“As seen on TV” can be false advertising if seller hasn’t been seen on TV

E. Mishan & Sons, Inc. v. Smart & Eazy Corp., 2018
WL 6528496, No. 18 Civ. 3217 (PAE) (S.D.N.Y. Dec. 12, 2018)
Plaintiff Emson sued defendants Masterpan and S&E for
false advertising.  The parties compete
to sell pots and pans.  Emson’s Gotham
Steel pots and pans are made of aluminum and have a copper-colored, non-stick
ceramic and titanium coating; it uses direct response TV commercials and as “As
Seen On TV” logo on its packages and other ads.
S&E and Masterpan sell “The Original Copper Pan” which
allegedly deceives the public by falsely and deceptively conveying to consumers
that its cookware is the first of its kind and that Emson’s (and other’s)
products are not the originals but are instead mere imitations. In addition,
defendants allegedly falsely advertised certain versions of the OCP as being
made of, and not merely coated with, copper. “Although each pan has a
copper-colored cooking surface, Emson alleges that it ran tests on samples of
the 12-inch OCP,” and found that “the cores of each of the tested Original
Copper Pans had undetectable levels of copper” and that the inner coating on
the samples also lacked the presence of copper. 
Finally, defendants allegedly “use an ‘As Seen On TV logo in their
advertising,” without having advertised on TV, or only minimally doing so.
The court found that false advertising was plausibly alleged
against Masterpan, in terms of copper construction, use of “original” to
suggest it was first of its kind, and use of “As Seen on TV.”  The court noted that the allegations on the
last one were tenuous, and that discovery might deterimine whether there was
literal truth/any TV advertising. 
Masterpan tried to distance itself from statements on the main website
and on Groupon, but while it was conceivable that Masterpan had no control over
or awareness of those statements, the court wouldn’t assume so on a motion to
dismiss. It was plausible that Masterpan “controls or is party to the marketing
statements regarding its products that appear on both websites.” The OCP
website “bears the name of the product that Masterpan manufactures and sells,”
and even if it wasn’t registered to Masterpan, it was plausible that “Masterpan
has had a say in the words used to market its products as sold through that website.”
Masterpan’s control over Groupon advertising was even more plausible, since the
OCP Groupon page “explicitly states that the product is ‘[s]old by Master[p]an’
and that ‘the merchant is solely responsible to purchasers for the fulfillment,
delivery, care, quality, and pricing information of the advertised goods and
Defendant S&E, however, fared better. Emson alleged
sufficient facts to plausibly conclude that Masterpan markets and sells the OCP,
as noted above and by providing documentary evidence that Masterpan shares
directors with Dreambiz, Ltd., which owns the trademark “The Original Copper
Pan.” But there was nothing so specific as to S&E, only allegations that it
shared an address with Masterpan.

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Cheezit, the food cops! 2d Circuit reinstates claim over “made with whole grain” where most grain content is white

Mantikas v. Kellogg Co., No. 17-2011 (2d Cir. Dec. 11, 2018)
Plaintiffs bought Cheez-It crackers that were labeled “whole
grain” or “made with whole grain.” They alleged violation of New York and
California consumer protection laws because such labeling would cause a
reasonable consumer to believe that the grain in whole grain Cheez-Its was
predominantly whole grain, when, in fact, it was primarily enriched white
flour. The district court held that the whole grain labels would not mislead a
reasonable consumer, and the court of appeals (in some tension with its recentholding on Trader Joe’s truffle-flavored oil) reversed.

