New in False Ad Suits
The range of products targeted in recent false advertising class actions ran the gamut from baseball bats to a messaging app to soup.
In his Illinois federal court complaint, Theodore Sheeley alleged that Wilson Sporting Goods tricked parents into purchasing baseball bats by claiming they met national requirements for use in youth leagues and tournaments. But an audit revealed that several models—including some of the company’s more expensive bats, with price tags of $350 or higher—did not actually meet the standards set by the United States Specialty Sports Association.
The bat prominently displayed a silver sticker certifying that it was USSSA compliant. Had he known the standards had not been met, Sheeley would not have purchased one of the bats for his son. He requested monetary damages for a class of those who purchased the misleadingly advertised baseball bats.
Popular messaging app Confide also faces litigation that accused the company of deceiving consumers by offering a confidential means of sending digital communications without fear of their communications being monitored or recorded.
Although the app claims to block screenshots where possible and take other steps to protect messages when they can’t be completely blocked, “the App fails to protect communications its users send through it, and it fails to offer the unequivocal confidentiality advertised by Confide,” according to Jeremy Auman’s New York federal court complaint.
Absent the promised ephemerality and screenshot protection, any Confide user accessing the platform through the app can take screenshots of any and all received messages, the plaintiff alleged, making Confide’s representations “patently false.” To recover the $6.99 monthly subscription he paid for the app—along with an estimated “millions” of other putative class members—Auman requested monetary damages (including punitive damages where available) as well as injunctive relief to stop the allegedly wrongful acts.
And in Florida federal court, a consumer continued the focus on challenging “all natural” claims by hitting Tabatchnick Fine Foods with a lawsuit accusing the company of mislabeling 19 different soups. Although the company described the products as “handcrafted soups made from the highest quality, natural ingredients,” and labeled them as “ALL NATURAL,” the products in fact contain genetically modified organisms (GMOs), Jerome Ramsaran told the court.
Federal regulations define an all-natural product as one containing no artificial or synthetic ingredients, nor any ingredient that has been more than “minimally processed,” which by definition, Ramsaran argued, does not include the GMO versions of soy, corn and canola used by Tabatchnick.
The use of GMOs poses “a potential threat to consumers because medical research and scientific studies have yet to determine the long-term health effects of genetically engineered foods,” the plaintiff alleged. “Numerous studies suggest that GMOs may in fact be harmful to a consumer’s health.”
Seeking injunctive relief and damages, Ramsaran’s complaint hopes to certify a nationwide class estimated to run in the “many thousands.”
To read the complaint in Sheeley v. Wilson Sporting Goods, Co., click here.
To read the complaint in Auman v. Confide, Inc., click here.
To read the complaint in Ramsaran v. Tabatchnick Fine Foods, click here.
Why it matters: The three putative class actions represent the breadth of products targeted by false advertising litigation and demonstrate some of the current litigation trends.
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Commercial Sounds Give Rise to Claim of Superior Efficacy, NAD Says
The National Advertising Division recommended that the maker of Sonicare electric toothbrushes discontinue certain claims suggesting that the sound made by its brushes correlates to superior performance.
Competitor Procter & Gamble, makers of Oral-B toothbrushes, challenged claims made in two commercials for Philips Oral Healthcare’s Sonicare brushes, including, “This is the sound of sonic technology cleaning deep between teeth. [Powers on toothbrush…] Hear the difference?” Both the 15- and 30-second versions of the ad featured a voice-over praising the Sonicare brushes with the buzzing noise of the products in the background.
Consumers will connect the “sound of sonic technology” to the product’s efficacy, P&G argued, and in the context of the commercial, the question “Hear the difference?” will be understood to mean the sound of Oral-B technology tells the consumer something about its relative cleaning performance.
Philips disagreed, taking the position that the ad would be viewed as one of auditory comparison, not efficacy, and merely informs consumers about the “pleasing sound” of its sonic technology, which is more pleasant than the noise of Oral-B toothbrushes.
