Wednesday, September 02, 2015

Do implicit falsity plaintiffs have to plead the existence of a survey?

Vincent v. Utah Plastic Surgery Society, --- Fed.Appx. ----, 2015 WL 5090868, No. 13–4146 (10th Cir. Aug. 31, 2015)
Plaintiffs (cosmetic surgeons) sued defendants (plastic surgeons) for false advertising under the Lanham Act and monopolization under the Sherman Act by running billboard ads called “Public Safety Announcements,” allegedly promoting the deceptive message that cosmetic surgery is safer when performed by plastic surgeons rather than cosmetic surgeons.   The Sherman Act claim failed.
The holding of note: plaintiffs conceded they were bringing implied falsity claims.  Because this requires a showing of actual deception, they needed extrinsic evidence to show that “a statistically significant part of the commercial audience holds the false belief allegedly communicated by the challenged advertisement.” But the complaint didn’t plead any specific facts about consumer deception.  The allegation that “Defendants’ false and misleading statements have created confusion among Plaintiffs’ clients, potential clients, and will continue to do so if permitted to continue,” unsupported by even a single relevant fact, was insufficient. 
Nor did generally pleading that they suffered damages in the form of lost sales and potential customers suffice to allege sufficient facts to prove an entitlement to damages.  By way of example, “the complaint does not indicate how much Plaintiffs’ profits have decreased since Defendants began their advertising campaign; it does not quantify or estimate the decrease in goodwill; it does not quantify the number of potential customers who allegedly have been lost because of Defendants’ statements or how that number would be measured.”

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