Antitrust Law Daily Wrap Up, ADVERTISING—C.D. Cal.: NUTRIBULLET thwarts NUTRI NINJA’s stab at dismissing false reviews claim, (Feb 6, 2015)

By Greg Hammond, J.D.

Homeland Housewares, LLC, the maker of the “NUTRIBULLET” line of blenders, has stated a sufficient false advertising claim against Euro-Pro Operating LLC—the maker of the “NINJA” line of blenders. In partially denying Euro-Pro’s motion to dismiss, the federal district court in Los Angeles, determined that Homeland stated sufficient, specific facts to demonstrate Euro-Pro engaged in a campaign to plant false reviews of NUTRIBULLET blenders on the Internet (Homeland Housewares, LLC v. Euro-Pro Operating, LLC, February 5, 2015, Pregerson, D.).

Background. Homeland and Euro-Pro compete in the home blender market. Homeland sells the NUTRIBULLET line, which includes the NUTRIBULLET CLASSIC, the NUTRIBULLET SPORT, and the NUTRIBULLET PRO 900 SERIES. Similarly, Euro-Pro sells the NINJA line of blenders, including the NUTRI NINJA PRO, which is frequently sold in close proximity to the NUTRIBULLET line of blenders.

Homeland seeks damages and injunctive relief for false advertising, trade dress infringement, trade libel, and unfair competition. Specifically, Homeland asserts that Euro-Pro launched a campaign to plant false reviews on the Internet, in which Euro-Pro made false claims of defects in NUTRIBULLET blenders and touted the NUTRI NINJA as a superior alternative. In addition, Homeland claims that Euro-Pro planted false statements about the NUTRIBULLET in its infomercials, and that the false statements constituted trade libel and unfair competition. Euro-Pro moved to dismiss the second amended complaint.

False Internet reviews. Unlike Homeland’s earlier complaints, its second amended complaint set forth specific facts regarding Euro-Pro’s alleged campaign to plant false reviews on the Internet. Homeland alleged a specific review that made false statements regarding spillage and lubricant leaks. In addition, the second amended complaint alleged that the statements were false and planted by Euro-Pro; Euro-Pro convinced consumers that Homeland’s product is inferior in quality; and Euro-Pro’s alleged deception actually changed consumer behavior, injuring Homeland. In assuming that the placement of the allegedly false review on a widely-available website constitutes placement of a statement into interstate commerce, the court concluded that Homeland stated a sufficient claim for false advertising.

Infomercial comparison. Homeland also asserted that Euro-Pro engaged in false advertising when it compared the NUTRIBULLET to the NUTRI NINJA in an infomercial and stated that the NUTRIBULLET had “trouble” blending a particular set of ingredients. Specifically, Homeland asserted that the comparison test failed because Euro-Pro did not fill the NUTRIBULLET container with a sufficient amount of liquid. The court dismissed this claim, however, finding that Euro-Pro’s statement was literally true and was not confusing, because the demonstration showed that the NUTRIBULLET was actually not effective at blending that particular set of ingredients without adding liquid.

Trade dress. The trade dress claim was also dismissed by the court. Although Homeland alleged sufficient facts to state a trade dress infringement claim based on secondary meaning and that the alleged trade dress is non-functional, the two blenders’ trade dresses were not substantially similar. Consequently, there was no likelihood of consumer confusion, and the trade dress claim could not stand.

Trade libel. Lastly, Euro-Pro moved to dismiss Homeland’s trade libel claim, arguing that Homeland failed to plead special damages. Homeland alleged that its sales declined by 31 percent in stores where NUTRI NIJA PRO was sold, but sales increased by 14.5 percent in stores where NUTRI NIJA PRO was not sold. Consequently, Homeland identified a net loss in sales of 45.5 percent due to Euro-Pro’s allegedly false statements, and that Euro-Pro proximately caused damage to Homeland and caused a pecuniary loss of over $1.2 million. Euro-Pro argued that Homeland’s allegations were ambiguous. The court rejected that argument, finding that Homeland pleaded “however minimally” a prior market, a drop in sales, and a specific amount lost, to state a valid trade libel claim.

The case number is CV 14-03954 DDP (MANx).

Attorneys: Dylan C. Dang (Trojan Law Offices) for Homeland Housewares LLC and NutriBullet, LLC. Kenneth L. Wilton (Seyfarth Shaw LLP) for Euro-Pro Operating LLC.

Companies: Homeland Housewares, LLC; NutriBullet, LLC; Euro-Pro Operating, LLC

Cases: Advertising CaliforniaNews