Consumer Law & Policy Blog

Public Citizen, the ACLU, and the NYCLU Comment on New York's Advertising Rules

by Greg Beck

As I've previously written, the New York courts are considering adopting new ethics rules restricting attorney advertising.  Today, Public Citizen, the ACLU, and the New York Civil Liberties Union submitted comments urging the courts to reject the proposed amendments in their entirety.  The comments, which you can read here, attack the constitutionality of the proposed amendments on three grounds:

1. The rules do not contain an exception for nonprofit attorneys, thereby restricting non-commercial and political speech at the core of the First Amendment.
2. The rules contain pointless restrictions on the content of attorney advertising that seem aimed more at limiting competition than helping consumers.  I wrote about these restrictions in more detail here.
3. The rules impose draconian burdens on Internet speech that would, for example, require us to print out a copy of this blog every time it is modified.  I covered this aspect of the rules here.

The proposed amendments have garnered a lot of negative publicity, especially in the blogosphere, and we hope that the courts will reconsider these blatantly unconstitutional rules.

FTC to Look Into Food Marketing to Kids

by Stephen Gardner

On October 25, the Federal Trade Commission announced its plans to issue "compulsory process orders to major food and beverage manufacturers and quick service restaurant companies in order to obtain information from those companies concerning, among other things, their marketing activities and expenditures targeted toward children and adolescents."

This is a significant development in the regulation of food marketing to kids. Of course, the proof of this pudding is in the eating, so it remains to be seen what the FTC does with the information it obtains.

In 2005, Congress directed the FTC "to prepare a report on food industry marketing activities and expenditures targeted to children and adolescent."  Pub. L. No. 109-108.

In March 2006, the FTC asked nicely for information, but the food industry failed to provide "information, especially empirical data, on the nature and extent of marketing activities and expenditures targeted to children and adolescents."

My organization, the Center for Science in the Public Interest (CSPI), filed a comment in response to the March 2006 proposal, urging the FTC to obtain "information on the nutritional quality of products marketed to children."

The FTC now proposes to do something akin to that — to demand information from about 50 companies about food advertised to children, including fast foods, breakfast cereals, snack foods, candy and gum, carbonated and noncarbonated beverages, frozen and chilled desserts, prepared meals, and dairy products, including milk and yogurt. Specifically, the FTC announced its need to obtain data about:

• The types of foods marketed to children and adolescents.
• The media techniques used to market products to children and adolescents.
• The amounts spent to market to children and adolescents.
• The amount of commercial advertising time that results from this marketing.

The FTC continued talking tough, cautioning that anyone who destroyed responsive data might be prosecuted criminally.  But at the same time, it indicated a willingness to second-guess itself, by asking for comments "whether the proposed collections of information are necessary for the proper performance of the functions of the FTC, including whether the information will have practical utility."

Since the FTC in the New Millennium has moved from being the "National Nanny" (as it was called in the 70's) to the Chicken Guarding the Foxhole, one must wonder what engendered this tough squawk from the FTC.  It might be the desire to come to the rescue of the food industry, to prevent it being sued, in light of recent developments.

FTC Proposes to Ban Most Prerecorded Telemarketing Messages

    By Brian Wolfman

    In an October 4, 2006, Federal Register notice, 71 Fed. Reg. 58,176, the Federal Trade Commission has proposed to prohibit all prerecorded telemarketing messages to consumers except where the seller has obtained the consumer's written consent to receive such prerecorded calls. 

Interestingly, the FTC's proposed rule was issued in response to a petition (which the agency denied) from the Voice Mail Broadcasting Corp. (VMBC) urging the FTC to permit all prerecorded messages to consumers with whom the seller had an "established business relationship."  According to the FTC, about 13,600 consumers responded to the petition, with over 13,000 opposing VMBC's position.  The FTC cited the overwhelming consumer opposition to VMBC's petition as one reason for the proposed rule.  Comments on the proposed rule are due by November 6, 2006.  An FTC synopsis of the proposal appears here.

How Far Can Companies Go to Regulate Use of Their Trademarks?

by Greg Beck

A scene in the pilot for NBC's new superhero drama Heroes shows one of the characters sticking her hand in a running garbage disposal and pulling out a mangled and bloody stump.  Due to the nature of her super powers, the hand heals itself within a matter of seconds.  Most viewers watching the gory scene (myself included) probably did not notice the name on the rim of the garbage disposal.  If you watch carefully, however, you can see that the disposal is an "In-Sink-Erator."  That is an actual brand of garbage disposal made by Emerson Electric Co.

