COLORADO BIOLABS, INC., Plaintiff-Counterdefendant, VS. THREE ARROWS NUTRA, LLC, Defendant-Counterplaintiff.
Civil Action No. 3:25-CV-0601-D
IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION
September 2, 2025
Case 3:25-cv-00601-D Document 23 Filed 09/02/25 PageID 308
Plaintiff-counterdefendant Colorado Biolabs, Inc. (“CBL“) sues defendant-counterplaintiff Three Arrows Nutra, LLC (“Three Arrows“) for breach of a settlement agreement and other related claims, and Three Arrows counterclaims for breach of the same settlement agreement, breach of a nondisclosure agreement, and other related claims. Three Arrows moves to dismiss under
CBL manufactures, markets, and sells under the name “Proferrin” an iron supplement product that contains Heme Iron1 Polypeptide sourced from bovine blood.2 CBL‘s competitor, Three Arrows, also manufactures, markets, and sells dietary iron supplements. Prior to the events giving rise to this lawsuit, Three Arrows’ products were called and labeled “IronRepair Heme Plus” and “IronRepair Simply Heme.”3
CBL‘s Proferrin products are black in color. When CBL noticed that Three Arrows’ products, which were purportedly derived from bovine sources, were brown in color, it began to suspect that Three Arrows’ IronRepair products did not actually contain Heme Iron, but were mislabeled. To further investigate, CBL conducted and commissioned a series of scientific assay tests4 to confirm the actual iron content of the IronRepair products and whether they contained Heme Iron. Internal testing of Three Arrows’ products revealed that IronRepair Heme Plus contained only 3-7% of the amount of iron represented on its label and that IronRepair Simply Heme contained just 1-2% of the amount of iron reflected on its label. Further testing by an outside laboratory revealed that Heme Iron was “not detectable” in IronRepair Simply Heme or IronRepair Heme Plus.
In September 2024 various members of the Iron Protocol Facebook Group, an online community focused on iron deficiency, posted questions and comments about the omission of the word “heme” from Three Arrows’ new labeling. Three Arrows’ owner, Krystal Moore (“Moore“), responded:
Nothing fishy going on.
Heme iron is animal derived.
Iron Repair is made from bovine spleen only.
We have every single batch 3rd party tested to ensure purity & potency.
Compl. (ECF No. 1) ¶ 35.
According to CBL‘s complaint, as recently as March 11, 2025 Three Arrows has used its website to falsely represent that its IronRepair products contain Heme Iron. CBL alleges that Three Arrows has tried to “dupe” its customers into believing that the IronRepair products contain Heme Iron by simultaneously espousing the myriad benefits of Heme Iron over Non-Heme Iron, making clear that Heme Iron comes from animal sources, and stating that the IronRepair products are made with bovine spleen. CBL also alleges that Three Arrows has used its Amazon storefront to market its IronRepair products as containing Heme Iron by using old product labels and descriptions and Q&A responses that specifically include the word “heme.”
In March 2025 CBL filed the instant lawsuit, alleging that Three Arrows has failed to comply with its Rebranding and No-Misrepresentation Obligations under the Settlement Agreement; has continued to falsely represent that its IronRepair products contain or constitute Heme Iron; and has disparaged CBL. Three Arrows brings claims for breach of the Settlement Agreement, false advertising and unfair competition under the Lanham Act,
Three Arrows counterclaims against CBL for breach of the Settlement Agreement, breach of the parties’ September 25, 2023 Non-Disclosure Agreement (“NDA“), and unfair competition under common law and the Lanham Act,
Three Arrows moves to dismiss CBL‘s action under Rules
II
The court first considers Three Arrows’ Rule 12(b)(6) motion to dismiss, which requires the court to decide whether CBL has stated a claim on which relief can be granted. “In deciding a Rule 12(b)(6) motion to dismiss, the court evaluates the sufficiency of [the plaintiff‘s] complaint by ‘accept[ing] all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.‘” Bramlett v. Med. Protective Co. of Fort Wayne, Ind., 855 F.Supp.2d 615, 618 (N.D. Tex. 2012) (Fitzwater, C.J.) (second alteration in original) (internal quotation marks omitted) (quoting In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007)). To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than
III
Three Arrows moves in part to dismiss on the ground that all of CBL‘s claims arising before May 31, 2024 are barred by the Settlement Agreement, which
fully and forever release[d] and discharge[d] Three Arrows of and from all claims, demands, damages, liability, responsibility, and causes of action of whatever nature, character or description, known or unknown, suspected or unsuspected, past, present, or future, arising from or relating to the past or current branding, labeling, marketing, advertising, or sale of the IronRepair Products.
