FRIDAY, NOV 3 2023
8:45AM – 3:30PM More info
ADVANCED REGISTRATION REQUIRED
ATTEND AT THE UNIVERSITY OF NEW HAMPSHIRE FRANKLIN PIERCE SCHOOL OF LAW OR BY ZOOM. Full program.
from Blogger http://tushnet.blogspot.com/2023/10/panels-on-exploring-new-constitutional.html
Deetsch v. Lei, 2023 WL 6373073, No. 22-cv-1166-RSH-BLM (S.D.
Cal. Jul. 21, 2023)
Deetsch alleged that he owned design patents for CPAP pillow
products, which the Lei defendants infringed. They also allegedly used Deetch’s
image in ads and on packaging, and allegedly falsely claimed on Amazon that
their pillow products “were designed in the United States but are manufactured
in China.”
In December 2020, Deetsch notified Amazon of his patents through
the Brand Registry portal and asked Amazon to remove the Lei defendants’
products. He sent two letters by mail in March 2022, but was told he needed to
use the Brand Registry … which he had already done.
Amazon’s Brand Registry advertises “Automated Protections”
that are “[p]owered by Amazon’s Machine Learning.” Amazon claims its service
will “save valuable time,” allows users to report “patent[ ] and design right
violations,” uses “advanced machine learning that prevents bad listings,” and
can “[r]emove counterfeits instantly” “without the need to contact [Amazon].” Deetch
signed up for and paid for a Brand Registry service subscription, and submitted
multiple complaints through that system, allegedly to no avail.
Since the designs were not plainly dissimilar, infringement
was plausible.
False advertising, Lei defendants: The complaint didn’t
explain how “designed in the United States but … manufactured in China” was
materially deceptive and thus didn’t meet FRCP 9(b) pleading standards. A “true
statement that a product was designed in the United States” is not “a
representation that the product does not infringe any third party’s intellectual
property rights.” Motion to dismiss granted.
False advertising, Amazon defendants: The complaint didn’t
explain how any of the statements about the Brand Registry were false or
misleading. It wasn’t enough to suggest that “taking all of the statements
together, a consumer would reasonably expect the Brand Registry service to work
better or faster than it did for Plaintiff.” Even a reasonable consumer’s “disappointment
that a service did not work as well or as quickly as hoped” doesn’t show false
advertising. Also, plaintiff was a customer, not a competitor, and not within
the relevant zone of interests. (State law claims would have been better.)
False association, Lei defendants: Although he alleged that
they used his image, he didn’t allege that this would cause confusion, mistake,
or deception as to his association with the Lei defendants’ products, nor any
facts that would establish that his likeness is recognizable by would-be
consumers. Again, right of publicity would’ve been better.
A copyright claim was dismissed because the plaintiff had
yet to receive his registration; this couldn’t be corrected by amendment in
order to implement the command of Fourth Estate; the dismissal was without
prejudice to refiling a new action.
from Blogger http://tushnet.blogspot.com/2023/10/amazon-escapes-liability-for-its-brand.html
Cap Export, LLC v. Zinus, Inc., 2023 WL 6381821, No.
2:21-cv-07148-JWH-MRWx (C.D. Cal. Sept. 28, 2023)
Cap Export alleged that Zinus fraudulently obtained a patent
after Zinus used the public domain bed-in-a-box sets of a non-party as the
basis for its patent application. Before it prevailed in the underlying patent
litigation, Cap Export alleged that defendants disparaged Cap Export and its
products as an infringer/infringing. Among other things, Defendants’ counsel sent
a letter to Cap Export’s customer 4Moda Corp. and to Amazon. Amazon responded
by shutting down 4Moda’s Amazon webpage, which allegedly caused Cap Export to
lose sales of its bed-in-a-box products. The underlying patent litigation
allegedly fraudulently induced Cap Export to enter into a $1.1 million consent
judgment, which defendants touted in a press release and advertised on Zinus’s
website even after the court vacated the stipulated judgment. Defendants
allegedly distributed the false advertisement to Cap Export’s online sales
partners—including Amazon, Walmart, and Wayfair—which caused a decrease in Cap
Export’s product ranking and sales, through Google Ads, and through a press
release published in July 2019 on the Business Insider website.
