Rufe, J.
Plaintiff Larry Pitt & Associates and Defendant Lundy Law LLP are Philadelphia-area law firms that advertise for personal injury, social security, and workers compensation cases. After Lundy filed and then withdrew a trademark infringement lawsuit against Pitt, Pitt filed this suit against Lundy Law and its managing partner, L. Leonard Lundy (collectively, Lundy), asserting wrongful use of civil proceedings, false advertising, and trade secret misappropriation. Lundy moves for summary judgment on all claims. For reasons discussed below, Lundys motion will be granted.
I. BACKGROUND
In Pennsylvania, unlike in many other jurisdictions, an attorney or a law firm is permitted to refer a case to another attorney or law firm and earn a portion of the clients fees without performing any work on the case, so long as the arrangement is disclosed to the client and the fee is not excessive. However, a law firm may not actively advertise in its own name for certain categories of cases for the purpose of referring those cases to other law firms. This case requires the Court to determine whether, and under what circumstances, a law firm can obtain relief against such advertising practices by its competitor.
For years, Lundy Law, a personal injury law firm with offices in Philadelphia and surrounding counties in Pennsylvania, New Jersey, and Delaware, has advertised on television, public transit, and other media, using the slogan Remember this Name and its mnemonic hotline number 1-800-LUNDYLAW. Since at least 2008, Lundy Laws advertisements have solicited workers compensation and social security disability cases, among other categories of cases.
Pitt is another Philadelphia-area law firm, which has, for many years, advertised for personal injury, workers compensation, and social security disability cases.
At some point, Pitt began using the slogan Remember this Number in conjunction with its own mnemonic intake number. On March 4, 2013, in a decision that set off the current legal battles between the two firms, Lundy Law sued Pitt for trademark infringement, but dismissed the suit voluntarily without prejudice on April 18, 2013.
Pitt responded by filing this suit, asserting that Lundy Laws trademark suit was a wrongful use of civil proceedings in violation of Pennsylvanias Dragonetti Act. Pitts initial complaint also asserted that various aspects of Lundy Laws advertising campaign violated the Sherman Antitrust Act, the Lanham Act, and Pennsylvania common law prohibitions against tortious interference and unfair competition. After two amendments to the complaint and briefing on two motions to dismiss, the Court dismissed Pitts Sherman Act and tortious interference claims with prejudice but allowed Pitt to proceed on 1) its false advertising claim under the Lanham Act (Count Five), 2) its common law unfair competition claims based on deceptive marketing and trade secret misappropriation (Count Six); and 3) its Dragonetti claim (Count Eight).
Pitts false advertising claim under the Lanham Act and deceptive marketing claim under Pennsylvania unfair competition law are both based on Lundy Laws extensive advertisements for workers compensation and social security cases, which Lundy Law agreed to refer to certain other law firms in exchange for referral fees. With respect to social security cases, between November 11, 2008 and February 2011, Lundy maintained an agreement with the Indiana-based law firm, Fleschner, Stark, Tanoos & Newlin, under which the two firms would share in the cost of Lundy Laws advertising for social security disability cases in the Philadelphia area, and Lundy Law would refer all of its potential social security disability cases directly to Fleschner in return for referral fees. Between March 2011 and October 31, 2013, Lundy Law had a similar referral and advertising agreement with the Pennsylvania-based law firm, Pond Lehocky. In 2013, shortly after the filing of this lawsuit, Lundy Law entered into yet another referral agreement with the Carolinas-based law firm of Crumley Roberts, under which Lundy referred most of its potential social security cases to Crumley in exchange for referral fees. However, at the same time, Lundy Law engaged a social security attorney, Michele Squires, as part-time of counsel to the firm to handle up to five social security cases a month.
With respect to workers compensation cases, beginning sometime between 2009 and 2012, Lundy Law has maintained a referral agreement with the Law Offices of Lenard A. Cohen, P.C. (LOLAC), under which LOLAC subsidizes the cost of Lundy Laws workers compensation advertisements, and Lundy Law refers all its potential workers compensation cases in Pennsylvania to LOLAC in exchange for a referral fee. However, while LOLAC has remained an independent firm, Lenard A. Cohen himself has been covered under Lundy Laws liability insurance policy as of counsel to the firm since 2009 and keeps Lundy Law business cards and a Lundy Law email address. Since 2012, LOLACs offices have also been physically located within Lundy Laws office in Philadelphia, and Mr. Cohen has attended Lundy Law attorney meetings and advertising meetings.
Lundy Laws advertisements throughout this time vary in the specificity with which they solicit social security and workers compensation cases. Many are banners featuring 1-800-LUNDYLAW in large font with the words Injury and Disability Lawyers or Injury, Disability & Workers Compensation lawyers, in smaller font above or below the telephone number. Some advertisements feature testimonials from purported social security disability or workers compensation clients that they were glad they remembered the name.
Some of Lundy Laws television commercials, however, specifically promote Lundy Laws purported services for workers compensation and social security disability clients. For example, a commercial aired between June 2012 and January 2013 displays the message Lundy Law gets you the social security benefits you deserve and features the following statement from Leonard Lundy:
People should always apply for Social Security Disability Benefits. Well help you through the process. Thats what we do ."
Another commercial aired during the same period features a similar statement from Mr. Lundy:
Social Security benefits are available to people because they have a physical or mental condition that makes it impossible for them to work. Its also available for people who have never worked. Its really a cumbersome process. Our job is to get them the benefits after theyve been denied Thats what we do .
