The Missouri Court of Appeals recently overturned a jury verdict under the Missouri Merchandising Practices Act (MMPA) against Nissan North America, Inc., arising out statements made by Nissan in the advertising and promotion of its Infiniti FX vehicles. In September 2005, Nissan began to receive warranty claims based on "bubbling" in the dashboard of FX vehicles. A class action lawsuit was filed, Hurst v. Nissan North America, Inc., in which the plaintiffs sought damages for violations of the MMPA. Plaintiffs alleged that the defects in the dashboard reduced the value of the vehicle, reducing its marketability and resale value.
At trial, the plaintiffs focused on Nissan's advertising and marketing materials, which made the following representations, among others:
- The FX is a "premium" vehicle and a "leader in style."
- The FX provides a "unique blend of uncompromising style and luxury."
- The FX was a "premium" vehicle with a "premium automotive experience."
- Nissan had a "commitment to offer a superior product representing excellent value" and "to ensure total satisfaction for our customers."
Plaintiffs claimed Nissan violated the MMPA by making representations regarding the FX vehicles that were factually inaccurate, or by making representations that created a false impression regarding the quality of the vehicle. The MMPA makes unlawful "[t]he act, use or employment by any person of any deception, fraud, false pretense, false promise, misrepresentation, unfair practice or the concealment, suppression, or omission of any material fact in connection with the sale or advertisement of any merchandise in trade or commerce[.]"The MMPA bars an "assertion that is not in accord with the facts," and deceptions in advertising that have a tendency "to create a false impression."
After hearing the evidence, the jury returned a verdict in favor of the plaintiffs. The circuit court determined that 326 class members each were entitled to a payment of $2,000. The circuit court also awarded class plaintiffs $1,819,785 in attorney's fees.
Nissan appealed on multiple grounds, including that plaintiffs failed to make a submissble case under the MMPA because the alleged misrepresentations were not actionable statements of fact, but inactionable puffery. Nissan argued that many statements made in advertising are merely the "puffing" of sales propaganda or other expressions of opinion. Nissan argued that ""puffery" regarding the quality and value of goods -- even to the point of exaggeration -- is permitted under Missouri law.
The court agreed, holding that puffery is not actionable under the MMPA. View a copy of the opinion. According to the court, "the generally recognized distinction between statements of fact and opinion is that whatever is susceptible of exact knowledge is a matter of fact, while that not susceptible is generally regarded as an expression of opinion." Advertising statements such as "Better Ingredients. Better Pizza" and "America's Favorite Pasta" constitute puffery, because they are unquantifiable and not capable of being proved false.
Applying these principles, the court characterized Nissan's marketing statements as merely "dealer's talk, trade talk, puffing of manufacturer's wares, and sales propaganda," which are not actionable under the MMPA because there is no way that such statements are measurable or capable of being disproven. The verdict was overturned.
Importantly for defendants in MMPA actions, the court rejected Plaintiff's argument that puffery should be actionable because it is based on the notion of reliance, which is not a required element under the MMPA. The court found that although plaintiffs in an MMPA action need not show individualized reliance upon alleged misrepresentations, they cannot base their claims on alleged misrepresentations upon which no reasonable consumer would rely.
Expanding the already-broad MMPA to include puffery would have devastating consequences for businesses engaging in advertising. Given the recent proliferation of consumer class action lawsuits attacking statements made on product labels or packaging, it will be interesting to watch courts distinguish between puffery and actionable statements of fact going forward. As one example, see the following article about a false advertising suit against Simply Orange, involving statements that its orange juice is "100% Pure Squeezed," "Pure," and "Natural," among other statements.