Antitrust Law Daily Wrap Up, ADVERTISING—E.D. Wis.: Lanham Act allegations ruled insubstantial and frivolous, (Nov 24, 2015)

By Edward L. Puzzo, J.D.

Claims brought under the Lanham Act were not substantial enough to provide federal jurisdiction because the allegations involved person-to-person communications to specific customers, rather than promotional materials disseminated to anonymous recipients, the federal district court in Milwaukee has ruled (Arandell Corporation v. Walker, November 19, 2015, Adelman, L.).

Federal jurisdiction. Plaintiff Arandell Corporation brought a federal claim of false advertising under the Lanham Act. Two of the defendants, Calev Print Media LLC and Mark Calev, moved to dismiss because the statements in question were made in person-to-person communications to specific customers, rather than in promotional materials disseminated to anonymous recipients. The court noted that under Seventh Circuit precedent, only the latter qualified as "commercial advertising or promotion," an essential element of a claim under § 43(a)(1)(B) of the Lanham Act. Plaintiff responded that whether the false statements were made in an advertisement was a question of fact for the jury. The court disagreed, stating that the definition of a statutory term was a question of law for the court, not a question of fact for the jury. The court ruled that plaintiff's allegations were insubstantial and frivolous because they did not allege acts that violated the Lanham Act. Thus, they did not provide a basis for federal jurisdiction.

Diversity jurisdiction. The court also found allegations concerning the citizenship of some of the defendants was lacking because the plaintiff assumed citizenship was determined by the state of residency instead of the state of domicile. Allegations concerning the citizenship of limited liability company defendants was similarly lacking because that was determined by the citizenship of the members of the LLC. Therefore, there was also an inadequate basis to establish diversity jurisdiction.

The court granted the parties leave to amend their jurisdictional allegations.

The case is Civil Action No. 2:14-cv-01279-LA.

Attorneys: Emily Ann Constantine (Whyte Hirschboeck Dudek SC) for Arandell Corporation. Brian R. Smigelski (Dewitt Ross & Stevens SC) for Loyd Walker.

Companies: Arandell Corporation

Cases: Advertising WisconsinNews