Ariix, LLC v. Nutrisearch Corporation ( 2021 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ARIIX, LLC, No. 19-55343
Plaintiff-Appellant,
D.C. No.
v. 3:17-cv-00320-
LAB-BGS
NUTRISEARCH CORPORATION; LYLE
MACWILLIAM,
Defendants-Appellees. OPINION
Appeal from the United States District Court
for the Southern District of California
Larry A. Burns, Chief District Judge, Presiding
Argued and Submitted April 15, 2020
Pasadena, California
Filed January 22, 2021
Before: Daniel Paul Collins and Kenneth K. Lee, Circuit
Judges, and Gregory A. Presnell, * District Judge.
Opinion by Judge Lee;
Dissent by Judge Collins
*
The Honorable Gregory A. Presnell, United States District Judge
for the Middle District of Florida, sitting by designation.
2 ARIIX V. NUTRISEARCH
SUMMARY **
Lanham Act
The panel reversed the district court’s dismissal of a false
advertising claim under the Lanham Act and remanded for
further proceedings.
Addressing whether the First Amendment shields a
publisher of supposedly independent product reviews if it
has secretly rigged the ratings in favor of one company in
exchange for compensation, the panel held that this speech
qualifies as commercial speech. Accordingly, a non-favored
company may potentially sue the publisher for
misrepresentation under the Lanham Act, which prohibits
any person from misrepresenting her or another person’s
goods or services in “commercial advertising or promotion.”
Addressing whether the defendant made
misrepresentations in advertising or promotion, the panel
concluded that the plaintiff plausibly alleged that the
defendant’s publication was commercial speech, was
sufficiently disseminated, and contained actionable
statements of fact. The panel left for the district court to
decide, on remand, whether defendant’s publication was “for
the purpose of influencing consumers to buy defendant’s
goods or services.”
Dissenting, Judge Collins wrote that the plaintiff failed
to plead sufficient facts to show that it had an actionable
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
ARIIX V. NUTRISEARCH 3
claim for false advertising under the Lanham Act. He wrote
that, in his view, it was unnecessary to reach the question
whether the defendant’s publication amounted to
commercial speech for First-Amendment purposes because
the Lanham Act applies only to a subset of commercial
speech, and defendant’s publication did not fall within the
statute’s textual limitations.
COUNSEL
Aaron R. Gott (argued), Jarod M. Bona, David C. Codell,
and Luke Hasskamp, Bona Law PC, La Jolla, California, for
Plaintiff-Appellant.
Erik A. Christiansen (argued) and Alan S. Mouritsen,
Parsons Behle & Latimer, Salt Lake City, Utah, for
Defendants-Appellees.
OPINION
LEE, Circuit Judge:
This case addresses whether the First Amendment
shields a publisher of supposedly independent product
reviews if it has secretly rigged the ratings to favor one
company in exchange for compensation. We rule that this
speech qualifies as commercial speech only, and that a non-
favored company may potentially sue the publisher for
misrepresentation under the Lanham Act. We reverse the
district court’s dismissal of the complaint, and remand for
further proceedings.
4 ARIIX V. NUTRISEARCH
FACTUAL BACKGROUND
I. NutriSearch publishes a widely used nutritional
supplement guide.
NutriSearch Corporation regularly self-publishes the
NutriSearch Comparative Guide to Nutritional Supplements
(the “Guide”), a book that compares and reviews nutritional
supplements sold in the direct marketing industry. Written
by Lyle MacWilliam, the Guide has become a trusted name
among sales representatives in the direct marketing
supplement industry.
The Guide has two types of ratings. First, it
comparatively rates supplement products using a five-star
rating system based on 18 criteria. Second, companies
whose products receive five stars can obtain another
certification from NutriSearch. These certifications are
called NutriSearch Medals of Achievement. To obtain a
medal certification, a company must verify compliance with
the FDA’s pharmaceutical good manufacturing practices
(“GMP”) and obtain certification from an approved
laboratory that its label claims are true. The complaint
alleges that the medal certifications are “described as a
binary determination: either a company obtains [GMP]
certification and laboratory verification of the label claims,
or it does not.” In the sixth edition of the Guide, Usana
Health Science, Inc. was the only company that obtained the
highest ranking, the platinum medal.
NutriSearch portrays itself as an independent company
that presents only objective data and scientific analyses to
the public. For example, NutriSearch claims on its website
that it relies on scientific criteria to mathematically calculate
the ratings. Further, MacWilliam, the author of the Guide
and the former CEO of NutriSearch, has appeared on the
ARIIX V. NUTRISEARCH 5
Dr. Oz Show promoting the Guide as an evidence-based
book that does not have any “particular bias.” Most relevant
to this appeal, the inside of every edition of the Guide
through the fifth edition had the following disclaimer:
This guide is intended to assist in sorting
through the maze of nutritional supplements
available in the marketplace today. It is not a
product endorsement and does not make any
health claim. It simply documents recent
findings in the scientific literature.
This guide was not commissioned by any
public sector or private sector interest, or by
any company whose products may be
represented herein. The research,
development, and findings are the sole
creative effort of the author and NutriSearch
Corporation, neither of whom is associated
with any manufacturer or product
represented in this guide. (emphasis added).
NutriSearch removed the second paragraph from the sixth
edition of the Guide, which was published months after Ariix
filed this lawsuit.
II. Ariix alleges that NutriSearch rigged its ratings to
favor Usana under a hidden financial arrangement.
NutriSearch’s claims of neutrality are false, according to
Ariix, LLC, a nutritional supplement company that competes
fiercely with Usana. 1 Despite assertions of being a neutral
1
Because the complaint was dismissed at the pleading stage, we
assume for purposes of this appeal that the allegations in the complaint
6 ARIIX V. NUTRISEARCH
third-party reviewer, NutriSearch allegedly has a secret —
and mutually lucrative — relationship with Usana.
MacWilliam — who worked as a Usana sales
representative and served on its scientific advisory board —
at first conceived the Guide to boost sales of Usana products,
according to Ariix. MacWilliam remained a Usana sales
representative and advisory board member until another
company exposed this affiliation. When this happened,
MacWilliam allegedly told former Usana executives, “I
should not be on the board or a representative anymore
because it looks like I’m biased. I am going to create more
of a third-party appearance, but I’d like you to use me for
speaking and support me.” Usana agreed to this arrangement
in exchange for the number one rating in the Guide. Usana
also encourages its sales representatives to buy the Guide
and to refer to it in marketing pitches to customers.
Now, Usana annually pays hundreds of thousands of
dollars in speaking and promotion fees to NutriSearch and
MacWilliam in exchange for being rated the top supplement
company in the Guide. Usana’s payments to MacWilliam
allegedly account for more than 90% of his income.
The complaint alleges additional examples of
NutriSearch and MacWilliam colluding with Usana to tweak
the Guide’s ratings criteria to benefit Usana. NutriSearch
promotes certain scientific claims to dovetail with Usana’s
marketing campaign, or emphasizes certain ingredients that
Usana has added to its products to ensure that Usana attains
the top ranking in the Guide.
are true. Whether Ariix can prove these allegations, of course, is a
different question and is left for another day.
