package highly sensitive electronics and that's been true since february of two thousand and ten but it's also true today to qualify the product must undergo a rigorous testing by the department of the navy which has extremely high safety and quality standards and the reason is because if something is packaged improperly then it may degrade and if it degrades there are going to be all kinds of issues in terms of performance so it's a very very specific and highly qualified product could i just ask you a question how does the evidence that came out here provide a trial demonstrated ok his claims were literally false well literal falsity comes from a number of areas first of all when they say that it meets the standard they said here's what they said the static shielding bags meet the electrostatic requirements of m y o b eight one seven  type three that's fobs in the reason it's false is because the only entity that can make that determination is the department of the navy that's why they have two steps that are taken the first step that is taken is by an entity that decides it wants to submit its material to get military specification and they go to the website and the website says here all this test and here are all the standards here all the qualifications you need to meet once you think you have met those qualifications then you must submit it to the government to the department of the navy in this case the evidence is absolutely clear that that never happened they didn't do independent testing on the part of ok they didn't submit anything to the government and the only one that did was cal tech which is why it has the designation on who was a burden of proof well i would say that the burden of proof which you're making a representation has to be on the pretty party that's making the representation if you want to look at literal falsity and you want to say whether or not literal falsity applies you say ok let's look at the context in the case of say literal falsity can be done in two ways one is just by on it's face in the other is the context in the context when you're advertising and you're making statements that it's testimony that the testing was limited to the court but there was no statement as to what the finding was and the reason there was no statement as to what the finding was because it was largely irrelevant and the reason it's irrelevant is because if you're going to make a representation that you're in my own p r f you must by definition have the only thing that is in the record was a statement that was made on cross examination which was whether or not the material had been tested and the answer was that our client sent it to a company called sent away so knowing as a company that manufactures the product for us but there was no result that was ever asked about and it was never followed up again it doesn't really matter because even if sent along said it would have met the standard it wouldn't have met the standard for advertising in his military specification but just so i'm clear on this i see these ads on for trucks all the time on t v and i'll say general motors g m see avalanche truck with military grade truck bed now and i see that i don't think oh i think the military when i really went out and tested that truck that i'm thinking they're saying that it's as good as military grade but there is a denotation when you put m y l p r f in front of it that is the difference if you say it's up to military grade that's a very ambiguous comment but when you use a specification that is identified by the government that is not something that's general that's not something you can say well people have found that we are equal to or better than somebody else because then you can talk about ok is that true or not and you can do comparative testing in this particular instance the only comparative testing that you can do after you decide for yourself that that's the situation is to go to the government and say ok we can grant the two step process for supposed to test for yourself yes and send a small yourself and the reason and then once you've satisfied yourself then you give it to the government and the government the second test that's correct and in this case they testified that the president of the company testified he did absolutely no testing they didn't do any testing they didn't submit anything to the government they just made the meets that particular standard that is correct but the takes the next step which is you cannot make that representation unless the government says it meets the standard or in the evidence was well i'm the spend you  pronged argument one is literally meaning literally in the sense that we always use the term literally or or by clear implication i may not be using the actual template words but somebody reading this how else would they be able to say that it meets that category but specific category without testing isn't there an implication yes and that's your second organ yes and that's why i said you have to look at the context in the context in terms of making a representation is that there's an assumption when you say it means something that you must have done something to determine that it met it and they've done nothing and they've done nothing w hat's the evidence in fact that it does not meet the specification other than we know what i think it's agreed everyone agrees the military does not going to test it but what is the evidence that it in fact did not maybe just magically it was the same they happens he's as fast as carl lewis and these things can happen in the question is answered very directly who's going to make that determination as to whether or not it meets it let me give you an example you just used the example of a runner well if i have a runner back there and i say that my runner can be who's on bolt right the question is let's see it let's test it and so in this particular situation if you say i'm in my own p r if there's only one entity in the entire world that can make that determination as to whether you satisfy the test that's the government but what it doesn't i get back nelson's question of who has the burden of proof here i mean the fact of the matter is if they had the burden of proof to prove that fact was as good maybe they feel the burden of proof but since you're the plaintiffs in this case and you're the one suing is not on you guys know it that's the literal falsity argument the literal falsity argument is it changes the dynamic because once i show that it was literally false as your honor indicated that you're making a statement that you have which implies that you've tested it and you haven't tested it and i say well it's literally false and then they can come back and say well it's not literally false let me show you all the testing we did let us prove that our product is equal to or better than yours where it meets the standards that have been articulated by the government and that's not been the case now but here we have a jury trial judge verdict right and he found that there was no confusion here there was no deception here so what standard of reviewing this under i think the answer is that he reviewed a different standard in the case that he cited was really not standing for the proposition that he said and by the way he's a good judge but judges are not always infallible and so that is definitely true that's where a few other feel but one of the