NEW JERSEY PHYSICIANS UNITED RECIPROCAL EXCHANGE v. THE MEDICAL PROTECTIVE COMPANY, INC. et al

Filing 151

OPINION filed. Signed by Judge Brian R. Martinotti on 9/20/2018. (mmh)

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
____________________________________
:
BRIAN S. KERN and NEW JERSEY
:
PHYSICIANS UNITED RECIPROCAL
:
EXCHANGE,
:
:
Plaintiffs,
:
Civil Action No. 13-02286-BRM-TJB
:
v.
:
:
OPINION
THE MEDICAL PROTECTIVE
:
COMPANY, INC. d/b/a PRINCETON
:
INSURANCE COMPANY and DOES 1-10, :
:
Defendants.
:
____________________________________:
MARTINOTTI, DISTRICT JUDGE
Before this Court is The Medical Protective Company Inc., d/b/a Princeton Insurance
Company’s (“Princeton”) Motion for Summary Judgment. (ECF No 145.) Plaintiff New Jersey
Physicians United Reciprocal Exchange (“NJ PURE”) opposes the Motion. (ECF No. 146.)
Having reviewed the submissions filed in connection with the Motion and having declined to hold
oral argument pursuant to Federal Rule of Civil Procedure 78(b), for the reasons set forth below
and for good cause shown, Princeton’s Motion for Summary Judgment is GRANTED.
I.

BACKGROUND
This case is based on Princeton’s allegedly misleading publication of its Princeton

Marketplace Updates from 2005 to 2012. (See ECF No. 1.)
A. The Parties and Princeton’s Marketplace Updates
NJ PURE is a New Jersey not-for-profit reciprocal insurance exchange entity that sells
medical malpractice insurance directly to medical providers. (Princeton’s Statement of Facts (ECF
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No. 145-1) ¶ 1 and NJ PURE’s Resp. to Princeton’s Statement of Facts (ECF No. 146-4) ¶ 1.)
Princeton sells medical malpractice insurance in New Jersey. (ECF No. 145-1 ¶ 2 and ECF No.
146-4 ¶ 2.)
As required by insurance policies in New Jersey, both NJ PURE and Princeton submit
financial information to the New Jersey Department of Banking and Insurance (“DOBI”) on an
annual basis, which is known as an “Annual Statement.” (ECF No. 145-1 ¶ 3 and ECF No. 146-4
¶ 3.) From 2005 to 2012, on an annual basis, Princeton created a publication entitled “Marketplace
Update- Prepared for Authorized Agents of Princeton Insurance- [Year]” (the “Princeton
Marketplace Updates”). (ECF No. 145-1 ¶ 4 and ECF No. 146-4 ¶ 4.) The Princeton Marketplace
Updates contained a chart on the first page demonstrating certain financial indicators for named
companies, including but not limited to, NJ PURE and Princeton, that sold medical malpractice
insurance in New Jersey. (ECF No. 145-1 ¶ 6 and ECF No. 146-4 ¶ 6.) Some of the information
that appeared in the Princeton Marketplace Updates were taken directly from the Annual
Statements filed by each company annually to the DOBI, but not all. (ECF No. 145-1 ¶ 7 and ECF
No. 146-4 ¶ 7.) The Princeton Marketplace Updates also contained narrative information regarding
the financial indicators that appeared in them. (ECF No. 145-1 ¶ 9 and ECF No. 146-4 ¶ 9.)
However, the Princeton Marketplace Updates do not disclose that NJ PURE is a not-forprofit insurance company, while Princeton is for-profit. (ECF No. 146-3 ¶ 4 and ECF No. 147-1
¶ 4.) NJ PURE alleges this distinction is significant because the Princeton Marketplace Updates
described net income as determinative of the insurer’s surplus but NJ PURE’s surplus
contributions are not considered in calculating net income because it is a not-for-profit entity. (ECF
No. 146-3 ¶¶ 9-10.) Therefore, NJ PURE alleges the Marketplace Updates advertise that NJ PURE
suffered a net loss in four out of the seven years the Princeton Marketplace Updates published,

