United States District Court, E.D. Texas, Marshall Division
ROBROY INDUSTRIES - TEXAS, LLC, a Texas corporation, and ROBROY INDUSTRIES, INC., a Pennsylvania corporation, Plaintiffs,
THOMAS & BETTS CORPORATION, a Tennessee corporation, Defendant. THOMAS & BETTS CORPORATION, a Tennessee corporation, Plaintiff,
ROBROY INDUSTRIES - TEXAS, LLC, a Texas corporation, and ROBROY INDUSTRIES, INC., a Pennsylvania corporation, Defendants.
MEMORANDUM OPINION AND ORDER
WILLIAM C. BRYSON UNITED STATES CIRCUIT JUDGE.
the Court is Thomas & Betts' Motion for Summary
Judgment for Lack of Evidence Required by Plaintiff's
False-Advertising, Product Defamation, and Unfair Competition
Claims, Dkt. No. 134 (“Summary Judgment Motion”).
The motion is DENIED.
& Betts Corporation (“T&B”) and the
plaintiffs (“Robroy”) compete in the market for
polyvinyl chloride (“PVC”) coated electrical
conduit, which is used to carry electrical wiring in
buildings or other structures. The two companies are the
major suppliers of PVC-coated electrical conduit in the
United States. Robroy offers its conduit products under
several brand names. T&B's conduit is known as
several occasions, disputes have arisen between the competing
companies (including the predecessor producer of Ocal).
Robroy has complained that T&B and its predecessor have
made false claims about Ocal and about Robroy's products.
In 2015, the dispute came to a head when Robroy filed this
action charging that T&B had engaged in false advertising
in violation of the Lanham Act, 15 U.S.C. § 1125(a), and
had committed the Texas state law torts of unfair competition
and trade defamation.
alleged that in advertising and in direct contacts with
customers T&B had falsely claimed that only its Ocal
products had certain features, and that Robroy's products
lacked those features. In particular, T&B claimed that
only its Ocal products met the UL 6 standard, which is the
quality standard for PVC-coated electrical conduit
established by a national standards-setting organization,
Underwriters Laboratories, Inc. T&B also claimed that
only its Ocal products satisfied the ANSI C80.1 standard, a
standard established by the American National Standards
Institute, and the NEMA RN-1 standard, a standard established
by the National Electrical Manufacturers' Association. In
addition, T&B claimed that “only Ocal” offers
local installation training and certification. As to Robroy,
T&B's promotional materials claimed that Robroy
“abrade[s] the surface of the conduit prior to the
application of the PVC, ” thereby “remov[ing] the
protective coatings that the customer is paying for.”
T&B further claimed that Robroy used a standard employed
by ETL Semko Intertek, “because UL standards are not
being followed by the abrading of the conduits [sic] exterior
zinc finish.” Complaint, Dkt. No. 1; Dkt. Nos.
1-1 through 1-4. Robroy contends that each of those
statements was false.
has now moved for summary judgment on both the federal and
state law claims. As to the federal Lanham Act claim, T&B
argues that Robroy has not offered sufficient evidence that
the false statements allegedly made by T&B agents caused
any cognizable injury to Robroy. As to the state law claims,
T&B argues that those claims also fail because of lack of
proof of causation; in addition, T&B argues that
Robroy's unfair competition claim fails because Robroy is
not a “consumer” within the meaning of the Texas
Deceptive Trade Practices and Consumer Protection Act, Tex.
Bus. & Com. Code Ann. § 17.45.
The Lanham Act Claim
Lanham Act provides, in pertinent part:
Any person who [uses 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 . . . 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).
plaintiff must establish five elements to make out a prima
facie case of false advertising under the Lanham Act: (1)
that the defendant made a false or misleading statement of
fact about a product; (2) that the statement either deceived
or had the capacity to deceive a substantial number of
potential customers; (3) that the deception was material, in
that it was likely to influence the consumers' purchasing
decisions; (4) that the product was in interstate commerce;
and (5) that the plaintiff has been or is likely to be
injured as a result of the statement at issue. IQ Prods.
Co. v. Pennzoil Prods. Co., 305 F.3d 368, 375 (5th Cir.
2002); Logan v. Burgers Ozark Country Cured Hams
Inc., 263 F.3d 447, 462 (5th Cir. 2001); Pizza Hut,
Inc. v. Papa John's Int'l, Inc., 227 F.3d 489,
495 (5th Cir. 2000). To recover money damages under the
Lanham Act, a plaintiff seeking compensation for injury
“must prove both actual damages and a causal link
between defendant's violation and those damages.”
Rhone-Poulenc Rorer Pharms., Inc. v. Marion Merrell Dow,
Inc., 93 F.3d 511, 515 (8th Cir. 1996); see also
Versign, Inc. v. XYZ.com LLC, 848 F.3d 292, 299 (4th
Cir. 2017); L.S. Heath & Son, Inc. v. AT&T Info.
