By failing to specify the content of the allegedly deceptive ads, plaintiffs failed to plead a plausible claim for relief under NY and California consumer protection law. Time Warner allegedly misleadingly described its Road Runner internet service as providing an “always-on connection” at a “blazing speed” that is “up to 3 times the speed of most standard DSL packages and up to 100x faster than dial-up” and the “fastest, easiest way to get online.” Plaintiffs alleged that, in fact, Time Warner’s network management techniques decreased the speed of access of certain high-bandwidth internet applications.
A court may determine as a matter of law that an allegedly deceptive advertisement would not have misled a reasonable consumer, as required. Here, the record didn’t contain the allegedly deceptive ads, and their precise formulation and context was pivotal. The court of appeals asked the plaintiffs to supplement the record, and they identified a single ad dated nine months after they filed suit, which contained only one of the four alleged misstatements (up to 3 times the speed of most standard DSL packages and up to 100x faster than dial-up). Given that the complaint purported to quote the offending ad verbatim, it should have been easy to produce. Time Warner, meanwhile, submitted an ad printed from the internet less than a week after it received the initial complaint, which contained at least three of the alleged misstatements, “closely accompanied by multiple disclaimers and explanatory language, including the statement, ‘[a]ctual speeds may vary.’”
The primary evidence in a consumer fraud case based on advertising is the advertising itself, and context is crucial since, “under certain circumstances, the presence of a disclaimer or similar clarifying language may defeat a claim of deception.” Plaintiffs can’t misquote or misleadingly excerpt the language of an ad and survive a motion to dismiss (which suggests that plaintiffs must attach ad texts to complaints before discovery, or at least that defendants will demand that they do so from now on; I wonder what that means for pleading the net impression of an ad, which is the key factual issue). The allegations of the complaint were “materially inconsistent with the sole advertisement Plaintiffs have submitted” and therefore lacked facial plausibility.
In addition, the statement in the ad plaintiffs submitted couldn’t support their claims, because the phrase “up to” would lead a reasonable consumer to expect that speeds could be less than the advertised speeds. Plaintiffs conceded that “up to” was not a guarantee of the top speed
Still, plaintiffs argued that the parties’ disagreement about what documents would be relevant showed that how a reasonable consumer would react was a factual issue whose resolution would be premature on a motion to dismiss. The court disagreed: “this puts the cart before the horse. Plaintiffs brought this lawsuit, and purported to do so based upon the specific text of a specific advertisement. They should not need discovery to tell them exactly what that advertisement said.” (I sure hope future plaintiffs have eidetic memories!)