consumer suit against kratom seller proceeds on failure to disclose theory

Cheswick v. Mitra-9 Brands, LLC, 2026 WL 2949413, No. 1:25-CV-6795-LTS (S.D.N.Y. Sept. 30, 2026)

The court allowed NY consumer protection claims against a kratom seller to proceed. Kratom is “a plant-derived substance that affects the human body in a manner similar to opioids.” Mitra-9 allegedly touts the “unique benefits” of its kratom products, advertising them as “caffeine-free, non-alcoholic, low-calorie[ ]” “plant-based beverages” that “compliment[ ][sic] active lifestyles every day,” “help [consumers] sail through [their] workday or support [their] post-workout routine,” and “support[ ] overall vitality and well-being, fostering focus and a serene approach to life’s challenges.” It allegedly advertises “the unique benefits of [its] kratom,” which comes from “the verdant rainforests of Southeast Asia” and factors into their “specially designed formula.” This so-called “Mitra9 difference” makes the products “an upgrade” from “ordinary supplement drinks” and a “perfect way to shake things up.”

However, kratom allegedly contains alkaloids that, depending on the dose, can produce either stimulating or sedating effects by interacting with numerous receptors in the brain. This includes the brain’s mu-opioid receptor, which is the receptor that “produces the most addictive or habit-forming effects.” It is allegedly similar to morphine in the risks it poses of physical addiction and dependency, with similar withdrawal symptoms, as well as in the fact that repeat users need to consume increasingly large doses to achieve the same effects. Sudden cessation of kratom use can allegedly produce severe, opioid-like withdrawal symptoms, including “irritability, anxiety, difficulty concentrating, depression, sleep disturbance, including restless legs, tearing up, runny nose, muscle and bone pain, muscle spasms, diarrhea, decreased appetite, chills, inability to control temperature, extreme dysphoria, and malaise.”

Nonetheless, most United States consumers allegedly “do not know what kratom is and have no idea how addictive it is.” Mitra-9, despite allegedly knowing the truth, does not warn them, but instead uses packaging that resembles that of commonplace products like “5-Hour Energy” shots and caffeinated energy drinks like “Redbull” and “Celsius.” The named plaintiff initially purchased Mitra-9 Products as an “alternative for pain relief,” but, after consuming them for several months, he began experiencing withdrawal symptoms including “cold sweats, anxiety, joint aches, extreme irritability, restless leg syndrome, and insomnia.”

The plaintiff pled on information and belief that Mitra-9 “interacted with growers and distributors in Southeast Asia who have disclosed the addictive nature of kratom”; “received numerous user reports about the addictive potential of kratom in the United States”; and possessed “studies regarding kratom addiction.”

The court found that a price premium theory of injury was plausible. It was logical that the class “suffered economic injury because they ... would have paid substantially less for [the Products], if they had known that the Products posed a serious risk for addiction.” This was not the same as pleading they never would have purchased the relevant products absent the deception, which is apparently not enough to plead injury.

“Where, as here, the allegedly deceptive act involves an omission, the plaintiff must show that ‘the business alone possesses material information that is relevant to the consumer and fails to provide this information,’ or that the plaintiff could not ‘reasonably have obtained the relevant information [he] now claim[s] the [defendant] failed to provide.’ ”  This latter path was plausibly pled in light of allegations about the public’s general lack of familiarity with kratom, the fact that kratom was “marketed as providing benefits without disclosure of its addictive potential,” the inaccessibility or incomprehensibility of the medical literature to an average consumer, the unlikelihood that consumers would inquire about kratom when “purchasing from third parties or online,” and packaging that mimics that of well-known supplements and caffeinated energy drinks. “Within this broader landscape, a reasonable consumer contemplating a purchase of Defendant’s Products—which Defendant markets and packages as though they are innocuous health supplements—would have no reason to suspect or inquire whether they contained an opioid-like substance with serious addictive risks.”

Fraud by omission claims also survived.

Brita's clearly qualified filtration claims couldn't mislead reasonable consumers as to lack of qualification

Brown v. Brita Products Company, --- F.4th ----, 2026 WL 1028347 No. 24-6678 (9^th Cir. Apr. 16, 2026)

Unlike 800-thread count sheets (see previous post), a reasonable consumer would not expect a fifteen-dollar water filter to “remove or reduce to below lab detectable limits common contaminants hazardous to health” in tap water, notwithstanding clear disclosures to the contrary. Brown brought the usual California claims against Brita.

The Standard Filter, Brita’s lowest cost filter, is certified to reduce five contaminants—copper, mercury, cadmium, chlorine, and zinc—to below the levels recommended by the NSF and EPA. [At least, for now; I assume those recommendations will soon be lifted.] The Elite Filter, a more expensive model, reduces more than a dozen other contaminants to less than or equal to NSF/EPA recommended levels.

The package advertises that the filter “reduces” certain harmful contaminants. The Brita Everyday Water Pitcher, which includes the Standard Filter, claims: “Reduces Chlorine (taste & odor), Mercury, Copper and more” and directs consumers to “see back panel for details.” The back label likewise claims to “reduce” “Copper,” “Mercury,” “Cadmium,” “Chlorine (taste and odor),” and “Zinc (metallic taste).” The product labels offer links to additional sources of information known as “Performance Data Sheets,” which provide more information. Performance Data Sheets contain more detailed information on exactly which contaminants are filtered by Brita’s Products, and to what extent. For example, the Standard Filter’s Performance Data Sheet discloses the following information:

Brown bought the Brita Everyday Water Pitcher with the Standard Filter and alleged that he received the misleading message that the product “removes or reduce[s] common contaminants hazardous to health ... to below lab detectable limits.” He pointed to the claims: “BRITA WATER FILTRATION SYSTEM”; “Cleaner, Great-Tasting Water”; “Healthier, Great-Tasting Water”; “The #1 FILTER”; “REDUCES Chlorine (taste and odor) and more!”; “REDUCES Chlorine (taste and odor), Mercury, Copper and more”; and “Reduces 3X Contaminants.” He alleged that the filter didn’t reduce to below lab detectable levels various hazardous contaminants, including arsenic, chromium-6, nitrate and nitrites, perfluorooctanoic acid (PFOA), perfluorooctane sulfonate (PFOS), radium, total trihalomethanes (TTHMs), and uranium.

Material omission claims: Absent a contrary misrepresentation, a duty to disclose arises under California law if either (1) a product contains a defect that poses an unreasonable safety risk; or (2) a product contains a defect that defeats its central function. The omission must also be material. The reasonable consumer standard is not satisfied where plaintiffs allege only “a mere possibility that [the] label might conceivably be misunderstood by some few consumers viewing it in an unreasonable manner.” Even if there was an unreasonable safety hazard or defect in central function, Brita lacked a duty to disclose that its filters didn’t completely remove or reduce to below lab detectable levels all of the alleged contaminants. “Such a disclosure would not be important to a reasonable consumer in light of Brita’s other disclosures on its Products’ packaging and the objective unreasonableness of such an expectation.”

“As a matter of law, no reasonable consumer would expect Brita’s low-cost filters to completely remove or reduce to below lab detectable levels all contaminants present in tap water, particularly in light of Brita’s extensive disclosures to the contrary.” Brita discloses that its filters “reduce” contaminants from tap water, not that they remove contaminants entirely, and specifically discloses the contaminants that are reduced. It also provided “easily accessible information” (the Performance Data Sheets) about the extent of the reductions. Thus, “[b]ecause a reasonable consumer has been made aware of the Products’ limitations, we cannot say that a reasonable consumer would have been misled by Brita’s omission of these limitations on its Products’ packaging.

Court finds literal falsity where two supposedly distinct, rated reverse mortgage sellers are actually one

Longbridge Financial, LLC v. Mutual of Omaha Mortgage, Inc., No. 24-cv-1730-DMS-VET, 2025 WL 1382866 (S.D. Cal. May 13, 2025)

Mutual owns defendant Review Counsel and is the first and only advertising partner of defendant Advisory; those two have similar websites. Review Counsel’s disclosure banner at the top of its webpages, which previously stated that Review Counsel was “affiliated with” Mutual of Omaha, now states that it is “owned and operated by Mutual.” Likewise, Advisory updated its “Disclaimers” page with a “[l]ist of [a]dvertising [p]artners” that “have paid to advertise with [Defendant Advisory]”; a list that includes only Mutual of Omaha. Advisory also added a disclosure to its landing page and “changed some references on its site [previously] describing it as ‘independent,’ to ‘objective.’ ” Both websites now omit any reference to Retirement Funding Solutions (RFS), which was previously listed as Defendants’ number two recommended reverse mortgage provider, but which is also Mutual of Omaha in a different hat.

