Plaintiff Larry Pitt & Associates and Defendant Lundy Law LLP are Philadelphia-area law firms that advertise for personal injury, social security, and workers' compensation cases. After Lundy filed and then withdrew a trademark infringement lawsuit against Pitt, Pitt filed this suit against Lundy Law and its managing partner, L. Leonard Lundy (collectively, "Lundy"), asserting wrongful use of civil proceedings, false advertising, and trade secret misappropriation. Lundy moves for summary judgment on all claims. For reasons discussed below, Lundy's motion will be granted.
I. BACKGROUND
In Pennsylvania, unlike in many other jurisdictions, an attorney or a law firm is permitted to refer a case to another attorney or law firm and earn a portion of the clients' fees without performing any work on the case, so long as the arrangement is disclosed to the client and the fee is not excessive.
For years, Lundy Law, a personal injury law firm with offices in Philadelphia and surrounding counties in Pennsylvania, New Jersey, and Delaware, has advertised on television, public transit, and other media, using the slogan "Remember this Name" and its mnemonic hotline number 1-800-LUNDYLAW.
Pitt is another Philadelphia-area law firm, which has, for many years, advertised for personal injury, workers' compensation, and social security disability cases.
Pitt responded by filing this suit, asserting that Lundy Law's trademark suit was a wrongful use of civil proceedings in violation of Pennsylvania's Dragonetti Act.
Pitt's false advertising claim under the Lanham Act and deceptive marketing claim under Pennsylvania unfair competition law are both based on Lundy Law's extensive advertisements for workers' compensation and social security cases, which Lundy Law agreed to refer to certain other law firms in exchange for referral fees. With respect to social security cases, between November 11, 2008 and February 2011, Lundy maintained an agreement with the Indiana-based law firm, Fleschner, Stark, Tanoos & Newlin, under which the two firms would share in the cost of Lundy Law's advertising for social security disability cases in the Philadelphia area, and Lundy Lаw would refer all of its potential social security disability cases directly to Fleschner in return for referral fees.
With respect to workers' compensation cases, beginning sometime between 2009 and 2012, Lundy Law has maintained a referral agreement with the Law Officеs of Lenard A. Cohen, P.C. ("LOLAC"), under which LOLAC subsidizes the cost of Lundy Law's workers' compensation advertisements, and Lundy Law refers all its potential workers' compensation cases in Pennsylvania to LOLAC in exchange for a referral fee.
Lundy Law's advertisements throughout this time vary in the specificity with which they solicit social security and workers' compensation cases. Many are banners featuring 1-800-LUNDYLAW in large font with the words "Injury and Disability Lawyers" or "Injury, Disability & Workers' Compensation lawyers," in smaller font above or below the telephone number.
Some of Lundy Law's television commercials, however, specifically promote Lundy Law's purported services for workers' compensation and social security disability clients. For example, a commercial aired between June 2012 and January 2013 displays the message "Lundy Law gets you the social security benefits you deserve" and features the following statement from Leonard Lundy:
People should always apply for Social Security Disability Benefits. We'll help you through the process. That's what we do ."19
Another commercial aired during the same period features a similar statement from Mr. Lundy:
Social Security benefits are available to people because they have a physical or mental condition that makes it impossible for them to work. It's also available for people who have never worked. It's really a cumbersome process. Our job is to get them the benefits after they've been denied That's what we do .20
As Mr. Leonard speaks, the following messages appear on the screen:
• Denied Social Security benefits?
• Lundy Law gets more than retirement benefits from Social Security.
• Lundy Law simplifies the Social Security process.
• Lundy Law gets the Social Security benefits you need.
Similarly, a workers' compensation commercial aired in 2015 and 2016 features Mr. Lundy telling viewers:
Injured on the job? We're here to help. Call now to talk directly to a workers' compensation lawyer. At Lundy Law, your own lawyer will guide you through every step of the process.21
In addition, at least one of Lundy Law's paper advertisements specifically identifiеs "Social Security Disability" and "Workers' Compensation" as two of Lundy Law's "Practice Areas."
Pitt's claim of unfair competition based on misappropriation of trade secrets focuses on a different aspect of Lundy Law's advertising campaign: specifically, Lundy Law's relationship with Titan (now known as Intersection Media), the exclusive advertising
II. STANDARD OF REVIEW
"The underlying purpose of summary judgment is to avoid a pointless trial in cases where it is unnecessary and would only cause delay and expense."
