Friday, June 20, 2025

Federal Circuit reads "literal falsity" way too narrowly

BPI Sports, LLC v. Thermolife Int’l LLC, Nos. 2023-1068, 2023-1625, 2023-1112, 2025 WL 1683234 (Fed. Cir. Jun. 16, 2025)

This is a false advertising case involving allegedly false patent marking. Creatine nitrate is an amino-acid nitrate used in dietary supplements. At the time of the trial, ThermoLife owned several patents covering creatine nitrate, which it licensed to manufacturers. BPI sells supplements that compete with licensees of ThermoLife; it sued for false advertising under the Lanham Act and unfair competition under state law in connection with ThermoLife’s CRTN-3, as well as false patent marking under the Patent Act. A jury found that BPI showed false advertising and unfair competition but awarded zero damage, and found in favor of the defendants as to the false patent marking claim. In the cross-appeals, the court found that ThermoLife should have gotten judgment as a matter of law.

“JMOL should be granted only when the [moving party] presents no legally sufficient evidentiary basis for a reasonable jury to find for him on a material element of his cause of action.” Adopting a perjury-like standard, the court of appeals found that no reasonable jury could have found in favor of BPI under the falsity element of a false advertising claim: that CRTN-3 label’s statement of “increase vasodilation” was literally false. (BPI didn’t preserve misleadingness as an alternative ground, and there was no survey or other evidence of consumer reaction in the record.)

The claim was literally true because BPI’s own evidence shows that the dosage disclosed in CRTN-3’s label would “cause vasodilation” for people weighing 113 pounds or less. However, the dosage amount of creatine nitrate needed for “an average adult in the U.S. weighing 177 pounds” is more than the amount disclosed in CRTN-3. But the label didn’t claim to increase vasodilation for average people.

Once again, a court ignores ordinary rules of implicature. Other cases have (in my view correctly) held that a product that self-evidently won’t work for most people can’t claim to “work” in general. Under the Federal Circuit’s view, apparently, an advertiser could claim that its product “treats hair loss” if it could help the small percentage of people whose hair loss stems from a specific vitamin deficiency. That's a mistake, and it's one that thinking about "what would the true message look like?" could help.


"abortion reversal" promoter engaged in inherently and potentially misleading commercial speech, court rules

Culture of Life Family Services, Inc. v. Bonta, 2025 WL 1677783, No. 3:24-cv-01338-GPC-KSC (S.D. Cal. Jun. 13, 2025)

In two opinions on the same day, the court didn’t give much comfort to an “abortion reversal” provider.

COLFS sought to enjoin AG Bonta’s pending state court false advertising proceeding against its “abortion reversal” claims. APR is touted for pregnant women who have started the chemical abortion process by ingesting mifepristone, the first pill out of two; it involves taking the hormone progesterone in order to counteract mifepristone’s blocking of the body’s natural supply of progesterone. The main proponent, COLFS’s medical director, has done small human case studies, claiming an overall fetal survival rate was 48%, higher for the subgroup that received progesterone intramuscularly (64%) and the subgroup that received a high dose of oral progesterone followed by daily oral progesterone until the end of the first trimester (68%).  

The state enforcement action under California’s UCL and FAL challenged as unsupported by credible scientific evidence: the use of the terms “reverse” and “reversal”; claims that APR “has been shown to increase the chances of allowing the pregnancy to continue”; claims that APR has a success rate of 64-68%; claims that the rate of birth defects following APR is “less or equal to the rate in the general population”; claims that “thousands of lives have been saved” through APR; claims that APR may be effective at longer time ranges and following administration of misoprostol and methotrexate; and claims that APR can cause only non-life-threatening side effects, even though it can cause severe bleeding.

The court found the UCL and FAL to be content-neutral, because they were laws of general applicability that prohibit false and misleading statements. (This is probably not consistent with Reed, but Reed doesn’t make a ton of sense, especially applied to commercial speech—the underlying conclusion that strict scrutiny doesn’t apply is correct.)

Bonta argued that COLFS’s APR statements were commercial speech, used to advertise the treatment, and that fundraising provided an economic motivation for the APR claims. The court noted that many of the disputed statements appeared on COLFS’s website, and appeared more informational and educational than client-soliciting. Statements about APR in fundraising weren’t as clear as in a previous case, where a “majority” of fundraising communications involved the advertising language at issue, nor did COLFS anywhere claim to compete with abortion providers. However, in exchange for its APR services, COLFS accepts insurance and/or payment from women who have insurance or the means to pay; it also provides free treatment. On a motion to dismiss, COLFS sufficiently pled that its statements weren’t commercial speech.

However, the Free Exercise claim failed. A Free Exercise claim requires that a government entity has “burdened [a plaintiff’s] sincere religious practice pursuant to a policy that is not ‘neutral’ or ‘generally applicable.’ ” But the UCL and FAL “protect consumers by prohibiting false and misleading advertisements – because of the stated interest in consumer protection, not because of any sort of motivations underlying those advertisements – and as such these laws are neutral.” There were no exceptions to the UCL and FAL that could discriminate against religious conduct, nor did they treat “any comparable secular activity more favorably than religious exercise.” The AG “regularly enforces” these laws against secular entities. Although the UCL and FAL don’t apply to public entities or political speech, that wasn’t required to make them “generally applicable” laws. Instead, laws of general application treat religious and secular speech comparably. “Whether secular and religious activity are ‘comparable’ is evaluated ‘against the asserted government interest that justifies the regulation at issue’ and requires looking at the risks posed, not the reasons for the conduct.” The risks posed by public entity and political speech were different. Public entities are exempted because the state is a “sovereign entity representing the people,” and can have sovereign immunity. Political speech is exempted because “false and misleading political speech is protected while inherently false and misleading commercial speech is not.”

Although COLFS claimed that allowing progesterone to be prescribed for everything except APR treatment was not neutral and generally applicable, “laws do not need to cure every problem or aspect of a problem.” Seems like the correct result for the wrong reason—it might not be false or misleading to proscribe progesterone for something else! Plus, the claim here isn’t against the prescription, it’s against the advertising. The court gets there: “AG Bonta is not banning APR treatment, but is enforcing consumer protection laws against specific advertisements of APR treatment.”

COLFS argued selective enforcement against COLFS, but not Planned Parenthood. But “COLFS’s statements refer to a medical treatment that has only undergone studies for efficacy and safety since 2012, while Planned Parenthood’s statements speak to an FDA-approved medical procedure…. COLFS’s statements about APR treatment and Planned Parenthood’s statements about the abortion pill are not comparable.” There was no indication that Planned Parenthood had violated the UCL or FAL.

COLFS also didn’t have a valid “right to receive information” claim, which is cognizable “only where the listener has a concrete, specific connection to the speaker.” That wasn’t pled here, for statements outside a doctor-patient relationship.

The substantive due process claims for “COLFS’s patients’ rights to procreation, reproductive privacy, and to reject unwanted medical treatment” also failed.

 

Culture of Life Family Services, Inc. v. Bonta, 2025 WL 1687929, No. 3:24-cv-01338-GPC-KSC (S.D. Cal. Jun. 13, 2025)

The court denied a preliminary injunction against AG Bonta.

