9th Circuit courts are very committed to letting juries hear testimony about surveys

Monster Energy Co. v. Vital Pharmaceuticals, Inc., 2022 WL 17218077, No. EDCV 18-1882 JGB (SHKx) (C.D. Cal. Aug. 2, 2022)

Before the jury verdict in favor of Monster’s false advertising claim was this opinion resolving evidentiary issues. I have tried to avoid scientific disputes about creatine and focus on the consumer survey side, which might be more generalizable.

Monster sought to exclude Vital’s expert Dr. Chiagouris, who conducted two surveys to assess the materiality of Super Creatine to Bang energy drink consumers. Dr. Chiagouris opined that, based on his survey results, “[t]he presence of the words ‘Super Creatine’ included on the Defendants’ cans has no impact on the purchasing decisions by consumers.” Monster argued that the relevant surveys failed to test materiality, used misleading pictures, surveyed an overbroad audience, and failed to exclude nonresponsive answers.

“The Ninth Circuit has stated that surveys in trademark cases are to be admitted as long as they are conducted according to accepted principles” and “relevant.” Critiques about “issues of methodology, survey design, reliability, the experience and reputation of the expert, critique of conclusions, and the like go to the weight of the survey rather than its admissibility.” Materiality was relevant, so the court asked whether Monster’s criticisms of the surveys showed a failure to apply accepted survey principles or merely raised issues that went to their weight.

Some participants were shown Bang cans and labels with “Super Creatine,” and others saw altered Bang cans and labels without that phrase. They were asked to describe what they saw and how likely they were to purchase Bang generally. They weren’t directly asked about the phrase “Super Creatine,” whether participants had prior experiences with or opinions of Bang, or whether they had seen Vital’s advertising in the market. Thus, Monster argued that the survey only tested responses to Bang cans and labels, rather than the entirety of Vital’s advertisements.

Although “the sloppy questions are problematic and the sweeping conclusions are careless,” the questions were not so broad that they “lack [ ] relevance to the pertinent issues” in this case.

Monster then argued that the picture of the Bang can was taken at an angle that obscures the words “Super Creatine,” and that the survey should  have used a picture that clearly showed the top half of the can and the phrase “Super Creatine.”

“Leading images in surveys have the potential to ‘infect[ ] the entire study with an unacceptable degree of bias.’” But the pictures here didn’t rise to that level. While the picture of the Bang can partially obscured “Super Creatine,” the image of the flattened Bang label clearly showed the phrase. The surveys also allowed respondents to view the image for as long as they needed and told respondents that they could click on the image and zoom in.

Surveying all energy drink consumers, rather than only Bang consumers, and arguably underweighting young men between 18 and 29 years old who are the relevant demographic were not flaws meriting exclusion.

Dr. Chiagouris also opined on two Monster-commissioned surveys conducted by InfoScout, a market research firm. Monster argues that these opinions were unreliable because he lacked foundational information about the surveys, only looked at one of the surveys and not the second, and they were methodologically flawed. Although the surveys themselves were inadmissible because they contained hearsay, “the record fails to show that the surveys are atypical of the kind of evidence that consumer experts rely on. Accordingly, they are admissible to examine Dr. Chiagouris on the basis of his opinions.”

The InfoScout surveys looked at Bang purchasers, and they were relevant to show what aspects of Bang are material to its purchasers. “Monster’s criticisms that the survey respondents were disproportionately women and grocery-store shoppers raise concerns about the surveys’ reliability, not their relevance.” But there wasn’t evidence in the record about whether they were conducted using accepted survey techniques. Thus, they were not supported by sufficient guarantees of trustworthiness to be admitted under a residual hearsay exception.

