Gale Encyclopedia Of American Law 3Rd Edition Volume 4 P35 docx

CROSS REFERENCE Administrative Law and Procedure. FAIR HOUSING ACT OF 1968 The Fair Housing Act of 1968 (FHA) (42 U.S.C. A. §§ 3601-3631) is also known as Title VIII of the CIVIL RIGHTS Act of 1968. Congress passed the act in an effort to impose a comprehensive solution to the problem of unlawful DISCRIMINA- TION in housing based on race, color, sex, national origin, or RELIGION. The Fair Housing Act has become a central feature of modern civil rights enforcement, enabling persons in the protected classes to rent or own residential property in areas that were previously segregated. THE DEPARTMENT OF HOUSING AND URBAN DEVELOP- MENT (HUD) is charged with enforcement of the act. It issues regulations and institutes investigations into discriminatory housing practices. The passage of the Fair Housing Act came after the failure of two earlier federal initiative s. A 1962 EXECUTIVE ORDER directed all departments of the EXECUTIVE BRANCH to take appropriate action to prevent discrimination in all fede- rally administered housing programs. The Civil Rights Act of 1964 contained language in Title VI that prohibited housing discrimination in any program receiving federal financial assis- tance. Although Title VI provided that a recipient of funding who was found in violation could be prevented from conti nuing receipt of governmental assistance, this sanction w as rarely used. The Fair Housing Act prohibits discrimina- tory conduct by a variety of legal entities. The act defines “person” to include one or more indi- viduals, corporations, partnerships, associations, labor organizations, legal representatives, mutual companies, joint-stock companies, trusts, unin- corporated organizations, trustees, receivers, and fiduciaries. In addition, municipalities, local government units, cities and federal agencies are subject to the law. The act explicitly defines a list of prohibited practices involving housing, including sales, rentals, advertising, and financing. Its primary prohibition makes it unlawful to refuse to sell, rent to, or NEGOTIATE with any person because of that person’s race, color, religion, sex, familial status, handicap, or national origin. The Fair Housing Amendments Act of 1988 added exten- sive provisions that apply to discrimination against disabled persons and families with children 18 years of age and under. It is illegal under the Fair Housing Act to discriminate in the sale or rental of a dwelling because of the DISABILITY of (1) the buyer or renter, (2) a person who will reside in the dwelling after it is sold or rented, or (3) any person associated with the buyer or renter. It is not illegal, however, to refuse to rent or sell housing to an individual, with or without a disabling condition, whose TENANCY would constitute a direct threat to the health or safety of other individuals or whose tenancy would result in substantial physical damage to the property of others. Newly constructed multi- family dwellings must be designed so that the public and common-use portions are accessible to pe ople with disabilities. The Fair Housing Act also prohibits discrim- inatory advertising practices in the sale or rental of housing. Advertising may not disclose a “preference, limitation or discrimination” based on any of the protected categories of persons. The media company that runs an offensive advertisement or other statement may be held liable, as may the advertiser. Subtle advertising strategies, such as the selective use of minority- identified media for the marketing of segregated and overpriced hous ing to minorities, and the use of code words, such as “exclusive” neighbor- hood, in the text of the realty classified advertise- ments, violate the act. The law reaches unpub- lished statements including discriminatory expressions and conduct, such as a landlord’s instruction to his rental agent, superintendent, or other employees that they should either not rent to blacks or that they should give a preference to whites or certain ethnic groups. The law makes it illegal for an owner or his agent to represent to any member of any statutorily protected class that a dwelling is unavailable for inspection, rental, or sale, when, in fact, it actually is available. The act has been found to have been violated by a realty firm that posted “sold” signs on the lawns of a white neighborhood in an attempt to discourage minorities from purchasing houses in the neighborhood. The Fair Housing Act also sought to end a practice called “blockbusting:” the practice by realtors of frightening homeowners by telling them that people who are members of a particular race, religion, or other protected class GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION FAIR HOUSING ACT OF 1968 329 are moving into their neighborhood and that they should expect a decline in the value of their property. The purpose of this scheme is to get homeowners to sell out at a deflated price. In alleged BLOCKBUSTING cases, the courts have focused on what was heard, rather than w hat was said. Even in the absence of wrongful in tent by the real estate salesman, or explicit reference to a protected class, liability will attach if the reasonable homeowner believes that the sales- man is trading on his assumed fear of minorities to stimulate that homeowner to list his house for sale. Although the primary focus of the law is to protect prospective renters and buyers of real estate, the Fair Housing Act also protects real estate agents who are members of the protected classes. Real estate brokerages may not set different fees for membership in multiple listing services, and may not deny or limit benefits accruing to members in real estate brokers’ organizations. In addition, brokerages may not establi sh geographic boundaries, office location, or residence requirements for access to, or membership in, any