Continuing the First Amendment analysis: Content-neutral regulations like the FAL and UCL “are generally subject to heightened scrutiny: the government may impose reasonable restrictions on the time, place, or manner of protected speech, provided the restrictions ‘are justified without reference to the content of the regulated speech, that they are narrowly tailored to serve a significant governmental interest, and that they leave open ample alternative channels for communication of the information.’” This is weird framing because false advertising does assess content; the court thus turns to the commercial speech inquiry, which is the dispositive issue.

The court credited the AG’s evidence that COLFS uses the APR statements in advertisements that are directed towards, and solicit, women to become potential clients. The statements were “placed in a commercial context and are directed at the providing of services rather than toward an exchange of ideas.” COLFS’s use of the APR statements in its yearly fundraising gala and use of patient stories about APR to solicit donations also provided a “powerful economic motivation.” Plus, even though COLFS argued that it provided “numerous free services,” including “free APR treatment,” it still accepts insurance and payment for APR treatments from women who do have the ability to pay. That was an obvious economic motivation, which COLFS didn’t address.

What about falsity/misleadingness? “Three district courts have struck down state laws that required abortion providers, under threat of criminal sanction, to inform patients about supplemental progesterone therapy in language providers objected to for being untruthful or misleading.” Plus, district courts have split on this situation: “a pro-life organization asking for a preliminary injunction that would disallow an attorney general from pursuing a hypothetical enforcement action against them based on APR-related speech.”

Use of the terms “reverse” and “reversal”: These statements are based on a theory that supplemental progesterone can “outcompete” mifepristone to counteract or “reverse” the effects of mifepristone. Typically, mifepristone acts as a “competitive binder of the progesterone receptor – it binds to progesterone receptors at twice the avidity of progesterone itself, thus blocking endogenous progesterone from acting to support a pregnancy.” But, given high amounts of progesterone in pregnancy, mifepristone is still able to work; adding more progesterone would be like “rain on a swimmer in a pool – the swimmer cannot get more wet.” Rat studies were unhelpful because “there are significant differences between rat and human pregnancies and progesterone’s actions in each” and “[p]rogesterone receptors also vary widely between species in their responsiveness to different molecules...”

A recent placebo-controlled study on nine people was designed to examine the effects of progesterone supplementation, after mifepristone administration, on the endometrium (the inner lining of the uterus where implantation occurs) on nonpregnant persons, but the endometrial lining, uterus, and hormonal milieu of a pregnant person are all “vastly different” from those of a nonpregnant person.

Given that the science was “unclear on how exactly supplemental progesterone reacts with mifepristone,” the court turned to the common understanding of the word “reverse” to determine whether it accurately captures what we do know about the effects of supplemental progesterone. According to dictionary definitions, “reverse” means “to change the direction, order, position, result, etc. of something to its opposite.” Or, “to turn completely about in position or direction” or “to undo or negate the effect of (something, such as a condition or surgical operation).” “Reversal” was the wrong way to describe the evidence here. It was also plausible that “failing to continue taking the second drug in the medication abortion regimen, misoprostol, may result in continued pregnancy in some percentage of women who take mifepristone[.]” (The court notes that there is no agreement on the baseline here. In studies, continuing pregnancy rates ranged from 8% to 46%, depending on the mifepristone regimen used, making it hard to conclude that supplemental progesterone did any better than simply not taking the second medication.) Without better evidence, “it would be at the very least potentially misleading to state that supplemental progesterone can ‘reverse’ an abortion.”

Effectiveness statements: COLFS’s principal’s study purportedly showed that progesterone increases the chances of a pregnancy continuing after taking mifepristone. But some patients were screened by ultrasound for viable pregnancies before joining the study, which biased the data towards pregnancies already likely to continue. It also did not record how far along in her pregnancy each patient was or how much progesterone each patient took – even though mifepristone is less effective at terminating pregnancies as they progress. And there were no controls in the study, despite treatment by 325 different medical providers. Thus, the study didn’t support the statement that APR is “effective” in continuing pregnancies. [Reminder: the AG can go after advertising for lack of substantiation.] “The Court finds that given the lack of robust scientific study on this issue, statements on the effectiveness of APR are potentially misleading.”

Likewise, there wasn’t enough evidence to conclude that the side effects were limited/that APR was safe. “No study offered or used by COLFS appears to track health or safety outcomes for the pregnant individual.” The first and only randomized clinical study to attempt to test the safety and efficacy of APR had to stop because of the serious “safety concerns” after 3 of the 12 participants experienced “severe bleeding” after taking mifepristone without misoprostol. Two of those three received a placebo; the third person had been given progesterone. The “dearth” of evidence made it potentially misleading to say that APR can only cause non-life-threatening side effects.

Birth defects: Again, the evidence was limited and tiny. “Given the lack of scientific evidence on this specific question, the Court finds the statements on birth defects following APR to be potentially false and misleading.”

That APR has a 64-68% success rate was also inherently false and misleading, given the defects in the supporting studies and the lack of clarity about what percentage of COLFS patients would use which methods of administration.

“Thousands of lives saved” statement: This claim was based on the number of pregnant people who used APR and were confirmed by Heartbeat International to remain pregnant at 13 weeks, plus the number of those who started APR (but Heartbeat cannot confirm remained pregnant) multiplied by a 64% success rate. But there was no reason to generalize this statistic to all women who started APR. These were potentially false and misleading.

Statements on non-standard situations (after 72 hours have passed from the ingestion of mifepristone and t after taking the second pill of medication abortion): “From the Court’s review, nothing from the expert declarations submitted by COLFS even purports to support either of these statements.” These statements were inherently misleading.  

Where the statements were inherently misleading, the court’s analysis was done. Where they were only potentially misleading, the court proceeded to apply Central Hudson. (In my view, this is the wrong approach. The potentially misleading standard goes to the scope of a prohibition—if a statement is potentially misleading, the question is whether it can be communicated in a nonmisleading way, in which case the properly presented claim can’t be prohibited entirely. But the particular way in which a defendant is communicating a claim may be actionable/enjoinable even if the state would be required to allow a properly qualified claim. Given the posture of the case, I would expect this to be an issue for the state court.)

Under Central Hudson, the regulation of misleading advertising by medical professionals directly advances a substantial government interest (protecting medical consumers). And it directly advances the asserted government interest and was not more extensive than necessary to serve that interest. “AG Bonta is not aiming to limit the actual practice of APR. And reproductive choices are not apart from consumer choices: women, in exercising their reproductive rights, are also consumers who must be given the correct information to make knowledgeable decisions for themselves.”

 

Friday, June 06, 2025

it's plausibly deceptive to sell "Kids" gummies identical to adult gummies

Barrales v. New Chapter, Inc., 2025 WL 1584424, No. 2:25-cv-01171-HDV-KES (C.D. Cal. Jun. 4, 2025)

Plaintiff alleged that defendant’s Fiber Gummies were deceptively labeled (1) because the claim “with 4g of probiotic fiber” was false because it implies that each gummy contains that amount of fiber, when the serving size is 2 gummies; and (2) because the KIDS Organic Fiber Gummies falsely implies that the product is specifically formulated or uniquely suitable for kids. She brought the usual California claims (including common-law claims).

regular gummies

Kids gummies

Compared to the regular gummies, the front label of the Kids Gummies has the word “kids” with each letter a different color, but they have the exact same chemical composition and consumption method as the Fiber Gummies.

