ERICKSON, Justice.

We granted certiorari to review the decision of the court of appeals in Winkler v. American Safety Equipment Corporation, 43 Colo.App. 241, 604 P.2d 693 (1979). In *217Winkler, the court of appeals expressly adopted the doctrine of strict liability for misrepresentation of a product under section 402B of the Restatement (Second) of Torts, and concluded that the trial court had erred in refusing to instruct the jury on a claim for relief under section 402B. The court of appeals ordered a new trial. For the reasons set forth in this opinion, we reverse and remand to the court of appeals with directions to reinstate the judgment entered in favor of American Safety Equipment Corporation by the district court.

I.

Petitioner, American Safety Equipment Corporation (American), is the designer and manufacturer of a wide variety of protective headgear. One type of helmet manufactured by American is a model # 1601 “general duty” helmet which was designed at the request of police agencies for exclusive police use. It was not designed or intended for use by police officers assigned to motorcycles. The model # 1601 helmet is designed with a special snap harness arrangement which permits quick release and easy removal to protect police officers in riot and crowd control situations. The quick snap release design of the chin strap prevents a police officer from being maneuvered or injured by someone pulling on his model # 1601 helmet. American also designs and manufactures a model # 1602 helmet for police officers using motorcycles. The model # 1602 helmet uses a D-ring harness arrangement which is not designed for quick release. Both models are packaged in the same type of box. The exterior of the box has artist illustrations of some of the uses of American’s headgear, including illustrations of a motorcyclist wearing a helmet. The distinctive uses of both helmets, however, are indicated in American’s brochures, which are distributed with the helmets upon delivery to the police departments. Neither model is sold to the general public.

The Denver Police Department purchased both types of helmets from American, and issued model # 1601 for general duty purposes and model # 1602 for use by motorcycle officers. In order that the two models could be readily distinguished, the model # 1601 helmets were painted blue and the model # 1602 helmets were painted white. In 1974, the Denver Police Department adopted a policy of giving the used, cosmetically-damaged, model # 1601 helmets to Denver police officers for their personal use. Under the giveaway program, the helmets were placed in a discard bin in the warehouse of the Denver Police Department, from which officers could select a helmet. According to the record, the chief supply officer at the Denver Police Department testified that he knew that the helmets would be used privately as motorcycle helmets. At no time, however, was American informed of the giveaway program.

The respondent, Donald Winkler, was a Denver police officer. Upon graduation from the police academy in 1971, he was issued a new model # 1601 helmet for general duty purposes, which was packaged in its original box. Early in 1975, after buying a motorcycle for recreational dirt bike riding, Winkler selected a used model # 1601 helmet from the discard bin at the Denver Police Department warehouse. Winkler did not receive a box when he selected the model # 1601 helmet from the discard bin.

On July 19,1975, while off duty, Winkler was seriously injured when his motorcycle collided with a pickup truck. At the time of the accident, Winkler was wearing the used model # 1601 helmet he had obtained from the discard bin. When he collided with the truck, Winkler was thrown several feet into the air and, before he hit the ground, his helmet came off his head. Winkler suffered severe head injuries as a result of the accident.

On November 3, 1976, Winkler filed suit for damages against American. Winkler’s complaint asserted four claims for relief: (1) strict liability for the manufacture of a defective product under section 402A of the Restatement (Second) of Torts (section 402A); (2) negligent manufacture of a product; (3) res ipsa loquitur; and (4) *218strict liability for misrepresentation of a product under section 402B of the Restatement (Second) of Torts (section 402B). The claims for negligence and res ipsa loquitur were dismissed prior to trial. Winkler’s claim for damages under section 402B was predicated on the following theory. Both model # 1601 and model # 1602 helmets are packaged in the same type of box, which has two artist illustrations depicting a motorcyclist wearing a helmet. Although Winkler did not receive a box with the model # 1601 helmet he was wearing at the time of the accident, he claimed to have used the helmet as a motorcycle helmet because of his reliance on the illustrations on the box he received with the model # 1601 helmet that was issued to him by the Denver Police Department in 1971.

At trial, Winkler tendered jury instructions relating to two claims of strict liability: (1) misrepresentation of a product under section 402B; and (2) manufacture of a defective product under section 402A. Further, because Winkler claimed recovery on two theories of strict liability, he tendered a proximate cause instruction which would have permitted the jury to consider concurrent causes in its determination of whether proximate cause existed. The trial judge refused to instruct the jury on Winkler’s strict liability claim for misrepresentation of a product under section 402B, and limited instructions to the jury regarding proximate cause to strict liability arising out of the manufacture or design of a defective product (section 402A).

The case was then submitted to the jury on Winkler’s claim of strict liability for the manufacture of a defective product under section 402A. On November 28, 1977, the jury returned a verdict in favor of American, and judgment was entered accordingly. Thereafter, Winkler filed a motion for a new trial which alleged, in pertinent' part: (1) that the trial court’s failure to instruct the jury regarding the strict liability claim for misrepresentation of a product under section 402B constituted error; and (2) that the instruction given to the jury on proximate cause was improper. The trial court denied Winkler’s motion, and Winkler appealed to the court of appeals.

The court of appeals reversed the judgment of the trial court, and concluded that the trial court erred in refusing to instruct the jury on Winkler’s section 402B claim. The court also concluded that, because the jury could have found that more than one cause was operative at the time of injury, the trial court failed to properly instruct the jury regarding proximate cause. In its decision, the court of appeals expressly adopted, for the first time in Colorado, the doctrine of strict liability for misrepresentation of a- product under section 402B. Winkler v. American Safety Equipment Corporation, 43 Colo.App. 241, 604 P.2d 693 (1979).

II.

We first address the court of appeal’s express adoption of section 402B for products liability actions in Colorado. We find section 402B to be applicable under the facts of this case.

A.

The imposition of strict liability in products liability cases is not foreign to Colorado. In Hiigel v. General Motors Corp., 190 Colo. 57, 544 P.2d 983 (1975), we expressly adopted the doctrine of strict liability in tort under section 402A of the Restatement (Second) of Torts.1 However, while the *219strict liability action under section 402B is a corollary of the strict tort liability doctrine articulated in section 402A, it represents a unique and totally distinct cause of action. Section 402A imposes liability on the supplier or manufacturer of a defective product which is unreasonably dangerous for its intended or reasonably foreseeable uses to the user or consumer. See, e.g., Union Supply v. Pust, 196 Colo. 162, 583 P.2d 276 (1978); Bradford v. Bendix-Westinghouse Automotive Air Brake Co., 33 Colo.App. 99, 517 P.2d 406 (1973). In contrast, the representational theory of section 402B requires neither a defective product nor one that is unreasonably dangerous. Sales, The Innocent Misrepresentation Doctrine: Strict Tort Liability Under Section 402B, 16 Houston L.Rev. 239 (1979). Rather, the rule stated in section 402B stems from the concept of express warranty by advertising. See Restatement (Second) Torts § 402B, Comment d, at 360 (1965); 2A L. Frumer & M. Friedman, Products Liability 3C-2 (1981). Section 402B provides:

“One engaged in the business of selling chattels who, by advertising, labels, or otherwise, makes to the public a misrepresentation of a material fact concerning the character or quality of a chattel sold by him is subject to liability for physical harm to a consumer of the chattel caused by justifiable reliance upon the misrepresentation, even though

(a) it is not made fraudulently or negligently, and

(b) the consumer has not bought the chattel from or entered into any contractual relation with the seller.”

Section 402B, therefore, permits an action in strict liability for physical harm to the consumer, resulting from a misrepresentation to the public of the character or quality of the chattel sold, even though the misrepresentation is an innocent one and is not made fraudulently or negligently.

B.

The theory of recovery for misrepresentation in section 402B presents an unconventional hybrid between contract and tort law. At common law, an action grounded on breach of warranty sounded in tort rather than in contract. Hansen v. Firestone Tire & Rubber Co., 276 F.2d 254 (6th Cir. 1960). See generally Sales, supra, at 241. Characterizing the action as trespass on the case, the English courts permitted recovery for the breach of an express warranty of a material fact, relied upon in the purchase of a chattel, that later proved to be false. See, e.g., Medina v. Stoughton, 1 Lord Raym. 593, 91 Eng.Rep. 1297 (K.B.1700); Cross v. Garnet, 3 Mod. 261, 87 Eng.Rep. 172 (K.B.1689).

By the end of the eighteenth century, however, the tort character of an express warranty action had disappeared in favor of a cause of action based on assumpsit. See, e.g., Stuart v. Wilkins, 1 Dougl. 18, 99 Eng. Rep. 15 (K.B.1778). Thereafter, claims for breach of the express warranty by the manufacturer’s representation became the sole cognizable claim for product misrepresentations. Because this contractual cause of action required privity between the parties to the contract of sale, however, suits between the consumer and the manufacturer were uniformly dismissed. See, e.g., Senter v. B.F. Goodrich Co., 127 F.Supp. 705 (D.Colo.1954); Barnie v. Kutner, 45 Del. 550, 76 A.2d 801 (1950); Pearl v. William Filene’s Sons Co., 317 Mass. 529, 58 N.E.2d 825 (1945); Turner v. Edison Storage Battery Co., 248 N.Y. 73, 161 N.E. 423 (1928).

As the law continued to evolve, the courts increasingly rejected the necessity for a contractual relationship, recognizing that the ultimate consumer, in purchasing a product, often relied heavily upon the manufacturer’s express public representations *220of the qualities and character of the product. In Baxter v. Ford Motor Co., 168 Wash. 456, 12 P.2d 409, on second appeal, 179 Wash. 123, 35 P.2d 1090 (1934), the court used the concept of misrepresentation to conclude that a manufacturer who innocently misrepresented a material fact concerning a product, which was relied upon by the purchaser, was strictly liable for injuries caused by the failure of the product to conform to the represented facts. Moreover, the modern approach to merchandising precipitated a judicial rejection of the contractual trappings of express warranty and a recharacterization of a publicly communicated innocent misrepresentation as tortious in nature. See, e.g., Randy Knitwear, Inc. v. American Cyanamid Co., 11 N.Y.2d 5, 181 N.E.2d 399, 226 N.Y.S.2d 363 (1962); Rogers v. Toni Home Permanent Co., 167 Ohio St. 244, 147 N.E.2d 612 (1958). Using this theory, the court in Randy Knitwear imposed strict liability on the manufacturer for material public representations which were relied upon by the ultimate consumer and which were subsequently proved to be false:

“The world of merchandising is, in brief, no longer a world of direct contract; it is rather, a world of advertising and, when representations expressed and disseminated in the mass communications media and on labels (attached to the good themselves) prove false and the user or consumer is damaged by reason of his reliance on those representations, it is difficult to justify the manufacturer’s denial of liability on the sole ground of absence of technical privity. Manufacturers make extensive use of newspapers, periodicals and other media to call attention, in glowing terms, to the qualities and virtues of their products, and this advertising is directed at the ultimate consumer or at some manufacturer or supplier who is not in privity with them. Equally sanguine representations on packages and labels frequently accompany the article throughout its journey to the ultimate consumer and, as intended, are relied upon by remote purchasers. Under these circumstances, it is highly unrealistic to limit a purchaser’s protection to warranties made directly to him by his immediate seller. The protection he really needs is against the manufacturer whose published representations caused him to make the purchase.” Id. 226 N.Y.S.2d at 367, 181 N.E.2d at 402.

The ultimate result of judicial rejection of the orthodox rule of contractual privity and recognition of a theory of strict tort liability for innocent misrepresentations by a manufacturer was the adoption of section 402B in the Restatement (Second) of Torts by the American Law Institute. Several jurisdictions have since expressly adopted the theory of section 402B. See, e.g., Klages v. General Ordnance Equipment Corp., 240 Pa.Super.Ct. 356, 367 A.2d 304 (1976); Hauter v. Zogarts, 14 Cal.3d 104, 534 P.2d 377, 120 Cal.Rptr. 681 (1975); Crocker v. Winthrop Laboratories, 514 S.W.2d 429 (Tex.1974); Ford Motor Co. v. Lonon, 217 Tenn. 400, 398 S.W.2d 240 (1966). See generally W. Prosser, Torts, § 97 (1975).

C.

We agree that it is sound policy to permit a consumer, who purchases a product on the strength of the manufacturer’s representations, to obtain direct recovery from the manufacturer on a theory of strict liability. In our view, the rationale behind such a policy is most persuasive in our complex society where manufacturers offer apparently similar but, in reality, fundamentally different products. It is the manufacturer who, through the design and testing of his products, knows of their particular qualities and capabilities. A consumer, on the other hand, knows only the information he has been able to glean from the manufacturer’s marketing materials. Because of his superior knowledge, the manufacturer should not be permitted to avoid responsibility for his misrepresentations to the consumer, even though the misrepresentations were neither fraudulently nor negligently made.

Further, imposing strict liability on manufacturers who misrepresent their products does not impose an undue burden. A man*221ufacturer intends to reap economic benefit from the public representations it makes regarding the character and quality of its products, and must assume the economic consequences for physical harm resulting from misrepresentations it has made about its products. Manufacturers should not benefit economically from representations they make to the public and, at the same time, be insulated from liability for misrepresentations which result in physical harm.

We do not agree with petitioner’s contention that adoption of a theory of strict liability in Colorado for product misrepresentation is superfluous in light of the applicable provisions of Colorado’s express warranty statute. Sections 4-2-313 and 318, C.R.S.1973. An express warranty action involves elements of proof different from those required in a strict liability action for product misrepresentation. Specifically, section 4-2-313 provides that a seller creates express warranties by “[a]ny affirmation of fact or promise” or by “[a]ny description of the goods.” Section 402B, on the other hand, provides that the misrepresentation must be of a “material fact concerning the character or quality” of the product and that the consumer must have justifiably relied upon the misrepresentation. An action based upon an express warranty, while not requiring contractual privity in this state, involves a distinctly different theory of recovery from that provided in a strict liability action for product misrepresentation. Comment d to section 402B provides:

“The liability in this Section is liability in tort, and not in contract; and if it is to be called one of ‘warranty,’ it is at least a different kind of warranty from that involved in the ordinary sale of goods from the immediate seller to the immediate buyer, and is subject to different rules.”

Although the elimination of the privity requirement in section 4-2-318, C.R.S.1973, allows the buyer to sue the manufacturer directly on the basis of a warranty tied to misrepresentation of a product, there is no rationale for not recognizing a similar cause of action in tort. See Klages v. General Ordnance Equipment Corp., 240 Pa.Super.Ct. 356, 367 A.2d 304 (1976). Accord, Hauter v. Zogarts, 14 Cal.3d 104, 534 P.2d 377, 120 Cal.Rptr. 681 (1975) (recognizing that the express warranty provisions in the Uniform Commercial Code provide even greater coverage than section 402B allows). Therefore, when a product fails to perform to the level or in the manner that a consumer had been led to believe it would by the express representations of the manufacturer, we see no sound reason to preclude a separate and distinct strict liability action, under section 402B, against the manufacturer for the resulting physical harm to the consumer.2

III.

We next address the issue of whether Winkler established a prima facie case for recovery under a theory of strict liability for product misrepresentation, thereby warranting the submission of his section 402B claim to the jury. Strict tort liability for misrepresentation does not impose an insurer status upon the manufac*222turer. Therefore, to establish a prima facie case for a strict liability action under section 402B, as adopted in this state, three major requirements must be met: (1) there must be a misrepresentation of a material fact concerning the character or quality of a chattel; (2) the misrepresentation must be made to the public; and (3) physical harm must have resulted to a consumer from justifiable reliance upon the misrepresentation. Even assuming arguendo that a material misrepresentation was made to the public by the illustrations on the helmet box which depicted a motorcyclist wearing a helmet,3 the record in this case fails to establish that Winkler justifiably relied upon whatever representation was made. Accordingly, we conclude that Winkler did not establish a prima facie case for recovery under section 402B.

Justifiable reliance upon a misrepresentation constitutes a critical requirement for strict liability under section 402B. Unless the misrepresentation of a particular fact reasonably influences the purchase or use of the product, liability cannot be imposed upon its maker. Comment j to section 402B declares:

“The rule here stated applies only where there is justifiable reliance upon the misrepresentation of the seller, and physical harm results because of such reliance, and because of the fact which is misrepresented. It does not apply where the misrepresentation is not known, or there is indifference to it, and it does not influence the purchase or subsequent conduct. At the same time, however, the misrepresentation need not be the sole inducement to purchase, or to use the chattel, and it is sufficient that it has been a substantial factor in that inducement.” Restatement (Second) Torts § 402B, Comment j, at 362 (1965).

In considering whether justifiable reliance existed, the reasonable objective belief of the purchaser or user is determinative. See Grinnell v. Charles Pfizer & Co., 274 Cal.App.2d 424, 79 Cal.Rptr. 369 (1969); Arrow Transportation Co. v. A.O. Smith Co., 75 Wash.2d 843, 454 P.2d 387 (1969). In this regard, a purchaser’s or user’s actual knowledge of the quality or condition of a product, even though contrary to the representations of the seller, totally nullifies any justifiable reliance. Harris v. Belton, 258 Cal.App.2d 565, 65 Cal.Rptr. 808 (1968). See Sales, The Innocent Misrepresentation Doctrine: Strict Tort Liability Under Section 402B, 16 Houston L.Rev. 239, 261. See also Arrow Transportation Co. v. A.O. Smith Co., supra.

Under the facts of this case, we find no evidence of justifiable reliance by Winkler upon any misrepresentation by American sufficient to establish a prima facie case under section 402B. Winkler contends that he relied upon the illustration on the box he received with the helmet issued to him at the police academy in 1971 as a basis for using the “discarded” model # 1601 helmet for use while riding his dirt bike in 1975. In our view, such a claim is without merit. Winkler had previously received instructions on the proper use of model # 1601 helmet when he received training in riot control at the police academy in 1971:

COUNSEL: “Do you have training in riot control?”

WINKLER: “Yes.”

COUNSEL: “Okay. And is that when they issued the helmet.. .?”

WINKLER: “Yes, that would be the helmet.”

* * * * * *

COUNSEL: “Did you get any instruction in the police academy or on-the-job instruction on the use of that helmet?”

WINKLER: “Well, I believe we would have.”

*223During the time that Winkler was an officer in the Denver Police Department, model # 1601 helmets were issued only for use by general duty officers. In order that the two models could be readily distinguished, the general duty helmets were painted blue and the motorcycle helmets were painted white. Winkler was aware of this distinction and knew that the blue general duty helmets were not used by solo motorcycle officers. When Winkler chose the discarded model # 1601 helmet from the discard bin in the police warehouse, he chose a blue general duty helmet and thereafter painted it white. Moreover, the used model # 1601 helmets in the discard bin were not in the boxes supplied by the manufacturer.

Justifiable reliance contemplates the reasonable exercise of knowledge and intelligence in assessing the represented facts. Unsupportable subjective reliance is inadequate. In our view, Winkler did not establish that he justifiably relied upon any misrepresentation by American when he put the model # 1601 helmet to use while riding his motorcycle.

Therefore, we conclude that Winkler did not establish a prima facie case for recovery under a theory of strict liability for product misrepresentation, thereby warranting the submission of his section 402B claim to the jury. Because of our decision, we need not address Winkler’s contention that the instructions given to the jury regarding proximate cause were improper.

Accordingly, we reverse the decision of the court of appeals and remand with directions to reinstate the judgment of the district court in favor of American Safety Equipment Corporation.

DUBOFSKY, LOHR and QUINN, JJ., dissent.

LOHR, Justice,

dissenting:

I respectfully dissent. I agree with Justice Quinn’s dissenting opinion except for his expressed differences with the majority as to the standard for justifiable reliance in a claim under § 402B of the Restatement (Second) of Torts. In my opinion the majority sets forth the correct standard but does not apply it properly to the facts of this case.

The majority states that “[jjustifiable reliance contemplates the reasonable exercise of knowledge and intelligence in assessing the represented facts.” Contrary to Justice Quinn’s views, this test imposes no duty of investigation upon a claimant. As I understand the majority’s statement, it means no more than that it is not justifiable for a person to rely on a representation which he knows to be untrue or, through exercise of his knowledge and intelligence, could not reasonably believe to be true. This is eminently sound. If the drafters of the Restatement (Second) of Torts meant anything to the contrary, I would not adopt their position as the law of this state.

As developed by part II of Justice Quinn’s dissent, however, the justifiability of Winkler’s reliance upon the manufacturer’s representations here is properly a question for the jury, even under the standard for justifiable reliance properly adopted by the majority. There is nothing in the record which would have required the jury as factfinder to determine that Winkler knew or must reasonably have believed that any representation by American that the helmet was suitable for motorcycling use was untrue. The sparse and inconclusive record references which the majority quotes as to Winkler’s training in the proper use of the helmet simply underscore this conclusion.

I would affirm the judgment of the Court of Appeals and remand the case for a new trial on Winkler’s § 402B claim.

QUINN, Justice,

dissenting:

I respectfully dissent. My disagreement with the majority is on two counts: (1) I believe the majority’s interpretation of justifiable reliance imposes upon a § 402B claimant a standard of conduct not intended by the drafters of the Restatement; and (2) I also believe the evidence adduced in support of the § 402B claim of the respondent (plaintiff) was sufficient to submit the ease to the jury on that theory of liability.

*224I.

Although I agree that § 402B is a salutary rule which should be incorporated into the tort law of this state, in my view the majority’s conclusion that the plaintiff failed to establish a prima facie case of justifiable reliance is based on a misapprehension of § 402B. In rejecting the plaintiff’s § 402B claim, the majority states that “[ujnsupportable subjective reliance is inadequate” and posits as the appropriate standard the following: “Justifiable reliance contemplates the reasonable exercise of knowledge and intelligence in assessing the represented facts.” This standard, however, requires a consumer to make a reasonable independent assessment of the contents of the representation and, in effect, imposes upon a consumer a duty far beyond anything contemplated by § 402B.1

Comment j to § 402B indicates that the issue of justifiable reliance should be determined in accordance with the rules stated in §§ 537-545A. For reliance to be justifiable the matter misrepresented must be material. Restatement (Second) of Torts, supra, § 538(1). The content of a misrepresentation is material if “a reasonable man would attach importance to its existence or nonexistence in determining his choice of action in the transaction in question.” Restatement (Second) of Torts, supra, § 538(2)(a). Thus, the only standard of reasonableness applicable to the element of justifiable reliance under § 402B relates to the consumer’s attachment of importance to the misrepresented fact, not to the consumer’s assessment of the contents of the misrepresented fact. That the drafters of § 402B did not intend the element of justifiable reliance to require the consumer’s reasonable exercise of knowledge and intelligence in assessing the represented facts is obvious from § 540. That section states that the recipient of a misrepresentation of fact “is justified in relying upon its truth, although he might have ascertained the falsity of the representation had he made an investigation.” Comment a to § 540 states that a failure to investigate is no defense even “when it could be made without any considerable trouble or expense.”

The interpretation of justifiable reliance adopted by the majority imposes a standard of conduct on the consumer which has no place in the doctrine of strict liability for misrepresentation.

II.

I also disagree with the majority’s analysis of the evidence and its conclusion that the plaintiff failed to establish a prima fa-cie case of strict liability under § 402B. In determining whether a prima facie case of liability has been established, the evidence must be viewed in a light most favorable to the plaintiff and all reasonable inferences must be drawn in his favor. E.g., Gossard v. Watson, 122 Colo. 271, 221 P.2d 353 (1950). When the evidence is so viewed, it is apparent that the plaintiff’s § 402B claim should have been submitted to the jury.

There was sufficient evidence establishing the defendant-seller’s misrepresentation of a material fact concerning the helmet. The carton in which the model 1601 helmets were originally packaged had two pictured illustrations, one on each side, depicting a motorcyclist wearing the helmet. Also shown on the outside of the carton were illustrations of persons using the helmet to drive an automobile and to operate a snowmobile. A slogan on the carton stated “Protection Thru Research.” No warning was placed on the carton that helmet model 1601 could not be used for motorcycling purposes.2 From the consumer’s stand*225point, the only way to determine the particular model inside the carton was by the model number written on the exterior of the carton. However, the model number by itself offered no indication that the helmet could not be used for the purposes depicted on the carton.

Although not addressed by the majority, the evidence also established a prima facie case that the misrepresentation was to the public — that is, the likely users of the helmet. Comment h of § 402B makes clear that the misrepresentation may be made not only by a form of advertising directed towards the general public, such as newspapers and television, but also “by literature distributed to the public through dealers, by labels on products sold, or by leaflets accompanying it .. ..” A representation through a dealer in particular goods or a representation by means of a label or leaflet accompanying the chattel would be directed only to that limited portion of the public likely to use the chattel, rather than to the public at large. Thus, what is significant under § 402B is whether the representation was made to likely consumers of the product, even though those consumers may constitute only a limited and select component of the general public.3 The defendant in this case sent sales literature to law enforcement agencies and to retail outlets through which the helmet could be purchased. The defendant’s custodian of records testified that he had seen records of sales of both types of helmets to a Denver retail outlet with whom the Denver Police Department placed its order. Moreover, the illustrations on the outside of the carton were calculated to reach the consumers of both helmet models 1601 and 1602.

There was also sufficient evidence of justifiable reliance by the plaintiff on the defendant’s representation that helmet model 1601 could be used for motorcycling. The plaintiff testified that when helmet model 1601 was issued to him in 1970, it was packaged in a carton which had a picture on the outside showing a motorcyclist wearing the helmet and also a slogan stating “Protection Thru Research.” The plaintiff retained the helmet in his police locker and relied on the illustration on the carton in using the helmet for motorcycling. Such evidence, when appropriately viewed, is sufficient to permit a jury to conclude that the plaintiff justifiably relied on the defendant’s representation because, as a reasonable man, he regarded the representation on the carton to be important in determining his decision to use helmet model 1601 for motorcycling purposes. See Restatement (Second) of Torts, supra, § 538, Comment d.

In concluding that the plaintiff failed to establish justifiable reliance the majority singles out the instruction received by the plaintiff on the use of helmet model 1601, particularly as related to riot control situations, as well as his knowledge that this helmet model was issued to general duty officers and not to motorcycle officers. However, the plaintiff’s awareness of these matters is not the equivalent of actual knowledge of the unsuitability of helmet model 1601 for motorcycling purposes. Unless there is some duty on the part of the consumer to make a reasonable independent assessment of the representation — a duty expressly repudiated by § 540 of the Restatement — the extent of the plaintiff’s knowledge of helmet model 1601, as disclosed by this record, is not sufficient as a matter of law to nullify his right to rely on the defendant’s representation that the helmet could be used for motorcycling purposes.

Finally, although not addressed by the majority, there can be no doubt that the plaintiff was a consumer within the mean*226ing of § 402B. “ ‘Consumer’ is to be understood in the broad sense of one who makes use of a chattel in a manner which a purchaser may be expected to use it.” Restatement (Second) of Torts, supra, § 402B, Comment i. It is certainly foreseeable that an officer of the police department, to which helmet model 1601 was sold, would use it for the purpose depicted on the sales carton.

