• Appellate Court Rejects Media Liability for Advertising
  • February 27, 2006 | Author: Jill P. Meyer
  • Law Firm: Frost Brown Todd LLC - Cincinnati Office
  • Ohio's First District Court of Appeals has upheld the dismissal of a lawsuit seeking to hold Clear Channel Communications, Inc. liable for the content of advertisements it aired on a Cincinnati radio station. Amann v. Clear Channel Communications, Inc., No. C-050411. Plaintiffs were a group of investors, mostly elderly, who had invested their savings with local investor George Fiorini . Fiorini had advertised his "10 Percent Income Plus Plan" in a wide range of media, including extensively with Clear Channel AM radio station, WSAI. After almost thirty problem-free years running his financial business, Fiorini came under investigation, was found to have run a fraudulent investment scheme under which investors were bilked of millions of dollars, and was sentenced to federal prison. Seeking restitution for their losses, and with Fiorini bankrupt, groups of investors filed three separate lawsuits seeking to hold Clear Channel liable for their losses for having negligently aired Fiorini's commercials. The investors targeted Clear Channel station WSAI because its popular announcer, the late Bob Braun , had appeared in some of Fiorini's commercials and stated that he had invested in Fiorini's plan.

    After one judge allowed such claims to proceed, a different judge in another of the cases, Amann, dismissed the claims, and the plaintiffs appealed. Plaintiffs argued to the court of appeals "that broadcasters have only limited First Amendment protection, and that this limited protection requires broadcasters to exercise a duty of care to verify the accuracy of all advertisements they broadcast." According to plaintiffs "the scarce resource of radio broadcast frequencies ... requires this limited First Amendment protection. *** [and] because a broadcast license is held in trust for the public, broadcasters necessarily owe their audience a duty of care, which includes verifying the accuracy of advertisements." Rejecting the plaintiff's assertions based on a lack of applicable court precedent, the court declined to impose such an "onerous" burden on broadcasters that would inflict "havoc," stating: "Because radio broadcasters have full First Amendment protection in this context, it follows that they have no heightened duty to verify the accuracy of advertisements broadcast. *** And we can say without doubt that the burden resulting from such a requirement would certainly be, at the least, arduous. Substantial time and money would be necessary to verify the accuracy of advertisements." While noting that a broadcaster could face liability for "deliberate, intentional, or wanton misrepresentation," liability for a third party's advertisements, whether in print or electronic media, is "limited to those cases where the defendant actually knew the ad was false before publication, or where the ad is so inherently improbable on its face that the defendant must have realized the ad was probably false." Thus, plaintiffs' claims of negligent behavior could not defeat the First Amendment protections.

    The court also rejected the plaintiffs' lawsuit on another basis, finding, as a matter of law, that plaintiffs failed to prove that they were members of a "limited group of persons for whose benefit and guidance [Clear Channel] intend[ed ] to supply the information." Thus, Clear Channel owed no duty to them that could have been breached by negligence. Noting that such a determination requires a fact-specific analysis, the court identified the group at issue as "Clear Channel's listening audience," and reasoned as follows, based upon precedent rejecting the notion that a group of newspaper readers is such a limited group: "Just as an entire class of newspaper readers is unknown and immeasurable, Clear Channel's listening audience is unknown and immeasurable as well. It is impossible to determine how many people actually heard Fiorini's advertisement, which was available to anyone in the Greater Cincinnati area who had the radio on at the exact time the advertisement was broadcast. We are faced with only one reasonable conclusion: Clear Channel's listening audience was not a limited group of people." *** Clear Channel did not intend to influence any particular person or group. Rather, it intended to reach the large general class consisting of its entire listening audience."

    Thus, the claims asserted by the plaintiffs in Amann were dismissed. The other two companion cases, in which the plaintiffs assert identical claims, were stayed pending final resolution of Amann.