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Lawyer Advertising – Manipulate This!

When it comes to advertising, lawyers are bound not only by laws and regulations that apply to all advertisers, but also by the rules set by the professional licensing authorities in each state in the United States, as well as by many “Bar” Associations (Bar as in Barrister, not barista or your local tavern). These authorities and associations often set more stringent advertising standards and rules, based on ethical guidelines and professional standards.

Florida has some of the most stringent restrictions on attorney advertising in the United States. For example, Florida’s rules prohibited ads that were “manipulative” (whatever that means) or that included “background sound other than instrumental music” – presumably to prevent the sounds of ambulance sirens or jail cell doors slamming.

The restrictiveness of attorney advertising, including Florida’s tough rules, has been the subject of criticism, as noted in a previous Wall Street Journal article.

Yesterday, a federal judge in Jacksonville, Fla., ruled that these restrictions are vague and violate the First Amendment rights of lawyers, and must go! The judge’s ruling noted that, “The term ‘manipulative’ is so vague that it fails to adequately put members of the Bar on notice of what types of advertisements are prohibited” – declaring the standard void. The judge also overturned the prohibition on background sounds, noting that such a rule violates the free speech rights of attorneys. Here is the entire Harrell v. Florida Bar decision [PDF] if you are interested.

In honor of the occasion, one clever individual decided to create a “lawyer ad” parody, which, by the way, has sounds previously banned by the Florida regulations. Enjoy.

 

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Advertising: Misleading? Deceptive? What Do Consumers Think?

I have to thank Carl Bialik, The Numbers Guy writer and blogger for The Wall Street Journal, for including a quote in his recent (September 23, 2011) column, Bag Battle Takes a Statistical Turn.

The column focuses on the use of statistics by competitors and analysts alike – in this case statistics that related to claims made by Chicobag about the environmental impact of reusable plastic bags that many retail stores use to bag items, from groceries to clothing, when you check out with your purchases. It seems that Chicobag made some claims – citing statistics – about its products. Mr. Bialik’s column notes that Hilex Poly and some other competitors challenged the claims being made by Chicobag, and were unable to come to grips with either the numbers or the claims; litigation ensued.

Although Mr. Bialik focuses on the way numbers are used and the difficulties inherent in accumulating and using statistics – often when the subject matter may actually be a moving target – the legal issue is similarly complex. More often than not, false, misleading, deceptive advertising claims challenge the explicit veracity of a claim and whether that claim can be substantiated or whether the “net impression” or implicit claims (e.g., pictures or activities) can mislead or potentially deceive consumers. This claim, brought as an action under the Lanham Act – seeking an injunction and damages for false advertising and unfair competition for both a violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and under a state statute (South Carolina Unfair Trade Practices Act, South Carolina Code Annotated § 39-5-10, et seq.) – really revolves around whether the veracity or inaccuracy of claims (even if they can be substantiated or derived from facts that were believed to be true when stated) makes any difference at all in the minds of consumers.

Without giving away The Numbers Guy’s secrets (or forgetting the Federal Trade Commission Act that prohibits “unfair or deceptive acts or practices in or affecting commerce”), the legal claim, in my view, hinged not on whether the statistics claimed by Chicobag were incorrect or even in some cases materially inaccurate, but whether the particular claims as made using those statistics, were material to a consumer. Whether a consumer was likely to make a different purchasing decision – or might at least be informed enough to consider doing so – based on the degree of inaccuracy.

So when you think of my blog Legal Bytes, I’ll close with a claim that everyone sees on those pizza cartons around the country – maybe the world: “You’ve tried the rest. Now try the best!” Can you say “puffery”?

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“Mom, is it OK for them to follow me?” FTC Targets Ads That Target Kids

Many of us remember when kids were actually worried about being caught misbehaving. Back in those days, parent’s concern over children’s behavior dealt with whether the kids were ‘fresh’ or ‘mischievous’ or talked too much in school. I was perennially the subject of “he would do so much better in class if he just stopped horsing around and paid attention.” Dear Mrs. Frohman, Mrs. Handel, Mrs. Flynn and Mrs. Bernstein – thanks! It took me several decades, but I finally got the message. Today, however, when we hear the terms children and behavior – well, at least according to the FTC, it ain’t the children that are misbehaving.