It is only in the clearest of cases, where the facts are undisputed and reasonable persons may draw but one inference from the facts, that the issue is one of law for the court. See Blount v. Romero, 157 Colo. 130, 401 P.2d 611 (1965). Here, when the evidence is viewed in a light most favorable to the plaintiff and every legitimate inference is acknowledged in his favor, a prima facie case of strict liability under § 402B has been established. Therefore, I would affirm the judgment of the Court of Appeals and remand the case for a new trial on the plaintiff’s § 402B claim.

I am authorized to say that Justice DU-BOFSKY joins me in the dissent.

LIPEZ, Circuit Judge.

This case is about a sweater with a controversial price tag. Appellant Judith Shaulis purchased a cardigan sweater for $49.97 at a Nordstrom Rack outlet store in Boston, Massachusetts. The price tag attached to that sweater listed both the purchase price of $49.97 and a higher “Compare At” price of $218. Shaulis claims that the listed “Compare At” price was deceptive. The sweater was, she alleges, never sold by Nordstrom Rack, or any other retailer, for $218. Instead, Shaulis claims that the “Compare At” price tags are used by Nordstrom to mislead consumers about the quality of items. To vindicate this position, Shaulis filed suit alleging that Nord-strom had, in violation of Massachusetts statutory and common law, improperly obtained money from her and other Massachusetts consumers and requested that a court order Nordstrom to restore this money and enjoin Nordstrom from continuing to violate Massachusetts law. The district court, in a well-reasoned opinion, *5granted Nordstrom’s motion to dismiss all of Shaulis’s claims. We affirm.

I. Background

The facts underlying this case are taken from the second amended complaint and are presumed true for the purpose of this appeal. They are fully set forth in the opinion of the district court. See Shaulis v. Nordstrom Inc., 120 F.Supp.3d 40, 43-44 (D. Mass. 2015).

Defendant Nordstrom, Inc. is a Seattle, Washington-based corporation that operates department stores throughout the United States and Canada, including five “Nordstrom Rack” outlet stores in Massachusetts. Shaulis purchased a sweater at one of these stores in Boston in 2014. The price tag attached to the sweater, which included both the $49.97 purchase price and the “Compare At” price of $218, identified the difference between the two numbers as “77%” worth of savings.1

Shaulis claims that this price tag was deceptive. According to Shaulis, although price tags on Nordstrom Rack products contain both a sale price and a “Compare At” price that purports to represent a bona fide price at which Nordstrom (or some other retailer) formerly sold those products, Nordstrom, in reality, sells goods manufactured by designers for exclusive sale at its Nordstrom Rack stores, which means that such items were never sold—or intended to be sold—at the “Compare At” prices advertised on the price tags. Shaulis claims that she was wrongfully “[e]ntieed by. the idea of paying significantly less than the ‘Compare At’ price charged outside of Nordstrom Rack,” and that, but for Nordstrom’s deception, she never would have purchased the sweater.

On November 6, 2014, Shaulis initiated this action with a complaint filed in the Massachusetts Superior Court. She filed an amended complaint on December 8, 2014, and a second amended complaint (“SAC”) on December 24. The SAC alleged claims for fraud, breach of contract, unjust enrichment, violations of the Code of Massachusetts Regulations and the Federal Trade Commission Act,2 and violations of Mass. Gen. Laws ch. 93A (“Chapter 93A”). The SAC was brought on behalf of herself and all those similarly situated, and proposed a class consisting of “[a]ll individuals residing in the Commonwealth of Massachusetts who, within the applicable statute of limitations preceding the filing of this action ..., purchased Nordstrom Rack Products.”

Nordstrom removed the case to federal court and successfully moved to dismiss the action for failure to state a claim. The district court held that Shaulis had failed to adequately plead a legally cognizable injury under Chapter 93A, and further denied her requests to certify several Chapter 93A questions to the Massachusetts Supreme Judicial Court (“SJC”) and for leave to file a third amended complaint. The court also dismissed all of Shaulis’s common law claims, again citing the failure to plead a legally cognizable injury.

On appeal, Shaulis challenges dismissal of her Chapter 93A claim and her common law claims for fraud, breach of contract, and unjust enrichment. Our review is de novo. Carter’s of New Bedford, *6Inc. v. Nike, Inc., 790 F.3d 289, 291 (1st Cir. 2015). As a federal court sitting in diversity, we apply the substantive law of Massachusetts, as articulated by the SJC. Sanders v. Phoenix Ins. Co., 843 F.3d 37, 47 (1st Cir. 2016).

II. Chapter 93A

The bulk of Shaulis’s appeal involves objections to the district court’s dismissal of her Chapter 93A claim for damages and injunctive relief.3 Chapter 93A, commonly known as the Massachusetts Consumer Protection Act, is a broad consumer protection statute that provides a private cause of action for a consumer who “has been injured,” Mass. Gen. Laws ch. 93A § 9(1), by “unfair or deceptive acts or practices in the conduct of any trade or commerce,” icl § 2(a). See Rule v. Fort Dodge Animal Health, Inc. (Rule II), 607 F.3d 250, 253 (1st Cir. 2010); see also Casavant v. Norwegian Cruise Line Ltd., 460 Mass. 500, 952 N.E.2d 908, 912 (2011) (“If any person invades a consumer’s legally protected interests, and if that invasion causes the consumer a loss—whether that loss be economic or noneconomic—the consumer is entitled to redress under our consumer protection statute.” (quoting Hershenow v. Enterprise Rent-A-Car Co., 445 Mass. 790, 840 N.E.2d 526, 535 (2006))).

After reviewing the relevant Massachusetts regulations,4 the district court determined that Nordstrom’s alleged pricing scheme “constitut[ed] an unfair or deceptive practice under Chapter 93A.” Shaulis, 120 F.Supp.3d at 48-49. The court further found that Shaulis had adequately alleged that Nordstrom’s deception “caused” an identifiable “harm”—namely, that Shaulis had sufficieiitly alleged that she was “directly induced” to make a purchase she would not have made, absent the unfair or deceptive practice. Id at 50, 52. The court held, however, that Shaulis had failed to allege a legally cognizable injury for purposes of Chapter 93A because Shaulis’s “subjective belief that she did not receive a good value, without more, is not enough to establish the existence of a Chapter 93A injury.” Id. at 53.

On appeal, Shaulis contends that the district court misread the SJC’s Chapter 93A jurisprudence and erroneously concluded that she had failed to adequately allege a legally cognizable injury based on Nordstrom’s deceptive pricing scheme. Hence, we first review the relevant case law on Chapter 93A injuries, and then review Shaulis’s claim de novo.

*7A. Injury under Chapter 93A

Many courts—both state and federal— have struggled to explain what constitutes an injury under Chapter 93A. See Tyler v. Michaels Stores, Inc., 464 Mass. 492, 984 N.E.2d 737, 745 n.15 (2013) (discussing differing interpretations of earlier' SJC opinions); Rule v. Fort Dodge Animal Health, Inc. (Rule I), 604 F.Supp.2d 288, 298 (D. Mass. 2009) (noting that case law “construing the Chapter 93A ... injury requirement has had a less than intellectually coherent course of development”). We last explored the parameters of Chapter 93A injuries in 2010 in Rule II. That case involved a Chapter 93A claim by a plaintiff who purchased heartworm medication for her dog, Luke. 607 F.3d at 251. After administering the medication, the plaintiff learned that the FDA had recalled the medication because of harmful side effects. Id. Plaintiff then brought a class action against the manufacturer of the heart-worm medication, alleging that, although. Luke was none the worse for wear, she had overpaid for the medication. Id. at 251-52. Plaintiffs theory of the case was that “she purchased [the medication] because of a deception (failure to disclose the risk), the product was ‘in reality’ worth less than she paid for it (because of that undisclosed risk),” and thus she had suffered “injury,” the measure of her damages being “the difference-between what she paid and what she would have paid if the risk had been disclosed.” Id. at 253.

A central issue in Rule II was whether a “per se” theory of injury—that is, a claim that the deception itself is the requisite injury—was sufficient to state a claim under Chapter 93A. Or, as we put the question in Rule II: whether “[Cjhapter 93A injury requires that a plaintiff who seeks to recover show ‘real’ economic damages,” or whether “injury as a violation of some abstract ‘right’ like the right not to be subject to a deceptive act that happened to cause no economic harm” was sufficient. Id. We noted that the plaintiff had suffered no “economic injury in the traditional sense” because she had “used up” the medication for its advertised purpose without ill effect, and she thus held nothing of reduced value nor faced any risk of harm. Id. at 265. We acknowledged, however, that if Rule had sued before Luke consumed the medication, she may have been able to claim injury based on her overpayment theory, because she would have possessed medication that was not what she bargained for. Id.

In reaching this decision, we observed that “the most recent SJC cases” had “moved away” from the “per se” theory of injury supported by earlier cases—that is, a claim that an unfair or deceptive act alone constitutes injury—and had “returned to the notion that injury under [Chapter 93A means economic injury in the traditional sense.” Id. at 254-55; see also Rule I, 604 F.Supp.2d at 298-306 (surveying the development of the SJC’s Chapter 93A jurisprudence). Specifically, we contrasted the SJC’s earlier opinions in Leardi v. Brown, 394 Mass. 151, 474 N.E.2d 1094 (1985), and Aspinall v. Philip Morris Cos., 442 Mass. 381, 813 N.E.2d 476 (2004), with more recent opinions in Hershenow, 840 N.E.2d at 526, and Iannacchino v. Ford Motor Co., 451 Mass. 623, 888 N.E.2d 879 (2008), which had rejected the “per se” theory of injury. See Hershenow, 840 N.E.2d at 535 (“A consumer is not ... entitled to redress under [Chapter 93A], where no loss has occurred.”); Iannacchino, 888 N.E.2d at 886-87 (explaining that, if properly alleged, a claim that plaintiffs own vehicles with defective door handles, in violation of federal safety regulations, would support a cause of action under Chapter 93A because plaintiffs would have paid for fully compliant vehicles, which they did not receive). *8We acknowledged, however, that there may remain certain “exceptions” to this general rule, embodied in older SJC opinions that have not been expressly overruled, but we left to the SJC the task of defining them. Rule II, 607 F.3d at 255 (citing Leardi, 474 N.E.2d at 1101); see also Hershenow, 840 N.E.2d at 538, (Cow-in, J., concurring) (noting that Hershenow had “overruled ... sub silentio” earlier opinions supporting a “per se” theory of injury).

1. Tyler

Helpfully, since our opinion in Rule II, the SJC has clarified what constitutes a legally cognizable injury under Chapter 93A, most notably in Tyler v. Michaels Stores, Inc. In Tyler, the plaintiff accused the defendant of violating a statute, Mass. Gen. Laws ch. 93, § 105, that prohibits companies from writing customers’ “personal identification information” on credit card transaction forms when the credit card issuer does not require the company to provide such information. 984 N.E.2d at 738 & n.1. The SJC explained that, if the company, as a result of a violation of § 105, “use[d] the [personal identification] information for its own business purposes,” such as “by sending the customer unwanted marketing materials or by selling the information for a profit,” the company would “ha[ve] caused the consumer a[] [non-economic] injury that [wa]s distinct from the statutory violation itself and [thus] cognizable under [Chapter 93A].” Id. at 746. But the SJC went on to explain that if, by contrast, the company had merely placed the personal information in a file “and never used the information for any purpose thereafter, a consumer would not have a cause of action for damages” under Chapter 93A, even though the company may have violated § 105 and thereby committed “an unfair or deceptive act.” Id. at 746 n.17.

In explaining its decision in Tyler, the SJC stated that a violation of an independent statute—such as the Code of Massachusetts Regulations here—does not itself “satisffy] the injury requirement of c. 93A, § 9,” and hence, does not “automatically entitle[] the plaintiff to at least nominal damages (and attorney’s fees)” under Chapter 93A. Id. at 744-45. Instead, “the violation of the legal right that has created the unfair or deceptive act or practice must cause the consumer some kind of separate, identifiable harm arising from the violation itself.” Id. at 745 (emphasis added). The SJC thus held that “a plaintiff bringing an action ... under [Chapter 93A] must allege and ultimately prove that she has, as a result [of the statutory violation], suffered a distinct injury or harm that arises from the claimed unfair or deceptive act.” Id. at 745-46 (emphasis added); see also Walsh v. TelTech Sys., Inc., 821 F.3d 155, 161-62 (1st Cir. 2016) (discussing Tyler); Bezdek v. Vibram USA Inc., No. 12-cv-10513-DPW, 2013 WL 639145, at *5 (D. Mass. Feb. 20, 2013) (observing that the SJC has “disavowed the notion that deceptive advertising constitutes per se injury on consumers who purchase the product”).

2. Bellermann

The SJC recently reaffirmed Tyler’s holding in Bellermann v. Fitchburg Gas & Elec. Light Co., 475 Mass. 67, 54 N.E.3d 1106 (2016), which postdates the district court’s opinion in this case. See 54 N.E.3d 1106. In Bellermann, a state agency determined that a utility company had failed to comply with certain storm preparedness regulations. Id. at 1107. Plaintiffs, customers of the company, filed a class action under Chapter 93A, alleging that they had suffered economic injury by “overpaying for a level of emergency storm preparedness” that the company could not have *9provided, if a storm had occurred. Id. at 1108. As the plaintiffs saw it, they had adequately alleged injury because “they ha[d] paid for more in terms of quality and reliability of service than they received.” Id. at 1109-10.

The SJC rejected the Bellermann plaintiffs’ theory of injury. Id. at 1114. Citing Tyler and earlier cases, the SJC distinguished cases where a Chapter 93A plaintiff “suffered an economic injury because ... the defendants’ products did not deliver the full anticipated and advertised benefits, and therefore were worth less, as used or owned, than what the plaintiffs had paid,” from those cases where the alleged injury was merely hypothetical or speculative. W. at 1112. Reaffirming Tyler’s holding that “to meet the injury requirement under [Chapter 93A], a plaintiff must have suffered a ‘separate, identifiable harm arising from the [regulatory] violation’ that is distinct ‘from the claimed unfair or deceptive conduct itself,’ ” the SJC concluded that permitting plaintiffs’ overpayment theory of injury “would permit class certification ... whenever a product (or service) fails to conform to a regulatory requirement and the consumer alleges an economic injury based on overpayment for the product.” Id. at 1111 (quoting Tyler, 984 N.E.2d at 745).

In other words, the SJC treated the plaintiffs’ theory as akin to a per se theory of injury. Because the plaintiffs had alleged only a possibility of adverse consequences—which did not occur—they were, in effect, seeking damages based solely on the utility company’s violation of the regulations. The court held that such a claim, alleging an “overpayment” for a flawed “product” that never actually underperformed, did not state a cognizable injury under Chapter 93A.

The SJC reached this conclusion in Bellermann by comparing and contrasting its reasoning in three earlier Chapter 93A cases: Iannacchino, Aspinall, and Hershenow. Two of the cases, Iannacchi-no and Aspinall, involved regulatory noncompliance in which the court had found identifiable economic injury. In the third, Hershenow, the SJC concluded that the defendant’s regulatory violation had caused no economic loss. Id. at 1111-13.

Specifically, in Iannacchino, the plaintiffs claimed that their vehicles’ door handles did not comply with applicable safety regulations. 888 N.E.2d at 882. Although the SJC dismissed the plaintiffs’ claims on other grounds, the court observed that safety regulations play “a highly significant role” in a consumer’s decision to purchase a vehicle, id. at 886, and thus

the purchase price paid by the plaintiffs for their vehicles would entitle them to receive vehicles that complied with ... safety standards or that would be recalled if they did not comply. If [the defendant] knowingly sold noncompliant (and therefore potentially unsafe) vehicles or if [the defendant], after learning of noncompliance, failed to initiate a recall and to pay for the condition to be remedied, the plaintiffs would have paid for more (viz., safety regulation-compliant vehicles) than they received. Such an overpayment would represent an economic loss—measurable by the cost to bring the vehicles into compliance—for which the plaintiffs could seek redress under G.L. c. 93A.

888 N.E.2d at 886-87.

Bellermann similarly construed the circumstances in Aspinall. There, the SJC had held that purchasers of cigarettes could bring a class action against a manufacturer for falsely claiming that its cigarettes delivered health benefits they did not, in fact, provide. 813 N.E.2d at 479-80. The manufacturer labeled the cigarettes as “light,” in purported compliance with regu*10lations under which “light” cigarettes were those that delivered lower levels of toxins compared to regular cigarettes. Id. The SJC concluded that the putative class members “were injured when they purchased a product that, when used as directed, exposed them to substantial and inherent health risks that were not ... minimized by their choice of the defendant’s ‘light’ cigarettes.” Id. at 488. As the Bellermann court interpreted the holding in Aspinall, the consumers had alleged a legally cognizable injury because each consumer “had purchased and smoked cigarettes that did not deliver the advertised health benefits” and they did not receive the benefit (lower toxins) “for which each had paid.” Bellermann, 54 N.E.3d at 1112.

The SJC contrasted these cases with Hershenow, in which putative class members who had rented automobiles from the defendant rental company sought class certification based on the defendant’s violation of a regulation governing the terms of damage waiver clauses. Although the rental agreement did not comply with applicable regulations, none of the putative class members had been in an accident that triggered the damage waiver clause. Because the invalid provision was never enforced, the SJC concluded that no plaintiff had suffered the necessary, distinct injury that “is an essential predicate for recovery under” Chapter 93A. Hershenow, 840 N.E.2d at 528 (emphasizing that each putative class member was no “worse off during the rental period than he or she would have been had the [damage waiver provision] complied in full”). Hence, “unlike the injuries recognized in Iannacchino and Aspinall,” where plaintiffs did not “receive!] the full benefit of the purchase,” the plaintiffs in Hershenow received everything they bargained for and faced no future risk of harm. Bellermann, 54 N.E.3d at 1113 (quoting Shaulis, 120 F.Supp.3d at 52).

We can derive from the analyses in Tyler and Bellermann a clear understanding of the SJC’s current view of a legally cognizable economic injury under Chapter 93A. To state a viable claim, the plaintiff must allege that she has suffered an “identifiable harm” caused by the unfair or deceptive act that is separate from the violation itself. Tyler, 984 N.E.2d at 745. Put another way, a plaintiff must “show ‘real’ economic damages,” as opposed to some speculative harm. Rule II, 607 F.3d at 253. Accordingly, a claim that alleges only a “per se” injury—that is, a claim resting only on a deceptive practice, regulatory noncompliance, or the “impairment of an abstract right without economic loss”—is insufficient to state a Chapter 93A claim. Id.; see also Tyler, 984 N.E.2d at 745-46. It is thus not enough to claim that the defendant’s improper conduct created a risk of “real economic damages.” Rule II, 607 F.3d at 253 (internal quotation marks omitted). Speculation concerning still inchoate harm does not establish the distinct injury that “is an essential predicate for recovery under” Chapter 93A. Bellermann, 54 N.E.3d at 1113 (quoting Hershenow, 840 N.E.2d at 528); see also Rule II, 607 F.3d at 253. Instead, legally cognizable injuries under Chapter 93A must involve objective, “identifiable” harm that goes beyond the deception itself. Tyler, 984 N.E.2d at 745; Iannacchino 888 N.E.2d at 888.

B. Application

Shaulis claims that she has suffered a legally cognizable injury because she was “induced” to make a purchase she would not have made, but for the false sense of value created by Nordstrom’s pricing scheme. She primarily asserts that her injury is the loss of $49.97 because, in the district court’s words, “she would rath*11er have her money—which she could use to purchase other things—than the sweater.” Shaulis, 120 F.Supp.3d at 52. Although the SJC has not addressed an “induced purchase” theory of injury exactly like Shaulis’s, we think it is clear, given the discernible principles in the SJC’s case law, that Shaulis’s claim falls short of alleging the “identifiable” injury, distinct from the claimed deceptive conduct itself, that the SJC requires for individual relief under Chapter 93A. Tyler, 984 N.E.2d at 745; see also Bellermann, 54 N.E.3d at 1111.

The flaw in Shaulis’s theory of injury— that the mere purchase of an item may constitute cognizable injury, regardless of the item’s specific qualities—is that it merges the alleged deception with the injury. To illustrate that point, we offer two scenarios. First, if Shaulis had not purchased a sweater after viewing the offending “Compare At” price tag, and later learned that Nordstrom’s pricing scheme violated the Massachusetts Code of Regulations, she obviously would not have suffered a legally cognizable Chapter 93A injury. To claim injury based on the deceptive tag would be to rely on the “per se” theory of injury the SJC has rejected.

In the second scenario, taking the facts as Shaulis alleges them, she purchased the sweater, but claims she did so only because the tag suggested that the sweater was worth more than the price Nordstrom actually charged. This contention is simply another way of saying that Shaulis was wrongfully deceived by Nordstrom. She identifies no objective injury traceable to the purchased item itself—for example, that the sweater was poorly made or that its materials were misrepresented. Such a purchase-as-injury claim collapses the SJC’s required distinction between deception and injury by attempting to plead an assertion about a consumer’s disappointed expectations of value in place of an allegation of real economic loss.

Shaulis contends that this construction reads the SJC’s definition of injury too narrowly. In her view, her injury is clear: she no longer has her money, and the sweater she does have is “worth nothing at all to [her] since she never would have bought it” absent Nordstrom’s deception. Thus, Shaulis argues, her injury is concrete—more like the injuries alleged by owners of noncompliant cars in Iannacchi-no than like the speculative or never-realized harms alleged in Rule II or Hershe-now—and, therefore, she has alleged more than the mere regulatory violation the SJC has rejected as a viable form of Chapter 93A injury.

However, Shaulis’s attempt to distinguish her injury from those of the unsuccessful plaintiffs in cases like Rule II, Hershenow, and Bellermann overlooks a primary rationale for those decisions, namely, that the plaintiffs had received everything they had bargained for. Thus, in Rule II, the plaintiff received effective medication without side effects. In Her-shenow, the plaintiffs received adequate rental cars, and the illegal damage waivers in their rental contracts were never enforced. And, in Bellermann, the plaintiffs received all of the electrical service to which they were entitled.

By contrast, in cases where plaintiffs’ Chapter 93A claims were successful, there was a clear connection between the defendant’s regulatory violation and an objective injury. In Iannacchino, for example, the SJC noted that plaintiffs could adequately plead injury where the cars they purchased purported to, but did not, meet federal safety regulations, the defendant refused to recall and fix the vehicles, and the plaintiffs’ damages could be easily identified by measuring the cost to bring the vehicles into compliance with the regu*12lations. Iannacchino, 888 N.E.2d at 886-87; see also Bezdek, 2013 WL 639145, at *6 (recognizing “price premium” theory of injury adequately alleged where plaintiffs claiméd they paid more for shoes that promised to, but did not, provide specific health benefits).

Unlike the plaintiffs in Iannacchino, however, Shaulis’s complaint fails to identify any bargained-for characteristic of the sweater that she has not received. As the district court explained, Shaulis “arguably got exactly what she paid for, no more and no less,” emphasizing her failure to allege that the sweater was “worth less than the selling price, that it was manufactured with shoddy materials or inferior workmanship, that it is of an inferior design, or that it is otherwise defective.” Shaulis, 120 F.Supp.3d at 51-52. At bottom then, Shau-lis’s alleged “injury” is only that Nord-strom tricked her into believing that she was getting a bargain, and not, as was the case in Iannacchino, that the product itself was deficient in some objectively identifiable way. That perceived adverse impact— as the district court put it, “the subjective belief as to the nature of the value [Shau-lis] received”—does not state a legally cognizable , economic injury under Chapter 93A because it fails to identify anything objective that Shaulis bargained for that she did not, in fact, receive.

Perhaps realizing this flaw in her claims, Shaulis attempts to reframe her injury as a loss of the benefit of the bargain, contending that the “Compare At” price tag was a false representation that the sweater was of “high quality.” But this reformulation is fundamentally no different than her “induced purchase” theory of injury because Shaulis does not explain how the sweater was not of “high quality” in any objective way. As the SJC explained in Iannacchino, a plaintiff’s “bare assertion” that a product is deficient in some way is “conclusory and can be subjective” and thus “does not suffice to state a viable claim.” 888 N.E.2d at 888. Instead, claims of injury premised on “overpayment” for a product,' or a loss of the benefit of the bargain, require an objective measure against which the plaintiff’s allegations may be evaluated. See id. (“[T]he complaint must identify a legally required standard that the [product] w[as] at least implicitly represented as meeting, but allegedly did not.”).

Shaulis, however, makes no objective claims, instead relying only on inferences she drew about the quality of the sweater based on the “Compare At” price tag. Indeed, Shaulis’s assertion that the sweater is “worth nothing to [her]” proves too much, as it demonstrates that the only injury she has alleged is based solely on her subjective belief that she got a bad deal. Shorn of its conclusory allegations, the complaint adequately alleges only that Nordstrom violated the Massachusetts Code of Regulations and that Shaulis purchased a sweater for $49.97 that she no longer wants.

Shaulis’s attempt to analogize this case to fake-Rolex hawking in Hong Kong is also unpersuasive. She claims that the district court “apparently would find no actionable grievance in the fact that the purchase was not a real Rolex but a replica made of inferior materials, selling at a 99% discount.” There is an obvious distinction there: falsely advertising a watch as a “Rolex” is a material misstatement about the watch’s quality. Shaulis alludes to what she purchased as a “phony designer sweater” but has made no allegations that Nord-strom ever represented it as such. -

It may be the case that Shaulis, in fact, made an inference from price to value (the claimed “high quality” of the sweater) based on Nordstrom’s “Compare At” price tag, or even that Nordstrom hopes some *13customers will make this inference. See Dhruv Grewal & Larry D. Compeau, Comparative Price Advertising: Informative or Deceptive?, 11 J. Pub. Pol’y & Mktg. 52, 55 (1992) (“By creating an impression of savings, the presence of a higher reference price enhances subjects’ perceived value ... [of a] product.”). Indeed, it is presumably just this kind of erroneous inference that Massachusetts seeks to prevent by regulation. Yet, not only have Massachusetts courts declined to find injury under Chapter 93A where the plaintiff relies entirely on her subjective belief as to the value received, but federal courts also have routinely rejected claims of injury under Chapter 93A that were not grounded in any objective measure. See, e.g., In re Celexa & Lexapro Mktg. and Sales Practices Litig., No. 14-cv-13848-NMG, 2015 WL 3751422, at *8 (D. Mass. June 15, 2015) (rejecting “informed choice” theory of injury where plaintiffs alleged they would not have purchased drug had they known certain information); Sergeants Benv. Ass’n Health & Welfare Fund v. Sanofi-Aventis U.S. LLP, 20 F.Supp.3d 305, 336 (E.D.N.Y. 2014), aff'd, 806 F.3d 71 (2d Cir. 2015) (rejecting induced purchase theory of injury under Chapter 93A).

