Buetow v. A.L.S. Enter.S Inc

• Decision Date: 13 May 2010
• Docket Number: Civ. No. 07-3970 (RHK/JJK).
• Parties: Mike BUETOW, Gary Steven Richardson, Jr., Joe Rohrbach, Jeff Brosi, and Dennis Deeb, individually on behalf of themselves and all other Minnesota residents and entities similarly situated, Plaintiffs,v.A.L.S. ENTERPRISES, INC., Cabela's Inc., Cabela's Wholesale, Inc., and Gander Mountain Company, Defendants.
• Court: U.S. District Court — District of Minnesota

713 F.Supp.2d 832

Mike BUETOW, Gary Steven Richardson, Jr., Joe Rohrbach, Jeff Brosi, and Dennis Deeb, individually on behalf of themselves and all other Minnesota residents and entities similarly situated, Plaintiffs,v.A.L.S. ENTERPRISES, INC., Cabela's Inc., Cabela's Wholesale, Inc., and Gander Mountain Company, Defendants.

Civ. No. 07-3970 (RHK/JJK).

United States District Court,

D. Minnesota.

May 13, 2010.

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Renae D. Steiner, Rachel L.B. Stoering, Heines Mills & Olson, PLC, Minneapolis, MN, Ernest W. Grumbles, III, Thomas J. Leach, III, Merchant & Gould, PC, Minneapolis MN, for Plaintiffs.

Naikang Tsao, Foley & Lardner LLP, Madison, WI, John D. Sear, Bowman and Brooke LLP, Minneapolis, MN, for Defendants.

MEMORANDUM OPINION AND ORDER

RICHARD H. KYLE, District Judge.

INTRODUCTION

This lawsuit concerns hunting clothing manufactured and/or sold by Defendants A.L.S. Enterprises, Inc. (“ALS”), Cabela's, Inc., Cabela's Wholesale, Inc., and Gander Mountain Co. (“Gander Mountain”) (collectively, “Defendants”). Plaintiffs ¹ allege that Defendants have misrepresented that their clothing eliminates human odor and is capable of being “reactivated or regenerated in a household [clothes] dryer after the clothing has become saturated with odors.” (Sec. Am. Compl.(“SAC”) ¶ 2.) All parties now move for summary judgment. For the reasons set forth below, the Court will grant all Motions in part and deny them in part.²

BACKGROUND

Because game animals have an acute sense of smell, there is a demand for odor-controlling clothing in the hunting market. (Sesselmann Decl. ¶ 2.) As a result, ALS patented and began selling hunting clothing with embedded activated carbon (“carbon-embedded clothing”) under the brand name “Scent-Lok.” ( Id. ¶¶ 3-5.) Activated carbon has the ability to adsorb human odor. ( Id. ¶ 3.) ALS licenses its patent and Scent-Lok brand to other retailers, including Defendants, who manufacture and sell their own carbon-embedded clothing to consumers. ( Id. ¶¶ 13-15.)

Defendants have published countless advertisements promoting their carbon-embedded clothing. Almost all of these advertisements utilize the slogans “odor-eliminating technology” or “odor-eliminating clothing.” (Wilde Decl. Exs. 17-18, 24, 28; Grumbles Decl. Ex. 32.) ³ Otherwise, Defendants' advertisements describe the clothing's ability to control odor in several different ways. For example, many advertisements utilize these slogans and phrases such as “eliminates all types of odor” or “odor elimination.” (Wilde Decl. Exs. 20, 21, 23, 26.) Others assert that the clothing can eliminate “100% of your scent” or “all human odor,” thus making the hunter “scent-free.” (Leach Decl. Exs. 7, 10, 12, 15.) In addition, some advertisements utilize graphics indicating that odor cannot escape carbon-embedded fabric. ( Id. Exs. 17-19.)

Defendants have also published numerous advertisements stating that purchasers can “reactivate” carbon-embedded fabric in a standard clothes dryer after the activated carbon becomes saturated with odor. ( Id. Exs. 16, 21-22.) Some of these advertisements claim that carbon-embedded clothing can be reactivated for further use without describing the extent to which odors can be removed from the activated carbon. ( Id. Ex. 21.) Other advertisements state that reactivation will make the clothing “like new” or “pristine.” ( Id. Exs. 16, 22.)

Plaintiffs claim that all of the above-referenced advertisements are false and/or misleading because Defendants' carbon-embedded clothing cannot “eliminate” odors and cannot be reactivated to be “like new” or “pristine.” Both Plaintiffs and Defendants have consulted with experts who have conducted extensive laboratory testing on Defendants' clothing. While the results of such testing differ dramatically, Plaintiffs' and Defendants' experts agree that carbon-embedded clothing cannot eliminate 100% of a hunter's odor. (Leach Decl. Exs. 28, 38; Hartman Dep. Tr. at 213, 225-29; Turk Dep. Tr. at 101.) Moreover, the experts agree that carbon-embedded clothing, once saturated with odor, cannot be reactivated to be “like new” or “pristine.” (Hartman Dep. Tr. at 168; Leach Decl. Exs. 38, 41.)

