Boltex Manufacturing Company, L.P. v. Galperti, Inc.
4:17-cv-01439
S.D. Tex.Mar 29, 2018Background
- Plaintiffs Boltex and Weldbend manufacture and sell normalized carbon-steel flanges that comply with ASTM standards and are sold at a premium; they mark flanges and include Mill Test Reports (MTRs) to indicate normalization.
- Defendants ONG and Galperti manufacture flanges and stamp and describe some flanges as "A105N" / "normalized" in catalogs, MTRs, and on the flanges themselves.
- Plaintiffs allege Defendants do not actually perform normalization and thus their representations that the flanges meet ASTM A105 (and are normalized) are false, harming Plaintiffs in the market.
- Plaintiffs sued under the Lanham Act § 43(a) for false advertising and under common-law unfair competition; Defendants moved to dismiss under Rule 12(b)(6) or for a more definite statement under Rule 12(e).
- The court accepted Plaintiffs’ well‑pleaded factual allegations as true for the motion to dismiss, denied judicial notice of ASTM standards at this stage, and denied Defendants’ motions, holding the Lanham Act claim and unfair competition claims survive 12(b)(6).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Plaintiffs alleged a false or misleading statement of fact | Plaintiffs allege Defendants advertised flanges as "A105N"/normalized and that this was literally false because Defendants did not normalize the flanges | Defendants contend Plaintiffs’ allegations are vague, conclusory, and rest on incorrect assumptions about ASTM A105 requirements | Court: Accepting pleaded facts as true, Plaintiffs sufficiently alleged literally false statements; claim survives 12(b)(6) |
| Whether screenshots / third‑party listings supply advertising by Defendants | Plaintiffs point to Defendants’ own catalogs, stamps, and MTRs as advertising, in addition to third‑party listings | Defendants argue the complaint relies only on third‑party distributor webpages and thus fails to show Defendants’ own advertising | Court: Complaint alleges Defendants’ own advertising (catalogs, MTRs, stamps); allegations are adequate at pleading stage |
| Whether stamps and MTRs (post‑sale or limited‑dissemination items) qualify as "commercial advertising or promotion" | Plaintiffs assert industry realities: stamps and MTRs inform distributor/end‑user acceptance and thus influence purchasing decisions in this industry | Defendants argue stamps and MTRs are post‑sale or narrowly viewed and therefore not commercial advertising under the Lanham Act | Court: Industry‑specific allegations plausibly show stamps/MTRs can influence purchases and meet Seven‑Up factors; survive 12(b)(6) |
| Whether literal falsity eliminates requirement to plead actual deception | Plaintiffs assert the statements are literally false and therefore the court must presume deception | Defendants argue Plaintiffs did not plead that statements actually deceived a substantial segment | Court: Because Plaintiffs alleged literal falsity, actual deception need not be pleaded; Plaintiffs also pleaded deception/tendency to deceive anyway |
| Judicial notice of ASTM standards and motion for more definite statement | Plaintiffs rely on ASTM compliance allegations; discovery can resolve standards issues | Defendants asked judicial notice of ASTM A105 and A961 and moved for a more definite statement | Court: Denied judicial notice at this stage due to dispute over which ASTM standards govern; denied motion for more definite statement as premature and discovery‑appropriate |
Key Cases Cited
- Seven-Up Co. v. Coca‑Cola Co., 86 F.3d 1379 (5th Cir. 1996) (factors for what constitutes "commercial advertising or promotion" under Lanham Act)
- IQ Prods. Co. v. Pennzoil Prods. Co., 305 F.3d 368 (5th Cir. 2002) (literal falsity presumes consumer deception under § 43(a))
- Pizza Hut, Inc. v. Papa John’s Int’l, Inc., 227 F.3d 489 (5th Cir. 2000) (elements of a Lanham Act false advertising claim and proof considerations)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard for pleading)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (requirements for factual allegations to survive dismissal)
- Gillette Co. v. Norelco Consumer Prods. Co., 946 F. Supp. 115 (D. Mass. 1996) (district court decision finding certain post‑sale package inserts were not commercial advertising)