Archive for the 'Marketing' Category
On Friday March 9, 2012 the British Columbia Court of Appeal, in an unanimous judgment by Justices Hinkson, Finch and Hall, decided an interesting defamation case involving the publication of a newspaper column in the Vancouver Sun entitled “Ambitious claims to a trillion-dollar jackpot” written by David Baines.
The article in dispute contained allegedly defamatory statements relating to the Honorable Edward M. Lawson, a former Senator and executive of the International Brotherhood of Teamsters (the respondent in this case).
Mr. Baines’ article referred, among other things, to how a company named Arctic Oil and Gas, a “tiny U.S. company with big ambitions and some interesting Vancouver connections” had been promoting itself by claiming ownership of “a 30 per-cent interest in a claim to all the oil and gas resources within the entire Arctic Ocean ‘commons area’” allowing them access to the “Trillion Dollars in oil and natural gas!” in the Arctic. The article also dismissed this claim as overly “ambitious” for a company that “trades at only eight cents per share on the lowly ‘pink sheets’ in the United States”.
The dispute in this case, however, arose in relation to the following underlined portion of the article describing the company’s “Vancouver connections” (the Senator):
“Which makes it all the more curious that a retired Canadian senator would be a director of this company. But more on that later. …
At the same time that Bulldog morphed into Arctic Oil & Gas, Sterling appointed Senator Edward Lawson as a director and gave him 50,000 restricted shares.
Lawson served 34 years in the Canadian Senate before retiring in 2004, making him the longest-serving senator in B.C. history. He also served as international vice-president of the Teamsters Union for more than 26 years, a position which often landed him in controversy.
In June 1988, the US. Department of Justice filed a lawsuit under the Racketeer-Influenced [and] Corrupt Organizations Act alleging that the Teamsters Union and the union’s entire executive board (including Lawson), plus 26 purported mob figures, had hijacked the union from its members.
Several months later, the suit was dropped after union executives signed a settlement agreeing to union reform.
In 2003, the union presented Lawson with the James R. Hoffa Lifetime Achievement Award in honour of the former Teamsters president. This is an award that only a Teamster could love.
Lawson also suffered the embarrassment of being identified as a close associate of Ed Carter, who along with partner David Ward was caught in a huge stock bribery scam in the mid-1980s.
Evidence at the criminal trial of Carter and Ward was that the two promoters gave Lawson shares of their rigged companies, and Lawson flew them, often free of charge, on the Teamsters executive jet he had at his disposal.
In 1986, David Ward’s wife, Carol, and Lawson’s wife, Beverly, became embroiled in another stock fiasco while serving as directors of an Alberta Stock Exchange company called Boston Financial Group Inc.
A Bahamian bank called Charterhouse Bank and Trust, long suspected of acting as a front for insiders, had bought 90 per cent of Boston’s free-trading stock and had promptly dumped $291,000 worth of stock without filing insider trading reports.
The bank claimed it was acting as agent and couldn’t reveal its clients’ identity. Although regulators suspected the stock belonged to insiders or related parties, its beneficial ownership was never established.
Sterling said he met Lawson in Vancouver several months ago. “He offered to come on board [with Arctic Oil & Gas] because he believes that there is a significant benefit to be had for the country of Canada from this project,” he said in an interview Tuesday.”
Trial Decision
The Senator’s defamation claim succeeded at trial and the appellants, including Mr. Baines and several Vancouver Sun editors, appealed taking the position that the lower court judge erred in finding for the Senator.
Appeal
On appeal, the appellants argued that the words in the article were incapable in being defamatory and, if they were capable of being defamatory, they were not in fact defamatory.
In hearing the Appeal, the Court set out some of the essential law of defamation, in particular holding that in defamation actions there are two essential issues: first, the legal issue of whether or not words are capable of being defamatory (determined on a standard of review of correctness); and second, if capable of being defamatory, the factual issue of whether the words are in fact defamatory (typically subject to a standard of reasonableness).
March is Fraud Prevention Month. On March 5, 2012, the Competition Bureau issued the following tips for consumers to protect themselves against fraud:
Be vigilant when evaluating ads, whether for a job, a product or service offered online, over the phone or in print.
Before sending money or giving credit card or account details, be sure you understand what you are agreeing to. Do not feel pressured into paying for a product or service because of threats that your credit rating will be damaged.
Know who you are dealing with. Be wary of any unsolicited phone calls, emails, text messages or letters from unknown sources.
Search for the company, the individuals, the product or the offer on the Internet, and verify any contact and company details.
On March 1, 2012, the BC Supreme Court released its decision in Tjelta v. Wang (2012 BCSC 299) (see: Tjelta v. Wang 2012 BCSC 299), in which the plaintiff was awarded damages of $20,000 for defamatory statements made in e-mails and other communications.
This recent case is a good illustration of the importance of ensuring accurate e-mail and online communications. The case is also a good update on the law of defamation in British Columbia.
