Monthly Archives: November 2013

Defamation Case Studies: Politics

picture of the inside of the capitol building to represent political defamationElsewhere, politicians and powerful people often use defamation claims to silence critics. But political defamation is a lot less common in free-speech loving America. That said, it still happens.

Recently, two political defamation lawsuits hit U.S. headlines. One resulted in a closed door settlement, and the other is just beginning.

Political Defamation of Character Case #1: Blogger Makes Deal with Washington, DC Publicist

FishbowlDC is the TMZ of Washington power jockeying. A company under the WebMediaBrands umbrella, FishbowlDC is an opinionated pundit site with favorites and foes. Unfortunately for her, publicist Wendy Gordon fell into the latter group. Things became legally contentious when FishbowlDC created a weekly column called “Wendy Wednesday”. Gordon says the site used the column to spread “false and humiliating descriptions” of her and her PR tactics. Gordon described it as an “unprovoked, online smear campaign.” So, she filed a defamation lawsuit against WebMediaBrands.

Welp, the case never made it to a jury. As is wont to happen in DC, involved parties struck a behind-closed-doors deal. Gordon filed a dismissal notice at DC Superior Court a few days later. That’s what you call using a lawsuit to get your adversaries attention. Apparently, it worked in this case.

Political Defamation of Character Case #2: Long Island Lawyer Screams Libel Over Campaign Marketing Piece

A defamation showdown involving a Nassau County legislator and his campaign rival is revving up on Long Island. Lisa Daniels, a lawyer with political aspirations, sued Howard Kopel, incumbent representative of the 7th Legislative District, for defamation.

Not-So-Nice Political Mailer Results In Libel Lawsuit

Daniels, who ran against Kopel in a recent election, is suing her opponent over a political mailer. She’s asking for a cool $100 million. What slight of political warfare could be worth $100 million? Well, Daniels is irate over accusations that she displayed “poor judgment” a few years back when acting as counsel in a contentious child custody case. Daniels had become personally involved in the case and temporarily became the child’s guardian. Tragically, after litigation ended, the young boy died after falling out of a bunk-bed.

In her lawsuit, Daniels’ argues that the mailer unfairly draws a parallel between her and the boy’s death.

Kopel Swears He Didn’t Engage in Any Political Defamation

Kopel insists he had nothing to do with the political mailer in question, but he does concede that the race with Daniels “turned very, very nasty.” He didn’t indicate, however, if any PACs paid for the marketing piece.

Do you have a defamation issue? Do you need to speak with a lawyer with an encyclopedic knowledge of defamation law? If yes, contact Aaron Kelly, founding partner of the Kelly Warner Law Firm. He’s a top-rated attorney with rates priced for your budget.

Marketer Jailed For Consumer Fraud

Puffery can lead to consumer fraud. Too much can land you in the clink.
Puffery can lead to consumer fraud charges. Too much can land you in the clink.

Oh how the mighty fall. Long time TV pitchman Kevin Trudeau recently battled the Federal Trade Commission in a Chicago courthouse. Consumer fraud was the question at hand. In the end, Trudeau lost. Now the notorious weight loss marketer will have to spend some time behind bars.

Why? Keep reading.

When You Disregard FTC Orders and Edicts, Expect Serious Legal Trouble

The FTC says the “easy weight loss” infomercial kingpin lied to their faces and willfully disobeyed a 10-year-old commission consent order that demanded Trudeau refrain from making “misleading” advertisements. So, the FTC slapped him with criminal contempt charges.

Don’t Kid Yourself: Exaggeration In Marketing Is Against The Law

Meet Kevin Trudeau: Weight Loss Infomercial King, Extraordinaire!

If you find yourself awake in the wee hours of the night, you’re probably familiar with Kevin Trudeau, a veteran on the infomercial circuit. For years, he peddled his *miracle* weight loss system called, “The Weight Loss Cure ‘They’ Don’t Want You to Know About”. In infomercials, Trudeau waxed poetic about his diet plan that allowed for steak, potatoes and hot fudge sundaes. It sold like fireworks on July 4th. Unfortunately, what Trudeau said was in the book was very different than what was in the book. The FTC caught up with him, and now he’s going to jail.

Assistant U.S. Attorney Marc Krickbaum put it bluntly, explaining:

“[Trudeau] chose to make his book sound way better than it was to sell more books and make more money.”

