## Facts

- Time, Inc. mailed Michael Freeman personalized sweepstakes promotions for the “Million Dollar Dream Sweepstakes” to solicit magazine subscriptions.
- The mailers used large, prominent text implying Freeman had won or would soon be paid a $1,666,675 prize, while smaller text repeatedly conditioned any payment on returning an entry with the “grand prize winning number.”
- The mailer included an entry certificate with “YES” and “NO” options (subscription or no subscription), both allowing sweepstakes entry, and return envelopes stating “enter me in the sweepstakes and notify me if I am a millionaire.”
- The official rules stated the winner would be selected at random by a specified date; odds depended on entries distributed and received; and distribution was estimated not to exceed 900 million entries.
- Freeman did not win and alleged the mailers falsely conveyed he had already won or was virtually guaranteed to win.
- Freeman filed two actions asserting fraud, breach of contract, misleading advertising, unfair business practices, and other California consumer-protection claims; the district court dismissed both under Rule 12(b)(6), finding no likely deception when the materials were read as a whole.

## Issues

1. Whether the sweepstakes mailers were likely to deceive consumers under California consumer-protection statutes despite conditional language and official rules.
2. Whether California consumer-protection liability turns on likely deception of a “reasonable consumer” or may be based on deception of especially vulnerable or gullible consumers.
3. Whether Freeman stated plausible claims under Rule 12(b)(6) where the challenged materials, considered in full context, arguably disclosed the conditional nature of winning.

## Decision

- The Ninth Circuit affirmed dismissal of both actions under Rule 12(b)(6).
- The court held the governing California consumer-protection standard is whether members of the public acting reasonably are likely to be deceived.
- Applying that objective standard, the court concluded the mailers, read in their entirety (including conditions and rules), were not likely to mislead a reasonable consumer into thinking Freeman had already won or was guaranteed to win.

## Legal Principles

- California consumer-protection claims premised on deception require an objective showing that reasonable members of the public are likely to be deceived.
- Courts evaluate the “net impression” of an advertisement by reading the challenged statements in context, including qualifying language and incorporated rules.
- At the pleading stage, a court may dismiss deception-based claims as a matter of law when the full text of the promotional materials dispels a reasonable likelihood of consumer deception.

## Conclusion

The Ninth Circuit held that sweepstakes promotions using attention-grabbing “winner” phrasing are not actionable under California consumer-protection statutes when the overall materials clearly condition winning on possessing the winning number and explain the random-selection process and odds, defeating any plausible claim of likely deception to reasonable consumers.


Freeman v. Time, Inc., 68 F.3d 285 (9th Cir. 1995)