Thursday, April 21, 2016

District court still rejects contribution/contributory false advertising for supplier

Nestlé Purina Petcare Co. v. Blue Buffalo Co., No. 4:14 CV 859, 2016 WL 1579195 (E.D. Mo. Apr. 19, 2016)
Previous ruling on ad agency’s potential liability for helping create allegedly false ads.  Blue Buffalo also sought contribution from Wilbur-Ellis, one of its suppliers (since the ads involved claims about the contents of Blue Buffalo’s pet food).  “For a right to contribution to exist under Missouri law, defendants must be jointly and severally liable to the plaintiff for the same indivisible harm.”  However, Blue Buffalo didn’t sufficiently allege that Wilbur-Ellis was potentially liable to Purina for the same, indivisible injury it is alleged to have caused. Rather, Blue Buffalo alleged that it lost customer goodwill and paid above market-price for the by-product meal it bought from Wilbur-Ellis, and that it was exposed by Wilbur-Ellis’s conduct to liability in this case and others.
Purina alleged that Blue Buffalo harmed Purina by disparaging its pet food and making false claims about Blue Buffalo’s own pet food. Although Duty Free Americas, Inc. v. Estee Lauder Cos., 797 F.3d 1248 (11th Cir. 2015), held that a claim of contributory false advertising could be maintained under the Lanham Act, the plaintiff has to show that the relevant defendant “contributed to that conduct either by knowingly inducing or causing the conduct, or by materially participating in it.”   The court had previously concluded that there was no federal common law right to contribution under the Lanham Act, nor is there an express right of contribution under the Lanham Act.  “While the Eleventh Circuit’s reasoning in support of recognizing a right to contributory false advertising is sound, it is not persuasive enough to compel me to reconsider my previous ruling or to reject the line of cases holding that no such right exists.”
Thus, Blue Buffalo’s only hope was to seek contribution from Wilbur-Ellis based on Purina’s unjust enrichment claim. But there was no allegation that Purina conferred a benefit on Wilbur-Ellis. Purina’s claim for unjust enrichment alleged that it conferred a benefit on Blue Buffalo: Blue Buffalo’s profits from sales to consumers who chose it because of the false advertising.  (Still don’t see how that’s Purina conferring a benefit on Blue Buffalo.)  Purina’s injuries from this unjust enrichment aren’t the same as the injuries Wilbur-Ellis allegedly caused, and Purina couldn’t have sued Wilbur-Ellis.  “As a supplier, Wilbur-Ellis could not be found liable for Purina’s claims that Blue Buffalo knowingly and in bad faith engaged in false advertising or that it made false comparative statements.”

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