Two Philadelphia Personal Injury Law Firms’ Lanham Act Dispute: Remember This Case

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Two Philadelphia Personal Injury Law Firms’ Lanham Act Dispute: Remember This Case

This case Larry Pitt & Assocs. v. Lundy Law LLP got everything. At one point or the other it had virtually every possible legal issue: from a Sherman Act antitrust claim to abuse of process and tortious interference claims (in violation of Pennsylvania’s Dragonetti Act). At least two tribunals have been involved: a federal district court and Trademark Trial and Appeal Board of the U.S. Patent and Trademark Office (TTAB). Would you be surprised to learn that one of the two firms already sued its lawyer for legal malpractice? Incidentally, please read a legal disclaimer at the bottom of this post.

This blog only will address a Lanham Act claim of false advertising. The federal Lanham Act prohibits the “false or misleading description of fact, or false or misleading representation of fact, which … in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities…” 15 U.S.C. §1125(a)(1).

The facts are relatively straightforward. One prominent and successful personal injury firm sued its crosstown competitor. It all started in 2013 when Lundy Law LLP accused Larry Pitt & Associates (“Pitt”) of trademark infringement. Pitt was using an advertising slogan “Remember this Number.” Lundy Law alleged that the slogan was too close (and confusingly similar) to its heavily advertised in a tri-state area slogan “Remember this Name.”

Lundy Law dropped its trademark infringement against Pitt relatively quickly. However, Pitt thought the timing of such voluntary dismissal was too suspicious. Lundy Law withdrew its lawsuit the next day it learned that Pitt’s insurance would cover its defense. In turn, Pitt filed a lawsuit accusing Lundy Law of malicious prosecution, and false and misleading advertisements in violation of the Lanham Act, among other things.

The lawsuit has been very contentious and involved significant motion practice. After two motions to dismiss and two amended complaints, only a handful of claims survived.

On February 15, 2018, U.S. District Judge Cynthia M. Rufe dismissed the remaining claims of Pitt’s lawsuit, specifically its Lanham Act’s false advertising claims. 2018 BL 52844, E.D. Pa., No. 13-2398, 2/15/18.

In Pennsylvania an attorney or a law firm is permitted to refer a case to another attorney or law firm and earn a portion of the clients’ fees without performing any work on the case, so long as the arrangement is disclosed to the client and the fee is not excessive. However, a law firm may not actively advertise in its own name for certain categories of cases for the purpose of referring those cases to other law firm

Pitt’s false advertising claim under the Lanham Act and deceptive marketing claim under Pennsylvania unfair competition law are both based on Lundy Law’s extensive advertisements for workers’ compensation and social security cases, which Lundy Law agreed to refer to certain other law firms in exchange for referral fees.

The facts differed somewhat as to workers’ compensation cases and social security cases.

Initially, Lundy Law indeed did not handle workers compensation cases itself. However, around in 2009 Lundy Law added an attorney (Leonard Cohen) the sole proprietor of one of these firms (the Law Offices of Lenard A. Cohen, P.C. or “LOLAC”) as “of counsel.” Lundy maintained that LOLAC’s sole proprietor, Lenard Cohen, had been “of counsel” to Lundy since 2009, and Lundy could therefore truthfully advertise Mr. Cohen’s legal services as those of an attorney at Lundy Law.

Lundy’s position relied on the following facts, which Pitt has not disputed:

⦁ In 2009, Mr. Cohen was added to Lundy Law’s professional liability insurance as “Of Counsel” to the firm.

⦁ Mr. Cohen currently carries Lundy Law business cards, maintains a Lundy Law email address, appears on Lundy Law’s website, and sometimes attends Lundy Law attorney meetings and marketing meetings.

⦁ Since September 2012, LOLAC has been located within the office space rented by Lundy Law.

