game over for allegations relating to misattributed/distorted consumer complaints

Skillz Platform Inc. v. Papaya Gaming, Ltd., 2025 WL 918411, 24cv1646(DLC) (S.D.N.Y. Mar. 26, 2025)

Previously, the court partially granted Skillz’s motion to dismiss Papaya’s amended counterclaims; Papaya sought leave to file further amended counterclaims, which the court denied.

The parties compete in the market for mobile games that allow users to spend and win money (and in-game prizes). “Users of Papaya’s games typically compete with between five and twenty opponents. … The Skillz platform hosts games, each of which allows gameplay between only two players, created by third-party developers.” Skillz allegedly “engaged in a multipronged campaign to discredit Papaya in the eyes of the public and law enforcement officials regarding Papaya’s use of robots or ‘bots.’”

The challenged conduct included an alleged “false-front organization called 4 Fair Play” that “solicited complaints from consumers about Papaya and other competitors of Skillz.” As alleged:

Skillz forwarded these complaints to state attorneys general. But before doing so, it added stock language to the complaint, which said “I’m a resident of your state and I would like to make you aware of a mobile game that is defrauding consumers like me out of their hard-earned money. I strongly believe the following games use AI or ‘bots’ to scam players by pretending that those are real players.” It then listed the games selected on the complaint form. Skillz did not tell complainants it was adding this language. Most complaints that 4 Fair Play received did not mention bot use, but the stock language, which misleadingly appeared to have been written by the complainant, was added to them anyway. Skillz “spot checked” the complaints that it forwarded to law enforcement, but it otherwise did not vet them to make sure they came from real people.

This Skillz-added material in the forwarded consumer complaints was not alleged in the previous counterclaims.

The 4 Fair Play website also included short quotations purportedly from consumers complaining about Papaya’s games. “These testimonials, each one or two sentences long, were attributed to consumers identified only by initials and state of origin … or by the game they had played.” Skillz itself allegedly drafted some of those testimonials, and they had not come from real consumers. “Other testimonials did come from real consumers but had been edited by Skillz.” The fact that these weren’t real consumers or real quotes was added to the proposed counterclaims.

[Gotta say, if we had a working FTC, this would be the kind of thing that the FTC considers deceptive, though it might well leave the parties to private remedies given their incentives to litigate and the lack of direct sales from the website.]

Finally,

[p]ortraying itself as a “public policy group conducting research,” 4 Fair Play contacted Skillz employees … and offered recipients $300 for participating in interviews meant to “better understand the mobile gaming industry.” An internal guide, which was edited by Skillz executives, encouraged interviewers to ask questions about Papaya’s use of bots. The involvement of Skillz and 4 Fair Play in this scheme was hidden.

Despite NDAs, two former Papaya employees participated in interviews and “disclosed information about when and why bots are used and the coding behind the bots, among other things.” Using this information, Skillz publicly accused Papaya of using bots. It also sued Papaya for false advertising about lack of bots. The proposed counterclaims added an unfair competition claim based on these facts.

The existing surviving counterclaims relate to Papaya’s challenges to Skillz’ advertising that its own platform did not use bots, matched players evenly, and allowed customers to withdraw cash at any time.

The new allegations didn’t change the outcome for Papaya. Misleadingly adding to consumer complaints before sending them to state law enforcement doesn’t violate the Lanham Act because it’s not “commercial advertising or promotion.” It also doesn’t violate NY GBL § 349 because it doesn’t involve consumer-facing representations/consumer-oriented conduct.

That leaves defamation, but falsity requires pleading that the alleged statement is not “substantially true,” meaning that it “could have produced no worse an effect on the mind of a reader than the truth pertinent to the allegation.” But Papaya didn’t allege that “the substantive content of this stock language was false—just that it was misattributed.” Nor did it allege that state authorities ever did anything with these communications or that they became public. There was thus no allegation of harm, “reputational or otherwise.” The statements couldn’t be per se actionable, which requires proof that the statement “impugns the basic integrity or creditworthiness of a business.” But, while “the integrity of Papaya’s business practices and its deception of the public about its historic use of bots to compete with customers in its games of ‘skill’ are at the heart of this case,” Papaya didn’t deny such undisclosed historic use in the proposed amended complaint, and thus wouldn’t be able to prove the falsity of the supposedly defamatory statement at trial. Footnote: “In recent depositions, none of Papaya’s individual deposition witnesses denied the historic use of bots, as they all asserted their Fifth Amendment rights against self-incrimination rather than testifying to any potentially disputed facts.” [Yikes!]

Misattribution of testimonials: Both Lanham Act and GBL claims require materiality, and Papaya didn’t allege that the content of the testimonials (accusing Papaya of using bots or being unfair generally) were false, nor that numerous real consumers were not submitting complaints along these lines. Even if the consumers “(barely) identified by the website –‘J.P. from Florida,’ ‘Bingo Cash Player,’ and the like” didn’t write “the specific words included in the displayed testimonials,” it was not plausible that the misattribution was material and caused injury.  

[N]o reasonable jury could find that anyone’s purchasing decisions would have been affected (or that consumers would be affected in any other meaningful sense) by the fact that a real “J.P. from Florida” did not say the words, “I have genuinely never played a game that is so rigged in my life.” While parties generally “should be given the opportunity to develop their evidence to demonstrate materiality,” the pleadings must set forth some plausible basis for the defendant to ultimately be held liable.

Finally, the interview scheme wasn’t actionable. “The essence of an unfair competition claim under New York law is that the defendant misappropriated the fruit of plaintiff’s labors and expenditures by obtaining access to plaintiff’s business idea either through fraud or deception, or an abuse of a fiduciary or confidential relationship.” Although Skillz allegedly used deceptive means to obtain information about Papaya’s business, there were no allegations that Skillz actually did anything with that information. Yes, Skillz told reporters that Papaya was using bots in its games. But according to the complaint itself, “Skillz was publicly accusing Papaya of using bots well before the interviews took place anyway.” Given that context, “characterizing the accusation that Papaya used bots as a trade secret is a stretch at best.” And even if it was, this conduct wasn’t unfair competition.

 

 

honey producers have statutory standing to challenge Bayer's claims to direct purchasers that herbicides were safe

Coy’s Honey Farm, Inc. v. Bayer Corp., MDL No.:1:18-md-02820-SNLJ, No. 1:21-CV-089-SNLJ, 2025 WL 901264 (E.D. Mo. Mar. 25, 2025)

Coy’s s a beekeeping and honey-producing operation. It alleged that dicamba-based herbicide products, including those produced by defendants, moved away from the targeted dicamba-tolerant plants and damaged non-tolerant vegetation surrounding plaintiff’s beekeeping operation. This allegedly resulted in reduced honey production and loss of bees. The court allows Lanham Act false advertising claims (and others) to proceed. I think the proximate cause question is interesting, but the other claims may have obscured the specific proximate cause question with respect to false advertising, since there was a material issue of fact on proximate causation of damage to the bees/honey.

The Lanham Act claim is based on defendants’ alleged false representations that their dicamba products were safe for the type of use that allegedly let them to volatize and spread to surrounding areas after being applied to the intended target of soybean and cotton fields. Misled purchasers then used the dicamba as directed, which “allegedly resulted in the destruction of a great deal of plant habitat for the honeybees, and, in turn, caused the bees to produce less honey. Thence, plaintiff profited less.” There was a fact issue on whether that had happened.

But was there Lanham Act standing? Lexmark held that a plaintiff must “allege an injury to a commercial interest in reputation or sales proximately caused by the defendant’s misrepresentations.” That is, a Lanham Act plaintiff must be a commercial actor suffering commercial injuries instead of being a “consumer who is hoodwinked into purchasing a disappointing product.” “Here, there is no question that plaintiff is a commercial actor, and plaintiff has alleged a loss in sales due to defendants’ misrepresentations.” The “due to” is doing a lot of work there—I’m open to the argument that the honey producers are at least as distant from the false advertising as the landlord of a business that suffers damage from false advertising. But proximate cause is, of course, a legal rather than factual conclusion.

National Republican Senatorial Committee loses ROP/Lanham Act/UCL claims against alleged "Scam PAC"

National Republican Senatorial Committee v. Red Senate, 2025 WL 819711, No. 8:24-cv-02301-JVS-KES (C.D. Cal. Jan. 14, 2025)

NRSC sued Red State, alleging that it was exploiting Senator Rick Scott’s “name, image, and likeness without his consent to deceive and scam potential donors...” Red State is a Super PAC, which may accept “unlimited contributions” from nearly any domestic source “so long as it does not coordinate its public communications with any federal candidate.” But NRSC alleged that it was a scam, misleading donors “into believing that their contributions will support a particular candidate or cause, when in reality the Scam PAC plows that cash into endless fundraising that ultimately funds little more than the salaries of its officers and its preferred vendors, who profit handsomely.”

