Lack of evidence on lost goodwill leads to remittitur (but also proposed doubling of lost profits)

Sterilite Corp. v. Olivet International, Inc., No. 1:22-cv-10327-JEK, 2025 WL 3460553 (D. Mass. Dec. 2, 2025)

A jury awarded Sterilite $11 million in damages for Olivet’s willful infringement of the trade dress in Sterilite’s storage cabinets and drawers: $2,656,711 in lost profit damages and an additional $8,343,289 in damages for loss of goodwill. The jury also found that Olivet tortiously interfered with Sterilite’s business relationship with Walmart and awarded Sterilite an additional $5.2 million in lost profits for its wastebasket lids.

The court granted Olivet’s motion for remittitur with respect to the loss of goodwill damages but denied as to the lost profits for Sterilite’s cabinets and drawers. The Court reserved judgment on Sterilite’s motion for enhanced damages: If Sterilite opted for a new trial, its motion for enhanced damages would be denied without prejudice. But if Sterilite accepted remittitur, Sterilite’s motion for enhanced damages would be granted and Sterilite’s damage award in lost profits for its cabinets and drawers would be doubled to account for the difficult-to-quantify reputational harms caused by Olivet’s trade dress infringement.

The standard: The court must view the evidence in the light most favorable to the verdict, and it may not upset the jury’s assessment of damages unless that assessment “is ‘grossly excessive, inordinate, shocking to the conscience of the court, or so high that it would be a denial of justice to permit it to stand.’ ”

Lost profits: To demonstrate causation under the Lanham Act, Sterilite “must demonstrate that the [infringement] actually harmed its business.” While Sterilite “must prove the profits [it] would have made but for [Olivet’s] infringement,” it need not “ ‘negate every conceivable intervening factor which might have caused a decline in sales.’ ” Olivet argued that, during the COVID-19 pandemic, Sterilite was unable to fulfill its customers’ orders and therefore decided to allocate its stock of cabinets and drawers among different customers. It thus supplied only 63% of the cabinets and drawers that Walmart demanded, and Walmart decided to look to other suppliers of cabinets and drawers. An email from Walmart stated that it had decided “to exit the Sterilite business in plastic shelving” “[a]s a result of [Sterilite’s] inability to keep pace with customer demand,” “poor instock, not accepting [fines] due to loss sales, and poor communications as a business partner.” But the jury heard this evidence and rejected Olivet’s theory of causation. There was evidence that Olivet sought “to follow [Sterilite’s] spec detail exactly” in order “to replace Sterilite” at Walmart, and Olivet replaced Sterilite only three months after that notification; a Sterilite witness wrote that, “in [his] 30 years’ experience it takes longer than 60 days to design, engineer, build molds, prepare with inventory, to put yourself into position to serve Walmart well for a program of this magnitude.” The jury could have accepted that “had Olivet not agreed to replicate Sterilite’s products for Walmart (and at a lower price), Walmart would not have terminated Sterilite’s business on those products and Sterilite would not have lost the associated profits.”

But awarding over $8.3 million for lost goodwill was “sheer speculation,” given that “no witness or evidence attempted to quantify the value of Sterilite’s reputation before and after Olivet’s trade dress infringement.” Because “[r]eputational damages are often difficult to quantify,” plaintiffs “need not prove such damages with exacting precision.” Still, while “ ‘mathematical precision’ ” is not required, plaintiffs “ ‘must provide sufficient evidence to take the amount of damages out of the realm of speculation and conjecture.’ ”

“The evidence at trial supported, and Olivet does not contest, that Olivet’s trade dress infringement harmed Sterilite’s reputation. Customer complaints and witness testimony demonstrated that Sterilite’s brand suffered from customer confusion over Olivet’s inferior cabinets and drawers.” Product reviews “revealed that customers attributed Olivet’s inferior products to Sterilite. One customer complained, for instance, about ‘how cheaply these ones were made compared to the first set [she] bought.’”

However, not a single witness testified about the approximate dollar amount of Sterilite’s lost goodwill or how that amount could be calculated. “Nor did Sterilite produce any evidence of how much it spent promoting its cabinets and drawers before Olivet’s infringing conduct, or how much it spent or would need to spend on corrective advertising after that infringing conduct.” The award exceeded the $7,863,871 that Sterilite sought in total lost profits for its cabinets, drawers, and wastebasket lids, but the wastebasket lids were not even a part of the trade dress infringement claims presented to the jury. Thus, Olivet met its “substantial” burden to show that, viewing the evidence in the light most favorable to Sterilite, the jury’s loss of goodwill damages award was excessive, speculative, and unsupported by the record.

So Sterilite could go for a new trial—with no new witnesses or evidence, so that doesn’t seem desirable—or accept remittitur and get its motion for enhanced damages granted. The Lanham Act provides that “[i]n assessing damages the court may enter judgment, according to the circumstances of the case” and “subject to the principles of equity,” “for any sum above the amount found as actual damages, not exceeding three times such amount.” That sum “shall constitute compensation and not a penalty.”

The court “is bound by ... the jury’s finding of willfulness, which affect[s]” its determination of the appropriate “equitable remedy.” But willfulness alone is insufficient to justify an enhancement of damages. “The role of deterrence must be carefully weighed in light of the statutory prohibition on the imposition of penalties.” Sterilite argued that Olivet engaged in “egregious” pretrial discovery misconduct that forced it to file multiple motions to compel production. But courts are “reluctant to approve increased damages intended solely as punishment for conduct unrelated to the trademark infringement or to the actual damages caused by it.” “That is particularly so where, as here, Sterilite could have requested other sanctions for the alleged discovery violations at the time those violations occurred.”

“[T]he pertinent inquiry remains whether the jury’s award appropriately compensates Sterilite.” To enhance an award “based on the same conduct that established Olivet’s liability for willful infringement, without any connection to the alleged inadequacy of the award itself, improperly ‘appear[s] to be punitive.’”

Sterilite argued that the award missed some infringement, but “Sterilite repeatedly represented to the jury that [its expert’s] assessment of $2,656,711 in damages was all that it sought in lost profits for its cabinets and drawers.” Any new post-trial theories of damages were waived and too speculative.

What about Olivet’s allegedly improved relationship with Walmart? The Second Circuit affirmed trebling damages “reflect[ing] the intangible benefits that accrued to [the defendant] as a result of its false advertising,” particularly given that the parties were “direct competitors in a two-player market” and the defendant “usurp[ed] ... [the plaintiff’s] market share.” While Sterilite and Olivet are competitors, they are not the only two manufacturers of plastic household products. So Sterilite was already compensated for its losses.

Finally, though, the evidence supported the conclusion that Olivet’s infringement damaged Sterilite’s reputation, and “damages for loss of reputation ... are inherently indeterminate” and thus difficult to quantify. “If Sterilite were to reject remittitur and opt for a new trial, the jury could weigh the value of that loss of goodwill and, if appropriate, award damages. In that case, equity would not justify granting Sterilite’s request for enhanced damages on the basis of that same loss of goodwill.” But if it accepted remittitur, it wouldn’t have been compensated for reputational harm, and the court would double lost profit damages.

thorough opinion allows CT's greenwashing claims against Exxon to proceed

State v. Exxon Mobil Corp., 2025 WL 3459468, No. HHDCV206132568S (Conn. Super. Ct. Nov. 26, 2025)

The court allows greenwashing claims against Exxon to proceed under the Connecticut Unfair Trade Practices Act (CUTPA). The state alleged a decades-long “systematic campaign of deception” about the impact of its fossil fuel products on the earth’s climate and a more recent “greenwashing” campaign designed to bolster its image as an environmental steward in order to attract consumers.

The state focused particularly on an advertising campaign that began in 1970 and continued until 2007 or later, including advertorials in the New York Times nearly every Thursday between 1972 and 2001 with knowingly false claims such as

• Claiming that “a greenhouse effect” that could “melt the polar ice caps and devastate U.S. coastal cities” was a “lie” and a “myth of the 1960s and 1970s.”

• Describing predictions concerning the impact of global warming as “media hype” creating “an unwarranted sense of crisis.”

• Promoting the delay of any response to climate change based on a supposed “lack of scientific data.”

• Using scientific data in a misleading fashion to suggest that fossil fuels had little to do with global warming and that “little if any warming” had occurred.

Greenwashing: Exxon allegedly promotes its “minor and insignificant alternative fuels program to obscure its continued focus on its fossil fuel business and mislead the public into believing that the defendant is making serious efforts to address climate change.” The ads also allegedly mislead consumers into believing that “certain of its fossil-fuel-based products can help consumers reduce greenhouse gas emissions and improve fuel economy.” Exxon allegedly “sought to falsely induce purchases and brand affinity by portraying ExxonMobil as a company working on a solution to climate change through selling ‘green’ products.”

The materially false claims allegedly included: 

a. that ExxonMobil was uncertain that climate change was real, occurring or would occur in the future;

b. that ExxonMobil was uncertain that human activity, including the combustion of fossil fuels, contributed to climate change;

c. that there was time to wait before taking action;

d. that there was a balanced debate amongst scientists about whether climate change was occurring, its relationship to human activity, and whether its effects would be positive or negative;

e. that ExxonMobil’s research supported the assertions in (a) – (d).

The state sought penalties based on the number of false ads, as well as injunctive relief against making the claims and requiring disclosure of Exxon’s relevant internal research. It disclaimed seeking any damages caused by Exxon’s contribution to climate change.

