Transfresh Corp. v. Ganzerla & Assoc., Inc.

862 F. Supp. 2d 1009, 2012 WL 994674, 2012 U.S. Dist. LEXIS 40169
CourtDistrict Court, N.D. California
DecidedMarch 23, 2012
DocketNo. C-11-06348 JCS
StatusPublished
Cited by10 cases

This text of 862 F. Supp. 2d 1009 (Transfresh Corp. v. Ganzerla & Assoc., Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Transfresh Corp. v. Ganzerla & Assoc., Inc., 862 F. Supp. 2d 1009, 2012 WL 994674, 2012 U.S. Dist. LEXIS 40169 (N.D. Cal. 2012).

Opinion

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS COMPLAINT PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 12(b)(6) [Docket No. 10]

JOSEPH C. SPERO, United States Magistrate Judge.

I. INTRODUCTION

Plaintiff TransFresh Corp. (“Trans-Fresh”) brings this action for injunctive relief and other remedies under the Lanham Act, 15 U.S.C. §§ 1051 et seq., and under California state law based on alleged false advertising and unfair competition on the part of Defendant PeakFresh USA (“PeakFresh”) in connection with statements and a video posted on PeakFresh’s website. According to TransFresh, the video purports to compare PeakFresh’s system for packaging fresh produce to maintain freshness during transport with that of TransFresh and misleadingly depicts PeakFresh’s as being more environmentally friendly than TransFresh’s. TransFresh further seeks a declaratory judgment, pursuant to 28 U.S.C. § 2201, that it has not made false and misleading statements to the public or its customers about PeakFresh’s products and services. Defendants have filed a Motion to Dismiss Complaint Pursuant to Federal Rules of Civil Procedure 12(b)(6) (“the Motion”). The parties have consented to the jurisdiction of a United States magistrate judge pursuant to 28 U.S.C. § 636(c).

The Court finds that the Motion is suitable for determination without oral argument, pursuant to Civil Local Rule 7-l(b). Accordingly, the hearing set for March 30, 2012 is vacated. The Case Management Conference scheduled for March 30, 2012 at 9:30 a.m. is moved to 1:30 p.m. on the same day. For the reasons stated below, the Motion is GRANTED in part and DENIED in part.

II. BACKGROUND

A. The Complaint1

Plaintiff TransFresh is a Delaware corporation whose principal place of business is Salinas, California. Complaint, ¶ 7. Plaintiff markets products and services to [1013]*1013maintain the freshness of produce during transport using its proprietary technology, under the trademark TECTROL. Id, ¶ 8. According to TransFresh, it is the industry leader and has provided goods and services in the field for over four decades. Id., ¶ 8

Part of Plaintiffs technology uses “a relatively small amount of CO2 in connection with food products” to preserve the freshness of the produce that is being transported. Id, ¶ 9. “Plaintiff recovers CO2 from processes where it would otherwise be released into the atmosphere.” Id CO2 as a food additive is on the FDA’s Generally Recognized as Safe list. Id., 1110.

Defendant Greg Ganzerla is an individual and is alleged to be the principal of Defendant Ganzerla & Associates, Inc., also doing business as PeakFresh. Id, ¶ 12. PeakFresh also markets products and services to enhance the freshness of produce and as such, is a direct competitor of TransFresh. Id, ¶ 13.

Defendants operate a website located at Avww.PeakFreshusa.com (the “Website”) on which they have posted a video (the “Video”) that “purports to discuss preserving the environment and to explore ‘one promising example’ of working in greater harmony with the environment,” namely, Defendants’ PeakFresh system. Id, ¶¶ 14, 16. “TransFresh alleges, on information and belief, that Defendants solicited production of the Video, and/or had substantial input of information to the Video, and/or had substantial control over the information to be included in the Video, and/or assisted in the filming of the Video.” Id, ¶ 15. TransFresh alleges that the Video “features [its] equipment, [which is] readily recognizable by consumers of each party’s goods and services, to illustrate what the Video claims are harmful practices in Plaintiffs use of CO2 in its fresh produce pallet covers.” Id, ¶ 16. TransFresh further alleges that the Video compares the CO2 released from Plaintiffs process to car exhaust, even though car exhaust contains far more CO2, as well as damaging components absent in Plaintiffs process, including ozone, nitrogen oxide, hydrocarbons, carbon monoxide, and particulates. Id, ¶ 18.

According to TransFresh, the Video “omits to state that a significant amount of the CO2 released has been produced by the berries themselves [and] [t]he net amount of CO2 released when opening Plaintiffs produce pallet is only marginally greater than that created by produce using the PeakFresh method.” Id, ¶ 19. Further, TransFresh alleges, the Video and the Website use the pejorative term “gassing” when referring to Plaintiffs TECTROL process. Id, ¶ 20. Plaintiff alleges that the Video’s claims that Plaintiffs products and services introduce an unhealthy amount of CO2 into the atmosphere are unsubstantiated and false on their face. Id, ¶ 29. Conversely, TransFresh alleges that Defendants’ claims that their method is “green” and more environmentally responsible than alternative methods are unsubstantiated and untrue. Id, ¶¶ 31-34.

TransFresh alleges that the intended goal of the Video is to denigrate Plaintiff and its goods and services and to destroy its reputation among actual and prospective customers as well as the general public. Id, ¶20. TransFresh also alleges that the Video makes many statements that are “false on their face, misleading, and/or fail to disclose information needed [1014]*1014to prevent the statements from being misleading.” Id., ¶2 1. For example, Trans-Fresh alleges that Defendants falsely claim in the Video, as well as on its Website, that PeakFresh uses modified atmosphere packaging (“MAP”); according to TransFresh, the Video shows pallets of produce, but PeakFresh’s pallet cover system is not, in fact, a MAP system. Id., ¶ 22-23. “MAP packaging is a food-packaging method in which the proportions of carbon dioxide, nitrogen, and oxygen in a sealed container are different from those in the normal (ambient) air to enhance the food’s shelf life.” Id., ¶ 23. However, PeakFresh’s bag is open at the bottom and does not “significantly modify the ambient air.” Id.

TransFresh also alleges that PeakFresh has sent prospective strawberry shipper customers a sample of a PeakFresh consumer bag, which is sealable, and told them that they can test its pallet cover system by putting some strawberries inside the sealable bag and putting it in the customer’s home refrigerator. Id. ¶ 24. “PeakFresh then states or implies that the PeakFresh unsealed pallet cover system will work as well as the sealed bag on strawberries, a statement which has no foundation.” Id. According to Plaintiff, Defendants have also falsely claimed that strawberries shipped in a PeakFresh pallet bag have a shelf life of at least 20 days but has provided no substantiation for this claim. Id., ¶ 44. In addition, TransFresh alleges that Defendants have falsely claimed that Plaintiffs goods and services are not certified as organic. Id., ¶45.

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862 F. Supp. 2d 1009, 2012 WL 994674, 2012 U.S. Dist. LEXIS 40169, Counsel Stack Legal Research, https://law.counselstack.com/opinion/transfresh-corp-v-ganzerla-assoc-inc-cand-2012.