Antitrust Law Daily Wrap Up, ADVERTISING—DNJ: Juice Importer May Be Liable For Role In Falsely Marketing Products , (Nov 29, 2012)

By Jody Coultas, J.D.

A lemon and lime juice products importer stated Lanham Act and New Jersey Consumer Fraud Act false advertising claims against a competitor that allegedly misrepresented the nature and contents of its products, the federal district court in Newark has held (MB Imports, Inc. v. T&M Imports, LLC, November 28, 2012, Debevoise, D.).

The companies import and distribute lemon and lime products that compete in the U.S. market. According to the complaint, the competitor collaborated with a manufacturer, another importer, and the personality behind the products to package, market, advertise, and sell the juice products using false and misleading representations regarding the composition and quality of the juices. These representations allegedly caused a supermarket chain to substitute the importer’s juice products with the competitor’s juice products, resulting in loss of sales.

In its motion to dismiss the claims, the competitor argued that the importer’s complaint failed to delineate the specific allegations against the competitor and merely lumped the competitor in with the other defendants in conclusory factual statements.

The importer stated a Lanham Act false advertising claim based on clear assertions that the competitor was part of a supply chain and integral in the labeling and marketing of the products, according to the court. To state a claim, the importer needed to plead that the competitor made false or misleading statement about its own product, there was actual deception or a tendency to deceive, that the misrepresentation was likely to influence purchasing decisions, the goods entered interstate commerce, and there was likelihood of injury to the importer’s sales or good will. The allegations supported the claims that the misrepresentations were likely to cause consumers to switch juice brand, resulting in a loss of sales.

A reasonable inference could be drawn of the competitor’s liability for unlawful practices under the New Jersey Consumer Fraud Act, according to the court. The competitor’s argument that the statute did not apply because the importer failed to provide any detail relating to the actions taken by the competitor was dismissed based on specific allegations in the complaint.

The importer also stated New Jersey Unfair Competition Law, Truth-in-Consumer-Contract, Warranty And Notice Act, and tortious interference claims against the competitor, according to the court.

The case is No. 10-3445 (ES).

Lisa Anne Rega Bicocchi (Archer & Greiner, P.C.) for MB Imports, Inc. Robert Mahoney (Norris, McLaughlin & Marcus, PC) for T&M Imports, LLC.

Cases: Advertising NewJerseyNews