Appellate courts reviewing the consumer protection statutes of other states also have consistently rejected similar purchase-as-injury claims. See, e.g., Kim v. Carter’s Inc., 598 F.3d 362, 366 (7th Cir. 2010) (rejecting induced purchase theory of injury where plaintiff alleged she was deceived by fictitious price tags on clothing); Small v. Lorillard Tobacco Co., 94 N.Y.2d 43, 698 N.Y.S.2d 615, 720 N.E.2d 892, 898 (1999) (rejecting induced purchase theory of injury under New York law because it “sets forth deception as both act and injury”). Absent allegations of real loss grounded in some objective measure, Shaulis’s “induced purchase” theory of injury is simply the “per se” theory of injury in new clothing, and hence, it is insufficient to adequately allege injury under the SJC’s current Chapter 93A jurisprudence.

In a final attempt to salvage her claim for damages, Shaulis changes tack, arguing that even if she has not suffered an economic injury by being induced to purchase the sweater, she has suffered a separate injury in the form of expenses incurred traveling to the Nord-strom Rack.5 Shaulis’s “travel expenses” theory of damages, however, was not pleaded in the SAC, and she did not raise it in the district court. Hence, we need not address it here. In any event, this argument would also fail because Shaulis does not explain how a deceptive price tag could have caused her to travel to the Nord-strom Rack in the first place.6 See Walsh, *14821 F.3d at 160 (“A plaintiffs failure to establish both factual causation and proximate causation is fatal to her Chapter 93A claim.”).

C. Injunctive Relief under Chapter 93A

Shaulis separately assigns error to the district court’s failure to grant her request for injunctive relief under Chapter 93A. In particular, Shaulis contends that she is entitled to injunctive relief under Chapter 93A regardless of whether her claim for damages is dismissed.

Shaulis’s only support for this claim is Diviacchi v. Speedway LLC, in which the district court held that “a [Chapter 93A] plaintiff may pursue a claim for purely injunctive relief ... absent any injury.” 109 F.Supp.3d 379, 386 (D. Mass. 2015). In making this determination, the Diviacchi court focused on language in Tyler that it said suggested that the requirement of proving injury applied only to a claim for damages. Id. at 385-86. Specifically, the Diviacchi court acknowledged that Tyler demonstrated “a broad shift away from the notion that the invasion of a legal right, standing alone, is sufficient to support a claim under Chapter 93A,” but the court noted that the SJC’s silence on the availability of equitable relief counseled in favor of finding that such relief was available. Id.; see Shaulis, 120 F.Supp.3d at 50 n.5 (discussing Diviacchi).

We find this reasoning unpersuasive, as did the district court. Neither the text of Chapter 93A nor the relevant case law supports this argument. The plain language of Chapter 93A limits the class of consumers who may bring an action to those who “ha[ve] been injured,” and offers as remedy both “damages and ... equitable relief, including an injunction.” Mass. Gen. Laws ch. 93A, § 9(1) (emphasis added). We find nothing in the text of Chapter 93A that obviates the need to prove injury in private suits for injunctive relief, or even suggests that private suits for equitable relief should somehow be treated differently than claims for damages.

Further, the SJC has never explicitly distinguished between the form of injury required for damages and that required for injunctive relief. See Hershenow, 840 N.E.2d at 535 (holding that Chapter 93A plaintiff must prove (1) an “invasion” of a “legally protected interest” and (2) that the “invasion causes the consumer a loss,” either “economic or non-economic”); cf. Young v. Wells Fargo Bank, N.A., 717 F.3d 224, 242 (1st Cir. 2013) (vacating dismissal of claims for both damages and injunctive relief under Chapter 93A, and noting that claim for injunc-tive relief was “derivative of’ plaintiffs claim for damages). Moreover, the SJC’s most recent opinion on point, Bellermann, lacks any language distinguishing claims for damages from claims for injunctive relief. See 54 N.E.3d at 1110 (“To succeed in [a] motion for class certification under [Chapter 93A] ... plaintiffs ... must show that the assertedly unfair or deceptive act or practice ... caused their injuries.”). Hence, consistent with the plain language of the statute, we hold that a private cause of action under Chapter 93A—either for damages or injunctive relief—requires a plaintiff to allege injury, as that term is defined by the SJC. See Tyler, 984 N.E.2d at 745 (“The invasion of a consumer’s legal right ... may be a violation of G.L. c. 93A, § 2 ... but the fact that there is such a *15violation does not necessarily mean the consumer has suffered an injury.”).

Shaulis gravely warns, however, that failure to provide for a private cause of action for injunctive relief will leave Massachusetts consumers unprotected from retailers’ dishonest pricing schemes. We disagree. As we noted in Rule II, the Massachusetts Attorney General “has authority [under Chapter 93A] to seek heavy sanctions on those who engage in deceptive advertising even without injury.” 607 F.3d at 255 (emphasis added) (citing Mass. Gen. Laws ch. 93A, § 4); see also Rule I, 604 F.Supp.2d at 304 (“Chapter 93A was not ‘mean[t] to authorize purely vicarious suits by self-constituted private attorneys-general.’” (alteration in original) (quoting Leardi, 474 N.E.2d at 1102)). It may be the case that Nordstrom’s allegedly unlawful conduct needs to be deterred, “but not necessarily by those who ... were not injured.” Rule II, 607 F.3d at 255. Hence, because Shaulis has not adequately alleged that she suffered a legally cognizable injury, her Chapter 93A claims for damages and injunctive relief were both properly dismissed.

III. Common Law Claims

Shaulis’s remaining common law claims—for fraud, unjust enrichment, and breach of contract—fare no better than her Chapter 93A claim. We address each in turn.

First, Shaulis’s claim for fraudulent misrepresentation fails for the same reason as her Chapter 93A claim: she has not alleged an actionable injury caused by Nordstrom’s allegedly false statement. Specifically, under Massachusetts law, a claim for fraudulent misrepresentation requires a pecuniary loss. See Twin Fires Inv., LLC v. Morgan Stanley Dean Witter & Co., 445 Mass. 411, 837 N.E.2d 1121, 1135-36 (2005). Although Shaulis alleges that she would not have purchased the sweater but for Nordstrom’s deception— and, hence, that we should infer that her “loss” is the total purchase price—she does not allege that the sweater she actually received was worth less than she paid, or that the sweater was defective in some way. Absent such allegations, her claim for fraudulent misrepresentation fails to allege any pecuniary loss.

Shaulis contends, however, that she is at least entitled to consequential damages on her fraud claim—in the form of travel expenses to the Nordstrom Rack, shipping expenses to return the sweater, or the cost of telephone calls to Nordstrom to complain. This argument also fails. Although consequential damages are generally available for fraudulent misrepresentation, see Rivera Castillo v. Autokirey, Inc., 379 F.3d 4, 12 (1st Cir. 2004), Shaulis does not allege any consequential damages in the SAC. As explained above, the “travel expenses” theory of damages is alleged for the first time on appeal, and, even if this theory had been properly alleged in the SAC, it fails for the simple reason that plaintiff could not have seen the deceptive price tag until she had already reached the store. See Kiluk v. Select Portfolio Servicing, Inc., No. 11-civ-10731-FDS, 2011 WL 8844639, at *5 (D. Mass. Dec. 19, 2011) (“[T]he complaint must allege that plaintiffs suffered a pecuniary loss as a consequence of their reliance on defendant’s alleged misrepresentation.”).

As for Shaulis’s breach of contract claim, we find no allegations in the SAC that the sales contract itself was actually breached. See Kim, 598 F.3d at 364 (finding no breach of contract where item was advertised for “30% off an inflated, fictitious” price, because “[b]y charging this agreed price in exchange for ownership of the clothing, [defendant] gave the *16plaintiffs the benefit of their bargain”). The agreement between Shaulis and Nord-strom was nothing more than a straightforward, everyday sales contract for the purchase of a sweater. By charging the agreed price in exchange for ownership of the sweater, Nordstrom fulfilled its contractual obligations.7

Shaulis’s common law claim for unjust enrichment also fails because a party with an adequate remedy at law cannot claim unjust enrichment. ARE-Tech Square, LLC v. Galenea Corp., 91 Mass. App.Ct. 1106, 2017 WL 634771 (Mass. App. Ct. 2017); see also Mass. Eye & Ear Infirmary v. QLT Phototherapeutics, Inc., 412 F.3d 215, 234 (1st Cir. 2005) (noting that unjust enrichment serves only as an “equitable stopgap for occasional inadequacies in contractual remedies at law”). Moreover, Massachusetts law does not permit litigants “to override an express contract by arguing unjust enrichment.” Platten v. HG Bermuda Exempted Ltd., 437 F.3d 118, 130 (1st Cir. 2006). Although Shaulis argues that, if her other claims are dismissed, she effectively has no adequate remedy, this argument misapprehends the relevant law. It is the availability of a remedy at law, not the viability of that remedy, that prohibits a claim for unjust enrichment. See Reed v. Zipcar, Inc., 883 F.Supp.2d 329, 334 (D. Mass. 2012) (noting that the viability of the remedy at law “is beside the point” and the “mere availability” of a remedy at law bars a claim for unjust enrichment), aff'd, 527 Fed.Appx. 20 (1st Cir. 2013); Fernandes v. Havkin, 731 F.Supp.2d 103, 114 (D. Mass. 2010) (“Plaintiffs negligence and [CJhapter 93A claims ... preclude a claim for unjust enrichment. The disposition of those claims is irrelevant.”).

IV. Motion for Reconsideration and Leave to Amend

Finally, we find that the district court did not err in denying Shaulis’s motion for reconsideration and for leave to amend.

The district court held “that [Shaulis had] not made the necessary showing of newly discovered evidence or a manifest error of law to warrant reconsideration,” and thus declined to vacate the judgment of dismissal under Fed. R. Civ. P. 59 or 60 to allow leave to amend. See Acevedo-Villalobos v. Hernandez, 22 F.3d 384, 389 (1st Cir. 1994) (“Unless post-judgment relief is granted, the district court lacks power to grant a motion to amend the complaint under Rule 15(a).”). As explained above, the district court committed no legal error in dismissing Shau-lis’s Chapter 93A and common law claims. Hence, Shaulis’s only remaining argument for post-judgment relief is based on purported newly discovered evidence—a Nordstrom “Compliance Manual” that Shaulis alleges demonstrates “that Nord-strom has intentionally and deliberately implemented” a deceptive pricing scheme. The district court, however, found that Shaulis had adequately pleaded that Nord-strom’s alleged pricing scheme “eonsti-tut[ed] an unfair or deceptive practice under Chapter 93A.” Shaulis, 120 F.Supp.3d *17at 49. Nordstrom has not even appealed this determination, and, hence, cumulative allegations of Nordstrom’s allegedly deceptive conduct cannot help Shaulis avoid dismissal of her claims. Here, the primary deficiency in the SAC was that Shaulis failed to adequately plead that she suffered a legally cognizable injury; further allegations of deception do nothing to remedy that flaw.

Affirmed.

*657OPINION

BOYCE F. MARTIN, JR., Circuit Judge.

The plaintiffs, twelve graduates of the Thomas M. Cooley Law School, sued their alma mater in district court, alleging that the school disseminated false employment statistics which misled them into deciding to attend Cooley. The graduates relied on these statistics as assurances that they would obtain full-time attorney jobs after graduating. But the statistics portrayed their post-graduation employment prospects as far more sanguine than they turned out to be. After graduation, the Cooley graduates did not secure the kind of employment the statistics advertised— or in some cases any employment at all. They claimed that, had they known their true — dismal—employment prospects, they would not have attended Cooley — or would have paid less tuition. Because their Cooley degrees turned out not to be worth what Cooley advertised them to be, they have sought, among other relief, partial reimbursement of tuition, which they have estimated for the class would be $300,000,000. But because the Michigan Consumer Protection Act does not apply to this case’s facts, because the graduates’ complaint shows that one of the statistics on which they relied was objectively true, and because their reliance on the statistics was unreasonable, we AFFIRM the district court’s judgment dismissing their complaint for failure to state any claim upon which it could grant relief.

From the prolix amended complaint (sixty-six pages with one-hundred and twenty-six paragraphs) we take the following facts, which we must regard as true. City of Columbus, Ohio v. Hotels.com, L.P., 693 F.3d 642, 648 (6th Cir.2012) (citing Courie v. Alcoa Wheel & Forged Prods., 577 F.3d 625, 629 (6th Cir.2009)). We also derive the facts from the exhibits attached to the complaint, because the complaint refers to them and they are “central to the claims” in it. Bassett v. Nat’l Collegiate Athletic Ass’n, 528 F.3d 426, 430 (6th Cir.2008) (citing Amini v. Oberlin Coll., 259 F.3d 493, 502 (6th Cir.2001)).

The Thomas M. Cooley Law School, a non-profit corporation accredited by the American Bar Association, has its main campus in Lansing, Michigan, with satellite campuses in the Michigan cities of Ann Arbor, Auburn Hills, and Grand Rapids. Cooley enrolls more law students than any other law school in the country: for the 2010-2011 academic year, the school enrolled approximately 4,000 students, eighty-two percent of whom attended part-time. On August 8, 2011, Cooley announced plans to open a satellite campus, in Riverview, Florida, near Tampa Bay, to accommodate another 700 law students.

Cooley charges full-time students tuition of $36,750 per year. With room, board, and living expenses, the total cost to attend Cooley Law is estimated to be $52,000 per year. For the fiscal year 2009, Cooley’s total operating revenue was $117,577,686, which included $108,979,296 in tuition. Its total operating costs were $97,i96,760, including $47,158,197 that Cooley paid its employees. Cooley paid its Dean, Don LeDuc, $548,047 in total compensation during fiscal year 2008, and it paid him $523,213 during fiscal year 2009, making LeDuc one of the highest paid law-school deans in-the country. Cooley has also continued to pay its former Dean and founder, Thomas Brennan, $368,581 in 2008, and $370,245 in 2009. Cooley pays its other eleven highest-paid employees amounts ranging from between $200,225 to $249,999.

According to the amended complaint, U.S. News & World Report reported that Cooley has the lowest admissions standards of any accredited or provisionally *658accredited laws school in the country. In 2010, the school accepted eighty-three percent of all applicants, an acceptance rate nearly fifteen percentage points greater than the second least-selective law school, Phoenix School of Law. In 2010, the mean Law School Admissions Test score for incoming students at Cooley was 146, and the mean undergraduate grade-point average was 2.99 — both lows for all accredited and provisionally accrédited law schools. Cooley also has low retention rates. For example, in 2008, almost thirty-two percent of the roughly 1,500 students who enrolled at Cooley failed to enter their second year, and ten percent of second-year students failed to continue into their third year. Some third-year students do not complete their degrees. In 2008, twenty-two third-year students, about three percent of the class, either failed or dropped out during the academic year.

The twelve plaintiffs in this case fared better, having graduated from Cooley between 2006-2010. Each individual did so, however, burdened with an average of $105,798 in student-loan debt, according to U.S. News & World Report.

The graduates averred that they decided to enroll at Cooley, or to continue to study there, “to prospectively better themselves and their personal circumstances through the attainment of full-time employment in the legal sector.” In making their decisions, the graduates relied on the “Thomas M. Cooley Law School Employment Report and Salary Survey” that Cooley provided on its website and to prospective and current students. The plaintiffs attached to the complaint, as exhibits numbered two through six, an Employment Report and Salary Survey for each of the graduating classes in 2004, 2005, 2006, 2009, and 2010.

Each Employment Report and Salary Survey purported to show the employment outcomes of Cooley graduates in a given class year by showing: the percentage of graduates employed, the average starting salary of graduates, and the percentages of graduates employed in various sectors— private practice, government, public interest, academic, judicial clerkship, and business — and the average starting salary in each sector. Cooley produced these statistics by sending out surveys to graduates in a given class, some of whom would complete the surveys and return them. For example, the responses of about eighty-three percent of the 2010 graduates provided the basis for the 2010 Employment Report and Salary Survey. Cooley has never audited nor verified the responses.

Cooley, according- to the graduates, makes “two uniform, written misrepresentations” in each Employment Report and Salary Survey. The first supposed misrepresentation in each Employment Report is the “percentage of graduates employed” statistic. For example, the 2010 Employment Report states, next to the phrase “percentage of graduates employed” that seventy-six percent of its graduates were employed (within nine months of graduation). According to the 2010 Employment Report, fifty percent were employed in “private practice,” fifteen percent in “government,” two percent in “public interest,” three percent in “academic,” three percent in “judicial clerkship,” and eighteen percent in “business.”

The second alleged misrepresentation in each Employment Report is the “average starting salary of all graduates” statistic. For example, in the 2010 Employment Report, Cooley stated that the “average starting salary for all graduates” was “$54,796.”

The plaintiffs relied on these two supposed misrepresentations — the “percentage of graduates employed” and the “average starting salary of all graduates” — in deciding either to apply to Cooley or to remain enrolled there. These statistics, *659however, did not correspond with their actual employment prospects upon graduation.

Most of the plaintiffs had difficulty finding full-time, paying jobs as lawyers after graduating. Anders -Christensen graduated from Cooley Law in 2010, passed the Utah Bar, and worked as a law clerk for a Utah law firm, where he is currently an associate. Carrie Kalbfleisch, who graduated in 2010, passed the Kentucky Bar and started her own law firm in Kentucky. After graduating in 2010, John T. MacDonald, Jr. passed the Michigan Bar, but could not find full-time, permanent legal employment and so was forced to open up his own law firm which he still operates. Shawn Haff, who also graduated in 2010, could not find full-time, permanent legal employment, and so he took temporary, contract assignments reviewing documents to make ends meet. He now owns and operates his own law firm in Michigan, where he is licensed to practice law. Dimple Kumar, who graduated in 2009, passed the New York Bar, but tried unsuccessfully for over nine months to find full-time, permanent legal employment. He was forced to take temporary, contract assignments reviewing documents to make ends meet, until he found full-time employment practicing landlord-tenant law. He currently owns and operates his own law firm. Dan Guinn, who also graduated in 2009, passed the Ohio Bar, but was also forced to take temporary, contract assignments reviewing documents to make ends meet. He now owns and operates his own law firm. Similarly, Kevin Prince, after graduating in 2009, passed the Michigan Bar, but was forced to take temporary, contract assignments reviewing documents to make ends meet, until finding full-time, permanent employment, nearly a year after graduating from law school. Benjamin Forsgren, who graduated in 2008, passed the Utah Bar and began his current position as a contracts manager at a Utah company. Lastly, Chelsea A. Pejic, who graduated in 2006, could not find gainful legal employment despite' circulating hundreds of resumes, and so was forced to endure a long period of unemployment. She passed the Illinois Bar, and operated her own law firm for a brief period while working as a volunteer staff attorney and a temporary contract attorney.

Others have not been able to find any legal employment. Shane Hobbs, who lives in Pennsylvania, graduated in 2010. He failed to secure any type of legal employment and has worked as a substitute teacher and day laborer at a golf course. Steven Baron, who graduated in 2008, lives in Los Angeles, California. He is currently unemployed and has failed to get any kind of job, despite circulating hundreds of resumes. Danny Wakefield graduated from Cooley Law in 2007. Although he passed the Utah Bar, and used to be a member in good standing, he voluntarily assumed inactive status because he could not get any type of employment in the legal profession. He currently manages the deliveries of telephone books.

These individuals are not alone. As the amended complaint states, the plaintiffs, like all other law students throughout the country, graduated into one of the “grimmest legal job markets in decades.” According to the amended complaint, a recent study found that there were twice as many people who passed a bar examination — 53,508—as there were job openings — 26,239. See Catherine Rampell, The Lawyer Surplus, State by State, New York Times (June 27, 2011), http://a conomix.blogs.nytimes.eom/2011/06/27/the-lawyer-surplus-state-by-state/.

The graduates sued Cooley in a three-count complaint alleging that it had: (1) violated Michigan’s Consumer Protection Act, M.C.L.A. §§ 445.901-445.922; (2) committed common-law fraud under Michi*660gan state law; and (8) committed negligent misrepresentation, also under Michigan state law. Cooley moved to dismiss the amended complaint, and the district court, in a published opinion and order, granted Cooley’s motion. MacDonald v. Thomas M. Cooley Law Sch., 880 F.Supp.2d 785, 788 (W.D.Mich.2012). As to count one, the district court concluded that the Act “d[id] not apply to the purchase of a legal education to attain employment.” Id. As to counts two and three, the district court concluded that the graduates failed to state a claim upon which relief could be granted because one representation — the statistic about “percentage of graduates employed” — was “literally true,” id., and the graduates “unreasonably relied,” id., on the other statistic about “average starting salary for all graduates.” The graduates timely appealed, and Cooley cross-appealed.

We review de novo, the grant of a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). Republic Bank & Trust Co. v. Bear Stearns & Co., Inc., 683 F.3d 239, 246 (6th Cir.2012) (citing La. Sch. Emps. Ret. Sys. v. Ernst & Young, LLP, 622 F.3d 471/ 477 (6th Cir.2010)). Our review of the district court’s dismissal must construe the record in the light most favorable to the non-moving party, here the graduates, and we must accept as true all of the complaint’s well-pleaded allegations. Id. (citing Robert N. Clemens Trust v. Morgan Stanley DW, Inc., 485 F.3d 840, 845 (6th Cir.2007)). We must ascertain whether the complaint contains “ ‘sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face[‘.]’ ” Bartholomew v. Blevins, 679 F.3d 497, 499-500 (6th Cir.2012) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)).

On appeal, the graduates argue that the district court erred in two ways: (1) it “impermissibly created an exception to coverage” under the Michigan Consumer Protection Act “for any purchase whose object is to make money or find or maintain employment” and (2) it erroneously held, as a matter of law and without discovery, that the graduates could not have reasonably relied upon Cooley’s statistics in its Employment Reports and Salary Surveys. We address each argument in turn.

The district court held that the Michigan Consumer Protection Act “d[id] not apply to the purchase of a legal education to attain employment[.]” MacDonald, 880 F.Supp.2d at 788. The district court reasoned that, because the graduates attended law school — as they themselves declared in the amended complaint — “to prospectively better themselves and their personal circumstances through the. attainment of full-time employment in the legal sector,” they attended for a “business purpose.” Id. at 792. But the Act does not cover purchases that consumers make for business or commercial purposes. Id. Therefore, the district court held that the Act, as a matter of law, does not cover the graduates’ purchasing of a legal education, and so they cannot state a claim under it. We agree.

The Michigan Consumer Protection Act, sections 445.901^445.922, covers a wide variety of conduct: “the advertising, solicitation, offering for sale or rent, sale, lease, or distribution of a service or property, tangible or intangible, real, personal, or mixed, or any other article, or a business opportunity.” Mich. Comp. Laws Ann. § 445.902(g). The Act prohibits “[ujnfair, .unconscionable, or deceptive methods, acts, or practices in the conduct of trade or commerce[.]” Id. § 445.903(1). The Act defines “trade or commerce” as “the conduct of a business providing goods, property; or service primarily for personal, family, or household purposes [.]” Id. *661§ 445.902(g) (emphasis added). This definition, then, creates an exception to the Act’s coverage: if a consumer — whether a business or a natural person — buys a good, property, or service for a business purpose — that is, not “primarily for [a] personal, family, or household purpose[ ]”— then the Act does not apply.

The Michigan Supreme Court has held that the Act, while applying to consumer purchases, “does not apply to purchases that are primarily for business purposes.” Slobin v. Henry Ford Health Care, 469 Mich. 211, 666 N.W.2d 682, 684 (2003) (per curiam). In Slobin, a law firm requested medical records on behalf of a client from a copy service. Id. at 633. The law firm claimed that the service charged too much for the copies and claimed that it violated the Act by charging “a consumer price grossly in excess of similar copying rates.” Id. The Michigan Supreme Court held that the claim failed “as a matter of law because obtaining medical records for the purpose of litigation is not ‘primarily for personal, family, or household use,’ as required by the [A]ct.” Id. at 635.

Slobin cited approvingly two Michigan Court of Appeals cases which “reflect[ed] a correct understanding of the scope and purpose of the [Act]” because they excluded from the Act purchases of goods or services for business purposes. Id. at 635. In the first case, the plaintiff bought a truck from the defendant and sought to hold the defendant liable under the Act. Because the plaintiff testified that he attributed eighty percent of the miles he drove the truck to business purposes, with the rest attributable to personal use, the court summarily disposed of the plaintiffs claim under the Act, holding that' “ ‘if an item is purchased primarily for business or commercial rather than personal purposes, the [Act] does not supply protection.’ ” Id. (quoting Zine v. Chrysler Corp., 236 Mich. App. 261, 600 N.W.2d 384, 393 (1999)). In the second case, the plaintiffs sought to hold the defendant, which provided electricity to the plaintiffs’ hog-production facility, liable for damages to its hogs allegedly caused by “ ‘stray voltage;’ ” but the court held- that the Act did not apply because the plaintiffs bought electricity from the defendant “ ‘primarily for the purpose of operating their business rather than ‘primarily for personal, family or household purposes.’ ” Id. (quoting Jackson Cnty. Hog Producers v. Consumers Power Co., 234 Mich.App. 72, 592 N.W.2d 112 (1999) (per curiam)).

Here, the graduates bought their legal education — like the medical records in Slobin, the pickup truck in Zine, or the electricity in Jackson County — for a business purpose. We must accept the facts in their complaint as true. The complaint averred that each of the graduates intended to use his or her law degree “to prospectively better themselves and their personal circumstances through the attainment of full-time employment in the legal sector.” (emphasis added). The graduates, then, did not attend law school for personal purposes, nor for dilettantish reasons. As the district court wryly commented, they “did not purchase a Cooley legal education so that they could leisurely read and understand Supreme Court Reports!.]” MacDonald, 880 F.Supp.2d at 792. We agree with the district court’s reasoning, and we hold that, based on the amended complaint’s facts, the Act did not cover their purchasing of a legal education.

If, for example, the graduates had alleged that they attended Cooley to get a legal education with no intention of using it to make money, then the district court might have erred in holding that the Act did not apply. But because the graduates admitted in their complaint that they bought their legal education for a business *662purpose, to make a living, the district court correctly concluded that that they failed to state a claim under the Act.

Therefore, we need not reach Cooley’s alternative argument in its cross-appeal that the Act did not apply because of the Act’s exemption for any “ ‘transaction or conduct specifically authorized under laws administered by a regulatory board or- officer acting under statutory authority of this state or the United States.’ ” Liss v. Lewiston-Richards, Inc., 478 Mich. 203, 732 N.W.2d 514, 515 (2007) (citing Mich. Comp. Laws Ann. § 445.904(l)(a)).

Instead, we address the graduates’ contention that the district court erred in dismissing their second claim, that Cooley committed fraudulent misrepresentation by making, in its Employment Report and Salary Survey for any given year, “two uniform, written misrepresentations.” These were: (1) the statistic showing “percentage of graduates employed,” and (2) “average starting salary for all graduates.”

We first address the graduates’ claim that Cooley committed fraudulent misrepresentation by disseminating, in its Employment Reports, the “percentage of graduates employed” statistic. For example, the 2010 Employment Report states, next to the phrase “percentage of graduates employed” that seventy-six percent of its graduates were employed (within nine months of graduation). According to the 2010 Employment Report, of the 2010 graduates, fifty percent were employed in “private practice,” fifteen percent in “government,” two percent in “public interest,” three percent in “academic,” three percent in “judicial clerkship,” and eighteen per-' cent in “business.”

