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129 F. Supp. 3d 1158
D. Colo.
2015
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Background

  • General Steel sells prefabricated steel buildings and briefly employed Ethan Chumley, who founded Armstrong Building Systems in competition with General.
  • Chumley purchased generalsteelscam.com and hosted defamatory material about General; later created steelbuildingcomplaints.com after a ruling transferred the site to General.
  • Chumley/Armstrong allegedly used back-linking SEO and pay-per-click tactics to promote steelbuildingcomplaints.com and disadvantage General in search results.
  • General alleges six claims against Armstrong: Lanham Act false advertising, Anti-Cybersquatting Act domain disputes, common-law libel, unjust enrichment, civil conspiracy, and misappropriation of trade secrets.
  • Armstrong asserts counterclaims for copyright infringement and false advertising related to Armstrong’s logo and advertising practices.
  • The Court resolves motions for summary judgment and discovery disputes, including Armstrong’s objections to a magistrate’s denial of certain discovery requests.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Agency for JEMSU content Armstrong argues JEMSU acted as a General contractor, not an independent entity. General contends JEMSU was independent and not General’s agent. Genuine dispute of fact; agency not entitled to summary judgment.
Whether JEMSU blog posts are advertising Armstrong claims JEMSU content is false advertising under Lanham Act. General argues blog posts were not advertising or not commercially disseminated. Blog-post claims of false advertising granted summary judgment for General on the basis of lack of dissemination.
Pay-per-click ads as advertising These ads were false representations promoting General as a manufacturer. General allegedly approved/controlled some pay-per-click content. Lanham Act claim premised on pay-per-click ads may proceed; evidence supports General review/approval.
False advertising of General's own statements Statements like 100% customer satisfaction and zero unresolved issues are false and actionable. General argues puffery or non-definitive terms; some statements are unverifiable. Court denies General’s motion for summary judgment; findings support falsity as to specific, measurable claims.
Anti-cybersquatting Act domain General seeks to hold Armstrong for registration/use of confusingly similar domain. Disputed similarity and ownership issues; WIPO findings not controlling here. Armstrong is entitled to summary judgment; domain not confusingly similar; ownership addressed separately.

Key Cases Cited

  • Procter & Gamble Co. v. Haugen, 222 F.3d 1262 (10th Cir. 2000) (tests for falsity and likelihood of deception under Lanham Act)
  • Sports Unlimited, Inc. v. Lankford Enterprises, Inc., 275 F.3d 996 (10th Cir. 2002) (dissemination necessary for advertising claims)
  • Hutchinson v. Pfeil, 105 F.3d 562 (10th Cir. 1997) (presumed injury only in direct-comparison advertising contexts)
  • Porous Media Corp. v. Pall Corp., 110 F.3d 1329 (8th Cir. 1997) (presumption of injury applies to certain comparative advertising cases)
  • Ortho Pharmaceutical Corp. v. Cosprophar, Inc., 32 F.3d 690 (2d Cir. 1994) (flexible approach to injury and causation in Lanham Act claims; requires proof of injury)
  • Coca-Cola Co. v. Tropicana Products Inc., 690 F.2d 312 (2d Cir. 1982) (causation and market studies used to demonstrate deception)
  • Barefoot Architect, Inc. v. Bunge, 632 F.3d 822 (3d Cir. 2011) (oral copyright assignments ratified in writing later may be effective)
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Case Details

Case Name: General Steel Domestic Sales, LLC v. Chumley
Court Name: District Court, D. Colorado
Date Published: Sep 15, 2015
Citations: 129 F. Supp. 3d 1158; 2015 U.S. Dist. LEXIS 122850; 2015 WL 5353080; Civil Action No. 13-cv-00769-MSK-KMT
Docket Number: Civil Action No. 13-cv-00769-MSK-KMT
Court Abbreviation: D. Colo.
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    General Steel Domestic Sales, LLC v. Chumley, 129 F. Supp. 3d 1158