Castrol, Inc. v. Quaker State Corp.

• Decision Date: 07 October 1992
• Docket Number: No. 1667,D,1667
• Citation: 977 F.2d 57
• Parties: 1993-2 Trade Cases P 70,459, 24 U.S.P.Q.2d 1838 CASTROL, INC., Plaintiff-Appellee, v. QUAKER STATE CORPORATION, Quaker State Oil Refining Corporation, and Grey Advertising, Inc., Defendants-Appellants. ocket 92-7347.
• Court: U.S. Court of Appeals — Second Circuit

Page 57

977 F.2d 57

1993-2 Trade Cases P 70,459, 24 U.S.P.Q.2d 1838

CASTROL, INC., Plaintiff-Appellee, v. QUAKER STATE CORPORATION, Quaker State Oil Refining Corporation, and Grey Advertising, Inc. Defendants-Appellants.

No. 1667, Docket 92-7347.

United States Court of Appeals Second Circuit.

Argued May 27, 1992.

Decided Oct. 7, 1992.

Paul, Weiss, Rifkind, Wharton & Garrison (Lewis R. Clayton, Daniel McNeel Lane, Jr., Peter B. Bensinger, Jr., Donn B. Zaretsky, of counsel), New York City, for plaintiff-appellee.

Weil, Gotshal & Manges (Robert G. Sugarman, Richard G. Tashjian, Ronald E. Klempner, of counsel), New York City, for defendants-appellants Quaker State Corp. and Quaker State Oil Refining Corp.

Winston & Strawn (James J. Terry, Jr., Leonard Orkin, of counsel), New York City, for defendant-appellant Grey Advertising, Inc.

Before: MINER and WALKER, Circuit Judges, and POLLACK, District Judge. ^*

WALKER, Circuit Judge:

A Quaker State television commercial asserts that "tests prove" its 10W-30 motor oil provides better protection against engine wear at start-up. In a thoughtful opinion reported at 1992 WL 47981 (S.D.N.Y. March 2, 1992), the United States District Court for the Southern District of New York (Charles S. Haight, Judge ) held that plaintiff-appellee Castrol, Inc. ("Castrol") had proven this advertised claim literally false pursuant to § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (1988). The district court issued a March 20, 1992 Order preliminarily enjoining defendants-appellants Quaker State Corporation, Quaker State Oil Refining Corporation, and Grey Advertising Inc., ("Quaker State"), from airing the commercial. We agree that Castrol has shown a likelihood of success in proving the commercial literally false. We accordingly affirm.

BACKGROUND

Judge Haight's March 2, 1992 opinion thoroughly recites the facts of this case. We describe only those facts essential to the disposition of this appeal.

The voiceover to Quaker State's 10W-30 motor oil commercial states:

Warning: Up to half of all engine wear can happen when you start your car.

At this critical time, tests prove Quaker State 10W-30 protects better than any other leading 10W-30 motor oil.

In an overwhelming majority of engine tests, Quaker State 10W-30 flowed faster to all vital parts. In all size engines tested, Quaker State protected faster, so it protected better.

Get the best protection against start up wear. Today's Quaker State! It's one tough motor oil.

Visually, the commercial begins with a man entering a car and then shows a bottle of Quaker State 10W-30 motor oil. Large, block letters, superimposed over the bottle, "crawl" across the screen with the words:

AT START UP QUAKER STATE 10W-30 PROTECTS BETTER THAN ANY OTHER LEADING 10W-30 MOTOR OIL.

Originally, this "crawl" used the words "tests prove" instead of "at start up," but shortly after the filing of the current lawsuit Quaker State revised the message. The commercial then shows an engine, superimposed over which are bottles of Quaker State and four competing motor oils (including Castrol GTX 10W-30) and a bar graph depicting the speed with which each oil flowed to components of a Chrysler engine. The Quaker State bar is higher than all four competitors indicating that it Polymethacrylate or "PMA," an additive intended to quicken oil flow to engine parts, is the source of Quaker State's superiority claim. The competitors listed in its commercial use olefin copolymer or "OCP," another additive. Two laboratory tests, the first run in 1987 and the second in 1991, have compared Quaker State's PMA-based oil with competing OCP-based oils. Rohm and Haas, the Pennsylvania corporation which manufactures PMA, conducted both tests.

                flowed faster.   The commercial closes with the words:  "ONE TOUGH MOTOR OIL."
                

