Plaintiff Alexander Panelli filed a putative class action against Target Corporation alleging that the retailer sold 100% cotton bedsheets labeled with thread counts of 600 or greater, specifically 800, which Panelli claimed was physically impossible to achieve with 100% cotton textile. Panelli argued that these representations were literally false and deceptive under California's Unfair Competition Law (UCL) and Consumer Legal Remedies Act (CLRA). The district court granted Target's motion to dismiss, concluding that no reasonable consumer would be deceived by a claim that was factually impossible. The district court relied on the Ninth Circuit's decision in Moore v. Trader Joe's Co., interpreting it to mean that allegations of consumer deception based on factually impossible claims fail as a matter of law.
The Ninth Circuit held that the district court misinterpreted the precedent set in Moore v. Trader Joe's Co. In Moore, the court affirmed dismissal because the label '100% New Zealand Manuka Honey' was ambiguous, and contextual clues like price and product knowledge would dissuade a reasonable consumer from believing the claim. The Ninth Circuit clarified that the Moore framework applies only when a label is ambiguous and requires the consumer to look beyond the front label for context. In this case, the thread count claim was not ambiguous; it purports to communicate an objective, concrete measurement. Therefore, the Moore framework did not apply. Instead, the court assessed the claims under the standard for literally false advertising. The court reasoned that while some claims may be so clearly false that no reasonable consumer would be deceived, this is a rare exception. A reasonable consumer is unlikely to possess specialized knowledge of textile manufacturing to know that 800 threads per square inch is impossible for 100% cotton. Consequently, the allegation that the claim is physically impossible does not automatically render the complaint insufficient. The court emphasized that allowing such a dismissal would create an untenable rule where wholesale falsity is immune from liability while partial falsity is actionable, undermining the broad purpose of California consumer protection laws.
The case is remanded to the district court for further proceedings, allowing the putative class action to proceed. The decision clarifies that literally false advertising claims regarding product specifications generally survive a motion to dismiss unless the falsity is so obvious that no reasonable consumer could be deceived. It limits the scope of Moore v. Trader Joe's Co. to cases involving ambiguous labels where contextual information would dissuade a reasonable consumer.
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