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which is not accurate. (Id. ¶ 11.) Notably, Princeton’s Marketplace Updates do not state the
organizational structure of any insurer. (ECF No. 147-1 ¶ 4.)
The 2012 Princeton Marketplace Update, for the first time, contained an A.M. Best &
Company rating category, which the parties admit was accurate. (ECF No. 145-1 ¶ 7 and ECF No.
146-4 ¶ 7.) The A.M. Best & Company is an entity that provides ratings “on financial stability of
insurers and the insurance industry,” providing ratings ranging from A++ to D. (ECF No. 145-1 ¶
11 and ECF No. 146-4 ¶ 11 (citation omitted).) Not all companies make the A.M. Best & Company
ratings.
The Princeton Marketplace Updates did not always portray Princeton with the best
Loss/LAE Ratio or NJ PURE with the worst Loss/LAE Ratio. (ECF No. 145-1 ¶ 8 and ECF No.
146-4 ¶ 8.) In fact, NJ PURE’s Loss/LAE Ratio is lower than, i.e. better than, Princeton’s number
in 2007, 2010, 2011, and 2012. (Id.) Princeton distributed its Princeton Marketplace Updates to its
producers every year. (ECF No. 145-1 ¶ 10 and ECF No. 146-4 ¶ 10.)
In 2004, Princeton lost its A.M. & Company best rating. (ECF No. 145-1 ¶ 12 and ECF
No. 146-4 ¶ 12.) This led to Princeton’s creation of the Marketplace Updates to illustrate its
financial situations for potential purchasers of its insurance in 2005. (ECF No. 145-1 ¶ 13 and ECF
No. 146-4 ¶ 13.) In 2012, Princeton again became A.M. Best Rated and ceased producing and
publishing the Princeton Marketplace Updates. (ECF No. 145-1 ¶ 15 and ECF No. 146-4 ¶ 15.)
In 2010, NJ PURE wrote a letter to DOBI complaining about the Princeton Marketplace
Updates and requesting that DOBI stop Princeton from publishing it. (ECF No. 145-1 ¶ 19 and
ECF No. 146-4 ¶ 19.) However, no letter was sent to Princeton at this time. (Id.) In 2011, DOBI
issued Bulletin 11-01 to “all authorized or admitted property and casualty insurers” stating in part,
“if an advertisement includes financial information of competitors, such as surplus, assets or

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premium, the same information must be presented for the advertising insurer.” (ECF No. 145-1 ¶¶
22-23 and ECF No. 146-4 ¶¶ 22-23.) The parties agree that “[e]very Princeton Marketplace Update
included financial indicators of medical malpractice insurers in New Jersey including, among other
things, surplus, assets and premium information, and every Princeton Marketplace Update also
presented that same financial indicator for Princeton for the same year.” (ECF No. 145-1 ¶ 25 and
ECF No. 146-4 ¶ 25.) Irrefutably, “virtually every sentence” contained in the Princeton
Marketplace Updates “probably could be construed as true.” (ECF No. 145-1 ¶ 26 and ECF No.
146-4 ¶ 26.)
B. NJ PURE’s Lawsuits Against Other Producers of Medical Malpractice Insurance
On September 7, 2012, NJ PURE filed a complaint against Boynton & Boynton, Inc.
(“Boynton”) and Kevin Byrne (“Byrne”) (the “Boynton Action” and the defendants there
collectively the “Boynton Defendants”). (ECF No. 145-1 ¶ 28 and ECF No. 146-4 ¶ 28.) The
second amended complaint in the Boynton Action alleges the Boynton Defendants made “false
written and oral statements to the public” regarding NJ PURE’s financials. (ECF No. 145-1 ¶ 31
and ECF No. 146-4 ¶ 31.) It also alleges the Boynton Defendants distributed the Princeton
Marketplace Updates, as well as different marketplace updates that were created and published by
Boynton. (Id.)
Boynton produces medical malpractice insurance in New Jersey and Byrne was one of its
employees. (ECF No. 145-1 ¶ 29 and ECF No. 146-4 ¶ 29.) Unlike Princeton, NJ PURE does not
use producers to sell their medical malpractice insurance products. (ECF No. 145-1 ¶ 30 and ECF
No. 146-4 ¶ 30.)
In the Boynton Action, Eric Poe’s, NJ PURE’s Chief Operating Officer, who previously
held the title of NJ PURE’s Chief Marketing and Business Development Officer, declaration

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asserted that University Radiology Group (“URG”) “expressed an interest in purchasing medical
malpractice insurance from NJ PURE” in 2012. (ECF No. 145-1 ¶ 33 and ECF No. 146-4 ¶ 33
(citation omitted).) Poe also stated that URG expressed concerns regarding “NJ PURE’s A.M.
Best[] rating and NJ PURE’s reinsurer” and that URG’s concerns were identical to statements
contained in emails sent by Byrne to other physician groups. (ECF No. 145-1 ¶ 34 and ECF No.
146-4 ¶ 34.) Poe declared “as a result of these false allegations . . . [URG] chose not to continue
pursuing purchasing a policy from NJ PURE.” (ECF No. 145-1 ¶ 35 and ECF No. 146-4 ¶ 35
(citation omitted).)
On May 16, 2013, NJ PURE sent cease and desist letters to five different producers of
medical malpractice insurance in New Jersey The NIA Group, PRiMed Consulting, Bollinger
Insurance Solutions, MBS Insurances Services, Inc., and Cornerstone Professional Liability
Consultants for making derogatory remarks regarding NJ PURE. (ECF No. 145-1 ¶¶ 36-37 and
ECF No. 146-4 ¶¶ 36-37.)
C. NJ PURE’s Allegations Against Princeton
On April 10, 2013, NJ PURE filed a Complaint against Princeton, alleging: (1) unfair
competition under the Lanham Act; (2) trade libel; (3) libel; (4) libel per se; (5) tortious
interference with prospective contractual relationships; and (6) unfair methods of competition and
unfair or deceptive acts or practices under the New Jersey Insurance Trade Practices Act. (ECF
No. 1.) NJ Pure alleges that because of the Princeton Marketplace Updates it suffered “pecuniary
harm in the form of loss of former medical malpractice liability policyholders, delays in obtaining
new medical malpractice liability policyholders and the loss of prospective contracts with potential
medical malpractice liability policyholders.” (Id. ¶¶ 70-71.) NJ PURE also sought a permanent
injunction to prevent Princeton from publishing its Princeton Marketplace Updates. (ECF Nos. 1-