Longbridge argued that both websites still: (1) falsely represent those defendants as independent organizations using objective ratings despite their financial relationship with Mutual of Omaha; (2) use “arbitrary and statistically unsound criteria” that artificially boost Mutual of Omaha’s rating as a reverse mortgage provider while deflating other providers’ scores; and (3) use false and misleading Google ads and landing pages that promise consumers information about “Top 3” reverse mortgage providers while actually only promoting Mutual of Omaha.

Longbridge sought an injunction requiring removal of various webpages and reviews/review metrics, including a review of Longbridge that falsely listed it as not being licensed in Hawaii. After Longbridge moved for injunctive relief, Review Counsel stopped using the phrase “Top 3 Reverse Mortgages” in its sponsored Google ads and instead used “2025’s Best Reverse Mortgages” and “Top U.S. Reverse Mortgage Companies Reviewed & Ranked.” It also removed the false statement that Longbridge was not licensed in Hawaii.

The court found that the Hawaii statement was literally false. And ads promising information about “Top 3” reverse mortgage providers were literally false “because those ads redirected consumers to landing pages that highlighted Mutual of Omaha and RFS—which the parties agree are the same company—as two of the three ‘top’ providers.”

Likewise, “spotlighting and recommending of Mutual of Omaha and RFS as two separate reverse mortgage providers was literally false by necessary implication.” Listing them side by side, describing them as “some of our notable reverse mortgage loan partners” and “industry leaders,” describing both as having “[e]xcellent customer service” and “[g]reat borrower reviews from independent sites,” and listing a different phone number for each necessarily implied that the two were separate and independent entities.

In addition, Longbridge showed that other past statements, while not literally false, would likely mislead or confuse consumers. Review Counsel’s previous banner disclosure, stating that Review Counsel was “affiliated with” Mutual of Omaha and RFS, was “literally true but obfuscated Mutual of Omaha’s actual control and ownership of Review Counsel.” (The court didn’t identify extrinsic evidence of deception, though I don’t think it should have to.)

What about the current websites, highlighting Mutual of Omaha as their “Featured” or “Top” reverse mortgage company? Longbridge argued that their disclosures were insufficient and too far removed to reveal the true nature of Mutual of Omaha’s ownership and control of Review Counsel and Advisory, and that the sites’ ratings and criteria were “unsound, arbitrary, deceptive and misleading.”

But the court found the current disclosures sufficient, again without any consumer reception evidence.  At the top of every Review Counsel webpage is an evergreen banner stating that “Review Counsel is owned and operated by Mutual of Omaha Mortgage,” and a bolded “Disclosure” link at the top of the landing page that repeats the same disclosure.

Review Counsel page with disclosure at top

Advisory with much less impressive disclosure that "the companies" on the page compensate it

Advisory’s current disclosures include a paragraph on the landing page stating that “[t]he companies listed on this page compensate us as advertising partners.” And, at the very bottom of Advisory’s full-form disclaimer page, Advisory added a “[l]ist of [a]dvertising [p]artners” denoting Mutual of Omaha as the only company to “have paid to advertise with [Advisory].” Longbridge didn’t meet its burden to show misleadingness: “While a consumer would have to read Advisory’s long-form disclosure to understand the true nature of Mutual of Omaha’s advertising relationship with Advisory, the other two disclosures on the landing page—albeit less informative—should spur a reasonable consumer to further inquire about Advisory’s advertising partnerships. Advisory’s long-form disclosure page ultimately provides that information.” However, without that specific information, the previous disclosures were misleading, since they only referred to paid partnerships. “That Mutual of Omaha is Advisory’s only advertising partner is a vital piece of information consumers should know to avoid being misled or confused. The information is particularly salient because Mutual of Omaha is featured on Advisory’s landing page and Advisory makes vague references to ‘[c]ompanies’ who pay Advisory to be promoted or featured on its website without identifying those companies.

The court rejected Longbridge’s argument that defendants’ “.org” domain names were misleading and confusing because they are primarily used for “nonprofit websites such as non-governmental organizations (NGOs), open-source projects, charitable organizations, and educational platforms.” “To the extent Defendants’ ‘.org’ usage engenders a false sense of trust and objectivity, Defendants’ current disclosures likely counteract it.”

What about the ratings criteria and ratings? Longbridge argued that defendants’ criteria were neither relevant nor meaningful to reverse mortgage consumers and instead were pretextually selected to make Mutual of Omaha Defendants’ top rated reverse mortgage provider. But the court found that ratings with this much judgment involved were likely not factual claims. “[C]hallenges to the selection of purportedly objective criteria which are summarized by a five-star rating are not actionable under the Lanham Act.”

Likewise, the individual review pages for Longbridge were not actionable. Review Counsel’s own “3.7” rating for Longbridge showed alongside another four-star rating and a button to “Read Reviews.” Clicking that button brings a consumer to Review Counsel’s consumer review section for Longbridge, a consumer would see that Longbridge’s four-star rating is based entirely on a single consumer review stating “Yes. I understand.”

A reasonable consumer should notice that the 3.7 score [that is, nonactionable opinion] and the four-star score are distinct since they are side-by-side and numerically different. Additionally, if a reasonable consumer were to click on “Read Reviews” to read the four-star consumer review, they would likely conclude it was not relevant to evaluating Longbridge’s services since the consumer review is nonsensical—stating, “Yes, I understand.”

As for Longbridge’s complaints about Mutual of Omaha’s individual consumer ratings, there was no suggestion that Review Counsel authored or influenced them.

However, Advisory’s prior statements that its reviews and scores “are based upon Advisory’s own independent propriety scoring system” and that advertisement compensation does not influence Advisory’s reviews, scores, or ratings of providers, were falsifiable. A claim of independence “is a statement of fact that can be proven true or false.” Given that Advisory was founded and owned by Mutual of Omaha’s former General Counsel, the Advisory website was designed using a “templated design footprint” provided by Review Counsel, and Advisory’s sole advertising partner is Mutual of Omaha, that was dubious, but the record didn’t support a preliminary injunction.

Materiality: disclosure of the Mutual of Omaha connection was material “because it misrepresents an inherent quality or characteristic of Review Counsel’s services—whether a consumer can trust Review Counsel’s reviews and recommendations.” Even if reverse mortgage consumers were “savvy” and needed mandatory counseling from a government-approved agency before they could take out a reverse mortgage, that evidence was too generalized. “Further, the mandatory counseling occurs well after consumers are exposed to and potentially influenced by Defendants’ false and misleading statements. It is also contested whether these counselors are allowed to redirect consumers from their chosen reverse mortgage provider.” The same was true for Advisory’s disclosures. “Consumers are more likely to use Advisory’s website if they can trust and rely on the information Advisory chooses to present. Failing to disclose the sole source of income for Advisory, when that source is a reverse mortgage provider highlighted on Advisory’s website, could certainly influence consumers’ decisions to use Advisory’s website and choose a reverse mortgage provider.”

The court presumed irreparable harm, which defendants didn’t rebut. It didn’t matter that Longbridge had no evidence of harm or that defendants voluntarily changed their websites. Even if Longbridge’s business was growing, that could happen anyway, and its greater growth might have been stymied by the false advertising. Review Counsel argued that Longbridge itself paid for favorable placement and ratings on competing comparison/review websites, but it didn’t Longbridge own and operate any advertising website or serve as the sole advertiser of a review website that was founded by a former Longbridge employee. Anyway, “[e]vidence of threatened loss of prospective customers or goodwill certainly supports a finding of the possibility of irreparable harm.”

The court also rejected arguments based on Longbridge’s delay of more than sixteen months in seeking preliminary injunction rebuts the presumption of irreparable harm.  “ ‘[D]elay is but a single factor to consider in evaluating irreparable injury’; indeed, ‘courts are loath to withhold relief solely on that ground.’ ” Longbridge discovered Review Counsel’s false advertising in April 2023, then raised formal complaints to relevant trade associations and state banking regulators between July 2023 and January 2024 before eventually suing in September 2024. The magnitude of Longbridge’s “potential harm [became] apparent gradually, undermining any inference that [Longbridge] was ‘sleeping on its rights.’ ” Longbridge attempted to resolve its claims extrajudicially during the delay period, and then the potential for harm increased with Advisory’s founding in January 2024. An additional eight months delay wasn’t dispositive under these circumstances.

