Circuit Sorts out 'Truth' from 'Puffery' in Advertising Dispute

G THE B IN EN V C R H E S A N 8 8 D 8 B 1 AR SINCE Web address: http://www.nylj.com VOLUME 238—NO. 29 friday, august 10, 2007 Circuit Sorts Out ‘Truth’ From ‘Puffery’ in Advertising Dispute BY BETH BAR concluded with a narrator saying “for picture quality facially false depictions of cable’s picture quality that beats cable, you’ve got to get DIRECTV.” A could not be discounted as mere puffery because it THE U.S. COURT of Appeals for the Second revised version of both ads instead ended with the line was possible that consumers unfamiliar with HD Circuit yesterday upheld a decision preliminarily “for HD picture that can’t be beat, get DIRECTV.” technology would rely on the images in deciding enjoining satellite television provider DIRECTV DIRECTV also placed banner ads on various Web whether to hook up their HD TVs to DIRECTV from airing TV commercials comparing the quality sites to promote the message that, when it comes to or analog cable. of its high-definition service in markets picture quality, “source matters.” The ads where Time Warner Cable operates. showed a pixilated and distorted image of Reality and Puffery Second Circuit Judge Chester J. Straub, New York Giants quarterback Eli Manning, writing for the panel in Time Warner Cable and equates the blurriness with the picture In upholding Judge Swain’s decision in connection v. DIRECTV, 07-0468-cv, said Southern quality of cable. with the revised Simpson commercial, Judge District Judge Laura Taylor Swain did not On its own Web site, the satellite Straub said Ms. Simpson’s statement that “you’re “exceed [her] allowable discretion” when company also showed similar blurry and just not going to get the best picture out of some she ordered DIRECTV to pull ads featuring distorted images, and equated those images fancy big screen TV without DIRECTV” was Jessica Simpson and William Shatner. with cable’s picture quality. And they “flatly untrue.” But Judge Straub, in a decision joined by included a statement that said “if you’re “The uncontroverted factual record establishes Judges Amalya L. Kearse and Rosemary S. hooking up your high-definition TV to that viewers can, in fact, get the same ‘best picture’ Pooler, said Judge Swain “clearly erred” in preventing basic cable, you’re not getting the best picture on by ordering HD programming from their cable DIRECTV from running some of its Internet ads. every channel. For unparalleled clarity, you need service provider,” he said. Though the parties have since settled their DIRECTV HD.” Judge Straub also said Judge Swain’s findings in dispute, the decision nevertheless provides what connection with the revised Shatner commercial Judge Straub described as “clarifications” to the were not “clearly erroneous.” Second Circuit’s “false advertising doctrine.” Injunction Sought “The District Court found that Shatner’s Jade L. Ekstedt, DIRECTV’s public relations On Dec. 7, 2006, Time Warner filed suit accusing assertion that ‘settling for cable would be illogical,’ manager, and Alexander Dudley, senior director for DIRECTV of false advertising in violation of the considered in light of the advertisement as a whole, corporate communications at Time Warner Cable, Lanham Act. The cable company filed a motion for unambiguously made the false claim that cable’s HD confirmed that the parties have reached a settlement. a preliminary injunction against the revised Simpson picture quality is inferior to that of DIRECTV’s,” Both, however, declined to elaborate on its terms. commercial and the banner and Web site ads on Dec. Judge Straub said. “We cannot say that this is clearly Judge Straub found that an ad can be “literally 18, 2006. And on Jan. 4, 2007 it filed supplemental erroneous, especially given that in the immediately false even though it does not explicitly make a papers requesting that the revised Shatner commercial preceding line, Shatner praises the ‘amazing picture false assertion, if the words or images, considered also be preliminarily enjoined. quality of DIRECTV HD.’” in context, necessarily and unambiguously imply “TWC claimed that each of these advertisements Judge Straub, however, said Judge Swain should a false message.” was literally false, obviating the need for extrinsic have agreed with DIRECTV that its claims were Second, Judge Straub held that ads with “visual evidence of consumer confusion,” Judge Straub permissible puffery. depictions that, while factually inaccurate, are so said. “TWC further argued that as DIRECTV’s “The Internet Advertisements’ depictions of grossly exaggerated that no reasonable consumer direct competitor, it was entitled to presumption cable are not just inaccurate; they are not even would rely on them” can be aired. of irreparable injury.” remotely realistic,” Judge Straub said. “It is difficult Finally, he said that if a plaintiff demonstrates In response, DIRECTV argued that the revised to imagine that any consumer, whatever the level that a defendant’s ad is “literally false and that given TV commercials were not literally false because of sophistication, would actually be fooled by the the nature of the market, it would be obvious to the no single statement in the commercials explicitly Internet Advertisements.” viewing audience that the advertisement is targeted at claimed that DIRECTV HD is superior to cable HD Time Warner Cable was represented by Saul the plaintiff, even though the plaintiff is not identified in terms of picture quality. As to the Internet ads, B. Shapiro, Sarah E. Zgliniec and Catherine A. by name,” irreparable harm to the plaintiff may be the satellite company said the images and messages Williams of Patterson Belknap Webb & Tyler. presumed. constituted non-actionable puffery. And they argued DIRECTV was represented by Daniel H. According to Judge Straub, DIRECTV began that irreparable harm could not be presumed because Bromberg, Marc L. Greenwald, Sanford I. Weisburst, running the disputed TV commercials in October none of the contested ads identified Time Warner Michael E. Williams, Justin C. Griffin, A.J. Bedel 2006. Ms. Simpson portrayed Daisy Duke from the Cable by name. and Margaret Caruso of Quinn Emanuel Urquhart movie “The Dukes of Hazzard,” and Mr. Shatner In granting Time Warner’s preliminary injunction Oliver & Hedges. was featured as Captain James T. Kirk from request, Judge Swain said in a Feb. 5, 2007, opinion Attorneys for both parties directed calls for “Star Trek.” that the cable company had met its burden of showing comment to company representatives. In her commercial, Ms. Simpson told viewers that each of the challenged ads was likely to be proven — Beth Bar can be reached at [email protected]. that they cannot “get the best picture out of some literally false. She said that Ms. Simpson and Mr. big fancy screen TV without DIRECTV.” In his Shatner’s statements could only be understood as commercial, Mr. Shatner said that “settling for cable making the literally false claim that DIRECTV HD Reprinted with permission from the August 10, 2007 edition would be illogical,” and praised the “amazing picture is literally superior to HD in picture quality (NYLJ, of the New York Law Journal © 2007 ALM Properties, Inc. All rights reserved. Further duplication without permission is quality of DIRECTV HD.” Feb. 16). prohibited. For information, contact 212-545-6111 or visit The original version of both commercials also As for the Internet ads, she found that the www.almreprints.com. # 070-08-07-0022.

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