In evaluating a summary judgment motion, a court "must view the facts in the light most favorable to the non-moving party," and make every reasonable inference in that party's favor.
III. DISCUSSION
Lundy moves for summary judgment on each of Pitt's remaining claims undеr the Lanham Act, Pennsylvania's unfair competition law, and Pennsylvania's Dragonetti Act. The Court will address each count in turn.
A. Lanham Act (Count V)
The Lanham Act prohibits the "false or misleading description of fact, or false or misleading representation of fact, which...in commercial advertising or promotion,
1) that the defendant has made false or misleading statements as to his own product or another's, 2) that there is actual deception or a tendency to deceive a substantial portion of the intended audience, 3) that the deception is material in that it is likely to influence purchasing decisions 4) that the advertised goods traveled in interstate commerce, and 5) that there is a likelihood of injury to the plaintiff in terms of declining sales, loss of good will, etc.36
To establish that the asserted injury falls within the "zone of interest" of the Lanham Act, and thus entitles the plaintiff to relief under the statute, the plaintiff must show that its alleged injury is "proximately caused" by the defendant's alleged misrepresentation.
The Third Circuit has held, and the parties agree, that where a plaintiff can show that the defendant's statements are not only misleading, but "literally false," the second element of deception is presumed.
Here, Pitt's claims rely separately on Lundy Law's advertisements for workers' compensation cases and social security disability cases, and Pitt seeks monetary damages, disgorgеment of profits, prospective corrective advertising costs, and injunctive relief.
1. Lundy Law's Workers' Compensation Advertisements
It is undisputed that Lundy Law has advertised for workers' compensation cases since at least 2008, and the record shows that at least some of Lundy Law's most recent workers' compensation advertisements represent that prospective clients would work with an attorney "at Lundy Law."
Lundy's position relies on the following facts, which Pitt has not disputed:
• In 2009, Mr. Cohen was added to Lundy Law's professional liability insurance as "Of Counsel" to the firm.45
• Mr. Cohen currently carries Lundy Law business cards, maintains a Lundy Law email address, appears on Lundy Law's website, and sometimes attends Lundy Law attorney meetings and marketing meetings.46
• Since September 2012, LOLAC has been located within the office space rented by Lundy Law.47
Pitt nonetheless contests Mr. Cohen's status as "Of Counsel" to Lundy. Specifically, Pitt cites to evidence that LOLAC remains an independent law firm in terms of ownership and control, that LOLAC maintains separate fax and telephone numbers from Lundy Law and pays rent to Lundy Law, that neither Mr. Cohen, LOLAC's associate, nor LOLAC's staff are W-2 employees of Lundy Law, and that
The Court is not persuaded that any of this evidence from Pitt raises a genuine issue as to whether Lundy Law's workers' compensation advertisements are materially false or misleading. While the use of the label, "of counsel," is not dispositive of whether an attorney can be fairly advertised as an attorney of the firm (since there may be circumstances where the use of the title itself is meant to mislead), Pitt has not provided sufficient evidence to show that the nature of Lenard Cohen's relationship with Lundy differed materially from a consumer's reasonable understanding of the relationship between a law firm and its attorneys. A potential workers' compensation client who contacted Lundy Law would meet with an attorney physically present in the office and would have recourse to Lundy Law's malpractice insurance for the attorney's conduct, if necessary. Pitt provides no argument for why an attorney's non-W-2 status within a law firm or his decision not to announce his relationship with the law firm in certain contexts means that he cannot be an attorney of the law firm. Nor has Lundy shown that the ownership of a separate law practice prevents Cohen from acting as an attorney at Lundy Law. More importantly, there is no indication that Lundy and Mr. Cohen adopted the "of counsel" title solely for this litigation because both the title and the relationship have existed since 2009.
2. Lundy Law's Social Security Advertisements
It is undisputed that Lundy Law has advertised for social security cases since at least November 2008.
At the outset, the Court notes that Pitt has provided no affirmative evidence of consumer reactions to any of the specific messages and statements in Lundy Law's advertisements. There are no customer survey or сlient statements in the record demonstrating how potential clients actually interpreted Lundy Law's advertisements. Because such evidence is necessary to satisfy the "deception" prong of a false advertising claim in the absence of literal falsity, Pitt can only survive summary judgment with respect to claims that are literally false.