real estate- related organization, based on an individual’s membership in any of the statutorily protected categories. Congress worked to identify all components of the housing industry that might discriminate against persons in the protected classes. This explains why the Fair Housing Act governs the housing financing industry. Banks and financial institutions may not discriminate when financ- ing the purchase, construction, improvement, repair, or maintenance of a house. This section of the act also applies to the selling, brokering, or appraising of residential real estate. Despite the apparent breadth of the law, Congress did exempt several classes of defen- dants from coverage. It does not apply to single- family homeowners if they sell or rent their homes witho ut the use of a real estate agent or other person who is in the business of selling and renting homes. In addition, the homeowner must not use advertising that indicates a discriminatory preference. This exemption applies to only one sale within a 24-month period. Multiple-family homeowners are ex- empt if no more than four families reside in a dwelling, including the owner. The act also grants exemptions to religious organizations, private clubs, and senior citizens, subject to some limitations. The provisions of the Fair Housing Act may be enforced by HUD and through “pattern and practice” lawsuits brought by the attorney general. A person who alleges discrimination may file a complaint with HUD. If the depart- ment believes that the claim has merit, the matter will be referred to an administrative law judge for a hearing. The judge is empow- ered to award actual damages, equitable relief, and attorneys’ fees to the PREVAILING PARTY. The judge also may assess civil penalties against the violators, which can range from $25,000 to $50,000. The judge may not award PUNITIVE DAMAGES nor require AFFIRMATIVE ACTION of the violator, however. In addition, a private citizen may also file a civil lawsuit in federal court against the alleged violator of the act. Fina lly, the attorney general may file a civil lawsuit when there is evidence of a pattern or practice by the alleged violator that extends beyond on e or two victims. When the attorney general prevails in these types of lawsuits, the act allows the awarding of injunctive relief and monetary damages to the AGGRIEVED PARTY. In addition, the court may assess civil penalties against the violator up to $50,000 for a first violation and up to $100,000 for any subsequent violation. FURTHER READINGS Justice Department. Civil Rights Division. The Fair Housing Act of 1968. Sec. 800 [42 U.S.C. 3601–3631]. Available online at http://www.usdoj.gov/crt/housing/title8.php; website home page: http://www.usdoj.gov (accessed July 23, 2009). Russell, Marcia L. 2004. Fair Housing. Chicago, IL: Dearborn. Sidney, Mara S. 2003. Unfair Housing: How National Policy Shapes Community Action. Lawrence: Univ. Press of Kansas. FAIR LABOR STANDARDS ACT The Fair Labor Standards Act of 1938 (29 U.S. C.A. § 201 et seq.) was federal legislation enacted in 1938 by Congress, pursuant to its power under the COMMERCE CLAUSE, that mandated a MINIMUM WAGE and maximum 40-hour work week for employees of those businesses engaged in inter- state commerce. Popularly known as the “Wages and Hours Law,” the Fair Labor Standards Act was one of a number of statutes making up the NEW DEAL program of the presidential administration of FRANKLIN DELANO ROOSEVELT. Aside from setting a maximum number of hours that a person could work for the minimum wage, it also established GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 330 FAIR LABOR STANDARDS ACT the right of the eligible worker to at least “time and a half”—or one and one-half times the customary pay—for those hours worked in excess of the statutory maximum. Other provisions of the act forbade the use of workers under the age of 16 in most jobs and prohibited the use of workers under the age of 18 in those occupations deemed dangerous. The act was also responsible for the creation of the Wage and Hour Division of the LABOR DEPARTMENT . Over the years, the Fair Labor Standards Act has been subject to amendment but continues to play an integral role in the U.S. workplace. CROSS REFERENCES Employment Law; Labor Department. FAIR MARKET VALUE The amount for which real property or personal property would be sold in a voluntary transaction between a buyer and seller, neither of whom is under any obligation to buy or sell. The customary test of fair market value in real estate transactions is the price that a buyer is willing, but is not under any duty, to pay for a particular property to an owner who is willing, but not obligated, to sell. Various factors can have an effect on the fair market value of real estate, including the uses to which the property has been adapted and the demand for similar property. Fair market value can also be referred to as fair cash value or fair value. FAIR-TRADE LAWS State statutes enacted in the first half of the twentieth century permitting manufacturers to set minimum, maximum, or actual selling pric es for their products, and thus to prevent retailers from selling products at very low prices. Manufacturers have an interest in establish- ing and maintaining GOOD WILL toward their products. This means assuring consumers that the manufacturers’ goods are quality product s. Good will is promoted by advertising and other sales efforts. Manufacturers in the early 1900s believed that commanding minimum retail prices was necessary to preserve good will, and that uncontrolled price-cutting by retailers would be detrimental to good will. Specifically, manufacturers feared that consumers would become skeptical if a particular retailer began to sell for a lower price a product that had had a relatively consistent price over the years: the lower price would undercut any claim by the