reminder: Harvard/Yale/Stanford Junior Faculty Forum, June 2-3, 2025 submissions due soon

Posted on February 17, 2025 by rtushnet

 Request for Submissions

Harvard/Stanford/Yale Junior Faculty Forum

June 2-3, 2025, Harvard Law School

Harvard, Stanford, and Yale Law Schools are soliciting submissions for the 2025 Harvard/Stanford/Yale Junior Faculty Forum, to be held at Harvard Law School on June 2-3, 2025. Twelve to twenty junior scholars (with one to seven years in teaching) will be chosen, through a double-blind selection process, to present their work at the Forum. A senior scholar will comment on each paper. The audience will include the participating junior faculty, senior faculty from the host institutions, and invited guests. The goal of the Forum is to promote in-depth discussion about particular papers and more general reflections on broader methodological issues, as well as to foster a stronger sense of community among American legal scholars, particularly by strengthening ties between new and veteran professors.

TOPICS: Each year the Forum invites submissions on selected topics in public and private law, legal theory, and law and humanities topics, alternating loosely between public law and humanities subjects in one year, and private law and dispute resolution in the next. For the upcoming 2025 meeting, the topics will cover these areas of the law:

Administrative Law

Antidiscrimination Law and Theory

Constitutional Law—theoretical foundations

Constitutional Law—historical foundations

Criminal Law

Critical Legal Studies

Environmental Law

Family Law

Jurisprudence and Philosophy

Law and Humanities

Legislation and Statutory Interpretation

Public International Law

Workplace Law and Social Welfare Policy

A jury of accomplished scholars will choose the papers to be presented. There is no publication commitment. Harvard Law School will pay presenters’ travel expenses, though international flights may be only partially reimbursed.

QUALIFICATIONS: Authors who teach law in the U.S. in a tenured or tenure-track position as of the submission deadline (February 28, 2025) and have not been teaching at either of those ranks for a total of more than seven years are eligible to submit their work. American citizens or permanent residents teaching abroad are also eligible provided that they have held a faculty position or the equivalent, including positions comparable to junior faculty positions in research institutions, for less than seven years and that they earned their last degree after 2015. We accept jointly authored submissions, but each of the coauthors must be individually eligible to participate in the Forum. Papers that will be published prior to the Forum are not eligible. There is no limit on the number of submissions by any individual author. Faculty from Harvard, Stanford, and Yale Law Schools are not eligible.

PAPER SUBMISSION PROCEDURE: Electronic submissions should be sent to Rebecca Tushnet at rtushnet@law.harvard.edu with the subject line “Junior Faculty Forum.” The deadline for submissions is February 28, 2025. Remove all references to the author(s) in the paper. Please include in the text of the email your name, the title of your paper, your contact email and address through June 2025, and under which topic your paper falls. Each paper may only be considered under one topic. Any questions about the submission procedure should be directed to Rebecca Tushnet.

FURTHER INFORMATION: Inquiries concerning the Forum should be sent to Christine Jolls (christine.jolls@yale.edu) or Yair Listokin (yair.listokin@yale.edu) at Yale Law School, Rebecca Tushnet (rtushnet@law.harvard.edu) at Harvard Law School, or Norman Spaulding (nspaulding@stanford.law.edu) at Stanford Law School.

Christine Jolls

Yair Listokin

Rebecca Tushnet

Norman Spaulding

from Blogger http://tushnet.blogspot.com/2025/02/reminder-harvardyalestanford-junior.html

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game spat expands beyond false advertising to TM and (c)

Posted on February 17, 2025 by rtushnet

Skillz Platform Inc. v. Papaya Gaming, Ltd., 2025 WL 438387,
24cv1646(DLC) (S.D.N.Y. Feb. 7, 2025)

Previous
discussion. Skillz sued its competitor Papaya, alleging false advertising
under federal and state law. Papaya counterclaimed for the same causes of
action and added trademark and copyright infringement as well as defamation and
civil conspiracy claims. Here, the court partially granted Skillz’s motion to
dismiss the counterclaims, and severed Papaya’s trademark and copyright
counterclaims.

Papaya alleged: its multiplayer games allow users to deposit
money and earn real cash prizes, along with in-game currency. “In a game, users
typically compete with between five and twenty opponents for the highest score.
Using an algorithm, Papaya arranges games by matching users of similar skill,
as measured by each player’s performance in prior games.” Skillz operates a
competing mobile gaming platform that hosts games created by third-party
developers. “Skillz’s games involve only head-to-head gameplay, as opposed to
games involving more than two players.”

Skillz allegedly markets its games as being uniquely fair
and trustworthy with a badge indicating it is “Committed to Fair Play” and a
claim that it will “[m]atch [users] with real players of equal skill” in its
games. Skillz promotes its promise to “NEVER EVER employ bots” and “guarantee
that every match you engage in is a true reflection of your skill level.” A
2024 “letter to our community” stated that the company was “committed to
rooting out and eradicating cheaters, bad players, and bots,” and that its
games would include “No unfair bots, not ever.” The letter said that Skillz
used a “proprietary technology to ensure fair matching,” so that users could be
“sure the competition is real, and so are your chances of winning.”

However, Papaya alleged, Skillz used and allowed the use of
bots in its games, and it has unevenly matched players. Skillz “clarified that
it uses bots only in certain non-cash games and in games where two human
players compete asynchronously. In addition to permitting the use of bots on
its platform, former Skillz employees say that the company sometimes
manipulates the outcomes of games by unevenly matching players.”

Papaya alleged harms because some players’ experience with
Skillz’s games  allegedly leads them to
believe that all mobile gaming is rigged and stop using other games, like
Papaya’s. Players also allegedly confuse the two platforms and attribute the
unfairness of Skillz’s games to Papaya. “And if not for Skillz’s claims about
the fairness of its games, some players may have played Papaya’s games instead
of Skillz’s.” [This last theory seems like the only one where proximate cause
logic favors Papaya.]

Papaya also alleged that Skillz claims that they can
withdraw cash that they win on its platform “at any time.” “But some players
have complained online and in reviews of Skillz’s platform that they were
unable to withdraw money from their accounts when they attempted to do so. In
some cases, players were unable to access their winnings because their accounts
had been banned from the platform.”

Papaya alleged that Skillz smeared competitors “first, by
creating an organization that accuses Skillz’s competitors of using bots in its
games, and, second, by planting and disseminating an article that stated Papaya
had admitted to using bots in its games.” This allegedly tarnished Papaya’s
reputation and that of the mobile gaming industry generally.

The alleged “false front” website “Fair Play for Mobile
Games” allegedly “encouraged and facilitated visitors’ filing of complaints
about mobile gaming companies, other than Skillz and including Papaya, with
state attorneys general.” It had a homepage banner “showing a counter that
purported to display an increasing number of complaints filed with state law
enforcement about Papaya and two other companies. That counter did not display
an accurate number of complaints; in fact, each time a visitor arrived at the
website, it would display the same number. The number would appear to increase
every few seconds.” It also displayed a pie chart purporting to show the
relative number of complaints relating to various games offered by Papaya and
other companies, stating: “Bingo Cash and Solitaire Cash by Papaya Games have
received the highest complaints so far followed by Solitaire Cash from Avia
Games.” The figures allegedly didn’t reflect in real time any actual database
of complaints being continuously updated, and there were similar problems with
a map purporting to show the number of complaints submitted from each state. 

screenshot from alleged astroturf website

Papaya also alleged that Skillz had engaged in copyright and
trademark infringement by copying specific games.

Lanham Act and GBL § 349: The court found that Papaya stated
counterclaims as to claims arising from Skillz’s statements about its own
products, but not to the extent that Papaya alleged violations based on
Skillz’s claims about its competitors. That is, false advertising was
sufficiently pled as to statements that games on Skillz’s platforms did not use
bots, matched players evenly, and allowed users to withdraw funds at any time. The
complaint plausibly alleged that these were material claims, “evidenced in part
by customer reviews implying that Skillz’s users participated in its games
because they thought they would be fairly matched against a human.”