ARIIX V. NUTRISEARCH 7
In 2008, Usana withdrew its support for NutriSearch
after other companies obtained a medal certification in the
Guide. That caused NutriSearch’s sales and MacWilliam’s
speaking engagements to drop. A Usana executive
suggested that Usana would recommence providing fees and
speaking engagements if Usana obtained a number one
ranking in some way. NutriSearch then released a new
“Editor’s Choice” award and gave it to Usana. Afterwards,
MacWilliam approached Usana and, according to a former
Usana executive, stated that “I would like to do a tour for
Usana” and that “Usana is number one Editor’s Choice, and
I’ll travel from city to city so my wife and I can go on a
summer-long vacation and basically I want you to pay for
it.” Usana paid MacWilliam $90,000 for that tour.
III. NutriSearch improperly thwarts Ariix from
obtaining the top rating.
Ariix considers itself Usana’s fiercest competitor in both
sales and recruitment of independent sales representatives.
Because of this rivalry, Ariix asserts that NutriSearch has
improperly thwarted Ariix from obtaining the top medal
certification in the Guide.
Ariix first applied for a medal certification in 2014. The
application was denied because NutriSearch decided to stop
accepting reports and certifications from ISO-17025-
certified laboratories. 2 Even though prior medal recipients
used ISO-17205-certified labs, NutriSearch applied this new
2
There was apparently an NBC Dateline expose on something
called “dry-labbing” that caused NutriSearch to re-think its application
guidelines. The parties do not explain what dry-labbing is, and it is of
minimal significance to this appeal.
8 ARIIX V. NUTRISEARCH
restriction only on a future basis, exempting the previous
recipients (including Usana) from the new requirement.
In response, Ariix sought to obtain a new analysis of its
formulation by using new protocols and procedures that
followed NutriSearch’s new guidelines. When Ariix
submitted its new results, NutriSearch stated that “we can
insert your NutriSearch GOLD Medal of Achievement into
future printings of the existing guide once current stock has
been depleted.” NutriSearch released a new edition of the
Guide, the sixth edition, but it did not include Ariix’s medal
certification. NutriSearch then stopped responding to
Ariix’s inquiries.
Ariix also alleges that Usana in 2011 misappropriated
Ariix’s confidential information and draft marketing
materials about its debut product and gave them to
NutriSearch with the instruction “to run a new printing for
the express purpose of thwarting Ariix’s entry to the
market.” At first, NutriSearch rated this product 3.5 stars,
but after public criticism and incontrovertible evidence of
quality, NutriSearch revised the rating to 5 stars.
Finally, Ariix points to its failed attempts to engage
MacWilliam as a speaker. Ariix offered MacWilliam an
opportunity to speak at one of Ariix’s conventions, but in
September 2014, MacWilliam declined, explaining he was
not taking any more speaking engagements. MacWilliam,
however, continued to take speaking engagements with
Usana. When confronted with this apparent favoritism,
MacWilliam admitted that “[t]hey [Usana] will cut me off
the second I do this [speak for Ariix].”
ARIIX V. NUTRISEARCH 9
PROCEDURAL HISTORY
Ariix filed a complaint in district court against
NutriSearch and MacWilliam, alleging a false advertising
claim under Section 43(a) of the Lanham Act. See 15 U.S.C.
§ 1125(a)(1)(B). In response, the defendants moved to
dismiss for failure to state a claim.
The district court granted the defendants’ motion to
dismiss the complaint. The district court interpreted the
complaint as based on two sets of alleged
misrepresentations: (1) NutriSearch misrepresented Ariix
and its products as not being top quality and not worthy of a
medal certification, and (2) NutriSearch misrepresented
itself as objective and neutral, when it is in fact a “shill” for
Usana. In deciding the motion, the court held that the
Lanham Act does not apply to consumer product reviews,
even if they are biased, inaccurate, or tainted by favoritism.
It then reviewed the definition of “commercial advertising or
promotion” in § 1125(a)(1)(B) and found that the Guide did
not meet this definition because it was not commercial
speech and because its statements of neutrality were not
sufficiently disseminated. It also found that the statements
in the Guide were unactionable statements of opinion rather
than actionable statements of fact.
Ariix filed an amended complaint. The amended
complaint had more allegations about the relationship
among NutriSearch, MacWilliam, and Usana as well as more
details on the type of statements used to market the Guide.
Again, the defendants moved to dismiss for failure to state a
claim.
The district court granted the motion and dismissed the
action with prejudice. The court noted that it incorporated
much of the earlier order and affirmed its conclusion that the
10 ARIIX V. NUTRISEARCH
Guide as a whole and any statements in the Guide are not
commercial advertising within the scope of the Lanham Act.
It also rejected the argument that the relationship between
the defendants and Usana made it plausible that the Guide
was commercial advertising. The court found that none of
the asserted statements, including statements about the
ratings’ methodology and the failure to award the medal
certification, were actionable.
Ariix then timely filed its notice of appeal to this court.
JURISDICTION AND STANDARD OF REVIEW
We have jurisdiction under 15 U.S.C. § 1121(a) and
28 U.S.C. § 1291. “We review de novo the district court’s
dismissal for failure to state a claim.” Wilson v. Lynch,
835 F.3d 1083, 1090 (9th Cir. 2016). “When ruling on a
motion to dismiss, we accept all factual allegations in the
complaint as true and construe the pleadings in the light most
favorable to the nonmoving party.” Knievel v. ESPN,
393 F.3d 1068, 1072 (9th Cir. 2005). Our task is to
“determine whether [the well-pleaded factual allegations]
plausibly give rise to an entitlement to relief.” Ashcroft v.
Iqbal, 556 U.S. 662, 679 (2009). See also Starr v. Baca,
652 F.3d 1202, 1216 (9th Cir. 2011) (“[T]he factual
allegations that are taken as true must plausibly suggest an
entitlement to relief, such that it is not unfair to require the
opposing party to be subjected to the expense of discovery
and continued litigation.”).
DISCUSSION
The district court made two main determinations about
Ariix’s false advertising claim: The Guide is not
ARIIX V. NUTRISEARCH 11
commercial advertisement under the Lanham Act and it
lacks statements that are actionable. 3
I. Ariix has plausibly alleged that NutriSearch engaged
in commercial speech, but we remand for the district
court to consider the “purpose of influencing”
element under the Lanham Act.
The Lanham Act prohibits any person from
misrepresenting her or another person’s goods or services in
“commercial advertising or promotion.” 15 U.S.C.
§ 1125(a)(1)(B). The Act does not define “advertising” or
“promotion,” but this court has adopted the following
definition: (1) commercial speech, (2) by a defendant who is
in commercial competition with plaintiff, (3) for the purpose
of influencing consumers to buy defendant’s goods or
services, and (4) that is sufficiently disseminated to the
relevant purchasing public. See Coastal Abstract Serv., Inc.
v. First Am. Title Ins. Co., 173 F.3d 725, 735 (9th Cir. 1999).
The parties focus mainly on the first element: whether
NutriSearch’s Guide qualifies as “commercial speech.” If it
is not commercial speech, then the Lanham Act claim must
fail, as the Guide would receive robust protection under the
First Amendment. But if the Guide is commercial speech,
our First Amendment jurisprudence allows more
restrictions, including permitting a potential cause of action
under the Lanham Act. See Central Hudson, 447 U.S.
3There are five elements to a false advertising claim under
§ 1125(a), but the district court’s two determinations address only one
element (i.e., whether there was “a false statement of fact by the
defendant in a commercial advertisement about its own or another’s
product”). Wells Fargo & Co. v. ABD Ins. & Fin. Servs., Inc., 758 F.3d
1069, 1071–72 (9th Cir. 2014). We thus limit our analysis to this
element.