On September 13, 2007, Plaintiffs commenced the instant action claiming that Defendants' advertising is false and misleading in violation of various Minnesota state laws. Each Defendant now moves for summary judgment on all of Plaintiffs' claims. Plaintiffs oppose these Motions and request partial summary judgment and injunctive relief.

STANDARD OF REVIEW

Summary judgment is proper if, drawing all reasonable inferences in favor of the nonmoving party, there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party bears the burden of showing that the material facts in the case are undisputed. Id. at 322, 106 S.Ct. 2548; Mems v. City of St. Paul, Dep't of Fire & Safety Servs., 224 F.3d 735, 738 (8th Cir.2000). The Court must view the evidence, and the inferences reasonably drawn from it, in the light most favorable to the nonmoving party. Graves v. Ark. Dep't of Fin. & Admin., 229 F.3d 721, 723 (8th Cir.2000); Calvit v. Minneapolis Pub. Schs., 122 F.3d 1112, 1116 (8th Cir.1997). The nonmoving party may not rest on mere allegations or denials, but must show through the presentation of admissible evidence that specific facts exist creating a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Krenik v. County of Le Sueur, 47 F.3d 953, 957 (8th Cir.1995).

Where, as here, the Court confronts cross-motions for summary judgment, this approach is only slightly modified. When considering the defendant's motion, the Court views the record in the light most favorable to the plaintiff, and when considering the plaintiff's motion, the Court views the record in the light most favorable to the defendant. Int'l Bhd. of Elec. Workers, Local 176 v. Balmoral Racing Club, Inc., 293 F.3d 402, 404 (7th Cir.2002). “Either way, summary judgment is proper if the record demonstrates that there is no genuine issue as to any material fact.” Id.

ANALYSIS

Plaintiffs assert that Defendants' advertising is false and misleading in violation of the Minnesota Consumer Fraud Act (Claim 1), the Minnesota Uniform Deceptive Trade Practices Act (Claim 2), and the Minnesota Unlawful Trade Practices Act (Claim 3). (SAC ¶¶ 86-114.) The parties agree that the appropriate analysis for these claims is the same as that applied under the Lanham Act. (Pls. Mem. in Supp. at 14 n. 8; ALS Mem. in Supp. at 13.) To prevail on a false-advertising claim under the Lanham Act, a plaintiff must prove:

(1) that defendant made a false statement of fact in a commercial advertisement about its own or another's product; (2) that the statement actually deceived or would tend to deceive a substantial segment of its audience; (3) that the deception is material, in that it is likely to influence the purchasing decision; (4) that defendant caused its false statement to enter interstate commerce; and (5) that the plaintiff has been or likely to be injured as a result of the false statement, either by direct diversion of sales from itself to the defendant or by a loss of good will associated with its products.

Surdyk's Liquor, Inc. v. MGM Liquor Stores, Inc., 83 F.Supp.2d 1016, 1022 (D.Minn.2000) (Doty, J.).⁴ In this case, Plaintiffs seek summary judgment on the element of falsity only,⁵ requesting an injunction. Defendants also seek summary judgment, asserting that all claims must be dismissed because their advertising is not false or misleading as a matter of law. Accordingly, this Court need only address the element of falsity for purposes of the present Motions.

False statements actionable under the Lanham Act fall into two categories: “(1) commercial claims that are literally false as a factual matter, and (2) claims that may be literally true or ambiguous but which implicitly convey a false impression, are misleading in context, or likely to deceive consumers.” Surdyk's, 83 F.Supp.2d at 1022 (internal quotation marks and citation omitted). When assessing literal falsity, a court will conduct a two-part inquiry: “(1) whether the challenged advertisement conveys an explicit factual message, and (2) whether that explicit factual message is false.” Id. In making this inquiry, the Court must view advertisements in their full context, including visual imagery. United Indus. Corp. v. Clorox Co., 140 F.3d 1175, 1180-81 (8th Cir.1998).

To determine whether an advertisement is not literally false but misleading, the Court must asses whether “the advertising actually conveyed [an] implied message and thereby deceived a significant portion of the recipients.” Id. at 1182. Thus, “the success of the claim usually turns on the persuasiveness of a consumer survey.” Id. at 1183.

I. What advertisements the Court may consider

As a preliminary matter, Defendants argue at length that the advertisements the Court may consider are limited to those Plaintiffs specifically recall reviewing and relying upon in making their purchases. Specifically, Defendants assert that the Court is limited to finding whether the terms “elimination” and “reactivation” are literally false or misleading, as these are the only statements Plaintiffs recall with specificity. (ALS Mem. in Opp'n at 31-45; ALS Mem. in Supp. at 36-38; Gander Mem. in Supp. at 6-8; Cabela's Wholesale Mem. in Supp. at 6-9.) The Court does not agree.

For the purposes of the present Motion, Plaintiffs argue that a variety of Defendants' advertisements are literally false and therefore request an injunction. When an advertisement is literally false, the Court “need not consider the remaining Lanham Act ... elements in order to grant Plaintiffs injunctive relief.” Minn. Life...