The good news for defendants: the injunction didn’t require discontinuing current practices, only that they couldn’t (1) advertise that Longbridge is not licensed to issue loans in any state or territory where Longbridge is licensed; (2) advertise to consumers on sponsored Google-search links that they provide information relating to “Top 3” reverse mortgage providers when their landing pages advertise fewer than three independent reverse mortgage providers; (3) advertise RFS on their websites as if RFS were an independent reverse mortgage provider originating its own loans, including by representing that RFS has customer support phone lines, reviews, and ratings that are distinct from Mutual of Omaha; or (4) “diminish” their existing disclosures.

package claim that required users to double serving size and add ingredient was plausibly misleading despite disclaimer

Mencia-Montes v. Fit Foods Distrib., Inc., 2025 WL 1185372, No. 24-cv-01768-EKL (N.D. Cal. Mar. 31, 2025)

Courts in the 9^th Circuit have increasingly held, in consumer protection cases, that an asterisk puts the consumer on notice of important qualifications. But sometimes an advertiser goes too far with that; so here. Defendant’s protein supplement, “Mutant Mass Extreme 2500 Muscle Mass Gainer” says “92G PROTEIN†††” on the front of the package. A disclaimer on the bottom right-hand corner of the package reads” “†††Per 2 servings when taken as directed with milk.” The disclaimer in the bottom right-hand corner is even smaller font than the “PROTEIN†††” text.

front label with 92 gram representation

The back shows three columns of nutrition facts. The first column, “Per 1 serving with water,” reflects 30 grams of protein; the second column, “Per 2 servings with water,” reflects 60 grams of protein; and the third column, “Per 2 servings with 1% milk (31.8 fl. oz total),” reflects 92 grams of protein.

Mencia-Montez brought the usual California statutory claims.

The court found that it was plausible that reasonable consumers were likely to be deceived into thinking there were 92 grams of protein per serving, rather than 30.  “This type of statement is likely to deceive a reasonable consumer because it represents a seemingly concrete detail about the Product’s nutritional content.” What about that triple-dagger mark? Whether it was sufficient to put a reasonable consumer on notice was a fact question that couldn’t be resolved at this stage. First, plaintiff alleged that the reference mark is “barely legible, insufficiently offset by the much larger and prominent text that surrounds [it], and [is] lost within the various other symbols contained elsewhere on the Product’s label.” Second, the triple-dagger symbol wasn’t “an ‘asterisk’ but, rather a less familiar symbol, which evidently lacks a name in common parlance, and, at best, leads the consumer to a partial disclosure.” Third, Plaintiff the purported disclaimer itself was allegedly “buried on the bottom of the label, in small print and among other fine print language, and is completely separated from the at-issue ‘92G Protein’ claim such that it can easily be missed by a reasonable consumer.” (There was also at least one other “dagger” disclaimer on the front relating to protein, so the consumer would have to find the right one.)

Moreover, the disclaimer itself was plausibly misleading because it required consumers to both double the serving size and add an ingredient.  Then they’d have to figure out how much additional milk would be required (31.8 fluid oz).

However, plaintiff lacked standing to seek injunctive relief, which kicked out the CLRA claims entirely.

asterisk alone makes front of package claims ambiguous

Wong v. Iovate Health Sciences U.S.A. Inc., 2025 WL 821451, No. 2:24-cv-00901-DAD-CKD

(E.D. Cal. Mar. 14, 2025)

Is an asterisk on the front of a package a get-out-of-jail-free card for false advertising? If the disclosure doesn’t flatly contradict the claim, at least, maybe it is. (I would think that evidence of what reasonable consumers thought they might learn from the asterisk is quite relevant for that—if they didn’t realize they needed to consult the qualification, then they could still be deceived—but that’s not what this court holds, even though there are allegations that other marketplace participants advertise differently and less deceptively.)

front and back panels from complaint

Wong bought “100% Mass Gainer,” a dietary supplement in the form of a protein powder, which stated that the supplement provided 60 grams of protein per serving. But, without adding milk, the supplement contained only 44 grams of protein per serving rather than 60 grams. The rest of the product line also has fewer grams of protein in a serving than what is stated on the front label of the packaging because they all require the consumer to add some quantity of milk. “Other protein powders not produced by defendant have packaging that prominently advertises the amount of protein contained within a serving of the powder, but only include the protein content from the powder itself.”

There’s a disclaimer that the protein content assumes the addition of milk, “though those disclaimers and the associated asterisk symbols appear in small font on the front of the packaging.” [NB: I think only the asterisks appear on the front, according to the rest of the opinion and to the images.] On the back, “the protein content is reduced below the advertised amount appearing on the front of the packaging when the powders are mixed with water instead.” Wong brought the usual California statutory claims.

The court dismissed claims for injunctive relief, but not equitable relief under the FAL and UCL. The court accepted the idea that the pleading standard for seeking equitable relief is “minimal.” “[I]f a plaintiff pleads that she lacks an adequate legal remedy, Sonner will rarely (if ever) require more this early in the case.” Wong alleged that equitable relief is more “prompt and certain and in other ways efficient” than an award of damages, given that “equitable restitution can justify an award of greater relief than damages and is governed by a different standard of proof that allows the award of restitution even if a plaintiff cannot adduce evidence to support an award of damages.” That was enough.

Still, a reasonable consumer would not have been deceived, despite the large font size representation of the products’ protein content. The asterisk itself made the protein claim “ambiguous” to a reasonable consumer, which ambiguity could then be cleared up by reading the back label. “Even before reading the back label, the presence of an asterisk alone puts a consumer on notice that there are qualifications or caveats ….” This strikes me as a license to cheat.

false claims of buying and "rebranding" a festival lead to disclosure/correction remedies

Nantucket Wine & Food Festival, LLC v. Gordon Companies, Inc., --- F.Supp.3d ----, No. 24-11640-LTS, 2024 WL 5442374 (D. Mass. Dec. 12, 2024)

Wild facts here.

Plaintiff NWF runs an annual, multi-day event on Nantucket called the Nantucket Wine & Food Festival “The Festival has been held annually—with the exception of a hiatus during the COVID-19 pandemic—since its founding as the Nantucket Wine Festival in 1997.” Recently, it’s been held over the course of five days encompassing the weekend in May between Mother’s Day and Memorial Day. NWF solicits “Luminaries”—experts and high-level presenters—and “Invitees”—other exhibitors, wineries, distributors, importers, and sponsors. The remaining attendees are “Guests,” who either purchase tickets to the various events or are invited by, for example, a sponsor. NWF works on the Festival year-round, with ticket sales typically commencing in November. Nancy Bean, with a partner, owns the rights to the Festival and is one of two permanent staffers; she’s the majority owner.

David Gordon is the president and chief executive officer of the Gordon Companies, a regional liquor-and-wine retail-and-distribution business based in Waltham, Massachusetts. He approached Bean about potentially investing in NWF in 2021. Discussions continued over two years, and Gordon provided logistical, financial, and other assistance to Bean. “Principally, Gordon furnished Bean with an attorney, defendant Todd Goldberg, who had previously done work for the Gordon Companies, to help Bean buy out her original partner,” a transaction completed in 2022, though a small percentage is still owned by a third party. The Gordon Companies also extended to NWF a loan of approximately $55,000, and Gordon gained access to financial and other sensitive information relating to NWF.

NWF and the White Elephant resort agreed that White Elephant would be the exclusive “Host Hotel” of the 2024 Festival, reserving to NWF the exclusive rights to its name and logo. But, as the 2024 Festival approached, Bean broke off negotiations for a Gordon Companies investment in NWF. Gordon and Bean executed a release agreeing that NWF’s $55,000 debt to the Gordon Companies would be paid off via sponsorship rights at the 2024 Festival. The Festival occurred as planned, and Bean posted on NWF’s website a save-the-date for the 2025 Festival, marking the same weekend, May 14 to May 18, 2025, as well as a similar Instagram post.

