The Truth Hurts: Two Circuits Now Recognize That Consumer Surveys Cannot Be Used To Dispute Unambiguous Advertising Claims

Pernod Ricard USA, LLC v. Bacardi U.S.A., Inc., No. 10-2354 (3d Cir. Aug. 4, 2011)

The Third Circuit has joined the Seventh Circuit in holding that a false advertising plaintiff cannot rely upon a consumer survey to alter the clear meaning of words in an ad.

The plaintiff in Pernod Ricard USA, LLC v. Bacardi U.S.A., Inc. sought to use a consumer survey to show that the label of Bacardi's "Havana Club" rum was misleading under the Lanham Act. But on August 4, 2011, the Third Circuit held that the trial court was not required to consider the plaintiff's survey evidence because no reasonable consumer could be misled by the "accurate" and "unambiguous" statements on the label.

In reaching its determination, the Third Circuit relied heavily upon the Seventh Circuit's landmark opinion in Mead Johnson & Co. v. Abbott Labs., 201 F.3d 883, 886 (7th Cir. 2000), a case successfully handled by our firm (Steven Zalesin argued the Mead appeal). At issue in Mead was the claim on defendant's label that its infant formula was the "1st Choice of Doctors." Though this statement was literally truthful – more doctors recommended the product than any other – a survey purported to show that some consumers interpreted the claim to mean that the defendant's product was preferred by a majority of physicians. The Seventh Circuit rejected this approach, holding that survey evidence cannot be used to "determine the meaning of words, or set the standard to which objectively verifiable claims must be held."

The Third Circuit became the first federal appellate court to endorse this decade-old ruling with its recent decision in Pernod Ricard, in which the plaintiff challenged the label on Bacardi's "Havana Club" rum, shown below.

The label displayed "Havana Club" in large stylized letters, followed by the word "BRAND" in smaller type. The phrase "PUERTO RICAN RUM" appeared prominently, albeit in letters smaller than the brand name. Text on the back of the bottle also stated that the rum is distilled in Puerto Rico.

Pernod Ricard asserted that the label misled consumers to believe that the rum is produced in Cuba. To support this...