Applying Rule 8, Papaya adequately alleged that Skillz used
bots or unevenly matched players. It cited “Skillz documentation that refers to
the use of bots” and “language used internally at Skillz, which, construed in
the light most favorable to Papaya, could suggest that Skillz was manipulating
the outcomes of games by unevenly matching players.” Skillz argued that bot
usage in a narrow set of circumstances, such as in training games, was
immaterial to consumers. But that was a factual question, and it wasn’t clear
how limited the bot use allegedly was.

Withdraw cash at any time: Skillz argued that this wasn’t
false in context, including Skillz’s website having an article called “why does
it take 4-6 weeks to get my withdrawal.” While, “under certain circumstances,
the presence of a disclaimer or similar clarifying language may defeat a claim
of deception,” on a motion to dismiss the court would only consider a
disclaimer located near the challenged language and “so clear that no
reasonable addressee could believe the plaintiffs’ allegations of being misled.”
Here, Skillz allegedly made the challenged claims in video advertisements and
on another page of its website, not on the same page.

Statements about competitors: Papaya failed to sufficiently
allege falsity. The allegations “are essentially that the website’s graphics
caused consumers to be confused.” For example, the complaint counter allegedly “created
a false sense of specificity and legitimacy,” but that didn’t mean that it was
unambiguous or that it necessarily implied a constantly updated connection to a
live database. Likewise, the claims that other companies are “scams” or
“fraudulent” “do not necessarily and ambiguously imply a false message, because
those words are not susceptible to a single clear, widely agreed-upon
definition.”

Papaya failed to “plead sufficient facts to support a
finding that consumers were confused or misled,” as is necessary to challenge
“a statement that is not literally false.” The conclusory allegation that “a
reasonable consumer … would have been deceived” was insufficient. Papaya
argued that the 4FairPlay website involved Skillz’s hiding its involvement to
“give the impression” that 4FairPlay was unbiased, the “design” of the website
suggesting its impartiality, and the website’s omission of Skillz as an option
for the subject of complaints. “But these accusations do not identify ‘any
description of fact,’ or statement about a product or service.” (Really? The
question in a misleadingness case is what message consumers received, not
whether it was said in words; and omissions generally do count! This is at
least in tension with other cases finding that fake reviews/claims of
independence were plausibly deceptive, something the FTC surely thinks.)

Papaya also failed to plead defamation. To show falsity, a
defamation complaint “must plead facts that, if proven, would establish that
the defendant’s statements were not substantially true.” “A statement is
substantially true if the statement would not have a different effect on the
mind of the reader from that which the pleaded truth would have produced.” And
the counterclaim didn’t plead that the complaint counter, pie graph, and map
were not substantially true. There was, for example, no allegation that
multiple consumers had not complained about Papaya, or that the
complaints about Papaya were not increasing over time.

Even if the counter gave the false impression of being
connected to a live database, “the thrust of its presentation” was to urge
viewers to “join a growing list of complainants.” Other statements about
“fraudulent games” and “scams” were mere opinions. “Various other alleged
aspects of the website, such as the solicitation of complaints against Papaya
but not against Skillz, likewise are not factual statements.”

Papaya also alleged that Skillz defamed it by creating and
sharing an article whose headline stated that Papaya “Admits Bot Use.” This was
protected by New York’s fair and true report privilege. A statement is “a fair
and true report if it is substantially accurate, that is if, despite minor
inaccuracies, it does not produce a different effect on a reader than would a
report containing the precise truth.” The complaint indicated that the article
was about this litigation: a judicial proceeding. And the challenged headline
was “substantially true” inasmuch as, at a conference, Papaya’s counsel stated
that “at the pleading stage, we have not denied the use of bots” and that
Papaya’s games “as currently constituted do not use bots.” Papaya’s brief
stated: “Papaya does not represent that its games never include computerized
opponents” and “Papaya has not denied or refuted that it deployed bots.”

Even if the Bonus.com headline may
have been more accurate in saying that Papaya “has not denied or refuted that
it deployed bots,” defamation does law does not require maximal accuracy, and
Papaya does not plausibly allege that such a characterization would have a
different effect on readers than that of what the headline actually said.
Particularly in a headline — an especially “condensed report of events,” —
New York law does not require the level of precision that Papaya’s arguments
imply.

Trademark: Papaya plausibly alleged confusion with its logo
marks, but not with its word marks. Skillz argued that the word marks — “BINGO
CASH,” “21 CASH,” and “SOLITAIRE CASH” — lacked secondary meaning. It was
enough at this stage to allege “longstanding, continuous use of the names and
logos, which represent popular games that have been downloaded many times,” as
to the logo marks, but not as to the word marks.  

[For the copyright claims, there doesn’t seem to be a lot
there that isn’t scenes a faire for a game, but it might be important to look
at other games in the market.]

Game 1 logos

quick research suggests that “daub” is a standard term for a bingo function

logos for game 2

logos for game 3

The marks were descriptive, thus requiring secondary meaning
to protect.  The logo marks’
registrations on the Principal Register plus the other allegations were enough
at this stage. But Papaya’s supplemental trademark registration for the word
marks “disclaims use of any particular font style, size, or color in connection
with the words.” The counterclaim didn’t explain how the word marks are
presented to consumers or other facts “to support a claim that the word marks,
by themselves, have become identifiers of the source of the games.”

Papaya plausibly alleged confusion of the logos.

There is clearly substantial
similarity between the marks, as the logos use many of the same words, colors,
and symbols and position these components similarly with respect to each other.
The parties’ products are in close competition and are offered in essentially
the same market. And a factfinder could find that the similarities of the
logos, and Skillz’s likely knowledge of them as a close competitor, imply a
degree of bad faith.

Skillz also counterclaimed that Skillz infringed copyrighted
elements of Papaya’s game BINGO CASH. “The parties appear to agree that
elements common to bingo-style games are not protectible, but they disagree
about whether substantial similarity between other elements exists in the two
games.” Various elements supported a plausible claim:

Those elements include a similarly
colored and shaped “Bingo” button, similarly named and described bonus options
(“Wild Daub”, “Daub any number”), similar shapes and colors used for certain
bingo squares, and similarly colored and shaped icons similarly arranged above
the bingo board. A motion to dismiss is not the appropriate vehicle to
determine whether these elements are inherent parts of the unprotectible
concept of bingo, or that they “necessarily result” from choosing to create a
bingo game.

But severance was appropriate because copyright and
trademark were very different claims, with new counterclaim defendants, and
discovery here on false advertising had been ongoing.

from Blogger http://tushnet.blogspot.com/2025/02/game-spat-expands-beyond-false.html

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J&J’s talc subsidiary can bring trade libel but not Lanham Act claims against testifying experts

Posted on February 14, 2025 by rtushnet

LLT Management LLC v. Emory, No. 4:24-cv-75, 2025 WL 438100
(E.D. Va. Feb. 7, 2025)

The defendants “published an article in a scientific
journal, asserting that they had identified 75 people, additional to 33 in an
earlier study, who had malignant mesothelioma but no known exposure to asbestos
except through cosmetic talc.” LLT, J&J’s talc
subsidiary, alleged that the statement was false. It allegedly identified
six of the anonymous study subjects and alleged that the defendants, through
their expert witness work, knew those subjects had been exposed to asbestos
through other means. LLT alleged that defendants’ “real goal was to create a
body of scientific literature to appease the plaintiffs’ bar, who hired the
defendants as expert witnesses in tort cases against LLT.” After the defendants
published their article, sales of J&J’s talc-based baby powder allegedly
declined due to misinformation about the product’s safety—including in the
defendants’ article.

