SAN FRANCISCO — Car dealers are not required to sell vehicles if a newspaper wrongly prints the price in an advertisement, the California Supreme Court has ruled.
The decision for the first time spelled out the rules of liability when the media falsely states the price of merchandise. The justices said Monday that sellers are not required to pay for a newspaper's mistake.
The case was a blow to an Orange County lawyer who tried to buy a Jaguar for $26,000 — $12,000 below the price advertised in other newspapers.
Chief Justice Ronald M. George said Lexus of Westminster was not acting in bad faith when it refused to sell the blue 1995 Jaguar XJ6 for the price incorrectly published by the Costa Mesa Daily Pilot in 1997.
The Los Angeles Times and the California Newspaper Publishers Association sided with the car dealer, saying it shouldn't be punished for a mistake by an advertiser. Advertising, auto advertising in particular, is the newspaper industry's financial lifeblood.
"It was decided that we needed to support our advertisers here," said Megan E. Gray, the attorney for the news outlets. "There's not liability every time a mistake happens. That's life. Mistakes happen."
The Daily Pilot did not return repeated calls.
The plaintiff, Brian J. Donovan, whose suit was supported by the National Association of Consumer Advocates, urged the court to require the sale at the advertised price to protect consumers from being falsely lured into dealerships and to ensure that dealers review the accuracy of their advertisements.
But by a 4-2 vote, the court said agreeing with Donovan "would be holding that the dealer intended to assume the risk of all typographical errors in advertisements, no matter how serious the error and regardless of the circumstances in which the error was made," George wrote.
The court also wrote that sellers don't necessarily have to pay for their own advertising mistakes if they were made in good faith. However, incorrect prices advertised in bad faith to lure customers to a store are grounds for consumer lawsuits.
"If it's the media's mistake, the retailer will always have an out," said James G. Lewis, the car dealer's attorney. "If it's the dealer's mistake, he'll usually be bound" unless the
difference in price is so great that honoring it would cause significant harm to the seller.
Donovan, an attorney specializing in contract law, was shopping for his wife's 50th birthday present when he saw the advertisement in the Daily Pilot. After taking a test drive, he offered to write a check for the $26,000 advertised price.
He was immediately told it was a mistake, and the dealership offered to take $1,000 off the correct $38,000 price. He declined, filed suit seeking damages and called it a bait-and-switch tactic.
An Orange County Municipal Court judge originally sided with the dealer but the 4th District Court of Appeal backed Donovan, saying the case was so easy that "A first year law student would not be surprised to be called upon to answer the questions we address here."