12 ARIIX V. NUTRISEARCH
at 562–63 (explaining that commercial speech receives
lesser protection than other types of speech). We address
each of the four elements below.
A. Whether the Guide constitutes commercial speech.
We first address whether Ariix’s complaint plausibly
alleges that the Guide is commercial speech. See Coastal
Abstract, 173 F.3d at 735. We disagree with the district
court’s conclusion that the Guide is not commercial speech
because the complaint plausibly alleges that the Guide is
essentially a sham marketing ploy intended to boost Usana
products.
Commercial speech is “usually defined as speech that
does no more than propose a commercial transaction.”
United States v. United Foods, Inc., 533 U.S. 405, 409
(2001). Courts view “this definition [as] just a starting
point,” however, and instead try to give effect to “a
‘common-sense distinction’ between commercial speech
and other varieties of speech.” Jordan v. Jewel Food Stores,
Inc., 743 F.3d 509, 516 (7th Cir. 2014) (quoting Ohralik v.
Ohio State Bar Ass’n, 436 U.S. 447, 455–56 (1978)).
Indeed, “[o]ur commercial speech analysis is fact-driven,
due to the inherent difficulty of drawing bright lines that will
clearly cabin commercial speech in a distinct category.”
First Resort, Inc. v. Herrera, 860 F.3d 1263, 1272 (9th Cir.
2017) (internal quotation marks omitted).
On its face, the Guide purportedly describes the science
of nutritional supplements and provides ratings for various
nutritional supplement products. 4 Based on this general
4
Although the Guide is central to both parties’ arguments, neither
party has attached the Guide as part of the record on appeal or filed the
ARIIX V. NUTRISEARCH 13
description alone, the Guide does not appear to propose a
commercial transaction. But speech that does not propose a
commercial transaction on its face can still be commercial
speech. See Bolger v. Youngs Drug Prods. Corp., 463 U.S.
60, 66–68 (1983) (finding that informational pamphlets that
“cannot be characterized merely as proposals to engage in
commercial transactions” were still commercial speech).
Because of the difficulty of drawing clear lines between
commercial and non-commercial speech, the Supreme Court
in Bolger outlined three factors to consider. “Where the
facts present a close question, ‘strong support’ that the
speech should be characterized as commercial speech is
found where [1] the speech is an advertisement, [2] the
speech refers to a particular product, and [3] the speaker has
an economic motivation.” Hunt v. City of L.A., 638 F.3d
703, 715 (9th Cir. 2011) (citing Bolger, 563 U.S. at 66–67).
These so-called Bolger factors are important guideposts, but
they are not dispositive. See Bolger, 463 U.S. at 67 n.14
(“Nor do we mean to suggest that each of the characteristics
present in this case must necessarily be present in order for
speech to be commercial.”); Dex Media West, Inc. v. City of
Seattle, 696 F.3d 952, 958 (9th Cir. 2012).
Applying those Bolger factors, we face a close question.
First, neither side materially disputes that the Guide is
not in the traditional form of an advertisement — for
example, there is no price or availability information listed.
But this fact alone does not tell us much, especially given
today’s sophisticated and subtle marketing campaigns. For
Guide as an exhibit in the district court. This was a curious decision.
Thus, our decision is limited to the descriptions of the Guide as alleged
in the complaint.
14 ARIIX V. NUTRISEARCH
example, companies now pay so-called “influencers” to
issue posts on social media touting their products or
services. 5 While such social media posts may not have the
indicia of a traditional advertisement, there can be little
doubt that these paid posts are in fact advertisements. See
Federal Trade Commission, FTC Staff Reminds
Influencers and Brands to Clearly Disclose Relationship
(Apr. 19, 2017), https://www.ftc.gov/news-events/press-
releases/2017/04/ftc-staff-reminds-influencers-brands-cle
arly-disclose (“After reviewing numerous Instagram posts
by celebrities, athletes, and other influencers, Federal
Trade Commission staff recently sent out more than
90 letters reminding influencers and marketers that
influencers should clearly and conspicuously disclose their
relationships to brands when promoting or endorsing
products through social media.”).
Second, neither side materially disputes that the Guide
refers to specific products. 6 But this element does not shed
much light, either. A publication that is not in a traditional
advertising format but that still refers to a specific product
can either be commercial speech — or fully protected
speech. Compare United States v. Wenger, 427 F.3d 840,
847–48 (10th Cir. 2005) (finding that a newsletter
5
A prominent influencer, Kim Kardashian West, stated in a
declaration that she receives $300,000 to $500,000 for a single Instagram
post endorsing a company’s product. See Declarations of Kim
Kardashian West, Todd Wilson, and Gregory Korn Filed in support of
Plaintiffs’ Motion for Entry of Default and Default Judgment at 4,
Kimsaprincess, Inc. v. Misguided USA (Finance) Inc., No. 19-cv-01258
(C.D. Cal. May 3, 2019), Dkt. No. 19-1.
6
NutriSearch argues in its answering brief that “the Guide does not
refer to ‘a specific product,’” but the very next sentence concedes that
“[t]o be sure, it refers to more than 1,000 nutritional supplements.”
ARIIX V. NUTRISEARCH 15
concerning investment advice is commercial speech even
though it “is concededly not a traditionally structured
advertisement”) with Commodity Trend Serv., Inc. v.
Commodity Futures Trading Comm’n, 149 F.3d 679, 686
(7th Cir. 1998) (citing cases that show that product reviews
are generally not commercial speech).
The third Bolger factor — whether the speaker had an
economic motivation — requires a more thorough
explanation. This factor asks whether the speaker acted
primarily out of economic motivation, not simply whether
the speaker had any economic motivation. See Procter &
Gamble Co. v. Amway, 242 F.3d 539, 552–53 (5th Cir.
2001), abrogated on other grounds by Lexmark Int’l, Inc. v.
Static Control Components, Inc., 572 U.S. 118 (2014) (“The
question whether an economic motive existed is more than a
question whether there was an economic incentive for the
speaker to make the speech; the Bolger test also requires that
the speaker acted substantially out of economic motivation.”
(footnote omitted)); Am. Future Sys., Inc. v. Pennsylvania
State Univ., 752 F.2d 854, 862 n.26 (3d Cir. 1984) (“The
critical question would be whether the primary purpose of
the organization was to sponsor religious activity or to sell
Bibles, and the Bolger criteria would be applied in an
attempt to answer this question.”).
Indeed, not all types of economic motivation support
commercial speech. A simple profit motive to sell copies of
a publication or to obtain an incidental economic benefit,
without more, does not make something commercial speech.
Otherwise, virtually any newspaper, magazine, or book for
sale could be considered a commercial publication. See, e.g.,
Bolger, 463 U.S. at 67 (“Finally, the fact that Youngs has
an economic motivation for mailing the pamphlets would
clearly be insufficient by itself to turn the materials into
16 ARIIX V. NUTRISEARCH
commercial speech.”); Dex Media, 696 F.3d at 960 (finding
that the financial benefit obtained from publishing yellow
pages directories could not characterize the publication as
commercial); Gordon & Breach Sci. Publishers S.A. v. Am.