manufacturer that the higher price was neces- sary to maintain the product’s quality, and purchasers at the higher price would feel cheated. The Great Depression following the STOCK MARKET crash of 1929 started a movement toward state involvement in product price controls. State lawmakers believed that allowing manufacturers to dictate resale prices to retailers would help stabilize price levels and markets. In 1931 California became the first state to pass fair-trade laws. These laws made it legal for a manufacturer to enter an agreement whereby the purchasing retailer, the signor, could resell a product only at a prescribed minimum price. In 1933 California amended these laws to make such an agreement binding on nonsignors. The amendments made minimum-price agreements enforceable against any retailer who had knowledge of another retailer’s agreement with the manufacturer. The setting of minimum resale prices, which state fair-trade laws legalized, was precisely the sort of vertical PRICE-FIXING that the federal SHERMAN ANTI-TRUST ACT of 1890 (15 U.S.C.A. § 1) had been intended to prohibit. While the courts wrestled with the conflicting state and federal laws, Congress passed first the Miller- Tydings Act (50 Stat. 693 [Aug. 17, 1935]), which amended the Sherman Act to exempt state fair-trade laws, and then the McGuire Act (66 Stat. 632 [1952]), which allowed states to pass fair-trade laws making minimum price agreements enforceable against nonsignors as well. After the enactment of Miller-Tydings and McGuire, state fair-trade laws and federal antitrust laws were no longer in conflict, and as many as 45 states enacted fair-trade laws. As time passed, though, state courts whittled away at the fair-trade laws, often finding them to be in violation of the state’s constitution. The perceived importance of allowing manufac- turers to set minimum prices deteriorated as it became evident that the laws were harming the free market. In 1975 Congress, with support of the Ford administration, passed the Consumer Goods Pricing Act (Pub. L. No. 94-145), which repealed the Miller-Tydings and McGuire Acts, GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION FAIR-TRADE LAWS 331 putting state fair-trade laws back within the prohibitions of the Sherman Act. In the early twenty-first century, the com- puter and electronics industries face retail price- cutting issues. Volume discount retailers sell name brand computers and electronics at prices far below those initially established in the market. With fair-trade laws off the books, retailers and the market determine at what prices goods will be sold. FURTHER READINGS Areeda, Phillip, Louis Kaplow, and Aaron S. Edlin. 2004. Antitrust Analysis: Problems, Text, Cases. 6th ed. Frederick: Aspen. Posner, Richard A. 2001. Antitrust Law. Chicago: Univ. of Chicago Press. Tucker, Albert. 2006. “Fair Enough? Big Business, Mass Markets and Fretting Farmers.” New Internationalist 395 (November 1). FAIRNESS DOCTRINE The doctrine that imposes affirmative responsibil- ities on a broadcaster to provide coverage of issues of public importance that is adequate and fairly reflects differin g viewpoints. In fulfilling its fairness doctrine obligations, a broadcaster must provide free time for the presentation of opposing views if a paid sponsor is unavailable and must initiate programming on public issues if no one else seeks to do so. Between the 1940s and 1980s, federal regu- lators attempted to guarantee that the broadcast- ing industry would act fairly. The controversial policy adopted to further that attempt was called the fairness doctrine. The fairness doc- trine was not a statute, but a set of rules and regulations that imposed controls on the content of the broadcasting media. It viewed radio and television as not merely industries but servants of the PUBLIC INTEREST. Enforced by the FEDERAL COMMUNICATIONS COMMISSION (FCC), the fairness doctrine had two main tene ts: Broadcasters had to cover controversial issues, and they had to carry contrasting viewpoints on such issues. Opponents of the doctrine, chiefly the media themselves, called it unconsti- tutional. Although it survived court challenges, the fairness doctrine was abolished in 1987 by deregulators in the FCC who deemed it out- dated, misguided, and ultimately unfair. Its demise left responsibility for fairness entirely to the media. The fairness doctrine grew out of early regulation of the radio industry. As the medium of radio expanded in the 1920s, its chaotic growth caused problems: For one, broadcasters often overlapped on each other’s radio frequen- cies. In 1927 Congress imposed regulation with its passage of the Radio Act (47 U.S.C.A. § 81 et seq.). This landmark law established the Federal Radio Commission (FRC), reestablished in 1934 as the Federal Communications Com- mission. Empowered to allocate frequencies among broadcasters, the FRC essentially decid- ed who could broadcast, and its mandate to do so contained the seeds of the fairness doctrine. The commission was not only to divvy up the limited number of bands on the radio dial; Congress said it was to do so according to public “convenience, interest, or necessity.” Radio was seen as a kind of public trust: Individual stations had to meet public expecta- tions in return for access to the nation’s airwaves. In 1949 the first clear definition of the fairness doctrine emerged. The FCC said, in its Report on Editorializing, “[T]he public interest requires ample play for the free and fair competition of opposing views, and the com- mission believes that the principle applies to all discussion of issues of importance to the public.” The doctrine had two parts: it required broadcasters (1) to cover vital controversial issues in the community and (2) to provide a reasonable opportunity for the presentation of contrasting viewpoints. In time, additional rules were added. The so-called