In a proposed amendment to rules that have been in effect since 2000, the Federal Trade Commission (“FTC”) is proposing amendments to COPPA (the Children’s Online Privacy Protection Act”) that “would require parental notification and consent prior to the collection of persistent identifiers where they are used for purposes such as amassing data on a child’s online activities or behaviorally targeting advertising to the child.” In describing the proposed changes (the proposed  Amendment runs 122 pages long), the FTC notes that these new rules would apply to any identifying or tracking technology (cookies) that would link a child’s browsing behavior across multiple web pages and services – ostensibly including advertising networks and metric/measurement/analytical service providers who routinely have access to such information.

Although a ‘safe harbor’ for compliance with self-regulatory programs is included within the FTC’s proposal, it did suggest that these programs (and individual company compliance with these programs) be more closely monitored and supervised – including mandatory audits every 18 months and reports detailing actions taken by the self-regulatory body against the companies that do not comply. Clearly, one of the FTC’s objectives is to not only ensure a mandatory review of compliance, even for those companies that have not been subject to proceedings, but also to create a record-keeping and reporting system that gives the FTC the ability to obtain detailed information about the proceedings and the compliance efforts of individual companies.

Comments, which are due by November 28, 2011, may be filed with the FTC using it’s COPPA Rule Review Form. If you are interested, concerned, want your voice heard, or otherwise need to be guided by experienced counsel in this area, please feel free to contact me, Joseph I. Rosenbaum, or the Rimon lawyer with whom you regularly work. We would be happy to help!

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The FTC vs. Google: Who Are You Going to Call?

Late this past June, the Federal Trade Commission indicated it was launching an investigation into Google’s search engine technology and whether it pushes consumers to Google’s other services in a manner that is unfair to competition.

That also means that the FTC will not only be asking Google for records and information about the way it conducts its business, but it will also be asking for information from Google’s competitors (presumably who would provide information gleefully, except that they best be careful about celebrating too prematurely when they hand over information to the government), AND – here it comes – lots of companies who do business with Google: The host of third parties that are advertising and marketing networks, publishers, services, sponsors and, yes, even advertisers and agencies themselves.

What should you do? Well we’ve prepared a handy reference guide – What Should You Do When the FTC Calls About Google? to explain what the FTC can ask, to explain a few of the basic legal principles that apply to the “asking” the FTC may engage in and, frankly, a warning that you should be calling your lawyers—lawyers knowledgeable in this process—and protecting your interests. For you in-house lawyers out there, if you aren’t familiar with handling these inquiries and third-party requests, perhaps you should consider engaging the services of outside lawyers who know how to help. So whether you know you need help, before or after receiving an inquiry from the FTC – formal or informal – or if you aren’t sure, you might just want to call Joseph I. Rosenbaum, Rachel A. Rubin or the Rimon lawyer with whom you regularly work. We would be happy to help!

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The New Robocop in Town: TCPA, When ‘ALL’ Really Means ALL

This post was written by Judith L. Harris, James M. Duchesne, and Joseph I. Rosenbaum.

It’s Election Night 2010 in Maryland, where a high-profile gubernatorial race is coming to a close. The telephone rings once again, but this time, the message is not “go out and vote before the polls close.” Instead, a recorded message tells the voter, “Relax. Everything is fine. The only thing left is to watch [election results] on TV tonight.” The automated call with a recorded message (a “robocall“) ends with no indication as to who made it or where it came from. This was what actually happened to more than 112,000 African-American voters in Maryland on November 2, 2010. While these “robocalls” may have violated Maryland election laws (criminal charges were recently issued), they may also have violated the TCPA – the Telephone Consumer Protection Act of 1991 (47 U.S.C. 227).

The TCPA amended the Communications Act of 1934 and is the primary law regulating telemarketing in the United States. Subsection (d) of the TCPA, entitled “Technical and procedural standards,” requires the Federal Communications Commission to create minimum technical and procedural standards for making calls using an artificial or prerecorded voice system (a “robocall”) and makes it a violation of the law if an individual ignores those standards. As part of those minimum standards, one must, at the beginning of the robocall, clearly disclose the identity of whoever initiated the call and at some point during the call, disclose the telephone number or address of that business, individual or entity.

