Silt Saver, Inc. v. Hastings et al

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM with Brief In Support

N.D. Ga.May 1, 2017

1 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION SILT SAVER, INC., a Georgia corporation Plaintiff, vs. Denny Hastings d/b/a FRIENDLY ENVIRONMENT and ATLANTIC CONSTRUCTION FABRICS, INC., a Virginia corporation d/b/a ACF ENVIRONMENTAL and KEVIN B. WOLFE Defendants. : : : : : Case No.: 1:16-cv-01137-SCJ : : : : : : : : : : : DEFENDANTS’ MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED NOW come Defendants Denny Hastings d/b/a Friendly Environment (“Friendly”), Atlantic Construction Fabrics, Inc., d/b/a ACF Environmental (“ACF”) and Kevin B. Wolfe (“Dr. Wolfe”) (collectively “Defendants”), by and through their attorneys, and hereby submit this Motion to Dismiss for Failure to State a Claim Upon Which Relief can be Granted pursuant to Fed. R. Civ. P. 12(b)(6). Case 1:16-cv-01137-SCJ Document 59 Filed 05/01/17 Page 1 of 4 2 1. On April 10, 2017, Plaintiff filed its First Amended and Restated Complaint alleging Patent Infringement (Count I), False Advertising under O.C.G.A. § 10-1-421 (Count II), False Advertising under O.C.G.A. § 10-1- 372(a)(5) (Count III), False Advertising under 15 U.S.C.A. § 1125(a) (Count IV), and Unfair or Deceptive Trade Practices in violation of the Uniform Deceptive Trade Practices Act (Count V). (Doc. 52) 2. For the reasons set forth in the accompanying Brief in Support, Defendants respectfully request this Court dismiss Counts II, III, IV, and V of Plaintiff’s First Amended and Restated Complaint with prejudice for failure to state a claim upon which relief can be granted. Respectfully submitted, this 1st day of May, 2017. /s/ Audra A. Dial Audra A. Dial Georgia Bar No. 220298 KILPATRICK TOWNSEND & STOCKTON 1100 Peachtree Street, Suite 2800 Atlanta, GA 30309 Tel: (404) 815-6500 adial@kilpatricktownsend.com Eric G. Soller (Admitted pro hac vice) PIETRAGALLO GORDON ALFANO BOSICK & RASPANTI, LLP One Oxford Centre, 33rd Floor Pittsburgh, PA 15219 Tel: (412) 263-2000 EGS@Pietragallo.com Case 1:16-cv-01137-SCJ Document 59 Filed 05/01/17 Page 2 of 4 3 Alan G. Towner (Admitted pro hac vice) LEECH TISHMAN FUSCALDO & LAMPL 525 William Penn Place 28th Floor Pittsburgh, PA 15219 Tel: (412) 261-1600 atowner@leechtishman.com Counsel for Defendants Case 1:16-cv-01137-SCJ Document 59 Filed 05/01/17 Page 3 of 4 4 CERTIFICATE OF SERVICE I hereby certify that on May 1, 2017, I electronically filed the foregoing MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED with the Clerk of Court using the CM/ECF system, which will send notice electronically to the following attorneys of record: Kirk W. Watkins, Esquire DAVIS, ZIPPERMAN, KIRSCHENBAUM & LOTITO, LLP 918 Ponce de Leon Avenue, NE Atlanta, GA 30306 D. Scott Sudderth, Esquire WOMBLE CARLYLE SANDRIDGE & RICE, LLP 271 17th Street NW, Suite 2400 Atlanta, GA 30363 /s/ Audra A. Dial Audra A. Dial Georgia Bar No. 220298 KILPATRICK TOWNSEND & STOCKTON 1100 Peachtree Street, Suite 2800 Atlanta, GA 30309 Tel: (404) 815-6500 adial@kilpatricktownsend.com Case 1:16-cv-01137-SCJ Document 59 Filed 05/01/17 Page 4 of 4 1 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION SILT SAVER, INC., a Georgia corporation Plaintiff, vs. Denny Hastings d/b/a FRIENDLY ENVIRONMENT and ATLANTIC CONSTRUCTION FABRICS, INC., a Virginia corporation d/b/a ACF ENVIRONMENTAL and KEVIN B. WOLFE Defendants. : : : : : Case No.: 1:16-cv-01137-SCJ : : : : : : : : : : BRIEF IN SUPPORT OF DEFENDANTS’ MOTION TO DISMISS Defendants Denny Hastings d/b/a Friendly Environment (“Friendly”), Atlantic Construction Fabrics, Inc., d/b/a ACF Environmental (“ACF”) and Kevin B. Wolfe (“Dr. Wolfe”) (collectively “Defendants”), hereby submit this Brief in Support of their Motion to Dismiss for Failure to State a Claim Upon which Relief can be Granted pursuant to Fed. R. Civ. P. 12(b)(6). INTRODUCTION When moving for leave to amend its Complaint, Plaintiff Silt Saver, Inc. (“Silt Saver” or “Plaintiff”) filed a proposed First Amended and Restated Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 1 of 27 2 Complaint as an Exhibit to its Motion for Leave on March 15, 2017. (Doc. 39-1) When granting Plaintiff leave to amend the Complaint, the Court directed Plaintiff to amend and refile the proposed First Amended Complaint because it was a “shotgun” pleading in violation of Fed. R. Civ. P. 8(a) and 10(b). (Order of Court, April 6, 2017; Doc. 46). Plaintiff thereafter filed the operative First Amended and Restated Complaint for Patent Infringement and Other Causes of Action (hereinafter “Amended Complaint”) on April 10, 2017. (Doc. 52) The gravamen of Plaintiff’s Amended Complaint is that all of the Defendants worked in some fashion to infringe upon the patent rights of Plaintiff. Plaintiff also alleges three additional counts alleging false advertising and one additional count alleging unfair trade practices. Although Defendants deny any patent infringement, by this Motion, Defendants move to dismiss the Amended Complaint under Fed. R. Civ. P. 12(b)(6) only as to Counts II, III, IV, and V alleging false advertising and unfair trade practices because each of these counts fails on its face and amounts to a thinly veiled attempt to unduly manufacture additional, needless claims in this litigation.1 1 Dr. Wolfe is filing a separate Motion to Dismiss as to Count I of the Amended Complaint, which applies only to him, because he, as an individual does not make, use, sell, offer for sale or import into the United States an accused infringing product and cannot be liable for patent infringement. Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 2 of 27 3 STANDARD OF REVIEW A complaint may be dismissed under Rule 12(b)(6) if the facts as pleaded do not state a claim for relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 679-80 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 561-62 (2007). A complaint does not suffice if it tenders naked assertions devoid of further factual enhancement, and must assert more than “a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678. When assessing the sufficiency of a complaint under Rule 12(b)(6), Courts within the Eleventh Circuit apply a two- prong approach; (1) eliminate any allegations in the complaint that are merely legal conclusions, (2) assume the veracity of any well-pleaded factual allegations, and then determine whether they plausibly give rise to an entitlement to relief. Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010). FACTUAL ALLEGATIONS AND REASONABLE INFERENCES THEREFROM Although Defendants do not admit the truthfulness of the factual averments contained within the Amended Complaint, the following facts, even when taken as true, demonstrate the deficiencies of Plaintiff’s claims. This dispute arises out of the manufacture of reinforced silt retention fencing products sold under the name “SMARTfence.” Silt Saver alleges that Friendly Environment manufactures the SMARTfence products, and that ACF distributes, sells, and/or offers for sale the Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 3 of 27 4 SMARTfence products, which allegedly infringe the ‘695 Patent. (Doc. 52, ¶¶ 13, 14-16, 19). Dr. Wolfe is alleged to have promoted the SMARTfence products and to have a financial interest in them. (Id., ¶¶ 15, 17) A. The February 16, 2016 Letter was a Private Communication Plaintiff’s counsel sent a letter to Friendly’s counsel, dated February 11, 2016, alleging patent infringement. (Doc. 52, ¶ 21) Counsel for Friendly responded on February 16, 2016, and enclosed “new specification sheets.” (Doc. 52, ¶ 22) Importantly, Plaintiff does not allege in the Amended Complaint that the February 16 letter or the enclosed specification sheets were public statements, were made available to the public, or were used in connection with any advertisement. In fact, the February 16 letter appears on counsel’s letterhead, immediately states that the purpose of the letter is in connection with legal representation of Friendly, and is addressed to Plaintiff’s counsel. As such, it is clear both on the face of the document and via the allegations in the Amended Complaint that the February 16 letter and its enclosure were not an advertisement, were not made to the public, and (as for the letter) contained counsel’s legal opinions. B. Plaintiff’s Test of the SMARTfence Product Revealed that it was in Conformity with the ACF Webpage Plaintiff alleges that James Miller purchased a sample of the SMARTfence product on March 17, 2016. (Doc. 52, ¶ 23) Plaintiff alleges that ACF’s webpage Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 4 of 27 5 published properties for the SMARTfence product as of March 17, 2016. (Id., ¶ 26) On March 21, 2016, Plaintiff allegedly tested the product purchased by James Miller, which revealed that the published properties on the ACF webpage for the SMARTfence product were “consistent with the testing performed by Silt Saver as shown on Exhibit D.” (Id., ¶§ 25, 26). As such, Plaintiff alleges that the ACF webpage was accurate and truthful and Plaintiff alleges that its own independent testing confirmed the truthfulness of the ACF webpage. (Id., ¶ 26) Significantly, Plaintiff also asserts that “any strength differential between the SMARTfence® Products and Silt Saver’s reinforced silt retention products is not material to the performance of those products ...” (Doc. 52, ¶ 40; emphasis added) C. Plaintiff Claims the Tested SMARTfence and ACF Webpage were Inconsistent with the February 16 Letter’s Enclosed Specification Sheet Plaintiff alleges that its test revealed that one of the SMARTfence products was “within the ranges claimed in the ‘695 Patent,” and thus the material properties of the tested product differed from the “letter of February 16, 2016 and attachments sent by counsel for Friendly Environment.” (Id., ¶ 25) Paragraph 26 also alleges that the ACF webpage printouts were “inconsistent with the specification sheets sent with [the] February 16, 2016 letter….” Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 5 of 27 6 D. Dr. Wolfe Authored a Letter, Performed a Stability Field Test, and Managed or Monitored a Field Study Plaintiff alleges that Dr. Wolfe authored a letter comparing the use of the SMARTfence products product to “‘a non-proprietary best management practices (BMP) for sediment control…’” (Id., ¶¶ 53-55). This “Hydraulic Study Letter” is attached to the Amended Complaint as Exhibit H. Plaintiff claims that the letter was used in public advertisement on the ACF website and in such a way so as to give the appearance that the study was independent. (Doc. 52, ¶¶ 53-55) However, from the face of the letter, it is clear that the letter was not an evaluation of the SMARTfence products, but rather a “Comparative Assessment of the Corrugated Retention Filtering System (CRAFS™) using SMARTfence®HD versus the Durham County, North Carolina ‘Silt Fence Outlet.” (Doc. 52-1, p. 75 of 99) In other words, it was a comparison of the CRAFS system structure versus the “Silt Fence Outlet” system structure proposed by Durham County Engineering Department. (Id.) The SMARTfence products were not being evaluated or tested alone, but rather, were part of the test because they were simply the “silt fence material used” to construct the CRAFS system structure that was being evaluated: Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 6 of 27 7 Plaintiff also alleges that Dr. Wolfe performed a “Structural Stability Field Performance Testing of the SMARTfence®” (hereinafter “Performance Report”) that was provided to the Tennessee Department of Transportation (hereinafter “TDOT”). (Doc. 52, ¶¶ 56-57). Plaintiff alleges that the Performance Report, attached to the Amended Complaint as Exhibit I, did not disclose Dr. Wolfe’s Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 7 of 27 8 financial interest in the SMARTfence products or Friendly. Again, even a cursory review of that document refutes Plaintiff’s allegation. The introductory paragraph of the report states: “Dr. Wolfe works as a special R and D consultant to various BMP manufacturers and is a water-quality consultant for the Tennessee Department of Transportation.” (Doc. 52-1, p. 86 of 99) Plaintiff also alleges that Dr. Wolfe managed or monitored a field study of silt fence products on behalf of TDOT, which included a SMARTfence® product and a product made by the Plaintiff, and that Dr. Wolfe did not disclose his financial interest at that time. (Doc. 52, ¶ 57) Plaintiff alleges that Dr. Wolfe refused to communicate to TDOT certain “deficiencies” in the study, specifically as to the Plaintiff’s product. (Id., ¶ 63) These “deficiencies,” which appear to include incorrect installation, are identified in an email from Roger Singleton to Dr. Wolfe. (Attached to the Amended Complaint as Exhibit J). This email confirms that Dr. Wolfe did not install Plaintiff’s product for this study, and that Plaintiff’s product failed after a “record rainfall;” and it does not identify any methodological errors in the study itself. Mr. Singleton does not ask Dr. Wolfe to take any action, particularly as to TDOT, but rather concludes: “Thank you in advance for any help that you can provide.” (Doc. 52-1, p. 92 of 99). Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 8 of 27 9 Missing from the Amended Complaint is any allegation that Dr. Wolfe’s “Hydraulic Study Letter”, “Performance Report”, or management of the field study are incorrect or inaccurate in any way. Missing from Mr. Singleton’s email is any request for action by Dr. Wolfe or identification of a “deficiency” in the methodology of the field study itself. E. Further Singleton Emails Request Only Wolfe’s Advice and for Wolfe to Pass on the Opinions of Others Plaintiff attaches additional emails from Mr. Singleton as Exhibit K to the Amended Complaint. These emails request only Dr. Wolfe’s advice and for Dr. Wolfe to pass on the opinions of others: “I’m just checking back to see if you are able to add any substance to my ongoing issue with [TDOT]…. If you are willing to put in writing your thoughts on the matter, and can get it to me this week, I would appreciate it. …” (September 24, 2014 email, Doc. 52-1, p. 96 of 99) Mr. Singleton’s subsequent email of October 1, 2014 (Doc. 52-1, p. 98 of 99) confirms that his earlier emails asked for Dr. Wolfe’s professional opinion, and include Mr. Singleton’s opinion that Plaintiff’s product was incorrectly installed. In short, all that these emails show is that: (1) Mr. Singleton made a request for service to Dr. Wolfe; (2) Dr. Wolfe either ignored or otherwise failed to respond initially; (3) that after Dr. Wolfe failed to respond, Mr. Singleton contacted him again; and (4) in response to the second email, Dr. Wolfe disclosed Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 9 of 27 10 a potential