ORDER DENYING DEFENDANT’S MOTION TO DISMISS
Before this court is Defendant’s, United States Postal Service, Rule 12(b)(6) motion to dismiss Plaintiffs, Federal Express Corporation, complaint for failure to state a claim upon which relief can be granted. Plaintiff alleges that Defendant violated Section 43 of the Lanham Act, 15 U.S.C. §§ 1051-1127, by disseminating false and misleading advertising concerning the characteristics of its Priority Mail and Global Priority Mail services. More specifically, Plaintiff alleges that Defendant violated the 15 U.S.C. § 1125(a) by 1)
Defendant contends that Plaintiffs complaint fails to state a claim and should be dismissed pursuant to Rule 12(b)(6). In support of this contention, Defendant argues that 1) Plaintiffs complaint fails to plead the facts underlying its allegations of a Lanham Act violation with sufficient particularity, 2) the alleged statements of misrepresentation are not material and therefore not actionable under the Lanham Act, 3) Defendant’s representation of itself as a “company” which “delivers around the world” was a statement of puffery and therefore not actionable under the Lanham Act, and 4) Defendant’s comparison between its delivery services and those of Plaintiff is not actionable under the Lan-ham Act because the statements were true and Defendant did not have a duty to disclose all the differences between its delivery service and that of Plaintiff.
For the following reasons, the court denies Defendant’s Rule 12(b)(6) motion to dismiss Plaintiffs complaint for failure to state a claim upon which relief can be granted.
I. FACTS
Plaintiff is a private corporation organized under the laws of Delaware and having its principal place of business in Memphis, Tennessee. (Pl.’s Compl. ¶ 1). Its principal business is the door-to-door express delivery of documents, packages and freight throughout the United States and the world via a complex, integrated air ground transportation system. Currently, Plaintiff delivers an average daily volume of approximately 2,500,000 packages per day. (Pl.’s Compl. ¶ 6). Plaintiffs delivery business features door-to-door delivery, time and day delivery commitments, package status tracking, a money-back guarantee for on-time delivery and a second guarantee for package status tracking, evening package drop-off facilities across the country, a network of over 500 airplanes owned or operated by Plaintiff, over 37,000 land vehicles such as trucks and vans, and over 40,000 retail locations for customer access and other feature. (Pl.’s Compl. ¶ 7). FedEx 2Day, one of the express delivery services offered by Plaintiff, provides customers with two-day committed delivery directly to the recipients. (Pl.’s Compl. ¶ 8). Defendant also offers a delivery service entitled Global Priority Mail which delivers to countries outside the United States. (Def.’s Mem. In Supp. of Mot. to Dismiss p. 4).
Defendant is an independent establishment of the executive branch of the United States Government. (Pl.’s Compl. ¶ 2). Defendant provides mail services to the general public, consisting of pickup and delivery of documents and parcels. (Pl.’s Compl. ¶ 9). Defendant also offers expedited mail delivery services for customers
Defendant commenced an advertising campaign to promote the use of Domestic Priority Mail in March, 1996 and an advertising campaign to promote the use of Global Priority Mail in April, 1996. (Def.’s Mem. In Supp. of Mot. to Dismiss p. 4). In its advertising campaign for Priority Mail, Defendant compares certain features of Priority Mail delivery service and FedEx 2Day express service, including the alleged prices of the services. (PL’s Compl. ¶ 10). Plaintiff alleges that these advertisements are false and misleading because they suggest that Priority Mail is equivalent or superior to Plaintiffs express service, FedEx 2Day. (PL’s Compl. ¶¶ 10,12). Plaintiff alleges that the advertising campaign’s descriptions of many of the features of Priority Mail and FedEx 2Day, including the price of FedEx 2Day, are false and misleading. (PL’s Compl. ¶ 10). Plaintiff also alleges that Defendant’s advertising campaign promoting Global Priority Mail is also false and misleading because the advertisements state that Defendant is a company which delivers around the world. (PL’s Compl. ¶ 13). Plaintiff alleges that this statement is false because Defendant is not a company and it does not deliver around the world. (PL’s Compl. ¶ 13).
II. STANDARD
Rule 12(b)(6) of the Federal Rules of Civil Procedure enables a defendant to file a motion to dismiss for a plaintiffs failure to state a claim upon which relief can be granted. Motions to dismiss under Rule 12(b)(6) are designed to test “whether a cognizable .claim has been pleaded in the complaint.”
Scheid v. Fanny Farmer Candy Shops, Inc.,
Dismissal under Rule 12(b)(6) is appropriate where there is no set of facts which would entitle the plaintiff to recover.
Hammond v. Baldwin,
A district court may not grant a defendant’s Rule 12(b)(6) motion to dismiss based on its disbelief of the plaintiffs factual allegations.
In Re Sofamor Danek Group, Inc.,
Although a court reviewing a Rule 12(b)(6) motion to dismiss should construe the plaintiffs complaint liberally, “more than bare assertions of legal conclusions is ordinarily required to satisfy federal notice pleading requirements.”
Scheid
at 436. Rather, a plaintiffs complaint will not survive a motion to dismiss under Rule
III. ANALYSIS
A. Timeliness of Defendant’s Rule 12(b)(6) Motion to Dismiss
The motion before this court is the second Rule 12(b) motion filed by the Defendant. Successive Rule 12(b) motions are governed by Rules 12(g) and 12(h)(2) of the Federal Rules of Civil Procedure. Rule 12(g) states in relevant part:
If a party makes a motion under this rule but omits therefrom any defense or objection then available to the party which this rule permits to be raised by motion, the party shall not thereafter make a motion based on the defense or objection so omitted, except a motion as provided in subdivision (h)(2) hereof on any of the grounds there stated.
Fed.R.Civ.P. 12(g).
Rule 12(h)(2) states:
A defense of failure to state a claim upon which relief can be granted, a defense of failure to join a party indispensable under Rule 19, and an objection of failure to state a legal defense to a claim' may be made in any pleading permitted or ordered under Rule 7(a), or by motion for judgment on the pleadings, or at trial on the merits.
Fed.R.Civ.P. 12(h)(2);
These rules taken together prohibit a defendant from raising the defense of failure to state a claim after filing an initial 12(b) motion to dismiss unless that defense is made in the defendant’s answer to the complaint
1
, motion for judgment on the pleadings, or at trial. These restrictions upon successive 12(b) motions were imposed to “eliminate unnecessary delays at the pleading stage of a case by avoiding the piecemeal consideration of pretrial motions.”
Rauch v. Day and Night Mfg. Corp.,
Defendant’s Rule 12(b)(6) motion does not fall into any of the three categories enumerated in Rule 12(h)(2). Under the familiar canon of statutory construction,
expressio unius est exclusio alterius,
Rule 12(h)(2)’s authorization of three narrowly defined exceptions to the general prohibition against successive 12(b) motions automatically excludes any other means of filing successive Rule 12(b) motions. As the United States Court of Appeals for the Sixth Circuit stated in
Swart v. Pitcher,
No. 92-2401,
However, this court chooses to exercise its discretion in adherence to the
B. Sufficiency of Pleadings
Plaintiffs cause of action against Defendant is governed by Section 43 of the Lanham Act which states in relevant part:
Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which—
(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her 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.
15 U.S.C. § 1125(a)(1)(B) (1997).
One of the purposes of the Lanham Act was to protect consumers from false or misleading advertising.
Coca-Cola Co. v. Procter & Gamble Co.,
Because the Sixth Circuit has not addressed the question of what elements are required to successfully plead a false advertising claim under the Lanham Act, this court looks to relevant precedent from other federal courts. The federal courts seem to have reached a consensus as to the elements required to plead a Lanham Act false advertising claim.
2
See e.g., Skil Corp. v. Rockwell International Corp.,
1. Specificity of Plaintiffs Allegations
In the present case, Defendant contends that Plaintiff has failed to properly plead the elements of a Lanham Act false advertising claim. Defendant bases this contention upon the grounds that Plaintiff has failed to allege any false or misleading statements of fact with the degree of particularity required for a Lanham Act false advertising claim. Defendant urges the court to impose the requirements of Rule 9(b) of the Federal Rules of Civil Procedure upon Plaintiffs complaint or, in the alternative, at least require Plaintiff to plead the nature of the allegedly false advertisements. If either of these standards are used by this court, Defendant argues that Plaintiffs complaint should be found wanting.
