Saturday, February 04, 2006

Superiority claims: puffery or actionable?

Daugherty v. Sony Electronics, Inc., 2006 WL 197090 (Tenn.Ct.App.)

Plaintiff filed a putative class action alleging that Sony marketed its DVD players as high quality, even though Sony knew they were inherently defective. The dismissal of his claims for breach of express warranty, breach of implied warranty, unjust enrichment, and money had and received were dismissed. There was no breach of the express warranty and there was no additional implied warranty. Given the existence of a limited warranty, the other two claims, which only apply when there is no contract between the parties, also failed.

Plaintiff’s Tennessee Consumer Protection Act (TCPA) claim, however, fared better on appeal. The complaint named several Sony ads touting Sony’s product quality, including that “the company has earned a solid reputation for quality, reliability, innovation and stylish design.” As to DVD players specifically, Sony’s ads claimed that its DVD players “set[] the standard” and were “superior.” Sony called itself “the groundbreaking technology innovator and market leader in DVD Video” and claimed to be responsive to “increasing consumer demands for high quality DVD performance.” Plaintiff alleged that Sony’s nondisclosures of defects and false and misleading statements induced plaintiff and other members of the class to buy Sony DVD players they wouldn’t otherwise have bought.

The issue was whether the complaint stated a cause of action. Though the ad claims here seem like puffery, the court wanted to be cautious and leave the issue to the jury as long as the circumstances indicate that the buyer reasonably understood that he or she was getting some kind of assurance about specific facts. Although courts interpreting the Lanham Act have held “superiority” claims to be mere puffing, the court of appeals noted that the Lanham Act and the TCPA are distinct, and the law requires courts to construe the TCPA broadly.

The court refused to hold Sony’s statements to be puffery as a matter of law. The rationale is bracing: the court rejected the legal conclusion that, “notwithstanding the amount of money that Sony spends on advertising its DVD players, Sony never intended for Plaintiff or any consumer actually to rely on so much as even one of these advertisements and, if there was such reliance by a consumer, it was altogether unjustified.”

Some academics have argued against the puffery doctrine on precisely these grounds – the seller, as master of its ad, presumably chooses claims it thinks likely to influence consumers, and if so we should give consumers a chance to prove that they were influenced.

It may be the case that the claims were too vague to make any real factual representation, and yet consumers did rely on them; what then? The concurring opinion takes up this issue, suggesting that a claim of superiority is non-actionable puffery because it’s nothing more than opinion. Superiority can’t be measured, since superiority in one aspect may be offset by inferiority in another, for example in a tradeoff between sound quality and durability. Superiority, like beauty, is in the eye of the beholder. Nonetheless, the concurring judge agreed that the facts needed further development before dismissal as a matter of law could be appropriate.

No comments: