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Almblad v. Scotsman Industries, Inc.

United States District Court, N.D. Illinois, Eastern Division

March 26, 2014

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

MEMORANDUM OPINION AND ORDER

JOHN W. DARRAH, District Judge.

Plaintiff, Robert Almblad ("Almblad"), filed suit against Defendants, Scotsman Industries, Inc. and Kevin Fink (collectively, "Scotsman"), on February 19, 2013, alleging one count of defamation and one count of false advertising, in violation of the Lanham Act, 15 U.S.C. § 1125. Almblad was then granted leave to file a First Amended Complaint, which he did on April 15, 2013; the First Amended Complaint contained the same two counts. On May 9, 2013, Scotsman filed a motion to dismiss both counts which was denied with respect to the defamation count and granted with respect to the Lanham Act violation. However, Almblad was given leave to file a Second Amended Complaint ("SAC"), which he did on September 16, 2013. The SAC still alleges one count of defamation and one count of false advertising. Scotsman has moved to dismiss with regard to the false advertising claim only, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). The Motion has been fully briefed. For the following reasons, Scotsman's Motion is granted.

BACKGROUND

Scotsman is in the business of manufacturing commercial ice machines. (SAC, Count I ¶ 2.)[1] It is known certain types of commercial ice machines, including some of those manufactured by Scotsman, "accumulate slime, mold and airborne micro-organisms, " which can contaminate the ice produced. ( Id. Count II ¶ 5.) Scotsman sells cleaning agents within an existing market for products able to clear away or prevent such contaminants. ( Id. ¶¶ 6-7.)

Prior to February 28, 2012, Almblad determined that a design defect in some ice machines - produced by Scotsman and other manufacturers - allowed for the intake of sewer gas. ( Id. ¶ 2.) After informing the affected companies of his findings, Almblad developed a device that prevented sewer gas intake and made it available for purchase, license, or lease. ( Id. ¶¶ 2-4.) Ice machine users who availed themselves of Almblad's device would not need to purchase Scotsman's cleaning products. ( Id. ¶ 8.)

On or about February 28, 2012, Scotsman composed a written, defamatory statement for dissemination to the public, falsely asserting that the design defect Almblad identified did not exist in Scotsman ice machines. ( Id. Count I ¶ 9.) Later the same day, Scotsman and Almblad participated in a teleconference of representatives of machine manufacturers and buyers and the general public, organized by Michigan-based standards organization, NSF. ( Id. ¶ 10) The purpose of the teleconference was to discuss whether NSF Standard "NSF/ANSI 12 - Automatic ice making equipment" should be revised. (Mem. in Support of Mot. Ex. A at 2.)[2] During the teleconference, Kevin Fink, speaking for Scotsman, verbally disseminated the written defamatory statement. (SAC, Count I ¶ 10.)[3]

Fink expressed that Scotsman was grateful for 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.) Allegedly based on testing performed under two scientific advisors, Scotsman concluded Almblad's allegation of sewer gas intake was "just flat wrong. None of our machines do this." ( Id. ) Next, Fink presented Scotsman's findings with regards to airborne contaminants within its ice machines resulting in illness. ( Id. at 4.) Fink asserted, "Almblad has no scientific or medical evidence... describing a single occurrence in which airborne contamination infected an ice machine and caused an illness." ( Id. ) Finally, Fink contended that Scotsman machines are "NSF 12-compliant and NSF 12 is completely consistent with the FDA Food Code, " and "Mr. Almblad misinterprets the FDA Food Code to suit his commercial purposes.... There is simply no reason to change NSF 12." ( Id. ) Fink acknowledged having seen a video produced by Almblad, showing cocoa powder getting into the machine through the allegedly faulty intake. ( Id. ) After Fink concluded, the ice machine manufacturers present were asked what they believed was happening in the video. ( Id. ) The teleconference concluded without revising NSF 12. ( Id. at 10.)

Scotsman violated the Lanham Act in connection with Almblad's invention and Scotsman's own goods on and after February 28, 2012, and made false or misleading representations "as exemplified by the false assertions of Scotsman Industries, Inc. recited in paragraph 9 of Count I"[4] of the SAC. (SAC, Count II ¶ 10.)

LEGAL STANDARD

Scotsman moves to dismiss pursuant to Rule 12(b)(6). When considering Rule 12(b)(6) motions, all well-pleaded allegations within the complaint are taken as true. Lavalais v. Village of Melrose Park, 734 F.3d 629, 632 (7th Cir. 2013). Within a complaint, a proper claim only requires short and plain statements of jurisdiction and entitlement to relief, as well as a demand for the relief sought. Fed.R.Civ.P. 8(a)(1-3). However, the pleading "demands more than an unadorned, the-defendant-unlawfully-harmed-me-accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The presumption of truth afforded allegations within a complaint is not extended to legal conclusions. Id.

A defendant may move to dismiss pursuant to Rule 12(b)(6) for the plaintiff's failure to state a claim upon which relief can be granted. Withstanding such a motion requires alleging enough facts to support a claim that is "plausible on its face." Id. (quoting Twombly at 570). Facial plausibility exists when the court can "draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. The court must consider context, but if it still must speculate, plausibility is lacking. Id.

Almblad's false or deceptive advertising claim alleges violations of section 43(a)(1) of the Lanham Act, which provides in applicable part:

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 ...

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