Pitt generally asserts that any reference to social security disability services in Lundy Law's advertisements is literally false.
However, as noted above, a small number of Lundy Law's advertisements do contain more specific representations with respect to its attorneys' handling of social security cases. For example, in 2012 and 2013, Lundy aired two television commercials with the following statements:
• Lundy Law gets you the social security benefits you deserve.
• We'll help you through the process. That's what we do .
• Our job is to get [people] the benefits after they've been denied. That's what we do .
• Lundy Law simplifies the social security process.
• Lundy Law gets you the social security benefits you need.55
In addition, at least one paper advertisement that Lundy distributed to clients between 2012 and 2016 prominently listed "social security" as one of Lundy Law's "practice areas."
While Lundy maintains that these advertisements do not "suggest that Lundy Law employees will themselves handle the viewers' social security disability claims from beginning to end," this argument misapprehends both the standard for literal falsity and the nature of the asserted misrepresentation.
Having concluded that some, but not all, of Pitt's advertisements for social security advertisements unambiguously represent that Lundy Law's attorneys handle social security claims, the Court considers whether this message "conflicts with reality."
[B]eginning the week of November 10, 2008, [Lundy Law] will refer all of its potential Social Security cases to [Fleschner], and [Fleschner] will do all of the investigation, management, processing, overseeing, preparation, and attend hearings as to any and all Social Security cases which are referred to [Fleschner] by [Lundy] and accepted by [Fleschner].
...
[Fleschner] and [Lundy Law] have agreed that both are responsible for the representation of their joint clients [sic ] social security cases in accordance with this Memorandum of Understanding. Basically, [Lundy Law]'s obligation is to exclusively refer the potential [Lundy Law] Social Security cases to [Fleschner], and [Fleschner]'s obligation is to handle all other aspects of the [Lundy Law] Social Security Cases from investigation to conclusion.62
However, in November 2013, Lundy engaged a social security attorney, Michele Squires, to handle social security cases at Lundy. Because Plaintiff has not disputed that Ms. Squires was available and authorized to handle at least some social security cases at Lundy Law after November 2013, Lundy Law's advertisements for social security cases since then are not "literally false." While Pitt contends that Ms. Squires only handles a "de minimis " number of cases,
The Court nеxt considers what relief, if any, Pitt can obtain for Lundy Law's potentially false advertising between November 8, 2008 and October 31, 2013. With respect to money damages, as discussed above, Pitt must establish a causal link between its alleged injury and Lundy's specific misrepresentations by showing that Lundy's statements actually deceived and influenced consumers.
First, Pitt's evidence that potential clients responded to Lundy Law's advertisements does not support its conclusion that the clients relied on any of the specific false misrepresentations made by Lundy. Pitt's argument is based on a spreadsheet of Lundy Law's social security intakes, which identifies only the category of advertising (e.g. television, website, Yellow Pages) to which the client was responding, not the content of the advertisement.
Second, while the analysis conducted by Pitt's expert, Michal A. Malkiewcz, shows that Lundy Law's monthly social security intakes was greater after the start of its referral agreement with Fleschner than before, there is no evidence linking the increase to the use of any specific advertisements, in particular any of the subset of advertisements that can be construed as literally false.
For the same reasons, the Court will also grant summary judgment with respect to Pitt's request for disgorgement of profits and corrective advertising. Thе plaintiff bears the burden of showing that the sales for which it seeks disgorgement occurred because of the alleged false advertising.
The final question is whether Pitt should be permitted to proceed to trial on its claim for injunctive relief only based on a rebuttal presumption of deception, materiality, and likelihood of injury. Courts have generally declined to grant injunctive relief when the "defendant ceases [the offending activity] and shows no inclination to repeat the offense."
B. Pennsylvania Unfair Competition Law (Count Six)
Pennsylvania follows the Restatement (Third) of Unfair Competition, which provides that one business may be liable for harm to the commercial relations of another if:
(a) the harm results from acts or practices of the actor actionable by the other under the rules of this Restatement relating to:
(1) deceptive marketing, as specified in Chapter Two;
(2) infringement of trademarks and other indicia of identification, as specified in Chapter Three;
(3) appropriation of intangible trade values including trade secrets and the right of publicity, as specified in Chapter Four;
or from other acts or practices of the actor determined to be actionable as an unfair method of competition, taking into account the nature of the conduct and its likely effect on both the person seeking relief and the public; or (b) the acts or practices of the actor are actionable by the other under federal or state statutes, international agreements, or general principles of common law apart from those considered in this Restatement.74
Here, Plaintiffs have alleged unfair competition based on decеptive marketing and misappropriation of trade secrets.