Then, mid-June, 2024, the Gordon Companies issued statements announcing the Gordon Companies’ plans for the 2025 Nantucket Food and Wine Experience. An email announcement sent to “a cultivated list of industry professionals, including wine vendors, chefs and restaurant owners” stated, in relevant part: “The Gordon Companies is thrilled to announce that we have partnered with White Elephant Resorts to present the newly branded Nantucket Food And Wine Experience. Under new guidance, this rebranded event will take place on Nantucket from Wednesday, May 14th through Sunday, May 18, 2025. This extraordinary celebration will offer a revitalized experience featuring the world’s top vineyards, distilleries, and culinary minds.”

Another email went to the Gordon Companies’ customer list: “The Gordon Companies Purchases Nantucket Food and Wine Experience.” It read in relevant part: “The Gordon Companies have partnered with the iconic White Elephant Resorts to present the newly branded Nantucket Food And Wine Experience. Under this new partnership, one of the nation’s longest-running food and wine events will take place on Nantucket from Wednesday, May 14th through Sunday, May 18, 2025.”

The Gordon Companies also sent a press release to at least fifteen media outlets, including the Boston Globe, Boston Common Magazine, Wine Spectator, and Forbes: “The Gordon Companies Partner with The White Elephant to Present a Newly Branded Nantucket Food & Wine Experience.” A subhead read: “One of the nation’s longest running food and wine events returns to Nantucket on May 14–18, 2025.” Relevant bits included:

The Gordon Companies ... and White Elephant Resorts are thrilled to announce their partnership for a newly branded Nantucket Food & Wine Experience in 2025.... David Gordon, CEO of The Gordon Companies, notes, “We are excited to introduce the newly rebranded Nantucket Food & Wine Experience to the loyal guests who have enjoyed this celebratory time on the island for many years.” … Khaled Hashem, President of White Elephant Resorts, adds, “We are honored that our harborside hotel will continue to serve as the official host for this dynamic partnership with The Gordon Companies. We look forward to carrying on the tradition of providing food and wine excellence for locals and visitors alike on beautiful Nantucket.”

A similar press release went to industry media outlets such as BevNet/Nosh, Wine Industry Advisor, Kane’s Beverage News Daily, Beverage Dynamics, and Wine Business: “Prominent New England Wine and Spirits Retailer Purchases Nantucket Food & Wine Experience.” Its subhead was: “Gordon’s Fine Wine Acquires Ownership Stake in One of the Nation’s Longest-Running Food and Wine Events.” In relevant part, it said:

The Gordon Companies … have acquired the ownership rights to the Nantucket Food & Wine Experience (previously known as the Nantucket Wine & Food Festival), one of the longest running food and wine events in the U.S. The rebranded event … will take place on the island from Wednesday, May 14 through Sunday, May 18, 2025 …. “This longstanding event is an important part of Nantucket’s rich history, not to mention a significant annual driver of tourism and local pride,” says David Gordon, CEO of The Gordon Companies. “We’re excited to introduce the newly rebranded Nantucket Food & Wine Experience, and we’re especially honored to be one of the only fine wine and spirits retailers in the country to own and present a festival of this size and prominence.”

Both Gordon and White Elephant had issues with Bean—the former believing that Bean would never bring him on as a co-owner as he’d hoped, the latter because of Bean’s “organization and planning and time management.” Thus, they’d planned a new event for a couple of months, including nantucketfoodandwine.com. The person who sold them that domain name offered Gordon a list of domains including the word “festival” or “fest,” but Gordon replied, “[w]e need to use experience not festival (for now).”

After the four statements went out, Gordon quickly realized that there was a bit of a problem, and emailed “[t]he subject of our email that went out said Purchases Nantucket Food and Wine, if we can I’d like to stick with ‘The Gordon Companies Partner with The White Elephant to Present a Newly Branded Nantucket Food & Wine Experience.” Meanwhile, Bean’s contemporaneous reaction was: “I am inundated with texts and calls—everyone thinks I sold NWF to him for $$$$$$$.” NWF also received “frantic inquiries from Boston Common Magazine regarding the sale and their astonishment of it given they had just been with us on-site and were in the midst of writing all of our post-festival acclaims and reviews and pieces.”

The next day, the Gordon Companies sent out a clarification to its industry email (“Gordons has not purchased any festival. We have partnered with the White Elephant in a multiyear deal to produce a new event. In no way are we affiliated with any other event or festival on Nantucket. Sorry for any confusion this may have caused.”) and contacted industry publications to remove from the Industry Release the statement that the Experience had been “previously known as the Nantucket Wine & Food Festival.” But they didn’t send out corrective emails to the other recipients of the statements. Even after Gordon’s instruction not to use the word “purchase,” he responded to “[c]ongratulations to your purchase of the Nantucket Food and Wine Festival” without a correction.

Amy Baxter, Licensing Administrator at the Nantucket Police Department, met with Gordon and subsequently emailed a third party about “a change in ownership and management of the Wine Fest.” She then emailed Gordon: “[j]ust to confirm I should not be expecting Nancy to come at us to try and secure that weekend since you have a contract with White Elephant correct? I know that to be the case and I will be general in my answer but just reconfirming.” She then told a reporter from a local newspaper, “I do not anticipate competing festivals.”

Three days after the initial announcement, and two days after first contact from NWF’s lawyer, the Gordon Companies sent a correction to its customer list: “Gordon’s has not purchased, acquired, or rebranded the previously existing Nantucket Food & Wine Festival which has been operated by a still operating entity which is not affiliated with The Gordon Companies in any way. The Nantucket Food and Wine Experience is also not affiliated with the Nantucket Food & Wine Festival.” The Gordon parties succeeded in getting several industry publications to remove the parenthetical stating that the Experience was “previously known as the Nantucket Wine & Food Festival,” but didn’t send corrections to the general media release.

“In response to questions from several chefs regarding whether a sale had happened, Bean emailed all chefs who had participated in the 2024 Festival clarifying the situation and asking for their support.” She also contacted sommeliers, wine importers, and other constituents. The Boston Globe, the Newport Buzz, and the Nantucket Current all ran articles about the Festival and the Experience with quotes by Bean. Nonetheless, Bean testified, “many people remain under the impression that I either tried to sell the genuine festival or will sell the genuine festival” because they “find it hard to believe someone would lie so blatantly about purchasing a company unless there had been some agreement that I reneged or that belatedly fell apart.”

The Nantucket Select Board received applications from both sides for events during the same time and announced that tickets for these events should not be sold until the applications had been evaluated; the applications were pending as of the court’s decision.

Right before the PI hearing, plaintiffs dismissed White Elephant from the case, and White Elephant agreed that it wouldn’t host an event with the Gordon parties on the relevant weekend for the next two years. The Gordon Parties represented that they were in the process of withdrawing the permit applications they had filed to the Nantucket Select Board. So the Experience wasn’t going to happen in 2025, at least not on Nantucket. Thus, plaintiffs narrowed their request for preliminary relief, but still wanted defendants to be enjoined from disparagement and to be required to make corrective disclosures including a statement that their earlier statements were “false.” They also wanted prominent links on defendants’ websites to NWF’s own site. The court granted the corrective disclosure and website remedies, but not a general prohibition against disparagement.

The court relied on Massachusetts General Laws Chapter 93A and did not analyze the claims as Lanham Act false advertising. Chapter 93A grants a private right of action to any business harmed by another business’s “unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.”

The court found that defendants’ statements constituted commercial disparagement, which requires proof that a defendant: (1) published a false statement to a person other than the plaintiff; (2) “of and concerning” the plaintiff’s products or services; (3) with knowledge of the statement’s falsity or with reckless disregard of its truth or falsity; (4) where pecuniary harm to the plaintiff’s interests was intended or foreseeable; and (5) such publication resulted in special damages in the form of pecuniary loss.

The court found that at least three of the widely disseminated messages were false, implying that that the Gordon Companies had purchased and the long-running Festival and was “rebranding” it as the Experience. (Although this probably counts as falsity by necessary implication, relying on 93A avoids any need to nitpick about explicitly false v. implicitly false claims under the Lanham Act, since state laws generally don’t have the same doctrinal distinctions.) The statements were plainly of and concerning plaintiffs, and they were made with knowledge/recklessness as to their falsity.

