In This Issue:

• Lawsuit Alleging Tesla Falsely Advertised Autopilot Drives On
• Unilever Sweats It Out Over Degree Antiperspirant Claims at NAD
• NAD Keeping a Close Eye on the Divide Between Advertising and Editorial
• New York AG Gets to the Heart of "Abortion Pill Reversal" Marketing

Lawsuit Alleging Tesla Falsely Advertised Autopilot Drives On

Teslas are everywhere these days, including for a while longer at the courthouse defending a class action lawsuit that will proceed for now.

Plaintiffs' allegations that Tesla misled consumers about the self-driving features of its cars have survived dismissal on some key false advertising claims. The trimmed suit will proceed without the express and implied warranty claims but with claims that the company violated the California Consumer Legal Remedies Act (CLRA) and the state's Unfair Competition Law (UCL) and perhaps with claims for equitable relief if the plaintiff can sufficiently allege such claims in another amended complaint.

In the complaint, the plaintiff alleged that for years Tesla has falsely advertised the company's so-named "Autopilot" and "Full Self-Driving Capability" features. Such features are misleadingly named because the company's advanced driver assistance systems (ADAS) technology never lived up to the claims in the names. According to the complaint, Tesla falsely claimed that it was "perpetually on the cusp of perfecting technology and finally fulfilling its promise of producing a fully self-driving car." Time after time these promises proved to be false, said plaintiff, and nevertheless Tesla continued to make them at the expense of consumers.

A California federal court concluded that the plaintiff sufficiently pleaded false advertising claims arising out of the company's alleged fraud and negligence. The court concluded that the false advertising causes of action may go forward so long as they are based on one of two claims.

First, claims arising out of Tesla's alleged representations that Tesla cars currently have the hardware to be fully self-driving were properly alleged and may go forward. For example, plaintiff alleged that he viewed and relied on specific statements made by Tesla on its website that as of 2016 all Tesla cars had the "hardware necessary for full self-driving capability." By alleging the specific reasons these statements are false, the "SAC plainly alleges sufficient falsity" about Tesla's claim that its hardware "was sufficient to reach high or full automation," wrote the court.

Second, the court found the complaint also properly alleged that Tesla CEO Elon Musk falsely represented in 2016 Tesla's ability to drive cross-country by the end of 2017 and that plaintiff relied on these representations before purchasing his car.

But claims arising out of allegations that Tesla falsely represented that future developments would occur at an "unspecified time" did not make the cut, as the court found that plaintiff failed to allege that Tesla promised fully autonomous self-driving by any particular timeline or that Tesla knew that the timeline was unrealistic.

Key Takeaways

Tesla has also faced a false advertising suit on these self-driving claims from the California Department of Motor Vehicles, which in 2022 alleged that Tesla falsely advertised its Autopilot feature. Tesla countered that the California Vehicle Code implicated in that case was invalid under the First Amendment. But that law is not at issue here. In this case, unable to access Musk's much-used "they are violating my free speech" argument, Tesla is encountering a bumpy road.

Unilever Sweats It Out Over Degree Antiperspirant Claims at NAD

Sure, your product is effective, but it is not perfect despite its advertising claims.

That's what Procter & Gamble told Unilever in so many words at the National Advertising Division (NAD) when it recently challenged Unilever advertising for its Degree Advanced antiperspirant that depicted the product as preventing those telltale underarm sweat marks even through serious workout sessions.

Notably, P&G didn't challenge claims that Degree Advanced is "extra effective" at reducing sweat, nor that it is more effective than P&G's Old Spice. But it did draw the line at the claim that "While your workout will leave your gray T-shirt soaked, Degree will protect those pits at all costs."

The claims appeared as part of Unilever's "Gray T-Shirt Challenge" marketing campaign promoting Degree Advanced. P&G argued that the claims convey the message that Degree Advanced completely prevents underarm sweat, even during intense workouts. Unilever countered that the ads convey the message that the product provides effective sweat reduction and lack of visible sweat marks during workouts. But NAD sided with P&G, citing the advertisement's use of phrases like "nothing on my armpits," "we have no sweat stains," and "moving for hours, still dry," reinforced by visuals in commercial showing athletes in intense workouts, but with no sweat stains in sight.

