courts continue to jack up materiality requirements; the Lanham Act and the death of common sense?

Delta T LLC v. MacroAir Technologies, Inc., No. EDCV
20-1489-GW-JPRx, 2022 WL 19827572 (C.D. Cal. Nov. 18, 2022)

MacroAir asserted – among other things – a counterclaim for
false advertising under the Lanham Act. Of potential note: Plaintiff aka BAF
(Big Ass Fans) argued that MacroAir needed consumer testimony, consumer
surveys, or expert testimony to establish materiality. The court
stated—contrary to actual practice—that “materiality in false advertising cases
is ‘typically’ proven through consumer surveys,” but immediately qualified this
claim: “that type of evidence is not required.” Still, “[w]hile surveys are not
required, a party advancing a false advertisement claim still must have some
basis for demonstrating a triable issue of fact on the subject,
when-challenged.” This is an example of courts cranking up the liability
standard over time, in the inverse of what they’ve done in trademark cases
where they’ve accepted ever broader theories of liability. Historically,
materiality was usually a matter of common sense; it still should be in
appropriate cases.

The court rejected MacroAir’s attempt to presume materiality
from (alleged) literal falsity. It surveyed the caselaw in the Ninth Circuit,
which was not consistent. Even though materiality is itself not provided for in
the statute—it developed from the injury requirement—the court reasoned that,
in the absence of any statutory guidance, “the elements of a false advertising
claim under the Lanham Act should be treated like the elements of any other
claim which a plaintiff must prove in order to prevail – MacroAir must come
forward with evidence to demonstrate a triable issue of fact on the question.”
Moreover, “it is not the type of advertisement or communication in question in
general that must be material, but the deception itself.”

The court rejected MacroAir’s evidence as insufficient
because of this. Its expert apparently opined on the materiality of
“manufacturers’ claims about warranty, performance, reliability, [ ] safety,
and perceived differences between manufacturers’ offerings in these areas,” but
“that evidence is too broadly-drawn for the false advertising element of
materiality.” Summary judgment dismissing the claim.

from Blogger

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