Virginia Business Litigation Lawyer Blog

Lawyers representing Ryerson, Inc., a metal roofing company, were called upon recently to defend the company against the claims of two homeowners who alleged that Ryerson failed to honor the warranty on its roofing system and that such failure violated the Virginia Consumer Protection Act ("VCPA"). The lawyers argued that Ryerson could not be liable under the VCPA because all statements made in its warranty were statements of opinion rather than factual misrepresentations. The Eastern District of Virginia disagreed.

The VCPA was enacted to promote fair and ethical standards of dealings between suppliers and the consuming public. (See Va. Code § 59.1-197). It contains provisions that make it unlawful for a supplier to misrepresent that goods and services are of "a particular standard, quality, grade, style, or model," and prohibits suppliers from using "any other deception, fraud, false pretense, false promise, or misrepresentation in connection with a consumer transaction." (See Va. Code § 59.1-200(A)(6), (14)).

In Gottlieb v. Ryerson, the Gottliebs (according to the Complaint) hired a contractor to install a Ryerson steel roof on their gazebo and house. The roof came with a 20-year warranty, which assured the Gottliebs that the warranty was "low-risk, no-nonsense, [and] ironclad." The warranty materials also stated that Ryerson would honor the warranty "at any time and as often as needed within the 20-year period" from the installation date, and that the warranty entitled the homeowners to "complete repair or replacements of any covered problem--freight and labor included."

Approximately 10 years into the warranty, the Gottliebs claim the roof began to peel away and show signs of deterioration. They claim they placed several calls and sent several emails to Ryerson to discuss the roof issues, but say their attempts to communicate were largely ignored. A roofing contractor was hired to determine the cause, and he concluded that the finish coat had failed and that the roof needed to be replaced. Ryerson refused to replace the roof.

The court noted that "puffing" will usually not constitute fraud because "statements of this nature are generally regarded as mere expressions of opinion which cannot rightfully be relied upon" when the parties deal on equal terms. The court agreed with Ryerson that its statement that the warranty was "low-risk, no-nonsense, ironclad" was a mere statement of opinion and not actionable. On the other hand, however, the plaintiffs stated a plausible claim for relief under the VCPA because the statements that the warranty would be honored "at any time and as often as needed within the 20-year period" and that it would cover "complete repair or replacements of any covered problem" were unequivocal, specific, and factual.

Maryland-based Marriage Savers, Inc., a non-profit marriage counseling service and operator of www.marriagesavers.com, has filed a trademark action in the Eastern District of Virginia against Lovepath International, Inc., another marriage counseling organization, which allegedly has been conducting business using the confusingly similar domain name marriagesaver.com.  As of this writing, www.marriagesaver.com has been taken down.

According to the complaint, Marriage Savers owns the federally registered trademark "MARRIAGE SAVERS" and has used the mark since the early 1990's in connection with a wide variety of products and services, including writing printed materials and publications in the field of marriage, conducting workshops and seminars to community leaders, and offering counseling to couples.  

Lovepath, according to the suit, also offers seminars, books, and online resources geared to marriage counseling and markets them using the name "Marriage Saver."  Marriage Savers contends that Joe Beam, Lovepath's founder and president, is not only familiar with Marriage Savers and its trademarks but has actually been a speaker at its conferences.  

Marriage Savers filed the lawsuit on April 20, 2009, and brings claims of trademark infringement, false designation of origin and false advertising, cybersquatting, and related common-law claims.  It is asking the court to award an injunction to stop the infringing activity and prevent future infringment, to order the destruction of any infringing materials, to order that Lovepath transfer its domain names to Marriage Savers, and to award compensatory, statutory, and punitive damages.

While regrettable that these marriage-counseling services can't seem to exist together in blissful harmony, the case looks like a strong one.  Under 15 U.S.C. § 1114(1), trademark infringement exists where (1) the mark is distinctive and has been used in commerce; (2) the plaintiff is the legal or equitable owner of the mark; and (3) the defendant is using a similar mark which is likely to cause confusion among consumers as to the source of the goods and services.  While one might think Lovepath could escape liability by arguing the MARRIAGE SAVERS mark lacks "distinctiveness," in this particular case, the mark was registered over five years ago and has been used continuously ever since, resulting in "incontestable" status under 15 U.S.C. § 1065.  Once a mark becomes incontestable, it may no longer be attacked for lack of distinctiveness.

On Monday, the company that owns Gatorade (a Pepsi subsidiary) filed suit against Coca-Cola and Energy Brands, accusing them of false advertising and other unfair competition in connection with its two-week advertising campaign for Coke's Powerade ION4 sports drink.

In the advertising campaign, Powerade (which continues to be marketed as "the complete sports drink") was claimed to be superior to Gatorade (identified, by comparison, as an "incomplete" sports drink) due to Powerade's inclusion of trace amounts of two electrolytes, calcium and magnesium.  According to the lawsuit, no evidence exists to suggest that the addition of these two minerals--especially in such tiny quantities--provides any nutritional or physiological benefits.  Pepsi says Coke isn't playing fair when it displays a photo of a Gatorade bottle lopped in half alongside the slogan, "Don't settle for an incomplete sports drink."  In legal terms, it claims Coke is guilty of "false advertising, trademark dilution, deceptive acts and practices, injury to business reputation and unfair competition."

The Lanham Act, on which all of Pepsi's claims are based in various forms, prohibits misleading advertisements.  Specifically, Section 43(a) of the Lanham Act, found at 15 U.S.C.A. § 1125, makes a defendant liable for false advertising where all of the following conditions are met: (1) the defendant made a misrepresentation in commercial advertising or promotion concerning goods, services, or commercial activities; (2) the misrepresentation actually deceived or tended to deceive its recipients; (3) the misrepresentation was likely to influence purchasing decisions; (4) the misrepresentation injured or was likely to injure the plaintiff; and (5) the misrepresentation was made in commerce.

As the trial moves forward, the key issues are going to be whether the statements in Coke's advertising were actually false and whether labeling Gatorade an "incomplete sports drink" tends to deceive consumers and/or influence purchasing decisions.