As Mr. Leonard speaks, the following messages appear on the screen:
• Denied Social Security benefits?
• Lundy Law gets more than retirement benefits from Social Security.
• Lundy Law simplifies the Social Security process.
• Lundy Law gets the Social Security benefits you need.
Similarly, a workers compensation commercial aired in 2015 and 2016 features Mr. Lundy telling viewers:
Injured on the job? Were here to help. Call now to talk directly to a workers compensation lawyer. At Lundy Law, your own lawyer will guide you through every step of the process.
In addition, at least one of Lundy Laws paper advertisements specifically identifies Social Security Disability and Workers Compensation as two of Lundy Laws Practice Areas. Pitt asserts that all of these advertisements are false and misleading because Lundy intended to refer, rather than handle, any potential workers compensation and social security cases.
Pitts claim of unfair competition based on misappropriation of trade secrets focuses on a different aspect of Lundy Laws advertising campaign: specifically, Lundy Laws relationship with Titan (now known as Intersection Media), the exclusive advertising company for the Southeastern Pennsylvania Transportation Authority (SEPTA). For many years, Lundy Law has purchased advertising space on SEPTA buses, trains, and transportation stops, and throughout that time, Leonard Lundys daughter, Sara Lundy, has been an account executive at Titan. In that role, she provided Lundy Law with photographs of advertisements used by other law firms and information on their locations as well as transit ridership information. Pitt alleges that these disclosures constituted misappropriation of confidential information concerning the advertising strategies of Lundy Laws competitors, including Pitt.
II. STANDARD OF REVIEW
The underlying purpose of summary judgment is to avoid a pointless trial in cases where it is unnecessary and would only cause delay and expense. A court will award summary judgment on a claim or part of a claim where there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. A fact is material if resolving the dispute over the fact might affect the outcome of the suit under the governing [substantive] law. A dispute is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.
In evaluating a summary judgment motion, a court must view the facts in the light most favorable to the non-moving party, and make every reasonable inference in that partys favor. Further, a court may not weigh the evidence or make credibility determinations. Nevertheless, the party opposing summary judgment must support each essential element of the opposition with concrete evidence in the record. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted. Therefore, if, after making all reasonable inferences in favor of the non-moving party, the court determines that there is no genuine dispute as to any material fact, summary judgment is appropriate.
III. DISCUSSION
Lundy moves for summary judgment on each of Pitts remaining claims under the Lanham Act, Pennsylvanias unfair competition law, and Pennsylvanias Dragonetti Act. The Court will address each count in turn.
A. Lanham Act (Count V)
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 persons goods, services, or commercial activities.... To prevail on a Lanham Act claim for false advertising, a plaintiff must prove each of the following five elements:
1) that the defendant has made false or misleading statements as to his own product or anothers, 2) that there is actual deception or a tendency to deceive a substantial portion of the intended audience, 3) that the deception is material in that it is likely to influence purchasing decisions 4) that the advertised goods traveled in interstate commerce, and 5) that there is a likelihood of injury to the plaintiff in terms of declining sales, loss of good will, etc.
To establish that the asserted injury falls within the zone of interest of the Lanham Act, and thus entitles the plaintiff to relief under the statute, the plaintiff must show that its alleged injury is proximately caused by the defendants alleged misrepresentation.
The Third Circuit has held, and the parties agree, that where a plaintiff can show that the defendants statements are not only misleading, but literally false, the second element of deception is presumed. If a plaintiff seeks only injunctive relief, courts in this circuit have extended this presumption to the elements of materiality and likelihood of injury as well. However, if a plaintiff seeks monetary damages, it must provide some evidence that consumers actually relied on the defendants misrepresentation in order to establish the requisite causal link between the defendants illegal conduct and actual commercial injury suffered by the plaintiff. This affirmative evidence of consumer reliance is required even though a plaintiff need not provide detailed individualization of loss of sales at the summary judgment stage. The rationale for this requirement is that the private right of action for false advertising under the Lanham Act was enacted to promote fair business dealings, not to provide a windfall to an overly eager competitor.
Here, Pitts claims rely separately on Lundy Laws advertisements for workers compensation cases and social security disability cases, and Pitt seeks monetary damages, disgorgement of profits, prospective corrective advertising costs, and injunctive relief.
1. Lundy Laws Workers Compensation Advertisements
It is undisputed that Lundy Law has advertised for workers compensation cases since at least 2008, and the record shows that at least some of Lundy Laws most recent workers compensation advertisements represent that prospective clients would work with an attorney at Lundy Law. Pitt asserts that since as early as 2009, these advertisements have been literally false and misleading because Lundy Law has referred all, or essentially all, of its potential workers compensation cases in Pennsylvania directly to LOLAC, and has received referral fees from LOLAC. Lundy maintains, however, that LOLACs sole proprietor, Lenard Cohen, has been of counsel to Lundy since 2009, and Lundy could therefore truthfully advertise Mr. Cohens legal services as those of an attorney at Lundy Law.
Lundys position relies on the following facts, which Pitt has not disputed:
• In 2009, Mr. Cohen was added to Lundy Laws professional liability insurance as Of Counsel to the firm.
• Mr. Cohen currently carries Lundy Law business cards, maintains a Lundy Law email address, appears on Lundy Laws website, and sometimes attends Lundy Law attorney meetings and marketing meetings.
• Since September 2012, LOLAC has been located within the office space rented by Lundy Law.
