Court Opinion

ID: 9469972
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:53:36.783759+00
Date Added: 2024-06-11T17:41:39.380260
License: Public Domain

GODBOLD, Chief Judge,
dissenting:
I would reverse on the unfair competition claim.
No party contends that there is a general tort of “unfair competition” in Florida. Rather unfair competition is a generic term that covers several categories of specific torts. This case went to the jury on two specific theories, trade disparagement of a competitor’s product and unjustified interference with business relations. The evidence and rulings of the trial court must be examined in terms of these two torts.
A. Disparagement
The Florida law on disparagement of a competitor’s goods is stated in our opinion in Aerosonic Corp. v. Trodyne Corp., 402 F.2d 223, 231 (5th Cir.1968) (emphasis added):
Basically, actionable disparagement is a ‘statement [1] about a competitor’s goods which is [2] untrue or misleading and which is [3] made to influence or tends to influence not to buy. [Citations omitted].’ Mere puffing of one’s product, claiming its superiority over a competitor’s product, is not disparagement .... As was stated in [citation omitted], ‘as long as the comparison attempts primarily to enhance the quality of the advertiser’s product without being unduly critical of the other’s product, there can be no disparagement.’ [citation omitted].
The trial court charged the jury on trade disparagement as follows:
As a consequence, the Plaintiff claims that it has a right to recover damages from the defendant on either of two legal theories of unfair competition.
Under the first theory, which is known as trade disparagement, you may find for the Plaintiff if you find from the greater weight of the evidence, that the Defendant, through its agents or employees actually made some of the statements about the Plaintiff’s product attributed to it by the Plaintiff.
That the statements attributed to the Defendant constituted a misrepresentation of the material fact.
That the statements were made for the purpose of influencing others not to buy the Plaintiff’s product, or were made under circumstances which would lead a reasonable person to foresee that such statements would likely influence others not to buy the Plaintiff’s product.
And that the Plaintiff has sustained damages which were proximately caused by the publication of the Defendant’s statements.
With regard to the second element which you must find under this theory, you are instructed that a statement that something is to occur in the future can be considered a misrepresentation of fact only if the person making the statement had no reasonable basis for that statement at the time he made it.
T. 1814-15.
Greenlee requested instructions on “puf-fery,” the privilege of a seller of goods to engage within an allowable range in boasting or “sales talk” about its goods. The court refused to instruct on puffery on the ground that puffery had no application where defendant’s product was not in existence. This theory has been adopted by the majority in this court, with minimal analysis and without citation of authority.
The claimed acts of Greenlee’s disparagement of MRC’s product are these:
(1) Greenlee employees actively spread the news at trade shows that Greenlee would soon market a better hydraulic cable bender for much less money.
(2) On two occasions Greenlee employees said its product would work in more confined spaces.
(3) On one occasion a Greenlee employee masqueraded as an MRC representative and told a potential customer that MRC was out of hydraulic cable benders.
*1045The representations under (2) were not accurate. Greenlee’s cable bender, when it came out, would not work in more confined spaces. If this were the sole disparagement involved I could join in a holding that the court was not required to instruct the jury on puffery. The statement gave specific misinformation about MRC’s product through comparison with a quality that Greenlee’s product was said to have but that in fact it did not have.
The acts described in (3) were acts of disparagement, asserting a negative falsehood that MRC’s product was not available. Puffery has nothing to do with this occurrence.
With respect to acts described under (1), the defendant was entitled to an instruction on puffery. The majority opinion decides as a matter of law that puffery was not involved because Greenlee’s product had not been sufficiently developed and because it would not be available “soon.” Whether these inaccuracies are within the permissible range of puffery should be decided by a properly instructed jury, not by judges in their appellate chambers. The majority’s approach misconceives the principles that underlie the tort of trade disparagement and ignores the realities of the market place.
In our free-market competitive economy the seller is permitted to advertise and promote his product and loudly proclaim its virtues. Within acceptable limits that may be determined by a fact-finder case by case, our world accepts hyperbole by sellers. The tort of trade disparagement, brought over from equity, is not a roving commission to enforce precise standards of morality on the part of competing vendors. Rather it is concerned with the extent to which the seller should be allowed to sell not on the merits of his goods but on the alleged deficiencies of his competitor’s. Callman, Unfair Competition Trademarks and Monopolies, § 11.05, p. 13.
The law of product disparagement prevents diversion to defendant of plaintiff’s potential sales by defendant’s disparaging plaintiff’s goods. Disparagement may, of course, be directly done, as by X’s saying “Y’s product is made of inferior steel.” Or disparagement may be carried out in a comparative sense, as, by X’s saying “Y’s product will not relieve your headache but ours will.” The law relating to puffing interfaces where there is comparative disparagement, because it is necessary to appraise whether the defendant’s statements describing its product and comparing it with plaintiff’s have exceeded the limits of permissible sales talk or hyperbole. In most circumstances inquiry into the allowable scope of a defendant’s boasting will concern two existing products. But permitting an allowable range of sales talk is not limited as a matter of law to situations in which the product about which defendant’s statements are made is at that moment in existence. The focus of trade disparagement is not on whether defendant’s product exists, or will exist next week, or will exist next year, but on whether the statements defendant has made in drawing a comparison with plaintiff’s product go beyond permissible limits. Statements about the fact of prospective availability, the expected date of availability, and the expected qualities of the product when available, are statements to be considered by a fact-finder, like any other statements about defendant’s product (actual or prospective), in determining whether defendant has exceeded permissible limits in attempting to divert sales from plaintiff’s product to defendant’s product (actual or prospective). In this ease the proper inquiry for the jury to determine was whether Greenlee departed from the allowable limits of sales talk by saying that it would soon market a better cable bender at a lower price. The district court refused to give defendant’s requested instructions on this issue. This court’s affirmance thrusts it into the determination of an issue peculiarly suited for jury determination— the acceptability of boasting sales talk.