NRSC alleged that, according to FEC disclosures, Red Senate raised over $2.6 million in the 2019-2020 election cycle and spent over $1.1 million in total disbursements during the cycle, including over $1 million in operating expenses. The 2021-2022 election cycle had similar numbers, and, at the time the complaint was filed, Red Senate had raised over $300,000 in the current election cycle, and spent over $500,000, with approximately $450,000 going towards operating expenses. Thus, NRSC alleged, Red Senate merely compensates vendors and keeps any leftover cash, harming the candidates “they purport to be supporting” in the process.

Red Senate allegedly allocates the bulk of its spending to Wavecrest or Google Ads. According to the Google Ads Transparency Center, Red Senate has paid between $35,000 to $40,000 for Google ads mentioning Senator Scott, which were shown between 70,000 to 80,000 times throughout the United States. The advertisements specifically state: “Red Senate for Rick Scott - Keep Florida Red in 2024,” and “Red Senate for Rick Scott - Take Back Our Senate in 2024.” Red Senate also reported making independent expenditures in the 2024 Florida Senate race; however, as of October 2, 2024, none of the reported expenditures expressly advocated for Senator Scott or his opponent. Rather, “the reported expenditures served to raise funds for Red Senate while using Rick Scott’s name and likeness.”

Senator Scott allegedly assigned his rights to NRSC, and, “as the only national party committee solely purposed to supporting Republican senate candidates,” NRSC claims to have an independent interest in stopping false advertising and false personification of Republican candidates. NRSC sued for California statutory and common law right of publicity violations, Lanham Act false advertising, and unfair competition under California’s UCL.

The court took judicial notice of the existence of disclaimers on Red Senate’s website, though not their accuracy, and did the same for the content of FEC reports filed by Red Senate. And it took judicial notice of the “fact that there has been significant news media coverage of Senator Rick Scott, his 2025 campaign for re-election to the United States Senate, and his opponent Debbie Mucarsel-Powell.”

Initially, NRSC’s statement that Senator Scott’s assignment was exclusive was sufficient to establish standing to assert his claims as an initial matter. But did Scott have statutory Lanham Act standing? He needed to allege an “injury to a commercial interest in reputation or sales.” NRSC argued that the parties competed in “the political-fundraising marketplace,” meaning that “potentially millions of dollars were diverted from his campaign.” But the complaint didn’t so allege; its only allegations focused on the deception of donors. But the court granted leave to amend. (Seems like “commercial advertising or promotion” is going to be an insuperable barrier here.)

California’s UCL requires “the plaintiff to be the one ‘who has suffered injury in fact and has lost money or property as a result of the unfair competition.’ ” Consequently, “an injured [party’s] assignment of rights cannot confer standing on an uninjured assignee.” NRSC’s allegation of its own interest in stopping false advertising and false personification of Republican candidates was not enough to satisfy this burden; again, there was leave to amend.

As for the California claims, they were subject to anti-SLAPP analysis. NRSC argued that its complaint “challenges Red Senate’s deceptive conduct in fundraising—not the message it conveys in its ads,” so that the lawsuit did not “arise from” any statements that Red Senate made “in relation to political campaigns.” Instead, it arose from its post-speech conduct—its spending allocation. (I thought political spending was speech.) The court was unpersuaded by these arguments. “First, it is well settled that the anti-SLAPP statute applies to conduct in furtherance of the right to free speech, in addition to the protected speech itself. Second, even if the lawsuit as a whole challenges Red Senate’s disbursement of funds, the right of publicity claims specifically target Red Senate’s use of Senator Scott’s name in Google ads.” The speech was itself allegedly wrongful, not merely evidence of a wrongful act (fundraising misconduct). “[H]ad Red Senate never used Senator Scott’s name in its Google advertisements, NRSC would have no right to publicity claims.”

Thus, the burden shifted to NRSC to demonstrate a probability of prevailing on the merits of its claims. For a common law cause of action for commercial misappropriation, a plaintiff must prove: “(1) the defendant’s use of the plaintiff’s identity; (2) the appropriation of plaintiff’s name or likeness to defendant’s advantage, commercially or otherwise; (3) lack of consent; and (4) resulting injury.” The statutory cause of action requires commercial misappropriation.

Red Senate argued that its speech was related to a political campaign, a matter of public interest, and that NRSC couldn’t prove that Scott’s image was used “exclusively” for commercial gain. NRSC’s argument that Red Senate’s speech was unprotected because it was fraudulent lacked sufficient evidence. The exception for political speech isn’t limited to specific types of political campaigns; nor does the “underlying purpose of one’s dissemination of a political message” determine whether an exception applies. Motion to strike granted, with leave to amend. (How could there be a successful amendment, especially for the statutory cause of action?)

Reading List: morality and trademarks in South Asia

Zehra Jafri, One Sari, Three Different Ways to Drape It: Trademarks, Religion, Language, and Morality in Post-Colonial India, Pakistan, and Bangladesh, 40 UCLA Pacific Basin Law Journal 127 (2023)

 Abstract:

Pakistan, India, and Bangladesh were all established on a sense of wanting to be a majority in a nation where they were once “othered,” be it by the British, Hindu majority, or Urdu-speaking majority. As a result, religious independence and mother-tongue/linguistic independence are highly valued in these countries, and are the context by which the morality of trademarks within the borders of these countries are assessed. Notions of free speech traditions and political ideologies that also color traditions are discussed, as they also run abreast trademark law. Although these three countries once emerged from one land, they carry differences as distinct and rich as the cultural and religious historical tensions that define them. Each sought to create a space where their cultural and religious identities were represented fairly. As thus, it is no surprise that religion is such an important consideration that it was codified into each country’s trademark law. 

This paper aims to illustrate what each country deems as running afoul to notions of morality and religious susceptibilities, and how that may have changed over time with politics and other social factors. The factors that may have influenced these definitions is assessed in depth by country, with homage to the political structures and free speech traditions within which they are nested. A framework of what would and what wouldn’t qualify as a registrable trademark under the morality bar is posited through an analysis of government guidelines on registering trademarks, case law, and a comparative analysis of certain marks that were treated one way under one country’s standard but could be treated differently under different standards from other countries.

 

Some interesting passages (footnotes omitted):

[U]nder Section 9(2)(c) [of Indian trademark law], a mark is prohibited for registration as a trademark if it contains or comprises of any matter likely to hurt the religious susceptibilities of any class or section of the citizens of India. The Draft Manual further explicitly acknowledges that it is a common trade practice in India to use names and pictures of religious deities or symbols as trademarks. Accordingly such use is not regarded per se as offending religious sentiments of any class or section of public. However, such use in relation to certain goods may offend the religious sentiments of the people. For example, the use of the names or device of deities or religious heads on footwear will be considered distasteful and will be open to objection. Similarly, use of Hindu Gods on beef or meat products or use of names of Muslim saints on pork products would offend the religious feeling of respective sections of the public and may attract objection under this section. … The Draft Manual goes on to list illustrative examples. The use of religious symbols (like OM) or names (e.g., Jesus) as trademarks is likely to undermine/offend religious value and sentiments. Names of gods or goddesses which are also used as personal names may be considered as personal names for registration purpose, unless accompanied by the device of such god or goddess.

 

… Not included in the explicit list of unauthorized religious names in the trademark guidance are Islamic marks. All of the explicitly prohibited religious deities and figures are Hindu, Jain, and Sikh. By including only Hindu, Sikh, and Jain names in the official guidance of prohibited marks, India may also project a certain vision of Indian identity in line with the “pseudo-secularism” and Hindutva ideology espoused by Modi and the BJP, which has its roots from the religious tension harbored from the partition between India and Pakistan.

 

The author notes that marks containing “Allah” are, however, apparently routinely refused.

asterisk alone makes front of package claims ambiguous

Wong v. Iovate Health Sciences U.S.A. Inc., 2025 WL 821451, No. 2:24-cv-00901-DAD-CKD

(E.D. Cal. Mar. 14, 2025)

Is an asterisk on the front of a package a get-out-of-jail-free card for false advertising? If the disclosure doesn’t flatly contradict the claim, at least, maybe it is. (I would think that evidence of what reasonable consumers thought they might learn from the asterisk is quite relevant for that—if they didn’t realize they needed to consult the qualification, then they could still be deceived—but that’s not what this court holds, even though there are allegations that other marketplace participants advertise differently and less deceptively.)

front and back panels from complaint

Wong bought “100% Mass Gainer,” a dietary supplement in the form of a protein powder, which stated that the supplement provided 60 grams of protein per serving. But, without adding milk, the supplement contained only 44 grams of protein per serving rather than 60 grams. The rest of the product line also has fewer grams of protein in a serving than what is stated on the front label of the packaging because they all require the consumer to add some quantity of milk. “Other protein powders not produced by defendant have packaging that prominently advertises the amount of protein contained within a serving of the powder, but only include the protein content from the powder itself.”

There’s a disclaimer that the protein content assumes the addition of milk, “though those disclaimers and the associated asterisk symbols appear in small font on the front of the packaging.” [NB: I think only the asterisks appear on the front, according to the rest of the opinion and to the images.] On the back, “the protein content is reduced below the advertised amount appearing on the front of the packaging when the powders are mixed with water instead.” Wong brought the usual California statutory claims.