Defendant argued that the FDCA preempted the claim because it expressly allows claims made by serving size. FDCA regulations allow “direct statements about the level (or range) of a nutrient in the food” so long as they “do not in any way implicitly characterize the level of the nutrient in the food and are not false or misleading in any respect.” Here, the allegations were that the nutrient content claims were false or misleading; thus, plaintiff was seeking only to enforce a requirement identical to federal law and her claims weren’t preempted.

Defendant argued that “with 4g[rams] prebiotic fiber” was specifically allowed because it was based on the “reference amount customarily consumed,” i.e., serving size, FDA-defined as the “maximum amount recommended, as appropriate, on the label for consumption per eating occasion.” “But the Ninth Circuit differentiates between claims that challenge and seek to alter accurate statements about serving size and the nutrient content thereof, and claims that a defendant’s ‘omission of supplemental or clarifying language’ misleads consumers.” The plaintiff wasn’t seeking to alter how the serving size is calculated, nor how the fiber content of each serving is calculated.

Misleadingness was also plausible; a reasonable consumer might not consult the back label. Believing that each gummy contains four grams of fiber was “plausibly an unambiguous interpretation of the label based solely on the language used.”

Likewise, it was plausible for a reasonable consumer to be deceived by the “KIDS” label into thinking it was especially suitable for kids. Contrary cases involved factual differences, e.g. a medicine whose “infant” version came with a dropper for administration and its otherwise identical “children’s” version had a cup. “Here, there is nothing, pharmacologically or otherwise, that differentiates the Fiber Gummies from the Kids Gummies.”

 


"wholesome" not puffery in context, court finds

Levit v. Nature’s Bakery, LLC, 767 F.Supp.3d 955 (N.D. Cal. 2025)

Nature’s Bakery Products fig bars claim “Wholesome Baked In,” “equal parts wholesome and delicious,” “what we bake in is as important as what we leave out,” “simple snacks made with real ingredients,” and “the best fuel for active ... lives.” The packaging also includes a “ ‘heart’ vignette next to depictions of real, whole fruit, and also displays a ‘Whole Grains Council’ stamp.”

Nature's Bakery front panel

Levit alleged that the products are actually high in sugar, excessive consumption of which is “toxic to the human body.” Of 19 total grams of sugar, 14 grams are added sugars, representing 28% of the total calories. Levit brought the usual California statutory claims, as well as common law claims for breach of express warranty, breach of the implied warranty of merchantability, negligent and intentional misrepresentation, and unjust enrichment.

The court found most, but not all, of the challenged statements to be puffery: “what we bake in is as important as what we leave out” is an unmeasurable opinion, and, in full context, “Started by father and son bakers, we believe simple snacks made with real ingredients are the best fuel for active, joyful lives,” was a subjective statement of belief, as was the heart vignette in conjunction with the phrase “We ‘Heart’ Figs.” Likewise, though the “Whole Grains Council” stamp was falsifiable, Levit didn’t allege that it was false.

However, the statements using “wholesome” were potentially actionable.

“Wholesome Baked In” and “equal parts wholesome and delicious” were not phrases like “unbelievably wholesome” or “positively wholesome,” which converted the term to “exaggerated advertising, blustering, [or] boasting.”

And deception was plausibly alleged where a food label proclaims a product to be healthy but in fact allegedly contains unhealthful levels of sugar, despite the disclosures on the Nutrition Facts panel. There was no argument that “wholesome” was ambiguous such that a reasonable consumer would consult the label to determine its meaning. However, fraudulent omission-based claims failed because there needs to be a duty to disclose; although the complaint plausibly alleged that high levels of sugar mean the products are not wholesome, it didn’t plausibly allege that eating Nature’s Bakery’s fig bars in “customary” amounts would cause death or serious injury, or any other basis for a duty to disclose.


competitor's challenge to use of expired certification marks must go to trial

FireBlok IP Holdings v. Hilti, Inc., No. 19-cv-50122, 2025 WL 1557924 (N.D. Ill. Jun. 4, 2025)

FireBlok sued defendants, relevantly for false advertising and false association. The court denied FireBlok’s motion for summary judgment.

FireBlok alleged that defendants’ use of the UL certified mark and FM approved mark on their product, the Firestop Box Insert, was false advertising and false association. “According to UL’s website, a product with the UL certification mark is one that UL found to meet UL’s requirements by a representative sample. According to FM’s website, an FM approved mark denotes that a product has completed FM’s testing process.” FireBlok was never FM approved, and its UL certification was withdrawn in 2025. Defendants’ product has used the UL and FM marks since 2008 and 2009, respectively, but requested withdrawal of UL certification/sent an email to FM leading FM to withdraw its listing in 2008.

FireBlok was asserting false association claims on behalf of a third party as false advertising, which led to an “undifferentiated amalgam of a claim.”

 “A ‘literal’ falsehood is bald-faced, egregious, undeniable, over the top.” (This is a bad standard, risking a conflation of falsity with willfulness.)

The court found that it was not enough to get summary judgment on literal falsity that defendants withdrew their certifications with both certifying bodies. Defendants argued that the Firestop Box Insert was, in fact, UL certified as shown by UL’s continued listing of Hilti’s product as a UL certified product and UL’s lack of adverse actions against Defendants for their use of the UL certified mark, and that their use of the FM approved mark was not literally false because FM continued to conduct routine inspections of the manufacturing process, issued Certificates of Compliance, and continued listing the Firestop Box Insert as an FM Approved product. This was a genuine factual dispute over what the use of certification marks meant. A jury could find the use to mean that the Firestop Box Insert met the safety requirements set by UL and FM, “in which case the statement would be true.” But a jury could also reasonably interpret these statements to mean that defendants were authorized to use these marks on their product [though one has to wonder about materiality in that event].

The parties argued over the likely confusion factors, but false attribution isn’t enough: “a false advertising claim requires a showing of deception about the product itself.”

FireBlok also failed to show that there was no dispute about materiality. Nor was injury to FireBlok shown sufficiently to grant summary judgment; it wasn’t enough that the parties competed.

What about false association? (I would probably have held that there wasn’t standing under 43(a)(1)(A), only (B).) Doing conflating of its own, the court said that, without literal falsity, FireBlok had to show misleadingness with actual consumer confusion, and there was no evidence of that. The court would not presume likely confusion from literal falsity in a false association case.

 


Friday, May 30, 2025

P&G's primary jurisdiction argument over tampon labels goes down like a lead balloon

Barton v. Procter & Gamble Co., 766 F.Supp.3d 1045 (S.D. Cal. 2025)

Plaintiffs alleged that P&G’s Tampax Pearl and Radiant tampons had dangerous levels of lead; the court allowed some of the usual California claims to proceed, including for injunctive relief.

There’s no safe level of lead exposure, and it’s “particularly harmful to young children and women of child-bearing age.” California’s Proposition 65 establishes a Maximum Allowable Dose Level of 0.5 micrograms of lead per day for reproductive toxicity. Based on “independent scientific testing and analysis,” the ordinary and expected use of the tampons would allegedly expose consumers to more than this MADL per day. Plaintiffs alleged that their independent laboratory testing of the super versions shows that Tampax Pearl Products contain .181 micrograms of lead per gram, and that Tampax Radiant Products contain .123 micrograms of lead per gram; extrapolating to light and regular, consumers would allegedly be exposed to lead in excess of the MADL regardless of which type they used.  Plaintiffs alleged that vaginal insertion allowed lead to be directly absorbed into the bloodstream, making this exposure particularly bad.

