Antitrust Law Daily Wrap Up, ADVERTISING—D. Colo.: Costs awarded for prefabricated building false advertising claims, (Aug 20, 2013)

By Tobias J. Gillett, J.D., LL.M.

A prefabricated steel building seller, found liable under the Lanham Act for its literally false comparative advertising, must pay a competitor $12,166 in taxable costs associated with litigating the false advertising claims, the federal district court in Denver has ruled (General Steel Domestic Sales, LLC v. Chumley, August 16, 2013, Brimmer, P.).

General Steel Domestic Sales, LLC sued Atlantic Building Systems, LLC, doing business as Armstrong Steel Corporation, and Ethan Chumley, alleging that they committed trademark infringement and false advertising under the Lanham Act by using the phrase “General Steel Buildings” and “general steel” in their Google AdWords advertising copy, as paid keywords in the AdWords program, and in the text of several websites.

On May 7, 2013, the court ruled in favor of General Steel on its false advertising claim and against General Steel on its trademark infringement claims. The court enjoined the defendants from engaging in the specific misrepresentations for which they were found liable and awarded disgorgement of profits in the amount of $243,462 and costs of suit to be taxed by the clerk of court. On June 11, 2013, the clerk of court taxed costs in the amount of $13,773. In the present motion, the defendants sought review of the costs.

The court rejected the defendants’ assertion that the costs should be reduced by approximately 85 percent because General Steel only prevailed on one of its claims, taking into account “the interrelated nature of the claims” and General Steel’s success in obtaining the “sizable” disgorgement award. However, the court did reduce the costs by ten percent to reflect the expense of litigating claims on which General Steel did not prevail.

The court also declined to deny costs for three depositions, even though the individuals involved were not called to testify at trial. The defendants failed to provide support for their “assertion that their depositions were not relevant in some measure to General Steel’s false advertising claim,” according to the court. However, the court did deny $255 in costs associated with a transcript of a hearing of a General Steel motion for discovery sanctions on which General Steel did not prevail and which was unrelated to its false advertising claim.

Therefore, the court awarded General Steel $12,166 in taxable costs, representing 90 percent of $13,518, the initial $13,773 minus $255 for the transcript.

The case is Civil Action No. 10-cv-01398-PAB-KLM.

Attorneys: David Samuel Fein for General Steel Domestic Sales, LLC. Paul Matthew Grant (Grant/Kuhn LLC) for Ethan Daniel Chumley.

Companies: General Steel Domestic Sales, LLC; Atlantic Building Systems, LLC

Cases: Advertising ColoradoNews