United States Court of Appeals
For the First Circuit
No. 99-1608
THE CLOROX COMPANY PUERTO RICO,
Plaintiff, Appellant,
v.
THE PROCTOR & GAMBLE COMMERCIAL COMPANY,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. José Antonio Fusté, U.S. District Judge]
Before
Lynch, Circuit Judge,
Cyr, Senior Circuit Judge,
and Lipez, Circuit Judge.
Armando Lloréns, with whom Dora M. Peñagaríciano and
McConnell Valdés were on brief, for appellant.
Harold P. Weinberger, with whom Jonathon M. Wagner,
Gabrielle L. Gould, Kramer Levin Naftalis & Frankel, LLP, Pedro
J. Santa-Sánchez, and O'Neill & Borges were on brief, for
appellee.
October 3, 2000
LIPEZ, Circuit Judge. "Más blanco no se puede" (Whiter
is not possible) was the advertising tag line used by the
defendant, the Proctor and Gamble Commercial Company, to sell
its detergent, Ace con Blanqueador (Ace with whitener), in
Puerto Rico. The Clorox Company Puerto Rico cried foul,
complaining that no detergent brings out the white like its
chlorine bleach when used with a detergent. Proctor & Gamble
modified its pitch, inviting consumers to "Compare con su
detergente . . . Más blanco no se puede" (Compare with your
detergent . . . Whiter is not possible). Unimpressed by this
change, Clorox sued, alleging, inter alia, that the
advertisements were false and misleading in violation of Section
43(a) of the Lanham Act, 15 U.S.C. § 1125(a). After Clorox
moved for a preliminary injunction, the district court dismissed
the false advertising claim sua sponte. Concluding that Clorox
has stated a claim under § 43(a) of the Lanham Act, we vacate
the dismissal and remand to the district court for further
proceedings.
I.
We present the facts in the light most favorable to
Clorox, the party opposing the dismissal of the complaint. See
Langadinos v. American Airlines, Inc., 199 F.3d 68, 69 (1st Cir.
2000). In 1989, Proctor & Gamble introduced in Puerto Rico Ace
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con Blanqueador, a powdered laundry detergent that contains a
non-chlorine whitening agent described as a "color-safe oxygen
bleach" with a patented "activator," the same formula used in
powdered Tide with Bleach marketed in the continental United
States. In 1997, Proctor & Gamble introduced a liquid version
of Ace containing a "compound of high levels of sulfactants and
enzymes which function as a whitener and a color enhancer," the
same formula used in liquid Tide with Bleach Alternative.
The Original Doorstep Challenge Campaign
Proctor & Gamble conducted some consumer studies in
1997 and determined that an obstacle to obtaining an enhanced
market share for Ace con Blanqueador was the public's perception
that chlorine bleach was necessary to get clothes white. Using
this new information, Proctor & Gamble implemented an
advertising campaign to counter the perception of consumers that
chlorine bleach was necessary, and to convince them that Ace was
a superior option to using a lower-priced detergent in
conjunction with chlorine bleach. This "Doorstep Challenge"
included a series of television advertisements in which
Francisco Zamora, a television celebrity in Puerto Rico, visited
women in their homes to ask them about their laundry practices
and to elicit their praise for Ace. In the commercials
depicting powdered Ace, the overriding theme was that chlorine
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bleach was not necessary to get clothes white if washed with
Ace. The commercials pitching liquid Ace also emphasized its
enhanced whitening capacity, but did not specifically mention
chlorine bleach. Each commercial closed with the tag line,
"Whiter is not possible," a slogan Proctor & Gamble had been
using since powdered Ace arrived on the market in 1989.
For instance, the "Evelyn" commercial for powdered Ace
went as follows:
Francisco: Do you use Ace?
She: No . . .
Fco: What is your laundry routine?
She: I put in the three detergents I use,
I throw in a bit of chlorine and I
let it soak until the next day. I
waste a lot of time . . . but to
accomplish what I want I have to do
it that way.
Fco: I dare you to wash your white
garments with Ace and nothing else!
She: Without chlorine?
. . . .
Fco: Without chlorine . . . we're going to
wash all these.
She: I don't think so . . .
She: The truth is . . . that's whiteness, that's
whiteness! So now I'm going to save money,
time . . .
. . . .
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[VISUAL: Whiter is not possible.]
Certified Translation.
The Promotional Mailing
As part of its campaign to sell Ace, Proctor & Gamble
sent a promotional brochure and product sample to consumers in
Puerto Rico. The first page of the brochure depicted a bowling
ball imprinted with the word "Ace" standing in front of several
bowling pins that resembled Clorox bottles. The caption read:
"Da en el blanco con una sola tirada," (hit the [white] spot
with just one shot). The second and third pages of the brochure
contained additional pictures surrounded by punchy statements in
Spanish like, "Dare to pass the test. Wash with Ace and nothing
else," "Say goodbye to the complications of chlorine and other
cleaners," and "Resist the 'bombs.'1 Put your ACE con Blanqueador
to the test." Like the television commercials, the brochure
ended with the tag line, "Whiter is not possible!"
The Modified Campaign
In January 1998, the Clorox Company, which markets in
Puerto Rico a brand of chlorine-based liquid bleach called
Clorox, sent a letter to Proctor & Gamble complaining that the
Doorstep Challenge campaign was false and misleading, and
1 The combination of detergent and chlorine bleach is
called "la bomba" in Puerto Rico.
