Can a Violation of State Consumer Protection Law be Based on a Failure to Comply with the FTC's Endorsement Guides?

As part of its marketing efforts for Blue Ice Vodka, 21^st Century Spirits engages influencers to promote the product in social media.  In a lawsuit against the company alleging violations of the consumer protection laws of various states, the plaintiffs claimed that the company misled consumers through their influencer marketing campaigns because the influencers made false claims about Blue Ice Vodka and failed to disclose that they were working on behalf of the company. 

Specifically, the plaintiffs alleged that the influencers tagged or recommended Blue Ice products while “pretending they are disinterested consumers.”  The plaintiffs asserted that the influencers made a number of false claims about Blue Ice, including that the product is “handcrafted,” that the product is made in a company-owned distillery, that the product is filtered four or five times, that it “tastes better than other vodkas,” that it has between 52 and 57 calories per ounce, and that it is “fit-friendly” and has “health benefits.”  

Puffery

21st Century Spirits (who I'll just refer to as “Blue Ice”) moved to dismiss on various grounds, including that the influencers' alleged statements are not misrepresentations as a matter of law.  The court defined a “misrepresentation” as a representation that is “likely to deceive reasonable consumers” and mislead “a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances."  

While the court didn't buy Blue Ice's arguments for most of the statements in the influencers' posts, the court did dismiss the plaintiffs' claim to the extent it was based on the influencers' statements that Blue Ice is “the best tasting vodka."  Here, the court held that the “best tasting" claim was non-actionable puffery.  Nothing that “puffery” is a generalized, vague, nonquantifiable statement of corporate optimism, the court explained that Blue Ice “makes no quantifiable or verifiable promise, but, rather, merely expresses 21st Century's ‘optimism’ that it can achieve that ‘generalized’ ambition.”  

Material Connection Disclosures

Blue Ice also moved to dismiss on the grounds that the influencers are not legally required under  applicable state law to disclose their material connection to the company.  Blue Ice argued that the plaintiffs can't rely on the FTC's Guides Concerning the Use of Endorsements and Testimonials in Advertising as the basis for a violation of state law because that guidance is merely advisory in nature.  (As an aside, there's no private right of action under the FTC Act.  Therefore, consumers can't sue under federal law for violations of FTC standards.)

Evaluating the plaintiffs' claim under the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA"),  the court noted that a violation of FDUTPA may be based upon any FTC rules and “the standards of unfairness and deception set forth and interpreted by” the FTC.  While FDUTPA does not automatically adopt all FTC standards, courts give them due consideration and great weight when construing Florida law. 

Giving the FTC Endorsement Guides “due consideration and great weight,” the court held that the influencers should have disclosed their relationship with Blue Ice.  Therefore, the court denied Blue Ice's motion to dismiss on these grounds, finding that the plaintiffs had plausibly alleged that the influencers' failure to include the material connection disclosures were deceptive acts within the meaning of FDUTPA.  

Sava v. 21st Century Spirits, 2024 WL 3161625 (N.D. Ill.  2024).