Pitt nonetheless contested Mr. Cohen’s status as “Of Counsel” to Lundy. Specifically, Pitt has cited to evidence that LOLAC remains an independent law firm in terms of ownership and control, that LOLAC maintains separate fax and telephone numbers from Lundy Law and pays rent to Lundy Law, that neither Mr. Cohen, LOLAC’s associate, nor LOLAC’s staff are W-2 employees of Lundy Law, and that Mr. Cohen does not identify himself as “of counsel” to Lundy Law on LOLAC’s website, on the Pennsylvania Bar Association’s listing of Workers’ Compensation Lawyers, on social media, or in entering his appearances.

Pitt’s arguments did not convince the Court. The Court noted that there was no indication that Lundy and Mr. Cohen adopted the “of counsel” title solely for this litigation because both the title and the relationship had existed since 2009. Under these circumstances, Pitt has not met its burden of raising a genuine question of fact as to whether Mr. Cohen is an attorney at Lundy Law, or even if he is not, whether the particular differences between Lundy Law’s relationship with Lenard Cohen and a law firm’s relationship with its own attorneys would be material to potential clients. Accordingly, Pitt has not provided sufficient evidence to support its Lanham Act claim based on Lundy’s workers’ compensation advertisements.

Pitt’s allegations concerning the falsity of Lundy Law’s social security advertisements were somewhat stronger. The parties stipulated that between November 8, 2008 and October 31, 2013, Lundy Law referred all of its potential social security cases directly to other law firms. In 2013, Lundy Law engaged a social security attorney to handle social security cases at Lundy. Because Pitt demanded damages for allegedly false advertisements in 2008-2013, the Court wanted to see a causal link between Pitt’s alleged injury and Lundy’s alleged misrepresentations by showing that Lundy’s statements actually deceived and influenced consumers. Pitt failed to establish such a causal link. In particular, the Court noted, Pitt has provided no surveys or consumer testimony that show clients would have responded differently to Lundy Law’s advertisements if they omitted references to its social security practice or expressly disclosed that Lundy Law would refer rather than handle social security cases.

The Court granted Lundy Law’s motion for summary judgment with respect to Pitt’s Lanham Act claim in its entirety.

While Lundy Law seemingly may be tempted to celebrate its legal victory, this victory may be somewhat premature. First, there is still a pending TTAB case. Larry Pitt & Associates, P.C. v. Lundy Law, LLP, File No: 91210158. The TTAB case focuses on a completely different aspect: whether the slogan REMEMBER THIS NAME can function as a service mark. Second, Judge Rufe ended her opinion with a not-so-subtle suggestion to Pitt: consider filing an ethical claim with the state attorney disciplinary board:

The Court is aware that its decision today denies a plaintiff relief despite evidence of years of wrong-doing by the defendants. There is every indication here that a prominent personal injury law firm in Philadelphia essentially rented out its name in exchange for referral fees and that its managing partner lied on television that his firm handled social security disability claims when it did not. But when a plaintiff fails to meet its burden of establishing causation of harm or likelihood of future violations, the Lanham Act and Pennsylvania law do not permit a court to grant relief based solely on a defendant’s past misrepresentations. Nonetheless, courts are not the only institutions to review deceptive attorney advertising; nor are they typically the most appropriate or efficient forum. In many instances, a complaint to the state attorney disciplinary boards may be the most effective means for quickly ending and sanctioning plainly unethical conduct. Thus, the Court’s decision should not be read to condone or excuse Defendants’ alleged actions, but should instead serve as a reminder of the burden that plaintiffs bear when they choose to seek relief against their competitors in court.

Somehow it is doubtful that Pitt will remain content with the recent decision and not take further action hinted at by the federal judge. Therefore, stay tuned for further developments.

Text © 2018 Maxim A. Voltchenko

* This piece is not intended to be a review of U.S. case law. This posting may not necessarily represent the views of the author’s employing law firm. Although every effort has been made to verify the accuracy of items in the Sputnik Blog®, readers are urged to check independently on matters of specific concern or interest.