Compl. Ex. 2 (ECF No. 1-2) at 2-3. Three Arrows contends that this language makes clear that the parties intended to, and did, release all claims and causes of action arising before the Settlement Agreement was executed, and that, because the Settlement Agreement bars all claims that arose before May 31, 2024, CBL‘s pre-settlement claims must be dismissed as a matter of law.
CBL responds that none of its claims in this lawsuit is barred by the Settlement Agreement because the conduct giving rise to these claims had not yet occurred when the
The court agrees with CBL that all of its claims are based on conduct that post-dates the Settlement Agreement and, therefore, are not barred by the Settlement Agreement‘s release provision—i.e., the claims do not arise from, or relate to, the past or current (as of May 31, 2024) branding, labeling, marketing, advertising, or sale of the IronRepair products. Accordingly, the court denies this ground of Three Arrows’ motion to dismiss.
IV
Three Arrows next contends that CBL has failed to state a claim for common law business disparagement.
A
To prevail on a claim for business disparagement under Texas’ law7 “a plaintiff must establish that (1) the defendant published false and disparaging information about it, (2) with malice, (3) without privilege, (4) that resulted in special damages to the plaintiff.” Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167, 170 (Tex. 2003) (citing Hurlbut v. Gulf
B
Three Arrows moves to dismiss CBL‘s common law business disparagement claim on the ground, inter alia, that CBL has failed to plausibly allege that it has suffered special damages.8 It maintains that CBL has not alleged any lost sales or other dealings as a result of any statements allegedly published by Three Arrows and that its failure to plead any specific facts supporting its clam of special damages is fatal to its claim.
CBL responds that it need not produce direct evidence of pecuniary loss at the motion
Three Arrows’ slurs about CBL easily permit a reasonable inference that the customers and prospective customers in the Iron Protocol Facebook Group failed and refused to purchase CBL products when they would have done so otherwise. As summarized above, CBL‘s complaint includes facts plausibly showing that at least one member of the Iron Protocol Facebook Group (and, upon information and belief, many others) declined or refused to purchase CBL products as a direct result of Three Arrows’ false and disparaging comments about CBL and Proferrin.
P. Br. (ECF No. 13) at 10 (citing Compl. (ECF No. 1) ¶¶ 64-67).
C
The court concludes that CBL has failed to plausibly allege the special damages element of its common law business disparagement claim. CBL cites in its response a string of posts on the Iron Protocol Facebook Group to contend that at least one member “declined or refused to purchase CBL products as a direct result of Three Arrows‘” disparaging statements. Id. (citing Compl. (ECF No. 1) ¶¶ 64-67). But the part of the complaint that CBL cites does not permit the court to draw the reasonable inference that “Three Arrows’ slurs about CBL,” id., “result[ed] in a direct pecuniary loss that has been realized or liquidated, such as specific lost sales, loss of trade, or loss of other dealings,” AHBP LLC v. Lynd Co., 649 F.Supp.3d 371, 398-99 (W.D. Tex. 2023) (quoting Encompass Off. Sols., Inc. v. Ingenix, Inc., 775 F.Supp.2d 938, 959 (E.D. Tex. 2011)). In fact, the allegations of the complaint do not permit the court to draw the reasonable inference that the allegedly disparaging statements resulted in the loss of even one sale.
if you see the comments above it goes over it. Proferrin the competitor came after them mad that they took a chunk of their market share and wanted to bleed them dry in legal battles. Easier for her to settle on removing the word heme than going out of business due to legal fees.
Id. ¶ 66. Later in the thread, an Iron Protocol Facebook Group member named Cherry Vanil (“Vanil“) posted, “boo proferrin! I [heart] three arrows. I think this group and three arrows saved my life.” Id. ¶ 67 (alteration in original).
