Amid criticism of racial insensitivity, retailer Just For Feet sued its agency, Saatchi & Saatchi Business Communications, Rochester, N.Y., for more than $10 million in damages for advertising malpractice.
While the status of the case was uncertain at press time, following Just For Feet's move to liquidate last week, the suit has raised a troubling question for the advertising community: Can advertising agencies be held liable for the ads they produce?
`A FRIGHTENING SPECTER'
"It's a frightening specter," said Grant Richards, co-founder and creative director of San Francisco shop Grant, Scott & Hurley. Mr. Richards points out the daunting effect a malpractice threat would have on an agency's creative limits.
Court Crandall, co-partner at Ground Zero, Marina del Rey, Calif., said such considerations would dim the creative spark. For example, he said, beer ads often use beautiful women to sell their product. But Goodby, Silverstein & Partners used lizards, "one of the ugliest creatures on earth," Mr. Crandall said.
The agency gave them a voice and turned them into one of the most effective ways of selling product, he said, adding that the threat of malpractice could change that.
"People would have no choice but to follow what's always been done to avoid a lawsuit," Mr. Crandall said. "Advertising is still an imperfect science."
The case raises concerns in the industry's creative community at a time when agencies have been flooded with requests from dot-com companies for cutting-edge campaigns to build quick awareness in a crowded market.
"With the clutter that is out there, there is certainly an increased exposure for someone [in the agency business] getting a claim," said Jeffrey Michel, associate general counsel, True North Communications, Chicago.
A MUTUAL MISTAKE
Several executives said the Just For Feet lawsuit is really limited to a mistake made by the client and the agency.
"The agency was a fool for proposing such a thing, and the client was a fool for paying for it," Mr. Richards said. "We live in politically correct times. You have to be careful what you do."
In its lawsuit, Just For Feet said the finished spot, called "Kenya," was entirely different from the concept Saatchi first presented.
The original spot, the company said, would have showed a Just For Feet team coming up to a runner whose shoelace had become untied. The Just For Feet team would tie the runner's shoelace and give him water and a towel, the company said.
The spot was one of two that Saatchi and Just For Feet had been considering using until immediately before Super Bowl XXXIII.
A second spot showed a gymnasium in a school with the fictional name "Ruttenberg High," apparently a reference to Just For Feet CEO Harold Ruttenberg. There, a geeky boy played dodge ball, a school yard game where a player stands alone and tries to dodge a ball thrown at him by other players; the Just for Feet team came in and rescued him by giving him better shoes.
Just for Feet preferred this spot, the company claimed in its suit, but one network rejected it, saying it was "mean-spirited and promotes antisocial behavior."
COST, TIME CONSIDERATIONS
As the clock ticked down toward the big game, Saatchi presented the final "Kenya" spot to the client. Just For Feet said it "expressed strong misgivings and dissatisfaction" over the spot, according to the lawsuit, but Saatchi "then reassured Just For Feet that the commercial would be well received based on Saatchi's expertise and experience with national advertising and marketing, and that having committed to advertise in the Super Bowl it was too late to develop and produce another commercial or to reshoot the dodge ball commercial."
The company, out $900,000 in production costs and $2 million for the Super Bowl time slot, said in court documents it had no choice but to run the "Kenya" spot.
But creative wasn't the retailer's only problem.
Just For Feet also planned a sweepstake promotion, the "Just For Feet Third Quarter Super Bowl Win a Hummer Contest." In the weeks leading up to the game, Just For Feet spent $800,000 on promotional teaser spots during the National Football League and American Football League conference championship games.
Those spots urged viewers to watch the third quarter and find out how many times the Just For Feet name was mentioned. Viewers wishing to participate in the contest were to telephone or go to the Just For Feet Web site with their answer to enter the sweepstakes.
The spot, however, ran in the fourth quarter, making the contest's correct answer zero. The company's Web site would not accept zero as the answer, so "customers were left with the mistaken impression that Just For Feet was attempting to trick or deceive them," the lawsuit said. Saatchi's sibling, Zenith Media, bought the ad time.
INEFFECTIVE BRAND BUILDING?
Following the Super Bowl, critics lashed out at the "Kenya" spot. Some said it was not only ineffective in building the company's brand, it may even have been viewed as promoting drug use. Advertising Age's Bob Garfield said the spot was "probably racist."
It all came as the retailer was trying to move away from its "Where the 13th pair is free" tagline from agency Rogers Advertising, Birmingham, Ala., and break out as a national advertiser appealing to its core customer base of minorities and women with small children.