The graduates claimed that, to a reasonable consumer, this statistic meant that the jobs reported were full-time, permanent positions for which a law degree was required or preferred. But, the graduates argued, this percentage was false because it included any type of employment, including jobs that had absolutely nothing to do with the legal industry, and which did not require a law degree or which were temporary or part-time. In their words, a graduate “could be working as a barista in Starbucks ... and would be deemed employed and working in ‘business,’ even though such employment [wa]s clearly temporary in nature and obviously d[id] not require a JD degree.” The district court concluded that the graduates failed to state a claim for fraud under Michigan law for - two reasons. First, because the “percentage of graduates employed” statistic was “literally true[,]” MacDonald, 880 F.Supp.2d at 788, and was “not objectively false.” Id. at 794. Second, the district court held that the graduates’ reliance on the “percentage of graduates employed” statistic as including “only graduates who were employed in full-time legal positions” was unreasonable. Id. Again, we agree with the district court.

Under Michigan law, to prove that a defendant committed fraudulent misrepresentation, a plaintiff must prove six elements: (1) the defendant made a material representation; (2) the representation was false; (3) when the defendant made the representation, it knew that it was false, or made the representation recklessly, without any knowledge of its truth, and as a positive assertion; (4) the defendant made the representation with the intention that it should be acted on by the plaintiff; (5) the plaintiff acted in reliance on the representation; and (6) the plaintiff suffered injury due to his reliance on the representation. Hord v. Envtl. Research Inst. of Mich., 463 Mich. 399, 617 N.W.2d 543, 546 (2000) (per curiam) (citing Hord v. Envtl. Research Inst. of Mich., 228 Mich.App. 638, 579 N.W.2d 133, 135 (1998)).

An additional requirement for element five is that the plaintiffs’ reliance on *663the alleged misrepresentation must have been reasonable. Novak v. Nationwide Mut. Ins. Co., 235 Mich.App. 675, 599 N.W.2d 546, 553-54 (1999); Nieves v. Bell Indus., Inc., 204 Mich.App. 459, 517 N.W.2d 235, 238 (1994). Although we have found no case in which the Michigan Supreme Court has held that the reliance must be reasonable, intermediate appellate court cases, including Novak, have held that the plaintiffs’ reliance must be reasonable. Novak held “that the reliance must indeed be reasonable.” Novak, 599 N.W.2d at 553 (citing Nieves, 517 N.W.2d at 238; Webb v. First of Mich. Corp., 195 Mich.App. 470, 491 N.W.2d 851 (1992)). Novak explained that Nieves and Webb “stated the correct rule of law, because a person who unreasonably relies on false statements should not be entitled to damages for misrepresentation.” Id. at 554. We follow Novak and the cases it cited, because “ordinarily a state’s, intermediate appellate court decisions are the best authority in the absence of any supreme court precedent!)]” United States v. Simpson, 520 F.3d 531, 536 (6th Cir.2008).

Here, as to the “percentage of graduates employed” statistic, the graduates’ amended complaint showed that they could not establish the second element: that the representation was false. Their failure is analogous to the plaintiff’s failure in Hord v. Environmental Research Institute of Michigan, 463 Mich. 399, 617 N.W.2d 543 (2000) (per curiam). In Hord, a representative of the defendant, a corporation, interviewed the plaintiff for a job and provided him with information about the company, including an operating summary containing financial data. Id. at 545. The plaintiff accepted the job, but the defendant, for economic reasons, ultimately gave him a lay-off notice a year after he began working for the defendant. Id. The plaintiff sued, alleging that the defendant had misled him about its financial soundness. Id. The trial court submitted the case to a jury on both a standard fraud claim involving fraudulent misrepresentation and a silent fraud theory. Id. The jury returned a verdict for the plaintiff, which the Michigan Court of Appeals affirmed. Id.

The Michigan Supreme Court reversed. Id. The court held that the plaintiff failed to establish element (2), that the financial statement “was in any way false or misleading.” Id. at 549. The Court acknowledged that the plaintiff interpreted the operating summary “as a representation of the financial status of the organization.” Id. But, the court said, “that simply is not a reasonable interpretation of information that, on its face, presented data for a period that ended well before the plaintiffs job interview.” Id. The court reiterated that fraudulent misrepresentation “requires a false representation by the defendant.” Id. And “[a] plaintiffs subjective misunderstanding of information that is not objectively false or misleading cannot mean that a defendant has committed the tort of fraudulent misrepresentation.” Id.

The graduates cannot prove that Cooley committed fraudulent misrepresentation based on the “percentage of graduates employed” because the graduates cannot prove that this statistic was false. The statistic does not say percentage of graduates “employed in full-time, permanent positions for which a law degree is required or preferred.” It only says percentage of graduates “employed.” The graduates might have thought that “employed” meant employed in a permanent position for which a law degree was required or preferred — but, again “[a] plaintiffs subjective misunderstanding of information that is not objectively false or misleading cannot mean that a defendant has committed the tort of fraudulent misrepresentation.” Id.

*664The graduates argue that the district court “erred when it made determinations of fact on a motion under Rule 12(b) with respect to whether the [plaintiffs could have reasonably relied on Cooley’s advertised employment rates and salary information.” But, under Michigan law, a court may determine, based on the complaint, that a plaintiffs reliance was unreasonable, as illustrated by Novak, 599 N.W.2d at 549.

In Novak, the defendant, an insurance company, fired the plaintiff, one of its insurance sales agents. Id. When the plaintiff sued, one of the claims he brought was for fraudulent misrepresentation, id. at 552, based on the following facts. When the plaintiff had signed the defendant’s employment agreement, it included the following: (1) that he was forbidden from selling insurance for another company other than the defendants (unless the defendants specifically directed him to do so) and (2) that his employment was terminable at will by either party. Id. at 549. But the defendants induced him into signing the employment agreement by telling him two statements that directly contradicted the written document: (1) the at-will provision in the employment agreement did not apply to him, and (2) he would be allowed to sell insurance for companies other than the defendant. Id. at 552-53. The trial court summarily disposed of the case, and the Michigan Court of Appeals affirmed. Id. at 549.

The court of appeals observed that “the written contract, with its integration clause, expressly contradicted” the two statements the defendants made, which rendered the “plaintiffs alleged reliance on these statements unreasonable.” Id. at 553. So, the court then determined — as a matter of law — that the plaintiffs reliance on the statements “was not reasonable in light of the written contract,” and, therefore, “did not support a misrepresentation claim.” Id. at 554 (citing Nieves, 517 N.W.2d at 235). Novak, establishes that a court may determine, at the pleading stage and without discovery, whether the plaintiffs reliance was unreasonable.

Here, the graduates’ reliance on the “percentage of graduates employed” statistic to mean “percentage of graduates employed in full-time legal positions” was not reasonable because, as the district court noted, “basic deductive reasoning informs a reasonable person that the employment statistic includes all employed graduates, not just those who obtained or started full-time legal positions.” MacDonald, 880 F.Supp.2d at 794 (citation omitted). We therefore conclude that the graduates failed to state a claim of fraudulent misrepresentation under Michigan Law based on the “percentage of graduates employed” statistic.

Nor can the graduates establish a claim for fraudulent misrepresentation based on the statistic for “average starting salary for all graduates” because their reliance on it was unreasonable. The graduates alleged that Cooley committed fraudulent misrepresentation by including the line in each year’s Employment Report and Salary Survey stating the “average starting salary for all graduates.”

For example, the Employment Report for 2010 states that the “average starting salary for all graduates” was $54,796. On its face, the phrase “all graduates” means just that: all Cooley graduates — not just the ones who responded to the survey— made, on average, $54,796. One could assume that, because there were 934 graduates, the average starting salary for all 934 graduates was $54,796. The title of the document containing this statement is “Employment Report and Salary Survey.” Therefore, it cannot be that the average starting salary of all 2010 graduates was $54,796, because the document, entitled *665“Employment Report and Salary Survey ” (emphasis added) was not based on the responses of all of the Cooley graduates in 2010; rather, the document states that the number of 2010 graduates was 934, but the number of graduates with employment status known was 780. So, the “[a]verage starting salary for all graduates” would instead mean the average starting salary of graduates who responded to the survey and chose to include their salary information — not the average salary of all Cooley graduates in any given year.

We agree -with the district court that this statistic is “objectively untrue,” MacDonald, 880 F.Supp.2d at 794, but that the graduates’ reliance upon it was “also unreasonable,” id. at 796, which dooms their fraudulent misrepresentation claim.

Despite the statement’s untruth, the graduates cannot demonstrate that their reliance on this statement was reasonable. Unreasonable' reliance includes relying on an alleged misrepresentation that was expressly contradicted in a written contract that a plaintiff reviewed and signed. Novak, 599 N.W.2d at 553-54; Nieves, 517 N.W.2d at 237-38. A plaintiff unreasonably relies on one of the defendant’s statements if another of the defendant’s statements contradicts it.

Here, the statement “average starting salary for all graduates” expressly contradicted other statements in the very same report showing that the report itself was based not on data for the entire class, but on data from those who completed the surveys. The Cooley graduates’ reliance on the statement that the “[a]verage starting salary for all graduates” was “$54,796” was unreasonable in light of both the statement that the “[njumber of graduates with employment status known” was less than the total number of graduates and the very title of the report (a “Salary Survey”). Because their reliance was unreasonable, their claim for fraudulent misrepresentation failed as a matter of law. Therefore, the district court properly dismissed the claim.

Next, we address the graduates’ claim that Cooley committed silent fraud, also called fraudulent concealment, which has “long been recognized in Michigan.”. Roberts v. Saffell, 280 Mich.App. 397, 760 N.W.2d 715, 719 (2008) (citing Lorenzo v. Noel, 206 Mich.App. 682, 522 N.W.2d 724, 725 (1994)). This cause of action prohibits “ ‘[a] fraud arising from the suppression of the truth[,]’ ” which can harm a plaintiff as much as “‘that which springs from.the assertion of a falsehood[;]’ ” courts in Michigan, therefore, “‘have not hesitated to sustain recoveries where the truth has been suppressed with the intent to defraud.’” Noel, 522 N.W.2d 724, at 725 (quoting Williams v. Benson, 3 Mich.App. 9, 141 N.W.2d 650, 654 (1966)).

The graduates alleged that Cooley committed the tort of silent fraud by failing to disclose material facts accompanying its statistics. For example, as to the statistic on “percentage of graduates employed,” the graduates claim that Cooley committed silent fraud by failing to disclose what percentage of graduates were employed in either part-time or temporary positions, or whether the jobs required law degrees. As to the statistic of “average starting salary for all graduates,” the graduates assert that Cooley committed silent fraud by failing to disclose that it calculated this statistic not based on all the graduates, but only based on a subset of graduates; those who submitted their salary information in response to the survey.

But to state a claim for the tort of silent fraud, a plaintiff must allege more than non-disclosure; a plaintiff must establish that the defendant had “a legal duty to make a disclosure.” Hord, 617 N.W.2d 543, 550 (citing U.S. Fid. & Guar. *666Co. v. Black, 412 Mich. 99, 313 N.W.2d 77, 88 (1981)). Such a legal duty to make a disclosure arises “most commonly in a situation where inquiries are made by the plaintiff, to which the defendant makes incomplete replies that are truthful in themselves but omit material information.” Id. (citing Groening v. Opsata, 323 Mich. 73, 34 N.W.2d 560, 564-566 (1948); Sullivan v. Ulrich, 326 Mich. 218, 40 N.W.2d 126, 130-132 (1949)). In Groening, a duty arose where the plaintiff-buyer asked the defendant-seller if the bluff on which the house that the plaintiff was about to buy was eroding. This inquiry triggered the defendant’s duty to tell the plaintiff-buyer the truth — that the cliff was in fact eroding. Id. Similarly, in Sullivan, the plaintiff-buyer’s having asked the defendant-seller if the house he was about to buy had termites created duty in the defendant-seller to tell plaintiff-buyer that the house did in fact have termites. Id.

But unlike the house buyers in Groening and Sullivan, the Cooley graduates did not allege in their amended complaint that they ever asked Cooley about the claims in its Employment Reports so as to create a duty for Cooley to disclose the truth. As the district court noted, the graduates admitted, in their response to Cooley’s motion to dismiss, that they did “not allege that they specifically requested additional information regarding Cooley’s employment reports beyond what was publicly available[.]” MacDonald, 880 F.Supp.2d at 788. This failure to inquire dooms the silent-fraud claim. Absent such an inquiry, Cooley had no duty to make any further disclosure concerning its Employment Reports.

Next, we address the graduates’ claim of negligent misrepresentation, a theory which we are not even sure the Michigan Supreme Court would recognize as applicable to these facts. The Michigan Supreme Court has recognized the tort of negligent misrepresentation in only one context. Williams v. Polgar, 391 Mich. 6, 215 N.W.2d 149, 156 (1974), held that an abstracter could be liable under a theory of negligent misrepresentation where the abstracter negligently performed a title search. But the Michigan Supreme Court stressed that it recognized the tort of negligent misrepresentation only in the title-search context. The Court said “[t]hus, we adopt the tort action of negligent misrepresentation in this context.” Id. (emphasis added).

The Michigan Court of Appeals, has, in published opinions, recognized the tort of negligent misrepresentation. Alfieri v. Bertorelli, 295 Mich.App. 189, 813 N.W.2d 772, 775 (2012) held that “‘[a] claim for negligent misrepresentation requires plaintiff to prove that a party justifiably relied to his detriment on information prepared without reasonable care by one who owed the relying party a duty of care.’ ” (quoting Unibar Maint. Servs., Inc. v. Saigh, 283 Mich.App. 609, 769 N.W.2d 911, 919 (2009)). The Michigan • Court of Appeals first mentioned the tort of negligent misrepresentation in 1989, saying that “the tort involved in the underlying suit, negligent misrepresentation, was one requiring proof that a party justifiably relied to his detriment on information prepared without reasonable care by one who owed the relying party a duty of care.” Law Offices of Lawrence J. Stockler, P.C. v. Rose, 174 Mich.App. 14, 436 N.W.2d 70, 79 (1989) (citing Raritan River Steel Co. v. Cherry, Bekaert & Holland, 322 N.C. 200, 367 S.E.2d 609 (1988)). A later case addressed a claim of negligent misrepresentation by stating that negligent misrepresentation “requires plaintiff to prove ‘that a party justifiably relied to his detriment on information prepared without reasonable care by one who owed the relying party a duty of care.’ ” The Mable Cleary Trust v. The Edward-Marlah Muzyl Trust, 262 Mich. *667App. 485, 686 N.W.2d 770, 783 (2004) (quoting Law Offices of Lawrence J. Stockler, PC, 436 N.W.2d at 79), overruled on other grounds by Titan Ins. Co. v. Hyten, 491 Mich. 547, 817 N.W.2d 562 (2012).

But we need not decide whether Michigan law recognizes negligent misrepresentation as a cause of action, because the Cooley graduates still have failed to fulfill the tort’s requirement of justifiable, Alfieri, 813 N.W.2d at 775, or reasonable reliance, as our discussion above regarding their claim for fraudulent misrepresentation shows.

Lastly, we address Cooley’s cross-appeal, which raises three arguments, two of which the district court rejected: that the district court should have dismissed the case because the Cooley graduates failed to join the American Bar Association (ABA) and the National Association for Law Placement (NALP) as Federal Rule of Civil Procedure 19 requires, and because the Cooley graduates’ case is preempted by federal law requiring law schools to report employment data. We agree with the district court’s reasoning. Cooley also argues in its cross-appeal (as it did before the district court) that federal law preempts the Cooley graduates’ state-law consumer law and tort claims. We need not reach this argument given that we AFFIRM the district court’s judgment.

WILLIAM G. CALLOW, J.

This is a review of a published decision of the court of appeals, State v. American TV, 140 Wis. 2d 353, 410 N.W.2d 596 (Ct. App. 1987). That decision reversed an order of the circuit court for Dane county, Judge P. Charles Jones, granting a motion to dismiss the state’s complaint for failure to state a claim in this forfeiture action. We reverse the decision of the court of appeals because the state cannot prevail, even if the facts alleged in the complaint are true.

The state filed a complaint against American TV & Appliance of Madison, Inc., (American) alleging that in January, 1985, American ran the following radio advertisement one hundred sixty-four times on twenty-two radio stations:

"There are lots of good quality washers and dryers on the market. But when you ask which ones [sic] the best automatic washers and dryers, well it’s simple. There’s Speed Queen, Maytag and all the *296rest. Sears makes good washers and dryers there are lots of other good brands. But the best washers and dryers are made by Maytag and Speed Queen. And at American we have both of them and they’re on sale for our January white sale. A clearance sale on the finest washers and dryers you can buy. This week a Speed Queen washer and dryer set is reduced to 499. This week you can buy the finest for less than $500. Both the Speed Queen washer and dryer set for 499. Speed Queen, the choice of more commercial laundra-mats than any other washer because they last. Because Speed Queen uses the same transmission in home washes [sic] as they use in commercial washers. When it comes to washers and dryers, there’s Maytag, Speed Queen and all the rest. And during American’s closeout January white sale you can buy the best like a Speed Queen washer and dryer pair for 499 at American. Why pay more at Sears.”

The state contends that this advertisement violated secs. 100.18(1) and (9)(a), Stats. The complaint alleges that American ordered twenty of these $499 Speed Queen sets at a cost of $520 per set. In addition, the complaint alleges that American ordered one hundred thirty-three more expensive washer and dryer sets. Sixty-five of these sets contained more features and were "visually more sophisticated” than the $499 sets. American purchased these for $518. The other sixty-eight sets cost American up to $604 and were of an even higher quality. The complaint states that, although American sold only four of the $499 sets during the sale, the state "believes that a much larger number” of the more expensive sets were sold. In addition, American sold a large number of non-Speed Queen washers and dryers at higher prices.

*297The complaint also alleges that American employs a commission system under which a salesperson receives commission only on the sale of items at a price greater than the wholesale cost. Since American sold these sets at $21 below cost, the salespersons received no commission on their sale.

The state’s complaint alleges that the advertisement is not a bona fide offer to sell the $499 set and that American used the advertisement to induce potential buyers to come to the store where it discouraged the purchase of the $499 set and tried to sell the more expensive unadvertised sets. The state alleges that the following eight indicia reveal American’s deceptive intent: (1) the loss of money on sales of the $499 set; (2) the disproportionate number of unadvertised sets purchased for sale; (3) the disproportionate number of unadvertised sets sold; (4) the large expense of advertising a set upon which American would lose money; (5) the plain appearance of the $499 set and the lack of certain features found in more expensive sets, even though the $499 set was advertised as the "best” and "finest”; (6) the commission structure discouraging sales of the $499 set; (7) the training received by sales persons encouraging them to direct customers to the more expensive models; and (8) the fact that American did not permit credit card purchases of the $499 set.

Based upon these allegations, the state, in its complaint, makes two claims for relief. First, it claims that the advertisement is untrue, deceptive or misleading in violation of sec. 100.18(1), Stats.1 Second, it *298claims that the advertisement is a part of a plan or scheme, the purpose or effect of which is not to sell the merchandise as advertised, in violation of sec. 100.18(9)(a).2

*299The circuit court dismissed both counts set forth in the complaint. It concluded that the advertisement is not ^deceptive under sec. 100.18(1), Stats., because the advertisement, reasonably read, promotes a sale on Maytag and Speed Queen washers and dryers generally. The advertisement does not say that the "best” washer and dryer set in the world is the particular Speed Queen model sold for $499. Further, the use of the words "best,” "finest,” and "clearance” are merely examples of hyperbole and puffery.

With regard to sec. 100.18(9)(a), Stats., the circuit court concluded that the pleaded facts did not give rise to a reasonable inference that the advertisement was part of a plan or scheme to bait customers into the store and switch them to more expensive models. "Absent some pleaded facts that this in fact occurred to a consumer” the complaint fails, the circuit court concluded.

The court of appeals reversed. With regard to sec. 100.18(1), Stats., it disagreed with the circuit court about the reasonable reading of the advertisement. It concluded that the advertisement can be read to represent that the $499 set is the "best” or "finest” model made by Speed Queen; and the truth or falsity of that assertion can be determined by examining other models in the product line. Further, the court of appeals held that it was possible for a finder of fact to conclude that the use of the words "clearance” and "closeout” was misleading. American TV, 140 Wis. 2d at 361-63.

The court of appeals also reversed the circuit court’s dismissal of the claim under sec. 100.18(9)(a), *300Stats. It rejected the circuit court's assertion that the claim must allege that a bait and switch occurred to a particular customer. Instead, it held that the facts alleged lead to a "reasonable inference that American’s purpose was not to sell the $499 sets but to sell the more expensive sets. That is enough to establish a violation of sec. 100.18(9)(a), Stats.” American TV, 140 Wis. 2d at 367.

The issue before this court is whether the state’s complaint states a claim upon which relief can be granted. For the purpose of determining whether a complaint should be dismissed, "[t]he facts pleaded and all reasonable inferences from the pleadings must be taken as true.” Morgan v. Pennsylvania General Insurance Co., 87 Wis. 2d 723, 731, 275 N.W.2d 660 (1979). The motion to dismiss tests the legal sufficiency of the complaint. Anderson v. Continental Insurance Co., 85 Wis. 2d 675, 683, 271 N.W.2d 369 (1978). The claim is dismissed only when '"it is quite clear that under no conditions can the plaintiff recover.’” Morgan, 87 Wis. 2d at 731, quoting Clausen and Lowe, The New Wisconsin Rules of Civil Procedure — Chapters 801-803, 59 Marq. L. Rev. 1, 54 (1976).

I. False, Deceptive, or Misleading Advertisements.

We first address the legal sufficiency of the claim based upon sec. 100.18(1), Stats. There are two elements to this offense: There must be an advertisement or announcement, and that advertisement must contain a statement which is "untrue, deceptive or misleading.” The state maintains that American violated this provision both by the use of the terms "best” and "finest” and by the use of the words "clearance” *301and "closeout” in describing the sale on washers and dryers.

The state contends that American used the words "best” and "finest” to assert that the $499 washer and dryer set is the single finest set in the world. It then concludes that this is a statement of fact which can be shown to be false simply by comparing the set to better models in the Speed Queen line. This is not a reasonable interpretation of the advertisement. It is clear that the words "best” and "finest” refer to the brands of Maytag and Speed Queen. The first half of the advertisement does not mention the $499 set. Instead, it asserts that, although there are many good brands of washers and dryers, Speed Queen and Maytag are the "best.” The advertisement goes on to tell consumers that they can buy one model of these fine brands for $499. "This week a Speed Queen washer and dryer set is reduced to $499.” (Emphasis added.) The conclusion drawn by the state is not reasonable.

Given that the advertisement asserts that Maytag and Speed Queen are the best brands, we must conclude that the state cannot state a claim for relief based upon sec. 100.18(1), Stats. The assertion is not a statement of fact which can be proven false. Rather, it is an example of puffery, long considered an acceptable advertising technique. As no Wisconsin cases have addressed this issue, we turn for guidance to federal law.

The Federal Trade Commission (FTC) defined puffery in Better Living, Inc., et al., 54 F.T.C. 648 (1957), aff’d., 259 F.2d 271 (3d Cir. 1958). "Puffing, as we understand it, is a term frequently used to denote the exaggerations reasonably to be expected of a seller *302as to the degree of quality of his product, the truth or falsity of which cannot be precisely determined.” Id. at 653. A general statement that one’s products are best is not actionable as a misrepresentation of fact. The FTC made this clear in a case very similar to the present one. In Sterling Drug, Inc., et al., 102 F.T.C. 395, 752 (1983), the FTC held that Bayer’s claim that it produced "the world’s best aspirin” was not capable of being substantiated or refuted and thus was an example of lawful puffery. Similarly, in Marcyan v. Nissen Corp., 578 F. Supp. 485 (N.D. Ind. 1982), aff’d, 725 F.2d 687 (7th Cir. 1983), the court held that statements such as defendant’s claim that its exercising machines were the best of their type were "not actionable as false advertisement. These are, at worst, merely considered as 'puffing.’” Id. at 507 (citation omitted).

Just as the use of the words "best” and "finest” cannot form the basis for a claim under sec. 100.18(1), Stats., in this case, neither can the use of the words "clearance” and "closeout.” The court of appeals concluded that, because American ordered merchandise specifically for this sale, the representation that the sale was a "closeout sale” is false or deceptive. This conclusion does not follow from the evidence alleged. As Judge Eich urged in his dissent, "[wjhether some or all of the sale merchandise was already on hand, or whether some or all was ordered for the sale, does not, in my opinion, make the ad’s use of the words 'clearance’ or 'closeout’ a lie.” American TV, (Eich, J., dissenting) 140 Wis. 2d at 370. American’s advertisement suggests that it had stock on hand which it was attempting to sell during the sale. It does not matter under sec. 100.18(1), when that stock was *303purchased. There is nothing deceptive about this use of these words in this case.

With regard to the use of both the terms "best” and "finest” and the terms "closeout” and "clearance,” the state simply has not stated a claim upon which relief can be granted. Even if all of the allegations pleaded are taken as true, it is quite clear that the state cannot prevail under sec. 100.18(1), Stats.

II. Bait and Switch.

The state’s second claim for relief is based upon sec. 100.18(9)(a), Stats. There are three elements which must be alleged to state a claim under this provision. First, there must be an advertisement. Second, there must be a plan or scheme of which the advertisement is a part. Third, the purpose or effect of this plan must be to not sell the product as advertised.

The state insists that American violated this provision because its advertisement induced customers to visit the stores and then it switched them from the $499 set to more expensive models. The state bases its claim on the eight indicia of intent which, it claims, reveal a purpose not to sell the $499 set as advertised.

Missing from the complaint are allegations tending to prove that, apart from any purpose not to sell the merchandise as advertised, there was a plan or scheme to carry out such a purpose. The state’s complaint is more conspicuous by what it does not allege than by what it does allege. It does not allege that the $499 sets were not available to customers. It does not allege that the $499 sets were not sold to customers. To the contrary, it acknowledges four sets were sold. It does not allege that the sets displayed were defective. It does not allege that salespersons discouraged any actual customers from buying the *304$499 model and then switched them to more expensive models. The complaint does not allege any improper overt act.

The complaint does not allege anything except that there were incentives for American to try to sell the more expensive models and that, in fact, it stocked and sold more of those models. All profit motivated retailers recognize these incentives and hope to sell their more profitable items, if possible. Section 100.18(9)(a), Stats., cannot be interpreted to make unlawful such an incentive. The statute requires a plan or scheme which is not demonstrated in this complaint.

Notwithstanding this deficiency in its complaint, the state attempts to rely upon FTC cases and guides for support of its position. It does so to no avail. The cases upon which the state relies do not find the existence of bait and switch merely from the kind of indicia of intent listed by the state. Indeed, the state recognizes that the federal cases often focus on disparagement of the advertised product, and it argues that disparagement occurred in this case. It contends that the $499 set was "plain” and lacked many features found in the more expensive models, and thus disparaged itself.

