IN RE: MCCORMICK & COMPANY, INC., PEPPER PRODUCTS MARKETING AND SALES PRACTICES LITIGATION
MEMORANDUM OPINION in support of 76 Order Granting in Part and Denying in Part 37 Defendant McCormick & Company's Motion to Dismiss Plaintiff Watkins' Amended Complaint. Signed by Judge Ellen S. Huvelle on October 17, 2016. (lcesh2) Modified on 10/17/2016 (AG).
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
IN RE: MCCORMICK & COMPANY,
INC., PEPPER PRODUCTS MARKETING
AND SALES PRACTICES LITIGATION
MDL Docket No. 2665
Misc. No. 15-1825 (ESH)
This Document Relates To:
Watkins Incorporated v. McCormick &
No. 1:15-cv-2188 (ESH)
Plaintiff Watkins, which produces black pepper, alleges that its largest competitor,
defendant McCormick, deceptively “slack-filled” its black pepper containers, thereby confusing
consumers and proximately causing a loss in Watkins’ pepper sales. Watkins asserts five causes
of action: violation of the Lanham Act, 15 U.S.C. § 1125(a)(1)(B) (Count One), violations of
three state statutes punishing unfair trade practices (Counts Two, Three, and Four); and the
common law tort of unfair competition (Count Five). (See Am. Compl., ECF No. 32, ¶¶ 56-89.)
Watkins seeks both monetary and injunctive relief.
Watkins filed its initial complaint in the District of Minnesota on June 9, 2015. After
several consumer class actions against McCormick followed—each alleging deception by the
same “slack-filled” pepper containers—the Judicial Panel on Multi-District Litigation
consolidated all of the “slack-fill” lawsuits against McCormick and transferred them to this
Court on December 8, 2015. Once plaintiff was before this Court, it filed an amended complaint
on March 2, 2016, referencing the allegations in the parallel consumer actions. (See Am. Compl.
¶¶ 50-55.) After the parties had begun briefing the present motion to dismiss, plaintiff filed a
second amended complaint on July 10, 2016. (See Second Am. Compl., ECF No. 57.)
The consumer class actions and this lawsuit all rely upon the allegation that consumers
were deceived by McCormick’s pepper packaging and believed they were buying more pepper
than they ended up receiving. (See Am. Compl. ¶¶ 52-55.) Watkins claims that the fraudulently
induced choices of these duped consumers inflated McCormick’s sales to the detriment of
Defendant filed its motion to dismiss on March 30, 2016, arguing that: (1) plaintiff enjoys
neither constitutional standing under Article III nor statutory standing under the Lanham Act;
(2) plaintiff fails to state a claim under either the Lanham Act, the state statutes, or common law;
and (3) Minnesota choice-of-law rules1 preclude plaintiff’s claims under the California and
Florida statutes; and (4) unfair competition is not an independently existing tort under Minnesota
law. (See Def.’s Mem. Supp. Mot. Dismiss (“Def.’s Mem.”) at 5-7.) Plaintiff filed its opposition
on April 27, 2016. (See Pl.’s Mem. Opp. Def.’s Mot. Dismiss, ECF No. 42 (“Pl.’s Opp.”).)
Defendant filed its reply on May 18, 2016. (See Def.’s Reply, ECF No. 46.) Defendant also
filed a supplemental memorandum in support of its motion to dismiss on July 10, 2016, and
plaintiff filed its response on July 12, 2016. This Court held a hearing on July 20, 2016.
For the reasons stated below, defendant’s motion to dismiss Watkins’ amended complaint
is granted in part and denied in part.
The procedural history of this case demands that Minnesota’s choice-of-law rules govern the
state law claims: In its amended complaint, Watkins asserts both diversity and federal question
jurisdiction because it brings claims under both the Lanham Act and state law. (Am. Compl.
¶ 4.) “In a diversity action transferred pursuant to 28 U.S.C. § 1407(a), the transferee court
applies the choice-of-law rules of the state where the transferor court sits.” In re U.S. Office
Prods. Co. Sec. Litig., 251 F. Supp. 2d 58, 68 (D.D.C. 2003) (citing Ferens v. John Deere Co.,
494 U.S. 516, 518-19 (1990)). Because Watkins originally filed this action in the District of
Minnesota and that court transferred the case to this Court pursuant to the MDL Order,
Minnesota choice-of-law rules apply.
According to Watkins, McCormick has been the dominant wholesaler of black pepper for
decades and is now responsible for approximately 70% of domestic black pepper sales. (Am.
