Filed 1/17/03

SEE CONCURRING OPINION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

Introduction

This appeal arises out of appellant’s challenge to allegedly deceptive television commercials supporting the launch of Aleve, a non-prescription pain relief product developed, manufactured and marketed by respondents. Plaintiff-appellant Zion Lavie appeals from the judgment against him and in favor of defendants-respondents Procter & Gamble Co, (Procter & Gamble), Syntex Health Products, Inc. (Syntex), Procter-Syntex Health Products Company (Procter-Syntex), and others, following a court trial upon appellant’s action challenging television advertising supporting the launch of Procter-Syntex non-prescription pain reliever Aleve in the mid-1990s. Among other claims, appellant alleged the television advertising promoting Aleve violated the California unfair competition law (Bus. & Prof. Code, § 17200) (UCL) and this state’s false advertising law (Bus. & Prof. Code, § 17500) because the explicit claim of the ads that "Aleve is gentler to the stomach lining than aspirin" was false and/or likely to mislead members of the public and because the advertisements contained an implicit and false message that Aleve was gentle to the stomach and would not cause stomach upset. At the end of a 13-day bench trial, the trial court found in favor of respondents on all counts, including finding that respondents did not engage in unlawful, unfair or fraudulent business practices or unfair, deceptive or misleading advertising within the meaning of sections 17200 or 17500. The court found the substantial weight of the evidence supported the conclusion that the phrase "Aleve is gentler to your stomach lining than aspirin" was a true statement and that the challenged ads were not likely to deceive reasonable consumers. The court also found that the ads did not target particularly gullible consumers and that the evidence did not show that a substantial number of consumers were deceived into thinking Aleve would not cause gastrointestinal side effects.

Appellant contends the judgment must be reversed as the court erred: (1) in employing the wrong methodology in determining what messages were conveyed by the commercial, relying upon its own intuition rather than viewing the ads from the vantage point of a reasonable consumer; (2) by disregarding evidence showing the messages were misleading and unsupported by the medical data; and (3) by disregarding evidence that these messages were impressed upon a significant number of consumers and were therefore likely to deceive the public. Appellant also contends that the evidence established defendants’ conscious decision to communicate implied messages they knew would mislead many California consumers, and that such was an unfair business practice under section 17200. Finally, he argues that if the matter is reversed, the trial court on remand has discretion to enter restitution relief.

The Attorney General has filed an amicus brief in this appeal, contending the likelihood of deception under the UCL must be measured by the standard of the "least sophisticated consumer" and that the trial court erred in using a "reasonable consumer" standard to determine whether the advertisements were likely to deceive the public.

We shall affirm the judgment.

The lawsuit.

In June 1994, Aleve was brought to the market as a new addition to over-the-counter pain relief products. Appellant, aged 47, is a computer programmer and manager. He testified that he took Aleve in mid-December 1994 for relief of cold symptoms. Twelve years before, he had been diagnosed with an ulcer and his doctor had told him to avoid aspirin. The ulcer had been inactive. Appellant decided to try Aleve after seeing some newspaper and television ads. He took Aleve over the weekend and on the following Monday was hospitalized overnight with serious gastrointestinal bleeding. His doctor told him not to use Aleve and appellant presented evidence the bleeding was caused by his ingestion of Aleve.

Appellant wrote to Procter & Gamble about his problem, stating he believed the company should be working on revising its warning label. Procter & Gamble responded by offering him his purchase price plus interest and requesting the name of his doctor, so the matter could be looked into. Plaintiff did not accept return of the purchase price. He sued respondents on various claims centering on the allegation that the television advertising for Aleve was false, misleading and/or likely to mislead. He asserted claims both individually and on behalf of the general public for violation of the UCL (§ 17200 et seq.) and the false advertising act (§ 17500). He also asserted claims for common law fraud, negligent misrepresentation, and violation of the Consumers Legal Remedies Act (Civ. Code, § 1750 et seq.).  Although he eventually waived any claims for personal injury, appellant sought restitution for himself and the general public with respect to his UCL and false advertising claims in the amount of all sales of Aleve to customers in California (a sum ranging from approximately $104 million to $140 million) and injunctive relief in the form of corrective advertising. Appellant also sought actual and punitive damages under his common law and Consumers Legal Remedies Act claims. Finally, he sought to have any monetary relief awarded under the UCL or the Consumers Legal Remedies Act enhanced up to treble the amount awarded pursuant to Civil Code section 3345.

At the end of a 13-day bench trial, the Honorable Isabella H. Grant found against appellant and in favor of respondents on all claims, including finding that defendants did not engage in unlawful, unfair or fraudulent business practices or unfair, deceptive or misleading advertising within the meaning of sections 17200 or 17500. Judgment was entered on October 11, 2000, and this timely appeal followed. Appellant challenges the judgment against him on his UCL and false advertising claims only.

I. California laws prohibiting unfair competition (§ 17200 et seq.) and false advertising (§ 17500).

"Sections 17200 and 17500 are consumer protection statutes designed, in part, to protect the public by prohibiting false, unfair, misleading or deceptive advertising. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 211 . . . .)" (Day v. AT&T Corp. (1998) 63 Cal.App.4th 325, 331-332.)

A. The Unfair Competition Law.

"California’s unfair competition law (UCL) (§ 17200 et seq.) defines ‘unfair competition’ to mean and include ‘any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by [the false advertising law (§ 17500 et seq.)].’ (§ 17200.) The UCL’s purpose is to protect both consumers and competitors by promoting fair competition in commercial markets for goods and services. (Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 110.) [¶]  The UCL’s scope is broad. By defining unfair competition to include any ‘unlawful . . . business act or practice’ (§ 17200, italics added), the UCL permits violations of other laws to be treated as unfair competition that is independently actionable. (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.)" (Kasky v. Nike (2002) 27 Cal.4th 939, 949, cert. granted Jan. 10, 2003, sub nom. Nike, Inc. v. Kasky, ___ U.S. ___ [___ S.Ct. ___, 2003 WL 77085, 71 USLW 3319].) "By defining unfair competition to include also any ‘unfair or fraudulent business act or practice’ (§ 17200, italics added), the UCL sweeps within its scope acts and practices not specifically proscribed by any other law. (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., supra, at p. 180.)" (Kasky v. Nike, Inc., supra, at p. 950.)

The Supreme Court has recognized that, "In drafting the act, the Legislature deliberately traded the attributes of tort law for speed and administrative simplicity. As a result, to state a claim under the act one need not plead and prove the elements of a tort. Instead, one need only show that ‘members of the public are likely to be deceived.’ (Chern v. Bank of America [(1976)] 15 Cal.3d [866,] 876; see also Committee on Children’s Television Inc. v. General Foods Corp. [(supra)] 35 Cal.3d [197,] 211.)" (Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1266-1267; accord, Prata v. Superior Court (2001) 91 Cal.App.4th 1128, 1136.) Consequently, "[a]ctual deception or confusion caused by misleading statements is not required. [Citation.]" (Day v. AT&T Corp., supra, 63 Cal.App.4th 325, 332.) "[I]t is immaterial under [these statutes] whether a consumer has been actually misled by an advertiser’s representations. It is enough that the language used is likely to deceive, mislead or confuse. (People v. Dollar Rent-A-Car Systems, Inc., (1989) 211 Cal.App.3d 119, 129-130.)" (Day v. AT&T Corp., supra, 63 Cal.App.4th 325, 334, italics added.) "This means that a section 17200 violation, unlike common law fraud, can be shown even if no one was actually deceived, relied upon the fraudulent practice, or sustained any damage." (State Farm Fire & Casualty Co. v. Superior Court (1996) 45 Cal.App.4th 1093, 1105, disapproved on another ground in Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., supra, 20 Cal.4th at p. 187, and fn. 12; AICCO, Inc. v. Insurance Co. of North America (2001) 90 Cal.App.4th  579, 588.)

Nor is the reach of sections 17200 and 17500 limited to statements which are untrue. "By their breadth, the statutes encompass not only those advertisements which have deceived or misled because they are untrue, but also those which may be accurate on some level, but will nonetheless tend to mislead or deceive. . . . A perfectly true statement couched in such a manner that it is likely to mislead or deceive the consumer, such as by failure to disclose other relevant information is actionable under these sections." (Day v. AT&T Corp., supra, 63 Cal.App.4th 325, 332-333.)

"Notwithstanding the broadly worded definition of unfair competition, the law was not relied on as the basis of general consumer protection actions until the late 1950’s. Even then, however, the law was relied on principally by public prosecutors until Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94 . . . , a case brought by private plaintiffs, confirmed the breadth of the definition of unfair competition and the availability of the action for injunctive relief to private plaintiffs. [Citation.]" (Kraus v. Trinity Management Services, Inc. (2000) 23 Cal.4th 116, 130.)

"Not only public prosecutors, but also ‘any person acting for the interests of . . . the general public,’ may bring an action for relief under the UCL. (§ 17204.) Under this provision, a private plaintiff may bring a UCL action even when ‘the conduct alleged to constitute unfair competition violates a statute for the direct enforcement of which there is no private right of action.’ (Stop Youth Addiction, Inc. v. Lucky Stores, Inc. (1998) 17 Cal.4th 553, 565.) ‘This court has repeatedly recognized the importance of these private enforcement efforts.’ (Kraus v. Trinity Management Services, Inc. (supra) 23 Cal.4th 116, 126.)" (Kasky v. Nike, Inc., supra, at p. 950.)

B. The False Advertising Law.

"California’s false advertising law (§ 17500 et seq.) makes it ‘unlawful for any person, . . . corporation . . . , or any employee thereof with intent directly or indirectly to dispose of real or personal property or to perform services . . . or to induce the public to enter into any obligation relating thereto, to make or disseminate . . . before the public in this state, . . . in any newspaper or other publication . . . or in any other manner or means whatever . . . any statement, concerning that real or personal property or those services . . . which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading . . . .’ (§ 17500.) Violation of this provision is a misdemeanor. (Ibid.) As with the UCL, an action for violation of the false advertising law may be brought either by a public prosecutor or by ‘any person acting for the interests of itself, its members or the general public,’ and the remedies available to a successful private plaintiff include restitution and injunctive relief. (§ 17535.)" (Kasky v. Nike, Inc., supra, at p. 950.)

C. Common Features of the UCL and the False Advertising Law.

"[The California Supreme Court] has recognized that ‘[a]ny violation of the false advertising law . . . necessarily violates’ the UCL. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 210.) [It has] also recognized that these laws prohibit ‘not only advertising which is false, but also advertising which[,] although true, is either actually misleading or which has a capacity, likelihood or tendency to deceive or confuse the public.’ (Leoni v. State Bar (1985) 39 Cal.3d 609, 626.) Thus, to state a claim under either the UCL or the false advertising law, based on false advertising or promotional practices, ‘it is necessary only to show that "members of the public are likely to be deceived."’ [Citations.]" (Kasky v. Nike, Inc., supra, at p. 950-951.)