Inst. of Physics, 859 F. Supp. 1521, 1541 (S.D.N.Y. 1994)
(“The fact that AIP and APS stood to benefit from publishing
Barschall’s results—even that they intended to benefit—is
insufficient by itself to turn the articles into commercial
speech.”).
At the same time, however, economic motivation is not
limited simply to the expectation of a direct commercial
transaction with consumers. Courts have found commercial
speech even when it involves indirect benefits, such as
benefits to employee compensation (First Resort, 860 F.3d
at 1273), improvements to a brand’s image (Jordan,
743 F.3d at 519–20), general exposure of a product
(Facenda v. N.F.L. Films, Inc., 542 F.3d 1007, 1017 (3d Cir.
2008)), and protection of licensees’ interests (Handsome
Brook Farm, LLC v. Humane Farm Animal Care, Inc.,
193 F. Supp. 3d 556, 568–69 (E.D. Va. 2016)). Importantly,
the type of economic motivation is not the focus; rather, the
crux is on whether the speaker had an adequate economic
motivation so that the economic benefit was the primary
purpose for speaking. 7
7
We do not intend to collapse the Bolger factors into this one factor;
no one factor will be dispositive. As the Fifth Circuit pointed out, speech
that is mainly motivated out of economic benefit can still be fully
protected, such as in labor cases. See Procter, 242 F.3d at 553 & n.30.
Nor do we suggest that any economic benefit satisfies this factor. Rather,
the question is context-specific and requires determining whether the
speaker’s purpose primarily turns on the economic benefit that the
speaker receives from the speech.
ARIIX V. NUTRISEARCH 17
With the above in mind, we find that Ariix has plausibly
alleged that NutriSearch and MacWilliam published the
Guide mainly with the economic goal of furthering their own
self-interests beyond simply benefiting from sales of the
publication. Specifically, Ariix has alleged enough to make
it plausible that NutriSearch and MacWilliam published the
Guide mainly to reap the financial benefits of a hidden
marketing arrangement with Usana rather than to inform
consumers about nutritional supplements. For example:
• To begin with, MacWilliam, who worked
for Usana, concocted the Guide to ratchet
up sales for Usana products, according to
the complaint.
• Ariix alleges a specific conversation in
which Usana agreed to pay
MacWilliam’s speaking fees if
NutriSearch gave Usana the “number one
rating.” Since then, MacWilliam and
NutriSearch allegedly receive hundreds
of thousands of dollars annually in
speaking and other fees from Usana.
• Ariix also alleges an incident in which
Usana threatened to pull its support for
NutriSearch when other companies
obtained a medal certification making
them appear equal to Usana. In response,
NutriSearch created a new “Editor’s
Choice” award to give to Usana, the only
company to receive this award.
MacWilliam then used this award as a
reason to persuade Usana to pay him for
18 ARIIX V. NUTRISEARCH
a “summer-long vacation” in which he
promoted Usana.
We do not, however, rely only on the allegations of
payments. Many of Ariix’s allegations raise significant
doubts about whether the Guide is an objective compilation
of product reviews and suggest that the Guide is instead a
sham marketing scheme intended to benefit Usana.
First, the disclaimer included in the first five editions of
the Guide stated that the book is “the sole creative effort of
the author and NutriSearch Corporation, neither of whom is
associated with any manufacturer or product represented in
this guide.” That disclosure statement is false, at least
according to the allegations in the complaint. Indeed, the
Guide’s genesis was as a marketing tool to sell Usana
products. 8 Today, Usana even uses MacWilliam as part of
its image advertising; the complaint includes an image of
MacWilliam that states that “I have full confidence that
USANA will once again stand out as an industry leader and
will continue to receive an elite standing in the new
Comparative Guide.” That NutriSearch and MacWilliam
chose such a strongly worded yet false disclaimer —
disclaiming any association with all manufacturers in the
Guide despite having obvious ties to Usana — raises
8
The district court noted that the factual allegations do not show that
the defendants should be treated as a single entity subject to the same
conflicts of interest. But showing that the defendants are so closely
related as to constitute a single entity is not required to plausibly allege
that the Guide was published primarily for economic benefit. We are not
asking whether MacWilliam’s actions influence NutriSearch or vice
versa, but whether allegations involving either defendant reveal the
primary purpose of the Guide.
ARIIX V. NUTRISEARCH 19
substantial questions about the Guide’s true purpose, if the
allegations in the complaint are true.
Ariix also alleges collusion about how the Guide’s
criteria are chosen. MacWilliam and NutriSearch allegedly
re-wrote the fifth edition of the Guide to promote vitamin D
and iodine content because it would coincide with Usana’s
new product formulations and marketing claims. In
addition, the defendants allegedly coordinated with Usana to
have the sixth edition focus on “cell-signaling” to match
Usana’s new marketing campaign focused on cell-signaling.
Finally, the complaint alleges that the defendants reworked
the Guide’s medal certifications to award Usana the highest
medal certification (the Platinum Medal of Achievement),
something no other company earned.
To be clear, our decision today is a narrow one that is
tied specifically to the troubling allegations in this case: they
plausibly suggest that the Guide is more like a sophisticated
marketing sham rather than a product review guide. Today,
consumers face waves of advertisements amid a sea of
product choices. To navigate the seemingly unending
stream of advertisements, consumers often depend on
independent reviews for candid and accurate assessments.
But when someone falsely claims to be independent, rigs the
ratings in exchange for compensation, and then profits from
that perceived objectivity, that speaker has drowned the
public trust for economic gain. Society has little interest in
protecting such conduct under the mantle of the First
Amendment. Cf. Central Hudson, 447 U.S. at 563 (“[T]here
can be no constitutional objection to the suppression of
commercial messages that do not accurately inform the
public about lawful activity.”). Such speech becomes more
like “the offspring of economic self-interest” that “is a hardy
20 ARIIX V. NUTRISEARCH
breed of expression that is not ‘particularly susceptible to
being crushed by overbroad regulation.’” Id. at 564 n.6.
We are guided by a common-sense distinction between
protected speech and commercial speech — in this case,
legitimate product reviews versus paid product promotion —
in determining whether the Guide is commercial speech. Cf.
Wenger, 427 F.3d at 848 (“While disinterested investment
advice will still qualify for full First Amendment protection,
paid publicists’ speech is grounded in commercial
transactions of the kind that the state has traditionally
regulated.”). Simply put, paid promotion is commercial
speech.
Though NutriSearch urges us to rule that biased and
inaccurate reviews are fully protected speech, Ariix does not
allege that the Guide is simply biased or inaccurate. A mere
failure to disclose bias or financial interest would not
necessarily make speech commercial. Here, though, we face
allegations that the defendants conceived the Guide to juice
sales of Usana products, actively misled the public about
their supposed independence, and fiddled with their own
ratings criteria to boost a favored company that lavishes
them with hundreds of thousands of dollars in compensation.
Put another way, it is more paid promotion than product
review, according to the complaint. It is not controversial to
conclude that “liability can arise under the Lanham Act if
websites purporting to offer reviews are in reality stealth
operations intended to disparage a competitor’s product
while posing as a neutral third party.” GOLO, LLC v.
HighYa, LLC, 310 F. Supp. 3d 499, 505 (E.D. Pa. 2018). In
short, taking the allegations in Ariix’s complaint as true at
the pleading stage, we hold that Ariix plausibly alleged that
the Guide amounts to commercial speech.