The general rule governing the requirements for a plaintiffs complaint is found in Rule 8(a) of the Federal Rules of Civil Procedure. That rule states in relevant part:
A pleading which sets forth a claim for relief ... shall contain (1) a short and plain statement of the grounds upon which the court’s jurisdiction depends ..., (2) a short and plain statement of the claim showing that the pleader is entitled to relief, and (3) a demand for judgment for the relief the pleader seeks.
Fed.R.Civ.P. 8(b).
However, the Federal Rules of Civil Procedure require a heightened standard for pleadings in cases involving fraud or mistake. Under Rule 9(b), “the circumstances constituting fraud or mistake shall be stated with particularity” when a plaintiff raises allegations of fraud or mistake in her complaint. The federal courts are currently divided as to whether Rule 9(b) should apply to a Lanham Act claim.
See Barr Lab., Inc. v. Quantum Pharmics, Inc.,
As Defendant concedes, the Sixth Circuit has yet to decide this question. Nevertheless, in the present case, it is not necessary for this court to resolve the question of whether a Lanham Act false advertising claim must satisfy the pleading requirements of Rule 9(b). Even if the
Defendant relies upon
Textile Deliveries, Inc. v. Stagno,
No. 90 CIV.2020,
To understand why Plaintiffs complaint does satisfy Rule 9(b)’s requirements, it is necessary to review Sixth Circuit precedent concerning the purpose of the rule and how it should be construed by courts. The Sixth Circuit has identified two purposes underlying Rule 9(b): 1) to provide a defendant fair notice of the substance of a plaintiffs claim in order that the defendant may prepare a responsive pleading,
Michaels Bldg. Co. v. Ameritrust Co., N.A.,
Here, Plaintiffs complaint satisfies, both purposes underlying Rule 9(b). Although Plaintiffs complaint does contain some conclusory and vague allegations
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, it also alleges facts which have given Defendant sufficient notice to prepare responsive pleadings. Plaintiff alleges that Defendant’s advertising “represents and implies that Priority Mail is equivalent or superior to FedEx 2Day.” (Pl.’s Compl. ¶ 10). Plaintiff supports this allegation in paragraph 11 by pointing to one of Defendant’s print advertisements which claims that FedEx charges an additional fee for
The court fails to see how these three allegations are not sufficiently specific to allow Defendant to prepare its responsive pleadings. All three allegations specify the misleading statement and the nature of the alleged deception perpetrated upon consumers. All three allegations identify the Defendant as the source of these misleading statements. Plaintiffs complaint identifies the place of these allegedly misleading statements as advertisements disseminated through television, radio, direct mail and print media. Plaintiffs allegations that the advertising campaign in question is “presently being conducted” along with its averment that it is suffering “continuous irreparable harm” should satisfy the time requirement. Where the allegedly misleading advertising has occurred over a long period of time, it would be unreasonable and contrary to the Sixth Circuit’s liberal construction of Rule 9(b) to require Plaintiff to identify the exact day, hour or place of every advertisement which made the allegedly misleading statements.
See e.g., Hot Wax, Inc.
at *4 (stating that Rule 9(b)’s pleading requirements with respect to time apply less stringently where the alleged fraud occurred over a period of time). This is especially true in this case where it is clear that Defendant is aware of the advertising campaigns referred to in Plaintiffs complaint, when those campaigns started, and how long they have run.
