ALDF alleged that Hudson Valley Foie Gras violated the Lanham Act and California’s UCL and FAL by marketing their foie gras as “the humane choice” without producing it humanely. At 3 months old, Hudson Valley’s ducklings are allegedly moved into special feeding barns, where they’re restrained by the neck 2-3 times per day to be force-fed. Corn mash is pumped directly into their stomachs, with amounts increasing slightly each day. After about a month of this, at a time just before force-feeding typically becomes fatal, the ducks are slaughtered, though some die from the force-feeding before that.
The alleged cruel and inhumane aspects were that (1) injuries and illness commonly result from the force-feeding, “including ruptured esophagi, bone fractures, inhalation of food into the lungs, and bacterial infection,” (2) the force-feeding enlarges ducks’ livers, resulting in hepatic lipidosis, which causes liver failure as well as seizures and nervous system impairment, and (3) the extremely swollen liver may lead to difficulty breathing, severe pain from the liver's capsule stretching, and broken legs as a result of the excess body weight. Foie gras ducks are not given veterinary care and thus may suffer up to four weeks until they die or are slaughtered.
In 2004, California banned force-feeding birds for the purpose of producing an enlarged liver, and also banned the sale in California of any products resulting force-feeding, but the law only took effect in 2012. The delay was designed to allow California foie gras producers to find a humane way to produce the desired fatty liver, but no one was able to do so. Thus, there are no longer any foie gras producers in California. However, out-of-state foie gras producers may market and ship their products to California. Hudson Valley is the largest foie gras producer in the United States and markets its foie gras as “the humane choice.”
Plaintiff Regal Vegan produces a non-meat, spreadable product called “Faux Gras” and sells it online as well as in Colorado and Washington, DC. It alleged that its sales are harmed by Hudson Valley’s “humane” claim. ALDF is a nonprofit focused on animal cruelty.
Hudson Valley challenged plaintiffs’ standing. Article III injury occurs in a false advertising case if some consumers who bought the defendant’s product under a mistaken belief fostered by the defendant otherwise would have bought the plaintiff’s product. Plaintiffs can show lost sales or “probable market behavior” by establishing a “chain of inferences” showing how defendant's false advertising could harm them. Here, Regal Vegan presented surveys showing that animal welfare was important to consumers in choosing what food to buy; that consumers stop buying foods they believe are produced in an unethical way; that they will choose otherwise-identical “humane” products over those that are not humane; that meat substitutes like Regal Vegan's product have gained a significant market share; and that many meat-eaters who have reduced their meat intake choose meat substitutes instead. Moreover, its product’s name is a play on “foie gras” and it aims to compete in the pâté market. Faux Gras was specially formulated to satisfy a craving for pâtés. Thus, Regal Vegan alleged sufficient facts to show that it competed with Hudson Valley for the same pool of potential customers: those interested in purchasing humanely produced pâtés.
Likewise, Regal Vegan alleged injury fairly traceable to Hudson Valley’s acts. “[C]ausation follows from accepting that Regal Vegan and Hudson Valley may produce a competing product. In the market for humanely produced pâtés, a statement by one competitor that its product is ‘humane,’ if in fact it were not, would plausibly disadvantage its humane competitor.” And redressability also followed. Hudson Valley argued that even if it had to stop using “humane,” Regal Vegan would still suffer because foie gras would still be available and competing with Faux Gras. But it would be able to compete more fairly in the market, which sufficed.
Hudson Valley then argued that plaintiffs lacked Lanham Act standing. The court agreed: ALDF doesn’t compete with Hudson Valley to sell anything, and thus doesn’t compete for dollars from the same consumer group. “A theoretical educational competition for the “hearts and minds” of consumers is insufficient to give ALDF Lanham Act standing.”
Regal Vegan, however, had Lanham Act standing, which requires commercial injury based on a misrepresentation as well as “competitive” injury. Direct competition leads to a presumption of commercial injury. Hudson Valley argued that Regal Vegan wasn’t a direct competitor (why not?) but proof of direct competition isn’t necessary. Regal Vegan alleged that the parties “compete in the same industry, food products, selling the same product, pâté, and vie for the same consumer dollars from the same target audience, purchasers who care about the humane treatment of animals raised for food production.”
Regal Vegan cited Kournikova v. General Media Communications, 278 F. Supp. 2d 1111 (C.D. Cal. 2003), which held that an athlete could maintain a Lanham Act false advertising claim against a men’s magazine for printing nude photos falsely labeled as photos of her. The court (applying the 9th Circuit’s typically unusual standard) found that she could proceed even though athletes and magazines are in different industries; because she wasn’t just an athlete but also a sex symbol, both parties “compete[d] for the same dollars from the same target audience—namely men.” Hudson Valley cited Brosnan v. Tradeline Solutions, Inc., 681 F. Supp. 2d 1094 (N.D. Cal. 2010), which held that, though the parties were both in the credit repair industry, they provided different types of credit repair services and thus weren’t competitors. Hudson Valley argued that, if Regal Vegan’s argument were accepted, peanut butter manufacturers would also be in competition with foie gras producers, since they too make a humane spread.
The court found the key difference to lie in the manufacturers’ “marketing posture”: “When one product is marketed to compete with another product whose advertisements may mislead consumers, then the first product's maker may be harmed.” While peanut butter is unlikely to be marketed as a foie gras alternative, Faux Gras is “plausibly an indirect competitor.” The relevant market could be more specific than “food products”—it could be “spreadable pâtés for consumers interested in animal welfare.” (Cf. Mark Lemley & Mark McKenna on defining markets in IP.)
Hudson Valley then argued that it wasn’t making a falsifiable claim, but rather a mere statement of opinion that no consumer would interpret as a statement of objective fact. Regal Vegan alleged that the context of “the humane choice” in Hudson Valley’s ads gave the impression that there was independent authority and research determining that its process was humane. “Humane” was a hard word to pin down, but Congress has twice defined “humane” in reference to the killing of different animals. (See also Salon on the appeal of “humane” slaughter.) Though both statutes addressed slaughter, not life, they both focused on minimizing the pain to animals. The statutes taught that, in some contexts relating to food animals, Congress had found “humane” definable, and that a possible definition would involve treatment that doesn’t cause undue pain. Thus, “the humane choice” might be falsifiable and reasonably interpreted as a statement of objective fact, at least at the motion to dismiss stage.