Suit on Magazine Promotion Dismissed as ‘Junk Litigation’

In a sharp rebuke to the public-interest attorneys who brought the case, a state appellate court Monday upheld the dismissal of a $15-million unfair advertising suit against Time Inc. over an allegedly deceptive offer of “free” calculator watches to woo subscribers.

The panel acknowledged that Time Inc. used a “trick” to get recipients to open a subscription solicitation mailed to thousands of California households in 1984. Using the court system to combat such mailings was, however, “an absurd waste” of legal resources, it said.

“The plaintiffs’ real complaint is that they were tricked into opening a piece of junk mail,” the court said. “The law may permit junk mail to be delivered for a lower cost than the individual citizen must pay. It does not require that the public subsidize junk litigation.”

The unusual class-action lawsuit was initiated by lawyers for Public Advocates Inc., representing three plaintiffs on behalf of about 345,000 Californians who received the mailer. Among the plaintiffs was 3-year-old Joshua Gnaizda, son of Public Advocates’ counsel Robert L. Gnaizda.

The suit said Time had sent unsolicited letters to Joshua and millions of others in the country in envelopes with see-through windows revealing the words, “I’ll give you this versatile new calculator watch free just for opening this envelope before Feb. 15, 1985.”

When the envelope was opened, the rest of the statement appeared, saying “and mailing this certificate today.” The certificate required that recipients purchase a subscription to Fortune magazine for $27 to receive the watch.

After Time had refused a demand by Robert Gnaizda that the company give his son a watch without requiring a subscription, the plaintiffs filed suit in San Francisco Superior Court, charging unfair advertising and breach of contract.

The suit asked for an order requiring Time to stop making such mailings, to provide free watches to recipients of the mailer and to pay $15 million in punitive damages to establish a consumer education and advocacy fund. The award of such damages was the only effective way to deter unscrupulous advertisers, it said.

Time’s subsequent request for dismissal of the suit was granted, and the Court of Appeal upheld the decision Monday in an opinion written by Appellate Justice Donald B. King.

In a stinging 20-page opinion, the court said dismissal was required under the legal maxim: “The law disregards trifles.” This case, it said, was trifling “in the extreme.”

King rejected the claim for punitive damages, saying that under state law, only government agencies, not private parties, could collect such penalties for unfair advertising.

Although there is considerable consumer irritation from junk mail, he continued, the courts cannot intrude on the right of commercial free speech where there is “no actual detriment” to the recipient.

A ‘Skirmish’ Lost

King noted that the “name of the game” for an advertiser or solicitor is to get recipients to open the envelopes. Although not expressing approval of Time’s technique, the justice pointed out that the plaintiffs, who had not subscribed to the magazine, had not been misled into buying anything.

If Joshua Gnaizda’s mother had “lost the skirmish” with Time by opening the envelope, she “could have won the war” by simply throwing the offer away, the court said.

Reactions of Parties

James F. Brelsford of San Francisco, an attorney representing Time, called the decision “a complete affirmation” of the firm’s contentions and said it is “100% satisfied” with the ruling. The offer of watches to new subscribers was discontinued in February, 1985, he added.

Robert Gnaizda expressed disappointment with the decision and strongly defended the suit.

“The only embarrassment in this case is to the court, which is unable to address the problem of fraudulent advertising,” he said.