Rohm and Haas' 1987 tests measured two performance indicators: "oiling time," or the time it takes for oil to reach distant parts in a just-started engine, and engine wear, measured through the amount of metal debris observed in the oil after the engine had run. Rohm and Haas technicians filled engines, in all other respects similar, with either Quaker State's PMA-based 10W-30 oil, or with a generic OCP-based oil known as "Texstar." During numerous engine starts, Quaker State's oil demonstrated a substantially faster oiling time, reaching distant engine parts as much as 100 seconds earlier than the Texstar competitor. Contrary to expectations, however, this did not translate into reduced engine wear. A Rohm and Haas report stated that "[a]fter 64 starts ... the Quaker State oil gave marginally better results, but there was no significant difference in wear metals accumulation between the two oils."

Rohm and Haas initially attributed the poor engine wear results to the presence of "residual oil" remaining from the prior engine starts. They theorized that this oil might be lubricating the engine in the period between ignition and arrival of the new oil, and so might be preventing the faster flowing Quaker State oil from demonstrating better protection that is statistically significant. To address this, they conducted additional engine starts with a warm-up between each run so as to burn off the residual oil. The Rohm and Haas report, however, concluded that "[w]ear metals analysis for this test cycle also failed to differentiate significantly between the two oils...." Thus, while the 1987 Rohm and Haas tests demonstrated faster oil flow, they could not prove better protection against engine wear that is statistically significant.

The 1991 Rohm and Haas tests compared Quaker State's oiling time with that of four leading OCP-based competitors, including Castrol GTX 10W-30. Again, Quaker State's PMA-based oil flowed significantly faster to engine parts. Using a 1991 2.2 liter Chrysler engine with a sump temperature of minus 20 degrees Fahrenheit, for example, the Quaker State oiling time was 345 seconds, as compared to the competing oils' times of 430, 430, 505 and 510 seconds. In the 1991 tests, as opposed to the 1987 studies, Rohm and Haas made no attempt to measure whether this faster oiling time resulted in reduced engine wear.

Quaker State broadcast their commercial in November, 1991. On December 19, 1991, Castrol initiated the present action. Castrol asserted that no studies supported the commercial's claim that "tests prove" Quaker State's oil provides better protection, and that this claim of test-proven superiority constituted false advertising. It sought preliminary and permanent injunctive relief and damages pursuant to § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), New York General Business Law §§ 349, 350, and common law unfair competition.

At the hearing on the motion for a preliminary injunction, Quaker State relied on the Rohm and Haas tests. It argued that the Rohm and Haas oiling time findings support the advertised claim of better protection because oil which flows faster to engine parts necessarily protects them better. Dr. Elmer Klaus, Quaker State's sole expert witness, explained this "faster means better" theory as follows: Prior to start-up "the metal parts [of an engine] are not separated by a film of oil. The solid members are sitting on each other," a condition referred to as "boundary lubrication." Upon ignition, engine wear begins to occur. Soon, however, the movement of the parts generates a film of lubrication from the "residual oil" remaining from a Castrol's three experts focused on the role of residual oil. They testified that the small amount of residual oil left from a prior running of an engine provides more than adequate lubrication at the next start-up. Moreover, they asserted that this residual oil remains functional for a significant period of time so that both PMA-based and OCP-based 10W-30 motor oils reach the engine parts before this residual oil burns off. Thus, they maintained, there is no second boundary lubrication period and Quaker State's faster oiling time is irrelevant to engine wear.

                prior running of the engine and engine wear ceases.   But the heat of the running engine thins the residual oil which can no longer keep the parts sufficiently apart.   The engine returns to a condition of boundary lubrication and wear again occurs until the arrival of the new oil.   Dr. Klaus concluded that the faster the new oil flows to the engine parts, the better job it does of minimizing this second period of boundary lubrication.   Faster oil flow, therefore, means better protection
                

Castrol's experts supported their residual oil theory with a Rohm and Haas videotape, produced in the course of its tests, which shows the residual oil present on the cam lobe interface of a Chrysler 2.2 liter engine. Dr. Hoult, who narrated the tape for the court, explained that "as the film goes on the lubricant there will never go away[,] which means it's lubricated throughout the starting process and that's the basic reason that the time for the replenishment oil to reach these parts is not related to wear[,] because the parts have already lubricated okay."

The experts also cited the near absence of catastrophic engine failure since the imposition of mandatory "pumpability" standards, known as "J300" standards, in the early 1980's. Pumpability refers to the ease with which the pump can spread oil throughout the engine. As pumpability increases, oiling times decrease. Prior to the J300 standards, certain oils became unpumpable in cold weather. This, the experts testified, caused engines to suffer catastrophic failure within a "fraction" of a second after the residual oil had burned off. The J300 standards, however, required increased pumpability and have virtually eradicated reported cases of engine failure. The experts inferred that all 10W-30 oils, which are required to meet the J300 standards, must therefore be reaching the engine before the residual oil burns off. At best, there is only a "fraction" of a second between...