Antitrust Law Daily Wrap Up, ADVERTISING—OhioAppCt: Complaints About Advertisements to the Attorney General Were Protected by Privilege , (Dec 28, 2012)

By Jody Coultas, J.D.

An Ohio trial court correctly held that statements made by the National Propane Gas Association to the Ohio Attorney General, complaining about a company’s advertising, were protected by absolute privilege, according to an Ohio appellate court (Thrifty Propane, Inc. v. National Propane Gas Assn., December 26, 2012, Dickenson, C.). Thrifty Propane, Inc., the company that sought to sue the association for defamation and malicious prosecution in connection with statements made by the association to the Attorney General, was liable for the association’s attorney’s fees.

Thrifty Propane’s advertisement referred to its competitors’ product as “slop.” The association complained to the Attorney General, but Thrifty Propane was able to resolve the issue in its favor because the term “slop” has a recognized technical meaning.

Two years later, the association complained about another advertisement. Thrifty Propane sued the association for defamation and malicious civil prosecution in connection with the association’s complaint to the Attorney General about its advertising practices, and sued the Attorney General to prohibit him from requiring Thrifty Propane to enter into an assured voluntary compliance agreement. The claims stemmed from Thrifty Propane’s efforts to avoid a formal hearing on the claims in order to avoid its competitors characterizing it as engaging in allegedly deceptive practices.

A trial court dismissed the claims against the Attorney General, holding that the court could not enjoin the Attorney General from performing his statutory duties. The court also awarded judgment on the pleadings to the association based on its determination that the claims were barred under the statute of limitations and that any statements that the association made to the Attorney General were privileged.

The trial court correctly determined that the association’s complaints to the Attorney General were protected by absolute privilege and, therefore, could not provide the basis of the libel and malicious prosecution claims, according to the court. A complaint to the Attorney General raising a claim of deceptive advertising is generally entitled to an absolute privilege against civil liability. However, Thrifty Propane argued that the fact that it eventually learned that it was the association that made the complaints demonstrated that the association must have also communicated its complaints to a third-party, which destroyed the privilege. Even if the association told a third-party that it intended to complain to the FTC about Thrifty Propane’s advertising practices, the mere fact that it told others that it had contacted the Attorney General did not support a claim for libel. Thrifty Propane did not cite any authority suggesting that a party forfeits an absolute privilege simply by telling others that it engaged in privileged communications rather than disclosing the actual contents of the communication.

The trial court also correctly awarded the association attorney’s fees, according to the court. Thrifty Propane argued that the award of attorney fees was improper because the court incorrectly entered judgment on the pleadings for the association. According to Thrifty Propane, because its lawsuit was proper, any cause of action arising from the defense of the suit is without merit. However, the argument is without merit because the trial court properly entered judgment on the pleadings.

In a concurring opinion, an appellate judge noted that the legal precedent cited in support of the conclusion that statements made to the Attorney General were protected by absolute privilege pertained to notifying a prosecutor about a crime. Here, the communications at issue did not pertain to criminal activity. The association’s communications should have been subject to a qualified privilege. However, resolution of that issue was unnecessary to the outcome of the case.

The case is No. 11CA0086-M, 2012-Ohio-6113.

David C. Eisler for Thrifty Propane, Inc. Caroline Petro Gately (Venable LLC) for National Propane Gas Assn.

Cases: Advertising OhioNews