5
Plaintiff has already alleged the existence of a specific print advertisement that is representative of the type of misleading statements it alleges are currently being disseminated by Defendant. In light of Defendant’s awareness of the allegedly misleading state
2. Materiality of Plaintiffs Allegations
Defendant also contends that Plaintiffs complaint fails to satisfy the third element of a Lanham Act false advertising claim requiring that the alleged deception be material. Defendant argues that even if its advertising statements were construed by some consumers as misleading, that deception would not affect those consumers’ purchasing decision because 1) whether Defendant is considered to be a corporation or not is not likely to affect consumer’s buying patterns, and 2) if a consumer were lured to Defendant’s place of business, he would quickly discover Defendant’s mailing limitations with respect to international destinations and choose to go elsewhere if he desired to ship a package to a country outside the scope of Defendant’s delivery area. Because neither of these alleged misrepresentations would affect the consumer’s purchasing decision, Defendant contends that the alleged misleading statements are not material and therefore not actionable under the Lan-ham Act.
Defendant is correct in noting that false or misleading statements must be material before liability will ensue under the Lanham Act. For purposes of the Lanham Act, materiality is defined in terms of a statement’s propensity to have some effect on consumers’ purchasing decisions.
See National Basketball Ass’n v. Sports Team Analysis and Tracking Systems, Inc.,
Although materiality is a legal determination, such a determination should be informed by factual evidence concerning the relevant consumer market. When a court assesses materiality, the relevant perspective is that of the consumers.
See American Tel. and Tel. Co. v. Winback and Conserve Program, Inc.,
3. Falsity of Defendant’s Statements
Defendant further contends that its advertising statement claiming that it delivers on Saturday without a surcharge while Plaintiff charges an additional fee for Saturday deliveries is true and exempt from liability under the Lanham Act. Defendant supports its contention by arguing that its advertisements specifically stated that it delivers Priority Mail on a national average of two to three days. Defendant contends that this statement operated as a disclaimer of any delivery guarantee and thereby obviated any need to explicitly state that it fails to offer guaranteed delivery. Moreover, Defendant argues that any confusion as to whether its Priority Mail service is exactly the same as the FedEx 2Day service offered by Plaintiff should have been dispelled by the dramatic price differential between the two services. Finally, Defendant contends that it should not be held liable under the Lanham Act simply because it omitted a statement explaining that it does not offer guaranteed Saturday delivery.
Defendant’s efforts to identify all the evidence which should have prevented consumers from perceiving Defendant as offering a guaranteed express delivery service comparable to that offered by Plaintiff is to no avail at this juncture in the case. As this case progresses, Plaintiff may be unable to bear its burden to prove that consumers were deceived or likely to be deceived because of the obstacles created by the very evidence noted in Defendant’s motion to dismiss. However, the time has not come for this court to determine the truth or falsity of Defendant’s advertising statements. As the court stated in
Johnson & Johnson Merck Consumer Pharmaceuticals Co. v. Smithkline Beecham Corp.,
C. Puffery
Defendant argues that its characterization of itself as a company and its statement indicating that it delivers around the world constitute puffery and therefore should not subject Defendant to liability under the Lanham Act. Puffery has been defined as “exaggerated advertising, blustering, and boasting upon which no reasonable buyer would rely.”
Southland Sod Farms
at 1145;
see also Castrol Inc. v. Pennzoil Co.,
In the context of this particular case, Defendant’s representation of itself as a company should not be characterized as puffery. The issue raised by the use of the word “company” is whether that term confused or misled a segment of consumers as to the true nature of Defendant’s Priority Mail and Global Priority Mail services. Plaintiff argues that the term “company” evoked images of a private, commercial enterprise in the minds of the buying public and misled those potential customers into comparing Plaintiff and Defendant as two private companies providing express delivery services. Defendant’s description of itself as a “company” in its advertising campaign was not an example of “exaggerated advertising, blustering and boasting” or “claims of general superiority.” Defendant’s description of itself as a “company” was not so vague and exaggerated that no reasonable person could have relied upon it. In short, Defendant’s use of the word “company” was not the sort of representation usually associated with puffery. 7 Quite to the contrary, Defendant’s representation of itself as a company was a specific description of a characteristic allegedly possessed by Defendant. Factual claims such as this one are actionable under the Lanham Act if they have misled or confused a significant segment of consumers.
