September 13, 2016

contest-rulesLast August, we reported that the U.S. Court of Federal Claims had dismissed a lawsuit related to the Federal Trade Commission (the “FTC” or “Commission”) sponsorship of a contest promoting robocall-blocking technology, siding with the FTC and its contest rules.  The plaintiff, who appealed the claims court’s decision to the Federal Circuit, maintains that the Commission breached its contest rules.

How can well-drafted contest rules help protect sweepstakes and contest sponsors?

Claims Court Enforces Contest Rules

In 2012, the FTC sponsored its Robocall Challenge, which offered a $50,000 prize for the best new robocall-blocking technology proposed by a contestant.  In August 2013, a disgruntled contestant sued the Commission, claiming that the FTC materially breached the contest rules by allegedly passing over his submission without affording him a fair opportunity to win.

Looking to the Commission’s contest rules, the trial court found that the contest judges’ decision was final and binding and granted the FTC’s motion for summary judgment.

Plaintiff Apparently Faces Pushback on Appeal

After appealing his loss to the Federal Circuit, in oral arguments held on September 7, 2016, the subject plaintiff argued that the robocall contest’s judges had misapplied the contest rules.

Law360 reports that Judge Timothy B. Dyk was not impressed with plaintiff’s counsel’s stance, rejoining that “You’re relying on your interpretation of the rules and the problem is you can’t challenge the judge’s interpretation of the rules.”

Contest Rules: More Than Just Boilerplate

As the above-referenced case illustrates, well-drafted contest rules can help protect contest and sweepstakes sponsors from substantial liability.  As such, before sponsoring any contest, sweepstakes or other promotion, businesses should retain an experienced marketing attorney to help formulate the contest and draft associated contest rules.

If you are interested in learning more about this topic, or need contest rules for your promotional contest or sweepstakes-related venture, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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Related Blog Posts:

FTC Wins Robocall-Blocking Technology Lawsuit with Contest Rules

Risqué Contest Sponsor Sued by Contestant’s Family After Promotion Fatality

Sweepstakes Rules: Carved in Stone

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