American Italian Pasta Co. v. New World Pasta Co.

• Decision Date: 07 June 2004
• Docket Number: No. 03-2065.,03-2065.
• Parties: AMERICAN ITALIAN PASTA COMPANY, Appellee, v. NEW WORLD PASTA COMPANY, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

371 F.3d 387

AMERICAN ITALIAN PASTA COMPANY, Appellee, v. NEW WORLD PASTA COMPANY, Appellant.

No. 03-2065.

United States Court of Appeals, Eighth Circuit.

Submitted: November 17, 2003.

Filed: June 7, 2004.

COPYRIGHT MATERIAL OMITTED

Forrest A. Hainline, III, argued, San Francisco, CA (Brent N. Coverdale, on the brief), for appellant.

William R. Hansen, argued, New York, NY (Thomas H. Van Hoozer, on the brief), for appellee.

Before RILEY, RICHARD S. ARNOLD, and MELLOY, Circuit Judges.

RILEY, Circuit Judge.

"America's Favorite Pasta"-Commercial puffery or factual claim?

American Italian Pasta Company (American) sued New World Pasta Company (New World), seeking a declaratory judgment that American's use of the phrase "America's Favorite Pasta" does not constitute false or misleading advertising under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(B) (2000). New World counterclaimed, asserting American's use of "America's Favorite Pasta" violated the Lanham Act and many states' unfair competition laws. On summary judgment, the district court¹ concluded American's use of "America's Favorite Pasta" did not violate the Lanham Act, dismissing New World's counterclaims and declining to exercise jurisdiction over New World's state law claims. We affirm.

I. BACKGROUND

From 1997 to 2000, American² manufactured Mueller's brand (Mueller's) dried pasta for Best Foods. In the fall of 2000, American purchased Mueller's and assumed all packaging, distributing, pricing, and marketing for the brand. Since purchasing Mueller's, American has placed the phrase "America's Favorite Pasta" on Mueller's packaging. On various packages, the phrases "Quality Since 1867," "Made from 100% Semolina," or "Made with Semolina" accompany the phrase "America's Favorite Pasta." The packaging also contains a paragraph in which the phrase "America's Favorite Pasta" appears. The paragraph states (1) pasta lovers have enjoyed Mueller's pasta for 130 years; (2) claims Mueller's "pasta cooks to perfect tenderness every time," because Mueller's uses "100% pure semolina milled from the highest quality durum wheat;" and (3) encourages consumers to "[t]aste why Mueller's is America's favorite pasta."

New World³ sent American a letter demanding American cease and desist using the phrase "America's Favorite Pasta." Consequently, American filed this suit, requesting a declaration that its use of the phrase "America's Favorite Pasta" does not constitute false or misleading advertising under the Lanham Act. In its federal counterclaim, New World asserted American's use of "America's Favorite Pasta" violated the Lanham Act. New World claims American's use of the phrase is false or misleading advertising, because, according to New World's consumer survey, the phrase conveys Mueller's is a national pasta brand or the nation's number one selling pasta. American and New World agree Barilla sells the most dried pasta in the United States and American's brands are regional.

American moved to dismiss New World's counterclaims, arguing the phrase "America's Favorite Pasta" constituted non-actionable puffery. New World resisted American's motion and filed a motion for partial summary judgment. The district court denied American's motion, concluding it would have to consider facts outside the pleadings to determine if the phrase "America's Favorite Pasta" constituted puffery. Two weeks later, the district court denied New World's motion for partial summary judgment, dismissed New World's Lanham Act counterclaim, and declined to exercise jurisdiction over New World's state law counterclaims. The district court concluded the phrase "America's Favorite Pasta" constitutes non-actionable puffery as a matter of law, and the phrase is not actionable under the Lanham Act. New World appeals, contending the phrase "America's Favorite Pasta" is not puffery, but is a deceptive factual claim.

II. DISCUSSION

We review the district court's summary judgment decision de novo. Interstate Cleaning Corp. v. Commercial Underwriters Ins. Co., 325 F.3d 1024, 1027 (8th Cir.2003). A purpose of the Lanham Act is "to protect persons engaged in commerce against false advertising and unfair competition." United Indus. Corp. v. Clorox Co., 140 F.3d 1175, 1179 (8th Cir.1998). To establish a false or deceptively misleading advertising claim under section 43(a) of the Lanham Act,⁴ New World must establish:

(1) a false statement of fact by [American on its packaging] about its own or another's product; (2) the statement actually deceived 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 caused its false statement to enter interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result of the false statement.