Defendant argues that its representation of itself as a company cannot possibly be deemed a factual claim because a “common sense” awareness of the Postal Service and its governmental nature should preclude reasonable reliance upon any phrase or word suggesting that Priority Mail and Global Priority Mail are services offered by a private commercial entity. While it may be true that no consumer construed or was likely to construe Defendant’s description of itself as a company, those considerations are not relevant to the inquiry at hand. In a motion to dismiss for failure to state a claim, a court addresses a very narrow question: has the Plaintiff pled facts respecting all material elements of the claim in question? Whether consumers should have known that any service advertised by the Postal Service must be a governmental service bears very little on the question of whether a proper complaint has been filed. The answer to the question raised by Defendant’s arguments requires evidence and thus is more properly resolved in the disposition of a motion for summary judgment. Furthermore, it would not be appropriate for this court to rely upon such ambiguous concepts as “common sense” or its own intuitive notions of how an advertising statement should have been interpreted to conclude that Defendant’s statement is not actionable because no one could have relied upon it. The relevant barometer is the opinion of the consumer, not that of a court.
See, e.g. American Home Products Corp.
at 165-166 (quoting
American Brands, Inc. v. R.J. Reynolds Tobacco Co.,
413 F.Supp.
Defendant also contends that its advertising statement indicating that its Priority Mail and Global Priority Mail services deliver “around the world” also constitutes inactionable puffery under the Lanham Act. Defendant supports this contention by arguing that the phrase “around the world” is “a generalized statement, too vague and ambiguous to convey the message that Global Priority Mail is delivered to literally every country in the world.” On its face, the phrase “around the world” does seem to be the type of vague, general exaggeration which no reasonable person would rely upon in making a purchasing decision. Nevertheless, the determination of whether an advertising statement should be deemed puffery is driven by the context in which the statement is made. Where the context of an advertising statement may lend greater specificity to an otherwise vague representation, the court should not succumb to the temptation to hastily rule a phrase to be inactionable under the Lanham Act. To do so would insulate from liability some of the misleading advertising which the Lanham Act was intended to prohibit. Thus, this court will proceed to analyze whether the vagueness created when the phrase “around the world” is isolated from its context disappears once that phrase is placed back into its context.
In the present case, the context is the mail and parcel delivery industry. Where, as here, consumer perceptions are so critical to Defendant’s liability under the Lan-ham Act, this court should evaluate the specificity of the phrase “around the world” against the backdrop of industry norms. For example, if the industry norm for scope of delivery were 200 countries and customers had become aware of this norm, it would be misleading for a company to advertise that it delivers “around the world” when it only delivers to one country. Although the phrase “around the world” would be vague in a vacuum, the context of the mail and parcel delivery industry and its norms would give a more concrete meaning to the phrase and may lead consumers to reasonably believe that the company which made the statement offers a scope of coverage at least comparable in extent to that of its competitors, if not superior. In such a fashion, information concerning industry norms can convert an advertising statement from puffery into a misleading representation of fact which is actionable under the Lanham Act.
However, at this stage of the litigation between Plaintiff and Defendant, the court does not have sufficient information to even begin any analysis of industry norms. If the court were to adopt Defendant’s characterization of its statement concerning delivery “around the world” as puffery and grant its motion to dismiss, Plaintiffs cause of action would be lost despite the possibility that the term “around the world” is sufficiently specific in the context of industry norms and in the minds of the buying public to render it actionable under the Lanham Act. Because a motion to dismiss can be granted only when “no relief could be granted under any set of facts that could be proved consistent with the allegations,”
Hishon
at 73,
IV. ORDER
Based on the foregoing, Defendant’s Rule 12(b)(6) Motion to Dismiss Plaintiffs false advertising claims under 15 U.S.C. § 1125(a) is DENIED.
IT IS SO ORDERED.
Notes
. Among other things, Rule 7(a) authorizes replies and answers to complaints, counterclaims, and cross claims. In the context of this case, the pleading “permitted or ordered under Rule 7(a)” would refer to Defendant’s answer, which had not been filed at the time this opinion was drafted.
