Antitrust Law Daily Wrap Up, FALSE ADVERTISING—WDWash: Exclusion of Testing Evidence Doomed False Labeling Claims, (Oct 30, 2012)
Organizations Mentioned:Pepper Hamilton, LLP | Squire Sanders & Dempsey
By Jody Coultas, J.D.
Because a yarn manufacturer could not show that a competitor’s labels were literally and unambiguously false, the federal district court in Seattle dismissed the manufacturer’s Lanham Act, state law unfair competition, and state false advertising claims (Cascade Yarns, Inc. v. Knitting Fever, Inc., October 29, 2012, Martinez, R.).
Knitting Fever, Inc. (KFI) allegedly began to substitute its Cashmerino yarn, which was 12% cashmere, with a 0% cashmere version of yarn. Despite not containing any cashmere, the label stated that both versions were 12% cashmere. Cascade Yarns, Inc. tested samples of the yarn and found that they were mislabeled, but KFI denied the test results. Cascade also sent samples of milk fiber yarns distributed by KFI to a lab for fiber analysis. The lab found no milk protein in any of the yarns.
Nevertheless, the court found that Cascade failed to produce evidence to support the contention that KFI’s yarns were mislabeled as to cashmere or milk fiber content. The reports and testimony of Cascade’s designated expert was excluded as inadmissible for lack of reliability. There was no evidence, independent of the inadmissible test results, that would demonstrate that KFI’s accused yarns were mislabeled, and that KFI knew of the mislabeling.
The accuracy and reliability of the test results were not an isolated problem with the lab, but an industry-wide problem, according to the court. Cascade’s allegations were based on literal falsity, and there was no evidence that the labels were false.
The case is No. C10-861RSM.
Robert J. Guite (Squire Sanders) for Cascade Yarns, Inc. Deirdre E. McInerney (Pepper Hamilton LLP) for Knitting Fever, Inc.
Cases: Advertising WashingtonNews