Compl. ¶¶ 7-14.) It sells its pepper in distinctively branded red and white metal containers in
three sizes: small (full capacity of two ounces of pepper), medium (full capacity of four ounces
of pepper), and large (full capacity of eight ounces of pepper). (Id. ¶ 11.) In addition,
McCormick sells black peppercorn grinders, which—until recently—contained 1.24 ounces of
whole black peppercorns. (Id. ¶¶ 14, 28.) Watkins claims that other pepper manufacturers often
model their tins on McCormick’s, and pepper manufacturers use the packaging, appearance, size,
and shape of their tins to advertise their products. (Id. ¶ 12.) Consumers cannot see the amount
of pepper inside McCormick’s containers because the tins are not transparent and the grinders
are covered on the top and sides by a plastic seal and product label. (Id. ¶¶ 16, 28.)
Plaintiff alleges that, in early 2015, McCormick reduced the amount of actual pepper in
each of its pepper tins by 25% but “misleadingly continued to use the same traditional-sized tins”
and reduced the quantity of peppercorns in its grinders from 1.24 ounces to 1 ounces, again
without changing the size of the containers. (Id. ¶¶ 15, 28.) The photographs included with
plaintiff’s complaint show that McCormick did print the reduced quantity on the containers, even
though the size of the containers did not change. (See id. at 7-9 (Photos A, B, and C).) Plaintiff
alleges on information and belief that McCormick “maintained the price” of each tin size,
although plaintiff does not specify whether “price” refers to the wholesale or retail price. (Id.
¶ 21.) According to plaintiff, this reduction in the product within McCormick’s well-known and
recognizable containers amounts to what regulators have termed “nonfunctional slack-fill.”
(Pl.’s Opp. at 2 (citing 21 C.F.R. § 100.100 (“A container that does not allow the consumer to
fully view its contents shall be considered to be filled as to be misleading if it contains
nonfunctional slack-fill. Slack-fill is the difference between the actual capacity of a container
and the volume of product contained therein.”)).)
Because McCormick’s consumers had become accustomed to the size of McCormick’s
containers (and those of its competitors) and relied on them to advertise the amount of pepper
being sold, plaintiff alleges that the reduction in pepper quantity and resulting slack-fill has “led
to widespread confusion and deception of the consuming public.” (Am. Compl. ¶¶ 13, 26, 5055.)2 Watkins claims that McCormick’s decision to change the amount of pepper sold without
changing the size of the tins or their price amounted to a willful attempt to mislead consumers.
(Id. ¶ 71.)
Finally, Watkins alleges that McCormick’s practice of slack-filling is disadvantaging
Watkins’ sales. As plaintiff explains, “[w]hen McCormick’s slack-filled tins and grinders are
positioned on a grocery store shelf next to competitors, including Watkins, McCormick tried to
induce consumers to buy McCormick pepper because it appears — falsely — that the
McCormick container is equivalent to, or larger than, the Watkins containers and those of other
competitors.” (Id. ¶ 37.) Watkins claims that if consumers had actually known that
McCormick’s various tins contained 25% less pepper than usual, they would have bought pepper
produced by McCormick’s competitors, including Watkins.
The plaintiffs in the consumer class action complaint allege that if they had known the actual
amount of pepper in McCormick’s containers, they would not have bought the products. (See
Consol. Am. Class Action Compl., ECF No. 34, ¶ 90.)
McCormick argues that this Court should dismiss all five counts of Watkins’ amended
complaint. First, it challenges Watkins’ standing to bring a claim for injuries which McCormick
believes to be speculative. Second, it maintains that Watkins has not alleged all elements of a
Lanham Act claim. Third, it argues that Watkins’ state statutory claims should be dismissed for
failure to state a claim or on the basis of choice-of-law analysis. And finally, McCormick
maintains that, under Minnesota law, unfair competition is not an independently existing tort.
The Court considers each of these arguments seriatim.
I. ARTICLE III STANDING
“To survive a motion to dismiss for lack of [constitutional] standing, a complaint must
state a plausible claim that the plaintiff has suffered an injury in fact fairly traceable to the
actions of the defendant that is likely to be redressed by a favorable decision on the merits.”