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2 and 1-3.) On April 19, 2013, the Court denied NJ PURE’s request for injunctive relief. (ECF No.
6.) NJ PURE’s Motion for Reconsideration of the denial of its Motion for Injunctive Relief was
denied on February 26, 2014. (ECF No. 50.)
D. NJ PURE’s Lost Business
On September 15, 2017, NJ PURE filed a revised economic report conducted by Michael
Soundry (the “Soundry Report”) calculating NJ PURE’s alleged economic losses because of the
conduct of both Princeton and the Boynton Defendants. (ECF No. 145-1 ¶ 53 and ECF No. 146-4
¶ 53.) NJ PURE concedes the Soundry Report “does not state that any particular economic loss
claimed by NJ PURE was due solely to Princeton’s Marketplace Updates.” (ECF No. 145-1 ¶ 54
and ECF No. 146-4 ¶ 54.) Instead, the Soundry Report calculates damages allegedly caused by a
combination of factors the different marketplace updates that were created and published by
Boynton and emails sent by the Boynton Defendants. (Id.) The Soundry Report only identifies two
potential insureds who allegedly did not purchase insurance from NJ PURE due to the conduct of
Princeton and the Boynton Defendants, URG and Pulmonary and Allergy Associates (“PAA”).
(ECF No. 145-1 ¶¶ 55-56 and ECF No. 146-4 ¶¶ 55-56.)
However, Franca Hobbs, Esq., URG’s general counsel and the individual who was solicited
by NJ PURE, did not recall reviewing a Princeton Marketplace Update. (ECF No. 145-1 ¶¶ 73-76
and ECF No. 146-4 ¶¶ 73-76.) In fact, NJ PURE concedes “[t]here is no evidence that anyone at
URG ever read a Princeton Marketplace Update.” (ECF No. 145-1 ¶ 77 and ECF No. 146-4 ¶ 77.)
They further admit Hobbs never stated URG did not purchase insurance from NJ PURE because
of a Princeton Marketplace Update. (ECF No. 145-1 ¶ 78 and ECF No. 146-4 ¶ 78.) According to
Hobbs, URG was required to obtain medical malpractice from an A.M. Best-rated carrier. (ECF
No. 145-1 ¶ 81 and ECF No. 146-4 ¶ 81.) Therefore, on April 12, 2012, she emailed Poe requesting

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documents as to NJ PURE’s rating. (ECF No. 145-1 ¶ 82 and ECF No. 146-4 ¶ 82.) Poe responded
by providing Hobbs with “the official A.M. Best Capital Adequacy Ration (BCAR) score and
report for NJ PURE” of 183.6, which NJ PURE alleged qualified them for an A++ rating. (ECF
No. 145-1 ¶¶ 82-83 and ECF No. 146-4 ¶¶ 82-83.) However, NJ PURE was not rated by A.M.
Best & Company in 2012. (ECF No. 145-1 ¶ 84 and ECF No. 146-4 ¶ 84.)
In fact, on May 25, 2012, NJ PURE received a letter from A.M. Best & Company regarding
Poe’s misrepresentation about being rated. (ECF No. 145-1 ¶ 86 and ECF No. 146-4 ¶ 86.) Once
Hobbs was advised by A.M. Best & Company about the misrepresentation, NJ PURE was
eliminated from consideration as a carrier because URG does “not deal with people who are not
one hundred percent forthright and honest, and [she] would never put [her] company in that
situation, so this whole conversation about financials, it didn’t matter because we never got to
that.” (ECF No. 145-1 ¶ 87 and ECF No. 146-4 ¶ 87 (citation omitted).)
Larry Epstein, the former CEO of PAA and the individual solicited by NJ PURE, also did
not recall reviewing a Princeton Marketplace Update. (ECF No. 145-1 ¶ 59 and ECF No. 146-4
¶ 59.) There is also no evidence that anyone at PAA ever read a Princeton Marketplace Update.
(ECF No. 145-1 ¶ 94 and ECF No. 146-4 ¶ 94.) Epstein stated it did not choose to use NJ PURE
in 2012 because it would lose a capital contribution of at least $150,000 it made to its carrier. (ECF
No. 145-1 ¶ 91 and ECF No. 146-4 ¶ 91.) In fact, NJ PURE’s sales notes for PAA establish that
PAA’s capital contribution to its carrier was “the determining factor” in PAA remaining with its
carrier and not choosing NJ PURE. (ECF No. 145-1 ¶ 92 and ECF No. 146-4 ¶ 92 (citation
omitted).)
In addition, four NJ PURE representatives were deposed: (1) Poe; (2) Dr. Lena Chang, NJ
PURE’s co-founder and CEO; (3) Michael Kochnover, former Director of Marketing and Business