The allegations described above at most permit the reasonable inference that one member of the Iron Protocol Facebook Group (Vanil) preferred Three Arrows’ products over Proferrin. But there is no suggestion that the reason for this preference had anything to do with the First Lawsuit or Hartigan‘s comments. CBL does not allege that it lost a single sale, or otherwise suffered any direct pecuniary loss, as a result of Hartigan‘s statements. Its conclusory allegation that Three Arrows “has published false and disparaging information
Accordingly, the court grants Three Arrows’ motion to dismiss CBL‘s common law business disparagement claim.
V
Three Arrows moves to dismiss CBL‘s claims for false advertising and unfair competition under the Lanham Act on the ground that CBL has failed to plausibly allege that any false statements were disseminated broadly enough to constitute actionable commercial advertising or promotion.
A
The Lanham Act applies to misrepresentations made in “commercial advertising or promotion.”9
In order for representations to constitute “commercial advertising or promotion” under Section 43(a)(1)(B), they must be: (1) commercial speech; (2) by a defendant who is in commercial competition with plaintiff; (3) for the purpose of influencing consumers to buy defendant‘s goods or services. While the representations need not be made in a “classical advertising campaign,” but may consist instead of more informal types of “promotion,” the representations (4) must be disseminated sufficiently to the relevant purchasing public to constitute “advertising” or “promotion” within that industry.
Seven-Up Co. v. Coca-Cola Co., 86 F.3d 1379, 1384 (5th Cir. 1996) (citation omitted).10
The level of public dissemination required to constitute advertising and promotion “var[ies] from industry to industry and from case to case.” Id. at 1385 (quoting Am. Needle & Novelty, Inc. v. Drew Pearson Mktg., Inc., 820 F. Supp. 1072, 1078 (N.D. Ill. 1993)). While “merely isolated, individual statements of opinion by a single sales representative to a single customer” do not ordinarily suffice, “even a single promotional presentation to an individual purchaser may be enough” where the “potential purchasers in the market are relatively limited in number.” Id. at 1386. Actionable statements do not need to be made in the form of a “classical advertising campaign” and can include “more informal types of ‘promotion,‘” as long as they are sufficiently disseminated to the relevant purchasing public.
B
CBL‘s false advertising claim is based on four categories of alleged misconduct: (1) Moore‘s Facebook posts on the Iron Protocol Facebook Group, (2) Hartigan‘s Facebook posts in the same group, (3) “deep-linked” webpages on Three Arrows’ website, and (4) product descriptions on certain of Three Arrows’ Amazon Storefront listings. Three Arrows contends that CBL has not pleaded that the allegedly false statements in these four categories were sufficiently disseminated to constitute “commercial advertising or promotion.” It maintains that the Iron Protocol Facebook Group is not a commercial forum for
CBL responds that posting false information to a Facebook group and promoting products by means of false advertising on Amazon can constitute “commercial advertisement” under the Lanham Act; that the Iron Protocol Facebook Group is a very large and robust market for actual and potential purchasers of Three Arrows’ iron supplements; and that misrepresentations posted to a defendant‘s publicly-available website can also support false advertising liability under the Lanham Act.
C
The court holds that the allegations in the complaint are sufficient to enable the court to draw the reasonable inference that Three Arrows engaged in “commercial advertising or
CBL alleges that Three Arrows posted false or misleading information about its products on the Iron Protocol Facebook Group, “an online community focused on iron deficiency,” that is “by far, the largest online group primarily dedicated to iron deficiency issues.” Compl. (ECF No. 1) ¶ 33. It also asserts that the Iron Protocol Facebook Group “has approximately 166,300 members,” and that “[b]ecause of its focus and membership, [it] is an important part of the iron supplement market and a valuable source of potential iron supplement customers.” Id. At the pleading stage, these allegations are sufficient to enable the court to draw the reasonable inference that Three Arrows’ allegedly misleading statements were “disseminated sufficiently to the relevant purchasing public to constitute ‘advertising’ or ‘promotion’ within the iron supplement market.” Seven-Up Co., 86 F.3d at 1384 (citation omitted). CBL has also adequately alleged that Three Arrows made misleading statements on its Amazon Storefront and in the “deep linked” pages on its website that were sufficiently disseminated to the relevant purchasing public because they were “available to the consuming public at all times.” Greater Hous. Transp. Co., 155 F.Supp.3d at 687.
D
Three Arrows also moves to dismiss CBL‘s common law unfair competition claim. It posits that, because CBL‘s Lanham Act claim fails, its derivative common law unfair competition claim must also fail. As explained above, the court is denying Three Arrows’ motion to dismiss CBL‘s Lanham Act claim. Accordingly, it also denies Three Arrows’ motion to dismiss CBL‘s common law unfair competition claim.
