Remember when KellyAnne Conway did that little commercial for Ivanka Trump’s clothing line from the White House briefing room? Or when Ivanka’s company sent out an email promoting the $10,000 bracelet Ivanka wore during a 60 Minutes interview ? Or when President Trump tweeted about how Nordstrom had treated his little girl was “so unfairly”? Turns out, there may be someone acting “unfairly” when it comes to Ivanka’s business, and it doesn’t sound like that someone is Nordstrom.
A lawsuit against Ivanka Trump’s business was just filed in California state court by family-owned boutique Modern Appealing Clothing (MAC). And it’s not just any lawsuit – it’s a class action lawsuit, brought on behalf of a whole group of women’s clothing and accessory companies. The lawsuit alleges that Ivanka’s business got a sweet deal when President Trump was elected, especially since Ivanka herself and her husband Jared Kushner are working closely with POTUS. According to the filing, Ivanka’s brand was “promoted by using the power and prestige of the White House.” Not inconspicuously, the Complaint also called out KellyAnne Conway and Sean Spicer for adding their own signature touches to the problem at hand.
The Complaint alleges that Ivanka Trumps Marks, LLC violated California statute §17200, which reads, in pertinent part:
“unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising”
MAC’s claim argues that the favoritism created for Trump’s brand by her relationship to the White House isn’t just unfair – it’s also unlawful. Under the Constitution, creating commercial preference is “specifically prohibited” – a rule we heard quite a bit about when KellyAnne Conway was reportedly “counseled” for her press-room informercial.
The lawsuit is especially timely in that just yesterday, as Ivanka began her move to the White House, while officials assured the public that Ivanka Trump will voluntarily follow federal ethics rules and standards. Sean Spicer, at a recent presser, said:
“Ivanka has taken on several measures to promote high standards of ethical conduct. Even though she’s not a federal employee, she’ll follow the restrictions that would apply if she were. She’s taken these steps with the advice of counsel and in consultation of the Office of Government Ethics.”
Ivanka, the sole owner of her apparel company, turned over daily management to company president Abigail Klem. Still, though, the First Daughter has some broad control over the company and its dealings. And while it’s always difficult to quantify which factors may have had which effects on a particular company, you can bet we’ll be hearing more about the 346% spike in sales Ivanka’s company had following the 2016 election.
Of course, at this stage, only a Complaint has been filed, and no findings of fact have been made. But things don’t look stellar for the Defendant here. As a matter of common sense, having an immediate family member become President of the United States would have to help almost any business in some way or another. Add in the incessant air-time Spicer and Conway have given to Ivanka’s clothing line and a major bump in sales (even despite being dropped by Nordstrom), and you’ve certainly got the makings of a competitive advantage. Experts agree. Norman Eisen, chief ethics lawyer for the Obama administration, told the Washington Post:
“I do believe that the Trump family businesses are engaged in unfair competition. The ways in which the whole Trump family uses the White House and the presidency as the world’s greatest infomercial does strike me as unfair.”
Still, the plaintiffs have a long road ahead of them. Proving the link between the Trumps’ conduct and the damages alleged can be tricky. Misty Marris, trial attorney with Gordon Rees, explained the difficulty in lawsuits like these:
“The biggest issue here will be proving causation. An increase in Ivanka’s profits does not necessarily translate to harm to these retailers, without proving that the entire class of retailers was harmed in a similar way as a direct result of any improper conduct. That’s a tough hurdle for the plaintiff to prove causation and harm on a class wide basis. It will be tough to show that Ivanka’s sales would have gone to these other companies but for Ivanka’s connection to the White House.”
Whether any advantage Ivanka may have enjoyed amounts to illegality will depend on the specific evidence introduced as the lawsuit progresses. We will keep you posted as more detailed on this lawsuit unfold.