Harm intended or foreseeable: “Stating that a competitor no longer operates independently could foreseeably cause that competitor to lose business.” “[W]here a false statement has been ‘widely disseminated,’ and it would be impossible to identify particular customers who chose not to purchase a plaintiff’s goods or services,” a plaintiff can show special damages “by circumstantial evidence showing that the loss [of the market] has in fact occurred, and eliminating other causes.” That was also sufficiently shown with evidence of confusion, including among the Nantucket town government, preventing plaintiffs from selling tickets to the 2025 Festival starting in November, as they normally would.

Plaintiffs also showed irreparable harm to their goodwill and reputation. “By its very nature injury to goodwill and reputation is not easily measured or fully compensable in damages. Accordingly, this kind of harm is often held to be irreparable.”

The existing corrective efforts were inadequate: they “did not admit or explain the falsity of the original statement.” Indeed, the court found their language obfuscatory, with the potential to leave readers believing that the NWF no longer existed: “Gordon’s has not purchased, acquired, or rebranded the previously existing Nantucket Food & Wine Festival which has been operated by a still operating entity which is not affiliated with The Gordon Companies in any way.” Plus, “while the original Customer Email went out as its own message, the corrections went out in small print above ads for the Gordon Companies.”

Defendants argued that confusion had already dissipated due to plaintiffs’ efforts.  “However, just because some locals and insiders now know that the Gordon Parties did not purchase the Festival, that does not mean that all confusion has dissipated. Many Festival devotees may still find it difficult to trust Bean, as she has avowed. Other, more casual participants may not be so plugged in and so may, having seen one of the Gordon Parties’ statements, still believe the Festival is no more.”

Still, plaintiffs couldn’t identify any actionable, false statements made by the Gordon Parties after July 1. Thus, the court denied their requires for an injunction against “false disparaging statements about either of the Plaintiffs, the ownership of the Nantucket Wine & Food Festival, or its operations.”

However, additional corrective disclosures, including prominent placement on defendant’s nantucketfoodandwine.com website with links to plaintiffs’ site, were justified. The disclosure is not the kind of thing you want to have to send out:

Pursuant to an Order of the U.S. District Court …, the Gordon Companies hereby discloses that, in June of this year, the Gordon Companies sent out false press releases and emails stating that Gordon Companies had acquired and rebranded the Nantucket Wine & Food Festival under new management. There was never any acquisition, rebranding, or new management of the Nantucket Wine & Food Festival. The Gordon Companies is not planning any festival for May 2025. The long-running Nantucket Wine & Food Festival continues to operate. As previously announced by the Nantucket Wine & Food Festival, the annual tradition will continue May 14 – 18, 2025, under the leadership of its longtime Executive Director Nancy Bean. For more information, please visit www.nantucketwinefestival.com.

Defendants had to post the disclosure in large bold font on the home page of the website at nantucketfoodandwine.com and foodandwinenantucket.com, with no other text or links on the page, but with the reference to www.nantucketwinefestival.com at the end of the disclosure hyperlinked.

GIGO? literal falsity and a remedy mismatch

InSinkErator LLC v. Joneca Co., No. 8:24-cv-02600-JVS-ADS, 2025 WL 250032 (C.D. Cal. Jan. 10, 2025)

InSinkErator, allegedly the world’s largest manufacturer of garbage disposals for home and commercial use (and to its shame, an entity that sued a TV show for dilution for showing a garbage disposal being used unsafely), sued its competitor Joneca for falsely advertising the horsepower of its garbage disposals and secured a preliminary injunction.

Joneca prominently claims that its garbage disposals are rated at 1/2, 3/4, 1, and 1 1/4 horsepower on its product packaging, as well as its promotional materials online and in brick-and-mortar retail stores nationwide. These garbage disposals tend to match the same horsepower advertised by InSinkErator on its disposals, but at a cheaper price. InSinkErator’s testing revealed results approximately 39% below the claimed 1 1/4 horsepower disposal, and 24% below the claimed 1 horsepower disposal; none of Joneca’s products allegedly produced the claimed horsepower.

Joneca didn’t deny the test findings, but argued that the recognized standard for garbage disposals looks only at input horsepower and not the output horsepower measured by InSinkErator. Thus, it argued that there was no falsity, because all of the tested samples met or exceeded the input-based horsepower rating.

The key question, then, was whether “horsepower” was unambiguous. If the court construed the question to be “what do consumers think ‘horsepower’ means?” maybe it would have required a consumer survey. But the court didn’t; it accepted testimony about industry standards, and thus finds literal falsity. Joneca’s expert relied on the Underwriter Laboratories compliance standard UL 430 Waste Disposers, which establishes a method for rating horsepower of garbage disposals on an input basis. But that was a safety standard, not meant to be used to measure horsepower, as confirmed by engineers at UL. The court was more persuaded by InSinkErator’s expert and sources such as the National Electrical Manufacturers Association (and others), which requires claims of horsepower on motors to be derived from the torque output by the motor. Ultimately, a court may determine literal falsity “based on its own common sense and logic interpreting the message.” See Edminston v. Jordan, 98 Civ. 3298 (DLC), 1999 WL 1072492, at *9 (S.D.N.Y. Nov. 24, 1999). “The general consensus among engineers, even if not specific to the garbage disposal industry, appears to be that horsepower is determined by mechanical output.”

InSinkErator also provided market research to show that consumers ranked horsepower as one of the top purchasing considerations for garbage disposals, as well as “retailer perspective” indicating that horsepower was “a key differentiating factor”—Lowe’s and Home Depot organize and advertise them by horsepower. “This signals that horsepower is an important—if not primary—distinction used by retailers to market to consumers.” That bolstered “the common sense impression that more horsepower means more efficiency.” Home Depot characterized higher horsepower disposals as “Heavy Duty,” and lower as “Light Duty” and said that “[t]he higher the HP, the better the disposal will run. Food waste will be ground into finer particles and you’ll have fewer jams,” while Lowe’s said that “models with higher HP motors have better sound insulation and run more quietly than basic models.”

And then, in the remedy, the court imposes only a disclaimer remedy that seems quite unlikely to work, and won’t actually correct for the misimpressions given how—as it has already explained—garbage disposals are marketed.

In setting out the injunction, the court states that “Joneca would be free to explain during retailer bids and sales presentations that its products have a certain horsepower input, or alternatively, to explain that InSinkErator’s AC induction motor design requires more output horsepower to provide the same level of performance as Joneca’s PMDC motor. Such is not a hardship, but rather the truth, as Joneca has described it.” But will it need to do so given the actual injunction?

The injunction bars “false and deceptive horsepower claims,” then says that “Any horsepower-related communications to retailers, wholesalers, or other third parties for the purposes of obtaining contracts for the sale of Joneca-made garbage disposal products will include a clear and conspicuous disclaimer stating: ‘Horsepower claimed on package does not indicate motor output or motor power applied for processing.’” But they’ll still be shelved in stores as 1 HP motors next to InSinkErator’s 1 HP motors, if I understand this correctly. (The order says Joneca can’t assist, etc. the continued display of false and deceptive claims in stores—are the general statements about HP on Lowe’s and Home Depot’s sites, or the stocking of the parties’ products side by side, encompassed in that?)  Even if the sticker is conspicuous, it seems at best contradictory with the store placement; will consumers then think that’s also true of InSinkErators? Making matters worse, if the motors on the parties’ products work differently, then they aren’t actually fully comparable just on horsepower, are they? What exactly is a consumer supposed to make of all this?

I’m left wondering: why not at least explain why the court didn’t require Joneca to label its product with what the court had just held was the only truthful measure of HP with respect to motors in this context—output?

incontestable LIZZIE BORDEN registration + actual confusion insufficient to overcome weight of history, 1st Circuit rules

US Ghost Adventures, LLC v. Miss Lizzie’s Coffee LLC, No. 23-2000 (1^st Cir. Nov. 15, 2024)

The Lizzie Borden House “bears a storied history that originates with the still-unsolved murders — in 1892 — of Lizzie Borden’s father and stepmother.” Ghost Adventures “provides ghost tours and related hospitality services across the United States.” It owns a bed and breakfast operated out of the Lizzie Borden House featuring a museum, “ghost tours,” and kindred activities. 

bed & breakfast sign

Its success “depends in large part on the Lizzie Borden name and lore.” Ghost Adventures owns incontestable trademark registrations for both the name “Lizzie Borden” for hotel and restaurant services and for a realistic hatchet logo displaying a notched blade (a reference to the implement that allegedly killed Borden’s parents).

