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Spruce Environmental Technologies, Inc. v. Festa Radon Technologies, Co.

United States District Court, D. Massachusetts

April 4, 2017

SPRUCE ENVIRONMENTAL TECHNOLOGIES, INC., Plaintiff-Counterclaim Defendant,
v.
FESTA RADON TECHNOLOGIES, CO., Defendant-Counterclaim Plaintiff.

          MEMORANDUM & ORDER

          NATHANIEL M. GORTON UNITED STATES DISTRICT JUDGE.

         This case involves a dispute between two competitors in the radon extraction business. Plaintiff/counterclaim-defendant Spruce Environmental Technologies, Inc. (“Spruce”) claims that defendant/counterclaim-plaintiff Festa Radon Technologies, Co. (“Festa”) engaged in false advertising of its fans in violation of 1) the Lanham Act, 15 U.S.C. § 1125(a), 2) the Massachusetts Consumer Protection Act, M.G.L. ch. 93A, §§ 2, 11, (“Chapter 93A”), 3) a Massachusetts statute that prohibits unfair and misleading advertisements, M.G.L. c. 266, § 91 and that Festa committed commercial disparagement. Festa counterclaims that Spruce has, itself, violated the Lanham Act and Chapter 93A and engaged in commercial disparagement. Spruce has filed a motion for partial summary judgment and, for the reasons that follow, that motion will be denied.

         I. Factual and Procedural Background

         Spruce, a Massachusetts corporation with a principal place of business in Haverhill, Massachusetts, manufactures and advertises radon mitigation devices, including a line of radon extraction fans. Festa, a Pennsylvania corporation with a principal place of business in Cranberry, Pennsylvania, similarly manufactures and advertises radon extraction fans.

         In April, 2015, Spruce filed a complaint against Festa which, in turn, answered and counterclaimed. Each party moved for a preliminary injunction. In July, 2015, the Court enjoined Festa from 1) using inaccurate photos of Spruce's fans and 2) representing that Festa fans have Energy Star and Home Ventilating Institute (“HVI”) certifications. In April, 2016, the Court enjoined Spruce from claiming that its fans were Energy Star certified.

         In November, 2016, Spruce filed a motion for partial summary judgment on its claims that Festa violated the Lanham Act and Chapter 93A with false advertisements concerning 1) the color of Spruce's fans, 2) Festa's Energy Star partnership and certification and 3) Festa's HVI membership and certification. Spruce requests that the Court permanently enjoin Festa from publishing those purportedly false advertisements. Spruce also moves for the summary dismissal of Festa's counterclaim that Spruce violated the Lanham Act and Chapter 93A by asserting that its fans comply with standards for outdoor use. Festa has timely opposed Spruce's motion for summary judgment which is the subject of this memorandum and order.

         II. Motion for Partial Summary Judgment

         A. Legal Standard for Summary Judgment

         The role of summary judgment is “to pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.” Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822 (1st Cir. 1991). The burden is on the moving party to show, through the pleadings, discovery and affidavits, “that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A fact is material if it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine issue of material fact exists where the evidence with respect to the material fact in dispute “is such that a reasonable jury could return a verdict for the nonmoving party.” Id.

         If the moving party has satisfied its burden, the burden shifts to the non-moving party to set forth specific facts showing that there is a genuine, triable issue. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). The Court must view the entire record in the light most favorable to the non-moving party and indulge all reasonable inferences in that party's favor. O'Connor v. Steeves, 994 F.2d 905, 907 (1st Cir. 1993). Summary judgment is appropriate if, after viewing the record in the non-moving party's favor, the Court determines that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law.

         B. Application

         1. Lanham Act and Chapter 93A

         The Lanham Act prohibits “commercial advertising or promotion” that “misrepresents the nature, characteristics, [or] qualities” of a product. 15 U.S.C. § 1125(a)(1)(B). To prevail on a claim brought under that statute, a plaintiff must prove:

(1) the defendant made a false or misleading description of fact or representation of fact . . . in a commercial advertisement about [its] own or another's product; (2) the misrepresentation is material . . .; (3) the misrepresentation actually deceives or has the tendency to deceive a substantial segment of its audience; (4) the defendant placed the false or misleading statement in interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result of ...

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