Schering doesn't justify reconsideration in Whirlpool steam case

LG Electronics vs. Whirlpool Corp. (N.D. Ill. Nov. 23, 2009)

Earlier discussion here. Thanks to Ron Rothstein of Winston & Strawn for alerting me that the district court just denied Whirlpool’s motion for reconsideration and request to certify issues to the court of appeals.

Whirlpool argued that the court should reconsider its ruling refusing to grant summary judgment on LG’s literal falsity claim because “steam” has more than one meaning and thus can’t be literally false, and because falsity by necessary implication can’t apply when Whirlpool’s ads are susceptible of more than one interpretation.

To succeed on a motion for reconsideration without new evidence, Whirlpool needed to show a manifest error of law or fact, which it didn’t do. Whirlpool didn’t present sufficient evidence at the summary judgment stage to show that it met one of the definitions of steam, and it didn’t cite any controlling caselaw that an ad using a term with more than one meaning can’t be literally false. (There are cases in which an ad directed at a lay audience uses a term that also has a different highly technical meaning, or vice versa—in such cases a court should be willing to find literal falsity; perhaps this is a variant of falsity by necessary implication.) Instead, questions of fact remain about the literal meaning of “steam” in the context of the ad; other decisions from within the Seventh Circuit have also taken the position that literal falsity is a fact issue.

As for Whirlpool’s objection to falsity by necessary implication, the court first found that Whirlpool had waived objection to this theory by not addressing it earlier. (It’s my totally unscientific impression that courts in the Seventh Circuit are super-aggressive about waiver.) Even without the waiver, Whirlpool didn’t meet the standards for a motion to reconsideration. Though the Seventh Circuit hasn’t explicitly adopted falsity by necessary implication, it hasn’t repudiated the doctrine either.

Finally, and most notably, the district court rejected the argument that Schering-Plough served as a game-changer. Unsurprisingly, Whirlpool focused on the language that “[a] ‘literal’ falsehood is bald-faced, egregious, undeniable, over the top.” But, contrary to Whirlpool’s argument that an ad “cannot be literally false unless it is an [un]ambiguous, bald-faced lie,” Schering-Plough never addressed ambiguity, nor did it take up falsity by necessary implication. (Comment: Phew! I had hoped that sense would prevail, and this is a good early sign that Schering-Plough can be read consistently with the main line of Lanham Act cases, which do not require bad intent or some sort of super-falsity.)

The district court also rejected Whirlpool’s request, in the alternative, for certification of these issues to the court of appeals.