Freeman v. Time, Inc.

Time, Inc. (defendant) sent personalized mailers to millions of people advertising its sweepstakes promotions. Michael Freeman (plaintiff) received these mailers from Time. The mailers included large capitalized and bold font that claimed that Freeman had won a prize of $1,666,675. In smaller font, the mailers qualified that Freeman would only win the prize if he mailed back a winning prize number. Freeman filed a lawsuit against Time in state court, alleging that Time violated two of California’s unfair or deceptive acts or practices statutes, the Unfair Business Practices Act and the California Consumers Legal Remedies Act (collectively, the state consumer-protection laws), by sending the mailers. The state consumer-protection laws required a showing that members of the public were likely to be deceived by claimed violations. Time moved to dismiss Freeman’s claims for failure to state a claim on which relief may be granted. Time argued that the state consumer-protection laws required a showing that a reasonable person of ordinary intelligence would be deceived by the mailers. Time made its argument by referring to § 5 of the Federal Trade Commission (FTC) Act, which had been interpreted to use a reasonable-person standard. Freeman opposed the motion, arguing that he only needed to show that some members of the public, such as minors or the elderly, were likely to be deceived by the mailers. The district court held that a reasonable-person standard applied, granted Time’s motion, and dismissed the claims. Freeman appealed.