Backgrounder on Colligan v. Activities Club of New York, Ltd.

    AUGUST 2, 1971 

BACKGROUNDER 

COLLIGAN v. ACTIVITIES CLUB OF NEW YORK, LTD. 

NEW YORK, N.Y. --- In a case which could have major impact 

on national advertising practices, the NAACP Legal Defense and 

Educational Fund, Inc. (LDF) on July 29 asked the U.S. Supreme 

Court to determine whether a 1946 law, known as the Lanham Act, 

gives consumers the right to bring federal actions against firms 

engaged in interstate commerce which advertise falsely, misrepresent 

their product or service, or in other ways deceive their customers. 

The Lanham Act -- which to date has only been successfully 

invoked by commercial enterprises usually trying to halt unfair 

advertising practices of competitors -- could close a major loop- 

hole in the area of consumer protection if the Supreme Court hears 

the case and finds that the Act extends its protection to consumers 

as well. Unlike present federal consumer laws, the Lanham Act 

requires no minimum monetary loss in order to invoke the statute. 

Petitioners in the case are two parochial school children, 

acting on behalf of themselves and 151 of their classmates at the 

Sacred Heart Academy of Hempstead, New York. Defendants named in 

the case include the Activities Club of New York, LTD., which also 

operates under the name of the New York Winter Ski Club. 

The LDF petition alleges that the 153 Sacred Heart students 

contracted with the Activities Club for a ski tour to Great 

Barrington, Mass. to be conducted during the weekend of January 24, 

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NAACP Legal Defense and Education Fund, Inc. | 10 Columbus Circle | New York, N.Y. 10019 | (212) 586- 

William T. Coleman, Jr. - President Jack Greenberg - Director-Cout 

ee
] 



BACKGROUNDER 
PAGE TWO 

1970, for which each student paid -75 in advance. The tour, 

it claims, was purchased by the children in reliance on the club's 

representations that each child would be provided with adequate 

ski equipment and qualified instruction, that safe and reliable 

transportation certified by the Interstate Commerce Commission 

(ICC) would be provided, and that all meal costs would be included 

in the prepaid tour price. It further claims that the club represented 

itself as a membership club rather than an ordinary commercial tour 

Operator, and suggested, by means of flyers closely resembling those 

of a major interstate firm (National Ski Tours) that the club was 

affiliated with that reputable organization. 

The children claim that all these representations were false 

-- that only 88 pairs of boots and skis were provided for the 153 

children; that only one qualified ski instructor, who spent a 

substantial portion of his time fitting the children with such 

equipment as was available, was assigned to the tour; that the 

three buses used to transport the children were dangerously defective 

(one poured exhaust fumes into its interior, another had faulty 

breaks and only one headlight, and the third broke down, stranding 

40 children and two nuns on a country road in the middle of the 

night); and that neither the buses nor the club was licensed or 

certified by the IcC. The children further allege that because of 

the bus breakdown, its passengers were forced to pay for an 

additional meal, which the club refused to reimburse. 

LDF's past experience, in representing poor and low income 

consumers in New York State, has taught that the odds against 

bringing class action suits under state law are enormous, that they 

are always difficult and often impossible to pursue when a large 

number of people seek to redress their grievances. Another factor 

in bringing the case in federal court is that local court rulings 



BACKGROUNDER PAGE THREE 

are often inadequate where companies are involved in interstate 

business. And finally, many firms, highly transient or mobile by 

nature of their business might receive an unfavorable ruling in 

one state and simply cross state lines where business could continue 

as usual. It is estimated that a large number of businesses, 

falsely representing and selling anything from insurance plans to 

books, could be made to shape up if consumers were able to press 

suits under the Lanham Act. At present, it would take separate 

suits in each state to bring such businesses to account for their 

misconduct. 

The Second Circuit Court of Appeals as well as a district 

court, ruled the intent of the Lanham Act was to protect only 

commercial firms from unfair competition, although the act, in 

part, states that “any person who believes that he is or is likely 

to be damaged by use of any such false description or representation" 

has the right to seek relief. 

=30= 

For further information contact: Sandy O'Gorman 

or 

Jack Greenberg 

(212) 586-8397 

NOTE: Please bear in mind that the NAACP Legal Defense and 

Educational Fund, Inc. is a completely separate and 

distinct organization, even though we were established 

by the NAACP and retain those initials in our name. 

Our correct designation is NAACP Legal Defense and 

Educational Fund, Inc., frequently shortened to LDF.