A federal court in Fort Lauderdale, Fla., on Monday granted Star brite's motion for a preliminary injunction against ValvTect Petroleum Products in a lawsuit over comparison advertisements from ValvTect.
"The court concludes that the claims in the ads in this case were not literally false, though they were misleading," U.S. District Judge James Cohn wrote in his opinion.
The court ordered ValvTect to stop running advertisements stating that certain lab tests show ValvTect Ethanol Gasoline Treatment outperforms Star brite's Star Tron Enzyme Fuel Treatment.
"We appreciate the strength and clarity of the court's findings against the false and misleading advertising by ValvTect," Star brite CEO Peter Dornau said in a statement. "This type of false advertising not only hurts Star brite but the entire marine industry by confusing customers about the truth and fiction of ethanol fuel additives."
ValvTect president Jerry Nessenson says that the ruling did not find the ValvTect ads to be literally false.
"We are pleased that the court did not find any of our advertising claims to be false and no retraction was ordered, nor did the court order prevent ValvTect from placing future ads comparing the performance of ValvTect Ethanol Gasoline Treatment and Star Tron," he said in a statement.
"We will certainly comply with the order by modifying future ads to more accurately describe the results of new tests that are currently being run," he added.
Nessenson said the motion was only a preliminary hearing. The case is set for a hearing in March 2010, at which time ValvTect expects to present current data comparing the performance of the two products.
The judge's 16-page opinion in the preliminary injunction outlines the case as follows:
In March 2007, ValvTect set out to conduct comparison tests between the two products on four performance measures: fuel stability, corrosion resistance, water control and prevention of carbon deposit buildup. The defendant began running the comparison ads earlier this year.
On fuel stability: ValvTect claimed that the ASTM D525 test found its own product improved stability by 138 percent, while Star Tron improved stability by 4 percent. However, the court found this misleading because ASTM D525 was not designed to test E10-based fuels (10 percent ethanol).
On corrosion control: The defendant used the National Association of Corrosion Engineers TM-0172 test. These tests were not performed by an independent laboratory but by ValvTect's corrosion inhibitor supplier, as blinded and coded samples. ValvTect ads claimed that its product, in independent testing, showed no corrosion, and Star Tron had 25 percent corrosion.
The NACE TM-0172 test was designed to determine corrosive properties of fuel in petroleum product pipelines, but E10 fuel is distributed through railroad cars or tanker trucks, according to the court's ruling. The test specifically states that it "does not predict corrosiveness in standing aqueous phase," which describes the condition that marine fuel is in while it sits in a tanker truck, railcar, marina fuel tank or a boat's fuel tank.
On water control: The defendant used ASTM D1094, a standard test method for reaction of aviation fuels. The defendant's own expert testified that in a 100-gallon marine fuel tank phase separation could occur between 1,000 ppm and 7,000 ppm. The test results indicated that untreated gasoline retained 262 ppm, the Star Tron-treated gasoline retained 272 ppm (a 3.8 percent improvement), and the ValvTect-treated gasoline retained 284 ppm (an 8.4 percent improvement).
"To claim that the test results show that Star Tron is 50 percent less effective in preventing phase separation is clearly misleading, though not literally false," Judge Cohn wrote.
On carbon deposit control: ValvTect's initial ad stated that its product prevents fuel injector and valve deposits by using the test method of "EPA Vehicle Deposit Test" and listed under ValvTect the brand names of BMW, Chrysler, Ford and GM. Under Star Tron, the ad stated "no verification."
ValvTect later revised the ad and eliminated the brand-name vehicles. The court said the present ad is not misleading or false regarding carbon deposit control, though the initial ad was misleading in implying that the listed car manufacturers endorsed the ValvTect product over Star Tron.
"The court concludes that the claims in the ads in this case were not literally false, though they were misleading," the ruling states. "The distinction between a 'false' and 'misleading' claim is important, because once a court deems an advertisement to be literally false the movant need not present evidence of consumer deception."
On the issue of consumer deception: The court ruled in favor of Star brite, finding that the "claims in the advertisements are material to consumers' purchasing decisions and that consumers are likely to be deceived."
The court has allowed the defendant's ads that have already been placed prior to the completion of the injunction hearing to remain in circulation.
However, the court ruled that ValvTect and its officers, agents and so on are "enjoined and restrained" from "advertising or marketing of any comparison ads based upon any testing regarding fuel stability, corrosion control or water control as depicted in the comparison ads, or as to any endorsement of its product's carbon deposit control benefits by any automobile manufacturer, unless that manufacturer has specifically consented to the endorsement."
— Melanie Winters