Safelite Group, Safelite Solutions and Safelite Fulfillment have asked the judge to dismiss a lawsuit filed by Rich Campfield, founder of Ultra Bond in Grand Junction, Colo., which alleges misleading advertising that favors replacement of windshields rather than repairs of long cracks, which have “wiped out a large portion (if not most) of the market for Ultra Bond’s products and services.”
“This is a false advertising action under the Lanham Act, though one may not realize it from the complaint,” Safelite’s attorneys allege. “Plaintiff’s allegations actually have nothing to do with advertising. They concern issues like alleged market power, vertical integration and insurance claims administration networks, all of which one might expect to see in an antitrust case. But plaintiffs already brought antitrust claims (over a decade ago) on essentially the same allegations against different parties. These claims were rejected both by a Federal District Court and again by a Court of Appeals. (Campfield vs. State Farm Mutual Auto Insurance Co.) Plaintiffs’ present attempt to resurrect their claims against Safelite under the guise of the Lanham Act should be rejected as well.”
Plaintiffs allege they were injured in two ways, according to Safelite’s attorneys.
“First, they are seeking lost profits,” reads the court documents. “Plaintiffs say that the defendants have weakened the market for long-crack repair services, resulting in ‘low sales and reduced licenses.’ If Safelite Solutions had told policyholders about the Ultra Bond process, plaintiffs assert those policyholders ‘would seek out shops that perform this service and, in turn, [the shops] would purchase or license plaintiffs’ products in order to be able to offer this service.’
“Second, as a result of the lost profits claimed above, plaintiffs allegedly ‘have not been able to develop, market or license a more advanced system for long-crack repair,’ resulting in further lost profits,” according to the attorneys.
Safelite’s attorneys allege the complaint should be dismissed because plaintiffs “cannot meet the statutory requirements as recently explained by the Supreme Court in Lexmark International Inc. v. Static Control Components Inc.
“Under Lexmark, a plaintiff seeking to assert a false advertising claim must allege sufficient facts to show both that: a) its allegedly affects interests are within the ‘zone of interests’ protected by the Lanham’s Act’s proscription on false advertising; and b) its alleged injury was proximately caused by the defendant’s alleged violation of the statute,” reads the court documents. “These are separate, necessary requirements, and plaintiffs have not and cannot establish either one.”
In response to the allegations that Safelite has stated [in scripts] that long crack repairs could be unsafe and that the company’s glass shops use replacement windshields that are equivalent to original windshields, Safelite’s attorneys contend this argument does not fall under the Lanham Act.
“At best, these are highly generalized statements that say nothing about plaintiffs or their products and as such are not actionable under the Lanham Act, even if plaintiffs could show some falsity (which they cannot do either),” the court document reads.
For these reasons, among others, Safelite’s attorneys have requested the court dismiss the complaint with prejudice.
Campfield’s attorneys filed the complaint in mid-August in the U.S. District Court for the Southern District of Ohio.
“The heart of this case is Safelite’s long-running and egregiously misleading advertising and promotional scheme in which it falsely tells consumers that cracks longer than six inches cannot be repaired,” according to Campfield’s attorneys.
“Instead, Safelite falsely tells consumers that their windshield must be replaced when a crack is longer than six inches” alleged the court documents. “This misstatement misleads consumers to replace their damaged windshield which costs many times more than a repair, in addition to the fact that replacement is also demonstrably less structurally safe than repairing a factory installed windshield.”
Campfield’s attorneys cited the Lanham Act, which prohibits any “false or misleading description of fact, or false or misleading representation of fact which . . . in commercial advertising or promotion, misrepresents the nature characteristics, [or] qualities . . . of . . . goods, services, or commercial activities.”
His suit alleged that in addition to “depriving consumers of their freedom of choice to repair long cracks” defendants failure to disclose the availability of long-crack repair has “directly damaged the businesses of plaintiffs, which are competitors.”
The complaint Campfield brought against State Farm and LYNX Services, referenced by Safelite, was filed in the U.S. District Court of Colorado in February 2003. The District Court judge dismissed the case in December 2005.
The Appellate Court denied Campfield’s request for a rehearing in August 2008.
To read Safelite’s response, click here.
To read Rich Campfield’s complaint, click here.