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demanding that Proctor & Gamble stop running the television
advertisements. Although Proctor & Gamble would not alter the
theme of its advertising, it agreed to soften the tag line by
adding the qualification, "compare with your detergent," before
the phrase "whiter is not possible."2
The qualification did not satisfy Clorox. In March
1998, Clorox filed this lawsuit, alleging in its complaint
violations of Section 43(a) of the Lanham Act, 15 U.S.C. §
1125(a), the Federal Trademark Dilution Act, 15 U.S.C. §
1125(c), the Federal Trade Commission Act and regulations, 15
U.S.C. § 45(a), Article 1802 of the Puerto Rico Civil Code, P.R.
Laws Ann. tit. 31 § 5141, and regulations issued by the Puerto
Rico Department of Consumer Affairs ("DACO"). Clorox later
amended the complaint by dropping the claims pled under the FTC
Act and the FTC and DACO regulations, and adding a claim under
Article 1802 predicated solely on Proctor & Gamble's alleged
violations of those laws and regulations.3 Proctor & Gamble
moved to dismiss all of the claims except the Lanham Act claim.
2 For advertisements depicting liquid detergent, the new
tag line read, "Compare con su detergente líquido . . . Más
blanco no se puede." (Compare with your liquid detergent . . .
Whiter is not possible).
3 Presumably, Clorox did this because it worried that the
FTC Act and FTC and DACO regulations do not authorize private
rights of action.
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Clorox then sought leave to amend the complaint again to add
Proctor & Gamble's alleged violation of the Lanham Act as
another predicate for its Article 1802 claim.4
Clorox sought to permanently enjoin Proctor & Gamble
from "making any claims that Ace gets clothes 'the whitest
possible,' without the use of Clorox." (Emphasis in original).
Additionally, Clorox sought damages and attorneys' fees under §
43(a) of the Lanham Act. 5 Finally, Clorox moved for a
preliminary injunction on its Lanham Act claim. In connection
with the motion for a preliminary injunction, the parties
conducted document production and depositions and submitted to
the court relevant evidentiary materials, including consumer
surveys, statements of experts, and the testimony of various
witnesses. The district court did not hear oral argument.
In March 1999, while Clorox's motion to amend its
amended complaint and its motion for preliminary injunction were
pending, the district court granted Proctor & Gamble's motion to
4 This Second Amended Complaint also assailed a new
series of advertisements, first aired by Proctor & Gamble in
September 1998, depicting the celebrity interviewer Zamora
wrapped in chains and exclaiming, "Free yourself from chlorine
bleach!"
5 Section 35 of the Lanham Act, 15 U.S.C. § 1117(a),
allows for the recovery of damages and attorney's fees for false
advertising in violation of § 43(a). See 4 J. Thomas McCarthy,
McCarthy on Trademarks and Unfair Competition § 27:40 (4th ed.
1997).
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dismiss both the Dilution Act and Article 1802 claims.
Additionally, the district court dismissed the Lanham Act claim
sua sponte. This appeal followed, limited to the dismissal of
the Lanham Act and Article 1802 claims.
II.
A. The Sua Sponte Dismissal
We review de novo the district court's dismissal of
Clorox's Lanham Act claim pursuant to Fed. R. Civ. P. 12(b)(6).
See Beddall v. State St. Bank & Trust Co., 137 F.3d 12, 16 (1st
Cir. 1998). We will affirm the dismissal of the complaint if,
and only if, accepting all well-pleaded facts as true and
drawing all reasonable inferences in favor of the plaintiff, the
complaint "fail[s] to state a claim upon which relief can be
granted." Fed. R. Civ. P. 12(b)(6). That is, the complaint is
properly dismissed only when the allegations are such that "the
plaintiff can prove no set of facts to support [the] claim for
relief." Rockwell v. Cape Cod Hosp., 26 F.3d 254, 260 (1st Cir.
1994).
Courts must move cautiously when dismissing a complaint
sua sponte. See, e.g., Baker v. Cuomo, 58 F.3d 814, 818 (2d
Cir. 1995). Although it is occasionally appropriate for a
district court to "note the inadequacy of the complaint and, on
its own initiative, dismiss the complaint[,] a court may not do
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so without at least giving plaintiffs notice of the proposed
action and affording them an opportunity to address the issue."
Wyatt v. City of Boston, 35 F.3d 13, 14-15 (1st Cir. 1994)
(quoting Literature, Inc. v. Quinn, 482 F.2d 372, 374 (1st Cir.
1973)). See also Perez v. Ortiz, 849 F.2d 793, 797 (2d Cir.
1988) (noting that "the general rule is that a 'district court
has no authority to dismiss a complaint for failure to state a
claim upon which relief can be granted without giving the
plaintiff an opportunity to be heard'"). Clorox was given no
opportunity to argue the validity of its claim to the district
court. Moreover, the court's dismissal was done in the face of
Proctor & Gamble's acknowledgment that "the complaint states a
claim under the federal false advertising statute[--]Section
43(a) of the Lanham Act." Clorox had no reason to suspect,
therefore, that its Lanham Act claim was in danger of dismissal.
