T.W. Garner Food Co. makes "Texas Pete" hot sauce. The product label includes a cartoon image of a cowboy throwing a lasso as well as a white star that some might say is reminiscent of the star on the Texas flag. Will consumers believe that the hot sauce is made in Texas? That was the issue in a recent lawsuit in federal court in California.

Texas Pete hot sauce is, in fact, not made in Texas. It's made in North Carolina (and, apparently, it's not made in the small town of Texas, North Carolina either, but more on that later). The ingredients in the hot sauce are also not sourced from Texas.

A consumer sued T.W. Garner, alleging false advertising and other claims under California law. T.W. Garner then moved to dismiss, arguing, among other things, that no reasonable consumer would be misled by the product's labeling. T.W. Garner's argument is that the company didn't explicitly say the product was made in Texas. The company also agued that "Texas Pete" is just a brand name -- not an indication of origin. In addition, the company said that the packaging made it clear that the product was not made in Texas by including the following statement on the back of the package, "T.W. Garner Food Co., Winston-Salem, NC 27105, Product of the U.S.A."

In order to prove false advertising under California law, a plaintiff must show that the product's packaging is "likely to deceive" a member of public. And, "this requires more than a mere possibility that the label might conceivably be misunderstood by some few consumers viewing it in an unreasonable manner. Rather, the reasonable consumer standard requires a probability that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled."

The court denied the motion to dismiss, holding that, at least at this stage of the proceeding, T.W. Garner had failed to show that no reasonable consumer could be misled.

The court wrote, "Looking first to the use of the word 'Texas,' it is plausible that a reasonable consumer would assume that the use of the term refers to the state . . . with the ultimate result that . . . the hot sauce itself is or derives from Texas."

The court also didn't think that the fact that the product's name, "Texas Pete," had a trademark symbol next to it would change how consumers' interpreted the phrase.

T.W. Garner also argued that the word "Texas" could be understood by consumers to refer to places other than the state of Texas, such as "the coastal town of Texas, North Carolina." (Apparently, I'm not the only one who was a bit surprised that the company made this argument. Here's a story where a reporter tried to find out something about this mysterious coastal town, but wasn't able to find out much.) Not surprisingly, the court was unpersuaded, writing, "Texas is one of the largest states in the United States and, Texas, North Carolina, appears to be relatively unknown, meaning that it is far more likely that a reasonable consumer will have the state of Texas top of mind when viewing the Products' labels, not the 'coastal town.'"

What about the fact that the back of the label says, "Winston-Salem, NC"? The court didn't think that this constituted an explicit statement of origin at all, but instead more likely just communicated the location of the company's corporate address.

While you probably don't need to worry all that much when you're advertising French bread or Danish pastries, this lesson of this case is clear. If your product name -- or other aspects of your advertising -- may communicate something false or misleading about where your product was made, you should consider what you can do to correct that misimpression, or you may find yourself trying to argue that your product was made in Paris, Texas . . . .

White v. T.W. Garner Food Co., No. 2:22-cv-06503-MEMF (C.D. Cal. July 31, 2023).

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