California Business Litigation Blog

Academy Award winning director Woody Allen filed a lawsuit in U.S. District Court in Manhattan seeking $10 Million from American Apparel for use of his image without permission. The lawsuit states that the actor and director does not endorse commercial products or services in the United States.

Allen’s image (shown at right courtesy of Frillr.com), appeared on two billboards in New York and Los Angeles for one week in May 2007. Allen appears as a Hasidic Jew, a character from his movie “Annie Hall”. The lawsuit calls the billboards "especially egregious and damaging."

In a statement, American Apparel defended their use of Allen’s image as “Social Parody” protected by the First Amendment. They also stated “We had no intention of selling garments through the use of Mr. Allen’s image … We will make every effort to resolve this with Mr. Allen in an amicable way.”

In addition to its clothing line, American Apparel, based in Los Angeles is known for its colorful CEO Dov Charney and its political efforts in favor of immigration reform.

Was this “Social Parody”, infringement or just an effort to generate publicity? While we may never know for sure, I predict it will go away quietly with a monetary settlement.

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Posted In: Business Litigation , False Advertising , Intellectual Property

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Most of us have seen the LifeLock advertisement in which company CEO Todd Davis reveals his Social Security number and then speaks about the effectiveness of the company’s protections. Experian’s lawsuit claims that LifeLock’s ads are fraudulent and misleading. Experian also claims that LifeLock’s primary means of protecting its 600,000 clients is filing a fraud alert every 90 days for each LifeLock client.

A fraud alert is a notice/flag put on your credit report through the consumer reporting agencies. This flag establishes that as part of any credit approval process, you need to be notified.

Experian claims LifeLock’s practice of filing fraud alerts on behalf of clients is illegal because, under the Fair Credit Reporting Act, “fraud alerts can only be requested by the individual consumer or an individual acting on behalf of the consumer."

Further the lawsuit claims, adding four alerts per year for 600,000 LifeLock members to Experian’s database will degrade the effectiveness of legitimate fraud alerts over time. Credit grantors could lose the ability to distinguish between fraud alerts added by consumers who legitimately believe that identity theft is imminent and those added by LifeLock. The complaint alleges that credit grantors will have reason to doubt the credibility of all fraud alerts and their effectiveness for consumers legitimately impacted by fraud and identity theft will be severely compromised.

The complaint against LifeLock was filed by Experian in the U.S. District Court for the Central District of California.

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Posted In: Business Litigation , False Advertising , Internet

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Allianz Life Insurance Co. is reportedly the largest seller of annuities in California. According to the Department of Insurance, Allianz allegedly used deceptive sales tactics to mislead thousands of elderly people into purchasing unstable and/or unsuitable annuities. Many of those mislead were over 80 years old!

An annuity is a contract between a person and a financial institution (insurer) in which the person makes at least one payment and in turn receives "tax-deferred growth of earnings" back from the insurer.

California Department of Insurance officials conducted an examination into Alliance which revealed that in 2004/2005 Allianz replaced 126 existing annuities with financially unsuitable annuities for elderly clients.

In addition to the $10 Million penalty, Allianz agreed to implement a “suitability review” for customers over 65 to insure they are “fully aware of the products they are purchasing."

California Insurance Commissioner Steve Poizner stated “This landmark settlement ends years of aggressive and misleading marketing schemes targeted to our most elderly and vulnerable. The fact that Allianz used deceptive practices and high-pressure sales tactics to lure and cajole seniors into buying unsuitable policies is appalling. However, today's settlement represents a real change for the industry and is a tremendous victory for all California seniors."

Anyone with questions regarding insurance matters can contact the California Department of Insurance consumer hot line at (800) 927-HELP or visit http://www.insurance.ca.gov.