The shoe store chain, the second- largest in the nation, also was under duress because of a fashion shift from sweatsuits and white athletic shoes to khakis and brown shoes. It also had been expanding at a rapid rate, buying the Athletic Attic and Sneaker Stadium chains to the concern of some analysts, who questioned the fast pace of growth.
Just as the dust from the Kenyan runner's shoes settled, Saatchi sued Just For Feet in U.S. District Court in Rochester in late February for failing to pay its $3 million media bill. On March 1, Just For Feet filed its own case in Jefferson County Circuit Court in Birmingham, against Saatchi and Fox Broadcasting Co.
The retailer charged Saatchi with breach of guaranty and warranty, misrepresentation, breach of contract and "professional negligence and malpractice."
"As a direct consequence of Saatchi's appalling, unacceptable and shockingly unprofessional performance, Just For Feet's favorable reputation has come under attack, its business has suffered and it has been subjected to the entirely unfounded and unintended public perception that it is a racist or racially insensitive company," the company said in its lawsuit.
At press time, executives for Just For Feet had not returned phone calls for comment. A spokesman for Saatchi said neither the agency nor its attorneys would comment on the pending litigation. In its legal papers, however, the agency claims advertising is a business that has no explicit guidelines and standards, and therefore, it cannot have committed malpractice.
Still, the litigation and publicity have become an embarrassment to other Saatchi offices, said one executive familiar with the situation. The executive blames Advertising Age's Mr. Garfield for Monday morning quarterbacking the spot in print and in TV interviews and stirring up the controversy.
Before the spot aired, "No one ever mentioned racial overtones," the executive said, noting the client selected the agency and its work in a pitch that included DDB Needham Worldwide, FCB Worldwide and TBWA/Chiat/Day.
"Kenya" "was presented to the networks and it was not rejected. This issue never surfaced," he said.
The executive also said the hunters depicted in the spot were a multiracial group, though it was difficult to determine through the camouflage gear.
The executive also denied that Just For Feet and Saatchi planned to go the "controversy as cheap advertising" route, that is, creating a controversy around the "Kenya" spot to generate talk and subsequent publicity. Such tactics can multiply the reach of a spot far beyond the price paid for its original audience.
Many advertising executives and their legal advisers would agree with the non-culpability of the agency.
"This is not a doctor who removes the wrong foot. It is not a big mistake in auditing," said True North's Mr. Michel. Advertising, he said, "is a shared expertise and a shared responsibility."
Many clients wouldn't even consider the responsibility shared, but believe it is firmly in their laps.
"I think the client is ultimately responsible," said John Lauck, senior VP-marketing of shoe retailer Footaction, a shoe store chain. "I don't agree with laying the blame on the agency. It speaks poorly of your ability and skills to manage."
Although agencies do carry some legal protection for things that can go wrong (see story at right), most agency executives believe that, ultimately, the client approves the ad and therefore takes responsibility for it. Standing industry philosophy also strongly backs an unfettered creative department.
"How far do we have to go? Build something in [the contract] which says, `Warning, this advertising might not work' ?" asked one attorney who works for agencies and asked not to be identified.
New York attorney David Lehv, whose firm handles the McManus Group, Omnicom Group and WPP Group, said it is "inappropriate for an advertiser to disclaim responsibility for its message," adding a client "cannot be compelled to do advertising that is illegal, immoral or in bad taste." However, Mr. Lehv said, the agency has a responsibility to tell its clients that "their advertising message may be perceived as in bad taste."
Just For Feet attorney Robert Brodegaard said that's just not the case. "Just about everybody else who holds themselves out as an expert, is," Mr. Brodegaard said. "The agency does have a responsibility . . . And somebody should have said stop."
For an agency to claim it doesn't have any responsibility is the equivalent of saying "we have no expertise," he said.
The issue Mr. Brodegaard raises, along with the "Kenya" spot, may take its place in advertising history. For the retailer, the controversy appears to be a small pebble in the Just For Feet shoe.
In September, Helen Rockey replaced Mr. Ruttenberg as president-CEO; she left four months later.
By November, the company filed for bankruptcy and began liquidating inventory and closing some stores.
The Alabama Securities Commission also has begun a probe of possible financial irregularities.
Last week, Just For Feet filed a motion in U.S. Bankruptcy Court in Wilmington, Del., to liquidate its assets.