Antitrust Law Daily Wrap Up, ADVERTISING—D. Conn.: Lawyer’s federal false advertising claims against former law firm dismissed, (Feb 25, 2025)

By Brian Craig, J.D.

The lawyer failed to show damages over loss of potential clients in the underlying antitrust case when he had not even formed a new law firm.

In a false advertisement dispute between competing law firms over clients in an underlying mass arbitration case alleging anti-competitive pricing with the video game distribution service Steam, the federal district court in Connecticut has dismissed all federal claims and declined to exercise jurisdiction over state law claims. The court concluded that the lawyer failed to plausibly allege false advertising and unfair competition claims against his former law firm and a seed funding company under the Lanham Act. The court reasoned that the lawyer failed to show damages over loss of potential clients in the underlying antitrust case when he had not even formed a new law firm (Bucher v. Zaiger LLC, No. 3:23-cv-00452-AWT (D. Conn. Feb. 24, 2025)).

A lawyer in Connecticut, and a new law firm that he formed, sued his former law firm in the federal district court in Connecticut alleging federal claims under the Lanham Act for false advertising over clients in a mass arbitration case. The underlying mass arbitration case alleges anti-competitive pricing with the video game distribution service Steam, owned by the Valve Corporation. The underlying antitrust involves approximately 14,000 clients. The lawyer alleges that after he left the law firm, his former employer continued to the lawyer’s name and likeness in advertising to recruit new mass arbitration clients. The lawyer also alleges the law firm refused to provide a list of clients that he represented at the time he was employed by the law firm, failed to provide the clients with sufficient information to make an informed choice of counsel, and sent a misleading email to clients. The complaint alleges these acts constitute unfair competition and false advertising in violation of 15 U.S.C. § 1125(a) under the Lanham Act. The lawyer also brought contributory false advertising claims against a seed funding company that provided $500,000 to develop the mass arbitration practice. In addition, the lawyer brought Connecticut state law claims against his former employer, including breach of contract. The law firm and seeding funding company moved to dismiss.

False advertising. The court concluded that the lawyer failed to plausibly allege false advertising and unfair competition claims under the Lanham Act against his former law firm. To prevail on a Lanham Act false advertising claim, a plaintiff must establish that the challenged message was the cause of actual or likely injury to the plaintiffs. Here, the court found that the lawyer failed to show actual or likely injury from the advertisements in the form of YouTube videos and information on the law firm website to recruit new mass arbitration clients after the lawyer’s termination. The lawyer did not form a new law firm until four weeks after his termination. The court concluded that potential clients could not withhold business from the lawyer or his new law firm. The court reasoned that the lawyer failed to show damages when he had not ever formed a new law firm when the advertisements were shown.

Next, the court found that the law firm’s refusal to provide the lawyer with a list of mass arbitration clients does not fall within the scope of the false advertising statute in the Lanham Act. To fall within the scope of the statute, the representations at issue must be commercial speech made for the purpose of influencing the purchasing decisions of the public. Failure to provide the lawyer with a list of clients is not considered commercial speech under the statute.

The false advertising claim based on the contention that an email to clients should have included additional information also fails. The Lanham Act does not impose an affirmative duty of disclosure. Furthermore, the court found that a single message to existing law firm clients to inform them of personnel changes to their legal team does not show that there was an organized campaign to penetrate the relevant market.

Moreover, the court concluded that false advertising claims based on communications to prospective clients through a website fail. The allegations related to the representation on the website that the lawyer will negotiate and litigate claims do not state or suggest how the representation results in injury to a commercial interest of the lawyer in reputation or sales. This count merely contains a conclusory assertion. Thus, the court dismissed the false advertising claims under the Lanham Act.

Contributory false advertising. The court also concluded that the lawyer failed to plausibly allege contributory false advertising against the seed funding company. A claim of contributory false advertising must be based on an underlying instance of false advertising. In this case, the lawyer failed to allege facts that state a claim that the law firm engaged in a primary violation.

Supplemental jurisdiction. Having dismissed all federal claims, the court declined to exercise supplemental jurisdiction over the remaining Connecticut state law claims. Accordingly, the court closed the case.

The Case is No. 3:23-cv-00452-AWT.

Judge: Thompson, A.

Attorneys: Amy E. Markim (O'Sullivan McCormack Jensen & Bliss, P.C.) for William W. Bucher. Alexander Banzhaf (Tuttle Yick LLP) for Zaiger LLC.

Companies: Zaiger LLC

Cases: Advertising Antitrust ConnecticutNews GCNNews