Fashion Boutique v. Fendi USA The case of improper evidence supporting plaintiffs claims and their subsequent appeal of District Courts decision

In October 1996, Fashion Boutique brought a case against Fendi USA Inc. and Fendi Stores Inc. on the premise that the fall in their sales and the subsequent closing of its retail operations was the result of Fendis misrepresentation of the quality and authenticity of the products sold at Fashion Boutique. Fashion Boutique claims violation of Lanham Act 15 which prohibits misrepresentation of another person's goods or services in commercial advertising or promotion, and violation of New York law on product disparagement and slander. Overview of previous case

Overview of previous case ctd. Fashion Boutiques claims were based on rumors and on statements from the undercover investigators it hired to pose as shoppers. However in the evidence provided by Fashion Boutique, none of the interactions by the Fendi employees did initiate the conversations about Fashion Boutique. Fendi USA moved for summary judgment on the Lanham Act claim. This was granted by the District Court.

Current Case overview The current case concerns the appeals made by Fashion Boutique against the District Court on what they believe were errors on the side of the court, these were: 1.Granting the defendants motion for partial summary judgment based on plaintiffs Lanham Act claim 2.Abusing its discretion in excluding the plaintiffs expert testimony on the value of business lost 3.Instructing the jury that damages on slander were limited to the reputation injury in the minds of the three customers

Fashion Boutique Claims that their proof of disparaging comments by defendant and rumors of selling fake and inferior merchandise, falls under commercial advertising or promotion The court improperly limited the damages to be recovered for slander and general damages The exclusion of expert testimony was crucial as his value estimate is essential in calculating damages Fendi Claims that Fashion Boutiques argument does not fall under Lanham Act claim of misrepresentation in commercial advertising or promotion The Arguments

Central Dispute In this case, the main issue at hand is the definition of commercial advertising and promotion. What is the definition of commercial advertising and promotion, and exactly what can be classified as commercial advertising and promotion?

Case Overview On the four part test set forth in the Gordon & Breach I, the court adopted the elements that the alleged representation made by Fendi, according to Fashion Boutique, was a commercial speech, for the purpose of influencing customers to buy defendants good/services and that the representations must be disseminated sufficiently to the relevant purchasing public. The Court of Appeals subsequently decided that the District Court had not abused its discretion in excluding the evidence of rumors. Thus, Fashion boutique failed to put forth sufficient evidence.

Case Overview ctd. Based on unproven policy, the assumption made by the expert that a campaign of disparagement caused the sales of Fashion Boutique to decline, was denied. Furthermore, Fashion Boutique only had proof that one customer heard defamatory statements from Fendis sales person. Hence the falling sales cannot be attributed to one testimony. As a result, the Court agrees with the District Court that no causal relationship can be proved.

Case Overview ctd. Assessing the courts restriction on general damages for slander to the plaintiffs business reputation in the mind of the person to whom the slanderous statement was made, the Court of Appeals decided to once again, agree with the District court. The damages rewarded to the plaintiff were restricted as each slanderous statement was made only to an individual customer at Fendi and the degree of circulation of statements, made by Fendi, was not proven and hence had to be speculated by the jury.

Conclusion The Court of Appeals fully agrees with the previous decisions made by the District Court of southern New York.

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