There are limited exceptions to the general rule
barring dismissal without notice, applicable to frivolous claims
or to claims whose defects could not be cured by amendment. See
Wyatt, 35 F.3d at 15 n.1 (noting that reversal of a sua sponte
dismissal without notice may not be "mandated if amendment [of
the complaint] would be futile or if it is patently obvious that
the plaintiff could not prevail"); Street v. Fair, 918 F.2d 269,
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272 (1st Cir. 1990) (per curiam) (noting that procedural
protections may be unnecessary when the court dismisses in forma
pauperis actions as frivolous). As our discussion infra
indicates, Clorox's Lanham Act claim does not fall within any of
these exceptions.
Recognizing the procedural vulnerability of the court's
dismissal, Proctor & Gamble points out that Clorox submitted
substantial evidence in conjunction with its complaint and its
preliminary injunction motion--evidence that the district court
presumably could have used to convert, sua sponte, a motion to
dismiss into a motion for summary judgment. See 5A Charles Alan
Wright & Arthur R. Miller, Federal Practice and Procedure §
1366, at 470 (West Supp. 2000) (explaining that it may be
appropriate for a court to convert a motion to dismiss into one
for summary judgment sua sponte when parties offer material
outside of the pleadings in conjunction with a motion to
dismiss). Proctor & Gamble now urges us to treat the district
court's ruling as a summary judgment, inviting us to affirm on
any alternative ground supported by a full examination of the
record. See Frillz, Inc. v. Lader, 104 F.3d 515, 516 (1st Cir.
1997) (stating that we may "affirm an entry of summary judgment
on any alternative ground made manifest by the record").
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There are several problems with this approach. Even
if we were to agree that it would have been appropriate for the
district court to consider material outside the pleadings in
connection with its sua sponte dismissal of the Lanham Act
claim, this is not what the district court did. The court's
opinion and order sets forth its analysis in a section entitled
"Motion to Dismiss," which it prefaces with a discussion of the
12(b)(6) motion to dismiss standards. The court expressly
grants "Defendant's motion to dismiss Plaintiff's complaint for
failure to state a claim upon which relief can be granted
pursuant to Fed. R. Civ. P. 12(b)." More significantly, the
district court did not conduct the searching review of the
record necessary to rule on summary judgment. See Garita Hotel
Ltd. Partnership v. Ponce Fed. Bank, F.S.B., 958 F.2d 15, 18-19
(1st Cir. 1992) (stating that the test for deciding whether a
district court's ruling is a 12(b)(6) dismissal or an entry of
summary judgment is "whether the court actually took cognizance
of" supplementary materials). The district court looked only to
the face of the complaint. It did not purport to dismiss
Clorox's Lanham Act claim based on an evaluation of the record
as a whole.
Moreover, Proctor & Gamble's suggestion fails to
address the fundamental problem with the district court's sua
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sponte actions: the failure to give Clorox notice and an
opportunity to be heard. Even if the district court had
converted the motion to dismiss into a motion for summary
judgment--which it did not--such conversion usually requires
that "all parties shall be given reasonable opportunity to
present all material made pertinent to such a motion." Fed. R.
Civ. P. 12(b). Although we do not "mechanically enforce the
requirement of express notice of a district court's intention to
convert a Rule 12(b)(6) motion into a motion for summary
judgment," we do guard against allowing such a conversion where
it would come as a "surprise" or be "unfair" to the party
against whom judgment is rendered. Chaparro-Febus v.
International Longshoremen Ass'n, Local 1575, 983 F.2d 325, 332
(1st Cir. 1992). In light of Proctor & Gamble's acknowledgment
that the complaint stated a claim under § 43(a) of the Lanham
Act, the district court's conversion without notice would have
been both surprising and unfair.
It would only compound the unfairness to Clorox if we
accepted the invitation of Proctor & Gamble to indulge the
fiction that the district court's ruling was a summary judgment
determination and then affirm on any basis that seems
appropriate. Clorox has now tailored its appellate advocacy to
address the legal standards that it reasonably expected would
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govern this appeal--i.e., the standards governing review of a
12(b)(6) dismissal. Clorox has never had an adequate
opportunity to argue the relationship between the record
evidence and its Lanham Act claim. Also, it would be imprudent
to evaluate the voluminous filings in this case in light of the
summary judgment standard without advocacy from both parties on
the relationship between this evidence and the legal standards
governing liability under the Lanham Act.
Our refusal to review the entire record based upon
summary judgment standards does not mean, however, that we will
not examine any of the filings in this case. The record
includes hundreds of pages of exhibits appended to the various
complaints and submitted in support of motions to dismiss and
motions for and against a preliminary injunction. These
exhibits include the full text of the advertising copy, internal
company memoranda, letters exchanged between the parties, market
research and consumer survey data, and declarations and
deposition testimony of experts and other witnesses. Although
much of the evidence contained in the record is out-of-bounds in
reviewing a 12(b)(6) dismissal, it is well-established that in
reviewing the complaint, we "may properly consider the relevant
entirety of a document integral to or explicitly relied upon in
the complaint, even though not attached to the complaint,
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without converting the motion into one for summary judgment."
Shaw v. Digital Equip. Corp., 82 F.3d 1194, 1220 (1st Cir. 1996)
(citing Watterson v. Page, 987 F.2d 1, 3-4 (1st Cir. 1993)
(explaining that the main problem of looking to documents
outside the complaint--lack of notice to plaintiff--is
dissipated "[w]here plaintiff has actual notice . . . and has
relied upon these documents in framing the complaint")). "Were
the rule otherwise, a plaintiff could maintain a claim . . . by
excising an isolated statement from a document and importing it
into the complaint . . . ." Id.; see also Northern Indiana Gun
& Outdoor Shows, Inc. v. City of South Bend, 163 F.3d 449, 454
(7th Cir. 1998) ("It is a well-settled rule that when a written
instrument contradicts allegations in the complaint to which it
is attached, the exhibit trumps the allegations.").
Accordingly, in determining whether Clorox has stated a claim
for relief for false advertising, we read the allegations in the
complaint in light of the full text of the advertising copy
contained in the record. We limit our evaluation of material
outside the complaint to the advertisement copy because that is
the only material we deem "integral" to assessing the
sufficiency of the allegations in the complaint.
In closing our discussion of the sua sponte dismissal,
we must reiterate that basic fairness and sound prudential
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reasons underlie our insistence on the involvement of the
parties in any dismissal. "[A]dequate notice helps the court
secure a just determination, by giving parties moved against the
opportunity to present their best arguments in opposition."
Perez, 849 F.2d at 797 (internal citations and quotations
omitted). This case aptly illustrates the wisdom of that
insistence. The relationship between the allegations in the
complaint and the Lanham Act false advertising claim is complex
and contested. By dismissing Clorox's Lanham Act claim without
the benefit of the parties' advocacy in addressing these complex
issues, the district court misunderstood the relationship
between the allegations in Clorox's complaint and the relevant
legal standards. We turn now to those standards.
B. The Lanham Act False Advertising Claims
The false advertising prong of the Lanham Act provides:
(1) Any person who, on or in connection with
any goods or services, or any container for
goods, uses in commerce any word, term,
name, symbol, or device, or any combination
thereof, or any false designation of origin,
false or misleading description of fact, or
false or misleading representation of fact,
which--
. . . .
(B) in commercial advertising or
promotion, misrepresents the nature,
characteristics, qualities, or
geographic origin of his or her or
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another person's goods, services, or
commercial activities,
shall be liable in a civil action by any
person who believes that he or she is or is
likely to be damaged by such act.
15 U.S.C. § 1125(a).6 A plaintiff can succeed on a false
advertising claim by proving either that an advertisement is
false on its face or that the advertisement is literally true or
ambiguous but likely to mislead and confuse consumers. See
Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1139 (9th
Cir. 1997); Castrol, Inc. v. Pennzoil Co., 987 F.2d 939, 943 (3d
Cir. 1993); Abbott Labs. v. Mead Johnson & Co., 971 F.2d 6, 13
(7th Cir. 1992). If the advertisement is literally false, the
court may grant relief without considering evidence of consumer
reaction. See United Indus. Corp. v. Clorox Co., 140 F.3d 1175,
6 The elements of a false advertising claim under the
Lanham Act are: (1) a false or misleading description of fact or
representation of fact by the defendant in a commercial
advertisement about its own or another's product; (2) the
statement actually deceives or has the tendency to deceive a
substantial segment of its audience; (3) the deception is
material, in that it is likely to influence the purchasing
decision; (4) the defendant placed the false or misleading
statement in interstate commerce; and (5) the plaintiff has been
or is likely to be injured as a result of the false or
misleading statement, either by direct diversion of sales from
itself to defendant or by a lessening of goodwill associated
with its products. See Southland Sod Farms v. Stover Seed Co.,
108 F.3d 1134, 1139 (9th Cir. 1997); see also Johnson & Johnson-
Merck Consumer Pharms. Co. v. Rhone-Poulenc Rorer Pharms., Inc.,
19 F.3d 125, 129 (3d Cir. 1994); 4 J. Thomas McCarthy, McCarthy
on Trademarks and Unfair Competition § 27:24 (4th ed. 1997).
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1180 (8th Cir. 1998). In the absence of such literal falsity,
an additional burden is placed upon the plaintiff to show that
the advertisement, though explicitly true, nonetheless conveys
a misleading message to the viewing public. See Sandoz Pharms.
Corp. v. Richardson-Vicks, Inc., 902 F.2d 222, 228-29 (3d Cir.
1990). To satisfy its burden, the plaintiff must show how
consumers have actually reacted to the challenged advertisement
rather than merely demonstrating how they could have reacted.
See id. at 229.
Clorox's amended complaint alleged that Proctor &
Gamble's original and modified Doorstep Challenge television
campaigns, as well as the promotional brochure, were false and
misleading. Specifically, Clorox alleged that the Doorstep
Challenge advertisements and promotions conveyed the false and
misleading message to the Puerto Rican public that Ace con
Blanqueador gets clothes as white or whiter than a detergent
used with chlorine bleach.7 Clorox also alleged that the name
7 Significantly, the Lanham Act false advertising claim
was directed at the alleged comparison between Ace and chlorine
bleach. Unlike the Dilution Act claim, therefore, the false
advertising claim is not directed at a dilution, disparagement,
tarnishment, or diminishment of Clorox's brand name. That is,
Clorox alleged that it was false and misleading to claim the
superiority of Ace over chlorine bleach, generically, not Clorox
bleach, in particular. To the extent that such false
advertising would lead to a reduction in market share for Clorox
as the leading producer of chlorine-based "cleansing bleach" in
Puerto Rico (Clorox alleged that it controls 74% of the Puerto
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"Ace con Blanqueador" is literally false with respect to Ace
liquid detergent.
