MEMO TO:
Alexsei Demo US
RESEARCH ID:
#40009684ca6076
JURISDICTION:
State
STATE/FORUM:
California, United States of America
ANSWERED ON:
December 20, 2022
CLASSIFICATION:
Commercial law

Issue:

Do clearly false statements on food packaging about the energy content and/or diet compatibility of the food constitute false advertising?

Research Description:

Judah “the Maccabee” Stern decided to temporarily use his commercial bakery to produce traditional Hannukah foods during the holiday season. It is common knowledge that traditional Hannukah foods are made with and/or fried in large quantities of oil. Judah, going for a lighthearted theme, printed jokes and comical images on his bakery’s Hannukah packaging. He properly labelled the nutritional information on the side of the package, but, in jest, on the front of his packaging, stated that his latkes (deep fried potato pancakes) were “low-fat,” and sufganiyot (jelly-filled donuts) were “keto-diet approved”.

Conclusion:

Per Cal. Bus. & Prof. Code § 17500, it is unlawful to make or disseminate any advertising device that is untrue or misleading.

Actions brought under Cal. Bus. & Prof. Code § 17500 are governed by the "reasonable consumer" test, which focuses on whether members of the public are likely to be deceived. (Surzyn v. Diamond Foods, Inc., Case No: C 14-0136 SBA (N.D. Cal. 2014))

To prevail on a false advertising claim, a plaintiff need only show that members of the public are likely to be deceived. A "reasonable consumer" standard applies when determining whether a given claim is misleading or deceptive. A "reasonable consumer" is the ordinary consumer acting reasonably under the circumstances and is not versed in the art of inspecting and judging a product or in the process of its preparation or manufacture. (Colgan v. Leatherman Tool Group, Inc., 135 Cal.App.4th 663, 38 Cal.Rptr.3d 36 (Cal. App. 2006))

A statement of opinion—mere "puffing"—is not actionable. (Hauter v. Zogarts, 120 Cal.Rptr. 681, 14 Cal.3d 104, 534 P.2d 377 (Cal. 1975))

A statement is considered puffery if the claim is extremely unlikely to induce consumer reliance. Ultimately, the difference between a statement of fact and mere puffery rests in the specificity or generality of the claim. A statement that is quantifiable or that makes a claim as to the specific or absolute characteristics of a product may be an actionable statement of fact, while a general, subjective claim about a product is non-actionable puffery. (Demetriades v. Yelp, Inc., 175 Cal.Rptr.3d 131, 228 Cal.App.4th 294 (Cal. App. 2014))

In the federal context, the Ninth Circuit has rejected the argument that the accurate disclosure of ingredients on product packaging necessarily insulates a food product manufacturer from liability for misleading statements elsewhere on the product packaging. A defendant cannot rely on disclosures on the back or side panels of the packaging to contend that any misrepresentation on the front of the packaging is excused. (Surzyn v. Diamond Foods, Inc., Case No: C 14-0136 SBA (N.D. Cal. 2014))

No California cases were identified where courts considered whether clearly false statements on consumer packaging, included for the purpose of humor or jest, constituted false advertising. However, federal court decisions may be instructive.

Literally false statements of puffery and exaggeration that are so extreme that a court can confidently say that no one could be fooled by them are not deceptive. If a representation is so grossly exaggerated that no reasonable buyer would take it at face value, there is no danger of consumer deception and no basis for a false advertising claim. This is particularly so when such statements are made with disclaimers highlighting their intended farcical nature. (Martin v. Living Essentials, LLC, 160 F. Supp. 3d 1042, 2016 U.S. Dist. LEXIS 11287, 117 U.S.P.Q.2D (BNA) 1629 (N.D. Ill. February 1, 2016))

In the federal case of Martin v. Living Essentials, LLC, 160 F. Supp. 3d 1042, 2016 U.S. Dist. LEXIS 11287, 117 U.S.P.Q.2D (BNA) 1629 (N.D. Ill. February 1, 2016), the plaintiff was the world-record holder for most consecutive kicks in the hacky sack singles category. The defendant ran a television commercial in which an actor plugging an energy drink claimed to have accomplished a series of seemingly impossible feats, all within the five-hour boost of energy the product purported to provide. These included mastering origami "while beating the record for Hacky Sack," disproving the theory of relativity, swimming the English Channel and back, and finding Bigfoot. The plaintiff took umbrage at the suggestion that consuming an energy drink could enable someone to break his hacky sack record and sued for false advertising and other claims. The United States District Court for the Northern District of Illinois held that the ad was clearly a comedic farce and dismissed the plaintiff's claims. In this case, the Court held the commercial, which made claims that were so patently impossible and exaggerated that they were comical, was a farce upon which no reasonable consumer would rely.