This lawsuit represents yet another disturbing development
in the “sue your critics” space and highlights the need for a federal
anti-SLAPP regime. Here, the court dismisses the fraud claim on statute of
limitations grounds and the Lanham Act claim because of a mismatch between the “commercial
advertising and promotion” alleged and the falsity alleged, but allows
injurious falsehood/product disparagement claims to proceed.

Trade libel: The court predicted that Virginia would
consider this an “injury to property” tort claim with a five-year limitations
period. LLT sued within that period, and was thus not barred by the statute of
limitations.

Fraud: Virginia has a two-year statute of limitations for
civil fraud claims. The court declined to give any weight to LLT’s conclusory
allegation that it “could not have known of the [defendants’] fraud until
recently.” LLT pled that it discovered the defendants’ fraud by “match[ing] …
the [a]rticle’s subjects to [ ] litigation plaintiff[s]” with “documented
alternative exposures to asbestos” that were known to the defendants because of
the defendants’ roles as expert witnesses in the subjects’ “underlying tort
cases.” Of those six subjects, five were plaintiffs in lawsuits against LLT. Thus,
there were no facts in the complaint giving rise “to a reasonable inference
that LLT required any additional information, outside of what it already
possessed because of its role in earlier litigation, in order to match the
alleged study subjects to the testimony of the expert witnesses in their
respective trials or to spot the non-talc asbestos exposures the experts
identified in each case. And if the matching process itself took years, LLT
should have said that, but it did not. Thus, it appears on the face of the
Complaint that the study subjects’ alleged non-talc asbestos exposures were
discoverable, given the exercise of due diligence, at the time the study was
published.”

What about defendants’ alleged concealment of the truth?
That allegation was not enough to make out a plausible claim that the
defendants’ concealment tolled the statute of limitations. Tolling requires
plausible allegations that “the defendant undertook an affirmative act designed
or intended … to obstruct the plaintiff’s right to file [the] action.” LLT
alleged: (1) “statements reaffirming the false statements in the [a]rticle,”;
(2) “refus[al] to disclose the identity of the 75 subjects of the [a]rticle,” for
example refusing to testify about their identities in depositions and stating
they didn’t retain documentation of those identities; and (3) “omit[ing] from
their publication that their statements regarding the lack of alternative
exposures were false and that they knew they were false.” That last wasn’t an
affirmative act. Even assuming that (1) and (2) could be affirmative acts, such
acts must actually “have the effect of debarring or deterring the plaintiff
from his action.” But defendants weren’t alleged to have ever changed their claims
that all 75 subjects were new, that none of the 75 study participants had known
non-talc asbestos exposure, or to have revealed the study subjects’ identities.
“But LLT was able to bring its fraud claim anyway. That makes it facially
implausible that the defendants’ repetition of the alleged falsehood or
nondisclosure of the study subjects’ names ‘had the effect’ of deterring filing
of the claim.”

False advertising: potential laches problems, though
defendants didn’t show prejudice (shouldn’t the burden be on LLT to plead
around it where laches is pled on the face of the complaint?). But that didn’t
matter because of the bigger problem requiring dismissal.

LLT plausibly alleged two categories of harm: (1) lost
“sales volume and profits,” and (2) costs incurred to “respond to, defend
against, and otherwise counteract the [defendants] false statements.”  Even though the article was distributed in a
publication “whose audience is doctors, not consumers,” LLT plausibly alleged
that the defendants’ intended and actual audience was the plaintiffs’ bar,
rather than the scientific community. While actions by the plaintiffs’ bar
allegedly contributed to consumer behavior, they were plausibly not
“independent” of the defendants’ conduct, and thus didn’t defeat traceability. Nor
did preexisting negative publicity for talc break the causal chain. “[T]he
Court cannot assume that negative publicity had already influenced 100% of
Johnson & Johnson’s customers before the article came out.” And LLT
plausibly pled increased litigation costs as a result, since some people might
have been motivated to sue by the article. Additionally, “[e]very time LLT has
to defend against an expert witness who relies on the defendants’ allegedly
false statements in litigation, it costs money LLT would not otherwise have to
spend. That too is a fairly traceable injury.” [I have to wonder about the
cognizability of that—seems like a collateral attack on the underlying tort litigation.
If the expert’s testimony is allowed despite LLT’s objections, should LLT be
allowed to sue over it?]

Likewise, the complaint plausibly alleged “a commercial
interest in reputation or sales.”  What
about proximate causation? Lexmark says that “a plaintiff suing under §
1125(a) ordinarily must show economic or reputational injury flowing directly
from the deception wrought by the defendant’s advertising.” “[T]hat occurs when
deception of consumers causes them to withhold trade from the plaintiff.” LLT
plausibly alleged that defendants led consumers to believe that “cosmetic talc
should be considered a probable cause of mesothelioma.” Although one prior
study came to the same conclusion as the defendants’ article, “it is at least
plausible that the earlier article was not an ‘independent’ case of consumer
decisionmaking regarding Johnson & Johnson’s products, since LLT alleges
the two publications were designed in concert, to create the impression that a ‘body
of literature’ supported the defendants’ claims.” And “the defendants’ article
did not merely cement the link to cancer in general—it purported to tie
cosmetic talc to “mesothelioma,” which the defendants admit had not been the
focus of earlier publicity around the dangers of Johnson & Johnson’s baby
powder.”

What about commercial advertising or promotion? The
complaint plausibly alleged that the defendants made their statements “in order
to influence their own customers—plaintiffs’ attorneys—to hire them to provide
expert opinions in tort litigation.” Here, the court stretches—it doesn’t go
through the caselaw on identifying commercial advertising or promotion, but
instead says that the “impli[cations]” of the article suffice to make it plausibly
advertising: “something like ‘we will testify that we have identified 75 more
people with mesothelioma who have no known asbestos exposure except to talc.’” That
seems to be in tension with most of the false advertising cases about
scientific studies as such, where for-profit companies subsidized studies that
would allegedly promote their own products. Still, the
court understood this as a limiting principle: the statements were only
actionable to the extent that they were about the defendants’ own litigation
services.

[This workaround has logical flaws of its own: “commercial
advertising and promotion” is not an element of statutory standing, as the
court assumes, but a separate requirement. If an advertiser, in the course of ordinary advertising for a noncompeting product, randomly falsely disparaged an innocent
unrelated product, I think Lexmark would allow that claim. The statutory
standing issue is whether the advertising proximately caused the harm, not
whether the harm came from the part of the message that most directly served
the advertiser’s interests. That’s one reason why we should police the
definition of “commercial advertising or promotion” and not treat scientific
articles as such in most cases.]

Anyway, doing it the court’s way: LLT had statutory standing
to bring its Lanham Act claim only if the defendants’ statements “are construed
to be about the defendants’ own litigation services.” But the complaint failed
to allege that those statements—that they’d testify for plaintiffs—were false.

Injurious falsehood/product disparagement/trade libel: under
New Jersey law, a plaintiff must allege (1) publication (2) with malice (3) of
a false statement of fact (4) about the plaintiff’s product or property (5)
that causes special damages. Publication and malice were adequately pled, the
latter by alleging that defendants were informed in litigation about individual
study subjects’ non-talc asbestos exposures or had access to the same
information LLT used to demonstrate the alleged falsity of the defendants’
statements.

The court found that the statements at issue were statements
of fact, not nonactionable opinion. They were clearly not figurative speech or
rhetorical hyperbole, like name-calling, “which cannot reasonably be understood
to be meant literally.” They were verifiable “because a factfinder can
determine, based on proof at trial, whether any of the 75 study subjects had
non-talc asbestos exposures that were ‘known’ to the defendants at the time
they published the article, and whether any of the 75 subjects were common to
the defendants’ study and the earlier study.” “While the Court takes seriously
the ‘risk [of] chilling the natural development of scientific research and
discourse’ that can arise from critiquing scientific opinions as though they
were verifiable facts, it also has a duty to make all reasonable inferences in
favor of the non-moving party at this stage of the litigation.” Thus, a jury “could
verify the statements by deciding whether the defendants subjectively knew
about non-talc asbestos exposures among the study subjects” and whether the
subjects of their study were “additional” to the subjects in the previous study.