Exxon argued that federal law preempted claims seeking monetary relief for injuries allegedly caused by interstate and international greenhouse-gas emissions. Although the court followed the framework in City of New York v. Chevron Corp., 993 F.3d 81 (2d Cir. 2021), finding preemption, it distinguished the claims at bar. The Chevron case involved claims for “(1) public nuisance, (2) private nuisance, and (3) trespass under New York law stemming from the [defendants’] production, promotion, and sale of fossil fuels. The [plaintiff] requested compensatory damages for the past and future costs of climate-proofing its infrastructure and property, as well as an equitable order ascertaining damages and granting an injunction to abate the public nuisance and trespass that would go into effect should the [defendants] fail to pay the court-ordered damages.”

Here, the deceptive marketing claims and, to some extent, the nature of the relief sought counseled against preemption. The state’s CUTPA claims didn’t amount to state regulation of “the production, sale and use of fossil fuels,” but were limited to “regulating the associated marketing conduct.”

Indeed, in Connecticut v. Exxon Mobil Corp., 83 F.4th 122, 142 (2d Cir. 2023), the Second Circuit addressed federal removal jurisdiction in this case in a decision that resulted in remand to state court. The court said, “Each of the three necessary elements of Connecticut’s deception claim is one that a court could ... resolve[ ] ... without reaching the federal common law of transboundary pollution.... We entirely agree with the district court’s analysis of this point: Connecticut alleges that ExxonMobil lied to Connecticut consumers, and that these lies affected the behavior of those consumers. The fact that the alleged lies were about the impacts of fossil fuels on the Earth’s climate is immaterial.” So too with the unfairness claim.

On the merits, the complaint stated a claim. Exxon argued that the statements were made outside of Connecticut. CUTPA defines “trade” and “commerce” as: “the advertising, the sale or rent or lease, the offering for sale or rent or lease, or the distribution of any services and any property, tangible or intangible, real, personal or mixed, and any other article, commodity or thing of value in this state.” The federal courts have “held that CUTPA does not require that a violation actually occur in Connecticut, if the violation is tied to a form of trade or commerce intimately associated with Connecticut, or if, where Connecticut choice of law principles are applicable, those principles dictate application of Connecticut law.” Based on the allegations of the complaint, some of the alleged tortious conduct occurred in Connecticut (advertorials in papers delivered to Connecticut), and that was enough.

Were the claims made in “trade or commerce”? Lafferty v. Jones, 229 Conn. App. 487, 327 A.3d 941 (2024), held that Alex Jones’s defamatory and harassing speech, which was motivated by desire to sell products, but otherwise unrelated to those products, fell outside the scope of “trade” and “commerce” in CUTPA. “[N]othing in the defendants’ speech, in and of itself, concerning the Sandy Hook massacre made any mention of their products.” That wasn’t the case here. “The speech at issue in the present case is expressly alleged to be about the defendant’s products, if not specifically then genetically.” [ed. note: generically?] After all, “advertising” “is not limited to direct and express solicitations for the sale of a product,” but includes “[a]ny form of public announcement intended to aid directly or indirectly in the sale of a commodity....” At least without a more developed factual record, the court wasn’t going to reject the claims here.

Were the statements falsifiable, or just opinion or true? Were they immaterial? The complaint adequately alleged deceptiveness; many of these disputes were for the factfinder. In determining whether a claim is falsifiable or opinion, Connecticut requires “analysis of three basic, overlapping considerations: (1) whether the circumstances in which the statement is made should cause the audience to expect an evaluative or objective meaning; (2) whether the nature and tenor of the actual language used by the declarant suggests a statement of evaluative opinion or objective fact; and (3) whether the statement is subject to objective verification.”

“It may be that some of the statements referenced in counts one and two of the complaint are expressions of opinion but … this court is being asked to make that judgment based only on the allegations of the complaint.” The complaint sufficed, especially given allegations that Exxon’s internal research disagreed with its ads. Interpretation of CUTPA is supposed to be guided by FTC interpretations, and the FTC has long held that “[c]laims phrased as opinions are actionable... if they are not honestly held, if they misrepresent the qualifications of the holder or the basis of his opinion or if the recipient reasonably interprets them as implied statements of fact.”

The disclosure-based claims also survived because, even though there’s no duty to disclose in many circumstances, one who decides to speak may not omit material facts if the omission misleads reasonable consumers about the import of the affirmative claims, and that was alleged here.

And materiality was properly alleged, given that materiality is a lower standard than reliance:

The FTC’s publication of the Green Guides reflects a recognition that environmental issues are a matter of interest and concern to consumers and that, therefore, the defendant’s alleged greenwashing efforts are material, at least potentially so. It is fair to be skeptical that consumers would choose to purchase gasoline from the defendant based on an erroneous impression that the defendant is proactively and earnestly engaged in efforts to reduce greenhouse gas emissions through the development of alternative energy sources and other more eco-friendly fossil fuel products. It is not a question of reliance by the consumer, however, only a question whether the consumer is influenced by the defendant’s allegedly misleading environmental marketing. That is a question of fact, not a question of law.

Unfairness claims survived for much the same reasons. CUTPA’s unfairness standard is taken from the FTC:

(1) [W]hether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise—in other words, it is within at least the penumbra of some common law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers, [competitors or other businesspersons].... All three criteria do not need to be satisfied to support a finding of unfairness. A practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three....

Did the First Amendment bar the claim? Not at this stage. Commercial speech “can include material representations about the efficacy, safety, and quality of the advertiser’s product, and other information asserted for the purpose of persuading the public to purchase the product.” And “[a]dvertisers should not be permitted to immunize false or misleading product information from government regulation simply by including references to public issues.” Interestingly, the court relied heavily on Jordan v. Jewel Food Stores, Inc., 743 F.3d 509 (7th Cir. 2014) (an ad congratulating Michael Jordan on his career and bearing store branding, but not explicitly proposing a commercial transaction or mentioning a specific product, was commercial speech), and Kasky v. Nike, Inc., 45 P.3d 243 (2002) (Nike’s advertorials and letters to the editor claiming fair labor practices were commercial speech). Jordan: “An advertisement is no less ‘commercial’ because it promotes brand awareness or loyalty rather than explicitly proposing a transaction in a specific product or service.”Kasky: “speech is commercial if the speaker is a commercial person or entity, the intended audience is likely to be consumers of the speaker’s products or services, and the content of the speech includes ‘representations of fact about the business operations, products or services of the speaker... made for the purpose of promoting sales of, or other commercial transactions in, the speaker’s products or services.’”

In dismissing cert in Kasky as improvidently granted—basically because they couldn’t figure it out—Justice Stevens wrote:

Whether similar protection [as in defamation law] should extend to cover corporate misstatements made about the corporation itself, or whether we should presume that such a corporate speaker knows where the truth lies, are questions that may have to be decided in this litigation. The correct answer to such questions, however, is more likely to result from the study of a full factual record than from a review of mere unproven allegations in a pleading. Indeed, the development of such a record may actually contribute in a positive way to the public debate.

“Unfortunately, in the twenty-two years that followed the Court’s decision to dismiss the writ of certiorari in Kasky, it still has not addressed the ‘important,’ ‘difficult’ and ‘novel’ issues presented.” Preach!

Anyway, Exxon’s conclusory claim that the statements described in the complaint do not propose commercial transactions were insufficient. “[T]he mere presence of non-commercial information in an otherwise commercial presentation does not transform the communication into fully protected speech.”

Nor did the Noerr-Pennington doctrine, which protects the right to petition the government through lobbying, litigation, or other advocacy including publicity campaigns, bar the claims at this stage.

The court also rejected challenges to various smaller bits of the complaint, such as the state’s claim for relief seeking “an order that ExxonMobil fund a corrective education campaign to remedy the harm inflicted by decades of disinformation, to be administered and controlled by the State or such other independent third party as the Court may deem appropriate.” This wasn’t government-compelled speech or compelled subsidy of private speech; the funds would be used by the state to pay for corrective education.

Restitution/disgorgement: the state sought “payment of the monetary value of the defendant’s gain” to the state, acting on behalf of the citizens of the state. “[W]hen a public entity seeks disgorgement it does not claim any entitlement to particular property; it seeks only to deter violations of the [ ] laws by depriving violators of their ill-gotten gains.” This was a proper request.

Can the state reach decades back in its claims?  CUTPA’s three-year limitations period applicable to private enforcement actions does not apply to actions brought by the state. “The defendant presents scant authority in support of its proposition that an egregious delay by the sovereign violates due process.” It’s up to the legislature, not the judiciary, to abolish or modify the doctrine of nullum tempus (no limitations period runs against the state). Even if the court agreed that, at some point, nullum tempus must yield to due process, it couldn’t decide a laches-equivalent defense on a motion to strike. “The defendant is not precluded from raising due process concerns to temper the court’s consideration of the monetary relief sought by the plaintiff if the case reaches that juncture.”

wrongfully claiming Amazon ASIN might be false advertising, even with foreign TM rights

Best Glide Aviation Survival Equipment, Inc. v. Tag-Z, LLC, No. 1-23-cv-1080-DAE, 2025 WL 3454210 (W.D. Tex. Aug. 20, 2025)

This case involves an alleged abuse of Amazon’s system to keep out legitimate competitors. Amazon is so big it can help other, smaller would-be monopolists! The parties compete to sell military style P-38 and P-51 can openers, stamped with “U.S. Shelby Co.” Best Glide alleged that U.S. Shelby openers were originally manufactured by Mallin Shelby Hardware until 1983, when the company dissolved, and since then, they have been manufactured, distributed, and sold by various entities.