Ghost Adventures' registered logo

Miss Lizzie’s Coffee LLC recently opened a coffee shop next door to the Lizzie Borden House. You will not be surprised to learn that it, too, markets itself by reference to the Lizzie Borden saga. One sign says “Miss Lizzie’s Coffee” between a cup of coffee and a stylized bloody hatchet. A second sign advertises Miss Lizzie’s as “The Most Haunted Coffee Shop in the World!” “The hatchets on both signs include handles and dramatic blood splatters.”

2 hatchets and blood splatters, "The Most Haunted Coffee Shop in the World!"

Miss Lizzie's Coffee in Sweeney Todd-like font and a bloody hatchet

Some visitors have incorrectly assumed that the Lizzie Borden House and Miss Lizzie’s are affiliated or asked about whether such a relationship existed. Some guests of the Lizzie Borden House were frustrated to learn that they could not bring Miss Lizzie’s coffee on their tours of the Lizzie Borden House, having bought the coffee under the erroneous impression that the coffee shop was affiliated with the historical site. A Fall River city official called Ghost Adventures to discuss its “new business in the building next door named Miss Lizzie’s.”

Ghost Adventures sought to enjoin Miss Lizzie’s from using either the “Lizzie Borden” trademark or the hatchet logo in the coffee shop’s trade names, trade dress, and marketing materials.

The core problem here was causation. Ghost Adventures needed to show that Miss Lizzie’s used its mark in commerce in a way that caused confusion, not the Lizzie Borden mythos. The district court found that the hatchet displayed on Miss Lizzie’s signage was “not at all the hatchet trademarked by Ghost Adventures” nor even “a colorable imitation of it.” It continued: “Miss Lizzie’s mark associates its business with the historical story of Lizzie Borden, not the mark ‘Lizzie Borden’” that Ghost Adventures owns. Although “Ghost Adventures has an ‘incontestable’ trademark in ‘Lizzie Borden’ and its hatchet, Miss Lizzie’s is using neither the mark ‘Lizzie Borden’ nor the Ghost Adventures hatchet.” “Ghost Adventures has not demonstrated that its mark bears the strength which might give it the ‘secondary meaning’ reach that, for example, ‘Sam Adams Beer’ might claim regarding the historical figure Sam Adams.”

The court found the consumer confusion “limited” and caused mainly by physical proximity, their common but independent reliance on the shared Lizzie Borden mythos, and the tendency to associate services related to a historical site with the site itself, not by the similarity of the businesses’ marks. After all, “the same issues would arise if Miss Lizzie’s called its cafe ‘Forty Whacks Coffee’ and used a different image as its logo.”

The district court also noted that the parties’ services were different: “on one hand, sophisticated buyers who come from afar with tickets or reservations to experience the Lizzie Borden House; and the other, buyers seeking food or coffee.”

The parties also rely on different forms of advertising, and a sign on Miss Lizzie’s storefront explicitly disclaimed any relationship with the neighboring Lizzie Borden House. Such a disclaimer can “tip the scales to a finding of no likelihood of confusion and no infringement” where, as here, “the multi-factor analysis points to a low likelihood of confusion.”

disclaimer of affiliation or association in window

The court of appeals affirmed, noting, for example, that “Miss Lizzie’s hatchet spews blood, whereas Ghost Adventures’ is spotless. Indeed, it appears that the only similarity between the hatchet logos is that they both depict hatchets. The court, then, did not clearly err in finding that the hatchet logos are facially dissimilar.” Also, “the district court supportably found that Miss Lizzie’s reference to ‘Lizzie’ was to the lore of Lizzie Borden — which Ghost Adventures does not own — rather than to the mark ‘Lizzie Borden.’ Thus, the meaning associated with the name ‘Miss Lizzie’s Coffee’ is only incidentally similar to that of the ‘Lizzie Borden House.’” Ghost Adventures didn’t persuade the court of appeals that consumers would associate “Lizzie Borden” with its services rather than with Lizzie Borden herself.

Likewise, the district court permissibly viewed the parties’ differences as more important than their joint presence in the broad hospitality industry. “Ghost Adventures’ registration of the mark ‘Lizzie Borden’ did not prohibit other businesses in the hospitality industry from setting up shop in the vicinity of the Lizzie Borden House. Nor did it prohibit such businesses from marketing themselves by the use of Lizzie Borden’s story.”

What about actual confusion?

The relevant consumer confusion in a trademark infringement action is confusion caused by an infringing mark. Consumer confusion due to non-trademarked similarities between businesses or products does not indicate infringement. For example, if two outdoor Saturday farmers’ markets opened on the same block, causing wandering shoppers to think that they were affiliated, their proximity and similar business models, without more, would not be suggestive of trademark infringement. This basic principle tracks a core purpose of trademark law: to prevent a copycat from appropriating the goodwill of a brand by wrongly copying the brand’s mark. Because the district court supportably found that the source of consumer confusion was not the similarity of their marks, but something else altogether, the evidence of confusion relied upon by Ghost Adventures is of no consequence. (emphasis added)

Of course, this means that we have to be very sure what you can and can’t own as a mark! The foundational proposition of the district court and court of appeals here is “Ghost Adventures can’t own the Lizzie Borden mythos, even if consumers think they do.” I agree! But apparently a beer company might own the Sam Adams mythos, at least for sufficiently beer-related activities? This is of course related to the difference between owning a mark for something and confusion about affiliation, which is a very different animal.

What about intent? Ghost Adventures argued that the coffee shop “opened a location in immediate proximity to [Ghost Adventures’] business” and “intentionally used the word ‘Lizzie’ and a hatchet in [its] name and signage.” The district court supportably found that Miss Lizzie’s sought to benefit from the Lizzie Borden story in its own right, “not from the manner in which Ghost Adventures used that story.” It was not clear error to decide, “given the historical significance of the location,” neither Miss Lizzie’s acts alone nor those acts “considered in light of the entire record” evinced an intent to appropriate Ghost Adventures’ trademark.

What about incontestability? It didn’t affect the marketplace strength of the mark, which was not strong enough to displace consumers’ association with the real Lizzie Borden. 

The district court also pointed to a sign taped to the physical storefront that conspicuously reads: “Miss Lizzie’s Coffee is NOT ASSOCIATED, NOR AFFILIATED in any way with the Lizzie Borden Museum or Bed and Breakfast next door, nor any other business.” The district court supportably found that this clarification “further distinguish[ed] the businesses,” noting that effective disclaimers can “tip the scales to a finding of no likelihood of confusion and no infringement.”

6th Circuit applies JDI to political speech, but holds that disclaimers avoid confusion

Libertarian National Committee, Inc. v. Saliba, No. 23-1856 (6th Cir. Aug. 28, 2024)

Dissenting members of the Libertarian Party of Michigan maintain that they are the true Michigan affiliate. The Libertarian National Committee sued and the district court enjoined them from using the Libertarian Party mark. In an opinion that follows JDI in insisting that “use as a mark” is the appropriate speech-protective line, the court of appeals mostly affirms, though it vacates the injunction as to fundraising that uses a pop-up disclaimer to inform donors of the substance of the dispute, which the court of appeals finds avoids likely confusion. [This is probably best understood as a normative version of “reasonable consumers wouldn’t be confused.”]

Defendants, even after the dispute began, kept identifying themselves as the Libertarian Party of Michigan in connection with soliciting donations, filing campaign finance paperwork, and promulgating platform positions, endorsements, and commentary critical of the Chadderdon-chaired group. The core holding: “[D]efendants’ use of the LNC’s mark to, among other things, solicit party donations, fill out campaign finance paperwork, advertise events, and espouse political platform positions and commentary falls within the scope of the Lanham Act.” “Services” are broadly defined, and the Lanham Act reaches noncommercial speech at least to the extent of covering uses as a mark. Although prior cases protecting noncommercial/political actors have sometimes reasoned that political positions etc. aren’t “services” within the scope of the Act, they are better understood as in fact standing for the principle that, for example, discussing and critiquing the trademark owner is not a source-identifying use. 

For what it’s worth, this distinction roughly tracks my pre-JDI proposal to focus on whether reasonable citizens can tell who is speaking when it comes to noncommercial speech, although my version notably relies on traditional First Amendment tiers of scrutiny and—perhaps foretelling coming Supreme Court moves—the court here does not. This is going to create further doctrinal crinkles when trademark owners assert that noncommercial uses cause sponsorship/affiliation confusion; one of the merits of tiers of scrutiny, which can concededly be replicated by other methods with which modern courts have less experience, is that they provide a framework for assessing the strength of the relevant interests and the fit between a particular imposition of liability and those interests.

