Vitamins Online, Inc. v. HeartWise, Inc.

207 F. Supp. 3d 1233, 2016 U.S. Dist. LEXIS 127522, 2016 WL 5106990
CourtDistrict Court, D. Utah
DecidedSeptember 19, 2016
DocketCase No. 2:13-CV-982-DAK
StatusPublished
Cited by2 cases

This text of 207 F. Supp. 3d 1233 (Vitamins Online, Inc. v. HeartWise, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Utah primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vitamins Online, Inc. v. HeartWise, Inc., 207 F. Supp. 3d 1233, 2016 U.S. Dist. LEXIS 127522, 2016 WL 5106990 (D. Utah 2016).

Opinion

MEMORANDUM DECISION AND ORDER

DALE A. KIMBALL, United States District Judge

This matter is before the court on the Motion for Partial Summary Judgment filed by Defendant HeartWise, Inc. d/b/a NatureWise (“NatureWise”), A hearing on the matter was held on August 29, 2016. At the hearing, Vitamins Online was represented by Chad Nydegger. NatureWise was represented by Brian Johnson, William B. Ingram, and Alan R. Houston. Before the hearing, the court carefully considered the memoranda and other materials submitted by the parties. Since taking the matter under advisement, the court has further considered the law and facts relating to the matter. Now being fully advised, the court renders the following Memorandum Decision and Order.

BACKGROUND

Plaintiff Vitamins Online, Inc. (“Vitamins Online”) is a Utah-based company that manufactures and sells a variety of dietary supplements online, including on Amazon.com (“Amazon”), under the brand name NutriGold.. Defendant HeartWise, Inc. d/b/a NatureWise (“NatureWise”) also sells .dietary supplements, including on Amazon. For purposes of this suit, Vitamins Online and NatureWise sell two competing dietary supplements: one that contains an extract of garcinia cambogia and one that contains an extract of green coffee.

Vitamins Online began selling its Nutri-Gold Garcinia Cambogia and NutriGold [1236]*1236Green Coffee products on Amazon before 2010. Before 2010, there was little demand and competition on Amazon for these products because they were not well known to consumers.

After Dr. Mehmet Oz, the famous television personality known as “Dr. Oz,” showcased dietary supplements containing gar-cinia cambogia and green coffee extract for weight loss purposes on his television show, “The Dr. Oz Show,” in 2011 and 2012, the demand for those dietary supplements increased. With the increase in demand, other companies, including Nature-Wise, began to offer competing products to Vitamins Online’s products. NatureWise advertised its products as having the qualities and characteristics that Dr. Oz recommended.

After entering the green coffee and gar-cinia cambogia markets on Amazon, Na-tureWise began a practice of having its employees vote on the helpfulness of some of the reviews on its product pages. Amazon lists the reviews on its product pages using a complex algorithm that takes into account the helpfulness of the review based on the voting. By having its employees vote that positive reviews were helpful and negative reviews were unhelpful, Na-tureWise increased the likelihood that potential customers would see positive reviews of its products first and negative reviews last. NatureWise also encouraged customers to post or repost their positive reviews on Amazon by offering them free products or gifts cards. NatureWise would review and, in some cases, make minor edits to the reviews before asking the customers to post them on Amazon. The number of positive reviews a product receives on Amazon affects that product’s position in results for product searches.

On October 28, 2013, Vitamins Online filed a Complaint against NatureWise in this court claiming unfair competition under the Lanham Act and the common law for false advertising. The Complaint included a claim for unfair competition under the Lanham Act for unfairly competing with Vitamins Online by manipulating Amazon’s customer review system (“Amazon Review Claims”). Both Vitamins Online and NatureWise filed motions for summary judgment. The court denied both the motions but denied the Amazon Review Claims portion of NatureWise’s motion without prejudice. Instead of granting the Amazon Review Claims portion of the summary judgment motion, the court granted Vitamins Online’s 56(d) motion to conduct additional discovery. Once the additional discovery was complete, Nature-Wise filed a new motion for summary judgment to dismiss Vitamins Online’s Amazon Review Claims.

DISCUSSION

NatureWise filed a summary judgment motion to renew its arguments that the court should dismiss Vitamins Online’s Amazon Review Claims because Nature-Wise argues that its actions do not qualify as false or misleading representations of fact in commercial advertising or promotion under the Lanham Act.

STANDARD OF REVIEW

“Summary judgment is appropriate if the pleadings, depositions, other discovery materials, and affidavits demonstrate the absence of a genuine issue of material fact and that the moving party is entitled to judgment as a matter of law.” Sally Beauty Co., Inc. v. Beautyco, Inc., 304 F.3d 964, 971 (10th Cir. 2002) (citing Fed. R. Civ. P. 56(c)). “An issue is genuine ‘if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.’ ” Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).

[1237]*1237The initial burden is on the moving party to show that “there is an absence of evidence to support the nonmoving party’s case.” Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the movant has met its initial burden of demonstrating the absence of a genuine issue of material fact, “the burden shifts to the nonmoving party to go beyond the pleadings and set forth specific facts showing that there is a genuine issue for trial.” Sally Beauty Co., 304 F.3d at 971 (citing Anderson, 477 U.S. at 248, 106 S.Ct. 2505). The Court must “construe the evidence and the reasonable inferences drawn therefrom in the light most favorable to the nonmovant,” id. at 972 (citation omitted), but conclusory statements and attorney arguments submitted by the non-moving party do not create a genuine issue of material fact, see Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 671-72 (10th Cir. 1998).

AMAZON REVIEW CLAIMS UNDER THE LANHAM ACT

NatureWise argues that its actions do not qualify as false advertising under the Lanham Act for two main reasons. First, NatureWise argues that it did not make any false or misleading statements in commerce. Second, NatureWise argues that, to the extent that false or misleading statements can be attributed to NatureWise, Vitamins Online has not shown that the statements have been viewed by a sufficient number of people to constitute commercial advertising or promotion. The court will first analyze the terms of the statute to determine whether Nature-Wise’s conduct is actionable under the Lanham Act. The court will then analyze relevant caselaw.

a. Statutory Interpretation

“In interpreting statutes, [the court] begin[s] with the relevant language. When the terms of a statute are unambiguous, [the court’s] inquiry is complete, except in rare and exceptional circumstances. In interpreting the relevant language, however, [the court] look[s] to the provisions of the whole law, and to its object and policy.” Aulston v. United States, 915 F.2d 584, 589 (10th Cir. 1990) (citations omitted).

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207 F. Supp. 3d 1233, 2016 U.S. Dist. LEXIS 127522, 2016 WL 5106990, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vitamins-online-inc-v-heartwise-inc-utd-2016.