Antitrust Law Daily Wrap Up, ADVERTISING—N.D.W. Va.: Court beaches boat dock manufacturer’s false ad claims, (May 11, 2016)

By Michael Menzhuber, J.D., LL.M.

Claims that a boat dock manufacturer made misrepresentations regarding its products and about a competitor were dismissed by the federal district court in Wheeling, West Virginia (American Muscle Docks & Fabrication, LLC v. Merco, Inc., May 9, 2016, Bailey, J.).

American Muscle Docks & Fabrication, LLC (AMD) filed an action against Merco, Inc., a competitor in the boat dock and boat dock accessory manufacturing business, asserting false advertising claims under the Lanham Act, tradename violations, misrepresentation, unfair competition, slander, defamation, tortious interference, fraud, and tortious interference with business relationships. Merco responded by filing a motion for partial summary judgment.

Specifically, Merco sought summary judgment on claims that (1) Merco made representations that its products were equivalent, if not better, and less expensive than AMD’s products; (2) Merco told a municipal purchaser that AMD was incapable of doing the work that it had successfully bid to do; (3) Merco told customers that AMD had gone out of business and that Merco was the only company in the dock building business; (4) Merco represented that AMD was not related to Follansbee Dock (a former competitor that was purchased by AMD) and that Merco’s owner was the driving force behind Follansbee Dock; (5) Merco defamed AMD; and (6) Merco committed tortious interference.

Lanham Act. Merco asserted that the statements it was alleged to have made—and which formed the basis for AMD’s Lanham Act false advertising claims—did not constitute commercial advertisements; were non-actionable puffery; were not alleged to have been made in interstate commerce; and were, in fact, never made.

The court found that Merco’s alleged statements did not constitute “commercial advertisements” for purposes of the Act because they were not disseminated sufficiently to the relevant purchasing public.

The court also found that Merco’s alleged statements that its products were superior to AMD’s constituted non-actionable puffery. AMD argued that the statements were actionable when paired with statements that Merco’s owner was the driving force behind Follansbee Dock, the company acquired by AMD. The court, however, noted that there were no allegations that these two representations were ever made in conjunction or that both statements were ever made to any one consumer.

Allegations that Merco had made statements that AMD had gone out of business were incorrect, according to the court, because the alleged statements were, in fact, that Follansbee Dock was going out of business and there was no evidence the Merco had asserted that AMD was going out of business or had closed.

Summary judgment. AMD argued that Merco’s summary judgment motion was premature because of the need for more discovery. The court, however, noted that: (1) AMD did not file a Federal Rule of Civil Procedure 56(d) affidavit to outline the need for discovery and the additional facts that could be uncovered to defeat summary judgment; (2) the parties had more than a year and a half to conduct discovery since the first scheduling order; and (3) AMD had more than two months since the summary judgment motion was filed to identify its deficiencies and to take steps to do so. Consequently, the court concluded that AMD did not sufficiently state the need for additional discovery related to the summary judgment motion or what additional facts it hoped to uncover.

The Case is No. 5:14-CV-56.

Attorneys: Bradley K. Shafer (Swartz Campbell LLC) for American Muscle Docks & Fabrication, LLC. Jeffrey S. Zurbuch (Busch, Zurbuch & Thompson, PLLC) for Merco, Inc.

Companies: American Muscle Docks & Fabrication, LLC; Merco, Inc.

Cases: Advertising WestVirginiaNews