“most experienced” is puffery, but misrepresenting degree of responsibility for projects could be false

Cypress Advisors, Inc. v. Davis, 2019 WL 7290948, No.
17-cv-01219-MSK-KLM (D. Colo. Aug. 28, 2019)
Cypress provides financial advice to clients in the
franchise restaurant industry. Defendant Kent Davis used to work there, but he
left and started a competing business, C2. 
I’ll focus on the false advertising claims.
First, the allegedly false statements were on C2’s website,
but the parties didn’t produce a copy of the website itself, which limited the
court’s analysis.
C2’s claim that it was “the most experienced and
multi-skilled industry advisory firm” was allegedly false because C2 had only
been operating a short time and has had few clients in that time, while Cypress
has been operating since 1991 and has had “hundreds of engagements.” However,
“most experienced” is puffery—it might be defined by different customers in
different ways, including by counting the experience of principals.  Except at the margins—the extreme case where
the only employee had been in the business for only a few months and the
competitor has been around for decades—this was a matter of opinion. This was
not a marginal case, because Davis, and other C2 employees, had many years of
experience in the field, making distinctions “more nebulous” and opinion-based.
C2 also claimed that when Davis joined Cypress, it was a “fledgling” investment
bank; this was allegedly false because Cypress had been operating for 10 years
already. For the same reasons, “fledgling” lacked sufficient factuality to be
C2 also allegedly misrepresented Davis’s level of
involvement with Wendy’s and TGI Friday’s refranchising projects, claiming that
he “secure[d] and manage[d] a 340-unit refranchising initiative … followed by
a 540-unit follow-up refranchising project” with Wendy’s and “originated and
managed the TGI Friday’s refranchising project.” He did work on these projects
while at Cypress, but the parties disputed the nature and extent of Mr. Davis’
work. Whether he was responsible for “originat[ing],” “manag[ing]” or “secur[ing]”
them could be sufficiently factual in nature as to proven true or false. [In
the Seventh Circuit, a reverse passing off claim might also work.]
C2 also allegedly misrepresented “Representative
Transactions” in the form of 44 “deal tombstones” (icons denoting individual
deals) that suggested that C2 had been involved with the listed deals. C2, as
an entity, was not involved in any of those deals, but Davis was, albeit as an
employee of Cypress at the time. So, would a reasonable consumer believe that
C2 was involved, or that its principals did? Neither side offered consumer
perception evidence, so the court determined that a factfinder should resolve
the issue at trial (implicitly holding that the representation could be
literally false). Relatedly, a specific testimonial/tombstone for one
particular transaction, as to which the endorser allegedly denied having made
the endorsement, could also go to trial.
Other alleged misrepresentations weren’t enough: C2
represented that one person was a “partner” and that two others were members of
the “team.”  Cypress argued that the
first was only an independent contractor and that, of the “team” members, one
was a provider of occasional services to C2 and who agreed to be listed as a
member of the “team” to make it “look like the company had a little more depth
to it”; and the other was an independent contractor. “The Court finds that
terms like ‘team’ and ‘partner’ as used in this respect have no particular
meaning, other than to convey some degree of business association and agreement
to work together,” and that much was true.
Injury: C2 argued that there was no evidence of injury.
Cypress’s damages expert opined that “the cost of a robust corrective
advertising campaign … as a result of the Defendants’ alleged false
advertising and false statements would range from $75,000 to $150,000 according
to an analysis performed by [the expert’s] public relations consulting
practice.” That created a triable issue of fact.  [Not every court would agree without evidence
of injury resulting in a need to correctively advertise.]
Cypress also argued that two statements were libelous: the
“fledgling” statement and claiming credit for Wendy’s/TGIF. The latter didn’t
defame Cypress; at most it might defame Cypress’s principal, who isn’t a party.
For purposes of defamation law, “fledgling” was not defamatory; it commonly
means “young, new, or inexperienced” or “a person or organization that is
immature, inexperienced, or underdeveloped,” but that’s “a necessarily
subjective statement of opinion.” 
Anyway, even if it had factuality, it was about 2000 Cypress, and the
coutt couldn’t see how that would harm 2019 Cypress.

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