You see, the problem with Trudeau’s book is that it doesn’t deliver on what he promised. Instead it advocates expensive solutions like prescription hormone injections and month-long, spa-like therapies. Oh, and according to the book, his method won’t work unless dieters stick to a 500-calorie-a-day diet! (For the record, eating only 500 calories a day is bad for your health.)

The Marketer’s Defense, “TPTB Are After Me Because I’m An Outspoken Critic,” Didn’t Work

In his defense, Trudeau’s attorneys argued that their client was an outspoken natural cures advocate who regularly railed against government and big pharma. The lawyers hoped to frame Trudeau as a persecuted truth teller, mercilessly harassed by the evil powers that be.

Jury Votes Guilty For Consumer Fraud In A Flash

But alas, the marketing gods were not on Trudeau’s side. Less than an hour after retiring to deliberate, the jury came back with a guilty verdict. Not only that, but Trudeau was taken into custody immediately – a rarity for these types of white collar crimes.

In Addition To Jail, Marketer Also Slapped With $37 Million Fine. Ouch.

In a related civil case, a court fined Trudeau a cool $37 million for violating his FTC order. The pitchman, however, insists he doesn’t have the money. Though, federal officials are convinced he’s got several, shall we say, “healthy” offshore accounts – which is probably why he was taken into custody ASAP.

The FTC Likes To “Drink The Blood” Of Consumer Fraudsters. Keep The Commission At Bay By Making Sure Your Marketing Materials Don’t Cross The Consumer Fraud Line.

Well, friends, let the case of Kevin Trudeau serve as a reminder that the Federal Trade Commission does not mess around when it comes to their edicts. They may have a reputation for being wishy-washy, but think of the department as a voracious vampire that thrives on second-offense blood. If you’ve been slapped on the wrist once, don’t get on the commission’s bad side again!

Consumer Fraud Lawyer With FTC Defense Experience

If you do, however, find yourself in trouble with the Federal Trade Commission for the first, second of third time, get in touch with Aaron Kelly at Kelly Warner Law. He has a wealth of experience defending startups and online marketers against FTC charges.

Major Newspaper: “Don’t Pay Attention To Our Headlines”

picture of an old time newsie cartoon to represent defamation lawsuit against the Mail on SundayThese days, thanks to the seminal 1964 New York Times Co. v. Sullivan ruling, it’s rare for a newspaper to lose a defamation lawsuit in the U.S. – but The New York Post may prove to be an exception to the rule.

In the wake of the Boston Marathon bombings, before the responsible parties were identified, the Post covered their April 18th edition with a picture of 16-year-old Salaheddin Barhoum and 24-year old Yassine Zaimi. The words “BAG MEN” in bold type ran across the top, with the subheading, “Feds Seek These Two Pictured At Boston Marathon.”

Unfortunately for the paper, the people pictured weren’t the bombers. They were two legal United States residents — who happen to be dark-complexioned. As you might imagine, they’re suing for libel, negligent infliction of emotional distress and false light invasion of privacy.

Despite the obvious mess up on the part of the Post, the daily is sticking by its interpretation of the incident, insisting that the photo used was “emailed to law enforcement agencies seeking information about these men, as our story reported. We did not identify them as suspects.”

In a recent lawsuit-related document, the Post is also arguing that the headline is merely an “attention-getter” that should not be read as a “true reflection” of the story inside. Furthermore, the paper maintains it played no part in “influencing readers to jump to conclusions.”

Let’s recap. A nationally recognized newspaper is using “Oh, people know our headlines aren’t real,” as a legal defamation defense.

Welp, good night and good luck, I guess.

Judge Says, “Where’s The Malice” In Doctor Defamation Lawsuit

doctor-defamationTragically, in 2007, a teenage girl from Indiana was found dead in her bed. At the scene of the incident, a miscommunication between the pathologist conducting the autopsy, Dr. Joseph Czaja, and the coroner’s office led to a procedural mishap. Due to the confusion, the autopsy pathologist ended up changing his cause of death conclusion a few months into the ensuing litigation – a change that ultimately led to a judge dismissing the murder case.

Why Did The Doctor File A Defamation Lawsuit Against The Lawyer?

The demise of the case displeased Wayne County Indiana’s prosecuting attorney, Mr. Mike Shipman. So, he publicly vented his frustrations about the dropped case against the girl’s boyfriend, whom Shipman believed was guilty of murder. In doing so, Shipman criticized Dr. Czaja, the pathologist, and questioned the doctor’s motives for changing his analysis.