The TCPA allows each state attorney general to enforce the law in federal court, and Maryland brought an action against the company that initiated the offending calls, as well as one of its owners, and one of its employees, claiming they violated the TCPA’s disclosure requirements in an effort to confuse voters and suppress voter turnout (Maryland v. Universal Elections). In response, Universal filed a motion to dismiss the suit, and just a few weeks ago (May 25, 2011), in its opinion dismissing that motion and allowing the suit to proceed, the U.S. District Court for the District of Maryland made some noteworthy observations regarding TCPA liability:

Purpose Doesn’t Matter. The defendants claimed that making “political robocalls” exempted them from the requirements of the TCPA. Nope. While the FCC may have exempted political robocalls from the requirement of obtaining prior consent, neither Congress nor the FCC exempted political robocalls from the minimum disclosure standards of the TCPA – the plain language of the rule states: “all artificial or prerecorded telephone messages.” Any robocall, for any purpose – commercial, political, or charitable – must contain a disclosure regarding who initiated the call and where that entity or individual can be contacted.

Individuals Can Be Liable. The plain language of the statute, cited in the court’s opinion, states: “It shall be unlawful for any person . . .” to violate the robocall disclosure requirement. Whether an owner of the company or an employee acting on behalf of the company, the court noted several instances in which individuals acting on behalf of corporations could be held personally liable for violating the TCPA (e.g., if they, “had direct, personal participation in or personally authorized the conduct found to have violated the statute”). The owner and employee here could be found liable not because they worked for Universal Elections, but because they were directly involved in initiating the calls that may have violated the TCPA. In other words, if an individual causes a corporation to act in a way that violates the TCPA, that individual can be found liable for the corporate action. Corporate, political campaign and nonprofit decision makers should be aware of this personal liability when they plan their calling campaigns.

One Who Initiates the Call, Not Just Makes It, Can Be Liable. In its motion, Universal argued that because it did not physically make the robocalls, it was not subject to the procedural disclosure standards of the TCPA. It hired a third party to place the robocalls and only recorded the message and uploaded it, and the 112,000 telephone numbers to be called, into the vendor’s system. Guess what the court said? “As the persons and entity responsible for recording the message, the defendants,” and not the conduit that distributed the message, “were in a position to ensure that the content of the message complied with the TCPA.”

If you are making pre-recorded calls, compliance is cheaper than the risk of damages. Maryland is seeking not just to enjoin the defendants from ever violating the TCPA again, but is also seeking monetary damages of $500 per TCPA violation (i.e., each call); and since the state alleges the violations were made willfully and knowingly, it claims the defendants were trying to deceive voters by failing to disclose who made the call, and is also asking the court to triple the damages and require the defendants pay the state’s attorneys’ fees.

A special thank you to James M. Duchesne, a legal intern at Rimon and one of the primary authors of this post. His contribution is greatly appreciated. If you need legal advice and representation on issues related to telemarketing, look no farther than Judith L. Harris and her team, working with our Advertising Technology & Media law practice group. Experienced. Knowledgeable. Seamless. Responsive. Cost Effective. We are happy to help.

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Advertisements going Mobile – something new or just the matrix reloaded?

Wow! I thought I was cool playing “Going Mobile” by The Who (from their album – remember albums? – Who’s Next, released in the United States August 14, 1971) to introduce my presentation about the legal implications of mobile advertising and mobile marketing (see Advertising on the Go – Mobile Marketing or Mobile Mayhem).

But I tip my hat to you Legal Bytes readers. You are on the ball. After blogging about the presentation, a friend and avid Legal Bytes reader reminded me of an article I wrote in 2005, published in the New York Law Journal Magazine, entitled “Transformed“, in which I stated: “No longer tied to desks or offices located in centers of commerce and society, we carry our electronic tool boxes with us wherever we go. We have pagers, cell phones and wireless PDAs with names like Treo™ and the BlackBerry® . . . whose addictive qualities . . . (make us refer to them) as ‘crack’ berries! We carry them with us into restaurants, Broadway shows, buses and even bathrooms.”