things that he was talking about was the establishment claiming he said his test was we didn't meet the establishment claim and also he looked at the very first test in terms of what the elements are and it says the first element is  end of made a false statement of fact about plaintiff or its own product and he said you never made a false statement so he never went beyond that statement he never went beyond the idea that there's no false statement here and then what i say is you take a look at the cases that they've cited or that have been cited and they talk about that it's within the context you have to look at the entire situation and that's not what the judge did although the judge did acknowledge and this is why his opinion to me is inconsistent he did acknowledge on a number of occasions they were the only ones that have been tested and received approval beat never did a single thing in terms of making any kind of a test number three it got information from its suppliers saying that it met certain standards but they never asked for any information pertaining to the suppliers to what testing it had done and number four that supplier changed its advertising because it recognized by saying it was a myopia or if it was wrong so if you take the context and all of that you get really strange for the lit and i don't see where the judge addressed those issues because he didn't reach them he just looked at it from the first point of view and said not only is there no literal falsity but you plaintive have not done any testing to make a determination to compare and contrast and we're saying under the literal faulty test from the ninth circuit and other circuits that's not a requirement so it is a switching of the burden of proof and that burden of proof then goes to the defense which they couldn't that's what we read and then he goes on for the law correct the findings of fact that were step forth in the beginning of his opinion are the findings of fact the council and i had agreed to before him that was a submitted statement of facts and no there's nothing in there that's wrong so what our concern is is that he made certain findings based upon that that did not take into account the real test for a literal falsity or any of the other underlying factors well when you say he made certain findings that there's a difference between finding conclusions ok well let me say that he for the conclusions that he reached based on those findings in the testimony that were that was presented at trial is where we part company in lester's any other question you want reserved yes found through the evidence it actually was introduced at trial l k plastics purchased the products that it sold the bags that it's all right to suppliers ok those suppliers provided them technical don't believe anybody put it on the product itself or made that the suppliers the two suppliers that l k purchased from made that representation to l k and in reliance on that rep the reputation from their suppliers they in turn put that in some of their promotional literature i know that gets me down to the question why did they put it in their literature or advertis it wasn't intended to mislead it seems to me that it had the obvious purpose of saying that this meets the military standard and why did they say that and you think you know we since i think you said possibly in your brief but i don't  even selling to the people who did defense work you this was a general so this was a sale to the that's a commercial that's correct your honor in the court did find that that l k markets in the commercial industry not in the defense contract and so you you the military standard we're saying and that was isn't centrally intended to mislead no which your honor if it is only misleading if in fact it's knowingly false if they made that statement knowing it was false then yes you could con to know why didn't you make it to begin with that's a question that did not come out at trial that it wasn't a deuce to trial that's something you go in marketing people do some things you don't know but there was no evidence as to where you advertise and you advertise it as meeting in this military standard which it clearly says and you don't know why that's correct your honor it was placed there and it by the advertising and and well that's not an answer that was placed there by the advertising department knows what sells it's designed to suggest to somebody that this meets a military standard and you've you have no way of knowing whether it does or it doesn't and an under the law it doesn't matter if it is in fact true well it doesn't carry the implication it seems to me that that carries the clear implication that that how couldn't you say that it meets this military standard without doing some sort of test that carries the implication that some test was done requirement and and is no requirement if you're not making the representation i'm i'm getting what i'm suggesting is that there's a clear implication that the test was made because i was the determined that but that begs the question your honor and this case on the false advertising claim calque x had the burden of proof to show that that claim was literally false and they can do it two ways they can actually cement actual evidence that it was false that the claim was false but if i would say i don't mean to interrupt you i know what you're saying but if you accept the premise of my argument that carries the clear implication that it was tested then they've introduced they've met their burden because it conceded that it wasn't tested by anybody no they did not meet the burden your honor all they all the evidence shows is that l k did not the evidence was clear that l k relied on the representations of its two suppliers cal techs did not submit any evidence look this is what they relied on they had made then made the statement they relied on it was an almost proves their confusion point you relied on it because you're assume that the two suppliers tested the product and they tested the product they put those representation onto the spec sheets that that l k received on relied upon so in order to prevail in other words you they would have to show that the people who use and or show that the false that that the representation was otherwise false and misleading as just as owen's question counsel hypothetically with the olympic sprinter i can say he can have speed and just in terms of this false advertising claim cal tech bore the burden of proof and that's i don't think there's a dispute on that under the law to to prove it was false one of two ways it's literally false which they didn't do and they had the opportunity because they tested the bags and did not submit the test results in court to prove that it was false i e the test result showed it meet the it didn't meet the spec secondly councils argument it only flows under the assumption that they're correct and the statement that meets is the same as qualify that you can't even say it meets the spec unless you've had the navy qualify it and that's the gist of of their misleading argument that since only the navy can put your product on the queue if the navy didn't test it and you make any representations about median a spec that's false because you can't only the navy can do it but what the court found based upon the testimony magnifico the navy individual in charge of the testing labs now you can test