Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_17-cv-00967/USCOURTS-casd-3_17-cv-00967-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1125(a) False representation of goods sold in interstate commerce

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

WASTE AND COMPLIANCE 

MANAGEMENT, INC.,

Plaintiff,

Case No. 17-cv-0967 DSM (NLS)

ORDER (1) GRANTING IN PART 

AND DENYING IN PART 

MOTION TO DISMISS AND (2) 

DENYING MOTION FOR 

v. PRELIMINARY INJUNCTION

STERICYCLE, INC., 

STERICYCLE SPECIALTY 

WASTE SOLUTIONS, INC., AND 

DOES 1-20,

Defendants.

Pending before the Court are Defendants Stericycle, Inc. and Stericycle 

Specialty Waste Solutions, Inc.’s motion to dismiss and Plaintiff Waste and 

Compliance Management, Inc.’s motion for preliminary injunction. For the reasons 

set forth below, Defendants’ motion is granted in part and denied in part, and 

Plaintiff’s motion is denied.

/ / /

/ / /

/ / /

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I.

BACKGROUND

Plaintiff is a California corporation that markets and sells a medical waste 

disposal product trademarked as Isolyser/SMS, which provides onsite sharps 

treatment and disposal. (FAC ¶¶ 10–11.) Isolyser/SMS is approved for use in many 

states, including California and Arizona. (Id. ¶ 16.) Defendants are Delaware 

corporations that collect and dispose of medical waste. (Id. ¶ 17.)

In January 2017, Ashley McBee, Defendants’ sales representative, called the 

medical office of Dr. Brian Mitchell in Tucson, Arizona to promote Defendants’

waste management services. (FAC ¶ 55; Declaration of Rhonda Mandes (“Mandes 

Decl.”) ¶ 2.) Rhonda Mandes, a dental assistant in the office, answered the phone, 

and during the telephone conversation, Ms. McBee allegedly inquired as to what 

product the office used for medical waste disposal. (FAC ¶ 55; Mandes Decl. ¶ 4.) 

When Ms. Mandes informed Ms. McBee that the office used Isolyser/SMS, Plaintiff 

alleges Ms. McBee wrongfully stated that Isolyser/SMS was not compliant with the 

regulations in Arizona. (FAC ¶¶ 55, 63; Mandes Decl. ¶ 4.) Subsequently, in 

February 2017, Ms. McBee called Dr. Mitchell’s office again to promote 

Defendants’ product and informed Ms. Mandes that Isolyser/SMS was not compliant 

with the law. (FAC ¶¶ 18, 47; Mandes Decl. ¶ 5.) Thereafter, Ms. McBee e-mailed 

Dr. Mitchell’s office, explaining its “current process” of waste disposal “is not 

compliant.” (Mandes Decl. ¶¶ 6–7, Ex. 1.)1

As a result of the actions alleged above, Plaintiff filed suit against Defendants 

on May 10, 2017. Subsequently, on July 21, 2017, Plaintiff filed a First Amended 

 1 In the motion for preliminary injunction, Plaintiff alleges there were several other 

incidents where Defendants allegedly made false statements regarding 

Isolyser/SMS. Plaintiff, however, concedes such incidents are outside the statute of 

limitations. The Court, therefore, declines to recite facts underlying those incidents

as they are unnecessary in resolving the present motions. 

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Complaint (“FAC”) alleging: (1) false advertising in violation of the Lanham Act, 

15 U.S.C. § 1125(a), (2) a violation of California’s false advertising law (“FAL”), 

Cal. Bus. & Prof. Code § 17500 et seq., (3) a violation of California’s unfair 

competition law (“UCL”), Cal. Bus. & Prof. Code §17200 et seq., (4) trade libel, (5) 

intentional interference with contractual relations, and (6) intentional interference 

with prospective economic advantage.

II.

DISCUSSION

A. Motion to Dismiss 

Defendants move to dismiss the FAC pursuant to Federal Rule of Civil 

Procedure 12(b)(6). A motion to dismiss pursuant to Rule 12(b)(6) tests the legal 

sufficiency of the claims asserted in the complaint. Fed. R. Civ. P. 12(b)(6); Navarro 

v. Block, 250 F.3d 729, 731 (9th Cir. 2001). In deciding a motion to dismiss, all 

material factual allegations of the complaint are accepted as true, as well as all 

reasonable inferences to be drawn from them. Cahill v. Liberty Mut. Ins. Co., 80 

F.3d 336, 338 (9th Cir. 1996). However, a court need not accept all conclusory 

allegations as true. Rather, it must “examine whether conclusory allegations follow 

from the description of facts as alleged by the plaintiff.” Holden v. Hagopian, 978 

F.2d 1115, 1121 (9th Cir. 1992) (citation omitted); see Benson v. Ariz. St. Bd. of 