When the information about the prior art came in, the court
granted summary judgment in favor of Cap Export in the patent case and
invalidated the patent. There was a partly successful appeal to the Federal
Circuit, after which Zinus gave Cap Export a covenant not to sue.
Courts have generally harmonized the Lanham Act with the Patent
Act by requiring bad faith before claims about patent infringement can
constitute false advertising. Although the Ninth Circuit has held that statements
about copyright licensing status are not actionable under the Lanham Act, it
has referred with approval to the bad faith standard for patent-related claims,
and the court here noted that Lexmark, a Supreme Court case, concerned
false advertising claims based on accusations of infringement and expressed no
concerns about that.
Cap Export sufficiently pled disparagement in bad faith,
knowing the patent was invalid.
The litigation/fair report privileges did not, at this stage,
bar the related state law claims. The ads were not necessary for the
litigation, and the fair report privilege didn’t apply because Cap Export pled
that the statements didn’t match the court proceedings: Defendants claimed that
Cap Export infringed multiple “patents” and falsely asserted that Cap Export
“deliberate[ly] cop[ied] Zinus’ innovation, which could mislead those who
depend on Zinus’ exceptional product quality.”
Tortious interference: “Defendants targeted Cap Export’s
economic relationship with Amazon, Walmart, and Wayfair by sending
communications to those companies concerning the allegedly bad faith underlying
litigation, and Cap Export pleads that those communications damaged Cap
Export’s sales.” Given the alleged bad faith, this sufficed.
from Blogger http://tushnet.blogspot.com/2023/10/accusing-someone-of-patent-infringement.html
Dental Recycling North America, Inc. v. Stoma Ventures, LLC,
2023 WL 6389071, No. 4:23 CV 670 CDP (E.D. Mo. Oct. 2, 2023)
The parties compete in the market for amalgam capture
devices, which remove fillings (or pieces thereof) from dental office
wastewater. This is required by the EPA because fillings can contain toxic
mercury. EPA regs say that dental offices may comply by using amalgam capture
devices, “separators” and removal devices “other than separators.” Both options
require at least 95% removal efficiency; the former must use ANSI testing,
while the latter must use sampling averages. There’s no premarket approval.
Plaintiff alleged that Stoma falsely advertised that its
Capt-all device, which fits onto the end of a high volume evacuator valve, is
an amalgam separator and EPA compliant. However, it allegedly only treats
amalgam process wastewater that passes through its device, rather than all
potential sources of amalgam process wastewater in a dental office, which is
insufficient.
Stoma argued that representations about legality/legal
compliance were inactionable opinion. Prior cases have so found, unless there
was a clear statement to the contrary from a relevant authority (including a very
clear statute), or unless there was no good-faith belief in the statement about
legality.
Here, the plaintiff alleged that Stoma made/caused others to
make false statements that the Capt-all was tested and found to be an amalgam
separator when it knew that Capt-all did not meet the regulatory definition of
an amalgam separator. Stoma conceded that the Capt-all is not an amalgam
separator; the knowing falsity exception could apply, even if statements about
Capt-all being “compliant” with EPA regulations may not be actionable.
from Blogger http://tushnet.blogspot.com/2023/10/knowingly-false-statement-of-regulatory.html
Geomatrix, LLC v. NSF International, — F.4th —-, 2023 WL
5925977, No. 22-1947 (6th Cir. Sept. 12, 2023)
Geomatrix sells a septic system
that substantially differs from those sold by its competitors. It asserts
defendants, those competitors and NSF International (the primary
standard-setting organization for the wastewater product industry), conspired
to exclude its unique system from the marketplace.
The court of appeals affirmed the dismissal of the complaint—the
antitrust claim on Noerr-Pennington grounds, which I will now ignore.
NSF certification is practically required for residential septic
systems; at least 37 states have adopted its requirements into law. Although Geomatrix
obtained a Standard 40 certification, NSF—allegedly packed by competitors using
a different method—started to question whether Geomatrix’s method, which does
not require aeration devices to treat wastewater before it leaches into the
drain field, should be certified under that standard. This agitation for a new,
separate standard allegedly disparaged and promoted unfounded concerns about
Geomatrix’s system; one proposed different standard has been adopted in only
one state, and another proposed standard for high-strength systems (used by,
e.g., restaurants) that would exclude Geomatrix’s system. This allegedly harmed
Geomatrix’s business.
