Labeling tangerine juice as having “no sugar added” did not constitute false advertising because the statement was accurate and did not imply that competing products do actually contain added sugar, a California appellate panel has ruled.

Michelle Schaeffer sued Califia Farms, alleging that its Cuties Juice made from tangerines ran afoul of California law by using the phrase “No Sugar Added” on its label. Despite acknowledging the literal truth of the statement, Schaeffer contended that it deceived consumers with the implication that competing brands do contain added sugar and that Cuties was therefore healthier than its competitors.

Califia moved to dismiss the action, arguing that no reasonable consumer was likely to be deceived by the challenged language. A trial court agreed, and the appellate panel affirmed dismissal of the suit.

Whether a truthful statement about one’s own product is actionable turns on whether (1) reasonable consumers are likely to infer from such a statement that the same statement is untrue as to comparable, competing products and that the product at issue is consequently superior to its competition, and (2) those consumers would be deceived if the statement is true as to the comparable, competing products, the court said.

“We hold that such statements are not actionable as a matter of law,” the panel wrote. “First, a reasonable consumer is unlikely to make the series of inferential leaps outlined above. Second, we are hesitant to adopt a theory upon which ‘almost any advertisement [truthfully] extolling’ a product’s attributes ‘would be fodder for litigation.’ Third, the weight of other authority has come to the same conclusion.”

An example drove home the court’s point.

“Assume that a new airline runs an ad with the tagline, ‘No Hijackers Allowed,’” the panel proposed. “Is a reasonable consumer likely to infer that other airlines do allow hijackers and that the new airline is consequently the safer choice? We think the answer to this question is ‘no.’”

The court gave another example from an actual case.

“A water bottle label with a green waterdrop may suggest ‘something to do with the environment,’ but does not imply that it is ‘environmentally superior to that of the competition’ and thus does not constitute” false advertising.

While Schaeffer argued that the question of whether a label is likely to deceive shouldn’t be decided on a motion to dismiss, the court was not persuaded. “Although ‘whether consumers are likely to be deceived is’ typically ‘a question of fact,’ that issue may be resolved on demurrer if ‘the facts alleged fail as a matter of law to show’ that a ‘reasonable consumer would be misled,’” the panel wrote. “Here, they do.”

To read the opinion in Schaeffer v. Califia Farms, LLC, click here.

Why it matters: The court held—as a matter of law—that a reasonable consumer would not infer that a truthful statement about a company’s own product implies that the same statement is not true about the competition and that the product at issue is therefore superior.