Best Glide alleged that it began such sales in 2009; that it was well known in the community for making such sales; and that the public has come to associate it as a provider of U.S. Shelby openers on its own website and on Amazon’s. (Seems unlikely, but I don’t think it needs to be true for Best Glide to be in the right here, given what comes next.)

Each product on Amazon has an Amazon Standard Identification Number (ASIN), “akin to a serial number.” Amazon’s Brand Registry Program allows a seller to become a brand owner by registering a brand name, registered trademark, and/or trademark application into the program. “Once entered in the program, a brand owner controls both the content of an ASIN and who is listed as a seller on an ASIN.” With a generic ASIN, no one seller controls the listing or who may be listed as a seller.

Tag-Z filed for, but later withdrew, a trademark application for “US Shelby.” It also filed trademark applications for “P-38” and “P-51.” Best Glide’s opposition to those applications is suspended pending resolution of this case. Tag-Z possesses German trademark registrations for “P-38,” “P-51,” “US SHELBY,” and “US SHELBY CO.” It allegedly used these to enter the Brand Registry Program and block US sales.

Specifically, Amazon informed Best Glide that Tag-Z had registered one or more of its marks in the program and thus was now the brand owner for the previously generic ASINs. This allegedly led to a marked decline in Best Glide’s sales.

Stretching the definition of “commercial advertising or promotion” a little, but not in any way I find troubling, the court found that Best Glide stated a claim for false designation of origin/association/endorsement and unfair competition/false advertising under the Lanham Act and coordinate state law claims.

The court lumped false designation of origin, association, or endorsement together under §43(a)(1)(A), then applied (B) standards to the claim, including materiality. (This is really mostly a (B) claim.)

The (A) claim was predicated on the idea that, by exploiting the Brand Registry loophole, Tag-Z was able to misrepresent that associated reviews should be attributed to it, when they in fact should be attributed to Best Glide; this was plausibly material “since it can be inferred that customers will be influenced by reviews believed to be associated with Defendant when they are in fact attributable to Plaintiff.”

Likewise, the (B) claim survived because it was plausible that the ASINs are commercial advertisements about the good’s designation of origin, association, or endorsement. They were plausibly (1) commercial speech, (2) for the purpose of soliciting business, and (3) sufficiently disseminated to a relevant public audience. ASINs are (as alleged) not only serial numbers, but the shorthand method of describing a product webpage. “[G]iven that consumers can see the associated ASINs on the Products’ webpage listing, the Court finds Plaintiff has pled the speech is sufficiently disseminated to the relevant public audience.” [Yeah, but is it plausible they’re paying attention? I think this could also be analyzed as a series of commercially motivated false statements to Amazon, which is such a big intermediary that misstatements to it are sufficiently disseminated to a relevant audience.] And “Defendant’s excluding other sellers from using the ASINs and thereby positioning itself to consumers as the exclusive seller of these Products with reviews which should be attributed to Plaintiff is sufficient to plead a misrepresentation.” [Note the one-from-column-A-and-one-from-column-B approach here: the commercial speech is the ASINs, but then the misrepresentations come in the reviews associated with the ASINs. I suppose this is analogous to situations where a pharmaco claims “genericity” for something that isn’t bioequivalent, etc.—the ASIN is sufficiently concentrated information, in this context, that it functionally contains the statements associated with it, here the reviews.]

The similar state law claims survived, but tortious interference with contract failed because the complaint (somehow?) didn’t allege the existence of a contract between Amazon and Best Glide. Moreover, Best Glide failed to allege that any contract between itself and Amazon obligated Amazon to allow it to sell products under specific ASINs. “In the absence of a contract requiring that obligation, Plaintiff cannot allege such a contract was breached.” Likewise, tortious interference with prospective economic relations failed for want of alleged interference with a specific prospective contract or client relationship.

Business disparagement also failed because no allegedly false statement was “about” Best Glide, much less defamatory.

"abortion pill reversal" proponents engaged in noncommercial speech, 2d Circuit agrees for PI purposes

National Institute of Family and Life Advocates v. James, --- F.4th ----, 2025 WL 3439256, No. 24-2481-cv (2d Cir. Dec. 1, 2025)

Unlike the similar California proceeding, the district court in NY granted a preliminary injunction against enforcement of consumer protection law against evidence-free “abortion reversal” claims, because there weren’t allegations of commercial benefit from promoting those claims. “The NIFLA plaintiffs are non-profit, faith-based organizations that have made, and seek to continue to make, statements regarding abortion pill reversal.” At this stage, they were likely to succeed on their First Amendment claim because their APR-related statements are noncommercial speech. The statements were religiously, not economically, motivated; the NIFLA plaintiffs didn’t provide APR and only refer individuals to third-party providers who could then administer APR; and they received no remuneration for their services, including no referral fees or commissions. The NIFLA plaintiffs didn’t charge for access to APR “information” or any of their pregnancy-related or parenting services.

“To hold otherwise could potentially subject a sweeping range of non-profits to regulation of their speech for providing the public with information and resources concerning critical services.” E.g., abortion information, LGBT rights groups in states that ban in-state gender-affirming care, or “a group that matches immigrants with organizations providing access to employment, English language classes, or immigration legal services.” “Expanding commercial speech in a way that covers public statements made by these types of organizations would push the commercial speech doctrine far beyond its ‘core’ of regulating commercial transactions.”

The AG argued that the speech should be considered commercial because “someone must bear the cost” of APR “be it insurance, the medical provider, or a charity,” and that the NIFLA plaintiffs offer services in the “stream of commerce” that have commercial value. “However, this would be true of any non-profit providing information, free services, and access to third-party providers; those services will inevitably have some commercial value and eventually someone will have to be paid for them.”

The AG also argued that “consumers will likely be led to believe that the NIFLA plaintiffs will arrange for them to receive [the APR protocol] because their intended statements invite consumers to access a network of physicians who are willing and able” to provide it, thus making the statements analogous to ads for other medical services. But the cases cited by the AG involved medical procedures or products offered in exchange for money. The NIFLA plaintiffs allege that they receive no direct or indirect payment for the services they provide or referrals they make. “Moreover, there is no evidence in the record, at this stage of litigation, to suggest that the NIFLA plaintiffs gain other types of economic benefits by engaging in this speech, such as an increased customer base or a capital increase through fundraising.” [If soliciting for nonprofits is noncommercial speech, why would ordinary fundraising be commercial speech as to statements about what the nonprofit does?]

The court emphasized that “no factor, including the speaker’s motivation, is dispositive to the noncommercial speech inquiry.” But it wasn’t just ideological motivation at issue here: the NIFLA plaintiffs were actually not providing or charging for services or getting direct or indirect compensation for their referrals.   

"ambiguity" in consumer protection cases is something different from "ambiguity" in Lanham Act cases: the case of "Naturally Derived"

Kent v. Conopco, Inc., 2025 WL 3296002, No. 25-cv-03660-JCS (N.D. Cal. Nov. 26, 2025)

The court allows a claim against “Naturally Derived” personal care products to proceed. “There is no asterisk on the front label linking the claim to a definition elsewhere on the front or back label; nor is there a definition of the term ‘Naturally Derived’ on the front label.” The back label does purport to describe what “naturally derived” means.” E.g.: Love Beauty & Planet Plant-Based Vanilla Body Wash’s back label says, ‘92% of our formula is naturally derived, meaning it’s unchanged from nature or keeps over 50% of its original structure after some processing. This includes water and ingredients from plant, mineral and fermentation sources.’ ”

For some of the products, “naturally derived ingredients” in the list of ingredients are denoted with an asterisk. Plaintiffs allegedly falsely or misleadingly identify synthetic ingredients as naturally-derived, including cocoamidopropyl betaine, sodium lauroyl isethionate, sodium methyl cocoyl taurate lauric acid, citric acid, and stearamidopropyl dimethylamine, cetearyl alcohol, and behentrimonium chloride. Many of these ingredients are allegedly non-naturally occurring chemicals made by chemically modifying naturally-occurring plant oils.

The products are allegedly “predominantly composed of ingredients produced using industrial chemical processes.” By way of example, the complaint alleged that, “of the twenty (20) ingredients listed for the Dove Men + Care Eucalyptus and Birch 2-in-1 Shampoo and Conditioner, fourteen (14) are industrially-produced chemicals that most consumers would not identify as ‘natural’ or ‘naturally derived,’ including one (citric acid) produced using industrial fermentation processes.” Plaintiffs alleged that “[s]imilar analyses hold true for all the ‘X% Naturally Derived’ Products.” They also alleged that the claims would be false even if they were based on ingredient weight.

Conopco allegedly used the British Standards Institute’s ISO 16128 to make its claims. That standard allegedly “defines ‘derived natural ingredients’ as ‘cosmetic ingredients of greater than 50 % natural origin, by molecular weight, by renewable carbon content, or by any other relevant methods, obtained through defined chemical and/or biological processes with the intention of chemical modification.’ ” But, plaintiffs alleged, this standard is a proprietary standard that is not available to the public and thus, “for all intents and purposes, the public is entirely ignorant of how [Conopco] calculates the percentage of ingredients that is naturally derived/natural origin and what [Conopco] is communicating when it makes the naturally derived/natural origin claims.”

