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When Court-Made Rules Fail: Leveraging the Private Market to Stop Misinformation in Advertising


The internet has given large corporations huge platforms to spread misinformation in their advertising. Due to the statute of limitations defense, government agencies are unable to effectively discourage this misinformation by themselves. Companies using the defense are more protected from government-led lawsuits the longer they get away with spreading false information, giving them little reason to stop making those misrepresentations. Traditionally, for situations when the statute of limitations defense has produced seemingly inequitable results, courts have developed exceptions to the usual rules of the defense. However, none of the exceptions permit the government to discourage consumer fraud without dismantling the statute of limitations defense. This article argues that because of the statute of limitations defense, government agencies alone are unable to stop misinformation in advertising. Therefore, they should focus their broad investigative powers on exposing the fraud and stopping it with injunctive relief. Once the fraud is exposed, plaintiffs in the private market can seek their own relief. Their lawsuits face much lessrestrictive statute of limitations rules than government-led lawsuits. Corporations will be discouraged from committing fraud because they know that, even if they are successful for a long time, they will remain vulnerable to private plaintiffs. This joint action by the government and the private market will discourage misinformation in advertising without doing undue damage to the statute of limitations defense.

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