The court dismissed claims for injunctive relief, but not equitable relief under the FAL and UCL. The court accepted the idea that the pleading standard for seeking equitable relief is “minimal.” “[I]f a plaintiff pleads that she lacks an adequate legal remedy, Sonner will rarely (if ever) require more this early in the case.” Wong alleged that equitable relief is more “prompt and certain and in other ways efficient” than an award of damages, given that “equitable restitution can justify an award of greater relief than damages and is governed by a different standard of proof that allows the award of restitution even if a plaintiff cannot adduce evidence to support an award of damages.” That was enough.

Still, a reasonable consumer would not have been deceived, despite the large font size representation of the products’ protein content. The asterisk itself made the protein claim “ambiguous” to a reasonable consumer, which ambiguity could then be cleared up by reading the back label. “Even before reading the back label, the presence of an asterisk alone puts a consumer on notice that there are qualifications or caveats ….” This strikes me as a license to cheat.

discovery rule applies to false "reference price" allegations at outlet stores

Clark v. Eddie Bauer LLC, --- F.Supp.3d ----, 2025 WL 814924, No. 2:20-cv-01106-RAJ (W.D. Wash. Mar. 12, 2025)

A good choice for publication given that the opinion addresses (and rejects) some arguments I haven't seen before. Clark sued Eddie Bauer under Oregon’s Unlawful Trade Practices Act for using purportedly false and misleading tagged list prices, aka reference prices, on the garments sold at Eddie Bauer’s outlet stores. A previous district court decision found the claim time-barred, even though Eddie Bauer’s policy change of using the phrase “comparable value” on its sales tags for garments as opposed to a reference price based on the garment’s claimed fictitious full retail price violated the UTPA, “as Eddie Bauer must provide the origin of any such reference price.” On appeal, the Ninth Circuit certified a question to the Oregon Supreme Court: whether a consumer suffers an ascertainable loss under the UTPA when the consumer purchased a product that she would not have purchased at that price but for a violation of the UTPA if the violation arises “from a representation about the product’s price, comparative price, or price history, but not about the character or quality of the product itself.” That court said yes, recognizing Clark’s “purchase price theory,” holding that “when a person acts in response to the deception by spending money that the person would not otherwise have spent, the person has been injured to the extent of the purchase price as a result of that deception.” Clark v. Eddie Bauer, LLC, 532 P.3d 880 (2023).

The Ninth Circuit subsequently accepted Clark’s standing and ruled that she could seek injunctive relief against Eddie Bauer’s ongoing falsely discounted prices, despite the new use of the term “comparable value.” It also held that monetary damages for past harms was not an adequate legal remedy for Clark’s future harm and granted Clark leave to amend her complaint is appropriate so she can explain the circumstances associated with her discovery of Eddie Bauer’s advertising scheme. The amended complaint described Clark’s “unearthing of the advertising scheme in 2020 after finding the law firm’s website describing Eddie Bauer’s unlawful practices.” (In a footnote, the court declined Eddie Bauer’s invitation to impute counsel’s knowledge of the scheme to Clark herself.)

The court agreed that, for purposes of a motion to dismiss, Clark had pled that the discovery rule applied to toll her claim. Oregon’s UTPA provides that a party must commence a lawsuit “within one year after the discovery of the unlawful method, act, or practice.” The statute of limitations begins to run when the plaintiff “knows or should have known of the allegedly unlawful conduct.” And it is an objective standard: “how a reasonable person of ordinary prudence would have acted in the same or a similar situation.”

In Oregon, a plaintiff must have had sufficient knowledge to “excite attention and put a party upon his guard or call for an inquiry notice.” In addition, “it must also appear that a reasonably diligent inquiry would disclose the fraud.” “Application of the discovery rule presents a factual question for determination by a jury unless the only conclusion that a jury could reach is that the plaintiff knew or should have known the critical facts at a specified time and did not file suit within the requisite time thereafter.”

Eddie Bauer argued that Clark knew or should have known of her case well over one year before she sued in July 2020 because “her experience using the products that she bought ... provided enough information for her to conclude before July 2019 that she had been misled as to the value of the items she purchased.” They also posit that when she bought the items, she knew the reference prices, and she “apparently used the products sufficiently to gauge their quality and value.”

The court found this to be nonsense: As Clark argued, “[t]he only way for a person to know that Eddie Bauer’s advertised discounts were false is for the person to know Eddie Bauer’s true historical selling prices for the products he or she purchased.” “The Court struggles to find a correlation between a consumer wearing an item of clothing and the same consumer somehow knowing the item’s regular selling price or worth merely because she wears it.” It is not the case that, “when a reasonable consumer wears an item, she learns facts that trigger suspicion of a discrepancy between a garment’s ticketed price and its regular selling price.”

Nor did it appear from the face of the complaint that Clark had a duty to conduct an investigation. She had no obligation to uncover a pricing scheme “by talking to her fellow consumers, to whom she has no relation.” Nor did the court accept that she could simply have asked Eddie Bauer for price information:

First, Plaintiff had no idea Eddie Bauer was engaging in an unfair trade practice at the time. Second, there is no evidence to show that its employees would know or have access to this information. These two considerations also do not factor in the employee’s state of mind, as an employee might be suspicious of such questions and feel obligated to protect her employer.

A person sometimes cannot discover a false advertising scheme “because, by design, its very nature is hidden and impossible for an ordinary consumer to discover.”

What about the argument that “Comparable Value” in an outlet context isn’t deceptive? It was plausibly reasonable for consumers to interpret that to mean “Eddie Bauer’s price for the identical item.” “Under Oregon’s UTPA, Eddie Bauer has an obligation to provide the origin of a reference price. It has not done so.”

As for standing to seek injunctive relief, the Ninth Circuit explained that Clark “will be harmed if, in the future, she is left to guess as to whether Eddie Bauer is providing a legitimate sale or not, and whether products are actually worth the amount that Eddie Bauer is representing.”

false claims of buying and "rebranding" a festival lead to disclosure/correction remedies

Nantucket Wine & Food Festival, LLC v. Gordon Companies, Inc., --- F.Supp.3d ----, No. 24-11640-LTS, 2024 WL 5442374 (D. Mass. Dec. 12, 2024)

Wild facts here.

Plaintiff NWF runs an annual, multi-day event on Nantucket called the Nantucket Wine & Food Festival “The Festival has been held annually—with the exception of a hiatus during the COVID-19 pandemic—since its founding as the Nantucket Wine Festival in 1997.” Recently, it’s been held over the course of five days encompassing the weekend in May between Mother’s Day and Memorial Day. NWF solicits “Luminaries”—experts and high-level presenters—and “Invitees”—other exhibitors, wineries, distributors, importers, and sponsors. The remaining attendees are “Guests,” who either purchase tickets to the various events or are invited by, for example, a sponsor. NWF works on the Festival year-round, with ticket sales typically commencing in November. Nancy Bean, with a partner, owns the rights to the Festival and is one of two permanent staffers; she’s the majority owner.

David Gordon is the president and chief executive officer of the Gordon Companies, a regional liquor-and-wine retail-and-distribution business based in Waltham, Massachusetts. He approached Bean about potentially investing in NWF in 2021. Discussions continued over two years, and Gordon provided logistical, financial, and other assistance to Bean. “Principally, Gordon furnished Bean with an attorney, defendant Todd Goldberg, who had previously done work for the Gordon Companies, to help Bean buy out her original partner,” a transaction completed in 2022, though a small percentage is still owned by a third party. The Gordon Companies also extended to NWF a loan of approximately $55,000, and Gordon gained access to financial and other sensitive information relating to NWF.

NWF and the White Elephant resort agreed that White Elephant would be the exclusive “Host Hotel” of the 2024 Festival, reserving to NWF the exclusive rights to its name and logo. But, as the 2024 Festival approached, Bean broke off negotiations for a Gordon Companies investment in NWF. Gordon and Bean executed a release agreeing that NWF’s $55,000 debt to the Gordon Companies would be paid off via sponsorship rights at the 2024 Festival. The Festival occurred as planned, and Bean posted on NWF’s website a save-the-date for the 2025 Festival, marking the same weekend, May 14 to May 18, 2025, as well as a similar Instagram post.

Then, mid-June, 2024, the Gordon Companies issued statements announcing the Gordon Companies’ plans for the 2025 Nantucket Food and Wine Experience. An email announcement sent to “a cultivated list of industry professionals, including wine vendors, chefs and restaurant owners” stated, in relevant part: “The Gordon Companies is thrilled to announce that we have partnered with White Elephant Resorts to present the newly branded Nantucket Food And Wine Experience. Under new guidance, this rebranded event will take place on Nantucket from Wednesday, May 14th through Sunday, May 18, 2025. This extraordinary celebration will offer a revitalized experience featuring the world’s top vineyards, distilleries, and culinary minds.”