The standard allegedly expressly states that it “is not designed for use in labeling and product communications.” Indeed, as alleged, “ISO 16128’s definition of ‘natural origin index’ is very complicated and entirely beyond the ability of an ordinary consumer to understand.” It is allegedly not a government standard, but instead, “was designed solely by cosmetic industry scientists, without involvement of any consumer advocates or persons familiar with consumer advertising” with the apparent purpose of “provid[ing] an expansive definition [of] ‘natural origin’ to encourage manufacturers to use ‘natural’ materials as ingredients for manufacturing.” Plaintiffs further alleged that ISO 16128 is “inappropriate for use in labeling because it does not require uniform calculations”: users can include or exclude added water at will. They can also use any of three criteria: “molecular weight,” “renewable carbon content”, or “any other relevant methods” to calculate percentage, but the standard does not define “renewable carbon content,” nor what the “any other relevant methods” may be. The complaint also pled that “[l]aypeople are not versed in assessing molecular weights.”

They brought the usual California claims.

The court found the labels to be plausibly deceptive. In the 9^th Circuit, consumer protection claims can be maintained if the front label is plausibly misleading—that is, if it’s plausible that a reasonable consumer would conclude that the front label contains all the relevant information and believe a false claim as a result. If a reasonable consumer who cared about the fact at issue would necessarily conclude that they needed to look at the back label to clarify matters, though, and the back label clears things up, the claim is merely ambiguous and not misleading.

This is a different framing of “ambiguity” than Lanham Act “ambiguity,” though it may not produce hugely different results in practice. A front label is not ambiguous under consumer protection law merely because it has more than one plausible meaning (the Lanham Act standard). “Nature Fusion” is fatally ambiguous: “so devoid of any concrete meaning that there was nothing ‘from which any inference could be drawn or on which any reasonable belief could be based about’” a personal care product’s ingredients. “[A] front label is ambiguous when reasonable consumers would necessarily require more information before reasonably concluding that the label is making a particular representation. Only in these circumstances can the back label be considered at the dismissal stage.” “[F]ront-label ambiguity is determined not by whether a consumer ‘could’ look beyond the front label, but whether they necessarily would do so.” And context can also matter to whether something is plausibly misleading, such as one’s background knowledge about the exotic product Manuka honey, and whether the product is a specialty one or would be bought by a busy consumer with kids in tow.

The consumer protection concept of “ambiguity” therefore determines whether a claim can be pursued under state law at all, whereas the Lanham Act concept uses ambiguity as a screen for whether evidence of actual consumer response is required, or whether proof of falsity alone will show deceptiveness; that is, a Lanham Act-ambiguous claim can still be litigated and proved deceptive. By contrast, consumer protection ambiguity is more like a puffery defense: if a claim is so mushy that it doesn’t have a specific enough meaning to be factual on its own (without consulting the back label), then it’s too ambiguous to sue over.

The risk—and I do think it’s a significant one—is that courts might use “ambiguity” the same way across regimes despite the different meaning and function of the concept in the two areas. I have argued that courts should not be so rigid in their use of the literal/implicit falsity divide in Lanham Act cases, and this development in consumer protection law adds to the reasons to do so: ambiguity in consumer protection law (understood broadly to include the Lanham Act) should be a single concept.

Back to the case at bar: This front label was plausibly misleading, so the court declined to consider the back label at this stage. Plaintiffs alleged that a reasonable consumer would understand from the phrase “x% naturally derived” that the specified percentage of the product, whether evaluated by weight or by the number of ingredients, is made of ingredients that are not synthetic but that in fact, because of the inclusion of synthetic ingredients in the definition of “naturally derived” used by Conopco, the percentage of the product that is made from synthetic ingredients is much higher than the label suggests. It was indeed plausible that a reasonable consumer would believe that “naturally derived” means non-synthetic. In some cases, qualifying language indicating the percentage of the product that was plant-based can be enough to avoid misleadingness—but that depends on the plaintiff’s theory of the case. Where the plaintiff’s theory isn’t about “100% natural” or similar claims, the percentage doesn’t help if it’s an allegedly false percentage. Additionally “this case involves everyday products and not the niche product at issue in the Trader Joe’s case [Manuka honey] that resulted in a higher standard of care from the reasonable consumer.”

Even considering the back labels, they didn’t resolve any ambiguity in a way that avoided plausible misleadingness, given the plaintiffs’ allegations that the definition Conopco used was unsuitable and misleading.

However, plaintiffs’ omission-based claims failed. (They were a repackaged “the back label definition is bad” theory.)

The court also refused to reject a UCL unfairness theory at this stage based on the allegation that Conopco’s conduct violates FTC regulations and policy set forth in the Green Guides.

However, the common law fraud and negligent misrepresentation claims fail to state a claim under California’s economic loss rule.

"unfair competition" CGL insurance exclusion applies only to competitor claims, not consumer claims

Athena Cosmetics, Inc. v. Great American E&S Ins. Co.,  2025 WL 3304392, No. 2:24-cv-08010-AH-AGRx (C.D. Cal. Nov. 24, 2025)

Three underlying putative class actions targeted Athena’s sale of “lash enhancement serums from Athena that contained compounds found in prescription drugs and were known to cause adverse side effects to the face and eye area.” They alleged “false, misleading, unfair, and deceptive sale of beauty products without disclosing dangerous risks and side effects of the products’ key ingredient” and “unfair competition or unfair or deceptive acts or practices” in violation of various states’ consumer protection statutes. Although the underlying complaints alleged that the plaintiffs experienced “physical impact” on their face and eye area, they explicitly did “not seek to recover for physical injuries.”

Great American denied a duty of coverage to its insured, Athena, under a Commercial General Liability Policy stating that Great American “will pay those sums that [Athena] becomes legally obligated to pay as damages because of ‘bodily injury’ ... to which this insurance applies” and “will have the right and duty to defend [Athena] against any ‘suit’ seeking those damages.” The Policy defines “bodily injury” to mean “injury, sickness, or disease sustained by a person, including death of a person,” as well as “mental anguish, mental injury, or shock, if directly resulting from physical injury, sickness, or disease to that person.” There’s also an exclusion for any “Claim or Suit Alleging Infringement of Intellectual Property or Violation of Laws Concerning Unfair Competition or Similar Laws,” which excludes coverage for bodily injury or property damage “alleged in any claim or ‘suit’ that also alleges any: ... (2) violation of any statute, common law, or other laws or regulations” “concerning unfair competition, antitrust, restraint of trade, piracy, unfair trade practices, or any similar laws or regulations.”

Two questions: First, did the underlying lawsuits create a duty to defend, or did they not claim “bodily injury”? The court’s answer: there was a duty to defend given that the underlying complaints alleged such injury, even though they disclaimed recovery for damages for physical injury (presumably to allow a bigger class). An “insured is entitled to a defense if the underlying complaint alleges the insured’s liability for damages potentially covered under the policy, or if the complaint might be amended to give rise to a liability that would be covered under the policy.” In other words, under California law, “the insurer’s duty is not measured by the technical legal cause of action pleaded in the underlying third-party complaint, but rather by the potential for liability under the policy’s coverage as revealed by the facts alleged in the complaint or otherwise known to the insurer.” The insurer cannot “duck coverage simply because the complainants sought the tactical advantage of bringing their claims through a class action.” In addition, the complaint also alleged mental distress, which was covered under the policy’s broad definition of physical injury.

Second, was a noncompetitor consumer protection suit one for “unfair competition” or “unfair trade practices”? The court’s answer: no. The exclusion, which must be interpreted narrowly, was focused on competitor-type behavior, got its tenor from “antitrust,” “restraint of trade,” and “piracy.” Consumer protection claims brought by consumers weren’t excluded. Great American argued that nothing in the exclusion limits its application to disputes among business competitors. But Standard Fire Ins. Co. v. Peoples Church of Fresno, 985 F.2d 446 (9th Cir. 1993), interpreted “unfair competition” in the context of a CGL policy and described common law unfair competition as “synonymous with the act of ‘passing off’ one’s goods as those of another,” limiting the term to “the common law tort which includes competitive injury as an element,” at least where it was listed alongside of “libel, slander, defamation, violation of right of privacy, piracy, misappropriation of idea, and infringement of copyright, title or slogan.” And “piracy” was also in the policy here. Thus, none of the “similar laws or regulations” listed along with “unfair competition” in this policy referred to conduct directed at consumers.

The “objectively reasonable expectations of the insured” would not consider “unfair competition” to broadly exclude consumer fraud-related claims.

court of appeals refuses to create right of publicity for houses, over dissent

Dihno v. Netflix, Inc., 2025 WL 3280834, B335652 (Cal. Ct. App. Nov. 25, 2025)

Over a partial dissent, the court of appeals affirms the rejection of various claims, including CLRA and FAL claims, against Netflix based on its use of a photo of plaintiffs’ house in an ad for Buying Beverly Hills, one of its reality shows, which depicts the operations of a real estate firm. “Plaintiffs’ home is on a ridgeline in the Hollywood Hills. The property is guarded by a private gate and the home is not visible from any nearby street. The closest publicly accessible vantage point from which the home can be seen is 1,034 feet away.” The photo was taken by a nonparty and published on Shutterstock, then licensed for the ad. The photographer “allegedly took the photo without Dihno’s knowledge or consent using a drone or other specialized photography equipment. The photo depicted interior and exterior details of the home not visible from any public location, including the ‘room layout’ and the entrances and exits. The original photo allegedly depicted plaintiffs’ silhouettes, but was cropped to remove them for the ad. As alleged, both Netflix and its ad agency knew that the home was not associated with or depicted in Buying Beverly Hills.

