HBI: Another Court Finds HBI Advertising Untruths

Last month, yet another court found that HBI (in this case HBI Europe GmbH and Mr. Joshua Kesselman) had been making untrue statements, this time about the products of its competitors. The case was brought by the European Rolling Paper Association (comprised of other rolling paper manufacturers and their paper suppliers) against HBI Europe and Mr. Kesselman.

The first court ruling in this case came on August 25, 2022, where the German Regional Court of Appeals described HBI Europe’s failure to “disseminate true facts about the products of HBI Europe’s competitors” in a 2018 video posted by Mr. Kesselman. 

The video claimed, without evidence, that competitors’ papers:

  • “It had chalk in it.” (“Es enthielt Kalk.”)

  • “It had bleach in it.” (“Es enthielt Bleichmittel.”)

  • “It had E150c in it.” (“Es enthielt E150c”)

25-08-2022 Certified Verdict at 3-4. 

In the video, Mr. Kesselman also stated, without any evidence to support his defamatory statements about his competitors’ products, that: “Other papers when they want them to look like “RAW”- just naturally brown and that has none of this shit in [..] - what they do is they basically sell you the same papers, substantially similar to the ones they sold your parents in the 80s, they just add more brown dye.”

While making these untrue statements, the Court noted that Mr. Kesselman pointed to “a pile of white crumbs, a canister of bleach and a dark coloured bottle containing the substance ammonia-sugar caramel (E150c).”  

“. . .On the whole,” the Court said, “Mr. Kesselman presents himself as wanting to inform the uninformed consumer about the use of the stated rolling papers of the competitors – presented as harmful to the health – and these products were in contrast to the good and pure “Raw rolling paper” of [HBI Europe].” 25-08-2022 Certified Verdict at 3-4. 

However, the German Regional Court of Appeals went on to find that: “The statements for which [this] complaint was made represent untrue factual claims regarding products of the members of [the European Rolling Paper Association], which are [capable of] harming the operation of these companies and/or their [reputation] as entrepreneurs.” (Emphasis added.) 25-08-2022 Certified Verdict at 7-8. 

As a result, the Court ordered the Defendants to cease making the untrue statements about the products from other manufacturers having chalk, bleach, and/or E150c colorant and the statement about RAW papers containing “none of this shit.“ To enforce its ruling, the Court imposed the following sentence on HBI Europe and Mr. Kesselman: “The Defendants [HBI Europe and Mr. Kesselman] are sentenced with the threat of an administrative fine that is to be fixed for each case of infringement of up to EUR 250,000.00 – alternatively imprisonment – or imprisonment up to 6 months, to be enforced for [HBI Europe] against its managing directors, [and] to cease and desist . . . regarding brown rolling paper of competitors.” (Emphasis added.)  25-08-2022 Certified Verdict at 7-8.

On January 23, 2024, the German Federal Court agreed and affirmed the August 2022 Regional Court ruling, saying that HBI Europe’s defamatory statements “which cannot be proven to be true, are likely to damage the business or the [reputation] of HBI Europe’s competitors, including ERPA’s members.” 

The German Federal Court continued: “The statements [by HBI Europe and Mr. Kesselman] were designed to highlight the alleged disadvantages of the products, using, among other things, the term “shit” and suggesting a health risk. The representation is objectively capable of . . . discouraging end-customers or dealers from purchasing products from the HBI Europe’s competitors.. . . .” 

Accordingly, the German Federal Court ruled that the Appeal [by HBI Europe and Joshua Kesselman] against the judgment of the German Regional Court of Appeals is Denied at the Defendant’s expense.

The German Federal Court continued, “. . . In the video, Mr. Kesselman consciously refers to competitive products on the market, which also include cigarette rolling papers that are manufactured or sold by [ERPA’s] members. With the video at issue, HBI Europe demonstrably did not disseminate true facts about the products of HBI Europe’s competitors. . .” (Emphasis added.) 

The judgment of the German Courts is now final.   

The full texts of the German Court opinions can be downloaded below.

ERPA vs HBI and Kesselman August 2022

ERPA vs HBI and Kesselman January 2024

——————

On January 31, 2023, the United States District Court for the Northern District of Illinois entered a Permanent Injunction against HBI International, maker of RAW® and other brands of rolling paper products.

The Court ordered HBI to cease promoting, selling, distributing, shipping, or delivering products that contain the statements below after March 2, 2023 for RAW® Organic Hemp. In addition, after May 31, 2023, HBI may not promote, sell, distribute, ship or deliver products under its other brands (e.g., Elements®, DLX®, Skunk®, Pay-Pay® and Juicy Jays®) sold in packaging including an Alcoy stamp.

The Order follows a jury’s verdict that HBI engaged in unfair competition and violated the Illinois Uniform Deceptive Trade Practices Act through its packaging and promotional activities for certain rolling paper products.

The Court’s order pe
rmanently prohibits HBI and its affiliates, officers, agents, servants, and employees “from making any statement or communication, or engaging in any promotion or advertising activity that states, implies, or suggests the following:”

  1. That HBI and/or RAW operate(s) or contributes its funds or sales proceeds to a charitable entity or foundation of any kind referred to as the “RAW Foundation” or making reference to the “RAW Foundation” in text or images;

  2. That RAW Organic Hemp rolling papers are “unrefined;”

  3. That RAW Organic Hemp rolling papers are made with natural hemp gum, or that the adhesive used in RAW Organic Hemp rolling papers is made from or contains hemp;

  4. That RAW Organic Hemp rolling papers are, or ever were, the world’s first or world’s only organic (or organic hemp) rolling papers;

  5. Alcoy Spain
         a) That RAW Organic Hemp rolling paper booklets are made in Alcoy, Spain;

    b) That RAW Organic Hemp pre-rolled rolling-paper cones are made in Alcoy, Spain;

    c) That the bulk paper (“bobbins”) used to make RAW Organic Hemp rolling paper products is made in Spain;

    d) That RAW Organic Hemp rolling papers are made in Alcoy Spain, the birthplace of rolling papers; and

    e) HBI shall not use on its packaging a “stamp” including the use of the word Alcoy or referring to Alcoy.

  6. That RAW Organic Hemp rolling papers are made using wind power or are powered by wind;

  7. That HBI uses or used the center of the hemp stalk for its RAW Organic Hemp rolling papers;

  8. That HBI or Joshua Kesselman invented rolling paper pre-rolled cones;

  9. That the OCB Organic Hemp papers are knock-offs, “RAWnabees”, copies, or fake versions of RAW.

See Agreed Order for Permanent Injunction, January 31, 2023 (footnotes omitted)

For more information, please review the court documents that can be downloaded below.

PDF Icon - Download the Memorandum Opinion and Order, December 6, 2022 using the Download button on the right.

Memorandum Opinion and Order,
December 6, 2022

PDF Icon - Download the Memorandum Opinion and Order, January 19, 2023 on the right.

Memorandum Opinion and Order,
January 19, 2023

PDF Icon - Download the Agreed Order for Permanent Injunction, January 31, 2023 using the Download button on the right.

Agreed Order for
Permanent Injunction,
January 31, 2023

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