conflict of interest. Regardless of the interpretation by Mr. Singleton for the failure to timely respond to the first email, failure to timely respond to an email is not false advertising or a deceptive business practice. F. Additional Documents from Dr. Wolfe are Alleged but Not Identified Paragraph 27 of the Amended Complaint alleges that additional documents were “created and provided to the public by Wolfe through CEC, to bolster approvals, sales, and marketing of the accused infringing (Friendly) Products.” Paragraph 27 does not allege that the “additional documents” were untrue or fraudulent. Plaintiff makes no attempt to describe the “additional documents” and did not attach any such “additional documents” to the Amended Complaint. ARGUMENT The facts contained within the Amended Complaint, even if taken as true, fail to state a claim upon which relief can be granted. Therefore, Counts II, III, IV, and V of the Amended Complaint must be dismissed. Moreover, Plaintiff makes no attempt to distinguish its allegations between the Defendants in the Amended Complaint, and, in fact, appears to be alleging all cause of actions against all Defendants, even though there are no factual allegations against each of the Defendants to support a claim under each cause of action, and even though some defendants are corporate entities (or d/b/a’s) and one is an individual. Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 10 of 27 11 I. Neither the February 16 Letter nor the ACF Webpage may Form the Basis of a False Advertising or Unfair Trade Practices Claim Counts II, III, IV, and V each rely on paragraphs 25, 26 and 27 of the Amended Complaint via incorporation by reference. These paragraphs contain allegations regarding the February 16 letter, ACF webpage specifications, and the test of a SMARTfence product by Plaintiff. None of these allegations are capable of supporting a plausible claim for false advertising or unfair trade practices. As previously noted, Plaintiff does not allege anywhere in the Amended Complaint that the February 16 letter or the enclosed specification sheets were public statements, were available to the public, or were used in connection with advertisement in any fashion; this is also clear on the face of the document. Defendants respectfully submit that legal counsel’s communications to other attorneys is incapable of being considered a “trade practice” of any kind. The nature of the attorney-client relationship must allow counsel to communicate their legal opinions to opposing counsel in the course of potential litigation without being misconstrued as a commercial activity on behalf of their client. Therefore, it is also clear that the February 16 letter, including the enclosure, cannot form the basis of a false advertising or unfair trade practices claim because the letter was: (1) not an advertisement, (2) not made to the public, and (3) not untrue or fraudulent as to a circumstance or matter of fact, as discussed infra. Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 11 of 27 12 Plaintiff’s test of the SMARTfence revealed that the ACF webpage published properties were “consistent with the testing performed by Silt Saver as shown on Exhibit D.” (Doc. 52, ¶ 26). As such, the ACF webpage was accurate and truthful in its description of the properties of the tested SMARTfence product. In fact, Plaintiff alleges that its own independent testing revealed the truthfulness of the ACF webpage. Therefore, neither the allegations relating to purchase of the SMARTfence by James Miller nor contents of the ACF webpage may form the basis of a plausible false advertising or unfair trade practices claim. II. Count II Fails to State a Claim for False Advertising Count II alleges a claim for False Advertising under the Georgia Uniform Deceptive Trade Practices Act. The Georgia Uniform Deceptive Trade Practices Act (“GUDTPA”), § 10-1-421(a) (emphasis added), reads as follows: No person, firm, corporation, or association or any employee thereof, with intent directly or indirectly to dispose of real or personal property or to perform services, professional or otherwise, or to do anything of any nature whatsoever to induce the public to enter into any obligation relating thereto, shall make or disseminate or cause to be made or disseminated before the public in this state, in any newspaper or other publication, radio, television, or advertising device or by public outcry or proclamation or any other manner or means whatever, any statement concerning such real or personal property or services, professional or otherwise, or concerning any circumstances or matter of fact connected with the proposed performance or disposition thereof which is untrue or fraudulent and which is known or which by the exercise of reasonable care should be known to be untrue or fraudulent. Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 12 of 27 13 Therefore, to state a claim upon which relief can be granted under GUDTPA Section 10-1-421(a), the Amended Complaint must allege that Defendants (1) made or disseminated a public advertisement, (2) that was untrue or fraudulent. As set forth more fully below, the Amended Complaint does not satisfy this standard. A. The Amended Complaint Does Not Allege a Public Advertisement 1. The February 16 Letter is Not a Public Advertisement No claim for false advertising may be based on the February 16 letter or its attachment because the letter was sent by Friendly’s counsel to Plaintiff’s counsel for purposes of legal representation. There are no allegations that the February 16 letter or its attachment was ever made available to the public for any purpose. Paragraph 41 alleges that Friendly “provided counsel with a false basis to deny infringement of certain claims,” which is not actionable under Section 10-1-421 because it is not an advertisement, not a public statement, and is a representation made by Friendly to its own lawyer in the course of seeking legal counsel. 2. Statements to TDOT are Not Public Advertisements Paragraphs 42 and 43 allege that Friendly presented TDOT with “higher tensile strengths” for Friendly products. These are not allegations of any public advertisement, but instead statements made to TDOT. Allegations regarding private conversations with TDOT are not actionable because they are not public Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 13 of 27 14 advertisements and there are no allegations that these statements to TDOT were later incorporated into any public advertisements or public statements of Friendly. 3. Plaintiff’s Bald Conclusions are Undermined by the Allegations Set Forth in Paragraph 26 and Contrary to Iqbal and Twombly Insofar as Paragraphs 39 and 40 allege that Friendly’s products have an actual strength that is different than an advertised strength, Paragraph 26 clearly states that Friendly products met the claims made in Friendly’s “advertisements”. In fact, Plaintiff’s own test revealed that published properties contained on the ACF webpage for the SMARTfence product were “consistent with the testing performed by Silt Saver ...” (Doc. 52, ¶ 26). The ACF webpage is the only actual public advertisement described in the Amended Complaint, and Plaintiff does not allege that the statements on the ACF webpage were untrue or fraudulent. Although Paragraph 37 of the Amended Complaint generically references the publishing of information, it is a bald allegation that “ACF has published that information containing materially false statements or omitting material information…including representations…as to different tensile strength properties…which were known to be false when made….” This vague and conclusory allegation is contrary to the well-established standards for pleading, as set forth in Iqbal and Twombly, because it amounts to nothing more than a “formulaic recitation of the elements” of false advertising. Twombly, 550 U.S. at Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 14 of 27 15 555; Iqbal, 556 U.S. 662 (2009). The elements of false advertising claims must include factual allegations about the specific publication made and the falsity of information contained in that publication. Therefore, although the Amended Complaint’s allegation that false information was publicly published appears to allege actions by Friendly, on closer investigation, the allegation is just rote, formulaic recitation of the elements of the claim. Any allegation regarding unnamed advertisements as to unidentified products is contrary to the pleading standards set forth in Iqbal and Twombly because it is a mere recitation of the elements of the asserted cause of action. 4. Section 10-1-421 Does Not make Imprecise Advertising Actionable Paragraph 38 of the Amended Complaint alleges that the use of the same name to identify different products is confusing. However, Section 10-1-421 does not make imprecise advertising actionable. Instead, statements must be “untrue or fraudulent.” For this reason alone, Plaintiff’s allegations regarding the name of SMARTfence products cannot be the basis for a plausible false advertising claim. Further, a fundamental element of a false advertising claim is that the untrue or fraudulent statement induced the deceived plaintiff into purchasing the product. Yet, the only allegation in the Amended Complaint regarding a purchase is contained in paragraph 23, wherein James Miller successfully purchased a Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 15 of 27 16 SMARTfence product. There is no allegation that he was confused or deceived, received the wrong product, or had any problem that the purchase he made was not what he expected it to be. Merely using the same name for different products of the same company is not singularly capable of confusion or deception. Plaintiff may feel that Defendants’ naming convention could be improved, but this is not false advertising. It is also adverse to