Caltex Plastics, Inc. v. Elkay Plastics Co.

FILED
NOT FOR PUBLICATION
DEC 13 2016
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
CALTEX PLASTICS, INC., No. 15-55331
Plaintiff-Appellant, D.C. No.
2:12-cv-10033-RSWL-JEM
v.
ELKAY PLASTICS COMPANY, INC., a MEMORANDUM*
California corporation,
Defendant-Appellee.
Appeal from the United States District Court
for the Central District of California
Ronald S.W. Lew, District Judge, Presiding
Argued and Submitted December 6, 2016
Pasadena, California
Before: D.W. NELSON and OWENS, Circuit Judges, and KORMAN,** District
Judge.
Caltex Plastics, Inc. (“Caltex”) appeals from a decision by the district court
after a bench trial dismissing claims that Elkay Plastics, Inc. (“Elkay”) engaged in
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Edward R. Korman, United States District Judge for
the Eastern District of New York, sitting by designation.
false advertising under the Lanham Act, 15 U.S.C. § 1125(a), unfair competition
under Cal. Bus. & Prof. Code § 17200, and false advertising under Cal. Bus. &
Prof. Code. § 17500. As the parties are familiar with the facts, we do not recount
them here. We affirm.
Caltex claims that Elkay’s advertisements that its product “meets” the MIL-
PFR-81705 Type III military specification (“81705 Spec.”) constitute false
advertising under the Lanham Act, 15 U.S.C. § 1125(a). To prove a prima facie
case for false advertising under § 1125(a), a plaintiff must show “that the statement
was literally false, either on its face or by necessary implication, or that the
statement was literally true but likely to mislead or confuse customers.” Southland
Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1139 (9th Cir. 1997).
Caltex argues that the only way for a product to “meet” the 81705 Spec. is
for it to be formally tested by the Department of the Navy (“DON”) and qualified
to that specification. It is undisputed that the DON never tested Elkay’s product
for formal qualification. Thus Caltex argues that Elkay’s advertisements that its
product “meets” the 81705 Spec. are literally false.
However, Caltex’s argument that a product cannot “meet” the 81705 Spec.
without formal DON testing ignores that product testing can occur outside of the
formal DON qualification process. In short, there is a distinction between
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“meeting” the requirements of a specification and being “qualified” under a
specification.
Caltex did not submit any evidence showing that Caltex’s own tests prove
that Elkay’s products do not meet the 81705 Spec or indicating the unreliability of
Elkay’s product tests. Caltex also did not provide any affirmative evidence to
show that Elkay’s advertisements were misleading to customers. See William H.
Morris Co. v. Group W, Inc., 66 F.3d 255, 258 (9th Cir. 1995). Accordingly, the
trial court did not err in concluding that Caltex did not meet its burden to show that
Elkay’s advertisements violated the Lanham Act.
Caltex’s literal falsity arguments under its Lanham Act claim apply to the
Section 17500 and 17200 claims as well, and fail for the same reasons.
AFFIRMED.
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