Another email went to the Gordon Companies’ customer list: “The Gordon Companies Purchases Nantucket Food and Wine Experience.” It read in relevant part: “The Gordon Companies have partnered with the iconic White Elephant Resorts to present the newly branded Nantucket Food And Wine Experience. Under this new partnership, one of the nation’s longest-running food and wine events will take place on Nantucket from Wednesday, May 14th through Sunday, May 18, 2025.”

The Gordon Companies also sent a press release to at least fifteen media outlets, including the Boston Globe, Boston Common Magazine, Wine Spectator, and Forbes: “The Gordon Companies Partner with The White Elephant to Present a Newly Branded Nantucket Food & Wine Experience.” A subhead read: “One of the nation’s longest running food and wine events returns to Nantucket on May 14–18, 2025.” Relevant bits included:

The Gordon Companies ... and White Elephant Resorts are thrilled to announce their partnership for a newly branded Nantucket Food & Wine Experience in 2025.... David Gordon, CEO of The Gordon Companies, notes, “We are excited to introduce the newly rebranded Nantucket Food & Wine Experience to the loyal guests who have enjoyed this celebratory time on the island for many years.” … Khaled Hashem, President of White Elephant Resorts, adds, “We are honored that our harborside hotel will continue to serve as the official host for this dynamic partnership with The Gordon Companies. We look forward to carrying on the tradition of providing food and wine excellence for locals and visitors alike on beautiful Nantucket.”

A similar press release went to industry media outlets such as BevNet/Nosh, Wine Industry Advisor, Kane’s Beverage News Daily, Beverage Dynamics, and Wine Business: “Prominent New England Wine and Spirits Retailer Purchases Nantucket Food & Wine Experience.” Its subhead was: “Gordon’s Fine Wine Acquires Ownership Stake in One of the Nation’s Longest-Running Food and Wine Events.” In relevant part, it said:

The Gordon Companies … have acquired the ownership rights to the Nantucket Food & Wine Experience (previously known as the Nantucket Wine & Food Festival), one of the longest running food and wine events in the U.S. The rebranded event … will take place on the island from Wednesday, May 14 through Sunday, May 18, 2025 …. “This longstanding event is an important part of Nantucket’s rich history, not to mention a significant annual driver of tourism and local pride,” says David Gordon, CEO of The Gordon Companies. “We’re excited to introduce the newly rebranded Nantucket Food & Wine Experience, and we’re especially honored to be one of the only fine wine and spirits retailers in the country to own and present a festival of this size and prominence.”

Both Gordon and White Elephant had issues with Bean—the former believing that Bean would never bring him on as a co-owner as he’d hoped, the latter because of Bean’s “organization and planning and time management.” Thus, they’d planned a new event for a couple of months, including nantucketfoodandwine.com. The person who sold them that domain name offered Gordon a list of domains including the word “festival” or “fest,” but Gordon replied, “[w]e need to use experience not festival (for now).”

After the four statements went out, Gordon quickly realized that there was a bit of a problem, and emailed “[t]he subject of our email that went out said Purchases Nantucket Food and Wine, if we can I’d like to stick with ‘The Gordon Companies Partner with The White Elephant to Present a Newly Branded Nantucket Food & Wine Experience.” Meanwhile, Bean’s contemporaneous reaction was: “I am inundated with texts and calls—everyone thinks I sold NWF to him for $$$$$$$.” NWF also received “frantic inquiries from Boston Common Magazine regarding the sale and their astonishment of it given they had just been with us on-site and were in the midst of writing all of our post-festival acclaims and reviews and pieces.”

The next day, the Gordon Companies sent out a clarification to its industry email (“Gordons has not purchased any festival. We have partnered with the White Elephant in a multiyear deal to produce a new event. In no way are we affiliated with any other event or festival on Nantucket. Sorry for any confusion this may have caused.”) and contacted industry publications to remove from the Industry Release the statement that the Experience had been “previously known as the Nantucket Wine & Food Festival.” But they didn’t send out corrective emails to the other recipients of the statements. Even after Gordon’s instruction not to use the word “purchase,” he responded to “[c]ongratulations to your purchase of the Nantucket Food and Wine Festival” without a correction.

Amy Baxter, Licensing Administrator at the Nantucket Police Department, met with Gordon and subsequently emailed a third party about “a change in ownership and management of the Wine Fest.” She then emailed Gordon: “[j]ust to confirm I should not be expecting Nancy to come at us to try and secure that weekend since you have a contract with White Elephant correct? I know that to be the case and I will be general in my answer but just reconfirming.” She then told a reporter from a local newspaper, “I do not anticipate competing festivals.”

Three days after the initial announcement, and two days after first contact from NWF’s lawyer, the Gordon Companies sent a correction to its customer list: “Gordon’s has not purchased, acquired, or rebranded the previously existing Nantucket Food & Wine Festival which has been operated by a still operating entity which is not affiliated with The Gordon Companies in any way. The Nantucket Food and Wine Experience is also not affiliated with the Nantucket Food & Wine Festival.” The Gordon parties succeeded in getting several industry publications to remove the parenthetical stating that the Experience was “previously known as the Nantucket Wine & Food Festival,” but didn’t send corrections to the general media release.

“In response to questions from several chefs regarding whether a sale had happened, Bean emailed all chefs who had participated in the 2024 Festival clarifying the situation and asking for their support.” She also contacted sommeliers, wine importers, and other constituents. The Boston Globe, the Newport Buzz, and the Nantucket Current all ran articles about the Festival and the Experience with quotes by Bean. Nonetheless, Bean testified, “many people remain under the impression that I either tried to sell the genuine festival or will sell the genuine festival” because they “find it hard to believe someone would lie so blatantly about purchasing a company unless there had been some agreement that I reneged or that belatedly fell apart.”

The Nantucket Select Board received applications from both sides for events during the same time and announced that tickets for these events should not be sold until the applications had been evaluated; the applications were pending as of the court’s decision.

Right before the PI hearing, plaintiffs dismissed White Elephant from the case, and White Elephant agreed that it wouldn’t host an event with the Gordon parties on the relevant weekend for the next two years. The Gordon Parties represented that they were in the process of withdrawing the permit applications they had filed to the Nantucket Select Board. So the Experience wasn’t going to happen in 2025, at least not on Nantucket. Thus, plaintiffs narrowed their request for preliminary relief, but still wanted defendants to be enjoined from disparagement and to be required to make corrective disclosures including a statement that their earlier statements were “false.” They also wanted prominent links on defendants’ websites to NWF’s own site. The court granted the corrective disclosure and website remedies, but not a general prohibition against disparagement.

The court relied on Massachusetts General Laws Chapter 93A and did not analyze the claims as Lanham Act false advertising. Chapter 93A grants a private right of action to any business harmed by another business’s “unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.”

The court found that defendants’ statements constituted commercial disparagement, which requires proof that a defendant: (1) published a false statement to a person other than the plaintiff; (2) “of and concerning” the plaintiff’s products or services; (3) with knowledge of the statement’s falsity or with reckless disregard of its truth or falsity; (4) where pecuniary harm to the plaintiff’s interests was intended or foreseeable; and (5) such publication resulted in special damages in the form of pecuniary loss.

The court found that at least three of the widely disseminated messages were false, implying that that the Gordon Companies had purchased and the long-running Festival and was “rebranding” it as the Experience. (Although this probably counts as falsity by necessary implication, relying on 93A avoids any need to nitpick about explicitly false v. implicitly false claims under the Lanham Act, since state laws generally don’t have the same doctrinal distinctions.) The statements were plainly of and concerning plaintiffs, and they were made with knowledge/recklessness as to their falsity.

Harm intended or foreseeable: “Stating that a competitor no longer operates independently could foreseeably cause that competitor to lose business.” “[W]here a false statement has been ‘widely disseminated,’ and it would be impossible to identify particular customers who chose not to purchase a plaintiff’s goods or services,” a plaintiff can show special damages “by circumstantial evidence showing that the loss [of the market] has in fact occurred, and eliminating other causes.” That was also sufficiently shown with evidence of confusion, including among the Nantucket town government, preventing plaintiffs from selling tickets to the 2025 Festival starting in November, as they normally would.

Plaintiffs also showed irreparable harm to their goodwill and reputation. “By its very nature injury to goodwill and reputation is not easily measured or fully compensable in damages. Accordingly, this kind of harm is often held to be irreparable.”

The existing corrective efforts were inadequate: they “did not admit or explain the falsity of the original statement.” Indeed, the court found their language obfuscatory, with the potential to leave readers believing that the NWF no longer existed: “Gordon’s has not purchased, acquired, or rebranded the previously existing Nantucket Food & Wine Festival which has been operated by a still operating entity which is not affiliated with The Gordon Companies in any way.” Plus, “while the original Customer Email went out as its own message, the corrections went out in small print above ads for the Gordon Companies.”