II. "Reasonable consumer" versus "least sophisticated consumer" standard.

A. Amicus brief raising issue of the standard.

In an amicus brief filed in this appeal, the Attorney General argues that the trial court committed reversible error in failing to use a "least sophisticated consumer" standard rather than a "reasonable consumer" standard to determine whether the advertisements were likely to mislead or deceive the public. It is analytically necessary to address this issue first, for if we agreed with the Attorney General, the additional issues raised on this appeal likely would be rendered moot.

Both parties and the trial court agreed below that the "reasonable consumer" standard applied and appellant did not raise this claim of error on appeal. Ordinarily, "[a]micus curiae must take the case as they find it." California Assn. for Safety Education v. Brown (1994) 30 Cal.App.4th  1264, 1274-1275; accord Eisenberg et al., Cal. Prac. Guide: Civil Appeals & Writs (The Rutter Group 2001) ¶9:210.1.) " ‘ "[A]n appellate court will consider only those questions properly raised by the appealing parties. micus curiae must accept the issues made and propositions urged by the appealing parties, and any additional questions presented in a brief filed by an amicus curiae will not be considered [citations]." ’ " (Younger v. State of California (1982) 137 Cal.App.3d 806, 813-814; see Fisher v. City of Berkeley (1984) 37 Cal.3d 644, 711, fn. 1 (conc. opn. of Bird, C.J.); E.L. White, Inc. v. City of Huntington Beach (1978) Cal.3d 497, 510-511.)

However, the rule is not absolute. An appellate court has discretion to consider new issues raised by an amicus. (See Fisher v. City of Berkeley, supra, 37 Cal.3d 644, 654-655 [Supreme Court considered argument for invalidating rent control ordinance raised by amicus]; E.L. White, Inc. v. City of Huntington Beach, supra, 21 Cal.3d 497, 510-511; Eisenberg et al., Cal. Prac. Guide: Civil Appeals & Writs, supra.) Although we do not do depart lightly from the general rule, we are persuaded that this case is one in which it is not only permissible, but also appropriate to do so. The Supreme Court has justified consideration of a new issue on appeal for the first time "when the issue posed is purely a question of law based on undisputed facts, and involves important questions of public policy. [Citations.]" (Fisher v. City of Berkeley, supra, at pp. 654-655, fn.3.)

The standard to be used in evaluating whether an advertisement is deceptive under the UCL is purely a question of law and certainly has important public policy implications for California consumers and businesses. Moreover, the Attorney General has a particular interest in the interpretation of sections 17200 and 17500, as these sections "are the basic tools of the Attorney General and the district attorneys in combating consumer fraud." (People v. Superior Court (Olson) (1979) 96 Cal.App.3d 181, 189, fn. 6; see also, Manufacturers Life Ins. Co. v. Superior Court (1995) 10 Cal.4th 257, 275, fn. 8.) The Attorney General and district attorneys have an independent role in the enforcement of this state’s false advertising laws. They are authorized to prosecute violations of the UCL criminally (see § 17500) and may also seek redress through the bringing of civil law enforcement cases seeking equitable relief and civil penalties beyond those available to private parties (see §§ 17203, 17206, 17535, 17536). The possibility that a published decision could contain a misstatement of law as to a fundamental provision of these statutes is a cause of particular concern to the Attorney General. The Legislature has recognized the importance of amicus participation by the Attorney General in these appeals by requiring that the Attorney General and the district attorney of the county in which the proceeding occurred receive notice and copies of the briefs in any appeal in which sections 17200 and 17500 are at issue. (§§  17209, 17536.5; California Rules of Court, rule 15(e)(2).)

Finally, the question of the standard to be applied in determining whether the advertisements here violated the UCL is inherent in this case. If, as the Attorney General argues, the parties and the trial court applied an erroneous standard, a rule of decision relying upon that incorrect standard could have profound precedential impact on the operation and enforcement of the UCL. For all of these reasons, we exercise our discretion to consider the question raised by the Attorney General.

B. "Reasonable consumer" or "least sophisticated consumer."

The Attorney General contends that the trial court must apply a "least sophisticated consumer" standard in determining whether an advertisement was likely to mislead the public. In a lengthy discussion of the origins of the UCL, he argues that California’s deceptive advertising law has always prohibited advertising that has the capacity or tendency to mislead members of the public, including the unwary, unsophisticated, and the gullible. Asserting that an advertisement violates the law if it is false or if it has the capacity to mislead unwary, unsophisticated or the most gullible consumers, the Attorney General maintains, the "trial court’s failure to apply the ‘least sophisticated consumer’ standard as the measure of deception and the court’s imposition of responsibility on consumers to investigate the merits of advertising claims were error."

We disagree. California and federal courts applying the UCL have never applied a "least sophisticated consumer standard," absent evidence that the ad targeted particularly vulnerable customers. Rather, they have consistently applied a standard closer to an ordinary or "reasonable consumer" standard to evaluate unfair advertising claims. Nor do we view the court’s application of the "reasonable consumer" standard as requiring consumers to investigate the merits of advertising claims.

As a necessary corollary to his argument, the Attorney General urges that we reject Freeman v. Time, Inc. (9th Cir. 1995) 68 F.3d 285 (Freeman) and Haskell v. Time, Inc. (E.D. Cal. 1994) 857 F.Supp. 1392 (Haskell), as well as other federal decisions which have concluded that California employs the reasonable person or reasonable consumer standard in evaluating deceptive advertising. In Freeman, the Ninth Circuit agreed with the district court in Haskell that the "reasonable consumer" standard was the appropriate test for a violation of the UCL. Recognizing that to state a claim under the UCL "one need only show that ‘members of the public are likely to be deceived’ " (Bank of the West v. Superior Court, supra, 2 Cal.4th. at 1267, quoting Chern v. Bank of America, supra, 15 Cal.3d at 876), Freeman rejected the contention that to so demonstrate, the plaintiff "need show only that some members of the public, such as the elderly, minors or the mentally disadvantaged are likely to be deceived." (Id. at p. 289.) Rather, the court adopted the "reasonable person" standard championed in Haskell and variants thereof applied in other cases. (Id., also citing State Bd. of Funeral Directors v. Mortuary in Westminster Memorial Park (1969) 271 Cal.App.2d 638, 642 ["what a person of ordinary intelligence would imply" from ads in a § 17500 false advertising case]; Audio Fidelity, Inc. v. High Fidelity Recordings, Inc. (9th Cir. 1960) 283 F.2d 551, 557 [applying "the eye of the ordinary purchaser" standard to interpretation of California’s unfair competition and misleading advertising law with respect to a similarly designed package claim]. ) Freeman reasoned that the "ordinary person" standard was consistent with the standard articulated in Bank of the West v. Superior Court, supra,—whether members of the public are "likely" to be deceived. (Freeman, supra, at p. 289.)

Both Freeman and Haskell pointed out that the "reasonable person" standard was the common standard in the law in a number of contexts involving claims of deception and that it is the standard the Federal Trade Commission (FTC) uses in interpreting section 5 of the Federal Trade Commission Act (15 U.S.C. § 45(a)(1)), which contains similar provisions.

As Haskell observed, "[T]he reasonable person standard is well ensconced in the law in a variety of legal contexts in which a claim of deception is brought. It is the standard for false advertising and unfair competition under the Lanham Act [, citations]; for securities fraud [citation], for deceit and misrepresentation [citations] and for common law unfair competition [citation]. This list no doubt could be much expanded. Section 17500 of the Business and Professions Code, on which plaintiff proceeds, in no way expressly departs from the ‘reasonable person’ standard so well rooted in the law. . . . Indeed, by explicitly imposing a ‘reasonable care’ standard on advertisers, § 17500 impliedly adopts such a standard for consumers as well: unless particularly gullible consumers are targeted, a reasonable person may expect others to behave reasonably well. [Citation.]" (Id. at pp. 1398-1399; accord Freeman, supra, at p. 289.)

We agree with the Haskell court that a reasonable consumer may be unwary or trusting. Where advertising is aimed at a particularly susceptible audience, such as the preschool children targeted by the advertisements in Committee on Children’s Television, Inc. v. General Foods Corp., supra, 35 Cal.3d 197, its truthfulness must be measured by the impact it will likely have on members of that group, not others to whom it was not primarily directed. (See id. at p. 214; In the Matter of Kirchner (1963) 63 F.T.C. 1282 [1983 FTC Lexis 71].) We also recognize that an advertisement may be designed to appeal to specific groups of consumers, although it is ostensibly directed to the public at large. Where the plaintiff contends that a more vulnerable subgroup is the true target of such an advertisement, a question of fact is presented, which the trial court must resolve.

However, unless the advertisement targets a particular disadvantaged or vulnerable group, it is judged by the effect it would have on a reasonable consumer. (Haskell, supra, at p. 1399.) As noted by the FTC many years ago: "Perhaps a few misguided souls believe, for example, that all ‘Danish pastry’ is made in Denmark. Is it, therefore, an actionable deception to advertise ‘Danish pastry’ when it is made in this country? Of course not. A representation does not become ‘false and deceptive’ merely because it will be unreasonably misunderstood by an insignificant and unrepresentative segment of the class of persons to whom the representation is addressed." (In the Matter of Kirchner, supra, 63 F.T.C. 1282.)

Federal courts have followed Freeman and Haskell in adopting the "reasonable consumer" standard for California UCL claims: (See Southwest Sunsites, Inc., supra, 785 F.2d 1431; Churchill Village, L.L.C. v. General Elec. Co. (N.D. Cal. 2000) 169 F.Supp.2d 1119, 1131 ["A reasonable consumer standard applies to a false advertising claim under the UCL."]; Cairns v. Franklin Mint Co. (C.D. Cal. 1998) 24 F.Supp.2d 1013, 1037 ["To state a claim under [§§ 17200 and 17500 et seq.], one need only show that ‘members of the public are likely to be deceived.’ [Citation.] A claim based on false or misleading advertising and unfair business practices ‘must be evaluated from the vantage of a reasonable consumer.’ [Citation.]"].)

The Attorney General contends the FTC’s reinterpretation of the Federal Trade Commission Act should not affect what the Attorney General characterizes as the traditional interpretation of the UCL by California courts. We disagree. FTC interpretation of the federal act has always been viewed as "more than ordinarily persuasive" (e.g., Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., supra, 20 Cal.4th at p. 186; Bank of the West v. Superior Court, supra, 2 Cal.4th at pp. 1263-1264) in its construction of the breadth of the protection afforded consumers under the UCL and we see no good reason to depart from that view here. More importantly, we believe that California case law has never embraced a "least sophisticated consumer test" to determine whether a UCL violation has occurred.

