Many businesses make positive, truthful claims about their products or services.  Claims are statements of fact about a product or service, such as, “no added sugar,” “made with organic milk,” “customer support calls answered in 2 minutes or less,” or “all features playable on mobile and console devices.”  One factor a business might consider when preparing marketing content is that a truthful claim about its product or service is a feature that a competitor does not and cannot offer.  A competitor in that situation recently filed a lawsuit arguing that the truthful claim that did not mention the competitor was a “false comparison” to that competitor’s product.

The California Court of Appeal’s published decision in that case analyzed whether “statements a business affirmatively and truthfully makes about its product and which do not on their face mention or otherwise reference its competing products at all,” can give rise to liability under California’s False Advertising Law, Unfair Competition Law, and Consumer Legal Remedies Act. Shaeffer v. Califia Farms, LLC, No. B291085, 2020 WL 581452 (Cal. Ct. App. Feb. 6, 2020)

The product at issue was tangerine juice manufactured by Califia Farms. The label stated, truthfully, that it had “no added sugar.” Califia’s competitor alleged this statement was an implied representation that Califia’s tangerine juice had less sugar than comparable products, and thus misrepresented the comparative healthiness of Califia’s tangerine juice.

The Court of Appeal affirmed the dismissal in favor of Califia Farms. In so doing, it held as a matter of law that a reasonable consumer could not be misled by truthful statements about a company’s own product, without reference to a competitor’s product. To do so, the Court explained, would require the consumer to be (1) likely to infer from the statement that the very same statement is untrue as to comparable, competing products, (2) likely to infer that the product at issue is consequently superior to its competition, and (3) likely to be deceived if the statement is true as to the comparable, competing products.

As a matter of law, the Court held, this test cannot be met. This was so because a “reasonable consumer is unlikely to make the series of inferential leaps outlined above.”  Under the plaintiff’s theory, virtually any truthful advertising could be subject to litigation. The Court used the following analogy to make its point. “Assume that a new airline runs an ad with a tagline, ‘No Hijackers Allowed.’ Is a reasonable consumer likely to infer that other airlines do allow hijackers and that the new airline is consequently the safer choice? We think the answer to this question is ‘no.’” Similarly, a reasonable consumer could not interpret the defendant’s claim that its juice did not contain added sugar as an implied representation that competitor’s juices did.

While the Shaeffer v. Califa Farms decision arose in the food and beverage context, its logic would apply equally in the context of any consumer product advertising. Indeed, the trial court in Shaeffer analogized the case to one involving a clothing brand.

What this means for brands advertising their products and services is that truthful, factual claims that make no comparison to a competitor are generally “safe” claim.  However, these same brands need to remember that all claims need to be substantiated, meaning that there is evidence supporting the factual claim being made.  Whether a claim is substantiated such that it is not false or misleading can oftentimes benefit from the input of counsel.