Effective advertising is a necessary part of any modern business, and competition can drive marketers to make bold claims.
Executives should be careful to ensure their marketing stays within reasonable bounds; marketing that slips over the line could expose the company to a lawsuit. The risk is all too real, as that line is patrolled by zealous plaintiffs’ lawyers, who have recently had some surprising successes in moving the boundary further in their favor.
Historical Safeguards
Marketers who defraud their customers have always been subject to lawsuits, but American courts have also historically recognized an almost complementary marketing “safe harbor.”
This safe harbor, sometimes called “puffery,” protects marketers whose claims are either so excessive they are clearly not expected to be believed, or so generic that they have no substantive meaning. In other words, puffery is advertising that reasonable consumers would not take literally.
A similar standard has been adopted over time for use in many consumer protection laws, which punish marketing that would deceive a “reasonable consumer.” However, this line can be difficult to identify, and recent cases suggest that plaintiffs are having success in moving it.
Recent Exposure
Recent years have seen a spate of lawsuits over food labeling, many of which are expanding the scope of what can legally be considered “deceptive.”
These decisions suggest that even such generic, overused terms as “healthy” and “natural” may be fair game for plaintiffs’ lawyers.
For example, a federal court in California refused to give the makers of Nutella the protection of the safe harbor for packaging and advertisements portraying Nutella as part of a “healthy” and “tasty yet balanced breakfast.” The company settled the case after the court went on to certify it as a class action.
More recently, in a suit in federal court in New York, plaintiffs claimed that an “ALL NATURAL Ingredients” label on Frito Lay’s chips and bean dip is deceptive because the chips and dip contain genetically modified corn.
Frito Lay argued that “no reasonable consumer” would apply such a strict interpretation of “natural,” but the court disagreed, allowing the claims to go forward.
And a federal court in California similarly green-lighted a suit against General Mills alleging that a “100% Natural” label on the packaging of granola bars was deceptive because the granola bars contain processed sugars, such as high fructose corn syrup.
Considerations for Products Manufacturers
Although the extreme cases highlighted above arose in the food labeling context, the judicial decisions they produce may find application elsewhere.
Enterprising plaintiffs’ lawyers may well seek to use the victories in food-labeling cases to press for a similarly expanded scope of liability in other products cases.
Importantly, the food-labeling decisions described above involved ordinary, simple words that have been ubiquitous in our culture for decades, and have been appropriated over that period for countless different ends.
Words like “healthy” and “natural” have been so overused it may seem impossible that they could have any specific meaning today.
The courts in the food-labeling cases, however, seem to ignore this cultural backdrop, and give plaintiffs every opportunity to show that these seemingly-fungible words have a specific meaning to the modern consumer in the context of the product at issue.
In light of this plaintiff-friendly attitude from the courts, product marketers should be wary of making claims that are too generic, as well as claims that are too bold.
Seemingly-banal words or phrases could be unexpectedly shaped into the basis for a lawsuit.
Practical Tips
What does this mean as a practical matter?
• Manufacturers and marketers should carefully consider a literal interpretation of a proposed advertisement. Is it true? False? Patently ridiculous?
• Manufacturers and marketers should try to avoid words or phrases that seem so overused or malleable that they have no specific meaning or that could be misunderstood in specific ways in the context of the given product.
• Manufacturers and marketers should make advertisements more specific – generic claims are easier to twist to make them seem deceptive.
• Manufacturers and marketers should be clear about what they mean when they make claims about their products – for instance, by including information that provides context for claims (e.g., “EPA gas mileage” rather than “mileage,” referring to a specific test).
