When © trips courts up: Lack of access to standards makes false ad claim impossible to resolve

Wing Enterprises, Inc. v. Tricam Industries, Inc., 2019 WL
2994465, No. 17-cv-1769 (ECT/ECW) (D. Minn. Jul. 9, 2019)
This false advertising case about multi-position ladders turns
out to involve an important copyright issue that the Supreme Court has taken
up: when a standard is incorporated into law, should it be readily accessible
to the public? Because an older ANSI standard incorporated into OSHA isn’t
available to the court, the court can’t resolve whether failure to meet the current
ANSI standard also violates OSHA. This matters because the defendant advertised
ANSI/OSHA compliance, but plaintiff’s evidence went to whether there was
compliance with current ANSI.
The thrust of the federal and state false advertising claims
claims is that Tricam represented that its Gorilla Ladders comply with ANSI ASC
A14.2, a voluntary industry standard for portable metal ladders that was
developed by the American Ladder Institute, but in fact the rungs of its
ladders are not sufficiently deep all the way across to satisfy that standard
as Wing understands it.  The label
affixed to each ladder has an oval icon that says: “manufacturer certifies
conformance to OSHA ANSI A14.2 code for metal ladders” and there were similar
representations elsewhere.
The court admitted one expert on ANSI conformance and
excluded an expert report on materiality, the latter because of the access-to-code
problem.  Wing’s survey expert, Hal
Poret, conducted materiality surveys: a labeling survey, intended to measure
consumer reaction to the allegedly false statement on the label, and an
importance survey, intended to assess the importance to consumers of compliance
with industry safety standards in general. First, the court rejected the
argument that the labeling survey was unreliable because it failed to replicate
market conditions; it highlighted the label and demanded consumers spend a certain
amount of time looking at it, which might not happen on the retail floor.  “These might be fair points if the survey had
been intended to test what message the statements conveyed (as relevant to the
falsity element), or whether consumer confusion existed in a trademark case.”
But for a materiality study, how the consumers would see the image in the store
didn’t affect its relevance, although a jury could weigh divergence from the
retail context in its considerations.
The real problem is that Poret’s surveys tested ANSI and
OSHA conformance together by eliminating the entire challenged label (and his
importance survey referred only to conformance to unspecified “industry safety
standards,” not specifically to ANSI); Wing didn’t show that either a combined
OSHA/ANSI statement or industry safety standards writ large was relevant to the
issues a jury would need to decide in this litigation.
Wing argued that OSHA uses ANSI standards, so that a
violation of ANSI is necessarily a violation of OSHA.  And here’s where the access part comes
in.  OSHA regulations provide that
mandatory provisions (“shall” provisions) of standards incorporated by
reference are adopted as mandatory under OSHA and “have the same force and
effect” whether they are issued by federal agencies or by nongovernmental
organizations. Here, OSHA regulations incorporate by reference “ANSI A14.2-56
Safety Code for Portable Metal Ladders, Supplemented by ANSI A14.2a-77.”
Those last two digits are apparently pre-2000 year codes.  Wing didn’t identify how -56 and -77
differed/overlapped with the 2007 version of ANSI A14.2 the parties were apparently
working from in this case.  OSHA
regulations, in fact, incorporate by reference different versions of ANSI
A14.2. “For example, one regulation that pertains to the construction industry
incorporates the 1982 version; another, pertaining to shipyards, incorporates
the 1972 version; and others, relating to marine terminals and longshoring,
incorporate the 1990 version.”  Wing didn’t
confirm whether there was any relevant variation, and “[e]ven if the Court were
inclined to do that legwork on Wing’s behalf, the Court cannot independently
verify the extent to which the 1956 version explicitly mentioned in the
regulations overlaps, if at all, with the 2007 version before the Court by
referencing publicly available sources because the ANSI standards are not
reproduced in the Code of Federal Regulations and are instead behind a paywall
or available for in-person review in another state.” [Apparently the “state” is
DC, at the National Archives.]  Testimony
from Tricam witnesses was not sufficient to reach the legal conclusion that failure
to meet the current ANSI standard, in the manner identified, would also be
failure to meet the older standards that actually have the force of law.
Because Poret’s label survey was premised on the assumption
that ANSI falsity meant OSHA falsity, it couldn’t test ANSI falsity alone and
was not admissible. Likewise, his importance survey tested “[c]ompliance with
industry safety standards” in general, but given the multiple sources of
industry safety standards and the evidence in this case, that wasn’t relevant—“What
happens if, as contemplated above, a ladder that fails to conform to the 2007
version of ANSI nonetheless does meet the requirements of one or more OSHA
regulations that incorporate an older version of that standard?”
Without the survey, Wing couldn’t show materiality and
summary judgment was warranted. It argued that it could show materiality by
showing that “the false or misleading statement relates to an ‘inherent quality
or characteristic’ of the product,” and that “questions of safety and efficacy
are likely to satisfy automatically the materiality prong.” But the Eighth
Circuit has not endorsed the “inherent quality or characteristic” method of
showing materiality. And here, without further evidence on ANSI variation, “the
most Wing could show is a technical noncompliance with one of multiple
potentially applicable safety standards. That is not a compelling context in
which to adopt a new approach to showing materiality.”
Nor was the following adequate: (1) testimony from a
high-level Wing executive that, in his opinion, compliance statements on Home
Depot’s website are “important, otherwise, I don’t believe Home Depot would put
it on the website,” (2) testimony by Tricam’s president that an
ANSI-certification statement on Home Depot’s website “could be” helpful in
differentiating Tricam’s products from hypothetical competing ladders that do
not purport to conform to ANSI, and suggesting that an ANSI-certification
statement on the product label might be something a professional might want for
purposes of OSHA inspections of a job site, and (3) testimony from the chairman
of the ANSI labeling committee that “[i]t’s possible” that an ANSI-compliance
statement would help a consumer choose a ladder. But these statements were all
speculative on their face, and in each case the testimony was qualified by
reference to the speaker’s lack of direct knowledge about consumer behavior.

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