The challenged packages used “WHOLE GRAIN” in large print in
the center of the front panel of the box, and “MADE WITH 5G OF WHOLE GRAIN PER
SERVING” in small print on the bottom or “MADE WITH WHOLE GRAIN” in large print
in the center of the box, with “MADE WITH 8G OF WHOLE GRAIN PER SERVING” in
small print on the bottom. Both packages also contained a “Nutrition Facts”
panel on the side of the box, which stated in much smaller print that a serving
size of the snack was 29 grams and that the first ingredient on the ingredients
list (in order of predominance, as required by federal law) was “enriched white
flour.” “Whole wheat flour” was either the second or third ingredient.
The district court held that both the “MADE WITH WHOLE
GRAIN” and “WHOLE GRAIN” labels would not mislead a reasonable consumer,
because both statements were true and were “qualified by further accurate
language detailing the number of grams of whole grain per serving.”
False advertising or deceptive business practices under New
York or California law requires that the deceptive conduct was “likely to
mislead a reasonable consumer acting reasonably under the circumstances.” Context
is crucial, including disclaimers and qualifying language. The district court
reasoned that “a reasonable consumer would not be misled by a product’s
packaging that states the exact amount of the ingredient in question.” But the
packaging here allegedly implied that the product was “predominantly, if not
entirely, whole grain,” and it wasn’t. This was plausibly misleading because
they falsely imply that the grain content was entirely or at least
predominantly whole grain.
The ingredient list didn’t help, even though it indicated that
a serving size of Cheez-Its was 29 grams and the list of ingredients names
“enriched white flour” as the first (and thus predominant) ingredient. The
serving size didn’t “adequately dispel the inference communicated by the front
of the package that the grain in ‘whole grain’ crackers is predominantly whole
grain because it does not tell what part of the 29-gram total weight is grain
of any kind.” Plus, adopting the Ninth Circuit’s Williams rule, the court of appeals agreed that “reasonable
consumers should [not] be expected to look beyond misleading representations on
the front of the box to discover the truth from the ingredient list in small
print on the side of the box.” The Nutrition Facts panel and ingredients list plausibly
contradicted, rather than confirmed, the “whole grain” representations on the
front of the box.
Other cases dismissed on the pleadings involved plaintiffs
who alleged deception because a product label misled consumers to believe, falsely,
that the product contained a significant quantity of a particular ingredient. Here,
however, the deceptiveness was the implication that, of the grain content in
the product, most or all of it is whole grain, as opposed to less nutritious
white flour. In addition, in most of the other cases, “plaintiffs alleged they
were misled about the quantity of an ingredient that obviously was not the
products’ primary ingredient.” No reasonable consumer would think that crackers
“made with real vegetables” were made primarily with fresh vegetables.  Here, “reasonable consumers are likely to understand
that crackers are typically made predominantly of grain. They look to the bold
assertions on the packaging to discern what type of grain.” Thus, the front of
the package could have misled them. The court declined to adopt a rule that
would allow any “made with X” advertising when the ingredient X was in fact
present, no matter how deceptive (e.g., if the crackers here were 99.999% white

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low volume of confused callers doesn’t establish irreparable harm

TrueNorth Companies, L.C. v. Trunorth Warranty Plans, LLC, No.
C17-31-LTS, — F.Supp.3d —-, 2018 WL 6438370 (N.D. Iowa Dec. 7, 2018)
TrueNorth sued TN Warranty for trademark infringement and
related claims based on the parties’ respective design logos:

plaintiff’s logo
defendant’s logo
TrueNorth provides financial and insurance services, including
products and services to commercial transportation companies and drivers
including “transportation risk management, transportation property insurance
and transportation equipment insurance. TrueNorth originated in eastern Iowa
and now has offices in Tennessee, Texas, Illinois, Michigan and Colorado.”  TN Warranty sells commercial truck
warranties, specifically “extended warranty services for mechanical components
for used commercial vehicles manufactured by others whose original
manufacturer’s warranty has expired.” It markets through independent truck dealers
or “authorized retailers,” and the end user is a truck owner or fleet owner who
owns the truck(s) covered by the warranties. About 80 percent of its authorized
retailers are used truck dealers who sell TN Warranty products at the point of
sale at or near the same time they close a deal for the sale of a used truck,
while about 15 percent of its warranties are sold by finance companies that
provide the financing for the truck and approximately 5 percent of its
warranties are sold by repair facilities. Sales to end consumers (individual
truckers) are under 1 percent of sales. 
TN Warranty argued that “in training new authorized retailers, it
emphasizes that it is not selling insurance, but a limited warranty. It does
not compete with providers of insurance products and does not market its
warranty products through insurance brokers or agents.”  According to TN Warranty, neither it nor its
retailers have encountered TrueNorth in the marketplace and was unaware of any
other entities that market insurance to the end user in the same way that TN
Warranty markets its products; its clients don’t offer insurance. Also, TN Warranty
said, “most customers are interested in coverage, cost and convenience rather
than the provider of the warranty.”
TrueNorth registered three marks in 2006, including the one
shown above, a word mark for TRUENORTH, and the following logo:

