Opinion ID: 2192361
Heading Depth: 1
Heading Rank: 8

Heading: Breadth of Cease and Desist

Text: Luskin's challenges the cease and desist provisions of the Agency's final order as being too broad, and we agree. Those provisions read as follows: 1. Luskin's shall not use advertising that creates an overall impression about a particular matter that has the capacity, tendency or effect of deceiving or misleading consumers, or that fails to state any material fact if the failure deceives or tends to deceive consumers. 2. If Luskin's makes a statement about a particular matter in an advertisement, it shall state all related material facts. 3. All statements made in an advertisement relating to a particular matter shall be disclosed clearly and conspicuously. If any statement is given prominence in the advertisement, all related material statements shall be of equal prominence. 4. All statements made in an advertisement relating to a particular matter shall be placed reasonably adjacent to each other. 5 No statement made in an advertisement shall contradict or conflict with any other statement. 6. No statement made in an advertisement shall be ambiguous or make any other statement ambiguous. B. Compliance with § 13-305 7. Luskin's shall not violate Md. Com. Law Code Ann. § 13-305(b), which prohibits notifying consumers by any means, as part of an advertising scheme or plan, that consumers are eligible to receive anything of value, such as a prize, gift, or award, if the consumers are required to purchase any other goods or services, pay any money to anyone, or submit to a sales promotion effort. `Anything of value' as used in this paragraph does not include a thing that is of negligible or de minimis monetary value. 8. Luskin's may, as allowed by § 13-305(a)(3), conduct retail promotions which offer consumers monetary savings on the purchase of consumer goods and services. Such offers of monetary savings include manufacturer's `cents off' coupons and price reductions for buying together two or more of the same or functionally related items, such as offering components of a system for a single price, `two-for-the-price-of-one' sales and `one cent' sales. Such offers do not include an offer to sell together two or more items that are not functionally related, such as airline tickets and appliances, as part of an advertising scheme or plan in which one of the items is represented as `free' or as a gift or prize. 9. Luskin's shall make the disclosures required by Md. Com. Law Code Ann. § 13-305(c), (e), (f), and (g), when applicable. The Agency has the power to prohibit not only continued use of past advertisements but also future acts that involve the same violation or unlawful practice.... Luskin's Inc. v. Consumer Protection Div., 338 Md. 188, 198, 657 A.2d 788, 792 (1995). The Agency is further authorized to issue an order requiring a violator to take affirmative action. See, e.g., Consumer Protection Div. v. Outdoor World Corp., 91 Md.App. 275, 290, 603 A.2d 1376, 1383 (1992) (recognizing Agency's power to require notices sent into Maryland of eligibility for prize to state what the likelihood is that [recipients] will receive a prize of any significant value). The above-quoted order imposes requirements that go far beyond the deceptive practice in which Luskin's engaged in the instant matter. Paragraph nine of the order invokes provisions of the Act, violations of which were not even charged against Luskin's. Paragraph seven involves a violation, the charging of which we have held was based on an erroneous interpretation of § 13-305(b). Moreover, paragraph seven simply recites the language of § 13-305(b) and directs Luskin's not to violate it. Paragraphs one through six of the order go beyond the type of violation that Luskin's committed here. The violation here was the omission, before sale, of the disclosure of material facts relating to the conditions of the free airfare promotion. We assume that an order affirmatively requiring the disclosure of material conditions involving a promotion based on something being free would be proper. The vice in the instant order is that it applies to all advertising, without limitation as to the promotional theme, while at the same time directing Luskin's to comply with what amount to the general principles that are applied to determine whether a statement is deceptive. Standard Oil Co. v. FTC, 577 F.2d 653 (9th Cir.1978), was a case of false advertising in the sale of gasoline. One provision of the order issued against Standard Oil directed it to cease and desist from using any pictorial or other visual means of communication with or without an accompanying verbal text which directly or by implication creates a misleading impression in the minds of viewers as to the true state of material facts which are the subject of said pictures or other visual means of communication. Id. at 661 n. 4. Although the deceptive trade practice in Standard Oil was in a simulation, the Court struck down the quoted provision and others like it. The court said: The order's generality adds to its burdensome character. Various paragraphs of the [FTC's] order are framed in language which amounts to a restatement of general principles of fair advertising. In effect the petitioners are simply enjoined from violating the law. The Supreme Court has expressly disapproved of such nonspecific FTC orders[.] Id. at 661 (referring to FTC v. Henry Broch & Co., 368 U.S. 360, 367-68, 82 S.Ct. 431, 436, 7 L.Ed.2d 353, 358-59 (1962)) (footnote omitted). See also NLRB v. Express Pub. Co., 312 U.S. 426, 61 S.Ct. 693, 85 L.Ed. 930 (1941) ([T]he mere fact that a court has found that a defendant has committed an act in violation of a statute does not justify an injunction broadly to obey the statute and thus subject the defendant to contempt proceedings if he shall at any time in the future commit some new violation unlike and unrelated to that with which he was originally charged.); Swift & Co. v. United States, 196 U.S. 375, 396, 25 S.Ct. 276, 279, 49 L.Ed. 518, 524 (1905) ([W]e ... are bound, by the first principles of justice, not to sanction a decree so vague as to put the whole conduct of the defendants' business at the peril of a summons for contempt. We cannot issue a general injunction against all possible breaches of the law.); Harford County Educ. Ass'n v. Board of Educ., 281 Md. 574, 587, 380 A.2d 1041, 1049 (1977) (`Where the terms of an injunction are not specific and definite, a defendant will not be punished for contempt.' ) (quoting Rocks v. Brosius, 241 Md. 612, 648, 217 A.2d 531, 552 (1966)); International Pocketbook Workers' Union v. Orlove, 158 Md. 496, 511, 148 A. 826, 831 (1930) (In so far as the injunctions may be so broad that their meaning and content depend upon the unpredictable views of the court in particular applications, they may operate as mere screens for subsequent ex post facto injunctions and punishments.); Country Tweeds, Inc. v. FTC, 326 F.2d 144 (2d Cir. 1964). Consequently, the cease and desist provisions of the Agency's final order should be modified on remand.