Lanham Act and state unfair competition law: Although Geomatrix
alleged disparagement, it failed to describe what “independent harm” occurred
in the market or how defendants’ actions actually “influenc[ed] consumers’
purchasing decisions.” Although the complaint states that NSF published false
statements to regulators and customers and then used the standard-setting
process to limit competition, and that individual defendants made false
statements about the reliability of T&D systems or adopted disparaging
terms, there was no description of how consumers “with[held] trade from the
plaintiff.”
Even if it had done so, Geomatrix didn’t plausibly allege
that these statements caused the harm: Geomatrix could not market its products
in certain states because state regulators did not approve their product, which
was the actual cause of Geomatrix’s injuries. “While Geomatrix contends that
its injuries resulted from the conspiracy by itself, the regulators’ decisions
were still an intervening cause and the proximate one. Any deception on
defendants’ part was not the cause of consumers’ decisions, for consumers were
not the ones who decided to do anything.”
Unusually, but soundly, the court proceeded to analyze the
Michigan common law unfair competition claim separately. Though courts usually
group competitor claims together under state and federal law, the court pointed
out that Lexmark is a rule of construction for the federal statute. “Michigan
common law does not rely on the words of a statute, let alone a federal one.”
The causes of action are similar for likely confusion/deception, but not for
statutory standing.
Still, Geomatrix needed to plead proximate causation, because
Michigan common law requires causation as an element of any tort action, and it
didn’t.
A similar fate awaited other Michigan common-law business
tort claims: business defamation/injurious falsehood, fraud/misrepresentation,
and interference with prospective economic advantage. For defamation/injurious
falsehood, the alleged statements weren’t “of and concerning” Geomatrix but about
systems of the type Geomatrix made, which apparently isn’t limited to
Geomatrix. Disparaging an industry or type of product isn’t defamation, and
injurious falsehood requires pleading special damages, which wasn’t done.
Fraud/misrepresentation and interference with prospective
economic advantage claims were also based on conduct immunized by Noerr-Pennington,
which the court predicted Michigan would apply.
Michigan Consumer Protection Act: covers only “conduct of a
business providing goods, property, or service primarily for personal, family,
or household purposes.” Standard 40 certification is not a “consumer” good or
service.
A concurrence would have resolved the fraud and tortious
interference with prospective economic advantage claims on different grounds,
declining to predict that Michigan would extend Noerr-Pennington to
them. The argument is pretty interesting: the Michigan lower courts that have
applied Noerr-Pennington to state law claims did so as a matter of First
Amendment reasoning directly, rather than constitutional avoidance (the
explicit ground on which Noerr-Pennington was decided). The concurrence
would give no deference to their First Amendment analysis, and it would go far
beyond NYT v. Sullivan in immunizing even knowingly false, fraudulent
statements. But proximate cause/damages would still lead to the same result.
from Blogger http://tushnet.blogspot.com/2023/09/proximate-cause-defeats-false.html
Kominis v. Starbucks Corp., 2023 WL 6066199, No. 22 Civ.
6673 (JPC) (S.D.N.Y. Sept. 18, 2023)
Plaintiffs alleged violations of New York and California law
based on Starbucks’ allegedly misleading use of fruit words for drinks. The court allowed some claims to proceed,
dismissing only unjust enrichment (duplicative under NY law/not allowed with
express warranty claims under California law) and fraud (failure to
sufficiently plead scienter).
The “Mango Dragonfruit Lemonade Starbucks Refreshers” and
the “Mango Dragonfruit Starbucks Refreshers” allegedly contain no mango; the
“Strawberry Açaí Lemonade Starbucks Refreshers” and the “Strawberry Açaí
Starbucks Refreshers” allegedly contain no açaí; and the “Pineapple
Passionfruit Lemonade Starbucks Refreshers” and the “Pineapple Passionfruit
Starbucks Refreshers” allegedly contain no passion fruit. But they are “part of
[Starbucks’s] ‘Refresher’ line of beverages, marketed as fruit-based
beverages.” The following marketing images allegedly show that “the presence of
fruit in the Products is central to the Products’ identity.”