Possibly, as a matter of law, it would have been beyond permissible limits of puf-fery if Greenlee had represented that it had a product better and cheaper than MCR’s when in fact the product was merely being *1046developed and Greenlee only expected to have it later. But Greenlee made no such statement. Or, perhaps if Greenlee had not been engaged in the manufacture of goods in the same product line and had no practicable means to enter the line, an instruction on puffery would not have been required. Or, perhaps, if Greenlee were engaged in the same line but had done nothing toward development of the product represented to be soon available, no instruction would have been required. But these were not the circumstances. Greenlee was engaged in the same line and was seeking to develop a less expensive cable bender.
The majority’s approach of treating boasting as amenable to decision as a matter of law will inhibit the processes for marketing new products and improving the old. Must manufacturers and their advertising agents, promoting the virtues of “NEW Product X” against existing “Product Y,” be certain that no puffery is uttered before “NEW Product X” is in its final form of development and possibly in production? If not, how far along in the process of development must the product be, and how short - the time span before its expected availability, before the manufacturer is past the reach of a judge’s evisceral reaction that the manufacturer is boasting prematurely?
Assume defendant says “our new product will be better than plaintiff’s, it will be cheaper, and it will be available in three months.” Defendant is sued. It turns out that defendant’s product became “existent” and in fact was better and cheaper, but it became available in six months rather than three. Or, the product becomes available within the time estimated but is not better, or not cheaper. Is the manufacturer, as a matter of law, outside the range of puffery because of over-optimistic statements of availability, of quality, or of cost? The majority’s approach is ill adapted to an economy where research and development bring the consumer better products and are essential to a manufacturer’s survival.
It is obvious that expectability of existence of a product and its time of availability can be so remote that there is no jury issue. But this is not true here where Greenlee was engaged in manufacture of goods in the same product line and its engineering department was working on development of a less expensive cable bender. Moreover, remoteness in stage of development and in time was not the basis of the trial court’s refusing the instructions on puffery. It perceived that there was a bright line rule that puffery was inapplicable to a product not then in existence.
The plaintiff makes an alternative argument, not referred to by the majority, that instructions on puffery were covered by the last paragraph of the instruction above quoted concerning when a statement of something that is to occur in the future can be considered a misrepresentation of fact. This part of the instruction does not adequately convey the concept of allowable sales talk or hyperbole.
B. Unjustified interference with business relations
The basis for this claim is that statements by Greenlee prompted distributors and manufacturers’ representatives to sever their connections with MRC or potential representatives to not make a connection. There was evidence that one or two sales representatives severed their connection and that one lost interest in making a connection by reason of Greenlee’s statements. But there was no proof of any causal relationship between these occurrences and any damage to MRC. Damage cannot be inferred from the fact of the occurrences. There was no proof that MRC suffered a shortage of sales representatives or that it suffered any losses from the unavailability of the one or two who severed their connections and the one who did not make a connection.
C. New trial on damages only
In the first trial the issues were submitted to the jury on special interrogatories under which the jury found that the defendant engaged in “unfair competition” that proximately resulted in damages to MRC. It found the amount of damages consisting of lost profits arising from loss in *1047value in the plaintiff’s.business. The court ordered a remittitur with the alternative of a new trial on the issue of damages only. The remittitur was refused.
The jury had found in the first trial that the defendant had engaged in “unfair competition.” There had been no findings of whether this consisted of disparagement or of unjustified interference with business relations, or of both. At the second trial, on damages only, the court instructed the jury that it should decide “whether the false and misleading statements made by the Defendant regarding the availability, pricing and capabilities of its Model 800 cable bender were a proximate cause of any damage to MRC, and, if so, the extent of those damages.” The two theories, trade disparagement and unjustified interference with business relations, focus on markedly different kinds of competitive harm. The effect of disparagement is to decrease the number of buyers of the product. The effect of business interference is a drop in sales representatives. Counsel for Greenlee pointed out that, in order to argue to the jury concerning damages, he needed to argue whether trade disparagement or interference with business relations, either or both, had been found by the first jury to exist. The court refused to permit this and held that the first trial had established that defendant had committed both types of unfair competition, and that defendant could only argue proximate cause of damages. Arguably, defendant should have objected at the first trial to the form of the interrogatory. But it is equally arguable that if the plaintiff wished to prove damages arising from both theories of unfair competition it had to object to a global interrogatory that did not establish the existence of both. We need not answer this argument, because, under the circumstances, it was unfair to the defendant to have a second trial on damages only.