Defendants argued that confusion had already dissipated due to plaintiffs’ efforts.  “However, just because some locals and insiders now know that the Gordon Parties did not purchase the Festival, that does not mean that all confusion has dissipated. Many Festival devotees may still find it difficult to trust Bean, as she has avowed. Other, more casual participants may not be so plugged in and so may, having seen one of the Gordon Parties’ statements, still believe the Festival is no more.”

Still, plaintiffs couldn’t identify any actionable, false statements made by the Gordon Parties after July 1. Thus, the court denied their requires for an injunction against “false disparaging statements about either of the Plaintiffs, the ownership of the Nantucket Wine & Food Festival, or its operations.”

However, additional corrective disclosures, including prominent placement on defendant’s nantucketfoodandwine.com website with links to plaintiffs’ site, were justified. The disclosure is not the kind of thing you want to have to send out:

Pursuant to an Order of the U.S. District Court …, the Gordon Companies hereby discloses that, in June of this year, the Gordon Companies sent out false press releases and emails stating that Gordon Companies had acquired and rebranded the Nantucket Wine & Food Festival under new management. There was never any acquisition, rebranding, or new management of the Nantucket Wine & Food Festival. The Gordon Companies is not planning any festival for May 2025. The long-running Nantucket Wine & Food Festival continues to operate. As previously announced by the Nantucket Wine & Food Festival, the annual tradition will continue May 14 – 18, 2025, under the leadership of its longtime Executive Director Nancy Bean. For more information, please visit www.nantucketwinefestival.com.

Defendants had to post the disclosure in large bold font on the home page of the website at nantucketfoodandwine.com and foodandwinenantucket.com, with no other text or links on the page, but with the reference to www.nantucketwinefestival.com at the end of the disclosure hyperlinked.

"natural" products can be produced in factories

Karabas v. TC Heartland LLC, 2025 WL 777001, No. 24-CV-2722 (AMD) (VMS) (E.D.N.Y. Mar. 11, 2025)

Karabas alleged that Heartland deceptively marketed its stevia-based sweetener as “100% Natural” when the sweetener’s two ingredients — stevia leaf extract and erythritol — are synthetic because of the process through which the defendant produced the ingredients, which were allegedly not natural. The court granted the motion to dismiss.

There were no allegations that the chemicals used in production were added to the product:

No reasonable consumer would conclude that a product contains artificial ingredients merely because it is produced “in industrial factories” using “synthetic processes.” Indeed, that is the way most consumer goods are produced. “A reasonable consumer would not think that a compound found in nature is artificial even if it is produced in a different way than nature produces it, if the way it is produced is that it is derived from a natural product and does not contain anything synthetic.”

Moreover, the package included a description of the process by which the stevia was extracted — that the stevia leaves are steeped in water, the “sweet parts of the leaf” are extracted, the extract is separated, filtered, and purified, and the erythritol is fermented. That was sufficient to clear up any ambiguities, given that the product was a “niche, specialty product” whose purchasers “are undoubtedly more likely to exhibit a higher standard of care.”

court once again reduces false advertising statutory damages award to 10% of request on constitutional grounds

Montera v. Premier Nutrition Corp., 2025 WL 751542, No. 16-cv-06980-RS (N.D. Cal. Mar. 10, 2025)

I just taught this case!—The court once again, after remand, reduces a statutory damages award based on NY consumer protection law from $83 million to $8.3 million on substantive due process grounds (funny how that never works in copyright). (At least plaintiffs got their fees for the appeal.)

A jury found Premier liable to a class of New York purchasers for deceptive advertisement of Joint Juice under GBL Sections 349 and 350, which impose statutory damages of $50 and $500, respectively, or actual damages, whichever is greater. Wakefield v. ViSalus, Inc., 51 F.4th 1109 (9th Cir. 2022), subsequently held that statutory damages awards could be unconstutionally excessive as a matter of substantive due process (gone for women! Here for corporations!). The 9^th Circuit told the district court to apply Wakefield on remand.

Montera asked this time for $83,124,500, or $500 per violation under GBL § 350, based on sales of 166,249 units of Joint Juice in New York during the class period; the court determined instead that the award should be reduced to $50 per unit sold—the amount available under GBL § 349 only.

Possibly a key factor here is that New York law provides that statutory damages are not an available remedy in class actions under §§349-350, but that rule doesn’t apply in federal court because the Supreme Court said that the New York rule was procedural, not substantive. Actual damages for the class—all that would be available in state court—would be $1.4 million.

Wakefield instructed courts to consider whether “aggregation [of statutory damages] has resulted in extraordinarily large awards wholly disproportionate to the goals of the statute” and whether the award “greatly outmatch[es] any statutory compensation and deterrence goals.” The case also pointed to the factors articulated in Six (6) Mexican Workers v Ariz. Citrus Growers, 904 F.2d 1301 (9th Cir. 1990), for “further guidance” in determining whether statutory damages are disproportionately punitive in the aggregate: “1) the amount of award to each plaintiff, 2) the total award, 3) the nature and persistence of the violations, 4) the extent of the defendant’s culpability, 5) damage awards in similar cases, 6) the substantive or technical nature of the violations, and 7) the circumstances of each case.”  The “public importance and deterrence goals” to be considered are: “(i) the public interest; (ii) the opportunities for committing the offense; and (iii) the need for securing uniform adherence to the statute.” But, the court noted, “there is a dearth of appellate authority on how to reduce aggregated statutory damages awards once a constitutional issue is identified.”

Premier sought to get the court to reject any award of statutory damages at all.

Wakefield began with the proposition that “[o]nly very rarely will an aggregated statutory damages award … exceed constitutional limitations where the per-violation amount does not.”

Although the statute’s language was clear, this was the uncommon case where the constitution must limit damages “so severe and oppressive’ as to no longer bear any reasonable or proportioned relationship to the ‘offense.’ ”

Montera argued that the NY state provision that didn’t allow statutory damages in class actions was irrelevant because it was merely procedural and thus inapplicable in federal cases.  But the Ninth Circuit, in remanding, said that “the relevant statutory goals for the district court to consider on remand include the Legislature’s compensation and deterrence goals in enacting GBL §§ 349 and 350—the statutes that authorized the statutory damages at issue.” “Therefore, the New York legislature’s explicit concern about the punitive nature of aggregated statutory damages does some work to differentiate this case” from others. On the other hand, rejecting statutory damages entirely because of the NY state rules would be an “end run” around the Supreme Court determination that the rule was procedural.

So what are the relevant goals? The private right of action was added when the legislature recognized “the limited ability of the New York State Attorney General adequately to police false advertising and deceptive trade practices.” The legislature authorized statutory damages to “encourage private enforcement” and to “add a strong deterrent against deceptive business practices,” and increased those amounts in 2007, because “[c]urrent limits [were] too low to be effective.”

Thus, the statute’s legislative history and text indicated that the goals were “to compensate injured consumers and deter future wrongdoing.” The legislature also didn’t reject punitiveness, because there was no damages range.  “Even a predominantly punitive award is not necessarily constitutionally unsound.”

Nonetheless, “Premier persuasively argues Montera’s requested award is disproportionate to the goals of the statute, particularly in light of the conduct at issue. The $83 million requested by Montera is so large as to become entirely untethered from the statutory goals.” It was far in excess of compensation; what about deterrence and punitiveness? Premier argued that actual damages and attorneys’ fees (nearly $7 million, plus $1 million in costs) sufficed for deterrence.

And, on deterrence grounds, “while there are important public interest concerns in protecting New York consumers, the opportunities for committing this offense are not unlimited. In this matter, Premier has ceased to sell Joint Juice.” Thus, “an $83 million award would be largely punitive”—so punitive as to raise constitutional concerns.

In terms of the Six Mexican Workers factors, it was hard to evaluate whether the award to each individual class member (over $1100) was really out of bounds because there aren’t many comparable cases. Premier’s culpability was “mixed”: it made the choice to continue marketing its product as containing joint health benefits. “Despite the arrival of numerous studies pointing to a lack of benefits from glucosamine and chondroitin in the dosage at issue, Premier Nutrition continued to market its product not just to people seeking joint health benefits, but more specifically to people seeking joint pain and arthritis relief.” And Montera offered evidence that Premier “was aware of the changing tide in the science yet continued its marketing.” The violations here were “substantive, not merely technical.”

On the other hand, the harm to consumers was economic and not physical. On the other other hand: “Class members based reasonable hopes on Joint Juice’s promises. And while Premier may not have targeted people with financial vulnerability, it did target people suffering from joint issues seeking relief. Taken with Premier’s culpability, these economic and intangible harms again lead to a mixed result on Premier’s overall reprehensibility.”

As noted above, there weren’t really comparable cases. So, on balance, the Six Mexican Workers factors “support the conclusion there is a due process issue with Montera’s $83 million requested award.” (Which factors favored Premier?)

So, how to go about reducing the award? Measuring by actual damages had no real justification:

Wakefield’s warning against overstepping the role of the judiciary looms large at this stage. When a legislature codifies minimum damages in statutory text, courts “are constrained by a statute’s language and interpret statutes with awareness that [the legislature] could have enacted limits as to damages, including in large class action litigation, provided discretion to courts to award damages within a given range, or limited liability in any number of ways.”