the standards set forth in Iqbal and Twombly for Plaintiff to baldy assert that using the same name for Friendly products amounts to a claim for false advertising that damaged Silt Saver. B. The Amended Complaint Does Not Allege an Untrue or Fraudulent Advertisement in Support of Count II 1. The February 16 Letter Was Not an Untrue or Fraudulent Advertisement Even if the February 16 Letter were considered a public advertisement, which Defendants deny, the letter does not contain any untrue or fraudulent statements. The letter was authored by Friendly’s counsel as a reply to a claim for patent infringement, and clearly identifies its purpose as the provision of legal counsel. This letter amounts to a legal opinion, and not a statement of fact in the course of advertising. Legal opinions proffered on behalf of clients are not actionable within the plain purview of Section 10-1-421. Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 16 of 27 17 2. Plaintiff Admits The Truthfulness of the ACF Webpage The ACF webpage is the only “public” advertisement identified in the Amended Complaint, and the SMARTfence product tested by Plaintiff is the only product referenced in regard to the false advertisement allegations. Paragraph 26 of the Amended Complaint reveals that the ACF webpage published accurate and truthful information regarding the SMARTfence product. Plaintiff performed its own testing and concluded that the webpage information was “consistent with the testing performed by Silt Saver….” (Doc. 52, ¶ 26). Therefore, the allegations in Plaintiff’s Amended Complaint are an admission that there was no untrue or fraudulent public advertisement. 3. Plaintiff’s Bald Conclusions are Undermined by Paragraph 26 and Contrary to Must be Disregarded Any other allegation in the Amended Complaint about general, unidentified statements amounts to a formulaic recitation of the elements of a false advertising claim, which is clearly undermined by the allegations in paragraph 26. These kinds of bald allegations are contrary to the standards set forth in Iqbal and Twombly. Because the Amended Complaint identified only truthful advertising, Count II must be dismissed for failure to state a claim. Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 17 of 27 18 C. There is no Support for Claims under Sections 420 or 423 Plaintiff refers to Sections 10-1-420 and 10-1-423 in paragraph 44. Section 10-1-423 sets forth a standing requirement, identifies the remedy for violations, and does not assert a further cause of action. Section 10-1-420 sets forth an additional substantive section of the GUDTPA. However, for the identical reasons set forth as to Section 10-1-421, any claim under Section 10-1-420 fails to state a claim upon which relief can be granted. Further, there are no allegations as to any price, terms, or intent as required for a cause of action under Section 10-1-420. As such, Count II of the Amended Complaint must be dismissed with prejudice for failure to state a claim upon which relief can be granted. III. Count III Fails to State a Claim for False Advertising under Georgia Law Count III alleges a violation of Section 10-1-372(a)(5), which states that “a person engages in a deceptive trade practice when, in the course of his business, vocation, or occupation, he…(5) represents that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation, or connection that he does not have….” Defendants herein reiterate their arguments made as to Count II. For the same reasons that Count II fails to state a claim, Count III is also deficient; there Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 18 of 27 19 are no alleged statements made “in the course of…business” that were untrue or fraudulent. Plaintiff merely recites the elements of a false advertising claim when it alleges that “Defendants have misrepresented that the SMARTfence® Products have characteristics (greater warp tensile strength) that they did not have at the time the representation was made to the injury and damage of Silt Saver.” (Doc. 52, ¶ 46). Plaintiff’s passing reference to “greater warp tensile strength” adds nothing to the Amended Complaint; it simply points to a singular feature of the product in the course of formulaically reciting the elements of the cause of action. As Plaintiff admitted: “[A]ny strength differential between the SMARTfence® Products and Silt Saver’s reinforced silt retention products is not material to the performance of those products ...” (Doc. 52, ¶ 40) This is precisely the type of insufficient pleading that is disallowed by Iqbal and Twombly, and should be disregarded under the first prong of the Eleventh Circuit approach. Iqbal, 556 U.S. 662 (2009); Twombly, 550 U.S. 544 (2007); Am. Dental Ass’n v, 605 F.3d at 1290. Count III is based entirely on the ACF website printouts and the February 16 letter. (Doc. 52, ¶ 45). As previously discussed, the February 16 letter cannot be the basis for a claim for deceptive