Humane Soc’y of the U.S. v. Vilsack, 797 F.3d 4, 8 (D.C. Cir. 2015) (citing Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560-61 (1992)). On such a motion to dismiss, the Court “must accept as
true all material allegations of the complaint, and must construe the complaint in favor of the
complaining party.” Warth v. Seldin, 422 U.S. 490, 501 (1975). The Court must “‘presum[e]
that general allegations embrace those specific facts that are necessary to support [a contested]
claim,’” and thus “general factual allegations of injury resulting from the defendant’s conduct
may suffice” to survive a motion to dismiss for lack of Article III standing. Lujan, 504 U.S. at
561 (quoting Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 889 (1990)).
For Lanham Act claims, Article III standing requires “the familiar trio of injury in fact,
causation, and redressability.” TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820, 825 (9th
Cir. 2011). In a false advertising suit, a plaintiff can demonstrate injury by showing that “‘some
consumers who bought the defendant’s product under a mistaken belief’ fostered by the
defendant ‘would have otherwise bought the plaintiff’s product.’” Id. (citing Joint Stock Soc’y v.
UDVN Am., Inc., 266 F.3d 164, 177 (3d Cir. 2001)). Defendant cites Joint Stock Soc’y, 266 F.3d
at 176, for the proposition that a plaintiff’s claimed injury is too speculative if the defendant’s
false advertising would harm other competitors in addition to the plaintiff. (See Def.’s Reply at
3.) That court actually found the plaintiff’s injury speculative because it had never sold its
product in the United States and stated that the plaintiff likely would have established an injury if
it had done so. Joint Stock Soc’y, 266 F.3d at 176-77.
As Judge Bazelon once explained, “all claims of competitive injury are to some extent
speculative, since they are predicated on the independent decisions of third parties; i.e.,
customers. However, . . . it is the stuff of the most elementary economic texts that if two firms
are offering a similar product for different prices, the firm offering the lower price will draw
away customers from its competitor.” Am. Soc’y of Travel Agents, Inc. v. Blumenthal, 566 F.2d
145, 157 (D.C. Cir. 1977) (Bazelon, C.J., dissenting). Although the majority in that case denied
standing because it was concerned about allowing a private business “to contest the tax treatment
of a competitor,” id. at 151, the Lanham Act exists precisely “to protect persons engaged in . . .
commerce against unfair competition,” 15 U.S.C. § 1127. Therefore, this Court agrees with the
Ninth Circuit that “[a] plaintiff who can’t produce lost sales data may . . . establish an injury by
creating a chain of inferences showing how defendant’s false advertising could harm plaintiff’s
business.” TrafficSchool.com, 653 F.3d at 825; see also Johnson & Johnson v. Carter-Wallace,
Inc., 631 F.2d 186, 190 (2d Cir. 1980) (A plaintiff in a Lanham Act case can recover damages by
showing “a logical causal connection between the alleged false advertising and its own sales
position” rather than being required to “come forward with specific evidence that [the
defendant’s] ads actually resulted in some definite loss of sales.”).
That is what plaintiffs have done here. Given that the Court must assume at this stage
that Watkins’ allegations of consumer confusion are true, Watkins’ inference that some of the
deceived customers would have purchased Watkins’ pepper products instead of McCormick’s
(had they been aware of the slack-fill) is an adequate allegation of injury. (See Am. Compl.
¶¶ 53-55, 80.) In the Court’s view, Watkins has plainly alleged injuries that are fairly traceable
to McCormick’s conduct. It therefore enjoys Article III standing.
II. STATUTORY STANDING UNDER THE LANHAM ACT
The Supreme Court’s decision in Lexmark Int’l v. Static Control Components, Inc., 134
S. Ct. 1377 (2014), created a two-part test to determine whether a plaintiff can bring a cause of
action under the Lanham Act. First, plaintiff’s interest must be within the zone of interests that
the Act is intended to protect, id. at 1388; and second, plaintiff must allege that its injuries were
proximately caused by defendant’s deceptive practices, id. at 1390. Watkins’ claims easily fall
within the Act’s zone of interests because it has “allege[d] an injury to a commercial interest in
reputation or sales.” Id. While consumer claims are thus excluded from the scope of the
Lanham Act, see id., injuries to a business competitor are precisely the type of harm Congress
intended to protect.
To allege proximate causation, a plaintiff must allege that defendant’s “deception of
consumers cause[d] them to withhold trade from the plaintiff.” Id. at 1391. Even though
proving causation and damages at trial can be difficult, the Lexmark Court noted that “potential
difficulty in ascertaining and apportioning damages is not . . . an independent basis for denying
standing where it is adequately alleged that a defendant’s conduct has proximately injured an
interest of the plaintiff’s that the statute protects.” Id. at 1392.
