Court Rules GuideStar Suit Not Covered by Lanham Act

Jan 24, 2018

NORFOLK, VIRGINIA  – Judge Raymond A. Jackson of the U.S. District Court for the Eastern District of Virginia dismissed Liberty Counsel’s federal lawsuit against GuideStar, stating that under the federal Lanham Act GuideStar’s republication on its website of a “hate group” label did not met the commercial purpose  requirement of the act. The lawsuit, Liberty Counsel, Inc. v. GuideStar USA, Inc., charges GuideStar with violating the federal Lanham Act, along with state law violations of Interference with Business Expectancy and Defamation. Since the court found no commercial purpose, it did not rule on the state law claims.

The Lanham Act states: “(1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which—(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.”

Judge Jackson only analyzed the Lanham Act claim and stated that the suit did not satisfy the first element which requires that the advertising or promotion constitute commercial speech. Jackson further stated that because the Southern Poverty Law Center (SPLC) notation on Liberty Counsel's profile does not solicit funds for GuideStar, then it is not commercial speech. The analysis on this point is subject to an appeal. Judge Jackson did not analyze the rest of the Lanham Act claim or the state law claims.

Liberty Counsel's case presents accurate facts and harm caused by GuideStar's reckless action. GuideStar presented the SPLC “hate group” label as “fact.” GuideStar issued a statement saying it will continue to provide the SPLC “hate group” information upon request and is considering other ways to distribute this incorrect information to the public. Though after receiving a letter confronting GuideStar's false label, it temporarily removed the label from the pages of conservative nonprofit groups. However, the damage already done by GuideStar is far reaching because this lie has been spread through scores of media sources and widely published on the internet. 

GuideStar used the SPLC false and dangerous “hate group” designation by placing its logo and rhetoric on Liberty Counsel’s page, stating, “This organization was flagged as a hate group by the Southern Poverty Law Center.” GuideStar placed the same ‘hate group’ label on 46 nonprofit organizations, including Alliance Defending Freedom, American Family Association, Family Research Council, and others.

“Despite GuideStar’s admission that it was seeking to influence the purchasing decisions of its constituents and the general public, the court without much analysis ruled such a goal is not commercial in nature,” said Mat Staver, Founder and Chairman of Liberty Counsel. “The GuideStar publication was designed to inflict financial harm because its purpose was to affect the financial transactions of the public. The SPLC false label has become discredited and it has proven to be dangerous as history has shown with the attack against Family Research Council. This false label applied to non-violent and law-abiding groups must stop,” said Staver.

Liberty Counsel is considering an appeal of the decision.

Liberty Counsel is an international nonprofit, litigation, education, and policy organization dedicated to advancing religious freedom, the sanctity of life, and the family since 1989, by providing pro bono assistance and representation on these and related topics.