Lysol can’t quickly clean up this mess of anti-Clorox ads

Clorox Co. v. Reckitt Benckiser Gp. PLC, 2019 WL 3068322, No.
19-cv-01452-EMC (N.D. Cal. Jul. 12, 2019)
Clorox sued Reckitt for false advertising of its Lysol cleaning products under the Lanham Act and California’s UCL/FAL. The court found
tiny parts of the complaint insufficiently pled but kept most of the claims
intact.
First, the court determined that Rule 9(b) applied to the
false advertising claim, as to the California claims, because intentional
misrepresentation was alleged.
Next, Reckitt argued that all Clorox’s misleadingness claims
failed because the complaint didn’t allege specific facts proving significant
consumer deception.  But proof is for
summary judgment/trial, not the pleadings. “[A]t the pleading stage the
plaintiff need only allege specific misleading statements and explain why they
are misleading in accordance with Rule 9(b).”
On to specifics: Ads: (1)“Bleach Indicator Test” depicting a
side-by-side test of Clorox Clean Up and Lysol Daily Cleanser.. One cutting
board is first cleaned with Clorox Clean Up and another cleaned with Lysol
Daily Cleanser, then an apple slice is placed on each cutting board; the former
turns brown and the latter doesn’t. Four individuals labeled as “real people”
negatively react to the browned apple, e.g., “I wouldn’t even want to touch
this.” Voice-over: “unlike Clorox Clean Up, Lysol Daily Cleanser has only three
simple ingredients and leaves surfaces free from harsh chemical residue.” A
similar ad used a “bleach indicator test” instead.

