The Eleventh Circuit just ruled that a standard-setting-body’s interpretation of its own standards is an opinion that cannot support Lanham Act false advertising liability. Warren Technology, Inc. v. UL LLC, __ F.3d __, No. 18-14976, 2020 WL 3406585 (11th Cir. Jun. 22, 2020).
Plaintiff Warren Technology and defendant Tutco, LLC competed in the field of electric heaters. UL LLC (Underwriters Laboratories, or “UL”) certified Tutco’s heaters as compliant with UL standard 1995. Warren Technology sued both Tutco and UL, alleging that Tutco’s claim of UL 1995 compliance was false because the standard required the heater to include a safety device that would automatically cut off power if the unit over heated. Because Tutco’s heaters allegedly did not incorporate such a safety device, Warren Technology asserted that the heaters did not comply with UL 1995 and Tutco’s advertising of its products with UL’s certification mark therefore constituted false advertising in violation of the Lanham Act. Slip Opinion, at 2-4.
UL 1995 recognized an exception to the safety device requirement, however, and the issue of whether Tutco’s heaters complied with UL 1995 came down to whether the standard’s phrase “intended operating conditions” includes both normal (i.e., unrestricted airflow) and abnormal (i.e., restricted airflow) operating conditions. Slip Opinion at 4. UL interpreted its own standard one way, and Warren Technology interpreted it the other (notably, the UL standard had been amended by the time of appeal, and the disputed exception was no longer allowed, mooting claims for injunctive relief). Id. Dismissing the suit, the District Court held that it lacked authority to interpret UL’s standards and determine compliance. Id. at 5. The Eleventh Circuit affirmed, agreeing that UL’s interpretation of its own standard is an opinion rather than a representation of fact, and thus cannot be actionable as a false or misleading statement. Id. at 7-8:
Determining the conformance of a product with a UL standard obviously requires UL to interpret the standard, just as conformance with a statute requires a court to interpret the statute. Warren calls UL’s authorization to Tutco to use UL’s mark, and Tutco’s advertisements to that effect, “misrepresentations,” but it really means nothing more than (by its lights) a “misinterpretation” of UL 1995. It does not follow, however, that even a misinterpretation of UL 1995 is a falsity – or, a “deceptive act” within the meaning of the Lanham Act – rather than a matter of opinion, provided it was made in good faith and in accordance with OSHA’s criteria for independence, procedural regularity, etc.
The court went on to state, however, that an inconsistent or biased certification could still be actionable: “if only the facts had warranted doing so, Warren could have brought an action alleging UL failed to meet its own standards for testing, or interpreted the UL 1995 standard inconsistently over time, or applied it inconsistently to Warren and Tutco, or lacked independence relative to Tutco.” Slip Opinion, at 9 (citing Brand Mktg. Grp. v. Intertek Testing Servs., 801 F.3d 347, 360-61 (3d Cir. 2015) as “holding a NRTL [nationally recognized testing laboratory] responsible for negligent misrepresentation because it ‘subjectively knew of, and consciously disregarded, a risk of harm’ due to faulty testing”), and Idaho Potato Comm’n v. M&M Produce Farm & Sales, 335 F.3d 130, 133, 139 (2d Cir. 2003) (remanding for consideration on the merits of allegations that the registrant’s certification mark should be cancelled for (1) “discriminatorily refusing to certify” products that met its standards; (2) “imposing standards for certification beyond” those it registered; and (3) “lack[ing] the independence necessary for certification mark owners under the Lanham Act”).
