false advertisement of a kidney transplant test.
“Some of the largest false advertising jury verdicts were recorded in 2022,” write attorneys Alexis Crawford Douglas and Ben Roxborough for the National Law Review. “This, coupled with increased inflationary pressures will likely lead to an uptick in false advertising suits given that such pressures will impact consumer spending habits, leading to increased scrutiny of competitor advertising practices—particularly in the social media space.”
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NC Rule of Professional Conduct 7.1
Communications Concerning a Lawyer’s Services
A lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services. A communication is false or misleading if it contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading. Such communications include but are not limited to a statement that is likely to create an unjustified expectation about results the lawyer can achieve; a statement that states or implies that the lawyer can achieve results by means that violate the Rules of Professional Conduct or other law; or a statement that compares the lawyer's services with other lawyers’ services, unless the comparison can be factually substantiated.
Comment [1] False and Misleading Communications. This Rule governs all communications about a lawyer's services, including advertising. Whatever means are used to make known a lawyer's services, statements about them must be truthful.
[2] Misleading truthful statements are also prohibited by this Rule. A truthful statement is misleading if it omits a fact necessary to make the lawyer's communication considered as a whole not materially misleading. A truthful statement is also misleading if there is a substantial likelihood that it will lead a reasonable person to formulate a specific conclusion about the lawyer or the lawyer's services for which there is no reasonable factual foundation. A truthful statement is also misleading if presented in a way that creates a substantial likelihood that a reasonable person would believe the lawyer’s communication requires that person to take further action when, in fact, no action is required.
[3] A communication that truthfully reports a lawyer's achievements on behalf of clients or former clients may be misleading if presented so as to lead a reasonable person to form an unjustified expectation that the same results could be obtained for other clients in similar matters without reference to the specific factual and legal circumstances of each client's case. Similarly, an unsubstantiated claim about a lawyer’s or law firm’s services or fees, or an unsubstantiated comparison of the lawyer's or law firm’s services or fees with those of other lawyers or law firms may be misleading if presented with such specificity as would lead a reasonable person to conclude that the comparison or claim can be substantiated. The inclusion of an appropriate disclaimer or qualifying language may preclude a finding that a statement is likely to create unjustified expectations or otherwise mislead the public.
SOURCES: Bang Energy False Advertising Lawsuit Settlement is $271M (natlawreview.com); Law 360; NC Rules of Professional Conduct
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