corn syrup case ends with whimper/plea to remember that literally true statements can be misleading

Molson Coors Beverage Co. USA, LLC v. Anheuser-Busch Cos., No. 19-cv-218-wmc, 2022 WL 1718901 (W.D. Wisc. May 27, 2022)

Previously, the district court found that AB’s anti-Miller/Coors campaign was false advertising “to the extent it was designed to mislead consumers into believing corn syrup remained in Miller Lite and Coors Light products after the brewing process was completed.” But the court of appeals reversed because MC had characterized corn syrup as an “ingredient” itself, creating its own problem. “[I]t is not ‘false or misleading’ (§ 1125(a)(1)) for a seller to say or imply, of a business rival, something that the rival says about itself.”

What remained? MC argued that it was still entitled to a permanent injunction because its “webpage has now been changed to clarify that while corn syrup is used as an adjunct to aid fermentation, it is consumed by yeast during that process, and is not present in the final products.” But that wasn’t enough to get an injunction “based on ads that ran before February 2019.” There wasn’t an imminent risk of new, now-false ads. Anyway, it was far from clear that AB couldn’t continue to rely on “ plaintiff’s own, albeit now past, ingredients disclosure for at least some period of time given that only the ingredients list, and not the brewing process itself, has changed.”

However, MC could sue again “should defendant begin to run new advertisements about the presence of corn syrup in its finished products that plaintiff maintain are demonstrably false, especially in light of its corrected statements explaining what the actual ‘ingredients’ of their light beer products are.”

Even the Seventh Circuit appears to recognize that literally true statements can be “truly misleading.” Hot Wax, Inc. v. Turtle Wax, Inc., 191 F.3d 813 (7th Cir. 1999) (explaining that “claims that may be literally true or ambiguous, but which implicitly convey a false impression, are misleading in context, or likely to deceive consumers” are actionable under the Lanham Act). In an understandable jab at the court of appeals, the court pointed out that

50 years of behavioral economics and 100 years of marketing would strongly support the traditional interpretation of the language of the Lanham Act to preclude truth from being an absolute defense, even setting aside the incredible waste of economic resources on cross-advertising intended falsely to sway consumers during the five to ten seconds most spend before choosing a product, as well as the need for sufficient statutory or ethical constraints to limit … notorious or dark images.

Although the court was bound by the law of the case, and although the court of appeals used “such sweeping language as to preclude looking … at defendant’s motive,” the court pointed to “overwhelming documentation of defendant’s intent to mislead consumers as to the presence of corn syrup in the finished products despite it knowing that none or virtually none were present.” The court of appeals left it for consumers to decide whether this was good or bad for them in this case, but

hopefully that ruling will be limited to the narrow facts of this case and not act as an anchor to historical assumptions about the “rational consumer” that decades of economic and psychological research, and hundreds of billions (if not trillions) of dollars of advertising, has demonstrated is largely a myth (or at minimum, far more complicated) when it comes to the snap judgments of a typical consumer of food or drink in this and other free market economies.

Sing it!