Antitrust Law Daily Wrap Up, ADVERTISING—NDGa: Manufacturer of Fiber Used to Make Artificial Turf Failed to Show False Advertising by Former Customer, (May 13, 2013)

By Peter Reap, J.D., LL.M.

TenCate Thiolon Middle East, LLC, and its affiliates (collectively "TenCate"), a manufacturer of polyethylene fiber used to make artificial grass turf for athletic fields, failed to show that its former customers FieldTurf USA Inc. and its affiliates (collectively "FieldTurf") committed false advertising in violation of the Lanham Act in advertisements for their Revolution fiber product that competed with TenCate’s Evolution fiber, the federal district court in Rome, Georgia, has decided (FieldTurf USA Inc. v. TenCate Thiolon Middle East, LLC, May 10, 2013, Thrash, T.). Thus, FieldTurf was entitled to summary judgment on all of TenCate’s counterclaims related to false advertising.

In 2005, FieldTurf entered into a supply agreement with Mattex Leisure Industries, TenCate’s predecessor-in-interest, under which Mattex would provide its monofilament fiber called Evolution exclusively to FieldTurf. Mattex issued a warranty guaranteeing Evolution’s performance for six to nine years.

In 2007, TenCate acquired Mattex and entered into another supply agreement with FieldTurf in 2008, whereby TenCate provided FieldTurf with Evolution yarn.

In 2009 and 2010 FieldTurf allegedly began receiving complaints about the durability of the artificial turf fields it had installed using TenCate’s Evolution fiber. According to FieldTurf, its own subsequent testing demonstrated that the Evolution yarn was degrading prematurely. In December 2010, FieldTurf announced the release of Revolution, a fiber product that would compete with Evolution.

In 2011, FieldTurf sued TenCate for breach of contract, breach of warranty, and fraud. TenCate answered and filed several counterclaims. FieldTurf moved for summary judgment on TenCate’s counterclaims for false advertising.

False Advertising

To prevail on a false advertising claim under the Lanham Act, TenCate must establish that: (1) the advertisements of the opposing party were false or misleading; (2) the advertisements deceived, or had the capacity to deceive, consumers; (3) the deception had a material effect on purchasing decisions; (4) the misrepresented product or service affects interstate commerce; and (5) the movant has been, or was likely to be, injured as a result of the false advertising.

FieldTurf argued that the TenCate’s counterclaim for false advertising must fail because it did not show that any FieldTurf advertisements were literally false. When determining whether an advertisement was literally false or misleading, courts must analyze the message conveyed in full context, and must view the face of the statement in its entirety, the court observed.

TenCate argued that FieldTurf’s advertisements about Revolution were literally false when they claimed that Revolution was the "industry’s strongest fiber," that Revolution had "the strongest ultraviolet inhibitor in the industry," that Revolution was "the most natural looking" fiber, and that Revolution "has the strongest tuft bind."

Industry’s strongest fiber. TenCate argued that FieldTurf’s use of the phrase "industry’s strongest fiber" with respect to Revolution was false advertising. TenCate argued that the advertisement must refer to tensile strength and provided evidence that Revolution did not contain the strongest tensile strength in the industry, the court noted.

However, a TenCate executive admitted in his deposition that fiber "strength can be measured in many ways" and that the assertion that the fiber is the strongest in the industry could be understood in several ways.

Based on the competing evidence, the phrase "industry’s strongest fiber" was not susceptible to only one interpretation. Because the statement was ambiguous and could cover several different meanings of "strength" aside from "tensile strength," TenCate failed to show that the statement was literally false, the court held. Because TenCate offered no evidence of consumer deception, FieldTurf’s motion for partial summary judgment with respect to the false advertising claim stemming from FieldTurf’s "industry’s strongest fiber" promotion was granted.

Strongest ultraviolet inhibitor. TenCate argued that FieldTurf’s claim that Revolution contains the "strongest ultraviolet inhibitor technology in the industry" was false. TenCate showed that the UV stabilizer in Revolution was "better or equal to what others were using" in the Industry, according to the court.