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Posted In: Business Litigation , Contract Litigation , False Advertising

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The California Supreme Court reversed a decision by the Court of Appeals allowing a class action lawsuit to proceed over disclosure of chemically color enhanced salmon sold in many California grocery stores. Named in the lawsuit are Albertson’s Inc., Safeway Inc., The Kroger Co., Trader Joe’s, Costco Wholesale Corp., Whole Foods Market Inc., Bristol Farms Inc., Ocean Beauty Seafoods Inc., and various subsidiaries.

Plaintiffs in Los Angeles, Alameda and Monterey counties consolidated lawsuits in 2004 claiming that the named stores sold fish with chemical additives canthaxanthin and astaxanthin. The additives allegedly changed the grayish color of farm raised salmon to resemble the color of wild salmon. The lawsuit claims that the stores’ failure to disclose the use of chemical additives to consumers was misleading. The lawsuit also claims possible concerns exist over farm raised salmon and consuming artificial coloring agents.

Specifically the lawsuit contains causes of action for unfair or deceptive trade practices under the Consumer Legal Remedies Act; false and misleading advertising; negligent misrepresentation and unfair and unlawful business acts and practices in violation of the state’s Unfair Competition Law, which includes the Sherman Law.

In the unanimous opinion the justices held that the Federal Food, Drug, and Cosmetic Act does not preempt deceptive marketing claims under California’s Sherman Food, Drug, and Cosmetic Law because Congress explicitly intended to allow states to establish their own disclosure requirements and remedies for violations, and because the plaintiffs’ claims were based on state, rather than federal, law.

What is the true color of your salmon? Only your grocery store knows for sure, and until this lawsuit is resolved, they aren’t telling!

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Posted In: Business Litigation , False Advertising

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By the time you read this, there will likely be at least one more lawsuit filed against Apple and AT&T over the iPhone. While I believe that all lawyers are good and some are better, it is times like these that make me question some in the legal profession.

When lawyers take on a lawsuit where the plaintiffs are suing because the iPhone will do everything it was promised to do, but won’t allow use on other networks or with third party application software....it just ticks me off!

Good lawyers DO NOT accept meritless lawsuits!

In case you don’t know, the Apple iPhone has been sold to only work on the AT&T network. There were never any other promises in any advertising or on the website. If you visit the Apple iPhone questions and answers web page you will find the following:

Can I “unlock” iPhone and use it with another wireless carrier?
AT&T is the exclusive wireless carrier for iPhone in the United States. If you currently use another wireless carrier, you can choose to transfer your number when you activate your AT&T account.

One of the toughest aspects of my practice is meeting with people who think they have a case and telling them they don’t. Countless times during an initial consultation with a prospective client, I have to tell them honestly that they have little or no chance of coming out ahead in a lawsuit. Most people appreciate our integrity.

Knowing where you stand before signing a retainer agreement or writing a check means that both you and your lawyer have a better chance of reaching a favorable result in your legal matter. This is one of the reasons for success on our clients’ behalf.

If your iPhone won’t fly a kite or will not do anything else it was not intended to do…call someone else. But if you want an honest appraisal of your current legal issue (always at no charge), call me today at 818-461-8500.

Richard Oppenheim

PS Additional helpful information may be found in questions 5 and 6 in our resource document “Eleven Questions to Ask BEFORE Hiring a Business Attorney”. You will find it on our website Home page.

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Posted In: Business Litigation , False Advertising , Internet

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California Women’s Law Center Executive Director Katherine Lee Buckland admitted to purchasing certain skin care products in the belief that they were being deceptively sold and with the intent of suing. Originally Los Angeles Superior Court Judge Robert Hess, sustained a demurrer joined by many of the more than 30 defendants (members of the American Herbal Products Association), and whom Buckland sued for negligent misrepresentation, fraudulent concealment and violations of unfair competition and false advertising laws as well as the Consumer Legal Remedies Act. Judge Hess also denied Buckland’s motion for a injunctive relief.

Buckland appealed, contending the trial court erred. She argued that her claims were legally tenable. The Court of Appeals disagreed.

