Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—M.D. Fla.: PHOSfree® manufacturer states deceptive practices, false advertising by competitor, (Jul 9, 2014)

By Greg Hammond, J.D.

Natural Chemistry L.P., maker of the pool cleaning product PHOSfree, has stated sufficient claims against a competing company under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) and Florida’s false advertising law. In denying the competitor’s motion to dismiss, the federal district court in Orlando determined that (1) the FDUTPA may be asserted by one entity against a competitor, (2) the out-of-state competitor was alleged to conduct “substantial” activity in Florida, and (2) the competitor failed to provide any authority to limit the state’s false advertising law to “any portion” of the general public (Natural Chemistry L.P. v. Orenda Technologies, Inc., July 8, 2014, Presnell, G.).

Background. Natural Chemistry holds a patent for its PHOSfree product, which is used to reduce phosphorus in recreational swimming pool water. In previous litigation, Natural Chemistry sued Orenda Technologies, Inc. for allegedly promoting competing products that violated Natural Chemistry’s patent and a settlement agreement was reached. Orenda was subsequently dissolved, but the owner—Harold Evans—allegedly carried on Orenda’s business through two other companies, Natural Pool Products, Inc. (NPP) and Pure Planet Science & Technology, Inc. (PPST). According to Natural Chemistry, Evans made statements to members of the Independent Pool & Spas Service Association (IPPSA) stating “that Natural Chemistry’s products caused a detrimental condition of water mold in pools.” In addition, Natural Chemistry alleged that Evans contacted Natural Chemistry’s competitors and customers and made false claims about the company’s products.

FDUTPA. In support of its motion to dismiss, Evans argued that the FDUTPA is geographically restricted and does not generally apply to acts outside the state of Florida. The court found that although Evans’ businesses are located out of state, they allegedly conduct a “substantial” amount of activity in Florida. In addition, because FDUTPA may be asserted by one entity against a competitor, the court found that Natural Chemistry stated a sufficient FDUTPA claim.

False advertising. Under Florida’s false advertising law, a claim for misleading advertising requires that the advertisement be made to the Florida general public or any portion thereof. Because Natural Chemistry alleged that at least some of the individuals or companies that attended the IPPSA conference were members of Florida’s general public, and Evans failed to raise any authority that would effectively limit the broad language of the statute, the court determined that Natural Chemistry stated a sufficient false advertising claim.

The case number is 6:13-cv-1607-Orl-31KRS.

Attorneys: Richard E. Mitchell (GrayRobinson, PA) for Natural Chemistry LP. Jeffrey Scott Boyles (Allen, Dyer, Doppelt, Milbrath & Gilchrist, PA) for Orenda Technologies, Inc., Natural Pool Products, Inc., and Pure Planet Science & Technology, Inc.

Companies: Natural Chemistry LP; Orenda Technologies, Inc.; Natural Pool Products, Inc.; Pure Planet Science & Technology, Inc.

Cases: Advertising StateUnfairTradePractices FloridaNews