The package statements “#1 U.S. GYNECOLOGIST RECOMMENDED TAMPON BRAND”; “FREE OF PERFUME”; “FREE OF ELEMENTAL CHLORINE BLEACHING”; “TAMPON FREE OF DYES”; and “CLINICALLY TESTED GENTLE TO SKIN” allegedly mislead reasonable consumers to believe that the tampons are safe to use, including that “they are free from potentially harmful elements and ingredients.”

The court rejected the application of the primary jurisdiction doctrine. A 2024 study finding “measurable concentrations” of lead “in 30 tampons produced by 14 tampon brand manufacturers,” which concluded that “[f]uture research is necessary to replicate our findings and determine whether metals can leach out of tampons and cross the vaginal epithelium into systemic circulation.” “In response, on September 10, 2024, the FDA announced that it commissioned an independent literature review and initiated an internal bench laboratory study to determine if metals from tampons are released and if they are absorbed by the body.” The completed literature review “did not identify safety concerns associated with tampon use and contaminant exposure.” Despite the “limitations related to the methods used in the [reviewed] studies” and the fact that none of the studies actually addressed “how much, if any, of the contaminants identified are released from the tampon or absorbed through the vagina,” the FDA stated that it “continues to recommend FDA-cleared tampons as a safe option for use as a menstrual product.”

“Although the FDA has a history of regulating tampons, the primary jurisdiction doctrine does not ‘require[ ] that all claims within an agency’s purview ... be decided by the agency.’” “ The FDA’s literature review did not, and the FDA’s laboratory study will not, review affirmative representations such as those on the Product packaging and determine whether they were misleading when Defendant omitted the presence of lead in the tampons.” And, as to the fraudulent omission of an unreasonable safety risk allegations, the underlying questions of whether lead is released from tampons, enters the circulatory system, and creates an unreasonable safety risk are within the jurisdiction of the FDA, but there was no indication that the FDA was going to provide an opinion on any particular tampon, and staying the case would cause a delay. The FDA provided no timeline for releasing its findings after peer review. (And, honestly, even a functioning FDA takes years; does anyone believe that’s what we have?) “[P]rimary jurisdiction is not required when a referral to the agency would significantly postpone a ruling that a court is otherwise competent to make.”

However, the court found that the complaint lacked sufficient detail as to the laboratory that performed the testing or the form and date of testing. (I remain baffled by why this is important at the pleading stage.) Also, plaintiffs needed either to test the light and regular products or explain why extrapolation was appropriate, given that a different sub-brand of Tampax, pure cotton, didn’t have detectable levels of lead. (Maybe because it’s made differently?) Leave to amend was granted.

The court also denied P&G’s argument that the complaint was an impermissible attempt to bring a “back-door Proposition 65 claim.” Under Proposition 65, no person doing business shall “knowingly and intentionally expose any individual to a chemical known to the state to cause cancer or reproductive toxicity without first giving clear and reasonable warning to such individual” where the amount exceeds the “no significant risk level” established by the California Environmental Protection Agency’s Office of Environmental Health Hazard Assessment. Private parties can enforce Proposition 65, but only 60 days after they give “notice of an alleged violation” to the “alleged violator,” the California Attorney General, and local prosecutors. The notice must also include a “certificate of merit” that states that the “person executing the certificate has consulted with one or more persons with relevant and appropriate experience or expertise ... and that, based on that information, the person executing the certificate believes there is a reasonable and meritorious case for the private action.” Pre-filing notice is mandatory, and defective notice cannot be cured retroactively. A plaintiff cannot skirt these requirements by bringing claims – under consumer protection statutes – that would otherwise “be barred under Proposition 65.”

But the complaint here wasn’t entirely derivative of the unspoken Proposition 65 violation (failure-to-warn of lead). Plaintiffs alleged that P&G “has gone beyond the offenses of omission that Proposition 65 seeks to prevent and has affirmatively deceived its customers.”

Here, representations like “GYNECOLOGIST RECOMMENDED,” “FREE OF ELEMENTAL CHLORINE BLEACHING,” and “CLINICALLY TESTED GENTLE TO SKIN” were sufficiently “conceptually related” to the idea that the tampons are free from harmful substances, like lead. By contrast, statements on chocolate products such as “always small farmer grown” would not lead reasonable consumers to believe that the chocolate didn’t contain unsafe levels of toxins, because the connection between being locally grown and being free from toxins is attenuated. Here, safety- and additive- related representations more plausibly suggested the absence of lead.

However, material omission claims failed. Plaintiffs didn’t sufficiently allege that the presence of lead amounts to an unreasonable safety hazard. There was no allegation that the tampons even release lead, and the court thought that the allegations that they would “contradicted” the June 2024 study, although it looked to me like the study just said that it didn’t investigate that question itself, which is not a contradiction.  Even if the tampons released lead at the levels alleged, plaintiffs still failed to allege that the lead was “unreasonably hazardous at the particular levels in the specific Products.”

Equitable claims: Although plaintiffs could plead inadequate legal remedies in the alternative to seek disgorgement/restitution, they hadn’t done so (again, there was leave to amend). However, they had pled that legal remedies were inadequate as to prospective injunctive relief.  An injunction wouldn’t necessarily require P&G to change the product composition; it could require a disclosure. Plaintiffs properly alleged their inability to rely on the product label in the absence of an injunction.


Wednesday, May 28, 2025

Deadline extended to Friday: TM scholarship roundtable

 

TM scholarship roundtable

The Trademark and Unfair Competition Scholarship Roundtable co-hosted by Harvard, NYU, and the University of Pennsylvania will take place this year at the University of Pennsylvania in Philadelphia, PA. The Roundtable is designed to be a forum for the discussion of current trademark, false advertising, right of publicity, and related unfair competition and IP scholarship, covering a range of methodologies, topics, and perspectives. Five to six papers will be chosen for discussion over the course of the Roundtable, with each paper allocated an entire hour for discussion and assigned a commentator.   

The Roundtable will be held on Friday, October 10, 2025. If there is a critical mass of papers, we may also extend the Roundtable through Saturday morning, October 11th. Participation at the Roundtable will be limited and invitation-only. We expect all participants to have read the papers in advance. The Roundtable will cover the travel and lodging expenses for invited authors.  We invite submissions from scholars working on any aspect of trademark, false advertising, marketing, right of publicity, unfair competition, or related areas of the law. Priority will be given to those who can attend the entire event (including Saturday) and a dinner the night of Friday, October 10th. Submissions must be of full drafts in Microsoft word or PDF format. The deadline for submission is May 30th.

To submit a draft paper, please fill out the form here: https://cvent.me/RXxbZ0 and upload an anonymized version of your draft.  Please note that the maximum file size that may be uploaded is 10MB. Appendices or other supporting material or larger files can be emailed separately to ctic@law.upenn.edu; please do not submit a CV or cover letter. 

For further information about the Roundtable, please email: Jennifer Rothman (Penn): rothmj@law.upenn.edu; Barton Beebe (NYU): barton.beebe@nyu.edu; or Rebecca Tushnet (Harvard): rtushnet@law.harvard.edu.

