A recent federal court decision sent a message to law firms: Lying in advertisements about your firm may be wrong, but it won’t necessarily carry a price tag in civil litigation.
That was one of the takeaways from a Feb. 15 ruling by U.S. District Judge Cynthia M. Rufe of the Eastern District of Pennsylvania, who refused to condone the advertising practices of Philadelphia plaintiffs firm Lundy Law, but granted summary judgment in favor of the Lundy firm nonetheless.
Another Philadelphia firm, Larry Pitt & Associates, had sued Lundy Law, alleging, among other things, that Lundy advertised legal services it does not actually provide. Rufe agreed on that count, finding that wrongdoing by the defendant firm was clear. But that didn’t mean Lundy Law could be held liable, she concluded.
“There is every indication here that a prominent personal injury law firm in Philadelphia essentially rented out its name in exchange for referral fees and that its managing partner lied on television that his firm handled Social Security disability claims when it did not,” Rufe wrote. “But when a plaintiff fails to meet its burden of establishing causation of harm or likelihood of future violations, the Lanham Act and Pennsylvania law do not permit a court to grant relief based solely on a defendant’s past misrepresentations.”
The Pitt firm’s lawyer, Maurice Mitts of Mitts Law, said he wasn’t ready to say whether his client would appeal. Either way, he will get a chance to test the law again in a similar case that’s been pending since last fall.
Mitts is representing Philadelphia-based Rosenbaum & Associates, which sued national plaintiffs firm Morgan & Morgan in September 2017. Like Pitt, Rosenbaum brought false advertising claims under the Lanham Act. The Rosenbaum firm alleged that Orlando-based Morgan & Morgan falsely advertises that it represents clients in Philadelphia, when it only has one lawyer in Pennsylvania with “little or no experience in handling personal injury matters.”
Rosenbaum has claimed that Morgan & Morgan’s advertising in Philadelphia has caused a decline in the number of new clients coming to Rosenbaum & Associates.
Mitts said the Pitt firm’s case gave the issue new visibility. And while he said the legal strategy in each case is different, he said they share a common theme.
“They’re both about a baseline of integrity in lawyer advertising, and that [deception] ought not to be tolerated,” Mitts said.
Other area lawyers said the two cases, while similar, don’t suggest that more and more law firms are taking each other to court over ads. As national personal injury practices grow, they said, litigation is not necessarily the most effective way to deal with deceptive advertising claims.
Guarding Their Turf
“What’s happened in Philly is not unusual,” said Bruce Carlson, co-founder of Carlson Lynch Sweet Kilpela & Carpenter in Pittsburgh. “It’s very common for those local lawyers to become territorial” when out-of-town firms allegedly stretch the truth in their ads.
Carlson, whose firm has a national class action practice, said Carlson Lynch seeks pre-approval from local ethics officials before running advertising in other markets.
“We have had lawyers in other parts of the country file disciplinary complaints against us—ill-founded, but it’s not uncommon to occur,” Carlson said.
Generally, lawyers are truthful in their advertising, said Abraham Reich of Fox Rothschild, who teaches legal ethics at University of Pennsylvania Law School. Still, he said, while declining to comment on the specifics of the Lundy or Morgan & Morgan cases, it’s not impossible to prove that a law firm has lied in its ads.
“When you cut through the analysis and the hundreds of pages of Supreme Court [opinions] and other case law, the bottom line is that advertising has to be truthful,” he said.
The consequences depend on the severity of the allegedly false advertising, Reich said, and those consequences could come in many forms.
“If you advertise something that is not truthful, you expose yourself to some repercussions, whether they exist at a disciplinary board level, or a competitor [sues], or a court decides to sua sponte raise the issue,” he said.
The American Bar Association’s model rule on lawyer advertising states that an attorney “shall not make a false or misleading communication about the lawyer or the lawyer’s services. A communication is false or misleading if it contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading.”
But each state has its own limits on and requirements of lawyer advertising. For instance, Pennsylvania is one of eight states that requires the ad to disclose the practice location.
That’s why Carlson Lynch, as a best practice, makes sure ads pass the local ethics requirements before running them, Carlson said. That won’t keep local law firms from becoming upset, he said, but it will prevent bigger problems arising from that.
“There are an increasing number of large firms that have a national footprint,” Carlson said. “As those firms try to expand their reach and cut into the potential business of local firms, it would not be unusual to … get some sort of reaction from local firms.”
Still he said, ethics complaints are a more common reaction than litigation. And he added that “most firms that operate at that [national] level have a pretty sophisticated approach to ethics compliance.”
Back in Court
Not long after the Pitt case was dismissed, Rosenbaum & Associates filed a new complaint against Morgan & Morgan. It makes the same claims, but adds a number of details found in discovery, including specific statements in Morgan & Morgan commercials.
“We were anticipating this approach and we will respond in court,” Morgan & Morgan’s lawyer, Gaetan Alfano of Pietragallo Gordon Alfano Bosick & Raspanti, said in a statement.
Mitts, who entered his appearance in Rosenbaum’s case in January, said his approach to the cases was already different before Rufe made her ruling. And Rosenbaum’s case is on a faster track, he said, with trial tentatively scheduled for June.
Despite his summary judgment loss in the Pitt case, Mitts said it was significant that Rufe suggested in her ruling that Lundy Law should face disciplinary consequences.
“It is important that you have a federal judge who is announcing that this is willfully dishonest,” he said. “That recognition is a driver in both cases.”