VI
The court now turns to CBL‘s claim for breach of the Settlement Agreement. Three Arrows moves to dismiss this claim on the ground that, to the extent this claim is “not co-extensive of its other claims,” CBL has failed to state a claim because it fails to “plead specific facts tying its claimed damages to its alleged breaches of contract.” D. Br. (ECF No. 6) at 15, 16.
CBL‘s complaint alleges that Three Arrows’ misrepresentations about the Heme Iron content of its products have “eroded, and will continue to erode, CBL‘s brand as a producer and seller of genuine Heme Iron supplements,” Compl. (ECF No. 1) ¶ 69; have “caused, and
VII
The court next considers Three Arrows’ Rule 12(b)(7) motion to dismiss for failure to join an indispensable party, i.e., Hartigan.
A
“Determining whether to dismiss a case for failure to join an indispensable party
Second, if the party is a necessary party, as defined in
B
The first question the court must address is whether Three Arrows has satisfied its burden of establishing that Hartigan is a required party under
This court has previously held that, to satisfy the requirements of
C
But even assuming that Three Arrows’ failure to show that the court lacks personal jurisdiction over Hartigan is not fatal to its motion, the court also denies the motion because Three Arrows has failed to satisfy the requirements of
Three Arrows has failed to carry its burden of establishing that Hartigan is a necessary party under
VIII
The court turns next to CBL‘s motion to dismiss Three Arrows’ counterclaims, beginning with Three Arrows’ counterclaims for breach of the Settlement Agreement and NDA.
A
The Non-Disparagement Obligation of the Settlement Agreement provides, in pertinent part, that “[e]ach Party agrees that it will not make to any other person or entity any false, misleading, threatening, or disparaging statement regarding the other Party or that Party‘s employees, products, or services.” Compl. Ex. 2 (ECF No. 1-2) at 3. Three Arrows alleges [in counterclaim I] that CBL breached the Non-Disparagement Obligation when it posted on the anemic subreddit (a forum for persons with anemia) that “Three Arrows has updated their claims and do not actually contain heme iron!,” which “essentially asserts that Three Arrows admitted to liability in the First [Lawsuit].” Countercl. (ECF No. 10) ¶ 15.17
B
Three Arrows agreed in the Settlement Agreement that
[b]eginning September 1, 2024 and continuing indefinitely thereafter, Three Arrows will not state or represent, whether expressly or by implication, that the IronRepair Products, or any other existing or future product that Three Arrows may at any time brand, label, market, advertise, or sell, constitutes, consists of, or contains any amount of Heme Iron.
Compl. Ex. 2 (ECF No. 1-2) at 2. Based on this provision, CBL maintains that its statement that “Three Arrows has updated their claims and do not actually contain heme iron” is not false, but is instead “an objectively true and accurate statement that Three Arrows acknowledged and agreed to in the Settlement Agreement,” and that Three Arrows therefore cannot plead that CBL‘s post is false or disparaging. P. Br. (ECF No. 12) at 6.
Three Arrows responds that, although it agreed in the Settlement Agreement to remove any reference that its products contain Heme Iron, it did not agree to any admission that its products do not contain Heme Iron. It cites the “No Admission of Liability”18
CBL replies that Three Arrows’ affirmative, contractual promise that it will never again represent or suggest that its products contain Heme Iron is, for purposes of evaluating Three Arrows’ counterclaims, “tantamount to an admission that its products do not contain Heme Iron,” P. Reply (ECF No. 22) at 1; that if, as Three Arrows implies, its products actually do contain Heme Iron, then the Settlement Agreement would essentially force it to lie to the consuming public about its products, which would be illegal; and that, under any definition of the term “disparagement,” CBL‘s posts cannot be disparaging because they “say nothing more or less than what Three Arrows has already confessed,” id. at 4.