Monday, May 26, 2025

court holds Elon Musk couldn't be deceived by statements he coauthored

Musk v. OpenAI, Inc., 2025 WL 1482386, No. 4:24-CV-04722-YGR (N.D. Cal. May 1, 2025)

I’m only discussing the false advertising claims; they are funny.

Musk’s false advertising claim under California law fails because “there is no evidence Musk relied on OpenAI’s public-facing statements to his detriment,” given that, under the facts pled as the complaint and the attached exhibits, “Musk himself helped author” the statements about OpenAI’s commitment to humanity that allegedly misled him.

Musk’s Lanham Act claims also failed; the theory was that the statements injured Musk and xAI as competitors, but “Musk is not xAI himself” and thus could not have been injured.


Thursday, May 22, 2025

omission of FedEx's role in embryo transport was potentially deceptive

S.W. v. Cryoport, Inc., 2025 WL 1421909, No. 8:24-cv-02212-AH-(DFMx) (C.D. Cal. Apr. 24, 2025)

Tragic facts in this consumer protection case. Plaintiffs underwent IVF treatments in 2019 to preserve their options, resulting in six cryopreserved healthy embryos. They contracted with Cryoport to have the embryos transferred from a fertility clinic in San Francisco to Irvine, California. Cryoport provided a travel tank to the clinic, clearly labeled as containing live specimens. What plaintiffs allegedly didn’t know was that Cryoport hired FedEx to physically take the package from San Francisco to Irvine; they learned that by receiving tracking alerts to FedEx. FedEx misdelivered the package to Cryoport’s logistics center, where a Cryoport employee opened the container and removed the contents; the embryos were then put back into a container and delivered to Irvine, no longer viable.

Plaintiffs sued for (1) bailment; (2) negligence and/or gross negligence; (3) violation of the California CLRA and (4) violation of the UCL. The contract’s limitations on liability to $200 applied (though not as to gross negligence); the court found that the contract limitations weren’t unconscionable or void as against public interest, though the claims otherwise survived. (Not clear to me whether CLRA/UCL claims are also governed by the contract; consumer protection laws were designed in part to avoid ordinary contractual exculpation clauses and the claims here go to whether they would have engaged in the transaction in the first place had they known the truth.)

The CLRA and UCL claims were based on omissions. “A failure to disclose a fact can constitute actionable fraud or deceit in four circumstances: (1) when the defendant is the plaintiff’s fiduciary; (2) when the defendant has exclusive knowledge of material facts not known or reasonably accessible to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations that are misleading because some other material fact has not been disclosed.”

Cryoport argued that no reasonable consumer who purchased Defendant’s standard transport services would be deceived into believing that it would physically transport the materials at issue. But plaintiffs alleged that Cryoport repeatedly identified itself as offering “transportation,” “shipping,” and “courier” services, and conveyed to consumers that it itself transports the material entrusted to it. They sufficiently alleged that the identity and participation of FedEx was material information that Cryoport was obligated to disclose, and that the omission was likely to confuse reasonable consumers; the complaint pointed to public reviews highlighting that FedEx is involved. “This indicates that a reasonable consumer would likely not understand from Defendant’s representations that it utilized FedEx for its services.”

 

 


omissions-based deceptiveness claims are easier to bring in Cal. than NY

Gamino v. Spin Master, Inc., No. ED CV 23-2242-DMG (SPx), 2025 WL 1421907 (C.D. Cal. Mar. 31, 2025)

California and New York residents sued the manufacturers of certain children’s toys they purchased, “Orbeez water beads,” alleging the water beads pose certain severe, undisclosed health hazards to children. “Water beads” are “tiny, spherical, and gelatinous toys that look strikingly similar to candy” and have gained immense popularity over the last decade. They’re made from superabsorbent polymers that expand up to 1,500 times their original size when exposed to water. “They are often marketed as sensory toys for children who are young or who suffer from developmental conditions to squish and move around to aid in their fine motor development.”

However, because they swell when exposed to fluid, “water beads pose severe health risks to children who ingest or insert the beads into their bodies, unless the beads are identified and surgically removed. This can cause injuries such as intestinal blockage or obstruction of the nasal cavity, ear canal, or respiratory system.” Worse, they’re “practically invisible” on x-rays. Plaintiffs alleged “several thousand reported water beads-related hospitalizations of children across the country, per year, since at least 2017, including several reported deaths.”

Each product has a warning for a choking hazard and instructions to keep the product away from children under 3 and pets. Also, each product except one also includes a “CAUTION: DO NOT EAT” warning or an illustration indicating not to eat the product. A few Orbeez products also include “do not insert Orbeez into nose or ear” warnings. See, e.g., id. at 6.2

Spin Master argued that no reasonable consumer could have been misled because the front packaging features prominent warnings about the dangers of eating Orbeez. “But such warnings do not capture the essence of the hazards alleged.” Plaintiffs alleged that “there is a severe risk of harm if children insert a water bead into their body other than by eating it—for instance inserting a water bead into their ear or nose,” citing an allegation about a child who suffered profound hearing loss after inserting a water bead into her ear, where it grew in size and was undetected for 10 weeks.

“A choking hazard warning could reasonably be interpreted by a consumer to suggest that if a child swallows a water bead without immediately choking, the child is no longer in danger.” But the complaint alleged that choking wasn’t the only danger, citing incidents in which children suffered severe harm or even death after ingesting or aspirating water beads, including incidents in which there was a delayed onset of symptoms coupled with the inability of x-rays to detect the ingested bead lodged in the child’s body. Even “do not eat” warnings coupled with “choking hazard” warnings could plausibly mean, to a reasonable consumer, that the choking hazard was the reason not to eat the beats.

However, the NY consumer protection claims were dismissed because plaintiffs could reasonably have obtained the information from other sources. Under NY law, an omissions-based claim requires that “the business alone possesses material information that is relevant to the consumer and fails to provide this information.” The complaint itself showed that Spin Master wasn’t alone in possessing information about the hidden dangers of the products, including the Consumer Products Safety Commission’s publicly available databases [ed. note: for now!]. “Consumers and parents have also allegedly denounced water beads for over a decade, including a parent who runs a non-profit organization to educate the public about the dangers of children playing with water beads.”

By contrast, in DeCoursey v. Murad, LLC, 673 F. Supp. 3d 194, 218 (N.D.N.Y. 2023), plaintiffs alleged an eye product contained color additives unsafe for the eye area, citing FDA regulations prohibiting color additives. “A consumer could not reasonably have learned of the danger, as the consumer would have had ‘to research the regulation for each specific additive and cross-reference the general FDA regulation that color additives may not be used unless the specific regulation for the color additive permits use in the eye area.’” And Kyszenia v. Ricoh USA, Inc., 583 F. Supp. 3d 350 (E.D.N.Y. 2022), involved only complaints on a “handful” of websites.

However, the plaintiffs did plead a duty to disclose under California law, which requires “(1) the existence of a design defect; (2) the existence of an unreasonable safety hazard; (3) a causal connection between the alleged defect and the alleged safety hazard; and that the manufacturer knew of the defect at the time a sale was made.”