Wow, déjà vu all over again (with respect to Yogi Berra). Can you make it through the day without your BlackBerry or your Smartphone (we didn’t call them that in 2005)? What’s the first device you look at in the morning? What about before going to bed? Now I can even access Legal Bytes with a scan using my mobile. Wow!!

I am reminded of one of my favorite quotes from George Santayana, Spanish American philosopher (perhaps most remembered for his remark, “Those who cannot remember the past are condemned to repeat it”). My personal favorite quote of his is, “We must welcome the future, remembering that soon it will be the past; and we must respect the past, remembering that once it was all that was humanly possible.” (The Philosophy of George Santayana, Northwestern University Press, 1940, p. 560). Oh, and if you actually like The Who, you can listen to Going Mobile:

 

https://youtube.com/watch?v=tQ5pi3UR5dY

 

Indeed. Déjà vu all over again!

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Advertising on the Go – Mobile Marketing or Mobile Mayhem

February 9, 2011—one day before the Association of National Advertisers held its TV & Everything Video Forum—Joseph I. (“Joe”) Rosenbaum had the privilege of presenting a pre-conference legal educational seminar at the New York offices of Rimon. Joe’s presentation, in PDF format, is available for your personal viewing right here: “Mobile Advertising, or I Know Where You Will Be Next Summer & Other Mobile Marketing Myths”.

You won’t be able to see the embedded videos – if you want to see those or any other presentations Joe and the Advertising Technology & Media practice has presented over the years, or if you want to arrange a customized presentation on any or all things ATM-related, contact Joe at joseph.rosenbaum@rimonlaw.com.

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Comcast v. FCC Fallout

This post was written by  Judith L. Harris and Amy Mushahwar.

The Federal Communications Commission (“FCC”) has just voted to open a formal proceeding regarding how best to respond to the D.C. Circuit’s decision in Comcast v. FCC (see our previous blog post, FCC Caught by (not in) the Web). In the Comcast case, the court reversed an FCC decision finding that Comcast had violated the Commission’s non-discrimination principles by interfering with traffic from broadband subscribers using an online peer-to-peer file-sharing technology from BitTorrent. The appellate court ruled the Commission, under the FCC’s previous (Republican) Chairman Kevin Martin, had improperly stretched its ancillary jurisdiction pursuant to Title I of the Communications Act to enforce one of its net neutrality principles against an Internet services provider. Earlier, the Commission had classified Internet access as an information service, only subject to light-touch Title I regulation, rather than as a telecommunications service, subject to more extensive Title II regulation, traditionally applied to common carriers.

At stake, in the minds of many, is nothing less than the future of the Internet: whether it is to be free and open and, assuming so, who is best positioned to determine what that means. In the eyes of some, especially the large Internet service providers such as Comcast, Verizon Wireless and AT&T, a free and open Internet equates to a complete government hands-off approach. Investment and innovation has flourished under the prior deregulatory steps, they argue. Others, especially edge players, including content and application providers such as Google, Amazon.com and Apple, focus on increasing Internet facilities consolidation and vertical integration in the industry. They see the need for a “cop on the beat” and explicit (e.g., net neutrality) rules to insure that those who control the “pipes” don’t interfere with consumer choice and play favorites when it comes to content.

In the two months that have ensued since the Comcast decision, handed down only two weeks after the FCC’s release of the Congressionally mandated National Broadband Plan, the debate has raged as to whether, and if so, how, the FCC should proceed to exercise oversight over the activities of Internet service providers. Not surprisingly, the question of increasing significance is where the FCC might turn for the power it needs to implement many of the recommendations contained in the National Broadband Plan. Everyone, it seems, has weighed in, from all branches of government (the White House, Congress and all the Commissioners at the FCC), to all of the private stakeholders, trade associations, coalitions that have come into existence to lobby the issue, media, academics, and Wall Street analysts (witnessing the recent volatility of ISP stocks).

Yesterday’s action by the FCC finally gets the ball really rolling. While Congress has threatened legislation (in both directions) and a court challenge is inevitable no matter where the Commission ends up, the FCC’s 3-2 decision opening this new proceeding is a necessary first step in breaking the current logjam.