In the federal case of Tommy Hilfiger Licensing v. Nature Labs, LLC, 221 F.Supp.2d 410 (S.D. N.Y. 2002), the defendant manufactured, marketed, and sold a line of pet perfumes whose names parodied elegant brands sold for human consumption. The label on the defendant's product, Timmy Holedigger, read, "If you like Tommy Hilfiger, your pet will love Timmy Holedigger." The plaintiff alleged that the statement constituted false advertising. The defendant moved for summary judgment. The United States District Court of the Southern District of New York granted the defendant's summary judgment motion. The Court held that the parodic context in which the statement appeared sufficiently cured any consumer confusion.

Law:

Under Cal. Bus. & Prof. Code § 17500 (2022), it is unlawful to make or disseminate any advertising device that is untrue or misleading:

17500. Untrue or misleading advertising

It is unlawful for any person, firm, corporation or association, or any employee thereof with intent directly or indirectly to dispose of real or personal property or to perform services, professional or otherwise, or anything of any nature whatsoever or to induce the public to enter into any obligation relating thereto, to make or disseminate or cause to be made or disseminated before the public in this state, or to make or disseminate or cause to be made or disseminated from this state before the public in any state, in any newspaper or other publication, or any advertising device, or by public outcry or proclamation, or in any other manner or means whatever, including over the Internet, any statement, concerning that real or personal property or those services, professional or otherwise, or concerning any circumstance or matter of fact connected with the proposed performance or disposition thereof, which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading, or for any person, firm, or corporation to so make or disseminate or cause to be so made or disseminated any such statement as part of a plan or scheme with the intent not to sell that personal property or those services, professional or otherwise, so advertised at the price stated therein, or as so advertised. Any violation of the provisions of this section is a misdemeanor punishable by imprisonment in the county jail not exceeding six months, or by a fine not exceeding two thousand five hundred dollars ($2,500), or by both that imprisonment and fine.

In Colgan v. Leatherman Tool Group, Inc., 135 Cal.App.4th 663, 38 Cal.Rptr.3d 36 (Cal. App. 2006), the California Second District Court of Appeal held that to prevail on a false advertising claim, a plaintiff need only show that members of the public are likely to be deceived. A "reasonable consumer" standard applies when determining whether a given claim is misleading or deceptive. A "reasonable consumer" is the ordinary consumer acting reasonably under the circumstances, and is not versed in the art of inspecting and judging a product or in the process of its preparation or manufacture (at 682):

A private plaintiff bears the burden of producing evidence and the burden of proof on a false advertising claim under the False Advertising Law and the Unfair Competition Law. (National Council Against Health Fraud, Inc. v. King Bio Pharmaceuticals, Inc. (2003) 107 Cal.App.4th 1336, 1346, 133 Cal.Rptr.2d 207.) To prevail on a false advertising claim, a plaintiff need only show that members of the public are likely to be deceived. (Freeman v. Time, Inc. (9th Cir.1995) 68 F.3d 285, 289;) see Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1267, 10 Cal.Rptr.2d 538, 833 P.2d 545 ["`members of the public are likely to be deceived'" under section 17200]. A "reasonable consumer" standard applies when determining whether a given claim is misleading or deceptive. (Lavie v. Procter & Gamble Co. (2003) 105 Cal.App.4th 496, 512-513, 129 Cal.Rptr.2d 486 (Lavie).) A "reasonable consumer" is "the ordinary consumer acting reasonably under the circumstances" (ibid.), and "is not versed in the art of inspecting and judging a product, in the process of its preparation or manufacture. . . ." (1A Callmann on Unfair Competition, Trademarks and Monopolies (4th ed.2004), § 5:17, p. 5-103; see Lavie, supra, at pp. 504-512, 129 Cal.Rptr.2d 486.)

In Surzyn v. Diamond Foods, Inc., Case No: C 14-0136 SBA (N.D. Cal. 2014) ("Surzyn"), the United States District Court for the Northern District of California noted that actions brought under Cal. Bus. & Prof. Code § 17500 are governed by the "reasonable consumer" test, which focuses on whether members of the public are likely to be deceived (at 4):

A. ACTIONABLE MISREPRESENTATION

1. "All Natural"

The first four causes of action are premised on violations of the UCL, FAL and CLRA. The UCL makes actionable any "unlawful, unfair or fraudulent business act or practice." Cal. Bus. & Prof. Code § 17200. The CLRA likewise prohibits "unfair methods of competition and unfair or deceptive acts or practices." Cal. Civ. Code § 1770. The FAL makes it unlawful to make or disseminate any statement concerning property or services that is "untrue or misleading." Cal. Bus. & Prof. Code § 17500. Actions brought under these statutes are governed by the "reasonable consumer" test, which focuses on whether "members of the public are likely to be deceived." Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008). Although reasonableness can, in appropriate circumstances, be decided as a question of law, "whether a business practice is deceptive will usually be a question of fact not appropriate for decision on [a motion to dismiss]." Id. (citing Linear Tech. Corp. v. Applied Materials, Inc., 152 Cal. App. 4th 115, 134-35 (2007)).

