A publisher’s marketing of a secondary source treatise, although targeting lawyers, does not violate consumer protection laws, a state appellate court held. The decision highlights that, while lawyers are “consumers” under state laws, they must show they were materially misled by the marketing of a product to bring a cause of action. Reasonable consumers, even lawyers, would not believe that a treatise marketed as complete and accurate was, particularly when the laws contained in the treatise are subject to legislative updates. ABA Litigation Section leaders say that when relying on secondary source materials, trained lawyers still have the obligation to confirm the accuracy of the material cited.
Lawyers Argue They Were Misled by Out-of-Date Treatise
In Himmelstein, McConnell, Gribben, Donoghue & Joseph, LLP, et al. v. Matthew Bender & Company, Inc., purchasers of the New York Landlord-Tenant annual publication (the Tanbook) sued its publisher in New York state court, alleging misrepresentations about the completeness and accuracy of the statutes and regulations referenced in the Tanbook. The purchasers argued these misrepresentations violated General Business Law Section 349, which prohibits “deceptive acts and practices” in connection with the sale of goods.
The trial court granted the publisher’s motion to dismiss, holding that the Tanbook was not “consumer-oriented” as required by the statute because it was not directed at “consumers at large for personal, family, or household use, but rather to legal professionals.” The appellate division affirmed. Although the intermediate court did not address whether the Tanbook was consumer-oriented, the court held that the only injury the purchasers suffered was the purchase price of the Tanbook, which is not an injury under the statute.
Lawyers Are Consumers, but Marketing of the Tanbook Was Not Materially Misleading
On appeal, the New York Court of Appeals held that Section 349 applies to all consumers, including legal professionals. The court first analyzed whether the publisher’s conduct was “consumer-oriented.” Rejecting the trial court’s analysis, the court recognized that any holding that limited the breadth of the term “consumer” ran afoul of the legislative intent and text of the statute, which was designed “to protect the public against all forms of deceptive business practices.” The court also noted that “an act or practice is consumer-oriented when it has a broader impact on consumers at large,” and it would not limit the reach of the statute, which is focused on deception and “its subsequent impact on consumer decision-making, not on the consumer’s ultimate use of a product.” The fact that the Tanbook was marketed to legal professionals did not matter because they are “merely a subclass of consumers,” and “consumer-oriented conduct need not be directed to all members of the public.”
The appellate court nevertheless affirmed the dismissal of the amended complaint, concluding that the purchasers could not plead the “materially misleading” element of their case. It noted that the publisher’s conduct could not objectively be held as misleading a party into believing the publisher guaranteed the Tanbook was complete and accurate. Specifically, the appeals court noted the terms and conditions for the purchasers’ contract for the Tanbook stated that it did not include updates, which the publisher provided and separately invoiced, when available. The appellate court also pointed to the publisher’s disclaimers stating the publisher did not warranty “the accuracy, reliability, or currentness” of the Tanbook.
Deceptive Conduct Toward Consumers Is Key, But Lawyers Should Trust and Verify
“Legal professionals are a ‘subclass’ of consumers in the sense that they too may qualify, in the right circumstances, as ‘consumers’ who purchase products and/or services in New York,” says Stephen L. Brodsky, New York, NY, cochair of the Securities Litigation Subcommittee and Practice Points editor of the Litigation Section’s Commercial & Business Litigation Committee. Nevertheless, some Section leaders believe the focus should remain on whether the marketing itself was deceptive. “The dispositive concern of GBL Section 349 is whether deceptive activity or conduct was perpetrated in connection with the conduct of business of selling or marketing a product in the State of New York,” explains Brodsky.
Section leaders point out that when it comes to deceptive conduct, the use of disclaimers may not be appropriate in all situations to avoid the contours of the consumer protection statute. “For example, a bath salt manufacturer should not be able to avoid liability for the ingestion of its product just because it places a warning label on the product while marketing its product only to teenagers,” suggests Ian H. Fisher, Chicago, IL, cochair of the Section’s Class Action & Derivative Suits Committee. However, according to Fisher, lawyers, regardless of any disclaimers on the products they use, we must be diligent and check the sources on which they rely. “We go to law school for a reason, and we are trained professionals,” says Fisher. “The court appeared to acknowledge that any properly trained lawyer would know not to simply trust a treatise and to update any legal citations,” adds Fisher.
Hashtags: #consumerprotection; #deceptivemarketing; #disclaimers
- Allen H. Denson, Latif Zaman, “States’ Divergent Approaches to Unfair, Deceptive, and Abusive Acts and Practices Reveal Consumer Protection Priorities,” Bus. L. Today (Aug. 22, 2019).
- Eugene M. Pak, “Do Consumers Want to Taste Jamaica?” Landslide, Vol. 9, No. 1 (Sept./Oct. 2016).
- C. Kinnier Lastimosa, “Consumer Lawsuits Arising from “Green” Labeling Claims,” Consumer Litig. (Apr. 17, 2012).
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