Antitrust Law Daily Wrap Up, ADVERTISING—D. Minn.: Jury must decide falsity of ‘Sleep Number’ statements, (Jan 14, 2016)

By Greg Hammond, J.D.

A jury will have to decide the falsity of statements various companies and individuals purportedly made in comparing their products to “Sleep Number” beds, the federal district court in St. Paul has ruled. In denying the “Sleep Number” manufacturer’s motion for summary judgment on its false advertising claim, the court determined that factual issues exist in whether the various statements were, in fact, false (Select Comfort Corp. v. Baxter, January 13, 2016, Frank, D.).

Select Comfort Corp. and Select Comfort SC Corp. filed suit against multiple companies and individuals, alleging that the defendants made false statements to customers while comparing their products to Select Comfort’s products—adjustable air beds marketed under the “Sleep Number” brand and “Comfortaire” mark.

Falsity. The court denied Select Comfort’s motion for summary judgment on the falsity, use in commerce, and materiality elements of its false advertising claim. The court noted that Select Comfort attempted to establish falsity as a matter of law based on excerpts of testimony of various witnesses concerning the truthfulness of certain statements. Conversely, the defendants contested the factual basis for the alleged falsity of some of the purportedly false statements and further claimed that the remaining statements were not literally false when explained in a broader context. The court concluded that numerous factual issues precluded summary judgment for either party on the false advertising claims, finding that these factual issues must be resolved by a jury as to the elements of Select Comfort’s false advertising claim, and in particular with regard to the falsity element of the claim.

Deceptive trade practices. The defendants’ motion for summary judgment with regard to Select Comfort’s Minnesota Deceptive Trade Practices Act (MDTPA) claim was also denied. The court rejected the defendants’ assertion that the MDTPA claim was coextensive with the Lanham Act claims for trademark infringement, unfair competition, and false advertising and agreed with Select Comfort’s argument that the MDTPA claim may lie separately for the purpose of calculating damages.

The case is No. 12-2899 (DWF/SER).

Attorneys: Andrew S. Hansen (Fox Rothschild LLP) for Select Comfort Corp. and Select Comfort SC Corp. Barbara P. Berens (Berens & Miller) for John Baxter. David T. Schultz (Maslon LLP) for Dires, LLC, Scott Stenzel, and Craig Miller. Digi Craft Agency, LLC, pro se. Direct Commerce, LLC, pro se.

Companies: Select Comfort Corp.; Select Comfort SC Corp.; Dires, LLC; Digi Craft Agency, LLC; Direct Commerce, LLC

Cases: Advertising StateUnfairTradePractices MinnesotaNews