Antitrust Law Daily Wrap Up, ADVERTISING—S.D. Cal.: Venue transfer denied in suit against nutrition supplement supplier, (Feb 11, 2016)

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

A transfer of venue was not warranted in an action alleging that a nutrition supplement supplier’s email blast regarding a competitor’s product violated the Lanham Act and California’s Unfair Competition Law (UCL) and the False Advertising Law (FAL), according to a federal district court in San Diego (Natural Alternatives International, Inc. v. Creative Compounds, Inc., February 8, 2016, Miller, J.).

Natural Alternatives International, Inc. (NAI), a manufacturer and supplier of nutritional supplements, brought an action against Creative Compounds, Inc. that alleged violations of, among other things, the Lanham Act and California’s UCL and FAL. The basis for the action was NAI’s allegation that Creative sent a widely distributed blast email to the market, which included NAI’s customers and competitors, that contained numerous false and misleading statements regarding Creative’s generic beta-alanine product, NAI’s branded beta-alanine product, and NAI’s intellectual property rights.

After filing an answer to NAI’s complaint, Creative filed a motion to transfer venue to the Eastern District of Missouri.

Venue. The court noted that 28 U.S.C § 1404(a), which governs transfers of venue, provides that an action can be transferred to another district for the convenience of the parties and witnesses, in the interest of justice, if the case could have originally been brought in the transferee court. Because there was no dispute that NAI’s claim could have been brought in the Eastern District of Missouri, the court only needed to examine whether the transfer would serve the interest of justice and be more convenient for the parties and witnesses.

After applying a nonexclusive multi-factor test used by Ninth Circuit courts in deciding whether to transfer a case under § 1404(a), the court determined that: (1) the district had an interest in the action because NAI was headquartered there and NAI’s claims were brought under California law; (2) the Eastern District of Missouri would not provide a greater ease of access to witnesses and evidence; and (3) California was more familiar with the California laws which were the subject of the action. The court determined that the parties’ contacts with forum, the costs of litigation in available forums, the availability of compulsory process to compel the attendance of unwilling witnesses, the location of relevant agreements, and the local interest in having localized controversies decided at home and the unfairness of imposing jury duty on citizens in an unrelated forum were all neutral factors and, therefore, also weighed against transfer.

Since only the factor of court congestion weighed in favor of transfer, the court concluded that transfer was not warranted.

The case is No. 15cv2081.

Attorneys: Caroline C. Maxwell (Patton Boggs LLP) and Frederick William Kosmo, Jr. (Wilson Turner Kosmo LLP) for Natural Alternatives International, Inc. Heather Nicole Catron (White, Oliver & Amundson, APC) and Nelson Nolte (Nolte Law Firm) for Creative Compounds Inc.

Companies: Natural Alternatives International, Inc.; Creative Compounds Inc.

Cases: Advertising StateUnfairTradePractices CaliforniaNews