Perry Haan: Lawsuit settlement could spell trouble for gun manufacturers

Recently, this column discussed a concept called "puffery." This when advertisers make subjective statements about products that can or cannot be proved.

As discussed in that column, puffery is typically considered harmless as most consumers understand that advertisers use this kind of language. Courts have refused to rule against advertisers for claims that puffery is deceiving. These claims are assumed to be understood by reasonable consumers as "mere puffery."

A recent settlement of a lawsuit against one the country's largest gun manufacturers might have scared advertisers who make puffed claims. Specifically, it might have scared gun advertisers.

In February, families of nine Sandy Hook school shooting victims settled a lawsuit for $73 million on against Remington, the company that manufactures the AR-15-style rifle used in the massacre. This is the largest payout by a gun manufacturer in a mass shooting case.

Many see this settlement is a significant loss for the firearms industry because the lawsuit worked around the federal law protecting gun companies from litigation. It did not criticize Remington for manufacturing the gun. It said the company's advertising of the weapon violated state consumer law in Connecticut where the event occurred.

The families argued Remington's advertising was meant to appeal to troubled young men like the killer who stormed into Sandy Hook Elementary School in Connecticut in December 2012, killing 20 first-graders and six adults.

Along with the financial settlement, Remington agreed to release internal company records, including plans for how it advertised the rifle used in the massacre. This was the first time a firearms company had been forced to do reveal this information and a point of contention in the negotiations that lead to the settlement.

This settlement could be a future threat to gun company advertising and advertisers generally. This agreement created a risk to companies trying to convince consumers, especially younger consumers, to buy products that could be dangerous to them.

While Remington did not lose the suit, conceding to the settlement suggested at least some culpability and could open up the door for others to pursue legal action against advertisers of other potentially harmful products.

If the company believed it did no harm, why did it settle? It is possible Remington believed the publicity around the suit would be more harmful than settling, even if the company successfully defended itself against the allegations.

Regardless of the reason for the firearms manufacturer agreeing to pay the families, this might have established a legal pathway for other consumers who believe advertising potentially dangerous products like guns, tobacco, alcohol or other goods.

Gun industry representatives said the settlement would not set a precedent.

"This settlement orchestrated by insurance companies has no impact on the strength and efficacy" of federal law, Mark Oliva, spokesman for the National Shooting Sports Foundation, a firearm trade association, said in a statement.

The association remains confident that the company "would have prevailed if this case proceeded to trial."

Melissa Meidinger, Instructor at Mount Marty University in Watertown, said there is a strong push by consumers for truth in marketing.

"Advertisers will need to 'prove' their messages with more than words," she said.

Still, the agreement is believed to be the largest and most significant settlement since the gun lobby, led by the National Rifle Association and congressional Republicans, enacted the Protection of Lawful Commerce in Arms Act in 2005. This is the law providing a potent legal shield to gun manufacturers and dealers.

"Marketers will need to adjust to consumers and truth-seeking behaviors" Meidinger said.

Advertisers beware. Puffed statements about certain types of products might be in for future peril.

Perry Haan is a Watertown native. He is professor of marketing and entrepreneurship at Tiffin, University in Ohio. He can be reached at haanpc@tffin.edu.