personal attack rule required broadcasters to allow opportunity for rebuttal to personal attacks made during the discussion of controversial issues. The “political editorializing” rule held that broadcasters who endorsed a candidate for political office had to give the candidate’s opponent a reasonable opportunity to respo nd. Enforcement was controversial. Complaints alleging violations of the fairness doctrine were to be filed with the FCC by individuals and organizations, such as political parties and unions. Upon review of the complaint, the FCC could take punitive action that included refusing to renew broadcasting licenses. Not surprisingly, radio and TV station owners resented this regulatory power. They grumbled that the print media never had to bear such burdens. The fairness doctrine, they argued, GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 332 FAIRNESS DOCTRINE infringed upon their FIRST AMENDMENT rights. By the late 1960s, a First Amendment challenge reached the U.S. Supreme Court, in Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 89 S. Ct. 1794, 23 L. Ed. 2d 371 (1969). The Court upheld the constitutionality of the doctrine in a decision that only added to the controversy. The print and broadcast media were inherently different, it ruled. In the broadcast media, the Court said, “it is the right of the viewers and listeners, not the right of the broadcasters, which is paramount it is the right of the public to receive suitable access to social, political, esthetic, moral, and other ideas and experiences which is crucial here.” Although the fairness doctrine remained in effect for almost two more decades following Red Lion, the 1980s saw its abolishment. Antiregulatory fervor in the administration of President RONALD REAGAN brought about its end. The administration, which staffed the FCC with its appointees, favored little or no restrictions on the broadcast industry. In its 1985 Fairness Report (102 F.C.C.2d 145), the FCC announced that the doctrine hurt the public interest and violated the First Amendment. Moreover, technology had changed: with the advent of multiple channels on cable television, no longer could broadcasting be seen as a limited re- source. Two years later, in August 1987, the commission abolished the doctrine by a 4–0 vote, intending to extend to radio and television the same First Amendment protections guaran- teed to the print media. Congress had tried to stop the FCC from killing the fairness doctrine. Two months earlier, it had sent President Reagan the Fairness in Broadcasting Act of 1987 (S. 742, 100th Cong., 1st Sess. [1987]), which would have codified the doctrine in federal law. The president vetoed it. President Reagan’s veto of the 1987 con- gressional bill to establish the fairness doctrine as law did not end the controversy, however. Even into the early 2000s, proponents contin- ued to call for its reinstatement. FURTHER READINGS Barron, Jerome A. 1989. “What Does the Fairness Doctrine Controversy Really Mean?” Hastings Communications/ Entertainment Law Journal 12 (winter). Hall, Roland F.L. 1994. “The Fairness Doctrine and the First Amendment: Phoenix Rising.” Mercer Law Review 45 (winter). Harowitz, Linda. 1989. “Laying the Fairness Doctrine to Rest: Was the Doctrine’s Elimination Really Fair?” George Washington Law Review 58 (June). Hazlett, Thomas W., and David W. Sosa. 1997. “Was the Fairness Doctrine a ‘Chilling Effect’? Evidence from the Postderegulation Radio Market.” Journal of Legal Studies 26 (January). Available online at http://papers. ssrn.com/sol3/papers.cfm?abstract_id=10146; website home page: http://papers.ssrn.com (accessed September 2, 2009). Leweke, Robert W. 2001. “Rules without a Home: FCC Enforcement of the Personal Attack and Political Editorial Rules.” Communication Law and Policy 6 (autumn). FALSE ADVERTISING “Any advertising or promotion that misrepresents the nature, characteristics, qualities or geographic origin of goods, services or commercial activities” (Lanham Act, 15 U.S.C.A. § 1125(a)). Proof Requirement To establish that an advertisement is false, a PLAINTIFF must prove five things: (1) a false statement of fact has been made about the advertiser’s own or another person’s goods, services, or commercial activity; (2) the state- ment either deceive s or has the potential to deceive a substantial portion of its targeted audience; (3) the deception is also likely to affect the purchasing decisions of its audience; (4) the advertising involves goods or services in interstate commerce; and (5) the deception has either resulted in or is likely to result in injury to the plaintiff. The most heavily weighed factor is the advertisement’s potential to injure a customer. The injury is usually attributed to money the consumer lost through a purchase that would not have been made had the advertisement not been misleading. False state- ments can be defined in two ways: those that are false on their face and those that are implicitly false. Development of Regulations One early attempt to create advertising industry standards was made in 1911 when the trade journal Printer’s Ink proposed that false adver- tising be classified as a crime. As a result, false advertising became a MISDEMEANOR in 44 states. Statutes were based on the model statute suggested by Printer’s Ink. These statutes are still in effect; however, they are rarely used because it requires proving that the false advertising exists BEYOND A REASONABLE DOUBT,a difficult standard to meet. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION FALSE ADVERTISING 333 In place of the Printer’s Ink statute, states adopted the Uniform Deceptive Trade Practices Act of 1964 (revised 1966), which lists a dozen different items that are prohibited in the advertising trade . The only remedy available under this act is injunctive relief—a court order that admonishes the guilty party for its actions—which may explain the low number of states that have adopted it. (As of 2003, only 12 states have adopted the statute in some form.) Other states have different statutes regarding false advertising. Most of these statutes require the courts to interpret state laws using federal guidelines provided by the FEDERAL TRADE COMMISSION (FTC). According to the FTC, which amended its standards to help regulate cigarette labeling, three elements are necessary to show that an advertisement is false or unfair. The ad has to offend PUBLIC POLICY; be immoral, unethical, oppressive, or unscru- pulous; and substantially injure consumers. Types of False Advertising Regulations in the early 2000s define three main acts that constitute false advertising: failure to disclose, flawed and insignificant research, and product DISPARAGEMENT. The majority of these regulations are outlined in the LANHAM ACT of 1946 (15 U.S.C.A. § 1051 et seq), which contains the statutes that govern trademark law in the United States. Failure to Disclose It is considered false advertising under the Lanham Act if a represen- tation is “untrue as a result of the failure to disclose a material fact.” Therefore, false advertising can come from both misstatements and partially correct statements that are mis- leading because they do not disclose something the consumer should know. The Trademark Law Revision Act of 1988, which added several amendments to the Lanham Act, left creation of the line between sufficient and insufficient disclosure to the discretion of the courts. American Home Products Corp. v. Johnson & Johnson, 654 F. Supp. 568, S.D.N.Y. 1987, is an example of how the courts use their discretion in determining when a disclosure is insufficient. In this case, Johnson and Johnson advertised a drug by comparing its side effects to those of a similar American Home Products drug, leaving out a few of its own side effects in the process. Although the Lanham Act does not require full disclosure, the court held the DEFENDANT to a higher standard and ruled the advertisement misleading because of the potential health risks it posed to consumers. Flawed and Insignificant Research Advertise- ments based on flawed and insignificant research are defined under section 43(a) of the Lanham Act as “representations found to be unsupported by accepted authority or research or which are contradicted by prevailing author- ity or research.” These advertisements are false on their face. Alpo Pet Foods v. Ralston Purina Co., 913 F.2d 958 (D.C. Cir. 1990), shows how basing advertising claims on statistically insignificant test results provides sufficient grounds for a false advertising claim. In this case, the Ralston Purina Company claimed that its dog food was benefi- cial for dogs with canine hip dysplasia, demon- strating the claims with studies and tests. Alpo Pet Foods brought a claim of false advertising against Purina, saying that the test results could not support the claims made in the advertise- ments. Upon looking at the evidence and the way the tests were conducted by Purina, the court ruled not only that the test results were insignificant but also that the methods used to conduct the tests were inadequate and the results could therefore not support Purina’s claims. Product Disparagement Product disparage- ment involves discreditin g a competitor’s prod- uct. The 1988 amendment to the Lanham Act extends claims for false adver tising to misre- presentations about another’s products. Trademark Infringement Trademark INFRINGEMENT is similar to product disparagement, and is described in section 32(1) of the Lanham Act. This section states that: anyone who shall, without the consent of the registrant—(a) use in commerce any repro- duction, COUNTERFEIT, copy or COLORABLE imitation of a registered mark in connection with the sale, offering for sale, distribution or advertising of any goods or services or in connection with which such use is likely to cause confusion, or cause mistake, or to deceive shall be liable in a CIVIL ACTION by the registrant. A trademark is a symbol, phrase, or some other device that distinguishes ownership of a product or service. A trademark also stands as a GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 334 FALSE ADVERTISING mark of quality, which means that consumers rely on TRADEMARKS when making purchases. If one company adopts a trademark similar to a competing company, the public may think the trademark’s owner either sponsored or ap- proved the use of the trademark. Therefore, the reputation of the original holder of the trademark is compromised and consumers are deceived and confused by false advertising. In determining whether there is a likelihood of confusion under the Lan ham Act, the courts use the Polaroid test, which includes eight factors established in Polaroid Corp. v. Polara Electronics Corp., 287 F. 2d 492 (2nd Cir. 1961). They are the strength of the plaintiff’s mark, similarity of uses, proximity of the products, likelihood that the prior owner will expand into the domain of the other, actual confusion, defendant’s good or BAD FAITH in using the plaintiff’s mark, quality of the junior user’s product, and sophistication of consumers. These eight factors do not all have to be satisfied to prove a case; the major factor the courts focus on is the potential to confuse consumers. The Polaroid test is for cases that involve commercial exploitation. When an advertising dispute involves FIRST AMENDMENT violations, the issue at hand is often the use of PARODY. Parody For parody cases, a balancing test that is more useful than the Polaroid test was established by Cliffs Notes v. Bantam Doubleday Dell Publishing Group, 886 F.2d 490 (2nd Cir. 1989). The court held that Bantam’sproductionofSpy Notes, which was a parody of Cliffs Notes study guides, was not a violation of the Lanham Act because Bantam clearly conveyed in