 |
| challenged products along with Pink Drink, Dragon Drink, Honey Citrus Mint Tea and others |
 |
| challenged drinks with images of fruit floating in beverages |
Instead of containing these fruits, “all of the Products are
predominantly made with water, grape juice concentrate, and sugar.” By
contrast, “Starbucks’ hot chocolate contains cocoa, its matcha lattes contain
matcha, and its honey mint tea contains honey and mint.” Also, “the Products do
in fact contain freeze-dried pieces of strawberries, pineapple, and dragon
fruit.” Starbucks allegedly does not affirmatively indicate anywhere which
ingredients are and are not in the Products. Plaintiffs alleged that the
“missing fruit ingredients are important to consumers because they are premium
ingredients, and consumers value them over the less nutritious and cheaper
grape juice concentrate found in the Products” at least in part because of
nutritional benefits from each of the respective fruits or their juices. Both states’
laws use the reasonable consumer standard. Indeed, the court noted, courts in
the Second Circuit have freely relied on Ninth Circuit cases. Has it been tightened
of late? The court considered two unpublished summary orders that it deemed to
articulate a “more demanding” standard: Axon v. Florida’s Natural Growers,
Inc., 813 F. App’x 701, 704 (2d Cir. 2020) (“To survive a motion to dismiss,
plaintiffs must plausibly allege that a significant portion of the general
consuming public or of targeted consumers, acting reasonably in the
circumstances, could be misled by the relevant statements.” (internal quotation
marks and brackets omitted) (quoting Jessani v. Monini N. Am., Inc., 744 F.
App’x 18, 19 (2d Cir. 2018))); Jessani, 744 F. App’x at 19 (explaining that
“plaintiffs must do more than plausibly allege that a ‘label might conceivably
be misunderstood by some few consumers,’ ” but instead “must plausibly allege
‘that a significant portion of the general consuming public or of targeted
consumers, acting reasonably in the circumstances, could be misled’ ” (quoting
Ebner v. Fresh Inc., 838 F.3d 958, 965 (9th Cir. 2016))).
Does the addition of “significant portion of the general
consuming public” change things? The court here doesn’t decide the issue
because, even under that standard, the claims survived.
Starbucks argued that its names accurately described the flavors,
not the ingredients. “[C]ontext is crucial” for a court’s determination of
“whether a reasonable consumer would have been misled by a particular
advertisement.” Here, the products were listed without any affirmative
statement one way or another about ingredients/flavors; there was no
ingredients list on the display. Parts of the names do refer to both a flavor
and an ingredient, e.g. strawberry, dragonfruit, and pineapple. This context
was mixed; a significant portion of reasonable consumers could be deceived.
This was unlike a product called “Açaí-Flavored Strawberry
Starbucks Refresher” or the like. “Starbucks’s position necessarily would
entail that two of the three parts of each name refer to actual ingredients
(i.e., dragon fruit, strawberry, pineapple, and lemonade), yet that a
reasonable consumer would somehow know the third term (i.e., mango, açaí, and
passion fruit) does not. The images of several of the Products add to this
information jumble, in that they depict the Products containing actual pieces
of fruit, just not the fruit apparently desired by Plaintiffs.” Starbucks argued
that a consumer would see the strawberry but not the açaí berry and thereby
conclude that the beverage contains only real strawberry. “But it is equally if
not more plausible that the image of real fruits would indicate to a consumer
that the drink contains all, not only part, of the fruits mentioned in the
Products’ name, especially given that fruit may be present in a drink in a
non-visible form, such as a juice.” Likewise, a consumer seeing drinks named
“Pink Drink” and “Dragon Drink” on the menu “may think that all of the names
are similarly fanciful or that only the fanciful names without a fruit
reference do not indicate the presence of actual fruit in the drink.” The other
items that contain the ingredients, like “Ice Matcha Tea Latte” which contains
matcha, “contribute to a reasonable conclusion that the names of the Products
refer to their ingredients as well as their flavors.”