The court also excluded evidence about Monster’s existing line of non-creatine-containing energy drinks that allegedly claim unsupported health benefits without identifying ingredient amounts as irrelevant to Monster’s claims here, which were only about creatine. Unclean hands requires a showing of inequitable conduct relating to the subject matter of the plaintiff’s claims. “Here, Defendants allege that Monster’s hands are dirty because it has engaged in the same kind of activity of which Defendants have been accused: the misrepresentation of certain benefits or ingredients in its drinks. However, they fail to show that Monster dirtied its hands to make the false advertising claims now alleged against Defendants.” General factual similarity wasn’t enough.

Vital also wanted to talk about Monster’s purported development of energy drinks that contained a manufactured creatine supplement. That was relevant: if Monster considered adding a manufactured creatine supplement in its own drinks, that would help “illuminate what constitutes ‘creatine’ and is probative of a key element in this case: whether Defendants’ claims about Super Creatine are literally false or misleading.” But it wouldn’t be relevant to affirmative defenses like unclean hands or estoppel, which require some element of prejudice to or reliance by defendants, and there was no evidence Vital knew of Monster’s efforts.

Evidence that Monster interfered with VPX’s shelf space was also excluded as not relevant to unclean hands, which when it comes to tortious interference with contractual relations requires that the plaintiff’s misconduct relate to “the contract [the plaintiff] seeks to enforce” or be “responsible” for the plaintiff’s acquisition of the contractual rights at issue. Here, Monster’s alleged interference with Vital’s contracts was unrelated to the contracts Monster sought to enforce.  So too with alleged trade secret misappropriation by Monster.

Allegations that Monster’s Reign energy drink was a “copy-cat” of Bang (and the subject of an unsuccessful trade dress suit by Vital in Florida): Vital argued that these were relevant because Reign was creatine-free, arguably showing that even Monster believed that caffeine, rather than Super Creatine or creatine, was material to Bang purchasers. But “[w]hat Monster believed set Bang apart from competitor energy drinks has little relevance to what consumers believed set Bang apart from other energy drinks.” I think this is wrong: successful participants in the market can be expected to have special knowledge about what sells products; even if they’re not perfect, they should be better than average in predicting what’s material to consumers. Nonetheless, while Monster’s survey of Bang consumers in connection with Reign’s development was admissible, the “copy-cat” allegations were neither necessary nor probative of Monster’s false advertising claims, nor did they aid in any defense. So too with evidence related to the history of adverse health events for Monster’s products and evidence of Monster’s general litigiousness (despite Vital’s argument that this bore on the credibility of its claims and alleged damages here).

Defendants moved to exclude the testimony of Monster’s marketing expert Dr. Carpenter, who reviewed Vital’s marketing of Bang Energy drinks, including their use of the term “Super Creatine” and “sugar crash” claims, to determine whether such marketing and promotion (a) impacted consumers’ decision to purchase these drinks, and (b) harmed Monster. There was no dispute that Dr. Carpenter’s opinions and testimony concerning marketing principles and strategies were admissible. But opinions that (1) Super Creatine is not creatine, (2) Super Creatine provides no health benefits, and (3) a “sugar crash” from consumption of Monster’s energy drinks is unlikely were not within the scope of his expertise. Monster argued that these were his assumptions, not his opinions. He was qualified to offer “marketing opinions about what VPX promised or claimed to consumers,” but not to make scientific claims, e.g., that a sugar crash from Monster’s energy drinks is unlikely. His report acknowledged that those statements were based on assumptions he made, accepting the conclusions of Monster’s scientific experts about creatine and sugar crashes. That’s ok for background reliance, but not for “principal conclusions.” He was not qualified to opine that a consumer who drinks a can of Bang may feel energized due “to the caffeine in Bang Energy drink, a placebo effect, or some unrelated cause such as receiving an uplifting phone call,” that “[f]or a consumer, determining the actual cause of that sensation is scientifically impossible,” and that “[b]y drinking Bang Energy drink, consumers ‘learn’ that Super Creatine provides health benefits because their experience ‘confirms’ that it does, based on VPX’s advertising, even when the consumer experience is entirely ambiguous.” “Dr. Carpenter may not opine on what consumers experience when they drink Bang or whether they can identify the cause of any effects they feel when they drink Bang.”