The district court's analysis of the Lanham Act claim
consisted of two paragraphs in which it reasoned that Clorox
"has failed to state a claim" under the Lanham Act because it
could not establish that Proctor & Gamble's advertisements
contained false or misleading statements. In particular, it
found that the tag line appearing in the modified campaign
commercials, "Compare with your detergent . . . Whiter is not
possible," was not false because it compared Ace only to other
detergents, not to detergents used with chlorine bleach. The
court also stated that, "Ace's comparison claim" was not
actionable under the Lanham Act because it was "mere puffing."
The district court's dismissal was erroneous for
several reasons. First, it ignored many of the allegations on
the face of the complaint. It did not address Clorox's
allegations directed at the advertisements in the original
Doorstep Challenge campaign, or the promotional brochure, nor
did it address Clorox's allegation that the name "Ace con
Blanqueador" as applied to the liquid detergent is literally
Rican market), Clorox may be in a position to show that it was
significantly damaged by false claims of superiority with
respect to chlorine bleach.
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false. Second, it applied an overly-restrictive view of the
requirements for pleading a false advertising claim under the
Lanham Act, dismissing the allegation that the modified campaign
was not false or misleading simply because it found the tag
line, read in isolation, to be literally true. Finally, the
district court erred in concluding that Clorox's allegations
were directed at non-actionable puffery. We analyze Clorox's
various allegations de novo, see Beddall, 137 F.3d at 16,
focusing on (1) the allegations of literal falsity, (2) the
allegations of misleading advertising, and (3) the concept of
"puffery."
1. Claims of Literal Falsity
Clorox challenged two features of Proctor & Gamble's
advertising campaign as literally false. First, Clorox alleged
that the television commercials that aired in the original and
modified campaign claimed that Ace gets clothes as white or
whiter than chlorine bleach. According to Clorox, that claim is
literally false because tests prove that chlorine bleach whitens
better than detergent used alone. Second, Clorox alleged that
the name, "Ace con Blanqueador," is literally false with respect
to Ace liquid detergent because it falsely suggests that Ace
liquid contains whitener or bleach.
a. The Television Advertisements
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Whether an advertisement is literally false is
typically an issue of fact. See Mead Johnson & Co. v. Abbott
Labs., 209 F.3d 1032, 1034 (7th Cir. 2000) (denying petition for
rehearing and amending prior panel opinion). At least two
factual questions must be answered in evaluating the accuracy of
any particular advertisement. First, a factfinder must
determine the claim conveyed by the advertisement. See United
Indus. Corp., 140 F.3d at 1181 (applying clearly erroneous
standard to review of district court's factual determination
regarding the claim conveyed by an advertisement for roach
bait); Johnson & Johnson v. GAC Int'l, Inc., 862 F.2d 975, 979
(2d Cir. 1988). Once the claim made by the advertisement has
been determined, the factfinder must then evaluate whether that
claim is false. See Castrol, 987 F.2d at 944.
In the case at hand, the parties focus their attention
solely upon the first of these factual determinations. The
complaint asserts that in head-to-head whitening tests, Clorox
achieved "by far, superior results" to Ace. Clorox also
emphasizes that "Ace's own boxes" state that in certain cases,
for better results, the consumers must use chlorine bleach. In
reviewing the motion to dismiss, we therefore assume as true
that chlorine bleach whitens better than Ace and that a contrary
claim would be literally false. The primary dispute between the
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parties is not which product whitens better,8 but rather whether
any of Proctor & Gamble's advertisements make a claim of
whitening superiority over chlorine bleach.
Although factfinders usually base literal falsity
determinations upon the explicit claims made by an
advertisement, they may also consider any claims the
advertisement conveys by "necessary implication." See Southland
Sod Farms, 108 F.3d at 1139; Rhone-Poulenc Rorer, 19 F.3d at
129. A claim is conveyed by necessary implication when,
considering the advertisement in its entirety, the audience
would recognize the claim as readily as if it had been
explicitly stated. For instance, a factfinder found that an
advertisement that claimed a motor oil provided "longer engine
life and better engine protection" without explicitly mentioning
competitors nonetheless drew a comparison by necessary
implication vis à vis those competitors. See Castrol, 987 F.2d
at 941, 946. This is not to say, however, that all messages
implied by an advertisement will support a finding of literal
falsity by a factfinder:
The greater the degree to which a message
relies upon the viewer or consumer to
integrate its components and draw the
8 Indeed, Proctor & Gamble does not challenge on appeal
Clorox's assertion that chlorine bleach in combination with a
detergent gets clothes whiter than its Ace detergent.
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apparent conclusion, however, the less
likely it is that a finding of literal
falsity will be supported. Commercial
claims that are implicit, attenuated, or
merely suggestive usually cannot fairly be
characterized as literally false.
United Indus. Corp., 140 F.3d at 1181. Similarly, a factfinder
might conclude that the message conveyed by a particular
advertisement remains so balanced between several plausible
meanings that the claim made by the advertisement is too
uncertain to serve as the basis of a literal falsity claim,
though even in that case it could still form the basis for a
claim that the advertisement is misleading. See id. at 1182;
Abbott Labs., 971 F.2d at 14.