The Notice of this new action is worded in neutral terms and presents three alternative solutions to the Commission’s current dilemma. The Notice also seeks other ideas from the public. However, FCC Chairman Julius Genachowski has made no secret of the course he prefers. In the aftermath of the Comcast ruling, he outlined what he dubbed a “third way,” (the third option, obviously not accidentally, in yesterday’s Notice). His approach, he believes, represents a middle road between continuing to limp along regulating ISPs under Title I, despite the limited power that would afford the FCC to implement some aspects of the National Broadband Plan, and simply reclassifying broadband as a telecommunications service under Title II, with the potential that would introduce for heavy-handed regulation – such things as oversight of rates and the imposition of interconnection and unbundling obligations. This “third way” envisioned by Chairman Genowchowski, WOULD involve Title II reclassification, but would also include explicit forbearance from use of those powers most feared by telcos and cable companies.

One thing is clear: it’s going to be a long, hot summer in Washington. The Chairman is determined to keep the proceeding moving (perhaps in part to encourage industry and public/private working groups that have already sprouted to come up with a negotiated solution). Comments from the public are due July 15, 2010, less than 30 days from now, with reply comments due August 12, 2010. An Order by the Commission is expected before year-end (and the start of a new Congress), with a decision possible as early as October. The effect of the outcome of the midterm elections and, before then, the tremendous amounts of money the upcoming election will infuse into the system from all of the stakeholders, create wildcards. The stakes are high; the decisions are likely to affect the shape of the Internet for a very long time.

Whether you want more information or need help filing comments with the FCC, look no further than our own Judith L. Harris and Amy Mushahwar in our D.C. office – authorities in the area. Of course, you can always call me, Joseph I. Rosenbaum, or any Rimon attorney with whom you regularly work.

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U.S. Supreme Court Case Tests Privacy in Employment Context

This post was written by Paul Bond.

Companies routinely issue communications devices to employees for on-the-job use. Employees routinely use such devices to conduct personal business, wasting company resources and sometimes violating company codes of conduct. Under what circumstances may a company monitor messages to and from an employer-issued device? That question is currently before the U.S. Supreme Court in the case City of Ontario v. Quon.

The CSO Breakfast Club, an organization of Chief Information Security Officers from around the country, recently interviewed Rimon attorney Paul Bond about the potential ramifications of the case.

The City issued Sergeant Quon a pager for work use and he signed an agreement acknowledging he had no expectation of privacy in his communications. When Sergeant Quon kept going over his character quota, a supervisor told him the supervisor would not audit communications, provided Sergeant Quon paid for the overages. A departmental audit revealed that Sergeant Quon was regularly sending highly inappropriate texts to his wife, girlfriend, and a fellow officer. All of them sued the City for violations of their constitutional rights to privacy. The Supreme Court briefing and a transcript of the spirited oral argument are available at SCOTUS Wiki, (neither Legal Bytes nor Rimon can vouch for the accuracy of the material or analysis on this external link).

Employers are watching this case closely to see if the nation’s highest court will provide any guidance on the ground-rules for monitoring employee use (and abuse) of company-issued communications devices; but whether you want to stay in tune with developments or you need help in this area, contact Paul Bond. Of course, you can always call me, Joseph I. Rosenbaum, or any Rimon attorney with whom you regularly work.

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FCC Caught by (not in) the Web

This post was written by Judith L. Harris.

Last week, the U.S. Court of Appeals for the D.C. Circuit handed down a unanimous decision in the case of Comcast v. the FCC, holding, in effect, that the Federal Communications Commission (“FCC”) could not use its ancillary jurisdiction under Title I of the Communications Act to exercise broad oversight over the activities of Internet service providers (“ISPs”). The case involved a 2008 decision under prior FCC Chairman Kevin Martin, seeking to enforce 2005 “net neutrality” principles by banning Comcast’s blocking or slowing of traffic from broadband subscribers using BitTorrent, an online peer-to-peer file-sharing technology. You can download and/or read the entire case here Comcast v. FCC.

 At first blush, the ruling appears to be a total victory for Comcast but,as no one knows better than Comcast itself, nothing in the Nation’s capital is ever that cut and dried. Thus, Comcast was wise to respond in a conciliatory fashion: “We are gratified by the court’s decision today to vacate the previous FCC order. Comcast remains committed to the FCC’s existing open internet principles, and we will continue to work constructively with this FCC as it determines how best to increase broadband adoption and preserve an open and vibrant internet.” .