The California Supreme Court recognized the "reasonable consumer" standard in Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26. There, prospective sellers of real property sued a title insurer who refused to issue title insurance policies on property acquired by plaintiffs at a tax sale, despite the company’s representation that title insurance would be issued on any property with good title. The Supreme Court held, among other things, that the plaintiffs had stated a cause of action for unfair competition under the UCL. "If plaintiffs are able to establish that a tax deed is ‘good’ title within the understanding of a reasonable consumer, the advertisement may be conduct prohibited as unfair competition under the section 17200 definition as ‘deceptive, untrue or misleading advertising.’" (Id. at p. 55, italics added.)

Other California cases, while not specifically referring to the reasonableness of the consumer, acknowledge that the standard to be applied in assessing whether the conduct or advertisement violates the UCL is whether it is "likely to deceive" the consumer. (Barquis v. Merchants Collection Assn., supra, 7 Cal.3d 94, 111; Schnall v. Hertz Corp. (2000) 78 Cal.App.4th 1144, 1167-1169; AICCO Inc. v. Ins. Co. of North America (2001) 90 Cal.App.4th 579, 588; State Farm Fire & Casualty Co. v. Superior Court, supra, 45 Cal.App.4th 1093, 1105, disapproved on other grounds in Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., supra, 20 Cal.4th at pp. 184-185; Chern v. Bank of America, supra, 15 Cal.3d 866, 876; Day v. AT&T Corp., supra, 63 Cal.App.4th 325, 332-334. ) "Likely to deceive" implies more than a mere possibility that the advertisement might conceivably be misunderstood by some few consumers viewing it in an unreasonable manner. Rather, the phrase indicates that the ad is such that it is probable that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled.

As Haskell noted, "The statement in some of the case law to the effect that § 17500 protects ‘unwary consumers’ is only descriptive of the effect of § 17500 and does not set the standard for liability. The reasonable consumer may well be unwary. The use of this language does not suggest that the Act protects the unwary, unreasonable consumer. Nor do statements that the Act protects the ‘public as a whole’ suggest a different standard from the average or reasonable member of the public. See Sunset House Distrib. Corp. v. Coffee Dan’s, Inc., [(1966)] 240 Cal.App.2d 748, . . . (‘the public as a whole, acting as reasonable persons’)." (Id. at p. 1399, fn. 10.)

None of the cases cited by the Attorney General arising under the UCL or its analog, the Federal Trade Commission Act, holds that the unreasonable expectations or perceptions of the least sophisticated consumer or most gullible consumer would be protected. Rather, most of the cases cited by the Attorney General stand for the proposition that whether an advertisement or business practice violates the UCL is not measured by the perception of the most sophisticated, wary, or expert consumer, but by the likely effect on the normally credulous consumer. The Attorney General’s error is his equating of the rejection of a standard requiring heightened consumer vigilance with the adoption of a "least sophisticated consumer" standard. The two clearly are not the same.

Donaldson v. Read Magazine (1948) 333 U.S. 178, 189, which did not arise under the Federal Trade Commission Act, but which is extensively quoted and relied upon by the Attorney General, involved a challenge to an order by the United States Postmaster finding plaintiffs had used the mail to further a fraudulent scheme and directing that mail be returned to the senders marked "Fraudulent," and that postal money order sums be returned. The Supreme Court articulated a standard more like the "reasonable consumer" standard than the "least sophisticated consumer" standard posited by the Attorney General, as the court explained that an advertisement may be literally true, but nonetheless misleading to the ordinary reader: "Advertisements as a whole may be completely misleading although every sentence separately considered is literally true. This may be because things are omitted that should be said, or because advertisements are composed or purposefully printed in such way as to mislead. [Citations.] That exceptionally acute and sophisticated readers might have been able by penetrating analysis to have deciphered the true nature of the contest’s terms is not sufficient to bar findings of fraud by a factfinding tribunal. Questions of fraud may be determined in the light of the effect advertisements would most probably produce on ordinary minds. [Citations.] People have a right to assume that fraudulent advertising traps will not be laid to ensnare them. ‘Laws are made to protect the trusting as well as the suspicious.’ " (Id. at pp. 188-189, italics added; see also, Federal Trade Commission v. Standard Education Soc. (1937) 302 U.S. 112, 116 ["The fact that a false statement may be obviously false to those who are trained and experienced does not change its character, nor take away its power to deceive others less experienced. There is no duty resting upon a citizen to suspect the honesty of those with whom he transacts business. Laws are made to protect the trusting as well as the suspicious. . . . [T]he rule of caveat emptor should not be relied upon to reward fraud and deception."].)

We agree that a "reasonable consumer" need not be "exceptionally acute and sophisticated." (Id. at p. 189.) Nor need a reasonable consumer necessarily be wary or suspicious of advertising claims.

Nor is it the case, as suggested by the Attorney General, that California appellate cases predating Cliffdale Associates, Inc., particularly People v. Wahl (1940) 39 Cal.App.2d Supp. 771 and Dept. of Agriculture v. Tide Oil Co. (1969) 269 Cal.App.2d 145, recognized the "least sophisticated consumer" standard. Rather, California courts consistently have looked to the ordinary consumer within the target population.

As stated in People v. Wahl, supra, 39 Cal.App.2d Supp. 771, 774: "The advertisement, although literally true, was nevertheless deceptive and misleading in its implications and this is sufficient to bring it under the ban of the statute. The fact that a Firestone dealer, or other person who knew the whole truth, would not be led astray by it does not make it lawful. None of the advertising described in the statute, even though utterly false, could harm one who knew the truth, but such laws are passed to protect the general public who read advertisements and are likely to know nothing of the facts, not the dealers who publish them or other experts on their subject-matter." (Id. at pp. 773-774.)

In Dept. of Agriculture v. Tide Oil Co., supra, 269 Cal.App.2d 145, the appellate court acknowledged that advertising signs which stated, " ‘We Give 2[cent] a Gal. Cash Disc. Coupon,’ or variations of similar phraseology" came within the scope of [former] section 20880, subdivisions (b) and (c) prohibiting certain advertising practices by service stations, as the signs could be read to refer to a designated numerical discount per gallon in cash. (Id. at pp. 154-155.) "While a sophisticated buyer may not attribute such meaning to the advertisement, it is within the regulatory ambit of the Legislature to protect the more gullible public." (Id. at p. 155, fn. omitted.) The Attorney General erroneously construes this sentence to mean that the Legislature intended to protect members of the public "more gullible" than ordinary members of the public. We think the sentence merely embodies the idea that the general public is "more gullible" than the "sophisticated buyer." This interpretation is confirmed by an accompanying footnote, in which the court quoted from the holding in Donaldson v. Read Magazine, supra, 33 U.S. 178, that " ‘Questions of fraud may be determined in the light of the effect advertisements would most probably produce on ordinary minds. [Citations.]’ " (Dept. of Agriculture v. Tide Oil Co., supra, at pp. 155, fn. 7, italics added.)

Two other more recent cases, Chern v. Bank of America, supra,15 Cal.3d 866 and South Bay Chevrolet v. General Motors Acceptance Corp. (1999) 72 Cal.App.4th 861, also relate to this issue.

In Chern v. Bank of America, supra, 15 Cal.3d 866, the court held that the practice of quoting a "per annum" rate of interest computed on the basis of a 360-day year was likely to mislead a bank's potential customers, and that such practice could be enjoined as false and misleading advertising under the false advertising law and the UCL. (§ 17500, 17535; [former] Civ. Code § 3369, subd. 2 [now contained in § 17200 et seq.].) (Id., at pp. 876-877.) "In the absence of evidence to the contrary," the court reasoned, "we must assume that the public is likely to understand that a ‘per annum’ rate is an annual rate based on a 365-day calendar year. The fact that it may be ‘customary’ business practice within the banking community to quote interest rates on the basis of a 360-day year does not necessarily establish that the practice is not misleading to the general public with whom defendant deals." (Ibid., italics added.)

In South Bay Chevrolet v. General Motors Acceptance Corp., supra, 72 Cal.App.4th 861, a case involving sophisticated businesses in an ongoing relationship, rather than the consuming public as a whole, the plaintiff auto dealership contended that General Motors Acceptance Corporation (GMAC)’s business practice of using a similar method to calculate interest on loans to California dealerships violated sections 17200 and 17500 as a matter of law. The appellate court affirmed the trial court’s conclusion that the plaintiff had failed to prove GMAC’s use of the 365/360 method to calculate interest on wholesale floor plan loans violated section 17200 because the dealership knew, understood, and agreed to that method of interest calculation. Analyzing the issue, the court applied the "reasonable consumer" standard: "The trial court correctly noted that to recover under section 17200, South Bay had the burden to establish GMAC’s conduct was unlawful, unfair, fraudulent or in violation of section 17500. (State Farm Fire & Casualty Co. v. Superior Court, supra, 45 Cal.App.4th at p. 1102 . . . .) The trial court also correctly noted that to recover under the third or fourth prong of section 17200, South Bay had the burden to establish GMAC engaged in a business practice ‘likely to deceive’ the reasonable consumer to whom the practice was directed. (Bank of the West v. Superior Court, supra, 2 Cal.4th at p. 1267 . . . ; Committee on Children’s Television, Inc. v. General Foods Corp., supra, 35 Cal.3d at p. 211 . . . ; Chern v. Bank of America, supra, 15 Cal.3d at p. 876 . . . .)" (Id. at p. 878, italics added.) South Bay was a case involving loans made to "a financially sophisticated automotive dealership with knowledge of the lender's use of the 365/360 method in the parties' ongoing relationship." (Id. at p. 884.) Because the practice was directed to automobile dealerships and not to the general public, the court affirmed the trial court’s use of a "reasonable dealership" standard, distinguishing Chern as a case directed toward the consuming public. (Ibid.)

Read together, Chern v. Bank of America, supra ,15 Cal.3d 866 and South Bay Chevrolet v. General Motors Acceptance Corp., supra, 72 Cal.App.4th 861, support our conclusion that the standard applied in UCL and false advertising cases is that of the ordinary consumer acting reasonably under the circumstances. Where the advertising or practice is targeted to a particular group or type of consumers, either more sophisticated or less sophisticated than the ordinary consumer, the question whether it is misleading to the public will be viewed from the vantage point of members of the targeted group, not others to whom it is not primarily directed. (See Committee on Children’s Television, Inc. v. General Foods Corp., supra, 35 Cal.3d 197.)

That the parties, who were represented by very capable counsel, accepted the reasonableness standard applied by the trial court reflects how well-established the reasonableness standard is in California law.

