Casper Sleep, Inc. v. Mitcham
1:16-cv-03224
S.D.N.Y.Sep 2, 2016Background
- Casper Sleep, an online mattress seller, sued Jack Mitcham and Mattress Nerd LLC alleging MattressNerd.com reviews falsely imply impartiality while Mitcham earns affiliate commissions from Casper's competitors.
- MattressNerd displays a sitewide "Affiliate Disclaimer" stating Mitcham earns "small commissions," is an affiliate for many companies, and is "brand-agnostic." Individual reviews include shorter disclaimers and affiliate links.
- Casper alleges some specific pages (e.g., a three-way comparison and a Casper review) falsely state or imply Mitcham is an affiliate of Casper (after Casper ended its affiliate relationship) or otherwise give the impression he has equal pecuniary interest in Casper sales.
- Casper brought claims under § 43(a) of the Lanham Act (false advertising) and N.Y. Gen. Bus. Law § 349 (deceptive practices). Defendants moved to dismiss under Rules 12(b)(1) and 12(b)(6).
- The court held the broad sitewide Affiliate Disclaimer and puffery statements are not actionable under the Lanham Act, but denied dismissal to the extent Casper alleged specific literal falsehoods about Mitcham’s affiliate relationship with Casper. The § 349 claim survived in full.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the sitewide affiliate disclosures and general claims of "brand-agnostic" reviews are actionable under § 43(a) | Those disclosures create a misleading impression of independence and omit material conflicts, causing diversion of sales | Disclosures admit affiliate relationships and are truthful; statements are subjective puffery and not provably false | Dismissed as to Lanham Act claims based on general Affiliate Disclaimer and puffery (not actionable) |
| Whether specific statements falsely claiming an affiliate relationship with Casper can support § 43(a) liability | Specific page statements and disclaimers falsely assert affiliation with Casper after Casper ended the relationship | Defendants dispute causation/standing and that statements are commercial advertising or provably false | Survives to the extent Casper pleads specific literal falsehoods (e.g., alleged claim of being an affiliate of Casper) |
| Whether Casper has a cognizable Lanham Act cause of action / standing | Casper alleges diversion of sales and reputational injury proximately caused by deception | Defendants contend prudential standing, direct-competition, and proximate-cause defenses require dismissal | Court treats these as merits (per Lexmark); proximate-cause allegation is plausible and not dismissed |
| Whether N.Y. Gen. Bus. Law § 349 claim requires more than consumer-oriented deception (e.g., public health/safety or "significant ramifications") | Casper: § 349 covers consumer-oriented deceptive practices that affect similarly situated consumers; MattressNerd's conduct is consumer-oriented | Defendants: § 349 should require significant public ramifications or danger to public health/safety | § 349 claim allowed in full; court rejects heightened requirement and finds consumer-oriented element satisfied |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard for plausible claims)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (plausibility pleading framework)
- Lexmark Int'l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377 (limits of "prudential standing" and proximate-cause framework under § 1125(a))
- Lipton v. Nature Co., 71 F.3d 464 (subjective puffery not actionable under Lanham Act)
- Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, N.A., 647 N.E.2d 741 (N.Y. Court of Appeals on consumer-oriented requirement under § 349)
- S.C. Johnson & Son, Inc. v. Clorox Co., 241 F.3d 232 (Lanham Act scope re: commercial advertising and product characteristics)