No, wood is good: possibility of detecting image manipulation keeps image from literal falsity

Louisiana-Pacific Corp. v. James Hardie Building Prods., Inc., No. 3:18-cv-00447-JPM, 2018 WL 3978364 (M.D. Tenn. Aug. 20, 2018)

LP challenged statements JH made regarding engineered wood siding products in its “No Wood Is Good” marketing campaign. The parties compete in the manufactured siding industry. LP claims to be the “undisputed leading manufacturer and distributor of stand-based engineered wood siding products in the United States.” JH produces cement-based siding products that it markets as alternatives to engineered wood siding, including LP’s products.

JH made superiority claims on www.nowoodisgood.com and www.nowoodsgood.com, in promotional materials, and in representations made by its agents to prospective customers. It stated that engineered wood sidings are inferior because “pests love” engineered wood sidings, and that engineered wood sidings are “natural fuel for fire,” “susceptible to water absorption,” and “won’t weather well.”  It used images and video of a woodpecker within a hole in what appears to be siding material and an image of buckling siding that JH indicates is LP’s strand-based engineered wood siding.

As for the woodpecker picture, LP argued that the image was literally false because it was doctored to add the woodpecker, and the image’s colors were edited to make the hole seem more severe and misrepresent its siding’s susceptibility to woodpecker damage. The record showed that the hole was in fact made in LP siding, and there was circumstantial evidence that it might have been a woodpecker; the record indicated that engineered wood products (including LP’s) are susceptible to woodpecker damage.

JH argued that adding the woodpecker was puffery. The court disagreed.  It was a specific representation rather than a broad, general one, and the court didn’t see why “[n]o reasonable consumer would believe that JH captured the woodpecker in the act of nesting in the hole.” However, the image was not literally false because it was “arguably identifiable as a fake.” The siding was too thin for the bird to nest within it and that the photo does not show that the bird has pecked through the moisture barrier that would be installed underneath the siding. “[A] reasonable consumer (who would be familiar with the dimensions of the product) may be able to spot the woodpecker as a fake.”

“Pests Love It”: LP argued that its products are treated with a termite-resistant zinc borate-based process that resists damage from pests and thus its siding doesn’t suffer structural damage from them, but JH responded that LP’s products are not impervious to pest damage. The court found the claim to be not literally false, but an exaggeration “to emphasize the point that wood siding is vulnerable to pest damage. No reasonable consumer would believe that pests ‘love’ wood siding, or that any siding material would be specifically designed to lure or attract pest damage.”

Photo of warped siding: LP argued that the image was literally false because the image does not depict engineered wood siding. JH responded that the image depicted fiber-based engineered wood siding. Originally, the ad referred to OSB siding, but was then changed to refer to “Engineered Wood.”  The image of buckled siding concededly depicted fiber-based wood siding, a distinct type. LP produces and sells both types.  The image labeled “Engineered Wood” wasn’t literally false, because it was factually accurate. If engineered wood siding is not properly installed, its natural expansion due to water absorption could result in buckling. Thus, the image was partially accurate, and there was a disclaimer that identified improper installation as a possible cause. But the disclaimer, in small font and at a distance from the image itself, wasn’t completely effective. This partial truth/partial correction rendered the image not literally false, except as to when the image was labeled “OSB Siding.”  The visual cues that an expert could use to identify the product weren’t clear in JH’s marketing and a non-expert might not recognize them on visual inspection. Thus, reasonable consumers would be unambiguously deceived by the image of buckled fiber-based siding labled “OSB Siding.”

There was no proof of consumer reception of the challenged images/statements. JH’s expert concluded that “the woodpecker image, the ‘Pests Love It’ statement, and online advertising for siding products generally are not material to purchasing decisions of builders, installers, or contractors.”  The Sixth Circuit permits “a presumption of money damages where there exist[s] proof of willful deception” where the defendant has been specifically targeted, with a specific reference to the competitor or a product identified as the competitor’s.  Only the ads labeled “OSB Siding” specifically targeted LP, the only producer of OSB siding in the US, while other companies make engineered wood products.  But was this falsity willful?  It was reckless, given JH’s knowledge that LP made both kinds, the difficulty of distinguishing them visually, and the lack of evidence that JH took any steps to confirm what kind of siding it was.

JH’s expert report didn’t rebut the presumption of money damages, because the expert’s survey polled only a subsection of the market; it excluded do-it-yourself home builders and do-it-yourself remodelers. Given that JH actually created a separate website geared for consumers and another for the trade audience, that wasn’t good enough.  Thus, LP showed likely success on the merits as to the one statement, but not the others.  The court also presumed irreparable harm because reputational injuries were at risk, and reputational harm can’t be quantified and redressed.