The parties compete to sell household steam irons. Plaintiff’s are sold under the name Rowenta, allegedly the top sellers by dollar value. Defendant’s are sold under the name Shark. Plaintiff alleged that the Shark 405 and 505’s packaging made literally false claims about Rowenta models. Both packages said: (1) “# 1 Most Powerful Steam* ” in the upper-right corner and (2) “More Powerful Steam v. Rowena®† at half the price” in the lower-right corner. (2) also appears on hang tags. The first one was clarified on the bottom of the package with “offers more grams per minute (extended steam burst mode before water spots appear) when compared to leading competition in the same price range, at time of printing.” The second was likewise clarified with “††based on independent comparative steam burst testing to Rowenta [model number] (grams/shot).”
Plaintiff retained an outside lab to test using protocols from the International Electrotechnical Commission (“IEC”) and Euro–Pro’s own instructions for use.” For each test, the Rowenta allegedly outperformed the Shark.
Euro-Pro argued that there should be an “intermediate” pleading standard for Lanham Act false advertising and that this complaint failed. Without deciding the issue, even though there is no such thing as an intermediate pleading standard under the federal rules, the court held that the complaint would pass anyway. It quoted the allegedly literally false statements and the disclaimers, and included photos of the packaging. It identified industry standards for testing, and described the tests on which the falsity claim is founded. This was enough to allow Euro-Pro to defend itself.
Euro-Pro also argued that the complaint didn’t sufficiently allege literal falsity. First, Euro-Pro argued that it had defined “steam power” on the packaging itself, so other measurements were irrelevant. But plaintiff’s tests also allegedly measured grams/minute and grams/shot, the same way the labeling did. Of more general relevance, Euro-Pro argued that its “# 1 Most Powerful Steam” claim was made in comparison to the “leading competition in the price range,” not in comparison to Rowenta, but the complaint sufficiently alleged that the “# 1 Most Powerful Steam” statement is false because it appears “in juxtaposition” to the other statement comparing Shark to Rowenta.
This is another illustration of the rule that falsity, including literal falsity, can come from statements that are placed so close together that reasonable consumers would understand them together. The disclaimers elsewhere on the packaging disclose that there are two different comparators, but small print disclaimers can’t fix a literally false message.
Finally, Euro-Pro argued that the complaint targeted statements it didn’t make: the complaint “alleges that Euro–Pro ‘represents’ other claims to consumers, namely that the Euro–Pro products are ‘superior’ and ‘offer the same high-quality performance’ as SEB’s products,” but “does not identify advertising that contains these statements and therefore these allegations do not support SEB’s purported literal falsehood claim.” However, plaintiff responded that the “more powerful steam/half the price” claim was “obviously a claim of superiority that deceives consumers into the false belief that the much lower-priced Shark steam irons offer the same high-quality performance of the Rowenta irons.” The court agreed.