ARIIX V. NUTRISEARCH 21
But that does not end our inquiry. Commercial speech
can lose its commercial character when it is “inextricably
intertwined” with fully protected speech. Dex Media,
696 F.3d at 958. If “[n]o law of man or of nature makes it
impossible” to present the noncommercial aspects of the
speech without the commercial aspects, then the
noncommercial speech is not inextricably intertwined with
the commercial speech. Bd. of Trs. of State Univ. of N.Y. v.
Fox, 492 U.S. 469, 474–75 (1989) (finding that the home
economics elements of Tupperware sales presentations were
not inextricably intertwined with the sales pitches done in
campus dormitories).
The Guide does include what appears to be fully
protected speech: It has an “informational” part that
describes the benefits and science of nutritional
supplements. But the commercial parts of the Guide —
specifically, the allegedly rigged ratings of nutritional
supplements — are not so connected to this informational
section to lose their commercial character. On the contrary,
they seem easily separable. The Guide is described as
consisting of two individual sections: an informational
section and a ratings section. Nothing prevents NutriSearch
from publishing the informational section as a separate
publication from its ratings. Indeed, the Guide does not gain
full First Amendment protection simply because it includes
a distinct summary of scientific ideas as a prelude to its
supposed product reviews. See Central Hudson, 447 U.S.
at 562 n.5 (rejecting the notion that speech that merely “links
a product to a current public debate” gains broad
constitutional protection given that “many, if not most,
products may be tied to public concerns with the
22 ARIIX V. NUTRISEARCH
environment, energy, economic policy, or individual health
and safety”). 9
B. Whether NutriSearch is in commercial competition
with Ariix.
The next element is whether the defendant is in
commercial competition with the plaintiff. Coastal
Abstract, 173 F.3d at 735. The district court, though noting
that this element “is likely in need of revision,” did not reach
9
On a related note, the defendants argue that we must construe the
Lanham Act to not apply to the Guide because otherwise this would
violate their First Amendment rights to speak on matters of public
concern. But as noted, false advertising claims under the Lanham Act
apply only to commercial speech. Coastal Abstract, 173 F.3d at 735.
And the “Constitution [] accords a lesser protection to commercial
speech than to other constitutionally guaranteed expression,” and “there
can be no constitutional objection to the suppression of commercial
messages that do not accurately inform the public about lawful activity.”
Central Hudson, 447 U.S. at 562–63. See also Bolger, 463 U.S. at 68(“A company has the full panoply of protections available to its direct
comments on public issues, so there is no reason for providing similar
constitutional protection when such statements are made in the context
of commercial transactions.”). Because we hold that Ariix plausibly
alleged that the Guide is commercial speech, there are no First
Amendment concerns in applying § 1125(a)(1)(B) to the Guide. The
cases cited by NutriSearch do not apply. See United States v. Alvarez,
617 F.3d 1198, 1206 n.6 (9th Cir. 2010) (“Here, there is no suggestion
that the Act targets commercial speech, and therefore we do not address
commercial speech given the unique way in which it is treated under the
First Amendment.” (footnote omitted)); Nike, Inc. v. Kasky, 539 U.S.
654, 679 (2003) (Breyer, J., dissenting from dismissal of writ as
improvidently granted) (addressing “a private ‘false advertising’ action
brought on behalf of the State, by one who has suffered no injury” and
noting that the “delegation of state authority to private individuals
authorizes a purely ideological plaintiff, convinced that his opponent is
not telling the truth, to bring into the courtroom the kind of political battle
better waged in other forums”).
ARIIX V. NUTRISEARCH 23
this question, and the parties agreed that Lexmark Int’l, Inc.
v. Static Control Components, Inc., 572 U.S. 118 (2014)
likely abrogated this element. NutriSearch has waived any
argument on this ground, given that it “agree[d] that a
plaintiff is no longer required to show that a
misrepresentation was made by a commercial competitor to
sue under § 1125(a)(1)(B).” We therefore assume without
deciding that Ariix need not satisfy this element.
C. Whether the Guide was intended to influence
consumers to buy the defendants’ goods.
The third element is whether the advertisement or
publication was issued “for the purpose of influencing
consumers to buy defendant’s goods or services.” Coastal
Abstract, 173 F.3d at 735 (emphasis added).
Here, though, the alleged advertising (the Guide) is
intended to help Usana’s goods, not NutriSearch’s product.
The district court did not rule on this issue, and the parties
have not briefed this issue before this court. We thus remand
for the district court to consider this question in the first
instance. 10
10
The dissent’s analysis of this statutory requirement is well taken.
But because the parties have not briefed this issue and the district court
did not rule on it, we remand it for further consideration. In considering
this question, though, it may be useful to determine whether the
defendants and Usana had an agency relationship; for example, it might
be the case that the defendants were acting as agents of Usana and
therefore had a vested interest in the goods that Usana sold, which might
be enough to satisfy this element.
24 ARIIX V. NUTRISEARCH
D. Whether the Guide was sufficiently disseminated.
The last element is whether the publication was
sufficiently disseminated to the relevant purchasing public.
Coastal Abstract, 173 F.3d at 735. To be “sufficiently
disseminated,” the actions must be “part of an organized
campaign to penetrate the relevant market,” which typically
involves “widespread dissemination within the relevant
industry.” Fashion Boutique of Short Hills, Inc. v. Fendi
USA, Inc., 314 F.3d 48, 57 (2d Cir. 2002). See also Newcal
Indus., Inc. v. Ikon Office Sol., 513 F.3d 1038, 1054 (9th Cir.
2008) (concluding that allegedly false statements were
sufficiently disseminated because they were made in
promotional literature distributed to thousands of sales
accounts).
The Guide plausibly fits this standard, given that Ariix
alleges that the “professional edition [of the Guide] is
specifically designed for and marketed to tens of thousands
of Usana sales representatives, who are told that referring
prospective customers to the guide is one of the most
effective ways to sell Usana products.” 11
11
The district court mistakenly analyzed whether statements within
the Guide were sufficiently disseminated as an independent issue from
whether the Guide as a whole was sufficiently disseminated. Because
the district court concluded that the Guide as a whole was not
commercial speech, however, that should have ended the inquiry. See
Dex Media, 696 F.3d at 957–58. If the Guide as a whole is not
commercial speech, then statements within the Guide could not have
been commercial advertising.
ARIIX V. NUTRISEARCH 25
II. Ariix has plausibly alleged that the Guide contains
misrepresentations.
For NutriSearch and MacWilliam to be liable for false
advertising under the Lanham Act, the Guide must include
false or misleading representations of fact, not simply
statements of opinion. See Coastal Abstract, 173 F.3d
at 730. An actionable statement is “a specific and
measurable claim, capable of being proved false or of being
reasonably interpreted as a statement of objective fact.” Id.
at 731. See also Newcal Indus., 513 F.3d at 1053 (“Thus, a
statement that is quantifiable, that makes a claim as to the
‘specific or absolute characteristics of a product,’ may be an
actionable statement of fact.”). We have explained that “a
false advertising claim may be based on implied statements”
as long as those statements are specific and deceptive.
Prager Univ. v. Google LLC, 951 F.3d 991, 1000 (9th Cir.
2020). Statements of opinion and puffery, however, are not
actionable. See Newcal, 513 F.3d at 1053.
The comparative five-star ratings in the Guide are not
actionable. They are simply statements of opinion about the
relative quality of various nutritional supplement products.
