Tuesday, December 11, 2012

Importer/sales agent could be liable for false advertising of product

MB Imports, Inc. v. T & M Imports, LLC, 2012 WL 5986454 (D.N.J.)

MB alleged false advertising of a competitor’s lemon and lime juice products, and defendant TrePunti moved to dismiss. TrePunti is the US brokerage sales agent for Eurofood, the Italian manufacturer of the competing juices, Tantillo Sicilian Lime Juice, Tantillo Lime Juice, and Tantillo Sicilian Lemon Juice. TrePunti imports the juices and sells them to defendant Colavita for sale to defendant T&M Imports and defendant Tony Tantillo’s customers. Tony Tantillo uses his persona and name to advertise the products. After discovery, MB amended its complaint to allege that TrePunti collaborated with the other defendants to determine the composition and labeling of the juices sold in the US, and thus they were all responsible for false and/or misleading representations about the composition and quality of the juices, which allegedly caused Safeway to drop MB’s Sicilia juices in favor of Tantillo’s.

As for the substance, MB alleged that independent lab analyses showed that the Sicilian Lime Juice product was mostly lemon juice, with added water and citric acid not found in a pure squeezed lime, thus falsifying its name and ingredient list, which said “Lime Juice (99.97%; Natural Flavor.” After the lawsuit began, the lime juice was renamed Tantillo Lime Juice, and the ingredients now say “Mexican lime juice,” but the front label still says “Product of Italy, Not from Concentrate, and All Natural,” which MB alleged was still misleading because, among other things, the product still contained added water and because it wasn’t from Italy. Similarly, MB alleged that the Sicilian Lemon Juice product was not 99.97% lemon juice, but also had added water and citric acid not naturally found in pure juice from squeezed lemons, and that it had very little juice from Italian or Sicilian lemons.


MB also argued that defendants wrongfully interfered with its business relationship with Safeway, because TrePunti and other defendants met and corresponded with Safeway to wrongfully persuade Safeway to switch, providing Safeway with samples that included the challenged labeling and making false/misleading representations about the juices’ composition and nature, allegedly misleading Safeway to believe that Tantillo products were comparable in nature and quality to Sicilia products.

TrePunti’s role was allegedly significant: it sought Colavito’s approval of the new label, which was forthcoming, and Colavito sought advice from TrePunti about whether the label should indicate that the limes came from Sicily or Mexico.  An email indicated that TrePunti told Colavito to change the back label to say “Product of Mexico” and collaborated on the number of old labels in stock.  TrePunti was also in on an email about the country of origin label and whether to specify “Lime juice from concentration.” Eventually, a TrePunti person directed the others to use lime juice labels specifying the product was made from concentrate.

TrePunti argued that the complaint just lumped all the defendants together and didn’t explain why TrePunti was liable.  Rule 8 doesn’t require detailed factual allegations; the claims against TrePunti were clearly laid out in the complaint and supported by the emails noted above: TrePunti participated in the composition, labeling, importation, distribution and sale of the Tantillo products in question, in its integral role as the United States agent for the Italian manufacturer of Tantillo juices.

The court continued that Lanham Act liability “is assessed at various stages of the product supply chain, including for manufacturers, sellers, or distributers.”  The allegations here asserted that “TrePunti was part and parcel of a supply chain of the product in question, and moreover was integral in the direct decision-making of the labeling and marketing of the product's label.”

The other elements of a Lanham Act claim were sufficiently alleged as well.  The court also sustained the tortious interference, New Jersey Consumer Fraud Act and NJ Unfair Competition Law claims, the last even though the court said it was a trademark statute. 

The NJ Truth-In-Consumer Contract, Warranty And Notice Act provides that “[n]o seller ... shall ... in the course of his business offer to any consumer or prospective consumer ... or give or display any written consumer ... notice ... includes any provision that violates any clearly established legal right of a consumer or responsibility of a seller ... as established by State or Federal law at the time the offer is made or the consumer ... notice is given or displayed.”  The court held that MB alleged a plausible claim here as well; TrePunti could count as a seller because it “played a role in the composition, labeling, marketing importation, distribution, and sale of the juices at issue,” and it displayed the labels to a prospective consumer.

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