According to Czaja, Shipman’s public criticism wrecked his medical career; the doctors at his pathology group denied him a partnership; law enforcement officials called on him less frequently; in the end, Czaja had no other choice than to seek work out of state. He attributed his financial downturn to Shipman’s statements, and decided to sue the attorney.

Judge In The Case Says, “Nope. Not Defamation.”

The judge in the case, however, pretty much shut it down before it got started. Why? Because the plaintiff failed to demonstrate compelling evidence apropos of actual malice on the part of the defendant. In his own words, the judge reasoned:

“ [T]he court finds that as a matter of law that the Prosecutor is immune from prosecution for the remarks made in this case both to the press, the Coroner, and the Allen County Prosecutor. Consequently there is no genuine issue of material fact. The Defendant’s Motion for Summary Judgment is hereby granted. Case dismissed.”

Actual Malice Was A Major Factor In The Judge’s Decision

Since the 1960s, actual malice has been the standard for defamation cases involving public figures. In the simplest terms, actual malice is when a person knowingly lies with the intent to cause harm or acts with reckless disregard for the truth. Now, whether actual malice standards need to be satiated in a given case depends on whether or not the plaintiff is a public or private figure.

Whether You’re A Public Figure or Private Citizen Matters In A Defamation Lawsuit

You read that correctly: U.S. defamation law sets a different standard of justice for “public figures” and regular ole’ Janes and Joes. Now, before you unnecessarily awaken your inner conspiracy theorist, the distinction is not as ominous as it may seem at first read.

For starters, the legal definition of a “public figure” is very different from say, TMZ’s definition. In most cases, a public figure is any person related to an issue of public concern. As such, public figures can be both “short-term” and “limited.” In some jurisdictions, any person that works for the government or in the public school system is automatically considered a public figure.

Simply stated, Kelly Warner lawyers know defamation law like Wayne Gretzky knows hockey. If you have a slander or libel legal issue, contact us today so we can start fixing the problem.

Fake Testimonial Writers Are Being Fined!

picture of asian coins
The FTC in Taiwan is now fining authors of fake testimonials and reviews.

Just like the United States, Taiwan has a federal consumer watchdog agency that also goes by the acronym FTC. Wu Shiow-ming heads the Taiwanese department, and his commission does not mess around. In fact, the foreign authority recently added an amendment to their nation’s Fair Trade Act that places penalties on anybody who writes fake testimonials or product reviews.

Samsung Hired Students To Trash Competitors Products Online

The Taiwanese FTC recently busted Samsung for hiring students to write positive product reviews. Not only did the students rave about Samsung online, but the paid product reviewers also trashed products made by Samsung’s competitors.

When preparing for the fake testimonial case against Samsung, Shiow-ming’s minions culled through 30,000 posts on 4,000 different websites. In the end, the government body slapped the tech company with an NT $10 million fine (about $340,000 US).

Moving Forward, Writers Of Fake Testimonials Will Be Held Responsible

The students hired by Samsung were not held liable in this case, but that will change soon, as Taiwanese officials amended their Free Trade Act. Moving forward, writers of phony reviews can be fined up to NT $25 million (about $840,000 US).

What About In The United States? Are Fake Testimonials Legal?

Do you think the U.S. is less strict than Taiwan when it comes to fake and paid testimonials?

Think again.

Writing fake testimonials and reviews is not legal on this side of the Pacific either, though over here, the people who use the phony reviews are liable, not the writers (in most cases).

To read more about the illegality of paid and fake testimonials in the U.S., go here, here and here.

Contact An Online Marketing Business Lawyer

Do you need to hire a lawyer with online marketing and business law background? If yes, contact Kelly Warner Law. Our top-rated attorneys focus on all things tech-related. Our firm has significant experience dealing with international claims– a plus in today’s digitally connected world. Get in touch today.

Another FTC HCG Weight Loss Product Crackdown

illustration of body builder to repesent FTC suing weight loss product for bad marketingLast week, the Federal Trade Commission initiated proceedings, in Arizona, against Kevin Wright, president of HCG Platinum and Right Way Nutrition. The FTC isn’t happy that Wright is still pushing his hCG products as weight loss miracle cures – especially since the consumer watchdog commission sent Wright a warning letter last year about his questionable marketing materials.

First Things First: What The Heck Is hCG?

Human chorionic gonadotropin (hCG) is a hormone produced by the placenta and other types of cancers. When used in certain ways, hCG can result in various desirable side effects, like weight loss. On the flip side, it is also a performance enhancing “drug” used by Major League Baseball players.

How Much hCG Did Wright Sell?