The court dismissed equitable relief claims, though not claims for injunctive relief, and also kicked out claims for unjust enrichment, negligent misrepresentation, NY fraudulent inducement but not California fraudulent inducement, and express/implied warranty claims (because a failure to disclose can’t be an affirmation of fact or promise by a seller that becomes part of a bargain).

 

Tuesday, May 20, 2025

Reminder: TM scholarship roundtable

The Trademark and Unfair Competition Scholarship Roundtable co-hosted by Harvard, NYU, and the University of Pennsylvania will take place this year at the University of Pennsylvania in Philadelphia, PA. The Roundtable is designed to be a forum for the discussion of current trademark, false advertising, right of publicity, and related unfair competition and IP scholarship, covering a range of methodologies, topics, and perspectives. Five to six papers will be chosen for discussion over the course of the Roundtable, with each paper allocated an entire hour for discussion and assigned a commentator.   

The Roundtable will be held on Friday, October 10, 2025. If there is a critical mass of papers, we may also extend the Roundtable through Saturday morning, October 11th. Participation at the Roundtable will be limited and invitation-only. We expect all participants to have read the papers in advance. The Roundtable will cover the travel and lodging expenses for invited authors.  We invite submissions from scholars working on any aspect of trademark, false advertising, marketing, right of publicity, unfair competition, or related areas of the law. Priority will be given to those who can attend the entire event (including Saturday) and a dinner the night of Friday, October 10th. Submissions must be of full drafts in Microsoft word or PDF format. The deadline for submission is May 27th.

To submit a draft paper, please fill out the form here: https://cvent.me/RXxbZ0 and upload an anonymized version of your draft.  Please note that the maximum file size that may be uploaded is 10MB. Appendices or other supporting material or larger files can be emailed separately to ctic@law.upenn.edu; please do not submit a CV or cover letter. 

For further information about the Roundtable, please email: Jennifer Rothman (Penn): rothmj@law.upenn.edu; Barton Beebe (NYU): barton.beebe@nyu.edu; or Rebecca Tushnet (Harvard): rtushnet@law.harvard.edu.

We look forward to reading your submissions!

Jennifer (Barton & Rebecca)

Friday, May 16, 2025

Court finds literal falsity where two supposedly distinct, rated reverse mortgage sellers are actually one

Longbridge Financial, LLC v. Mutual of Omaha Mortgage, Inc., No. 24-cv-1730-DMS-VET, 2025 WL 1382866 (S.D. Cal. May 13, 2025)

Mutual owns defendant Review Counsel and is the first and only advertising partner of defendant Advisory; those two have similar websites. Review Counsel’s disclosure banner at the top of its webpages, which previously stated that Review Counsel was “affiliated with” Mutual of Omaha, now states that it is “owned and operated by Mutual.” Likewise, Advisory updated its “Disclaimers” page with a “[l]ist of [a]dvertising [p]artners” that “have paid to advertise with [Defendant Advisory]”; a list that includes only Mutual of Omaha. Advisory also added a disclosure to its landing page and “changed some references on its site [previously] describing it as ‘independent,’ to ‘objective.’ ” Both websites now omit any reference to Retirement Funding Solutions (RFS), which was previously listed as Defendants’ number two recommended reverse mortgage provider, but which is also Mutual of Omaha in a different hat.

Longbridge argued that both websites still: (1) falsely represent those defendants as independent organizations using objective ratings despite their financial relationship with Mutual of Omaha; (2) use “arbitrary and statistically unsound criteria” that artificially boost Mutual of Omaha’s rating as a reverse mortgage provider while deflating other providers’ scores; and (3) use false and misleading Google ads and landing pages that promise consumers information about “Top 3” reverse mortgage providers while actually only promoting Mutual of Omaha.

Longbridge sought an injunction requiring removal of various webpages and reviews/review metrics, including a review of Longbridge that falsely listed it as not being licensed in Hawaii. After Longbridge moved for injunctive relief, Review Counsel stopped using the phrase “Top 3 Reverse Mortgages” in its sponsored Google ads and instead used “2025’s Best Reverse Mortgages” and “Top U.S. Reverse Mortgage Companies Reviewed & Ranked.” It also removed the false statement that Longbridge was not licensed in Hawaii.

The court found that the Hawaii statement was literally false. And ads promising information about “Top 3” reverse mortgage providers were literally false “because those ads redirected consumers to landing pages that highlighted Mutual of Omaha and RFS—which the parties agree are the same company—as two of the three ‘top’ providers.”

Likewise, “spotlighting and recommending of Mutual of Omaha and RFS as two separate reverse mortgage providers was literally false by necessary implication.” Listing them side by side, describing them as “some of our notable reverse mortgage loan partners” and “industry leaders,” describing both as having “[e]xcellent customer service” and “[g]reat borrower reviews from independent sites,” and listing a different phone number for each necessarily implied that the two were separate and independent entities.

In addition, Longbridge showed that other past statements, while not literally false, would likely mislead or confuse consumers. Review Counsel’s previous banner disclosure, stating that Review Counsel was “affiliated with” Mutual of Omaha and RFS, was “literally true but obfuscated Mutual of Omaha’s actual control and ownership of Review Counsel.” (The court didn’t identify extrinsic evidence of deception, though I don’t think it should have to.)

What about the current websites, highlighting Mutual of Omaha as their “Featured” or “Top” reverse mortgage company? Longbridge argued that their disclosures were insufficient and too far removed to reveal the true nature of Mutual of Omaha’s ownership and control of Review Counsel and Advisory, and that the sites’ ratings and criteria were “unsound, arbitrary, deceptive and misleading.”

But the court found the current disclosures sufficient, again without any consumer reception evidence.  At the top of every Review Counsel webpage is an evergreen banner stating that “Review Counsel is owned and operated by Mutual of Omaha Mortgage,” and a bolded “Disclosure” link at the top of the landing page that repeats the same disclosure.

Review Counsel page with disclosure at top

Advisory with much less impressive disclosure that "the companies" on the page compensate it

Advisory’s current disclosures include a paragraph on the landing page stating that “[t]he companies listed on this page compensate us as advertising partners.” And, at the very bottom of Advisory’s full-form disclaimer page, Advisory added a “[l]ist of [a]dvertising [p]artners” denoting Mutual of Omaha as the only company to “have paid to advertise with [Advisory].” Longbridge didn’t meet its burden to show misleadingness: “While a consumer would have to read Advisory’s long-form disclosure to understand the true nature of Mutual of Omaha’s advertising relationship with Advisory, the other two disclosures on the landing page—albeit less informative—should spur a reasonable consumer to further inquire about Advisory’s advertising partnerships. Advisory’s long-form disclosure page ultimately provides that information.” However, without that specific information, the previous disclosures were misleading, since they only referred to paid partnerships. “That Mutual of Omaha is Advisory’s only advertising partner is a vital piece of information consumers should know to avoid being misled or confused. The information is particularly salient because Mutual of Omaha is featured on Advisory’s landing page and Advisory makes vague references to ‘[c]ompanies’ who pay Advisory to be promoted or featured on its website without identifying those companies.

The court rejected Longbridge’s argument that defendants’ “.org” domain names were misleading and confusing because they are primarily used for “nonprofit websites such as non-governmental organizations (NGOs), open-source projects, charitable organizations, and educational platforms.” “To the extent Defendants’ ‘.org’ usage engenders a false sense of trust and objectivity, Defendants’ current disclosures likely counteract it.”