However, this did not establish that FieldTurf’s advertisement was literally false, only that the advertisement was phrased in a manner which may have misled consumers about the strength of Revolution’s ultraviolet inhibitor technology. TenCate failed to come forward with evidence of consumer deception to support a claim that the advertisement was unlawfully misleading. Thus, FieldTurf’s motion for partial summary judgment was granted with respect to its use of the phrase "strongest ultraviolet inhibitor."

Most natural looking fiber. TenCate argued that FieldTurf’s advertisement that Revolution is the "most natural looking fiber" in the industry was literally false. FieldTurf contended that the phrase was merely subjective "puffing."

The "most natural looking" advertisement was merely puffing, the court held. Although a TenCate expert testified that turf fiber becomes more natural looking by minimizing gloss and scattering light reflection, the same expert admitted in his deposition that one cannot prove whether any one fiber type is more natural looking than another fiber type. Because TenCate failed to show that FieldTurf’s advertisement was false or that it was even misleading, because the statement was puffery, FieldTurf’s motion for partial summary judgment was granted in this respect.

Strongest tuft bind. FieldTurf argued that TenCate lacked standing to challenge FieldTurf’s advertisements stating that Revolution had the "strongest tuft bind." FieldTurf argued that "tuft bind" relates to "how hard it is to pull a tuft of fiber out of its backing" and has nothing to do with the fiber itself.

In addition to Article III standing, the Eleventh Circuit also applied prudential standing limitations to false advertising claims under the Lanham Act. In assessing prudential standing, the Court must consider:

(1) The nature of the plaintiff’s alleged injury: Is the injury of a type that Congress sought to redress in providing a private remedy for violations of the Lanham Act? (2) The directness or indirectness of the asserted injury; (3) The proximity or remoteness of the party to the alleged injurious conduct; (4) The speculativeness of the damages claim; [and] (5) The risk of duplicative damages or complexity in apportioning damages.

The prudential standing limitations counseled against TenCate’s standing for this claim, and therefore the court did not address the Article III standing requirements.

TenCate showed that its commercial interests could have been harmed because FieldTurf’s advertisements about "tuft bind" could have led end-users to purchase turf through FieldTurf rather than through a TenCate-supplied turf producer, and this evidence counseled toward prudential standing, according to the court. However, the first factor did not counsel heavily toward granting prudential standing because the advertisements at issue promoted Revolution in a variety of ways and there was no indication that the brief mention of an "industry leading 9lbs. of tuft bind" persuaded a purchaser more than any other promotion of Revolution.

The second factor, concerning the directness of the injury, counseled slightly against prudential standing because FieldTurf and TenCate were not generally competing to sell the same products to the same end-users, and the second factor weighed in favor of standing in cases where one competitor directly injures another by making false statements about its own goods and thus influences customers to buy its product instead of the competitor’s product.

The third factor counseled toward prudential standing because TenCate was a commercial entity competing in the general market for artificial turf and was therefore connected to the effects of the false advertising, even though FieldTurf sells complete artificial turf fields to end-users and TenCate does not. The fourth factor, however, counseled against prudential standing because determining the profits that FieldTurf secured and the revenues that TenCate lost due to the "tuft bind" claims involved too much speculation. Finally, the fifth factor also weighed against prudential standing because, should the court grant standing to TenCate, every competitor in the market for artificial turf and its components could sue, thus creating the risk of duplicative damages.

Because the weight of the prudential standing factors, including the speculativeness of any damages claim, counseled against allowing TenCate to assert its claim for false advertising with respect to "tuft binds," TenCate did not have standing and FieldTurf’s motion was granted in this respect. Thus, the court granted summary judgment to FieldTurf on all of TenCate’s claims relating to false advertising.

The case is Civil Action File No. 4:11-CV-50-TWT.

Attorneys: Amy C. Brown (Friedman Kaplan Seiler & Adelman LLP) for FieldTurf USA Inc. Jessica K. Burtnett (Cremer, Spina, Shaughnessy, Jansen & Siegert, LLC) for TenCate Thiolon Middle East, LLC.

Companies: FieldTurf USA Inc.; TenCate Thiolon Middle East, LLC.

Cases: Advertising GeorgiaNews