Nor are we persuaded by the Attorney General’s argument that federal courts have continued to apply the "least sophisticated consumer" standard in non-FTC cases, such as those arising under the federal Fair Debt Collection Practices Act (15 U.S.C. §§ 1692 et seq. (1982)), prohibiting debt collectors from using "any false, deceptive, or misleading representation or means" to collect a debt. (15 U.S.C. § 1692e.) Cases arising under the federal debt collection statutes are inapposite. Even the Ninth Circuit, which recognized the "reasonable" consumer standard for cases arising under the UCL in Freeman, agreed that a "least sophisticated debtor standard" applied under the plain language of the Fair Debt Collection Practices Act (See Swanson v. Southern Oregon Credit Service, Inc. (9th Cir. 1988) 869 F.2d 1222, 1227.) To the extent federal law provides the template for our analysis, we look to the Federal Trade Commission Act, not to the Fair Debt Collection Practices Act.

The trial court did not err in assessing UCL and unfair advertising claims using a reasonable consumer standard.

III. The Evidence

A. Development of Aleve and the marketing campaign.

The active ingredient in Aleve is naproxen sodium. Naproxen belongs to a class of pain relievers known as non-steroidal anti-inflammatory drugs or NSAIDs. Other NSAIDs include aspirin (marketed under Bayer and other trade names) and ibuprofen (marketed under various brand names, including Advil and Motrin). Another popular over-the-counter pain reliever is acetaminophen (such as Tylenol), which is not an NSAID. These products comprise the large market for non-prescription analgesics (pain relievers).

Naproxen had been available since 1976 by prescription only, under the trade names Naprosyn and Anaprox. The patent for Naproxen, which was held by its manufacturer, Syntex, was due to expire in 1994. In the late 1980s, Syntex joined with Procter & Gamble to create the joint venture Procter-Syntex for the purpose of developing an over-the-counter version of this medicine and seeking its approval by the Federal Drug Administration (FDA).

Between 1987 and June 1994, respondents expended considerable effort and money on the Aleve project. Their activities included product testing, market research, preparation of an application seeking FDA approval of the non-prescription formulation of the drug, and development of a marketing and advertising campaign to launch Aleve into the highly competitive over-the-counter analgesic market. Approval of the new drug application for Aleve was delayed when two panels of the FDA’s approved neutral experts recommended against approval in June 1993. However, in January 1994, the FDA ultimately approved Aleve for over-the-counter sale as reasonably safe and effective. Although regulation of advertising is not under the authority of the FDA, Dr. John Harter, head of the pilot drug evaluation group at the FDA and the person responsible for overseeing the new drug application process for Aleve, required respondents to submit all broadcast and print advertising to him for review and approval. Harter approved the advertising.

During the first three months of the initial advertising (July through October 1994), the television advertising consisted of the four 45-second commercials at issue here, "Swimmer," "Pressman," "Husband and Wife," and "Airline Supervisor." These ads were shown nationally at least through March 1995 and during the initial launch period were shown extensively during prime time programming. The four ads have largely the same structure, concept and advertising copy. The campaign as a whole was titled "Care Giver" and the commercials involved an interaction between two characters, a stoic pain sufferer and a concerned relative. The challenged part of the text of the television ads is: "When the pain lasts longer than the Tylenol and you’ve tried the Advil and aspirin upsets your stomach, it’s time to call a doctor, time to ask a doctor what you need. Introducing Aleve . . . . It lasts longer than extra strength Tylenol. Advil isn’t stronger. Yet Aleve is gentler to your stomach lining than aspirin."

The advertising copy for the video "Airline Supervisor" is illustrative of all four commercials:

Husband talking about his wife’s pain. Husband: She’s not someone who shares her pain. But with working …

Wife at hectic airport ticket counter. . . . and trying to be the world’s best

mom.

Cut to flashing CANCELED sign. Sometimes it gets to be too much.

Husband talking again. When the pain lasts longer than the Tylenol…When you’ve tried the Advil . . .

Wife calmly speaking with annoyed passenger. . . . and aspirin upsets your stomach..

Wife puts hand to head as if in pain. Finally, I’ll say "its enough with the hero bit, we’re calling the doctor.

Husband talking again. We’re going to find something that keeps the pain away longer."

Product shot of Aleve bottle

SUPER [superimpose]: USE AS DIRECTED AVO [a voice over]: Introducing Aleve. Aleve is a …

Typing Rx label. . . . non-prescription strength of Anaprox,

Rx label being pasted on medicine bottle. . . . a fast-acting form of the medicine in

Super [superimpose]: IN NON-PRESCRIPTION Naprosyn, . . .

STRENGTH.

Rx bottle rotates into Aleve bottle. . . . the #1 selling brand in its class for

10 years.

Cut to dosing instructions on the back label. Aleve is the only pain reliever with 8 to

12 hour dosing.

Cut to an Extra Strength Tylenol bottle Aleve lasts longer than Extra Strength

removed from the medicine cabinet. Tylenol

Then an Advil bottle is removed from Advil isn’t stronger.

from [sic] the medicine cabinet.

Then an aspiring bottle is removed from Yet, Aleve is gentler to your stomach

medicine cabinet. lining than aspirin.

Hand puts Aleve into medicine cabinet. New Aleve.

SUPER: IF ASPIRIN OR IBUPROFEN

ALLERGIC, CONSULT YOUR DOCTOR

BEFORE USE.

Husband, wife and child together. Husband: "I’m not going to let anything happen

to her."

Aleve bottle.

SUPER: ALL DAY STRONG. AVO: New Aleve.

ALL DAY [LONG]. "All day strong. All day long."

The first segment of each commercial consists of a montage of rapid-fire images of the caring relative and the stoic sufferer, lasting about 20 seconds. The second segment, which lasts about 15 seconds, commences with the phrase "Introducing Aleve," and consists of claims about Aleve’s efficacy (which are not in dispute) and the comparison claims which form the basis of this action. Each commercial concludes with the family member and the pain sufferer side by side, embracing warmly. The smiling pain sufferer is apparently no longer in pain and the relative no longer worried.

The parties introduced voluminous and often conflicting evidence relating to the accuracy of the claim that Aleve is gentler to the stomach lining than aspirin, the messages the commercials sent to consumers, and what messages consumers received from the commercials.

B. Medical evidence as to "gentler" claim.

It is undisputed that all NSAIDs, including naproxen, can cause a range of subjective side effects (those felt by the user), including but not limited to stomach upset, heartburn, nausea, cramps, and indigestion. No one contended that Aleve was gentle to the stomach lining in an absolute sense. Rather, evidence was presented bearing on the advertisements’ claim that Aleve was "gentler to the stomach lining than aspirin." The medical evidence supporting and disputing the claim was presented through several expert witnesses.

Testifying for appellant, Dr. Neal Benowitz, professor of medicine, psychiatry and pharmaceutical science at the University of California at San Francisco, summarized his opinions regarding the gentleness of Aleve as follows:

"[T]he first is that Aleve, which is naproxen, as recommended for over-the-counter use is not gentle to the stomach or gentle to the stomach lining. The second is that Aleve is not gentler than aspirin, as aspirin is used over-the-counter, which would be the appropriate comparator. The third is that the ulcer and gastrointestinal hemorrhage suffered by Mr. Lavie was caused by his use of Aleve." Dr. Benowitz also opined that if it had been said that Aleve has no side effects, "[t]hat is absolutely incorrect and very misleading."

Dr. Benowitz expanded upon his conclusions, stating "[w]hen you look at serious adverse effects, there is no evidence that Aleve is any less hazardous than aspirin. The evidence that suggests that there are fewer symptoms and that there are endoscopy finding differences by and large is based on studies looking at high doses of aspirin, anti-inflammatory doses of aspirin that are not at all relevant to over-the-counter use. But the most recent data that I’ve seen suggests that there is no difference in toxicity between Aleve and aspirin."

On cross-examination, Dr. Benowitz agreed that the statement that Aleve is gentler to the stomach lining was a true statement, if based on endoscopy, and that endoscopy was useful for ulcer healing trials. He disagreed with the conclusion of an article by Dr. Michael Kimmey, "The Role of Endoscopy in Nonsteroidal Anti-Inflammatory Drug Clinical Trials" that " ‘[e]ndoscopy is a useful tool that can be used to determine the acute or chronic gastrointestinal toxicity of nonsteroidal anti-inflammatory drugs.’ " He also acknowledged that he was not a gastroenterologist or a specialist in the area of gastrointestinal disease. He had referred patients to Dr. John Cello, a gastroenterologist testifying as a defense expert. Dr. Benowitz had done no research on the relative toxicity of Aleve and aspirin and had never published in the area of NSAIDs or gastrointestinal toxicity.

Respondents presented expert testimony in support of the comparative claim from doctors John Cello, Byron Cryer, and Frank Lanza.

Dr. John Cello, Chief of Gastroenterology at San Francisco General Hospital for 21 years, designs protocols for clinical trials and is extensively involved with assessing the effect of medications, including NSAIDs, on the gastrointestinal tract. He has published extensively in the area.

Dr. Cello testified that endoscopic imaging has been the standard for evaluating the gastrointestinal impact of new drugs for the past 30 years. He opined that endoscopy clinic trials were absolutely essential to evaluate the gastrointestinal toxicities of medications, including NSAIDs and that "[t]hey are and have been for 30 years the gold standard to judge the efficacy and/or safety of drugs which have an impact upon the gastrointestinal tract." According to Dr. Cello, endoscopy provides absolutely objective data as to whether there is an impact of a particular agent on the gastrointestinal tract, the esophagus, the stomach, or the duodenum. He opined that endoscopically visualized lesions can be predictive of significant clinical outcomes such as developing an ulcer that bleeds, perforates, or obstructs. There is an overlap between endoscopically visualized lesions and subjective symptoms. Although not every lesion develops into an ulcer, the identification of lesions is clinically significant, notwithstanding that a patient may be subjectively asymptomatic. One cannot develop an ulcer without first going through the stage of a hemorrhage and an erosion. There is a connection between lesions and stomach upset, but it is not absolute.

From the 77 studies in the Aleve new drug application, Dr. Cello extracted those 12 studies that compared naproxen or naproxen sodium with aspirin and which contained data that was scientifically interpretable. These studies varied in length from one day to six months and involved both analgesic and anti-inflammatory dosages. In six of the 12 analgesic studies, patients reported significantly fewer gastrointestinal adverse events with Aleve than with aspirin. In none of the 12 studies was aspirin superior to naproxen or naproxen sodium.