Moreover, “statements are not protected solely because they
appear in a peer-reviewed journal.” “What matters is whether the facts are
adduced through a scientific method, or whether they exist independent of the
scientific process.” Defendants’ statements were plausibly construed as
assertions about their own knowledge of the study subjects’ medical histories. “Those
facts pre-existed the scientific process the article describes—in fact, they
were discovered through litigation, not through any scientific method.”

And this was a claim about LLT’s product even without
specific references to J&J, because LLT plausibly alleged that Johnson
& Johnson’s talc-based products were “the leading brands among a discrete
and limited number of cosmetic talc products in the market” and “maintained
well over a majority of the market share for talc powder products in the United
States.” Thus, “a consumer who learned of the defendants’ statements would
understand the defendants to be calling into question the safety of Johnson
& Johnson’s products.” The court expressed some interest in the argument
that the allegedly false statements were “about the study, not about the
talc-based products the study targets—that is, in saying they had 75 new
subjects with no known non-talc asbestos exposure, the defendants were merely
describing their data set, not commenting on the safety of any talc-based
product.” But “it is reasonable at this stage to construe the allegedly false
statements not as statements about the defendants’ method or assumptions, but
as conveying the thrust of the whole publication—which is squarely about the
safety of talc-based products like Johnson & Johnson’s.”

Special damages: The complaint didn’t identify specific
customers Johnson & Johnson lost as a result of the defendants’ statements.
But special damages are not extra-specific damages; they are simply “the loss
of something having economic or pecuniary value.” It was enough to plead “loss
of sales and customers” and “irreparable harm to its commercial reputation and
goodwill.” [Lots of courts disagree about this, but I haven’t dived into the
Virginia cases enough to see if Virginia is special.]

from Blogger http://tushnet.blogspot.com/2025/02/j-talc-subsidiary-can-bring-trade-libel.html

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LinkedIn connection supports right of publicity claim for otherwise generic word

Posted on February 14, 2025 by rtushnet

Joel E. Cape, PLC v. Cape Law PC, — F.Supp.3d —-, 2024
WL 4839370, NO. 5:24-CV-5104 (W.D. Ark. Nov. 20, 2024)

The right of publicity claim in this case seems to hang on a
LinkedIn connection. Joel Cape opened his law firm in 2013 under the trade name
“Law Firm of Joel E. Cape, PLC,” but shifted in 2016 to “Cape Law Firm, PLC.”

In mid-2022, “Cape Law PC” incorporated in Arizona and launched
an interactive online platform using the marks “CAPE” and “CAPE LAW.” “Despite
various marks and online statements claiming that CLP is a law firm, … it is [allegedly]
actually a legal referral service that matches customers in need of legal
services to attorneys that CLP contracts with.”

By January 2023,

Joel Cape began receiving phone
calls and emails at his firm from frustrated and confused customers who
believed they had hired him to be their attorney when, really, they had signed
up with CLP. … The most common complaints Joel Cape received from customers of
CLP were: (a) the customer’s credit card had been charged without
authorization; (b) the customer paid a fee and received no legal services; (c)
CLP failed to appear in court or provide correct dates for court appearances;
(d) the customer had a poor case outcome, such as dismissal; and (e) CLP failed
to communicate or update the customer.

Joel Cape pled that his firm received over 1,000 calls from
confused CLP customers, expressing frustration, seeking refunds, or attempting
to cancel the monthly payments. Also,

CLP customers have expressed their
dissatisfaction by posting google reviews intended for CLP on Plaintiff’s
business’s listing with comments such as “this is a scam do not give them your
credit card info,” “[t]hese people are not lawyers,” and “DO NOT hire them.”
Disgruntled customers have also filed complaints against Plaintiffs with the
Better Business Bureau, attributing CLP’s actions to Joel Cape and his law
firm.

Joel Cape pled non-consumer confusion too: “When CLP has
sent demand letters, some of the responses have been sent back to Joel Cape and
his firm. Additionally, corporate recruiters and employment agencies have
contacted Joel Cape when attempting to respond to CLP’s job postings.” Allegedly,
“[p]art of the problem is that CLP’s website makes it difficult to find the
name of an actual attorney that works for them. CLP does not provide accurate
contact information for its attorneys to its customers or recipients of demand
letters, leaving such parties to contact Joel Cape and his firm in error.”

CLP allegedly launched a Google advertising campaign using
the mark “CAPE LAW FIRM.” And its LinkedIn page lists Joel Cape as an employee—“a
mistaken association that CLP has failed to correct.”

The court found that Joel Cape successfully pled false
advertising, despite some problems with proximate causation: “for 12(b)(6)
purposes, the Court finds it plausible that the alleged reputational injury
flows directly from CLP’s alleged deception that caused consumers to withhold
trade from Joel Cape Entitities.”

Right of publicity: Cape seems like a generic word that
wouldn’t itself violate the right of publicity even if there were a successful
trademark/false advertising claim. Here, the LinkedIn page was key: “the Court
finds it is plausible that CLP associated its page with that of Joel Cape,
thereby using his ‘readily identifiable’ name and likeness for purposes of
advertising and soliciting business.” Although CLP argued that such
associations on Linkedln are within the individual’s control, not the
affiliated organization’s, and submitted outside evidence of Linkedln’s
functionality in support, that was not appropriate on a motion to dismiss. “The
Linkedln affiliation provides the identifying context that might otherwise be
lacking had CLP only used the generic word ‘cape,’ with no other connection to
Joel Cape.”

Finally, the court dismissed Joel Cape’s negligence claim.
The court declined to find that CLP owed a duty of care to the firm to not use its
mark in a confusingly similar manner for purposes of negligence law. “[T]his
Court does not see how § 1125(a)(1)(A) imposes a duty of care in the context of
negligence.”

from Blogger http://tushnet.blogspot.com/2025/02/linkedin-connection-supports-right-of.html

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gray market material differences must come from products/warranties, not supply chain alone

Posted on February 14, 2025 by rtushnet

Toyota Motor Sales, U.S.A., Inc. v. Allen Interchange LLC, 2025
WL 465815, No. 22-cv-1681 (KMM/JFD) (D. Minn. Feb. 11, 2025)

This discovery dispute says some interesting things about
gray market goods. “This lawsuit involves claims and counterclaims between
competitors selling Toyota parts to Toyota dealers in the United States.” Toyota
objected to Allen’s importation and sale of Toyota parts in the United States. “Most
parts in Toyota vehicles do not have aftermarket substitutes from independent
third parties.… Toyota allegedly sells parts in the U.S. at significantly
higher prices than the prices charged by other Toyota entities elsewhere in the
world.” Arbitrage thus occurs.

Allen maintained that the parts it sold bore the same part
numbers and were identical in design, function, and quality as Toyota parts
that are intended for sale in the U.S. market. Toyota claimed that the parts
have material differences from the “genuine” parts it sells, such as the
absence of a manufacturer-backed warranty, the shipping of the parts, and the
handling of “outdated” parts.

Toyota sought evidence about Allen’s supply chain and argued
that this was relevant to showing material differences in the parts. “[A]
material difference is a difference that a consumer would find relevant in
deciding to purchase one item over the other, and courts have established this
to be a low threshold.” The main alleged material differences were differences
in warranty coverage and differences in “supply chain and/or quality control
measures.”