Apparently upset by NBC's unauthorized use of a picture of its product, Emerson sued to block further distribution of the pilot episode.  Its complaint, which includes pictures of the ground-up hand, raises claims of unfair competion, trademark infringement, dilution by blurring and tarnishment, trade libel, and defamation.  It requests an order permanently restraining NBC from showing the pilot episode or from using any Emerson trademark without permission, and forcing NBC to destroy all existing copies of the show.  The complaint also demands attorneys' fees and damages, including money to conduct a corrective advertising campaign.

Blogosphere Aboil

So the ABA Journal reports about New York's proposed ethics rules that would make it difficult for attorneys to blog.

New York Sun on Attorney Advertising

by Greg Beck

Since this blog first covered the effect that New York's proposed advertising rules will have on attorney bloggers, the blogosphere has been abuzz about the new rules.  Legal blogs that have weighed in against the rules include the Volokh Conspiracy, the Trademark Blog, Recording Industry vs. the People, Law.com, Real Lawyers Have Blogs, and New York attorney Nicole Black at Sui Generis, one of the first to start blogging about the issue.  The FTC has also come down against the rules, concluding they are bad for consumers.

Now the story has  made the jump from the blogosphere to the mainstream press, as reporter Joseph Goldstein covered the issue in today's New York Sun.  It is clear from the article just how confusing the new rules would be in practice.  A federal defender who blogs on the Second Circuit Blog was unsure whether the rules would affect his blog.  Because the blog includes a short biography of the lawyer, there is no reason they would not.

Hopefully, the blog storm on the issue has resulted in some useful comments to New York's Office of Court Administration.  If you haven't yet commented, it's not too late.  The deadline has been extended until November 15.

Upcoming Program on Advertising and Marketing Law

by Jeff Sovern

The Committee on Consumer Affairs of the Association of the Bar of the City of New York (of which I am a member) is presenting "Hot Topics in Advertising & Marketing Law 2006" on Wednesday, September 27 from 9:00 a.m. to 12:30 p,m, at the City Bar, 42 W. 44th Street, New York City.  The program covers recent cases and legislative developments in the areas of general advertising, advertising to children, retail practices, branded entertainment, and sweepstakes and contests, as well as an update on regulatory enforcement priorities.  For more information, call 212-382-6663 or register online.

New York Bar: Speech Should Be Restricted as Much as Possible

by Greg Beck

Last week I wrote about the misguided proposed amendments to New York's ethics rules that would make it next to impossible for lawyers in New York to run a blog or, in many cases, even send an email.  In the comments to my last post, David Giacalone of the f/k/a blog pointed out that the problems with the rules go far beyond their effect on bloggers.  At their core, New York's proposed rules show a deep mistrust of the First Amendment and its protection of lawyer advertising.  In fact, the website of former New York Bar Association president A. Vincent Buzard argues that lawyer advertising should be restricted "to the fullest extent permitted, within the limitations of the First Amendment."

The proposed new rules in combination seem geared toward outlawing anything that might make an attorney's advertisement even remotely effective.  Imagine if New York had an Athletic Shoe Manufacturers' Association that imposed these restrictions on athletic shoe advertising in the name of preventing confusion among consumers.

• No use of actors to play athletes, referees, or spectators.  (Sec. 1200.6(d)(4) & (6) of New York's proposed rules would ban the use of actors to play judges, lawyers, and clients.)

• No showing the use of sports stadiums, tracks, or fields.  (Sec. 1200.6(d)(5) would ban showing the use of courtrooms and courthouses.)

This Blog Is False and Misleading (in New York)

by Greg Beck

In the name of protecting consumers from false and misleading lawyer advertising, New York is proposing draconian new restrictions on Internet communications and other forms of attorney advertising that will directly impact attorneys who maintain blogs or websites in New York, or in many cases who simply send an email into the state.  Instead of protecting consumers, however, the proposed rules will burden completely truthful and non-misleading communication by attorneys, and will serve no purpose other than to deprive consumers of useful information about their legal rights, protect established law firms from competition, and render many aspects of the Internet largely unusable for New York attorneys.

Stripped to their essence, the proposed amendments would define the term "advertisement" extremely broadly as any public communication made "by . . . a lawyer . . . about a lawyer."  Sec. 1200.1(k). This definition explicitly includes all forms of communication on the Internet, including websites, email, and instant messaging.  Sec. 1200.1(m).  There is no requirement that the speech be commercial in nature or related to the lawyer's practice of law.