People allegedly began to visit plaintiffs’ home “on a daily basis” asking to see it and claiming they learned it was for sale through the Buying Beverly Hills advertisement, including a woman who demanded to enter, refused to leave, and was arrested. “Other people attempted to open plaintiffs’ front gate and climb over their fence.” Plaintiffs received calls “more than once daily” from real estate agents who sought to represent the family in selling the home. (OMG! Me too!) This caused plaintiffs harm to their mental health, reputations, and relationships with neighbors. They spent approximately $20,000 on security measures.

Plaintiffs sued for: (1) invasion of privacy, based on theories that Netflix intruded upon plaintiffs’ seclusion and portrayed them in a false light; (2) negligent infliction of emotional distress (NIED); (3) intentional infliction of emotional distress (IIED); (4) Consumer Legal Remedies Act (CLRA) violations; and (5) violation of the California False Advertising Law (FAL).

Invasion of privacy: Right of seclusion: This requires that a defendant must intentionally intrude into a place, conversation, or matter as to which the plaintiff has a reasonable expectation of privacy, and the intrusion must occur in a manner highly offensive to a reasonable person.” The state constitutional cause of action for invasion of privacy has “largely parallel” elements.

Netflix didn’t do the intruding; the question was whether it “ratified” the intrusion when it published the ad. “Ratification is the voluntary election by a person to adopt in some manner as his own an act which was purportedly done on his behalf by another person, the effect of which, as to some or all persons, is to treat the act as if originally authorized by him.” But there were no allegations that the photographer acted on Netflix’s behalf. Indeed, the photo was on Shutterstock, from which any member of the public could license the photo, contradicting any argument that the photographer acted for Netflix. Moreover, “[r]atification can only occur where the person ratifying has full knowledge of the facts.” Netflix was not alleged to have knowledge. 

What about the people who intruded, allegedly caused by Netflix? Intentional intrusion doesn’t cover third party intrusions except when vicarious liability is possible—that is, when the intruders are defendant’s employees. Although an ad soliciting people to come to another’s home for sex and providing the address might show an intent for third parties to harass the plaintiff, that’s not what happened here.

False light: This requires a portrayal that would be “highly offensive to a reasonable person, and where the defendant knew or acted in reckless disregard as to the falsity of the publicized matter and the false light in which the plaintiff would be placed.” “Yet, on its face, the advertisement depicted a home, not the plaintiffs; and it included no personal information from which any viewer could identify them.” Even if third party real estate agents somehow associated them with the show, “the complaint does not allege, and plaintiffs fail to explain, how association with a television show involving real estate is highly offensive to a reasonable person. As a matter of law, we conclude it is not.” Although they alleged that the ad publicly disclosed the entrances, pathways, and floor layout of their home, there was no allegation of falsity.

Statutory invasion of privacy: Plaintiffs invoked a California law providing that any person who enters “the airspace above the land of another person ... in order to capture any type of visual image ... of the plaintiff engaging in a private, personal, or familial activity and the invasion occurs in a manner that is offensive to a reasonable person” is liable for physical invasion of privacy. But there were no specific factual allegations that could support this statutory claim with respect to offensiveness.

CLRA and FAL: No standing. Standing requires economic injury or damage which “ ‘was the result of, i.e. caused by,’ ” the CLRA or FAL violation. For causation, plaintiffs must demonstrate that they “ ‘ “actual[ly] reli[ed]” ’ on the ‘ “allegedly deceptive or misleading statements” ’ and that it ‘ “was an immediate cause” ’ ” of their injuries. But plaintiffs didn’t allege reliance, only harm from alleged perceived affiliation with Buying Beverly Hills.

Plaintiffs argued that reliance was unnecessary because their CLRA and FAL claims do not sound in fraud, but they obviously were. Plus, CLRA remedies are available only to a “consumer,” meaning “an individual who seeks or acquires, by purchase or lease, any goods or services ....” Although plaintiffs alleged that they purchased goods generally, “we disagree that the CLRA can be interpreted to permit any person who purchases goods to seek relief from any entity that publishes misleading advertisements.”

NIED: “[A]s a general matter, there is no duty to act to protect others from the conduct of third parties.” There were no allegations that plaintiffs had a special relationship with Netflix, and under the facts alleged, Netflix did not affirmatively create any peril. The ad didn’t encourage third parties to visit the home, trespass on the property, or harass the homeowners. It didn’t even disclose plaintiffs’ address, “nor any street or landmark from which the home’s location could be feasibly discerned.” Moreover, the complaint alleged, plaintiffs’ home “is not even located in Beverly Hills,” meaning that anyone searching for the home in the television show’s namesake city would be looking in the wrong place.

IIED: Netflix allegedly posted the ad on its own home page and on other unspecified websites and publications. The complaint didn’t allege that plaintiffs themselves were Netflix subscribers, nor that they were the target of any form of the ad, nor that Netflix intended to encourage third parties to visit.

IIED typically requires conduct directed at the plaintiff, but there’s an exception “when the defendant is aware, but acts with reckless disregard of the plaintiff and the probability that [its] conduct will cause severe emotional distress to that plaintiff.” This exception applies only when the defendant’s conduct “was done with knowledge of [plaintiffs’] presence and of a substantial certainty that they would suffer severe emotional injury.” The complaint didn’t and couldn’t plausibly allege that.

Private nuisance also failed for similar reasons.  

A concurrence defended the majority’s reluctance to expand the intentional tort of intrusion “in a sweeping and unwarranted way”:

In search of a legal theory, appellants contend they “should have some right under the law to limit Netflix’s exploitation of their home, life, and privacy.” Appellants’ claim that Netflix “exploit[ed]” “their home” sounds suspiciously like a proposed right of publicity for houses. For good reason, there is no such tort.

 Given the causal chain alleged, liability under this new theory would be

breathtaking in its scope. Let’s say the Los Angeles Times decides to do a piece on “five houses in Los Angeles that look like they came out of a fairy tale.” You know—with those cute, curving brown roofs. People read the piece and think, “Wow, I’d like to see that.” They drive by, or walk by, the houses. Maybe some even knock and ask to come inside. Let’s say lots of people do that. Let’s say the “publisher” of the piece is not the Los Angeles Times but an influencer on Instagram who’s interested in architecture. Can the owners or residents of those homes sue for intrusion? One can imagine myriad other examples. And—according to appellants—someone who merely licenses a photograph from a stock footage agency and publishes it can be socked with a lawsuit as well if people show up to check out the house in the photo.

Nor were ads without constitutional protection.

Judge Edmon partially dissented, arguing that there should be an intrusion claim here, relying on the flexibility and expansiveness of the privacy torts. “[A]t least a few cases have recognized claims for intrusion where defendants published information about the plaintiffs that caused third parties to intrude into their private spaces.” Unsurprisingly, these are cases when harassers published solicitations claiming that women wanted sex and third parties showed up in reliance on the false claims. But the dissent would generalize to “defendants’ publication of information that created interest in the plaintiffs and led to foreseeable physical intrusions by third parties that significantly disturbed the plaintiffs’ solitude.” That’s not foreseeability—that’s deception and intent to harass. But the dissent would not require intent to harm, only intent to intrude. [I’m still not seeing intent to intrude here.] And it didn’t matter that Netflix didn’t publish an address or names, because, in a previous case, the ad used the woman’s name but not her address and the third parties were able to find her address by using the phone directory. Because “many third parties allegedly were readily able to discover [the address here], presumably by using widely available Internet or artificial intelligence tools, “I therefore would leave it to the trier of fact to decide whether Netflix’s use of the photograph of plaintiffs’ home in its advertising, even without an accompanying address, was sufficiently offensive to create liability for intrusion.” And subsequent publication can matter to whether an intrusion is particularly invasive.

Plaintiffs do not suggest—and I would not conclude—that simply taking a photograph of the outside of plaintiffs’ house was an actionable invasion of privacy. But that is not all plaintiffs allege. They allege that the photograph was broadcast to hundreds of millions of viewers in connection with a television series about the sale of upscale real estate to the rich and famous. In an era of obsessive interest in fancy homes and fancy people—coupled with Internet tools that make it a simple matter to link an image of a property to an address—I believe a reasonable trier of fact could, in appropriate circumstances, conclude that Netflix’s advertisement gave rise to a cause of action for intrusion.

Because this was an ad, there were lesser constitutional concerns than with other applications of the privacy torts.

As for the anti-drone photography statute, the dissent would still have rejected the claim, albeit for a different reason: the dissent accepted the allegations that the drone must have flown too close because it “captured exterior and interior details of the house that that are not visible from any public location,” which could be “offensive to a reasonable person” within in the meaning of the law. Nonetheless, there was no “visual image, sound recording, or other physical impression of the plaintiff engaging in a private, personal, or familial activity,” as further required by the statute.

The dissent would also have found private nuisance properly alleged.

