U-Haul International, Inc. v. Jartran, Inc.

522 F. Supp. 1238, 212 U.S.P.Q. (BNA) 49, 1981 U.S. Dist. LEXIS 13657
CourtDistrict Court, D. Arizona
DecidedFebruary 17, 1981
DocketCiv. 80-454 PHX-EHC
StatusPublished
Cited by38 cases

This text of 522 F. Supp. 1238 (U-Haul International, Inc. v. Jartran, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
U-Haul International, Inc. v. Jartran, Inc., 522 F. Supp. 1238, 212 U.S.P.Q. (BNA) 49, 1981 U.S. Dist. LEXIS 13657 (D. Ariz. 1981).

Opinion

MEMORANDUM OPINION AND ORDER

CARROLL, District Judge.

I am called on to decide whether a stipulated preliminary injunction preventing certain cost-comparison advertising should be extended to cover allegedly false and deceptive advertising involving equipment qualities of the advertiser or claimed comparisons with a competitor.

For reasons set forth in this Opinion, an Amended Preliminary Injunction will issue, although not to the extent sought by Plaintiff.

THE PARTIES

Plaintiff U-Haul International, Inc., (U-Haul) brought this action against Jartran, Inc., (Jartran), JAR Corporation (JAR), James A. Ryder (Ryder) and Sandra C. Tinsley, Inc., (Tinsley) to enjoin continued publication of advertisements alleged to make false and misleading statements and comparisons of equipment leased by U-Haul and Jartran, and to recover damages alleged to result from such publications.

U-Haul, an Oregon corporation, has its principal place of business in Phoenix, Arizona. U-Haul provides accounting and coordination activities for over 90 rental companies which are incorporated in various states as wholly owned subsidiaries of U-Haul. Each of these local companies contracts with independent entities to act as local agents in renting U-Haul equipment to the public. These operations in totality are referred to as the U-Haul System. U-Haul’s business activities are directed towards renting equipment to persons interested in moving household goods and personal effects. Equipment includes trucks and trailers of various sizes, and related items such as trailer hook-up accessories and items to facilitate transportation of household goods. In the 1979-80 period, *1241 U-Haul’s annual gross revenues were approaching $400,000,000, based on more than 5,000,000 annual rental transactions. The U-Haul System included approximately 100,000 trailers and 60,000 trucks. On a national basis, prior to the advent of Jartran, U-Haul handled virtually 100% of the one-way trailer rentals and about 80% of the one-way and local truck rentals of comparably sized units.

James A. Ryder founded Ryder System in the 1930s, and by 1978 that company (or related companies) was involved in rental and leasing of large trucks and trailers of the type used by freight carriers and was also engaged in specialized contract carrier services. In 1978, Ryder terminated all relationships with Ryder System, and he then formed Jartran to lease large truck and trailer units to franchisees, with Jartran to service the units. This plan and related business did not develop rapidly and in 1979, Jartran (with Ryder as Chairman and Chief Executive Officer) decided to go into the business of renting trucks and trailers in the consumer rental market — the same market in which U-Haul operated. Jartran’s initial advertisements starting in August, 1979, involved rental of trucks. Jartran acquired its first trailers in early 1980, and ads mentioning trailers appeared in March, 1980. By late 1980, Jartran had approximately 2,100 dealers with 10,000 trucks and 19,000 trailers in its consumer rental division. In 1979, Jartran had gross revenues of approximately $5,000,000, and it was projecting $100,000,000 in 1980, with the majority of revenues coming from the consumer rental division. Jartran’s advertising budget in 1980 was $6,000,000.

JAR owns 97% of Jartran’s stock and Ryder owns approximately 87% of JAR’s stock.

Sandra C. Tinsley, Inc., is the advertising agency that worked with Jartran in its consumer rental market advertising program— which is at issue in this proceeding.

NATURE OF THE ACTION AND JURISDICTION

U-HauPs First Amended Complaint alleges five claims:

(1) violation of the Lanham Act, Section 43(a) (15 U.S.C. § 1125(a));

(2) violation of the Lanham Act, Section 44 (15 U.S.C. § 1126);

• (3) a common law claim for injurious falsehood;

(4) a common law claim for interference with prospective advantage; and

(5) a claim against Ryder that he is personally liable for damages sustained by Plaintiff due to the claimed false and misleading advertisements.

Jurisdiction is conferred on this Court by 15 U.S.C. § 1121 and 28 U.S.C. § 1338(a). The Court has jurisdiction over the pendent claims by reason of 28 U.S.C. § 1338(b), as well as... diversity jurisdiction under 28 U.S.C. § 1332.

MOTION FOR PRELIMINARY INJUNCTION

U-Haul moved for a Preliminary Injunction, pending final disposition of the action, to enjoin defendants from:

1. Continuing false advertising of prices offered by Jartran for its goods and services, either alone or in comparison with prices charged by U-Haul;
2. Continuing false advertising concerning the performance, safety, stability, design, aerodynamics, or fuel efficiency of the equipment offered by Jartran, either alone or in comparison with the equipment offered by U-Haul;
3. Utilization of false and deceptive advertising and/or any other verbal or written disparagements of the U-Haul System or its goods and services, which interfere with the U-Haul System’s contractual relationships with its dealers and/or the general public;
4. From engaging in such other and further conduct, as the Court may determine to be unjust and improper.

Prior to hearing, the parties stipulated to entry of a Preliminary Injunction, with respect to price advertising, as follows:

*1242 ORDERED that Jartran, Inc., its officers, agents, servants, employees and all those persons in active concert or participation with it, be and are hereby enjoined until the entry of a final order in this action from publishing any advertisement that (1) purports to state both the prices charged by U-Haul and those charged by Jartran and/or (2) states that Jartran saves consumers money by reason of the prices charged by Jartran while mentioning, displaying, or otherwise directly referring to U-Haul or any of its equipment.

U-Haul withdrew its request for a preliminary injunction related to dealer-contractual relationships, reserving its right to pursue this claim at trial on the merits, and accordingly, so-called dealer ads are not an issue at this time.

The preliminary injunction hearing commenced on December 16, 1980, and extended over all or parts of thirteen days, ending January 20, 1981, with more than 2,600 transcript pages of evidence and argument, and in excess of 300 exhibits. Twenty-four witnesses testified, either personally, or by way of deposition (and in several instances both ways).

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Bluebook (online)
522 F. Supp. 1238, 212 U.S.P.Q. (BNA) 49, 1981 U.S. Dist. LEXIS 13657, Counsel Stack Legal Research, https://law.counselstack.com/opinion/u-haul-international-inc-v-jartran-inc-azd-1981.