Id. at 1180 (emphasis added). The failure to establish any element of the prima facie case is fatal. Pizza Hut, Inc. v. Papa John's Int'l, Inc., 227 F.3d 489, 495 (5th Cir.2000).

Under section 43(a), two categories of actionable statements exist: (1) literally false factual commercial claims; and (2) literally true or ambiguous factual claims "which implicitly convey a false impression, are misleading in context, or [are] likely to deceive consumers." United Indus., 140 F.3d at 1180. Besides actionable statements, a category of non-actionable statements exists. Id. Many statements fall into this category, popularly known as puffery. Id. Puffery exists in two general forms: (1) exaggerated statements of bluster or boast upon which no reasonable consumer would rely; and (2) vague or highly subjective claims of product superiority, including bald assertions of superiority. Pizza Hut, 227 F.3d at 496-97; United Indus., 140 F.3d at 1180.

Juxtaposed to puffery is a factual claim. A factual claim is a statement that "(1) admits of being adjudged true or false in a way that (2) admits of empirical verification." Pizza Hut, 227 F.3d at 496 (quoting Presidio Enters., Inc. v. Warner Bros. Distrib. Corp., 784 F.2d 674, 679 (5th Cir.1986)). To be actionable, the statement must be a "specific and measurable claim, capable of being proved false or of being reasonably interpreted as a statement of objective fact." Coastal Abstract Serv., Inc. v. First Am. Title Ins. Co., 173 F.3d 725, 731 (9th Cir.1999); cf. United Indus., 140 F.3d at 1180 (noting puffery does not include "false descriptions of specific or absolute characteristics of a product and specific, measurable claims of product superiority"). Generally, opinions are not actionable. Coastal Abstract, 173 F.3d at 731.

Puffery and statements of fact are mutually exclusive. If a statement is a specific, measurable claim or can be reasonably interpreted as being a factual claim, i.e., one capable of verification, the statement is one of fact. Conversely, if the statement is not specific and measurable, and cannot be reasonably interpreted as providing a benchmark by which the veracity of the statement can be ascertained, the statement constitutes puffery. Defining puffery broadly provides advertisers and manufacturers considerable leeway to craft their statements, allowing the free market to hold advertisers and manufacturers accountable for their statements, ensuring vigorous competition, and protecting legitimate commercial speech.

A. "America's Favorite Pasta" Standing Alone

The phrase "America's Favorite Pasta," standing alone, is not a statement of fact as a matter of law. The key term in the phrase "America's Favorite Pasta" is "favorite." Used in this context, "favorite" is defined as "markedly popular especially over an extended period of time." Webster's Third New International Dictionary 830 (unabridged 1961). Webster's definition of "favorite" begs the question of how "popular" is defined. In this context, "popular" is defined as "well liked or admired by a particular group or circle." Id. at 1766. By combining the term "favorite" with "America's," American claims Mueller's pasta has been well liked or admired over time by America, a non-definitive person.⁵

"America's Favorite Pasta" is not a specific, measurable claim and cannot be reasonably interpreted as an objective fact. "Well liked" and "admired" are entirely subjective and vague. Neither the words "well liked" nor "admired" provide an empirical benchmark by which the claim can be measured. "Well liked" and "admired" do not convey a quantifiable threshold in sheer number, percentage, or place in a series. A product may be well liked or admired, but the product may not dominate in sales or market share. For example, assume a consumer's favorite cut of meat is beef tenderloin. If we were to look at the sheer amount of beef tenderloin our hypothetical consumer buys relative to other cuts of meat, beef tenderloin may not have a sizable market share or account for a significant percentage of the amount of money spent on meat. Therefore, we could not accurately determine whether beef tenderloin was the consumer's favorite cut of beef based on those benchmarks. The fact is, the consumer may admire beef tenderloin and like it best among beef cuts, but beef tenderloin is too expensive for our consumer to eat often. Likewise, sales volume and total dollars spent on particular pasta brands in the United States may not uncover America's favorite pasta.

"America's Favorite Pasta" also does not imply Mueller's is a national brand. First, "America's" is vague, and "America's," as well as "America" and "American" used in a similar context, is a broad, general reference. Second, a brand, chain, or product could be America's favorite without being national. For example, an individual restaurant or restaurant chain may be America's favorite, but may be located only in one or a few states. Although the restaurant chain may not be available nationally, consumers may prefer the restaurant because of its quality of food, quality...