Surzyn concerned a putative consumer fraud class action against the defendant for various causes of action, including false advertising based on the defendant's "All Natural" designation on the packaging of certain tortilla chips.

The Court noted that the Ninth Circuit has rejected the argument that the accurate disclosure of ingredients on product packaging necessarily insulates a food product manufacturer from liability for misleading statements elsewhere on the product packaging. A defendant cannot rely on disclosures on the back or side panels of the packaging to contend that any misrepresentation on the front of the packaging is excused (at 7-8):

The Ninth Circuit has rejected the argument that the accurate disclosure of ingredients on product packaging necessarily insulates a food product manufacturer from liability for misleading statements elsewhere on the product packaging:

We do not think that the FDA requires an ingredient list so that manufacturers can mislead consumers and then rely on the ingredient list to correct those misinterpretations and provide a shield for liability for the deception. Instead, reasonable consumers expect that the ingredient list contains more detailed

Page 8

information about the product that confirms other representations on the packaging.

Williams, 552 F.3d at 939-40; accord Lam v. Gen. Mills, Inc., 859 F. Supp. 2d 1097, 1105 (N.D. Cal. 2012) ("ingredients list cannot be used to correct the message that reasonable consumers may take from the rest of the packaging"). Following Williams, numerous decisions from this District have rejected the argument that Defendant makes here, i.e., that an "All Natural" representation on the front of the packaging is not deceptive, as a matter of law, merely because the ingredient panel lists the allegedly non-natural ingredient. See Rojas, 2014 WL 1248017, at *7-8 (rejecting defendant's contention that the ingredient list on the product packaging resolved any possible consumer confusion by identifying which ingredients in the products are not "100% Natural"); Wilson v. Frito-Lay N. Am., Inc., No. C 12-1586 SC, 2013 WL 1320468, at *12-*13 (N.D. Cal. Apr. 1, 2013) ("the Court finds that Plaintiffs have adequately pled that a reasonable consumer could interpret a bag of chips claiming to have been 'Made with ALL NATURAL Ingredients' to consist exclusively of natural ingredients, contrary to the reality described in the nutrition box."); Jou v. Kimberly-Clark Corp., No. C-13-3075 JSC, 2013 WL 6491158, at *8-9 (N.D. Cal. Dec. 10, 2013) ("Defendant cannot rely on disclosures on the back or side panels of the packaging to contend that any misrepresentation on the front of the packaging is excused.").

In Hauter v. Zogarts, 120 Cal.Rptr. 681, 14 Cal.3d 104, 534 P.2d 377 (Cal. 1975), the California Supreme Court explained that a mere statement of opinion—mere "puffing"—is not actionable (at 111-113):

Plaintiffs' claim of false representation relies on common law tort principles reflected in section 402B of the Restatement Second of Torts. 3 For plaintiffs to

Page 685

[534 P.2d 381] recover under this section, defendants' statement 'COMPLETELY SAFE BALL WILL NOT HIT PLAYER' must be a misrepresentation of material fact upon which plaintiffs justificably relied. (Rest.2d Torts, § 402B, coms. f, g, and j.) 4