TN Warranty started as CompassOne Warranty in 2015, with a
mark derived from an earlier company with a mark called Vector Compass. 
2015, another entity sued alleging that “Compass” infringed its rights, so (apparently
after a contempt order) the founder formed TN Warranty instead, using “TrüNorth”
to pay homage to its CompassOne Warranty and Compass Group roots. “It chose to
use a dieresis (ü) in its mark to give the brand an international feel,
consistent with the company’s international aspirations.”  TN Warranty applied to register the mark;
TrueNorth opposed and TN Warranty defaulted. 
(Seems like a B&B v. Hargis
issue here.)
In early 2016, TrueNorth sent a C&D; in mid-2016, it
received an application for insurance from one of its clients in the trucking
industry, and among the forms submitted with the application was a Component
Breakdown Limited Warranty Agreement form for TRÜNORTH™.  TrueNorth ultimately sued at the end of March 2017.
TN Warranty states that it then voluntarily redesigned its mark as follows:

TN Warranty also argued that a non-party, Premium 2000+, was
run by an ex-business partner turned rival of TN Warranty’s founder, who’s
filed various lawsuits against that founder. 
Premium 2000+ allegedly offered to do business with TrueNorth, but cited
TN Warranty’s name and mark as a “road block” to doing business, indicating
TrueNorth’s lawsuit was premised more on Premium 2000+’s animosity towards the
founder rather than on true confusion in the marketplace. TrueNorth disagreed,
citing emails and phone calls from truck drivers and professionals within the
trucking and insurance industries that allegedly demonstrated confusion.
Preliminary injunction: though the Eighth Circuit has not
yet ruled on the Lanham Act consequences of eBay
and Winter, those cases lead to the
conclusion that a presumption of irreparable harm upon showing likely success
on the merits (via confusion) is not warranted.
Harm to reputation can, however, be irreparable.  TrueNorth argued that TN Warranty has
received negative consumer reports from the Better Business Bureau and
Trucker’s Report (an online forum used by truck drivers). Some of TrueNorth’s trucking
industry partners contacted TrueNorth on behalf of drivers with warranty claims
in an attempt to resolve warranty issues. It explained its delay in seeking a
preliminary injunction stems with an increase in calls about warranties that it
received in 2018. TrueNorth argued that it started recording calls in January
2018 due to the “increasing number of calls and other instances of confusion
among TrueNorth customers.” It recorded six calls in February 2018, four calls
in March 2018, one call in April 2018, three calls in May 2018, no calls in
June 2018, two calls in late July 2018 and six calls in August 2018. Its
witness described the harm as follows: “Just verbal communications that have
been relayed to me that they think that the presence of having su[ch] a similar
logo is creating challenges and confusion that is disruptive to our working
together to market to owner operators and truck lessees.” The witness further
described the situation as creating challenges with how TrueNorth tries to
market to leasing companies, but could not provide any specific examples and
was not aware of any specific loss of business with the company under discussion.
The court found this evidence of irreparable harm insufficient.
Under Eighth Circuit law, a party must show that “the harm is certain and great
and of such imminence that there is a clear and present need for equitable
relief.” Though TrueNorth showed some level of confusion through phone call
recordings and email communications, that didn’t rise to the level of
irreparable harm (such as loss of customers or decline in sales) based on this
confusion. The time addressing confusion and explaining that TrueNorth provides
insurance services and not warranty services “can be addressed through monetary
means.”  As to call volume, TrueNorth
didn’t provide context; apparently each of the 28 to 30 individuals who take
calls in TrueNorth’s call center receive 25 to 30 calls per day (and up to 100
calls per day during peak season). “Six calls per month is hardly so disruptive
that TrueNorth is suffering irreparable harm that cannot be addressed through
monetary means.”
Nor did TrueNorth show that the alleged harm was more than a
possibility. Though reputational damage can constitute a threat of irreparable
harm and is difficult to measure, there was still no showing that it was likely.
TrueNorth argued that its reputational damage came from (1) customers upset
about their warranties and (2) industry partners who have commented on TN
Warranty’s presence. But TrueNorth doesn’t sell truck warranties, and there was
no record evidence that upset TN Warranty customers would tell fellow truck
drivers to avoid business with “True North” or fail to go to TrueNorth for
insurance based on a negative impression stemming from their warranty.  This was possible, but merely speculative.
And the only industry partners at issue were Lone Mountain Leasing (which raised
the alarm on the logo in the first place) and Premium 2000+ (“which competes
with TN Warranty and has its own arguable agenda for pursuing business with
TrueNorth”).  And the relevant witness
couldn’t establish any specific harm as to those partners.  As to Premium 2000+, it sought out TrueNorth
to do business, not the opposite, and its reason for not going forward was “questionable
based on the record,” which included an email stating that they couldn’t do
anything unless TrueNorth got rid of TN Warranty’s founder. “TrueNorth has
demonstrated only that its affiliates have acknowledged the presence of another
entity named “True North.”
TrueNorth had dealt with other True North entities, and had
previously entered into coexistence agreements with one that provided financial
consulting services to large banks and credit reporting agencies and another
that provided advertising and public relations services. “TrueNorth’s
willingness to co-exist with other entities using the same name, albeit in
arguably different industries, tends to lessen the alleged harm.”
Finally, its delay in seeking relief weighed against finding
irreparable harm. TrueNorth waited 17 months after filing its complaint to
bring its motion for preliminary injunction, and even longer if you measure
from the time TrueNorth learned of TN Warranty. “TrueNorth’s only explanation
for the delay was that it was collecting sufficient evidence to support its
motion. If the harm was truly as serious, imminent and irreparable as alleged,
TrueNorth should not have needed 17 months to bring a properly supported

