Dependable Sales v. Truecar, Inc., 377 F. Supp. 3d 337

Plaintiffs: 108 new‑car brick‑and‑mortar dealerships across ~23 states suing TrueCar under the Lanham Act for false advertising. TrueCar is an online lead‑generator that connects consumers with affiliated dealers but does not sell cars itself.
Core allegations: TrueCar advertised a “no negotiation / no haggling” buying experience and “guaranteed savings,” and displayed a “TrueCar Curve” (including a “factory invoice” data point) that plaintiffs say misled consumers and diverted sales to TrueCar‑affiliated dealers.
Evidence and discovery: Plaintiffs rely on consumer‑perception surveys and deposition testimony; plaintiffs’ damages expert (Patrick Anderson) was excluded under Daubert for failing to show causation between TrueCar ads and plaintiffs’ lost sales.
Procedural posture: Discovery closed; TrueCar moved for summary judgment. Court treated literal falsity of the “no‑haggle” ads as undisputed for the motion but evaluated injury, materiality, willfulness, and equitable remedies.
Holdings preview: Court granted summary judgment for TrueCar on compensatory injury (plaintiffs failed to show provable sales/reputation harm), denied summary judgment on materiality, and denied summary judgment as to disgorgement because plaintiffs produced evidence supporting willfulness (e.g., TrueCar ran ads over counsel’s objections).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether plaintiffs proved cognizable injury (sales or reputational) under the Lanham Act	Johnson surveys and dealer testimony show consumers understood ads and thus plaintiffs lost sales / reputation	No direct competition; ads non‑comparative; surveys show falsity not causation; expert excluded—no reliable proof of diverted sales	Plaintiffs failed to present admissible evidence of injury/causation; summary judgment for TrueCar on compensatory damages granted
Whether the alleged false statements were material	Ads promising no‑haggling/guaranteed savings induced consumer preference	Even if false, consumer behavior outcomes show immateriality	Materiality is a triable issue; TrueCar’s motion on materiality denied
Whether disgorgement of TrueCar’s profits is available absent proof of injury	Disgorgement appropriate to deter willful false advertising even if plaintiffs cannot prove specific injury	Plaintiffs must show injury; also TrueCar contends it had no net profits to disgorge	Plaintiffs presented evidence (ignored counsel, internal data about unhonored certificates) supporting willfulness; summary judgment denied as to disgorgement remedy (equitable issue for trial)
Whether state law claims proceed now	Plaintiffs want state claims tried with federal claim	TrueCar did not address state claims in briefing	State law claims stayed pending resolution of Lanham Act disgorgement claim

Church & Dwight Co. v. SPD Swiss Precision Diagnostics GmBH, 843 F.3d 48 (2d Cir.) (elements of a Lanham Act false advertising claim)
Lexmark Int'l, Inc. v. Static Control Components, Inc., 572 U.S. 118 (U.S.) (proximate causation and economic/reputational injury under § 1125(a))
Merck Eprova AG v. Gnosis S.p.A., 760 F.3d 247 (2d Cir.) (disgorgement for deterrence; presumption rules for comparative ads)
George Basch Co. v. Blue Coral, Inc., 968 F.2d 1532 (2d Cir.) (three rationales for awarding defendant's profits; willfulness prerequisite for disgorgement)
W.E. Bassett Co. v. Revlon, Inc., 435 F.2d 656 (2d Cir.) (disgorgement permitted solely for deterrence where defendant acted willfully)
McNeilab, Inc. v. American Home Prods. Corp., 848 F.2d 34 (2d Cir.) (non‑comparative ads affect all competitors equally; need proof of actual injury)
Ortho Pharm. Corp. v. Cosprophar, Inc., 32 F.3d 690 (2d Cir.) (flexible proof of injury but disfavors presumptions absent direct competition or comparative ads)
Int'l Star Class Yacht Racing Ass'n v. Tommy Hilfiger U.S.A., Inc., 146 F.3d 66 (2d Cir.) (district court discretion in awarding full or partial accounting to deter willful infringement)