The court accepted Allen’s argument that material
differences have to relate to the products themselves (which could include
warranty coverage). Toyota argued that if “Allen plans to argue that the Toyota
Branded Parts it sells are covered by some type of ‘Manufacturer Warranty’ as
advertised to the consuming public, Toyota is entitled to know what warranties,
if any, are offered by Allen’s suppliers.” “But the Court does not see how
Allen’s suppliers would have any documents relevant to whether Allen provides a
warranty to its customers.” The potential warranty sources were Allen, its
customers, or Toyota itself. “Suppliers merely divert the parts from an
authorized Toyota supply chain to Allen, and whether the warranty that Toyota
provides with its parts is valid is entirely up to Toyota and how the language
of its warranty addresses parts acquired through the gray market.” Thus, the
information Toyota sought about supplier warranties was irrelevant.

In addition, the court concluded, “supply chain differences
or differences in quality control measures in and of themselves” can’t be a
material difference:

Certainly, supply chain or quality
control differences could cause material differences between parts, but
material differences in the products must be observed in the products
themselves. The Court does not recognize the validity of a claim of material difference
that is premised solely upon differences in the processes by which parts are
made, supplied, checked for quality, etc., but without a resultant detectable
difference in the product itself. For the purposes of false advertising claims,
the issue that the parties must address is whether there are material
differences between the products, not why any such differences may exist. Any
material differences that result from differences in these processes can be
discovered by inspecting and testing the parts themselves.

In addition, the court declined to require Allen to produce
documents seeking “All communications to or from [Allen] mentioning, involving,
relating to, or otherwise concerning counterfeit automotive parts since January
1, 2016, to the present,” and “All documents Defendants reference or rely on in
determining whether or not the TOYOTA BRANDED PARTS sold by Defendants are or
are not counterfeit.” Toyota argued that these documents are relevant to
Allen’s counterclaim challenging the veracity of Toyota’s statements to dealers
that counterfeit parts are often intermingled with gray market parts. And it
argued that a 2018 email to a Toyota employee stating that counterfeit
headlamps were delivered to Allen from a company in Dubai provided further
support for its position.

Allen argued that counterfeiting wasn’t at issue in this
case (filed in 2022, after Toyota received the email). The court agreed. “The
logical chain from an email alleging that Allen once received a delivery of
counterfeit headlamps to relevance to this case about gray market parts is a
long one, in which Toyota’s argument skips multiple important links… That Allen
questions the veracity of Toyota’s intermingling statements does not create
sufficient relevance to open discovery in this case to counterfeit parts. All
Toyota has shown the Court is that Allen probably, once, took delivery of
counterfeit headlamps.”

from Blogger http://tushnet.blogspot.com/2025/02/gray-market-material-differences-must.html

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delay bars ROP/Lanham Act claims when Facebook use was open and plaintiffs were aware of lots of unauthorized use

Posted on February 14, 2025 by rtushnet

Davalos v. Baywaych Inc., 2024 WL 5344434, — F.Supp.3d
—-, No. 21-11075-NMG (D. Mass. Sept. 30, 2024)

The caption seems to be a typo, but it’s one of the many
right of publicity etc. cases by models against adult clubs that used their
images in online ads. The defendant here gets summary judgment on laches.

The four images in dispute were posted on defendant’s
Facebook page between August, 2013, and November, 2015. Plaintiffs sued in
2021. The court certified a question to the Massachusetts Supreme Judicial
Court:

Under what circumstances, if any,
is material publicly posted to social media platforms “inherently unknowable”
for purposes of applying the discovery rule in the context of defamation, right
to publicity, right to privacy and related tort claims?

The SJC answered:

Claims for defamation, violation of
the right to privacy, violation of the right of publicity, and related claims
that arise from material posted to social media platforms accrue when a
plaintiff knows, or reasonably should know, he or she has been harmed by the
defendant’s publication of that material. Given how “vast” the social media
universe is on the [i]nternet, and how access to, and the ability to search
for, social media posts may vary from platform to platform and even from post
to post, that determination requires consideration of the totality of the
circumstances regarding the social media posting, including the extent of its
distribution, and the accessibility and searchability of the posting. The
application of the discovery rule is therefore a highly fact-specific inquiry,
and the determination of whether plaintiffs knew or should have known that they
were harmed by a defendant’s post on social media must often be left to the
finder of fact. If, however, the material posted to social media is widely
distributed, and readily accessible and searchable, a judge may determine as a
matter of law that the discovery rule cannot be applied.

Among other things, the SJC thus clarified that the
“inherently unknowable” standard for the discovery rule is, under contemporary
law, more accurately stated as a “knows or reasonably should know” standard.

The state tort claims were governed by a three-year
limitation period. Under the discovery rule, a statute of limitations is tolled
and will not begin to run until “[T]he plaintiff discovers or with reasonable
diligence should have discovered that (1) he has suffered harm; (2) his harm
was caused by the conduct of another; and (3) the defendant is the person who
caused that harm.”

What a plaintiff knew or should have known is generally a
fact question, but the burden is on the party asserting the discovery rule to
demonstrate that an action is timely.

Plaintiffs here either stated that they were either unaware
of the Facebook posts at issue until their attorney brought the posts to their
attention in 2021 or could not recall how they became aware of the posts. Without
information about how many people actually viewed the Facebook page at issue/the
specific posts and without information about likes or shares, it was impossible
to determine how widely circulated they were. Even wide circulation itself
would not inherently prevent the application of the discovery rule. But,
relatedly, there were not allegations the posts were ever concealed, kept
secret, or restricted. “In fact, the purpose of the posts as advertisements for
Club Alex indicates that they were meant to be circulated, not hidden, and
plaintiffs offer nothing to rebut that inference. Even if the posts were in
some way restricted and not readily accessible to plaintiffs, moreover, that
would not be sufficient in and of itself to excuse plaintiffs’ failure to
discover them.”

Most importantly:

[T]he facts leave no doubt that
plaintiffs, all of whom license their images as part of their profession, had
good reason to know that people were misappropriating their likenesses on
social media. Indeed, plaintiffs have all been involved with numerous lawsuits
related to other instances of misappropriation in the years following Club
Alex’s posts. Plaintiffs were able to discover and act upon misappropriations
in other cases and offer no reason why these posts were any different or less
discoverable than others. … [T]he frequency with which plaintiffs have had
their likenesses misappropriated renders reliance on the discovery rule
suspect.

A footnote referred to Meta’s “facial recognition technology
that, at all times relevant to this case, could have aided in such searches.”

True, social media is vast, with more than 350 million
images uploaded to Facebook each day in 2013, but “[t]he fact that the allegedly
misappropriated posts occurred amid a vast sea of Facebook posts does not …
render plaintiffs’ lack of knowledge objectively reasonable. Nor is the fact
that the posts may have required more than a perfunctory search to locate on
Facebook enough to invoke the discovery rule’s protections.” Thus, there was no
genuine dispute of fact on tolling the limitations period, and the state law
claims were time-barred.

Lanham Act claims: instead of a limitations period, the
Lanham Act uses laches, generally borrowing the most relevant state law
limitations period to determine whether laches is presumed or not.  Plaintiffs argued that laches shouldn’t apply
to deliberate infringement, but only the Second Circuit agrees. Other circuits
consider deliberate infringement to be merely one factor in considering when to
apply laches, a rule that “better align[s] with the equitable nature of laches
than the Second Circuit’s brightline test.”

Here, the parties didn’t dispute that the most analogous
statute of limitations is drawn from the Massachusetts Consumer Protection Act,
with a four-year limitations period. Thus, laches was presumed. Laches requires:
1) a lack of diligence by the non-moving party in asserting their claims and 2)
prejudice to the party asserting the defense. Plaintiffs failed to create a
material dispute about reasonable diligence, for the reasons given above. “The
only substantive piece of evidence plaintiff has proffered to the contrary is
an affidavit of a legal secretary who claims that successful image searches can
take ‘days or weeks to complete,’ but that does nothing to explain why an over
eight-year delay is reasonable here.” The court again pointed to plaintiffs’ “host”
of other lawsuits. “[T]he extent to which plaintiffs’ likenesses have allegedly
been misused is sufficient to put them on notice.”

