A Florida U.S. District Court denied a law firm’s motion to dismiss a lawsuit that alleges that the firm employs false and misleading advertising to obtain and encourage clients to breach timeshare contracts.
The plaintiff, a Las Vegas based timeshare development company, claims that the lawyer and his firm solicited clients in an advertising campaign that offered a “secret sauce” of legal remedies that would release timeshare members from their contracts. The plaintiff asserts that the firm’s advertising induced timeshare members to stop contract payments, subjecting the company to baseless arbitration proceedings. The law firm claims that the language used in its advertisements is not false and misleading, but rather constitutes permissible opinion or puffery.
In an order ruling on the defendant’s motion to dismiss, the U.S. District Court dismissed some of the claims, but denied the defendant’s motion to dismiss the claims that allege false advertising, tortious interference with contract, trade libel and deceptive trade practices. The court rejected the defendant’s claim that the advertising campaign was not false or misleading but merely opinion or puffery because “[the] argument [failed] to appreciate that at the pleading stage, the court accepts plaintiffs’ allegations as true.”
While the plaintiff has employed the Lanham Act to allege false advertising, it is interesting to note that Florida Rule of Professional Conduct 4-7.13 also prohibits false advertising: “[a] lawyer may not engage in deceptive or inherently misleading advertising.” The rule defines deceptive and inherently misleading advertisements as any advertisement that “contains a material statement that is factually or legally inaccurate; omits information that is necessary to prevent the information supplied from being misleading; or implies the existence of a material nonexistent fact.”
We will be following the case with curiosity as to whether the legal ethics rules enter into the ultimate decision.
Read more on this issue here.
Read more on Florida Rule 4-7.13 here.