Pitt nonetheless contests Mr. Cohens status as Of Counsel to Lundy. Specifically, Pitt cites to evidence that LOLAC remains an independent law firm in terms of ownership and control, that LOLAC maintains separate fax and telephone numbers from Lundy Law and pays rent to Lundy Law, that neither Mr. Cohen, LOLACs associate, nor LOLACs staff are W-2 employees of Lundy Law, and that Mr. Cohen does not identify himself as of counsel to Lundy Law on LOLACs website, on the Pennsylvania Bar Associations listing of Workers Compensation Lawyers, on social media, or in entering his appearances.
The Court is not persuaded that any of this evidence from Pitt raises a genuine issue as to whether Lundy Laws workers compensation advertisements are materially false or misleading. While the use of the label, of counsel, is not dispositive of whether an attorney can be fairly advertised as an attorney of the firm (since there may be circumstances where the use of the title itself is meant to mislead), Pitt has not provided sufficient evidence to show that the nature of Lenard Cohens relationship with Lundy differed materially from a consumers reasonable understanding of the relationship between a law firm and its attorneys. A potential workers compensation client who contacted Lundy Law would meet with an attorney physically present in the office and would have recourse to Lundy Laws malpractice insurance for the attorneys conduct, if necessary. Pitt provides no argument for why an attorneys non-W-2 status within a law firm or his decision not to announce his relationship with the law firm in certain contexts means that he cannot be an attorney of the law firm. Nor has Lundy shown that the ownership of a separate law practice prevents Cohen from acting as an attorney at Lundy Law. More importantly, there is no indication that Lundy and Mr. Cohen adopted the of counsel title solely for this litigation because both the title and the relationship have existed since 2009. Under these circumstances, Pitt has not met its burden of raising a genuine question of fact as to whether Mr. Cohen is an attorney at Lundy Law, or even if he is not, whether the particular differences between Lundy Laws relationship with Lenard Cohen and a law firms relationship with its own attorneys would be material to potential clients. Accordingly, Pitt has not provided sufficient evidence to support its Lanham Act claim based on Lundys workers compensation advertisements.
2. Lundy Laws Social Security Advertisements
It is undisputed that Lundy Law has advertised for social security cases since at least November 2008. Pitt asserts that all of Lundy Laws social security advertisements since then have been literally false and misleading in light of the firms referral agreements with the Fleschner, Pond, and Crumley law firms.
At the outset, the Court notes that Pitt has provided no affirmative evidence of consumer reactions to any of the specific messages and statements in Lundy Laws advertisements. There are no customer survey or client statements in the record demonstrating how potential clients actually interpreted Lundy Laws advertisements. Because such evidence is necessary to satisfy the deception prong of a false advertising claim in the absence of literal falsity, Pitt can only survive summary judgment with respect to claims that are literally false.
In determining whether a claim is literally false, courts must consider only the unambiguous representations made by the defendants advertisements and determine whether those representations conflict with reality. In this case, the Court must determine 1) whether any of Lundy Laws advertisements unambiguously represents that the firms own attorneys handle social security cases; and if so, 2) whether Lundy Laws own attorneys in fact handled social security cases at the time the advertisement was published.
Pitt generally asserts that any reference to social security disability services in Lundy Laws advertisements is literally false. However, other than pointing generally to the entirety of Lundys social security marketing materials, the only language that Pitt specifically identifies in its briefing as false is the term Injury & Disability Lawyers that Lundy used in conjunction with its mnemonic telephone number. Pitt asserts that the use of this descriptor falsely represents that Lundy Law intends to provide legal services for social security disability cases. The Court disagrees. The use of the term Injury & Disability Lawyers, without further elaboration, is not necessarily a statement concerning the scope of Lundy Laws legal services. For example, the term could be reasonably interpreted as identifying the law firms intended clientele, i.e. people with injuries or disabilities, without representing that the firm would be able to handle all of their legal needs. Accordingly, these general advertisements are not sufficiently unambiguous to be construed as literally false.
However, as noted above, a small number of Lundy Laws advertisements do contain more specific representations with respect to its attorneys handling of social security cases. For example, in 2012 and 2013, Lundy aired two television commercials with the following statements:
• Lundy Law gets you the social security benefits you deserve.
• Well help you through the process. Thats what we do .
• Our job is to get [people] the benefits after theyve been denied. Thats what we do .
• Lundy Law simplifies the social security process.
• Lundy Law gets you the social security benefits you need.
In addition, at least one paper advertisement that Lundy distributed to clients between 2012 and 2016 prominently listed social security as one of Lundy Laws practice areas.
While Lundy maintains that these advertisements do not suggest that Lundy Law employees will themselves handle the viewers social security disability claims from beginning to end, this argument misapprehends both the standard for literal falsity and the nature of the asserted misrepresentation. First, an advertisement need not be verbally explicit to be literally false, so long as a consumer would unavoidably receive a false message from the advertising by necessary implication. In this case, when a law firm releases a commercial directed specifically at social security disability cases, and tells viewers that it will help them through the process of obtaining social security benefits because thats what [they] do, such a message necessarily implies that lawyers within the law firm handle their clients social security claims. Similarly, when a law firm lists social security among its practice areas, it unambiguously implies that attorneys at the firm handle cases within that practice area. Second, Lundy Laws advertisements need not assert that its attorneys handle all aspects of their clients claims in order to be false. If Pitt has provided evidence that Lundy Laws attorneys handled no aspect of their clients social security claims, then any advertisement that represents that Lundy Laws attorneys handled any portion of the claims process would be literally false. Here, the Court concludes that the statements in at least the three advertisements discussed above are sufficiently specific and definitive to constitute unambiguous representations that Lundy Laws attorneys handle social security disability claims.