After first finding that the advertiser made unsupported line claims—in light of the commercial’s “repeated general brand references, and depiction of multiple Sonicare handles”—the NAD found that the sounds used in the ads also conveyed a message of superior efficacy.
Putting aside questions regarding the truthfulness or accuracy of whether the Philips product emits a more pleasant sound than the challenger’s product, NAD observed that Philips itself “linked the sound of its sonic technology with a specific comparative performance benefit.”
The voice-over states, “This is the sound of Sonicare technology cleaning deep between teeth,” as the device is turned on, accompanied by “lively music” and the words “Dynamic cleaning action” on the screen. In contrast, the music stops abruptly upon the appearance of the Oral-B product as the voice-over asks, “Hear the difference?” and the toothbrush is powered on, spinning in the air.
“While perhaps in a monadic context, the voiceover’s statement ‘This is the sound of Sonicare technology cleaning deep between teeth’ could arguably be considered puffery, in the context offered here—the advertiser, having tied the sound of the parties’ respective technologies to a specific comparative performance benefit—it cannot,” the NAD said. “Rather, NAD concluded that at least one reasonable message conveyed by this portion of the commercial is one of superior efficacy … i.e., that the sound of sonic technology correlates to superior performance benefit of Sonicare over Oral-B at ‘cleaning deep between teeth’—a message that is unsupported by the record.”
In its advertiser’s statement, Philips said the NAD’s findings and recommendations “are contrary to the evidence in the record and prior NAD decisions,” adding that it intends to appeal the decision to the National Advertising Review Board.
To read the NAD’s press release about the decision, click here.
Why it matters: “An advertiser may choose the object of its comparison as long as information material to the comparison is clearly communicated within the context of the advertising in which the comparative claim appears,” the self-regulatory body wrote. “On this point, the advertiser here is free to tout the respective sounds of the parties’ products and—presuming such claims can be supported—claim that its product offers a more pleasing sound than that of a competitive product. What an advertiser may not do—absent any evidence—is claim that the respective sounds of the parties’ products correlate to a comparative efficacy or performance benefit.”
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Acting Chair Ohlhausen Signals Shift in FTC Enforcement
At a recent event, Federal Trade Commission Acting Chair Maureen K. Ohlhausen shared her plans for the agency, which likely left advertisers breathing a sigh of relief.
With the majority of the FTC currently vacant—Ohlhausen is joined only by Commissioner Terrell McSweeny and accompanied by three empty seats—she decided to take the time to re-evaluate the FTC’s priorities and how it calculates its own success. “Having a lot of cases is one measure,” she told attendees of the International Association of Privacy Professionals’ Global Privacy Summit. “But in a way, that’s like a doctor saying, ‘I performed a lot of operations so I’m successful, but I didn’t do a lot of preventative care.’”
To that end, Ohlhausen said the agency will focus on consumer education. “We’re better off if consumers know how to protect themselves,” she said. “If businesses who want to obey the rules know the rules and meet them, consumers are better off, business is better off, and we can use our limited resources on really bad actors.”
That focus—on actual consumer harm—has been Ohlhausen’s mantra since she was designated acting chair of the FTC in January. For example, when questioned whether an actual data breach must occur to trigger an agency action challenging a company’s cybersecurity, Ohlhausen reiterated her stance. “We need to be sure it causes or is likely to cause harm,” she explained. “That’s a statutory requirement. We should be directing our resources where there’s likely injury.”
Ohlhausen has also directed her attention to “process reform,” particularly in the area of civil investigative demands, a tool to collect information from a business when the agency suspects it may have engaged in deceptive or unreasonable acts. As the FTC’s core mission is to protect consumers without unduly affecting business, process reform ensures the proper balance, she explained. “We want to protect consumers and we want to maintain competition, but we also have to be sensitive to burdens on legitimate business,” Ohlhausen said, expressing concern about the impact of CIDs.
“Are our requests for information more burdensome than they need to be? Can we streamline some of these things?” she asked, noting that many cases close before an enforcement action is necessary. Other items on the process reform agenda include identifying unnecessary regulations no longer in the public interest, reviewing dockets to close older investigations, and taking a closer look at closed data security investigations to extract lessons for improved guidance and transparency in that ecosystem.