In reviewing the dismissal in the present case,
however, we are not required to determine what claim was
actually conveyed by the advertisements because we are not
factfinders. Instead, we must evaluate whether the complaint,
as supplemented by the advertising copy, alleges facts that
would allow a rational factfinder to conclude that Proctor &
Gamble's advertisements make a superiority claim either
explicitly or by necessary implication. We must draw all
reasonable inferences as to the claim made in the advertisements
in favor of Clorox. See Southland Sod Farms, 108 F.3d at 1139;
see also Rhone-Poulenc Rorer, 19 F.3d at 129; U.S. Healthcare,
Inc. v. Blue Cross, 898 F.2d 914, 922 (3d Cir. 1990). Dismissal
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would only be proper if no reasonable factfinder could conclude
that the advertisements, viewed in the light most favorable to
Clorox, make a claim of whitening superiority for Proctor &
Gamble's product.
We conclude that Clorox has stated a claim that Proctor
& Gamble's original Doorstep Challenge commercials are literally
false. These commercials juxtapose a tag line, "Whiter is not
possible," with images of consumers who normally used bleach to
achieve white clothes and who are favorably impressed by the
results obtained from using Ace alone. The overall theme of the
commercials is that bleach is unnecessary if clothes are washed
with Ace, and, in fact, many of the consumers visited by Zamora
are congratulated at the end of the commercials for passing "the
Ace whiteness challenge without chlorine." Some of the
commercials also suggest that eliminating chlorine from the
laundry process will save consumers time or money, or curtail
the negative side effects of washing clothes with chlorine. A
factfinder could reasonably conclude that, viewed in their
entirety, these advertisements claim that Ace is equal or
superior in whitening ability to a detergent and bleach
combination.
The modified Doorstep Challenge campaign continued the
same visual comparisons, as well as the congratulatory comments
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for passing the "Ace whiteness challenge without chlorine," but
added the words "Compare your detergent" to the "Whiter is not
possible" tag line shown at the bottom of the screen at the end
of the commercials. Although this change may render the
comparative claim of the advertisements more ambiguous, we
nonetheless conclude that it remains reasonable to interpret
these advertisements as making by necessary implication a
superiority claim for Ace over chlorine bleach. Consequently,
the court erred in dismissing Clorox's literal falsity claims
with respect to both Doorstep Challenge campaigns.
b. The Name "Ace con Blanqueador"
Clorox also alleged that the name, "Ace con
Blanqueador," as applied to liquid Ace, is literally false.
According to Clorox, the word "blanqueador" implies that liquid
Ace has whitening capabilities like bleach. Clorox alleged that
this is literally false because in its liquid form Ace does not
contain bleach or whitening agents. Instead, it contains only
a "color enhancer." Clorox emphasizes that liquid Ace uses the
same formula as "Tide with Bleach Alternative" whose name,
unlike "blanqueador," clearly signifies the absence of bleach.
Proctor & Gamble responds that "blanqueador" means "whitener,"
and that the name cannot be literally false because tests show
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that the agents added to liquid Ace produce greater whiteness
than detergents without those agents.
Clorox's allegations about the use of the name "Ace con
Blanqueador" for the liquid detergent state a claim for literal
falsity. Although "blanqueador," meaning "whitener," is broad
enough to encompass both bleach and non-bleach whitening agents,
the question remains whether liquid Ace is properly described as
containing "whitening agents" of any sort. Clorox has alleged
that it is not, insisting that Ace's ingredients are properly
termed "color enhancers." Although the distinction between a
"whitening agent" and a "color enhancer" eludes us, we must
credit that allegation in this appeal from a 12(b)(6) dismissal.
If Clorox succeeds in proving that liquid Ace contains only an
"enhancer," rather than a "whitener," and if it further
establishes the other elements of a false advertising claim, see
supra note 6, it will be entitled to relief under the Lanham Act
because Proctor & Gamble's designation of Ace liquid detergent
as "Ace con Blanqueador" would be literally false.
2. Claims of Misleading Advertising
In addition to its claims of literal falsity, Clorox
has alleged in its complaint that the Ace advertising campaign,
even if true or ambiguous, makes an implied claim that is
misleading to consumers. This second theory of recovery under
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the Lanham Act is independent of a literal falsity theory. See,
e.g., Coca-Cola, Co. v. Tropicana Prods., Inc., 690 F.2d 312,
317 (2d Cir. 1982). Unlike the requirements of a claim of
literal falsity, the plaintiff alleging a misleading
advertisement has the burden of proving that a substantial
portion of the audience for that advertisement was actually
misled. See Rhone-Poulenc Rorer, 19 F.3d at 134 (citing U.S.
Healthcare v. Blue Cross, 898 F.2d 914, 922 (3d Cir. 1990)). An
advertisement's propensity to deceive the viewing public is most
often proven by consumer survey data. See id. at 129-30.9
Clorox appended to the amended complaint a consumer survey
prepared by David Whitehouse of Gaither International/Puerto
Rico, Inc.10 The survey consisted of a series of open-ended
9 In some circuits, if the defendant "intentionally set
out to deceive the public," using "deliberate conduct" of an
"egregious nature" in light of the advertising culture of the
marketplace in which the defendant competes, a presumption
arises that customers were, in fact, deceived, dispensing with
the need for the plaintiff to commission a consumer survey. See
Rhone-Poulenc Rorer, 19 F.3d at 131-32; Johnson & Johnson*Merck
Consumer Pharms. Co. v. Smithkline Beecham Corp., 960 F.2d 294,
298-99 (2d Cir. 1992); McCarthy § 27:58. Because Clorox has
proffered a consumer survey, we need not decide whether Clorox's
allegations that Proctor & Gamble intentionally acted in bad
faith creates a presumption of consumer deception.