This was sufficiently alleged to be false for three reasons:
(1) It plausibly necessarily implied that Clorox Clean Up was unsuitable or
unsafe for use in kitchens, even though the EPA has in fact deemed the product
safe for kitchen use. “[A]n advertisement can be literally false where it
necessarily implies to customers that a product is unsafe to consume.” Given
the images of food turned brown and people recoiling in disgust, it was reasonable
to infer falsity by necessary implication. 
(2) It plausibly falsely indicated that the result of the
test depicted—that Lysol Daily Cleanser apparently leaves no residue that would
affect an apple slice—was inaccurate. According to Clorox, Lysol Daily Cleanser
contains hypochlorous acid, “a form of bleach,” so a “properly chosen and
calibrated ‘bleach indicator test’ would detect the residue left by Reckitt’s
product,” but Reckitt’s chosen test was deliberately designed not to do so. A “tests
prove” claim is false where the tests “are not sufficiently reliable to permit
one to conclude with reasonable certainty that they established the claim
made.” Clorox plausibly alleged that Reckitt’s test is not sufficiently
reliable to permit one to conclude with reasonable certainty that Lysol Daily
Cleanser leaves no bleach residue.  (Note
the elision of the key question here: what exactly does the ad claim that “tests
prove”?  The ad doesn’t explicitly say
there’s bleach on one slice and not on the other.)
(3) It was literally false because it necessarily implied
that Lysol Daily Cleanser and Clorox Clean Up are comparable products but that
the Clorox product leaves a harsh residue. But they have different formulations
and purposes. “Although usable in kitchens, Clorox Clean Up is a heavier duty
product than Lysol Daily Cleanser” with stronger ingredients not for everyday
use, so attempts to “position Lysol Daily Cleanser as a ‘simpler’ or ‘less
harsh’ substitute for CCU misrepresents the facts and deceives customers.”  [Gotta admit, less harsh sounds true but also
necessarily misleadingly comparative, given the background expectation that a
thing will be compared with a thing in its class, e.g., what are the harshest daily
cleaners? Clorox alleged that it did market an actually competing product,
which makes the misinterpretation even more likely.] LDC couldn’t be substituted
for CCU because the former was much more diluted and lacked a surfactant/detergent
for intensive cleaning. [This seems eminently correct as to indications but possibly
not descriptively true—I might want to know how many consumers are unaware of
the difference.] Apples-to-oranges comparisons can be literally false by
necessary implication “where non-comparable products are portrayed as otherwise
equivalent (except for the superior or inferior aspect being illustrated in the
advertisement).” Thus, “plaintiffs can establish literal falsity under the
Lanham Act by alleging that two products portrayed as comparable in an
advertisement are not actually comparable – that the advertisement omits
differences which would have been material to recipients.”  Clorox sufficiently alleged lack of comparability,
especially given the availability of a closer Clorox comparator.
Reckitt argued that Clorox Clean Up was in fact comparable
to Lysol Daily Cleanser because the EPA has approved the Clorox Clean Up as
“Gentle & Powerful Enough for Daily Use,” but there was no authority
holding that the EPA’s categorization of products makes those products
comparable for Lanham Act purposes. Anyway, this was a factual dispute.
(2) “Spray Away” ads showing an image of Clorox Clean Up and
its list of ingredients being sprayed and wiped away with Lysol Daily Cleanser.
The ad then flashes banners stating: “Lysol Daily Cleanser[;] Only 3
ingredients,” “Kills 99.9% of germs (when used as directed),” and “No harsh
chemical residue.” A Facebook ad juxtaposes the safety warnings of Clorox Clean
Up and Lysol Daily Cleanser and concludes with the same statement.  Also sufficiently alleged falsity.
First, this was another plausibly apples-to-oranges
comparison of LDC with CCU. Second, the Facebook ad juxtaposing the safety
warnings was plausibly likely to mislead consumers because it suggests that the
Lysol product is “simpler” and has “fewer safety risks” and “impugns the safety
of CCU by suggesting that consumers should shy away from products that require
cautionary disclosures.” Clorox also alleged that the active ingredient in the
Lysol product, hypochlorous acid, was no gentler than the bleach in Clorox
Clean Up.
 (3) “Fake It,” “Game
Over,” and “Spray Away” ads: the first said that Lysol could “help protect”
children from colds then showed a split screen with the Clorox and Lysol
symbols on either side, and “germs” on both sides of the screen; the germs on
the Lysol side of the screen disappear while those on the Clorox side remain.
An announcer states, “Lysol Disinfectant Spray kills the number one cause of
the cold and Clorox Wipes don’t.” Reckitt eventually added in “minuscule type”
that the comparison was between Clorox Disinfecting Wipes and Lysol
Disinfecting Spray. Two other ads had the same factual claims, presented differently
(in one, a container of Clorox Disinfecting Wipes is sprayed off the screen by
Lysol Spray).
Plausibly alleged to be literally false by necessary
implication. Clorox again alleged an apples-to-oranges comparison of Clorox’s
“pre-moistened, anti-microbial wipes that consumers use to clean and disinfect
surfaces throughout the home” to a Lysol product in a different category with different
usage instructions. Wipes are allegedly formulated to target different germs
than disinfecting sprays. “The key difference is between wipes and sprays, not
Clorox and Lysol.” Again, Clorox alleged that more comparable products were
available—both parties’ sprays (neither of which are approved for rhinovirus)
or their wipes (both of which are).
(4) “Strength Test” ads: Employed to pick up kettlebell
weights, the Clorox wipe rips immediately while the Lysol wipes holds the
weight for several seconds. A disclaimer states, “Dramatization. Based on lab
results. Supervised demonstration. Do not attempt.” A Facebook ad said, “Lysol
wipes are stronger than competition” and depicted a Lysol wipe intact next to a
torn “competitive” wipe that “appears below a version of the famous Clorox
chevron, in which the Clorox brand name has been replaced with the words ‘vs
leading competitor.’ ”

Clorox’s claim that the ad falsely insinuates that Lysol
wipes are “of higher quality, are more durable, and are more resistant to
tearing during use than Clorox wipes” failed because Clorox didn’t allege that Lysol
wipes are not of higher quality, more durable, and more resistant to
tearing than Clorox. [Technically, it should be enough to allege that they are
of equal quality—one might even hedge and allege that Clorox wipes are
of at least equal quality to Lysol’s.] It wasn’t enough to allege that
the Clorox wipes are unlikely to rip under typical use conditions.
However, the court was more receptive to the allegation that
the “strength test” conducted in the advertisement was unreliable and therefore
literally false. Clorox alleged that the test “is not capable of replication,
because neither product is actually long enough to serve as a ‘handle’ when
holding a kettlebell weight,” and thus it wasn’t “sufficiently reliable to permit
one to conclude with reasonable certainty that [it] established the claim made.”
This was more than the insufficient allegation “there was simply no way a valid
test would show” results supporting an advertising claim.
(5) “No Scrubbing” ads: for example, a woman squirts Lysol
Power Toilet Bowl Cleaner into a toilet and flushes; the toilet bowl instantly
becomes clean without the use of a brush. The ad then depicts the unfavorable
results of a side-by-side efficacy test comparing Lysol Power Toilet Bowl
Cleaner and Clorox Regular Liquid Bleach. A small disclaimer states, “Cleaning
Power vs. Clorox Regular Liquid Bleach on limescale and rust stains. Results
after contact with product for 10 minutes, followed by rinsing.” A small banner
states, “10X more cleaning power than Clorox.” 
In another similar ad, a tiny disclaimer states that the results involve
Lysol Power Toilet Bowl Cleaner and Clorox Toilet Bowl Cleaner Clinging Bleach
Gel, but that’s is a distinct product from the “Clorox Toilet Bowl Cleaner with
Bleach” product referenced in the voice-over. 
The “10X More Cleaning Power than Bleach” claim also appears in stores.