If defendants' assertion of safety is merely a statement of opinion--mere 'puffing'--they cannot be held liable for its falsity. (Cf. Willson v. Municipal Bond Co. (1936) 7 Cal.2d 144, 150, 59 P.2d 974; Pacesetter Homes, Inc. v. Brodkin (1970) 5 Cal.App.3d 206, 211--212, 85 Cal.Rptr. 39.) 5 Defendant's statement is so broad, however, that it properly falls [14 Cal.3d 112] within the ambit of section 402B. The assertion that the Gizmo is completely safe, that the ball will not hit the player, does not indicate the seller's subjective opinion about the merits of his product but rather factually describes an important characteristic of the product. Courts have consistently held similar promises of safety to be representations of fact. (See, e.g., McCormack v. Hankscraft Co. (1967) 278 Minn. 322, 154 N.W.2d 488 (vaporizer called 'safe' and 'practically foolproof'); Spiegel v. Saks 34th St. (N.Y.S.Ct.1964) 43 Misc.2d 1065, 1070, 252 N.Y.S.2d 852 (representation that cosmetic was 'safe'); Pritchard v. Liggett & Myers Tobacco Co. (3d Cir. 1961) 295 F.2d 292, 301 (concurring opinion) (representation that cigarettes 'can cause no ills'); Hansen v. Firestone Tire & Rubber Co. (6th Cir. 1960) 276 F.2d 254, 259 (tires described as 'safe' within stated limits); Hamon v. Digliani (1961) 148 Conn. 710, 718, 174 A.2d 294 (representation implying that detergent was safe for all household tasks); Rogers v. Toni Home Permanent Co. (1958) 167 Ohio St. 244, 249, 147 N.E.2d 612 (permanent wave solution represented as safe and harmless).)

These decisions evidence the trend toward narrowing the scope of 'puffing' and expanding the liability that flows from broad statements of manufacturers as to the quality of their products. 6 Courts have come to construe unqualified statements such as the instant one liberally in favor of injured consumers. 7 Furthermore, the

Page 686

[534 P.2d 382] illustrations in the Restatement indicate that the assertion 'COMPLETELY SAFE BALL WILL NOT HIT [14 Cal.3d 113] PLAYER' constitutes a factual representation. Defendants' statement parallels that of an automobile dealer who asserts that the windshield of a car is 'shatterproof.' (Rest.2d Torts, § 402B, illus. 1, based on Baxter v. Ford Motor Co. (1932) 168 Wash. 456, 461--463, 12 P.2d 409), or that of a manufacturer who guarantees his product is 'safe' if used as directed (Rest.2d Torts, § 402B, illus. 3, based on Rogers v. Toni Home Permanent Co. (1958) 167 Ohio St. 244, 259, 147 N.E.2d 612, and Markovich v. McKesson & Robbins, Inc. (1958) 106 Ohio App. 265, 149 N.E.2d 181, 186.)

In Demetriades v. Yelp, Inc., 175 Cal.Rptr.3d 131, 228 Cal.App.4th 294 (Cal. App. 2014) ("Demetriades"), the California Second District Court of Appeal explained that a statement is considered puffery if the claim is extremely unlikely to induce consumer reliance. Ultimately, the difference between a statement of fact and mere puffery rests in the specificity or generality of the claim. Consumer reliance will be induced by specific rather than general assertions. Thus, a statement that is quantifiable or that makes a claim as to the specific or absolute characteristics of a product may be an actionable statement of fact, while a general, subjective claim about a product is non-actionable puffery (at 311):

Yelp's statements about the efficacy of its review filter consist of representations of fact about its services, and are not mere puffery or opinion. “A statement is considered puffery if the claim is extremely unlikely to induce consumer reliance. Ultimately, the difference between a statement of fact and mere puffery rests in the specificity or generality of the claim. [Citation.] ‘The common theme that seems to run through cases considering puffery in a variety of contexts is that consumer reliance will be induced by specific rather than general assertions.’ [Citation.] Thus, a statement that is quantifiable, that makes a claim as to the ‘specific or absolute characteristics of a product,’ may be an actionable statement of fact while a general, subjective claim about a product is non-actionable puffery. [Citation.]” (Newcal Industries, Inc. v. Ikon Office Solution (9th Cir.2008) 513 F.3d 1038, 1053.)

In Demetriades, the plaintiff, a restaurant operator, sought an injunction to prevent the defendant, the operator of a popular online website for customer reviews of businesses (Yelp), from making claims about the accuracy and efficacy of its “filter” of unreliable or biased customer reviews. The trial court granted Yelp's special motion to strike the plaintiff's complaint in part because Yelp's statements about the filter were not statements of fact, but were “puffery” and opinion. The plainitff appealed.

On appeal, the California Second District Court of Appeal held that Yelp's specific representations about the accuracy of its review filter went beyond mere expressions of opinion or puffery and hyperbole; Yelp spoke with the authority of a website that intended to attract users with the accuracy of its filter (at 311-312):