Having concluded that some, but not all, of Pitts advertisements for social security advertisements unambiguously represent that Lundy Laws attorneys handle social security claims, the Court considers whether this message conflicts with reality. First, the parties have stipulated that between November 8, 2008 and October 31, 2013, Lundy Law referred all of its potential social security cases directly to other law firms. The text of Lundy Laws 2008 agreement with Fleschner expressly states that all work on the cases would be handled by Fleschner and that Lundy Law would have no obligations to any of these clients beyond referral of cases:
[B]eginning the week of November 10, 2008, [Lundy Law] will refer all of its potential Social Security cases to [Fleschner], and [Fleschner] will do all of the investigation, management, processing, overseeing, preparation, and attend hearings as to any and all Social Security cases which are referred to [Fleschner] by [Lundy] and accepted by [Fleschner].
[Fleschner] and [Lundy Law] have agreed that both are responsible for the representation of their joint clients [sic ] social security cases in accordance with this Memorandum of Understanding. Basically, [Lundy Law]s obligation is to exclusively refer the potential [Lundy Law] Social Security cases to [Fleschner], and [Fleschner]s obligation is to handle all other aspects of the [Lundy Law] Social Security Cases from investigation to conclusion.
Lundy Laws 2011 agreement with Pond similarly states that Pond shall be responsible solely at its own expense for evaluating, signing up and prosecuting each accepted Case. This evidence is sufficient for Pitt to establish that no attorney at Lundy Law handled social security claims between November 8, 2008 and October 31, 2013. Accordingly, there is a genuine dispute of fact over whether at least three of Lundy Laws advertisements published during this time period were literally false.
However, in November 2013, Lundy engaged a social security attorney, Michele Squires, to handle social security cases at Lundy. Because Plaintiff has not disputed that Ms. Squires was available and authorized to handle at least some social security cases at Lundy Law after November 2013, Lundy Laws advertisements for social security cases since then are not literally false. While Pitt contends that Ms. Squires only handles a de minimis number of cases, it has not shown that any of Lundy Laws advertisements since 2013 unambiguously represent that the firm would take on more than five cases per month. Moreover, Pitts arguments that Ms. Squires is not an attorney at Lundy law because she is not a W-2 employee and does not receive benefits fails for the same reasons as discussed above with respect to Mr. Cohen. Thus Pitts Lanham Act claims must be limited to advertisements prior to October 31, 2013.
The Court next considers what relief, if any, Pitt can obtain for Lundy Laws potentially false advertising between November 8, 2008 and October 31, 2013. With respect to money damages, as discussed above, Pitt must establish a causal link between its alleged injury and Lundys specific misrepresentations by showing that Lundys statements actually deceived and influenced consumers. Here, in asserting consumer reliance on Pitts misrepresentations, Pitt relies on 1) evidence that a substantial number of the social security clients were responding to Lundy Laws commercials, websites, and bus advertisements; and 2) evidence that Lundy Laws average monthly intakes of social security cases substantially increased in the years after the start of Lundy Laws referral agreement with Fleschner. Both are insufficient to satisfy Pitts burden.
First, Pitts evidence that potential clients responded to Lundy Laws advertisements does not support its conclusion that the clients relied on any of the specific false misrepresentations made by Lundy. Pitts argument is based on a spreadsheet of Lundy Laws social security intakes, which identifies only the category of advertising (e.g. television, website, Yellow Pages) to which the client was responding, not the content of the advertisement. Thus, the spreadsheet does not show that clients were responding to Lundy Laws social security advertising rather than generic brand-building advertisements or advertisements directed solely at other categories of cases. Moreover, even if Pitt had evidence that clients were responding specifically to advertisements that referenced social security cases, that alone would not establish that Lundy Laws clients were influenced by any specific misrepresentations regarding those cases. Pitt has provided no surveys or consumer testimony that show clients would have responded differently to Lundy Laws advertisements if they omitted references to its social security practice or expressly disclosed that Lundy Law would refer rather than handle social security cases.
Second, while the analysis conducted by Pitts expert, Michal A. Malkiewcz, shows that Lundy Laws monthly social security intakes was greater after the start of its referral agreement with Fleschner than before, there is no evidence linking the increase to the use of any specific advertisements, in particular any of the subset of advertisements that can be construed as literally false. Moreover, even if Malkiewczs analysis showed a temporal correlation between Lundy Laws social security intakes and the use of any of the potentially false advertisements, courts have held that inferences of causation based solely on the chronology of events, where the record contains...other equally credible theories of causation, are not reasonable inferences. Here, Malkiewczs analysis does not account for the potential effect of Lundy Laws non-false advertising, such as the firms more general injury & disability lawyers advertisements or its personal injury advertising. Thus, Pitts evidence does not support a reasonable inference of causation, and the Court will grant summary judgment with respect to Pitts request for money damages.