 

once again, injury requirement defeats a false advertising claimant

Skillz Platform Inc. v. Papaya Gaming, Ltd., 2025 WL 3268799, 24cv1646(DLC) (S.D.N.Y. Nov. 21, 2025)

Previously. Here, Skillz successfully kicks out Papaya’s false advertising counterclaims for lack of injury, showing once again that the statutory presumption of irreparable injury is really, really helpful when the elements of likely success on the merits don’t include injury (trademark) and much less helpful when they do (false advertising).

The parties compete in the real-money skill-based mobile gaming (“RMSB”) market. RMSB platforms match players with other users on games created by third parties and compete to win cash prizes or for game rewards. Skillz most commonly offers head-to-head competition between two players, while Papaya offers multi-player tournaments with larger cash prizes.

Papaya argued that several of Skillz’s claims were false: Skillz advertises “Match with REAL PLAYERS of equal skill,” and its website stated that it “leverages player matching technology to ensure fairness by pairing players of equal skill levels, so beginners only play beginners and experts only play experts.” However, Skillz does not dispute that matchmaking on its platform has included “skill band expansion.” That is, “[a]s the time increases from when a game is initiated, the maximum player rating differential permitted for a competitor to be matched with the initiating player also increases.” It also made other adjustments in matching that arguably don’t conform to the “equal skill levels” claim.

It also advertised “Play real people, NO BOTS, guaranteed!” and similar claims. However, to third-party developers, it instructed: “The bot behavior in your game must be deterministic, meaning that given the exact same set of player inputs and conditions, it must always produce the same bot behavior.”

Finally, Skillz informed its customers that they can withdraw their cash awards “at any time.” But users requesting withdrawals exceeding $5,000 must submit to a “playtest” fraud verification screening.

But none of the details mattered, because the question here was injury. The parties were direct competitors. But without comparative advertising, that wasn’t enough to presume injury. Papaya’s 30(b)(6) witness stated that “[b]ased on my experience, advertisements highlighting the ability to withdraw money easily and quickly are highly effective” and that “Skillz’s statements about withdrawals on its platform” “are likely to and do cause harm to Papaya.” Its damages expert did not opine on harm causation.

This was not enough to avoid summary judgment on injury.

Papaya’s market share in 2021 grew astronomically, while Skillz’s market share declined…. Although there is no requirement that a party experience a decline in revenue or sales in order to suffer an injury under the Lanham Act, Papaya has failed to point to any evidence demonstrating that it suffered harm either to its sales position or to its reputation from the statements by Skillz it challenges in the counterclaim.

The claims by the Rule 30(b)(6) witness were “entirely conclusory.” Also: “The four individuals that Papaya identified during discovery as the only individuals likely to have discoverable information about any harm Papaya suffered have each invoked their Fifth Amendment right against self-incrimination.”

Papaya’s argument that the ads were comparative failed. On one webpage, headed “The Skillz Difference,” Skillz stated that it was “committed to fair competition” and that “every game is evenly matched.” That wasn’t enough to be comparative. Nor was the statement under the same header, “only real people, no unfair bots here,” or other Skillz statements that an increasing number of RMSB games “infiltrated the app stores” and used bots to defraud player, even when Skillz stated “[w]e have never and will never use bots to defraud customers, unlike our competitors.” That post linked to a news segment on bot fraud in the RMSB industry that mentions class action lawsuits against Papaya and AviaGames for their usage of bots to control the outcomes of games. But none of these made “a misleading comparison to a specific competing product.” (Seems like the last one did, but maybe one tweet just isn’t enough.) Where an injury “accrues equally to all competitors” a party must produce evidence of “actual injury and causation” to ensure that the injury is not “speculative.” Skillz never mentioned Papaya itself nor was this a two-player market.

Skillz also won summary judgment on Papaya’s unclean hands defense. While “a jury would be entitled to find that Papaya used bots to compete with human players, including to control the outcome of games, while representing in its advertising that players would be competing against other humans and could win through the exercise of skill,” Papaya didn’t show that Skillz used bots that way. “Players in Skillz’s games lost because other human players out played them, not because they were outscored by a bot.”

Pop, six, squish: do both popsicle advertisers have it coming?

Here, false advertising claims generate false advertising counterclaims, serving as a reminder that the advertiser who goes to court needs to have its own house in order.

Austin’s Natural Frozen Pops, Inc. v. Jonny Pops, LLC, 2025 WL 3182084, No. 1:24-CV-716-RP (W.D. Tex. Mar. 13, 2025)

The parties target consumers seeking “better-for-you” treat options, selling in healthy grocery stores like Whole Foods and Sprouts. JonnyPops’ boxes show pictures of fruit, and JonnyPops advertises that its products are made from “simple ingredients,” are made with ingredients like “100% real fruit,” and have the “wholesome nutrition of a fruit bar.” JonnyPops also displays the “USDA Organic” label prominently on its packaging.

JonnyPops boxes

GoodPop alleged that this violated California law and the Lanham Act because the two main ingredients in JonnyPops’s pops are water and added cane sugar, and any fruit in the products is only miniscule amounts. And,despite displaying lemons, limes, blue raspberries, and grapes on the packaging for JonnyPops’s “Fruit Stacks” treats, the product allegedly contains none of those fruits. GoodPop’s survey of household grocery shoppers aged 18 to 65 years allegedly found that 50% of respondents believed JonnyPops’s “Fruit Stacks” treat was made primarily out of fruit, while the treat allegedly contains less than 2% fruit content. Likewise, JonnyPops’s advertising allegedly led 61% of respondents to believe that the majority of the sugar in the product came from fruit. GoodPop’s complaint also cited customer reviews that praise JonnyPops’s pops for being a healthier option and having relatively low sugar, and alleged deception among retailers as well.

GoodPop alleged that JonnyPops models its mission, brand positioning, and pops after GoodPop’s. While GoodPop uses Good in its name to refer not only to the ingredients in its products, “but also its desire to inspire a ‘World of Good,’” JonnyPops advertises its mission to be “Make the World A Better Place, One Pop At A Time.” JonnyPops allegedly uses “nearly identical flavors” and similar package design and claims. [In the absence of a trade dress claim—and flavors are surely functional for ice pops—how could that matter?]

JonnyPops boxes with same flavors as Goodpop boxes

First, JonnyPops argued that the images of fruit do not mislead consumers when viewed in context of the entire package, because the fruit images indicate flavors, rather than ingredients, especially in combination with the ingredients list on the side or back of the package. But “the mere presence of an ingredient statement on the back of the product ‘does not eliminate the possibility that reasonable consumers may be misled.’” Misleadingness was plausible. Nor were the pictures and the “simple ingredient” claim non-actionable puffery. The statements at issue here, especially the pictures, weren’t exaggerated in the way typically associated with non-actionable puffery: words like “best,” “better,” and “favorite.” Even if “simple” may be subjective, it was the phrase “simple ingredients” in combination with the fruit pictures and the rest of JonnyPops’s advertising that allegedly misled consumers; that context made the claim plausibly misleading.

Deception was plausible based on the survey as well as consumer reviews, along with allegations that “a nutritionist with more than 1 million followers on social media” recommended JonnyPops over another pop that contained less sugar, mistakenly believing that it was JonnyPops’s pop that had less sugar.

The consumer reviews also plausibly showed materiality. E.g., consumers believed and cared about claims that the pops have “a lower sugar content and appear[] to be a better for you[] product tha[n] your typical pop” and are “made of all natural ingredients and had good nutrition compared to a lot of sugar brands.”

And injury was plausible because of the direct competition, and because of allegations that, “where retailers have limited space to stock either GoodPop or JonnyPops in their better-for-you section, retailers have chosen JonnyPops due to its deceptive sales presentations, because JonnyPops is not truly a better-for-you product.” For example, “when JonnyPops began selling next to GoodPop as a better-for-you product in one health grocer, GoodPops’s sales velocity declined by about 25%.”

The state law claims survived for the same reason; it was ok to assert California claims in Texas because the alleged wrongful conduct occurred in California.

Austin’s Natural Frozen Pops, Inc. v. Jonny Pops, LLC, 2025 WL 3182084, No. 1:24-CV-716-RP (W.D. Tex. Nov. 10, 2025)

The parties compete in the market for “ice pops.” GoodPop sued JonnyPops under the Lanham Act and also for violations of California’s unfair competition law. JonnyPops counterclaimed under the same laws, alleging that GoodPop has “duped consumers into thinking that its products are nutritionally superior to other ice pops, including JonnyPops’s products.” The court refused to dismiss some of the counterclaims.

GoodPop allegedly falsely claimed that “[i]f it’s a GoodPop, it’ll never have ... refined sugars,” even though many of its products “contain cane sugar, which is always refined to some extent,” citing definitions of “raw sugar,” “sugar,” and “cane sugar.” It alleged that four consumer reviews showed consumer belief and reliance. The court found that, at this stage, it would accept the claim that cane sugar is refined sugar. Thus, JonnyPops had alleged actual falsity and didn’t have to provide separate evidence of deception/materiality; in the alternative, three of the alleged online reviews “specifically refer to GoodPop’s products not containing refined sugar, which make it plausible that GoodPop’s alleged deception is material.”

refined sugar claim on box

Second, JonnyPops alleged that GoodPop’s website makes the false or misleading statement, “The fruit in GoodPops is real and really good! We use real, whole fruits, juices and purees” when (1) certain GoodPops do not contain any fruit, and (2) some GoodPops that do contain fruit ingredients are made with fruit-juice concentrates and other additives, rather than “whole fruit, juices or purees.” It quoted seven online consumer reviews that mention GoodPops containing 100% fruit juice.

