The Ninth Circuit reversed the dismissal of Panelli’s claims under California’s Unfair Competition Law (UCL) and Consumer Legal Remedies Act (CLRA), ruling that allegations of physically impossible advertising claims do not automatically fail as a matter of law.

Panelli purchased a set of queen-sized Threshold Signature sheets labeled as an “800 Thread Count Sheet Set” made of “100% cotton sateen” at a Target in southern California in September 2023. He alleged he paid a higher price based on the understanding that the higher thread count correlated to higher quality.

After the purchase, Panelli claimed the sheets felt considerably rougher than expected. He filed suit in April 2024, alleging that independent testing showed the sheets had a thread count of only 288, not the 800 claimed on the label.

Panelli argued that it is physically impossible for cotton threads to be fine enough to allow for 600 or more threads in a single square inch of 100% cotton fabric. He cited expert testing performed in January 2024 using the ASTM D 3775 method.

The district court had granted Target’s motion to dismiss, relying on *Moore v. Trader Joe’s Co.* to conclude that no reasonable consumer would be deceived by a claim that is factually impossible. The district court denied leave to amend, reasoning that Panelli could not contradict his initial allegation of physical impossibility.

The Ninth Circuit held that the district court misinterpreted *Moore*, which involved ambiguous labels. The panel determined that the labels on Target’s bedsheets were not ambiguous, meaning the *Moore* framework did not apply.

Instead, the panel assessed the claims under caselaw regarding literally false advertising. The court held that the reasonable consumer standard under the UCL and CLRA raises questions of fact that are appropriate for resolution on a motion to dismiss only in rare situations.

The Ninth Circuit concluded that Panelli’s allegation that an 800 thread count is physically impossible on cotton material does not require dismissal. A reasonable consumer may still be deceived by a physically impossible claim, and the district court erred in dismissing the complaint on this basis.