Unlike in other
cases, there was no explicit disclaimer, and there was no reason to think that
“mango,” “passionfruit,” and “açaí” are terms that typically are understood to
represent a flavor without also representing that ingredient—unlike in the vanilla
cases. “There is no comparable term that appears to distinguish the flavors of
mango, passion fruit, and açaí from the actual presence of those fruits, as
vanilla bean may do for vanilla.” Moreover, “nothing before the Court indicates
that the fruit flavoring in fruit drinks is frequently created by something
other than a fruit ingredient.”
Starbucks also argued that any confusion experienced by a
consumer could be dispelled by asking a Starbucks employee about the Products’
ingredients. “This argument fails for the simple reason that it assumes the
truth of facts not asserted within the Amended Complaint, namely that
Starbucks’s employees are aware of the full ingredient list of each of the
Products.” But even if the argument were to be considered, it failed on the merits.
A reasonable consumer is not expected to consult an ingredients panel to
correct misleading information on the front of a box, much less a barista.
from Blogger http://tushnet.blogspot.com/2023/09/claims-against-starbucks-fruit-drinks.html
Read it here. Many years ago, I wrote a note about these disputes seeking return of engagement rings after a broken engagement, which is cited in the dissent–which also reads as an invitation to the Massachusetts Supreme Judicial Court to revisit its fault-based rule for when an engagement ring should go back to the (remorseful) giver.
from Blogger http://tushnet.blogspot.com/2023/09/new-engagement-ring-opinion-from-mass.html
Doctrinal evolution
is so fascinating! Here, I think we might be starting to see what a post-Abitron,
post-JDI world could look like: courts may begin to reestablish distinctions
between registered trademarks and unregistered matter protected by unfair
competition law, based this time on statutory interpretation rather than
conceptual categories. Because the plaintiff doesn’t own the relevant
registration, its §32 claims fail, but the court allows §43(a) claims to
proceed, partially reversing the district court’s grant of summary judgment—but
read on for more on what that might look like.
Plaintiff Rex Real
Estate sued Rex Real Estate Exchange for trademark infringement.
Plaintiff
is a real estate company founded by Rex and Sherese Glendenning that
“specializes in the acquisition and sale of commercial, investment and
development properties, both large and small, in the North Texas growth
corridor.” Plaintiff only brokers real estate in the state of Texas, but it has
clients throughout the United States and in other countries.
The Glendennings
started in Texas real estate in 1987. Its marks: “REX,” “REX Real Estate,” and
a logo showing a crown alongside the words “REX Real Estate.” In 2015, the
crown mark was registered. Plaintiff mostly works with retail, office,
industrial, and mixed-use properties; it’s brokered some single-family home
sales, but almost all involving individuals related to it or its employees.
Meanwhile, Rex Exchange,
founded in 2015, offers an online platform for homeowners and homebuyers to
transact the sale of single-family homes. It first expanded into Austin in
2018. Rex Exchange purchased a “REX” trademark with a 2002 priority from a
company called Azavea that had registered the mark for the following use:
“computer software for use in search and displaying real estate information on
a global computer network.”
At the close of
plaintiff’s evidence at trial, the court granted a directed verdict.
Only an owner or a
true assignee has statutory standing to bring a claim under §32.
Section 43(a) reaches more broadly; the court here applies Lexmark to
both false advertising and trademark claims.
Section 32 did not
apply because Mr. Glendenning became the original owner of the marks when he
first used them in commerce as a sole proprietor many years before the
plaintiff Rex was formed. Although “an applicant seeking to register a
trademark may benefit from its use by a related company,” “this does not
displace the requirement that only the owner can seek registration.”
Assignments of registered marks must be in writing. Assignments before
registration need not be in writing, but the evidence must be clear. “[R]equiring strong evidence to establish an
assignment is appropriate both to prevent parties from using self-serving
testimony to gain ownership of trademarks and to give parties incentives to
identify expressly the ownership of the marks they employ.” There was no
evidence at trial that there had been an assignment by Glendenning to
plaintiff. Thus, the §32 claim failed as a matter of law.