So, the court chose the clear minimum set by § 349 alone, or $50 per violation. That “more closely hews to the compensatory, deterrence, and punitive goals of the statutes.” It was compensatory, and enough to deter.  

 

comparative advertising isn't confusing

Windmar PV Energy, Inc. v. Solar Now Puerto Rico, LLC, 2025 WL 725078, NO. 24-1570 (RAM) (D.P.R. Mar. 6, 2025)

A frivolous lawsuit against comparative advertising; the court gets the right result at least. Windmar and Solar now compete in the Puerto Rico market for the sale and installation of solar energy equipment. Windmar has registrations with various elements including: the silhouette of the sun’s corona; the words “WINDMAR” or “WINDMAR HOME”; a combination of the colors orange, blue, black, and grey; and a stylized image of a windmill replacing the “I” in “WINDMAR.” The typical logo shows the words “WINDMAR HOME” written in blue and grey, with the “I” replaced by a blue windmill logo; the words are placed under and within an orange outline of a sunburst or corona. Windmar alleged that it was the “number one” company in the “solar energy industry in Puerto Rico.”

Solar Now’s marketing campaign featured ads and billboards that showed a salesman pointing to a form listing three different options for solar companies: a colored logo of Solar Now and two greyscale logos that feature the profile of a sun and its corona, one titled “PAQUITO SOLAR” and the other “MOLINITO.” Windmar alleged that “MOLINITO” (which translates to “little windmill”), when used in conjunction with the sun-related imagery, alludes to Windmar’s logo. Solar Now’s logo is next to a “X” mark of approval while the two greyscale logos are placed further down the form, allegedly implying that they are inferior options to Solar Now.

billboard

social media post

This just didn’t plausibly allege likely confusion, although the court relied way too heavily on the dissimilarity of the Windmar marks from what Solar Now actually used, as opposed to the obvious comparative advertising context. At least the court noted that most of the Pignons factors favoring Windmar (similarity of goods, channels of trade, advertising, and prospective consumers) “could be true for any two companies competing in the same market and geographic area, and do not weigh as heavily in the Court’s analysis.” The court declined to rely on nominative use because the First Circuit hasn’t adopted a specific test.

Nor did Windmar successfully plead fame for dilution. Even if the marks were famous, the comparative advertising and parody exclusions applied. “[W]hen viewed in the light most favorable to Plaintiff, the purpose of billboards and social media posts at issue is clear to a reasonable consumer: humorous comparative advertising showing Solar Now should be chosen over its (fictional or real) competitors.” Separately, the parody exclusion also applied, because “MOLINITO” “is not a particularly flattering phrase, mocking Plaintiff’s logo and reputation by referencing it as a tiny windmill.” It did not plausibly serve as a source-indicator for Solar Now. “It is abundantly clear that Plaintiff is the subject of Solar Now’s joke.”

Although the court misunderstood descriptive fair use to be limited to personal names, that didn’t matter.

"natural" claims proceed because reasonable consumers can know little about pet food

Goetz v. Ainsworth Pet Nutrition, LLC, 2025 WL 692426, No. 24-CV-04799 (JPO) (S.D.N.Y. Mar. 3, 2025)

Plaintiffs alleged violations of Sections 349 and 350 of the New York General Business Law and breach of warranty based on defendants’ allegedly false claims that their products were “natural” rather than synthetic. The court denied a motion to dismiss.

Defendants’ products use the label “natural food” in varying formats and sizes, alongside the phrase “with added vitamins, minerals & taurine.” Plaintiffs identified forty-seven products so labeled yet containing ingredients classified as synthetic by the FDA. The labels disclose “added vitamins, minerals & taurine,” but plaintiffs alleged that “an ordinary person would understand [this] claim to mean that the added vitamins, minerals and/or taurine are natural as well.”

The court applied the reasonable consumer standard, noting that determining reasonableness as a matter of law is appropriate only where a plaintiff’s claims are “patently implausible or unrealistic.” The requirement used by the Second Circuit that a “significant portion” of consumers be likely to be deceived “does not impose a particularly onerous burden on Plaintiffs.” The court quoted the Second Circuit’s 2008 affirmation that New York’s consumer protection laws are “meant to take into account the impact of allegedly deceptive statements on the ‘vast multitude which the statutes were enacted to safeguard—including the ignorant, the unthinking and the credulous who, in making purchases, do not stop to analyze but are governed by appearances and general impressions.’ ” City of New York v. Smokes-Spirits.com, Inc., 541 F.3d 425 (2d Cir. 2008), rev’d on other grounds sub nom. Hemi Grp., LLC v. City of New York, 559 U.S. 1 (2010) (quoting Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 273 (1977). Reasonable consumers can be “less astute than average.”

“It is not unreasonable as a matter of law for a consumer to expect that a product labeled ‘natural’ to contain only natural, and not synthetic ingredients.” That was true even though product labels said only “natural” and not “100%,” “solely,” “exclusively,” or “only” “natural.”

Defendants also argued that plaintiffs failed to plead that the ingredients were actually synthetic.

But the complaint identified at least some “synthetic ingredients,” including glycerin, xanthan gum, and menadione sodium bisulfate complex. Although FDA definitions of “synthetic” are not binding, they were “persuasive evidence” of what a reasonable consumer might consider to be “synthetic” as opposed to “natural.” Cases involving ingredients with both natural and synthetic forms were inapposite. “[A]t least some of the ingredients in Defendants’ products are named in their synthetic forms—for example, ‘menadione sodium bisulfate complex’ rather than the more generic ‘vitamin K.’” True, some of the other ingredients can occur naturally, and it was not enough to allege that “citric acid” must be synthetic simply because “[m]ore than 90 percent of commercially produced citric acid … is manufactured through a processed derivative of black mold.” However, given the allegations of unequivocally synthetic ingredients, “it is not too far a leap to infer that, because Defendants are willing to use synthetic forms of some vitamins and minerals, they are more likely to use the synthetic forms of others, particularly in light of widespread commercial practice.”

Nor did the many possible meanings of “natural” defeat the claim. “[T]he mere fact that ‘the term’s use is confusing to consumers’ does not prevent it from being used deceptively.” Also, defendants didn’t offer a single definition of “natural” that their products did satisfy. “The one definition they provide— ‘occurring in conformity with the ordinary course of nature’—is at least plausibly violated by the inclusion of synthetic, lab-created vitamin and mineral analogues.” The court commented that “it is unclear what purpose including ‘natural’ on their packaging would serve if not to indicate a lack of unnatural ingredients or components.”

Nor was it unreasonable for any consumer to believe that pet food could truly be “natural,” despite defendants’ argument that packaged pet food has to be processed. “[I]t is not clear why pet food—like some shelf-stable human food—cannot be made without the addition of synthetic (as opposed to naturally occurring) vitamins. It is also far from clear that the ordinary reasonable consumer is intimately familiar with the nature of the pet food industry and its processing norms.”

Likewise, the court rejected defendants’ argument that any ambiguity could be cleared up by the ingredient panel. “The Court is unpersuaded that all reasonable consumers should know what ‘menadione sodium bisulfate complex’ (synthetic vitamin K) is, for example. This is especially true given that the naturally occurring forms of the same vitamins and minerals have similarly difficult-to-pronounce names, like ‘phylloquinone’ (one of two forms of naturally occurring vitamin K).” Moreover, even if the list of ingredients were intelligible to an ordinary shopper, “a reasonable consumer should not be expected to consult the Nutrition Facts panel on the side of the box to correct misleading information set forth in large bold type on the front of the box.”

The express warranty claim also survived, for the same reason. And the court declined to dismiss claims as to unpurchased goods, since the products that plaintiffs did buy were sufficiently similar to those SKUs. “All are types of wet and dry pet food that are labeled ‘natural,’ and each contains a mix of synthetic ingredients. That is enough.” Variations in the prominence of “natural” and its corresponding potential to mislead created fact issues for discovery.

 

job postings aren't "commercial advertising or promotion" for hiring party's goods/services

Sun Nong Dan Foods, Inc. v. Kangnam1957, Inc., 2024 WL 5440252, No. 2:23-cv-09779-WLH-RAO (C.D. Cal. Nov. 19, 2024)

Not a surprise, but fills a gap in the caselaw: employment ads aren’t “commercial advertising and promotion” for the business trying to hire.

SND alleged that defendants stole SND’s recipe for its “flagship” dish “galbi jjim” and opened a “counterfeit” restaurant offering the same dish.

SND alleged that “two job posts and the employee training in 2019 which involves the dissemination of false statements, constitute false commercial adverting.” A customer allegedly posted the following in a review on Yelp: “We asked a few questions [of employees] since this a new spot, and we learned the head Chef of [defendant] Daeho was from KTown in LA.” Daeho also allegedly published job posts to SF Korean and go20.com:

We are looking for servers and kitchen staff to join our upcoming Korean food restaurant opening in early February in San Francisco’s Japantown neighborhood.

