an impossible claim is literally false and actionable if believing it is reasonable

Panelli v. Target Corp., --- F.4th ----, 2026 WL 1042441, No. 24-6640 (9th Cir. Apr. 17, 2026)

Something that I don’t yet have a full handle on is happening in 9^th Circuit consumer protection cases around literal falsity v. ambiguity. It could be good, but I’m nervous about the potential for weird Lanham Act interactions since “literal falsity” and “ambiguity” sound like the Lanham Act concepts but currently have important differences. FWIW, the emerging consumer protection approach has some things going for it—and if Lanham Act cases started to recognize that consumer surveys shouldn’t rigidly be required in cases of “ambiguity,” that would be a very good thing indeed.

Anyway, Panelli alleged that Target sells some of its “100% cotton” bedsheets with claimed thread counts of 600 or greater, but that it is impossible to achieve that high of level of thread counts with 100% cotton textile. The court of appeals held that the district court erroneously concluded that Panelli could not be deceived as a matter of law by an impossible claim under the usual California consumer protection laws.

Panelli alleged that independent testing showed the sheets he purchased had a thread count of only 288—not 800, as claimed on the sheet’s label. Indeed, he alleged, “it is physically impossible for cotton threads to be fine enough to allow for 600 or more threads in a single square inch of 100% cotton fabric.” The district court relied on Moore v. Trader Joe’s Co., 4 F.4th 874 (9th Cir. 2021), a badly reasoned case holding, in this opinion’s words, that “a reasonable consumer would be dissuaded by contextual information from reaching an implausible interpretation of the claims on the front label of the challenged product.” If it was physically impossible to achieve 800 thread count, the district court reasoned, then no reasonable consumer would interpret the ad as promising an impossibility.

The court of appeals distinguished Moore because there, “100% New Zealand Manuka Honey” was ambiguous: it didn’t necessarily mean that the bees making the honey fed only on the manuka flower. (This is not the poorly reasoned part, which is the stuff the court says a reasonable consumer should know about honey grading and pricing.) As a result, “reasonable consumers would necessarily require more information before they could reasonably conclude Trader Joe’s label promised a honey that was 100% derived from a single, floral source.” And “(1) the impossibility of making a honey that is 100% derived from one floral source, (2) the low price of Trader Joe’s Manuka Honey, and (3) the presence of the ‘10+’ on the label [which apparently signifies a relatively low manuka content] … would quickly dissuade a reasonable consumer from the belief that Trader Joe’s Manuka Honey was derived from 100% Manuka flower nectar.”

Here, the district court “skipped a step by not analyzing whether the label was ambiguous and therefore required the reasonable consumer to account for outside information to interpret the label’s claim.” The challenged claim here was not ambiguous. It “purports to communicate an objective measurement of a physical aspect of the product.”

Target argued that there are multiple possible measures of thread count—but it doesn’t produce consumer protection law ambiguity, which asks only whether a substantial number of reasonable consumers could think their questions about the feature had been answered without further information, not whether all reasonable consumers would necessarily think that. Note that the multiple possible measures of thread count would produce Lanham Act ambiguity, if the non-false possibilities are reasonable. Here, “it is unlikely that a reasonable consumer would know there are multiple thread-counting methodologies.” Indeed, consumers are not “expected to look beyond misleading representations on the front of the box” to discover the truth of the representations being asserted, and are “likely to exhibit a low degree of care when purchasing low-priced, everyday items,” “like bed sheets sold by a mass-market retailer.”

A reasonable consumer is “unlikely to be familiar with the intricacies of textile manufacturing.” [Moore said that reasonable consumers know how honey is made; its error was to assume that knowledge “bees collect pollen” would somehow translate to “and therefore they’d likely collect lots of different kinds of pollen” when people generally don’t give that much thought to that kind of background information.] “Realistically, a reasonable consumer’s knowledge of textile manufacturing is likely limited to the fact that a higher thread count listed on packaging indicates a higher quality sheet.”

The court added: “Allegations of literal falsity are the most actionable variety of consumer protection claims on California’s spectrum of actionability.” True, some claims can be so clearly false as to avoid deception. But Panelli’s claims weren’t unreasonable or fanciful:

While a vast majority of consumers are, for instance, familiar with the biological nature of bees so that it would be unreasonable for a consumer to think honey was sourced from a single type of flower, they likely would not have that same kind of baseline knowledge about textile manufacturing. Neither common knowledge nor common sense would cause a Target shopper to question the veracity of the claim on the bed sheet’s label that the product was of 800 thread count.

The court declined to create a situation where “manufacturers would face no liability for false advertising so long as the claims were wholly false—regardless of whether this falsity is generally knowable to consumers.”