Without suggesting a view on whether Three Arrows will prevail on its breach of contract counterclaim on summary judgment or at trial, the court holds that Three Arrows has plausibly pleaded sufficient facts at the motion to dismiss stage to support this counterclaim. The Settlement Agreement prohibits CBL from making disparaging statements regarding Three Arrows or its products. Three Arrows alleges that CBL‘s post, which suggests that Three Arrows admitted liability in the First Lawsuit, was “clearly meant to disparage Three Arrows by leveraging the parties’ confidential Settlement Agreement.” Countercl. (ECF No. 10) ¶ 15. Three Arrows’ allegations are sufficient to plausibly plead the breach element of
C
Regarding damages, Three Arrows alleges that CBL‘s statements “were intended to, and did, demean Three Arrows,” Countercl. (ECF No. 10) ¶ 26; that CBL‘s statements “cast doubt on the quality of Three Arrow[s‘] goods or services,” id.; and that, as a result of CBL‘s breach, Three Arrows has suffered damages, id. ¶ 27. These allegations are sufficient at the
D
CBL maintains that Three Arrows’ breach of contract counterclaim must be dismissed because Three Arrows has not plausibly alleged that it fully performed all of its obligations under the Settlement Agreement.
In its counterclaims, Three Arrows alleges that it “has performed its obligations under the Settlement Agreement.” Id. ¶ 25. It specifically pleads that it “agreed to rebrand its products to remove any reference that its products contain heme iron and to pay CBL $400,000 over the course of eight months,” id. ¶ 13, and that “[a]s CBL is well aware, Three Arrows rebranded its products solely to avoid the cost of further litigation,” id. ¶ 15. Three
E
CBL moves to dismiss Three Arrows’ counterclaim for breach of the NDA, contending that the challenged statement does not state, or even suggest, that the information referenced came from Three Arrows; that CBL commissioned and obtained its own test results for Three Arrows’ products and every test showed that the product contained no measurable amount of Heme Iron; that “[a]t best, Three Arrows has alleged the possibility that this statement refers to Three Arrows’ confidential test results[, b]ut it is equally possible that the statement is referring to the different test results that CBL commissioned and obtained on its own,” P. Br. (ECF No. 12) at 9; and that Three Arrows cannot plausibly plead damages related to CBL‘s statement because the statement is a true fact and Three Arrows has already admitted to it.
Three Arrows responds that the statement refers to “three arrows testing,” not “CBL‘s testing,” and that Three Arrows’ allegation that CBL breached the NDA by publicizing Three Arrows’ confidential test results, taken as true, plausibly states a claim for relief.
Three Arrows alleges that CBL breached the NDA when it stated publicly, again on Reddit, that “[r]ecent updates to three arrows ingredients/testing publishings have shown it actually does not contain any heme iron.” Countercl. (ECF No. 10) ¶ 16. Three Arrows asserts that “[a]ny ‘Three Arrows . . . testing publishings’ CBL has in its possession were produced pursuant to the NDA in the First [Lawsuit] and were marked CONFIDENTIAL,”
The court holds that Three Arrows has alleged sufficient facts to plausibly plead a counterclaim for breach of the NDA. Although the challenged statement may be susceptible to more than one interpretation, it is at least plausible that it revealed confidential information, i.e., the results of Three Arrows’ testing publishings. Regarding damages, the court must accept factual allegations of Three Arrows’ counterclaim as true; it cannot determine at the motion to dismiss stage whether or not CBL‘s statement regarding testing is in fact true, and thus precludes Three Arrows from establishing damages.
Accordingly, the court denies CBL‘s motion to dismiss CBL‘s counterclaim for breach of the NDA.
IX
The court now considers Three Arrows’ Lanham Act unfair competition counterclaim. CBL moves to dismiss this counterclaim under
A
The court begins, as it must,20 with CBL‘s
The standing doctrine addresses the question of who may properly bring suit in federal court, and “is an essential and unchanging part of the case-or-controversy requirement of Article III.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). It “involves both constitutional limitations on federal-court jurisdiction and prudential limitations on its exercise.” Warth v. Seldin, 422 U.S. 490, 498 (1975). To establish standing, a plaintiff must meet both constitutional and prudential requirements. See, e.g., Procter & Gamble Co. v. Amway Corp., 242 F.3d 539, 560 (5th Cir. 2001). CBL contends that Three Arrows lacks constitutional standing, which requires that Three Arrows establish that it “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016) (citing Defenders of Wildlife, 504 U.S. at 560). The plaintiff, or in this case, the counterplaintiff, “as the party invoking federal jurisdiction, bears the burden of establishing these elements.” Id. (citing FW/PBS, Inc. v. Dallas, 493 U.S. 215, 231 (1990)).