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Development; and (4) Joanna Quaintance, Assistant Director of Marketing and New Business
Development. (ECF No. 145-1 ¶ 59 and ECF No. 146-4 ¶ 59.) Neither of the four representatives
could identify a specific potential insured that did not purchase NJ PURE insurance because of the
Princeton Marketplace Update. (ECF No. 145-1 ¶¶ 63-72 and ECF No. 146-4 ¶¶ 63-72.)
E. Remaining Pertinent Procedural History
On May 5, 2014, the parties filed a stipulation of dismissal of Count IV of NJ PURE’s
Complaint, unfair methods of competition and unfair or deceptive acts or practices under the New
Jersey Insurance Trade Practices Act. (ECF No. 55.) On March 23, 2015, the Court denied NJ
PURE’s Motion to Consolidate the Boynton Action and this action for trial on the merits but
consolidated it for discovery purposes. (ECF No. 72.) On February 16, 2018, Princeton filed a
Motion for Summary Judgment. (ECF No. 145.) NJ PURE opposes the Motion. (ECF No. 146.)
II.

STANDARD OF REVIEW
Summary judgment is appropriate “if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter
of law.” Fed. R. Civ. P. 56(c). A factual dispute is genuine only if there is “a sufficient evidentiary
basis on which a reasonable jury could find for the non-moving party,” and it is material only if it
has the ability to “affect the outcome of the suit under governing law.” Kaucher v. Cty. of Bucks,
455 F.3d 418, 423 (3d Cir. 2006); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). Disputes over irrelevant or unnecessary facts will not preclude a grant of summary
judgment. Anderson, 477 U.S. at 248. “In considering a motion for summary judgment, a district
court may not make credibility determinations or engage in any weighing of the evidence; instead,
the non-moving party’s evidence ‘is to be believed and all justifiable inferences are to be drawn in

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his favor.’” Marino v. Indus. Crating Co., 358 F.3d 241, 247 (3d Cir. 2004) (quoting Anderson,
477 U.S. at 255)); see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587,
(1986); Curley v. Klem, 298 F.3d 271, 276-77 (3d Cir. 2002). “Summary judgment may not be
granted . . . if there is a disagreement over what inferences can be reasonably drawn from the facts
even if the facts are undisputed.” Nathanson v. Med. Coll. of Pa., 926 F.2d 1368, 1380 (3rd Cir.
1991) (citing Gans v. Mundy, 762 F.2d 338, 340 (3d Cir.), cert. denied, 474 U.S. 1010 (1985));
Ideal Dairy Farms, Inc. v. John Labatt, Ltd., 90 F.3d 737, 744 (3d Cir. 1996).
The party moving for summary judgment has the initial burden of showing the basis for its
motion. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). “If the moving party will bear the
burden of persuasion at trial, that party must support its motion with credible evidence . . . that
would entitle it to a directed verdict if not controverted at trial.” Id. at 331. On the other hand, if
the burden of persuasion at trial would be on the nonmoving party, the party moving for summary
judgment may satisfy Rule 56’s burden of production by either (1) “submit[ting] affirmative
evidence that negates an essential element of the nonmoving party’s claim” or (2) demonstrating
“that the nonmoving party’s evidence is insufficient to establish an essential element of the
nonmoving party’s claim.” Id. Once the movant adequately supports its motion pursuant to Rule
56(c), the burden shifts to the nonmoving party to “go beyond the pleadings and by her own
affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate
specific facts showing that there is a genuine issue for trial.” Id. at 324; see also Matsushita, 475
U.S. at 586; Ridgewood Bd. of Ed. v. Stokley, 172 F.3d 238, 252 (3d Cir. 1999). In deciding the
merits of a party’s motion for summary judgment, the court’s role is not to evaluate the evidence
and decide the truth of the matter, but to determine whether there is a genuine issue for trial.

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Anderson, 477 U.S. at 249. Credibility determinations are the province of the factfinder. Big Apple
BMW, Inc. v. BMW of N. Am., Inc., 974 F.2d 1358, 1363 (3d Cir. 1992).
There can be “no genuine issue as to any material fact,” however, if a party fails “to make
a showing sufficient to establish the existence of an element essential to that party’s case, and on
which that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322-23. “[A] complete
failure of proof concerning an essential element of the nonmoving party’s case necessarily renders
all other facts immaterial.” Id. at 323; Katz v. Aetna Cas. & Sur. Co., 972 F.2d 53, 55 (3d Cir.
1992).
III.

DECISION
A. Causation
There are five causes of action remaining in the Complaint against Princeton based on the

Princeton Marketplace Updates: (1) a false advertising claim under the Lanham Act (Count I); (2)
trade libel (Count II); (3) libel (Count III); (4) libel per se (Count IV); and (5) tortious interference
with prospective contractual relations (Count V). Princeton argues all five causes of action require
NJ PURE to “prove that the alleged wrongful conduct caused the damages at issue.” (ECF No.
145-2 at 17.) It further maintains the record is devoid of any evidence of causation sufficient to
create a genuine issue of material fact. (Id. at 20-24.) Specifically, Princeton contends “the record
is entirely devoid of any evidence demonstrating that the potential insureds at issue even read a
Princeton Marketplace Update.” (Id. at 16.) Moreover, Princeton maintains URG and PAA did not
purchase insurance from NJ PURE for reasons entirely unrelated to the Princeton Marketplace
Updates. (Id. at 20.)
NJ PURE argues evidence of specific causation is not required to support a Lanham Act
claim. (ECF No. 146 at 9-12.) Specifically, it argues that because Princeton employed willfully