The acting chair also weighed in on the rescission of the Federal Communications Commission’s privacy rules, which she argued will prove beneficial for competition because different rules will not apply to different wireless competitors. “It doesn’t make sense, carving out ISPs as specific providers, because there are more competitors in this ecosystem that have fewer competitors, and the FCC’s rules don’t apply to them,” Ohlhausen said. “To say we’re going to put these [protective] layers on this one portion … is giving consumers a false sense of protection.”
She expressed support for the FTC regaining authority over common carriers, which she believes would create a level playing field. “We do have the expertise; we have been very aggressive in enforcement and staying ahead in these issues,” Ohlhausen said. “I think the FTC has shown its capabilities here, and I’d like to see us continue in this space.”
Why it matters: Acting Chair Ohlhausen’s most recent remarks emphasize her position since taking on the leadership role at the agency in January: a focus on actual, concrete harm as the basis for an enforcement action, as well as consideration of the burdens placed on businesses by the FTC.
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Vacuum Makers Battle It Out in Lanham Act Case
Considering cross motions for summary judgment, an Illinois federal court found Dyson lacked sufficient evidence to move forward with its entire false advertising suit against competitor SharkNinja.
Dyson alleged that fellow vacuum maker SharkNinja used “false and aggressive advertising” as well as “inadequate and unreliable data” to make claims of superiority over Dyson’s products in print advertisements, short commercials and infomercials. SharkNinja countered that Dyson failed to present sufficient evidence that SharkNinja’s claims were false. Both sides provided independent testing under ASTM F608, which they recognized as the gold standard for testing the ability of vacuums to remove embedded dirt from carpet.
After both parties moved for summary judgment on various elements of their cases, U.S. District Court Judge Joan B. Gottschall attempted to navigate the waters of the dispute.
First, the court denied Dyson’s motion for summary judgment on the merits of its claims that SharkNinja’s advertising was false, rejecting the arguments that ads referencing “independent” tests were false because they were performed by an entity that was not independent of SharkNinja and that claims based on a statement that “tests show x” could be satisfied by showing those tests do prove the proposition.
The testing company used by SharkNinja was not beholden to or controlled by the advertiser simply because SharkNinja paid for its services, the court said. Nor was the court persuaded by Dyson’s reliance upon an email from a testing company employee to SharkNinja, calling the company’s attention to a Dyson ad.
“It is routine customer-relationship management and routine marketing for a service provider to inform a potential customer about a happening which might prompt that potential customer to hire the service provider,” Judge Gottschall wrote.
The court again sided with SharkNinja over Dyson’s challenge to a claim that SharkNinja ads were backed by independent testing, by arguing that another test of the product produced a different result. “The court cannot agree that a claim that ‘tests prove x’ could be literally false when the tests do, in fact, prove x,” the court wrote. “Here, it is undisputed as of December 2014, Shark had valid independent tests that showed its statements … were true. That Dyson conducted other tests that reached a different conclusion does not make Shark’s statements about its tests false.”
Concluding that Dyson had not put forth sufficient evidence from which a reasonable jury could find in its favor, the court granted SharkNinja’s motion for summary judgment as to a specific time period. The order wasn’t a total loss for Dyson, however, as the court also granted summary judgment for the plaintiff on SharkNinja’s affirmative defenses.
To read the memorandum opinion and order in Dyson, Inc. v. SharkNinja Operating LLC, click here.
Why it matters: After a deep dive into the world of vacuum testing, the court issued a mixed decision for the parties, which are currently embroiled in a related suit in Massachusetts federal court. In that case, SharkNinja claims Dyson falsely advertised that its vacuums have “Twice the suction” of other products on the market. The fierce competitors have also battled it out before the National Advertising Division, where the self-regulatory body recommended that SharkNinja discontinue a claim that “Americans now choose Shark 2-to-1 over Dyson.”
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