Ariix insists that these “star” ratings are factual because the
Guide purports to rely on scientific and objective criteria.
But there is an inherently subjective element in deciding
which scientific and objective criteria to consider. For
example, publications that rank colleges or law schools
purportedly rely on objective criteria (e.g., acceptance rates,
test scores, class size, endowment), but selecting those
criteria involves subjective decision-making. Ariix also
points to statements made by MacWilliam asserting that he
“didn’t want to put our particular bias into it” or that the
Guide relies on a “higher standard of evidence.” But such
unquantifiable assertions are “classic, non-actionable
26 ARIIX V. NUTRISEARCH
opinions or puffery.” Prager Univ., 951 F.3d at 1000
(finding that lofty but vague statements that appeal to free
speech and open dialogue are not actionable).
Ariix is on more fertile ground when it refers to the
disclaimer of independence found in the fifth edition of the
Guide. The claim that NutriSearch and MacWilliam are not
associated with any manufacturer listed in the Guide is a
statement of fact that can be proven true or false.
In addition, the failure to award Ariix a medal
certification presents specific and measurable statements
about Ariix. Ariix describes the medal certification as “a
binary determination” based on two falsifiable criteria:
compliance with the FDA’s pharmaceutical good
manufacturing practices and certification of product labels’
claims from an approved laboratory. By not awarding Ariix
a medal certification — despite Ariix being eligible for such
an award — the Guide falsely implies to consumers that
Ariix did not comply with the FDA’s GMPs or that it did not
obtain the appropriate laboratory certification. 12 This is
false, at least based on the allegations in the complaint.
Apparently, NutriSearch itself admitted that Ariix achieved
certification pending final laboratory reports and even
offered to “insert your NutriSearch GOLD Medal of
Achievement into future printings of the existing guide.”
Indeed, the complaint alleges that Ariix was the only
qualified applicant to have followed NutriSearch’s new
application guidelines, yet it still did not receive the
12
The district court rejected the notion that compliance with the
FDA’s GMPs can be a statement of fact because consumers would
merely “conclude that perhaps a manufacturer did not follow practices
that the FDA considered good.” Whether Ariix followed those practices,
however, is a question of fact.
ARIIX V. NUTRISEARCH 27
certification. These implications are specific, measurable,
and capable of being falsified, so they are actionable
statements for a false advertising claim under
§ 1125(a)(1)(B).
CONCLUSION
We find that Ariix’s allegations are enough to overcome
the defendants’ challenges. Ariix plausibly alleges that the
Guide is commercial speech, is sufficiently disseminated,
and contains actionable statements of fact. We make no
decision, however, about whether Ariix meets the Lanham
Act’s third element of the definition of “commercial
advertising or promotion” — i.e., whether the Guide was
“for the purpose of influencing consumers to buy
defendant’s goods or services” — and leave this issue for the
district court to decide in the first instance. We reverse and
remand to the district court for further proceedings
consistent with this opinion.
REVERSED AND REMANDED.
COLLINS, Circuit Judge, dissenting:
In my view, Plaintiff-Appellant Ariix, LLC, a
manufacturer of nutritional supplements, has failed to plead
sufficient facts to show that it has an actionable claim for
false advertising under § 43(a)(1)(B) of the Lanham Act
against Defendants-Appellees NutriSearch Corporation and
Lyle MacWilliam (“Defendants”). Defendants are
respectively the publisher and author of the NutriSearch
Comparative Guide to Nutritional Supplements (“Guide”), a
guidebook that evaluates and rates hundreds of nutritional
supplements, and Ariix complains that the Guide’s reviews
28 ARIIX V. NUTRISEARCH
are really covert advertisements for Usana Health Sciences,
Inc. (“Usana”), Ariix’s primary competitor. In reversing the
district court’s dismissal of Ariix’s novel complaint, the
majority rests on the dubious premise that the Guide
constitutes “commercial speech,” and it remands for
consideration of additional issues. Because I think it is
already clear that Ariix cannot state a claim under the
Lanham Act, I respectfully dissent.
I
The operative complaint in this case asserts a single
cause of action for false advertising in violation of
§ 43(a)(1)(B) of the Lanham Act, 15 U.S.C.
§ 1125(a)(1)(B). That section imposes civil liability on:
[a]ny person who, on or in connection with
any goods or services, . . . uses in commerce
. . . any . . . false or misleading description of
fact, or false or misleading representation of
fact, which . . . in commercial advertising or
promotion, misrepresents the nature,
characteristics, qualities, or geographic
origin of his or her or another person’s goods,
services, or commercial activities.
Id. (emphasis added). To succeed on such a claim, Ariix thus
must plead and prove, inter alia, that Defendants made the
challenged false or misleading representations “in
commercial advertising or promotion.” Id. The theory of
Ariix’s complaint is that, due to MacWilliam’s and
NutriSearch’s financial relationships with Usana, the Guide,
or at least portions of it, should be deemed to be “commercial
advertising or promotion” of Usana’s products within the
meaning of § 43(a)(1)(B). Ariix alleges that the challenged
statements in the Guide were false and misleading because
ARIIX V. NUTRISEARCH 29
Defendants’ ties to Usana were concealed and because the
Guide falsely stated or implied that its evaluations were
independent, neutral, and objective when in fact they were
biased and rigged. 1
The majority concludes that, under Bolger v. Youngs
Drug Products Corp., 463 U.S. 60 (1983), “Ariix plausibly
alleged that the Guide amounts to commercial speech” for
First-Amendment purposes, and it reverses the district
court’s contrary conclusion and remands for further
proceedings. See Maj. Opin. at 14–16, 21–22, 27. In my
view, it is unnecessary to reach this broader (and troubling)
constitutional question, because the Lanham Act applies
1
Some aspects of the complaint appear to rely on the alternative
theory that Defendants have falsely advertised the Guide itself, rather
than Usana’s products, but such a theory adds nothing here. The only
false statements the complaint alleges that Defendants made in
advertising the Guide were ones repeating the Guide’s claim that its
ratings and methods were objective and unbiased. But we have stated
that “advertisements that accurately reprinted false claims contained in
the advertised works were protected from tort liability to the same degree
as the underlying works.” Charles v. City of Los Angeles, 697 F.3d 1146,
1154 (9th Cir. 2012). This theory is thus not independent of, or
alternative to, Ariix’s theory that the Guide itself contains only lesser-
protected commercial speech. Moreover, the complaint fails to plead
sufficient facts to raise a plausible inference that any injury to Ariix is
proximately caused by the advertising of the Guide, as opposed to the
product reviews contained in the Guide. See Lexmark, 572 U.S. at 132–
34 (proximate causation is an essential element of a claim under
§ 43(a)(1)(B)). Ariix does not, for example, assert that it sells a
competing guide whose sales suffered by alleged false advertising for
Defendants’ Guide. The viability of Ariix’s complaint consequently
turns entirely on whether the Guide itself, or portions of it, constitute
“commercial advertising or promotion” of Usana’s products within the
meaning of the Lanham Act.
30 ARIIX V. NUTRISEARCH
only to a subset of commercial speech, and the Guide does
not fall within the statute’s textual limitations.
A
As the wording of the Act confirms, the “commercial
advertising or promotion” covered by § 43(a)(1)(B) does not
“‘encompass all commercial speech.’” Prager Univ. v.