Clorox pled falsity: (1) Again, apples-to-oranges: Clorox
alleged that the formulation and purpose of the two products differ.  [I just love what you learn about the world
in false advertising cases.]  Acid-based
cleaners, such as Lysol Power Toilet Bowl Cleaner, are more effective against
mineral-based deposits (like rust and limescale), whereas Clorox’s bleach-based
Clorox Toilet Bowl Cleaner is more effective at removing organic stains (like
mildew and mold). Again, the parties allegedly marketed more directly competing
products. Again, Reckitt’s argument that the EPA approved both for use on
mineral-based deposits wasn’t sufficient.
Reckitt argued that it added a “disclaimer expressly
stat[ing] that the purported advantage relates only to rust and limescale and
not to organic matter.” Clorox alleged that the disclaimers were “nearly
illegible” and “minuscule” and thus plausibly useless.
Second, Clorox plausibly alleged misleadingness: “[t]hrough
its depiction of a woman using a single squirt of the product to render her
toilet immaculate,…[the ad indicates that] the Lysol product works instantly
to removal all deposits from toilets.” First, “the product requires at least 10
minutes to remove some toilet bowl stains,” and second, it’s not [as] good at
organic deposits, so it “cannot render toilets immaculate in seconds, as
depicted in Reckitt’s advertising.”

Third, Clorox plausibly alleged that the claim “10X more
cleaning power than Clorox” was literally false because Lysol products
generally do not have a performance advantage over Clorox. Compared apples to
apples, the Lysol product allegedly didn’t have an advantage in removing
limescale and rust because they contain the same active ingredient, glycolic
acid. So too with the claim “10X More Cleaning Power than Bleach,” because a
reasonable consumer would likely believe that the comparison is in fact with
its leading competitor, Clorox.

(6) Noncomparative ads: claims included: kills “99.9% of
germs”; “kills over 100 illnesses causing germs” and a disclaimer that “Lysol
Disinfecting Spray kills germs on hard surfaces when used as directed.”  One ad was ambiguous as to whether the ad was
claiming that both touted products could
kill over 100 illness-causing germs, or whether they can do
so together.  But it was plausible that
it misleadingly implied that either product alone would be enough. Another ad
claimed that Lysol Daily Cleanser kills “99.9% of germs” and the visual showed
an actor spraying and immediately wiping the surface, whereas the EPA-approved
use instructions on the label requires ten minutes of contact with a treated
surface to achieve its disinfectant effect. That was plausibly misleading,
though it wasn’t a comparison to Clorox.
Materiality: the court quoted precedent that materiality “is
‘typically’ proven through consumer surveys,” even though that is empirically
false (this is a problem for the courts of appeal; the court here notes but
does not give a reason for the shift in judicial treatment of materiality over
time, from presuming materiality for literal falsity—often a matter of common
sense—to a seemingly rigid insistence on separate evidence no matter what).
Restoring some flexibility, a plaintiff can also establish materiality by
showing that “the defendants misrepresented an inherent quality or
characteristic of the product.” Clorox plausibly alleged that Reckitt’s
advertisements attack Clorox products’ efficacy, safety, and durability. These
were inherent qualities and characteristics of cleaning products, and would
likely influence the purchasing decision of a consumer.
Injury: Clorox alleged direct diversion of sales and damage
to its goodwill.  Reckitt argued that
wasn’t enough, but for a competitor who’d been directly attacked it definitely
was. In Vincent v. Utah Plastic Surgery Soc., 621 F. App’x 546 (10th Cir.
2015), the Tenth Circuit required the plaintiff to make some showing of “how
much Plaintiff’s profits have decreased since Defendants began their advertising
campaign,” to “quantif[y] or estimate the decreased in goodwill,” or to
“quantify the number of potential customers who allegedly have been lost
because of Defendant’s statements,” but the court wasn’t going to do that in
the Ninth Circuit.
UCL/FAL: Reckitt argued that Clorox needed to allege its own
reliance on Reckitt’s ads to state UCL/FAL claims.  That’s true for the FAL and UCL “unlawful,”
but not for UCL “unfair.”  Also, whether
the ads would deceive reasonable consumers was a fact question, as it usually
is.

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