After all, Comcast is awaiting the FCC’s judgment on Comcast’s $30 billion merger with NBC Universal. The Commission (along with the Department of Justice) has the power to sideline the deal altogether or to impose conditions that, depending on their severity, could place significant constraints on the business plan of the wanna-be merger partners. Stated another way: Comcast knows that its time for customer golf. Moreover, and possibly even more significant, the only options now available to a highly motivated FCC appear to be far more draconian to the ISP community than the relatively innocuous exercise of power that Comcast successfully challenged in court. The old adage “be careful what you wish for” comes to mind.

Not that any of this leaves the FCC smiling. From their perspective, the court’s ruling could cast a long shadow over the FCC’s ability to proceed with its pending rulemaking designed to codify even bolder net neutrality policies across all broadband platforms, including wireless. Moreover, the issue of the reach of the FCC’s jurisdiction over Internet services could constrain the FCC’s ability to deliver on President Obama’s promise of universal broadband access at high speeds and reasonable prices, and the FCC’s marquee project: implementation of the National Broadband Plan. That plan was released to Congress by the Agency just a few weeks ago (March 16), amid much fanfare and after a year’s worth of intensive effort involving no less than 36 public workshops, nine field hearings, and 31 public notices that produced 75,000 pages of public comment!

But, soldiers march forward. Only two days after the court’s decision, the FCC announced its “Broadband Action Agenda,” explaining the purpose and timing of more than 60 rulemakings and other proceedings recommended for action by the FCC in the plan, and quoting FCC Chairman Julius Genachowski defiantly proclaiming: “We are putting the National Broadband Plan into action,” immediately adding, “The court decision earlier this week does not change our broadband policy goals, or the ultimate authority of the FCC to act to achieve those goals.” Well, maybe not.

The ISPs will undoubtedly act with all deliberate speed to nail down the Comcast victory by vigorously lobbying Capitol Hill to oppose any effort by the FCC (and potentially other providers such as Google and Amazon.com, and tech companies such as Apple), to entreat Congress to mandate network neutrality or to enact legislation giving the FCC clear authority to regulate broadband. From the ISP perspective, even worse could be an effort by the FCC to unilaterally reclassify broadband transmission as a Title II telecommunications service, empowering the FCC (at least until the next court challenge) to regulate with impunity. This latter action, often referred to around town as the “nuclear option,” would only require an affirmative vote by three of the five Commissioners, a low hurdle given the unrestrained, unambivalent public reactions of all three of the Democratic Commissioners (including the Chairman) in the immediate aftermath of the court’s pronouncement.

This week (on April 14), Chairman Genachowski is scheduled to be the only witness at a hearing before the Senate Commerce Committee. That hearing was originally planned to focus exclusively on the National Broadband Plan. But now, in addition to examining the FCC’s substantive proposals, the hearing will likely focus on its power, in light of the Comcast decision, to move forward with its implementation plans. With lobbyists swarming the halls of power, expect fireworks. Hopefully, all-out war won’t be the only avenue considered. The public and private stakeholders would do well to take a deep breath and earnestly consider an immediate, good-faith attempt at serious industry self-regulation, with agreed-upon standards of conduct and meaningful enforcement mechanisms.

Time’s a-wasting. As the FCC moves to implement the administration’s broadband agenda, over at the Federal Trade Commission, net neutrality and open Internet advocates are undoubtedly pondering how best they can use their own powers to protect consumers from potentially abusive trade practices by vertically integrated ISPs with enormous market power in a world where the FCC might, in the end, have limited enforcement tools. Who knows, the FTC and the Antitrust Division might decide that its time to burnish tried and true antitrust laws as a way of curtailing any anti-competitive conduct. Comcast, to be sure, is ahead at half time but, as  they well know, there is still much more of the game to be played.

Whether you want to stay in touch and in tune with developments, you wonder how “net neutrality” and these skirmishes might affect your business; or if you need legal advice and representation, you need look no farther than our very own Judith L. Harris – she’s the authority, and she graciously contributed this timely and insightful post. Of course, you can always call me, Joseph I. Rosenbaum, or any Rimon attorney with whom you regularly work.