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Pleading compliance w/test rules doesn’t plausibly plead compliance for consumer plaintiffs

Anglin v. Edgewell Personal Care Co., 2018 WL 6434424, No.
4:18-CV-00639-NCC (E.D. Mo. Dec. 7, 2018)
Are there people who believe that Twiqbal improved consistency? 
Because I do not understand the level of detail required. Here, the magistrate
holds that pleading that one’s testing complied with FDA regulations is not
sufficient to plausibly plead that one’s testing complied with FDA
regulations.  I would have thought that,
if it’s enough of a fact to be determined by a court and not trigger
preemption, then it’s enough of a fact to be pled on its own, even if it is a potentially
dispositive issue.  But I don’t see
non-advertising Twiqbal cases, so I
might be overly critical.
The plaintiffs sought to represent a class of Banana Boat “SPF
50” or “SPF 50+” product purchasers. They alleged that “rigorous scientific
testing has revealed that the Products do not provide an SPF of 50, much less
‘50+’.” Consumer Reports magazine reported in May 2016 that “its own testing
had revealed that Banana Boat Kids SPF 50 sunscreen lotion had an SPF of only
8.” Further, plaintiffs alleged that their own independent testing using FDA
methods demonstrated the Products had SPFs lower than listed on the label. They
brought various state law false avertising claims.
The court rejected defendants’ primary jurisdiction argument.
The FDA published a “sunscreen Final Rule” allegedly “mandating a whole host of
highly specialized, highly scientific, and precise technical and scientific
protocols that manufacturers must follow relating to testing and labeling.”  Agency expertise is “the most common reason
for applying the doctrine,” which is also used “to promote uniformity and
consistency with the particular field of regulation.” Other cases have rejected
applying the doctrine to sunscreen labeling, given that plaintiffs allegedly
relied on long-established SPF testing procedures and standards, rendering
their labels false and misleading, which is a routine factual question for
courts. Defendants argued that the court would have to determine whether the
parties’ tests followed the technical and scientific requirements of the
sunscreen Final Rule. But “this Court is equipped to address such technical and
scientific questions, as this and other courts routinely do on a regular basis.”
Even if the FDA was in the “best” position to interpret the Final Rule, the
court could do so too.  In terms of
uniformity and consistency, it was merely speculative that the FDA would be
taking further action, much less formal action, or that any such action would
be retroactive. Though the FDA had solicited bids for testing sunscreens over
two years ago, there was no indication that further action was forthcoming.
However, the preemption argument did better in that it helped
kick out the case, although not definitively. The court found that the FDA
testing requirements meant that no non-FDA compliant testing could be used to
establish the true SPF of a sunscreen, making the Consumer Reports testing irrelevant. If and only if plaintiffs’
testing was FDA-compliant, then their claims were not preempted.  The relevant allegations:
…. Plaintiffs conducted their own
independent testing of the Products, utilizing the methodology for SPF testing
mandated by the FDA.
Specifically, the independent
testing conducted by Plaintiffs was conducted in compliance with all FDA
testing methods embodied in FDA Final Rule, 21 CFR Parts 201 and 310, (Federal
Register/Vol 76, No 117/Friday, June 17, 2011/Rules and Regulations, including
21 CFR 201.327).
The results of the independent
testing conducted by Plaintiffs were consistent with the results suggested by
Consumer Reports’ test results and confirmed that the Products had actual SPFs
substantially lower than the claimed SPF 50 or “50+”.
Plaintiffs’ investigation concluded
that all three products, clearly labeled as containing SPF 50 or “50+”,
contained an SPF of less than 37.8 and no more than a 30.1.
This wasn’t sufficient (though plaintiffs said they were
prepared to file an amended pleading). The complaint was 34 pages long and only
4 paragraphs were devoted to this crucial issue (this comparison strikes me as
a bad measurement tool). Only one paragraph mentioned the specific methodology.
There was a need for more than a “conclusory statement that the testing
complied with the FDA Final Rule, an ultimate question this Court may be called
upon to decide in the future.” And it was unclear whether plaintiffs had
FDA-compliant test results relating to all three challenged products. Thus, the
court found it prudent to allow an amended complaint.
The court also commented that plaintiffs would likely have
difficulty satisfying the predominance requirements on their nationwide claims,
but declined to dismiss the class certification parts of the case at this time.