because this the spec is online you get the spec first and you test it and make sure it meets so you don't waste my time testing a product for official qualification first and then they give it over to the navy and the navy does not take their word for it that they tested well let me ask you counsel is that was there ever any representations in that materials introduced at trial saying anything about testing and the promotional materials for example you'll see ads on t v that say we've tested this is the same so your honor the never representation about that there was no representation of what the evidence at trial showed was that in certain  catalogs or brochures that l k had used over time they had there had been representations along meets the electrical and i'm looking at one of them right now looks like e r to eighty five again i see things like me again in this instance they relied upon the people that they were buying products from most people who resell i think in the commercial world if you buy a product and the person you're buying it from for resale make tells you that this these are the characteristics of the product i think most companies on that wire argument them are relying suppose you would actually said this is been tested and it meets this military requirement and then if you made the actual statement then you wouldn't be on the fence some sort of the fence to you if you relied on your supplier for that under that scenario that might not be your honor well then what i'm suggesting is it's that's what occurred in this instance that's true that's true but again i think your honour's line of questioning sort of misses the point in terms of what cal texas burden of proof was in order to to meet the threshold under they're there for false advertising calling the lanham act claim they had to show that the the statement was false and there's two ways the literal which they agree that they didn't submit any testing evidence they didn't do it the other way is sort of by an implication and it's sort of it's the prong one under is the lack of substantiation approach where you know that if they if that statement implied least suggest something had happened and they have to come forward and to show one it either didn't happen or what what a impliedly did was wrong or insufficient to support that statement  forward with no evidence with regard to to anything and in that regard and they had the opportunity that the case was pending for many many months they could have taken discovery and introduce the evidence they chose not to  as long as we're talking about this supposedly they didn't think to us why didn't just stop when they told you to in effect when they threaten a lawsuit because one the reason we stopped we don't want to get sued it in the letter which i believe is in the record the response that i actually sent back to mr fenster said we don't agree with what you're saying we don't agree it's false but this isn't worth getting in a fight over and we pull it and we did before the suit was filed and it's in the right that's in the court found that you know my climb into business decisions said yeah i think we may have the right to continue to do it if you counsel if you tell me but i don't want to get in a fight with these guys so if they want to remove it using it and i'm not going to have my client is not going to give celtic's another reason to find you know another basis for them to find a reason to bring a new lawsuit we want to get this behind us and just move on while you want to move on well i do want to a couple of things again because the question's been asked about that the whole burden of proof issuing and you did ask the question your honor i don't think you got the correct answer to the burden under which ever approached cow tex uses to substantiate improve its claim it's the same it's their burden of proof they have to prove the falsity under one of two different ways they can prove it the burden never shift to the defendant doesn't shift ok to to substantiate or prove the validity of the the statements that was their burden and it never changed be honest you know what concerns me about this case is if they did you can simply think chose not to submit the results that's true and then again that would suggest strongly suggest i think most people there was a reason they weren't those test results didn't get submitted they didn't help their case  let me make a couple of observations number one frank magnifico who is the person from the department of the navy who's in charge of making these decisions said in his testimony that the eight one seventy five and i'm quoting requires qualification by the military and a company cannot claim to meet the standard when the company knows that there is a requirement to be tested but has not gone through the process that is the standard and so well that brings it to the literal falsity and why do i say that brings it to the lit falsity because under the cases that we have cited including i don't need to go through them all but it says that either you can show that his statement is false on its face or by necessary implication and that's the necessary implication that we've got in this in this case because of what happened and then when you have the president ok who says it did not have any evidence did static shielding banks do meet the eight one seven five standard and yet that's exactly what they advertise and the reason they advertise it was obvious because it's forty percent more expensive for our bags to be purchased than it is recently else who's selling commercial bags but saying that they have the protection that you have with m i up here if they want so don't try and the final comment is that it doesn't matter what their supplier said they have a claim which they would have raised for indemnity in the event that the trial court did what it did because they would have said we relied on what you told us and what you told us was wrong and therefore we're going to see condemn and so they have a remedy but they just can't say that we're going to rely on something else because what's the basis for the reliance where's the reasonable reliance there just isn't any right the new that you sell to different customer base than they do that your how would you prove damages if that's true or not the words you say you sell to the military you wouldn't have been hurt presumably in terms of the military sales how would you do you actually sell in the commercial market as well yes we do and here's the point that was raised on the direct question and that is that when we were trying to sell our products as military specification products in the commercial field the customers can go a sense of why would we pay forty percent more for your product when we can go somewhere else and get it it says that it meets the specifications that's exactly what it was designed to do a look at their sales they did over seven million dollars in sales in their products so there's a good reason that they did it because even the president the company said the reason that i put that on there is because i wanted to drive sales and howard i'm just  what would you have to show to prove them and says you prove damages by the statistical analysis of those products which were so when they said that they were they were using a misrepresentation i think very much counsel of the matter in l k plastics is submitted