When analyzing whether the claim was substantiated, NAD found that neither the "hot room" tests measuring amounts of sweat after spending time in a hot room nor the results of Unilever's own SweatSENSE study mapping and measuring sweating in users wearing either Degree or Old Spice were a good fit for the claims. In both cases, the studies weren't sufficiently narrowly tailored to fit the product demonstrations in the ads.

The hot room studies were not a good fit because they didn't measure sweat during activity, while the ads showed the products being used during intense exercise. Also, the studies didn't test whether the amount of measured sweat would be visible on a consumer T-shirt.

As for the SweatSENSE studies, the problem was that nothing connected the active sweat rate of study participants with the amount of sweat that appeared on their T-shirt. As a result, the evidence showed that Degree was effective at reducing armpit sweat, certainly, but "the product demonstrations in the videos and commercials go beyond sweat reduction and show the absence of sweat marks on user's underarms." The study also did not depict sweat throughout the workout but rather at specific time points, which was different than the depiction in the commercials.

NAD also analyzed a commercial comparing Degree Advanced and Old Spice antiperspirants. It depicted a man named Samuel applying Degree Advanced deodorant on one armpit and Old Spice on the other, and then working out. In the commercial, Degree Advanced left no visible sweat on Samuel's shirt, while the Old Spice deodorant did. The ad featured the claim "72H NONSTOP PROTECTION KEEPS WORKING WHEN OTHERS DON'T" alongside the visuals. NAD found that the commercial communicated a comparison between Degree Advanced and the full line of Old Spice antiperspirants and further conveyed the message that Degree Advanced users would not experience underarm sweat marks, while Old Spice users would.

NAD concluded that these claims were not supported. It recommended that Unilever modify the superior wetness and sweat reduction claim to avoid conveying the message that it applies to the entire line of products. It also recommended that Unilever discontinue the no-sweat-in-underarm claims because they were also based on the hot room and SweatSENSE studies, which were not a good fit for the claims.

Key Takeaways

NAD often takes an absolute view of absolute-seeming claims. This case joins a long line of precedent that when it comes to always or never—aka zero or 100 percent—test results can rarely close the divide between the claim and the perfection NAD finds is communicated.

NAD Keeping a Close Eye on the Divide Between Advertising and Editorial

For the second time in three months, the National Advertising Division (NAD) brought a challenge to claims about Biossance Squalane & Marine Algae Eye Cream manufactured by Amyris. This time, NAD initiated the self-monitoring challenge directly against the advertising, raising concerns that advertising claims were presented as editorial magazine content.

The case is almost a mirror image of the recent NAD Dotdash Meredith case—same cream, similar claims and issue, but that case challenged the publisher's statements rather than the brand's about these products—albeit the brand had provided the underlying product information. In both cases, the materials in question made the following claims about Biossance Squalane & Marine Algae Eye Cream: "This Reese Witherspoon-Approved Eye Cream Hydrates and Brightens. Shoppers say it fades fine lines 'almost immediately.'" Here, the NAD also questioned a number of more specific "clinically proven" claims that appeared in some of the materials.

The claims in question originally appeared on the social media accounts and search engine results of InStyle and Hello! magazines. NAD was concerned that these ads looked like editorial content from these magazines. NAD was also concerned that the ads did not clearly and conspicuously disclose Witherspoon's role as a Biossance brand ambassador. Those materials—which had been discontinued by Meridith—were here linked to by Amyris.

Amyris here argued that the statements in the linked-to articles were not advertising and that it had provided Dotdash Meredith, the parent company of InStyle and Hello! magazines, with information about the cream but did not have any other control over the content.

NAD's analysis centered on the original Dotdash Meredith case and what NAD now refers to as the "BuzzFeed" factors—one of NAD's first cases exploring the line between advertising and editorial. NAD noted that as the line between what is and is not advertising blurs, it is increasingly important that any economic relationship that exists between the publication and the brand must be sufficiently disclosed to consumers.

