A seller’s opinion – what Judge Learned Hand called the “kind[ ] of talk which no sensible man takes seriously” – is sales puffery that is not actionable as deception or fraud.
Last month, the Indiana Supreme Court recently reaffirmed this longstanding rule in Kesling v. Hubler Nissan, Inc., 975 N.E.2d 367 (Ind. 2013). At issue was an advertisement describing a used car for sale as a “Sporty Car at a Great Value Price.” After purchase, the buyer discovered that the car had extensive mechanical problems rendering it unusable. The buyer sued the dealer, alleging that the advertisement and other statements made by a salesperson were actionable deception and fraud.
The trial court granted the dealer’s motion for summary judgment, reasoning that the buyer’s claim for deception failed because the advertisement was “simply puffing” and not a misrepresentation of fact. A 2-1 majority of the Indiana Court of Appeals reversed, concluding that calling the car a “Sporty Car at a Great Value Price” could implicitly represent that “it is a good car for the price and that, at a minimum, it is safe to operate,” thus precluding summary judgment.
The dealer petitioned the Indiana Supreme Court for transfer. In support of the petition, the Indiana Legal Foundation, with support from Barnes & Thornburg LLP, filed an amicus brief, arguing that the subject statement was non-actionable puffery and that allowing such a statement to be actionable as fraud or deception exposed Indiana businesses to unprecedented risk.
The Supreme Court granted transfer and affirmed the trial court’s grant of summary judgment on the buyer’s claims relating the advertisement. It held that the statement was an opinion, “not a representation of fact, and thus cannot be the basis of deception or fraud claims.”
The Supreme Court recognized that a contrary holding would significantly impede legitimate advertising and that a contrary ruling would force sellers to list nothing but a product’s “name, rank, and serial number” in order avoid civil or criminal liability. Rejecting that result, the Court confirmed that sales puffery is not actionable in fraud or deception and reaffirmed that “[w]hile advertisements may not be deceptive, they need not refrain from any expression of the seller’s opinion.”