Intellectual Property Law

Ninth Circuit Finds Statements Don't Support False Advertising Claim

By Michael Atkins

Competing appliance recycling companies slugged it out in Appliance Recycling Centers of America, Inc. v. JACO Environmental, Inc., a false advertising case the Ninth Circuit decided on May 4.

The Central District of California granted the defendant summary judgment.

The Ninth Circuit affirmed, finding no reasonable jury could find the defendant’s statements were actionable.

The court found: “The statement that Defendants’ method for recycling appliances is a ‘unique’ system with ‘unprecedented’ results is non-actionable puffery because it is a ‘general, subjective claim,’ rather than a statement about ‘specific or absolute characteristics.’

“Plaintiffs argue that the district court erred by requiring proof of bad faith for the statements that ‘JACO’s system for handling contaminated polyurethane is an entirely different approach’ and that ‘no other company could handle polyurethane contaminated with CFC-11’ before Defendant JACO Environmental, Inc. entered the market. Even assuming that Plaintiffs are correct that proof of bad faith is not necessary, neither of those statements supports a Lanham Act claim.

“No reasonable jury could find that the ‘entirely different’ statement is false. In context, that statement asserts that Defendants’ method of incinerating the contaminated foam is entirely different than the Adelmann recycling process; it does not refer to the method of dismantling the appliances to obtain the contaminated foam in the first place. The record demonstrates that the statement is true — incineration is entirely different than the Adelmann process.

“No reasonable jury could find that the ‘no other company’ statement satisfies the deception element of a Lanham Act false advertising claim. The statement is ambiguous in its context because it could refer either to Plaintiffs or to JACO, and there is no evidence that it causes actual deception.”

Appliance Recycling Centers of America, Inc. v. JACO Environmental, Inc., 2010 WL 1767313, No. 09-55168 (9th Cir. May 4, 2010).

Full post as published by Seattle Trademark Lawyer on May 11, 2010 (boomark / email).