United States District Court, S.D. Texas, Houston Division
MEMORANDUM & ORDER
S. HANEN UNITED STATES DISTRICT JUDGE
the Court is a Motion for Summary Judgment on Traceability
(Doc. No. 208) filed by Plaintiff Weldbend Corporation
(hereinafter referred to as "Weldbend" or
"Plaintiff'). The Defendants Ulma Forja S. Coop, and
Ulma Piping USA Corp. (hereinafter referred to as
"Ulma" or "Defendants") have filed a
Response (Doc. No. 217), and Plaintiff has filed a Reply
(Doc. No. 226).
Court previously wrote more detailed background sections in
its prior summary judgment orders in this case (Doc. Nos. 189
& 193) and will only reproduce an abbreviated version
dispute arises between carbon steel flange manufacturers.
Plaintiff and Defendants sell their flanges to distributors
who in turn sell the flanges to customers. Defendants allege
that Weldbend falsely advertises that its goods are sold with
"unquestionable traceability" in violation of
§ 43(a) of the Lanham Act, codified at 15 U.S.C. §
1125(a). (Doc. No. 68 at 30). Weldbend uses its
traceability system to "identify and track flanges from
Weldbend's receipt of the incoming material through
finishing and inventory placement." (Doc. No. 208 at 2).
In other words, Weldbend tells its customers that it keeps
track of the originating forges and steel mills from which
all of the materials that comprise its flanges originate.
last round of summary judgment motions, the parties disputed
whether this "traceability" claim was properly
pleaded (or, more specifically, whether it was pleaded at
all) and whether Weldbend had moved for summary judgment on
the claim if it was pleaded. (See Doc. No. 110 at 3;
129 at 19-20). The Court held in its prior order that
Defendants had sufficiently pleaded the
"traceability" claim as a separate form of false
advertisement. (Doc. No. 68 ¶ 58). This Court also found
that Weldbend had not moved for summary judgment on this
issue but granted them leave to do so. (Doc. No. 193 at 19).
parties have fully briefed the issue, and it is now ripe for
Standards of Review
judgment is warranted "if the movant shows that there is
no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law." Fed.R.Civ.P.
56(a). "The movant bears the burden of identifying those
portions of the record it believes demonstrate the absence of
a genuine issue of material fact." Triple Tee Golf,
Inc. v. Nike, Inc., 485 F.3d 253, 261 (5th Cir. 2007)
(citing Celotex Corp. v. Catrett, Ml U.S. 317,
322-25 (1986)). Once a movant submits a properly supported
motion, the burden shifts to the non-movant to show that the
Court should not grant the motion. Celotex, Ml U.S.
non-movant then must provide specific facts showing that
there is a genuine dispute. Id. at 324;
MatsushitaElec. Indus. Co. v. Zenith Radio Corp., M5
U.S. 574, 587 (1986). A dispute about a material fact is
genuine if "the evidence is such that a reasonable jury
could return a verdict for the nonmoving party."
Anderson v. Liberty Lobby, Inc., Ml U.S. 242, 248
(1986). The Court must draw all reasonable inferences in the
light most favorable to the nonmoving party in deciding a
summary judgment motion. Id. at 255. The key
question on summary judgment is whether a hypothetical,
reasonable factfinder could find in favor of the nonmoving
party. Id. at 248.
False Advertisement Under the Lanham Act
Lanham Act was enacted to protect persons engaged in such
commerce against unfair competition." Seven-Up Co.
v. Coca-Cola Co., 86 F.3d 1379, 1382-84 (5th Cir. 1996)
(internal quotation marks omitted). To state a prima facie
case of false advertising, a plaintiff must establish: (1) a
false or misleading statement of fact about a product; (2)
such a statement either deceived, or had the capacity to
deceive, a substantial segment of potential customers; (3)
the deception is material, in that it is likely to influence
the consumer's purchasing decision; (4) the product is in
interstate commerce; and (5) the plaintiff has been or is
likely to be injured as a result of the statement at issue.
Derrick Petrol. Servs. v. PLS, Inc., Civil Action
No. H-14-1520, 2017 WL 3456920, at *5 (S.D. Tex. Aug. 11,
2017). "The failure to prove the existence of any
element of the prima facie case is fatal to the plaintiffs
claim." Pizza Hut, Inc. v. Papa John's
Int'l, Inc., 227 F.3d 489, 495 (5th Cir. 2000).
obtain money damages for false advertising under § 43(a)
of the Lanham Act, the plaintiff must first demonstrate that
the advertisement was (1) literally false; or (2) likely to
mislead and confuse customers." IQProds. Co. v.
PennzoilProds. Co.,305 F.3d 368, 375 (5th Cir. 2002).
"For a statement to be literally false, the statement
must be 'false on its face.'" Derrick,
2017 WL 3456920, at *5. "If the statement at issue is
shown to be literally false, the court must assume that it
actually misled consumers, without requiring any evidence of
such deception from the plaintiff." IQ Prods.,
305 F.3d at 375; see also Pizza Hut, 227 F.3d at 497
("[P]laintiff need not introduce evidence on the issue
of the impact the statements had on customers."). On the
other hand, "if the statement is . . . misleading or
ambiguous ... the plaintiff must demonstrate actual
deception." IQ Prods., 305 F.3d at 375.
"The statements at issue ...