Former head chef of Sun Nong Dan in Los Angeles is preparing to open a new restaurant in San Francisco’s Japantown.

The main menu will be tang (hot pot), and we’ll be serving up some of the best hot pot and other dishes you’ve never had in San Francisco, like BBQ, galbi jjim, and galbi tang.

Open 7 days a week, starting at 7am, part-time and full-time positions available.

If you’re interested in food, want to make money, or want to learn the restaurant business, we want to hear from you….

SF Korean was allegedly the “most well-known media platform within the Korean community in the San Francisco Bay Area.” Allegedly, “[f]or the Korean restaurants, recognition within the Korean Community is crucial for success.” And the representation about having the former head chef was allegedly false.

Instead, defendant C. Park allegedly sought employment at SND with the intent of stealing trade secrets which he then misappropriated, specifically recipes, such that defendants’ “galbi jjim and three side dishes have identical or nearly identical tastes and flavors to those of Sun Nong Dan, as noted by numerous Yelp reviewers.” Daeho allegedly “misappropriated Sun Nong Dan’s confidential galbi preparation method, which has the benefit of the meat easily falling off the bone.” And it allegedly misappropriated SND’s “confidential culinary processes and business operations designed to efficiently handle a large volume of orders for galbi jjim, including order-taking, cooking, the use of specialized cooking equipment, and serving methods tailored for quick handling of large-scale orders which preserving the deep flavors of galbi jjim.”

The court granted defendants’ motion to dismiss the state and federal false advertising claims, though other claims remain.  

SND alleged that the employee training in 2019, where one defendant allegedly instructed Daeho employees to make false statements about Daheo Kalbijjim’s relationship with SND, constituted false commercial advertising. But the Yelp review didn’t reflect that any employee made a false statement as part of a “commercial advertisement about [defendant’s] own or another’s product.” “Instead, the allegation indicates that an employee answered a customer’s questions with an undisputed fact—that the chef had worked in Koreatown in Los Angeles.”

As for the job postings, which can be commercial speech, they still weren’t plausibly published with “the purpose of influencing consumers to buy defendant’s goods or services.” It didn’t even include the restaurant’s name. (Note that California law doesn't have the same "commercial advertising or promotion" language--but when competitor-plaintiffs sue, courts usually interpret the relevant state false advertising laws as covering the same conduct.)

However, the complaint sufficiently alleged misappropriation of SND’s galbi jjim recipe and cooking method. But SND’s order-taking method, “which involves accepting pre-orders before seating customers,” was not plausibly a trade secret. By virtue of visiting the restaurant, any patron could see the method.

 

Rogers v. Grimaldi lives on, at least for work content

Of note because the lawsuit was brought at all, suggesting that trademark owners are willing to try to roll back any First Amendment protections for noncommercial speech.

Pepperdine University v. Netflix, Inc., No. 2:25-cv-01429-CV (ADSx), 2025 WL 632983 (C.D. Cal. Feb. 26, 2025)

Pepperdine sued Netflix for Lanham Act trademark infringement, contributory infringement, dilution, false advertising, and coordinate state claims based on Netflix’s Running Point series, which depicts a team known as the Waves. The court denies a TRO because Rogers is still good law, at least for things that aren’t titles.

Pepperdine’s athletic teams have been known as the “Waves” since the University’s founding in 1937, and it has registrations for WAVES marks. 

examples from complaint

Running Point was scheduled for release yesterday. It’s an “original comedic television series” created by Mindy Kaling and Warner Bros. about a “very dysfunctional family” who owns and manages a “high-profile, multi-billion-dollar basketball franchise and arguably the most famous professional team in all of sports, the Los Angeles Waves.” Pepperdine alleged that the fictional Los Angeles Waves team uses the word “WAVES” with a “strikingly similar font” and similar colors. An image in the Running Point trailer allegedly includes a framed jersey with the number “37,” similar to that worn by Pepperdine’s mascot and denoting Pepperdine’s founding year. Pepperdine also alleged that the story depicted in Running Point does not align with Pepperdine’s values.

comparisons from complaint

Jack Daniels cited Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894 (2002) (Barbie Girl) and University of Ala. Bd. of Trustees v. New Life Art, Inc., 683 F.3d 1266 (2012) (sports art), and Louis Vuitton Malletier S. A. v. Warner Bros. Entertainment Inc., 868 F. Supp. 2d 172 (S.D.N.Y. 2012) (use of “Louis Vuitton” to describe luggage in movie) with approval as non-trademark uses.  

Post-Jack Daniels cases have also applied Rogers to non-title uses. Haas Automation, Inc. v. Steiner, No. 24-CV-03682-AB-JC, 2024 WL 4440914 (C.D. Cal. Sept. 25, 2024) (use of mark on book’s front cover, back cover, and on several pages, but mark was “not used to tell the consumer who published the book or the source of the book”; mark told the consumer what the book was about and who the author worked for); JTH Tax LLC d/b/a Liberty Tax v. AMC Networks Inc., 694 F. Supp. 3d 315 (S.D.N.Y. 2023) (use of fictional tax preparation business name in Better Call Saul).

Photos, including on back cover, from Guenther Steiner's book 

Surviving to Drive: A Year Inside Formula 1, recounting his experiences as Team Principal of the Haas F1 Team 

This is distinct from cases like Punchbowl, which involved use in a business name, or Mar Vista Entertainment, LLC v. THQ Nordic AB, No. 2:23-cv-06924-MEMF (SSC), 2024 WL 3468933 (C.D. Cal. July 8, 2024) (rejecting application of Rogers in a dispute between the owner of the rights to the Alone in the Dark videogame franchise, and entities who released a horror film titled Alone in the Dark).

The court found no use of “Waves” or related indicia as source indicator. The “product” at issue was Running Point, the series, and defendants didn’t suggest Pepperdine was the source. The title cards confirmed that Netflix, Warner Bros., and Mindy Kaling are responsible for the series. They didn’t use Waves in the title (sigh), and, there was an express statement that the series is a fictional work, and “[a]ny similarity to any actual persons ... events, firms and institutions or other entities, is coincidental and unintentional.” “Ultimately, on this record, there is no evidence that any viewer would be misled regarding the source of the series.” (That is not a precondition for Rogers applying, though the court treats it as such; any such precondition makes Rogers irrelevant, at least to source confusion.)

complaint's social media "evidence"

The use of Waves was artistically relevant: it “was chosen as a nod to the real-life Lakers, whose team name also alludes to a body of water.” It also evokes the Los Angeles area and the “Southern California ‘vibe,’ associated with beaches, sun, surfing, and waves.” Nor was there any explicit misleadingness about source. “Neither Pepperdine nor the Waves Marks appear in the title cards for the series. There is therefore no implicit, let alone explicit statement that misleads the consumer as to the source of the series.”

Of note, not all is lost for Rogers for titles: Down to Earth Organics, LLC v. Efron, No. 22-CV-06218 (NSR), 2024 WL 1376532 (S.D.N.Y. Mar. 31, 2024), applied Rogers to the use Netflix and Zac Efron of the phrase “Down to Earth” for the documentary series entitled Down to Earth with Zac Efron. That court found that the defendants were “undoubtedly using ‘Down to Earth’ simply to identify the subject matter and tone of the Series.”

5th Circuit discounts confusion caused by overlap in commonly used arbitrary word

Rampart Resources, Inc. v. Rampart/Wurth Holding, Inc., No. 24-30111, 2025 WL 586820 (5^th Cir. Feb. 24, 2025)

District court’s denial of preliminary injunction discussed here. Rampart Resources provides real estate and property management services in Louisiana, Texas, Arkansas, Mississippi, Alabama, West Virginia, and Ohio. Its services relate to right-of-way acquisition, servitudes, real estate brokerage, permitting, and property management—across several industries, including utilities, oil and gas, renewable energy, and public works. It has a 2018 registration for those services for “the stylized wording ‘RAMPART RESOURCES’ to the right of a graphic image of a road going into the horizon, with a road curving off to the right and left of the main road.” “To be clear, Rampart Resources does not have a trademark for the word ‘Rampart’ or ‘Rampart Resources.’”

Rampart/Wurth offers commercial and residential property management services throughout Louisiana, Texas, Mississippi, and Alabama. Its services cover multifamily, single-family, office, retail, and receiver/keeper properties; it uses different logos to refer to Rampart Multifamily Management and Rampart Commercial Management.

Rampart Resources found out about Rampart/Wurth’s recent adoption of that name change in September 2023 when a FedEx driver told its president that “another Rampart” had just opened in Baton Rouge and that she had confused the two businesses.

Rampart Resources received at least seven telephone calls in September and October 2023 from individuals inquiring about rent collection, leasing units, Section 8 housing vouchers, lease payments, and refunding deposits. After being told they must have the wrong number, customers responded, “this is the home office of Rampart, correct?” and “this is the number I got for Rampart.”

