NEW YORK A federal court has ruled that Yellow Book USA "made false statements of fact claiming greater use of its [telephone] directories as compared to Verizon's SuperPages."
Judge Jack B. Weinstein of the U.S. District Court in Brooklyn, N.Y., found that Yellow Book "violated the Lanham Act by falsely claiming, as to national and some specific geographic areas, that the usage of Yellow Book's [directories] was substantially greater than it actually was, as compared to the usage of Verizon's SuperPages." The suit was filed in January [Adweek, Jan. 23].
Independent Trahan, Burden & Charles in Baltimore is Yellow Book's lead agency. MDC Partners-backed Kirshenbaum Bond + Partners in New York handles Verizon SuperPages. Yellow Book spends $10-15 million annually on broadcast and print ads, per TNS Media Intelligence/CMR, compared with Verizon SuperPages' $40 million.
Judge Weinstein had previously ordered that a second phase of the trial take place on Dec. 13 to fix the amount of damages that Verizon has suffered. However, Verizon and Yellow Book reached a settlement, and the December trial has been canceled. Terms of the settlement are not being disclosed.
In ruling, the court noted, "Verizon enjoys substantially greater usage of its directories nationally and in most of the local markets in which it competes with Yellow Book." The court determined that Yellow Book's claims of greater usage were false and misleading, and that Yellow Book knew they were false when it made them. After the judge criticized Yellow Book during the trial, Yellow Book stopped making the false claims in radio and television commercials and also directed its sales force to stop making the erroneous claims.
In addition, the court ruled that "in some of its sales collateral Yellow Book referenced studies performed by the Harris research organization that employed dubious survey methodology; the data was then manipulated by Yellow Book employees, resulting in inflated usage figures for Yellow Book's directories compared to those for Verizon in some geographic areas."
—Brandweek staff report