## Facts

- Harve Benard, Ltd. manufactured women’s blazers labeled “70% wool, 20% nylon, 10% cashmere” and marketed as “Cashmere and Wool” or a “Luxurious Blend of Cashmere and Wool.”
- Harve Benard sold substantial quantities of the blazers to retailers, including Saks Fifth Avenue and Filene’s Basement.
- Beginning in 1995, plaintiffs L.W. Packard & Co. (a cashmere and cashmere-blend fabric manufacturer) and the Cashmere & Camel Hair Manufacturers Institute (a trade association) bought random blazer samples for fiber testing.
- Two experts independently concluded the tested garments contained no cashmere despite the labels.
- One expert also determined roughly 10–20% of the fibers were recycled (reconstituted from previously used or woven garments).
- Plaintiffs sued under Lanham Act § 43(a), Massachusetts General Laws ch. 93A, and common-law unfair competition, alleging (1) false cashmere-content claims and (2) misleading use of “cashmere” to imply virgin cashmere rather than recycled fiber.
- Packard sought monetary damages for lost sales and competitive harm; the Institute sought injunctive relief to stop misleading labeling practices.

## Issues

1. Whether summary judgment was properly granted dismissing Packard’s damages claims under the Lanham Act and Massachusetts law, including whether plaintiffs had to produce extrinsic evidence of consumer deception and whether causation/damages were sufficiently shown.
2. Whether summary judgment was properly granted dismissing the Institute’s claim for injunctive relief based on allegedly misleading implications about recycled (non-virgin) cashmere.
3. Whether, at summary judgment, literal falsity and/or intent to deceive entitled plaintiffs to a presumption of consumer deception, and whether the district court drew inferences against the nonmoving parties.

## Decision

- The First Circuit reversed the partial summary judgment for defendants and remanded.
- The court held the district court improperly drew inferences in favor of the moving parties rather than the nonmovants.
- The court held plaintiffs were entitled to a presumption of consumer deception from literal falsity as to cashmere content, and that evidence of intent to deceive could independently support a presumption of deception.
- The court reinstated Packard’s damages claims and reinstated the Institute’s injunctive-relief claim concerning recycled cashmere.

## Legal Principles

- On summary judgment, courts must draw reasonable inferences in favor of the nonmoving party; weighing competing inferences is for the factfinder.
- In Lanham Act false-advertising cases, where a challenged claim is literally false, consumer deception may be presumed and plaintiffs need not provide extrinsic evidence (such as surveys) at the summary-judgment stage.
- Evidence supporting intentional deception can also justify a presumption of consumer deception.
- Misrepresentations about an inherent product characteristic, including fiber composition and the nature/quality of a named fiber, are presumptively material to purchasing decisions.
- For causation and damages in competitor false-advertising claims, evidence that mislabeling reduced costs and enabled undercutting competitors can create a triable issue without requiring definitive proof at summary judgment.

## Conclusion

The First Circuit held that plaintiffs’ testing evidence and related proof created triable issues on falsity, deception, materiality, and competitive injury, and that the district court erred by demanding direct proof of consumer deception and by drawing inferences for the movants; the court reversed and remanded, reinstating Packard’s damages claims and the Institute’s injunctive claim regarding recycled cashmere.


Cashmere & Camel Hair Mfrs. Inst. v. Saks Fifth Ave., 284 F.3d 302 (1st Cir. 2002)