Civil Penalties for Using False or Misleading Advertisements

NRS 207.174 – Overview of the Civil Penalties for Using False or Misleading Advertisements

It can be both a criminal act and civil infraction under Nevada law to violate NRS 207.171 for a person or organization to distribute or disseminate false or misleading advertisement with the intention of inducing a person to engage in a transaction whether it be causing a person to sell, purchase, lease, or otherwise dispose of or acquire an interest in any property.

Anyone convicted of the crime of false or misleading advertising is liable both civilly and criminally. Civil cases are different than criminal cases. If you lose a civil case you will likely have to pay money to the other person or group suing you. If you lose a criminal case you will be required to pay a fine or even face jail time. The burden of proof is different in civil and criminal cases as well. In criminal cases, you must be shown to have committed the crime in question “beyond a reasonable doubt” while in civil cases it only must be shown that you committed the crime in question based on a “preponderance of the evidence”. It is a much lower standard in civil cases. It is generally understood that in numerical terms, to convict someone “beyond a reasonable doubt” the jury must be 99% sure that the person did it. Meanwhile, to find someone guilty based on a “preponderance of the evidence” the jury must be 51% sure that the person did it. NRS 207.174 explains the civil penalties a person or organization sued for false advertising will face.

Civil Penalty for violation of NRS 207.174

Under NRS 207.174 any person, corporation, association, or other organization found civilly liable for committing false or misleading advertisements can be fined up $2,500 for each violation they commit. Unlike many civil actions, a civil action brought for false or misleading advertisements can be brought unilaterally by the Attorney General of Nevada. In many civil cases, the lawsuit is brought by one private party against another, however, because Nevada has a public interest in protecting consumers from deceptive business practices, civil actions for false or misleading advertisements can be brought by the Attorney General or some other state attorney on their own initiative.

What is a single violation?

It is important to explain what “each violation” means in terms of NRS 207.174, since a guilty party can be fined for each violation. The statute does count a continuous or repetitive violation as a single violation if it arises out of a single act. The single act is the act of distributing the false or misleading statement.

This means, for example, that if a person or organization runs a one false or misleading advertisement twice a week in five different newspapers, that would most likely only be one violation, not ten, because it is the same advertisement over the same period of time, and it arises out of the same advertisement. If, however, a person or company were to run two false or misleading advertisements two times a week in five different newspapers, that would count as two violations, as there were two different false statements distributed and therefore two different acts.