And for prejudice, the original club owner died in 2018. “Had
plaintiffs brought their claim sooner, that individual would have had the
opportunity to present potentially salient details about his intent and the
likelihood of confusion the images may have caused.” Also, plaintiffs relied on
a 2023 survey; defendants argued that, if plaintiffs had sued earlier, “it
would have been possible to assess this issue based on potential clientele at
the time the posts were made rather than a decade later. That deterioration in
the face of delay is precisely the kind of prejudice the First Circuit has
found to be meaningful.”

Given the totality of the circumstances, the court found
laches even assuming the infringement was willful. A claim brought more than
eight years after the final Facebook post was such a “lengthy” delay that it
was easier to find prejudice.

from Blogger http://tushnet.blogspot.com/2025/02/delay-bars-roplanham-act-claims-when.html

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Dastar bars claim against allegedly false copyright/licensing claims used to extract money from public domain works

Posted on February 10, 2025 by rtushnet

McKenzie v. Artists Rights Soc., Inc., 2024 WL 4803870, —
F.Supp.3d —-, 2024 WL 4803870, 22 Civ. 1619 (JHR) (S.D.N.Y. Nov. 15, 2024)

McKenzie is an art publisher that worked with the late
artist Robert Indiana to create and produce two images: one called “LOVE” and
the other, “HOPE.” In the 1960s, the LOVE image “gained global popularity
through display on commercial products, paintings, and outdoor sculptures,” all
published without notice and thus in the public domain. 

LOVE sculpture, Wikimedia

HOPE sculpture, Wikimedia

In 2007, Plaintiff and Indiana created the HOPE image, “similar to the LOVE image,” which began competing with the LOVE image. Indiana didn’t claim copyright in the HOPE image either.

Nonetheless, Indiana entered into two contracts with a defendant-linked entity, Morgan, in the 1990s, pursuant to which Indiana purported to convey to Morgan all “copyright, trademark, and other rights” in LOVE—in addition to “the exclusive right to reproduce, promote, and sell” the LOVE image, “produce and fabricate,” own, and sell sculptures of LOVE, and the purported right to sue for copyright infringement of the LOVE image.

McKenzie alleged that “Defendants well knew” and “certainly know now” that LOVE was not, in fact, protected by copyright. Nevertheless, “Defendants … combined together for at least two decades to fraudulently represent that they had and still have a copyright on the LOVE image” and engaged in false licensing to the tune of millions of dollars, harming plaintiff, which is authorized to “produce and market the HOPE [i]mage” and “is in direct competition with the LOVE image.”

The RICO claims failed because they were RICO claims (and untimely).

Lanham Act: McKenzie alleged that Defendants made false representations (1) in violation of § 1125(a)(1)(A), by claiming that “Morgan and ARS ow[n]ed the copyright to the LOVE image,” and (2) in violation of § 1125(a)(1)(B), by claiming “that ARS was authorized to license said copyright.” Neither survived Dastar. Cognizable misrepresentations regarding the “origin of goods” under § 1125(a)(1)(A) “refer[ ] to the producer of the tangible goods that are offered for sale, and not to the author of any idea, concept, or communication embodied in those goods.”

Although Dastar is about authorship, it also applies to claims “for false representation of ‘affiliation’ between the author and a distributor of communicative products,” even if through “a false assertion of license.” That was the essence of McKenzie’s complaint: Defendants “deceive[ ] the general public and the relevant market” that they have a copyright to LOVE—i.e., that Indiana (or his estate) provided them with the right to license products bearing the LOVE image.

What about false advertising? “Statements about whether a defendant has the right to use or distribute a work are not considered material ….” Thus, there was no actionable misrepresentation.

Even without that, Lexmark barred the claim. To allege causation, McKenzie pled that “HOPE and LOVE, as images, have no other competition than each other.” In addition, McKenzie alleged that defendants’ use of “the false copyright assertion in relation to its many licenses of the LOVE image has greatly enhanced the revenues derived from the LOVE image, and made it appear more valuable than the HOPE image given its supposedly copyright-protected status and the extensive public visibility it has acquired.” But McKenzie failed to allege that “consumers [e.g., potential licensees] were deceived by the fraudulent [copyright]” and “also that that deception” is what “led consumers to ‘withhold trade’ ” from McKenzie.

Plus, laches barred the claim.  Although “[i]n general, the defense of laches is not raised in a motion to dismiss[,] …. in certain circumstances, when the defense of laches is clear on the face of the complaint, and where it is clear that the plaintiff can prove no set of facts to avoid the insuperable bar, a court may consider the defense on a motion to dismiss.”

Although McKenzie averred that he “was unaware of the fraudulently concocted use of a false assertion of a ‘copyrighted’ LOVE image until … February 25, 2020,” when one defendant was deposed in connection with a separate lawsuit, other allegations—including that, since 1999, defendants made “repeated” and “continuous” false assertions of copyright—undermined this position. He admitted that, “[b]efore the Hicks deposition [in 2020], [he] had seen the public advertising, observed that the large auction house and others all referred to the LOVE image as being copyrighted to Morgan and thus he believed … that LOVE was copyrighted to Morgan.” At some point prior to Indiana’s death, he “notice[d] that virtually the entire artworld was marketing the LOVE image with the assertion that it was subject to a Morgan ‘copyright.’ ” He also alleged that, in 2007, thirteen years before the 2020 deposition, “Indiana would not authorize” him to produce a LOVE portfolio because Indiana “believed that Morgan had a copyright on the LOVE image based upon Morgan’s fraudulent representations to him that they had acquired one through his agreements with them.” Thus, he “knew” “or should have known” of any Lanham Act claim by no later than 2007. “The copyright registration status of the LOVE image was publicly available information that Plaintiff could, and ultimately did, uncover on his own.”

Thus, the delay in filing suit was inexcusable, and McKenzie didn’t rebut the defendants’ claims of prejudice based on their having continuously licensed LOVE since 1999 and the loss of evidence due to Indiana’s death.

from Blogger http://tushnet.blogspot.com/2025/02/dastar-bars-claim-against-allegedly.html

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literal falsity can exist even if there’s a strained “truthful” reading

Posted on February 6, 2025 by rtushnet

Kopp Development, Inc. v. Metrasens, Inc, No. 1:21cv1216, 2025
WL 371303 (N.D. Ohio Feb. 3, 2025)

Metrasens and plaintiff KDI compete in the market for
ferromagnetic detectors, used to detect magnetic items (such as iron) on a
person’s body or clothing before the person enters a room containing an MRI
scanner. In 2018, Metrasens purchased a Kopp Ferralert Solo unit from a
third-party located in Singapore and provided it, along with a Metrasens
Ferroguard Screener unit, to a company called Intertek Testing &
Certification. Intertek then issued a test report identifying the units by serial
number and photos. The report concluded that “[t]he results of the testing
showed that the Metrasens Ferroguard Screener had a significantly higher
detection rate than the Kopp Ferralert Solo across the range of typical target
objects.”

Metrasens then created a summary, which said in relevant
part:

Ferromagnetic detection systems
(FMDS) are not all the same. In an independent testing-laboratory comparison of
570 presentations of 9 typical risk items, there was a significant difference
in the probability of items being detected, with Ferroguard Screener detecting
96% of presentations for the complete risk-item set, compared with 75%
probability of detection for Kopp Ferralert Solo.

…

KEY FINDING

For smaller risk-Items, Ferroguard
Screener proved significantly more effective at detecting threats to patient
and staff safety and operational performance (94% of risk items detected) than
the Kopp Ferralert Solo (56% of risk items detected).

