Elias Indus., Inc. v. Kissler & Co., 2021 WL 409835, No. 20-CV-01011-CCW (W.D. Pa. Feb. 5, 2021)
Elias is a wholesale distributor of plumbing parts that primarily sells OEM plumbing parts. Kissler is a plumbing repair part manufacturer and distributor that primarily sells non-OEM parts.
Elias allegedly uses an online client portal that allows customers to place and track orders and provides further information on product pricing, availability, and the customer’s order history. Kissler allegedly used login credentials from a Bronx-based customer to access Elias’ pricing and inventory information as well as Elias’s Bronx-based customer’s previous inquiries. Elias suspended those credentials, and then a former Elias employee who had switched to Kissler used his old credentials to give Kissler access, and 13 other customers’ credentials were used to access the client portal from Kissler’s location.
Elias sued for violations of the CFAA, tortious interference, and “procurement of information by improper means.”
Elias e-mailed copies of the complaint to twelve of its customers, putatively to make them aware of the litigation, to avoid them hearing of the litigation first from the media, and to make them aware that their credentials were compromised, since each of the recipients was a customer whose client portal log-in credentials had been used at a Kissler location.
Kissler counterclaimed that these emails were commercial speech that violated the Lanham Act’s prohibition on false advertising and caused Kissler to suffer irreparable harm, including loss of business opportunities and harm to its reputation.
The court found that Kissler couldn’t show likely success on the merits. Sending the complaint to twelve customers wasn’t “commercial advertising or promotion.” It wasn’t a solicitation, and the complaint wasn’t created to attract clients “but rather to right the perceived wrongs alleged therein.” There was no product reference and they were only sent to clients whose credentials had been used to log in. “In sum, the e-mails fall outside the common sense understanding of speech that proposes a commercial transaction.”
In addition, Kissler didn’t show deception. It was literally true that the complaint had been filed, and the emails didn’t characterize the lawsuit’s contents.
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