When Are Provable Statements Considered To Be Puffery? - Advertising, Marketing & Branding

18 August 2021

by Jeffrey A. Greenbaum

Frankfurt Kurnit Klein & Selz

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The International Code Council creates andpublishes model building codes, which are often incorporated intofederal, state, and local law. ICC also revises the codesregularly and publishes updates, and it sells the codes through itsonline store. UpCodes, which is a competitor to ICC, operatesa website that also sells the ICC codes (apparently withoutauthorization from ICC).

ICC sued Upcodes, alleging various claims, including copyrightinfringement and false advertising. In a decision last spring(which was just brought to my attention by Rebecca Tushnet'sterrific blog), the United States District Court forthe Southern District of New York, considered UpCodes' motionto dismiss the false advertising claims.

ICC alleged that UpCodes falsely advertised that the codesprovided by UpCodes were "always up to date" and thatusers would "never work from outdated code" and would beable to "understand all the requirements for your jurisdictionin one place." ICC also alleged that UpCodes falselyclaimed that the codes they provide are "kept up-to-date withall the amendments integrated natively into the code."ICC said that these claims are false because of numerouserrors in the codes that UpCodes provides.

ICC brought its claims for false advertising under both theLanham Act and New York law. Under the Lanham Act, a marketeris liable for false advertising when it makes a "false ormisleading description of fact, or false or misleadingrepresentation of fact, which . . . misrepresents the nature,characteristics, qualities" of the marketer's oranother's products or services. In addition to provingthat a false statement was made, the plaintiff must also show thatthe false representation was "likely to influence purchasingdecisions." New York law similarly requires that thefalse statement be material to a purchasing decision.

As an initial matter, the court didn't buy ICC'sargument that UpCodes made false claims that its codes are"kept up-to-date with all the amendments integrated nativelyinto the code" simply because its codes may have errors.Noting that the UpCodes website does, in fact, include someintegrated amendments, the court held that, "The claim thatUpCodes offers integrated amendments is not rendered false by thefact that 'some but not all' amendments are posted, or thatin some instances, the amendments contain errors."

But what about ICC's claim that UpCodes advertised that thecodes it supplies are complete and accurate? Here, the courtheld that those statements are non-actionable puffery. Thecourt explained that the Second Circuit has defined puffery as:

"Subjective claims about products, which cannot be proveneither true or false";
"An exaggeration or overstatement expressed in broad,vague, and commendatory language . . . considered to be offered andunderstood as an expression of the seller's opinion only;or
"An exaggerated, blustering, and boasting statement uponwhich no reasonable buyer would be justified inrelying."

The court emphasized that, even if a statement is provable, itcan still be puffery if it is only understood as an expression ofthe seller's opinion or if it is a statement upon whichreasonable consumers would not rely.

The court held that UpCodes' statements that it provides"a complete understanding of the relevant material," itscode library is "always up to date," and customers will"never work from outdated code" are all puffery because"they are exactly the type of 'exaggerated' and'boasting' statements 'upon which no reasonable buyerwould be justified in relying.'" While the courtacknowledged the importance of maintaining accurate codes and thenegative consequences that can result from working from outdatedcodes, the court said that, no reasonable buyer "would takeUpCodes's representations of accuracy and completeness to meanthat the codes are instantaneously updated and at all timeserror-free." Because consumers understand that codes areever-changing, the court concluded that, "there is no dangerof consumer deception, and hence, no basis for a false advertisingclaim."

Ordinarily, when a claim is provable or disprovable, theadvertiser is responsible for ensuring that the claim is truthful,and for having substantiation to back it up. It's almostnever going to be the case that an objective claim, that relates toa material aspect of a product, is going to be puffery.

Here, however, the court determined that even if theadvertiser's claims about completeness and accuracy were false,they are still puffery, because reasonable consumers wouldnecessarily understand -- because of the ever-evolving nature ofthe codes -- that the claims couldn't be true. While thismay be an easier argument in the context of printed material that necessarily goesout-of-date after it is published, another court could certainlyhave determined that consumers would reasonably believe, in theface of specific statements about completeness and accuracy, thatan online resource could, in fact, be kept up-to-date. At theend of the day, however, the key question is going to be howreasonable consumers interpret the statement, in light of thecontext in which the statement is made.

International Code Council v. UpCodes, 2021 WL 1236106(S.D.N.Y. 2021).

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When Are Provable Statements Considered To Be Puffery? - Advertising, Marketing & Branding - United States (2024)

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