(CN) – The website DMV.org violated federal false-advertising laws by cultivating a widespread belief that it was associated with California’s motor vehicles department, the 9th Circuit ruled. In correcting the problem, however, the judges warned courts to take care not to interfere with the site’s free-speech rights.
A for-profit website, DMV.org assists consumers with driver’s license renewals, insurance and other automobile-related issues. It makes its money from advertising and referrals. Two competitors, TrafficSchool.com Inc. and Drivers Ed Direct, claimed in Los Angeles’ federal court that the website “actively foster[ed] the belief that DMV.org is an official state DMV website,” in violation of federal and state unfair competition and false advertising laws.
U.S. District Judge Percy Anderson agreed and ordered DMV.org to show every visitor a splash-screen disclaimer. The judge also declined to award the plaintiffs damages or attorneys’ fees.
On cross appeal, the 9th Circuit upheld the ruling, but directed Anderson to reconsider the injunction, which in its current state appears to be unconstitutional.
“The District Court does not appear to have considered that its injunction would permanently and unnecessarily burden access to DMV.org’s First Amendment-protected content,” Chief Judge Alex Kozinski wrote for the court. “The splash screen forces potential visitors to take an additional navigational step, deterring some consumers from entering the website altogether. It also precludes defendants from tailoring DMV.org’s landing page to make it welcoming to visitors, and interferes with the operation of search engines, making it more difficult for consumers to find the website and its protected content. All of these burdens on protected speech are, under the current injunction, permanent.”
The Pasadena-based three-judge panel said competing businesses had shown that DMV.org’s website “deceives a substantial segment of its audience.”
“Plaintiffs also produced evidence that two California cities, a private law firm in Texas and a number of newspapers mistakenly linked their websites to DMV.org instead of a state DMV website,” the ruling states.
Nonetheless, they don’t deserve any damages for their efforts, as they could not show that they were harmed by the deceptions, the panel found.
“Plaintiffs didn’t produce any proof of past injury or causation, so the district court had no way to determine with any degree of certainty what award would be compensatory,” Kozinski wrote. (Emphasis in original). He did, however, remand the case, telling the lower court to consider the plaintiffs’ claims for attorneys’ fees.