For the same reasons, the Court will also grant summary judgment with respect to Pitts request for disgorgement of profits and corrective advertising. The plaintiff bears the burden of showing that the sales for which it seeks disgorgement occurred because of the alleged false advertising. Because Pitt has not established a causal link between the claimed misrepresentations and any clients or cases obtained by the firm, Pitt has not established that Lundy was unjustly enriched as a result of its false statements. Similarly, a court may only grant damages to pay for corrective advertising when such damages are justifiable as a surrogate for plaintiffs damages or defendants profit. Plaintiffs seeking such corrective advertising damages usually must show some public confusion caused by the defendants conduct that injures the plaintiff and is most cost-effectively corrected through remedial advertising. Here, because Pitt has not established entitlement to disgorgement or money damages, corrective advertising cannot be justified as a surrogate for such recovery. Moreover, Pitt has not sufficiently shown that it suffered any injury proximately caused by Lundys misrepresentations that could be corrected through further advertising.
The final question is whether Pitt should be permitted to proceed to trial on its claim for injunctive relief only based on a rebuttal presumption of deception, materiality, and likelihood of injury. Courts have generally declined to grant injunctive relief when the defendant ceases [the offending activity] and shows no inclination to repeat the offense. Here, the Court has concluded that in light of Lundy Laws engagement with Ms. Squires, there is no evidence that Lundy Laws social security advertisements continue to be literally false. Although it is possible that Lundy may terminate this engagement with Ms. Squires in the future, and again farm out all its social security cases while representing to the public that its attorneys handle these cases, Pitt has not pointed to any evidence that Lundy intends to do so. Because Lundy has ceased its offending activity, and there is no evidence of an inclination to repeat the offense, there are no genuine disputes of fact that would support granting injunctive relief based on Lundy Laws allegedly false advertisements before November 2013. Accordingly, Lundys Motion for Summary Judgment will be granted with respect to Plaintiffs Lanham Act claim in its entirety.
B. Pennsylvania Unfair Competition Law (Count Six)
Pennsylvania follows the Restatement (Third) of Unfair Competition, which provides that one business may be liable for harm to the commercial relations of another if:
(a) the harm results from acts or practices of the actor actionable by the other under the rules of this Restatement relating to:
(1) deceptive marketing, as specified in Chapter Two;
(2) infringement of trademarks and other indicia of identification, as specified in Chapter Three;
(3) appropriation of intangible trade values including trade secrets and the right of publicity, as specified in Chapter Four;
or from other acts or practices of the actor determined to be actionable as an unfair method of competition, taking into account the nature of the conduct and its likely effect on both the person seeking relief and the public; or (b) the acts or practices of the actor are actionable by the other under federal or state statutes, international agreements, or general principles of common law apart from those considered in this Restatement.
Here, Plaintiffs have alleged unfair competition based on deceptive marketing and misappropriation of trade secrets.
First, because the parties agree that the definition of deceptive marketing under Section 2 of the Restatement (Third) of Unfair Competition is nearly identical to the Lanham Act, and because both Pitt and Lundy rely on the same arguments and facts with respect to both claims, Lundys motion for summary judgment will be granted with respect to Pitts state law deceptive marketing claim for the reasons discussed above with respect to Pitts Lanham Act claim.
Second, Plaintiffs unfair competition claim based on trade secret misappropriation is based solely on information provided by Sara Lundy to Lundy Law concerning advertisements used by Pitt and other law firms. Here, the parties have stipulated that Sara Lundy provided Lundy Law with information regarding the names of law firms with advertisements running through Titan, photographs of advertisements by law firms appearing in public, and information on where law firm advertisements ran publicly and the types of advertisements that ran in public at certain points in time in certain locations. Pitt also points to a particular email thread in which Leonard Lundy informs his daughter, Sara Lundy, that he intends to file suit against Pitt over its Remember this Number slogan and asks her for the location of Pitts advertisements and pictures or copies of [Pitts] ads and copies or pictures of [Lundy Laws] [a]ds. Sara Lundy responds that Pitt has ads inside buses, subways and on the platforms of subway stops and agrees to provide photos of Pitts and Lundy Laws advertisements.
However, while the nepotistic interactions between Leonard and Sara Lundy may be concerning for Titan and SEPTA, Pitt has not established that any of the information exchanged between Titan and Lundy was confidential. There is no evidence that Titan provided Lundy with copies of any internal advertising strategy documents, unpublished draft advertisements, or extensive compilations of advertising data that might reasonably carry an expectation of confidentiality. Nor has Pitt identified any confidentiality agreements between Titan and any law firm that prohibited Titan from sharing the locations or photographs of law firms advertisements with other Titan customers. Rather, the content and location of a law firms advertisements is generally intended to be public, and indeed, it is uncontested that Pitt was able to obtain similar information from Titan concerning the locations of Lundy Laws advertisements. Accordingly, Pitt has failed to meet its burden in providing any evidence of unfair competition through trade secret misappropriation, and summary judgment will be granted on Count Six in its entirety.
C. Dragonetti Act Claim (Count Eight)
Pennsylvanias Dragonetti Act allows a civil suit for wrongful initiation of civil court proceedings without probable cause and for a purpose other than securing adjudication of a legal claim, when the proceedings end in favor of the defendant. Accordingly, a plaintiff can succeed on a claim under the Dragonetti Act if it shows (1) that the underlying proceedings were terminated in plaintiffs favor; (2) that the defendant caused those proceedings to be instituted without probable cause; and (3) that the proceedings were instituted for an improper purpose.
