Reverse passing off claim fails as false advertising

Landrau v. Solis-Betancourt, -- F.Supp.2d --, 2008 WL 2091125 (D.Puerto Rico)

Some background here. The court found that the homeowners initially contracted with Solis-Betancourt to design a renovation, then decided to build a new house. The homeowners gave defendant Solis a “rough conceptual sketch” of the configuration of the new house, and then they worked together to refine it. After that was done, the homeowners hired Landrau and her firm. The homeowners gave Landrau a sketch of the new home, though there’s a factual dispute over whether Landrau was aware of Solis-Betancourt’s involvement at this point.

More basically, the parties disputed who was the “creative force” behind the architectural design. Solis maintained that Landrau was only hired to provide “technical working drawings” necessary to get building permits. There was evidence that Solis reviewed and modified Landrau’s drafts; modified the building authority-approved plan; and continued working on the project after the permits were issued, whereas Landrau did not. Landrau, however, introduced evidence that both she and the construction manager believed that Solis was only responsible for interior design or decoration, not architecture, and that the design changes during construction were merely “cosmetic.” (These details of the factual dispute make clear that Dastar precludes this claim under §43(a)(1)(A). The “creative force” question is precisely the kind of reverse passing off claim the Court meant to preclude unless it could successfully be pled as a false advertising claim.)

As is often the case, the practicalities of business trumped legal certainty: Landrau didn’t have a signed written contract. She sent the homeowners a letter with a fee proposal and an attached American Institute of Architects form contract which discussed architectural services. But the homeowners didn’t sign the fee proposal or the form contract. The parties dispute whether there was an oral agreement to the contract.

The court first asked whether this was a §43(a)(1)(A) or §43(a)(1)(B) claim, because the plaintiffs’ arguments were ambiguous. (a)(1)(A) covers “false representations concerning the origin, association or endorsement of goods or services (‘false association’ or ‘false designation of origin’); and (a)(1)(B) covers false advertising. Plaintiffs didn’t specify, but did call their claim one for “reverse palming off.” This, the court concluded, occurs “almost exclusively” under (a)(1)(A). In addition, plaintiffs failed to allege that the reverse passing off occurred in commercial advertising or promotion, as required for (a)(1)(B). The court declined to credit plaintiffs’ “revisionist history” in which they’d implicitly alleged that the Architectural Digest article was commercial advertising. Nonetheless, it analyzed the false advertising claim on the merits, as plaintiffs desired (plaintiffs having presumably realized their unsurmountable Dastar problem with respect to (a)(1)(A)).

The unsurmountable problem with a false advertising claim here was different: commercial advertising or promotion. The Architectural Digest article was not commercial speech. It proposed no commercial transaction. Solis-Betancourt didn’t pay AD for the article. Though a partner in Solis-Betancourt proposed that AD do an article on the house, and Solis-Betancourt may have hoped to attract clients (and may have succeeded in doing so) as a result of the article, that’s not enough to make the article commercial speech. The court quoted Croton Watch Co., Inc. v. National Jeweler, 2006 WL 2254818 (S.D.N.Y. Aug.7, 2006): “A plaintiff cannot adequately plead a violation of the Lanham Act by simply alleging that defendant caused a journalist to write the article, the content of which plaintiff finds objectionable.”