In addition, Dr. Carpenter could not tell the jury that Vital’s advertising was “false” or “misleading.” His conclusions were based entirely on his scientific assumptions, and he even testified in his deposition that he would have to “rethink” his opinion if the scientific opinions on which he relied were not true. Thus, his conclusions about Vital’s allegedly false or misleading advertising were not sufficiently reliable. Stripped of his assumptions, they were “conclusory statements that an advertisement that conveys a false or misleading statement is a false or misleading advertisement. This is ‘common sense and well within the knowledge or experience of lay people.’”

Vital also sought to exclude Dr. Carpenter’s opinions about the impact of Defendants’ marketing strategies on Bang consumers, arguing that his review of social media posts was not sound methodology, and that his reliance on an assertedly flawed consumer survey prepared by Monster’s expert Dr. Cowan made his opinions unreliable.

The court found his methodology “shaky at best.” He primarily focused on Vital’s and third-party posts on Instagram as evidence of Vital’s marketing strategies and consumers’ purported understanding of those claims. His reason for doing so was vague: Vital used Instagram “extensive[ly]” and that “Instagram has become an important advertising platform for companies, with its rising popularity among consumers.” But he failed to describe which Instagram posts he reviewed and why. For example, he noted that Vital employed “hundreds” of social media influencers and brand ambassadors, including on Instagram, but only identified posts from eight “VPX Influencers” and ambassadors. But “[s]hakiness [ ] does not require exclusion,” and went only to weight. “While slim, his report points to some marketing principles—such as a ‘brand promise,’ ‘brand positioning,’ and ‘marketing’—to explain how Defendants’ claims reflect those principles,” and could be used in forming opinions “based on his many years of marketing experience.”

However, Dr. Carpenter could not opine about the beliefs of the individuals whose social media posts he reviewed. He could infer from his experience and the documents reviewed what “a reasonable consumer would expect” or believe from Vital’s advertising, but he lacked any basis for determining how a specific consumer “interpreted the intended message.”

However, he could rely on Monster’s survey, which was admissible; he wasn’t required to conduct his own survey.

Dr. Cowan’s 2020 survey for Monster: Although Vital argued that it came too late to measure Bang’s effects in 2012-2019, even if that was true, it was still probative of materiality. The survey was not “infected with blatant bias” in a way that required exclusion. Survey participants included the relevant audience: purchasers of energy drinks, including Bang. It did not misrepresent the challenged statements. It included control questions. It did not exaggerate product features that were not at issue. And the answers were not suggestively worded.

Vital argued that the survey failed to rule out unfamiliar and unreliable respondents, asked open-ended questions, included other ingredients prominently featured on Bang cans, and used a control label in addition to a Bang label. But such challenges to “the basis of the test protocol used, the universe defined and tested, and the questions asked …go to the weight, not the admissibility of the survey.”

Finally, Vital moved to exclude evidence of defendant VPX’s work environment, specifically regarding VPX employee terminations, human resources issues, and other personnel matters. Monster argued that evidence of the principal’s management style “tends to show that VPX employees feared reprisal from him and furnishes a motive for why VPX employees may have allegedly misappropriated trade secrets, engaged in shelf space interference, or published false advertisements.”

Evidence that employers “terminated employees or threatened termination as retaliation for failure to engage in alleged misconduct may be relevant if it shows an employee’s motive.” But Monster’s evidence does not show any employee who had been terminated because he or she had challenged or refused to comply with Super Creatine claims or any shelf space interference and trade secret misappropriation, or any employee who allegedly engaged in false advertising, shelf space interference, or trade secret misappropriation out of fear of retaliation. “Absent this kind of proof, the Court agrees that general evidence of Mr. Owoc’s personality or his acts of firing employees is ‘[e]vidence of a person’s character or character trait [that] is not admissible to prove that on a particular occasion the person acted in accordance with the character or trait.’”