What about the ratings criteria and ratings? Longbridge argued that defendants’ criteria were neither relevant nor meaningful to reverse mortgage consumers and instead were pretextually selected to make Mutual of Omaha Defendants’ top rated reverse mortgage provider. But the court found that ratings with this much judgment involved were likely not factual claims. “[C]hallenges to the selection of purportedly objective criteria which are summarized by a five-star rating are not actionable under the Lanham Act.”

Likewise, the individual review pages for Longbridge were not actionable. Review Counsel’s own “3.7” rating for Longbridge showed alongside another four-star rating and a button to “Read Reviews.” Clicking that button brings a consumer to Review Counsel’s consumer review section for Longbridge, a consumer would see that Longbridge’s four-star rating is based entirely on a single consumer review stating “Yes. I understand.”

A reasonable consumer should notice that the 3.7 score [that is, nonactionable opinion] and the four-star score are distinct since they are side-by-side and numerically different. Additionally, if a reasonable consumer were to click on “Read Reviews” to read the four-star consumer review, they would likely conclude it was not relevant to evaluating Longbridge’s services since the consumer review is nonsensical—stating, “Yes, I understand.”

As for Longbridge’s complaints about Mutual of Omaha’s individual consumer ratings, there was no suggestion that Review Counsel authored or influenced them.

However, Advisory’s prior statements that its reviews and scores “are based upon Advisory’s own independent propriety scoring system” and that advertisement compensation does not influence Advisory’s reviews, scores, or ratings of providers, were falsifiable. A claim of independence “is a statement of fact that can be proven true or false.” Given that Advisory was founded and owned by Mutual of Omaha’s former General Counsel, the Advisory website was designed using a “templated design footprint” provided by Review Counsel, and Advisory’s sole advertising partner is Mutual of Omaha, that was dubious, but the record didn’t support a preliminary injunction.

Materiality: disclosure of the Mutual of Omaha connection was material “because it misrepresents an inherent quality or characteristic of Review Counsel’s services—whether a consumer can trust Review Counsel’s reviews and recommendations.” Even if reverse mortgage consumers were “savvy” and needed mandatory counseling from a government-approved agency before they could take out a reverse mortgage, that evidence was too generalized. “Further, the mandatory counseling occurs well after consumers are exposed to and potentially influenced by Defendants’ false and misleading statements. It is also contested whether these counselors are allowed to redirect consumers from their chosen reverse mortgage provider.” The same was true for Advisory’s disclosures. “Consumers are more likely to use Advisory’s website if they can trust and rely on the information Advisory chooses to present. Failing to disclose the sole source of income for Advisory, when that source is a reverse mortgage provider highlighted on Advisory’s website, could certainly influence consumers’ decisions to use Advisory’s website and choose a reverse mortgage provider.”

The court presumed irreparable harm, which defendants didn’t rebut. It didn’t matter that Longbridge had no evidence of harm or that defendants voluntarily changed their websites. Even if Longbridge’s business was growing, that could happen anyway, and its greater growth might have been stymied by the false advertising. Review Counsel argued that Longbridge itself paid for favorable placement and ratings on competing comparison/review websites, but it didn’t Longbridge own and operate any advertising website or serve as the sole advertiser of a review website that was founded by a former Longbridge employee. Anyway, “[e]vidence of threatened loss of prospective customers or goodwill certainly supports a finding of the possibility of irreparable harm.”

The court also rejected arguments based on Longbridge’s delay of more than sixteen months in seeking preliminary injunction rebuts the presumption of irreparable harm.  “ ‘[D]elay is but a single factor to consider in evaluating irreparable injury’; indeed, ‘courts are loath to withhold relief solely on that ground.’ ” Longbridge discovered Review Counsel’s false advertising in April 2023, then raised formal complaints to relevant trade associations and state banking regulators between July 2023 and January 2024 before eventually suing in September 2024. The magnitude of Longbridge’s “potential harm [became] apparent gradually, undermining any inference that [Longbridge] was ‘sleeping on its rights.’ ” Longbridge attempted to resolve its claims extrajudicially during the delay period, and then the potential for harm increased with Advisory’s founding in January 2024. An additional eight months delay wasn’t dispositive under these circumstances.

The good news for defendants: the injunction didn’t require discontinuing current practices, only that they couldn’t (1) advertise that Longbridge is not licensed to issue loans in any state or territory where Longbridge is licensed; (2) advertise to consumers on sponsored Google-search links that they provide information relating to “Top 3” reverse mortgage providers when their landing pages advertise fewer than three independent reverse mortgage providers; (3) advertise RFS on their websites as if RFS were an independent reverse mortgage provider originating its own loans, including by representing that RFS has customer support phone lines, reviews, and ratings that are distinct from Mutual of Omaha; or (4) “diminish” their existing disclosures.


Monday, May 12, 2025

Lanham Act false advertising disgorgement is equitable; no jury trial required

Diamond Resorts U.S. Collection Development, LLC v. Wesley Financial Group, LLC, No. 3:20-CV-00251-DCLC-DCP, 2025 WL 1334625 (E.D. Tenn. May 7, 2025)

Another timeshare case! Diamond alleged that defendants engaged in “a deceptive timeshare cancellation business” that induces Diamond’s timeshare owners to breach their contractual agreements with Diamond Resorts. It sued for false advertising in violation of the Lanham Act, the Tennessee Consumer Protection Act, and for the unauthorized practice of law. As trial approached, Diamond told the court that it wouldn’t pursue legal relief, only an injunction, disgorgement, attorneys’ fees, and costs, so that defendants couldn’t get a jury (which, one infers, might be more sympathetic to defendants because timeshares can be such nightmares). The court ruled that there was no statutory or Seventh Amendment right to a jury trial in these circumstances.

“The right to a jury trial is guaranteed by the Seventh Amendment,” which states that “[i]n Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved.” Common law means “suits in which legal rights were to be ascertained and determined,” and not suits in which “equitable rights alone were recognized, and equitable remedies were administered.” Making this distinction requires a court to compare the action at bar to “18th-century actions brought in the courts of England prior to the merger of the courts of law and equity,” because that is an excellent way to run a system. “[A]ctions that are analogous to 18th-century cases tried in courts of equity or admiralty do not require a jury trial.” If history doesn’t provide an answer, courts “look to precedent and functional considerations.” The inquiry also requires the court to “examine the remedy sought and determine whether it is equitable in nature.” “Th[is] second inquiry is the more important” of the two. Because of the value of a jury trial, a court “indulge[s] every reasonable presumption” in favor of finding a right to a jury trial.

Nonetheless, there was no statutory right to a jury trial in a Lanham Act case. “Congress has shown that it knows how to provide litigants with a right to a jury trial when it wants to.”

In Osborn v. Griffin, 865 F.3d 417 (6th Cir. 2017), the Sixth Circuit observed that “in 18th century chancery courts, what [modern-day courts] now call disgorgement was embodied in the remedies of ‘accounting, constructive trust, and restitution,’ ” which “were almost universally recognized as being within the ambit of courts of equity.” Disgorgement, that is, was equitable.