Dental Exam’rs, 673 F.2d 272, 275–76 (9th Cir. 1982) (court need not accept 

conclusory legal assertions). A motion to dismiss should be granted if a plaintiff’s 

complaint fails to contain “enough facts to state a claim to relief that is plausible on 

its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial 

plausibility when the plaintiff pleads factual content that allows the court to draw 

the reasonable inference that the defendant is liable for the misconduct alleged.”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556).

i. False Advertising Under the Lanham Act

Defendants move to dismiss the false advertising claim, arguing the FAC fails 

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to satisfy the heightened pleading standards of Federal Rule of Civil Procedure 9(b)

and to adequately plead injury it suffered as a result of the false statement. The 

Lanham Act “authorizes suit by ‘any person who believes that he or she is likely to 

be damaged’ by a defendant’s false advertising.” Lexmark Int’l, Inc. v. Static 

Control Components, Inc., 134 S. Ct. 1377, 1388 (2014) (quoting 15 U.S.C. § 

1125(a)(1)). To state a clam for false advertising under the Lanham Act, a plaintiff 

must plead the following elements: 

(1) a false statement of fact by the defendant in a commercial 

advertisement about its own or another’s product; (2) the statement 

actually deceived or has the tendency to deceive a substantial segment 

of its audience; (3) the deception is material, in that it is likely to 

influence the purchasing decision; (4) the defendant caused its false 

statement to enter interstate commerce; and (5) the plaintiff has been or 

is likely to be injured as a result of the false statement, either by direct 

diversion of sales from itself to defendant or by a lessening of the 

goodwill associated with its products.

Skydive Ariz., Inc. v. Quattrocchi, 673 F.3d 1105, 1110 (9th Cir. 2012) (citations 

omitted). False advertising claims are subject to heightened pleading standards

under Rule 9(b).

2

 See Bobbleheads.com, LLC v. Wright Bros., Inc., No. 16-CV2790 JLS (AGS), 2017 WL 1838932, at *3 (S.D. Cal. May 8, 2017); Youngevity 

Int’l, Corp. v. Smith, 224 F. Supp. 3d 1022, 1029 (S.D. Cal. 2016). To meet this 

 2 Although the Ninth Circuit has yet to decide whether Rule 9(b) applies to false 

advertising claim under the Lanham Act, Plaintiff does not dispute its application. 

Because the Ninth Circuit has applied Rule 9(b) to other types of false advertising 

claims and district courts have found false advertising claim under the Lanham Act 

subject to Rule 9(b), the Court also finds that Rule 9(b) applies to the present claim. 

See, e.g., Vess v. Ciba–Geigy Corp. USA, 317 F.3d 1097, 1102–04 (9th Cir. 2003) 

(applying Rule 9(b) to claim for false advertising under Cal. Bus. & Prof. Code § 

17500); Seoul Laser Dieboard Sys. Co., Ltd. v. Serviform, S.r.l., 957 F.Supp.2d 

1189, 1200 (S.D. Cal. 2013) (“District courts in the Ninth Circuit have held that the 

heightened pleading standard of Federal Rule of [Civil] Procedure 9(b) applies to 

false advertising claims”). 

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standard a plaintiff must allege the “who, what, where, when, and how” of the 

misconduct and explain what is false or misleading about the statement made and 

why it is false. Cafasso ex. rel. U.S. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 

1055 (9th Cir. 2011). Rule 9(b), however, “applies only to the specifics of the 

alleged misrepresentations; it does not, by contrast, apply to other aspects of 

Plaintiff’s claims, such as reliance or damages.” Tidenberg v. Bidz.com, Inc., No. 

CV085553PSGFMOX, 2009 WL 605249, at *7 (C.D. Cal. Mar. 4, 2009) (citations 

omitted).

Defendants contend Plaintiff’s allegations fail to satisfy Rule 9(b)’s 

heightened pleading standard.3

 In the FAC, Plaintiff alleges Defendants have 

repeatedly made false and misleading statements to Plaintiff’s customers and 

potential customers regarding its product. Specifically, Plaintiff states Ms. McBee, 

made false and misleading statements both orally and in writing regarding 

Isolyser/SMS to Dr. Mitchell’s medical office in January and February 2017. In 

January 2017, Plaintiff claims Ms. McBee telephoned Dr. Mitchell’s office to 

promote Defendants’ medical waste system, and during the conversation, she falsely 

advised Ms. Mandes that Isolyser/SMS was not compliant with Arizona’s 

regulations. Plaintiff has alleged the circumstances surrounding the 

misrepresentations with particularity, and thus, the allegations are sufficient to 

 3 Defendants raise the same argument in moving to dismiss the FAL and UCL 

claims. Plaintiff does not dispute that Rule 9(b) applies to its FAL and UCL claims. 