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deceptive comparative advertisements, causation is presumed. (Id. at 10.) NJ PURE further argues
its libel claims “do not require proof of concrete financial damages from specific lost customers.”
(Id. at 12.)
1. Lanham Act
The Lanham Act creates a cause of action against any person who “uses in commerce any
. . . false or misleading description of fact, or false or misleading representation of fact, which . . .
misrepresents the nature, characteristics [or] qualities . . . of his or her or another person’s goods,
services, or commercial activities.” 15 U.S.C. § 1125(a)(1). The purpose of the Lanham Act is “to
protect persons engaged in such commerce against unfair competition” and “to prevent fraud and
deception.” 15 U.S.C. § 1127.
This case is based upon a claim for false advertising. Therefore, the Court’s analysis must
begin with Section 43(a) of the Lanham Act. Section 43(a) of the Lanham Act provides, in part:
(1) 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—
(A) is likely to cause confusion, or to cause mistake, or to
deceive as to the affiliation, connection, or association of such
person with another person, or as to the origin, sponsorship, or
approval of his or her goods, services, or commercial activities by
another person, or
(B) 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 likely to be damaged by such an act.
15 U.S.C. § 1125(a). To prove a claim of false advertising under the Lanham Act, a plaintiff must
establish the following elements:
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1) that the defendant has made false or misleading statements as to
his own product [or another’s]; 2) that there is actual deception or at
least a tendency to deceive a substantial portion of the intended
audience; 3) that the deception is material in that it is likely to
influence purchasing decisions; 4) that the advertised goods traveled
in interstate commerce; and 5) that there is a likelihood of injury to
the plaintiff in terms of declining sales, loss of good will, etc.
Groupe SEB USA, Inc. v. Euro-Pro Operating LLC, 774 F.3d 192, 198 (3d Cir. 2014). “However,
‘[i]f a plaintiff proves a challenged claim is literally false, a court may grant relief without
considering whether the buying public was misled.’” Warner-Lambert Co. v. Breathasure, Inc.,
204 F.3d 87, 92 (3d Cir. 2000) (quoting Johnson & Johnson-Merck Consumer Pharm. Co. v.
Rhone-Poulenc Rorer Pharm., Inc., 19 F.3d 125, 129 (3d Cir. 1994)). In other words, “literally
false advertising, by raising a presumption of consumer deception, may support a finding of a
casual nexus between defendant’s misconduct and plaintiff’s injuries.” Princeton’s Motion for
Summary Judgment as to NJ PURE’s Lanham Act claim focuses solely on causation. Therefore,
the Court will only address causation.
The Lanham Act allows a plaintiff to pursue both monetary damages and injunctive relief.
The causation standard for money damages is higher than the standard for injunctive relief:
[C]ases involving injunctive relief and those seeking monetary
damages under the Lanham Act have different standards of proof. A
plaintiff suing to enjoin conduct that violates the Lanham Act need
not prove specific damage. In contrast, courts require a heightened
level of proof of injury in order to recover money damages.
Bracco Diagnostics, Inc. v. Amersham Health, Inc., 627 F. Supp. 2d 384, 480 (D.N.J. 2009). A
plaintiff seeking monetary damages instead of injunctive relief must establish “actual damages
rather than a mere tendency to be damaged.” Id. (citation omitted). “The plaintiff must line the
deception with actual harm to its business.” Id.; Labware, Inc. v. Thermo Labsystems, Inc., No.
04-2545, 2005 WL 1541028, at *12 (E.D. Pa. June 29, 2005) (“Actual damages cannot exist

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without a nexus between a false advertisement and an adverse purchasing decision.”).
Nevertheless, the Supreme Court has stated “that a plaintiff suing under § 1125(a) ordinarily must
show economic or reputational injury flowing directly from the deception wrought by the
defendant’s advertising; and that that occurs when deception of consumers causes them to withhold
trade from the plaintiff.” Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118,
133, 134 S. Ct. 1377, 1391, 188 L. Ed. 2d 392 (2014).
NJ PURE argues there is an alleged presumption of irreparable harm afforded to parties
seeking injunctive relief in Lanham Act cases where the challenged advertising is making a
misleading comparison or reference to a competitor’s product. (ECF No. 146 at 10.) NJ PURE
relies on Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer Pharm. Co.,
129 F. Supp. 2d 351, 364 (D.N.J. 2000), aff’d, 290 F.3d 578 (3d Cir. 2002), Pharmacia Corp. v.
GlaxoSmithKline Consumer Healthcare, L.P., 292 F. Supp. 2d 594, 599 (D.N.J. 2003), and Bracco
Diagnostics for this proposition. (Id.) The Court does not agree. First, the Novartis case is
superseded by the Third Circuit’s decision on appeal and Ferring Pharm., Inc. v. Watson Pharm.,
Inc., 765 F.3d 205, 216 (3d Cir. 2014). On appeal in the Novartis case, the Third Circuit held the
district court committed error in relying on the wrong standard in granting relief, but nevertheless
affirmed the decision because the error “was harmless because there is sufficient evidence in the
record to support a finding of irreparable harm.” Novartis Consumer Health, Inc., 290 F.3d at 595.
In addition, the Third Circuit has explicitly held “[b]ecause a presumption of irreparable harm
deviates from the traditional principles of equity, which require a movant to demonstrate
irreparable harm, we hold that there is no presumption of irreparable harm afforded to parties
seeking injunctive relief in Lanham Act cases.” Ferring Pharm., Inc., 765 F.3d at 216.

