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Groupe Seb USA, Inc. v. Euro-Pro Operating LLC

United States District Court, W.D. Pennsylvania

April 1, 2014

GROUPE SEB USA, INC., Plaintiff,
v.
EURO-PRO OPERATING LLC, Defendant.

MEMORANDUM OPINION AND ORDER

CYNTHIA REED EDDY, Magistrate Judge.[1]

Before the Court is Defendant's Motion to Dismiss the Complaint in its entirety pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 18). For the reasons discussed below, Defendant's Motion to Dismiss will be denied.

Procedural Background

On January 29, 2014, Plaintiff initiated this action for false advertising under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and common law unfair competition under Pennsylvania law. (ECF No. 1). Defendant filed a motion to dismiss on February 20, 2014, asserting that Plaintiff has failed to "allege sufficiently - according to the requirements of either Rule 8(a) or the heightened pleading standard applicable in this Circuit for false advertising claims - facts to plausibly support the falsity of the "steam power" claims at issue." (ECF No. 20 at 1). Plaintiff filed its response brief on March 3, 2014. (ECF No. 25). This matter has been fully briefed.[2]

Factual Background

Both Plaintiff and Defendant sell household steam irons in the United States. Plaintiff's steam irons are sold under the brand-name Rowenta, which Plaintiff asserts "are the number one selling steam irons in the United States (measured by dollar value of sales), known especially for their superior steam output." Complaint (ECF No. 1), at ¶ 2. Defendant's steam irons are sold under the brand-name Shark. Id. at ¶ 3. Plaintiff avers that packaging on the Shark Ultimate Professional Iron, Model No. GI505-55 ("Shark 505"), contains literally false statements about the Rowenta DW9080 iron. Id. at ¶¶ 21-23. Plaintiff further avers that the packaging on the Shark Professional Iron, Model No. GI405-55 ("Shark 405"), contains literally false statements about the Rowenta DW5080 iron.

Specifically, both the Shark 405 and the Shark 505 contain the following statements on the front of the packaging: (1) "#1 Most Powerful Steam*" in the upper-right corner and (2) "More Powerful Steam vs. Rowena®† at half the price" in the lower-right corner. Id. at ¶¶ 22, 24. There are two disclaimers on the bottom of the Shark 405 and Shark 505 packaging; one disclaimer per statement. Regarding the "#1 Most Powerful Steam*" statement, the Shark 405 and Shark 505 have a disclaimer stating, "offers more grams per minute (extended steam burst mode before water spots appear) when compared to leading competition in the same price range, at time of printing." Id. Regarding the "More Powerful Steam vs. Rowena®† at half the price" statement, the Shark 405 and Shark 505 each contain a disclaimer making comparisons to a specific Rowenta model. The Shark 405's disclaimer states "††based on independent comparative steam burst testing to Rowenta DW5080 (grams/shot)." Id. at ¶ 24. The Shark 505's disclaimer states "†based on independent comparative steam burst testing to Rowenta DW9080 (grams/shot)." Id. at ¶ 22. Plaintiff's Complaint provides pictures of the statements and disclaimers contained on the packing of the Shark 405 and Shark 505. Id. at ¶¶ 22, 24. The Complaint also provides a photograph of a hang tag on an in-store display of a Shark 405 with the statement and disclaimer that it has more powerful steam than the Rowenta DW5080 at half the price. Id. at ¶ 26.

Plaintiff avers that in December 2014, it "received a report from an outside laboratory that [Plaintiff] retained to conduct tests on the Shark [505], Shark [405], Rowenta DW9080 and Rowenta DW5080 pursuant to protocols established by the International Electrotechnical Commission ("IEC") as well as Euro-Pro's own instruction for use."[3] Id. at ¶ 27. "The independent tests measure (1) the variable steam rate (in grams per minute) according to IEC60311 protocol, (2) the mass of shot of steam of each iron (in grams per shot) according to IEC60311 protocol, and (3) the mass of shot of steam of each iron (in grams per shot) according to the instructions for use provided with the [Shark 505]." Id. at ¶ 29. "For each test, the Rowenta DW9080 performed better than the [Shark 505] and the Rowenta DW5080 performed better than the [Shark 405]." Id. at ¶ 30. As a result, Plaintiff concludes that "the Rowenta steam irons have greater steam power than the Euro-Pro Shark steam irons, thereby establishing Euro-Pro's advertising about the comparative performance of the Shark steam irons [is] literally false." Id. at ¶ 31.

Standard of Review

In light of the Supreme Court's decision in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), a complaint may be dismissed pursuant to Rule 12(b)(6) if it does not allege "enough facts to state a claim to relief that is plausible on its face." Phillips v. Co. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (quoting Twombly, 550 U.S. at 570). While Conley v. Gibson, 355 U.S. 41, 45-46 (1957) allowed dismissal of a claim only if "no set of facts" could support it, under Twombly, and Ashcroft v. Iqbal, 556 U.S. 662 (2009), a claim for relief under Rule 12(b)(6) now "requires more than labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555; Iqbal, 556 U.S. at 678.

In Iqbal, the Supreme Court held that a claim is facially plausible when its factual content allows the court to draw a reasonable inference that the defendants are liable for the misconduct alleged. Fowler v. UPMC Shadyside, 578 F.3d 203 (3d Cir. 2009) (citing Iqbal, 556 U.S. at 678). The plausibility standard in Iqbal "asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678. While well-pleaded factual content is accepted as true for purposes of whether the complaint states a plausible claim for relief, legal conclusions couched as factual allegations or "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, " are not entitled to an assumption of truth. Iqbal, 566 U.S. at 678. "Where the well-pleaded facts do not permit the court to infer more than a mere possibility of misconduct, the complaint has alleged - but it has not show[n]' - that the pleader is entitled to relief.'" Iqbal, 566 U.S. at 679 (quoting Fed.R.Civ.P. 8(a)(2)). In order to satisfy the requirement of Fed.R.Civ.P. 8(a)(2) that a plaintiff include a "short and plain statement of the claim showing that the pleader is entitled to relief, " a plaintiff must aver sufficient factual allegations which "nudge" its claims "across the line from conceivable to plausible." Id.

As the Court of Appeals for the Third Circuit explained in Fowler, 578 F.3d at 210-11:

... The Supreme Court's opinion in Iqbal extends the reach of Twombly, instructing that all civil complaints must contain "more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal, 129 S.Ct. at 1949.
Therefore, after Iqbal, when presented with a motion to dismiss for failure to state a claim, district courts should conduct a two-part analysis. First, the factual and legal elements of a claim should be separated. The District Court must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions. Id. Second, a District Court must then determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a "plausible claim for relief." Id. at 1950. In other words, a complaint must do more than allege the plaintiff's entitlement to relief. A complaint has to "show" such an entitlement with its facts. See Phillips, 515 F.3d at 234-35. As the Supreme Court ...

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