On appeal, the standard was abuse of discretion. “As to each element of the district court’s preliminary-injunction analysis ... the district court’s findings of fact are subject to a clearly-erroneous standard of review, while conclusions of law are subject to broad review and will be reversed if incorrect.” Here, the appeal failed on likely success on the merits.

The district court found that the type of mark/mark strength, similarity of products/services, and evidence of actual confusion weighed in favor of likely confusion; similarity of marks, consumer overlap, and degree of care of potential purchasers weighed against; and advertising media/defendant’s intent were neutral.

Rampart Resources argued that mark strength should weigh heavily in its favor, not just slightly as the district court held. Although the mark was arbitrary, and although Rampart Resources had used it for 34 years, Rampart/Wurth provided evidence of widespread use of the key portion (Rampart). This was not clear error.

Mark similarity: “It is visually apparent that all aspects of the marks (font, color, design, etc.) are different except the use of the singular word ‘Rampart.’ The common use of the word ‘Rampart’ does not make the marks similar when considering ‘the total effect of designation.’”

Similarity of services: the district court found only a minor overlap and didn’t weigh it heavily in Rampart Resources’ favor. “The district court correctly concluded that while both parties operate broadly in the real estate industry, there is not substantial overlap between the services offered.”

But, when there isn’t direct competition, “the confusion at issue is one of sponsorship, affiliation, or connection.” The critical question, the court of appeals said, is “whether the consuming public would believe that the natural tendency of [Rampart Resources]” would be “to expand into the [property management industry].” “Here, the district court found that it would be reasonable for a customer of Rampart Resources to believe it was making a foray into property management, since they have offered property management services in the past and represent that they are still capable of doing so.” Weighing this factor in favor of a likelihood of confusion, but only somewhat, not heavily, was plausible based on the record.

Advertising media: “Both parties stated that word of mouth advertising is perhaps their strongest form of advertising…. Although both parties represented they use face-to-face communications and website advertising, the district court is correct that the evidence presented for this digit is scant.” Finding the factor neutral was not an abuse of discretion.

Actual confusion: While swayed purchases are not necessary, “more is required when the confusion did not or cannot sway purchases.”  “[N]ot all confusion counts: evidence of actual confusion must show ‘more than a fleeting mix-up of names’; rather it must show that ‘[t]he confusion was caused by the trademarks employed and it swayed consumer purchases.’ ” Here, seven misdirected phone calls and the FedEx driver’s confusion was not weighty when evaluated in light of “the high volume of business conducted by the parties and the fact that there was no evidence that any of Rampart Resources’ customers had erroneously contacted Rampart/Wurth.” The court of appeals agreed.

Interestingly, the court found it “[m]ost important[]” that

there is no evidence that any of the eight incidents of actual confusion were related to Rampart/Wurth’s logo or conduct. None of Rampart Resources’ anecdotal evidence shows that parties were confused by the trademarks at issue in this case. Rampart Resources does not have a trademark on the word “Rampart.” Our court has rejected strictly anecdotal evidence where “the proponent did not show that ‘a misleading representation by [the defendant], as opposed to some other source, caused a likelihood of confusion.’ ”

[This is a covert way of saying that, if the confusion was caused by the overlap in “Rampart,” too bad for plaintiff—a purely empirical vision of trademark would say that if the confusion was caused by the overlap, then plaintiff’s rights would extend past its registration to other uses. But there is never a purely empirical account of trademark, much as courts often pretend otherwise. Also: How insulted do you think the Fifth Circuit would be to hear that this is a very European way of looking at it?]

Still, it wasn’t abuse of discretion to weigh actual confusion slightly in the plaintiff’s favor, even though the only evidence showed a “fleeting mix-up of names,” and not that any party was “actual[ly] confus[ed] about the origin of the parties’ products.”

There was no clear error in weighing the factors.  The district court found that the dissimilarity of the marks, as well as the sophistication of the clients weighed most heavily against a finding of likelihood of confusion. Given that each digit “may weigh differently from case to case,” that wasn’t clear error.

 

 

 

pandemic education shutdowns allow unjust enrichment, not contract or false advertising claims

Yodice v. Touro College & Univ. Sys., 2025 WL 579957, No. 21cv2026 (DLC) (S.D.N.Y. Feb. 21, 2025)

Yodice sued Touro for reimbursement of tuition and fees he paid during the Spring 2020 semester, when Touro’s campuses were closed due to the COVID-19 pandemic. On remand, the court dismisses some of the claims. Touro has nearly 20,000 students across the United States and three other countries. The Touro system includes an online institution named Touro University Worldwide (TUW), which offers undergraduate and graduate degree programs.

Yodice alleged that TCDM markets various aspects of the on-campus student experience to the public. For example, its dental website says that students begin in the “dental simulation laboratory” and then “treat patients in our modern clinic.” The website also emphasizes the setting of TCDM’s Hudson Valley campus, which “attracts talented students who prefer a suburban lifestyle with easy access to the New York metropolitan area.” The campus’s location, the website explains, “provides students with numerous career, residency, clinical, and internship opportunities.” And various opportunities to work with local institutions “offer a chance for students to put their learning into practice, conduct research, or interact with patients and professionals in preparation for their future careers.”

Obviously, that didn’t happen through 2020. “Yodice left campus sometime in March. He did not have access to any of Touro’s facilities for the rest of the semester, and he was unable to experience the in-person academic, social, and professional interactions he would have had if not for the pandemic. Touro did not refund the tuition or fees paid by Yodice and other students who were unable to participate in in-person instruction or campus life for much of the Spring 2020 semester.”

Yodice alleged breach of contract, unjust enrichment, and consumer protection false advertising claims. The Second Circuit affirmed dismissal of his contract/unjust enrichment claims based on fees he paid, but reversed on tuition, concluding that the plaintiff “plausibly stated a claim for breach of an implied contract to recover tuition.” It likewise remanded for further consideration of the GBL false advertising claims.

The court here dismissed the contract and GBL claims, but allowed unjust enrichment to proceed as to those who paid tuition for the Spring 2020 semester at Yodice’s dental college.

Limiting the claim to that group: Yodice didn’t sufficiently allege that the other Touro schools were similar: “The FAC itself emphasizes the representations by specific Touro schools as to the quality of the on-campus experiences they offered. The only characteristic that the dozens of Touro schools around the world share is affiliation with the same corporate entity. And Yodice provides no reason to think he has anything in common with most of the class he seeks to represent except that they were, like him, students during the pandemic.”

Yodice argued that Touro’s class standing arguments would be properly handled in assessing the adequacy and commonality of the class representative and class pursuant to Rule 23(a), but “the independent requirement of class standing requires a connection between his claims and those of the class he seeks to represent even at the motion to dismiss stage.”

Breach of contract: dismissed because performance was impossible. “There is no dispute that holding in-person classes and other functions, as Yodice alleges was promised, would have been illegal.”

But that did mean that Yodice could proceed with his unjust enrichment claim seeking a prorated refund of the tuition he paid at the beginning of the semester. “To recover under a theory of unjust enrichment under New York law, a litigant must show that (1) the other party was enriched, (2) at that party’s expense, and (3) that it is against equity and good conscience to permit the other party to retain what is sought to be recovered.” He stated a claim by alleging Touro

retained his tuition even after providing a less valuable and less costly service than was expected when the parties entered their relationship. The FAC alleges essentially that the tuition was conferred under a mistake of fact -- that is, that in-person instruction would be possible. It plausibly alleges that Touro spent less money operating TCDM remotely than it would have on a normal, open physical campus. Whether equity and good conscience require a partial refund cannot be decided at this stage, but Yodice has sufficiently alleged that they do.

Unjust enrichment may be available where one party’s duty to perform is unenforceable due to impossibility. In Goldberg v. Pace Univ., 88 F.4th 204 (2d Cir. 2023), a similar unjust enrichment claim failed because an enforceable force majeure provision in the contract limited the defendant’s duties to provide in-person instruction. There, the plaintiff was attempting to circumvent the terms of the parties’ contract by alleging unjust enrichment. But here, the plaintiff has pled that Touro had a contractual duty to provide in-person instruction, but its performance was excused by the doctrine of impossibility. Fault is not necessary for “circumstances [to] create an equitable obligation running from the defendant to the plaintiff.”

GBL: Usually, the GBL is broader than contract law. But there was no false advertising here because no reasonable person would think that Touro had promised to provide in-person instruction regardless of what happened. “Yodice has not plausibly alleged that Touro’s representation of an on-campus experience was deceptive, or that a reasonable consumer would have understood it to mean that in-person instruction would continue even in a pandemic.” In summary, “Sections 34 9 and 350 are far-reaching, but they do not require businesses to append ‘unless impossible’ to the end of every advertisement.” Nor could this be characterized as a materially deceptive omission; there was no allegation that “Touro possessed some piece of material information at the beginning of the Spring 2020 semester unknown to its students that would have affected prospective students’ decision to attend the university.”