Yes, Virginia, there is a cause of action for false advertising
In the PBM Products v. Mead Johnson baby formula case (E.D. Va. case no. 3:09-cv-00269) twice previously mentioned on this blog (here and here), Chief Judge James R. Spencer delivered a gift to counsel on Christmas Eve, in the form of the second of two Christmas week opinions that provide a full discussion of and rationale for prior rulings.
This blog entry addresses a portion of that December 24th opinion [docket no. 243 on PACER/ECF, copy available here, also available at 2009 U.S. Dist. LEXIS 120200], which dealt with Mead Johnson’s summary judgment motion on PBM’s false advertising claims under the Lanham Act and for commercial disparagement under Virginia law. The motion was denied on the former and granted on the latter. A passage (on p.10) about the
“As this Court has previously held, ‘the only claims for unfair competition recognized in
So, does this passage really mean that those who want to sue for “deceptive trade practices, such as false advertising,” are out of luck under Virginia law? No, as explained below.
Following the link to the 2001 opinion, also by Judge Spencer, quickly begins to clear up the confusion. Citing an unpublished 1994 Eastern District of Virginia opinion by Judge Cacheris (1994 U.S. Dist. LEXIS 20303) and a 1993 Fairfax County Circuit Court opinion by Judge Michael P. McWeeny (32
Further exploration of the authorities up the chain (a 1989 E.D. Va. opinion by Judge Ellis and a 1921 Supreme Court of Virginia case) confirm that what has happened – on both the federal and state level – is that legislatures have set forth what is prohibited, thereby displacing the common law’s efforts to address deceptive trade practices and false advertising through the rubric of unfair competition. See Monoflo Int’l, Inc. v. Sahm, 726 F. Supp. 121, 127 (E.D. Va. 1989) (“there is no federal common law of unfair competition applicable here separate or apart from the Lanham Act and the judicial decisions construing that Act”); Benj. T. Crump Co. v. J. L. Lindsay, Inc., 130 Va. 144, 164, 107 S.E. 679, 685 (1921) (“we have a statute … which expressly authorizes the adoption of a form of advertisement … provides for the registration thereof, and makes it a misdemeanor for any other to counterfeit or imitate such form of advertisement, or to circulate any such imitation thereof. The inference from the enactment of such a statute clearly is, that one who desires a monopoly of the precise form of his advertisements should take advantage of its provisions”).
Indeed,
The Virginia Consumer Protection Act contains numerous advertising and trade practices provisions, including a prohibition on any “deception, fraud, false pretense, false promise, or misrepresentation in connection with a consumer transaction.”
Virginia’s criminal code (§ 18.2-216) makes it a Class 1 misdemeanor to, with commercial intent, “publish[], disseminate[], circulate[] or place[] before the public … an advertisement of any sort regarding merchandise, securities, service, land, lot or anything so offered to the public … contain[ing] any promise, assertion, representation or statement of fact which is untrue, deceptive or misleading, or us[ing] any other method, device or practice which is fraudulent, deceptive or misleading to induce the public to enter into any obligation.”
The General Assembly has explicitly created a private cause of action for “[a]ny person who suffers loss as the result of a violation of” that misdemeanor false advertising statute. See Va. Code § 59.1-68.3 (allowing an action for damages or $100, whichever is greater, plus reasonable attorney’s fees for violation of Article 8 (§ 18.2-214 et seq.), Chapter 6 of Title 18.2).
And last but not least, there’s the Virginia Trademark and Service Mark Act. See Va. Code § 59.1-92.12.
In sum,