Thus, Yelp's statements that “Yelp uses a filter to give consumers the most trusted reviews”; “All reviews that live on people's profile pages go through a remarkable filtering process that takes the reviews that are the most trustworthy and from the most established sources and displays them on the business page. This keeps the less trustworthy reviews out so that when it comes time to make a decision you can make that using information and insights that are actually helpful”; “Rest assured that our engineers are working to make sure that whatever is up there is the most unbiased and accurate information you will be able to find about local businesses”; “Yelp is always working to do as good a job as possible on a very complicated task—only showing the most trustworthy and useful content out there”; and “Yelp has an automated filter that suppresses a small portion of reviews—it targets those suspicious ones you see on other sites” are more than puffery, they are statements of fact. Yelp's statements are factual because they are intended to induce consumer reliance on Yelp's reviews by making specific and detailed statements intended to induce reliance, such as: the filter “give[s]” consumers the “most trusted” reviews, and Yelp's engineers (a word inspiring confidence) are working to provide the “most unbiased and accurate” information available. Although in making these statements, Yelp may use words of emphasis (“remarkable filtering process,” “most trustworthy,” “most established sources”), Yelp's specific representations about the accuracy of its review filter go beyond mere expressions of opinion or puffery and hyperbole; rather Yelp speaks with the authority of a website that intends to attract users with the accuracy of its filter.

[228 Cal.App.4th 312]

Thus, it is illogical to conclude that Yelp's statements that all reviews on its website are filtered is intended to mean anything other than that. If Yelp intended the statements as puffery or opinion, in the context of Yelp's advertising-driven website such statements would have limited utility; thus Yelp would have had no legitimate purpose in making those statements about its review filter.

In the unpublished decision of Solk v. Kashi Co., 2016 Cal. Super. LEXIS 3730 (Cal. Super. Ct. January 25, 2016), the defendant food manufacturer (Kashi) contended that the plaintiffs failed to state a cause of action under California's false advertising and unfair competition laws because the words "wholesome," "good for you," and "nutritious" constituted mere non-actionable puffery not likely to deceive a reasonable consumer. The San Francisco County Superior Court noted that statements that are "likely to deceive" a "reasonable consumer" can serve as the basis for a false advertising claim. In contrast, statements that are not likely to deceive a reasonable consumer are deemed to be mere puffery not actionable under the false advertising laws. The Court held that whether the challenged statements, in this case, constituted false or misleading advertising or non-actionable puffery was a question of fact not to be determined on demurrer (at 8-11):

B. WHETHER THE STATEMENTS AT ISSUE CONSTITUTE FALSE OR MISLEADING ADVERTISING OR ARE NON-ACTIONABLE PUFFERY IS A QUESTION OF FACT NOT TO BE DETERMINED ON DEMURRER

Kashi contends that plaintiffs failed to state a cause of action under California's false advertising and unfair competition laws because the words "wholesome," "good for you," and "nutritious" constitute mere non-actionable puffery not likely to deceive a reasonable consumer. Demurrer at p. 10.

Statements that are "likely to deceive" a "reasonable consumer" can serve as the basis for a false advertising claim. Colgan v. Leatherman Tool Group, Inc. (2006) 135 Cal.App.4th 663, 682, 38 Cal. Rptr. 3d 36. In contrast, statements that are not likely to deceive a reasonable consumer are deemed to be mere puffery not actionable under the false advertising laws. Consumer Advocates v. Echostar Satellite Corp. (2003) 113 Cal.App.4th 1351, 1361 n.3, 8 Cal. Rptr. 3d 22. "California courts, however, have recognized that whether a business practice is deceptive will usually be a question of fact not appropriate for decision on demurrer." Williams v. Gerber Products Co. (9th Cir. 2008) 552 F.3d 934, 938 (citations omitted). The reasoning in Williams guides the Court's analysis in this case.

In Williams, plaintiffs challenged five packaging features of Gerber's Fruit Juice Snacks ("Snacks"), including a statement that the Snacks was "nutritious." Williams, supra, 552 F.3d at 936. The court noted that in addition to the "nutritious" [*9]  claim, the packaging also contained a claim that Snacks was made from "fruit juice and other all natural ingredients," and pictured a number of different fruits, which potentially suggested that those natural fruit juices are contained in the product. Id. at 939. In reversing the trial court's grant of a motion to dismiss, the court held that "there [we]re a number of features of the packaging...which could likely deceive a reasonable consumer" and thus "the facts of this case...do not amount to the rare situation in which granting a motion to dismiss is appropriate." Id. The court further stated in a footnote:

"[G]erber's claim that Snacks is 'nutritious,' were it standing on its own, could arguably constitute puffery since nutritiousness can be difficult to measure concretely...This statement certainly contributes, however, to the deceptive context of the packaging as a whole. Given the context of this statement, we decline to give Gerber the benefit of the doubt by dismissing the statement as puffery."