Dr. Cello also reviewed a multiple hospital, randomized, double-blind consumer usage study comparing naproxen sodium (Aleve), ibuprofen (Advil) and acetaminophen (Extra Strength Tylenol). Aspirin was not compared. The study showed that there was no significant difference in terms of adverse events when comparing the three compounds. This was significant because in terms of patient reported side effects, there was no difference between Aleve and Tylenol, which has no known impact upon the stomach. Dr. Cello observed that the study demonstrated that Aleve was "virtually equivalent to a placebo" in terms of its side-effects on the stomach.

Dr. Cello also performed a statistical analysis on 15 endoscopic imaging studies comparing patients being treated with either naproxen, naproxen sodium or aspirin. In 10 of the 15 studies the naproxen or naproxen sodium produced significantly less endoscopically scoreable lesions than did aspirin. In five there was no statistically significant difference. Consequently, two-thirds of the studies showed that naproxen or naproxen sodium had produced less injury to the stomach—a statistically significant better result.

Dr. Cello also reviewed six gastrointestinal micro-bleed studies ("very sophisticated looking at blood loss throughout the gastrointestinal tract") comparing naproxen or naproxen sodium to aspirin. He testified that in four of the six studies there were statistically significant differences between the groups and that naproxen sodium was gentler to the stomach than was aspirin.

Relying upon these and subsequent studies, Dr. Cello opined that to a reasonable degree of medical certainty Aleve "is gentler to the stomach and to the stomach lining than is aspirin." Based upon his review of the studies and his statistical analyses of them, he disagreed with Dr. Benowitz’s opinion that there was no difference between Aleve and aspirin as far as effects on the stomach.

Dr. Byron Cryer, a clinical researcher and professor of medicine at the University of Texas is board certified in gastroenterology and since 1989 has focused his research on NSAIDs and gastrointestinal injury. He wrote the chapter on NSAIDs for the textbook "Gastrointestinal Diseases," the premier textbook for the study of gastrointestinal diseases. Dr. Cryer opined that "absolutely Aleve was gentler to the stomach lining than aspirin" and that it was "safer to the stomach lining than aspirin." He based this opinion upon his 11 years experience in the area, his primary research, his understanding of the literature from serving as a peer reviewer of articles on the subject and as a moderator in various forums, and from the cumulative body of evidence with respect to the issue of nonsteroidal anti-inflammatory drug effects in the gastrointestinal tract. Dr. Cryer explained that the basis for the efficacy and the toxicity of all NSAIDs, including aspirin, was their inhibition of an enzyme called cyclo-oxygenase enzyme or COX, which produces prostaglandins. Among other things, prostaglandins protect against injury in the gastrointestinal tract. Aspirin, a salicylate, is different from all other non-salicylate NSAIDs in that aspirin irreversibly inhibits or inactivates COX and it does so at very small doses of aspirin. The effect of aspirin is days of inactivation of prostaglandins, reduction of protection in the stomach due to inactivation of the prostaglandins and anti-platelet effects. Other NSAIDs inactivate prostaglandins for only hours. This difference has significant clinical consequences for the gastrointestinal tract. Although all NSAIDs have the ability to inhibit platelet function, aspirin is very different from the other NSAIDs in that it inhibits platelet function to a much greater degree and much more potently than other NSAIDs. Consequently, not only does aspirin have a very potent ability to cause ulcers, but it is also much more capable of causing bleeding from that ulcer or bleeding from even other lesser lesions.

Expounding upon a chart in the chapter Dr. Cryer wrote for "Gastrointestinal Diseases" which contained results from a study of patients experiencing gastrointestinal bleeding, he recounted that 35 percent of the subjects experiencing such bleeding were taking aspirin; seven percent were taking other over-the-counter NSAIDs.

Dr. Cryer recognized that endoscopy studies do not correlate to clinical symptomology, but maintained that endoscopy studies were "very predictive" of significant clinical outcomes. "What is important about endoscopic ulceration is that you will see that same relative proportion with regard to clinical outcomes. Now you are not going to have as many clinically apparent ulcers. You will have many fewer. But the relative differences, the relative proportions in terms of effects, are going to be approximately the same." For that reason, the FDA requires that submissions include endoscopic ulcer studies.

Dr. Frank L. Lanza, board certified in gastroenterology, is a clinical professor of gastroenterology at Baylor College of Medicine and a specialist in the area. Dr. Lanza’s primary focus of research is the effects of NSAIDs on the stomach. He is the most published physician in the area of the relative effects of NSAIDs on the stomach. He developed the eponymous Lanza scale, which is the scale used to measure relative degrees of injury to the stomach lining seen through endoscopy. He has conducted approximately 120 randomized clinical trials concerning the effects of NSAIDs on the stomach using endoscopy and has published results. Five or six of these clinical trials specifically compared naproxen to aspirin. Dr. Lanza performed clinical trials on naproxen in conjunction with the Aleve submission to the FDA and noted that the FDA accepts randomized endoscopy control trials to predict the effect of drugs on the stomach. He testified that results of his randomized clinical control trials comparing aspirin and naproxen in both analgesic and anti-inflammatory dosages showed that "[t]he toxic effects of aspirin at equivalent doses are much greater in the stomach than those seen with naproxen." He opined that "[b]ased on my work and the work of others that I have read, I would say that Aleve is gentler to the stomach than aspirin." He also opined that Aleve was "safer" to the stomach than aspirin.

Dr. Bernadette DeArmond, a physician and former vice-president of medical affairs at Syntex testified that she supervised the staff who gathered safety data from clinical trials in support of the Aleve new drug application to the FDA. She was aware of from 40 to 50 clinical studies submitted to the FDA in support of the application to switch to over-the-counter status. She and her group gathered safety and adverse event data from the clinical trials and she published a scientific paper summarizing this information. The conclusions she reached after viewing the studies involving 8404 patients from 48 clinical studies was that, overall, Aleve had a side-effect profile similar to that of acetaminophen, ibuprofen and placebos and that it was generally well tolerated. The adverse event rates for the placebos and naproxen were very similar.

She understood at the time of summarizing the studies submitted to the FDA for the new drug application in support of the safety profile of naproxen, that "the superiority of naproxen to aspirin is clear-cut in the studies of G.I. micro-bleeding and in the endoscopic investigations." Dr. DeArmond testified that "symptoms are often not a good guide to what is going on within the stomach lining and that often what is seen is difficult to correlate with symptoms at that time." However, she stated her understanding that "most people feel that there is some correlation between what is seen endoscopically and, let’s say, clinically significant complications somewhere down the road. But the puzzle has been the inability to correlate what is seen endoscopically with the symptoms that are occurring at the time of the endoscopy; but probably not as surprising, because we know that symptoms—whether or not endoscopy is involved, symptoms are often not truly indicative of what’s going on in the stomach."

C. Evidence of messages communicated to consumers.

Plaintiff sought to prove his claim that the advertising was likely to mislead the public through survey evidence and expert testimony, as well as through the use of an opinion of the National Advertising Division (NAD) of the Council of Better Business Bureaus.

(1) NAD opinion. The NAD was created by the advertising community in 1971 to provide a system of voluntary self-regulation of accuracy in advertising. Procter & Gamble is a member. A NAD opinion typically concludes that a challenged advertisement has been substantiated, or that it should be modified or even discontinued. These findings are advisory only and have no binding effect on the advertising sponsor. Shortly after the launch of Aleve, a competitor (the manufacturer of Bayer aspirin) filed a challenge to the Aleve advertising with the NAD, alleging the commercials were inaccurate in several respects, including the stomach-comfort messages. In November, 1994, NAD concluded its investigation and issued its opinion. Although NAD "recognized that the carefully written claims contained in these advertisements were generally substantiated, it recommended that the advertiser consider certain accuracy concerns," which it outlined. With respect to the specific claims regarding stomach-comfort, NAD concluded: "[T]he interpretation of the two claims, ‘aspirin upsets your stomach’ and ‘Aleve is gentler to your stomach lining than aspirin,’ when read jointly in the context of this advertising, could lead to the inference that Aleve causes no stomach upset, which is not true. NAD recommended that the advertiser modify the advertising to more clearly reflect the objectively quantifiable product distinction that formed the basis of the ‘gentleness’ claim. Through less endoscopically measurable gastric irritation may be an important product attribute, its significance and relevance have the potential of being misunderstood when the advertisement is read in its entirety." (Italics added.)

Procter & Gamble replied that it would "avoid, in our advertising, the NAD concern about our claims involving the comparative gentleness of Aleve to the stomach lining, which everyone acknowledges are true." Kristine Malkoski, General Manager of Procter & Gamble, and former marketing director testified that the message that Aleve was gentler to the stomach lining than aspirin was dropped from the ads in January 1995, approximately six months after the launch period, because the ads moved from 45 seconds to 30 seconds and follow-up research had shown it was not an effective message with consumers and it was not a priority message.

(2) Consumer Surveys. Appellant relied primarily upon two consumer surveys to support his charge that the public was likely to be deceived by the Aleve commercials: BASES studies commissioned by Procter & Gamble before the Aleve launch and the Monroe Mendelsohn study, which had been commissioned by a competitor company, interested in establishing the deceptiveness of the Aleve advertisements with NAD.

The BASES study, named after the research company conducting the tests, consisted of several tests. A BASES test is a consumer survey testing advertising concepts and messages before launching the product advertising. Four BASES tests were conducted before launch of Aleve. Most did not test actual copy, but attempted to forecast sales volume within the first two years of the product’s introduction by trying to determine what consumers think of the concept and the product.

A June 1992 BASES test containing some of the copy for what became the "Swimmer" commercial and a variation on the commercial itself was introduced. The commercial in this BASES test contained a slightly different version of the actual commercial eventually used, including a different ending line: "Strong, long, gentle relief for people in pain." Responding to the question "What is there about this product that you think you would like" after viewing the film, 24 percent said they liked the "safety/side effects" concept, with 13 percent stating they liked that it did "not upset/irritate stomach" and seven percent responding they liked that it was "gentler to stomach than aspirin." The June 1992 BASES tests concluded that efficacy drove sales, but that "safety assurances need to be provided."

In a fall 1992 BASES test, consumers were exposed to two concept test boards (not the commercial itself) containing the "gentler to the stomach lining than aspirin" comparison and could look at them repeatedly. Thirty-seven and 39 percent respectively, received some safety/side effect message. These percentages were composed of 23 and 25 percent who received an absolute message that Aleve would not upset/irritate the stomach, 11 and 10 percent who received the message that Aleve was gentler to the stomach than aspirin, and three percent on each who received a message that Aleve did not contain aspirin. Exposed to a concept board not containing the gentler comparison message, three percent nevertheless took away a positive safety/side effect message.

A 1992 Procter & Gamble memo recognized that "[s]tomach safety is particularly important to older (50+) consumers." "Keeping in mind that this group has more heavy users, it is critical that we leave a strong stomach safety message in the minds of these consumers."

