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Nestlé Purina Petcare Co. v. Blue Buffalo Co. Ltd.

United States District Court, E.D. Missouri, Eastern Division

April 20, 2015

NESTLÉ PURINA PETCARE COMPANY, Plaintiff/Counterclaim Defendant,
v.
THE BLUE BUFFALO COMPANY LTD., Defendant/Counterclaim Plaintiff.
v.
BLUE STATE DIGITAL, INC., PRCG/HAGGERTY LLC and JOHN DOES 1-8 Counterclaim Defendants.

MEMORANDUM AND ORDER

RODNEY W. SIPPEL, District Judge.

This matter is before me on Counterclaim Defendants Blue State Digital, Inc. and PRCG/Haggerty LLC's Motions to Dismiss Counterclaim Plaintiff Blue Buffalo Company Ltd. ("Blue Buffalo")'s Second Amended Counterclaim. Blue Buffalo opposes these motions and the issues are fully briefed. For the reasons set forth below, I will grant in part and deny in part the Counterclaim Defendants' motions to dismiss.

Procedural Background

On May 6, 2014, Nestle Purina PetCare Company ("Purina") filed suit against Blue Buffalo. Purina's complaint primarily alleges that Blue Buffalo has engaged in false and misleading advertising because its dog food products, which are advertised as being "grain free" and containing "no chicken by-product, " actually do contain those ingredients. After it filed the complaint, Purina issued press releases about the suit and launched a website, www.PetFoodHonesty.com (the "Honesty website"), where it openly criticizes Blue Buffalo for its alleged false advertising. Blue Buffalo denies that its products contain chicken by-product meal or grain, or otherwise fail to meet the expectations of its customers. Blue Buffalo also asserts that the "independent testing" Purina relies upon for its claims against Blue Buffalo is unreliable.

On May 14, 2014, Blue Buffalo filed an action against Purina, alleging that Purina has engaged in false advertising and defamed Blue Buffalo through the various public statements it made upon its filing of this suit. See Blue Buffalo v. Nestle Purina PetCare Company, et al., 4:14 cv 920 SNLJ. In addition to Purina, Blue Buffalo named as defendants John Does 1-10, the advertising agencies that assisted Purina with its challenged public statements and the Honesty website. On June 2, 2014, Blue Buffalo answered Purina's Amended Complaint in this action, and reasserted the same false advertising and defamation claims against Purina by reference to its Complaint in 4:14 cv 920 SNLJ. On June 4, 2014, I consolidated Blue Buffalo's related action with this case, and its claims against Purina and the John Doe advertising agencies became counterclaims. See Court Order of June 4, 2014 [#22].

On September 19, 2015, Blue Buffalo sought leave to amend its complaint and add as counterclaim defendants Blue State Digital and PRCG/Haggerty LLC ("Advertising Defendants"). On November 17, 2014, I granted Blue Buffalo's motion to amend its counterclaim and add the Advertising Defendants. Blue Buffalo filed a First Amended Counterclaim on November 19, 2014. A Second Amended Counterclaim ("SAC") was filed on December 4, 2014. See Answer to Second Amended Complaint and Second Amended Counterclaim [#113].

On January 16, 2015, PRCG/Haggerty and Blue State Digital each filed motions to dismiss Blue Buffalo's SAC for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6). Blue State Digital incorporates and adopts PRCG/Haggerty's briefs in support of its own motion to dismiss, and both Advertising Defendants assert substantially similar arguments in their briefs. Accordingly, for purposes of this Memorandum and Order, I will address both motions together, distinguishing the counterclaim defendants where appropriate.

Factual Background

Blue Buffalo's SAC alleges that Purina and the Advertising Defendants engaged in false and misleading advertising in violation of Section 43(a) of the Lanham Trademark Act of 1946 ("Lanham Act"), 15 U.S.C. § 1125(a). The SAC also alleges violations of several related state law claims.

Blue Buffalo's counterclaims are based on Purina's advertising campaign and public statements following the filing of this suit. Specifically, Blue Buffalo claims that Purina has launched a "false and disparaging advertising campaign" against Blue Buffalo. The SAC alleges that PRCG/Haggerty "designed and built the advertising campaign." SAC at ¶ 12. "The centerpiece of Nestle Purina's campaign is a website (the "Honesty website"), designed and built by PRCG/Haggerty, that was launched on or about May 6, 2014." Id. at ¶ 33. "The home page of the Honesty website is styled as an open letter to pet owners from Nestle Purina, describing supposedly deceptive marketing practices by Blue Buffalo." Id. at ¶ 34.

For example, Blue Buffalo alleges that the following statements on the home page of the Honesty website are false or misleading statements regarding Blue Buffalo's products and marketing practices:

(a) "[T]esting conducted by an independent laboratory revealed that several of Blue Buffalo's top-selling Life Protection' pet food products actually contain substantial amounts of poultry by-product meal."
(b) "Independent testing also shows that Blue Buffalo's LifeSource Bits' contain poultry by-product meal and corn."
(c) "[S]everal Blue Buffalo products promoted as grain-free' actually contain rice hulls, despite Blue Buffalo stating on its website that its grain-free' products will free your pet from the grains and glutens that cause allergic reactions in some dogs.'"
(d) "Blue Buffalo is not being honest about the ingredients in its pet food."
(e) "99% of Purina pet food sold in the United States is manufactured at Purina's own plants in the United States. By contrast, 100% of Blue Buffalo pet foods is outsourced and made by third-party manufacturers."

Id.

Blue Buffalo also alleges that Purina promoted the Honesty website on its facebook page and on Twitter. On Purina's facebook page, for example, Purina allegedly posted links to the Honesty website accompanied by statements such as, "Not all pet food companies are honest about the ingredients they use. Get the facts at www.Puri.na.Honesty." Id. at ¶ 37 (hyperlink truncated). On Purina's Twitter account, Purina allegedly tweeted links to the Honesty website with text such as, "Is your pet food company being honest about its ingredients? Find out at Puri.na.Honesty." Id. at ¶ 38. (hyperlink truncated). According to the SAC, Blue State Digital "developed the content for these advertisements on Nestle Purina's Facebook and Twitter accounts and arranged for social media posts relating to PetFoodHonesty.com to be directed to the social media pages of pet food consumers on Facebook and Twitter." Id. at ¶ 39.

Blue Buffalo alleges that Purina also promotes the Honesty website through certain Google advertisements, and that Blue State Digital "developed the content of advertisements challenged herein" and "arranged for these links to PetFoodHonesty.com to appear when Google.com users search for terms related to Blue Buffalo." Id. at ¶ 13, 43. Blue Buffalo claims that the Google links to the Honesty website were accompanied by text such as, "A dog food company is lying about its ingredients. Learn the facts." Id. at 43. The SAC pleads that "[b]ecause these statements appear alongside the search results for Blue Buffalo and its products, they assert that Blue Buffalo is lying about the ingredients in its products." Id.

Legal standard

In ruling on a motion to dismiss, I must accept as true all factual allegations in the complaint and view them in the light most favorable to the plaintiff. Fed.R.Civ.P. (12)(b)(6); Kohl v. Casson, 5 F.3d 1141, 1148 (8th Cir. 1993). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. V. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678.

Unlike state courts which often require detailed statements of fact in a petition, the federal rules require only notice pleading. Under Fed.R.Civ.P. 8(a):

[A] complaint must include only a short and plain statement of the claim showing that the pleader is entitled to relief. Such a statement must simply give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests. This simplified notice pleading standard relies on liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims.

Romine v. Acxiom Corp., 296 F.3d 701, 711 ...


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