Introduction

In the landmark case Strauss v. Angie's List, Inc., decided on March 9, 2020, the United States Court of Appeals for the Tenth Circuit reaffirmed the application of the Proctor & Gamble test in determining what constitutes "commercial advertising or promotion" under the Lanham Act's false advertising provision. This case centers around plaintiff Steve Strauss's allegations that Angie's List engaged in deceptive practices affecting his tree care business's online visibility and reputation.

Summary of the Judgment

Steve Strauss, operating under Classic Tree Care, filed a class action lawsuit against Angie's List, Inc., alleging violations of the Lanham Act due to false advertising. He claimed that Angie's List manipulated business rankings based on advertising expenditures rather than genuine consumer reviews, misleading consumers and harming his business. The district court dismissed most of Strauss's claims, deeming them time-barred under laches and state statutes of limitations. The Tenth Circuit affirmed this dismissal, specifically upholding the district court's application of the Proctor & Gamble test to determine whether Angie's List's statements qualified as commercial advertising or promotion.

Analysis

Precedents Cited

The court heavily relied on established precedents to guide its decision:

• Proctor & Gamble Co. v. Haugen, 222 F.3d 1262 (10th Cir. 2000): Established a four-part test to determine what constitutes "commercial advertising or promotion" under the Lanham Act.
• Lexmark International, Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014): Addressed statutory standing under the Lanham Act but did not alter the Proctor & Gamble test.
• Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009): Established the "plausibility" standard for pleading under Rule 12(b)(6).

These precedents collectively underscored the importance of adhering to established legal standards when assessing claims under the Lanham Act.

Legal Reasoning

The core of the court's reasoning rested on the application of the Proctor & Gamble test, which outlines four criteria for a statement to qualify as commercial advertising or promotion:

1. Commercial speech.
2. The defendant is in commercial competition with the plaintiff.
3. The communication is intended to influence consumers to purchase the defendant's goods or services.
4. The communication is sufficiently disseminated to the relevant purchasing public to constitute "advertising" or "promotion" within the industry.

The court found that Strauss failed to demonstrate that Angie's List's 2016 website statements met these criteria, particularly the purpose of influencing consumers to buy Angie's List's services. Additionally, the court clarified that the Supreme Court's decision in Lexmark did not undermine the Proctor & Gamble test, as Lexmark dealt primarily with standing rather than the definition of commercial advertising.

Impact

This judgment reinforces the significance of the Proctor & Gamble test in evaluating false advertising claims under the Lanham Act. By upholding the four-part test, the Tenth Circuit ensures that plaintiffs must meet clear and specific criteria to establish claims of deceptive commercial practices. This decision may limit the ability of businesses to challenge competitors' advertising practices unless they can incontrovertibly demonstrate that the competitor's statements were made with the intent to deceive consumers within a competitive commercial context.

Complex Concepts Simplified

To better understand the judgment, it's essential to clarify some legal terminologies:

• Lanham Act: A federal statute that regulates trademarks, service marks, and false advertising.
• False Advertising Provision (15 U.S.C. § 1125(a)(1)(B)): Prohibits false or misleading statements in commercial advertising and promotion that misrepresent the nature, characteristics, qualities, or geographic origin of goods or services.
• Proctor & Gamble Test: A four-part legal test used to determine whether statements qualify as commercial advertising or promotion under the Lanham Act.
• Laches: An equitable doctrine preventing plaintiffs from bringing claims after an unreasonable delay that prejudices the defendant.
• Facial Plausibility Standard: A standard requiring that a claim must have enough factual content to suggest it is plausible, not merely conceivable.

Conclusion

The affirmation in Strauss v. Angie's List, Inc. underscores the enduring authority of the Proctor & Gamble test in assessing false advertising claims under the Lanham Act. By maintaining this standardized approach, the Tenth Circuit ensures consistency and clarity in determining what constitutes commercial advertising or promotion. This decision serves as a critical reference for future litigants and courts navigating the complexities of false advertising law, emphasizing the necessity for plaintiffs to provide substantial evidence that meets all facets of the Proctor & Gamble criteria.