Id. at n. 3 (emphasis added). It is clear, therefore, that to properly determine whether any single claim in a food label is likely to deceive a reasonable consumer, courts must look at whether the statement, [*10]  viewed against the "context of the packaging as a whole," is likely to deceive a reasonable consumer. Id; See also Peviani v. Natural Balance, Inc. (S.D. Cal. 2011) 774 F.Supp.2d 1066, 1072Hill v. Roll Intern Corp. (2011) 195 Cal.App.4th 1295, 1304-05, 128 Cal. Rptr. 3d 109.

Here, the Complaint alleges that each of the Kashi products at issue bore labels using words such as "wholesome," "good for you," and "nutritious." Complaint ¶¶ 32, 34; see also Complaint, Ex. E. For example, Kashi's Chocolate Chip Chia Crunchy Granola & Seed Bars Product represented on its label: "At Kashi, our mission is to change healthy eating from effort to enjoyment. For 30 years, we've been dedicated to making high quality food with positive nutrition, natural ingredients and great taste. We leave in the good-for-you goodness, so you can snack with satisfaction and feel great about it" and "Kashi Crunchy Granola & Seed bars are delicious, wholesome snacks made with chia seeds and our unique whole gram blend with quinoa. Cultivated for thousands of years, chia seeds and quinoa are known for their delicious taste and nutritional benefits." Id. at ¶ 32 (emphasis added).

Each of the above statements, when viewed as a whole, could suggest to a reasonable consumer that Kashi's Chocolate Chip Chia Crunchy Granola & Seed Bars "would help him maintain healthy dietary practices [*11]  because of their nutrient content," or that the product "is healthy when in fact it is high in unhealthy substances or low in vital nutrients." Id. at ¶¶ 8, 36. As in Williams, the Court finds that whether the challenged statements in this case constitute false or misleading advertising or non-actionable puffery is a question of fact not to be determined on demurrer.

No California cases were identified where courts considered whether clearly false statements on consumer packaging, included for the purpose of humor or jest, constituted false advertising. However, the following federal court decisions may be instructive.

In Martin v. Living Essentials, LLC, 160 F. Supp. 3d 1042, 2016 U.S. Dist. LEXIS 11287, 117 U.S.P.Q.2D (BNA) 1629 (N.D. Ill. February 1, 2016), the plaintiff was the world-record holder for most consecutive kicks (no knees) in the footbag (i.e. hacky sack) singles category and had held that record since 1988 (with the exception of a brief period of 50 days in 1997). The defendant ran a television commercial in which an actor plugging an energy drink claims to have accomplished a series of seemingly impossible feats, all within the five-hour boost of energy the product purports to provide. These include mastering origami "while beating the record for Hacky Sack," disproving the theory of relativity, swimming the English Channel and back, and finding Bigfoot. The plaintiff took umbrage at the suggestion that consuming an energy drink could enable someone to break his hacky sack record and sued for false advertising and other claims. The United States District Court for the Northern District of Illinois held that the ad was clearly a comedic farce and dismissed the plaintiff's claims.

The Court noted that consumer confusion is required for false advertising claims under section 43 of the federal Lanham Act. Literally false statements of puffery and exaggeration that are so extreme that a court can confidently say that no one could be fooled by them are not deceptive. Grossly exaggerated advertising claims such as blustering and boasting, which no reasonable buyer would believe was true, is therefore not actionable under Lanham Act § 43(a). If a representation is so grossly exaggerated that no reasonable buyer would take it at face value, there is no danger of consumer deception and hence, no basis for a false advertising claim. This is particularly so when such statements are made with disclaimers highlighting their intended farcical nature (at 1048-1049):

Martin's false advertising claim under the Lanham Act fails for essentially the same reason: The Commercial is an obvious farce that would not lead anyone to believe that Martin, or anyone else, had actually accomplished all of the remarkable feats described. Even unsophisticated consumers would get the joke.6

 [***1634]  Section 43(a) of the Lanham Act provides, in pertinent part that:

Any person who, on or in connection with any goods or services . . . uses in commerce . . . any . . . false or misleading description of fact, or false or misleading representation of fact, which—

. . .

(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another [**15]  person's goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

15 U.S.C. § 1125(a)(1).

In assessing false advertising claims under § 43 of the Lanham Act, it is often said that where a statement is literally false, a plaintiff need not show that the statement actually deceived consumers; evidence of consumer confusion is required only where the actionable statement is literally true or ambiguous. There is, in other words, a presumption of consumer confusion where statements are literally false; where they are not, evidence of confusion must be adduced. B. Sanfield, Inc. v. Finlay Fine Jewelry Corp., 168 F.3d 967, 971-72 (7th Cir. 1999)Avila v. Rubin, 84 F.3d 222 (7th Cir. 1996); see also Merck Eprova AG v. Gnosis S.p.A, 760 F.3d 247, 255 (2d Cir. 2014).