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Juxtaposition of claims about protein amounts and sources plausibly creates falsity

Hi-Tech Pharmaceuticals, Inc. v. HBS Int’l Corp., — F.3d
—-, 2018 WL 6314282 , No. 17-13884 (11th Cir. Dec. 4, 2018)
Hi-Tech sued HBS, alleging that the label of its
protein-powder supplement HexaPro misled customers about the quantity and
quality of protein in each serving, in violation of the Georgia Uniform
Deceptive Trade Practices Act and the Lanham Act.  The district court dismissed the Georgia
claims on FDCA preemption grounds and found that it wasn’t plausible that the
label was misleading. The court of appeals affirmed the first conclusion, but
reversed the second, and declined to find that the FDCA precluded Lanham Act
claims here.
The front of the label identifies the product as an
“Ultra-Premium 6-Protein Blend” with “25 G[rams] Protein Per Serving,” and it
touts the product’s “6 Ultra-High Quality Proteins” and “5 Amino Acid Blend
with BCAAs [Branch-Chain Amino Acids].” The left side repeated “an
Ultra-Premium, Ultra-Satisfying Blend of 6 High-Quality Proteins” and
identified those six whole-protein sources, stating that the product “is also
fortified with 5 Amino Acids to enhance recovery.” The right side features the
nutrition-facts table, which states that HexaPro contains 25 grams of protein
per serving, and the list of ingredients. This side also has a table labeled
“Amino Acid Profile” whose heading indicates that HexaPro contains 44 grams of
amino acids per serving, while the table itemizes only 25 grams.