10 In addition to its own survey, Clorox contends that
Proctor & Gamble's market research, commissioned three months
into the Doorstep Challenge campaign, demonstrates that
consumers have been misled.
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questions followed by several follow-up probes. In reliance on
the survey, the complaint alleges that:
In open-ended questions, 35% of respondents
of its scientifically valid survey responded
that the main message of the Doorstep
Challenge Campaign was that, with ACE, there
is no need to use other products for maximum
whitening performance. In addition, when
the respondents were asked if 'the Detergent
in the Ad (ACE) Leaves Clothes as White or
Whiter than If One Uses Bleach,' 47% totally
agreed and 20% somewhat agreed with that
statement. Plainly, the Doorstep Challenge
Campaign has been amply shown to be likely
to cause consumer deception.
Clorox has also alleged in its complaint that "in its
promotional activities and advertisements," Proctor & Gamble
"deceiv[ed] and confus[ed] the public, causing consumers to
wrongly believe they are buying a detergent that possesses the
same qualities and characteristics as a detergent used with
CLOROX."
The court was required to credit Clorox's allegations.
It could not conduct its own evaluation of the advertising copy
because whether advertising is misleading depends on "what
message was actually conveyed to the viewing audience."
Smithkline Beecham Corp., 960 F.2d at 298; see also Rhone-
Poulenc Rorer, 19 F.3d at 129. In deciding whether a message is
"misleading," the message conveyed is discerned by "public
reaction," not by judicial evaluation. McCarthy § 27:56; see
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also Castrol, 987 F.2d at 947 ("[I]n cases where the issue is
whether a statement . . . has a tendency to mislead, confuse, or
deceive . . . [,] the court's reaction is at best not
determinative and at worst irrelevant.") (internal quotation
marks omitted). That is, absent some other defect in its proof
of the elements of a false advertising claim, see supra note 6,
if Clorox's consumer survey data (or Proctor & Gamble's own
market research data) shows that the advertisements "deceive[d]
a substantial portion of the intended audience," U.S.
Healthcare, 898 F.2d at 922, Clorox is entitled to relief under
the Lanham Act.11 Hence, the claims asserting misleading
advertising were improperly dismissed.12
11 Although we have quoted Clorox's allegations relying
on the results of its own consumer survey, we do not mean to
suggest that a Lanham Act plaintiff must identify the particular
consumer survey that will be used to support its allegations to
survive a motion to dismiss. For the purposes of a motion to
dismiss, a court must credit the type of allegations of
misleading advertising set forth here. Obviously, if confronted
with a motion for summary judgment, the plaintiff can no longer
rest on the allegations in the complaint.
12 Proctor & Gamble vigorously disputes the validity of
Clorox's survey. In opposing Clorox's motion for a preliminary
injunction, Proctor & Gamble supplied its own expert, Dr.
Michael Rappeport, who testified that the responses to the open-
ended questions in Clorox's survey do not "by any stretch of the
imagination" show that the commercial's message was that there
is no need to use products other than Ace con Blanqueador for
maximum whitening performance. Dr. Rappeport concluded,
moreover, that the methodology used to conduct the survey was
"so biased as to have no value whatsoever." Proctor & Gamble
also argues that Clorox's own expert, Whitehouse, failed to
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Proctor & Gamble offers one last defense of the court's
ruling, pointing to Mead Johnson & Co. v. Abbott Labs., 201 F.3d
883, modified by, 209 F.3d 1032 (7th Cir. 2000) as a case that
stands for the proposition that "a consumer survey could not be
used to show that an advertisement that is clear and unequivocal
on its face otherwise conveyed a misleading message." According
to Proctor & Gamble, its tag line in the modified campaign
"clearly and unequivocally" does not compare Ace with Clorox
and, therefore, Mead Johnson prevents Clorox from using a survey
to prove that a comparison was made. We need not decide whether
we would agree with Mead Johnson in a factually similar case.
This case is of a different order.
Mead Johnson addressed whether a label was misleading
in claiming its product to be the "1st Choice of Doctors." See
201 F.3d at 883-84. The plaintiff argued that its surveys
demonstrated that consumers interpreted "first" to mean that
"more than 50%" of doctors preferred that brand rather than
vouch for the survey results when asked about it in his
deposition. Finally, Proctor & Gamble insists that even if the
survey were valid, it tests only one advertisement, and
therefore could not support Clorox's claim that the whole
advertising campaign was misleading. We express no view on the
merits of Proctor & Gamble's arguments. The "probative value of
a consumer survey is a highly fact-specific determination,"
Rhone-Poulenc Rorer, 19 F.3d at 134 (quotations omitted). It is
not the type of determination that we may make as a matter of
law upon review of a motion to dismiss.
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interpreting "first" to mean that a plurality of doctors
preferred the brand. See id. at 884-85. These distinctions
were important because, though the latter interpretation of the
label was true, the former was false. See id. at 884.
After first finding the plaintiff's survey "misleading
if not meaningless," the court identified a "deeper problem: the
use of a survey in the first place." Id. at 885. Although
agreeing that surveys are "accepted ways to probe for things
such as confusion about the source of goods, for confusion
depends on the effect of a phrase or trade dress on the
consumer," the court reasoned that surveys should not be used
"to determine the meaning of words, or to set the standard to
which objectively verifiable claims must be held." Id. at 886.
