Antitrust Law Daily Wrap Up, ADVERTISING—D. Ariz.: Prevailing party denied attorney fees in dismissal of false advertising case, (Mar 14, 2014)

By Linda O’Brien, J.D., LL.M.

A dietary supplement manufacturer was not entitled to attorney fees as the prevailing party in the dismissal of false advertising claims filed by a competing dietary supplement manufacturer because the case was not exceptional, a federal district court in Phoenix has held (ThermoLife International, LLC v. Gaspari Nutrition, Inc., March 13, 2014, Wake, N.). The competing manufacturer was also denied attorney fees as the prevailing party in the dismissal of counterclaims for unfair competition, trade disparagement, and false advertising.

ThermoLife and Gaspari Nutrition, Inc. (GNI) compete in the market of dietary supplement products related to bodybuilding. ThermoLife filed suit against GNI, alleging that GNI engaged in false advertising by marketing and selling its products as “safe,” “natural,” “DSHEA-compliant,” and “legal,” in violation of the Lanham Act. GNI filed counterclaims for unfair competition, trade disparagement, and false advertising, alleging that ThermoLife made false statements regarding GNI’s SuperPump 250, Novedex, Halodrol, and Vasotropin products. In granting GNI’s motion for summary judgment, the court ruled that ThermoLife could not state false advertising claims against GNI because the claims were barred by federal regulations. However, ThermoLife was granted summary judgment of GNI’s counterclaims.

The court determined that both parties, as prevailing parties in their respective motions for summary judgment, were not entitled to attorney fees. An action may be considered exceptional when the case is groundless, unreasonable, vexatious, or pursued in bad faith. In this case, neither party was successful on any of their claims, and the record showed misconduct and over litigation by both parties. The court noted that it was possible to examine the fee requests to eliminate certain categories based on fault and determine whether either party was entitled to an award after offset. However, the court concluded that equitable considerations supported the denial of the fee requests regardless of exceptionality.

The case is No. CV-11-01056-PHX-NVW.

Attorneys: Cara Molly Louise Eskay (Kercsmar & Feltus PLLC) for ThermoLife International LLC. Andrea Lynn Stone (Gallagher & Kennedy PA) and Flynn Patrick Carey (Mitchell Stein & Carey PC) for Gaspari Nutrition, Inc.

Companies: ThermoLife International LLC; Gaspari Nutrition, Inc.

Cases: Advertising ArizonaNews