This contention is without merit. The federal cases relied upon by the state, in which the merchandise was found to be self-disparaging, involve defective or poor quality merchandise. In Household Sewing Machine Co., 52 F.T.C 250, 263-64 (1955), the advertised sewing machine would not perform certain advertised functions and was exceptionally noisy. Similarly, in Carpets ”R” Us, Inc., et al., 87 F.T.C. 303, *305320-21 (1976), the carpet was of a "poor” quality and appearance. In both cases there was also verbal disparagement by salespersons. Id. at 320; Household Sewing, 52 F.T.C at 263. By contrast, the state alleges neither verbal disparagement nor defective merchandise. "Plainness” does not constitute defectiveness. The federal cases simply do not support the state’s claim.

The state further contends that American disparaged the set by displaying it next to the more sophisticated models. This argument, too, must be rejected. The state points to Southern States Distributing Co., et al., 83 F.T.C. 1126, 1166 (1973), in which swimming pool salespersons induced customers to switch from an economy pool to a deluxe pool by exhibiting two models side by side. However, the FTC’s opinion makes it clear that the side-by-side exhibition itself was not the deceptive act. It was that Southern States had constructed the two models in such a way as to misleadingly embellish the expensive model. Id. at 1167.

The state also relies upon Carpets "R” Us, 87 F.T.C at 320, 321, and Wilbanks Carpet Specialists, Inc., et al., 84 F.T.C. 510, 520 (1974), claiming that side-by-side exhibitions of products disparaged the lower priced items. However, unlike the perfectly functional, albeit plain, washer and dryer set in this case, the lower priced carpets in those cases were of poor quality and disparaged themselves.

Sec. 100.18(9)(a), Stats., does not require a retailer to display different items in a product line in separate areas of the store out of fear that the less expensive models will compare unfavorably. Side-by-side exhibition, far from being evidence of a bait and switch plan, *306is helpful to consumers. It enables them to balance price differences with feature differences in order to arrive at the most efficient decision for them, given their tastes and resources.

Failing in its attempt to show disparagement, the state also argues that a showing of disparagement is not needed. Instead, it insists that a finding of bait and switch may be inferred from the advertisement itself and minimal sales resulting from it. It relies upon cases such as Central Carpet Corp., Inc., 85 F.T.C 1022 (1975), and Tashof v. Federal Trade Commission, 437 F.2d 707 (D. C. Cir. 1970). What these cases conclude, however, is that, in addition to minimal sales of the product, the court must find bait advertising. Id. at 710; Central Carpet, 85 F.T.C at 1037-38.

The cases demonstrate that a bait advertisement is one which is false or misleading. In Tashof, 437 F.2d at 709, an advertisement offering glasses "complete” for $7.50 was misleading bait advertising because this price applied only to customers who had their own prescriptions. The supposedly "complete” package did not include a free eye examination as some signs and flyers indicated. Id. Similarly, in Central Carpet, 85 F.T.C at 1031, the advertisement itself was deceptive as "the carpeting was not suitable for the uses for which advertised.”

The FTC and federal courts have not made a finding of bait and switch simply on the basis of a low number of sales resulting from a true advertisement. As we stated above, American’s advertisement is not false or misleading and, hence, is not bait advertising. These cases are not applicable to this case.

The FTC Guides in 16 C.F.R. sec. 238.3 (1988) likewise do not support the state’s position. As this *307court noted in State v. Amoco Oil Co., 97 Wis. 2d 226, 243, 293 N.W.2d 487 (1980), the Guides are interpretive rules which "do not carry the force and effect of law." Section 238.3 of the Guides reads as follows:

"Discouragement of purchase of advertised merchandise.

"No act or practice should be engaged in by an advertiser to discourage the purchase of the advertised merchandise as part of a bait scheme to sell other merchandise. Among acts or practices which will be considered in determining if an advertisement is a bona fide offer are:

"(a) The refusal to show, demonstrate, or sell the product offered in accordance with the terms of the offer,

"(b) The disparagement by acts or words of the advertised product or the disparagement of the guarantee, credit terms, availability of service, repairs or parts, or in any other respect, in connection with it,

"(c) The failure to have available at all outlets listed in the advertisement a sufficient quantity of the advertised product to meet reasonably anticipated demands, unless the advertisement clearly and adequately discloses that supply is limited and/or the merchandise is available only at designated outlets,

"(d) The refusal to take orders for the advertised merchandise to be delivered within a reasonable period of time,

"(e) The showing or demonstrating of a product which is defective, unusable or impractical for the purpose represented or implied in the advertisement,

"(f) Use of a sales plan or method of compensation for salesmen or penalizing salesmen, de*308signed to prevent or discourage them from selling the advertised product.”

The circuit court correctly determined that the first five acts listed in sec. 238.3 are the very type of overt acts which the state, in its complaint, has not alleged. Only subparagraph (f), referring to the use of a commission system, applies to this case.

The existence of a commission system is not determinative evidence of a bait and switch plan or scheme. Commission systems merely reflect the general profit motivation which governs all retail operations. Consequently, the federal cases which discuss a commission plan as evidence of bait and switch also rely upon many other evidences of a plan or scheme which are not present in this case. For example, in Southern States, 83 F.T.C at 1166, in addition to the commission system, there was actual product disparagement. See also Carpets "R” Us, 87 F.T.C at 320-21 (finding both verbal disparagement and self-disparagement of the product). Neither the federal cases nor Guides support the state’s position.

The state’s allegations are not sufficient to state a claim under sec. 100.18(9)(a), Stats. While it has demonstrated that American had an incentive to sell the more expensive items, it has not made any allegations supporting the existence of a plan or scheme.

For the reasons set forth, we conclude that the state’s complaint fails to state a claim upon which relief can be granted.

By the Court. — The decision of the court of appeals is reversed.

*309STEINMETZ, J.

(dissenting). I would affirm the decision of the court of appeals which reversed the trial court’s order of dismissal and remand for further proceedings. I would hold that the state’s complaint states a cause of action under secs. 100.18(1) and 100.18(9)(a), Stats.

Although the majority sets forth the correct standard to be used in determining whether a motion to dismiss should be granted, it fails to apply that standard to the complaint in this case. As this court has historically and repeatedly held, when a party moves to dismiss a complaint for failure to state a claim under 802.06(2)(f), Stats., the issue is not whether the plaintiff can prove the case as pled. Morgan v. Pennsylvania General Ins. Co., 87 Wis. 2d 723, 731, 275 N.W.2d 660 (1979). Int’l Found. Emp. Ben. Plans v. Brookfield, 74 Wis. 2d 544, 549, 247 N.W.2d 129 (1976). Rather, the issue is whether the complaint is legally sufficient to state a claim. Scarpaci v. Milwaukee County, 96 Wis. 2d 663, 669, 292 N.W.2d 816 (1980). The facts alleged in the complaint and all reasonable inferences from the pleadings must be viewed as true. Id.; Anderson v. Continental Ins. Co., 85 Wis. 2d 675, 683, 271 N.W.2d 368 (1978). Legal conclusions and unreasonable inferences need not be accepted as true, Hartridge v. State Farm Mut. Auto. Ins. Co., 86 Wis. 2d 1, 4-5, 271 N.W.2d 598 (1978), but once pleaded, the facts and any reasonable inferences from these facts must be accepted as true until resolved by the finder of fact. Evans v. Cameron, 121 Wis. 2d 421, 426, 360 N.W.2d 25 (1985).

A claim should not be dismissed under sec. 802.06(2)(f), Stats., unless "it appears to a certainty” that the plaintiff cannot prevail even if the alleged facts are proven. Morgan, 87 Wis. 2d at 732, 275 *310N.W.2d 660 citing, Wright and Miller, 5 Federal Practice and Procedure, sec. 1215, p. 113. A complaint is legally insufficient only if it is '"quite clear’ that under no conditions can the plaintiff recover.” Quesenberry v. Milwaukee County, 106 Wis. 2d 685, 690, 317 N.W.2d 468 (1982).

As to the claim under sec. 100.18(1), Stats., that the advertisement was untrue, deceptive, or misleading, the state’s complaint was sufficient and should have survived the motion to dismiss on two individual bases. "[Ejven 'if there is no dispute in the testimony a question of fact is presented if different inferences may be drawn _’” Schmidlkofer v. Industrial Comm., 265 Wis. 535, 538, 61 N.W.2d 862 (1953). As this court has recognized in other causes of action, the truthfulness of the representation or statement remains a question of fact for the jury. Peil v. Kohnke, 50 Wis. 2d 168, 197, 184 N.W.2d 433 (1971) (whether a representation in an insurance policy was fraudulent is a question fact). See also Wis. J.I. — Civil No. 2401-2403 and 2500.

First, the ad directly stated that the "finest” and "best” Speed Queen set could be bought for under $500. Secondly, the complaint set forth facts which indicated American’s sale was not a clearance or closeout sale. Both of these assertions in the ad could be viewed as untrue, deceptive and misleading.

The ad directly stated that the finest and best Speed Queen could be bought for under $500. The ad did not, as the majority asserts, "tell consumers that they can buy one model of these fine brands for $499.” Majority at 301.

The radio advertisement stated: "This week you can buy the finest for less than $500.” Later the ad stated, "And during American’s closeout January *311white sale you can buy the best like a Speed Queen washer and dryer pair for 499 at American.” The complaint alleged that American also sold other Speed Queen washer and dryer sets. These other sets contained more features and were visually more sophisticated than that which American advertised as the best and finest. In fact, the sets American called the best and finest cost American $84 less than another set it sold.

The complaint alleged facts sufficient to show that the ad may be considered untrue, deceptive and misleading. If all reasonable inferences are viewed as true, it becomes even more clear that the motion to dismiss should have been denied.

In addition, the ad should be considered as a whole. Avis Rent A Car System, Inc. v. Hertz Corp., 782 F.2d 381, 385 (2d Cir. 1986). American’s advertisements were broadcast over the radio. Consumers do not have time to closely scrutinize the ad and therefore the ad must be read as a whole, as it would be heard by the average radio listener. Each line of the ad cannot be viewed as a separate statement.

The majority also asserts that the words "clearance” and "closeout” cannot be the basis of a claim under sec. 100.18(1), Stats. The majority reasoned that it did not matter under sec. 100.18(1), when the stock was purchased, and, therefore American’s use of the words "clearance” and "closeout” was not untrue, deceptive or misleading. The majority is correct insofar as it states that it does not matter when the stock was purchased. But what does matter is whether the complaint alleged facts from which it could be reasonably inferred that this was not a clearance or closeout sale. Stated another way, the only issue is whether the complaint alleged facts sufficient to reasonably infer *312that the ad was false. Many merchants have sales, but a clearance or closeout sale is a specific type of sale, at which customers expect a better than normal sale price. Such prices are the result of the merchant’s desire to no longer handle that line of product.

In this case, either the sale was a clearance or closeout sale or it was not. It defies logic for a merchant to specifically purchase items for the clearance or closeout sale. Although the facts alleged in the complaint indicate the advertisement was untrue, deceptive and misleading, this is a question of fact and therefore not appropriately dismissed by this court. Even though the state is entitled to all reasonable inferences from the facts in the complaint, the majority concluded that in the future merchants can use these terms as they please, with no regard for the every day meaning of these words.

Next, the majority believed that the complaint was legally deficient in alleging a cause of action under sec. 100.18(9)(a), Stats. The majority then sets out three elements which must be pled, one of which is a "plan or scheme” of which the advertisement is a part. The majority concludes by stating that the complaint does not allege any "improper overt act.”

A cause of action based on sec. 100.18(9)(a), Stats., does not require facts to show the defendant’s improper overt act. In light of Wisconsin’s rules of notice pleading, sec. 100.18(9)(a) only requires that a plaintiff allege facts from which it can be reasonably inferred that such a plan or scheme exists. It is inconceivable that such a plan or scheme cannot be reasonably inferred from the complaint which alleged: (1) American’s purchase of only 20 washers while running the *313advertisement 164 times;1 (2) American’s cost was $21 over the selling price; (3) American’s purchase of 133 more expensive washer-dryer sets; (4) American sold only four of the sets in its four stores; and (5) the salesperson’s commission structure which provided no commissions on these sets. The majority incorrectly concludes that no plan or scheme could even reasonably be inferred from the complaint.

The majority also mentions that the FTC Guides, 16 C.F.R. sec. 238.3 (1988), aid in determining whether a certain practice is violative of sec. 100.18(9)(a), Stats. The majority concedes that sec. 238.3(f) of the Guides was alleged by the state. However, 238.3(c) provides:

"(c) The failure to have available at all outlets listed in the advertisement a sufficient quantity of the advertised product to meet reasonably anticipated demands, unless the advertisement clearly and adequately discloses that supply is limited and/or the merchandise is available only at designated outlets.”

American’s advertisement contained no limitation. American ran 164 advertisements on 22 radio stations, yet American ordered only 20 of the advertised sets. The question of whether American ordered a sufficient quantity of the washer-dryer sets to meet reasonably anticipated demands is a matter of proof.

Because the allegations in the complaint do provide sufficient facts from which it could be reason*314ably inferred that secs. 100.18(1) and 100.18(9)(a), Stats., were violated, I would affirm the court of appeals which reinstated the complaint.

I am authorized to state that CHIEF JUSTICE NATHAN S. HEFFERNAN and JUSTICE SHIRLEY S. ABRAHAMSON join this dissenting opinion.

BEEZER, Circuit Judge:

We consider what constitutes an inherently fraudulent pyramid scheme for purposes of several federal antifraud statutes.

Shaun Webster and Robert Ligón represent a class of participants (collectively ‘Webster”) in a “multi level marketing” pro*780gram promoted by Omnitrition International, Inc. (“Omnitrition”). Webster alleges that Omnitrition, Roger Daley, Charles Ragus, James Fobair and Jerry Rubin operated an inherently fraudulent pyramid scheme under both California and federal law. Webster amended the complaint to add as defendants Omnitrition’s outside counsel, Douglas Adkins, and his law firm, Gardere & Wynne, L.L.P. (collectively “Attorney Defendants”).

The district court granted summary judgment in favor of all defendants, holding that Omnitrition’s program was not a pyramid scheme as a matter of law. The court also held that the federal securities claims against the Attorney Defendants were barred by the statute of limitations.

Webster appeals, claiming that there are disputed issues of material fact as well as errors of law. We have jurisdiction and we affirm in part and reverse in part.

I

Omnitrition is a corporation which operates a “multi level marketing” program, selling nutritional supplements, vitamins and skin care products. Members of Omnitri-tioris retail sales force are known as “Independent Marketing Associates” (“IMAs”).

The first level of IMAs are referred to by Omnitrition as “distributors.” There is no charge to become a distributor, and distributors have no quota of products they must purchase or sell. A distributor has the right to buy products at a discount from Omnitrition for use or resale and to recruit others into the program. A distributor can qualify to become a “Bronze Supervisor” by ordering a minimum amount (several thousand dollars) in products, measured by suggested retail price, from Omnitrition in one or two (consecutive) months.1 In order to remain a supervisor, an IMA must continue to meet the minimum order requirements each month.

Bronze Supervisors are entitled to receive a “Royalty Override Bonus” on up to three generations of “downline” supervisors, i.e. people the supervisor recruits who themselves also meet the minimum monthly order requirements to be supervisors. The “Royalty Override Bonus” gives the Bronze Supervisor a 1 to 4% commission on orders placed by downline supervisors. Supervisors and those they recruit must continue to purchase a minimum amount of products each month from Omnitrition to qualify the supervisor for commissions. Beyond the Bronze Supervisor level are Silver, Gold, and Diamond supervisors, who can recruit more supervisors into the program and earn the right to royalties on up to six levels of downline supervisors.

Omnitrition has three policies which are supposed to encourage retail sales. First, to order products, IMAs must certify that they have sold at least 70% of products previously purchased. This requirement can be met either by retail sales to end users or by sales to downline IMAs. Second, to qualify to earn commissions on downline orders, supervisors must certify that they have made sales to ten retail customers in the past month. It is undisputed that Omnitrition randomly calls some customers listed by supervisors to confirm that the sales have occurred. Third, if an IMA resigns from the program, Omnitrition will buy back unsold inventory for 90% of invoice price, with the caveat that Omnitrition will only repurchase consumable products that are less than three months old.

Fobair, Daley and Ragus are corporate officers of Omnitrition. Rubin, now deceased but appearing by the executor of his estate, was alleged to be involved in the creation and promotion of the marketing program. Adkins, a partner at Gardere & Wynne, is outside counsel and Assistant Secretary of Om-nitrition. Adkins appears in a promotional videotape produced by Omnitrition, in which he states that Omnitrition is “not a pyramid scheme,” gives advice on how to sell the nutritional products within the constraints of FDA guidelines, and makes other promotional statements concerning Omnitrition.

*781Webster and Ligón are former Omnitrition IMAs. Each filed class actions, Ligón in the Southern District of Texas and Webster in the Northern District of California, on behalf of all IMAs in Omnitrition’s program who lost money. The two actions were consolidated in the Northern District of California and the district court certified the class. Webster’s amended complaint alleges that Omnitrition’s marketing program is actually a fraudulent pyramid scheme violative of federal securities laws, state unfair sales practice and fraud laws and the Racketeer Influenced and Corrupt Organizations Act (“RICO”) (18 U.S.C. § 1961 et seq.).

The district court granted summary judgment for all defendants on the ground that Webster had failed to raise a triable issue of fact as to whether Omnitrition’s program was a pyramid scheme; the district court held that Omnitrition’s policies designed to encourage retail sales took the program outside the definition of fraudulent pyramid schemes. Most of the remainder of the district court’s reasons for granting summary judgment depend on this determination.

The district court determined that Omni-trition distributorships were not securities within the purview of the federal securities laws because their return did not depend primarily on the efforts of others. The district court further held that, because the program was not fraudulent, its operation and promotion did not constitute predicate acts under RICO. Finally, the district court determined that Webster had failed to provide evidence of several elements of the state law claims.

The district court granted summary judgment to the Attorney Defendants holding that the limitation period of the statute of limitations had expired on the federal securities claims. Webster timely appeals.

II

We review a grant of summary judgment de novo. Atwood v. Newmont Gold Co., 45 F.3d 1317, 1320 (9th Cir.1995). We determine whether the district court correctly applied the relevant substantive law and, viewing the evidence in the light most favorable to the nonmoving party, whether there are genuine issues of material fact. Jesinger v. Nevada Federal Credit Union, 24 F.3d 1127, 1130 (9th Cir.1994).

The central issue is whether Omnitrition’s marketing program is a pyramid scheme. Operation of a pyramid scheme constitutes fraud for purposes of § 12(2) of the Securities Act of 1933, § 10 of the Securities Exchange Act of 1934 and various RICO predicate acts. Because the record contains sufficient evidence to present a genuine issue of disputed material fact as to whether Omnitrition promotes a pyramid scheme, we reverse the grant of summary judgment.

A.

Pyramid schemes are said to be inherently fraudulent because they must eventually collapse. See, e.g., S.E.C. v. International Loan Network, Inc., 968 F.2d 1304, 1309 (D.C.Cir.1992). Like chain letters, pyramid schemes may make money for those at the top of the chain or pyramid, but “must end up disappointing those at the bottom who can find no recruits.” In re Koscot Interplanetary, Inc., 86 F.T.C. 1106, 1181 (1975), aff'd mem. sub nom., Turner v. F.T.C., 580 F.2d 701 (D.C.Cir.1978).

The Federal Trade Commission has established a test for determining what constitutes a pyramid scheme. Such contrivances

are characterized by the payment by participants of money to the company in return for which they receive (1) the right to sell a product and (2) the right to receive in return for recruiting other participants into the program rewards which are unrelated to sale of the product to ultimate users.

Id. (emphasis in original). The satisfaction of the second element of the Koscot test is the sine qua non of a pyramid scheme: “As is apparent, the presence of this second element, recruitment with rewards unrelated to product sales, is nothing more than an elaborate chain letter device in which individuals who pay a valuable consideration with the expectation of recouping it to some degree via recruitment are bound to be disappoint*782ed.” Id. We adopt the Koscot standard here and hold that the operation of a pyramid scheme constitutes fraud for purposes of several federal antifraud statutes.

B.

Omnitrition argues that because it does not charge for the right to sell its products at the “distributor” level, as a matter of law the first Koscot element is not met. We disagree.

Omnitrition’s argument improperly focuses only on the “distributor” level of Omnitrition’s program. The program is unquestionably not a pyramid scheme if only the distributor level is taken into account; the participant pays no money to Omnitrition, has the right to sell products and has no right to receive compensation for recruiting others into the program. The distributor level, however, is only a small part of the entire program. Taking into account the “supervisor” levels, a reasonable jury could conclude the Koscot factors are met here.

To become a supervisor, a participant must pay a substantial amount of money to Omni-trition in the form of large monthly product orders. The “payment of money” element of a pyramid scheme can be met where the participant is required to purchase “non returnable’.’ inventory in order to receive the full benefits of the program. In re Amway Corp., 93 F.T.C. 618, 715-16 (1979).2 In exchange for these purchases, the supervisor receives the right to sell the products and earn compensation based on product orders made by the supervisor’s recruits. This compensation is facially “unrelated to the sale of the product to ultimate users” because it is paid based on the suggested retail price of the amount ordered from Omnitrition, rather than based on actual sales to consumers.

On its face, Omnitrition’s program appears to be a pyramid scheme. Omnitrition cannot save itself simply by pointing to the fact that it makes some retail sales. See In re Ger-Ro-Mar, Inc., 84 F.T.C. 95, 148-49 (1974) (that some retail sales occur does not mitigate the unlawful nature of pyramid schemes), rev’d on other grounds, 518 F.2d 33 (2d Cir.1975). The promise of lucrative rewards for recruiting others tends to induce participants to focus on the recruitment side of the business at the expense of their retail marketing efforts, making it unlikely that meaningful opportunities for retail sales will occur. Koscot, 86 F.T.C. at 1181. The danger of such “recruitment focus” is present in Omnitrition’s program. For example, Webster testified that Omnitrition encouraged him to “get to supervisor as quick as [he] could.” Ligón states:

[T]he product sales are driven by enrolling people. In other words, the people buy exorbitant amounts of products that normally would not be sold in an average market by virtue of the fact that they enroll, get caught up in the process, in the enthusiasm, the words of people like Charlie Ragus, president, by buying exorbitant amounts of products, giving products away and get[ting] involved in their proven plan of success, their marketing plan. It has nothing to do with the normal supply and demand in this world. It has to do with getting people enrolled, enrolling people, getting them on the bandwagon and getting them to sell product.

Omnitrition argues that Webster failed to submit sufficient admissible proof that Omni-trition is a pyramid scheme. We disagree. The mere structure of the scheme suggests that Omnitrition’s focus was in promoting the program rather than selling the products. When added to statements from Webster’s and Ligon’s depositions, plaintiffs have produced sufficient evidence to defeat summary judgment.

C.

To rebut the pyramid allegations, Omnitrition relies heavily on In re Amway Corp., 93 F.T.C. 618 (1979), in which the FTC found Amway was not a pyramid scheme because its policies prevented inventory loading and encouraged retail sales. Id. at 715-16. Om-nitrition argues that its formal adoption of *783policies similar to Amway’s was sufficient to support summary judgment. We disagree.

The policies adopted by Amway were as follows: (1) participants were required to buy back from any person they recruited any saleable, unsold inventory upon the recruit’s leaving Amway, (2) every participant was required to sell at wholesale or retail at least 70% of the products bought in a given month in order to receive a bonus for that month, and (3) in order to receive a bonus in a month, each participant was required to submit proof of retail sales made to ten different consumers. Id. at 716. The Administrative Law Judge (“ALJ”) in Amway found as a matter of fact that these policies were enforced by Amway, and, more importantly, that the rules in fact served to encourage retail sales and prevent “inventory loading” by Amway distributors.3 Id. at 646, 668.

Omnitrition has distribution rules modeled on Amway’s. However, the existence and enforcement of rules like Amway’s is only the first step in the pyramid scheme inquiry. Where, as here, a distribution program appears to meet the Koscot definition of a pyramid scheme, there must be evidence that the program’s safeguards are enforced and actually serve to deter inventory loading and encourage retail sales. In Amway, the ALJ made that crucial finding of fact, after a full trial. See id. at 631. Our review of the record does not reveal sufficient evidence to establish as a matter of law that Omnitrition’s rules actually work.

Further, Omnitrition’s rules, while carefully crafted to appear like those in Amway, are weaker in operation. The key to any anti-pyramiding rule in a program like Omnitrition’s, where the basic structure serves to reward recruitment more than retailing, is that the rule must serve to tie recruitment bonuses to actual retail sales in some way. Only in this way can the second Koscot factor be defeated. Omnitrition has failed to prove that as a matter of law its rules operate in that manner.

First, Omnitrition produced evidence of enforcement only for its ten customer rule. Even assuming that Omnitrition’s enforcement measures are effective, it is not clear that these measures serve to tie the amount of “Royalty Overrides” to retail sales. The overrides are paid based on purchases by supervisors. In order to be a supervisor, one must purchase several thousand dollars worth of product each month. That some amount of product was sold by each supervisor to only ten consumers each month does not insure that overrides are being paid as a result of actual retail sales.4

Second, Omnitrition produced no evidence of enforcement of its 70% rule. It merely states that, in order to place further orders IMAs must “certify” that they have sold 70% of the product they previously ordered. There is no evidence that this “certification” requirement actually serves to deter inventory loading. Importantly, the requirement can be satisfied by non-retail sales to a supervisor’s own downline IMAs. This makes it less likely that the rule will effectively tie royalty overrides to sales to ultimate users, as Koscot requires.

In addition, plaintiffs have produced evidence that the 70% rule can be satisfied by a distributor’s personal use of the products. If Koscot is to have any teeth, such a sale cannot satisfy the requirement that sales be to “ultimate users” of a product.5

Third, Omnitrition has not shown that it enforces its buy-back rule, or the extent to which Omnitrition has actually repurchased product from disappointed IMAs. In addition, by Omnitrition’s own terms, the rule is weaker than Amway’s in two particulars: (1) Omnitrition only refunds 90% of the price of the product and (2) Omnitrition will only *784repurchase consumable products (the majority of what it sells) if they are less than three months old. The latter fact is very significant. The buy-back rule is only effective if it can reduce or eliminate the possibility of inventory loading by insuring that program participants do not find themselves saddled with thousands of dollars worth of unsaleable products. Omnitrition’s rule potentially would not achieve this goal for any person who participated in the program for more than three months.

Omnitrition misreads Amway as holding that any “multi level marketing” program employing policies like Amway’s is not a pyramid scheme as a matter of law. That was not the FTC’s holding. The FTC held that Amway was not a pyramid scheme as a matter of fact because its policies were enforced and were effective in encouraging retail sales. This ruling does not help Omnitrition at the summary judgment stage.