Defendant proposes an irrational reading of Lexmark when it suggests that, because
plaintiff cannot provide evidence that McCormick’s deceptive packaging impacted Watkins with
a “direct injury” — rather, it involved a chain of actions by third parties — Lexmark denies them
standing. (See Def.’s Mem. at 9-11.) On the contrary, a deceptive act will virtually always first
influence consumers, whose resulting actions affect a competitor’s business interests. That is not
remote and speculative; it is the intended scope of the statute. Indeed, the Lexmark Court’s test
for proximate cause—that “deception of consumers causes them to withhold trade from the
plaintiff”—explicitly assumes that deception will injure a competitor because of the intermediate
actions of consumers. See Lexmark, 134 S. Ct. at 1391. Although Lexmark does caution that
indirect injuries may not support a finding of probable cause, “diversion of sales to a direct
competitor [is] the paradigmatic direct injury from false advertising.” Id. at 1393-94. Such
diversion of sales is what Watkins claims here.
Watkins has alleged a logical causal connection between its lost sales and
McCormick’s slack-filling. Watkins’ pepper was available on store shelves beside McCormick’s
pepper. (Am. Compl. ¶ 37.) Therefore, there is no reason to infer that all confused consumers
would have — if enlightened — chosen a different pepper alternative instead of Watkins’. The
Court thus finds that plaintiff has plausibly alleged consumer confusion that proximately caused
it to lose sales. Because plaintiff’s complaint satisfies both prongs of Lexmark, it has statutory
standing to pursue claims under the Lanham Act.
III. THE LANHAM ACT
Defendant alternatively argues that Watkins has not adequately stated a claim for false
advertising under the Lanham Act. The Court disagrees. The Lanham Act states:
Any person who, on or in connection with any goods or services, or any
container for goods, uses in commerce any word, term, name, symbol, or
device, or any combination thereof, or any false designation of origin,
false or misleading description of fact, or false or misleading representation
of fact, which . . . . in commercial advertising or promotion, misrepresents
the nature, characteristics, qualities, or geographic origin of his or her or another
person’s goods, services, or commercial activities, shall be liable in a civil action
by any person who believes that he or she is or is likely to be damaged by such act.
15 U.S.C. § 1125(a)(1) (emphasis added). McCormick maintains that Watkins has failed to state
a claim under the statute for four reasons: (i) McCormick’s slack-fill packaging does not
constitute “commercial advertising or promotion”; (ii) the slack-fill packaging does not satisfy
the falsity requirement of the Act; (iii) Watkins has not adequately alleged consumer confusion;
and (iv) Watkins has failed to plead facts showing an injury. The Court will now address these
McCormick’s insistence that the size of its containers does not constitute advertising or
promotion defies common sense and the law. Courts have defined “commercial advertising or
promotion” under the Lanham Act as “(1) commercial speech; (2) made by a defendant who is in
commercial competition with the plaintiff; (3) for the purpose of influencing consumers to buy
the defendant’s goods or services[; and] (4) . . . disseminated sufficiently to the relevant
purchasing public to constitute ‘advertising’ or ‘promotion’ within that industry.” Coastal
Abstract Serv., Inc. v. First Am. Title Ins. Co., 173 F.3d 725, 734-35 (9th Cir. 1999) (quoting
Gordon & Breach Science Publishers v. Am. Inst. of Physics, 859 F. Supp. 1521, 1535-36
(S.D.N.Y. 1994)); Seven-Up Co. v. Coca-Cola Co., 86 F.3d 1379, 1384 (5th Cir. 1996); see also
Fashion Boutique of Short Hills, Inc. v. Fendi USA, Inc., 314 F.3d 48, 56-58 (2d Cir. 2002)
(adopting the first, third, and fourth elements of the quoted test while reserving judgment on the
second element). Without addressing the full four-part test, the D.C. Circuit has agreed that the
Lanham Act applies only to commercial speech. Farah v. Esquire Magazine, 736 F.3d 528, 541
(D.C. Cir. 2013).
Because the D.C. Circuit has stated that the core of commercial speech is speech that
does “‘no more than propose a commercial transaction,’” Nat’l Assoc. of Mfrs. v. S.E.C., 800
F.3d 518, 523 n.12 (D.C. Cir. 2015) (quoting Pittsburgh Press Co. v. Pittsburgh Comm’n on
Human Relations, 413 U.S. 376, 385 (1973)), defendant claims that the size of McCormick’s
containers does not propose a commercial transaction and therefore is not commercial speech.
(See Def.’s Mem. at 12-13.) In making this argument, defendant ignores the fact that advertising
includes statements about the product to be sold, not merely a proposal to sell. For example,
statements on product packaging are advertising. See, e.g., Telebrands Corp. v. Wilton Indus.,
Inc., 983 F. Supp. 471, 473-75 (S.D.N.Y. 1997). Images on product packaging can also support
a claim of false and misleading advertising. See, e.g., Aviva Sports, Inc. v. Fingerhut Direct
Mktg., Inc., 829 F. Supp. 2d 802, 812-13 (D. Minn. 2011) (denying summary judgment where
images on the defendants’ packaging made their products appear 20% larger).
Federal courts do not appear to have considered whether a slack-filled container
constitutes a false statement under the Lanham Act, but one court did hold that “the limited
authority on point suggests that excessive slack fill states a claim for false advertising” under
New York’s consumer protection statute. See Waldman v. New Chapter, Inc., 714 F. Supp. 2d
398, 406 (E.D.N.Y. 2010) (analyzing N.Y. Gen. Bus. Law § 350-a). There is no relevant
distinction between the language of New York’s consumer protection statute and that of the
Lanham Act that counsels against following Waldman’s lead here.
McCormick argues that size of its pepper tins is not commercial speech, but it is difficult
to understand how the size of a package or container could possibly not be considered a form of
“advertising or promotion.” 15 U.S.C. § 1125(a)(1)(B). The size of a package signals to the
consumer vital information about a product and is as influential in affecting a customer’s choices
as an explicit message on its surface. Moreover, in this case, “[t]he size of McCormick’s
containers is exactly what makes them misleading, because consumers cannot see the amount of
their contents.” (Pl.’s Opp. at 13.)
Watkins has properly alleged falsity under the Lanham Act. “Statements that are literally
true or ambiguous but which nevertheless have a tendency to mislead or deceive the consumer
are actionable under the Lanham Act.” United Indus. Corp. v. Clorox Co., 140 F.3d 1175, 1182
(8th Cir. 1998). As a matter of federal law, “[a] container that does not allow the consumer to
fully view its contents shall be considered to be filled as to be misleading if it contains
nonfunctional slack-fill.” See 21 C.F.R. § 100.100, which was promulgated under the authority
of 15 U.S.C. § 1454(c)(4). It is true that McCormick’s containers state the actual weight of the
contents on the front corner, but the slack-fill regulations do not include an exception for
containers which accurately state the product amount. See id. An accurate statement of weight
does not necessarily correct a consumer’s misimpression of product quantity based on the size of
a container, because consumers are accustomed to seeing how much space a product occupies
but may not know how that relates to its weight. Moreover, as plaintiff has alleged, the history
and iconic, recognizable size of the McCormick containers creates a misleading impression.
(Am. Compl. ¶¶ 50-55.) If the size of McCormick’s containers had a tendency to mislead or
deceive, as plaintiff claims, that is enough to satisfy the Lanham Act’s falsity requirement.
C. Consumer Confusion
Watkins has also adequately alleged consumer confusion. Defendant argues that Watkins
has not pleaded “facts showing that identifiable consumers were actually confused,” and “as a
matter of law, such confusion cannot be presumed.” (Def.’s Mem. at 14.) But Watkins has
referred to various consumer allegations in the parallel consumer class actions against
McCormick. (See Am. Compl. ¶¶ 51-55 (stating that specific consumers were confused and
deceived by McCormick’s packaging).) Moreover, as stated above, nonfunctional slack-fill is
considered deceptive as a matter of law, so there is nothing implausible about allegations of
actual, widespread deception among McCormick’s customers. See 21 C.F.R. § 100.100.
The Court has discussed the adequacy of Watkins’ allegations of injury in the context of
analyzing standing. (See supra Sections I & II.) As explained above, Watkins has made
sufficient allegations to establish that McCormick’s slack-fill packaging caused Watkins to lose
sales. Plaintiffs are not required to allege specific losses. See Johnson & Johnson, 631 F.3d at
IV. STATE LAW CLAIMS
Watkins has made claims under the Minnesota Deceptive Trade Practices Act, Minn.
Stat. §§ 325D.44, et seq., the California Unfair Competition and Business Practices Act, Cal.
Bus. & Prof. Code §§ 17200, et seq., and the Florida Deceptive and Unfair Trade Practices Act,
Fl. Stat. §§ 501.201, et seq. (Am. Compl. ¶¶ 65-86.) Watkins’ principal place of business is in
Minnesota, and it sells products throughout the United States. (Am. Compl. ¶ 1). McCormick
argues that all three state unfair trade practices claims should be dismissed for failure to state a
claim, yet it has conceded that the state statutes are co-extensive with the Lanham Act with
respect to liability. (Def.’s Mem. at 18-19.) Because the Court finds that plaintiff has adequately
stated a claim under the Lanham Act, it can also reject defendant’s argument that the state law
claims should fail for the same reasons as the Lanham Act.
Defendant makes other arguments about why Watkins has failed to state claims under the
state statutes, but none of those other arguments has merit. First, defendant cites a federal case
for the proposition that a business entity does not have standing to sue under FDUTPA. (Def.’s
Mem. at 19 n.9 (citing Kertesz v. Net Transactions, Ltd., 635 F. Supp. 2d 1339, 1349-50 (S.D.
Fla. 2009)).) However, a more recent opinion from a Florida state court held that non-consumers
do have standing. See Caribbean Cruise Line, Inc. v. Better Bus. Bureau of Palm Beach Cnty.,
169 So.3d 164, 169 (Fl. Ct. App. 2015). Second, defendant argues that Watkins’ claim under the
MDTPA fails because it does not involve mistaking one product for another. (See Def.’s Mem.
at 20-21.) Contrary to defendant’s claim, the plain language of the statute covers deception
about the “characteristics” or “quantities” of a product. Minn. Stat. § 325D.44(5).
Finally, the Court declines to dismiss any of the state statutory claims on the basis of
choice-of-law analysis at this stage, because it does not have a complete factual record or
adequate briefing. When there is a conflict between different states’ laws, Minnesota selects the
applicable law by considering five factors: “(1) predictability of result; (2) maintenance of
interstate and international order; (3) simplification of the judicial task; (4) advancement of the
forum’s governmental interest; and (5) application of the better rule of law.” Jepson v. Gen. Cas.
Co. of Wisc., 513 N.W.2d 467, 470 (Minn. 1994). The Minnesota Supreme Court has explained
that “[t]hese factors were not intended to spawn the evolution of set mechanical rules but instead
to prompt courts to carefully and critically consider each new fact situation.” Id. As a result,
courts often decline to complete the choice-of-law analysis on a motion to dismiss, when they do
not possess all of the relevant facts. See, e.g., P.L. Banks, Inc., v. Organized Fishing, Inc., No.
14-cv-3013, 2015 WL 420288, at *6 (D. Minn. Feb. 2, 2015); Smith v. Questar Capital Corp.,
No. 12-cv-2669, 2013 WL 3990319, at *10 (D. Minn. August 2, 2013).
Defendant argues for the application of Minnesota law (and dismissal of claims under
California and Florida law) by presenting a rule that a corporation is deemed to have suffered an
economic injury at its principal place of business, but it derives that rule from opinions that did
not apply Minnesota’s choice-of-law analysis. (See Def.’s Mem. at 17-18.) Furthermore,
defendant ignores the fact that this is an unfair competition case, and so one might argue that the
injury occurred where the plaintiff lost sales. See, e.g., Dole Food Co., Inc. v. Watts, 303 F.3d
1104, 1113 (9th Cir. 2002) (noting that “a corporation can suffer economic harm both where the
bad acts occurred and where the corporation has its principal place of business”). Indeed,
because of this ambiguity, the most recent Restatement explains that “the place of injury does not
play so important a role for choice-of-law purposes in the case of false advertising . . . as in the
case of other kinds of torts. Instead, the principal location of the defendant’s conduct is the
contact that will usually be given the greatest weight . . . .” Restatement (Second) of Conflict of
Laws § 145 cmt. f (1971). Since the parties have failed to offer an adequate discussion of the
applicable choice-of-law rules, how they apply to the facts of this case, or whether factual
development is necessary for the analysis, the Court will not dismiss plaintiff’s claims under
California and Florida law at this time.
V. UNFAIR COMPETITION
Because plaintiff failed to contest defendant’s motion to dismiss its common law claim of
unfair competition, it has conceded defendant’s argument. See Rosenblatt v. Fenty, 734 F. Supp.
2d 21, 22 (D.D.C. 2010). The Court will therefore dismiss Count Five of the amended
For the reasons discussed above, defendant’s motion to dismiss is granted in part and
denied in part. A separate Order accompanies this Memorandum Opinion.
/s/ Ellen Segal Huvelle
ELLEN SEGAL HUVELLE
United States District Judge
Date: October 17, 2016
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