Opinion ID: 601792
Heading Depth: 1
Heading Rank: 2

Heading: the viscosity breakdown claim

Text: 14 First, Pennzoil asserts that, absent any evidence of consumer confusion in this case, Castrol failed to meet its burden of proving literal falsity by the standard set forth in Sandoz, supra. Likewise, a substantial portion of the dissent is spent urging that Sandoz requires that we consider consumer evidence even in a case where there has been a finding of literal falsity. However, this argument ignores crucial differences between the case sub judice and Sandoz. In Sandoz, we sustained the trial court's findings that the advertisements in question were not literally false and held, where the advertisements are not literally false, a plaintiff bears the burden of proving actual consumer deception. Sandoz, 902 F.2d at 228-29. The Sandoz trial court resorted to proof of consumer confusion only after finding that the challenged claims were not literally false. As that court stated: 15 Where the advertisements are not literally false, plaintiff bears the burden of proving actual deception by a preponderance of the evidence. Hence, it cannot obtain relief by arguing how consumers could react; it must show how consumers actually do react. 16 Id. (emphasis supplied) (citations omitted). 17 In the instant case, however, the trial court found that Pennzoil's advertisements were literally false. Sandoz definitively holds that a plaintiff must prove either literal falsity or consumer confusion, but not both. Sandoz, 902 F.2d at 227; see also McNeil-P.C.C., Inc. v. Bristol-Myers Squibb Co., 938 F.2d 1544, 1549 (2d Cir.1991) (Where the advertisement is shown to be literally false, the court may enjoin it without reference to its impact on the consumer.). 18 Thus, there are two different theories of recovery for false advertising under section 43(a) of the Lanham Act: (1) an advertisement may be false on its face; or (2) the advertisement may be literally true, but given the merchandising context, it nevertheless is likely to mislead and confuse consumers. Johnson & Johnson v. GAC Int'l, Inc., 862 F.2d 975, 977 (2d Cir.1988) (Garth, J., sitting by designation). 19 When a merchandising statement or representation is literally or explicitly false, the court may grant relief without reference to the advertisement's impact on the buying public. When the challenged advertisement is implicitly rather than explicitly false, its tendency to violate the Lanham Act by misleading, confusing or deceiving should be tested by public reaction. 20 Coca-Cola Co. v. Tropicana Prod., Inc., 690 F.2d 312, 317 (2d Cir.1982) (citations omitted). 21 Therefore, because the district court properly found that claims in this case were literally false, it did not err in ignoring Pennzoil's superfluous evidence relating to the absence of consumer confusion. In addition, because the advertisement in Sandoz was not literally false, that case's references to consumer confusion, read in context, are completely consistent with the majority's disposition of this matter. 22 Second, Pennzoil argues that Castrol failed to sustain its burden of proving literal falsity because Castrol never offered affirmative proof to refute Pennzoil's claims, but merely cast doubt upon Pennzoil's research. See, e.g., Castrol, Inc. v. Quaker State Corp., 977 F.2d 57, 62 (2d Cir.1992) (Where the defendant's advertisement claims that its product is superior plaintiff must affirmatively prove defendant's product equal or inferior.). 23 Yet Pennzoil's contention is meritless, as the trial record is replete with Castrol's affirmative evidence proving the literal falsity of Pennzoil's claims. For example, between October 25, 1991, and February 26, 1992, the Castrol Technical Center conducted the CCMC, International Lubricant Standardization and Approval Committee, and Chrysler Stay-in-Grade Tests. Both Pennzoil and Castrol met the Stay-in-Grade requirements, thus refuting Pennzoil's contention that it outperforms Castrol with respect to viscosity breakdown. 24 Between January 1, 1992, and March 25, 1992, the Castrol Technical Center conducted HTHS Tests, and all Castrol motor oils met the HTHS standard established by the CCMC, as well as all the other HTHS specifications. Pennzoil's 5W-30 and 10W-30 motor oils, however, failed to meet this standard, although other Pennzoil motor oils passed this test. Therefore, this test also did not substantiate Pennzoil's claims of superiority; on the contrary, it demonstrated Pennzoil motor oil's inferiority in some respects to Castrol motor oil. Thus, according to the only two industry accepted tests for measuring viscosity breakdown, Pennzoil's claims of superiority were literally false. 25 Castrol also presented expert testimony and field tests which affirmatively demonstrated that Pennzoil motor oil does not outperform Castrol motor oil with respect to viscosity breakdown. For example, the Southwest Research Institute conducted an automobile fleet test at Castrol's request. Researchers placed Pennzoil motor oil inside a group of three automobiles, each of a different model, and then placed Castrol motor oil inside three cars identical to the first set. The researchers then drove these automobiles through various tests and compared the viscosity breakdown of the two motor oils. According to this test, Castrol motor oil outperformed Pennzoil's product with respect to viscosity breakdown, therefore discrediting Pennzoil's claims. 26 Moreover, the court found that Pennzoil failed to adequately refute Castrol's affirmative evidence. For example, the fundament of Pennzoil's claim of superior protection against viscosity breakdown was the results of its ASTM D-3945 Test. Castrol's expert, Marvin F. Smith, Jr. (Smith), who was a member of the task force which developed the ASTM D-3945 Test method, testified that the ASTM D-3945 test renders inaccurate results with regard to viscosity breakdown. 27 Smith explained that the ASTM-3945 Test was developed for manufacturers to measure the quality of one batch of oil against the next batch of the same type of oil. This test was never intended to compare the viscosity breakdown of oils of different polymer classes, and the test cannot perform this function accurately. Pennzoil and Castrol are motor oils of different polymer classes, and thus this test's comparison of the two oils proves nothing relevant. Actually, the test does not measure viscosity breakdown at all; rather, it measures percentage of viscosity loss. As Trial Judge Wolin perceptively observed: 28 Pennzoil ignores the caveat embodied in the [ASTM D-3945] test as to the significance and use of ASTM D-3945. In § 4.2 it states [T]hese test methods are not intended to predict viscosity loss in field service for different polymer classes or for different field equipment. 29 Castrol Inc. v. Pennzoil Co. & Pennzoil Prods. Co., 799 F.Supp. 424, 438 (D.N.J.1992). Thus, it cannot be gainsaid that Castrol presented affirmative evidence to prove the literal falsity of Pennzoil's claims and that Judge Wolin did not find Pennzoil's evidence to rebut Castrol's proof persuasive. 30 The dissent asserts, however, that a defendant need only establish a reasonable basis to support its claims to render the advertisement literally true. We disagree. Rather, the test for literal falsity is simpler; if a defendant's claim is untrue, it must be deemed literally false. 31 In this case, Pennzoil made a claim of superiority, and when tested, it proved false. Hence, under this standard, the district court correctly found literal falsity. Therefore, Castrol sustained its burden of proof, especially given this court's narrow scope of review: 32 If the district court's account of the evidence is plausible in light of the record viewed in its entirety, the court of appeals may not reverse it even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently. Where there are two permissible views of the evidence, the factfinder's choice between them cannot be clearly erroneous. 33