lack of specifics, even with certification involved, dooms falsity claim

Hydro-Blok USA LLC v.
Wedi Corp., 2019 WL 2515318, No. C15-671 TSZ (W.D. Wash. Jun. 18, 2019)
Wedi and Hydro-Blok
compete in the market for construction materials and sealants for use in
bathroom systems, including showers. Wedi accused Hydro-Blok of infringing a
patent in 2014; Hydro-Blok filed a declaratory judgment of non-infringement;
this was dismissed after Wedi represented that it didn’t own and wasn’t a
licensee under the patent.  Meanwhile,
Wedi sued defendants for breach of contract and a variety of other claims. The
parties were directed to arbitrate claims for breach of contract, breach of
fiduciary duty, civil conspiracy, and unjust enrichment claims, and also
arbitrated a claim under Washington’s Uniform Trade Secrets Act, which is,
delightfully, known as WUTSA. The arbitrator mostly found against Wedi, and
awarded it $1 in nominal damages on its contract claim.
What remained were
tortious interference, Lanham Act, abuse of process, and Consumer Protection Act
claims against various related defendants. 
Wedi’s abuse of process claims failed. 
Among other things, given its attorneys’ “repeated representations that
wedi owned the ’900 Patent and intended to take legal action to protect ‘its
patent rights,’ Hydro-Blok was not, as a matter of law, required to
independently investigate whether wedi owned or was a licensee under the ’900
Patent before initiating the declaratory judgment action. Moreover, in asking
wedi and wedi GmbH to identify the owners or licensees of the ’900 Patent,
refusing to dismiss the declaratory judgment action in the absence of a
covenant not to sue, and waiting until after wedi and wedi GmbH declared under
oath that they did not own and were not licensees under the ’900 Patent to
forego the litigation, Hydro-Blok did not, as a matter of law, engage in acts ‘to
accomplish an end not within the purview of the suit.’” Gotta admit, none of that
sounds even noticeably aggressive, much less an abuse of process. Nor was it abuse of
process to counterclaim for abuse of process. 
(This sounds like a fun litigation.)
False advertising
under state and federal law:  The key
issues here were puffery and falsity. 
The following claims were puffery: “Cutting of product is dust free and
quick”/“Environmentally friendly lightweight products with CFC-free XPS foam
core”—both of which had to be understood as relative claims, since cutting
mostly produces some dust or debris, and “environmentally friendly” implied
a comparison as opposed to a promise to have no negative impact on the ecosystem.  [These seem like reasons to go for possible
misleadingness over falsity, not reasons these claims are unprovable or even
unbelievable.]  Also puffery because not
measurable: “modified cement coating for maximum adhesion of tile & stone”/“When
laid on a floor with your favourite tile or stone, it is commercially rated.”  I was a little surprised by the last—there was
declaration testimony that “commercially rated” had meaning in the industry relating
to specific ASTM standards and that the Hydro-Blok products were never tested
using the relevant standard, which would indicate it’s not puffery, but the
court concluded that more was required, since the claim didn’t say outright
that it had passed ASTM testing and didn’t include the quantified rating
language used by other competitors (indicating how many cycles of testing the
tile survived), and there was no evidence that customers had been misled.
Other claims were
puffery because they were general opinions of superiority: “the easiest,
quickest and most user-friendly way to build a water-proof shower or tub
surround at a price you can afford.”/ “the better, easier & more
cost-effective way to build complete shower systems”/ “the most efficient,
light-weighted [sic], 100% water-proof, tile-ready shower system, which can be
installed within [sic] couple hours instead of days, by one person”/. “Speed
and ease of installation for commercial applications can not [sic] be beat”/ “The
BETTER Shower System.”
The remaining
factual assertions, “All HYDRO-BLOK products are IAPMO tested & certified” and
“100% WATERPROOF • HCFC-FREE XPS CLOSED-CELL FOAM CORE,” weren’t proven false.
Although the IAPMO certification claim was made before the certification was officially
issued, it did issue before any Hydro-Blok products arrived in the US.  Wedi didn’t show deception or injury
associated with the premature announcement. 
Nor did Wedi show that the IAPMO certification was either obtained or
maintained improperly; the certification agreement barred Hydro-Blok from
making any “substantial change” without prior written approval, which was
defined as any change that would make any of the information on the IAPMO certification
documents false or misleading, or would reasonably be deemed to cause the
product to fail to conform to the applicable standards.  Wedi provided evidence of quality control
issues and use of some different equipment and components, but didn’t show (or
provide expert testimony) that they resulted in a “substantial change.”  With a later certifier, Wedi argued that it
was false/misleading for the new certifier to rely on IAPMO testing and not its
own independent testing, but the certification did in fact issue.  A “challenge to the method by which
certification was granted does not form a basis for a false advertising claim
under the Lanham Act or the CPA.”
HCFC-FREE XPS:
Hydro-Blok products contain HBCD, a fire-retardant banned in Canada, but not in
the United States, but HCFC seems to stands for hydrochlorofluorocarbons, substances
composed of hydrogen, chlorine, fluorine, and carbon. HBCD or
hexabromocyclododecane contains bromine and no chlorine or fluorine, and it is
not an HCFC. Thus, the presence of HBCD didn’t make “HCFC-FREE XPS” false or
misleading.  One test report did show
testing for 62 CFCs and HCFCs; the test came back “not detected” for all but
two, which had levels of 1.0 and 7.3 μg/g. “Although these levels are above the
detection limit of 0.1 μg/g, they are nominal amounts,” and the testing entity
concluded that the product had “—” ozone-depleting substance, making it “essentially
‘HCFC-free.’” 
There was still a
triable issue on tortious interference, given that one individual concededly
shared with some of the defendants confidential information, including
financial data and customer lists, that he acquired while serving as Wedi’s sales
agent.

from Blogger http://bit.ly/31L8tMM

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