Here, Lundy argues, as it did in its earlier motion to dismiss Pitts Dragonetti claim, that Lundy Laws voluntary dismissal of its trademark suit without prejudice was not a termination in Pitts favor. In denying Lundy Laws first motion to dismiss, the Court held that the question of whether Pitts voluntary dismissal constituted a favorable termination would depend on the specific factual circumstances of the case, and evidence that Lundy anticipated an imminent loss on the parties pending motion for preliminary injunction may support a finding that the voluntary dismissal was in Pitts favor.
Since then, however, Pitt has come forward with no evidence that Lundy withdrew its suit in the face of imminent defeat or that the dismissal was otherwise based on the merits of the suit. The only evidence Pitt relies on for its claim are 1) that Lundy dismissed the day after it learned that Pitt was being indemnified by its insurance carrier for its defense of the suit; and 2) that Leonard Lundy, during his deposition as the corporate designee of Lundy Law in this case, could not identify the specific individuals who told him they were confused by Pitts use of its Remember This Name slogan. This does not satisfy Pitts burden. First, even if one could infer from the timing of Lundy Laws withdrawal of its suit that its decision was based on Pitts financial ability to fully litigate the case, the mere desire to avoid protracted litigation is not proof of anticipated defeat. Moreover, Pitt does not dispute that both parties are still actively litigating Lundy Laws attempt to obtain registration for its Remember this Name slogan before the Trademark Trial and Appeals Board. Thus, Lundy Laws decision to dismiss its suit without prejudice after learning that Pitt was insured does not establish that the dismissal was in Pitts favor. Second, the mere fact that Lundy could not identify specific witnesses who would testify regarding their confusion over Pitts Remember this Number slogan does not show that the case was instituted without probable cause. Indeed, a plaintiff asserting trademark infringement can prove likelihood of confusion without any evidence of actual confusion. Accordingly, Pitt has not satisfied its burden of establishing that Lundy Laws suit was terminated in its favor, and Lundys Motion for Summary Judgment is granted with respect to Pitts Dragonetti Act claim.
IV. CONCLUSION
For the reasons discussed above, Lundys motion for summary judgment will be granted as to all remaining claims. The Court is aware that its decision today denies a plaintiff relief despite evidence of years of wrong-doing by the defendants. There is every indication here that a prominent personal injury law firm in Philadelphia essentially rented out its name in exchange for referral fees and that its managing partner lied on television that his firm handled social security disability claims when it did not. But when a plaintiff fails to meet its burden of establishing causation of harm or likelihood of future violations, the Lanham Act and Pennsylvania law do not permit a court to grant relief based solely on a defendants past misrepresentations. Nonetheless, courts are not the only institutions to review deceptive attorney advertising; nor are they typically the most appropriate or efficient forum. In many instances, a complaint to the state attorney disciplinary boards may be the most effective means for quickly ending and sanctioning plainly unethical conduct. Thus the Courts decision should not be read to condone or excuse Defendants alleged actions, but should instead serve as a reminder of the burden that plaintiffs bear when they choose to seek relief against their competitors in court.
An order follows.
Compare Pa. Disc. R. Prof. Conduct 1.5(e), with ABA Model Code DR 2-107.
Pa. Disc. R. Prof. Conduct 7.2(k).
Stip. Facts (Doc. No. 169-1) ¶¶ 1, 2, 3; Pl.s Exhs. 14, 16, 17.
Stip. Facts ¶¶ 4, 5.
Id. at ¶ 7-10.
Id. at ¶ 11.
Id. at ¶¶ 25, 31.
42 Pa. Cons. Stat. § 8351.
See Mem. Op. and Order dated September 30, 2014 (Doc. Nos. 65, 66).
Stip. Fact. ¶ 21; Pl.s Exh. 48.
Stip. Fact ¶ 22; Pl.s Exh. 49.
Stip. Fact ¶ 36; Pl. Exh. 51 at LUNDY-0006463.
See Pl. Exhs. 45, 46.
Pl. Exhs. 31-35; Pl.s Exh. 4 at 133:16-135:6.
Stip. Fact ¶¶ 15-17; Def. Exh. 11.
Stip. Fact ¶¶ 18-19.
Pl. Exhs. 14, 16.
Pl. Exhs. 14, 16.
Pl.s Exh. 19 at LUNDY-0000090.
Id. at LUNDY-0000092.
Pl.s Exh. 19 at LUNDY-0000096.
See, e.g. , Pl.s Exh. 14 at LUNDY-0000032.
Stip. Fact. ¶ 41.
Id. at ¶ 42.
Id. at ¶¶ 44-46.
Walden v. Saint Gobain Corp. , 323 F.Supp.2d 637, 641 (E.D. Pa. 2004) (citing Goodman v. Mead Johnson & Co. , 534 F.2d 566, 573 (3d Cir. 1976) ).
Fed. R. Civ. P. 56(a).
Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
Id.
Hugh v. Butler Cty. Family YMCA , 418 F.3d 265, 267 (3d Cir. 2005).
Boyle v. Cty. of Allegheny , 139 F.3d 386, 393 (3d Cir. 1998) (citation omitted).
Celotex Corp. v. Catrett , 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
Anderson , 477 U.S. at 249-50, 106 S.Ct. 2505 (internal citations omitted).
Wisniewski v. Johns-Manville Corp. , 812 F.2d 81, 83 (3d Cir. 1987).
15 U.S.C. § 1125(a)(1).
Pernod Ricard USA, LLC v. Bacardi U.S.A., Inc. , 653 F.3d 241, 248 (3d Cir. 2011). Here, there is no dispute in this case that Lundys advertisements traveled in interstate commerce.
