Consumers who receive an inferior product or service than what was advertised are certainly harmed by false advertising, but they may not have the incentive to sue or take action against the company issuing false advertisements. False advertising can have a far greater impact on competitors. A business that engages in false advertising can damage its competitors by using false advertising to portray itself as a better value. An aggrieved business can initiate business litigation against its competitor for false advertising under the Lanham Act, common law unfair competition, and the Florida Deceptive and Unfair Trade Practices Act (FDUTPA). Peter Mavrick is a Fort Lauderdale business litigation lawyer, and also represents clients in business litigation in Miami, Boca Raton, and Palm Beach. The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.
Advertising can be an effective method for companies to show potential consumers the qualities of their products. Businesses have the incentive to present their products in the best possible light and may exaggerate the traits of their product. In business litigation over the legal effect of “opinion statements,” such as the qualifier that something is the “best value,” “finest,” and “high quality,” Florida courts generally consider such terminology as being lawful puffery. A previous Mavrick Law Firm article discussed lawful puffery in greater detail. By contrast, statements about specific qualities of a product which are demonstrably false can be unlawful.
Each of these laws requires that the plaintiff show a deceptive act by a competitor. Specifically, to prevail on a Lanham Act claim for false advertising, an aggrieved business must show that “(1) the ads of the opposing party were false or misleading, (2) the ads deceived, or had the capacity to deceive, consumers, (3) the deception had a material effect on purchasing decisions, (4) the misrepresented product or service affects interstate commerce, and (5) the movant has been—or is likely to be—injured as a result of the false advertising.” Johnson & Johnson Vision Care, Inc. v. 1-800 Contacts, Inc., 299 F.3d 1242 (11th Cir. 2002). “Unfair competition under Florida common law requires ‘deceptive or fraudulent conduct of a competitor and likelihood of consumer confusion.’” Webster v. Dean Guitars, 955 F.3d 1270 (11th Cir. 2020). To prevail in business litigation under FDUTPA, a plaintiff must also show that a “deceptive act or unfair practice” caused damages. City First Mortg. Corp. v. Barton, 988 So. 2d 82 (Fla. 4th DCA 2008).
In the recent case, Warren Tech., Inc. v. UL LLC, 962 F.3d 1324 (11th Cir. 2020), the Eleventh Circuit Court of Appeals examined whether the actions taken by a product certification organization were sufficiently deceptive or misleading to support claims under the Lanham Act, common law unfair competition, and FDUTPA. The Warren Tech plaintiff was a manufacturer of heaters. The defendant was a nationally recognized testing laboratory which certified products for compliance with safety standards. The plaintiff discovered that the defendant certified a competitor’s product as being compliant with particular safety standards. The plaintiff believed was clearly not compliant, and the certification was unlawful false advertising. Warren Tech reviewed the safety standards which the plaintiff claimed the defendant falsely represented that the product was compliant with. Warren Tech found that defendant’s representation of conformity to safety standards did not qualify as an actionable deceptive or misleading advertisement because the safety standards were subject to interpretation. “Determining the conformance of a product with [the defendant’s] standard obviously requires [the defendant] to interpret the standard, just as conformance with a statute requires a court to interpret the statute.” Warren Tech., Inc. v. UL LLC, 962 F.3d 1324 (11th Cir. 2020). Warren Tech explained that the plaintiff could have brought a claim that the defendant knew or consciously disregarded its own safety standards, but not any claims related to false advertising.
Peter Mavrick is a Fort Lauderdale business litigation attorney who also practices business litigation in Miami-Dade and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.