As the Seventh Circuit has explained, however, the doctrine of "literal falsity" does not actually require literal falsity: "'literal' must be understood in the common colloquial sense in which Americans (not realizing, or perhaps not caring, that they are making Fowler turn in his grave) say things like 'I am literally out of my mind.'" Schering—Plough Healthcare  [*1049]  Prods., Inc. v. Schwarz Pharma, Inc., 586 F.3d 500, 512-13 (7th Cir. 2009). Whether a statement is "literally" false or not, its actual meaning, and the risk that it may confuse consumers, depends on context. Id. ("[T]he meaning of the alleged literal falsehood must be considered [**16]  in context and with reference to the audience to which the statement is addressed").

Living Essentials maintains that the Commercial is not literally false because it is ambiguous as to which hacky sack record it referred. "[O]nly an unambiguous message can be literally false," it argues; "if the language or graphic is susceptible to more than one reasonable interpretation, the advertisement cannot be literally false." Mem. in Supp. 9 (quoting Time Warner Cable, Inc., 497 F.3d at 158). In this case, however, the Commercial's ambiguity does not mean it is not literally false—the claim that a 5HE consumer broke any hacky sack record (while mastering origami, no less) is false. Here, there is no interpretation that renders the claim about breaking the hacky sack record truthful—the statement wasn't intended to be truthful because the Commercial is a farce. It is, in that sense, literally false.

That does not mean, however, that it is actionable without evidence of consumer confusion. "Many literally false statements are not deceptive." Schering-Plough, 586 F.3d at 512. Among them are statements of puffery and exaggeration so extreme that we can confidently say that no one could be fooled by them. Id. ("if no one is or could be fooled, no one is or could be hurt"). [**17]  A leading authority on trademarks has defined puffery as "grossly exaggerated advertising claims such as blustering and boasting which no reasonable buyer would believe was true" and is therefore "not actionable under Lanham Act § 43(a)." 4 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 27.38 (4th ed. 1997) (adding further that "silly and unbelievable  [***1635]  print and television advertising falls into this category"). Indeed, if a representation "is so grossly exaggerated that no reasonable buyer would take it at face value, there is no danger of consumer deception and hence, no basis for a false advertising claim." Time Warner Cable, 497 F.3d at 159 (rejecting false advertising claim based on grossly exaggerated depiction of cable television image quality). This is particularly so when such statements are made with disclaimers highlighting their intended farcical nature. Faegre & Benson, LLP v. Purdy, 367 F. Supp. 2d 1238, 1244 (D. Minn. 2005) (disclaimers on webpage "should alert the consumer that the web pages are parodies; thus, they are less likely to confuse consumers as to the sponsorship, affiliation, or source"); Marriott Corp. v. Ramada Inc., 826 F. Supp. 726, 728 (S.D.N.Y.1993) (dismissing false advertising claim because ad was an obvious parody and one that no "reasonable person would be misled—even absent the disclaimer—into believing"). And [**18]  here, there were two disclaimers removing any doubt that the Commercial was not to be taken literally.

In this case, the United States District Court for the Northern District of Illinois held that the commercial, which made claims that were so patently impossible and exaggerated that they were comical, and therefore memorable, was a farce upon which no reasonable consumer would rely (at 1049-1050):

As discussed above, the Commercial plainly falls into the category of farcical exaggerations that carry no risk of deceiving consumers. Martin is right when he says that Living Essentials "deliberately wants the audience to hear loud and clear that the record for Hacky Sack was accomplished because of 5-hour Energy," Am. Compl. 2 (capitalization altered), but that's the point of exaggeration. Telling consumers that they might cross one more item off their to-do list in the afternoon if they drink 5HE isn't necessarily a compelling or memorable sales pitch; consumers are much more likely to remember the claim that 5HE will enhance productivity if it is delivered in a more colorful and entertaining message. The entire gambit of the [*1050] commercial is to make claims that are so patently impossible and exaggerated that they are comical and therefore memorable. Claiming that by taking 5HE, one can disprove the theory of relativity, master origami while beating "the record" for hacky sack, swim the English Channel and back, and find Bigfoot all within the span of five hours, is obviously exaggerated [**19] hyperbole—better described as farce than mere puffery—upon which no reasonable consumer would rely.