A third BASES study also exposing participants to a variation of the commercial containing the tag line "gentle relief for people in pain" similarly showed 13 percent stating they liked that Aleve did not upset the stomach, seven percent stating they liked that it was gentler to the stomach than aspirin, with a total of 24 percent overall stating they liked the safety/side effect product attribute. Again, three percent of those shown a concept board with no reference to the stomach-comfort references stated they like the overall safety/side effects product attribute.

In a study commissioned by an Aleve competitor, Monroe Mendelsohn Research, Inc. polled 308 users of over-the-counter pain relievers in August 1994 in conjunction with the NAD proceedings. Consumers were shown the actual "Swimmer" commercial twice in a row and were asked eight questions about the messages they took from it. The first question was: "What is the main idea that this commercial communicates to you?" Aleve’s duration of relief and ability to relieve pain were the messages most recalled by consumers exposed to the commercial. Six percent of viewers said the main idea was that Aleve "doesn’t hurt/bother upset your stomach" and three percent said the main idea was that Aleve was "easier on/gentler to the stomach than aspirin." Asked what other ideas were presented, 20 percent said that Aleve did not upset the stomach and eight percent said that it was gentler on the stomach than aspirin. Other, more directed questions were also asked. Asked what "specific symptoms or conditions" the "gentler" line referred to, survey respondents mentioned subjective side effects such as upset stomach (28%), nausea (19%), stomach pain (12%), heartburn (11%), cramps (8%), gas (5%), stomach ache (5%) and indigestion (5%). Survey respondents also mentioned bleeding in stomach (7%) and ulcers (23%).

Proctor & Gamble also used ARS testing conducted by Research Systems Corporation (RSC) before launching Aleve. The ARS technique is to invite people to observe a television program. Embedded in the program are pieces of the advertising copy. Seventy-two hours later the viewers are called at home and asked whether they remembered seeing a commercial for analgesics, if so what brand, and what did they remember about the commercial. The technique is open-ended and, according to Susan Mackey, marketing research director for Procter & Gamble, the purpose of the test is to help the sponsor evaluate whether viewers received the message the sponsor wanted to communicate. According to Mackey, Procter & Gamble liked to use 72-hour recall versus immediate recall testing, because "we want it put in more of a real life context of their regular everyday life, and so when you go back and ask them what they remember about the commercial, what they say back means it’s more relevant to them. [¶]  The same as when you put commercials on T.V., they are not only paying attention to the commercial and thinking about the commercial. There are a million things going on in their house. . . . [¶]  So what we are trying to do is make it more realistic and relevant in terms of what they remember about the commercial."

According to Russell Winer, professor of marketing strategy at the University of California at Berkeley and an expert in the area of advertising effectiveness and consumer behavior, the ARS data for all 10 different executions of Procter & Gamble advertisements showed that an average of 5.6 percent of participants recalled anything about messages related to safety. Even these low percentages overstated the general safety message that people recalled from the ad, as they included not only "wouldn’t upset the stomach like aspirin," but also "better for the stomach."

The parties also relied upon an "Analgesic Hierarchy of Importance Study" pre-launch survey conducted by Procter & Gamble in 1989. This study sought to identify attributes driving the choice of pain relievers by measuring the importance to consumers of the various benefits offered by analgesics. Asked what is the most important factor in the decision to buy a pain reliever, 64 percent mentioned efficacy. Safety was mentioned as the most important factor by 20 percent of responders. When analyzed further, 11 percent of all respondents said the most important thing to them was that it not upset their stomachs. When asked about additional important factors (not the most important factor), 35 percent mentioned "doesn’t upset stomach" as an important attribute.

Appellant introduced evidence that Procter & Gamble hoped to communicate that Aleve was gentler to the stomach than aspirin, and that this was a key element to include in the advertising copy.

(3) Expert testimony. David Stewart, dean of the University of Southern California School of Business, and an expert on deceptive advertising, marketing strategy and consumer surveys, testified for appellant. Stewart compared the Monroe Mendelsohn survey, which he described as a communication test designed to measure what consumers take away from an ad at the point of exposure, to ARS testing, which was designed to assess the persuasiveness of an ad and the degree to which it may have an impact on the choice of a particular product by measuring consumer recall. Stewart opined that if the question is what the ad actually communicates, a communication test was more appropriate than a memory test. According to Stewart, memory is insensitive as to what people take away from an ad, particularly when evaluating a "reassurance claim." He testified that the safety message was a "brand leveling claim" and that it was important to include such a claim to get the product into the consumer’s "consideration set" whether or not the consumer remembered the particular claim the next day. Stewart opined that with respect to stomach safety messages, the commercials at issue contained two related messages. "The first is that this is a product that is gentle on the stomach. It will not cause stomach upset. And that’s more in an absolute sense. The second message is a comparative message, and that is this product is gentler than aspirin." He based this opinion on the study of various internal Procter & Gamble documents indicating the company’s understanding of the importance of convincing consumers Aleve was a safe product. The second basis for his opinion was the results of the Monroe Mendelsohn communications tests. Stewart also stated that if he were to repeat the Monroe Mendelsohn study, he would include a control group.

Stewart opined that if Aleve had common side effects of abdominal discomfort, such as indigestion and heartburn, the ads were likely to mislead a substantial number of reasonable consumers. He further concluded that if there were no substantial difference between Aleve and aspirin in terms of the likely causation of subjective gastrointestinal problems, including stomach upset, the ads were likely to mislead a substantial number of reasonable consumers. He stated that the NAD opinion provided independent corroboration of his opinion.

On cross-examination, Stewart stated he would defer to medical science on whether Aleve was in fact similar to aspirin regarding side effects—that is whether the ad was explicitly misleading. He acknowledged that if as a medical and scientific fact Aleve was safer to the stomach, as safer is understood by consumers, then they were not being misled. He also acknowledged that in the Monroe Mendelsohn study "noise" in the marketplace from Advil and Nupren ads was not tested, as there was no control group. He acknowledged that the only consumer research he had reviewed and relied upon in forming his opinions was the Monroe Mendelsohn study and that study had been done in connection with a business dispute by a competitor economically interested in persuading NAD that the Aleve advertising was potentially deceptive. He also acknowledged that the "Aleve Business Review" dated March 15, 1995, prepared for Procter & Gamble and analyzing the remarkable success of the Aleve campaign, did not mention the leveling or safety message phenomenon as among the key factors driving the early success of the product.

Professor Winer, testifying for respondents, was asked for his opinion as to "whether the Aleve advertising was likely to deceive a significant number of reasonable consumers." Winer opined that "the evidence provided by the plaintiff in this case has not proven that a significant number of consumers were, in fact, deceived by the Aleve advertising that was run during the period in question." He also found no evidence that the line that "Aleve is gentler to the stomach lining than aspirin" was deceptive.

In forming these opinions, Winer relied on his own viewing of the commercials, the marketing research evidence presented through the trial process, including Procter & Gamble’s studies such as the ARS studies, and the Monroe Mendelsohn study. Winer testified he was familiar with ARS studies and that RSC, which had conducted the tests is a well-known, standard, legitimate source of information that companies can use to test their advertising. In Winer’s view, the 72-hour recall test is the more "real world" test of whether advertising actually affects consumer conduct. An advantage of ARS tests is that they measure the likely effectiveness of advertising at the point of purchase. Winer reviewed the data for all ARS studies regarding Aleve ads. He determined that "safety-related recall was extremely low." The average level of recall for any safety message was 5.6 percent, which he believed overstated the amount as it referred to general safety messages, rather than any specific stomach comfort message.

Winer opined that if the statement "Aleve is gentler to the stomach lining than aspirin" were a medically correct and true statement, consumers perceiving that from the ads would not be deceived.

Reviewing the "Hierarchy of Importance" survey, Winer observed that 64 percent of participants mentioned efficacy-related factors as most important to them in making an analgesic purchase; 20 percent mentioned safety in some manner. Eleven percent of total participants mentioned that that the most important thing to them was that the substance not upset their stomach. He concluded from these results that "efficacy or how well the analgesic actually works is considered to be the most important attribute of analgesic product choice by a much higher percentage of people than safety-related reasons." This is important because it indicates the kind of message that will resonate with most people. In rank ordering of the importance of product attributes, the study showed that "safety is down the list in terms of relative importance compared to other attributes."

Professor Winer understood that Professor Stewart’s opinions regarding deceptiveness of the commercials was based in part on the Monroe Mendelsohn study. Winer opined that the application of generally accepted research principles to that study, showed "a number of significant flaws that lead me to discount its value in terms of providing evidence one way or the other about the deceptiveness of the advertising." He recounted these flaws as follows: Undue focus on the safety claim alone, noting it was commissioned by a competitor interested in establishing deceptiveness and limited the inquiry to the safety claims. The study posed no neutral questions at all, which was unusual for a study of this type. Moreover, the study lacked a control group to filter out "noise" from other ads or information. For example, Winer pointed to one ARS study, which was similar to the other ARS 72-hour recall studies except that it did not contain the phrase "Gentler to the stomach lining than aspirin," and did not contain a comparison between aspirin and Aleve. About three percent of those tested nevertheless recalled some gentleness statement. This was nearly the same percentage as had recalled the statement from the commercials that did contain the phrase and the aspirin comparison, which indicates that some responders attributed information to a particular advertisement that they actually obtained from another source. Although the ARS studies also had no control group, measures were taken both before and after the ad exposure, so that there was a baseline. In contrast, the Monroe Mendelsohn study was a "fundamentally flawed design" because it simply exposed a group to a test stimulus and then took a measure. According to a well-known text on experimental design, this type of test is the "weakest experimental design" and "basically has no scientific value."

Winer also believed the survey technique used in the Monroe Mendelsohn study was flawed. Questions were asked in a way that invalidated most of the study. That participants "played back" the message that Aleve was "easier or gentler to the stomach than aspirin," immediately upon hearing the advertisement was not surprising or relevant. What was relevant is that in response to the first open-ended question about the main idea of the commercial, 11 percent perceived some gentleness/safety message not necessarily related to stomach comfort. Only six percent of participants identified that Aleve "doesn’t hurt, bother or upset your stomach" as a main idea. After the first question, the study kept probing repeatedly as to what other ideas might come out, eventually eliciting a safety response from 20 percent of participants. According to Winer, "The control group is critical here because these would be answers that would be directly compared to a placebo ad that doesn’t make any claim about Aleve with respect to aspirin. So it’s really important to have this placebo ad because we don’t know how to compare the six [percent]. We don’t know how to compare the 20 [percent] to how many people would have given that response just based on other information they may have had from the general environment." Winer concluded that despite these flaws, the six percent main idea response was "very close" to the 5.5 percent mean 72-hour recall that ARS found, "which is a very low number." Winer criticized the leading questions in the balance of the Monroe Mendelsohn survey as "cueing the respondent to give a particular answer" and unduly focusing upon and repeating the challenged portions of the ad. Questions 5-7 created "demand effects" where the experimenter almost demands an answer from the respondent. Winer summarized his criticism of the Monroe Mendelsohn study: "[T]he total numbers that they are coming up with from this report in terms of how many people were so-called deceived by the ad are, in my view, terribly inflated because of the []leading questions, the lack of the control group, the fact that the interviewer, in fact, did not mix other kinds of questions in to give a more unbiased perspective . . . ."