“[I]n the narrow context where a defendant uses the trademark as a source identifier, the Lanham Act does not offend the First Amendment by imposing liability in the political arena.” The court is right to say that the results of previous cases, if not their language/statutory interpretation, are relatively consistent with the line it draws—if you agree that none of the previously protected uses, including domain names like taubmansucks.com, were “source-identifying” if they didn’t sell (competing?) goods. But what this means is that now most of the speech-protective work will be done in the “source-identifying” inquiry. This is easy with people calling themselves the Libertarian Party, and has been relatively easy for courts dealing with individual “articles” (how the court describes both Farah v. Esquire Magazine, 736 F.3d 528 (D.C. Cir. 2013), and the Radiance Foundation “National Association for the Abortion of Colored People” case). But plaintiffs will adapt, and it might not stay easy for lots of representational art.

Thus, without going into factor analysis, the court of appeals found that most of the challenged uses were unauthorized and likely to be confusing. However:

Defendants also used the LNC’s trademark on their website to solicit donations. In connection with the donation tab, defendants displayed one of two pop-up disclaimers notifying the potential donor of the governance dispute, the LNC’s recognition of the Chadderdon-led faction, and that any donations would be going solely to defendants. The disclaimers also included hyperlinks to the Chadderdon-led affiliate’s website. By clearly explaining the identity of the donation recipient, these disclaimers ameliorated the confusion the Lanham Act seeks to prevent. The disclaimers also resemble those we have previously found sufficient to eliminate a likelihood of confusion. Accordingly, defendants’ use of the trademark in connection with their online solicitation of donations, when accompanied by appropriate disclaimers, does not create a sufficient likelihood of confusion as to the recipient of the funds and thus cannot be the predicate for Lanham Act liability.

Query: are defendants therefore entitled to a modification of the injunction to allow them to apply the same disclaimers to other things they do, like running the rest of the website or sending materials to officials?

5th Circuit allows image-based tobacco warnings in barest nod to consistency on compelled commercial speech

R J Reynolds Tobacco Co. v. Food & Drug Admin., 2024 WL 1208111, --- F.4th ----, No. 23-40076 (5^th Cir. Mar. 21, 2024)

The sudden shift in the political valence of the commercial speech doctrine strikes again! The Fifth Circuit upholds mandatory cigarette warnings as acceptable compelled commercial speech under Zauderer, reversing the district court’s 2022 decision. Let’s just say that, five years ago, this would have struck me as an unlikely result, and in 2020 the decision to file in Texas would have been much less complicated; even in 2022, I would have expected the district court to be upheld. (It returns to the district court for an APA challenge, about which I express no opinion.)

The Family Smoking Prevention and Tobacco Control Act requires cigarette packages to include “color graphics depicting the negative health consequences of smoking to accompany the [updated] label statements.” These warnings “shall comprise the top 50 percent of the front and rear panels of the package” of cigarettes and “at least 20 percent of the area of [any] advertisement ....” A facial challenge was rejected by the Sixth Circuit in 2012, but the DC Circuit struck down the FDA’s first attempt on an as-applied challenge. Now it’s the 5^th Circuit’s turn.

In enacting the TCA, Congress found that “efforts to restrict advertising and marketing of tobacco products,” including existing mandatory warnings, had “failed adequately to curb tobacco use by adolescents, [so] comprehensive restrictions on the sale, promotion, and distribution of such products [were] needed.” The TCA’s legislative findings included: (1) minors still often see and are exposed to tobacco product advertising; (2) the “overwhelming majority of Americans who use tobacco products begin using such products while they are minors and become addicted to the nicotine in those products before reaching the age of 18” and (3) “[r]educing the use of tobacco by minors by 50 percent would prevent well over 10,000,000 of today’s children from becoming regular, daily smokers, saving over 3,000,000 of them from premature death due to tobacco-induced disease[s]” and would “result in approximately $75,000,000,000 in savings attributable to reduced health care costs.”

Congress identified nine new warnings to rotate regularly, which must “comprise the top 50 percent of the front and rear panels of” each cigarette package and “at least 20 percent of the area of [any] advertisement ....” It further instructed the Secretary of Health and Human Services to “issue regulations that require color graphics depicting the negative health consequences of smoking to accompany the label statements.” And Congress gave the Secretary the authority to “adjust the type size, text and format of the label statements” for clarity, conspicuousness, and legibility.

When the FDA made its first attempt, the DC Circuit held that the chosen graphics were not targeted at deception; nor were they providing “‘purely factual and uncontroversial’ information” because the images “could be misinterpreted by consumers” and “are primarily intended to evoke an emotional response, or, at most, shock the viewer into retaining the information in the text warning.” It therefore applied Central Hudson instead of Zauderer and struck down the initial rule. Under Central Hudson, the FDA lacked even “a shred of evidence ... showing that the graphic warnings will ‘directly advance’ [FDA’s] interest in reducing the number of Americans who smoke.”

The FDA reasoned that its new images promoted “the Government’s interest in promoting greater public understanding of the negative health consequences of cigarette smoking” and also “dissipat[es] the possibility of consumer confusion or deception,” thereby advancing the government’s interest in preventing “consumer misperceptions regarding the risks presented by cigarettes.”

Plaintiffs here alleged that each of the Warnings “misrepresent[s] or exaggerate[s] the potential effects of smoking” and that, “[c]ontrary to FDA’s characterization, the peer reviewers raised serious, substantive concerns about FDA’s studies” used to support the selected Warnings.

The district court reasoned that Zauderer did not apply because the imagery was fundamentally so “prone to ambiguous interpretation” that “it is unclear how a court would go about determining whether it[ ] ... is ‘accurate’ and ‘factual’ in nature”:

In other words, the court reasoned that no photorealistic image could ever be purely factual and uncontroversial because different viewers will ascribe to it different meanings. The inherent ambiguity in any graphic warning—e.g., that viewers may interpret the heart disease warning to suggest that open-heart surgery “is the most common treatment for heart disease” or the best—means that the Warnings cannot be “ ‘purely factual and uncontroversial’ and objectively accurate as required to allow relaxed Zauderer review.” Further, the court found that the graphic portions of the Warnings fell beyond Zauderer’s reach because they are inherently “provocative.”

And the warnings weren’t narrowly tailored under Central Hudson because the government hadn’t first tried increased funding for antismoking advertisements, increased government anti-smoking communications, or “test[ed] the efficacy of ‘smaller or differently placed warnings.’ ”

(Preclusion as to RJR’s challenge to the constitutionality of the TCA itself would have been appropriate, but that didn’t resolve the case (there were other plaintiffs), so the court proceeded to the merits.)

Key holding: “The Warnings are both factual and uncontroversial, despite the emotional impact the graphics may have.”

The court—weighing in on an issue that divided the DC Circuit—concluded that Zauderer is a “carve-out” from, not an application of, Central Hudson.

Moreover (and not unrelatedly), Zauderer applies to all compelled commercial speech, not just deception-preventing speech. The Fifth Circuit held in NetChoice that the state’s interest in “enabling users to make an informed choice regarding whether to use [social media] Platforms” was sufficient to survive review under Zauderer. Similarly, Chamber of Commerce of the USA v. SEC, 85 F.4th 760 (5th Cir. 2023), recently held that “the disclosure of a company’s rationale for a stock buyback was purely factual and uncontroversial commercial speech” (although it still struck down the SEC’s action because it was the SEC, I mean because of the APA).

First, the warnings were “purely factual.” What is factual? Well, it’s not an opinion. Moreover, the government may not demand a private party “undertake contextual analyses, weighing and balancing many factors ... that depend on community standards,” to determine the speech it must “parrot.” Book People, Inc. v. Wong, 91 F.4th 318, 340 (5th Cir. 2024). “Factual” needs to involve “information” that is “[c]oncerned with what is actually the case rather than interpretations of or reactions to it” and “actually occurring.” (Lots of dictionaries invoked here.) Thus, “factual” must mean “falsifiable material and inferences fairly drawn from it, rather than one’s non-falsifiable ‘interpretations[,] ... reactions,’ or opinions.”