A
A party can also make a factual attack on subject matter jurisdiction by submitting evidence, such as affidavits or testimony. Id. (citation omitted). “A factual attack on the subject matter jurisdiction of the court, however, challenges the facts on which jurisdiction depends and matters outside of the pleadings, such as affidavits and testimony, are considered.” Vinmar Overseas, 2012 WL 3599486, at *4 (quoting Oaxaca v. Roscoe, 641 F.2d 386, 391 (5th Cir. Unit A Apr. 1981)). The court deems the instant motion to present a facial challenge.
2
Three Arrows bases its Lanham Act counterclaim on the following allegations: (1) CBL represents that it is the only domestic manufacturer of Heme Iron when at least one other competitor, the manufacturer of Promix, advertises that its Heme Iron product is made in the United States; and (2) CBL represents that one of its Proferrin products contains 10.5 mg of Heme Iron Polypeptide per capsule, when testing shows that, on average, these capsules have fewer than 10 mg of Heme Iron.
CBL contends that Three Arrows has not pleaded facts that plausibly support the constitutional requirements for standing with respect to its Lanham Act counterclaim because Three Arrows is not a domestic manufacturer of Heme Iron products and is not permitted to sell any product that is represented to contain any amount of Heme Iron; Three Arrows
Three Arrows responds that, as a competitor in the marketplace, it has standing to sue for CBL‘s Lanham Act violations. It contends that CBL‘s representation that it is the only Heme Iron manufacturer in the United States has caused customers to withhold trade from Three Arrows, a competitor in the same industry; that Three Arrows’ products are also made in the United States and thus, Three Arrows is clearly within the class of commercial actors with standing to bring this counterclaim; that “Three Arrows, as a competitor and U.S.-based manufacturer in the iron supplement market, alleges that CBL‘s false and misleading statements deceived customers who would otherwise have purchased Three Arrows’ products but for CBL‘s deception,” D. Br. (ECF No. 21) at 12; and that damages would remedy its loss through an injunction and monetary damages.
3
Three Arrows has alleged facts that, accepted as true, establish constitutional standing to bring its Lanham Act counterclaim. Although Three Arrows alleges that CBL‘s conduct “dilut[es] the value of other United States-manufactured heme iron products,” Countercl. (ECF No. 10) ¶ 34 (emphasis added), it also alleges that “CBL‘s false and misleading claims are designed to entice consumers to purchase CBL‘s products over Three Arrows[‘],” and
The court concludes that Three Arrows has established constitutional standing with respect to its Lanham Act counterclaim. Accordingly, CBL‘s
B
For largely the same reasons, the court concludes that Three Arrows has adequately pleaded that it has statutory standing under the Lanham Act. Section 43(a) of the Lanham Act provides a cause of action for “unfair competition through misleading advertising or labeling.” POM Wonderful LLC v. Coca-Cola Co., 573 U.S. 102, 107 (2014) (citing
The Lanham Act “authorizes suit by ‘any person who believes that he or she is likely to be damaged’ by a defendant‘s false advertising.” Id. at 129 (quoting
Relying on the text of the Lanham Act, the Court in Lexmark concluded that “to come within the zone of interests in a suit for false advertising under
a plaintiff suing under
§ 1125(a) ordinarily must show economic or reputational injury flowing directly from the deception wrought by the defendant‘s advertising; and that occurs when deception of consumers causes them to withhold trade from the plaintiff. That showing is generally not made when the deception produces injuries to a fellow commercial actor that in turn affect the plaintiff. For example, while a competitor who is forced out of business by a defendant‘s false advertising generally will be able to sue for its losses, the same is not true of the competitor‘s landlord, its electric company, and other commercial parties who suffer merely as a result of the competitor‘s “inability to meet [its] financial obligations.”
Id. at 133-34 (alteration in original) (quoting Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 458 (2006)). “At the pleading stage, general factual allegations of injury resulting from the defendant‘s conduct may suffice, for on a motion to dismiss [the court] presum[es] that general allegations embrace those specific facts that are necessary to support the claim.” Defenders of Wildlife, 504 U.S. at 561 (citation and internal quotation marks omitted).