advertising that Spy Notes was a parody. Therefore, there was no confusion. As a result, the balancing test used by the court in Cliffs Notes requires that “a parody must convey two simultaneous—and contradictory—messages: that it is the original, but also that it is not the original and is instead a parody.” If a parody does not have both messages, it is likely to confuse the consumers. Another claim involving parody is the 1995 case of Hormel Foods Corp. v. Jim Henson Productions, 73 F.3d 497 (2nd Cir. 1996). In this case, Hormel brought Jim Henson Productions to court for trademark infringement and false advertising under the Lanham Act. At the time the case was initiated, Henson was producing the movie Muppet Treasure Island with a new character: an exotic wild boar named Spa ’am. Henson’s intention was to make the audience laugh at the intended parody between the Muppet’s wild boar and Hormel’s tame lun- cheon meat. Hormel’s claims of false advertising and trademark infringement under the Lanham Act and its common-law claims of trademark dilution and deceptive practices were all denied by the court for several reasons, the main one being that Henson had clearly, in all his advertising, identified Spa’am as a character from a Muppet motion picture. This usage was not confusing under the Polaroid test and therefore was not a solid basis for a false advertising or trademark infringement claim. Henson’s usage also satisfied the balancing test requirements set up by Cliffs Notes. Remedies for False Advertising Had Hormel won its claim against Henson, three remedies would have been available to it: injunctive relief, corrective advertising, and damages. Injunctive Relief Injunctive relief is granted by the courts upon the SATISFACTION of two requirements. First, a plaintiff must demon- strate a “likelihood of deception or confusion on the part of the buying public caused by a product’s false or misleading description or advertising” (Alpo). Second, a plaintiff must demonstrate that an “irreparable harm” has been inflicted, even if such harm is a decrease in sales that cannot be completely attributed to a defendant’s false advertising. It is virtually impossible to prove that sales can or will be damaged; therefore, the plaintiff only has to establish that there exists a causal relationship between a decline in its sales and a competitor’s false advertising. Furthermore, if a competitor specifically names the plaintiff’s product in a false or misleading advertisement, the harm will be presumed (McNeilab, Inc. v. American Home Products Corp., 848 F.2d 34 [2nd. Cir. 1988]). Corrective Advertising Corrective advertising can be ruled in two different ways. First, and most commonly, the court can require a defendant to launch a corrective advertising campaign and to make an affirmative, correct- ing statement in that campaign. For example, in Alpo, the court required Purina to distribute a GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION FALSE ADVERTISING 335 corrective release to all of those who had received the initial, false information. Second, the courts can award a plaintiff monetary damages so that the plaintiff can conduct a corrective advertising campaign to counter the defendant’s false advertisements. For example, in U-Haul International v. Jartran, Inc., 793 F.2d 1034 (9th Cir. 1986), the plain- tiff, U-Haul International, was awarded $13.6 million—the cost of its corrective advertising campaign. Damages To collect damages, the plaintiff generally has to show either that some con- sumers were actually deceived or that the defendant used the false advertising in bad faith. Four types of damages are awarded for false advertising: profits the plain tiff loses when sales are diverted to the false advertiser; profits lost by the plaintiff on sales made at prices reduced as a demonstrated result of the false advertising; the cost of any advertising that actually and reasonably responds to the defen- dant’s offending advertisements; and quantifi- able harm to the plaintiff’s GOOD WILL to the extent that complete and corrective advertising has not repaired that harm (Alpo). Consumer Protection Although most false advertising claims brought against advertisers are by competitors, consu- mers can also file such claims. No hard-and-fast rules exist for all consumer-initiated cases; courts deal with claims brought by consumers on more of a case-by-case basis than they do with claims brought by competito rs. The issues surrounding consumer rights were discussed during the drafting of the 1988 Trademark Law Revision Act, but were not resolved. In cases where consumers have sued, they have most often been held to the same standards as competitors: They need to show that they have a reasonable interest in order to be protected. This standard was demonstrated by the CLASS ACTION lawsuit of Maguire v. Sandy Mac, 138 F.R. D. 444 (D.N.J. 1991). In that case, the class included both resellers, who had purchased a ham product from the defendant, and consu- mers, who had ultimately bought the ham products. The lawsuit claimed that the defendant sold ham products falsely represented as meeting U.S. DEPARTMENT OF AGRICULTURE standards. The court ruled for the plaintiffs, saying that “the plaintiff and the proposed class, the consumers, have a reasonable interest in being protected from criminal misrepresentations.” Another way consumers are protected is by state laws on deceptive trade practices. Some state laws define these practices as showing goods or services with the intention of not actually selling them as advertised. In Affrunti v. Village Ford Sales, 232 Ill. App. 3d 704, 597 N.E.2d 1242 (3rd. Dist. Ct. App. 1992), a consumer filed a lawsuit against an automobile dealership that sold him a car for more money than it was actually advertised for. Ronald Affrunti went to Village Ford Sales, a used-car lot, and looked at a blue 1986 