Hi-Tech alleged three kinds of deception.  First, HexaPro contains free-form amino acids
and other non-protein ingredients as well as whole proteins; an analysis that
excludes these “spiking agents” and counts only “total bonded amino
acids”—which alone are molecularly complete proteins—allegedly yields an
“actual protein content” of “17.914 grams per serving,” not 25 grams per
serving. However, the applicable FDA regulation permits “[p]rotein content [to]
be calculated on the basis of the factor 6.25 times the nitrogen content of the
food,” even if not all of a product’s nitrogen content derives from
whole-protein sources.
Second, Hi-Tech argued that the label and in particular the
use of “Ultra-Premium 6-Protein Blend” suggests that the product’s entire
stated protein content derives from the whole-protein sources identified on the
left side of the panel. Third, Hi-Tech alleged that the front of the label was
misleading about both the quantity and the source of the product’s protein
content: the proximity of “Ultra-Premium 6-Protein Blend” to the phrase “25 G
Protein Per Serving” misled consumers into believing that HexaPro “contains 25
grams of the ‘Ultra-Premium 6-Protein Blend’-type protein per serving,” but it
has only roughly 18 grams from those sources. 
The district court rejected these claims because HexaPro’s label
“provides a detailed breakdown of all … ingredients, including the mix of
amino acids.”
Georgia law: The FDCA expressly preempts state laws that
“directly or indirectly establish … any requirement for nutrition labeling of
food that is not identical to the requirement of section 343(q) of this title,
except [for sales of food at some restaurants], or … any requirement
respecting any claim of the type described in section 343(r)(1) of this title
made in the label or labeling of food that is not identical to the requirement
of section 343(r) of this title.” In turn, section 343(q) regulates “nutrition
information” that must be disclosed about certain nutrients in food products,
including the “total protein contained in each serving size or other unit of
measure.”  Section 343(r) governs all
other statements about nutrient content that “expressly or by implication”
“characterize[ ] the level of any nutrient.”  
Hi-Tech’s state-law claim was therefore preempted. Federal
regulation expressly allows “[p]rotein content [to] be calculated on the basis
of the factor 6.25 times the nitrogen content of the food,” and Hi-Tech didn’t
dispute that HexaPro’s labeling complied with this regulation. Alleged
misleadingness about the nature, source, and quality of the whole proteins,
free-form amino acids, and other ingredients that make up HexaPro’s advertised
25 grams of protein per serving would have to be fixed by changing the
advertised amount of protein or itemizing each source’s contribution, but the FDCA
and its regs don’t require that. “[T]o avoid preemption, Hi-Tech’s state-law
claim must be identical, not merely consistent, with federal requirements. To
the extent that the Georgia Uniform Deceptive Trade Practices Act would require
changes to HexaPro’s labeling, it would ‘directly or indirectly establish’ requirements
that are ‘not identical to’ federal requirements.”
Lanham Act: Initially, the court of appeals rejected the
argument that Hi-Tech’s allegation about the true whole-protein content was “conclusory”
because it didn’t explain HexaPro’s chemical composition; Twiqbal doesn’t require a plaintiff to provide evidence for its
factual allegations.  Courts can
disregard legal conclusions and “threadbare” recitals of the elements, but an allegation
about how much protein is actually in a product isn’t a legal conclusion.  That’s “a specific assertion about physical
and chemical fact that is either true or false, no matter what legal
conclusions it may or may not support.”
Given that, the complaint plausibly alleged that the label
was misleading. “Considering the label as a whole and taking its statements in
context, we find it plausible that a reasonable consumer would be misled to
believe that a serving of HexaPro contains 25 grams of protein derived from the
‘6-Protein Blend’ comprising the ‘6 High-Quality Proteins’ listed on the label.”
Even an additional prominent statement that the product contained an amino acid
blend wasn’t enough to avoid this conclusion. The allegation was not that
consumers would be misled to believe that the only ingredient is the “Ultra-Premium 6-Protein Blend.” Rather,
Hi-Tech argued that the label would induce a reasonable consumer to believe
that the protein in HexaPro derives
exclusively from the six-protein blend, and this was at least plausible. The
label doesn’t indicate that the claimed 25 grams came from any other source
than the whole-protein ingredients; other than in the 25-gram claim, it never
used the word “protein” to refer to anything other than the whole-protein
ingredients, and instead consistently treated “amino acids” as separate from
and providing distinct nutritional benefits from “protein.” The “Amino Acid
Profile” on the right side of the label listed 25 grams of amino acids, but
provided no explanation of how this figure related either to the product’s 25
grams of protein per serving or the 44 grams of amino acids per serving
advertised at the top of the table.
“Based on the total impression given by the label, it is
plausible that only sophisticated consumers schooled in federal regulations or
nutrition science would understand or even suspect that free-form amino acids
or other non-protein ingredients form any part of HexaPro’s stated 25 grams of
protein per serving.” While the FDA permits protein calculations based on
free-form amino acids and other nitrogen-containing non-protein ingredients, Pom Wonderful established that the FDCA “does
not generally bar claims of false advertising of food under the Lanham Act.”
HBS’s specific arguments for preclusion also failed. HBS
argued that application of the Lanham Act would create “a genuinely irreconcilable
conflict” with the federal regulation governing protein calculations because it
couldn’t simultaneosuly disclose both 25 grams of protein to satisfy the
requirements of the FDA and 18 grams to satisfy Hi-Tech. But that wasn’t the
only way to cure the misrepresentation. “[I]t would suffice to clarify on the
HexaPro label how much protein in each serving derives from the six-protein
blend and how much derives from free-form amino acids and other non-protein
ingredients”; there was no federal law against that.
HBS also argued that the Lanham Act claim would be barred
barred “if determining the truth or falsity of the [challenged] statement would
require a court to interpret FDA regulations, which is generally left to the
FDA itself.” And HBS alleged that Hi-Tech was asking the court “to substitute
its own judgment regarding the most appropriate way to measure protein for the
FDA’s judgment.” But the conclusion didn’t follow from the premise. The no-interpretation
rule involves claims trying to “circumvent the FDA’s exclusive enforcement
authority by seeking to prove that [d]efendants violated the FDCA, when the FDA
did not reach that conclusion.” Hi-Tech’s claim doesn’t require the court to
question the FDA’s conclusion that protein content may be calculated on the
basis of the factor 6.25 times the nitrogen content of the food. Instead, the
question was whether the HexaPro label was misleading “in the context of the
label’s failure to specify the sources of the nitrogen measured by the federal