Three Arrows’ alleged injuries—the loss of customers, confusion and deception in the supplement industry, and the deprivation “of business and good will”—are injuries to precisely the sorts of commercial interests the Act protects. Three Arrows is not suing as a deceived consumer, or even, as CBL suggests, on behalf of other manufacturers of Heme Iron supplements, but as a competitor whose position in the marketplace has allegedly been damaged by CBL‘s false advertising as to the substance and exclusivity of its product. Three Arrows’ allegations, taken as true, are sufficient to plausibly allege statutory standing under the Lanham Act.
Finally, the court denies CBL‘s motion to dismiss Three Arrows’ Lanham Act counterclaim under
Three Arrows acknowledges that the only person or entity who could be directly impacted by CBL‘s alleged misrepresentations are a “United States-based manufacturer of heme iron products[.]” Three Arrows is neither. Three Arrows does not allege that it is a United States-based manufacturer of anything, and it is prohibited from claiming to be a manufacturer of Heme Iron products. . . . Thus . . . Three Arrows is not a “person who believes that he or she is likely to be damaged” from CBL‘s alleged misstatements as required by the Lanham Act.
D. Br. (ECF No. 12) at 12 (citations omitted). But as explained above, Three Arrows alleges that it has been injured by CBL‘s conduct, asserting that “CBL‘s false and misleading claims are designed to entice consumers to purchase CBL‘s products over Three Arrows[‘],” that “CBL‘s customers would buy Three Arrows’ products but for CBL‘s misrepresentations,” and that “[t]he natural, probable, and foreseeable result of CBL‘s conduct is to cause confusion and deception in the supplement industry and to deprive Three Arrows of business and goodwill, and to injure Three Arrows’ relationships with existing and prospective customers.” Countercl. (ECF No. 10) ¶¶ 20-21. These allegations are sufficient to plausibly allege that Three Arrows has been injured by CBL‘s conduct.
The court therefore denies CBL‘s motion to dismiss Three Arrows’ Lanham Act
X
A
CBL requests that, if the court determines that any part of Three Arrows’ motion to dismiss is meritorious or that any of CBL‘s claims, or any portion of a claim, should be dismissed, it be granted leave to amend its complaint to plead additional facts in support of any such claim or portion of a claim. The court grants the request. See In re Am. Airlines, Inc., Privacy Litig., 370 F.Supp.2d 552, 567-68 (N.D. Tex. 2005) (Fitzwater, J.) (“[D]istrict courts often afford plaintiffs at least one opportunity to cure pleading deficiencies before dismissing a case, unless it is clear that the defects are incurable or the plaintiffs advise the court that they are unwilling or unable to amend in a manner that will avoid dismissal.” (quoting Great Plains Tr. Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 329 (5th Cir. 2002))). There is no indication that CBL cannot, or is unwilling to, cure the defects in its complaint. As noted, CBL expressly requests leave amend if its complaint is deemed deficient. The court therefore grants CBL 28 days from the date this memorandum opinion and order is filed to file an amended complaint.
B
Three Arrows also requests that the court grant it leave to replead if the court grants any portion of CBL‘s motion. Because the court has denied CBL‘s motion as to all challenged counterclaims, the court denies this request without prejudice as moot.
Accordingly, for the reasons explained, the court grants in part and denies in part Three Arrows’ motion to dismiss CBL‘s claims and denies CBL‘s motion to dismiss Three Arrows’ counterclaims. The court grants CBL 28 days from the date this memorandum opinion and order is filed to file an amended complaint.
SO ORDERED.
September 2, 2025.
SIDNEY A. FITZWATER
SENIOR JUDGE
Notes
Any person who . . . in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or another person‘s goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is likely to be damaged by such act.
(a) Persons Required to be Joined if Feasible.
(1) Required Party. A person who is subject to service of process and whose joinder will not deprive the court of subject-matter jurisdiction must be joined as a party if:
(A) in that person‘s absence, the court cannot accord complete relief among existing parties; or
(B) that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person‘s absence may:
(i) as a practical matter impair or impede the person‘s ability to protect the interest; or
(ii) leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest.
(1) the extent to which a judgment rendered in the person‘s absence might prejudice that person or the existing parties;
(2) the extent to which any prejudice could be lessened or avoided by:
(A) protective provisions in the judgment;
(B) shaping the relief; or
(C) other measures;
(3) whether a judgment rendered in the person‘s absence would be adequate; and
(4) whether the plaintiff would have an adequate remedy if the action were dismissed for nonjoinder.