trade practices, as it was not a statement made in the course of business but rather correspondence from Friendly’s legal counsel to Plaintiff’s legal counsel in response to a claim of patent infringement. The Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 19 of 27 20 allegations in paragraph 26 of the Amended Complaint admit that the ACF webpage was accurate and truthful, as confirmed by Plaintiff’s independent testing. Therefore, even if the bald generic assertion in paragraph 46 is sufficient to satisfy the pleading standards of Iqbal and Twombly, paragraph 26 of Plaintiff’s Amended Complaint defeats this assertion. Although Defendants reiterate their denial that statements to TDOT as alleged in Count II state a plausible claim, Count III makes no reference to any TDOT interaction nor to Dr. Wolfe’s “Hydraulic Study Letter”, and therefore those allegations have no bearing on the sufficiency of Count III. Citing a different section of the GUDTPA does not improve Plaintiff’s Amended Complaint. As such, Count III of the Amended Complaint must be dismissed for failure to state a claim upon which relief can be granted. IV. Count IV Fails to State a Claim for False Advertising under the Lanham Act Count IV alleges a violation of the Lanham Act, 15 U.S.C.A. § 1125(a)(1)(B), which states that “(a)ny 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… in commercial advertising or promotion, misrepresents the nature, Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 20 of 27 21 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….” For the same reasons that Count II fails to state a claim, Count IV is also deficient. Count IV is based entirely on the ACF website printouts and the February 16 letter. (Doc. 52, ¶ 47). As previously discussed, the February 16 letter cannot be the basis for a claim for deceptive trade practices, as it was not a statement made in the course of business but rather correspondence between counsel. As with Count III, Count IV makes no reference to any TDOT interaction or to Dr. Wolfe’s “Hydraulic Study Letter”, and therefore these allegations have no bearing on the sufficiency of Count IV. Paragraphs 48 through 51 are blatant formulaic recitations of the elements of a cause of action. This is precisely the type of insufficient pleading that is disallowed by Iqbal and Twombly. Alleging identical facts under the Lanham Act does not improve Plaintiff’s Amended Complaint. As such, Count IV of the Amended Complaint should be dismissed for failure to state a claim upon which relief can be granted. V. Count V Fails to State a Claim for False Advertising under the Uniform Deceptive Trade Practices Act Count V alleges a violation of the Uniform Deceptive Trade Practices Act, but cites no statute or other law, which seriously and impermissibly impedes Defendants' ability to defend against this claim. As such, Friendly is forced to Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 21 of 27 22 assume that Count V is simply another claim that Friendly violated the GUDTPA. This is consistent with paragraph 65 of the Amended Complaint, which references Section 10-1-372. The majority of allegations contained in Count V are subject to the same arguments made as to Count II. Count V is based on the ACF website printouts and the February 16 letter. (Doc. 52, ¶ 52). As previously discussed, the February 16 letter cannot be the basis for a claim for deceptive trade practices, as it was not a statement made in the course of business but rather correspondence between counsel. Defendants recognize that Count V uniquely relies on allegations regarding Dr. Wolfe’s “Hydraulic Study Letter”, “Performance Report”, or management of the field study. However, these additional allegations are a difference without a distinction, as they do not support a claim for violation of the GUDTPA. Plaintiff claims that the use of the Hydraulic Study Letter and Performance Report in public advertisement on the ACF website constitutes unfair and deceptive trade practices because Wolfe had an economic interest in the SMARTfence product that was undisclosed. Yet, missing from the Amended Complaint is any allegation that Hydraulic Study Letter, Performance Report, or management of the field study are incorrect or inaccurate in any way. Plaintiff has alleged only that Dr. Wolfe provided accurate, well-reasoned assessments to the Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 22 of 27 23 public and to TDOT. Therefore, Dr. Wolfe’s failure to disclose a financial interest is not capable of deception because disclosing a financial interest would not change the substantive statements made in the letter or stability study. Dr. Wolfe’s financial interest is immaterial to the statements made in the advertisements. In regard to the field study, Plaintiff alleges that providing this study to TDOT constituted unfair and deceptive trade practices because Dr. Wolfe had an economic interest in the SMARTfence