978-1285770178 Case Printout Case CPC-01-07 Part 4

“The court shall impose a civil penalty for each violation of this chapter. In assessing the amount of the civil

penalty, the court shall consider any one or more of the relevant circumstances presented by any of the parties to the

case, including, but not limited to the following: the nature and seriousness of the misconduct, the number of viola-

lars. Liberty points to Formeca’s testimony that Nielsen ratings, while they captured the number of adults who “saw”

the ads at issue, did not take into account those who may not have been watching when the ads appeared because,

for example, they momentarily left the room. Liberty then contends that “[i]n accord with Olson, not every viewer of

a television program will listen to every commercial.”

As the People further point out, Liberty also ignores the Nielson data indicating that viewers saw the deceptive

television advertisements multiple times. There was evidence presented that, on an aggregated basis, each viewer

saw the “Origami” ad an average of approximately 1.78 times; the “Stomp” ad an average of approximately 3.39

times; the “Catch” ad an average of approximately 1.78 times; and the Spanish language ad an average of approxi-

Beach (1960) 186 Cal.App.2d 669, 679, 9 Cal.Rptr. 90[“[s]tatements of alleged facts in the briefs on appeal which

are not contained in the record and were never called to the attention of the trial court will be disregarded”].)

Liberty’s contention that we should consider this academic literature because courts “often rely on academic lit-

erature” is unpersuasive. Liberty cites only Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 107–108,

Liberty further contends that the civil penalties awarded regarding the “Stomp” and “Catch” television adver-

tisements “are a particularly good example of how the use of gross viewership data led to an unreasonable and unfair

conclusion.” According to Liberty, the ads were entirely truthful and contained the required disclaimer, but, based

on Nielsen data, the court awarded $409,860 in civil penalties. Liberty acknowledges that the disclaimer required a

statement that the product was a loan, the name of the lender, and that a fee or interest applied. It nonetheless con-

Liberty’s argument is not about legal error, but about the facts, and ignores the substantial evidence to the con-

trary. As the People point out, the trial court concluded that the ads at issue were likely to deceive or confuse, there–

by violating the UCL and FAL. The court found that the mandatory disclaimers contained in these advertisements

“were in a very small font, appear within a mass of other text, and are on screen for just a second,” and concluded

they were “plainly designed to be overlooked by consumers” and “patently and deliberately illegible.” Liberty does

shortly after her husband had passed away. These are, of course, factual contentions, not arguments of legal error.

As the People point out, Liberty again ignores the factual basis for the trial court’s ruling, which was that the ad

falsely promised most refunds (by referring to “ ‘reembolsos’ ”) in 24 hours, and that this was “a serious violation of

a clear standard that Liberty was intimately familiar with.” Liberty’s contention is again unpersuasive in light of this

evidence and the court‘s findings.

violation, the court could have imposed penalties of over $9 million, but only imposed penalties of $715,344 for

these advertisements.

Finally, we also agree with the People that Liberty’s arguments lead to an approach that would all but require

individualized proof of viewership of an illegal commercial, which would be “so onerous as to undermine the effec-

his testimony, we conclude that it could. On the other hand, Liberty does not suggest any reasonable way to deter-

mine such viewings under the circumstances, i.e., the electronic transmission of advertisements to television sets

viewed by people in the privacy of their homes.

In short, Liberty fails to establish that the court committed any legal error or abuse of discretion in its imposi-

saver advertisements that were mailed to homes. Liberty argues the court’s penalties for additional violations were

improperly based on the circulation numbers for these advertisements, despite the admonition against doing so in

Olson . Again, we disagree.

As the People point out, the trial court did not rely on the kind of gross circulation figures disfavored in Olson .

reduced it to $50,000 because it considered the initial figure “grossly disproportionate to Liberty’s role, [the] harm

done to consumers, and the in terrorem goal of penalties.”

As the People also point out, there was circumstantial evidence, a category of evidence that was referred to fa-

vorably in Olson ( Olson, supra, 96 Cal.App.3d at p. 198, 157 Cal.Rptr. 628), upon which the court could rely for

person has read the advertisement, which would be “so onerous as to undermine the effectiveness of the civil mone-

tary penalty as an enforcement tool.” ( Olson, supra, 96 Cal.App.3d at p. 198, 157 Cal.Rptr. 628.)

In short, Liberty provides no explanation why the trial court‘s calculation that less than one percent of the publi-

cations circulated were viewed was unreasonable or improper in light of the circumstantial evidence. Its argument,

cretion.

A. The Proceedings Below

The trial court issued an injunction in order to “address Liberty’s failures not only to educate its own internal

staff on the legalities of advertising, but its failure in controlling its franchises.” The court stated it was concerned