Although courts routinely grant permanent injunctions to curtail deceptive marketing practices, they sometimes struggle with whether an injunction impermissibly violates a party’s rights under the First Amendment. In TrafficSchool.com, Inc. v. EDriver Inc., the Ninth Circuit struck down one such injunction finding that it was overbroad and violated the defendants’ First Amendment Constitutional rights to free speech.
In TrafficSchool.com, the defendants owned and managed several for-profit websites, including DMV.org, whose mission was to save their customer “time, money and even a trip to the DMV.” People could visit the defendants’ website “for help renewing drivers’ licenses, buying car insurance, viewing driving records, beating traffic tickets, registering vehicles and even finding DUI/DWI attorneys.” The defendants generated revenue from the DMV.org website based on the number of visitors it attracted. Given the website name DMV.org, as well as its layouts, many visitors confused the website with the one that was run by California’s actual Department of Motor Vehicles. In addition to consumers, law enforcement officials and DMV employees from other states also confused DMV.org with the real California DMV website.
Defendants’ competitors, TrafficSchool.com and Driver Ed Direct, LLC brought a false advertising claim under the Lanham Act (15 U.S.C. §1125(a)) claiming that defendants’ misleading advertisement was harming their business. Although the Court denied plaintiff’s request for monetary damages, it did grant plaintiffs an injunction which required the defendants to present every visitor to its website with a “splash screen” bearing a disclaimer that it was unaffiliated with California’s Department of Motor Vehicles. Although not discussed in detail in this article, the Ninth Circuit began by rejecting defendants’ argument that plaintiffs lacked standing to bring a claim for false advertising under the Lanham Act. After finding that the plaintiffs did have standing, the Court focused on whether the injunction was overbroad.
As mentioned above, the trial court ordered defendants to implement a splash screen that stated: “YOU ARE ABOUT TO ENTER A PRIVATELY OWNED WEBSITE THAT IS NOT OWNED OR OPERATED BY ANY STATE GOVERNMENT AGENCY.” A visitor when faced with this splash screen had to click “continue” before being directed to defendants’ website. Defendants argued that this constituted a “blanket injunction” in violation of their First Amendment rights. The lower court had reasoned that this splash screen was required to “remedy any confusion that consumers have already developed before visiting DMV.org for the first time;” to “remedy the public interest concerns with [confused visitors] transfer of sensitive information to defendants,” and to “prevent confusion among DMV.org’s consumers.”
The Ninth Circuit began by recognizing that courts routinely grant injunctive relief prohibiting deceptive advertising because false or misleading commercial statements are not constitutionally protected. However, in the TrafficSchool.com case, the Ninth Circuit recognized that the Court had gone beyond this general prohibition by erecting a barrier “to all content on DMV.org website, not merely that which [was] deceptive.” The Ninth Circuit continued by recognizing that because truthful commercial speech (which was subject to constitutional protection), was intermingled with false or misleading communications (which was not entitled to constitutional protection) “the district court was required to tailor the injunction so as to burden no more protected speech than necessary.”
The Ninth Circuit reasoned that the injunction infringed on defendants’ First Amendment rights because the splash screen forced all potential visitors to take an additional navigational step to access the site’s content, which likely deterred some consumers from entering the website altogether. This prevented defendants from making their website’s landing page welcoming to visitors and interfered with search engines resulting in making it more difficult for potential consumers to find defendants’ website.
The Court also noted that although the splash screen may have been necessary to remedy past confusion, the permanence of the injunction meant that this barrier would remain even after any confusion had dissipated. At that point in time, the injunction would be unconstitutionally overbroad in that it would burden protected speech without justification.
In remanding the case back to the lower court, the Ninth Circuit provided instructions that the lower court was to “reconsider the duration of the splash screen in light of any intervening changes in the website’s content and marketing practices as well as the dissipation of the deception resulting from past practices.” The Ninth Circuit also ordered that if the lower court was to continue to require a splash screen, it was to “explain the continuing justification for burdening the website’s protected content and what conditions defendants must satisfy in order to remove the splash screen in the future.” Finally, the Ninth Circuit ruled in the alternative that the lower court could merely enjoin defendants “from engaging in deceptive marketing or placing misleading statements on DMV.org.”
Plaintiffs pursuing false or deceptive adverting claims should be mindful of the breadth of the injunctive relief they seek so that it is directed at remedying the false and deceptive advertising. Plaintiffs who request broad permanent injunctions may find such relief stricken if it is not narrowly tailored so as to avoid burdening otherwise constitutionally protected speech.