With 2 weeks left until California ban, Kars4Kids loses again in court

Kars4Kids has less than two weeks until an effective ban on its advertisements in California kicks in — and a last-minute attempt to get the court order halted has failed. 

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For years, Kars4Kids has used a famous (or infamous) jingle to promote its charitable efforts, offering people a quick and easy way to donate an unused car to support the charity, which in turns helps children. But back on May 8, Orange County Superior Court Judge Gassia Apkarian that the charitable organization had violated false advertising and unfair competition state laws in a case originally brought forth by California resident Bruce Puterbaugh in 2021. The judge found that Kars4Kids’ jingle, which is played frequently on local radio and TV airwaves, failed to properly disclose that most of the money raised from the charity goes to a program for Orthodox Jewish teenagers in New York and New Jersey. 

Apkarian’s ruling said Kars4Kids had to give Puterbaugh the $250 he was owed and also included an injunction that Kars4Kids can no longer advertise in the state unless there’s an “express, audible disclosure” of the charity’s religious affiliation, the region where the money goes and a more accurate age range of the recipients. The judge gave Kars4Kids a 30-day grace period to remove or change its noncompliant advertisements, which is why people have continued to hear the jingle on the airwaves.

The ruling received international media coverage and has even led the Canadian Broadcasting Corporation, Canada’s national broadcaster, to proactively pull Kars4Kids ads off its airwaves. A spokesperson cited the “developments regarding this charity” in a story on its website explaining the decision. The coverage may be why Kars4Kids has so forcefully blustered at the ruling publicly. The charity posted a 770-word statement on its website about the ruling, calling the case “nothing more than a lawyer-driven attempt to siphon off charitable funds for their own gain.”

But while Kars4Kids said it is preparing a full legal appeal of the ruling, its lawyers filed for an “ex parte” order to try and get the injunction stayed — or halt it from taking effect. In its filing, Kars4Kids alleged the ban would do “irreparable harm” to its efforts while claiming the effective ban won’t actually help Puterbaugh directly. 

“The injunction is also extraordinarily onerous — and in some ways impossible — to comply with,” Kars4Kids argued. “Kars 4 Kids would have to immediately contact all media outlets currently playing Kars 4 Kids’ advertisements and cancel all current contracts; design an entirely new advertising campaign; hire a production company to shoot, direct, and produce new advertisements; and purchase new advertising time throughout California.”

Kars4Kids estimated that pulling its advertising off California airwaves would force it to absorb “more than $97,000 per week” in losses on its existing contracts. It said that the ruling would also be harmful moving forward, since nearly 25% of the charity’s revenue comes from California-based donations. 

The charity’s lawyers also argued that the initial ruling had some serious flaws. They alleged that it may be violating the First Amendment by requiring Kars4Kids to “disclose its religious affiliation” and also that it was “vague and unadministrable” because of its lack of specificity. The lawyers even questioned if Apkarian had correctly applied California’s false advertising and unfair competition laws in her ruling.

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The lawyers filed for the emergency hearing last Thursday, asking for a court date set for Tuesday — the first day after a holiday weekend. Puterbaugh’s lawyers filed their own response on Sunday, arguing that the injunction is not an outright ban on all Kars4Kids advertisements in California, but just the advertisements that are false and misleading by omission. And they even cited a key portion of Apkarian’s original ruling in arguing to rule against the requested emergency order. 

“The Court must weigh the harm to the Plaintiff and the California public against the burden on Kars4Kids to change its ads,” the May 8 decision read. “If the ads continue, thousands of California donors will continue to surrender property under the false impression that they are supporting local, secular, or underprivileged ‘kids.’ This constitutes a massive, ongoing transfer of assets based on a fraudulent omission. The Defendant’s burden is purely financial and administrative.”

That set up the hearing on Tuesday afternoon, which came back to Apkarian’s chambers. The judge decided not to hear oral arguments on the matter after reviewing both parties’ responses and denied Kars4Kids’ “ex parte” application for staying the injunction.

Kars4Kids can still request relief from a normal notice of motion, but it isn’t clear if there is time on the court calendar to stop the effective ban from taking place before June 8, the first day after the 30-day grace period ends.