Outlaw Lab., LP v. Shenoor Enter., Inc.

371 F. Supp. 3d 355 (2019) United States District Court for the Northern District of Texas 2019-03-04

civil false advertising action under Lanham Act ยง 43(a)(1)(B) by a competing supplement maker against retail convenience stores; Rule 12(b)(6) motions to dismiss granted with leave to amend; standing (Article III traceability, Lexmark proximate cause) flagged but expressly not ruled on (result: claimant-lost)

Facts

  1. 7 Commercial advertising or promotion not pleaded
    To qualify as a statement made in the context of commercial advertising or promotion, the representation should be made for "the purpose of influencing consumers to buy defendant's goods or services" and "disseminated sufficiently to the relevant purchasing public."
  2. 7 Commercial advertising or promotion not pleaded
    But these individualized allegations do no more than allege that the Retail Defendant "owns and operates" a store at a certain address and "promotes, advertises, disseminates and offers for sale" the Rhino Products at its store.
  3. 7 Commercial advertising or promotion not pleaded
    The Court agrees with Defendants-Plaintiff has alleged only that Retail Defendants sold the Rhino Products in store.
  4. 7 Commercial advertising or promotion not pleaded
    Applying that same reasoning in the context of this 12(b)(6) motion, there is nothing in the complaint that alleges the Retail Defendants here did anything more than passively offer the Rhino Products for sale.
  5. 7 Commercial advertising or promotion not pleaded
    The Court instead holds that in this case the Retail Defendants cannot be held liable for false advertising based solely on allegations that they displayed and sold the Rhino Products in their stores.
  6. 8 False or misleading factual representation not pleaded
    the Rhino Products have labels stating they are "all natural," with "no harmful synthetic chemicals," do not require a prescription, and have limited side effects.
  7. 8 False or misleading factual representation not pleaded
    This argument is strong because it appears that the nonparty manufacturer of the Rhino Products created and made the false labels at issue; Plaintiff has only alleged that Retail Defendants sell these products.
  8. 8 False or misleading factual representation not pleaded
    The Court holds that Plaintiff's complaint fails to sufficiently allege that Defendants made a false statement in the context of commercial advertising or promotion.
  9. 8 False or misleading factual representation not pleaded
    What's more, the only false statements Plaintiff identifies are the labels on the Rhino Products.
  10. 8 False or misleading factual representation not pleaded
    And, as the Baldino's court reasoned, displaying an advertisement created by a third party should not be considered, in itself, the making of a false statement under the Lanham Act.
  11. 8 False or misleading factual representation not pleaded
    Further, here, Plaintiff has provided only conclusory allegations that each Defendant had knowledge of the falsity of the Rhino Products' labels.