product that was undisclosed and that he did not pass on the opinions of others to TDOT. However, there is no allegation that Dr. Wolfe had any duty to do so. In fact, Dr. Wolfe is accused of simply allowing the field test study to speak for itself, the polar opposite of deception. Further, Plaintiffs’ claim of deceptive trade practices grows wholly from post- study interactions with Wolfe and his alleged refusal to communicate his rationales for the results. The refusal to pass-on Plaintiff’s excuses to TDOT had nothing to do with the results of the study, nor does Plaintiff allege otherwise. The remainder of the allegations in Count V are unadorned labels and conclusions that are formulaic recitations of the elements of a cause of action, as precluded by Iqbal and Twombly. For these reasons, Count V should be dismissed with prejudice for failure to state a claim upon which relief can be granted. Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 23 of 27 24 VI. Counts II-V Should be Dismissed with Prejudice, or in the Alternative, Plaintiff Should be Ordered to File a Legally Sufficient Pleading Plaintiff has already had multiple opportunities to properly assert its claims against Defendants. The Amended Complaint remains fatally deficient in its clarity, specificity, and consistency and Counts II-V should be dismissed with prejudice. A plain reading of the Amended Complaint makes clear that Plaintiff has simply attempted to manufacture false advertising and deceptive trade practice claims out of argument, rather than fact. Plaintiff’s assertion of broad and baseless allegations that are merely a recitation of the elements of false advertising claims suggests that the allowance of further amendment of these Counts will simply result in more generic allegations that lack substance. CONCLUSION For the reasons discussed above, Defendants respectfully request that its Motion to Dismiss be granted and that this Honorable Court dismiss Counts II, III, IV, and V of Plaintiff’s Amended Complaint with prejudice. In the alternative, Defendants request that Plaintiff be required to file a legally sufficient amended complaint that properly alleges specific activity that is the subject of Plaintiff’s Counts II through V. Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 24 of 27 25 Respectfully submitted, this the 1st day of May, 2017. /s/ Audra A. Dial Audra A. Dial Georgia Bar No. 220298 KILPATRICK TOWNSEND & STOCKTON LLP 1100 Peachtree Street, Suite 2800 Atlanta, GA 30309 Tel: (404) 815-6500 adial@kilpatricktownsend.com Eric G. Soller (Admitted pro hac vice) PIETRAGALLO GORDON ALFANO BOSICK & RASPANTI, LLP One Oxford Centre, 33rd Floor Pittsburgh, PA 15219 Tel: (412) 263-2000 EGS@Pietragallo.com Alan G. Towner (Admitted pro hac vice) LEECH TISHMAN FUSCALDO & LAMPL 525 William Penn Place 28th Floor Pittsburgh, PA 15219 Tel: (412) 261-1600 atowner@leechtishman.com Counsel for Defendants Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 25 of 27 LOCAL RULE 7.1 COMPLIANCE CERTIFICATE I hereby certify that the foregoing BRIEF IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS was prepared using the Times New Roman 14-point font, and otherwise conforms to the requirements of Local Rule 5.1 and 7.1D. This 1st day of May, 2017. /s/ Audra A. Dial Audra A. Dial Georgia Bar No. 220298 KILPATRICK TOWNSEND & STOCKTON LLP 1100 Peachtree Street, Suite 2800 Atlanta, GA 30309 Tel: (404) 815-6500 adial@kilpatricktownsend.com Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 26 of 27 CERTIFICATE OF SERVICE I hereby certify that on May 1, 2017, I electronically filed the foregoing BRIEF IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS with the Clerk of Court using the CM/ECF system, which will send notice electronically to the following attorneys of record: Kirk W. Watkins, Esquire DAVIS, ZIPPERMAN, KIRSCHENBAUM & LOTITO, LLP 918 Ponce de Leon Avenue, NE Atlanta, GA 30306 D. Scott Sudderth, Esquire WOMBLE CARLYLE SANDRIDGE & RICE, LLP 271 17th Street NW, Suite 2400 Atlanta, GA 30363 /s/ Audra A. Dial Audra A. Dial Georgia Bar No. 220298 KILPATRICK TOWNSEND & STOCKTON LLP 1100 Peachtree Street, Suite 2800 Atlanta, GA 30309 Tel: (404) 815-6500 adial@kilpatricktownsend.com Case 1:16-cv-01137-SCJ Document 59-1 Filed 05/01/17 Page 27 of 27 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION SILT SAVER, INC., a Georgia corporation Plaintiff, vs. Denny Hastings d/b/a FRIENDLY ENVIRONMENT and ATLANTIC CONSTRUCTION FABRICS, INC., a Virginia corporation d/b/a ACF ENVIRONMENTAL and KEVIN B. WOLFE Defendants. : : : : : Case No.: 1:16-cv-01137-SCJ : : : : : : : : : : : PROPOSED ORDER It is hereby ORDERED, ADJUDGED, and DECREED that Counts II, III, IV, and V of Plaintiff’s First Amended and Restated Complaint are hereby DISMISSED with prejudice this the __ day of ____, 2017. BY THE COURT: HONORABLE STEVE C. JONES UNITED STATES DISTRICT JUDGE Case 1:16-cv-01137-SCJ Document 59-2 Filed 05/01/17 Page 1 of 1