Celebrity with 29,000 miles on the odometer. The car did not have a sticker price, so he asked the salesman, Fred Galaraza, for a price. Galaraza answered that he would have to check in his office. After showing Affrunti several other used cars, and without going to his office, Galaraza quoted a price of $8,600 for the Celebrity. Affrunti and Galaraza settle d on a final price of $8,524, which included a trade-in and a discount for a front- end alignment. Upon returning home, Affrunti came across an advertisement by Village Ford Sales fo r a 1986 blue Celebrity with 29,999 miles on the odometer for $6,995. Affrunti called the dealership. Galaraza checked and said, “By God, it’s the same!” Affrunti asked to redo the deal based on the advertised price. Galaraza put him on hold. When Galaraza came back on the line, he said the car in the ad had been sent to auction, and they could not redo the deal because it was not the same car. At trial, the sales manager testified that prices listed in advertisements are not necessarily the listed cars’ actual prices; dealers can sell the cars for higher prices. After hearing the evidence, the judge ruled that the dealer had an obligation to inform the plaintiff of the advertised price of the car, and awarded Affrunti the difference between the purchase price and the advertised price, which amounted to $1,529. On appeal, the Illinois Appellate Court ruled that “the defen- dant’s failure to disclose the advertised sale price constituted deceptive conduct under the CON- SUMER FRAUD Act.” The appellate court also added attorneys’ fees to Affrunti’s award, bringing the total up to $1,937.50. FURTHER READINGS Bangert, Sharon J., Robert A. Cook, and Joseph D. Looney. 2002. “Unfair and Deceptive Advertising of Consumer Credit.” The Maryland Bar Journal 35 (March-April). GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 336 FALSE ADVERTISING Edelstein, Jeffrey S. 1996. False Advertising and the Law: Coping with Today’s Challenges. New York: Practising Law Institute. Ippolito, Pauline M., and Janis K. Pappalardo. 2003. Nutrition and Health Advertising: Evidence from Food Advertising, 1977–1997. New York: Nova Science. Jacobs-Meadway, Roberta. 1995. “False Advertising.” Amer- ican Law Institute-American Bar Association C122 (April 3). Leighton, Richard J. 2002. “Using (and Not Using) the Hearsay Rules to Admit and Exclude Surveys in Lanham Act False Advertising and Trademark Cases.” Trademark Reporter 92 (November-December). “Nextel Sues Verizon Wireless for False Ads.” Forbes (September 23, 2003). Postel, Theodore. 1993. “Consumer Fraud Act: False Advertising of Used Cars.” Chicago Daily Law Bulletin (February 5). Reddy, Anitha. 2003. “Nike Settles With Activist in False- Advertising Claim.” Washington Post (September 13). CROSS REFERENCE Injunction. FALSE ARREST A tort (a civil wrong) that consists of an unlawful restraint of an individual’s personal liberty or freedom of movement by another purporting to act according to the law. The term false arrest is sometimes used interchangeably with that of the tort of FALSE IMPRISONMENT , and a false arres t is one method of committing a false IMPRISONMENT. A false arrest must be perpetrated by one who asserts that he or she is acting pursuant to legal authority, whereas a false imprisonment is any unlawf ul confinement. For example, if a sheriff arrests a person without any PROBABLE CAUSE or reason- able basis, the sheriff has committed the torts of false arrest and false imprisonment. The sheriff has acted under the assumption of legal authority to deprive a person unlawfully of his or her liberty of movement. If, however, a driver refuses to allow a passenger to depart from a vehicle, the driver has committed the tort of false imprisonment because he or she unlawfully restrains freedom of movement. The driver has not committed false arrest, however, sin ce he or she is not claiming to act under legal authority. A p erson who knowingly gives police false information in order to have someone arrested has committed the tort of MALICIOUS PROSECUTION. An action can be instituted for the damages ensuing from false arrest, such as loss of salary while imprisoned, or injury to reputation that results in a PECUNIARY loss to the victim. Ill will and MALICE are not elements of the tort, but if these factors are proven, PUNITIVE DAMAGES can be awarded in addition to COMPENSATORY DAMAGES or NOMINAL DAMAGES. FALSE DEMONSTRATION An inaccurate or erroneous description of an individual or item in a written instrument. With respect to TESTAMENTARY gifts, where the description of an individual or item in a will is partly true and partly false, in the event that the true portion describes the subject or object of the gift with adequate certainty, the untrue part may be rejected under the doctrine of false demonstration, and the gift upheld and enforced. FALSE IMPRISONMENT The illegal confinement of one individual against his or her will by another individual in such a manner as to violate the confined individual’s right to be free from restraint of movement. To recover damages for false imprisonment, an individual must be confined to a substantial degree, with her or his freedom of movement totally restrained. Interfering with or obstruct- ing an individual’s freedom to go where she or he wishes does not constitute false IMPRISON- MENT . For example, if Bob enters a room, and Anne prevents him from leaving through one exit but does not preven t him from leaving the way he came in, Bob has not been falsely imprisoned. An accidental or inadvertent con- finement, such as when someone is mistakenly locked in a room, also does not constitute false imprisonment; the individual who caused the confinement must have intended the restraint. False imprisonment often in volves the use of physical force, but such force is not required. The threat of force or arrest, or a belief