## Facts

- Warner Bros. Distributing Corp. licensed exhibitors to show the film *The Swarm* and circulated highly laudatory promotional materials describing it as a “chilling, riveting, harrowing” experience and a prospective “summer blockbuster.”
- Presidio Enterprises and affiliated exhibitors operated multiple theaters in Austin, Texas, and had been in the business for years.
- Presidio agreed to pay $65,000 for exhibition rights to *The Swarm* at two theaters without previewing the film.
- Presidio consulted a Hollywood advisor who warned against taking a large risk on the film, but Presidio proceeded.
- The film performed poorly at the box office, and Presidio sustained losses of roughly $56,000.
- Presidio sued Warner in federal district court asserting common-law fraud, negligent misrepresentation, and violations of the Texas Deceptive Trade Practices–Consumer Protection Act (DTPA).
- A jury found for Presidio, and enhanced DTPA remedies increased the judgment to more than $500,000.
- Warner appealed the liability and damages; Presidio cross-appealed on issues not affecting the final disposition.

## Issues

1. Whether Warner’s promotional statements about the film’s quality and expected success were actionable misrepresentations of fact or nonactionable opinion/puffery under Texas common law.
2. Whether Warner’s superior access to information about the film triggered a “special knowledge” exception making its opinions actionable.
3. Whether the Texas DTPA changed the common-law analysis so that promotional puffery could support statutory liability and enhanced damages.

## Decision

- The Fifth Circuit reversed the judgment for Presidio and instructed dismissal of the complaint.
- The court held Warner’s statements were nonactionable opinions and sales puffery, not misrepresentations of material fact.
- The court rejected application of the “special knowledge” exception on these facts.
- The court held the DTPA did not convert promotional hype into actionable misrepresentation.

## Legal Principles

- Fraud and negligent misrepresentation require a misstatement of material fact; generalized praise, predictions, and promotional slogans are typically nonactionable opinion or puffery.
- An “opinion” may be actionable in limited circumstances when the speaker’s special knowledge effectively makes the opinion a factual representation, but ordinary advertising hyperbole does not satisfy this exception.
- A sophisticated commercial buyer’s experience and access to independent advice may defeat any claim of reasonable reliance on promotional puffery.
- Texas DTPA liability still requires actionable deception; the statute does not transform nonfactual puffery into a misrepresentation.

## Conclusion

Because Warner’s promotional descriptions and optimistic predictions about *The Swarm* were classic puffery rather than verifiable factual representations, Presidio could not establish fraud, negligent misrepresentation, or DTPA liability, and the enhanced judgment was reversed with instructions to dismiss.


Presidio Enters., Inc. v. Warner Bros. Distrib. Corp., 784 F.2d 674 (5th Cir. 1986)