Bimbo Bakeries and U.S. Bakery recently found out that consumer confusion, like politics, is local, and that “local” means what the local consumer says it means. Let’s unbraid this loaf.
In Bimbo Bakeries USA, Inc. v. Sycamore, No. 2:13-CV-00749, 2019 WL 1058234 (D. Utah Mar. 5, 2019), the jury originally awarded Bimbo $8,027,720 in damages on its false advertising claim against U.S. Bakery, who tried multiple times to convince the court that what makes bread “local” is really a matter of the seller’s opinion, or at least that claiming bread is “local” is mere puffery. According to U.S. Bakery, “local” was a geographical term, but not a geographically descriptive term entitled to Lanham Act protection, because “local” was not a specified location.
“Local,” as the Bimbo court noted, is a location, albeit one without a set definition. No matter, according to the court, because the question is not whether U.S. Bakery’s use of the term was false, but rather whether it was false or misleading. Bimbo presented evidence that customers in Utah interpreted “local” to mean “as least . . . in the state.” Because U.S. Bakery’s “local” bread did not meet that definition or even come close and the use of “local” suggested the “bread products were particularly fresh and of high quality because they were baked within the geographic vicinity of where they were sold,” the court held that the jury’s verdict on false advertising liability was supported by sufficient evidence.
But not so the jury’s damages award for unjust enrichment. Bimbo presented evidence of confusion only as to consumers in Utah, and presented no evidence that that data could be extrapolated to consumers in other states. The expert actually admitted that consumers in other states may have different interpretations about what makes a product “local.” Because the damages calculation was keyed to the consumer confusion data, the court found the damages must be limited to Utah, and remitted the $8 million damages award down to $80K. Bimbo appears not quite ready to accept the loss of all that dough and has filed a notice of appeal, which joins a previous appeal filed by a co-defendant.
The court’s treatment of the consumer confusion evidence demonstrates the problem with its treatment of “local.” Because the definition of the term is highly subjective, evidence of confusion and damages will need to be more nuanced and tailored to whatever a party wants “local” to mean. U.S. Bakery might say that this problem could be avoided by adopting a rule that geographically descriptive terms must describe specific locations, but at least in this case, that argument is getting stale. Parties looking to enforce false advertising claims based on these types of general geographically descriptive terms should recognize their accoutrements: Bimbo wanted a vague, subjective term to be factual—excellent choice for finding liability—but it only wanted to present a narrow slice of evidence, which is more cost-effective and easier to present to a jury. Bimbo’s win on the first issue had unforeseen consequences on the second. At least until the Tenth Circuit weighs in, this case is a cautionary tale about trying to butter an $8 million piece of bread on both sides. Should you have any questions about your bread, the Venable team is here to help.