Friday, November 30, 2007

False Ad Claim on Toy Safety Barred, Claim on Toy Capabilities Allowed to Proceed

This posting was written by William Zale, Editor of CCH Advertising Law Guide.

A Lanham Act claim that a magnetic toy construction set was falsely advertised as suitable for "Ages 3 to 100," when in reality the blocks were highly dangerous to small children, was precluded by the Federal Hazardous Substances Act (FHSA), as amended by the Child Safety Protection Act to require toy labeling, the federal district court in Seattle ruled. However, a Lanham Act claim challenging advertising that "500 designs" could be built with the set was allowed to proceed.

A seller of magnetic construction toy sets (Rose Art Industries, Inc.) represented in advertising and packaging that its sets were appropriate for those “Ages 3 to 100” and that a wide variety of structures (“500 designs”) can be built by assembling the magnetic blocks in various ways.

A competing seller of magnetic construction toys (PlastWood SRL) brought a Lanham Act suit against Rose Art, alleging (1) that the “Ages 3 to 100” claim misrepresented that the toy sets, which could cause severe injury if inhaled or ingested, were safe for young children and (2) that the “500 design” claim falsely counted structures that either cannot be built or would collapse under their own weight.

Safety Claim

The federal district court dispatched the Lanham Act safety claim on the grounds that it was “precluded” by the Child Safety Protection Act, a part of the FHSA, which did not authorize private causes of action. Instead, the FHSA had to be enforced by the Consumer Product Safety Commission (COSC). Thus, the competitor's Lanham Act claim as to age suitability amounted to an improper request to enforce safety labeling that would be incongruent with the safety requirements set forth by the CPSC, in the court's view.

“500 designs” Claim

The rule that fraud must be pleaded with particularity did not apply to the allegation that the "500 designs" advertising claim overstated the toy set's capabilities, the court held. PlastWood fell short of alleging fraud or facts necessarily constituting fraud because it did not aver that the manufacturer engaged in any knowing or intentional conduct in relation to collapsing structures. Accordingly, the lower standard of a short and plain statement showing the pleader to be entitled to relief was held applicable.

The complaint’s allegations that Rose Art overstated the qualities and capabilities of its toys, in violation of the Lanham Act, provided Rose Art with fair notice of the nature of the claim. The complaint pleaded sufficient facts to state a claim that is plausible on its face, the court held.

The October 22 decision in PlastWood SRL v. Rose Art Industries, Inc. is reported at CCH Advertising Law Guide ¶62,727.

No comments: