Rare "no interstate commerce" Lanham Act case

Premier Comp Solutions, LLC v. Penn Nat. Ins. Co., 2012 WL 1038818 (W.D. Pa.)

Premier sued defendants for violations of the Lanham Act and various state-law claims.  The court dismissed the Lanham Act claim and remanded the rest.  Premier offers health-related services useful to institutions; defendants are entities that provide health insurance and related services, some of which overlap with Premier’s.  Specifically, defendant Hoover had a contract with the other defendants, PNI and Inservco to perform services similar to Premier’s.

A PNI/Inservco employee in Pennsylvania sent an email to a number of Hoover and Inservco employees about payments to Premier, suggesting that Premier was committing Medicare fraud and that the FBI was reviewing the situation, and directing them to deny payments for any billings from Premier.  The Medicare fraud/FBI statements were false.  This email was forwarded on to a number of other employees, including one who discussed it with an outside party related to the municipality of Monroeville, PA, which was wondering why Inservco had stopped paying Premier’s invoices.  The information spread telephone-style to other clients in PA, with some extra additions (e.g., that Premier’s business model was not ethical because Premier used providers that weren’t allowed under PA’s worker’s comp act). 

The court held that Premier hadn’t sufficiently shown use in commerce to avoid summary judgment.  The communications were all intrastate.  Although Premier operated outside Pennsylvania, it didn’t identify anyone outside Pennsylvania as having received the email or having been told about the misrepresentations in the email. 

Separately, summary judgment was appropriate because there was no “commercial advertising or promotion.”  The false statements were not sufficiently disseminated to the relevant purchasing public to constitute advertising or promotion within the industry.  The initial email went only to defendants’ employees, and those employees told three other people, who told a couple of other people.  In this case, the defendants’ employees to whom the email was sent were not the relevant purchasing public.  Inservco and PNI employees weren’t the employers buying insurance/worker’s comp services who’d be interested in plaintiff’s services.  The subsequent dissemination to five people wasn’t enough in light of Premier’s claims to provide services in all 50 states and its evidence that it had hundreds of current and potential clients, along with evidence that Inservco claimed 600 clients.  No reasonable jury could find sufficient dissemination.