Lexmark Intl, Inc. v. Static Control Components, Inc. , --- U.S. ----, 134 S.Ct. 1377, 1395, 188 L.Ed.2d 392 (2014) (citation omitted).
Pernod , 653 F.3d at 248 ; Pl.s Opp. at 4-5; Def.s Reply at 12 n.10.
Smart Vent, Inc. v. Crawl Space Door Sys. Inc. , No. 13-5691, 2017 WL 4948063, at *6 (D.N.J. Nov. 1, 2017) ; Benihana of Tokoyo, Inc. v. Benihana, Inc. , 828 F.Supp.2d 720, 729 (D. Del. 2011) ([O]nce plaintiff proves literal falsity of an advertisement, the court may presume all other elements of the § 43(a) claim.) (citation omitted); Ecore Intl, Inc. v. Downey , No. 12-2729, 2015 WL 127316, at *4 (E.D. Pa. Jan. 7, 2015) (The presumption appears to cover materiality as well.).
Synygy, Inc. v. ZS Assocs., Inc., 110 F.Supp.3d 602, 621 (E.D. Pa. 2015) ([T]here are different standards of proof for different types of remedies under the Lanham Act...Where...a plaintiff seeks monetary damages, proof of actual deception is required. This does not mean that plaintiff bears the burden of detailing individualized loss of sales; however, plaintiff must show some customer reliance on the false advertising.) (internal citations omitted); see also Verisign, Inc. v. XYZ.COM LLC , 848 F.3d 292, 299 (4th Cir. 2017) (To recover damages under the Lanham Act, [the plaintiff] must show not only false advertising by [the defendant], but also that [the defendants] statements caused [the plaintiff] actual damages.); Alpha Pro Tech, Inc. v. VWR Intl, LLC , No. CV 12-1615, 2017 WL 3671264, at *14 (E.D. Pa. Aug. 23, 2017) (holding that presumptions of deception and materiality do not apply when plaintiff seeks money damages); Ecore Intl, Inc. v. Downey , No. 12-2729, 2015 WL 127316, at *4 (E.D. Pa. Jan. 7, 2015) (citing Mun. Revenue Serv., Inc. v. Xspand, Inc. , 700 F.Supp.2d 692, 716 (M.D.Pa. 2010) (same); Synygy, Inc. v. Scott-Levin, Inc. , 51 F.Supp.2d 570, 575 (E.D. Pa. 1999) (citation omitted) (To show entitlement to monetary damages under section 43(a), a plaintiff must show actual damages rather than a mere tendency to be damaged), affd , 229 F.3d 1139 (3d Cir. 2000) (unpublished table decision).
Parkway Baking Co. v. Freihofer Baking Co. , 255 F.2d 641, 648 (3d Cir. 1958) ; Synygy , 110 F.Supp.3d at 622 (quoting Gallup, Inc. v. Talentpoint, Inc., No. 00-5523, 2001 WL 1450592, at *13 (E.D. Pa. Nov. 13, 2001) ).
Syncsort Inc. v. Innovative Routines Intl, Inc. , No. 04-3623 (WHW), 2008 WL 1925304, at *10 (D.N.J. Apr. 30, 2008) (citing Parkway Baking, 255 F.2d at 649 ); see also Johnson & Johnson v. Carter-Wallace, Inc. , 631 F.2d 186, 192 (2d Cir. 1980) (Failure to prove actual damages in an injunction suit, as distinguished from an action for damages, poses no likelihood of a windfall for the plaintiff. The complaining competitor gains no more than that to which it is already entitled a market free of false advertising.).
Stip. Facts ¶ 4; Pl.s Exh. 19 at LUNDY-0000096. Both were aired between 2015 and 2016. Pl.s Exhs. 15, 17.
Pl.s Reply at 8.
Def.s Exh. 11.
Stip. Fact ¶¶ 16, 19. Def.s Exh. 29.
Stip. Facts ¶ 17-18.
Stip. Fact. ¶ 15; Pl.s Opp. 8-9; Pl.s Sur-Reply at 3-4 & n. 4.
Pitt also contends that Mr. Cohens individual relationship with Lundy Law is irrelevant because the referrals are to his firm rather than to him personally. But Pitt does not dispute that Mr. Cohen himself worked on workers compensation cases referred to him by Lundy, such that if he were a Lundy Law attorney, these cases would be handled by an attorney at Lundy Law regardless of whether others at LOLAC also worked on these cases.
Stip. Fact at ¶ 5.
Johnson & Johnson-Merck Consumer Pharm. Co. v. Rhone-Poulenc Rorer Pharm., Inc ., 19 F.3d 125, 129 (3d Cir. 1994). Pitt also asserts that a court can also presume deception when there is an egregious intent to deceive. The Third Circuit has not yet determined whether to adopt such a presumption. See id. at 132 (citing Johnson & Johnson-Merck Consumer Pharm. Co. v. Smithkline Beecham Corp. , 960 F.2d 294, 298 (2d Cir. 1992) ). Moreover, Pitt has not pointed to any evidence to establish that Lundys use of any advertising that is not literally false is sufficiently egregious to justify the presumption.
Synygy , 110 F.Supp.3d at 621.
Pl.s Sur-Reply at 2.
Pl.s Sur-Reply at 4; Pl.s Exhs. 14, 16.
Pl.s Exh. 19 at LUNDY-0000090, LUNDY-0000092.
Pl.s Exh. 14 at LUNDY-0000032; Pl.s Exh. 17.
