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Euro-Pro Operating LLC v. Dyson Inc.

United States District Court, D. Massachusetts

February 12, 2016

EURO-PRO OPERATING LLC, Plaintiff,
v.
DYSON INC., and DYSON LTD., Defendants.

ORDER

ALLISON D. BURROUGHS U.S. DISTRICT JUDGE

Before the Court are (1) Plaintiff SharkNinja Operating, LLC’s[1] Motion for Clarification or Reconsideration, Or, In the Alternative, For Leave to Amend the Complaint [ECF No. 134], and (2) Plaintiff’s Motion for Alternative Dispute Resolution [ECF No. 143]. For the reasons set forth herein, both of Plaintiff’s motions are DENIED.

This case involves a dispute between two competing vacuum manufacturers. Plaintiff’s First Amended Complaint [ECF No. 40, hereinafter “Amended Complaint”] sets forth the following relevant facts. In 2013, Defendants launched a national advertising campaign promoting a new line of vacuum cleaners known as the “Dyson Animal.” [Id. ¶ 1]. As part of that campaign, Defendants made advertising claims that its Dyson Animal vacuums had “twice the suction” of any other competing vacuum cleaner, including those manufactured by Plaintiff. [Id.]. On July 8, 2014, however, Plaintiff launched a vacuum product called the “Shark Powered Lift-Away.” [Id. ¶ 17]. Plaintiff alleges that the Shark Powered Lift-Away has “top-performing suction performance, ” and that the introduction of the Shark Powered Lift-Away “render[ed] Dyson’s ‘Twice the Suction’ claims literally false and misleading.” [Id. ¶ 2]. The Amended Complaint alleges that independent, third-party laboratory tests clearly demonstrate that the Dyson Animal does not, in fact, have twice the suction of the Shark Powered Lift-Away. [Id. ¶¶ 33, 37]. Accordingly, Plaintiff claims that Defendants’ “twice the suction” claims are now literally false, because “since July 8, 2014, the Shark Powered Lift-Away has replaced [prior Shark products] as the ‘top performing product’ in the Shark vacuum line, ” and that “[a]s a result, any testing by Dyson on the [prior Shark products] can no longer reliably establish that the Dyson Animal has ‘Twice the Suction of Any other Vacuum.’” [Id. ¶ 40].

The Amended Complaint contains three claims for relief. Count One alleges false advertising in violation of the Lanham Act, 15 U.S.C. § 1125(a)(1)(B); Count Two alleges deceptive trade practices in violation of Massachusetts General Laws Chapter 93A, § 11; and Count Three alleges false advertising in violation of Massachusetts General Laws Chapter 266, § 91.

In the Amended Complaint and throughout this litigation, including active motion practice and numerous related court appearances, Plaintiff has consistently taken the position that the gravamen of the dispute is that the introduction of the Shark Powered Lift-Away rendered Dyson’s “twice the suction” claim literally false. For example, paragraph 2 of the Amended Complaint alleges in pertinent part that “Euro-Pro recently introduced its newest vacuum product called the Shark Rotator Powered Lift-Away Upright . . . which has top-performing suction performance that renders Dyson’s ‘Twice the Suction’ claims literally false and misleading.” [ECF No. 40]. Similarly paragraph 3 of the Amended Complaint states that

Euro-Pro first notified Dyson in May 2014, that Euro-Pro’s impending launch of the Shark Powered Lift-Away would render Dyson’s “Twice the Suction” advertising false and misleading. Euro-Pro again contacted Dyson in July 2014, this time to inform it that Euro-Pro had now launched its new Shark Powered Lift-Away, and that testing on that product . . . showed that Dyson’s “Twice the Suction” claim was literally false.

[Id.]. Paragraph 45 of the Amended Complaint asserts that “[u]pon information and belief, Dyson’s false advertising is willful and knowing because Dyson continues to disseminate its ‘Twice the Suction’ advertising despite the fact that Euro-Pro first notified Dyson in May 2014, that its impending launch of the Shark Powered Lift-Away would render its advertising false and misleading.” [Id.].

