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Almblad v. Scotsman Industries, Inc.

United States District Court, Seventh Circuit

August 28, 2013

ROBERT ALMBLAD, Plaintiff,
v.
SCOTSMAN INDUSTRIES, INC. and KEVIN FINK, Defendants.

MEMORANDUM OPINION AND ORDER

JOHN W. DARRAH, District Judge.

Plaintiff Robert Almblad filed suit against Defendants Scotsman Industries, Inc. and Kevin Fink on February 19, 2013. Almblad amended his complaint with leave of the Court on April 15, 2013. Almblad asserts two claims against Defendants: (1) defamation and (2) false advertising, in violation of the Lanham Act, 15 U.S.C. § 1125. Defendants move to dismiss the Amended Complaint pursuant to Fed.R.Civ.P. 12(b)(6), for failure to state a claim upon which relief may be granted. The Motion has been fully briefed. For the reasons provided below, Defendants' mMotion is granted in part and denied in part.

BACKGROUND

The following facts are based on the Complaint and are accepted as true for purposes of the Motion to Dismiss. See Reger Dev., LLC v. Nat'l City Bank, 592 F.3d 759, 763 (7th Cir. 2010). Almblad is a citizen of Florida. (Am. Compl. ¶ 4.) Scotsman is a Delaware corporation with its principal place of business in Vernon Hills, Illinois. ( Id. ¶ 1.) Fink is the Group Managing Director of Scotsman and a resident of Colorado. ( Id. ¶ 3.) The amount in controversy exceeds $75, 000.00; accordingly, jurisdiction exists pursuant to 28 U.S.C. § 1332, as there is complete diversity of citizenship among the parties.

Scotsman is in the business of manufacturing ice machines for commercial use. ( Id. ¶ 2.) Prior to February 28, 2012, Almblad initiated a process whereby he determined that ice made from commercial machines, like Scotsman's machines, was contaminated "because the design of such machines allowed for the intake of sewer gas" during the ice manufacturing process. ( Id. ¶ 6.) Almblad informed Scotsman and other ice machine manufacturers of this contamination. ( Id. ) Almblad invented and developed a device for commercial ice machines that eliminated this contamination. ( Id. ¶ 7.) He made this device available to Scotsman for licensing. ( Id. ¶ 8.)

On or about February 28, 2012, Scotsman composed a written defamatory statement for dissemination to the public, falsely asserting that its products did not have the design defect identified by Almblad. ( Id. ¶ 9.) This statement further falsely asserted Almblad made false claims about his own inventions; "among other things Scotsman Industries Inc. falsely asserted that engineering testing was conducted and it was determined that Scotsman Industries, Inc.'s ice machines did not draw in sewer gas from drains and also that its ice machines were equipped with a component that prevents dust from entering a food zone of the machines..." rendering Almblad's inventions unnecessary. ( Id. ) That same day, a telephone conference was held by NSF[1], a Michigan based standards organization, among representatives of ice machine manufacturers and the general public. ( Id. ¶ 10.) During this phone conference, Fink, on behalf of Scotsman, verbally disseminated the defamatory written statement described above. ( Id. ) The defamatory statements intended to and did cause injury and financial loss to Almblad, diminishing his reputation in the ice machine industry. ( Id. ¶ 11.)

Almblad does not provide a copy of Fink's statement with his Amended Complaint, though Defendants attached it to their Motion, and it is properly considered part of the pleadings as it is central to Almblad's claim of defamation. Lott v. Levitt, 556 F.3d 564, 567 (7th Cir. 2009) (citing Continental Cas. Co. v. American National Insurance Co., 417 F.3d 727, 731 n.3 (7th Cir. 2005)). In this statement, Fink provided that Scotsman "appreciate[d] the opportunity to address Mr. Almblad's erroneous claims and mischaracterizations that are meant to serve his commercial purposes." (Mem. in Support of Mot. Ex. A at 3.) Fink went on: "[O]ur testing refutes Mr. Almblad's claims. In particular, his claim that gases are being sucked from floor drains into the equipment is just flat wrong. None of our machines do this.... Mr. Almblad has no scientific or medical evidence, and our experts cannot find anything in any medical or scientific study, describing a single occurrence in which airborne contamination infected an ice machine and caused an illness." ( Id. at 2-3.) Fink further stated that "Mr. Almblad misinterprets the FDA Food Code to suit his commercial purposes." ( Id. at 3.)

In addition to the claim of defamation against Scotsman and Fink, Almblad asserts Scotsman violated the Lanham Act, by making "false or misleading representations of fact and in commercial promotion of its goods misrepresented the nature, characteristics and qualities of its goods and those of Robert Almblad." (Am. Compl. at 6.) Due to Scotsman's actions in that regard, Almblad asserts potential licensees of his inventions were misled as to the value of his inventions and discouraged from transacting business with him. ( Id. ) Almblad seeks $200 million in damages on each count in his Amended Complaint.

Defendants move to dismiss Almblad's claims, contending Almblad cannot state a claim against Defendants upon which relief may be granted.

LEGAL STANDARD

To properly assert a claim in a complaint, the plaintiff must present "a short and plain statement of the claim showing that the pleader is entitled to relief and a demand for the relief sought." Fed.R.Civ.P. 8. Rule 8 "does not require detailed factual allegations, ' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). While a court is to accept all allegations contained in a complaint as true, this principle does not extend to legal conclusions. Iqbal, 129 S.Ct. at 1949.

A defendant may file a motion to dismiss a claim under Federal Rule 12(b)(6) for failure to state a claim upon which relief may be granted. To defeat a motion to dismiss under Rule 12(b)(6), a plaintiff must plead sufficient factual matter to state a claim for relief that is "plausible on its face." Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 570). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S.Ct. at 1949.

However, "[w]here the well-settled pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not show[n]' - that the pleader is entitled to relief.'" Iqbal, 129 S.Ct. at 1950. For a claim to be plausible, the plaintiff must put forth enough "facts to raise a reasonable expectation that discovery will reveal evidence" supporting the ...


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