Thursday, February 23, 2012

Don't make factual findings on a motion to dismiss

Ramchandani v. Sani, --- F.Supp.2d ----, 2012 WL 556198 (S.D.N.Y.)
Short and sweet opinion; if only more courts thought about standing like this!
The parties sell custom-tailored men's suits that are manufactured for them in Hong Kong to fill orders placed by customers attracted through newspaper advertising and whose measurements are taken by the parties in New York City and elsewhere.  Ramchandani alleged that Sani overstated the nature and quality grades of the fabrics used, producing a substantial competitive advantage by allowing Sani to charge extremely low prices for apparently high-quality goods.  Sani moved to dismiss, challenging Ramchandani’s standing on the ground that Ramchandani hadn’t suffered commercial or competitive injury, because there are so many Hong Kong tailors that he couldn’t have a reasonable basis for believing that Sani’s allegedly fraudulent activities would harm him.
The court pointed out that this was a factual argument, and inappropriate for a motion to dismiss.  “The allegations with respect to the Lanham Act claim are sufficient. Plaintiff's reasons for apprehension seem entirely reasonable to the Court, and that would be so even if there are others threatened with the same or similar harm.”
Likewise, the court rejected the alternate argument that no Lanham Act claim could lie because the alleged misrepresentations fell within the framework of the Wood [I think Wool] Products Labeling Act, which provides no private cause of action.  The court found this contention “entirely unconvincing,” since the point of Section 43(a) was to protect against consumer confusion.

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