Katherine Lee Buckland cannot sue for fraud, or under consumer statutes, because she did not rely on the alleged misrepresentations in choosing to purchase the products and did not suffer any “injury-in-fact,” Justice Nora Manella wrote for the Court of Appeal.

Simply stated, Buckland had no “standing”. Standing is a direct connection to a legal cause of action and was changed in California in 2004 by the passage of Proposition 64. Prior to that, the law allowed a private person not injured by an allegedly unfair or illegal business practice or by false advertising to seek equitable relief on behalf of the general public, which is essentially what Buckland stated she was trying to accomplish in her lawsuit.

Notably strange is that the.....

Continue reading "Court of Appeal Affirms: Plaintiff Cannot Purchase Products Solely as Reason to Sue" »

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Posted In: Business Litigation , False Advertising

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We regularly receive requests to explain the process of litigation, which we always communicate (using dialog NOT monologue) to prospective clients during our initial consultation. We hope you will find our lawsuit synopsis helpful. Feel free to forward it to others and remember to contact us with any questions about any business or employment lawsuit.

The litigation process generally involves four (4) phases. The length of each phase varies with the legal and factual complexities of each case.

The initial phase takes place before anything is filed in court. The attorney meets with the client to determine the facts of the claim being advanced by the client or the client's defense to a claim brought by another. In either case, it is essential that the client meet with the attorney at the earliest opportunity as valuable rights may be lost by delay. Once the attorney meets with the client, the attorney will review any documents relevant to the matter, research the applicable law and possibly speak to witnesses in order to chart a course which is in the best interest of the client.

The next phase involves the filing of an initial pleading in court. Typically, this is the filing of a Complaint or an Answer to a Complaint. The discovery process begins, which may include serving the other side with written questions, called Interrogatories, obtaining evidence which may be in the possession of the adversary or some other party and taking depositions, the oral questioning of parties and witnesses.

Once this phase has been completed, the case is ready to be tried. A trial may be in front of a Jury or a Judge and can vary in length depending upon the number of witnesses and quantity of exhibits offered. Under our system of jurisprudence, the plaintiff has the burden of proof. The plaintiff's case goes first. The defendant then has an opportunity to respond to the plaintiff's case with witnesses and evidence to support the defense. If the defendant has brought a Cross-Complaint, it is tried in the same manner. Otherwise, the plaintiff has an opportunity to put on a rebuttal case to counter the evidence offered by the defendant and, on occasion, a defendant may offer a sur-rebuttal to reply to the evidence offered by plaintiff in the rebuttal case.

The final phase of litigation involves the post-trial matters including motions to vacate or correct the judgment, appeals and efforts to collect on the judgment.

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Posted In: Business Litigation , Contract Litigation , Employment Law , False Advertising , Internet , Real Estate

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Two California men, Fred Greaves and Dave Gatley filed suit in San Diego County Superior Court. In the suit, which seeks class action status, the men claim Apple MacBook advertising promised displays capable of delivering up to 16 million colors (and 8 bits per channel). The suit states that the displays are only capable of 6 bits per channel which deliver ONLY about 262,144 colors.

The suit also alleges that Apple chastized customers for being too picky about their assessment of the quality of the display, and also told customers that they were imagining the complained about defects.

This lawsuit is an interesting blend of facts to generate sales for Apple (the number of colors) and facts which may have greater legal merit (6 bits vs 8 bits per channel). After all, who among
us can actually see over 260,000 different colors let alone 16 Million?

The other aspect of this suit which contribute to how this settles out will be the assertions that Apple told customers they were too picky or they were imagining the defects. It's one thing to not deliver on a product as promised and Apple could have complicated the problem ennormously if they denied the source of the problem and blamed customers' perceptions and imaginations.

False advertising will always be an interesting part of business law and our trial practice.

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Posted In: False Advertising

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