Crucially, “factual” does not mean “true,” because that would make “purely factual information”—the language of Zauderer—surplusage. (This seems to ignore the idea that opinions aren’t statutes, but here we are.) Thus, the required warnings would be factual if they were comprised of “only (a) information supported by facts and (b) conclusions driven by those facts, and (2) not akin to unfalsifiable statements of opinion.”

Plaintiffs argued that the new warnings “misleadingly exaggerate smoking risks” and improperly “focus on conditions that less frequently arise from smoking,” even though the existing warnings were concededly purely factual. “Consequences supported by scientific findings, even if exaggerated or non-modal, are still, by definition, factual.” The factual content of the text was undisputed.

What about the images? Images can be factual. “The addition of images to the textual warnings makes no difference to the constitutional analysis of factuality.” In the FDA’s own words: “FDA used a certified medical illustrator to design images that depicted common visual presentations of the health conditions and/or showed disease states and symptoms as they are typically experienced, and that present the health conditions in a realistic and objective format devoid of non-essential elements.” Each of the images was “a straightforward, science-based, objectively truthful depiction of the accompanying text,” “no different from those a medical student might see in a textbook.”

Merely because the images might convey “an ideological or provocative message” does not make them nonfactual:

A fact does not become “value-laden” merely because the fact drives a reaction. But even if it did, ideological baggage has no relevance to the first Zauderer prong. Any number of factual messages are, of course, ideological. Similarly, emotional response to a statement is irrelevant to its truth. That someone may have to declare bankruptcy [in order to get debt relief] is likely to engender strong emotions. But the Court never even discussed that aspect of the mandatory disclosures [in its case upholding required disclosures about bankruptcy by certain debt relief providers].

[Footnote] … We offer the following example: “The Nazis committed genocide.” That is a factual statement. It is also a statement that denounces the Nazi’s actions and beliefs as morally repugnant. That is an ideological message. Though the government may not be able to compel Volkswagen to include that message in its advertising without justification, a court would likely still review any such attempt under Zauderer.

[Somebody is thinking about abortion disclosures.]

Plus, these images were “meant to be interpreted literally.” They weren’t “primarily intended to evoke an emotional response” but instead “to draw attention to the warning and depict a possible medical consequence of smoking. Thus, at most, the emotional response of viewers is incidental to their retention of information about the health risks.”

What about the argument that the images might be subject to several different interpretations, and the FDA didn’t test for consumer takeaway? “[W]hen each image is paired with a fact-based, textual warning, any reasonable viewer interprets the image in light of the words.” It was error to ignore the words.

Also, the government need not choose only the most common side-effect or consequence of the disease or injury discussed in a warning. “People may interpret ‘debt relief agency’ in many ways, but disclosing that a business is one is still purely factual.” Nor were cigarette companies required to make difficult contextual judgments weighing multiple factors to determine the warning, since the FDA did it for them.  

For similar reasons, the warnings were uncontroversial. NIFLA says that abortion is a controversial topic, making disclosures about abortion controversial; but NetChoice said that “disclosures of social media censorship decisions” were not controversial. Thus, a factual disclosure is “controversial” under Zauderer “where the truth of the statement is not settled or is overwhelmingly disproven or where the inherent nature of the subject raises a live, contentious political dispute.” Content moderation isn’t inherently contentious, even though it was connected to “a live, contentious, political issue.” [Wow, this might be even dumber than the statements in NetChoice itself. Because it is about content that some people want and some people don’t, content moderation policy is the definition of inherently contentious—as abortion is not, even if people living in Texas today think it must be. This is a fake argument; the real reason—inconsistent with NIFLA’s dicta, which should be ignored the way all abortion-related First Amendment pronouncements should be ignored—comes next.]

There’s no good-faith debate that the warnings aren’t truthful. Thus, they are uncontroversial.

Next, the warnings must be “reasonably related to the State’s interest” and not “unjustified or unduly burdensome.” “Zauderer does not require the state to assert an anti-deception interest.” No court of appeals majority has ever held otherwise, and the Fifth Circuit has previously referred to valid interests in “promoting the free flow of commercial information”; we ruled that was “more than enough to satisfy this prong of Zauderer” and “promoting the ethical integrity of the legal profession.” “Increasing public understanding of the risks of smoking, particularly given the ‘long history of deception concerning consumer health risks in the cigarette industry,’ is a legitimate state interest.” [Now do the long history of state and private discrimination against nonwhites.]

The warnings were not unjustified. Plaintiffs argued that the interest at issue was too amorphous and that the warnings hadn’t been shown to be effective.

The images served an informational interest. Zauderer itself explained that “[t]he use of illustrations or pictures in advertisements serves important communicative functions: it attracts the attention of the audience to the advertiser’s message, and it may also serve to impart information directly.” The FDA even tested their effectiveness in raising consumer awareness and then refined them based on those results.

NIFLA says that a compelled disclosure is justified only if it will “remedy a harm that is ‘potentially real[,] not purely hypothetical,’ and ... ‘extend[s] no broader than reasonably necessary.’ ” Plaintiffs argued that current Surgeon General’s warnings are sufficient, but that ignored “significant evidence that consumers do not notice, much less internalize, the text-only warnings in the status quo. The updated warnings serve to remedy the harm that buyers might (1) not know about tobacco’s harms or (2) ignore the existing Surgeon General’s warnings.”

And here the Fifth Circuit engages in what is all too common in rejecting plaintiffs’ arguments: it makes up a contradiction that doesn’t exist. This isn’t to say the Fifth Circuit is wrong about the weighing here, but it’s a bad look to claim logical flaws that are themselves illogical: “Plaintiffs inconsistently claim that the disclosure requirements are overly emotional and ideological such that they become non-factual speech, while also asserting that FDA’s informational interest does not justify the Warnings because they will not be effective. In other words, plaintiffs suggest consumers will simultaneously notice and not notice the warnings.” But of course, consumers could both notice and not be informed or change their behavior because of the warnings. I notice a ton of stuff to which I am indifferent every day. The underlying question is whether the government ought to have to show some real likelihood of changed decisionmaking in order to justify mandatory disclosures, and I have to admit that I am leaning more towards “yes,” at least for a noticeable percentage of consumers. In the absence of any need for effectiveness, disclosure becomes a compromise where regulators/lawmakers tell themselves they’re protecting consumers while blaming the ones who continue to make “bad” decisions for the consequences of continued marketing.

Effectiveness: Plaintiffs argued that the FDA’s studies were flawed, but all that was required constitutionally was a reasonable relation to a legitimate state interest. “Whether FDA’s use of the studies survives APA review is a question we consider separately from our Zauderer review.” This move too sets up the ability to approve state mandates (not subject to the APA) like in NetChoice while still invalidating anything the Fifth Circuit doesn’t like as a policy matter.

The warnings were not unduly burdensome, despite their size and offputting content. Even if they wouldn’t survive Central Hudson review, that wasn’t enough to invalidate them. The Sixth Circuit already upheld the required size and the court here wasn’t going to revisit that. “Undue burden” means that “the regulation cannot impose a burden excessive or disproportionate to the benefits gained.” In NIFLA, the burden was undue because the disclosures were “wholly disconnected from California’s informational interest”; allowed for no consideration of “what the facilities say on site or in their advertisements”; and “cover[ed] a curiously narrow subset of speakers.” But in NetChoice, decision disclosure/appeal and biannual transparency disclosure couldn’t possibly burden protected speech, so that was ok, and the SEC’s buyback disclosures weren’t unduly burdensome because they “neither burden[ ] issuers’ protected speech nor drown[ ] out their message” given that they occurred only “within the narrow confines of SEC filings.” [Gotta admit, these don’t sound promising for disclosures that have to be a big part of every package.]

Here, the benefits were to alleviate “information asymmetry regarding the harms tobacco causes and consumers’ suboptimal awareness of and response to those harms,” and reducing those harms would be a significant benefit. [If it occurs.]

The claimed harms were to plaintiffs’ free speech rights and to their finances. But “plaintiffs can still speak on 80% of their advertisements, and they still control more than 50% of the total surface area of their cigarette packages.” That allowed “ample room for manufacturers to distinguish their products from other products” and not be “drown[ed] out” or deterred from advertising at all. And plaintiffs have at most a “minimal” interest in withholding useful and factual information; harm suffered from an infringement on that interest was limited. Thus, the burdens were not undue in comparison to the benefits.