Sys., Inc., 9 F.3d 561, 575 (7th Cir. 1993); ALPO
Petfoods, Inc. v. Ralston Purina Co., 913 F.2d 958, 959
(D.C. Cir. 1990). The causation element requires the
plaintiff to prove causation under the “proximate
cause” standard. Lexmark Int'l, Inc. v. Static
Control Components, Inc., 134 S.Ct. 1377, 1390-91
seeking summary judgment on Robroy's claim under the
Lanham Act, T&B focuses exclusively on the element of
causation. T&B contends that the evidence Robroy has
pointed to during the summary judgment proceedings is
insufficient to give rise to a genuine issue of material fact
on the issue of causation, and that summary judgment should
therefore be entered in T&B's favor. The Court
disagrees. From the Court's review of the evidence in the
summary judgment record, there is sufficient evidence of
causation to create a genuine issue of fact on that element
and thus to require that Robroy's Lanham Act claim be
resolved by a jury.
position is that, even assuming its agents made false
statements about its products and Robroy's products, the
evidence does not show that those statements proximately
caused the requisite injury to Robroy by causing customers to
shift their purchases to T&B at Robroy's expense.
T&B argues that Robroy's evidence showed no more than
that it “simply faced the speculative harm of increased
competition for a customer project or potential sale-not that
it actually lost sales or incurred another such cognizable
harm as a direct result of the statements-at-issue.”
Summary Judgment Motion, Dkt. No. 134, at 18.
T&B further asserts that “there is no substantial
evidence showing that Robroy lost a project or customer, or
that Thomas & Betts ever gained one at Robroy's
expense, because of these ‘Only Ocal'
makes three points in support of its motion: (1) that Robroy
has never been “kicked off” a specification for
PVC-coated conduit for any reason related to the T&B
statements at issue; (2) the evidence shows that customers
made purchasing decisions based on price, quality,
availability, and other factors having nothing to do with the
alleged false statements; and (3) the evidence shows that
customers made decisions to add T&B's Ocal product to
the specifications for particular projects and to purchase
Ocal based on price and other factors, not because of the
allegedly false statements.
offers two responses: First, Robroy argues that it is
entitled to a presumption of causation of competitive injury,
because the statements at issue were literally false and
either explicitly or implicitly compared T&B's
products with Robroy's. Second, Robroy contends that even
without the presumption of injury, the evidence is sufficient
to support its assertion that T&B's false statements
caused Robroy's injury, i.e., caused Robroy to lose
contracts that it otherwise would have won.
The Presumption of Causation
argues that in a case such as this one, involving a
two-competitor market, T&B's false statements to
potential customers about the competition were necessarily
directed at Robroy. As such, Robroy invokes a line of cases
holding that deliberately false or deceptive comparative
advertising gives rise to a rebuttable presumption that the
causation element of the Lanham Act cause of action is
number of circuits have adopted the presumption of causation
in such cases. See, e.g., Merck Eprova AG v.
Gnosis S.p.A., 760 F.3d 247, 259-61 (2d Cir. 2014);
Porous Media Corp. v. Pall Corp., 110 F.3d 1329,
1336 (8th Cir. 1997); Southland Sod Farms v. Stover Seed
Co., 108 F.3d 1134, 1146 (9th Cir. 1997); Balance
Dynamics Corp. v. Schmitt Indus., Inc., 204 F.3d 683,
694 (6th Cir. 2000); Pharmanetics, Inc. v. Aventis
Pharms., Inc., 182 F. App'x 267, 273 (4th Cir.
2006); Hutchinson v. Pfeil, 211 F.3d 515, 522 (10th
Cir. 2000). No circuit appears to have rejected that rule.
addition, numerous district courts have reached the same
conclusion, including district courts in the Fifth Circuit.
See, e.g., Snac Lite, LLC v. Nuts 'N More,
LLC, Case No. 2:14-cv-1695, 2016 WL 6778268, at *10 n.13
(N.D. Ala. Nov. 10, 2016); Greater Houston Transp. Co. v.
Uber Techs., Inc., 155 F.Supp.3d 670, 703 (S.D. Tex.
2015); W. Sugar Coop. v. Archer-Daniels-Midland Co.,
No. CV 11-3473, 2015 WL 12683192, at *3 (C.D. Cal. Aug. 21,
2015); Gen. Steel Domestic Sales, LLC v. Chumley,
Civil Action No. 10-cv-1398, 2013 WL 1900562, at *15 (D.
Colo. May 7, 2013); Campagnolo S.R.L. v. Full Speed
Ahead, Inc., No. C08-1372, 2010 WL 455195, at *2 (W.D.
Wash. Feb. 1, 2010); Trilink Saw Chain, LLC v. Blount,
Inc., 583 F.Supp.2d 1293, 1321 (N.D.Ga. 2008);
HipSaver Co. v. J.T. Posey Co., 497 F.Supp.2d 96,
108-09 (D. Mass. 2007); Healthpoint, Ltd. v. Status
Pharms., Inc., ...