Blast from the past: claims to comply with vague industry standard weren’t literally false

Lamons Gasket Co. v. Flexitallic L.P., No. H–14–0247, 2015
WL 12831719 (S.D. Tex. May 13, 2015)
The parties competed in the market for spiral wound gaskets
and other products used in the oil and gas industry to join and secure pipes. “A
spiral wound gasket consists of a piece of material wound tightly in a circular
form contained by a solid metal outer ring.” 
The American Society of Mechanical Engineers (ASME) issued relevant
industry standards, providing a specified range for the Outer Diameter (OD) of
a “4–inch” gasket. The ASME
standard did not, however, specify the method for measuring the OD and specifically didn’t provide whether the loose end, or “tail,” of the winding material should be
included in the measurement.
Flexitallic told customers that the outer diameter of Lamons’s
spiral wound gaskets failed to comply with the ASME standard.  Lamons alleged that this was false, because
Lamons’s spiral wound gaskets complied with the ASME standard if measured using
Lamons’s methodology.  Flexitallic alleged
that, in retaliation for Flexitallic’s statements about Lamons’s gaskets,
Lamons advertised that two Flexitallic spiral wound gaskets, depicted in a
photograph, failed to comply with the standard, and that Flexitallic had adopted
or endorsed Lamons’s methodology for measuring the OD of spiral wound gaskets.  Lamons sued for false advertising and
business disparagement, and Flexitallic counterclaimed for the same things.
Flexitallic had no evidence of actual deception, and thus had
to show literal falsity.  Lamons’s method
for measuring OD involved measurement with the gasket in a compressed state,
and included the tail in the measurement.  Flexitallic didn’t show that, measured using
this method, the gaskets didn’t comply with the ASME standard.  Flexitallic did show that if the OD was
measured using Flexitallic’s method or some variation of the Lamons method, the
OD was too small.  However, the ASME
standard didn’t address how the OD was to be measured. Indeed, after the Lamons
ad was distributed, the ASME Committee for Gaskets and Flanged Joints [I love the whole world and all its mysteries] discussed
the definition of “gasket outer diameter” and decided that “an inquiry [would]
be submitted in order to better clarify the definition.”  Dow Chemical Company also opined that the OD
standard was “vague” and subject to “open interpretation.”  Flexitallic’s evidence indicated that many—perhaps
most—companies in the industry measured the OD in a manner more similar to
Flexitallic’s method.  But that didn’t
show that Lamons’s method was impermissible under the ASME standard.  Thus, the claim was at most misleading and,
without evidence of actual deception, summary judgment for Lamons on the Lanham
Act counterclaim was proper.

However, there was a genuine issue of material fact on the Lanham
Act and disparagement claims based on Lamons’s statements that two Flexitallic
spiral wound gaskets did not comply with the ASME standard, and that
Flexitallic had adopted or endorsed Lamons’s measuring methodology.  First, there was evidence that one of the
gaskets wasn’t Flexitallic’s, which meant literal falsity.  Also, there was evidence of literal falsity
in that Flexitallic steadfastly maintained that Lamons’s measuring method was
improper.

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