A U.S. District Court judge ruled September 30 on a motion made by Safelite Group, Inc., to dismiss a case brought against the company by Ultra Bond, Inc., giving partial victories to each side and a case that will move forward in part.
Writing an opinion for the U.S. District Court’s Southern District of Ohio, Judge Michael H. Watson denied portions of Safelite’s motion to dismiss “with respect to specific statements on Safelite’s website” and granted portions of the motion to dismiss having to do with allegations made by Ultra Bond in its response to Safelite’s motion to dismiss the case.
“Only the allegations regarding Safelite’s statements in videos posted to its website remain pending in this litigation,” Watson wrote.
Plaintiff Rich Campfield, founder of Ultra Bond in Grand Junction, Colo., filed a lawsuit in August 2015 alleging Safelite has 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.” Campfield’s company has offered long-crack repair products and services since 1989.
“[S]afelite falsely tells consumers that their windshield must be replaced when a crack is longer than six inches” alleges 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.”
The judge disagreed, saying Ultra Bond’s contention does not meet the standard of misrepresentation required by law.
The original complaint also alleged 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 that this argument does not fall under 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.”
The judge agreed with Safelite on this point, stating Safelite’s scripted responses to policyholder questions do not qualify as “commercial advertising or promotion.”
However, the court agreed with Ultra Bond’s contention that some videos used by Safelite on its website do meet the standard of “commercial advertising or promotion.”
“Safelite’s argument is not compelling,” Watson wrote. “Ultra Bond’s allegations that the website is or was ‘viewable to retail and insurance companies alike’ and that Safelite’s statements have substantially impacted the long crack repair market, viewed in Ultra Bond’s favor, are sufficient to support the inference at this stage of the litigation that the statements at issue were widely disseminated to the relevant purchasing public.”
Watson also struck down Safelite’s claim that Ultra Bond’s allegations “lack statutory standing to bring its claim.”
Instead, Watson ruled, “Ultra Bond’s allegations regarding its lost sales from current products bring it within the purview of the statute. Safelite’s arguments regarding statutory standing therefore do not provide a basis for dismissal.”
The case will now move forward to a discovery phase and then on to determination of a final ruling on the remaining point, i.e., Safelite’s website videos.
Campfield responded to an e-mail provided today.
“We are happy that the court has recognized falsity in Safelite’s advertisements stating that, ‘cracks longer than a dollar-bill (or six inches) cannot be repaired.’” Campfield wrote. “We look forward to discovery and to getting on with the fight.”
Safelite spokesperson Melina Metzger said Safelite does not comment on ongoing cases.
To read a copy of Campfield’s complaint, click here.
To read Safelite’s motion to dismiss, click here.