On August 2, 2018, a Delaware federal court dismissed false advertising claims brought against CNBC LLC, NBCUniversal Media LLC, and other production companies (“Defendants”) that produced CNBC's show “American Greed.”
Efraim Diveroli (“Diveroli”), a 32-year-old former arms dealer whose company, AEY Inc. (“AEY”), was a weapons contractor for the U.S. Department of Defense. In his complaint against the Defendants, he alleged that the Defendants produced an “American Greed” episode that held itself out as portraying his “true story.” The episode was advertised as “the real story” behind the 2016 Warner Bros. film “War Dogs.”
The suit filed by Diveroli claimed the defendants violated the Lanham Act by advertising the episode as a “true story” where Diveroli got rich selling “bad ammunition.” The complaint states that this statement is factually incorrect because “none of the ammunition..were faulty.”
However, U.S. District Judge Mark A. Kearney ruled against Diveroli and granted the Motion to Dismiss the Lanham Act allegations because he found “that whether or not Diveroli sold bad ammunition to the U.S. does not render the statements in the advertisement false or misleading.”
Judge Kearney stated:
“[Diveroli] fails to allege the American Greed episode does not present itself to viewers as telling them Mr. Diveroli's true story…The advertisement tells potential viewers the episode presents the real story, which includes Mr. Diveroli selling ‘bad' ammunition to the United States. Whether Mr. Diveroli sold bad ammunition to the United States is a matter of argument which a viewer may reject or accept after viewing the episode.”
This ruling only applies to the false advertising claims. Judge Kearney did not address Diveroli's other claims, which include a claim for copyright infringement of photos and book cover artwork.
The case is Incarcerated Entertainment LLC v. CNBC LLC et al., number 1:18-cv-00480, in the U.S. District Court of Delaware.