WASHINGTON The U.S. Supreme Court has rejected an appeal by a Florida Burger King franchisee that sued McDonald’s Corp. alleging false advertising in connection with a rigged Monopoly promotion and other games the chain ran from 1995 to 2001.
Phoenix of Broward Inc., the BK franchisee, sued McDonald’s under the false-advertising provision of the Lanham Act, alleging the chain’s advertising during the promotions misrepresented the public’s chances of winning millions of dollars in prizes. Phoenix alleged the ads drew business away from its Burger King restaurant and that it incurred expenses to counter the loss of business.
The U.S. District Court for the Northern District of Georgia initially dismissed the case for lack of standing, and the dismissal was upheld by the 11th U.S. Circuit Court of Appeals in Atlanta last June.
The Supreme Court’s rejection on Monday was issued without comment.
In 2005 the National Franchisee Association of Burger King operators also sued McDonald’s for alleged false advertising and unfair competition in connection with the promotions, but the association withdrew the suit a week later.
During the time of the McDonald's promotions, a crime ring that included employees of Simon Marketing Inc., the burger giant's promotional agency, rigged the games and stole million of dollars in winning game pieces.
When the FBI was tipped off to the crime ring in 2000, it asked McDonald’s to assist efforts to nab the leaders. Convictions later were obtained from among the more than 50 people indicted in the scandal, including the security director of Simon Marketing.
McDonald’s eventually awarded $25 million in prizes to settle consumer lawsuits stemming from the rigged promotions. McDonald’s resumed the Monopoly game in 2003 after improving security measures to prevent fraud.