No, wood is good: possibility of detecting image manipulation keeps image from literal falsity

Louisiana-Pacific Corp. v. James Hardie Building Prods.,
Inc., No. 3:18-cv-00447-JPM, 2018 WL 3978364 (M.D. Tenn. Aug. 20, 2018)
LP challenged statements JH made regarding engineered wood
siding products in its “No Wood Is Good” marketing campaign. The parties
compete in the manufactured siding industry. LP claims to be the “undisputed
leading manufacturer and distributor of stand-based engineered wood siding
products in the United States.” JH produces cement-based siding products that
it markets as alternatives to engineered wood siding, including LP’s products.
JH made superiority claims on http://www.nowoodisgood.com and
http://www.nowoodsgood.com, in promotional materials, and in representations made by its
agents to prospective customers. It stated that engineered wood sidings are
inferior because “pests love” engineered wood sidings, and that engineered wood
sidings are “natural fuel for fire,” “susceptible to water absorption,” and
“won’t weather well.”  It used images and
video of a woodpecker within a hole in what appears to be siding material and
an image of buckling siding that JH indicates is LP’s strand-based engineered
wood siding.

As for the woodpecker picture, LP argued that the image was
literally false because it was doctored to add the woodpecker, and the image’s
colors were edited to make the hole seem more severe and misrepresent its
siding’s susceptibility to woodpecker damage. The record showed that the hole
was in fact made in LP siding, and there was circumstantial evidence that it
might have been a woodpecker; the record indicated that engineered wood
products (including LP’s) are susceptible to woodpecker damage.
JH argued that adding the woodpecker was puffery. The court
disagreed.  It was a specific
representation rather than a broad, general one, and the court didn’t see why “[n]o
reasonable consumer would believe that JH captured the woodpecker in the act of
nesting in the hole.” However, the image was not literally false because it was
“arguably identifiable as a fake.” The siding was too thin for the bird to nest
within it and that the photo does not show that the bird has pecked through the
moisture barrier that would be installed underneath the siding. “[A] reasonable
consumer (who would be familiar with the dimensions of the product) may be able
to spot the woodpecker as a fake.”
“Pests Love It”: LP argued that its products are treated
with a termite-resistant zinc borate-based process that resists damage from
pests and thus its siding doesn’t suffer structural damage from them, but JH responded
that LP’s products are not impervious to pest damage. The court found the claim
to be not literally false, but an exaggeration “to emphasize the point that
wood siding is vulnerable to pest damage. No reasonable consumer would believe
that pests ‘love’ wood siding, or that any siding material would be
specifically designed to lure or attract pest damage.”
Photo of warped siding: LP argued that the image was
literally false because the image does not depict engineered wood siding. JH responded
that the image depicted fiber-based engineered wood siding. Originally, the ad
referred to OSB siding, but was then changed to refer to “Engineered
Wood.”  The image of buckled siding concededly
depicted fiber-based wood siding, a distinct type. LP produces and sells both
types.  The image labeled “Engineered
Wood” wasn’t literally false, because it was factually accurate. If engineered
wood siding is not properly installed, its natural expansion due to water
absorption could result in buckling. Thus, the image was partially accurate,
and there was a disclaimer that identified improper installation as a possible cause.
But the disclaimer, in small font and at a distance from the image itself, wasn’t
completely effective. This partial truth/partial correction rendered the image
not literally false, except as to when the image was labeled “OSB Siding.”  The visual cues that an expert could use to
identify the product weren’t clear in JH’s marketing and a non-expert might not
recognize them on visual inspection. Thus, reasonable consumers would be
unambiguously deceived by the image of buckled fiber-based siding labled “OSB
Siding.”
There was no proof of consumer reception of the challenged
images/statements. JH’s expert concluded that “the woodpecker image, the ‘Pests
Love It’ statement, and online advertising for siding products generally are
not material to purchasing decisions of builders, installers, or contractors.”  The Sixth Circuit permits “a presumption of
money damages where there exist[s] proof of willful deception” where the
defendant has been specifically targeted, with a specific reference to the
competitor or a product identified as the competitor’s.  Only the ads labeled “OSB Siding”
specifically targeted LP, the only producer of OSB siding in the US, while other
companies make engineered wood products.  But was this falsity willful?  It was reckless, given JH’s knowledge that LP
made both kinds, the difficulty of distinguishing them visually, and the lack
of evidence that JH took any steps to confirm what kind of siding it was.
JH’s expert report didn’t rebut the presumption of money
damages, because the expert’s survey polled only a subsection of the market; it
excluded do-it-yourself home builders and do-it-yourself remodelers. Given that
JH actually created a separate website geared for consumers and another for the
trade audience, that wasn’t good enough. 
Thus, LP showed likely success on the merits as to the one statement,
but not the others.  The court also
presumed irreparable harm because reputational injuries were at risk, and
reputational harm can’t be quantified and redressed.
 

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