Google LLC, 951 F.3d 991, 1000 (9th Cir. 2020) (quoting
Fashion Boutique of Short Hills, Inc. v. Fendi USA, Inc.,
314 F.3d 48, 57 (2d Cir. 2002)). Rather, relying upon the
test articulated in Gordon & Breach Science Publishers S.A.
v. American Institute of Physics, 859 F. Supp. 1521(S.D.N.Y. 1994), we have held that “commercial advertising
or promotion” embraces only that subset of “commercial
speech” that is (1) made “‘by a defendant who is in
commercial competition with plaintiff’”; (2) “‘for the
purpose of influencing consumers to buy defendant’s goods
or services’”; and (3) “‘disseminated sufficiently to the
relevant purchasing public to constitute “advertising” or
“promotion” within that industry.’” Coastal Abstract Serv.,
Inc. v. First Am. Title Ins. Co., 173 F.3d 725, 735 (9th Cir.
1999) (quoting Gordon & Breach, 859 F. Supp. at 1536). I
address each of these three statutory limitations in turn.
As the majority notes, see Maj. Opin. at 22–23,
Defendants expressly concede—correctly, in my view—that
the first of these three limitations did not survive the
Supreme Court’s decision in Lexmark International, Inc. v.
Static Control Components, Inc., 572 U.S. 118 (2014).
Although it is true that Lexmark specifically declined to
decide whether the communications at issue in that case
constituted “commercial advertising or promotion,” id. at
123 n.1, the Court unanimously and explicitly rejected
lower-court rulings—including from this court—that had
limited standing to sue for false advertising under § 43(a)
ARIIX V. NUTRISEARCH 31
only to competitors of the defendant, id. at 136. The Court
rejected that limitation because it could not be found in the
text of the Lanham Act, nor could it be deduced from the
limitations that are in that text. Id. at 136–39. Given that
(1) a competitors-only limitation similarly lacks any textual
grounding in the phrase “commercial advertising or
promotion,” see Grubbs v. Sheakley Grp., Inc., 807 F.3d
785, 801 (6th Cir. 2015); Fashion Boutique, 314 F.3d at 58;
(2) Gordon & Breach derived this atextual limitation from
its review of pre-Lexmark caselaw, see 859 F. Supp. at1532–33; and (3) Lexmark’s emphatic rejection of a
competitors-only limitation would be wholly undone by
continued adherence to this aspect of Gordon & Breach, the
conclusion is inescapable that Lexmark precludes limiting
“commercial advertising or promotion” only to the
commercial advertising and promotion of a direct
competitor. See Handsome Brook Farm, LLC v. Humane
Farm Animal Care, Inc., 700 F. App’x 251, 257 (4th Cir.
2017) (“Taking into account Lexmark, the lack of a
competition requirement in the statute’s false advertising
prohibition, the fact that our sister circuits adopting the
competition factor did so before Lexmark, and that the only
circuit to examine the Gordon & Breach factors post-
Lexmark has rejected the competition factor, we also do not
require a competitive relationship when determining
whether a communication is advertising or promotion.”); but
see Straus v. Angie’s List, Inc., 951 F.3d 1263, 1268–69 &
n.5 (10th Cir. 2020).
Nothing in Lexmark, however, undermines Gordon &
Breach’s sufficient-dissemination requirement, which
properly recognizes that “commercial advertising” typically
refers to speech that is generally distributed to persons in the
relevant market. See Advertising, Black’s Law Dictionary
(11th ed. 2019) (“The action of drawing the public’s
32 ARIIX V. NUTRISEARCH
attention to something to promote its sale.” (emphasis
added)). I agree with the majority that, as to the Guide, this
requirement was adequately pleaded in Ariix’s complaint.
See Maj. Opin. at 24.
That leaves only Gordon & Breach’s requirement that
the commercial advertising be “for the purpose of
influencing consumers to buy defendant’s goods or
services.” 859 F. Supp. at 1536 (emphasis added); see
Coastal Abstract, 173 F.3d at 735. That limitation also flows
from the statutory language and remains valid after Lexmark.
By referring to representations that a “person” makes “in
commercial advertising or promotion,” 15 U.S.C.
§ 1125(a)(1)(B), the Lanham Act clearly refers to
commercial speech promoting sales of goods that may fairly
be said to be those of that “person,” i.e., the defendant. We
do not normally think of third-party product reviews or
endorsements as being that person’s “commercial
advertising”—at least when they are not done on behalf of
the product’s manufacturer or seller. See Bose Corp. v.
Consumers Union of U.S., Inc., 466 U.S. 485, 504 n.22
(1984) (“[A] commercial advertiser usually ‘seeks to
disseminate information about a specific product or service
he himself provides and presumably knows more about than
anyone else.’” (emphasis added) (quoting Virginia State Bd.
of Pharmacy v. Virginia Citizens Consumer Council, Inc.,
425 U.S. 748, 772 n.24 (1976))). Indeed, the Supreme Court
has “squarely held” that third-party product reviews—
favorable or unfavorable—are fully protected speech. Lowe
v. SEC, 472 U.S. 181, 210 n.58 (1985) (citing Bose, 466 U.S.
at 513).
But in stating that the Lanham Act only reaches
advertisements for one’s own goods and services, Gordon &
Breach and Coastal Abstract did not thereby strictly limit the
ARIIX V. NUTRISEARCH 33
statute’s reach just to advertising by manufacturers and
distributors themselves. Thus, for example, when an entity
acts as an agent of a manufacturer in making a product
review, then that entity acts on behalf of the manufacturer
and is in that sense advertising its own product. “[P]aid
publicists’ speech” about their payor’s products is
commercial speech. United States v. Wenger, 427 F.3d 840,
848 (10th Cir. 2005); see also Maj. Opin. at 20 (“[P]aid
promotion is commercial speech.”). In addition, there may
be other endorsers who have such a direct financial stake in
specific sales of a product—such as a cut of each sale—that
it may likewise be fair to say that they are thereby
advertising their own product. See, e.g., Handsome Brook,
700 F. App’x at 253, 260–61 (nonprofit organization that
certified egg producers as “humane” and that received
5 cents for every 30 dozen eggs sold by certified producers
was engaged in commercial advertising by promoting such
certified-producer sales). Each of these scenarios is
consistent with Gordon & Breach’s common-sense rule that,
as used in the Lanham Act, “commercial advertising”
connotes speech endorsing the speaker’s products.
While this speaker’s-product limitation on the scope of
§ 43(a)(1)(B) may not exactly parallel the outermost
boundary of what constitutes “commercial speech” under the
First Amendment, the overlap is considerable. We know
from Lowe and Bose that the speaker’s connection (or lack
of connection) to a product is, at the very least, a critical
consideration in determining whether that speaker’s
comments about that product are “commercial speech”
under the First Amendment. Moreover, the Lanham Act’s
bright-line limitation to speech about the speaker’s products
stays well within constitutional limits and avoids more
difficult questions, such as the extent to which the more
expansive conception of “commercial speech” in Bolger
34 ARIIX V. NUTRISEARCH
may be applied to an entity that is not speaking about its own
products. In holding that substantive mailers about
contraceptives nonetheless qualified as “commercial
speech,” the Court in Bolger addressed only such speech by
the product manufacturer, see 463 U.S. at 67–68; it did not
address whether the same looser constitutional standards
apply when the speech is made by other types of speakers.
