Tuesday, July 12, 2016

Discoverable falsity is immaterial to sophisticated consumers

Reed Const. Data Inc. v. McGraw-Hill Companies, Inc., 638 Fed.Appx. 43 (10th Cir. 2016)

Allegedly false claims about the quality of construction project data offered by these competitors were, even if false, not material to consumers, because the consumers were sophisticated.  “Discovery revealed only one customer who arguably relied upon McGraw–Hill’s advertising in deciding between Reed and McGraw–Hill, while numerous other customers testified that they discounted the companies’ representations as to their own products and conducted independent evaluations.”  Even though McGraw-Hill’s marketing professionals “professed great enthusiasm for the advertising campaign at issue, the evidence from consumers makes clear that the market of sophisticated consumers relying largely on face-to-face sales was unmoved.”  Thus, no reasonable jury could have found materiality.

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