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Nevertheless, even if there was a presumption of irreparable harm, it is just that, a
presumption. “Federal Rule Evidence 301 provides the default rule for how presumptions operate
in federal civil cases.” Lupyan v. Corinthian Colleges Inc., 761 F.3d 314, 320 (3d Cir. 2014). The
party the presumption operates against must produce evidence to rebut the presumption, while the
actual burden of persuasion remains does not change. Id. This is entitled the “bursting bubble”
theory, where “the introduction of evidence to rebut a presumption destroys that presumption,
leaving only that evidence and its inferences to be judged against the competing evidence and its
inferences to determine the ultimate question at issue.” Id. (citations omitted).
Here, NJ PURE seeks both injunctive and monetary relief. (ECF No. 1 at 20-21.) Therefore,
to prove causation NJ PURE must establish, at a minimum, mere tendency to be damaged for
injunctive relief and actual damages for monetary damages, unless it establishes the Princeton
Marketplace Updates were literally false.
NJ PURE has not established a genuine issue of material fact as to literal falsity. In fact,
the record reveals the opposite. “[O]nly an unambiguous message can be literally false.” Novartis
Consumer Health, Inc., 290 F.3d at 587 (emphasis omitted). During his deposition, Poe conceded
“virtually every individual sentence . . . could be construed as true” in the Princeton Market Place
Updates. (Poe Dep. (ECF No. 145-6) at 716:12-717:3; ECF No. 145-1 ¶ 26; ECF No. 146-4 ¶ 26.)
Dr. Chang also testified the Princeton Marketplace Updates contain “true numbers,” and conceded
that, in his opinion, the Princeton Marketplace Updates are misleading and that her opinion “could
be wrong, of course.” (ECF No. 145-4 at 59.) Lastly, James Corcoran, a supplemental expert
provided by NJ PURE, does not state the Princeton Marketplace Updates were literally false,

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instead he contends they “were misleading.” (Ex. D to ECF No. 146-2 at 23.) 1 As such, there is no
evidence to support that the Princeton Marketplace Updates were literally false. Therefore, NJ
PURE must establish mere tendency to be damaged for injunctive relief and actual damages for
monetary damages.
The Court finds the record is devoid of any evidence of a mere tendency to be damaged, let
alone actual damages, to create a genuine issue of material fact. NJ PURE only claims it lost two
potential insureds, URG and PAA, because of the Princeton Marketplace Updates. Indeed, the
Soundry Report only identifies those two potential insureds as allegedly not purchasing insurance
from NJ PURE due to the conduct of Princeton and the Boynton Defendants. (ECF No. 145-1 ¶¶
55-56 and ECF No. 146-4 ¶¶ 55-56.) However, there is no evidence that either URG or PAA ever
read a Princeton Marketplace Update. To the contrary, the record is replete with contrary evidence.
Hobbs, URG’s general counsel and the individual who was solicited by NJ PURE, did not recall
reviewing a Princeton Marketplace Update. (ECF No. 145-1 ¶¶ 73-76 and ECF No. 146-4 ¶¶ 7376.) Epstein, the former CEO of PAA and individual solicited by NJ PURE, also did not recall
reviewing a Princeton Marketplace Update. (ECF No. 145-1 ¶ 59 and ECF No. 146-4 ¶ 59.)
Further, NJ PURE concedes there is no evidence that anyone at URG or PAA ever read a Princeton
Marketplace Update. (ECF No. 145-1 ¶¶ 77, 94 and ECF No. 146-4 ¶¶ 77, 94.)
NJ PURE further admits Hobbs never stated URG did not purchase insurance from NJ
PURE because of a Princeton Marketplace Update. (ECF No. 145-1 ¶ 78 and ECF No. 146-4 ¶
78.) Hobbs testified that URG was required to obtain medical malpractice from an A.M. Best-rated

1

Princeton argues Corcoran’s expert testimony is inadmissible at this stage because it is unsworn
and “is not competent evidence for purposes of this motion.” (ECF No. 147 at 1 n.2.) Because his
testimony is of no consequence the Court need not address this issue.
15

carrier. (ECF No. 145-1 ¶ 81 and ECF No. 146-4 ¶ 81.) Therefore, on April 12, 2012, she emailed
Poe requesting documents as to NJ PURE’s rating. (ECF No. 145-1 ¶ 82 and ECF No. 146-4 ¶ 82.)
Poe responded by providing Hobbs with “the official A.M. Best Capital Adequacy Ratio (BCAR)
score and report for NJ PURE” of 183.6, which NJ PURE alleged qualified them for an A++ rating.
(ECF No. 145-1 ¶¶ 82-83 and ECF No. 146-4 ¶¶ 82-83.) However, NJ PURE was not rated by
A.M. Best & Company in 2012. (ECF No. 145-1 ¶ 84 and ECF No. 146-4 ¶ 84.) Once Hobbs was
advised by A.M. Best & Company about the misrepresentation, NJ PURE was eliminated from
consideration as carrier because she does “not deal with people who are not one hundred percent
forthright and honest, and [she] would never put [her] company in that situation, so this whole
conversation about financials, it didn’t matter because we never got to that.” (ECF No. 145-1 ¶ 87
and ECF No. 146-4 ¶ 87 (citation omitted).)
Further, Epstein stated it choose not to use NJ PURE in 2012 because it would lose a capital
contribution of at least $150,000 it made to its carrier. (ECF No. 145-1 ¶ 91 and ECF No. 146-4 ¶
91.) In fact, NJ PURE’s sales notes for PAA establish that PAA’s capital contribution to its carrier
was “the determining factor” in PAA remaining with its carrier and not choosing NJ PURE. (ECF
No. 145-1 ¶ 92 and ECF No. 146-4 ¶ 92 (citation omitted).)
NJ PURE has no evidence contradicting or calling into question the above testimony from
URG and PAA or the documents that corroborate it. In fact, neither of the four NJ PURE
representatives deposed in the matter Poe, Dr. Chang, Kochnover, and Quaintance could identify
a specific potential insured that did not purchase NJ PURE insurance because of the Princeton
Marketplace Update. (ECF No. 145-1 ¶¶ 63-72 and ECF No. 146-4 ¶¶ 63-72.) Moreover, NJ
PURE’s sales notes for PAA establish that PAA’s capital contribution to its carrier was “the

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determining factor” in PAA remaining with its carrier and not choosing NJ PURE. (ECF No. 1451 ¶ 92 and ECF No. 146-4 ¶ 92 (citation omitted).)
As such, there is no evidence that anyone ever even read a Princeton Marketplace Update,
let alone relied on anything false or misleading therein. More importantly, there is no evidence the
Princeton Marketplace Updates influenced a single purchasing decision. NJ PURE’s unsupported
allegation that “there’s probably thousands of physicians that chose not to purchase insurance
through us due to the Marketplace Update,” (ECF No. 146-4 ¶ 63), is speculative and insufficient
to create a genuine issue of material fact. Synygy, Inc. v. Scott-Levin, Inc., 51 F. Supp. 2d 570, 575,
578 (E.D. Pa. 1999), aff’d sub nom, Synyn, Inc. v. Scott-Levin, 229 F.3d 1139 (3d Cir. 2000)
(finding that, because a plaintiff seeking monetary relief must show “actual damages rather than a
mere tendency to be damaged,” and because plaintiff failed to “even tender a witness who
specifically recalls defendant maligning plaintiff, let alone one who made a business decision
based upon the slide,” summary judgment was appropriate). 2 Accordingly, Princeton’s Motion for
Summary Judgment is GRANTED as to the Lanham Act claim. 3

2

To the extent NJ PURE argues its asserted damages were the result of the combination of
Princeton Marketplace Updates, emails and oral statements made by the Boynton Defendants, and
different marketplace updated generated independently by the Boynton Defendants, such argument
is immaterial. (ECF No. 146 at 13-14, 19.) First, the record unambiguously demonstrates URG
and PAA did not choose NJ PURE for other reasons. Second, there is absolutely no evidence URG
or PAA received any of the Princeton Marketplace Updates. Third, even if URG or PAA received
the Boynton Defendants marketplace updates, Princeton and the Boynton Defendants are separate
entities and were sued in separate litigations. These cases were not consolidated for trial and there
is no evidence and NJ PURE makes no argument that Princeton has any responsibility for what
the Boynton Defendants may have generated or said.
3

Even applying NJ PURE’s presumption of irreparable harm standard, Princeton’s Motion is
GRANTED because Princeton has clearly provided evidence rebutting that alleged presumption.
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2. State Law Claims
Princeton argues NJ PURE’s trade libel, libel, libel per se, and tortious interference with
prospective contractual relations claims should be dismissed because they also require NJ PURE
to prove “that the alleged wrongful conduct caused the damages at issue.” (ECF No. 145-2 at 17.)
In the alternative, Princeton contends NJ PURE’s claims sound only in trade libel, not libel, and
that the Princeton Marketplace Updates do not “impute fraud, deceit, dishonestly, or reprehensible
conduct to NJ PURE” as required to satisfy a claim for common law libel. (Id. at 27.) NJ PURE
does not dispute it must prove causation for all its state law claims. However, it argues that libel
and trade libel claims can coexist. (ECF No. 146 at 24.) Lastly, it argues the “information
disseminated in the Marketplace Updates is reasonably susceptible of a defamatory meaning.” (Id.)
a. Libel
“In order to establish a prima facie case of defamation (whether denominated libel or
slander), a plaintiff must show that defendant communicated to a third person a false statement
about plaintiff that tended to harm [the] plaintiff’s reputation in the eyes of the community or to
cause others to avoid plaintiff.” W.J.A. v. D.A., 4 A.3d 601, 604 (N.J. Super. Ct. App. Div. 2010),
aff’d and remanded, 43 A.3d 1148 (N.J. 2012) (quoting McLaughlin v. Rosanio, 751 A.2d 1066,
1071 (N.J. Super. Ct. App. Div. 2000). “Another component of a statement’s defamatory natureand thus an element of a prima facie case-is that [a] plaintiff must have been harmed by the alleged
defamation.” Id. As demonstrated above under the Lanham Act discussion, it is this latter
component that is at issue here. There is no evidence NJ PURE was harmed by the Princeton
Marketplace Updates. Accordingly, Princeton’s Motion for Summary Judgment is GRANTED as
to the libel claim.

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b. Trade Libel
The Court now turns to NJ PURE’s claim of trade libel. To establish a claim of trade libel
on must prove the following elements: “1) publication; 2) with malice; 3) of false allegations
concerning plaintiff’s property, product or business; and 4) special damages-pecuniary harm.”
Foxtons, Inc. v. Cirri Germain Realty, No. A-6120-05T3, 2008 WL 465653, at *7 (N.J. Super. Ct.
App. Div. Feb. 22, 2008). “[T]o prove such special damages requires that Plaintiffs ‘allege either
the loss of particular customers by name, or a general diminution in its business, and extrinsic facts
showing that such special damages were the natural and direct result of the false publication.’”
Mayflower Transit, LLC v. Prince, 314 F. Supp. 2d 362, 378 (D.N.J. 2004) (quoting Juliano v. ITT
Corp., 1991 WL 10023, at *6 (D.N.J. Jan. 22, 1991)). This claim fails for the same reason the libel
claim fails, there is no evidence the alleged damage was caused by the Princeton Marketplace
Updates. Accordingly, Princeton’s Motion for Summary Judgment is GRANTED as to the trade
libel claim.
c. Libel Per Se
The Court now turns to NJ PURE’s claim of libel per se. Libel per se is “a writing that is
defamatory on its face, which is distinguished from a writing that is defamatory solely in light of
extrinsic facts (libel per quod).” Gillon v. Bernstein, 218 F. Supp. 3d 285, 302 (D.N.J. 2016) (citing
Lawrence v. Bauer Publ’g & Printing Ltd., 446 A.2d 469, 473 (N.J. 1982)). “A determination of
whether certain language is defamatory on its face rests within the power of the trial court.” Id.
(quoting Lawrence, 446 A.2d at 473)). “Only when the court finds the words to be capable of both
a defamatory and a nondefamatory meaning does a question of fact arise for the jury to decide.”
Id. (citation omitted). Therefore, “the critical inquiry is whether the statement in question is
defamatory on its face and, therefore, actionable without further factual support; or whether the

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statement requires extrinsic facts to establish its defamatory nature.” Id. NJ PURE has not
established the Princeton Marketplace Updates are defamatory on their face. In fact, as
demonstrated above, the record reveals the opposite. Poe conceded “virtually every individual
sentence is . . . could be construed as true” in the Princeton Market Place Updates. (ECF No. 1456 at 716:12-717:3; ECF No. 145-1 ¶ 26; ECF No. 146-4 ¶ 26.) Dr. Chang also testified the
Princeton Marketplace Updates contain “true numbers,” and conceded that in his opinion the
Princeton Marketplace Updates are misleading and that her opinion “could be wrong, of course.”
(ECF No. 145-4 at 59.) Extrinsic evidence is obviously necessary to prove the alleged falsity of
the Princeton Marketplace Updates. Accordingly, Princeton’s Motion for Summary Judgment is
GRANTED as to the libel per se claim.
d. Tortious Interference
Lastly, the Court turns to NJ PURE’s claim of tortious interference with prospective
contractual relations. Under New Jersey law, to prove tortious interference with a prospective or
existing economic relationship one must prove:
(1) a plaintiff’s existing or reasonable expectation of economic
benefit or advantage; (2) the defendant’s knowledge of that
expectancy; (3) the defendant’s wrongful, intentional interference
with that expectancy; (4) the reasonable probability that the plaintiff
would have received the anticipated economic benefit in the absence
of interference; and (5) damages resulting from the defendant’s
interference.
Coast Cities Truck Sales, Inc. v. Navistar Int’l Transp. Co., 912 F. Supp. 747, 771 (D.N.J. 1995)
(citing Printing Mart–Morristown v. Sharp Elecs. Corp., 563 A.2d 31, 37 (N.J. 1989)). Because
this claim also requires causation, it fails because there is no evidence the alleged damage was
caused by the Princeton Marketplace Updates. Accordingly, Princeton’s Motion for Summary
Judgment is GRANTED as to the tortious interference claim.

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IV.

CONCLUSION
For the reasons set forth above, Princeton’s Motion for Summary Judgment (ECF No. 145)

is GRANTED.

Date: September 20, 2018

/s/ Brian R. Martinotti___________
HON. BRIAN R. MARTINOTTI
UNITED STATES DISTRICT JUDGE

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