…

TESTING METHOD

– Independent testing-laboratory  

– Standard, new, 2018 FMDS patient
screening systems …

There were also comparative charts.

KDI’s owner testified that the Ferralert Solo unit that
Intertek tested was an early prototype from when the product was first released
in 2012, and that KDI had made several improvements to the Ferralert Solo
product since 2012. In late 2020, KDI told Metrasens that the Intertek unit
tested was an “old” version. Metrasens responded that it was unable to confirm
the manufacturing date but offered to resubmit the products if KDI provided
evidence that current versions were modified/upgraded. KDI responded that, if
Metrasens hadn’t confirmed the manufacturing date, it objected to the claim that
it tested “Standard, new 2018 FMDS patient screening systems.”

Previously, the court held that there was a genuine issue of
material fact as to whether Metrasens’ advertisements proximately caused KDI to
lose business from the University of Pittsburgh Medical Center, one of KDI’s
existing customers, which also created a genuine factual issue on corresponding
tort claims.

Although it excluded KDI’s proposed expert on damages, the
court concluded that KDI could try to show evidence of damages with reasonable
certainty at trial, including by showing the dollar value of the specific lost
sales to UPMC or other sales evidence.

Here, the court addresses additional briefing it sought on when
a presumption of money damages could apply.  Deception and injury are both components of causation.
Notably, “the sort of proof of these elements a plaintiff must show varies
depending upon whether damages or injunctive relief is sought.” Where the “rigorous”
requirement of literal falsity is met, deception may be presumed; otherwise “[t]here
must be evidence that a ‘significant portion’ of the consumer population was
deceived.”

For injury, a plaintiff must generally prove damages, but they
may be presumed in cases of willful deception where the plaintiff was the target
of comparative advertising. And it is a rebuttable presumption. The court expressed
some doubt that this presumption only applies to literal falsehoods—since it’s
about the injury component, it doesn’t obviously require literal falsity if there’s
willfulness & deceptive comparative advertising—but the parties assumed it
to be the case, and anyway this was a literal falsity case.

Literal falsity: Metrasens argued that it didn’t outright
say that the unit was made in 2018, just bought in 2018 and not used (new),
which was true. But in context, “the meaning of the challenged statement is not
ambiguous.” “[A]ny reasonable consumer of MRI screeners would interpret the
statement ‘standard, new, 2018 FMDS patient screening systems’ as meaning that
the KDI product involved in the testing was (1) standard; (2) new; and (3)
manufactured and sold by KDI in 2018.” Although it quoted the (really
misleading, ironically) Seventh Circuit statement that a literally false
statement is “bald-faced, egregious, undeniable, or over the top,” the court explained
that Metrasens was not required to explicitly state the date of manufacture to
engage in literal falsity. In context of a guide allowing hospitals to compare
the performance of the competing products on the market, “new, 2018” could not
reasonably be interpreted to mean purchase date.  

However, whether this was true was a disputed factual
question. KDI’s witness testified that he could identify it as a 2012 prototype
because of its color and serial number. On the other hand, (1) Metrasens bought
the KDI Ferralert Solo “on the open market as per a customer could have bought
it;” (2) the model number of the KDI Ferralert Solo that Metrasens bought
matched the model number of the KDI Ferralert Solo that was being sold at the
time; (3) the price that Metrasens paid for the Ferralert Solo fell within the
market price range for that product at the time; and (4) the box, packaging,
and instruction manuals of the KDI Ferralert Solo purchased by Metrasens were
“pristine.” The jury would have to decide. Presumption of damages: KDI argued
that literal falsity plus comparative advertising, without bad faith, sufficed
to presume damages. There’s logic to this—it’s not the bad faith that makes the
damage so much more likely, it’s the direct comparison! But the court disagreed
because it read the precedent to require literal falsity, bad faith, and comparative
advertising.

KDI also argued that Metrasens acted with “recklessness
amounting to willfulness” when it (1) purchased the Kopp Ferralert Solo product
despite knowing that the supplier “had been known in the past to provide old
stock;” (2) “willfully put out an ad” saying that the KDI product was a
“Standard, new, 2018” model “with no support to label it as such”; and (3) decided
to “keep up the campaign and continue to publish after express notice that the
message was literally false.”

Even if Metrasens purchased the KDI Ferralert Solo without
verifying the manufacture date and despite knowing that the supplier had
provided “old stock” in the past, its witness testified, at length, to the many
reasons why Metrasens reasonably believed that the KDI Ferralert Solo it
purchased for Intertek’s testing was, in fact, KDI’s current 2018 model. This
too created a jury question.

from Blogger http://tushnet.blogspot.com/2025/02/literal-falsity-can-exist-even-if.html

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ambiguity over who was first African-American bourbon distiller in Kentucky dooms false advertising claim

Posted on February 4, 2025 by rtushnet

Victory Global, LLC v. Fresh Bourbon, LLC, 2025 WL 366626,
No. 5:21-62-KKC (E.D. Ky. Jan. 31, 2025)

After dealing
with a motion to dismiss, the court now grants summary judgment in this
case brought by one African American-owned bourbon seller against another.

Victory operates as Brough Brothers, which claims it was the
first “African American owned bourbon distillery in the Commonwealth of
Kentucky,” with the requisite licenses to operate a distillery by September
2020. By December of that year, it had distilled bourbon and filled its first
bourbon barrel in a leased Kentucky facility. Brough Brothers alleged that
Fresh Bourbon falsely advertised that Fresh Bourbon is the “first black-owned
bourbon distillery in Kentucky,” and made other related claims. Fresh Bourbon didn’t
lease a facility until early 2022 and did not obtain the required federal and
state licenses to operate a distillery until September 2022. It began
distilling its product at this facility in late 2022.

However, Fresh Bourbon submitted evidence that, in 2018, its
representatives were “distilling” bourbon that it sold under the name “Fresh
Bourbon” at Hartfield & Company Distillery in Paris, Kentucky, even though
it didn’t own or operate its own distillery and could not legally have done so.

Challenged statements: 1) Fresh Bourbon was the “first
black-owned distillery in Kentucky”; 2) Fresh Bourbon is the “[f]irst
black-owned bourbon distillery coming to downtown Lexington” (not shown to be
false); 3) “There had been no African Americans producing bourbon that weren’t
slaves” until Fresh Bourbon did it; 4) Fresh Bourbon is “the first bourbon
developed grain to glass by African Americans in the state of Kentucky”; and 5)
Fresh Bourbon employed Kentucky’s “first African American Master Distiller in
Kentucky since slavery.”  

Fresh Bourbon argued that it didn’t say that it was the
“first black-owned distillery in Kentucky” but that it was “considered by the
Commonwealth of Kentucky to be the first black owned distillery in Kentucky,” given
Kentucky Senate Resolution No. 176, which stated, “The Fresh Bourbon Distilling
Company is considered to be the first black-owned bourbon distillery in
Kentucky.” An online news article made the “first black-owned distillery”
statement, but not quoting any Fresh Bourbon representative, and Fresh Bourbon
wasn’t shown to have used the article in any marketing. Thus, the actual
statement wasn’t literally false, given the Senate resolution, even if the
resolution was drafted by Fresh Bourbon’s representatives.

For the “producing” and “developing” statements, Brough Brothers
argued that Fresh Bourbon’s “minimal contributions” to producing bourbon at
Hartfield couldn’t constitute producing or developing bourbon. The court,
however, found the statements “at least ambiguous as to the degree of
involvement of the actor.” And the owner and master distiller of Hartfield
testified that Fresh Bourbon representatives were eventually engaged in all
aspects of the bourbon-making process, eventually had “free reign in the
building,” did “everything” in the bourbon-making process without anyone from
Hartfield present, and mashed and distilled the bourbon. The statements at
issue didn’t claim to have a distiller’s license and permit. Plus, Brough
Brothers’ own expert testified that it was “impossible to verify” whether Fresh
Bourbon representatives were the first African Americans to make bourbon since
slavery.

