On June 24, 2021, Bridget and Lisa Ward (the “Plaintiffs”) filed a class action lawsuit against Crow Vote LLC (“Crow Vote”), its owner Darrin Austin, and celebrity chef Edward Matney (collectively, the “Defendants”). The complaint alleges that the “Favorite Chef” contest promoted by Defendants was actually an illegal sweepstakes that misled consumers through use of false and deceptive advertising.
What is alleged in the complaint?
The Allegations
The Defendants hosted a contest with the goal of declaring who is the “World’s Favorite Chef.” To participate in the contest, anyone could create a profile on the Favorite Chef website and ask for people to vote for them. Whoever obtained the most votes at the end of each round of voting would proceed to the next round until a winner was declared.
It was advertised that the winning chef would receive the title, “World’s Favorite Chef,” $50,000, and be featured in a two-page advertisement in Bon Appetit magazine. The public could cast one free vote per day for their preferred chefs, but only through their respective Facebook accounts. People could buy extra votes to push their favorite chefs towards victory.
During the voting and payment process, it is alleged that the contest “terms and conditions,” “rules,” and “privacy policy” were not readily available. Plaintiffs also allege that there was no actual contest taking place, due to the fact that contestants were not being judged on their cooking skills, but only moving up in the standings based on their popularity. As alleged in the complaint, “theoretically, it was possible for someone with no cooking skill at all to win simply by having others spend the most money to obtain the most votes.” The Plaintiffs also allege that the Defendants: 1) failed to disclose the total number of contestants participating in the contest; 2) misrepresented the terms and conditions of participation; and 3) failed to clearly and conspicuously disclose the exact nature and approximate retail value of the contest prizes.
Illegal Sweepstakes
There are a few notable promotional issues that are highlighted by the Favorite Chef contest.
First, was this promotion a contest, a sweepstakes, or a lottery? A lottery consists of three (3) elements: prize, chance, and consideration. Lotteries are only legal if run by state governmental agencies. However, if skill replaces chance, a lottery becomes a legal contest. If consideration is removed, a lottery becomes a legal sweepstakes. In some circumstances, sweepstakes sponsors may accept some form of consideration, provided that they also offer a free, alternative method of entry (often referred to as an “AMOE”). In the case at hand, although there is the illusion that the skill of the chef determines the winner of the contest, the winner is actually determined by the chance of people voting for him or her.
Alternatively, if viewed as a sweepstakes, it is arguable whether consideration has been removed. The consideration at issue was paid by third parties and not the actual contestants. Plaintiffs argue that consideration was not removed because the contestants would not have had a chance of winning without soliciting paid votes. If it is determined by the court that consideration was not removed, and that the ability to vote for free only through a Facebook account was not an acceptable AMOE, the Favorite Chef contest could be considered an illegal sweepstakes (a lottery sponsored by a private entity).
Second, a set of official contest rules is required to serve as a binding contract between sweepstakes/contest operators and their entrants. These contest rules should be clearly and conspicuously presented to entrants and the voting public. Based on the allegations set forth in the complaint, it may be proven that the Defendants did not adequately abide by this requirement.
Finally, depending on the nature of the promotion, certain disclosures/disclaimers need to be prominently featured including, but not limited to, the value of the contest prizes and the odds of winning.
Avoiding Complications with Your Sweepstakes Promotions
Sweepstakes promotions and related marketing are highly regulated at both the state and federal level. In addition, the court of public opinion can come down hard on businesses that sponsor sweepstakes that allegedly deceive or harm consumers. To avoid complications similar to the instant class action lawsuit, businesses should seek counsel before running any contest or sweepstakes promotion.
If you are interested in learning more about this topic or require assistance with contest and sweepstakes promotions, please email us at info@kleinmoynihan.com, or call us at (212) 246-0900.
The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.
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Photo by Sebastian Coman Photography on Unsplash
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