Court Opinion

ID: 5699636
Source: CourtListenerOpinion
Date Created: 2022-01-12 15:38:40.092423+00
Date Added: 2024-06-11T08:40:18.384508
License: Public Domain

FraNK, J.
(dissenting). I must dissent from a complete reversal of the injunction granted herein after a trial of the issues, although concurring with the majority that no reference is required and that the plaintiff failed to establish any basis for an award of damages.
My disagreement with the majority rests upon its refusal to sustain so much of the injunctive relief granted by the learned trial court as restrains the defendant, in radio, television and other advertising, from associating the word “ Famous ” with Electrolux in such a manner as shall be capable of misleading the public.
The facts as found are that the defendants, in the use of radio and television advertising, employed phraseology leading the unwary to believe that a used Electrolux vacuum cleaner, guaranteed for a year and rebuilt by that famous company [Electrolux], was offered for sale at a very low price. Listeners and viewers of the broadcasts were solicited to telephone or write requesting a representative to visit the home and deliver or demonstrate the appliance. The defendants employed salesmen to make such home visits, each equipped with one used Electrolux and a new machine of different manufacture, priced considerably higher. Although the proof established that the salesmen were instructed to discourage the purchase of the second-hand Electrolux in favor of a new appliance, not an Electrolux, that proof was scarcely required, for the record is clear that the sales representative, working on a commission basis, received no compensation for the sale of a rebuilt Electrolux but was paid only for the sale of a new vacuum cleaner.
*222It is fair to assume that the majority agrees that the method adopted by the defendants to promote the sales of new maehines constituted ‘£ bait advertising ’ I believe it is an equally fair inference, from the proof, that the sole purpose in soliciting a potential purchaser of a rebuilt Electrolux was to sell a new vacuum cleaner.
Unfair competition is no longer confined to “palming off” one’s goods as those of another. It is an expanding concept and ‘ ‘ ‘ what was not reckoned an actionable wrong 25 years ago may have become such today. ’ * * * ‘ Many earlier dicta, probably some earlier decisions, are not now safe guides.’ ” (Maison Prunier v. Prunier’s Restaurant & Cafe, 159 Misc. 551, 555, per ShieNtag, J., quoting in part from 40 Harv. L. Rev., 813; see, also, 1 Nims on Unfair Competition and Trade-Marks [4th Ed.], pp. 1-7.)
The term “ unfair competition ” no longer adequately expresses business misconduct condemned by law. The American Law Institute in its Restatement of Torts (Vol. 3, eh. 35, introductory n.) has substituted “unfair trade practices” for it and states (p. 538): “ the scope of liability in this field is constantly expanding. This is due partly to the flexibility and breadth of equitable relief and partly to changing methods of business and changing standards of commercial morality ”.
In the enactment of the Federal Trade Commission Act, Congress adopted the term “unfair methods of competition,” and the Supreme Court has held that the substituted phrase, although broader in meaning, cannot be defined precisely and its scope must be left to judicial interpretation as controversies .arise. (Schechter Corp. v. United States, 295 U. S. 495, 531-533; Federal Trade Comm. v. Roladam Co., 283 U. S. 643, 648, 649.)
Whether ‘ ‘ bait advertising ”, “ loss leaders ’ ’ and other forms of competitive advertising to attract, entice or lure customers to retail establishments constitute unfair competition is, in my view, quite beside the point. We are not here concerned with the efforts of one who seeks to attract potential customers to his business establishment, by fair means or foul. Our problem is whether we will condone misrepresentation or deception as a means for gaining entrance to a home whose privacy should be inviolate.
It is one thing for a customer to enter a market open to the public and there to discover a deception, for he is free to turn and leave. It is quite another to discover that an invitee into one’s home has misrepresented the product for which the invitation was expressly extended, or has used that product as bait *223to promote the sale of another. A request for such an invitee to leave rarely brings prompt compliance, and high-pressure salesmanship exerted upon a householder who has no easy means of escape from his own home should not be countenanced or encouraged.
It is my view that cases like Sunbeam Corp. v. Payless Drug Stores (113 F. Supp. 31) and General Elec. Co. v. Gem Vacuum Stores (36 N. J. Super. 234) are inapplicable here. In addition to other distinguishing factors, they do not involve the use of media such as television and radio for the purpose of gaining entrance into private homes with the intent to sell a product different from that advertised.
The Supreme Court of this State does not fail to invoke its equity jurisdiction when the facts establish unfair trade practices (Fisher v. Star Co., 231 N. Y. 414, 428). In such a case, the courts will endeavor to adapt its relief to the equities of the particular problem as nearly as can be done (Penney Co. v. Lee Mercantile Co., 120 F. 2d 949, 954; 87 C. J. S., Trade-Marks, p. 241; cf. Straus v. Notasame Co., 240 U. S. 179; Rushmore v. Badger Brass Mfg. Co., 198 F. 379; Rowley Co. v. Rowley, 193 F. 390; 3 Eestatement, Torts, ch. 35, p. 541). Our courts have prohibited unfair competitive practices in a wide variety of business activities. This has been done even where there has been no direct competition, so long as the wrongdoer has resorted to subterfuge, over-reaching or unethical conduct. The emphasis is always upon the use of unfair tactics. (See Dior v. Milton, 9 Misc 2d 425, affd. 2 A D 2d 878; Glass & Co. v. Art-Mor Togs, 9 Misc 2d 339; Margolis v. National Bellas Hess Co., 139 Misc. 738, affd. 235 App. Div. 839; Madison Square Garden Corp. v. Universal Pictures Co., 255 App. Div. 459; Montegut v. Hickson, Inc., 178 App. Div. 94; Maison Prunier v. Prunier’s Restaurant & Cafe, 159 Misc. 551.)
“Bait advertising” was prohibited where the name of a recognized silk manufacturer was used to promote the sale of second quality merchandise and of goods manufactured by another (Cheney Bros. v. Gimbel Bros., 280 F. 746).
It is unfair competition for a merchant to mingle permissible activities in the sale of his goods with such improper presentation, packaging or advertising of his product as would tend to confuse or deceive the public (Ronson Art Metal Works v. Gibson Lighter Mfg. Co., 3 A D 2d 227).
If these defendants had by fraud or surreptitious design obtained a list, in the possession of the plaintiff, of persons who had requested demonstrations of the plaintiff’s appliance, we would not hesitate to enjoin the use of that information. I can *224see no distinction where, as here, the defendants by the misleading nse of the plaintiff’s name obtain snch a list of prospective purchasers.
The suggestion that injunctive relief should be denied because the defendants discontinued radio and television advertising upon the plaintiff’s demand and before the action was commenced should not be adopted. If the defendants, in good faith, do not intend to resume the criticized advertising, no harm can come to them by the granting of injunctive relief. If, however, they are likely to renew the condemned activity, then judicial restraint is an appropriate remedy. Mere cessation of unfair competitive practices upon demand or prior to the commencement of an action does not bar the issuance of injunctive relief (43 C. J. S., Injunctions, § 22, p. 445).
Where unfair competition is established, any doubts as to the adequacy of relief are generally resolved against the transgressor (Champion Plug Co. v. Sanders, 331 U. S. 125, 130; Warner & Co. v. Lilly & Co., 265 U. S. 526, 532).
For the foregoing reasons, the judgment should be modified to grant injunctive relief in accordance with the views herein expressed.
BoteiN, J. P., ValeNte and McNally, JJ., concur with RabiN, J.; FraNk, J., dissents and votes to modify in opinion.
Judgment reversed upon the law and upon the facts and judgment is directed in favor of defendants dismissing the complaint, with costs to the appellants.
Settle order.