Generally speaking, a plaintiff in a defamation action is required to prove three things: (i) that the impugned words were defamatory (i.e., that they would tend to lower the plaintiff’s reputation in the eyes of a reasonable person), (ii) that the words in fact referred to the plaintiff, and (iii) that the words were published (i.e., communicated to at least one person other than the plaintiff).
Helpful for plaintiffs is the fact that falsity and damage are presumed in defamation actions. Also helpful to plaintiffs is that they are not required to prove that a defendant intended to do harm or was careless (i.e., defamation is a “strict liability” tort). Where a plaintiff establishes the necessary elements, the onus or burden then shifts to the defendant to prove a valid defence to escape liability.
The Tjelta v. Wang case involved allegations of defamation in a series of emails and letters following a failed business relationship (a financing) to the plaintiff’s friends, family members, neighbours, business associates and other investors.
Statements made in this case included references to the plaintiff’s tax status with CRA (an alleged fine) and to him as a “blood-sucker”, “selfish, greedy and mean”, “dishonest”, “misleading” and “unethical”, among other things.
The U.S. Federal Trade Commission (“FTC”) has published a very interesting list of top 10 consumer complaints:
1. Identity theft:
Advertising Standards Canada (ASC) will be holding an introductory session to the Canadian Code of Advertising Standards in Toronto on March 27, 2012 entitled Introduction to the Canadian Code of Advertising Standards & Consumer Complaints Procedure.
The Competition Bureau announced earlier today that five companies and three individuals were found by the Ontario Superior Court of Justice to have violated the Competition Act in relation to a deceptive marketing operation (see: Competition Bureau Secures Over $9 Million and Money Back to Victims for Business Scam).
CANADIAN CONTEST RULES/PRECEDENTS
Do you need contest rules and forms for a Canadian contest/sweepstakes?
We offer a selection of Canadian contest rules and forms for random draw, skill and other common types of Canadian contests (i.e., contest precedents and forms).
For more information see Canadian Contest Forms/Precedents.
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On February 28, 2012, the Supreme Court of Canada awarded compensatory and punitive damages to a contest entrant for misleading claims in a contest mail-out (see: Jean-Marc Richard v. Time Inc. and Time Consumer Marketing Inc.).
The decision is interesting not only that a contest case made it to the Supreme Court, but that our highest court also allowed punitive damages. The Supreme Court also had interesting comments in this Quebec Consumer Protection Act case regarding the importance of the “general impression” test for evaluating advertising (the “general impression” is also relevant for evaluating whether advertising is false or misleading under the federal Competition Act).
In this case, the plaintiff received an “Official Sweepstakes Notification” that suggested he won USD $833,337. The prize notification letter included conditional clauses which began “If you have and return the Grand Prize winning entry in time” and information that the recipient would qualify for a $100,000 bonus prize if the entry was validated within five days. The mailing also included the official rules in small print and an offer to subscribe to Time magazine. The rules provided that a winning number had been pre-selected by computer and that the holder of the number could receive the grand prize only if the reply coupon was returned by the deadline (otherwise the prize winner would be selected by random draw from all eligible entries with odds of winning of about 1 in 120 million).
The plaintiff returned the coupon and subscribed to Time. Though he began receiving his magazines, no cheque arrived. Contacting Time, he was told that he would not be receiving a cheque, his document had not contained the winning entry for the draw and was merely an invitation to participate in the sweepstakes.
The Competition Bureau announced earlier today that it was kicking off Fraud Prevention Month with a series of panel discussions on fraud prevention across Canada that will assemble experts from law enforcement agencies, academics and business and consumer groups.
In making the announcement, the Bureau said:
“The Competition Bureau is organizing a series of panel discussions on fraud prevention across Canada that will bring together experts from law enforcement agencies, academia, as well as businesses and consumer groups. The focus of these discussions will be on practical strategies for fighting fraud and raising awareness so that Canadians can protect themselves in the marketplace, particularly in the online and mobile environments. These events will take place at the University of Ottawa on March 6, at the University of Alberta in Edmonton on March 8, and at Concordia University in Montreal on March 13.
Fraud is a crime that affects individuals, businesses and the economy as a whole. ‘It’s a matter of confidence,’ said Melanie Aitken, Commissioner of Competition. ‘Consumers need to know enough to make informed purchasing choices, based on advertising that is truthful and complete.’
The Competition Bureau, along with the Fraud Prevention Forum, plays an important role in helping Canadians get the information they need to be informed and confident consumers. Consumers also have a role to play in stopping fraud by arming themselves with the facts and reporting fraud when they encounter it.
The Fraud Prevention Forum, chaired by the Competition Bureau, is comprised of more than 125 private sector firms, consumer and volunteer groups, government agencies, and law enforcement organizations that have come together to help combat fraud and raise awareness. During Fraud Prevention Month, Forum members will participate in a number of targeted activities across the country, designed to raise awareness among consumers and businesses about the dangers of fraud.”
Recent fraud related cases that the Bureau has been involved in include bid-rigging (see: here and here), price-fixing (see: here, here, here, here, here and here), market division (see: here), deceptive telemarketing (see: here and here) and deceptive marketing cases (see: here and here).
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
