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EP Henry Corp. v. Cambridge Pavers, Inc.

United States District Court, D. New Jersey

October 31, 2017

EP HENRY CORP., Plaintiff,
v.
CAMBRIDGE PAVERS, INC., Defendant.

          Craig S. Hilliard, Esq. Gene Markin, Esq. STARK & STARK, PC Attorneys for Plaintiff.

          John Michael Agnello, Esq. Christopher John Buggy, Esq. Melissa E. Flax, Esq. CARELLA BYRNE CECCHI OLSTEIN BRODY & AGNELLO, PC Attorneys for Defendant.

          OPINION

          JEROME B. SIMANDLE, U.S. DISTRICT JUDGE.

         I. INTRODUCTION

         On January 13, 2017, Plaintiff EP Henry Corporation (“EP Henry” or “Plaintiff”) filed a complaint against its competitor, Defendant Cambridge Pavers, Inc. (“Cambridge” or “Defendant”). [Docket Item 8.] The action alleges that Cambridge made and continues to make misleading or false statements about the quality of its “ArmorTec” pavers, and it has seven counts: (1) false advertising; (2) deceptive marketing; (3) negligent misrepresentation; (4) unfair competition; (5) common law fraud; (6) declaratory judgment; and (7) violation of § 43(a) of the Lanham Act. (See generally Compl.)

         The matter is presently before the Court on Defendant's motion to dismiss the complaint in its entirety because the phrases and slogans used in Cambridge's advertising constitute non-actionable “puffery” or, in the alternative, to dismiss each of the seven counts individually as a matter of law. [Docket Item 8.] The principal issues concern whether Defendant's advertising claims are non-actionable as mere puffery and whether New Jersey law and the Lanham Act provide a remedy for a competitor claiming injury to sales and reputation by false advertising. For the reasons explained herein, the motion will be granted in part and denied in part: Counts One through Five will be dismissed with prejudice and Count Six will be dismissed without prejudice, while Count Seven will stand against Defendant; the case will go forward under § 43(a) of the Lanham Act.

         II. BACKGROUND[1]

         A. Factual Background

         EP Henry and Cambridge are both New Jersey businesses engaged in selling concrete pavingstone products throughout New Jersey and the rest of the country. (Compl. at ¶¶ 1-3.) Cambridge markets and sells a line of pavingstone products under the trademark “ArmorTec.” (Id. at ¶ 4.) Through various marketing devices, including television commercials and an online brochure, Cambridge represents or has represented to potential customers that its ArmorTec pavers are unique and superior to other pavers. In a 2014 commercial, for example, Cambridge's CEO and Founder, Charles H. Gamarekian, claims that “only Cambridge pavingstones have ArmorTec - a unique process that guarantees the color will never fade, backed by our fully transferable, lifetime guarantee.” (Exhibit 5 to Def. Br.)

         At issue in this case are several phrases and slogans Cambridge uses or has used to advertise its ArmorTec pavers. These advertising phrases and slogans include claims that:

• ArmorTec pavers will “always look like new.” (Id. at ¶ 8.)
• ArmorTec pavers will “look like new forever.” (Id. at ¶ 10.)[2]
• With ArmorTec pavers, “the color will never fade.” (Id. at ¶¶ 13-14.)

         According to EP Henry, “Cambridge's false and deceptive conduct had caused consumers to make purchasing decisions based on Cambridge's literally false and/or misleading representations about the capabilities of its ArmorTec pavers.” (Id. at ¶ 18.) For example, EP Henry alleges, “[consumers have reported to EP Henry distributors that they were misled by Cambridge's advertising claims and purchased Cambridge pavingstones based on those misleading statements, only to later discover that the Cambridge pavingstones did not continue to look like new following [the] purchase, and were not ‘fade-proof.'” (Id. at ¶ 19.) EP Henry further alleges that Cambridge's claims are “false and misleading[, ] . . . have damaged EP Henry's competitive position in the marketplace, [] have caused EP Henry to lose sales and reputation[, ] . . . and have caused and continue to cause commercial harm to [EP Henry].” (Id. at ¶¶ 17, 20.) At various points in its seven-count complaint, EP Henry requests the following relief: compensatory damages; consequential and incidental damages; punitive damages; preliminary and permanent injunctive relief; a declaratory judgment; reasonable attorney's fees, pre-judgment interest, and costs of suit.

         B. Procedural History

         On January 13, 2017, EP Henry filed the seven-count complaint against Cambridge in the Superior Court of New Jersey, Law Division, Gloucester County. [Docket Item 8.] On March 7, 2017, Cambridge removed to federal court pursuant to 28 U.S.C. §§ 1331 and 1441(a). [Docket Item 1.] On March 24, 2017, Defendant filed a motion to dismiss the Complaint pursuant to Fed.R.Civ.P. 12(b)(6). [Docket Item 8.] The Court heard oral argument on October 23, 2017.

         III. STANDARD OF REVIEW

         A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) may be granted only if, accepting all well-pleaded allegations in the complaint as true and viewing them in the light most favorable to the plaintiff, a court concludes that plaintiff has failed to set forth fair notice of what the claim is and the grounds upon which it rests. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). A complaint will survive a motion to dismiss if it contains sufficient factual matter to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009). Although a court must accept as true all factual allegations in a complaint, that tenet is “inapplicable to legal conclusions, ” and “[a] pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do.” Id. at 678.

         Additionally, “if a complaint is vulnerable to 12(b)(6) dismissal, a district court must permit a curative amendment, unless an amendment would be inequitable or futile.” Phillips v. County of Allegheny, 515 F.3d 224, 236 (3d Cir.2008).

         IV. ...


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