Duty Free Americas, Inc. v. Estée Lauder Cos., 2014 WL 1329359, No. 12–60741 (S.D. Fla. Mar. 31, 2014)
This is mostly an antitrust case; the antitrust claims are all dismissed because no one wins antitrust cases. DFA operates duty-free stores in airports, with beauty products a major category. ELC supplies many duty-free stores with beauty products, but no longer deals with DFA. DFA sued for attempted monopolization, tortious interference with prospective business relationships with three airports, and contributory false advertising. The dismissal was with prejudice for everything but the contributory false advertising claim, but the court cautioned that DFA shouldn’t try again without keeping Rule 11 in mind, since there’d already been amended complaints and extensive discovery.
Because of a past dispute on pricing, DFA stopped carrying ELC products and ELC refused to deal with DFA when DFA changed its mind. Various people said they thought DFA misrepresented its ability to sell ELC products during bidding on airport contracts. For example, one person connected to ELC wrote that “DFA does not have authority to offer our product lines in their operations” and “DFA is not authorized to represent that it has ability to sell Estée Lauder Companies/ brands in its stores.” DFA alleged that these statements were untrue because it still had ELC products in inventory, though DFA didn’t allege that ELC knew or had reason to know DFA’s inventory. For one airport contract, another bidder accused DFA of misrepresentations of its ability to carry ELC products.
ELC didn’t unjustifiedly interfere with business relations because it acted to safeguard its own financial interests and didn’t employ improper means in doing so. The representations that ELC made itself, as opposed to the representations that other duty-free operators made about the ELC-DFA relationship, were truthful. And ELC promoted its own financial interest by telling airports about the duty-free operators it dealt with and that it didn’t deal with DFA: doing so increased the likelihood that the airport would select an operator who sold ELC. Similarly, it wasn’t improper to tell other duty-free operators that ELC didn’t do business with DFA. And DFA didn’t allege facts that would allow the court to impute allegedly false representations by duty-free operators to ELC. The other operators were separate companies, and there was no allegation of conspiracy. The other operators did claim that because DFA didn’t carry ELC, its financial terms offered to airports were unrealistic—but ELC never said that.
Lanham Act contributory false advertising: DFA failed to allege a plausible claim of underlying direct liability. The statements that DFA alleged were false were “merely predictions about sales prospects,” and thus were opinions. The statements: “Given that Estée Lauder brands account for 20% of cosmetic and fragrance sales, at least in Orlando, and cosmetic and fragrance sales constitute one of the largest sources of revenue for duty free stores, a lack of access to Estée Lauder brands would cast doubt on the validity of DFA’s projected revenue streams”; “[W]e strongly believe that Estée Lauder is a product which you have to sell, also, to domestic passengers”; “DFA sales projects are deemed to be unreasonable and not sustainable in light of the history”; “[F]ailure to offer the Estée Lauder product line will negatively impact duty free and duty paid sales revenue for both international and domestic travelers.” These were all “predictions that do not lend themselves to empirical verification.” They used language signaling a prediction, and they were about future commercial events. (Presumably the court uses “commercial” because some predictions—like “this drug reduces complications 35%”—are empirically verifiable because probabilistic.)
The exception to the opinion rule is where the speaker knows facts that make the opinion false/not held in good faith. But DFA didn’t allege that the operators here knew their statements to be false or lacked a good faith basis for believing them. It was (more) plausible that they genuinely believed the statements. After all, they put up with onerous ELC conditions (described in the antitrust section), and it was unreasonable to assume that operators would do so if they didn’t believe that selling ELC products was an advantage.