Stokely-Van Camp, Inc. v. Coca-Cola Co., 646 F. Supp. 2d 510 (S.D.N.Y. 2009), provides an instructive example that also confirms the farcical nature of the Commercial. There, the court addressed a false advertising claim arising from an advertisement for Powerade that contained the slogan, "Upgrade your game." Id at 529. The court held that the advertisement was non-actionable puffery because it was "exaggerated and boastful, and no reasonable consumer, having read the slogan, would be justified in believing that it would actually result in improved athletic abilities, such as playing a better game of basketball." Id. at 530. So too here, where the boastful nature of the claim is the same but the message is delivered in a fashion that leaves no room for doubt that the literal claims being made are farcical.

In Tommy Hilfiger Licensing v. Nature Labs, LLC, 221 F.Supp.2d 410 (S.D. N.Y. 2002), the defendant manufactured, marketed, and sold a line of pet perfumes whose names parodied elegant brands sold for human consumption: Timmy Holedigger (Tommy Hilfiger), CK-9 (Calvin Klein's CK One), Pucci (Gucci), and others. The plaintiff, Tommy Hilfiger Licensing, Inc., sued under several causes of action, one of which was false advertising under New York statutory and common law. The defendant moved for summary judgment.

The label on the defendant's product read, "If you like Tommy Hilfiger, your pet will love Timmy Holedigger." The plaintiff alleged that the asserted similarity between the scent of Tommy Hilfiger and the fragrance products sold under the Hilfiger trademarks was a false and misleading claim. The United States District Court for the Southern District of New York held that the parodic context in which the statement appeared sufficiently cured any consumer confusion (at 423):

Plaintiff's final claim is for false advertising, based on the comparative statement on the Timmy Holedigger label that reads, "If you like Tommy Hilfiger, your pet will love Timmy Holedigger." Hilfiger alleges that the asserted similarity between the scent of Timmy Hilfiger and the fragrance products sold under the Hilfiger trademarks is a "false and misleading claim." (Pl. Supp. Mem. at 15).

Comparative advertising is often the basis for a false advertising claim, see McCarthy § 27:59, yet the analysis of any such claim must begin with the recognition that comparative advertising is not only permissible, but encouraged. Such advertisements serve the "beneficial purpose of imparting factual information about the relative merits of competing products." Deere, 41 F.3d at 44. It has repeatedly been held that one may copy the unpatented formula of another's product and may use that product's trademark in its advertising to identify the product it has copied. See Calvin Klein Cosmetics Corp. v. Parfums de Coeur, Ltd., 824 F.2d 665, 668 (8th Cir.1987); Smith v. Chanel, Inc., 402 F.2d 562, 563 (9th Cir.1968), and its progeny. Indeed, courts have upheld so-called "like/love" slogans such as the one at issue here. See id.; Diversified Mktg., Inc. v. Estee Lauder, Inc., 705 F.Supp. 128 (S.D.N.Y.1988). The only limitations the Lanham Act imposes on these slogans are that the advertiser cannot make false claims about the similarity of the products involved, and that the advertiser cannot use another product's mark in a way that is likely to confuse consumers about the source of the advertiser's product. See Saxony Prods., Inc. v. Guerlain, Inc., 513 F.2d 716, 722 (9th Cir.1975); Charles of the Ritz, 636 F.Supp. at 435. Liability on the latter theory has been discussed and rejected, see supra p. 13-14 & n. 5, because the parodic context in which the statement appears sufficiently cures any consumer confusion. The subject claim here rests on Hilfiger's assertion that the advertisement is untruthful.

The United States District Court of the Southern District of New York granted the defendant's summary judgment motion.

Authorities:
Cal. Bus. & Prof. Code § 17500 (2022)
Colgan v. Leatherman Tool Group, Inc., 135 Cal.App.4th 663, 38 Cal.Rptr.3d 36 (Cal. App. 2006)
Surzyn v. Diamond Foods, Inc., Case No: C 14-0136 SBA (N.D. Cal. 2014)
Hauter v. Zogarts, 120 Cal.Rptr. 681, 14 Cal.3d 104, 534 P.2d 377 (Cal. 1975)
Demetriades v. Yelp, Inc., 175 Cal.Rptr.3d 131, 228 Cal.App.4th 294 (Cal. App. 2014)
Solk v. Kashi Co., 2016 Cal. Super. LEXIS 3730 (Cal. Super. Ct. January 25, 2016)
Martin v. Living Essentials, LLC, 160 F. Supp. 3d 1042, 2016 U.S. Dist. LEXIS 11287, 117 U.S.P.Q.2D (BNA) 1629 (N.D. Ill. February 1, 2016)
Tommy Hilfiger Licensing v. Nature Labs, LLC, 221 F.Supp.2d 410 (S.D. N.Y. 2002)