Antitrust Law Daily Wrap Up, ADVERTISING—E.D. Va.: Fact issues preclude summary judgment of Reynolds’ false advertising claims, (Mar 3, 2014)

By Jody Coultas, J.D.

Genuine issues of fact precluded summary judgment in a false advertising case filed by Reynolds Consumer Products, Inc. against competitor Hand-Foil Corporation, the federal district court in Alexandria, Virginia (Reynolds Consumer Products, Inc. v. Handi-Foil Corporation, February 27, 2014, O’Grady, L.).

Both parties manufacture aluminum food storage and cookware products. Handi-Foil’s business was generally focused on aluminum baking pans, but began selling aluminum roll foil that it advertised as comparable to Reynolds Wrap. As part of its efforts to increase sales, Handi-Foil representatives contacted large retail grocery stores about its roll foil stating that it was comparable in strength to Reynolds Wrap.

To state a Lanham Act, a plaintiff must show that the defendant made a false or misleading statement in commercial advertising about the plaintiff’s or the defendant’s products, the misrepresentations were material, the misrepresentations actually deceived or had the capacity to deceive, the statements were placed in interstate commerce, and the misrepresentations injured the plaintiff. Commercial advertisements are (1) commercial speech by a defendant in commercial competition with the plaintiff, (2) for the purpose of influencing consumers to buy the defendant’s goods, and (3) disseminated to the public.

The court denied Handi-Foil’s motion for summary judgment of Reynold’s false advertising claim because there were genuine issues of fact that must be determined by a factfinder. Handi-Foil argued that the solicitations made by its sales representatives were not commercial advertisements and that Reynolds could not show that any of the statements were false, deceptive, or material. Handi-Foil was clearly a commercial competitor of Reynolds. Email exchanges between Handi-Foil’s sales representatives and retail stores were clearly commercial speech meant to encourage the stores to purchase Handi-Foil’s product. Handi-Foil also contacted over a quarter of the relevant market. The statements concerning the relative strength of the roll foil made by Reynolds and Handi-Foil were material, and Reynold’s claims created a genuine issue of fact as to whether Handi-Foil was actually as strong as Reynolds Wrap.

The case is No. 13-cv-214.

Attorneys: John G. Froemming (Jones Day) for Reynolds Consumer Products, Inc. Brian Nicholas Gross (Kirkland & Ellis LLP) for Handi-Foil Corp.

Companies: Reynolds Consumer Products, Inc.; Handi-Foil Corp.

Cases: Advertising VirginiaNews