Similarly, the statement that Fresh Bourbon employed
Kentucky’s “first African American Master Distiller in Kentucky since slavery” was
“either ambiguous or an opinion, which cannot be the basis for a Lanham Act
false advertising claim.” Apparently “Master Distiller” has no set definition.
Brough Brothers’ own expert testified that the term has no “legal definition”
and is “basically” a matter of opinion.

Even assuming that Brough Brothers had shown falsity, it
still failed on materiality. Even with literal falsity, materiality must be
shown.

If a company makes a literally
false statement, then it can be presumed that the consumer who receives the
statement was deceived. But whether that statement had any bearing on the
consumer’s buying decision is a different issue…. For example, if a company
advertises that its shampoo was manufactured in New Jersey, but it was actually
manufactured in Pennsylvania, then it can be presumed that consumers were
deceived about where the product was manufactured. But whether the place the
shampoo was manufactured means enough to influence consumers’ buying decisions
requires some evidence.

The fact that both parties used “first black-owned
distillery” in their marketing campaigns was insufficient. Materiality
“requires factual evidence concerning the relevant consumer market and the
perspective of the potential customer in that market.”

State law claims also failed.

from Blogger http://tushnet.blogspot.com/2025/02/ambiguity-over-who-was-first-african.html

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materiality surveys may not need controls

Posted on February 3, 2025 by rtushnet

In re Keurig Green Mountain Single-Serve Coffee Antitrust
Litig., No. 14-MD-2542 (VSB), 2025 WL 354671 (S.D.N.Y. Jan. 30, 2025)

This is a ruling on 19 motions to exclude expert testimony
in this case, which is mostly an antitrust case; I will focus only on some
false advertising-relevant rulings.

Keurig sought to exclude Hal Poret’s testimony, offered primarily
for the purpose of showing that Keurig statements misled consumers into
believing that its 2.0 Brewer worked only with Keurig’s K-Cups, and to provide
an additional basis for one plaintiff’s false advertising damages expert,
to rely on when estimating Lanham Act damages resulting from Keurig’s
incompatibility statements.

The court started with a presumption favoring the
admissibility of surveys. Poret didn’t test the exact language Keurig used, but
that wasn’t fatal.  Although surveys
“must ‘be designed to examine the impression presented to the consumer,’ ” “there
is no obligation that the survey use the exact language challenged, or mirror
the advertising conditions exactly.” Instead, Poret interviewed consumers about
“what they did and why,” addressing the broader question of why consumers had
not purchased competitor’s single-serve cups. His choice not to show the
allegedly misleading ad campaign didn’t render the entire survey unreliable, since
his methodology was well accepted in the survey field.

It was also not fatal that the survey lacked a control
group. “Control groups are not the universal and inflexible requirement of
survey research as Keurig seeks to portray them.” They’re useful when the
survey is trying to determine the source of attitudes or beliefs or behaviors,
or to “test directly the influence of [a] stimulus” such as a commercial. But “a
control group may not be necessary if the risk of simply recording pre-existing
values is not as great. For example, “a control group is not required for a
survey that purports only to understand what developers perceive as relatively
more or less important factors in their decision-making process.” That was the
case here.

Likewise, Keurig’s arguments that the questions were biased
and leading were insufficient to affect admissibility. The questions were
closed-ended, but that can be legitimate. Certain respondents were asked to
choose from a list of reasons that they did not purchase unlicensed pods. Some
of these choices favored plaintiff’s position (e.g., “I heard or read that the
Keurig 2.0 brewer works only with Keurig brand or licensed pods”) but some did
not (e.g., “I prefer the taste of Keurig or Keurig-licensed brands.”). “Determining
consumers’ preferences on these kinds of clearly defined alternatives is the
kind of task for which close-ended questions are frequently more appropriate.”

The court also rejected the criticism that the universe was
unrepresentative because Poret “imposed near-equal age distribution within his
sample survey,” creating an underinclusive universe of respondents whose ages
matched neither the population of Keurig users nor the population of the United
States. The survey population of interest was Keurig 2.0 Brewer owners, which
was appropriate.

Another plaintiff expert was Sarah Butler, who was offered
to testify both on Keurig’s testing of competitor cups and her own surveys.
Keurig objected to the first, because it argued that her “training is in
consumer surveys, not laboratory testing of physical products.” But she was
qualified to opine on whether Keurig’s comparisons between K-Cups and
competitive cups adhered to “specific research standards and methodology.”
Butler was an expert on survey research, market research, sampling, and
statistical analysis. Her evaluation related to research standards and
methodology generally, and not merely to “product testing,” and thus she was
qualified to opine on whether the methodology of a research study allows for
statistically valid conclusions to be drawn. Her non-survey testimony concerned
whether the cup testing conducted by Keurig followed “generally accepted
research standards for comparative product tests—such as objectivity,
sufficient sample size, use of control groups where appropriate, and testing
protocols—necessary for reliable statistical analyses,” and therefore aligned
with her experience, training, and expertise.

As for her surveys—one of home users and one of out-of-home
users like office users—the court also allowed them. For the home users, Butler
made adjustments to the control group to ensure that “respondents who had
previously been exposed to Keurig’s false advertising campaign were controlled
for.” In devising her survey, Butler noted her concern that “the rates in the
Control group may be driven by past exposures to statements made by Keurig
about the unreliability of Competitive Cups.” “Mitigating the impact of
preexisting beliefs on survey feedback is a sound objective in survey research.
Indeed, failure to control for the impact of preexisting beliefs can render a
survey unreliable.” Where a control group without preexisting beliefs is
unavailable, “social scientists sometimes employ statistical weights or
adjustments to the control groups. … Given the threat that preexisting views
pose to survey validity and the broad use of far more intensive methods of
control group weighing in modern econometric methods, I do not agree with
Keurig that there is no scientific justification for Ms. Butler’s modification
of the control group.”

For the out-of-home group, Keurig argued that there was no
control group at all, but that survey targeted “individuals responsible for
beverage supplies or contracts with beverage suppliers for their office or
business location to evaluate the impact of Keurig’s relationships with
Distributors[ ] on purchasing behaviors in the Away-From-Home Market.” Thus, it
didn’t seek to test the impact of a particular stimulus or statement on these
individuals, and a control group wasn’t as necessary.

Keurig also objected to questions in the first survey that
it argued created a false dichotomy between “licensed” and “unlicensed” pods as
well as the use of words like “unapproved” that it deemed biased, along with stronger
warranty language than Keurig itself used. Keurig’s rebuttal expert conducted a
survey along its proposed lines which yielded substantially different results.

The court disagreed. Keurig’s own materials used
“unapproved,” so it was fair to ask consumers about that, and the other
questions didn’t suggest answers in an impermissibly leading way. Although
there were differences between “affecting” a warranty and “voiding” a warranty,
“none are so strong that exclusion of the survey is warranted or that it
becomes more likely than not that Ms. Butler’s opinion is unreliable. Although
Keurig’s survey produced different results, this is to be expected—surveys
conducted in different ways produce different results.” Cross-examination was
the remedy.

The court also rejected sample-based criticisms of the
second survey, noting that samples don’t have to be perfect.

Keurig also criticized the use of “recall-based measures”
(i.e., questions about past purchasing decisions) in the first survey, on the
grounds that “[i]t is widely recognized that recall-based measures do not yield
reliable responses.”  “[R]ecall bias,
which recognizes the potential for inaccurate responses due to fading memories
over time,” is a known issue with survey reliability. But that went to weight
rather than admissibility. And asking about aggregate decisions over a long
term is less problematic than asking about very specific things. Likewise,
adding an “I don’t know” option can mitigate the problem, which was done.

from Blogger http://tushnet.blogspot.com/2025/02/materiality-surveys-may-not-need.html

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