Robert J. Debry & Associates, Pc v. Dex

Citations: 2006 UT 41; 144 P.3d 1079; 557 Utah Adv. Rep. 35; 2006 Utah LEXIS 131; 2006 WL 2089138Docket: 20050299

Court: Utah Supreme Court; July 28, 2006; Utah; State Supreme Court

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Defendants Qwest Dex, Inc. and Dex Media West LLC allow out-of-area businesses to purchase local phone numbers and advertise in the Ogden area telephone directory. The United States Court of Appeals for the Tenth Circuit requested clarification on whether these actions violated Utah Code section 13-11a-3(1)(b, d, or t) by publishing a local calling area table and advertising third-party Market Expansion Line (MEL) numbers without physical addresses, and if they are exempt from liability under section 13-11a-5(1). The Supreme Court of Utah concluded that Dex's actions did not violate section 13-11a-3(1), making it unnecessary to consider the exemption under section 13-11a-5(1).

The factual background indicates that Dex prints telephone directories throughout Utah, allowing businesses without a local presence to purchase MEL numbers that utilize local prefixes. This enables customers to connect with out-of-area businesses without long-distance charges. The Utah Public Service Commission has an agreement with Dex requiring one free directory listing for MELs, although it does not mandate the inclusion of an address. A survey commissioned by Plaintiff Robert J. DeBry and Associates revealed that 67% of respondents felt misled by the absence of an address next to MEL numbers in the directory, mistakenly believing that these businesses had a local office.

DeBry alleges that advertisements featuring MEL numbers without accompanying addresses are deceptive and infringe upon section 13-11a-3(1)(b, d, and t) of the Utah Truth in Advertising Act (UTIAA). Following DeBry's lawsuit against Dex in state district court for UTIAA violations, the case was removed to federal court, where DeBry's complaint was dismissed under rule 12(b)(6) for failure to adequately state a claim. The federal court did not determine if Dex was exempt from liability under the UTIAA due to compliance with the existing tariff. DeBry subsequently appealed to the Tenth Circuit, which sought clarification on UTIAA interpretation since no Utah appellate court had addressed this issue.

The Tenth Circuit requested legal guidance, and the reviewing court acknowledged its jurisdiction under Utah Code section 78-2-2(1) to respond to the certified question. The focus of the analysis was on the statutory language of the UTIAA, rather than the merits of the federal court's dismissal. The court examined whether Dex's practice of allowing corporations to advertise MEL numbers without addresses constituted deceptive trade practices under sections 13-11a-3(1)(b, d, t). 

The court concluded that Dex's actions did not violate section 13-11a-3(1)(b) because they did not create confusion regarding the source, sponsorship, approval, or certification of the goods or services. DeBry's assertion that MEL numbers without addresses mislead consumers was rejected. Consequently, the court found no violation of the UTIAA and did not address whether Dex could be exempt from liability under section 13-11a-5.

DeBry challenges the publication of MEL numbers without accompanying addresses, suggesting it misleads consumers regarding the 'source' of the advertisements. The term 'source' is defined as the origin or provider of information, which typically refers to the business that funds the advertisement. In this case, the law firm Siegfried & Jensen is cited as an example, asserting that it is the source of its own advertisement since it likely originated and financed it, providing the necessary information to Dex, the publisher. 

The text asserts that advertisements in the Ogden yellow pages, including those with MEL numbers, are not misleading regarding the source because the business name and associated services are clearly stated. Therefore, Dex is not in violation of Utah Code section 13-11a-3(1)(b).

Furthermore, DeBry's claim that Dex makes deceptive geographic origin representations is rejected. Dex does not list businesses based solely on their physical presence in a calling area but provides contact details for businesses willing to serve that area. Thus, Dex does not misrepresent geographic location, avoiding violation of section 13-11a-3(1)(d).

Lastly, DeBry's assertion that Dex violated the UTIAA's catch-all provision (section 13-11a-3(1)(t)) is dismissed. Although there may be some consumer confusion regarding local numbers implying geographic proximity, the confusion does not reach a level that would violate the statute, as required by the law.

The assessment of whether conduct creates a likelihood of confusion focuses on the statute's aim to address 'false front' business operations that mislead customers regarding the nature, location, source, or quality of goods or services. DeBry argues that MEL listings misrepresent businesses by allowing out-of-area companies to use local numbers. However, it is determined that this practice, while potentially confusing to some consumers, does not meet the deceptive misrepresentation standard outlined in the statute. Dex listings are characterized as simple directories of businesses that serve the area, without implying any misleading information about the services offered. DeBry failed to demonstrate that the geographical location of these businesses would materially alter their service quality or nature. Therefore, Dex's use of MEL numbers without addresses is not deemed confusing or misleading under the relevant Utah code sections. Consequently, Dex is found not to have violated the Utah Truth in Advertising Act (UTIAA), as there was no likelihood of misunderstanding or confusion regarding the goods or services offered, nor any deceptive representations concerning geographic origin. The court concludes that it is unnecessary to evaluate Dex's potential exemption under the UTIAA. The opinion is concurred by Chief Justice DURHAM, Justice DURRANT, Justice PARRISH, and Justice NEHRING.