Rebecca Tushnet

an impossible claim is literally false and actionable if believing it is reasonable

April 20, 2026 4:31 pm

Panelli v. Target Corp., — F.4th —-, 2026 WL 1042441,
No. 24-6640 (9th Cir. Apr. 17, 2026)

Something that I don’t yet have a full handle on is
happening in 9^th Circuit consumer protection cases around literal
falsity v. ambiguity. It could be good, but I’m nervous about the potential for
weird Lanham Act interactions since “literal falsity” and “ambiguity” sound
like the Lanham Act concepts but currently have important differences. FWIW,
the emerging consumer protection approach has some things going for it—and if
Lanham Act cases started to recognize that consumer surveys shouldn’t rigidly
be required in cases of “ambiguity,” that would be a very good thing indeed.

Anyway, Panelli alleged that Target sells some of its “100%
cotton” bedsheets with claimed thread counts of 600 or greater, but that it is
impossible to achieve that high of level of thread counts with 100% cotton
textile. The court of appeals held that the district court erroneously
concluded that Panelli could not be deceived as a matter of law by an
impossible claim under the usual
California consumer protection laws.

Panelli alleged that independent testing showed the sheets
he purchased had a thread count of only 288—not 800, as claimed on the sheet’s
label. Indeed, he alleged, “it is physically impossible for cotton threads to
be fine enough to allow for 600 or more threads in a single square inch of 100%
cotton fabric.” The district court relied on Moore v. Trader Joe’s Co., 4 F.4th
874 (9th Cir. 2021), a badly reasoned case holding, in this opinion’s words,
that “a reasonable consumer would be dissuaded by contextual information from
reaching an implausible interpretation of the claims on the front label of the
challenged product.” If it was physically impossible to achieve 800 thread
count, the district court reasoned, then no reasonable consumer would interpret
the ad as promising an impossibility.

The court of appeals distinguished Moore because
there, “100% New Zealand Manuka Honey” was ambiguous: it didn’t necessarily
mean that the bees making the honey fed only on the manuka flower. (This is not
the poorly reasoned part, which is the stuff the court says a reasonable
consumer should know about honey grading and pricing.) As a result, “reasonable
consumers would necessarily require more information before they could
reasonably conclude Trader Joe’s label promised a honey that was 100% derived
from a single, floral source.” And “(1) the impossibility of making a honey
that is 100% derived from one floral source, (2) the low price of Trader Joe’s
Manuka Honey, and (3) the presence of the ‘10+’ on the label [which apparently
signifies a relatively low manuka content] … would quickly dissuade a
reasonable consumer from the belief that Trader Joe’s Manuka Honey was derived
from 100% Manuka flower nectar.”

Here, the district court “skipped a step by not analyzing
whether the label was ambiguous and therefore required the reasonable consumer
to account for outside information to interpret the label’s claim.” The
challenged claim here was not ambiguous. It “purports to communicate an
objective measurement of a physical aspect of the product.”

Target argued that there are multiple possible measures of
thread count—but it doesn’t produce consumer protection law ambiguity, which
asks only whether a substantial number of reasonable consumers could think
their questions about the feature had been answered without further
information, not whether all reasonable consumers would necessarily
think that. Note that the multiple possible measures of thread count would
produce Lanham Act ambiguity, if the non-false possibilities are reasonable.
Here, “it is unlikely that a reasonable consumer would know there are multiple
thread-counting methodologies.” Indeed, consumers are not “expected to look
beyond misleading representations on the front of the box” to discover the
truth of the representations being asserted, and are “likely to exhibit a low
degree of care when purchasing low-priced, everyday items,” “like bed sheets
sold by a mass-market retailer.”

A reasonable consumer is “unlikely to be familiar with the
intricacies of textile manufacturing.” [Moore said that reasonable
consumers know how honey is made; its error was to assume that knowledge “bees
collect pollen” would somehow translate to “and therefore they’d likely collect
lots of different kinds of pollen” when people generally don’t give that much
thought to that kind of background information.] “Realistically, a reasonable
consumer’s knowledge of textile manufacturing is likely limited to the fact
that a higher thread count listed on packaging indicates a higher quality
sheet.”

The court added: “Allegations of literal falsity are the
most actionable variety of consumer protection claims on California’s spectrum
of actionability.” True, some claims can be so clearly false as to avoid
deception. But Panelli’s claims weren’t unreasonable or fanciful:

While a vast majority of consumers
are, for instance, familiar with the biological nature of bees so that it would
be unreasonable for a consumer to think honey was sourced from a single type of
flower, they likely would not have that same kind of baseline knowledge about
textile manufacturing. Neither common knowledge nor common sense would cause a
Target shopper to question the veracity of the claim on the bed sheet’s label
that the product was of 800 thread count.

The court declined to create a situation where “manufacturers
would face no liability for false advertising so long as the claims were wholly
false—regardless of whether this falsity is generally knowable to consumers.”

from Blogger https://tushnet.blogspot.com/2026/04/an-impossible-claim-is-literally-false.html