This theme is evidenced throughout the Amended Complaint, and it has been confirmed through in-court statements and other documents filed with the Court by Plaintiff and Defendant, demonstrating that both parties understood this case to revolve around the allegation that Dyson continued to claim that its vacuums had “twice the suction” even after the introduction of the Shark Powered Lift-Away. For example, in the parties’ March 30, 2015 Joint Statement submitted in advance of the Rule 16 Scheduling Conference, Plaintiff described the case, in a nutshell, as follows:

This case involves false advertising in violation of the federal Lanham Act based on Dyson’s false statement that its vacuums have “Twice the Suction” of any other vacuums, including competitor-Plaintiff Euro-Pro’s vacuums. Dyson kept its false statements on the market for more than half a year despite having express and scientific evidence (from Euro-Pro, from Dyson itself, and from Dyson’s outside laboratory), that Dyson’s advertising was expressly and literally false. Contrary to Dyson’s “Twice the Suction” advertising, Dyson’s vacuums do not have Twice the Suction of Euro-Pro’s Shark Rotator Powered Lift-Away vacuum.

[ECF No. 38]. Similarly, in Dyson’s May 4, 2015 Memorandum in support of its partial motion to dismiss Euro-Pro’s First Amended Complaint, Dyson wrote “[a]s discussed at the April 6, 2015 Pre-Trial Scheduling Conference before the Court, the parties do not dispute that the claim was literally true when Dyson introduced it, but it merely became outdated when Euro-Pro subsequently released its new Shark Rotator Powered Lift-Away a year later.” [ECF No. 47, p. 1]. Notably, Plaintiff did not dispute this representation in its Opposition to Dyson’s Motion to Dismiss. [ECF No. 53]. Instead, Plaintiff pointed out that Dyson was continuing to make the “twice the suction” claim “over ten months after Euro-Pro notified Dyson that ‘its impending launch of the Shark Powered Lift-Away would render its advertising false and misleading.’” [Id., p. 8] (emphasis in original).

Nonetheless, nearly six months later, on November 9, 2015, which was shortly before the close of fact discovery, Plaintiff filed a Motion to Compel the production of certain documents. [ECF No. 108]. Plaintiff’s Motion sought the production of, inter alia, documents relating to testing performed on Dyson vacuums as far back as 2012. Dyson objected to these requests as irrelevant to any disputed issue in the case, and not reasonably likely to lead to the discovery of admissible evidence. Specifically, Dyson noted that the Amended Complaint did not allege that Defendant’s “twice the suction” claims were literally false or misleading from inception; rather, the Amended Complaint merely alleged that those claims became literally false and misleading when the Shark Powered Lift-Away was launched into the marketplace. Therefore, Defendants argued that documents relating to their initial testing on the Dyson Animal in 2012 were not relevant to Plaintiff’s literal falsity claims.

On November 20, 2015, the parties appeared before the Court for a hearing on Plaintiff’s Motion to Compel and on Defendants’ Motion for an Emergency Protective Order [ECF No. 100]. In its Motion to Compel and at the hearing, Plaintiff argued-for the first time in this litigation-that the Amended Complaint “contains allegations of literal falsity which are not restricted in time, ” [ECF No. 109, p. 8], and that it had sufficiently alleged that Dyson’s “twice the suction” advertising was literally false even before Plaintiff launched the Shark Powered Lift-Away.

For the reasons set forth on the record at the November 20, 2015 hearing, the Court denied Plaintiff’s Motion to Compel insofar as Plaintiff sought to discover testing documents aimed at determining whether Defendants’ “twice the suction” claim was literally false from inception. The Court held that Plaintiff’s literal falsity claim under the Lanham Act, as alleged in Count One of the Amended Complaint, was limited to the allegation that Defendants’ “twice the suction” claims became literally false only after the introduction of the Shark Powered Lift-Away in 2014. The Court noted that Plaintiff’s Amended Complaint did not allege that Defendants’ advertising claims were literally false at inception, and that Plaintiff would have needed to amend the Amended Complaint to assert such a claim.

More than a month later, and after the close of discovery, Plaintiff filed the instant Motion For Clarification, Or. In The Alternative For Leave To Amend The Complaint, in which Plaintiff (1) asserts that the Court’s ruling on its Motion to Compel constituted an improper sua sponte dispositive ruling on the validity of its establishment claim, and (2) seeks reconsideration, or alternatively, leave to amend the First Amended Complaint or take an interlocutory appeal. The Court, in response to Plaintiff’s Motion for Clarification or Reconsideration, now reaffirms its holding that the First Amended Complaint is limited to allegations that Defendants’ “twice the suction” claim became literally false only after the introduction of the Shark Powered Lift-Away, and that the First Amended Complaint does not allege a claim that the “twice the suction” claim was false from its inception. Overall, the Court has little patience for Plaintiff’s late efforts to pursue a legal theory that is not articulated anywhere in the operative Complaint. ...


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