Ultimately, NAD closed the original Dotdash Meredith challenge and Meredith, in any case, removed the InStyle article about the Biossance Squalane & Marine Algae Eye Cream from the InStyle website. But NAD cautioned the company that "[i]f content is created because of the affiliate relationship, the content is promotional and is advertising."

Likewise, here NAD told Amyris to beware of how content it provides to a publisher with whom it has a marketing relationship is used by the publisher. This is particularly important in situations where, as here, the content features a celebrity endorsement. Though Amyris argued that readers would expect an A-list star like Reese Witherspoon to be compensated for an ad, NAD noted that the editorial nature of the ad made it difficult to distinguish it as such.

Turning to the substantive support for the claim that the cream is "clinically-proven to quickly and visibly lift, firm and diminish the appearance of fine lines for a revitalized eye area," NAD recommended that it be modified to reflect the fact that the underlying study results are reliable only to hydration and "the appearance of fine lines."

Key Takeaways

NAD continues to closely monitor the editorial/advertising divide. Publishers and advertisers alike would be wise to parse these cases closely and to take heed of NAD's advice. We note that NAD added an additional monitoring element here to the more traditional "BuzzFeed" factors, recommending that the brand keep track of how a given publisher with whom it has a marketing relationship advertises its content.

New York AG Gets to the Heart of "Abortion Pill Reversal" Marketing

New York Attorney General Letitia James filed suit against anti-abortion group Heartbeat International (HBI) and 11 other so-called "crisis pregnancy centers," alleging that their marketing of "abortion pill reversal" (APR), an unproven and potentially unsafe procedure, is deceptive marketing.

The complaint alleges that these "self-professed pro-life organizations," also referred to as "pregnancy help organizations" (PHOs), are falsely marketing APR procedures as safe and effective ways to "reverse" a medical abortion when, in fact, there is no competent and reliable scientific evidence that these procedures are safe or work as intended.

HBI advertises the APR procedure on its website and through a "coordinated and strategic marketing campaign" involving local PHOs, all of which use false and misleading statements to promote APR, according to the attorney general. The attorney general also alleges that the PHOs "advertise and widely promote" these procedures as part of their mission to discourage people from having abortions.

The PHOs' marketing promotes APR as a safe and effective treatment to reverse an FDA-approved medicated abortion procedure, but the terms "abortion pill reversal" and "abortion reversal" are misleading, says the attorney general. The procedure involves administering repeated doses of progesterone, a pregnancy-related steroid hormone, but there is no credible scientific evidence that the treatment works. In fact, major medical organizations including the American College of Obstetricians and Gynecologists have warned that the procedure is unproven and unscientific. Further, no valid clinical trial exists that demonstrates either the safety or efficacy of APR, says James.

In spite of this, according to James, the PHOs' advertising misleads consumers, falsely claiming that APR has been proven to be safe and effective and is an accepted and uncontroversial medical treatment.

James also alleges that HBI and the local PHOs target their misleading and false advertising directly to consumers who may be getting a medicated abortion for the sole purpose of disrupting the abortion process and inducing these consumers to undergo APR.

James argues that these false and misleading statements make it difficult for consumers to make informed decisions about their well-being or pregnancy, especially as it is difficult for the average layperson to verify the accuracy of the medical and scientific claims contained in the PHO advertisements.

"In advertising APR to consumers for the purpose of inducing them to obtain this 'treatment,' Defendants must be held to the same standard as anyone else advertising healthcare services in the state—they cannot use misleading and false statements, including those that misrepresent the nature and strength of the scientific evidence substantiating the efficacy and safety of those services," asserts the attorney general's complaint.

According to the complaint, these misrepresentations about APR are fraud, deceptive business practices, and false advertising in violation of New York's General Business Law (GBL) Sections 349 and 350, which prohibit false advertising in the course of commerce in the state. The attorney general's office seeks an end to the misleading statements as well as civil penalties.

Key Takeaways

New York's attorney general once again demonstrates that she is a master at using the power of false advertising law in the service of public policy. As we've covered previously in Stay ADvised, she has utilized similar types of claims under GBL 349 and 360 in greenwashing suits against JBS over its alleged carbon footprint false advertising, as well as against PepsiCo for falsely advertising recycling.

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