Home/Fifth Circuit/The Better Business Bureau of Metropolitan Houston, Inc. v. Medical Directors, Inc. And Weight Reduction Medical Centers, Inc.,defendants-Appellants

The Better Business Bureau of Metropolitan Houston, Inc. v. Medical Directors, Inc. And Weight Reduction Medical Centers, Inc.,defendants-Appellants

681 F.2d 397, 217 U.S.P.Q. (BNA) 209, 1982 U.S. App. LEXIS 16989
CourtCourt of Appeals for the Fifth Circuit
DecidedJuly 29, 1982
Docket81-2069
StatusPublished
Cited by54 cases

This text of 681 F.2d 397 (The Better Business Bureau of Metropolitan Houston, Inc. v. Medical Directors, Inc. And Weight Reduction Medical Centers, Inc.,defendants-Appellants) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
The Better Business Bureau of Metropolitan Houston, Inc. v. Medical Directors, Inc. And Weight Reduction Medical Centers, Inc.,defendants-Appellants, 681 F.2d 397, 217 U.S.P.Q. (BNA) 209, 1982 U.S. App. LEXIS 16989 (5th Cir. 1982).

Opinion

JOHNSON, Circuit Judge:

A preliminary injunction restrains Medical Directors, Inc. and Weight Reduction Medical Centers, Inc. (the Center) from in any manner representing that their weight reduction program is approved by the Better Business Bureau (the Bureau). The Center vigorously denies that the ads which piqued the Bureau’s ire imply that the Bureau vouches for the safety and effectiveness of the program, and asks that the injunction be lifted. We agree with the district court that the ads are misleading and affirm its decision to enjoin dissemination of such representations of endorsement. We find, however, that the protections extended to commercial speech by the first amendment require the injunction to be more narrowly drawn; the injunction is therefore affirmed as modified, 509 F.Supp. 811.

I.

The Council of Better Business Bureaus, Inc. is the governing body of a national association of licensed member Bureaus organized to further business honesty, to foster truth in advertising, and to protect the public and the business community from unfair, fraudulent, and unethical business practices. The Council’s co-plaintiffs, the Better Business Bureau of Metropolitan Houston, Inc. (Houston Bureau) and the Better Business Bureau of Southeast Texas, Inc. (Southeast Bureau) are not-for-profit corporations licensed by the Council to carry out its programs in their respective territories of East Central and Southeast Texas. As member Bureaus operating un *399 der the aegis of the Council, the Houston Bureau and Southeast Bureau regularly engage in investigations of the advertising and business practices of local enterprises. Investigations resulting in a determination that a practice is dishonest or misleading will result in the Bureau’s call for corrective measures. The converse is not, however, the case. To maintain the public’s perception of the Better Business Bureau as an impartial arbiter of fairness in commerce, the Council requires that member Bureaus refrain from endorsing or recommending any company, product or service. The Houston Bureau and the Southeast Bureau adhere to this policy.

Medical Directors, Inc. and Weight Reduction Medical Centers, Inc. are Texas corporations engaged in the operation of weight loss clinics throughout the State of Texas and other states. As a part of its advertising program the Center uses testimonials from satisfied clients. A typical ad features the photograph and personal endorsement of an individual who has completed the Center’s program. The advertisements which sparked this controversy have an added dimension: they state that the satisfied clients giving their endorsements of the program, Bill and Beverly Hickman, were actually “investigators” or “spies” working “on behalf of the Better Business Bureau.”

The Center published these ads in newspapers and on radio and television across several states. Their publication elicited an immediate response. Charging that the Center had made false representations in advertising violative of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) and the Texas Deceptive Trade Practices — Consumer Protection Act, V.T.C.A., Bus. & C. tit. 2, § 17.41 et seq., that it had by its ads engaged in common law unfair competition, and that its ads infringed trademarks registered to the Council, in violation of section 32 of the Lanham Act, 15 U.S.C. § 1114, the Bureau sought and won a temporary restraining order prohibiting further dissemination of the ads.

The hearing on the Bureau’s pending motion for a preliminary injunction promptly followed. On due consideration, the district court found the Center’s ads to “create the false and misleading impression that the Better Business Bureau stands behind the Hickmans’ endorsement of [the Center’s] weight reduction program, and by implication approves or endorses [the Center’s] weight reduction program .... ” Finding the ads to create a likelihood of confusion indicative of the Bureau’s success on its Lanham Act claims, and of irreparable harm absent cessation of the Center’s advertising campaign, the court granted the Bureau’s motion for preliminary injunction. The order entered was considerably broader than the activity which engendered it: the Center was prohibited not only from reiterating in its advertisements the claims found offensive, but also from making any mention of the “Better Business Bureau” or the “BBB” in its advertisements, or in any other way implying that it or its programs had the Bureau’s endorsement or approval. The court justified its order of complete disassociation from the Bureau’s name and mark as necessary “in view of [the Center’s] past practices and the likelihood of confusion and deception ...” which the ads created.

The Center appeals the district court’s order. It asks that the injunction be dissolved, tenaciously arguing its ads to be neither false nor misleading; failing that, it asks the scope of the injunction to be trimmed to prohibit only statements determined to be deceptive. 1 We consider the arguments in turn.

*400 II.

Central to a finding of false representations in advertising violative of section 43(a) of the Lanham Act (the Act) 2 is a determination that the challenged activities create a “likelihood of confusion” in the consuming public, Sun Fun Products, Inc. v. Suntan Research & Development, Inc., 656 F.2d 186, 192 (5th Cir. 1981), as to, inter alia, the product’s endorsement by the plaintiff, Supreme Assembly, Order of Rainbow for Girls, v. Ray Jewelry Co., 676 F.2d 1079 at 1082, 1085 (5th Cir. 1982); Kentucky Fried Chicken Corp. v. Diversified Packaging Corp., 549 F.2d 368, 388 (5th Cir. 1977). Representations are not shielded from condemnation under section 43(a) simply because they are literally true. The Act’s proscriptions against false representation reaches “innuendo, indirect intimations, and ambiguous suggestions evidenced by the consuming public’s misapprehension of the hard facts underlining an advertisement,” Vidal Sassoon, Inc. v. Bristol-Myers Co., 661 F.2d 272, 277 (2d Cir. 1981), as well as “blatant falsehoods,” id.; accord, Chevron Chemical Co. v. Voluntary Purchasing Groups, Inc., 659 F.2d 695 (5th Cir. 1981).

A determination that a challenged representation raises a likelihood of confusion is a question of fact; as such, it is susceptible to reversal only if clearly erroneous. Supreme Assembly at 1082; Chevron at 703.

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Bluebook (online)
681 F.2d 397, 217 U.S.P.Q. (BNA) 209, 1982 U.S. App. LEXIS 16989, Counsel Stack Legal Research, https://law.counselstack.com/opinion/the-better-business-bureau-of-metropolitan-houston-inc-v-medical-ca5-1982.