. Some of these cases require the plaintiff to plead that the defendant made a false statement of fact about its own products in competitive advertising while others require the plaintiff to plead that the defendant made false statements of fact about its own products or a competitor’s products. This difference can be explained by the passage of the Trademark Law Revision Act of 1988, Pub.L. No. 100-667, 102 Stat. 3935 (1988) ("TLRA”). Prior to the passage of the TLRA, subsection (a) read as follows:
Any person who shall affix, apply, or annex, or use in connection with any goods or services, or any container or containers for goods, a false designation of origin, or any false description or representation, including words or other symbols tending falsely to describe or represent the same, and shall cause such goods or services to enter into commerce, and any person who shall with knowledge of the falsity of such designation of origin or description or representation cause or procure the same to be transported or used in commerce or deliver the same to any carrier to be transported or used, shall be liable to a civil action by any person who believes that he is or is likely to be damaged by the use of any such false description or representation.
Some courts construed this language to limit a Lanham Act cause of action for false advertising to statements made about the defendant's own products.
See e.g., Bernard Food Industries v. Dietene Co.,
. The Sixth Circuit has also noted that Rule 9(b) requires a plaintiff at a minimum "to allege the time, place and contents of the misrepresentation upon which he relied.”
Bender v. Southland Corp.,
. For example, in paragraph 10 of its complaint, Plaintiff alleges that "[t]he descriptions of many of the features of Priority Mail and FedEx 2Day, including the price of Fe-dEx2Day, contained in the campaign are false or misleading.” AlLhough this statement does specify the price as one of the misleading descriptions which Plaintiff claims are actionable under the Lanham Act, the phrase "many of the features” is vague and does not grant Defendant any notice as to which additional descriptions are also the subject of this lawsuit.
Paragraph 14 of Plaintiff's complaint refers to "other false and misleading statements, implications, representations and descriptions in the ads.” Again, this isolated phrase is vague and conclusory in nature and does indeed leave Defendant "groping in the dark” as to the factual predicate for Plaintiffs cause of action. If Plaintiff’s complaint consisted of no allegations other than those identified in this footnote, Defendant's motion would be well-taken. However, Plaintiff has pled more specific allegations which warrant a denial of Defendant’s motion to dismiss.
. In the Facts section of Defendant’s Memorandum in Support of Motion to Dismiss, the Defendant states the following:
The Postal Service commenced an advertising campaign in March of 1996 to promote the use of Domestic Priority Mail and an advertising campaign in April of 1996 to promote the use of Global Priority Mail. With regard to the Domestic Priority Mail campaign, FedEx alleges that it was harmed because the advertising campaign compared features of Domestic Priority Mail delivery service with FedEx 2Day express service in a way that represented and implied that Domestic Priority Mail is equivalent to or superior to FedEx 2Day....
With regard to the advertising campaign concerning Global Priority Mail, Plaintiff alleges that an unspecified ad that describes the Postal Service as a "company” that delivers "around the world” is false because it is not a company and does not deliver Global Priority Mail to countries around the world.
(Def.’s Mem. in Supp. of Mot. to Dismiss pp. 3-4).
With these statements, Defendant appears to be eminently aware of the advertising campaign referred to in Plaintiff’s complaint. In fact, Defendant goes so far as to identify the month and year these campaigns actually began. Moreover, Defendant does not claim to be unaware of the three specific allegations made by Plaintiff in its complaint. Quite to the contrary, Defendant purports to explain how those allegedly misleading representations of fact are actually true and incapable of misleading consumers.
. Defendant submitted a decision of the National Advertising Review Board (NARB) of the Council of Better Business Bureaus dismissing the National Advertising Division's finding that a price comparative ad was misleading where a competitor had failed to disclose a guarantee feature. Defendant argues that this decision is relevant to the case at hand because of the factual similarities between the two cases. In adherence to Rule 12(b), this court declines Defendant's implicit invitation to convert this motion to dismiss into a Rule 56 motion for summary judgment and therefore excludes from its consid
. Most statements of puffery consist of vague advertising claims that one's product is belter than comparable products offered by competitors. For example, the
Southland. Sod Farms
court found that a turfgrass seed and sod producer's advertising statement, "Less is More”, was generalized boasting and should be deemed as nonactionable puffery.
Southland Sod Farms
at 1145. In
Smith-Victor Corp. v. Sylvania Electric Products, Inc.,
