Byte of Prevention Blog

by Jay Reeves |

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.”

What would happen to your law practice if you experienced a medical emergency? Who would take care of your clients? What if a key partner dies unexpectedly? What would happen to the firm? If you aren’t sure of the answers to those questions, HELP is available. Lawyers Mutual has assembled a rapid response team to Handle Emergency Legal Problems. Led by our in-house claims attorneys and outside counsel, our team has the training and resources to guide you through difficult professional times. Lawyers Mutual HELP will assess your crisis situation and work with you to craft a workable plan for moving forward. Since 1977, Lawyers Mutual has been there for our insureds and their clients. We have provided professional liability protection for NC lawyers longer than any other insurance company. Want to learn other ways Lawyers Mutual can HELP your practice? Visit our website, give us a call, or drop by our office. You’ll see why Lawyers Mutual is the smart choice for liability coverage in North Carolina.

 

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

 

For close to half a century, Lawyers Mutual has been the smart choice for professional liability coverage for North Carolina attorneys. We cover the state from Murphy to Manteo. We insure large firms, solo practitioners and everyone in between. We help new lawyers enter the profession with confidence, and we help keep seasoned veterans safe and successful. The numbers speak for themselves. Lawyers Mutual has been in business since 1977, making us the only insurance carrier to provide continuous protection over that period. Today we insure more than 8000 lawyers in North Carolina. Most of them will stick with us until they retire. Why? Because they know we are here for them today and will be here tomorrow, bringing protection and peace of mind in turbulent times. Visit our website, give us a call, or ask a colleague why Lawyers Mutual is the smart choice for liability coverage.

 

Related Posts