Monday, June 16, 2014

Such a lonely word: "honest" isn't puffery

Salazar v. Honest Tea, Inc., 2014 WL 2593601, No. 2:13-cv-02318 (E.D. Cal. June 10, 2014)
Salazar alleged that HT’s Honey Green Tea bottles didn’t contain the amount of antioxidants represented on their labels, where independent lab testing determined that the bottles contained an average of 186.7 mg of flavonoids per bottle, or 24 percent below the “247 mg Antioxidants Green Tea Flavonoids Per Bottle” highlighted on the labels.  (Previous versions claimed “250mg EGCG2 Super Antioxidant,” though independent testing showed only 70 mg, and then “Antioxidants 190mg Tea Catechins/Bottle,” though independent testing showed only 119 mg.  Salazar alleged that HT changed its labels but not the formulation.)  Salazar alleged that HT’s “Refreshingly Honest” and “Brutally Honest,” and interactive campaigns centered on the word “honesty,” made this more deceptive.
Salazar brought the usual California claims.  HT argued express preemption, because her tests didn’t employ the FDA-mandated test protocol for nutrient content claims.  Salazar argued that the FDA requirements only apply to disclosures in the “Nutrition Facts,” and that HT’s alleged misrepresentations weren’t “nutrient content claims” subject to the FDA regulations.  The court disagreed.
Under FDA regulations, “compliance with requirements for nutrient content claims” must be determined by analyzing a sample consisting “of a composite of 12 subsamples (consumer units), taken 1 from each of 12 different randomly chosen shipping cases, to be representative of a lot.”  However, Salazar’s claims were based on (1) her own independent testing (finding, for example, an average of 70 mg of EGCG, less than a third of the claimed 250 mg amount, with similar lower-than-claimed results for catechins and bioflavonoids), (2) a report from (finding 57.5 mg of EGCG, with similar lower-than-claimed results for catechins), (3) HT’s own marketing materials referring to supposed independent tests by Men’s Health Magazine (finding 71 mg).
The court found that the label statements were nutrient content claims even if not required to be in Nutrition Facts. Therefore, their accuracy had to be challenged under the 12-sample test method, which allowed for some variation in nutrient content of each individual product.  The complaint didn’t allege such testing. It was therefore dismissed with leave to amend.
However, the court did find that Salazar had standing, making the usual allegations of reliance.  But could she sue for the earlier labels, given that she began buying only in 2012?  At this stage, she’d alleged sufficient similarity between the Honey Green Tea products she bought and those she didn’t. The formulation was identical from 2008-2013, and all the variants related to the advertised antioxidant content.  Material differences, if any, were better addressed at the class certification stage.
HT argued that claims based on  the “Honest Tea” name; its “Refreshingly Honest” and “Brutally Honest” taglines; or its “just a tad sweet” and “a kiss of honey, but not enough to gross you out” statements should be dismissed because they are non-actionable puffery. Salazar argued that she believed them, as a reasonable consumer would.  While nonspecific, nonmeasurable assertions are puffery, some courts have found “honesty” to be actionable.  See, e.g., Richman v. Goldman Sachs Grp., Inc., 868 F.Supp.2d 261, 277 n. 8 (S.D.N.Y.2012) (“If Goldman’s claims of ‘honesty’ and ‘integrity’ are simply puffery, the world of finance may be in more trouble than we recognize.”).  The honey-related statements were more blatant puffery:
It is unclear how one could verify whether the level of honey in defendant’s product qualifies as a “kiss” and is “not enough to gross you out.” A “tad” and a “kiss” are vague and non-specific terms that lack any clear, objective indication of their levels. “Not enough to gross you out” is inherently subjective; two different consumers may have different tolerance levels to the honey.
Thus, the claims were dismissed with prejudice insofar as they relied on honey-related statements.
But “honesty” required more analysis.  The term’s frequent use in trademarks was “suggestive of its hyperbolic, generalized nature.”  HT’s use of “honest” was similar to non-actionable claims for “reliability” and “authentic[ity]” in other commercial product cases. “Adding the terms ‘refreshingly’ and ‘brutally’ to ‘honest’ in the tagline may appeal to consumers but may not substantively contribute to notions of honesty.”  On the other hand, “honest” might imply claims to provide only truthful information, and truthfulness can be measured. 
“Honest Tea” by itself also had a “concrete message.”  HT’s ad campaigns included a website posting, “Honest Tea: If it’s not real, it’s not Honest”; re-styling of the label to accentuate the word “Honest”; a billboard campaign of truths such as “YES, THAT DRESS DOES MAKE YOU LOOK FAT, BE REAL. GET HONEST” and “IT’S NOT ME IT’S YOU, BE REAL. GET HONEST”; and a National Honesty Index social experiment measuring compliance with an honor system across cities. As alleged, “defendant sets out to paint itself as honest and bases virtually its entire product image on that characteristic. These claims are not mere puffery.”

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