Fashion Boutique v. Fendi USA
The case of improper evidence supporting plaintiff’s claims and their
subsequent appeal of District Court’s decision
Overview of previous case
• 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 Fendi’s 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 ctd.
• Fashion Boutique’s 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 defendant’s motion for partial summary
judgment based on plaintiff’s Lanham Act claim
2. Abusing its discretion in excluding the plaintiff’s 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
The Arguments
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
Boutique’s argument does
not fall under Lanham Act
claim of misrepresentation in
“commercial advertising or
promotion”
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 defendant’s 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 Fendi’s 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 court’s restriction on general damages for
slander to the plaintiff’s 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.
Source: Justia Law USA
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