There is no doubt about it, Wright is a good at what he does. The hCG salesman offloaded  a whopping $13 million worth of product in 2010. Where did he sell his goods? Facebook, YouTube and via various online retailers and affiliate marketers. He also made it into Rite-Aid, Walgreens and GNC.

The FTC Sent A Warning Letter First, Which Wright Apparently Ignored

Why Aren’t The Retail Stores Listed As Defendants?

You may be wondering: why aren’t the retail stores that carried the product listed as defendants? In most cases, retail stores are not liable for product deficiencies. As a GNC spokesperson explained when interviewed about the Wright case, “[GNC] relies on the vendor to ensure ‘that the products are safe and compliant with all applicable laws and regulations.’”

This lawsuit should not come as a shock to Kevin Wright, though. According to reports, the FTC sent him a warning letter last year. In it, the commission reminded the hCG salesman that it had banned the sale of homeopathic hCG products and warned Wright that he was violating the Food, Drug and Cosmetic Act. In essence, the FTC gave him a chance to fix his marketing materials, but he chose not to pay heed.

Why Did Wright’s Weight Loss Marketing Material Get Him Into Legal Trouble?

Wright’s marketing materials, some of which featured Carmen Electra, were chock full of promises consumers love to hear, like “rapid and substantial weight loss.” For example, a testimonial on one website reads, “I don’t really like to exercise, it’s hard to get it in when I am a stay at home mom…I did GCG and lost 10 to 15 pounds in 30 days.”

According to HCG Platinum products’ instructions, all weight loss hopefuls had to do was “take a few drops before meals” to lose 1 to 2 pounds a day “for multiple weeks.” The products also included another set of crucial instructions: it works best if you stick to a 500 to 800 calorie a day diet. (Hmmmmm, wonder if the low calorie recommended has anything to do with the weight loss.)

And the last nail in Wright’s coffin? Some ads also contained a few unsubstantiated scientific claims.

Speak With An FTC Compliance Attorney

Need a business lawyer with a whole lot of FTC experience? Contact Aaron Kelly, founding partner of the Kelly Warner law firm. He works primarily with tech and online companies and has vast experience with online marketing law. He’s helped others out of jams with the FTC and can do the same for you.

JOBS Act: More Startup Opportunities?

jobsIn 2012, President Obama signed the JOBS Act into law. Dubbed the Jumpstart Our Business Startups Act, the statute intended to ignite America’s small business sector by democratizing the way companies can market investment opportunities.

JOBS Act Perk For Startups: Allows Startups To Crowdsource Initial Stock Investments

Over the past several years, crowdsourcing has taken off, but many rules still stand in the way of being able to crowdfund everything. The JOBS Act, however, removes some of the obstacles. Most notably, Title III of the Act removes various registration and investment requirements thereby paving the way for startups to sell stocks over the Internet.

JOBS Act Perk For Startups: Increases The Shareholder Reporting Threshold

Not only does the JOBS Act permit the online sale of startup stocks, but it also extends the financial reporting start date, from two years from business conception to five.

Additionally, in past, companies had to register with the SEC when their assets reached $10 M, and they had 500 shareholders. Once this section of the JOBS Act goes into effect, the shareholder number will increase to 500 “unaccredited” shareholders or 2,000 total shareholders.

JOBS Act Perk For Startups: Redefines Emerging Growth Company

The Jumpstart Our Business Startups Act also redefines the “emerging growth companies” category. Under the new rules, companies that gross less than $1 billion in the most recent fiscal year qualify as emerging. So why is it beneficial to be categorized as an EGC? They are exempt from certain filing disclosure requirements. Score.

JOBS Act Perk for Startups: More Marketing Freedom

Another great thing about the JOBS Act is that it lifts certain solicitation regulations. Specifically, it removes the ban on “general solicitation. As such, that means startups can approach different types of investors – perhaps most alluringly, small-time investors – which betters one’s chances of getting funded.

Is There Anything That The JOBS Act Prohibits?

All in all, the JOBS Act received widespread support in the tech sector. And, if all goes according to plan, it should open the door for a lot more startups. However, if you are planning on trying to build an investment fund via crowdfunding, think again. Officials decided that is not allowed.

JOBS Act Lawyer

If you have a company, or an idea for a startup, and want to speak with an attorney about the new business formation possibilities presented by the JOBS Act, get in touch. Kelly Warner has many tech sector and online companies as clients, and we keep on top of the latest Internet laws. We like to think of ourselves as the ideal law firm for startups – why not see if you agree and give us a ring today to start the chat.