First, because the parties agree that the definition of "deceptive marketing" under Section 2 of the Restatement (Third) of Unfair Competition is nearly identical to the Lanham Act, and because both Pitt and Lundy rely on the same arguments and facts with respect to both claims, Lundy's motion for summary judgment will be granted with respect to Pitt's state law deceptive marketing claim for the reasons discussed above with respect to Pitt's Lanham Act claim.
However, while the nepotistic interactions between Leonard and Sara Lundy may be concerning for Titan and SEPTA, Pitt has not established that any of the informаtion exchanged between Titan and Lundy was confidential. There is no evidence that Titan provided Lundy with copies of any internal advertising strategy documents, unpublished draft advertisements, or extensive compilations of advertising data that might reasonably carry an expectation of confidentiality. Nor has Pitt identified any confidentiality agreements between Titan and any law firm that prohibited Titan from sharing the locations or photographs of law firms' advertisements with other Titan customers. Rather, the content and location of a law firm's advertisements is generally intended to be public, and indeed, it is uncontested that Pitt was able to obtain similar information from Titan concerning the locations of Lundy Law's advertisements.
C. Dragonetti Act Claim (Count Eight)
Pennsylvania's Dragonetti Act allows a civil suit for wrongful initiation of civil court proceedings without probable cause and for a purpose other than securing adjudication of a legal claim, when the proceedings end in favor of the defendant.
Here, Lundy argues, as it did in its earlier motion to dismiss Pitt's Dragonetti claim, that Lundy Law's voluntary dismissal of its trademark suit without
Since then, however, Pitt has come forward with no evidence that Lundy withdrew its suit "in the face of imminent defeat" or that the dismissal was otherwise based on the merits of the suit.
IV. CONCLUSION
For the reasons discussed above, Lundy's motion for summary judgment will be granted as to all remaining claims. The Court is aware that its decision today denies a plaintiff relief despite evidence of years of wrong-doing by the defendants. There is every indication here that a prominent personal injury law firm in Philadelphia essentially rented out its name in exchange for referral fees and that its managing partner lied on television that his firm handled social security disability claims when it did not. But when a plaintiff fails to meet its burden of establishing causation of harm or likelihood of future
An order follows.
Notes
Compare Pa. Disc. R. Prof. Conduct 1.5(e), with ABA Model Code DR 2-107.
Pa. Disc. R. Prof. Conduct 7.2(k).
Stip. Facts (Doc. No. 169-1) ¶¶ 1, 2, 3; Pl.'s Exhs. 14, 16, 17.
Stip. Facts ¶¶ 4, 5.
Id. at ¶ 7-10.
Id. at ¶ 11.
Id. at ¶¶ 25, 31.
See Mem. Op. and Order dated September 30, 2014 (Doc. Nos. 65, 66).
Stip. Fact. ¶ 21; Pl.'s Exh. 48.
Stip. Fact ¶ 22; Pl.'s Exh. 49.
Stip. Fact ¶ 36; Pl. Exh. 51 at LUNDY-0006463.
See Pl. Exhs. 45, 46.
Pl. Exhs. 31-35; Pl.'s Exh. 4 at 133:16-135:6.
Stip. Fact ¶¶ 15-17; Def. Exh. 11.
Stip. Fact ¶¶ 18-19.
Pl. Exhs. 14, 16.
Pl. Exhs. 14, 16.
Pl.'s Exh. 19 at LUNDY-0000090.
Pl.'s Exh. 19 at LUNDY-0000096.
See, e.g. , Pl.'s Exh. 14 at LUNDY-0000032.
Stip. Fact. ¶ 41.
Walden v. Saint Gobain Corp. ,
Fed. R. Civ. P. 56(a).