More specifically, how did England’s 18th-century courts treat actions for trademark-related disputes when parties sought disgorgement as a remedy in those actions? The Sixth Circuit has recognized that, “prior to statutory protection for trademarks,” English and American courts “treated the damages portion of such suits as an equitable action in the nature of an accounting.” Consistent with this history, the Lanham Act allows for disgorgement “subject to the principles of equity” for claims of false advertising under § 1125(a).

True, the Sixth Circuit spoke about trademark cases, not false advertising. But Lexmark says that “the Lanham Act treats false advertising as a form of unfair competition,” and, the court here reasoned, “unfair competition is analogous to trademark infringement.” Analogy was good enough here.

Likewise, the disgorgement remedy was equitable in nature, even when the disgorgement was sought to redress false advertising rather than trademark infringement. What about an earlier Sixth Circuit statement that, “[d]espite this pervasive equity background [in trademark actions], the damages or accounting aspect of trademark infringement actions are considered legal actions for purposes of the jury trial clause of the Seventh Amendment.” The Sixth Circuit relied on Dairy Queen, Inc. v. Wood, 369 U.S. 469 (1962), which held that “a plaintiff, by asking in his complaint for an equitable accounting for trademark infringement, could not deprive the defendant of a jury trial on contract claims subsumed within the accounting.” “In short, Dairy Queen was an action for compensatory damages.”

But plaintiffs here disavowed seeking compensatory damages. “In Dairy Queen, the Supreme Court was itself skeptical of Dairy Queen’s claim because it had shades of a breach-of-contract claim and a trademark-infringement claim all in one, but the Supreme Court declined to resolve the ‘ambiguity’ in this claim because it was certain that Dairy Queen’s request for a ‘money judgment’ was “wholly legal in its nature however the complaint [was] construed.’” Here, disgorgement would only require proof of defendant’s sales, meaning that “evidence of compensatory damages arising from any breach of contract will be off the table at trial.” But, given that the theory here was that defendants induced Diamond Resorts’s timeshare owners to breach their contracts with Diamond Resorts, the court would watch carefully to prevent plaintiffs from using theories of breach of contract to arrive at lost profits; if they did so, defendants would be entitled to a jury trial.


Georgetown Law Institute for Technology Law & Policy student writing competition

 The annual Georgetown Law Institute for Technology Law & Policy student writing competition is now open.  We hope you will encourage your students to submit their papers for consideration.


Students are invited to submit papers that provide analysis or insights on issues at the intersection of technology law and policy. Example topics could include artificial intelligence, antitrust and consumer protection, biotechnology, computer crime, cybersecurity, digital platform regulation, intellectual privacy, international trade, and social justice applications of technology. 

Papers will be judged by a blind panel of judges. The author(s) of the first place paper will be awarded $1,000. The author(s) of the top paper on an artificial intelligence-related topic will be awarded $1,000.

Please submit papers via email to techinstitute@law.georgetown.eduSubmissions are due by June 6, 2025.

Papers will be accepted from students enrolled at any ABA-accredited law school in the United States during the 2024-2025 academic year. The paper must be the author’s own work, although students may incorporate feedback received as part of an academic course or supervised writing project. 

Please visit the Tech Institute's website for more details and submission guidelines. Questions can be sent to techinstitute@law.georgetown.edu.

Tuesday, May 06, 2025

court applies issue preclusion to a jury verdict under a different state consumer protection law

Dent v. Premier Nutrition Corp., 2025 WL 1282627, No. 16-cv-06721-RS (N.D. Cal. May 2, 2025)

Here, the court applies issue preclusion against Premier, makers of Joint Juice, which lost a bellwether-type trial under NY law (a ruling affirmed in relevant part by the Ninth Circuit), on claims against it based on Illinois consumer protection laws. The court noted that six other state-wide classes were stayed before it, and a California class was seeking judgment against Premier in state court.

Specifically, Premier was precluded from relitigating materiality, sale in commerce, and the measure of damages.

Premier didn’t dispute that Dent and the Illinois purchasers saw the same labels as Montera and the New York purchasers during the same relevant time period. Under California law, which supplied the rule of decision, “[i]ssue preclusion prohibits the relitigation of issues argued and decided in a previous case, even if the second suit raises different causes of action.” However, courts have discretion to deny issue preclusion if its application does not “comport[ ] with fairness and sound public policy.”

“While Premier may not have expected the Montera trial to have roll-on effects, it does not follow that any effects would be fundamentally unfair.” Montera and Dent both alleged that Premier’s advertisement and marketing of Joint Juice was misleading, harming entire classes of consumers in each state. The advertisement and labeling of Joint Juice was identical in New York and Illinois, and the time period covered in both suits was the same. Whether the advertising is deceptive was evaluated using the same reasonable consumer standard, not individual consumer understandings.

Premier argued that new scientific advances in the study of glucosamine’s potential benefits necessitated a full trial on whether Joint Juice’s label was in fact deceptive. But “new witnesses or cumulative evidence do not negate issue preclusion.”

Once issue preclusion was available, the question was what overlapping issues were decided by Montera. The jury decided that Joint Juice’s label was misleading, and both NY and Illinois use the same materiality standard, so there was issue preclusion.

However, the Montera jury didn’t need to reach a conclusion as to whether Premier intended for the class to rely on the alleged deceptive act or practice, which is required by Illinois law, so that remained for trial. (Imagine going to the jury and arguing, sure, it was materially misleading, but we didn’t intend for consumers to rely on it!)

Dent also conceded that she needed to prove individual causation, but argued that materiality justified an inference of classwide causation. Illinois’s ICFA requires that the defendant’s deceptive practice proximately caused the damages suffered by plaintiff, but not actual reliance. It allows courts to infer proximate causation on a classwide basis when all class members are subject to a material, standardized misrepresentation. While the court found Dent’s argument for preclusion on causation “strong,” it determined that the issue was not “identical.” “While Dent could certainly demonstrate causation by proving the class was exposed to uniform, materially misleading misrepresentations, Montera did not actually do so in her case. Moreover, based on the caselaw presented, such a showing is necessary, but not sufficient for a finding of ICFA causation.” The court cited Illinois cases articulating a standard demanding that “the only logical reason” to buy was as a result of the deception or that “no rational class member would have acted as they did absent the misrepresentation.”

What about the measure of harm? The ICFA defines damage as “the value of what [plaintiff] received less than the value of what was promised”: a benefit-of-the-bargain theory. This means that a full refund is justified if a product “had no value to consumers.” “The jury in Montera, in finding liability and awarding the entire purchase price to consumers, necessarily concluded Joint Juice was valueless for its advertised purpose.” Premier presented extensive evidence arguing purchasers received benefits apart from the potentially deceptive joint health ones advertised on Joint Juice’s label, but the jury declined to reduce its award based on Premier’s suggested alternative benefits, such as Vitamin C, Vitamin D, antioxidants, and hydration. Thus, the damages issues in Dent were narrowed to the calculation of damages due to the Illinois class based on the number of units sold and the purchase price, and punitive damages.

Premier also argued that it was entitled to raise a First Amendment defense, which wasn’t raised in Montera until its renewed judgment as a matter of law after trial. But “issue preclusion requires only the opportunity to litigate ... not whether the litigant availed himself or herself of the opportunity.” Also, “misleading commercial speech is not protected,” meaning that Premier couldn’t raise a First Amendment defense anyway because of the jury findings.

The court also advised the parties that they should settle “this now antique litigation.”