Omnitrition’s Amway defense must fail, at least on summary judgment, because the crucial evidence of the actual effectiveness of its anti-pyramiding distribution rules is missing.

Ill

We reverse summary judgment for Omni-trition on Webster’s securities claims.

A.

In S.E.C. v. Glenn W. Turner Enters., Inc., 474 F.2d 476 (9th Cir.), cert. denied, 414 U.S. 821, 94 S.Ct. 117, 38 L.Ed.2d 53 (1973), we declared that investments in a pyramid scheme were “investment contracts” and thus securities within the meaning of the federal securities laws. If Omnitrition’s program is a pyramid scheme, investments in the program’s supervisor positions are securities.

An investment contract is a transaction in which “the scheme involves an investment of money in a common enterprise with profits to come solely from the efforts of others.” Id. at 481 (quoting SEC v. W.J. Howey Co., 328 U.S. 293, 301, 66 S.Ct. 1100, 1104, 90 L.Ed. 1244 (1946)). Omnitrition argues that the success of a participant in its program depends on the participant’s own efforts and “hard work.” We have rejected a strict interpretation of the “solely from the efforts of others” requirement, however, in favor of a flexible approach that focuses on “whether the efforts made by those other than the investor are the undeniably significant ones.” Id. at 482.

In Glenn W. Turner, we determined in the context of the “Dare to be Great” pyramid scheme that the fact that investors in the scheme were required to exert some effort did not automatically preclude a finding that the investments were securities. Instead, we focused on the fact that the scheme’s promoters controlled the methods by which the product was sold and new members were recruited. The promoters provided the “essential managerial efforts which affect[ed] the failure or success of the enterprise.” Id. at 483.

The same is true of Omnitrition’s program. Plaintiffs claim they were taught to sell Om-nitrition’s “proven plan of success” and to “catch a wave of return that was far beyond anything that [they] were involved in personally.” By the very structure of a pyramid scheme, participants’ efforts are focused not on selling products but on recruiting others to join the scheme. Under the reasoning of Glenn W. Turner, this is enough to bring investments in the program within the definition of “investment contracts.”

If Omnitrition’s program involves the sale of securities, Omnitrition is liable under § 12(1) for fading to file a registration statement. Section 12(1) imposes civil liability on one who “offers or sells a security in violation of section 77e.” 15 U.S.C. § 77l(1) (1981). Section 77e(c) makes it unlawful “to offer to sell ... any security, unless a registration statement has been filed as to such security ...” 15 U.S.C. § 77e(c) (1981). There is no scienter requirement to § 12(1). Wolf v. Banco Nacional De Mexico, 549 F.Supp. 841, 853 (N.D.Cal.1982), rev’d on other grounds, 739 F.2d 1458 (9th Cir.1984), cert. denied, 469 U.S. 1108, 105 S.Ct. 784, 83 L.Ed.2d 778 (1985).

B.

The district court concluded that all of the allegedly fraudulent statements Web*785ster attributes to the defendants were statements of opinion not actionable under § 12(2) and Rule 10b-5. We disagree.

We have set out a three part test for the determination of when a statement of opinion is actionable under federal securities laws. See In re Apple Computer Sec. Litigation, 886 F.2d 1109, 1113 (9th Cir.1989), cert. denied, 496 U.S. 943, 110 S.Ct. 3229, 110 L.Ed.2d 676 (1990). There, we stated:

A projection or statement of belief contains at least three implicit factual assertions: (1) that the statement is genuinely believed, (2) that there is a reasonable basis for that belief, and (3) that the speaker is not aware of any undisclosed facts tending to seriously undermine the accuracy of the statement. A projection or statement of belief may be actionable to the extent that one of these implied factual assertions is inaccurate.

Id.

Because there is a material question of fact as to whether Omnitrition’s marketing program. is a pyramid scheme, there are also material questions of fact regarding whether any of the three Apple factors are met with respect to statements promoting the scheme. If defendants operated a pyramid scheme, the third Apple factor could not be satisfied by any statement implying that participants could make back their investment in the scheme.6 Pyramid schemes are destined to collapse, and the most recent entrants to lose their money. This fact would always be present to undermine the truth of promotional statements.

C.

We reverse summary judgment for Omni-trition on plaintiffs’ § 10 and § 12(2) claims.

Section 10(b) of the Securities Exchange Act of 1934 makes it unlawful “[t]o use or employ, in connection with the purchase or sale of any security ... any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe ...” 15 U.S.C. 78j(b). Securities and Exchange Commission Rule 10b-5 prohibits engaging “in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security.” 17 C.F.R. § 240.10b-5(c). Federal antifraud securities laws are to be construed broadly. Herman & MacLean v. Huddleston, 459 U.S. 375, 386-87, 103 S.Ct. 683, 689, 74 L.Ed.2d 548 (1983).

We hold that operation of a pyramid scheme violates 10b-5’s prohibition against engaging in an “act, practice or course of business which operates as a fraud or deceit upon any person.” A jury could rationally conclude that the promotion of a pyramid scheme demonstrates the necessary fraudulent intent. See In re Software Toolworks, Inc. Sec. Litigation, 50 F.3d 615, 628-29 (9th Cir.) (holding summary judgment on 10b-5 claim to be improper, even in absence of direct evidence of fraudulent intent, where evidence permitted a “reasonable inference” of scienter), cert. denied, - U.S. -, 116 S.Ct. 274, 133 L.Ed.2d 195 (1995). Because there is a genuine dispute of material fact as to whether Omnitrition operated a fraudulent pyramid scheme, the district court should not have granted summary judgment on Webster’s 10b-5 claims.

Section 12(2) imposes civil liability on any person who “offers or sells a security ... by means of a prospectus or oral communication, which includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements, in the light of the circumstances under which they were made, not misleading ...” 15 U.S.C. § 17l(2). There is genuine dispute over whether Omnitrition made false statements of fact when it declared Omnitrition was not a pyramid scheme. Even absent such statements, a company which promotes an inherently fraudulent pyramid scheme “omits to state a material fact” for purposes of § 12(2) when it does not explain that the program is bound to collapse.

*786There is a scienter requirement to § 12(2), but defendants bear the burden to prove that they “did not know, and in the exercise of reasonable care could not have known, of such untruth or omission ...” 15 U.S.C. § 17l(2). They have not met this burden at the summary judgment stage.

IV

The district court granted summary judgment for defendants on Webster’s civil RICO claims (see 18 U.S.C. § 1962(c) and (d)) on two grounds: The absence of predicate acts and the lack of proof of an “enterprise” beyond the alleged racketeering activity itself. We find there exists a genuine issue of material fact, and therefore we reverse the district court.

A.

Because there is a triable issue of fact as to whether Omnitrition was operating an inherently fraudulent pyramid scheme, there also is a triable issue of fact as to whether Omnitrition’s promotion of the scheme and use of the mails and wires in furthering the scheme constituted securities fraud, mail fraud and wire fraud respectively.7 All of these are predicate racketeering acts sufficient to allow plaintiffs to invoke civil RICO. 18 U.S.C. §§ 1961(1)(B) (mail and wire fraud) and 1961(1)(D) (securities fraud).

Omnitrition claims Webster has failed to produce evidence that defendants specifically intended to defraud anyone. Specific intent to defraud may be proven circumstantially, and is ill-suited for adjudication on summary judgment. Ikuno v. Yip, 912 F.2d 306, 310 (9th Cir.1990). Facts showing the creation and operation of a pyramid scheme are indications of specific intent to defraud sufficient to survive summary judgment. See People v. Bestline Products, Inc., 61 Cal.App.3d 879, 132 Cal.Rptr. 767, 788 (1976) (The “vice and quicksand nature of ‘endless-chain’ transactions ... is so apparent that the promoters must be charged with knowledge of the fraud inherent in it.”) (quoting State By Lefkowitz v. ITM, Inc., 52 Misc.2d 39, 275 N.Y.S.2d 303, 315 (N.Y.Sup.1966)); see generally Ikuno, 912 F.2d at 311 (finding for purposes of RICO that the existence of a fraudulent scheme “reveals implied if not express intent to defraud.”).

B.

Omnitrition argues that Webster must show the existence of an ascertainable structure of the enterprise apart from the alleged racketeering activity (i.e. the operation of a pyramid scheme).8 The participation of a corporation in a racketeering scheme is sufficient, of itself, to give the enterprise a structure separate from the racketeering activity: “corporate entities ha[ve] a legal existence separate from their participation in the racketeering, and the very existence of a corporation meets the requirement for a separate structure.” United States v. Feldman, 853 F.2d 648, 660 (9th Cir.1988), cert. denied, 489 U.S. 1030, 109 S.Ct. 1164, 103 L.Ed.2d 222 (1989) (citing United States v. Kirk, 844 F.2d 660, 664 (9th Cir.), cert. denied, 488 U.S. 890, 109 S.Ct. 222, 102 L.Ed.2d 213 (1988)). Omnitrition argues a corporation allegedly set up to conduct only illegal activities (e.g. operate a *787pyramid scheme) cannot be an enterprise with a structure separate from the racketeering activity. This argument misconstrues the nature of the separate structure requirement. See, e.g., United States v. Riccobene, 709 F.2d 214, 223-24 (3d Cir.), cert. denied, 464 U.S. 849, 104 S.Ct. 157, 78 L.Ed.2d 145 (1983). Wholly unlawful enterprises fall within RICO’s provisions. United States v. Tille, 729 F.2d 615, 620 (9th Cir.), cert. denied, 469 U.S. 845, 105 S.Ct. 156, 83 L.Ed.2d 93 (1984).

C.

Section 1962(d) prohibits conspiracy to violate RICO. Defendants argue that a corporation cannot engage in a RICO conspiracy with its own officers and representatives. We disagree.

In Ashland Oil, Inc. v. Arnett, 875 F.2d 1271 (7th Cir.1989), the court found that in-tracorporate conspiracies were actionable under RICO, while distinguishing the Supreme Court’s contrary ruling in antitrust cases:

Since a subsidiary and its parent theoretically have a community of interest, a conspiracy “in restraint of trade” between them poses no threat to the goals of antitrust law — protecting competition. In contrast, intracorporate conspiracies do threaten RICO’s goals of preventing the infiltration of legitimate businesses by racketeers and separating racketeers from their profits.

Id. at 1281.9 We agree with the reasoning of our sister circuit, and hold that § 1962(d) applies to intracorporate conspiracies. Cf. United States v. Benny, 786 F.2d 1410, 1416 (9th Cir.) (stating that the corporate form is the “sort of legal shield for illegal activity that Congress intended RICO to pierce”), cert. denied, 479 U.S. 1017, 107 S.Ct. 668, 93 L.Ed.2d 720 (1986).

V

A.

Whether Omnitrition’s program runs afoul of California’s laws against false advertising, unfair business practices and fraud is determined under California’s statutory definition of “Endless Chain” marketing schemes. California Penal Code § 327 makes it a public offense for any person to operate

any scheme for the disposal or distribution of property whereby a participant pays a valuable consideration for the chance to receive compensation for introducing one or more additional persons into participation in the scheme or for the chance to receive compensation when a person introduced by the participant introduces a new participant. Compensation, as used in this section, does not mean or include payment based upon sales made to persons who are not participants in the scheme and who are not purchasing in order to participate in the scheme.

Cal.Penal Code § 327 (West 1995). This definition is equivalent, if not identical, to the Koscot test. Because there is sufficient evidence for a jury to conclude the Omnitrition program fails the Koscot test, there also is a genuine issue of material fact as to whether it is an “Endless Chain” scheme under § 327.

Indeed, at least one of the Omnitrition’s Amway protections is less salient under the California statute. Omnitrition’s “70% Rule” allows supervisors to count products sold at wholesale to their own downlines toward their 70 percent sales requirement. This allows supervisors to be compensated on the basis of sales other than “sales made to persons who are not participants in the scheme and who are not purchasing in order to participate in the scheme.” Id. This is expressly prohibited by the California statute, while it is only implicit in the Amway “retail sales” defense.

*788B.

California Business and Professions Code §§ 17500 et seq. make it unlawful for anyone to use false or deceptive marketing practices. The operation and promotion of an Endless Chain scheme within the meaning of Penal Code § 327 is an inherently deceptive marketing practice, actionable under § 17500. People v. Bestline Products, Inc., 61 Cal.App.3d 879, 132 Cal.Rptr. 767, 789-90 (1976).

California Business and Professions Code §§ 17200 et seq. create a cause of action for anyone damaged by the defendant’s unfair competitive practices. By statutory definition, any illegal business practice is also unfair. Cal.Bus. & Prof.Code § 17200 (West 1995). Thus, if Omnitrition’s scheme violates Penal Code § 327, it is actionable under Business and Professions Code § 17200 et seq.

c.

The existence of a triable issue of fact as to Omnitrition’s operation of a pyramid scheme raises triable issues of fact as to Webster’s cause of action for common law fraud. The familiar elements of a fraud cause of action are (1) misrepresentations of material fact, (2) knowledge of falsity, (3) intent to induce reliance, (4) justifiable reliance and (5) resulting damage. Cicone v. URS Corp., 183 Cal.App.3d 194, 227 Cal.Rptr. 887, 890 (1986).

Evidence that the defendants operated an illegal, inherently fraudulent pyramid scheme raises a material question of fact going to the first three elements. Misrepresentations, knowledge and intent follow from the inherently fraudulent nature of a pyramid scheme as a matter of law. As to justifiable reliance, the defendants have not carried their burden on summary judgment of showing a lack of evidence to prove this element. To the contrary, defendants argue strenuously that their scheme was not fraudulent, and that plaintiffs were justified in relying upon the statements made in the promotional materials. Further, the very reason for the per se illegality of Endless Chain schemes is their inherent deceptiveness and the fact that the “futility” of the plan is not “apparent to the consumer participant.” Bestline, 132 Cal.Rptr. at 788 (quoting Twentieth Century Co. v. Quilling, 130 Wis. 318, 110 N.W. 174, 176 (1907)). Finally, there is a triable issue of fact as to damages. Webster testified that he never made back what he put in to the scheme and Ligón testified that he lost approximately $5,000 in the scheme.

VI

The district court granted summary judgment for the Attorney Defendants on Webster’s § 12 and § 10 securities claims because it concluded that the limitation period of the statute of limitations had expired on those claims before the class amended its complaint to add the Attorney Defendants. We agree.

A.

Claims under §§ 12(1) and 12(2) of the Securities Act of 1933 (15 U.S.C. §§ 77l(1) and 77l(2)) must be brought within one year of the plaintiffs discovery of the allegedly illegal sale or false statement, respectively. 15 U.S.C. § 77m. Section 10(b) claims also operate under a one year limitation period. Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350, 364, 111 S.Ct. 2773, 2782, 115 L.Ed.2d 321 (1991). The plaintiffs’ discovery of the statement’s falsity is sufficient to start the limitation period running. Winkelman v. Blyth & Co., 518 F.2d 530, 531 (9th Cir.), cert. denied, 423 U.S. 929, 96 S.Ct. 278, 46 L.Ed.2d 257 (1975).

Adkins’ alleged false statements were made in a videotape published in March of 1992. The class did not amend its complaint to add the Attorney Defendants until November 16,1993, some twenty months later. The class filed its original complaints on May 22, 1992 (Ligón) and October 14,1992 (Webster), both more than one year before the Attorney Defendants were added. Both complaints necessarily alleged that Omnitrition’s program was a pyramid scheme. By implication, therefore, plaintiffs knew of the alleged falsity in Adkins’ statements that the program was not a pyramid scheme. At the latest, the statute of limitations began to run *789when Webster filed his complaint on October 14, 1992, more than a year before the class filed suit against the Attorney defendants under § 12(2) and § 10(b).

Webster makes no claim that Adkins engaged in any specific individual conduct in violation of § 12(1), rather alleging that all defendants, severally and in concert, engaged in a continuous course of conduct to sell Omnitrition securities in violation of the registration provisions of 15 U.S.C. § 77e.10 It is undisputed that, more than one year before filing suit against the Attorney Defendants, plaintiffs knew of the Attorney Defendants’ participation in Omnitrition and its promotional activities, and knew that Omni-trition had not registered its alleged securities with the Securities and Exchange Commission. The limitations period began to run more that one year prior to the class’ amendment to add the Attorney Defendants, and therefore this claim was untimely.

B.

We also affirm the grant of summary judgment for the Attorney Defendants on the RICO claims.

Adkins is not liable under RICO because he did not “participate in the operation or management” of the alleged RICO enterprise. See Reves v. Ernst & Young, 507 U.S. 170, 113 S.Ct. 1163, 122 L.Ed.2d 525 (1993). In Reves, the Supreme Court refused to hold an accountant who audited company reports “participate^] in the operation or management of the enterprise” as required for § 1962(c) liability. Id. at 184-86, 113 S.Ct. at 1173-74. Following Reves, we stated that an attorney who wrote letters, prepared a partnership agreement, and assisted in a Chapter 7 proceeding, failed the “operation or management” test. Baumer v. Pachl, 8 F.3d 1341 (9th Cir.1993).

Adkins had far more involvement in the operation and management of Omnitrition than the defendants in the cases he cites. The attorney in Baumer “at no time held any formal position in the limited partnership. Nor did he play any part in directing the affairs of the enterprise.” Id. at 1344. By contrast, Adkins was an Assistant Secretary of Omnitrition. Adkins states, however, that his role as officer was “purely ministerial in nature.” We agree with the district court that Webster has not produced any facts which refute this assertion. Adkins’ statements allegedly promoting the scheme do not constitute participation in the “operation or management” of the enterprise. We find that Adkins’ purely ministerial role as “Assistant Secretary” in the corporation is insufficient to warrant liability under § 1962(c).

We also find Webster has produced no evidence showing the Attorney Defendants conspired to violate RICO. See 18 U.S.C. § 1962(d). Adkins’ statements promoting Omnitrition do not establish that he conspired to participate in the operation or management of the enterprise, as prohibited by § 1962(c). Webster has not alleged that the Attorney Defendants conspired to violate § 1962(a) or (b).

C.

We reverse the district court’s summary judgment in favor of the Attorney Defendants on the state law claims under California Business and Professions Code §§ 17200, 17500 et seq., and California common law fraud.

Unlike Omnitrition, Adkins’ section § 17200 liability cannot be based on violating Cal. Penal Code § 327. Section § 327 only punishes one who “contrives, prepares, sets up, proposes, or operates” an endless chain scheme. Similar to our Reves analysis above, we hold Adkins did not have the requisite involvement in the scheme to warrant § 327 liability.

Adkins’ statements in the Omnitrition video that Omnitrition’s profits are driven by retail sales and that Omnitrition could never be considered a pyramid scheme are false and misleading statements if Omnitrition’s program is found to be a pyramid scheme. Section 17500 makes it unlawful for *790any person to make an untrue or misleading advertising statement “which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading.” Section 17200 prohibits unfair competition, which includes untrue or misleading advertising as defined by § 17500. Adkins’ statements also are actionable under California common law fraud.

The Attorney Defendants ask us to dismiss the state law claims against them for lack of pendent jurisdiction. The district court may, in' its discretion, refuse to exercise supplemental jurisdiction after considering 28 U.S.C. § 1366. We will not examine the necessary factors in the first instance.

VII

Because we reverse the grant of summary judgment on other grounds, we decline to reach Webster’s challenges to the district court’s evidentiary and discovery rulings.11

The district court’s grant of summary judgment for the Attorney Defendants on Webster’s securities claims and RICO claims is AFFIRMED. The remainder of the district court’s orders granting summary judgment in favor of Omnitrition and the Attorney Defendants is REVERSED, and the case is REMANDED for further proceedings.

AFFIRMED IN PART, REVERSED IN PART and REMANDED.

KAUFMAN, Circuit Judge.

The Federal Trade Commission, appellant here, instituted an action in the District Court for the Southern District of New York praying for a temporary injunction designed to prevent the dissemination of what the Commission alleged it had reason to believe was false and misleading advertising. Judge Dawson denied the injunction, 215 F.Supp. 327 (S.D.N.Y.1963), holding that the Commission had failed to make the showing required by the Federal Trade Com*671mission Act, 15 U.S.C. § 53. We agree, and affirm the order denying the temporary injunction.

Section 5(a) (1) of the Federal Trade Commission Act, 15 U.S.C. § 45(a) (1), declares unlawful “unfair methods of competition in commerce, and unfair or deceptive acts or practices in commerce * * *, ” and proceeds to repose in the Commission the power to prevent such acts or practices, 15 U.S.C. § 45(a) (6). One such “unfair or deceptive act or practice” is defined in section 12, 15 U.S.C. § 52, as the dissemination of “any false advertisement” likely to induce the purchase of food, drugs, or cosmetics. The act expressly defines “false advertising” in section 15(a) (1), 15 U.S.C. § 55(a) (1), as an advertisement which is misleading in a material respect. Congress gave to the Commission the power to issue an administrative complaint and conduct a hearing whenever it has “reason to believe” that statutory violations such as false advertising are being committed. 15 U.S.C. § 45(b). In the usual case, the conduct of such a hearing, followed where appropriate by an administrative order prohibiting or modifying the advertising in question, is sufficient to guard the public from the evils proscribed by Congress in the act. Should the Commission feel, however, that delay during the pendency of administrative proceedings will work prejudice to the public due to the continued circulation of purportedly misleading advertising, it has available the recourse to the federal district court for a temporary injunction provided in section 13(a) of the act, 15 U.S.C. § 53(a):

“Whenever the Commission has reason to believe * * * that any person * * * is engaged in, or is about to engage in, the dissemination or the causing of the dissemination of any advertisement in violation of section 52 of this title, and * * * that the enjoining thereof pending [administrative proceedings] * * would be to the interest of the public, the Commission * * * may bring suit in a district court of the United States * * * to enjoin the dissemination or the causing of the dissemination of such advertisement. Upon proper showing a temporary injunction or restraining order shall be granted without bond.”

The interpretation and application of section 13(a) is at the heart of this dispute between the Commission and the defendants-appellees, Sterling Drug, Inc., the manufacturer of Bayer Aspirin, and Dancer-Fitzgerald-Sample, Inc. and Thompson-Koch Company, advertising agencies employed by Sterling Drug. The Commission referred in the court below to an advertisement in Life Magazine, published in January 1963, which summarized the results of a scientific investigation of five leading analgesic products, their efficacy in bringing about relief from pain and their tendency to cause stomach upset; it was this advertisement which the Commission alleged it had reason to believe was false and misleading and designed to induce the purchase of Bayer Aspirin. Judge Dawson remained unconvinced that the Commission was reasonable in its belief that the public would be misled by the advertisement in question, and denied the injunction for failure to make a “proper showing” under section 13(a) of the act. This court “will not ordinarily interfere with the action of a trial court either in granting or withholding an injunction * * * and will not reverse such an order unless it appears that there was a palpable misapplication of well-settled rules of law on the part of the trial judge * * Federal Trade Commission v. Rhodes Pharmacal Co., 191 F.2d 744, 746-747 (7th Cir., 1951). We do not believe that Judge Dawson’s conclusion was a “palpable misapplication” of the statutory standard or that he was “clearly erroneous” in finding as he did, Fed.R.Civ.P. 52(a).

I.

The controversy has its roots in the December 29,1962 issue of the Journal of the American Medical Association, which carried an article written by two physi*672•cians and a medical statistician,1 titled ~“A Comparative Study of Five Proprietary Analgesic Compounds.” The article analyzed the results of a study made •of the efficacy as well as the unhappy after-effects of certain pain-relieving •drugs, sold in pharmacies and supermarkets throughout the nation. These five were Bayer Aspirin, St. Joseph’s Aspirin, Bufferin (aspirin with buffering .agent), and two of the so-called “combination of ingredients” tablets, Anacin and Exeedrin. Also used in the experiment, as a form of control, was a placebo, the name given a harmless non-medicinal substance administered in the form of a pill for those pill-poppers whose ailment is without organic origin and whose pain seems to be relieved by following the ritual of downing a tablet irrespective of size, shape, or content which the user believes has qualities of medicinal value; the placebo utilized by the three researchers was composed of lactose, or milk sugar, and a conventional cornstarch binder. After investigating the efficacy of the five analgesic agents as pain relievers, the study noted, “The data failed to show any statistically significant •difference among any of the drugs (that is, excluding the placebo) at any of the •check points [fifteen minutes through four hours] * * * [T]here are no important differences among the compounds studied in rapidity of onset, degree, or duration of analgesia.” Fifteen minutes after the drugs were administered, so-called “pain-relief .scores” were computed, and Bayer earned a score of 0.94, while the next most effective drug at that point in time, Exeedrin, earned a score of 0.90; the others were rated at 0.76 and lower. The chart on which these figures appeared indicated that the “standard error of mean,” or the margin of statistical accuracy of the study, was 0.124. Upon investigating the incidence of stomach upset after the administration of the five drugs as well as the placebo, the researchers came to this conclusion: “Exeedrin and Anacin form a group for which the incidence of upset stomach is significantly greater than is the incidence after Bayer Aspirin, St. Joseph’s Aspirin, Bufferin, or the placebo. The rates of upset stomach associated with these last 4 treatments are not significantly different, one from the other.” The accompanying table revealed that of the 829 doses taken of Bayer Aspirin, there were nine episodes of upset stomach, a rate of 1.1%; the placebo was administered in 833 cases, and caused stomach upset but seven times, a rate of 0.8%. The article concluded by stating, “This study was supported by a grant from the Federal Trade Commission, Washington, D. C.” 2

It is not difficult to understand the heartwarming reception this article received in the upper echelons of Sterling and its Madison Avenue colleagues; no sooner were the results of the study published in the Journal of the American Medical Association when Sterling Drug and its advertising agencies decided to make the most of them. This decision, we may fairly assume, did not surprise Sterling’s competitors. The public had long been saturated with various claims proved by the study to be of doubtful validity. One of the products had boasted in its advertisements that it “works twice as fast as aspirin,” and “protects you against the stomach distress you can get from aspirin alone”; *673another, that it “does not upset the stomach” and “is better than aspirin”; and yet another, that it is “50% stronger than aspirin.” Believing that the Judgment Day has finally arrived and seeking to counteract the many years of hard-sell by what it now believed to be the hard facts, Sterling and its co-defendants prepared and disseminated advertising of which the following, appearing in Life Magazine and numerous newspapers throughout the country, is representative :

“Government-Supported Medical Team Compares Bayer Aspirin and Four Other Popular Pain Relievers.”

“Findings Reported in the Highly Authoritative Journal of the American Medical Association Reveal THAT THE HIGHER PRICED COMBINATION-OF-lNGREDIENTS PAIN RELIEVERS Upset the Stomach with Significantly Greater Frequency

THAN ANY OF THE OTHER PRODUCTS

Tested, While Bayer Aspirin Brings Relief that is as Fast, as Strong, and as Gentle to the Stomach as You Can Get.”

“This important new medical study, supported by a grant from the federal government, was undertaken to compare the stomach-upsetting effects, the speed of relief, and the amount of relief offered by five leading pain relievers, including Bayer Aspirin, aspirin with buffering, and combination-of-ingredients products. Here is a summary of the findings.