Def.s Reply at 11.
Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer Pharma. Co., 290 F.3d 578, 587 (3d Cir. 2002) ; AstraZeneca LP v. Tap Pharm. Prod., Inc. , 444 F.Supp.2d 278, 296-97 (D. Del. 2006).
It was Pitts burden to identify each of the specific messages in Lundys advertisements and explain why they should be construed as unambiguously and literally false. Pitt did not do so in its briefing on this motion. Accordingly, the Court will not independently review and analyze each of the thousands of advertisements in the record to identify all of the advertisements that conveyed unambiguous messages concerning Lundy Laws handling of social security claims.
Parks, LLC v. Tyson Foods, Inc. , 186 F.Supp.3d 405, 415 (E.D. Pa. 2016) (citing Novartis , 290 F.3d at 587 ).
Stip. Fact at ¶¶ 21-22.
Pl.s Exh. 48.
Exh. 49 at 3, ¶ 5 (e). The agreement does also provide that Pond would either provide Lundy with access to its case management system or provide period case status updates to Lundy to allow Lundy to respond to a Lundy Law client inquiry. Id. at ¶ 10.
Pl.s Opp. at 12.
Synygy , 51 F.Supp.2d at 575 ; see also Synygy , 110 F.Supp.3d at 621-22.
Exh. 56.
Pl.s Exh. 12 at 44-46.
Bracco Diagnostics, Inc. v. Amersham Health, Inc. , 627 F.Supp.2d 384, 487-88 (D.N.J. 2009) (quoting Seven-Up Co. v. Coca-Cola Co. , 86 F.3d 1379, 1388 (5th Cir. 1996) ).
There are additional flaws with the causal chain between Lundys misrepresentations and Pitts alleged injuries. Even if Malkiewicz could establish that Lundys false advertisements caused clients to engage Lundy Law for their cases, Malkiewicz does not rely on anything more than temporal correlation to connect Pitts alleged losses to Lundys gains. Pitt offers no direct evidence that any social security clients who chose Lundy Law would have instead chosen, or were aware of, Pitts social security practice. Instead Malkiewiczs conclusion regarding Pitts losses relies on the same before-and-after analysis used to support the asserted increase in Lundy Laws intakes. Pl.s Exh. 12 at 44-49.
Bracco Diagnostics , 627 F.Supp.2d at 484 ; see also Gucci Am. Inc. v. Duffys Inc., 354 F.3d 228, 242 n. 15 ; Castrol Inc. v. Pennzoil Quaker State Co., 169 F.Supp.2d 332, 343 (D.N.J. 2001) (Surely, Castrol must demonstrate with reasonable certainty the portion of Pennzoils profits attributable to the willful and intentional false advertising before the Court can order disgorgement.).
Callaway Golf Co. v. Dunlop Slazenger , 384 F.Supp.2d 735, 741 (D. Del. 2005) (quoting PBM Products, Inc. v. Mead Johnson & Co., 174 F.Supp.2d 417, 420 (E.D. Va. 2001) ).
Id. at 740-41 (citing Zazu Designs v. LOreal, S.A., 979 F.2d 499, 506, 509 (7th Cir.1992) ).
Bracco , 627 F.Supp.2d at 493 (citing Readers Digest Assn, Inc. v. Conservative Digest, Inc., 821 F.2d 800, 807 (D.C. Cir. 1987) ; Robert Stigwood Group, Ltd. v. Hurwitz, 462 F.2d 910, 913 (2d Cir.1972) ; Lurzer v. American Showcase, Inc., 75 F.Supp.2d 98, 101 (S.D.N.Y. 1998) ).
Restatement (Third) of Unfair Competition § 1.
Diodato v. Wells Fargo Ins. Servs., 44 F.Supp.3d 541, 571-72 (M.D. Pa. 2014) (holding that Pennsylvania common law claim for unfair competition through deceptive marketing is identical to the Lanham Act without the federal requirement of interstate commerce).
Pl.s Opp. at 23.
Stip. Fact ¶¶ 45-46.
Pl.s Exh. 84. See also Pl.s Exhs. 85-86.
Pl.s Exh. 84.
Stip Fact ¶ 47.
See 42 Pa. C.S. § 8351 -55.
Paparo v. United Parcel Serv. , 43 F.Supp.2d 547, 548 (E.D. Pa. 1999) (citing Bannar v. Miller , 701 A.2d 232, 238 (Pa. Super. 1997) ).
Mem. Op. dated December 13, 2013 (Doc. No. 35) at 15.
Zappala v. Eckert Seamans Cherin & Mellott, LLC , No. 0336, 2011 WL 8200380 (Phil. Ct. Com. Pl. September 20, 2011), affd , 53 A.3d 936 (Pa. Super. 2012) ; Contemporary Motorcar Ltd. v. MacDonald Illig Jones & Britton, LLP , No. 783 WDA 2012, 2013 WL 11253857, at *4 (Pa. Super. Ct. Sept. 19, 2013) (citing Majorsky v. Douglas , 58 A.3d 1250 (Pa. Super. Ct. 2012) ).
See Larry Pitt & Associates, P.C. v. Lundy Law, LLP , Opposition No. 91210158 (T.T.A.B.).
See Express Servs., Inc. v. Careers Exp. Staffing Servs. , 176 F.3d 183, 187 (3d Cir. 1999) (reversing and remanding district courts determination that plaintiff failed to demonstrate likelihood of confusion when the parties had stipulated there was no actual confusion).