Fair Trade Law Q&A - False or Misleading Advertising

1. The advertiser is generally the party responsible for false or misleading advertising. Legal liability may be imposed on an advertiser only when the advertiser knows or should have known that the advertising claims were false or misleading. Because an advertising endorser is not the producer of the advertisement, the endorser is generally not liable for the false or misleading content of the advertisement. However, if the endorser knows or should have known that the advertising claims were false or misleading and nevertheless provided the endorsement, the endorser may be held jointly and severally liable with the advertiser for any resulting damages. Accordingly, legal liability may be imposed on an endorser who is not the producer of the advertisement only where the "knows or should have known" requirement is satisfied.
2. Whether an advertising endorser "knows or should have known" must be determined based on the specific facts and evidence of each case. For example, where an endorser claims in an advertisement for a video game or MP3 player that certain results were achieved through personal use of the product, but the results of an investigation show otherwise, such circumstances would generally support a finding that the endorser knew or should have known that the claim was untrue. Likewise, where an endorser provides an endorsement based solely on data or information presented by the advertiser without independently verifying the information, the endorser may be requested to provide supporting evidence, and the case will be evaluated in light of the specific circumstances and related evidence.