The majority concludes that Bolger does apply in the latter
context, and its ensuing application of Bolger’s multi-factor
test to the Guide relies heavily on subjective expectations of
indirect economic benefits from speech praising another’s
products. See Maj. Opin. at 17–18. The result is a
substantial amount of uncertainty as to the scope of First
Amendment protection for product reviews, a result that I
find doubtful and disquieting.
In light of these considerations, I am unwilling to
overlook the fact that the Lanham Act applies only to
commercial advertising about the speaker’s products.
Moreover, even though the district court and the parties have
not directly addressed this limitation, they have done so
indirectly. The overwhelming focus of both the ruling below
and the briefing in this court has been on the strength of
various connections between Defendants and Usana and
whether those connections are sufficient to render the speech
in question “commercial speech” for First Amendment
purposes. Given the very substantial overlap between that
constitutional “commercial speech” issue and the statutory
“speaker’s product” issue, I see no reason not to resolve the
parties’ arguments through their proper statutory lens. And
the doctrine of constitutional avoidance—which Defendants
have specifically invoked in this court—confirms that we
should not disregard any relevant statutory limitation that,
by either eliminating or narrowing the constitutional
question we must consider, would lessen any constitutional
ARIIX V. NUTRISEARCH 35
concerns. Cf. Ashwander v. Tennessee Valley Auth.,
297 U.S. 288, 347 (1936) (Brandeis, J. concurring).
I therefore would not address the broader constitutional
questions that the majority decides. Instead, in my view, the
more limited question before us is whether Ariix has alleged
sufficient facts to show that the Guide, or a subset of it, is
commercial speech that influences the target audience to
purchase goods that are, in some viable sense, those of
Defendants. Ariix has failed to do so.
B
The operative complaint alleges that the Guide, or at
least portions of it, constitute “promotional material that is
bought and paid for by Usana” and “coordinated in advance
of publication.” This allegation sounds superficially
promising, because it seems to suggest that Defendants may
have acted on Usana’s behalf or at its direction by secretly
making, in exchange for compensation, specific changes
requested by Usana in its own or competitors’ product
reviews in the Guide. For the reasons explained earlier, I
would agree that, if Defendants covertly acted subject to
Usana’s advance direction and control in preparing the
content of the Guide, then Defendants could in that sense be
said to be promoting their own products by promoting
Usana’s products. See supra at 32–33. But Ariix’s
complaint contains no allegations that would support the
view that Defendants are Usana’s agents or that Defendants
altered or placed specific content in the Guide’s reviews at
Usana’s direction. See Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). Instead, the complaint’s factual allegations
establish, at most, that Defendants produced biased reviews
in the craven hope that Usana would then act in ways that
were economically favorable to Defendants. That is not
enough.
36 ARIIX V. NUTRISEARCH
The complaint alleges, for example, that when Usana
was rated “number one” in the Guide, Usana was willing to
pay MacWilliam as a speaker to promote its products, and it
also encouraged its sales representatives to purchase the
Guide. This resulted in “hundreds of thousands of dollars
per year” of economic benefit to Defendants. But when
Usana shared the top category with other additional
companies in 2008, Usana ceased encouraging sales of the
book and declined to give MacWilliam speaking
engagements. When MacWilliam inquired about these
changes, an Usana executive said that “we don’t want to
stand up and say ‘we’re one of the five best.’ We like the
fact that we’re number one.” When MacWilliam asked if it
would “help if Usana is number one in some way,” the
executive responded, “of course it would help.” The
complaint alleges that Defendants then came up with a new
“Editor’s Choice” award and gave it to Usana. Having done
so, MacWilliam then approached Usana and was paid
$90,000 for a specific tour for Usana the following summer.
Defendants thereafter took steps to ensure that Usana would
retain the top spot by repeatedly revising their criteria “in
order to weight [them] in Usana’s favor.”
These allegations establish that Usana liked favorable
reviews and that Usana promoted the Guide and its author
when the reviews were distinctly superlative and did not do
so when they were not. That does not raise a plausible
inference that Defendants, in the Guide, were thereby
reviewing their own products. That Defendants wrote
obsequious reviews in the hope that Usana would be pleased
and buy more Guides or give MacWilliam speaking
engagements does not make them Usana’s agents in writing
those reviews. Nor does it establish that they acted on
Usana’s behalf or subject to its control in doing so. To be
sure, MacWilliam acted as Usana’s agent when he did paid
ARIIX V. NUTRISEARCH 37
speaking tours expressly promoting Usana’s products, but
the complaint does not rest on the theory that this open
hawking of Usana’s products by MacWilliam violated the
Lanham Act, and the majority does not endorse any such
theory here. Rather, the complaint’s theory is that
Defendants violated the Act by writing a biased Guide that
favored Usana without disclosing Defendants’ financial ties
to Usana. But the complaint fails to allege facts showing
that, in writing the content of the Guide, Defendants had an
agreement with Usana that would suffice to make
Defendants into Usana’s “paid publicists.”
The closest that the complaint comes on this score is its
allegation that, when MacWilliam learned at one point that
another company was going to beat Usana with a “perfect
score,” he went to Usana and explained that either Usana
needed to change its formulas or he needed to change his
criteria. But the complaint is conspicuously devoid of any
non-conclusory allegations about how Usana responded. It
instead alleges, in the very next sentence, that “MacWilliam
and NutriSearch have since taken extraordinary steps to
ensure that Usana maintains its preeminent status”
(emphasis added). The omission is particularly notable,
because the district court’s order dismissing the previous
version of the complaint had emphasized Ariix’s failure to
plead facts that would tend to exclude the possibility that
Usana simply responded in a lawful and self-interested
manner to Defendants’ alleged sycophancy. Lacking such
factual allegations, the operative amended complaint lapses
into conclusory rhetoric, claiming that Defendants
“collude[d]” with Usana and have a “symbiotic relationship
that is profitable” for all of them. But the complaint does not
contain any well-pleaded factual allegations supporting an
inference that Defendants acted as Usana’s paid publicists in
writing favorable reviews of Usana’s products.
38 ARIIX V. NUTRISEARCH
Nor does the complaint allege any other viable
alternative theory for concluding that Usana’s products are
in any relevant sense Defendants’ products. Ariix does not
allege, for example, that Defendants had any kind of “direct
financial interest in sales” of Usana products, Facenda v.
NFL Films, Inc., 542 F.3d 1007, 1017 (3d Cir. 2008)
(emphasis added), such as a small cut of each sale,
Handsome Brook, 700 F. App’x at 259–61. More broadly,
nothing in the complaint suggests that Defendants
formulated the Guide with the hope that consumers of
nutritional supplements would respond by making
commercial decisions that would directly benefit Defendants
financially.
* * *
Because Ariix’s complaint fails to allege sufficient facts
to raise a plausible inference that Defendants were
advertising their own products when they rated supplements
in the Guide, Ariix has failed to state a claim for false
advertising under the Lanham Act with respect to the Guide
or its reviews.
II
In light of the conclusions set forth above, I do not reach
any of the other issues addressed by the majority. Because
the district court already allowed an amendment to add
additional factual allegations addressing the relationship
between Usana and Defendants, I agree with the district
court’s conclusion that further amendment would be futile.
I therefore would affirm the district court’s judgment
dismissing the complaint with prejudice. I respectfully
dissent.