“Upset Stomach

“According to this report, the higher priced combination-of-ingredients products upset the stomach with significantly greater frequency than any of the other products tested, while Bayer Aspirin, taken as directed, is as gentle to the stomach as a plain sugar pill.

“Speed and Strengtpi

“The study shows that there is no significant difference among the

products tested in rapidity of onset, strength, or duration of relief. Nonetheless, it is interesting to note that within just fifteen minutes, Bayer Aspirin had a somewhat higher pain relief score than any of the other products.

“Price

“As unreasonable as it may seem, the products which are most likely to upset the stomach — that is, the combination-of-ingredients products— actually cost substantially more than Bayer Aspirin. The fact is that these products, as well as the buffered product, cost up to 75% more than Bayer Aspirin.”

II.

In a proceeding such as this, the burden was upon the Commission, in seeking its temporary injunction against the advertising, to show that it had “reason to believe” that the advertisements were false and misleading, and that the injunction during the pendency of administrative proceedings which the Commission initiated against Sterling Drug in January 1963 “would be to the interest of the public.”

The Commission alleged and sought to prove that the appellees’ advertisements falsely represented, directly and by implication: (a) that the findings of the medical research team were endorsed and approved by the United States Government; (b) that the publication of the article in the Journal of the American Medical Association is evidence of endorsement and approval thereof by the association and the medical profession; (c) that the research team found that Bayer Aspirin is not upsetting to the stomach and is as gentle thereto as a sugar pill; (d) that the research team found that Bayer Aspirin, after fifteen minutes following administration, affords a higher degree of pain relief than any other product tested. An injunction was alleged to be in the public interest, since the consuming public would otherwise unwarrantedly rely upon the advertising to their “irreparable injury,” and *674since competitors of Sterling Drug might be encouraged to engage in similar advertising tactics in order to maintain competitive standing.

The legal principles to be applied here are quite clear. The central purpose of the provisions of the Federal Trade Commission Act under discussion is in effect to abolish the rule of caveat emptor which traditionally defined rights and responsibilities in the world of commerce. That rule can no longer be relied upon as a means of rewarding fraud and deception, Federal Trade Commission v. Standard Education Society, 302 U.S. 112, 116, 58 S.Ct. 113, 82 L.Ed. 141 (1937), and has been replaced by a rule which gives to the consumer the right to rely upon representations of facts as the truth, Goodman v. Federal Trade Commission, 244 F.2d 584, 603 (9th Cir., 1957). In order best to implement the prophylactic purpose of the statute, it has been consistently held that advertising falls within its proscription not only when there is proof of actual deception but also when the representations made have a capacity or tendency to deceive, i. e., when there is a likelihood or fair probability that the reader will be misled. See American Life & Accid. Ins. Co. v. Federal Trade Commission, 255 F.2d 289, 293 (8th Cir.), cert. denied 358 U.S. 875, 79 S.Ct. 115, 3 L.Ed.2d 105 (1958); Charles of the Ritz Distributors Corp. v. Federal Trade Commission, 143 F.2d 676, 680 (2d Cir., 1944); Herzfeld v. Federal Trade Commission, 140 F.2d 207 (2d Cir., 1944). For the same reason, proof of intention to deceive is not requisite to a finding of violation of the statute, Gimbel Bros., Inc. v. Federal Trade Commission, 116 F.2d 578 (2d Cir., 1941); since the purpose of the statute ■ is not to punish the wrongdoer but to protect the public, the cardinal factor is the probable effect which the advertiser’s handiwork will have upon the eye and mind of the reader. It is therefore necessary in these cases to consider the advertisement in its entirety and not to engage in disputatious dissection. The entire mosaic should be viewed rather than each tile separately. “[T]he buying public does not ordinarily carefully study or weigh each word in an advertisement. The ultimate impression upon the mind of the reader arises from the sum total of not only what is said but also of all that is reasonably implied.” Aronberg v. Federal Trade Commission, 132 F.2d 165, 167 (7th Cir., 1942).

Unlike that abiding faith which the law has in the “reasonable man,” it has very little faith indeed in the intellectual acuity of the “ordinary purchaser” who is the object of the advertising campaign.

“The general public has been defined as ‘that vast multitude which includes the ignorant, and unthinking and the credulous, who, in making purchases, do not stop to analyze but too often are governed by appearances and general impressions.’ The average purchaser has been variously characterized as not ‘straight thinking,’ subject to ‘impressions,’ uneducated, and grossly misinformed; he is influenced by prejudice and superstition; and he wishfully believes in miracles, allegedly the result of progress in science * * *. The language of the ordinary purchaser is casual and unaffected. He is not an ‘expert in grammatical construction’ or an ‘educated analytical reader’ and, therefore, he does not normally subject every word in the advertisement to careful study.”

1 Callman, Unfair Competition and Trademarks § 19.2(a) (1), at 341-44 (1950), and the eases there cited.3

It is well established that advertising need not be literally false in *675order to fall within the proscription of the act. Gone for the most part, fortunately, are the days when the advertiser was so lacking in subtlety as to represent his nostrum as superlative for “arthritis, rheumatism, neuralgia, sciatica, lumbago, gout, coronary thrombosis, brittle bones, bad teeth, ' malfunctioning glands, infected tonsils, infected appendix, gall stones, neuritis, underweight, constipation, indigestion, lack of energy, lack of vitality, lack of ambition and inability to sleep * * See Federal Trade Commission v. National Health Aids, Inc., 108 F.Supp. 340, 342 (D.Md. 1952). The courts are no longer content to insist simply upon the “most literal truthfulness,” Moretrench Corp. v. Federal Trade Commission, 127 F.2d 792 at 795, for we have increasingly come to recognize that “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.” Donaldson v. Read Magazine, 333 U.S. 178, 188, 68 S.Ct. 591, 597, 92 L.Ed. 628 (1948). See also Handler, supra note 3, 6 Law & Contemp. Prob. at 99. There are two obvious methods of employing a true statement so as to convey a false impression: one is the half truth, where the statement is removed from its context and the nondisclosure of its context renders the statement misleading, see P. Lorillard Co. v. Federal Trade Commission, 186 F.2d 52, 58 (4th Cir., 1950); a second is the ambiguity, where the statement in context has two or more commonly understood meanings, one of which is deceptive.

Ill

The Federal Trade Commission asserts here that the vice of the Bayer advertisement is of these types. It concedes that none of the statements made therein is literally false, but it contends that the half-truths and ambiguities of the advertisement give it “reason to believe” that our hypothetical, sub-intelligent, less-than-careful reader will be misled thereby. Thus, we are told that the reference in large type to a “Government-Supported Medical Team” gives the misleading impression that the United States Government endorsed or approved the findings of the research team. Surely the fact that the word “supported’r might have alternative dictionary definitions of “endorsed” or “approved” is not alone sufficient to show reason to believe that the ordinary reader will probably construe the word in this manner. Most words do have alternative dictionary definitions ; if that in itself were a sufficient legal criterion, few advertisements would survive. Here, no impression is conveyed that the product itself has its source in or is being endorsed by the Government; for this reason, the cases cited by the Commission are inapt. If the reader of the adve:rtisement believes that the Government in some way vouched for the soundness of the study’s conclusions, then this impression would have also been conveyed had the advertisement “told the whole story,” relating in full detail the extent of the Commission’s participation: it selected the research team, supported the study with a grant, and authorized the publication of the report. The capsulized expression “Government-Supported” can not, therefore, be characterized as misleading. The Commission indicated to us upon argument that it would have been equally unhappy had the advertisement stated that the medical team was “Government-Financed” or “Government-Subsidized.” But surely the concise statement of an established fact, immediately thereafter expanded — “This *676important new medical study, supported by a grant from the federal government * * * ”■ — cannot fairly be proscribed by the Commission; the alternatives are complete omission of the admittedly true statement or long-winded qualification and picayune circumlocution, neither of which we believe was in the contemplation of Congress.

The Commission’s attack upon the use of the phrase “Findings reported in the highly authoritative Journal of the American Medical Association,” as misleadingly connoting endorsement and approval, is similarly unfounded, for much the same reasons already discussed. To assert that the ordinary reader would conclude from the use of the word “authoritative” that the study was endorsed by the Journal and the Association is to attribute to him not only a careless and imperceptive mind but also a propensity for unbounded flights of fancy. This we are not yet prepared to do. If the reader’s natural reaction is to think that the study, because of publication in the Journal, is likely to be accurate, intelligent, and well-documented, then the reaction is wholly justified, and one which the advertiser has every reason to expect and to seek to inculcate. We, as judges, know that an article on the law which has survived the rigorous selection and editing process of one of the major law publications is most probably more reliable and more thoroughly researched than the report of a recent trial or judicial decision carried in the Podunk Daily Journal. But we hardly think that there is “reason to believe” that either we or the lay observer would tend to construe the! views expressed in the article as having secured the wholehearted endorsement and approval of the “authoritative” periodical in which it appears.4 The Commission’s third objection deals with the probable vulnerability of the ordinary reader to Bayer’s representations concerning stomach upset. We pass without comment the Commission’s claim that the Bayer advertisement represented that no other available analgesic product was more gentle to the stomach; clearly, any comparative statements made in the advertisement could only be understood to refer to the four other products tested. More seriously pressed upon us is the claim that the reader will be deceived by the statement that “Bayer Aspirin, taken as directed, is as gentle to the stomach as a plain sugar pill.” “Sugar pill”, we are told, is misleading terminology; the advertisement should have used the word “placebo”. Again, we are confronted by a simple problem of communication. For how can we expect our hypothetically slow-witted reader to react when he reads that “Bayer Aspirin is as gentle to the stomach as a placebo”! Most likely, he will either read on, completely unaware of the significance of the statement, or impatiently turn the page. Perhaps he will turn to his neighbor, and in response to a request for a definition of the troublesome word be greeted with the plausible query, “A whatV’ (This assumes that the reader will have been able to muster the correct pronouneiation of the word.) But, all this aside, the pill used as a control in this case was indeed constituted of milk sugar, and the use of the term “sugar pill” was neither inaccurate nor misleading.

The Commission next shifts its focus to the words “as gentle as,” alleging that it has reason to believe that the reader will conclude that Bayer is not in the slightest bit harmful to the stomach; this can be rectified, we are told, by stating that Bayer is “no more upsetting” *677than the placebo, which did in fact cause a very minor degree of stomach upset. Unlike the standard of the average reader which the Commission avidly endorses throughout these proceedings, it here would have us believe that he is linguistically and syntactically sensitive to the difference between the phrases “as gentle as” and “no more upsetting than.” We do not find that the Commission has reason to believe that this will be the case, and we therefore reject its contentions.

Finally, the Commission attacks the manner in which the Bayer advertisement treated the results of the study on speed and effectiveness of pain relief. As we understand the Commission’s argument, no objection is taken to the statement that “The study shows that there is no significant difference among the products tested in rapidity of onset, strength, or duration of relief.” Indeed, no objection can properly be taken, for the statement reproduces almost verbatim one of the conclusions enumerated in the article. It is thought, however, that the advertisement improperly represents greater short-run pain relief with Bayer Aspirin by stating that “Nonetheless, it is interesting to note that within just fifteen minutes, Bayer Aspirin had a somewhat higher pain relief score than any of the other products.” As we have seen, the statement is literally true, for Bayer’s “score” after fifteen minutes was 0.94 while its closest competitor at that time interval was rated 0.90. The fact that the margin of accuracy of the scoring system was 0.124 — meaning that the second-place drug might fare as well as or better than Bayer over the long run of statistical tests — does not detract from the fact that on this particular test, Bayer apparently fared better than any other product in relieving pain within fifteen minutes after its administration. It is true that a close examination of the statistical chart drawn up by the three investigators reveals that they thought the difference between all of the drugs at that time interval not to be “significantly different.” But that is precisely what the Bayer advertisement stated in the sentence preceding its excursion into the specifics of the pain-relief scores. We cannot, therefore, conclude that Judge Dawson clearly erred in finding that the Commission failed properly to carry its statutory burden of proof, however slim that burden might be. Not even the Commission contends that in a proceeding under section 13(a) the judge is merely a rubber stamp, stripped of the power to exercise independent judgment on the issue of the Commission’s “reason to believe.”

The Commission relies heavily, especially as to the pain-relief aspects of its case, upon P. Lorillard Co. v. Federal Trade Commission, 186 F.2d 52 (4th Cir., 1950). There, Header’s Digest sponsored a scientific study of the major cigarettes, investigating the relative quantities of nicotine, tars, and resins. It accompanied its conclusions with a chart which revealed that, although Old Gold cigarettes ranked lowest in these deleterious substances, the quantitative differences between the brands were insignificant and would have no effect in reducing physiological harm to the smoker. The tenor of the study is revealed by its cheery words to the smoker “who need no longer worry as to which cigarette can most effectively nail down his coffin. For one nail is just about as good as another.” Old Gold trumpeted its dubious success, claiming that it was found lowest in nicotine, tars, and resins, and predicting that the reader upon examining the results of the study would say “From now on, my cigarette is Old Gold.” The Court quite properly upheld a cease and desist order issued by the Commission. An examination of that case shows that it is completely distinguishable in at least two obvious and significant respects. Although the statements made by Old Gold were at best literally true, they were used in the advertisement to convey an impression diametrically opposed to that intended by the writer of the article. As the Court noted, “The company proceeded to advertise this difference as though it had *678received a citation for public service instead of a castigation from the Reader’s Digest.” 186 F.2d at 57. Moreover, as to the specifics of brand-comparison, it was found that anyone reading the advertisement would gain “the very definite impression that Old Gold cigarettes were less irritating to the throat and less harmful than other leading brands of cigarettes. * * * The truth was exactly the opposite.” 186 F.2d at 58. In the instant case, Sterling Drug can in no sense be said to have conveyed a misleading impression as to either the spirit5 or the specifics of the article published in the Journal of the American Medical Association.

IV

The Commission makes much of the fact that Judge Dawson, at the conclusion of his opinion, discussed the Commission’s probable success in its pending administrative proceedings and “balanced the equities” of the respective parties; it'urges that he thereby applied erroneous principles of law in denying the injunction. The Commission contends that a preliminary injunction under section 13(a) should issue immediately upon a showing that the specific requirements of the act — “reason to believe” and “interest of the public” — have been met, and that matters usually considered in the traditional equity suit are irrelevant. This question has been a source of some conflict in the courts, compare Federal Trade Commission v. Rhodes Pharmacal Co., 191 F.2d 744 (7th Cir., 1951), with Federal Trade Commission v. National Health Aids, Inc., 108 F.Supp. 340, 346 (D.Md.1952). See also Hecht Co. v. Bowles, 321 U.S. 321, 64 S.Ct. 587, 88 L.Ed. 754 (1944); Federal Trade Commission v. Thomsen-King & Co., 109 F.2d 516, 519 (7th Cir., 1940); 65 Harv.L.Rev. 349 (1951); but we do not believe Judge Dawson rested his holding on these grounds. In any event, since we find, as did Judge Dawson, that the commission failed in the initial step of making a proper showing that it had reason to believe the advertisements were false and misleading, it is unnecessary to resolve the question here raised.

Our affirmance of the order of the District Court should not, however, be thought to render fruitless the Commission’s activities in its pending administrative proceeding against Sterling Drug, Inc. Should further evidence there be adduced in support of its allegations of violation of the Federal Trade Commission Act, a cease and desist order may well be valid and its issuance properly sustained upon judicial review. We are sympathetic with the Commission’s commendable efforts in carrying out the important tasks assigned to it by Congress; we simply hold that in this case, it has failed to make that showing which Congress itself deemed requisite to judicial relief.

Affirmed.

MARSHALL, Circuit Judge

(concurring) .

In order to obtain a preliminary injunction of this type the Federal Trade Commission was required to show that it had “reason to believe” that appellee was using advertising in violation of the Act, and had to do so by a “proper showing” thereof. 15 U.S.C.A. § 53. Judge Dawson found that the Commission had failed to make such a showing. We are convinced that his conclusions were not clearly erroneous. Even in this type of statutory proceeding for the benefit of the public, as contrasted to the ordinary private injunction proceeding, we should be careful to go no further than is necessary in the initial preliminary stage of what will no doubt be long and protracted administrative and court proceedings. While I concur in the result, I would not want it construed as pre-judging the determination of the Commission in advance of such hearing.

HUG, Circuit Judge:

In this appeal from a decision of the Federal Trade Commission, Sterling Drug, Inc. seeks review of a determination that it disseminated false advertising for its nonprescription analgesic products. Sterling contests findings by the Commission that its advertising was deceptive. It contends that the provisions of the cease and desist order are not warranted by the record and that the order applies to more of Sterling’s *1148products than is warranted by the record, We uphold the findings and enforce the order.

I

Facts and Procedural History

Sterling Drug, Inc. (“Sterling”) manufactures nonprescription internal' analgesic products, including Bayer Aspirin, Bayer Children’s Aspirin, Vanquish, Cope, and Mi-dol. In February 1983, the Federal Trade Commission issued an administrative complaint against Sterling in which it was alleged that certain Sterling advertisements violated sections 5 and 12 of the Federal Trade Commission Act, 15 U.S.C. §§ 45 and 52. On the same day, the Commission also charged that two of Sterling’s competitors had engaged in deceptive advertising practices. Those complaints named Bristol-Myers Company, which manufactures Bufferin and Excedrin, and American Home Products Corporation, which produces Anaein and Arthritis Pain Formula.

The cases were partially consolidated before an administrative law judge, who held joint hearings on issues common to the three cases. After extensive pretrial discovery, the AU held a separate hearing in this case in 1979-80. He heard testimony from forty witnesses, including experts in the fields of medicine, pharmacology, and advertising. He also reviewed hundreds of exhibits and a large volume of scientific publications submitted in conjunction with the testimony of the expert witnesses.

The AU found each of the companies liable for violations of the Act and issued broad cease and desist orders barring future violations. Each of the companies appealed to the Commission. In each case, the Commission affirmed the AU’s decision as modified.1

In considering Sterling’s appeal, the Commission reviewed a complaint against Sterling that charged deceptive advertising as to several of its products. Briefly summarized, the charges made by the corn-plaint and the holdings reached by the Commission are as follows:

A. Advertising for Bayer Aspirin.

1. The complaint charged that Sterling had advertised that it was scientifically established that Bayer Aspirin had overall pharmaceutical superiority to other brands and that it was also pharma-ceutically superior as to four specific attributes: purity, freshness, stability, and speed of disintegration.

The Commission held that the Government had not met its burden of proof on the charge that a study done by Sterling on overall pharmaceutical quality did not demonstrate Bayer’s superior quality. However, the Commission held that Sterling’s scientific study did not establish superior pharmaceutical quality as to the four specific attributes.

2. The complaint charged that Sterling had represented that Bayer’s therapeutic effectiveness had been established by scientific means.

The Commission found that the representation had been made in the advertising and that the claim was not supported by scientifically acceptable evidence.

3. The complaint charged that advertising- represented that Bayer relieved nervous tension, stress, fatigue, and depression and that there was no reasonable basis for the claim.

The Commission held that the advertising did not make this representation.

B. Advertising for Cope.

1. The complaint charged that advertising falsely claimed that Cope had a unique formula that acted as a powerful pain reliever and as a gentle relaxer.

The Commission found that the advertising made the representation and that *1149there was no reasonable support for the claim that the formula was unique.

2. The complaint charged that advertising represented that Cope relieved nervous tension, stress, fatigue; and depression and that its effectiveness was established.

The Commission found that the representation was made and that there was no reasonable support for the claim.

C. Advertising for Midol.

1. The complaint charged that advertising represented that Midol did not contain aspirin as its analgesic agent whereas, in fact, it did.

The Commission found that a false representation had been made.

2. The complaint charged that advertising represented that Midol relieved nervous tension, stress, fatigue, and depression.

The Commission found that the representation was made and that there was no reasonable support for the claim. Sterling does not challenge this finding on appeal.

D. Advertising for Vanquish.

1. The complaint charged that Sterling claimed that Vanquish was superior to other products as a pain reliever and caused less stomach upset than other products and that this claim was scientifically established.

The Commission found that Sterling had represented that Vanquish was superior as to these qualities and that there was no reasonable basis for the claim, but the Commission also found that Sterling had not claimed that superiority was scientifically established.

E. Advertising for Bayer Children’s Aspirin.

1. The complaint charged that Sterling had represented that its children’s aspirin had superior therapeutic effectiveness to other products.

The Commission found that there had been no such representation.

The Commission entered a cease and desist order, which is set forth in Appendix A. All portions of the order covered the following Sterling products: Bayer, Bayer Children’s Aspirin, Vanquish, Cope, Midol, or other nonprescription internal analgesic products. Paragraph IV of the order also covered all of Sterling’s nonprescription drug products. The order set forth the criteria that must be met before Sterling can claim that superior therapeutic effectiveness or pharmaceutical quality has been established scientifically. The order also set forth the standard to be met for these products where claims of therapeutic performance are made but no claims are made that such performance has been scientifically established. The order prohibited Sterling from representing that one of its products has an unusual or special ingredient when the ingredient is commonly used in other similar products. The order also restricted Sterling from representing that the analgesic agent is an ingredient different from aspirin when, in fact, it is aspirin.

II

Liability Determinations

A. Standard of Review

In reviewing the Commission’s liability determinations, we apply the standard of review set out in 15 U.S.C. § 45(c): the Commission’s factual findings, “if supported by evidence, shall be conclusive.” This standard requires such relevant evidence as a reasonable mind might accept as adequate to support the conclusion. Litton Industries, Inc. v. F.T.C., 676 F.2d 364, 368 (9th Cir.1982). Thus the reviewing court may not reweigh the evidence, but must accept the findings of the Commission, if supported by substantial evidence in the record as a whole. See American Home Products Corp. v. F.T.C., 695 F.2d 681, 686 (3d Cir.1982).

The term “deceptive practices” states a legal standard, the ultimate determination of which remains with the courts; however, the Supreme Court has held that the Commission’s judgment that a practice is decep*1150tive is to be given great weight. The Court stated:

This statutory scheme necessarily gives the Commission an influential role in interpreting § 5 and in applying it to the facts of particular cases arising out of unprecedented situations. Moreover, as an administrative agency which deals continually with cases in the area, the Commission is often in a better position than are courts to determine when a practice is “deceptive” within the meaning of the Act. This Court has frequently stated that the Commission’s judgment is to be given great weight by reviewing courts. This admonition is especially true with respect to allegedly deceptive advertising since the finding of a § 5 violation in this field rests so heavily on inference and pragmatic judgment. Nevertheless, while informed judicial determination is dependent upon enlightenment gained from administrative experience, in the last analysis the words “deceptive practices” set forth a legal standard and they must get their final meaning from judicial construction.

F.T.C. v. Colgate-Palmolive Co., 380 U.S. 374, 385, 85 S.Ct. 1035,1042-43, 13 L.Ed.2d 904 (1965) (citations omitted).

B. Discussion

In its examination of the complaint, the Commission distinguished three distinct types of advertising claims. The first type, establishment claims, suggests that a product’s superiority has been scientifically established. An advertiser may make this type of representation through the use of specific language, such as “medically proven,” or through the use of visual representations.

The second type of claim is a representation that suggests the product is superior without claiming that superiority has been scientifically established. The claimed superiority may refer to therapeutic efficacy or may describe the product’s pharmaceutical attributes, such as freshness, purity, color, and shelf life. The Commission requires that the advertiser have a reasonable basis to support a claim of product superiority.

The third type of claim is puffing. These claims are either vague or highly subjective, e.g., “Bayer works wonders,” and therefore no substantiation of the claim is required.

1. Findings Concerning Bayer Aspirin Advertisements

a. Establishment of Pharmaceutical Claims

The complaint charged Sterling had claimed that Bayer’s overall pharmaceutical superiority to other brands had been established and that Bayer’s superiority as to certain specific pharmaceutical attributes had also been established. Sterling contended it was entitled to make such claims because of an in-house study it conducted in 1971 that compared Bayer to 220 other brands of plain 5-grain aspirin. The study evaluated thirty pharmaceutical characteristics. Sterling contended the study established both Bayer’s overall pharmaceutical superiority to all other brands and its superiority with regard to the four specific attributes listed in the Commission’s order. The Commission agreed that the Government had not carried its burden of proof because it did not show the aspirin comparison study was inadequate support for a claim of overall pharmaceutical superiority. However, after analyzing the test results on specific attributes and the expert testimony evaluating those results, the Commission determined the study did not support Sterling’s claims as to those individual qualities.

Sterling’s first argument on this issue is that, viewed as a whole, the advertisements claimed only that Bayer had overall pharmaceutical superiority, but made no specific claim of superior freshness, purity, or stability. It relies on the testimony of its expert, Dr. Miles, who concluded these individual attributes were “buried” in the advertisements and would not be noticed by consumers. The Commission apparently rejected the expert testimo*1151ny because it believed the claim of superiority of individual attributes was clear on the face of the advertisements. It cited as an example a print advertisement that stated “Bayer tested its aspirin against every other leading brand. For purity, stability, speed of disintegration, Bayer was consistently better.” The inference that this advertisement claimed better purity, stability, and speed of disintegration is not unreasonable. The Commission was careful to distinguish advertisements that asserted only overall quality. We therefore reject Sterling’s contention.

Alternatively, Sterling argues the Commission misconstrued the test results and ignored the testimony of its experts. The Commission’s analysis as to each attribute, however, weighs the testimony of the experts and reveals the basis for the Commission’s conclusions. This court may not redetermine the weight to be given Sterling’s evidence. Corn Products Refining Co. v. F.T.C., 324 U.S. 726, 739, 65 S.Ct. 961, 967, 89 L.Ed. 1320 (1945); Safeway Stores, Inc. v. F.T.C., 366 F.2d 795, 800 (9th Cir.1966), cert, denied, 386 U.S. 932, 87 S.Ct. 954, 17 L.Ed.2d 805 (1967). We therefore affirm the conclusion that these claims were deceptive.

b. Establishment of Therapeutic Superiority

The Commission determined that several advertisements for Bayer Aspirin represented the product to be therapeutically superior and claimed that superiority had been scientifically established. Sterling first contends that those advertisements, read as a whole, merely claimed Bayer’s pharmaceutical superiority, not its therapeutic superiority. Its second contention is that there was no establishment claim.

The Commission’s conclusions were based largely on its own reading of the advertisements. It observed that the advertisements referred to the product’s “quality” without limiting or explaining that term. Because the Commission thought that consumers’ primary concern was effective pain relief, it assumed that consumers would understand a representation of quality as a promise of therapeutic superiority. “[T]he ads speak in such sweeping terms about quality that a consumer could reasonably infer that the [aspirin comparison] tests measured Bayer in all respects, including efficacy.”

Sterling insists this analysis ignores the findings of the ALJ, who found consumers could distinguish drug quality claims from drug performance claims. The Commission did not reject this finding. However, it held that specific advertisements would lead consumers away from distinguishing pharmaceutical from therapeutic claims because the broad language used suggested that “quality” included the attribute of effectiveness. This was especially found to be true in advertisements that also referred to pain relief or to speed of disintegration, which consumers might view as a therapeutic attribute. For these reasons, the Commission agreed with the AU that the advertisements made therapeutic claims.

