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Champion Laboratories, Inc. v. Central Illinois Manufacturing Co.

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

May 8, 2015

Champion Laboratories, Inc., Plaintiff,
v.
Central Illinois Manufacturing Co., Defendant.

MEMORANDUM OPINION AND ORDER

JOHN ROBERT BLAKEY, District Judge.

This is a false advertising dispute brought under the Lanham Act and the Illinois Deceptive Trade Practices Act. Plaintiff Champion Laboratories and Defendant Central Illinois Manufacturing are the leading manufacturers and suppliers of fuel dispensing filters in the United States. Plaintiff alleges that in certain advertisements, Defendant falsely touted the benefits of its filters or made false claims about Plaintiff's filters.

In the same motion [20], Defendant moves to dismiss Plaintiff's false advertising claims under Federal Rule of Civil Procedure 12(b)(6) and also moves to strike certain purportedly immaterial and impertinent materials in the Complaint [1] under Rule 12(f). The motions are denied.

I. Legal Standard

Under Rule 12(b)(6), this Court must construe the Complaint in the light most favorable to Plaintiff, accept as true all well-pleaded facts and draw reasonable inferences in their favor. Yeftich v. Navistar, Inc., 722 F.3d 911, 915 (7th Cir. 2013); Long v. Shorebank Development Corp., 182 F.3d 548, 554 (7th Cir. 1999). Statements of law, however, need not be accepted as true. Yeftich, 722 F.3d at 915. Rule 12(b)(6) limits this Court's consideration to "allegations set forth in the complaint itself, documents that are attached to the complaint, documents that are central to the complaint and are referred to in it, and information that is properly subject to judicial notice." Williamson v. Curran, 714 F.3d 432, 436 (7th Cir. 2013).

To survive Defendant's motion under Rule 12(b)(6), the Complaint must "state a claim to relief that is plausible on its face." Yeftich, 722 F.3d at 915. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.

II. Facts

This dispute involves the purportedly false advertising of fuel dispensing filters. Fuel dispensing filters are incorporated in fuel dispensing equipment, such as gas pumps, and they are designed to remove particulate contaminants from petroleum and other fuels before being dispensed into a vehicle. Complaint ¶¶ 16-17.

The parties here are the two primary manufacturers and suppliers of fuel dispensing filters in the United States. Complaint ¶¶ 2, 26-27. Together, they supply more than half the fuel dispensing filters purchased in the United States annually. Complaint ¶ 27. Plaintiff markets its filters under the brand name PetroClear, and Defendant markets its filters under the brand names Cim-Tek and Bio-Tek. Complaint ¶¶ 3, 9, 11; see generally Advertisements, attached as Exhibits B to F to Complaint. The companies have many of the same customers, and the customers rely on Plaintiff and Defendant to provide them with the information necessary to make an informed purchasing decision, including through advertisements in PEI Journal. Complaint ¶¶ 33-37. PEI Journal is a quarterly publication of the Petroleum Equipment Institute, a trade association. Complaint ¶¶ 38-39.

The distinguishing and well-known difference between the filters that the parties sell is their composition. Complaint ¶¶ 29-30. Plaintiff manufactures and sells filters made from cellulose, whereas Defendant principally manufactures and sells filters made from microglass. Complaint ¶¶ 30-31.

Plaintiff brings claims under the Lanham Act (Count I) and the Illinois Deceptive Trade Practices Act (Count II) alleging that in certain advertisements, Defendant falsely touted the benefits of its microglass filters or made false claims about Plaintiff's filters. This Court analyzes each advertisement below.

III. Analysis

A. Motion to Dismiss

To state a false advertising claim under the Lanham Act, 15 U.S.C. § 1125(a)(1), Plaintiff must show that Defendant: (1) made a false or misleading statement; (2) that actually deceives or is likely to deceive a substantial segment of the advertisement's audience; (3) on a subject material to the decision to purchase the goods; (4) touting goods entering interstate commerce; and (5) that results in actual or probable injury to Plaintiff. B. Sanfield, Inc. v. Finlay Fine Jewelry Corp., 168 F.3d 967, 971 (7th Cir. 1999); LG Electronics U.S.A., Inc. v. Whirlpool Corp., 661 F.Supp.2d 940, 947-48 (N.D. Ill. 2009). The first element captures both statements that are literally false as a factual matter and statements that are ambiguous but convey a false or misleading impression in context. B. Sanfield, 168 F.3d at 971-72; Hot Wax, Inc. v. Turtle Wax, Inc., 191 F.3d 813, 819-20 (7th Cir. 1999); Dyson, Inc. v. Bissell Homecare, Inc., 951 F.Supp.2d 1009, 1029, 1031 (N.D. Ill. 2013). Because this Court must look at context to determine if a statement is false, it follows and, indeed, is well-settled in this Circuit, that whether a statement is ...


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