However,
§43(a)(1)(A) was available, and a reasonable jury could find that the marks
were inherently distinctive, not merely personal names. The relevant evidence
on plaintiff’s side, which the court thought went to public perception, was that
Mrs. Glendenning testified that she “came up with the crown because Rex means
king and that was that” and the mark is often accompanied by a crown, “reinforcing
the translation of Rex as a king in Latin.” On the other side Mr. Glendenning
testified that the name Rex has become synonymous with him as a person and
founder of the company to consumers in the real estate industry, and plaintiff didn’t
submit any evidence showing that the relevant consuming public associates the
Rex marks with their purported Latin meaning. Still, the court of appeals found
a fact issue because defendant
views
its marks by their Latin translation. While Defendant is not necessarily a
member of the “purchasing public,” the fact that some party outside of
Plaintiff recognizes the Latin translation support its claims that the marks
could be inherently distinctive. While there was strong evidence that the marks
are perceived by the public as primarily a personal name, the record does not
compel that conclusion.
This then meant
that likely confusion was at issue. Although the mark was at most suggestive,
and although many other entities in Texas have “Rex” names, and some of those
businesses might be involved in real estate, there was not enough evidence of “Rex”
in real estate. The jury saw evidence that only the parties appear in the first
page of results in a Google search for “Rex Real Estate Texas.” Plaintiff also pointed
to numerous calls it received from confused consumers as evidence that the
callers assumed that it was the sole source of the advertising. “This is a
plausible inference for a jury to make.”
Despite different
fonts, colors, and design elements, a reasonable jury could find enough
similarity to confuse.
Product/purchaser
similarity: The court framed this as an issue of sponsorship, affiliation, or
connection. “If consumers believe, even though falsely, that the natural
tendency of producers of the type of goods marketed by the prior user is to
expand into the market for the type of goods marketed by the subsequent user,
confusion may be likely.” Although the parties operate in different corners of
the real estate market and cater to different sets of prospective customers,
plaintiff’s lack of actual intent to expand into the single-family sales market
was not particularly probative of what a reasonable jury could find.
No reasonable jury
could find the parties’ advertising to be similar: plaintiff’s was “high touch,”
involving mainly a corporate suite at AT&T stadium and a dove hunt, and no
digital marketing, whereas defendant was focused on digital marketing. Intent
was neutral.
Plaintiff offered
anecdotal instances of confusion. Addressing variation in the case law, the
court found that the older precedent—which didn’t require any consumer purchases
to have been swayed by confusion—had to control. (The other way to read those
cases is that they (1) didn’t reach the issue or (2) were specific to bait-and-switch
theories of initial interest confusion, in which the confusion is still a
but-for cause of a sale.)
But the later cases
weren’t irrelevant. Instead, the court reasoned, “very little proof is required
when customer purchases were actually swayed. However, … more is required when
the confusion did not or cannot sway purchases.” In particular:
isolated
instances of confusion about the affiliation of two companies that do not
result in redirected business are not enough to sustain a finding of actual
confusion. Additionally, proof of actual confusion not involving swayed
customer purchases should be weighed against the parties’ total volume of
sales.
Also, courts should
“look to the volume of each company’s advertising” and give actual confusion “more
weight if it is a potential customer considering whether to transact business
with one or the other.” Circuit “precedents give varying weight to evidence of
actual confusion, depending on whether it is short-lived confusion by
individuals casually acquainted with a business or lasting confusion by actual
customers.”
With that
background: Plaintiff identified two people who inadvertently contacted
defendant while seeking plaintiff. Unlike initial interest confusion, “this
confusion did not present the possibility of garnering the Defendant business
before or after it was dissipated.” And there were three phone calls to
plaintiff from people who’d seen or heard defendant’s ads, and one of defendant’s
customers sent a letter to plaintiff complaining about defendant. “[P]roof that
the plaintiff is receiving calls from people who are trying to do business with
the other party can still be relevant even where there is no realistic
possibility that business can be diverted.” Finally, there were two instances
of third parties confusing the companies or their locations. “[T]hose anecdotes
are relevant because proof of actual confusion is not limited to actual or
potential customers.”
Although this wasn’t
much, it was some relevant evidence of actual confusion, and a reasonable jury
could weigh it in plaintiff’s favor. (How does this play into the statement above that isolated instances that don’t result in sales “aren’t enough”?) Question: what does a good instruction
look like in light of this discussion? Another question: Given Lexmark,
which does require a showing of likely harm for §43(a) cases, how should evidence
of nonpurchaser confusion go to show likely harm?
Degree of care: No reasonable jury could weigh this in
plaintiff’s favor.
