Avis Rent A Car System, Inc. v. Hertz Corp

In Avis Rent A Car System, Inc. v. Hertz Corp., 782 F.2d 381 (2d Cir.1986), the false advertising action was premised on a theory of literal, not implied, falsity. In the facts of that case, Avis Rent A Car System, Inc., the self-proclaimed "Number 2" in the car rental business, sued "Number 1" Hertz Corporation over an advertisement that proclaimed, in large bold print, that "Hertz has more new cars than Avis has cars." Avis Rent A Car, 782 F.2d at 381-82. Below a picture of mechanics unloading new cars into an airport parking lot, the advertisement went on to explain: "If you'd like to drive some of the newest cars on the road, rent from Hertz. Because we have more new 1984 cars than Avis or anyone else has cars-new or old. . . . Whether you're renting for business or pleasure, chances are you'll find a domestic or imported car you'll want to drive." Id. at 382. At the bottom of the ad was Hertz's slogan, "The # 1 way to rent a car." Id. At the time the advertisement was published, Hertz only had about 97,000 1984 model cars, whereas Avis had a total of approximately 102,000 cars. See id. at 383. However, 6776 cars in Avis's fleet were in the process of being sold and were no longer available for rental. Id. at 384. Thus, the literal truth or falsity of the claim that "Hertz has more new cars than Avis has cars" turned on whether the statement "referred to the rental fleets or the total fleets of the two companies." Id. at 383. The district court found that because the advertisement said "cars," and not "cars for rent," it had to be read as referring to the companies' total fleets and, as such, was literally false. See id. at 384. The Court held that the district court's finding was clearly erroneous. It pointed out that the parties had "made their reputations as companies that rent cars, not companies that sell or merely own cars," and that the advertisement had appeared "in publications that would come to the attention of prospective renters, not car buyers or financial analysts." Id. at 385. Moreover, the advertisement featured a large picture of an airport rental lot and made three specific references to rentals. See id. Taking this context into consideration, the Court concluded that the claim that "Hertz has more new cars than Avis has new cars" could only be understood as referring to the companies' rental fleets. The Court elaborated: Fundamental to any task of interpretation is the principle that text must yield to context. Recognizing this, the Supreme Court long ago inveighed against "the tyranny of literalness." In his determination to "go by the written word" and to ignore the context in which the words were used, the district judge in the present case failed to heed the familiar warning of Judge Learned Hand that "there is no surer way to misread any document than to read it literally," as well as his oft-cited admonition that "it is one of the surest indexes of a mature and developed jurisprudence not to make a fortress out of the dictionary." These and similar invocations against literalness, though delivered most often in connection with statutory and contract interpretation, are relevant to the interpretation of any writing, including advertisements. Thus, we have emphasized that in reviewing FTC actions prohibiting unfair advertising practices under the Federal Trade Commission Act a court must "consider the advertisement in its entirety and not . . . engage in disputatious dissection. The entire mosaic should be viewed rather than each tile separately." . . . Similar approaches have been taken in Lanham Act cases involving the claim that an advertisement was false on its face. (Id. at 385.)