False Advertising Under California Law

California’s unfair competition law was designed to protect competitors and consumers by promoting fair competition in the marketplace.

Under Section 17500 of the Business and Professions Code, it is unlawful for any individual, corporation, or employee to directly or indirectly advertise or disseminate any statement that is untrue or misleading concerning real or personal property, or services.

California’s false advertising law prohibits any false statements made in connection with the advertisement or sale of goods or services where the maker knew, or should have known were false or misleading in nature.

Essentially, all forms of deceptive advertising are prohibited.

False and Deceptive Claims

In the business world, there is a significant difference between pushing the truth and making a false claim. Is a product actually “scientifically proven,” or have the “results been guaranteed?”

For corporations that cross the line, it can cost millions and they can lose credibility. For example, Dannon’s Activia yogurt campaign lured customers into buying the product for its purported nutritional benefits – when in actuality, the yogurt was the same as other yogurts.

On Feb. 26, 2010, ABC News reported on a class action settlement against Dannon which forced the company to pay up to $45 million in damages to consumers claiming they were duped by the company’s claims.

False Advertising Under Federal Law

Under 15 U.S.C. §1125(a), commonly referred to as the Lanham Act, any person who, in connection with any good or services uses any false or misleading description of fact or representation of fact, which is likely to cause confusion or deceive, shall be liable for a civil action by anyone who believes that they have been damaged by such act.

Filing a Claim for False Advertising

To file a claim for false advertising, the plaintiff must be able to show: 1) the statements in the advertising were misleading or untrue, and 2) the defendants either knew, or should have known that the statements were untrue or misleading.

Some of the legal remedies available under a false advertising claim include injunctive relief and restitution – this applies to public and private prosecutors.

To learn more about false advertising claims, contact The Mirkhan Law Firm, APC to schedule a consultation with an Orange County business litigation lawyer.