Anderson v. Liberty Lobby, Inc. ,
Hugh v. Butler Cty. Family YMCA ,
Boyle v. Cty. of Allegheny ,
Celotex Corp. v. Catrett ,
Anderson ,
Wisniewski v. Johns-Manville Corp. ,
Pernod Ricard USA, LLC v. Bacardi U.S.A., Inc. ,
Lexmark Int'l, Inc. v. Static Control Components, Inc. , --- U.S. ----,
Pernod ,
Smart Vent, Inc. v. Crawl Space Door Sys. Inc. , No. 13-5691,
Synygy, Inc. v. ZS Assocs., Inc.,
Parkway Baking Co. v. Freihofer Baking Co. ,
Syncsort Inc. v. Innovative Routines Int'l, Inc. , No. 04-3623 (WHW),
Stip. Facts ¶ 4; Pl.'s Exh. 19 at LUNDY-0000096. Both were aired between 2015 and 2016. Pl.'s Exhs. 15, 17.
Pl.'s Reply at 8.
Def.'s Exh. 11.
Stip. Fact ¶¶ 16, 19. Def.'s Exh. 29.
Stip. Facts ¶ 17-18.
Stip. Fact. ¶ 15; Pl.'s Opp. 8-9; Pl.'s Sur-Reply at 3-4 & n. 4.
Pitt also contends that Mr. Cohen's individual relationship with Lundy Law is irrelevant because the referrals are to his firm rather than to him personally. But Pitt does not dispute that Mr. Cohen himself worked on workers' compensation cases referred to him by Lundy, such that if he were a Lundy Law attorney, these cases would be handled by an attorney at Lundy Law regardless of whether others at LOLAC also worked on these cases.
Stip. Fact at ¶ 5.
Johnson & Johnson-Merck Consumer Pharm. Co. v. Rhone-Poulenc Rorer Pharm., Inc .,
Synygy ,
Pl.'s Sur-Reply at 2.
Pl.'s Sur-Reply at 4; Pl.'s Exhs. 14, 16.
Pl.'s Exh. 19 at LUNDY-0000090, LUNDY-0000092.
Pl.'s Exh. 14 at LUNDY-0000032; Pl.'s Exh. 17.
Def.'s Reply at 11.
Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer Pharma. Co.,
It was Pitt's burden to identify each of the specific messages in Lundy's advertisements and explain why they should be construed as unambiguously and literally false. Pitt did not do so in its briefing on this motion. Accordingly, the Court will not independently review and analyze each of the thousands of advertisements in the record to identify all of the advertisements that conveyed unambiguous messages concerning Lundy Law's handling of social security claims.
Parks, LLC v. Tyson Foods, Inc. ,
Stip. Fact at ¶¶ 21-22.
Pl.'s Exh. 48.
Exh. 49 at 3, ¶ 5 (e). The agreement does also provide that Pond would either provide Lundy with access to its case management system or provide period case status updates to Lundy to allow Lundy "to respond to a Lundy Law client inquiry." Id. at ¶ 10.
Pl.'s Opp. at 12.
Synygy ,
Exh. 56.
Pl.'s Exh. 12 at 44-46.
Bracco Diagnostics, Inc. v. Amersham Health, Inc. ,
There are additional flaws with the causal chain between Lundy's misrepresentations and Pitt's alleged injuries. Even if Malkiewicz could establish that Lundy's false advertisements caused clients to engage Lundy Law for their cases, Malkiewicz does not rely on anything more than temporal correlation to connect Pitt's alleged losses to Lundy's gаins. Pitt offers no direct evidence that any social security clients who chose Lundy Law would have instead chosen, or were aware of, Pitt's social security practice. Instead Malkiewicz's conclusion regarding Pitt's losses relies on the same before-and-after analysis used to support the asserted increase in Lundy Law's intakes. Pl.'s Exh. 12 at 44-49.
Bracco Diagnostics ,
Callaway Golf Co. v. Dunlop Slazenger ,
Bracco ,
Restatement (Third) of Unfair Competition § 1.
Diodato v. Wells Fargo Ins. Servs.,
Pl.'s Opp. at 23.
Stip. Fact ¶¶ 45-46.
Pl.'s Exh. 84. See also Pl.'s Exhs. 85-86.
Pl.'s Exh. 84.
Stip Fact ¶ 47.
See 42 Pa. C.S. § 8351 -55.
Paparo v. United Parcel Serv. ,
Mem. Op. dated December 13, 2013 (Doc. No. 35) at 15.
Zappala v. Eckert Seamans Cherin & Mellott, LLC , No. 0336,
See Larry Pitt & Associates, P.C. v. Lundy Law, LLP , Opposition No. 91210158 (T.T.A.B.).
See Express Servs., Inc. v. Careers Exp. Staffing Servs. ,