Service Jewelry Repair, Inc. v. Cumulus Broadcasting, LLC

145 F. Supp. 3d 737, 2015 U.S. Dist. LEXIS 153892, 2015 WL 7112334
CourtDistrict Court, M.D. Tennessee
DecidedNovember 13, 2015
DocketCivil No. 3:14-cv-1901
StatusPublished
Cited by4 cases

This text of 145 F. Supp. 3d 737 (Service Jewelry Repair, Inc. v. Cumulus Broadcasting, LLC) is published on Counsel Stack Legal Research, covering District Court, M.D. Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Service Jewelry Repair, Inc. v. Cumulus Broadcasting, LLC, 145 F. Supp. 3d 737, 2015 U.S. Dist. LEXIS 153892, 2015 WL 7112334 (M.D. Tenn. 2015).

Opinion

MEMORANDUM

ALETA A. TRAUGER, District Judge.

The defendant Cumulus Broadcasting, LLC (“Cumulus”) has filed a Motion for Summary Judgment (Docket No.' 17), to which the plaintiff, Service Jewelry Repair,-Inc. (“Service Jewelry”), has filed a Response in-Opposition (Docket No. 22), and Cumulus has filed a Reply (Docket No. 25). For the following reasons, the motion will be granted.

FACTS AND PROCEDURAL HISTORY 1

The plaintiff, Service Jewelry, is a jewelry sales and service company that serves the Nashville area. It is a corporation organized under Tennessee law with its principal place of business in Brentwood, Tennessee. Beginning in 2010 and lasting until 2014, Service Jewelry promoted its products and services through on-air advertising on a local radio station, WWTN-FM. Service Jewelry purchased this advertising from Cumulus, a Nevada limited liability company that owns and manages several Nashville-area radio stations, including WWTN-FM, and that sells advertising 'time to many Nashville-area businesses, including thirteen different jewelry sales and services companies. This action arises from a dispute over an on-air advertising campaign that Service Jewelry purchased from. Cumulus and that ran from May 7, 2014 to July 17,2014.

This advertising campaign was prompted by an investigative news report that aired on May 5, 2014 on WSMV-TV, the Nashville NBC-affiliated television station. The report questioned the manner in which a major competitor of Service Jewelry, Genesis Diamonds (“Genesis”), graded the quality of its diamond products. On May 6, 2014, the day after the investigative report aired, Service Jewelry’s Chief Executive Officer, Mark Tomello, and Chief Financial Officer (“CFO”), Joe Townsend, met with Cumulus General Sales Manager Dave Elliott, Account Executive Mark Johnson, and WWTN radio personality Michael DelGiorno. Service Jewelry wanted to run a series of on-air advertisements highlighting the report and directing consumers to Service Jewelry for assistance if they had concerns regarding the quality of their diamonds. During the meeting, the five men discussed the content of the new advertising spots, which would include prerecorded advertisements and live radio endorsements by Mr. DelGiorno.

With regard to the live endorsements, Service Jewelry provided Mr. DelGiorno with a list of talking points that were designed to capitalize upon the negative publicity Genesis had received as a result of the investigative report. The list included, among others, the following talking points:

1. If you missed the channel 4 investigation on purchasing diamonds, be sure to visit WSMV.com and view the report that they ran on May 5th and 6th.
2. Service Jewelry and repair (sic) does not sell EGL International diamonds. As you will see on the re[741]*741port, these diamonds are- hugely ov-ergraded.
3. Service Jewelry and repair (sic) has an independent GIA graduate gemologist on staff. We will offer his services to provide a free consultation, if anyone feels that they may have been misle[d] on their diamond purchase. You must call Mark Tor-nello to schedule this consultation.
4. Service Jewelry and repair (sic) will give you an HONEST education when you purchase your diamond from us.
5. We will not be undersold on GIA and EGL USA certified diamonds.
6. When you walk out of Service Jewelry and repair (sic), you can rest assure (sic) that the diamond that you purchased is properly graded, based on GIA and EGL USA standards, which are different standards. You will pay a premium for a GIA graded diamond.
9. We do not have an unlimited -advertising budget. In order for us to advertise as much as our competitor, think about how much we would have to mark up our diamonds in order to pay for advertising. We prefer to save the customer as much as. possible.

(Docket No. 23 ¶ 14.) The talking points do not mention Genesis by name, but they do include references to the investigative report and to Service Jewelry’s “competitor.” To better understand the context of these talking points, Mr. DelGiorno played a video of the investigative report on his cell phone during the meeting. At no point did Mr. DelGiorno conduct an independent investigation into the truth or falsity of the allegations made about Genesis in the video, and at no point during the - meeting did Service Jewelry ask Mr. Del-Giorno or Cumulus to refrain from mentioning Genesis by name in the live endorsements.

Based upon this meeting and other communications between Cumulus and Service Jewelry, Cumulus prepared a standard Sales Order for the new advertising slots and an On Air Campaign form, both of which were executed by Service Jewelry. The Sales Order was subject to Cumulus’s “Standard- Terms and Conditions,” which include provisions regarding payment and billing, termination of the agreement, indemnification, and disputes regarding the Sales Order. Neither the Sales Order, the Standard Terms and Conditions, nor the On Air Campaign form contains any’ term or provision imposing contractual obligations on the content Cumulus airs outside of the paid advertisements for Service Jewelry or requiring Cumulus to use only language provided by Service Jewelry' in the pre-recorded advertisements and live endorsements.

Between May 7, 2014 and July 17, 2014, Cumulus ran 70 on-air spots for Service Jewelry, including a total of 16 live endorsements by Mr. DelGiorno. The first few live endorsements discussed the inyes-tigative report, but they did not mention Genesis by name, .-On May 12, .2014, after several live endorsements had aired, Service Jewelry’s CFO, Mr. Townsend, emailed Mr. DelGiorno to. thank him for his effort.. Mr. Townsend then wrote:

Genesis, -once again, is advertising that “if you find a certified diamond that is similar to ours for a cheaper price, we will give you ours for free.” We want to take this guy completely down for this. I would like for you to add to your talking points, something to the effect, that we would like for anyone to take him up on this offer.

(Docket No. 17-2 (Decl. of M. DelGiorno), Ex. 3.) Soon after receiving this email, Mr. DelGiorno mentioned Genesis by name' in [742]*742four live endorsements for Service Jewelry, which aired on May 21, 22, 23, and 27, 2014.

Genesis was one of the other jewelry sales and service companies that purchased advertising time from Cumulus. In mid-June 2014, a Genesis representative contacted Cumulus regarding the live endorsements for Service .Jewelry in which Mr. DelGiorno mentioned Genesis by name. Genesis requested that Cumulus air apologies for these endorsements, and Cumulus agreed. Two apologies were prepared, one by Cumulus and the other by Mr. DelGiorno, and they were posted on WWTN-FM’s website (the “Apologies”). The text of the Apologies is as follows: Station Apology:

We at WTN want to apologize for some very negative and unfair comments about Genesis [Diamonds made during a series of advertisements by our host, Michael DelGiorno. Michael has apologized to the staff at Genesis for reading a commercial by a competitor which included some very strong and disparaging comments. We are proud to be associated with Genesis Diamonds and hold them in the highest regard.

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145 F. Supp. 3d 737, 2015 U.S. Dist. LEXIS 153892, 2015 WL 7112334, Counsel Stack Legal Research, https://law.counselstack.com/opinion/service-jewelry-repair-inc-v-cumulus-broadcasting-llc-tnmd-2015.