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Copying others’ claims without substantiation for one’s own services can be false

TRUSTID, Inc. v. Next Caller, Inc., No. 18-172-LPS, 2018 WL
6242493 (D. Del. Nov. 26, 2018) (report and recommendation)
The magistrate addressed trade secret and false advertising
claims, though there are also patent claims in the case. The relevant facts for
the false advertising bit: TRUSTID alleged that it “invested significant time
and millions of dollars to test, measure, and validate the performance of its
[own anti-spoofing and caller-authentication] technologies[,]” and that such
“technologies can [only] be reliably tested … in real-world situations[.]” It
was thus allegedly able to advertise truthfully that it (i) saved customers
$0.50 per call, (ii) achieved a 10% increase in IVR [interactive voice
response, meaning that human customers talk to an automated menu] containment,
and (iii) saved 30 seconds per call. Last Caller allegedly claimed the same
capabilities for its own caller-authentication system: “‘increase 10% IVR
Containment Rate,’ ‘[s]ave $0.50 per call,’ and ‘save 30 secs handle time.’ ”
TRUSTID alleged that these statements must be false because Last Caller did
nothing to substantiate these claims but merely copied TRUSTID’s own
assertions. Without citing the Third Circuit Novartis case holding that
complete lack of substantiation can be literal falsity, the magistrate reached
the same result: though this only barely crossed the line to plausibility, “[i]t
seems likely that a party who makes claims about its own product’s
attributes—without ever taking any steps to confirm whether those claims are
true, and instead simply parroting assertions that its competitor made about
the competitor’s own products—is making false statements about its product.”  

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Restaurant can’t bring unfair competition claim against Trump Old Post Office claim for using Trump’s name to draw business

K&D, LLC v. Trump Old Post Office, LLC, No. 17-731 (RJL),
2018 WL 6173449 (D.D.C. Nov. 26, 2018)
Plaintiff owns Cork Wine Bar, located in the downtown
Washington, D.C. area. Cork argued that it faced unfair competition from the
Trump Old Post Office due to the desire of people to curry favor with the
Administration by getting restaurant services (including both hosting and catering)
there, encouraged by statements from people in the Administration.
The court found that this advantage, while perhaps looking bad
(and, you know, violating the Emoluments Clause), was not unfair competition.  Even though D.C. common law doesn’t have
specific elements, it’s understood to include “various acts that would constitute
the tort if they resulted in damage.” These acts include “defamation,
disparagement of a competitor’s goods or business methods, intimidation of
customers or employees, interference with access to the business, threats of
groundless suits, commercial bribery, inducing employees to sabotage, [and]
false advertising or deceptive packaging likely to mislead customers into
believing goods are those of a competitor.’ ” 
But none of this was pled—interference with business isn’t anything that
harms the business; it means tortiously interfering with access to the business. [After all, the problem doesn’t seem to be commercial bribery, as such.]
Somewhat uncharitably, the court characterized Cork’s objection
as being to “the process known as competition, which though painful, fierce,
frequently ruthless, sometimes Darwinian in its pitilessness, is the
cornerstone of our highly successful economic system.”  Prominent people are allowed to have equity in
the companies they promote.  More to the
point, given that a government official might be thought to have more power
worth courting via purchases as opposed to simply a popular image, a forty-year-old case is
(almost) directly on point.  In Ray v.
Proxmire, 581 F.2d 998 (D.C. Cir. 1978), Ray alleged that Proxmire’s tour and
hospitality service unfairly competed with Ray’s similar business by trading on
the prestige and contacts that Proxmire had as the wife of the senior sitting
United States Senator from Wisconsin. The court of appeals there held that “simple
use of one’s status in society is not itself illegal .… financial success does
not become unlawful simply because it is aided by prominence; nor could it be,
without locking the famous out of the economy.” “[H]owever reprehensible it
might be through political influence to use public for private gain,
that evil cannot provide a basis for” Cork’s unfair competition claim here.
Cork argued that the common law evolves, but provided no
case law indicating that D.C. common law had evolved so far as to reject Ray.

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