When © trips courts up: Lack of access to standards makes false ad claim impossible to resolve

Wing Enterprises, Inc. v. Tricam Industries, Inc., 2019 WL 2994465, No. 17-cv-1769 (ECT/ECW) (D. Minn. Jul. 9, 2019)

This false advertising case about multi-position ladders turns out to involve an important copyright issue that the Supreme Court has taken up: when a standard is incorporated into law, should it be readily accessible to the public? Because an older ANSI standard incorporated into OSHA isn’t available to the court, the court can’t resolve whether failure to meet the current ANSI standard also violates OSHA. This matters because the defendant advertised ANSI/OSHA compliance, but plaintiff’s evidence went to whether there was compliance with current ANSI.

The thrust of the federal and state false advertising claims claims is that Tricam represented that its Gorilla Ladders comply with ANSI ASC A14.2, a voluntary industry standard for portable metal ladders that was developed by the American Ladder Institute, but in fact the rungs of its ladders are not sufficiently deep all the way across to satisfy that standard as Wing understands it.  The label affixed to each ladder has an oval icon that says: “manufacturer certifies conformance to OSHA ANSI A14.2 code for metal ladders” and there were similar representations elsewhere.

The court admitted one expert on ANSI conformance and excluded an expert report on materiality, the latter because of the access-to-code problem.  Wing’s survey expert, Hal Poret, conducted materiality surveys: a labeling survey, intended to measure consumer reaction to the allegedly false statement on the label, and an importance survey, intended to assess the importance to consumers of compliance with industry safety standards in general. First, the court rejected the argument that the labeling survey was unreliable because it failed to replicate market conditions; it highlighted the label and demanded consumers spend a certain amount of time looking at it, which might not happen on the retail floor.  “These might be fair points if the survey had been intended to test what message the statements conveyed (as relevant to the falsity element), or whether consumer confusion existed in a trademark case.” But for a materiality study, how the consumers would see the image in the store didn’t affect its relevance, although a jury could weigh divergence from the retail context in its considerations.

The real problem is that Poret’s surveys tested ANSI and OSHA conformance together by eliminating the entire challenged label (and his importance survey referred only to conformance to unspecified “industry safety standards,” not specifically to ANSI); Wing didn’t show that either a combined OSHA/ANSI statement or industry safety standards writ large was relevant to the issues a jury would need to decide in this litigation.

Wing argued that OSHA uses ANSI standards, so that a violation of ANSI is necessarily a violation of OSHA.  And here’s where the access part comes in.  OSHA regulations provide that mandatory provisions (“shall” provisions) of standards incorporated by reference are adopted as mandatory under OSHA and “have the same force and effect” whether they are issued by federal agencies or by nongovernmental organizations. Here, OSHA regulations incorporate by reference “ANSI A14.2-56 Safety Code for Portable Metal Ladders, Supplemented by ANSI A14.2a-77.”

Those last two digits are apparently pre-2000 year codes.  Wing didn’t identify how -56 and -77 differed/overlapped with the 2007 version of ANSI A14.2 the parties were apparently working from in this case.  OSHA regulations, in fact, incorporate by reference different versions of ANSI A14.2. “For example, one regulation that pertains to the construction industry incorporates the 1982 version; another, pertaining to shipyards, incorporates the 1972 version; and others, relating to marine terminals and longshoring, incorporate the 1990 version.”  Wing didn’t confirm whether there was any relevant variation, and “[e]ven if the Court were inclined to do that legwork on Wing’s behalf, the Court cannot independently verify the extent to which the 1956 version explicitly mentioned in the regulations overlaps, if at all, with the 2007 version before the Court by referencing publicly available sources because the ANSI standards are not reproduced in the Code of Federal Regulations and are instead behind a paywall or available for in-person review in another state.” [Apparently the “state” is DC, at the National Archives.]  Testimony from Tricam witnesses was not sufficient to reach the legal conclusion that failure to meet the current ANSI standard, in the manner identified, would also be failure to meet the older standards that actually have the force of law.

Because Poret’s label survey was premised on the assumption that ANSI falsity meant OSHA falsity, it couldn’t test ANSI falsity alone and was not admissible. Likewise, his importance survey tested “[c]ompliance with industry safety standards” in general, but given the multiple sources of industry safety standards and the evidence in this case, that wasn’t relevant—“What happens if, as contemplated above, a ladder that fails to conform to the 2007 version of ANSI nonetheless does meet the requirements of one or more OSHA regulations that incorporate an older version of that standard?”

Without the survey, Wing couldn’t show materiality and summary judgment was warranted. It argued that it could show materiality by showing that “the false or misleading statement relates to an ‘inherent quality or characteristic’ of the product,” and that “questions of safety and efficacy are likely to satisfy automatically the materiality prong.” But the Eighth Circuit has not endorsed the “inherent quality or characteristic” method of showing materiality. And here, without further evidence on ANSI variation, “the most Wing could show is a technical noncompliance with one of multiple potentially applicable safety standards. That is not a compelling context in which to adopt a new approach to showing materiality.”

Nor was the following adequate: (1) testimony from a high-level Wing executive that, in his opinion, compliance statements on Home Depot’s website are “important, otherwise, I don’t believe Home Depot would put it on the website,” (2) testimony by Tricam’s president that an ANSI-certification statement on Home Depot’s website “could be” helpful in differentiating Tricam’s products from hypothetical competing ladders that do not purport to conform to ANSI, and suggesting that an ANSI-certification statement on the product label might be something a professional might want for purposes of OSHA inspections of a job site, and (3) testimony from the chairman of the ANSI labeling committee that “[i]t’s possible” that an ANSI-compliance statement would help a consumer choose a ladder. But these statements were all speculative on their face, and in each case the testimony was qualified by reference to the speaker’s lack of direct knowledge about consumer behavior.