Sterling claims the Commission improperly rejected the testimony of Dr. Miles, an expert in advertising and marketing. She testified that quality was a concept that was recognizable to consumers and that would not be confused with therapeutic effectiveness. She also stated, however, that consumers did not devote mental energy to interpreting Bayer advertisements and would not “rationally process advertising communications.” The Commission did not ignore this testimony. Instead, it viewed it as evidence that, given a broad general representation of “quality,” consumers would not attempt to analyze the components of quality. If the representation were so broad as to include an inference of efficacy, consumers would not consider whether any limitation had been placed on the term. This was particularly true of advertisements that, in addition to claiming “quality,” claimed aspirin was a superior pain reliever to combination products.

*1152Among the items of evidence presented to the AU were “copy tests” designed to measure viewer reaction to advertisements. The tests had surveyed viewers of two Bayer advertisements and found 11 percent of the viewers of one advertisement received an efficacy message and 13 percent of the viewers of the second advertisement received such a message. The AU partially accepted these test results and held they supported the conclusion that certain Bayer advertisements conveyed a message of therapeutic superiority. The Commission rejected this evidence. It found that the test methodology was flawed, that the percentages were too small to be significant, and that the tests on which the AU relied conflicted with other copy test evidence. Sterling now argues the Commission imper-missibly ignored this evidence.

The Commission can determine whether evidence is reliable and competent. See Resort Car Rental System,, Inc. v. F.T.C., 518 F.2d 962, 963 (9th Cir.) (per curiam), cert, denied, 423 U.S. 827, 96 S.Ct. 41, 46 L.Ed.2d 42 (1975). It explained fully why it disagreed with the AU’s appraisal of this evidence. Cf. Cinderella Career & Finishing Schools, Inc. v. F.T.C., 425 F.2d 583, 589 (D.C.Cir.1970) (Commission may not reverse AU’s determinations without stating reasons for doing so). We therefore do not agree that this evidence was ignored.

The Commission held it did not need to consider whether Sterling had a reasonable basis to claim Bayer was therapeutically superior, since in every case Sterling had also claimed that Bayer’s therapeutic superiority was scientifically established. It concluded that Sterling lacked the substantiation to make these establishment claims. The Commission held that establishment claims could be substantiated only if Sterling relied upon two well-controlled clinical studies that indicated Bayer was superior.2

Sterling refutes the conclusion that it made establishment claims, arguing that the text of its advertisements made no explicit assertion that Bayer’s therapeutic superiority was established. However, the Commission’s conclusions were based upon visual aspects of the advertisements, rather than only on the text. These visual representations included pictures of medical and scientific reports from which consumers could infer that Bayer's effectiveness had been objectively evaluated. The Commission noted that the advertisements conveyed a “serious tone” or a “scientific aura” that also implied scientific approval of the product.

A determination of false advertising can be based upon deceptive visual representations. Standard Oil Co. of California v. F.T.C., 577 F.2d 653, 659 (9th Cir. 1978); see American Home, 695 F.2d at 688. It is within the Commission’s expertise to determine what inferences consumers may draw from such representations. See Simeon Management Corp. v. F. T. C, 579 F.2d 1137, 1146 & n. 11 (9th Cir.1978); Resort Car, 518 F.2d at 964. We defer to that expertise and affirm the conclusion that Bayer was advertised to have scientifically established therapeutic superiority.

Sterling also challenges the conclusion that its establishment claims were not substantiated. It contends its in-house study comparing aspirin brands established Bayer’s superior therapeutic efficacy. It therefore questions the requirement that it rely on two well-controlled clinical tests to support its advertising claims. Sterling concedes that clinical studies are necessary to compare the therapeutic effects of different drugs or of different dosages of the same drug. It argues, however, that physi*1153cians and scientists would not require clinical studies to determine the comparative therapeutic efficacy of identical drugs and dosage forms. Sterling maintains that a therapeutic judgment comparing brands of the same drug could be based on pharmaceutical and other non-clinical data. It therefore insists that its aspirin comparison study, which tended to demonstrate Bayer’s pharmaceutical superiority, provided a reasonable basis to claim established therapeutic superiority.

The AU was provided extensive evidence on this issue, including testimony of several experts in various medical and pharmaceutical specialties and scientific literature. He took quite a narrow view of which of these items of evidence were to be accorded substantial weight. He accorded more weight to the testimony of experts specifically experienced in the comparison of mild analgesics. Sterling argues vigorously that the AU’s evaluation of the evidence ignored substantial portions of the expert testimony. It stresses that a decision that ignores competent evidence cannot be supported by substantial evidence, citing Cinderella Career & Finishing Schools, 425 F.2d at 589.

We do not agree that the AU ignored Sterling’s experts. His voluminous findings summarize each expert’s testimony and evaluate the weight to be given it based on its relevance and the expert’s experience. The Commission relied on the AU’s evaluation of the evidence when it held that “it is the consensus of the experts with experience in comparing analgesic efficacy who testified in this proceeding that at this time well-controlled clinical tests are necessary to establish the comparative superiority of one brand of aspirin over others.” This is not equivalent to a finding that no evidence supported Sterling’s position. It merely signifies that the Commission agreed with the AU’s resolution of the evidentiary conflict. Because we cannot reweigh the evidence, we affirm the Commission’s conclusion.

2. Findings Concerning Cope

a. Uniqueness Claims

Cope, which Sterling marketed as a remedy for nervous tension headaches, contained aspirin, caffeine, and methapyrilene fumarate, an antihistimine included to induce drowsiness. The Commission held this formula was falsely represented to be unique in advertisements such as this:

Cope looks different, is different. Besides a powerful pain reliever, Cope gives you a gentle relaxer. The others don’t ---- A unique formula for really effective relief of nervous tension headache. And you get it only in Cope.

The representation was held to be false because a Bristol-Myers product, Excedrin P.M., also contained aspirin and methapyri-lene fumarate. The Commission found that the misrepresentation was material because it discouraged consumers from comparing the two products.

Sterling maintains the Cope formula was unique because Cope was the only product on the market designed for daytime relief of tension headaches. It contends Excedrin P.M. was not intended for the same use as Cope; Excedrin’s larger dose of metha-pyrilene fumerate made it appropriate only for nighttime use. Sterling argues that, unlike Cope, Excedrin P.M. was intended as a sleeping aid.

We agree with the Commission that the Cope advertisements made clear and broad claims of uniqueness that were in no way limited to Cope’s intended use as a daytime remedy. Because consumers would not have been led to distinguish Cope from Excedrin P.M., the representation of uniqueness was deceptive.

b. Establishment of Therapeutic Claims

Sterling does not contest the Commission’s conclusion that it made therapeutic efficacy claims as to Cope. However, it claims these representations did not include the assertion that Cope’s superiority was established.

*1154The Commission based its conclusion on the visual aspects of advertisements for Cope. It cited as an example a television advertisement in which an announcer discussed Cope’s efficacy in conjunction with his description of “important studies” on pain relief. The announcer held a copy of the “important studies.” In the background were shelves lined with “ponderous books.” We agree with the Commission that the combination of the visual and oral representations was apt to convey to consumers a message of proven efficacy.

The Commission found Sterling could not substantiate its claim that Cope’s therapeutic efficacy was established. Sterling does not challenge that finding on appeal.

3. Findings Concerning Midol

The complaint charged Sterling with failing to disclose Midol’s aspirin content. The Commission held that a mere failure to disclose the presence of aspirin in advertising for aspirin-based analgesics was not misleading. It concluded, however, that it was a deceptive practice to disseminate advertising that implied aspirin-based products did not contain aspirin. It found that certain Midol advertisements did create that impression, and it illustrated its finding with this radio advertisement:

Midol starts to work fast with an exclusive formula that helps stop periodic pain ... and its medically approved ingredients give effective relief from headache and low backache. All in all, Midol’s unique formula gets you through those days in comfort.

The Commission concluded that the term “exclusive formula” conveyed the message that Midol’s analgesic ingredient was not aspirin. It also criticized an advertisement that claimed Midol was made from an “exclusive formula with medication ordinary pain relievers don’t give you.”

The failure to disclose material information may cause an advertisement to be deceptive, even if it does not state false facts. Simeon Management, 579 F.2d at 1145; see also Bristol-Myers Co. v. F.T.C., 738 F.2d 554, at 563 (2d Cir.1984). We must reject Sterling’s contention that these advertisements were not intended to suggest that Midol’s analgesic ingredient was unique. The illustrative advertisements specifically state that the unique ingredient relieves pain. We agree with the Commission that consumers could easily infer the unique pain reliever was something other than ordinary aspirin.

Ill

Validity of the Order

A. Standard of Review

Under the Federal Trade Commission Act, the Commission has the primary responsibility for determining the remedy for deceptive advertising. See F.T.C. v. National Lead Co., 352 U.S. 419, 429, 77 S.Ct. 502, 509, 1 L.Ed.2d 438 (1957). Because of the Commission’s expertise in determining what remedy is required to eliminate an unfair or deceptive practice, the Commission is granted wide latitude in deciding the scope of its orders. Jacob Siegel Co. v. F.T.C., 327 U.S. 608, 612-13, 66 S.Ct. 758, 760-61, 90 L.Ed. 888 (1946). In drafting the Act, Congress recognized that “there is no limit to human inventiveness in [the advertising] field.” F.T.C. v. Sperry & Hutchinson Co., 405 U.S. 233, 240, 92 S.Ct. 898, 903, 31 L.Ed.2d 170 (1972) (quoting H.R.Conf.Rep. No. 1142, 63d Cong., 2d Sess., 19 (1914)). Accordingly, it authorized the Commission to draft orders encompassing all of an advertiser’s products or all products in a broad product category in order to “fence in” known violators of the Act. See National Lead, 352 U.S. at 431, 77 S.Ct. at 510; Litton, 676 F.2d at 370. “Fencing-in provisions serve to ‘close all roads to the prohibited goal, so that [the FTC’s] order may not be by-passed with impunity.’” Id. (quoting F.T.C. v. Ruberoid Co., 343 U.S. 470, 473, 72 S.Ct. 800, 803, 96 L.Ed. 1081 (1952)).

In reviewing the Commission’s order, we must bear in mind its broad powers and its expertise in protecting consumers. We may not “lightly modify” the Commission’s orders. Colgate-Palmolive, 380 U.S. *1155at 392, 85 S.Ct. at 1046; F.T.C. v. Cement Institute, 333 U.S. 683, 726, 68 S.Ct. 793, 815, 92 L.Ed. 1010 (1948). Our inquiry is limited to the determinations that the order is sufficiently clear and precise to give notice to the advertiser and that its scope bears a reasonable relation to the advertiser’s violations of the Act. Colgate-Palmolive, 380 U.S. at 392, 394-95, 85 S.Ct. at 1046, 1047-48; Litton, 676 F.2d at 369, 370.

In Sears, Roebuck and Co. v. F.T.C., 676 F.2d 385 (9th Cir.1982), we explored in depth the factors that indicate whether there is a reasonable relationship between the violation and the scope of the order. We observed that the “ultimate question is the likelihood of the petitioner committing the sort of unfair practices [the order] pro-hibios].” Id. at 391 (quoting Litton, 676 F.2d at 370). We outlined the elements on which a forecast of future violations may be based: (1) the deliberateness of the violation; (2) the violator’s past record with respect to advertising practices; and (3) the adaptability or transferability of the unfair practice to other products. Id. at 392. We concluded that no single factor was determinative, but that the “more egregious the facts with respect to a particular element, the less important it is that another negative factor be present.” Id.

In reviewing the Commission’s order in the American Home case, the Third Circuit applied our analysis in Sears, Roebuck. Because of the nature of the products involved, the court believed it should also consider the seriousness of potential violations of the order. American Home, 695 F.2d at 706. It concluded that the health risks and potential adverse side effects associated with aspirin made this a unique product category. Id. at 698. The court also considered the fact that it is difficult for consumers to compare analgesic products effectively, so they are more likely to give credence to advertising claims. Id. We agree with the Third Circuit’s conclusion that “[w]hen drug advertising is at issue, the potential health hazards may well justify a more sweeping order than would be proper were the Commission dealing with a less consequential area.” Id. at 706. We therefore add the seriousness of potential violations to our analysis under Sears, Roebuck.

B. Discussion

1. Paragraph I of the Order

Paragraph I outlines the means by which Sterling must substantiate a claim that the therapeutic superiority of any of its nonprescription internal analgesic products is established. The order requires that such claims be supported by two well-controlled clinical studies, and it sets out the procedures under which such studies must be conducted. Section D of the paragraph authorizes an alternate method of establishing a claim of therapeutic superiority, permitting Sterling to disseminate a claim that cannot be verified by two well-controlled clinical studies, but which is supported by a test or investigation that is generally accepted by the relevant scientific community as sufficient to establish the claim.

Sterling contends this paragraph is im-permissibly broad. It argues that, at the least, the order should apply only to the two products, Bayer and Cope, as to which Sterling advertised established therapeutic superiority. We agree with the Commission that the scope of the paragraph is appropriate.

The violation was deliberate. The deceptive advertisements incorporated text, tone, and visual aspects intended to subtly persuade consumers that Bayer and Cope’s therapeutic superiority had been scientifically established. These advertisements were widely disseminated for a period of several years.

The Commission found that Sterling did have a past history of violations, including an order litigated in 1950 regarding false claims that Bayer had been endorsed by a pharmacists’ group. Sterling’s record with the Commission also included four consent decrees involving non-analgesic products.

*1156Applying the third Sears, Roebuck factor, the Commission found this practice to be readily transferable. It reasoned that if the order were limited to Bayer and Cope, Sterling could easily use the same subtle advertising devices to suggest that another internal analgesic had proven therapeutic superiority. Sterling would be free to change the name of one of its products and thereby avoid the order’s restrictions.

We believe any future violation of this nature would be serious and should therefore be prevented. These advertisements convey a strong message to consumers— that doctors and scientists endorse the product — and do so in a manner so intentionally subtle that consumers are unlikely to analyze the message they receive.

We reject Sterling’s contention that the requirement of two well-controlled clinical tests is unduly burdensome. The order sets out precisely the procedures to be followed; there is no question of adequate notice to Sterling. The Commission responded to Sterling’s argument that the. scientific community would not demand such studies by permitting an alternate means of supporting its claims. Furthermore, Sterling’s argument that these requirements are burdensome ignores the obvious. If it prefers not to undertake the burden of establishing the truth of its claims, it need only refrain from claiming its products have been proven to be superi- or.

2. Paragraph II of the Order

Paragraph II regulates establishment claims as to the pharmaceutical quality of any of Sterling’s nonprescription internal analgesic products. It is specifically limited to claims that any such product has superior purity, freshness, stability, or speed of disintegration. The level of support required for these claims is more lenient than that imposed in Paragraph I. Sterling is required to possess and rely on scientific evidence that would satisfy relevant experts as reliable.

Sterling believes this paragraph must be vacated because its establishment claims as to pharmaceutical attributes were made only about Bayer and there is no evidence it will make such claims about Bayer or any other internal analgesic in the future. We disagree. The violation was deliberate; the advertisements made explicit factual statements that consumers were likely to view as verified. See Sears, Roebuck, 676 F.2d at 398; American Home, 695 F.2d at 697'. Although the challenged claims were made only as to Bayer, it is clear that these claims are easily adaptable for use in other Sterling advertisements. This paragraph is narrowly drawn, referring only to four specific attributes, and is reasonably related to the violation. It will therefore be enforced.

3. Paragraph III of the Order

Paragraph III requires Sterling to have a reasonable basis to support therapeutic performance claims for any of its nonprescription internal analgesic products. “Reasonable basis” is defined in the order as “competent and reliable scientific evidence.”

Sterling asks us to vacate this paragraph as too vague. It relies upon American Home, in which the court held that an identical reasonable basis requirement was too vague and imprecise to give the advertiser sufficient notice of the standard. American Home, 695 F.2d at 710-11. The Commission’s decision in American Home had acknowledged that the requirement of competent and reliable scientific evidence was intended to be flexible. The Commission refused to equate the requirement with the well-controlled clinical tests standard, stating instead it would determine the standard on a case-by-case basis. Id. at 710. The reviewing court found that the imprecision of this standard was exacerbated by the order’s overbreadth. The advertiser had made only one comparative efficacy claim, but was subjected to an order covering all of its nonprescription drug products. The court concluded the combination of overbreadth and imprecision required it to deny enforcement of that section of the order. Id. at 711.

*1157The Commission again applied the “competent and reliable scientific evidence” standard in this case and in Bristol-Myers. In the explanation of its order, however, it attempted to make the standard more precise. It described the standard as requiring more support than the usual reasonable basis test, but less than that required for establishment claims. It recognized that this left “some ambiguity” regarding the minimum acceptable level of support, but observed that submission of two clinical studies would always be sufficient. It concluded that the flexibility inherent in the standard set “an appropriate balance between the need for clear standards and the need to prevent repeated violations.”

We agree with the Second Circuit’s conclusion that American Home should be distinguished. See Bristol-Myers, at 560-61. As in Bristol-Myers, the order here is not overbroad, but is limited to the product category in which a violation occurred. Sterling does not contest the Commission’s determination that it made therapeutic efficacy claims as to Cope, Vanquish, and Mi-dol. The Commission also found such claims were made as to Bayer. Sterling’s pattern of transferring this deceptive practice from one product to another is therefore clear.

With the Commission’s explanation of its intent, this section of the order is probably “as specific as the circumstances will permit.” Colgate-Palmolive, 380 U.S. at 393, 85 S.Ct. at 1047. In view of the extent of Sterling’s violations and of the fact that violations were transferred from one product to another, it is appropriate that Sterling bear any risk that results from the standard’s imprecision. Id. If Sterling prefers to continue to advance claims of therapeutic efficacy, it can reduce its risk of violating the order in one of several ways. First, it can support its therapeutic efficacy claims with two well-controlled clinical studies. Second, it can secure from the Commission an advisory opinion as to the propriety of proposed advertising. See id. at 394, 85 S.Ct. at 1047. Third, it can advise consumers that its claims of therapeutic efficacy are not clearly established. See American Home, 695 F.2d at 695.

We conclude that this portion of the order is sufficiently clear and precise, and it will be enforced.

4. Paragraph IV of the Order

Paragraph IV proscribes dissemination of advertising that claims or implies that ■ a product contains any special, unusual, or unique ingredient when that ingredient is used in other nonprescription products intended for the same use. This paragraph is the broadest section of the order. It covers all nonprescription drugs manufactured by Sterling, approximately 36 products.

Sterling contends there is no basis for such a broad order. It argues the Commission’s finding that it had made deceptive claims of ingredient uniqueness was based only on two Cope advertisements that had limited distribution.

The Commission emphasized that this violation was deliberate. It relied on evidence that Sterling was aware when it made its uniqueness claims that a Bristol-Myers product, Excedrin P.M., had the same ingredients as Cope. Despite this knowledge, Sterling made the specific factual representation that Cope’s ingredients were unique.

The transferability of this practice also influenced the Commission. In view of the ease with which Sterling could claim any of its products is composed of unique ingredients, we agree that there is significant potential for serious future violations. Claims of this type deceive consumers as to the product’s contents and defeat consumer efforts at product evaluation and comparison. They therefore encourage unnecessary use of a potentially hazardous product. See Bristol-Myers, at 564; American Home, 695 F.2d at 707.

Although the product category covered by this section is broad, the proscription is narrow and explicit. Because a very specific type of advertising claim is barred, the burden on Sterling is not onerous. The *1158deliberateness of the violation and the serious implications of its transferability convince us that a broad order is warranted. This paragraph will therefore be enforced.

5. Paragraph V of the Order

Paragraph V prohibits Sterling from falsely representing that an aspirin-based product is different from aspirin and from misrepresenting the analgesic ingredient of any product. This section bars Sterling from creating the impression that the analgesic ingredients in its products are different from those in competing products. It also proscribes advertisements that contrast with aspirin the ingredient in an aspirin-based analgesic, without disclosing the aspirin content of the Sterling product. This paragraph covers all of Sterling’s nonprescription internal analgesic products.

Sterling argues this section is irrationally broad because its violation was de minimus. We agree with the Commission, however, that this violation was serious for two reasons. First, misleading consumers who cannot tolerate aspirin is a grave concern. Second, consumers who did not know Mi-dol’s analgesic ingredient was aspirin might not question Midol’s comparatively high retail price.

Moreover, the Commission carefully tailored this section of the order. The ALJ’s proposed order would have required Sterling to disclose the presence of aspirin in any advertisement for an aspirin-based analgesic. The Commission rejected this requirement, holding Sterling has no affirmative duty to announce its products’ aspirin content. Instead, the duty imposed by the Commission’s order is that Sterling refrain from creating the false impression that a product does not contain aspirin.

Finally, Sterling argues that it has been forthright in revealing the aspirin content of Cope and Vanquish and that this indicates the.violation will not be transferred to other products. If it is in fact Sterling’s policy to disclose its products’ aspirin content, this section of the order will not be burdensome. It is closely tailored to the practice actually committed by Sterling and is a necessary and appropriate means of protecting consumers. Paragraph V will therefore be enforced.

The Commission’s order is ENFORCED.

Appendix A

ORDER

I

IT IS ORDERED that Sterling Drug, Inc., its successors and assigns, and its officers, agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the advertising, offering for sale, sale or distribution of “Bayer Aspirin,” “Bayer Children’s Aspirin,” “Vanquish,” “Cope,” “Midol,” or other nonprescription internal analgesic product, in or affecting commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

Making any representation, directly or by implication, that a claim concerning the superior effectiveness of such product has been established or proven unless such representation has been established by two or more adequate and well-controlled clinical investigations, conducted by independent experts qualified by training and experience to evaluate the comparative effectiveness of the drugs involved, on the basis of which it could fairly and responsibly be concluded by such experts (1) that the drug will have the comparative effectiveness that it is represented to have, and (2) that such comparative effectiveness is demonstrated by methods of statistical analysis, and with levels of confidence, that are generally recognized by such experts. The investigations shall be conducted in accordance with the procedures set forth below.

At least one of the adequate and well-controlled clinical investigations to evaluate the comparative effectiveness of the drug shall be conducted on any disease or condition referred to, directly or by implication, or, if no specific disease or condition is referred to, then the adequate and well-controlled clinical investí-

*1159gations shall be conducted on at least two conditions or diseases for which the drug is effective. The clinical investigations shall be conducted as follows:

A. The subjects must be selected by a method that:

1. Provides adequate assurance that they are suitable for the purposes of the investigation, and the diagnostic criteria of the condition to be treated (if any);

2. Assigns the subjects to the test groups in such a way as to minimize bias; and

3. Assures comparability in test and control groups of pertinent variables, such as age, sex, severity or duration of disease or condition (if any), and use of drugs other than test drugs.

B. The investigations must be conducted double-blind, and methods of double-blinding must be documented. In addition, the investigations shall contain a placebo control to permit comparison of the results of use of the test drugs with an inactive preparation designed to resemble the test drugs as far as possible.

C. The plan or protocol for the investigations and the report of the results shall include the following:

1. A clear statement of the objective of the investigation;

2. An explanation of the methods of observation and recording of results, including the variables measured, quantitation, assessment of any subject’s response and steps taken to minimize bias on the part of the subject and observer;

3. A comparison of the results of treatments or diagnosis with a control in such a fashion as to permit quantitative evaluation. The precise nature of the control must be stated and an explanation given of the methods used to minimize bias on the part of the observers and the analysts of the data;

4. A summary of the methods of analysis and an evaluation of data derived from the study, including any appropriate statistical methods.

D. A test or investigation which is not conducted in accordance with these procedures may be used to establish a claim only if respondent can show that, notwithstanding the failure to satisfy these procedures, the test or investigation would still be generally accepted by the relevant scientific community as sufficient to establish the truth of the claim.

II

IT IS FURTHER ORDERED that respondent Sterling Drug, Inc., a corporation, its successors and assigns, and its officers, agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the advertising, offering for sale, sale or distribution of “Bayer Aspirin,” “Bayer Children’s Aspirin,” “Vanquish,” “Cope,” “Midol,” or any other nonprescription internal analgesic product, in or affecting commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from making any representation, directly or by implication, that the superior freshness, purity, stability, or speed of disintegration of such product has been established, demonstrated, or proven unless at the time such representation is made, respondent possesses and relies upon competent and reliable scientific evidence which would permit qualified experts to conclude that the product has the comparative pharmaceutical qualities it is represented to have.

III

IT IS FURTHER ORDERED that respondent Sterling Drug, Inc., its successors and assigns, and its officers, agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the advertising, offering for sale, sale or distribution of “Bayer Aspirin,” “Bayer Chil-

*1160dren’s Aspirin,” “Vanquish,” “Cope,” “Mi-dol” or any other nonprescription internal analgesic, in or affecting Commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from making any therapeutic performance claim for such product unless respondent possesses a reasonable basis for making that claim. A reasonable basis for such a claim shall consist of competent and reliable scientific evidence supporting that claim. Well-controlled clinical tests conducted in accordance with the criteria set forth in Order Paragraph I shall be deemed to constitute a reasonable basis for a claim.

IV

IT IS FURTHER ORDERED that respondent Sterling Drug, Inc., its successors and assigns, and its officers, agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the advertising, offering for sale, sale or distribution of “Bayer Aspirin,” “Bayer Children’s Aspirin,” “Vanquish,” “Cope,” “Mi-dol,” or any other nonprescription drug product in or affecting commerce, as “commerce” and “drug” are defined in the Federal Trade Commission Act, do forthwith cease and desist from making any representation, directly or by implication that such product contains any unusual, special or unique ingredient or ingredients when such ingredient or ingredients are commonly used in other nonprescription drug products intended for the same use or uses as the product advertised by respondent.

V

IT IS FURTHER ORDERED that respondent Sterling Drug, Inc., its successors and assigns, and its officers, agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the advertising, offering for sale, sale or distribution of “Bayer Aspirin,” “Bayer Children’s Aspirin,” “Vanquish,” “Cope,” “Mi-dol,” or any other nonprescription internal analgesic in or affecting commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from falsely representing that the analgesic ingredient in an aspirin-containing product is different from aspirin or otherwise misrepresenting the identity of any analgesic ingredient. It shall be a violation of this paragraph to contrast the analgesic ingredient of a product which contains aspirin with the analgesic ingredient of another product if that product also contains aspirin, unless respondent discloses clearly and conspicuously that the analgesic ingredient in its product is aspirin.

VI

IT IS FURTHER ORDERED that respondent Sterling Drug, Inc., shall notify the Commission at least thirty (30) days prior to any proposed change in the corporation such as a dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or any other change in its corporation which may affect compliance obligations under this Order.

VII

IT IS FURTHER ORDERED that the respondent herein shall within sixty (60) days after service of this Order upon it and at such other times as the Commission may require, file with the Commission a written report setting forth in detail the manner and form in which it has complied or intends to comply with this Order.