Naperville Business Lawyer Discusses Lawsuit Over Taco Bell Ad Disclaimer

As a business owner and a business law attorney, I understand how important it is to be honest and straightforward with my clients. Doing so should be a high priority for any business owner. When you own a franchise, however, things are often a little more complicated.

Take, for example, the disclaimer that is read at the end of virtually every advertisement for a specific item at any national chain restaurant—the part where the voiceover announcer states, “At participating locations only; price and participation may vary.” Ads like these are almost always produced by the corporate leadership of a company with franchise locations around the country. However, a couple from New Jersey have filed a lawsuit against Taco Bell, alleging that the popular Mexican chain engaged in “false and misleading” advertising by using fine-print disclaimers.

A Quick Background

The situation began in May of last year when a husband and wife saw a Taco Bell commercial for Chalupa Cravings Boxes. The “box” included five items for an advertised price of $5.00. The couple visited a Taco Bell location in Green Brook, New Jersey, and ordered two of the boxes, for which they were charged $12.18 plus 81 cents in sales tax.

According to court documents, the couple questioned store management about the price, which was apparently $6.09 at that location. They were reportedly told that the location was not obligated to charge the advertised price because the ad contained fine print that said “prices may vary” and “at participating locations for a limited time.”

In response, the couple filed a lawsuit against Taco Bell, claiming that the ad’s disclaimer was in violation of New Jersey’s Consumer Fraud Statute. Specifically, the lawsuit alleged that the disclaimer was not “in a type size and style that is clear and conspicuous relative to the other type sizes and styles used in the advertisement.” The suit claimed that the couple suffered measurable losses, including their time to drive to Taco Bell, gas money, and the $2.18 that they should not have had to pay. The couple is seeking compensatory damages, punitive damages, attorneys’ fees, and court costs.

A Move to Federal Court

The couple originally filed suit in Middlesex County Superior Court, but attorneys for Taco Bell’s parent company successfully motioned for the case to be transferred to federal court. Neither Taco Bell nor its parent company Yum! Brands have headquarters in New Jersey. The transfer was also requested due to the request for punitive damages, which could exceed $75,000, the threshold amount for federal civil cases.

The Mexican chain said in a statement that the company intends to defend this case vigorously. “Our advertisements are truthful and accurate,” the statement said.

While the idea of making a federal case out of a couple dollars might seem humorous at first glance, it is now up to a federal court to determine where the line should be drawn when it comes to statements such as “prices may vary.” The outcome of the case could have a significant impact on how national advertisements are created in the future.

Call a DuPage County Business Law Attorney

Truth in advertising is important, and an experienced Naperville business lawyer can help you be sure that your company’s ads are fully compliant with all applicable local, state, and national regulations. For more information, or to schedule a confidential consultation at the Gierach Law Firm, call 630-756-1160 today.

Sources:

Newsweek

Fox Business