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Pizza Advertising Claim Up for High Court Review

The U.S. Supreme Court will meet in private conference March 16 to discuss whether to grant review in several pending cases. Among them is Pizza Hut Inc. v. Papa John's International Inc., No. 00-995, which stems from Pizza Hut's false advertising claim against Papa John's for its slogan, "Better Ingredients. Better Pizza." Below are summaries of this and other cases that have a substantial chance of being granted. The cases have been selected by D.C. practitioner Thomas Goldstein from among those the Court is expected to discuss at the conference. Goldstein does not otherwise participate in preparation of this column. The Court may announce the disposition of these cases on March 19, although it sometimes holds cases for a future conference.

False Advertising

One job requirement for U.S. Supreme Court justices is the ability to distinguish between solid arguments and mere puffery.

How average pizza consumers perform the same task is at the heart of a dispute between rivals Pizza Hut Inc. and Papa John's International Inc.

In 1998, Pizza Hut sued Papa John's over a $300 million Papa John's advertising campaign featuring the slogan "Better Ingredients. Better Pizza."

Pizza Hut claimed the slogan, when combined with ads comparing the two restaurants' tomato sauce and pizza dough, was so misleading it violated federal false advertising laws.

A jury in the Northern District of Texas agreed that the Papa John's ads were misleading and likely to deceive consumers. Then the trial judge banned, among other things, Papa John's from using any slogan using the adjective better to modify ingredients or pizza.

But last year, a panel of the 5th U.S. Circuit Court of Appeals reversed, despite agreeing that the slogan, when combined with the sauce and dough ads, was misleading.

Nonetheless, Circuit Judge E. Grady Jolly observed, "there is no evidence demonstrating that the slogan had the tendency to deceive consumers."

At issue in Pizza Hut's petition for certiorari is whether a plaintiff who succeeds in proving a competitor's advertising is false and misleading must also show that deceived consumers actually relied on the misrepresentation in deciding whether to make a purchase.

Pizza Hut, represented by Carter Phillips of the D.C. office of Chicago's Sidley & Austin, argues in its petition for certiorari that the 5th Circuit's ruling conflicts with those of other circuits.

The 2nd Circuit, for example, emphasizes "the relationship between the key deception and key product characteristics, not on demonstrating actual reliance on the misstatements to make purchasing decisions," Phillips writes.

Papa John's, represented by H. Bartow Farr III of D.C.'s Farr & Taranto, responds in opposition briefs that proving consumers actually relied on the misleading advertising to make their purchase decision is legally significant.

"While it is certainly true that some representations, by their very nature, may lead consumers to alter their purchasing decisions," Farr writes, "it is equally true that not all representations will have that effect."


Jonathan Ringel, American Lawyer Media. March 12, 2001

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