Cherry n' Lemonade flavor

First, it wasn’t plausible that consumers would be deceived by SKUs whose names didn’t claim fruit: the Disney Mickey Mouse Fudge n’ Vanilla Pop, the Fudge n’ Vanilla Crunch Pop, the Fudge n’ Caramel Crunch Pop, and the Chocolate Vanilla Sandwiches. However, GoodPop’s Cherry n’ Lemonade Pop and Star Wars Green Apple Lightsaber Pops allegedly “consist largely of fruit-juice concentrates and other additives, rather than whole fruit, juices, or purees.” Aaccepting as true JonnyPops’s allegation that fruit juice concentrate is not a type of whole fruit, juice, or puree, that was enough to plead literal falsity; several cited reviews positively reference GoodPop’s Cherry n’ Lemonade Pop being made with “100% real juice.”

Third, JonnyPops alleged that GoodPop uses images of children eating its most sugary products to give consumers the misleading impression that its products are healthy for children. No dice. None of the alleged online reviews or comments were tied in any way to images of children in its advertising.

Fourth, JonnyPops alleged that GoodPop’s packaging of its products is “misleading and deceptive because [it] displays images of fruit that are not the exclusive or even the primary ingredients of its products.” For example, GoodPop’s Cherry n’ Lemonade Pop allegedly contains filtered water, white grape juice concentrate, and apple juice concentrate as the top three ingredients, as well as “some lemon juice” and “cherry ... concentrate” as lesser-included ingredient. JonnyPops cited a review that states, “I love the mixture of the sweet tangy flavors from the lemon and cherry juice” and another stating “You can taste the lemon and cherry in them.” [I’m reminded of research indicating that vanilla ice cream tinted pink is perceived by many consumers as strawberry-flavored.] Whether consumers instead understand the packaging to show “critical ingredient[s]” was a fact issue to be resolved after discovery—just as in the Pom Wonderful case.

The court found that it was plausible that consumers believe GoodPop products only or primarily contain the fruit(s) depicted on the packaging, thus making the packaging misleading for products where the fruits in question are not the only or primary ingredient. However, “JonnyPops’s argument that GoodPop’s packaging displays images of whole fruit but does not contain whole fruit is borderline frivolous. As GoodPop argues in its Reply, ‘no customer who sees whole cherries or oranges on a package expects to find stems and peel in the product.’”

The court likewise denied the motion to dismiss counterclaims based on product names. “It is plausible, for example, that consumers are misled by a product being called Cherry n’ Lemonade Pop, when the product contains more grape-based and apple-based ingredients than cherry-based or lemon-based ingredients.”

Finally, JonnyPops alleged that GoodPop’s use of the “USDA Organic” symbol on its packaging misleads consumers into believing its products are healthy. A review of GoodPop’s Orange n’ Cream Pop, which contains eight grams of added sugar stated that the reviewer felt “particularly good about [this popsicle] because it is made of organic ingredients, no refined sugar or high fructose corn syrup, and no artificial dyes.” Another consumer reported that they “love the fact that these pops are organic, dairy free and isn’t loaded with sugars and calories. Taste like the normal thing but way healthier.”

Although I would have gone with preemption, the court found that this wasn’t plausibly misleading. “JonnyPops does not provide the Court with any facts supporting that GoodPops being labelled organic makes consumers think anything other than what the label says—that they are organic…. If JonnyPops’s argument is that a product can be both organic and unhealthy, which is misleading to consumers, then that is an issue inherent with the USDA’s definition of organic— not an issue with GoodPop’s particular use of the ‘USDA Organic’ label.”

The California claims failed because JonnyPops didn’t plead facts allowing the court to draw the reasonable inference that GoodPop engaged in wrongful conduct in California or made false or misleading statements there.

Chicken feed virus protection claim triggers lawsuit

 Kalmbach Feeds, Inc. v. Purina Animal Nutrition, LLC, 2025 WL 3153412, No. 2:25-cv-00617 (S.D. Ohio Nov. 12, 2025)

One reason I love advertising law is that, eventually, everything lands in it, and I learn about new-to-me corners of the world. Kalmbach sued its competitor Purina for statements about Purina’s poultry feed products under the Lanham Act and the Ohio Deceptive Trade Practices Act, and secured a preliminary injunction on some of its claim.

Kalmbach’s “Henhouse Reserve” is aimed at the “backyard” poultry market, as is Purina’s “Farm to Flock.” They are both granola-like “premium” feeds aimed at owners who keep egg-laying hens. “Backyard chicken flock owners tend to have fewer chickens; they may treat their chickens more like pets and pay for premium feed. … Backyard owners may also be more emotionally motivated to keep their chickens alive, because they might keep their chickens as a hobby, for eco-conscious reasons, or because they view them as their pets. Thus, they may be particularly concerned about recent avian influenza outbreaks.”

Farm to Flock contains “FeedLock,” a “multispecies feed additive technology” consisting of medium-chain fatty acids which are designed to interact with the membranes of envelope viruses and “deactivate” them. “Although medium-chain fatty acids have been found to help prevent outbreaks of disease in swine, to date, there is no evidence that they impact disease outbreaks in poultry.”

Nonetheless, for a month and a half in 2025, Purina actively marketed Farm to Flock as “helping to defend against bird flu.” It based this claim on (1) a lab test and (2) an assumption. For (1), Purina and its codeveloper dosed four samples of chicken feed with varying levels of FeedLock and H5N1, and one sample of control feed with H5N1 only. The FeedLock feed “showed reduced viral loads” after twelve hours, while the control sample showed stable levels of bird flu for a week. For (2), based on the “consensus in the swine industry,” stemming from a commercial swine study, that medium-chain fatty acids “inhibited the transmission of [swine envelope virus] pathogens in the feed to” swine, Purina extrapolated that the medium-chain fatty acids in FeedLock would similarly inhibit the transmission of the avian influenza envelope virus pathogens to poultry.

Purina directly advertised its Farm to Flock bird flu defense claims on its website and social media platforms, as well as through direct communications to consumers and distributors across the United States. Its employees, including scientists and sales representatives, repeated variations of these claims on webinars and at in-person industry meetings. In describing the purported flu-fighting properties of Farm to Flock, Purina’s employees sometimes claimed it “has been shown to be protective against, protecting against viruses...includ[ing] bird flu.”

one example of the virus defense claims; more below

Regulators in Kansas and Minnesota quickly raised concerns, to which Purina responded by removing its claims and requesting that similar claims made by third parties be taken down. The FDA subsequently identified an additional statement that Purina needed to edit or remove, which it did. But Kalmbach, believing it had already suffered damage, brought suit.

The court considered the state and federal claims to have identical standards.

Purina argued that claims like “helps defend against bird flu” referred to defending the feed from becoming a transmission mechanism for bird flu, not to defending the birds against bird flu. The court didn’t find that a plausible reading. Anyway, such claims were “scientifically dubious,” given that chicken feed was not known to be a transmission vehicle in the first place; swine feed can be a source of transmission for viruses in swine, but those swine viruses don’t affect birds. Its lab test didn’t show a decreased risk of chickens contracting bird flu. Thus, the court found that the statements about the impact of FeedLock feed on avian influenza were likely to be found literally false.

Purina’s “immunity” statements were also literally false. Not only did Purina tout its feed’s “Complete...Defense for Laying Hens” and “Fun-filled, flu-fighting goodness” in large font at the top of the advertisement, with the supposed caveat explaining that this defense relates to the feed in small font at the bottom, even the caveat was false: “FeedLock® is a breakthrough ingredient of the system that nourishes and protects, helping to instantly defend your flock against avian influenza, while also boosting immunity and breaking down harmful pathogens on the feed with every bite.” This reference to “immunity” indicated that Purina was making claims both about FeedLock’s interaction with avian influenza on feed, where FeedLock supposedly would break down pathogens, and about avian influenza in a bird, where FeedLock would supposedly boost immunity. Purina’s own expert witness testified that it was “improper” to represent that FeedLock provides any “immunity or treatment against avian influenza.”

ad claiming to support "immune, digestive & overall health"

And, given the expert consensus that feed is not recognized as a “transmission vector of bird flu,” Purina’s “more ambitious” statements that FeedLock defends against the bird flu, apart from any immunogenic function, were also literally false. “If feed is not a known transmission vector—and Purina’s laboratory test does not show that it is—protecting the feed could have no impact on whether birds would get avian influenza.” At most, Purina’s expert would only say that “[FeedLock] would definitely be able to interact with that virus and break down the viral envelope,” which would then reduce the infectivity of the virus to some extent—but she would not say that it could “neutralize” the virus. Even in the lab, infected feed was only “approaching nondetectable or approaching noninfective” once treated with FeedLock (emphasis added). “Purina had no evidence showing Purina feed infected with avian influenza, once treated with FeedLock, ever had a nondetectable or noninfective amount of avian influenza.” And the feed tested in the lab was poultry mash feed— “a ground feed different than Farm to Flock.” [Some parts of this sound like “lack of substantiation” arguments, something that shows up later in the remedy discussion, though taken together they plausibly add up to literal falsity. In addition, given the scientific nature of the claims, it is reasonable to treat them as “tests prove” claims, which means that they can be falsified by showing that the tests don’t prove the ad claim.]

social media post

In addition, Purina necessarily implied false statements about “defense against” bird flu.  E.g., claims that FeedLock “helps defend your flock....It helps to support strong healthy hens by actively supporting and fortifying immunity and gut health” had to be read in context with Purina’s claim in that same ad that “FeedLock®...helps defend your flock against avian influenza and other viruses” and claims that the feed “give[s] your hens the wellness boost they deserve with layer feed that nourishes AND defends: [f]ortifies immunity and helps defend against bird flu[,] [g]ut health support[,] [s]trong shells, vibrant yolks.” These claims necessarily implied that the feed would defend the chicken against bird flu after consumption, and that the feed gives the hens a wellness boost.

“Every other claim in the ad (that the feed nourishes, fortifies immunity, supports gut health, leads to stronger shells and vibrant yolks) suggests a benefit to the hen, not the feed.” Thus, even assuming the bird flu defense claim could technically/linguistically be about the feed, it was false by necessary implication. “Purina cannot be heard to claim that this one statement, buried among six about how Purina feed benefits the health of hens, is about a benefit to the feed itself. It cannot be heard to say that any claim that its feed fortifies immunity is unrelated to a claim that the feed defends against viruses.” Purina’s proposed truthful meaning was not reasonable and thus the claim could not be called ambiguous.  The court noted that other ads suggest that the more FeedLock feed a bird consumes, the stronger its immunity becomes: “FeedLock®...help[s] to instantly defend your flock against avian influenza, while also boosting immunity...with every bite.”

“[S]ome of these ads plainly and facially imply that FeedLock feed is defending or mitigating avian influenza in the chickens themselves by ‘boosting immunity.’” Letters and inquiries from Purina’s regulators confirm this implication.” (Among other things, the FDA took issue with advertising statements about the bird flu that lacked “explicit reference to the feed itself.”)

another ad

The ads also necessarily implied that FeedLock defended backyard chickens more when more feed is consumed, and continued to defend chickens even after consumption—by offering continuing immunogenic and health benefits to the birds “with every bite.” The combination of immunity and health claims along with claims that FeedLock feed “defends against” avian influenza and other viruses “necessarily implies that FeedLock is providing some antiviral value to the bird itself, including after consumption. Based on the record, this appears to be false.”

So too with the necessary implication of statements claiming benefits against “other viruses.” “Viruses,” plural, “necessarily and unambiguously implies, in the context of an advertisement for ‘Hen Food,’ that there are other viruses that FeedLock defends against.” Again, the record supported falsity. “Avian influenza is the only virus known to infect birds.”

fact sheet (or is it?) claiming to fight "viruses like" bird flu

The court didn’t bother with misleadingness (though some evidence shows up in the materiality discussion), because literal falsity can be presumed deceptive. There was direct and indirect evidence of materiality: direct from customer inquiries, which can show that a claim was purchase-relevant, and indirect. “One of Kalmbach’s sales representatives testified that she was told by customers and potential customers that they wouldn’t consider Kalmbach’s Henhouse Reserve feed because it lacked a bird flu preventative or bird flu prevention, unlike Purina’s Farm to Flock.” (Not hearsay because not offered for the truth of the matter asserted.) Plus, Kalmbach showed that Purina “misrepresented an inherent quality or characteristic of the product.” Advertising virus defense is likely to induce consumers to believe they are getting a better product than feed that does not offer such a defense. Purina’s own internal consumer research results concluded that such claims were “most motivating” to customers; Kalmbach’s expert testified that many consumers in this market “are more emotionally motivated to keep their chickens alive, and are concerned by recent outbreaks of avian influenza,” and Purina’s expert agreed that backyard owners “are emotionally connected to their flock.” Purina’s senior marketing manager testified that Purina’s consumers “started to humanize or personify their chickens, and so they treated them like family. They were more like pets like cats and dogs.” [I hate to ask, but, based on this story, I have to wonder: is MAGA going to go after antivirals in chicken feed? Will they worry about chicken autism?]

another example

The court pointed specifically to a Purina internal report finding that the vast majority of consumers in the market found “brands that spend time educating customers are more trustworthy,” [of relevance far beyond this case!] and thought it was “important to stay up to date on the latest nutrition for animals.” It did not follow that consumers would be skeptical of such claims: “If anything, it seems logical that consumers would be less inclined to scrutinize Purina’s claims because they would trust Purina, believing that Purina’s efforts to educate consumers as to their feed’s purported benefits were based on the latest updates in animal nutrition.” And Kalmbach’s sales rep supported this by testifying that she told a potential customer that the claim wasn’t true, and received the question: why would Purina advertise it if it wasn’t true?

Causation/harm: “[T]o obtain injunctive relief[,] logical likelihood of damages is sufficient.” Given the presumption of deception and the existence of some evidence of misleadingness, including a consumer inquiry into why Kalmbach does not “have a product like [Purina’s] that can defend against bird flu,” Kalmbach was a likely victim of Purina’s acts.

There was a presumption of irreparable injury. Purina argued that the presumption was rebutted here because any lost sales could be recouped by money damages, and there was no evidence supporting “a more severe and ongoing injury,” like a dealer dropping Kalmbach for Purina or reputational damage. It also argued that requiring it to contact its customers would be too extreme here, where there is no ongoing, irreparable injury.

Characterizing the issue as one of “presumption of harm,” rather than presumption of irreparable injury, the court found that there was still the distinct possibility that Kalmbach will suffer injury, which is the wrong question, but the right one probably still has the same answer. That’s because,

although Purina sent out three blast emails to 130,000 recipients about Farm to Flock with statements regarding avian influenza, it has never corrected those emails. Should any of those 130,000 email recipients (or any further recipients of those emails) rely on those emails, further disseminate those emails, or refer back to those emails today or in the future, they may believe Purina still represents that its Farm to Flock feed helps defend against bird flu. Because it would be difficult, if not impossible, to calculate whether Purina’s more recent sales of Farm to Flock were a result of these latent advertisements, calculating damages would be futile.

Purina argued that Kalmbach’s supposed delay in bringing the motion undermined any claim of irreparable harm. Kalmbach learned about Purina’s advertisements in April and sued in early June; that wasn’t a sufficient delay to undermine Kalmbach’s claim of irreparable injury, especially given that Kalmbach would need some time to evaluate the scientific claims.

Harm to Purina/balance of equities: Purina stopped further publication but didn’t issue corrective statements. Purina argued that a public retraction would risk damaging its reputation. At the preliminary injunction stage, a court order proclaiming its ads were “unsupported and untrue” would erode brand trust and goodwill, so that would be inappropriate. To be sure, this was something of “a self-imposed risk” to Purina, so the court tailored the injunction to avoid some of Kalmbach’s proposed harshness.

Purina initially consented to a mostly prohibitory preliminary injunction: stop the accused advertising and notify distributors, retailers, and marketing affiliates to cease use and dissemination of that advertising. Kalmbach wanted Purina to publish a statement saying its claims were untrue and that it was retracting them.

“Purina’s argument is mainly that requiring any public statement on Purina’s part would be too extreme, and Purina points to cases where courts ordered much more tailored relief.” The lesson was that “retractions should be issued in instances where identifiable third parties received the challenged claim,” and here those were emails. “Just because Purina has addressed some forms of its prior advertisements does not mean that all confusion will have dissipated. Thus, Purina must issue some form of a retraction.”

But the court would limit the language. The antivirus claim was false “for the purposes of the Lanham Act and the Ohio Deceptive Trade Practices Act because Purina had no empirical support or basis for it, and the scientific consensus today suggests that it is incorrect.” But Kalmbach’s expert testified that it is possible that avian influenza could live on chicken feed, and that if a bird ingested that infected feed, that bird could get avian influenza. And it was an open question whether FeedLock would have any effect on avian influenza in bird feed, or the population of birds that eat that feed. [It’s possible that sprinkling a mix of cinnamon and cumin into the feed would protect birds; this is why the Third Circuit held that making unsubstantiated claims that you have no reason to think are true counts as making literally false claims. It’s bullshit in the sense that you have no interest in the truth value of your claim; you’re just making it to sell the product. And that’s not an attitude towards truth worth protecting even if “lack of substantiation” claims are otherwise unavailable.]

But, anyway, this was a preliminary injunction and not a final determination of falsity, so the court required the retraction (to be sent to email recipients and posted on Purina’s website) to say “At the preliminary injunction stage, the Court found that Purina engaged in false advertising because these statements were not scientifically grounded and lacked a scientific basis. Purina retracts these statements, as well as any other representation that Purina’s Farm to Flock 18% Layer Hen Food defends against, protects against, prevents, mitigates, or provides immunity to the effects of avian influenza, bird flu, or other viruses.” [Quick TOS question: does your TOS warn people who unsubscribe from your mailing list that you might have to contact them in the future for legal compliance?] [Quick reading comprehension question: what percentage of consumers will consider the reputational hit to Purina decreased because it’s just a preliminary injunction? I think the court did the right thing, but that doing so will not change the effects on Purina’s overall reputation one jot. Which is to say that sometimes we should be happily normative about these issues.]

Note: the court specified URLs at which the notice should be given, and they’re not there yet, but Purina has 10 days, which (as of Nov. 14) have not yet passed.