Testing Systems, Inc. v. Magnaflux Corporation

United States District Court for the Eastern District of Pennsylvania · 1966 · Torts

251 F. Supp. 286 (1966)

Updated July 23, 2026

TortsTrade libelDisparagement of propertySpecial damagesproduct disparagementunfavorable comparisonpuffingassertion of fact

Facts

Both parties manufactured and sold nondestructive testing products, including competing chemical products marketed as plaintiff's "Flaw Finder" and defendant's "Spotcheck." The complaint alleged that defendant's agents told plaintiff's current and prospective customers that the United States Government had tested plaintiff's product and found it only about 40% as effective as defendant's product. At a manufacturers' convention, defendant's agent also allegedly stated loudly that plaintiff's "stuff is no good" and that "the government is throwing them out." Plaintiff alleged loss of current and prospective customers, but did not identify customers or quantify the losses.

Issue

Whether the alleged statements were nonactionable mere unfavorable comparison or puffing, and if actionable, whether the complaint adequately pleaded damages in a trade libel or disparagement action. Also, whether the statements could avoid the special-damages requirement by qualifying as libel per se.

Rule

A competitor's general claims of superiority or puffing are ordinarily not actionable, but a false statement asserting specific facts about a rival product's tested effectiveness, especially when bolstered by purported third-party governmental endorsement, is actionable disparagement rather than protected unfavorable comparison. In a disparagement of property action, the plaintiff must plead and prove special damages with particularity, such as naming lost customers or alleging specific business diminution and supporting facts, unless the statement is libel per se.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Denver, Summit Alloy Labs and FrontRange Inspection Supply sell competing metal-detection fluids. A FrontRange salesperson tells several factory buyers, "Our fluid is the best in Colorado and works better than Summit's product," but gives no test data, numbers, or outside source for the claim.

If Summit sues for disparagement of property based only on that statement, what is the most likely result?

Explanation. The governing distinction is between general claims of superiority and specific factual assertions capable of verification. A seller may boast that its product is better; such unfavorable comparison is ordinarily not actionable. Because the statement gives no concrete measurement, testing result, or factual basis, it is treated as puffing rather than actionable disparagement. (Derived from Testing Systems, Inc. v. Magnaflux Corporation (1966).)