on the part of the person being restrained that force will be used, is sufficient. The restraint can also be imposed by physical barriers or through unreasonable duress imposed on the person being restrained. For example, suppose a shopper is in a room with a security guard, who is questioning her about items she may have taken from the store. If the guard makes statements leading the shopper to believe that she could face arrest if she attempts to leave, the shopper may have a reasonable belief that she is being restrained from leaving, ev en if no actual GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION FALSE IMPRISONMENT 337 force or physical barriers are being used to restrain her. The shopper, depending on the other facts of the case, may therefore have a claim for false imprisonment. False imprison- ment has thus sometimes been found in situations where a storekeeper detained an individual to investigate whether the individual shoplifted merchandise. Owing to increasing concerns over SHOPLIFTING, many states have adopted laws that allow store personnel to detain a customer suspected of shoplifting for the purpose of investigating the situation. California law, for example, provides that “[a] merchant may detain a person for a REASONABLE TIME for the purpose of conducting an investi- gation whenever the merchant has PROBABLE CAUSE to believe the person is attempting to unlawfully take or has unlawfully taken mer- chandise” (Cal. Penal Code § 490.5 [ West 1996]). FALSE ARREST is a type of false imprisonment in which the individual being held mistakenly believes that the individual restraining him or her possesses the legal authority to do so. A law enforcement officer will not be liable for false arrest where he or she has probable cause for an arrest. The arresting officer bears the burden of showing that his or her actions were supported by probable cause. Probable cause exists when the facts and the circumstances known by the officer at the time of arrest lead the officer to reasonably believe that a crime has been committed and that the person arrested com- mitted the crime. Thus, suppose that a police officer has learned that a man in his forties with a red beard and a baseball cap has stolen a car. The officer sees a man matching this description on the street and detains him for questioning about the THEFT. The officer will not be liable for false arrest, even if it is later determined that the man she stopped did not steal the car, because she had probable cause to detain him. An individual alleging false imprisonment may sue for damages for the interference with her or his right to move freely. An individual who has suffered no actual damages as a result of an illegal confinement may be awarded NOMINAL DAMAGES in recognition of the invasion of rights caused by the defendant’s wrongful conduct. A PLAINTIFF who has suffered injuries and can offer proof of them can be compensat- ed for physical injuries, mental suffering, loss of earnings, and attorneys’ fees. If the confinement involved MALICE or extreme or needless violence, a plaintiff may also be awarded PUNITIVE DAMAGES . An individual whose conduct constitutes the tort of false imprisonment might also be charged with committing the crime of KIDNAP- PING , since the same pattern of conduct may provide grounds for both. However, kidnapping may require that other facts be shown, such as the removal of the victim from one place to another. False imprisonment may constitute a crimi- nal offense in most jurisdictions, with the law providing that a fine or imprisonment, or both, be imp osed upon conviction. FURTHER READINGS Bedau, Hugo Adam. 2003. “Causes and Consequences of Wrongful Convictions: An Essay-Review.” Current (March/April). Hare, Jamie. 1997. The Fight for Innocence. Portsmouth, VA: Jamie S. Hare. Scheck, Barry C., and Peter J. Neufeld. 2002. “Toward the Formation of ‘Innocence Commissions’ in America.” Judicature 86 (September-October). Available online at http://www.nacdl-legnet.org/sl_docs.nsf/issues/ inncomm/$FILE/Judicature_Scheck&Neufeld.pdf; web- site home page: http://www.nacdl-legnet.org (accessed July 23, 2009). FALSE PERSONATION The crime of falsely assuming the identity of another to gain a benefit or avoid an expense. The crime of falsely assuming the identity of another person in order to gain a benefit or cause harm to the other person can be referred to as false personation or false IMPERSONATION.False personation laws have been enacted at both the state and federal levels to protect the dignity, reputation, and economic well-being of the individual being impersonated. Further, these statutes deter criminals by discouraging the impersonator’s pursuit of benefits. A false impersonator need not alter her or his voice, wear a disguise , or otherwise change her or his characteristics or appearance in order to be found guilty. False personation simply involves passing oneself off as another person. For example, an individual who misrepresents herself to be someone else in order to wrongfully cash that person’s paycheck com- mits false personation. The person impersonated must be real, not FICTITIOUS. If a police officer pulls a driver over GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 338 FALSE PERSONATION . No. 94- 145 ), which repealed the Miller-Tydings and McGuire Acts, GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION FAIR-TRADE LAWS 331 putting state fair-trade laws back within the prohibitions of. to meet. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION FALSE ADVERTISING 333 In place of the Printer’s Ink statute, states adopted the Uniform Deceptive Trade Practices Act of 19 64 (revised. device that distinguishes ownership of a product or service. A trademark also stands as a GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 3 34 FALSE ADVERTISING mark of quality, which means that consumers rely