Nonetheless, because a reasonable jury could conclude that
some of these factors, including the important factor of actual confusion,
weigh in plaintiff’s favor, a reasonable jury could also find a “probability of
confusion.”
from Blogger http://tushnet.blogspot.com/2023/09/5th-circuit-holds-that-inquiries-weigh.html
Coleman v. Burger King Corp., No. 22-cv-20925-ALTMAN (S.D. Fla.
Aug. 25, 2023)
Plaintiffs alleged that Burger King, through its
advertisements and in-store ordering boards, “materially overstates” the size
of (and the amount of beef contained in) many of its burgers and sandwiches. Allegedly,
“[a] side-by-side comparison of Burger King’s former Whopper advertisement to
the current Whopper advertisement shows that the burger increased in size by
approximately 35% and the amount of beef increased by more than 100%. Although
the size of the Whopper and the beef patty increased materially in Burger
King’s advertisements, the amount of beef or ingredients contained in the
actual Whopper that customers receive did not increase.”
Burger King responded that it makes very clear how much beef
the Whopper contains. Its website says: “Our Whopper Sandwich is a ¼ lb* of
savory flame-grilled beef topped with juicy tomatoes, fresh lettuce, creamy
mayonnaise, ketchup, crunchy pickles, and sliced white onions on a soft sesame
seed bun,” with the asterisk after the burger’s weight referring to the
“[w]eight based on a pre-cooked patty.”
The court first refused to consider the consumer protection
laws of 50 different states without a named plaintiff from every state.
Although the named plaintiffs had Article III standing to assert claims
on behalf of absent class members from other states—they had alleged a
redressable injury—they couldn’t assert claims under the laws of states that
did not apply to them because they hadn’t made their purchases in those states.
Plaintiffs were directed to file an amended complaint for only those states in
which they’d purchased products. They could eventually seek certification to assert
materially identical consumer-protection claims on behalf of class members from
other states, and they could even list the states whose consumer-protection
statutes (they believe) are similar enough to justify certification. They could
also try a nationwide FDUTPA claim based on allegations that, from its
headquarters in Florida, Burger King disseminated throughout the whole country
its allegedly deceptive communications.
Side note: “in deciding whether a named plaintiff has
standing to pursue the claims of out-of-state class members, some of our
colleagues have tried to distinguish between state common-law and state
statutory claims.” That doesn’t work because (1) many states have codified the
traditional common-law claims, and it doesn’t make much sense to think of
traditionally common-law claims as distinct from statutory law. And (2)
regardless, the cause of action is still “a creature of state law,” not some 50-state
blanket.
Breach of contract: Burger King argued that its ads weren’t
binding offers. Generally, ads are
merely “solicitations to bargain,” not offers, and so here with the TV and
online ads. But in-store “menu ordering boards” were different. An ad can
become an offer if a “reasonable person” would have thought that “the
advertisement or solicitation was intended as an offer.” These in-store
ordering boards—unlike BKC’s TV and online ads—list price information and provide
item descriptions. “Their whole purpose is to present to the potential customer
an offering of the available menu items (and their prices). They’re thus very
different from the advertisements one might see on the Internet or on TV—which
cannot constitute offers precisely because they cannot promise that the item
will still be available when, at some future date and time, the customer
finally elects to walk into the store.” Although it’s not reasonable to believe
that an ad promised that inventory would always be available, the menu boards, “by
definition, are only subject to acceptance by the handful (or so) of customers
who are actually in the store looking to purchase a sandwich.”
Burger King argued that a sandwich’s appearance isn’t an
essential term of a contract. But the court wouldn’t “lightly suppose that a
proprietor can offer to sell you a certain amount of food at a specified price
only to provide you with less food for the same price.” Although a 1%
exaggeration wouldn’t be a problem, the court wouldn’t impose its own judgment
about whether “a seemingly substantial difference between what was promised and
what was sold was (or was not) enough to alter the purchasing preferences of
reasonable American consumers.”
Negligent misrepresentation survived (for now) because Florida
doesn’t require a special relationship; unjust enrichment survived as an
alternative claim.
from Blogger http://tushnet.blogspot.com/2023/09/are-burger-king-menu-boards-whoppers.html
Rebecca Tushnet 