Winer also stated that he did not rely upon the NAD opinion and he disagreed with NAD’s reliance upon the Monroe Mendelsohn study, if they did rely upon it. He stated that NAD complaint investigations were performed by experienced attorneys with expertise in the sciences, but that he saw no reference to NAD experts in the area of experimental science or marketing research.

Kristine Malkoski, marketing director at Procter & Gamble from December 1991 to 1996, testified that her department had responsibility for setting the vision for Aleve and oversee the strategic elements of the market research, and advertising campaign. After launch, a consumer satisfaction monitor was used to determine how the advertising was communicating to consumers and how consumers were reacting to various attributes of the product. The attribute of "doesn’t upset my stomach" performed significantly worse than all brands in the category except Bayer Select, with a negative number of minus 7.6 relative to the norm (25 of 26 product attributes). That was one of the two lowest ratings in terms of effectively communicating a message. Malkoski concluded based on this and other data that the success of Aleve was not due to the inclusion of the "gentler to the stomach lining than aspirin" phrase in the advertising. That phrase was eventually dropped because it was "extremely ineffectual" and because the ads were being shortened from 45 seconds to 30 seconds and "[i]t just didn’t make the cut."

She also explained the BASES results were different from and higher than the ARS results because the methodology was different. In BASES tests, one can look at the concept as long as one wants and can view the film repeatedly while answering which attributes one likes. "It was kind of like taking an open-book test."

The purpose of the reference to aspirin upsetting "your stomach" was to separate stomach upset as a point of dissatisfaction, along with dissatisfaction about Tylenol and Advil based on the perception that aspirin upsets the stomach. The focus was to establish dissatisfaction as pervasive among analgesic users. The purpose of the "gentler to the stomach lining than aspirin" phrase was to establish that Aleve had a side effect profile similar to other over-the-counter products in the category.

Susan Mackey, marketing research director for Procter & Gamble healthcare products from 1991-1996, managed approximately 35 people who designed and analyzed market research for various products, including label, concept and use testing for Aleve. She testified that Procter & Gamble relied upon ARS testing technique to decide what copy to use. She also testified that the gentler message was not a "selling proposition," but a reassurance that Aleve was gentler to the stomach lining than aspirin.

IV. Substantial Evidence Supports the Judgment

A. Standard of Review

The parties disagree as to the applicable standard of appellate review. While acknowledging the usual standard of review on appeal following a trial of the merits is substantial evidence, appellant argues that we should review the evidence de novo. He contends that the outcome depends not upon resolution of disputed factual issues or the credibility of witnesses, but upon the interpretation and application of the legal standards set forth in the statutes. (See, People v. Duz-Mor Diagnostic Laboratory, Inc. (1998) 68 Cal.App.4th 654, 660 [where facts were largely undisputed, the question of whether a practice is unfair under the UCL was a question of law and the issue was to be considered de novo].)

The ultimate question before the trial court was whether members of the public were "likely to be deceived" by the advertisements. This is quintessentially a question of fact, upon which we defer to the trial court. (Quelimane Co. v. Stewart Title Guaranty Co., supra, 19 Cal.4th 26, 54 ["Whether a tax deed conveys ‘good’ title within the meaning of an advertised promise to issue title insurance for any ‘good’ title and whether a reasonable consumer would so understand it are factual questions" to be determined at trial]; Cairns v. Franklin Mint Co., supra, 24 F.Supp.2d 1013, 1037 ["Whether consumers have been or will be misled is a factual question" under the UCL]; see Novartis Corp. v. F.T.C. (2000) 223 F.3d 783, 787, and fn. 4 [rejecting de novo review standard and holding substantial evidence supported FTC finding that advertisements were deceptive in violation of Federal Trade Commission Act sections 5 and 12]; F.T.C. v. Brown & Williamson Tobacco Corp. (D.C. Cir. 1985) 778 F.2d 35, 41[rejects de novo review of FTC ruling under the federal act].)

Contrary to appellant’s assertion that the facts relating to this question were undisputed, the parties disputed almost every material fact in the case, including the ultimate one. The parties introduced conflicting evidence as to whether the message that Aleve was "gentler" to the stomach lining than aspirin was a true statement. They disagreed as to the explicit and implicit messages conveyed by the commercial spots. Both parties introduced expert testimony and evidence of consumer surveys to buttress their competing arguments as to the implicit messages conveyed by the commercials and the impressions received by reasonable consumers. They disputed the validity and weight to be given each other’s evidence.

Consequently, we examine the record to determine whether substantial evidence supports the trial court’s conclusion that the advertisements at issue were truthful, were not likely to mislead reasonable consumers, and did not violate the UCL.

In applying the substantial evidence test, we view the record in the light most favorable to the prevailing party and will resolve all evidentiary conflicts and indulge all reasonable inferences in support of the judgment. (Marriage of Mix (1975) 14 Cal.3d 604, 614.) We look to the entire record to determine whether there is substantial evidence, contradicted or uncontradicted, which will support the determination of the trial court. (Bowers v. Bernards (1984) 150 Cal.App.3d 870, 873-874.) Where such evidence is present, we defer to the trial judge’s factual determinations and have no power to substitute our own deductions. (Id. at p. 874; Rupf v. Yan (2000) 85 Cal.App.4th 411, 429-430, fn. 5.) The rule applies equally to court and jury trials and to the assessment of lay and expert testimony. (Eisenberg et al., Civil Appeals & Writs, supra, ¶¶ 8:44, 8:55; Ortzman v. Van Der Waal (1952) 114 Cal.App.2d 167, 170 [249 P.2d 846].) Expert testimony cannot constitute "substantial evidence" when based on conclusions or assumptions not supported by the evidence in the record. (Hongsathavij v. Queen of the Angels etc. Medical Center (1998) 62 Cal.App.4th 1123, 1137; Eisenberg et al., Civil Appeals & Writs, supra, ¶ 855.) However, where the trial court has found expert testimony credible and there is supporting evidence in the record, we will not reweigh the evidence. (See Hasson v. Ford Motor Co. (1977) 19 Cal.3d 530, 544, overruled on other grounds in Soule v. General Motors Corp. (1994) 8 Cal.4th 548.)

Applying these rules to the case at hand, it is clear that substantial evidence supports the advertising claim that Aleve is gentler to the stomach lining than aspirin. The testimony of doctors Cello, Cryer, Lanza and DeArmond, recounted above, uniformly supported this conclusion.

In addition, even comparing Aleve and aspirin as to purely subjective side effects, there is substantial evidence that Aleve is gentler to the stomach than aspirin. Dr. Cello testified that there was an overlap between endoscopically visualized lesions and subjective symptoms and that there is a connection, albeit not an absolute one, between lesions and stomach upset. He further related that in six of 12 analgesic studies comparing naproxen or naproxen sodium with aspirin, patients reported significantly fewer gastrointestinal adverse events with Aleve than with aspirin and that in none was aspirin superior. Moreover, a study comparing Aleve, Tylenol, and Advil showed no significant difference in terms of adverse events. Dr. Cello opined that the study demonstrated that like Tylenol, which has no known impact on the stomach, Aleve was "virtually equivalent to a placebo" in terms of stomach side-effects. Dr. Cryer testified that endoscopy studies were "very predictive" of significant clinical outcomes. Dr. DeArmond testified there was "some correlation" between what is seen endoscopically and clinically significant complications.

We conclude that substantial evidence supported the trial court’s finding that the comparative claim that Aleve is gentler to the stomach lining than aspirin is factually accurate and not deceptive under the law.

We next consider whether substantial evidence supports the trial court’s finding that plaintiff failed to demonstrate that the challenged commercials were likely to mislead members of the public acting as reasonable consumers into believing Aleve would cause no subjective symptoms of gastrointestinal discomfort. As the court found, the commercials contained no express message that Aleve was absolutely gentle to the stomach and that it would not cause stomach upset. It is a closer question whether a substantial number of reasonable consumers were likely to be misled by an implied message into believing that Aleve was absolutely gentle to the stomach and would not cause stomach upset. Appellant contends that such implied message was conveyed to consumers by the reference to "when . . . aspirin upsets your stomach" and the comparison phrase "Aleve is gentler to your stomach lining than aspirin" viewed in the context of the entire commercial.

As a threshold matter, the parties disagree whether expert testimony and consumer studies are required to support the court’s decision. Each attacks the validity or the appropriateness of the studies primarily relied upon by the other.

Respondents and the Attorney General as amicus contend that the trier of fact, looking at the ad, can determine for itself whether the ad is likely to mislead a reasonable consumer and that consumer survey evidence is not required. Appellant argues that consumer studies like the Monroe Mendelsohn study and the BASES tests (and unlike the ARS recall studies) were required to support the expert testimony. The FTC has concluded that a facial analysis of the challenged ad will suffice if it permits the commission to conclude with confidence that the ad makes an express or implied claim. Where the claim is not manifest from examination of the ad, the commission looks to extrinsic evidence, including consumer surveys and copy tests, as well as expert testimony. (In the Matter of Novartis Corp. (May 13, 1999, No. 9279) ___ FTC ___ [1999 FTC Lexis 63, *14].) (Novartis Corp.)

We need not determine whether expert testimony based upon consumer survey evidence is required in all UCL cases. Expert testimony based upon consumer survey data was introduced in this case and was considered by the trial court, and it is therefore appropriate for us to evaluate this evidence.

Appellant suggests that the ARS recall tests cannot support the court’s determination, arguing that the Monroe Mendelsohn and BASES tests are superior to the ARS recall test as a measure of whether a misleading claim was made. He quotes from the FTC opinion in Novartis Corp., supra, at page *19, finding that ARS test methods "likely understate the communication results." (Ibid.) There, observing that the first prong of the Federal Trade Commission Act test for deception was "whether the claim was made and not whether it was memorable," the FTC concluded that forced-exposure tests "where questions are asked when the ad is fresh in the consumer’s mind, are more telling regarding whether a particular claim was made. The ARS . . . tests also tend toward understatement because their questionnaires contain no close-ended questions, and the open-ended questions asked consumers about express claims in the tested ads rather than what the ad implied or suggested." (Id. at pp. *19-20.)