Based upon these objections, the court held that the survey
could not "support a conclusion . . . that [the message conveyed
by the advertisement] either was false or implied a falsehood."
Mead Johnson, 209 F.3d at 1034.
Procedurally, Mead Johnson is different than this case.
That court's evaluation of the merits of the survey was based on
a record established during a three day hearing on a motion for
a preliminary injunction, which was granted. See Mead Johnson,
201 F.3d at 884. As noted, see supra note 12, it would not be
appropriate to undertake a similar analysis of the Clorox survey
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on the limited record subject to review after a 12(b)(6)
dismissal.
Also, the advertising slogan in Mead Johnson was a
single phrase printed on the label of a can of infant formula.
Proctor & Gamble points us to a similar phrase in its
advertising, the tag line "Compare with your detergent . . .
Whiter is not possible," as though the two slogans were
comparable. Proctor & Gamble's tag line, however, is an
integral part of a television commercial with substantial text
and images. There is a fundamental difference between a slogan
on a can label that communicates its meaning to consumers solely
through the printed text, and a tag line shown on the screen at
the end of a television commercial that communicates its message
to consumers through a combination of audio-visual and textual
media. Because we decline to read Proctor & Gamble's tag line
separately from the entirety of the commercials, Mead Johnson is
factually inapplicable to the present case.
3. Puffery
Finally, the statements, "Compare with your detergent
. . . Whiter is not possible," and "Whiter is not possible," are
not non-actionable puffing. "'Puffing' is exaggerated
advertising, blustering, and boasting upon which no reasonable
buyer would rely . . . ." McCarthy § 27:38. "A specific and
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measurable advertisement claim of product superiority . . . is
not puffery." Southland Sod Farms, 108 F.3d at 1145 (claim that
turfgrass seed requires "50% less mowing" was not puffery); see
also Castrol, Inc., 987 F.2d at 946 (claim that motor oil
provides "longer engine life and better engine protection" was
not puffery). Whether the "Doorstep Challenge" campaign conveys
the message that Ace gets clothes whiter than chlorine bleach,
or compares Ace with other detergents without implying that it
whitens better than chlorine bleach, the claim is specific and
measurable, not the kind of vague or subjective statement that
characterizes puffery. Indeed, Proctor & Gamble concedes in its
brief that its claim in its modified campaign, "Compare with
your detergent . . . Whiter is not possible," is not puffery.
It contends that it is a true statement supported by its studies
comparing Ace con Blanqueador with other detergents.
The original campaign tag line, "Whiter is not
possible," is a closer call on the puffing issue. Standing
alone, that statement might well constitute an unspecified
boast, and hence puffing. In context, however, the statement
invites consumers to compare Ace's whitening power against
either other detergents acting alone or detergents used with
chlorine bleach. Despite this ambiguity, it is a specific,
measurable claim, and hence not puffing.
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Proctor & Gamble's promotional brochure, on the other
hand, contained statements like, "hit the white spot with just
one shot," "Dare to pass the test. Wash with Ace and nothing
else," "Say goodbye to the complications of cloro and other
cleaners," and "Resist the 'bombs.' Put your ACE con Blanqueador
to the test." We agree with Proctor & Gamble that each of these
statements, viewed in isolation, is precisely the type of vague,
unspecified boasting that typifies puffery. Nonetheless, the
promotional brochure also states, "Whiter is not possible," the
same statement that appears as the tag line on the original
Doorstep Challenge television commercials. As in the television
commercials, that statement may be literally false.
Accordingly, the brochure cannot be dismissed as mere puffery.
III.
Pursuant to § 43(a) of the Lanham Act, Clorox has
stated a claim for literal falsity relating to the name of the
Ace liquid detergent, "Ace con Blanqueador." Clorox has also
stated claims for literal falsity and for misleading advertising
with respect to the commercials aired in both the original and
modified Doorstep Challenge advertising campaigns, as well as
the promotional brochure. The district court erred by
dismissing these claims pursuant to Rule 12(b)(6). We must
vacate its judgment and remand the Lanham Act claims to the
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district court for further proceedings consistent with this
decision.13
Clorox has also appealed the dismissal of its claim
pursuant to Article 1802 of the Puerto Rico Civil Code.
Although Clorox in its Second Amended Complaint sought to have
the alleged violation of the Lanham Act added as a predicate for
liability under Article 1802, the motion for leave to file the
second amended complaint was still pending at the time Clorox's
case was dismissed. Accordingly, the district court never ruled
on that motion, and hence Clorox's Article 1802 claim predicated
on a violation of the Lanham Act is not properly before us at
this time.14 On remand, Clorox should be given the opportunity
to resubmit its motion for leave to amend.
Vacated and remanded to the district court for further
proceedings consistent with this opinion.
13 We did not deal with every statement alleged by Clorox
to be false and misleading. The effect of the district court's
decision was to dismiss the Lanham Act claim in its entirety.
If any specific allegation in the complaint does not justify
that outcome, we must vacate. We have chosen to focus in this
appeal on what seem to be the most important of Clorox's
allegations. That focus does not mean that we are deciding the
merits of any of the allegations by Clorox not addressed in this
decision.
14 For the same reason, we also decline to express any
opinion on the validity of Clorox's claims in its Second Amended
Complaint relating to Proctor & Gamble's September 1998 Ace con
Blanqueador advertising campaign.
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