Legal Opinions - U.S. District Court, Maryland: May 5, 2008

LAW: The Lanham Act prohibits the "false or misleading description of fact, or false or misleading representation of fact, which ... 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." 15 U.S.C. [section]1125(a)(1)(B).

The elements of a false advertising claim under the Lanham Act are as follows: (1) the defendant made a false or misleading description of fact or representation of fact in a commercial advertisement about his own or another's product; (2) the misrepresentation is material, in that it is likely to influence the purchasing decision; (3) the misrepresentation actually deceives or has the tendency to deceive a substantial segment of its audience; (4) the defendant placed the false or misleading statement in interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result of the misrepresentation, either by direct diversion of sales or by a lessening of goodwill associated with its products. Scotts Co. v. United Indus. Corp., 315 F.3d 264, 272 (4th Cir. 2002).

False advertising is actionable under the Lanham Act if the statement is false on its face or if, despite its truth, the statement is likely to mislead or confuse consumers because of the nature of the advertisement. See C.B. Fleet Co. v. SmithKline Beecham Consumer Healthcare, L.P., 131 F.3d 430, 434 (4th Cir. 1997).

The court found that Sanderson's Amended Complaint stated sufficient factual allegations under [section]43(a) of the Lanham Act to survive dismissal on a 12(b)(6) motion.

Nonetheless, Tyson argued that Sanderson's Amended Complaint failed as a matter of law because the language that Sanderson alleged to be false and misleading under [section]43(a) of the Lanham Act -- i.e., the unqualified and qualified RWA claims -- was approved for use on Tyson's chicken labels by FSIS, the USDA agency to which Congress has delegated the authority to regulate poultry labels.

According to Tyson, courts uniformly have held that no Lanham Act cause of action lies regarding advertising claims that "comport substantively" with the label and labeling statements approved as accurate by the government agency vested with that approval authority.

To hold otherwise would enable competitors like Sanderson to use the Lanham Act to create a private cause of action, which the [Poultry Products Inspection Act, 21 U.S.C. [section]451 et seq. (PPIA)] expressly prohibits.

In support, Tyson relied on what has been termed the Cytyc line of cases, which includes American Home Products Corp. v. Johnson & Johnson, 672 F. Supp. 135 (S.D.N.Y. 1987), Cytyc Corp. v. Neuromedical Systems, Inc., 12 F. Supp. 2d 296 (S.D.N.Y. 1998), and, most recently, Prohias v. Pfizer, Inc., 490 F. Supp. 2d 1228 (S.D. Fla. 2007).

Taken together, the Cytyc line of cases exemplify a broader proposition -- namely, that federal courts should not unduly entangle themselves in regulatory agency decisions where the agency has special expertise in the subject matter and where, more importantly, doing so would usurp the authority specifically delegated by Congress to that agency.