However, the FTC in Novartis Corp. was acting as the trier of fact. Based upon its facial analysis of the challenged ads and extrinsic evidence of several forced-exposure consumer surveys, it concluded that "the issue of whether the claim was made is not a close one." (Id. at p. *21.) This determination was upheld by the District of Columbia Circuit Court of Appeals, which found it supported by substantial evidence. (Novartis Corp. v. FTC, supra, 223 F.3d 783, 786-788.)

The superior court here was not compelled to give the same weight to the ARS tests as did the FTC in Novartis Corp. "The ‘probative value of a consumer survey is a highly fact- specific determination,’ [Johnson & Johnson-Merck Consumer Pharmaceuticals Co. [v. Rhone-Poulenc Rorer Pharmaceuticals, Inc. (1994)] 19 F.3d [125] at 134 (quotations omitted). It is not the type of determination that we may make as a matter of law . . . ." (Clorox Co. Puerto Rico v. Procter &Gamble Commercial Co. (1st Cir. 2000) 228 F.3d 24, 37, fn. 12; accord Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer Pharmaceuticals Co. (3d Cir. 2002) 290 F.3d 578, 593.) The question of implied claims in this case was much closer than that in Novartis Corp., supra, and the trial court here received expert testimony regarding the relative uses, merits, and weaknesses of the various tests used to measure consumer message perceptions. We cannot say as a matter of law that ARS tests are not properly used to ascertain whether a particular message was relayed to consumers. This determination was for the trier of fact, informed by expert testimony.

Appellant introduced consumer survey evidence which could have led the court to conclude that the commercials were likely to deceive a substantial number of consumers acting reasonably. However, respondents challenged the validity and the weight to be given appellant’s evidence and also presented evidence, including survey evidence, expert testimony, and lay testimony, that the ads were not likely to deceive ordinary consumers acting reasonably.

Professor Winer discounted the value of the Monroe Mendelsohn study and of Professor Stewart’s opinion based thereupon. Winer questioned the reliability and survey method of the Monroe Mendelsohn study, explaining his reasons in detail, including that the survey relied upon leading questions and repeated probes to solicit the desired response. "A survey is ‘not credible if it relies on leading questions which are "inherently" suggestive and invite guessing by those who did not get any clear message at all.’ [Citation.]" (Johnson & Johnson-Merck Consumer Pharmaceuticals Co. v. Rhone-Poulenc Rorer Pharmaceuticals, Inc., supra, 19 F.3d 125, 134 [affirming district court’s finding that plaintiff had not carried its burden of proof of false advertising under the Lanham Act (15 U.S.C. § 1125(a)), absent well-designed consumer surveys showing that the challenged commercials misled consumers].)

Winer also discounted the NAD study because the NAD investigation appeared to rely on the Monroe Mendelsohn study and because the NAD complaint investigation staff was composed of attorneys rather than experts in experimental science or marketing research. He relied instead upon the ARS tests as a more "real world" test which showed that recall of a safety message was "extremely low" at 5.6 percent, and that even that amount was likely overstated. He also relied upon his analysis of the "Hierarchy of Importance" survey, concluding that safety was "down the list" in terms of its relative importance to consumers.

Malkoski testified she had concluded, based upon a post-launch consumer satisfaction monitor used to determine how the ads were communicating to consumers, that the "gentler to the stomach lining than aspirin" phrase was "extremely ineffectual" and that the success of Aleve in the marketplace was not due to the inclusion of that phrase in the ads. Addressing the discrepancy between the BASES test results and the ARS survey results, she explained that the methodology was different, as in BASES tests the subject could look at the concept boards as long as he or she wanted and could view the film repeatedly while answering questions about which product attributes the subject found desirable. Malkoski also testified that the purpose of including the comparison phrase, "gentler to the stomach lining than aspirin" was to establish that Aleve had a side-effects profile similar to other over-the-counter products in the category.

Viewed in the light most favorable to respondents, the evidence showed that only a small number of consumers understood the commercials to say that Aleve was absolutely gentle to the stomach or that it would not cause any stomach upset.

Appellant contends that the court erred in ignoring his showing that a substantial number of consumers were likely to be misled by the ads into believing that Aleve caused no gastrointestinal discomfort. Appellant argues that its consumer survey evidence demonstrated that 20 percent or more of consumers took away some safety message from the commercials. Of course, side effect and safety messages need not be related to gastrointestinal comfort and we have heretofore concluded that substantial evidence supported the trial court’s finding that the comparative claim that Aleve was "gentler" to the stomach lining than aspirin was true.

Whether the number of consumers likely to be misled is "substantial" is not measured by a fixed and inflexible standard. As appellant points out, in assessing deception under section 5 of the Federal Trade Commission Act, the FTC has stated that a "claim would likely mislead a reasonable consumer if at least ‘a significant minority of consumers’ would be deceived by it. Deception Statement, 103 F.T.C. at 177 n.20." (Novartis Corp., supra, at *22.) Under the Lanham Act, the courts have indicated that a finding that 15.5 percent of consumers received a misleading message would be sufficient to demonstrate a likelihood of substantial consumer confusion. However, in all these cases, deference to the factual findings of the trier of fact is the rule. (See, e.g., Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer Pharmaceuticals Co., supra, 290 F.3d 578, 594, and fns. 12 & 13, [under Fed. Rule of Civ. Proc. 52(a) Lanham Act false advertising finding cannot be set aside unless "clearly erroneous"].)

Based upon the expert testimony of Winer and other evidence presented regarding the tests, their purposes and methodology, the court could properly conclude the Monroe Mendelsohn consumer survey evidence was methodologically flawed and that the BASES studies (particularly those which did not expose consumers to the actual commercials) did not accurately reflect the number of consumers who were likely to take away an absolute stomach comfort message. Therefore, the court could properly refuse to credit the results of those studies on the issue. (See Johnson & Johnson-Merck Consumer Pharmaceuticals Co. v. Rhone-Poulenc Rorer Pharmaceuticals, Inc, supra, 19 F.3d 125, 134-135.) Moreover, the court could certainly conclude that the ARS test was more reflective of the actual number of consumers likely to take away an absolute stomach safety message. As Winer testified, approximately 5.6 percent of participants in the ARS tests recalled any safety message at all (much less an absolute stomach comfort message)—a very small number. The determination that a significant or substantial number of consumers was not likely to be misled by the commercials was supported by substantial evidence and was not clearly erroneous.

Appellant also argues that Winer’s testimony was insufficient to support the judgment, because his opinion was phrased in terms of consumers actually deceived, rather than likely to be deceived. (Winer had opined that "the plaintiff in this case has not proven that a significant number of consumers were, in fact deceived by the Aleve advertising.") We recognize that under the UCL, appellant need not show that consumers were actually misled to show that the ads were likely to mislead consumers. Such evidence is, nevertheless, very relevant to the ultimate issue and may be relied upon by the trier of fact. We conclude that taken together, the expert testimony, consumer survey data, and other evidence presented comprised substantial evidence supporting the court’s finding that the commercials were not likely to deceive a reasonable consumer.

A fortiori, the evidence did not establish as a matter of law a conscious decision by respondents to communicate implied messages they knew would mislead many California consumers.

Finally, appellant argues that the court based its conclusions upon its own parsing of the language of the ad, rather than upon the consumer survey evidence in the case. We cannot agree. The statement of decision issued by the court indicates the court carefully reviewed the evidence of doctors, other experts, and the various surveys introduced by the parties, both on the comparison of aspirin and naproxen and on the impact of the commercials on consumers. The court was aware of the standard for sustaining a claim under the UCL and false advertising statute, recognizing that the test was "whether the public was likely to be deceived." It appears the judge properly considered all the evidence presented and based her determination upon the evidence as a whole. That the court may have given little weight to appellant’s consumer surveys or marketing expert and more weight to respondents’ evidence is not grounds for reversal where, as here, substantial evidence supports the court’s findings. It is the plaintiff’s burden to demonstrate that the public was likely to be deceived by the challenged advertisements.

CONCLUSION

We conclude that substantial evidence supports the trial court’s finding that plaintiff had failed to show the commercials were likely to deceive members of the public, and that the commercials at issue were neither deceptive nor misleading under the UCL or the false advertising law. Therefore, we need not reach issues regarding the availability of restitution relief or the reach of the court’s equitable powers in UCL cases.

The judgment is affirmed. Respondents are awarded their costs on appeal.

_________________________ Kline, P.J.

I concur:

_________________________

Lambden, J.

Lavie et al. v. Proctor & Gamble Co. et al., No. A093393

Concurring opinion of Haerle, J.

I concur in everything my colleagues say, but I would have phrased matters a bit more strongly regarding the position urged in the Attorney General’s amicus brief.

I find the Attorney General’s position both troubling and startling for three separate and distinct reasons. First of all, and certainly most importantly, it effectively asks us to not only create new law but to do so in direct contradiction of precedent from our own Supreme Court. As the majority notes, that court has stated that the test under section 17200 is whether a "reasonable consumer" would have been misled. (See Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 55.) As I am sure the Attorney General’s office understands, we are required to follows applicable precedent from our Supreme Court. (See Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455.)

Second, and aside from our mandate to follow binding precedent, the Attorney General essentially asks us to become the only court to hold that a violation of section 17200 is evaluated by whether the representation may impact on the "least sophisticated consumer." As the majority opinion points out, every other court that has considered that issue has declined to do so.

Third and finally, the position adopted in those cases is consistent with common sense; the Attorney General’s position is not. That position would, I suggest, allow a section 17200 cause of action to the consumer who interprets literally the radio ads saying "Albertson’s is your store" and goes to court when he is not given access to his local store’s daily receipts.

Haerle, J.

Trial Court: San Francisco Superior Court

Trial Judge: Honorable Isabella H. Grant

Attorneys for Appellant:

Milberg Weiss Bershad Hynes & Lerach LLP

Dennis Stewart

William S. Dato

Timothy G. Blood

Sheri Pym

Kevin K. Green

Steyer Lowenthal Boodrookas & Walker LLP

Allan Steyer

Carols A. Alvarez

D. Scott Macrae

Attorneys for Respondent:

Haight, Brown & Bonesteel, LLP

Jules S. Zeman

Drinker, Biddle & Reath

David Fleming

William Hanssen

Attorneys for Amicus Curiae:

Bill Lockyer, Attorney General

Richard M. Frank, Chief Assistant Attorney General

Herschel T. Elkins, Senior Assistant Attorney General

Ronald A. Reiter, Supervising Deputy Attorney General

Seth E. Mermin, Deputy Attorney General