Indeed, while fraud is not an essential element of FAL or UCL, Plaintiff’s claims 

under these statutes “fall under the heightened pleading requirements of Rule 9(b) 

because they are ‘grounded in fraud.’” See In re iPhone 4s Consumer Litig., 637 F. 

App’x 414, 415 (9th Cir. 2016); Vess, 317 F.3d at 1102–05 (holding that the Rule 

9(b) pleading standards apply to California CLRA, FAL, and UCL claims because, 

though fraud is not an essential element of those statutes, a plaintiff alleges a 

fraudulent course of conduct as the basis of those claims). For the reasons stated in 

this order, however, the Court denies Defendants’ motion to dismiss the FAL and 

UCL claims on these grounds.

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satisfy the Rule 9(b).

Next, Defendants argue Plaintiff has failed to sufficiently plead any actual 

injury. Contrary to Defendants’ argument, Plaintiff has adequately alleged its 

commercial interests have been damaged by Defendants’ conduct. See Maya v. 

Centex Corp., 658 F.3d 1060, 1068 (9th Cir. 2011) (“At the pleading stage, general 

factual allegations of injury resulting from the defendant’s conduct may suffice, for 

on a motion to dismiss we presume that general allegations embrace those specific 

facts that are necessary to support the claim.”) (citations and internal quotation 

marks omitted). Plaintiff has alleged the following: “DEFENDANTS’ false and 

deceptive statements are likely to influence purchasing decisions of its customers 

and PLAINTIFF’S customers, as well as individual customers who purchase 

medical waste products,” “DEFENDANTS’ false and misleading promotion and 

solicitation statements injure PLAINTIFF by diverting sales from PLAINTIFF to 

DEFENDANTS[,]” and “DEFENDANTS have caused, and will continue to cause, 

immediate and irreparable injury to Plaintiff, including injury to Plaintiff’s business, 

reputation, and goodwill, for which there is no adequate remedy at law.” (FAC ¶¶ 

25, 27.) Because Plaintiff has sufficiently alleged it has suffered injury as a result 

of Defendants’ alleged false statements, Defendants’ motion to dismiss the false 

advertising claim is denied. 

ii. FAL and UCL

Defendants initially argue the FAL and UCL claims should be dismissed for 

lack of standing because Plaintiff has not alleged “lost money or property” required 

to show standing. In order to bring a claim under the FAL and UCL, a plaintiff must 

“(1) establish a loss or deprivation of money or property sufficient to qualify as 

injury in fact, i.e., economic injury, and (2) show that the economic injury was the 

result of, i.e., caused by, the unfair business practice or false advertising that is the 

gravamen of the claim.” Kwikset Corp. v. Super. Ct., 51 Cal. 4th 310, 322 (Cal. 

2011). Here, Plaintiff has alleged an economic injury in the form of loss of business, 

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sales, income, customers, and goodwill. See Obesity Research Inst., LLC v. Fiber 

Research Int’l, LLC, 165 F. Supp. 3d 937, 948 (S.D. Cal. 2016) (“Courts have also 

found ‘lost sales, revenue, market share, and asset value’ sufficient to allege an 

economic injury.”) (citations omitted); Luxul Tech. Inc. v. Nectarlux, LLC, 78 F. 

Supp. 3d 1156, 1174 (N.D. Cal. 2015) (“Plaintiff has alleged an economic injury in 

the form of lost customers and sales revenue. That is sufficient to satisfy standing 

under the UCL.”) (citations omitted). These allegations are sufficient to allege an 

injury in fact to confer standing under the FAL and UCL. Therefore, Defendant’s 

motion to dismiss the FAL and UCL claims on this basis is denied.4

 

Next, Defendants moves to dismiss the UCL claim, which alleges a violation 

of the “unfair” prong. The UCL prohibits “any unlawful, unfair or fraudulent 

business act or practice and unfair, deceptive, untrue or misleading advertising.” 

Cal. Bus. & Prof. Code § 17200. “Each of these three adjectives captures a separate 

and distinct theory of liability.” Rubio v. Cap. One Bank, 613 F.3d 1195, 1203 (9th 

Cir. 2010) (quotation marks omitted). Defendants contend Plaintiff fails to explain 

how Defendants’ alleged actions constitute an “antitrust injury” that would be 

actionable between “competitors.” Plaintiff does not oppose.5

 Accordingly, 

 4 Defendants also seek to dismiss Plaintiff’s UCL claim for improperly requesting 

compensatory damages and attorneys’ fees. Although remedies under the UCL are 

limited to restitution and injunctive relief, Madrid v. Perot Systems Corp., 130 Cal. 

App. 4th 440, 452 (Cal. Ct. App. 2005), this is not an argument that should be 

decided on the present motion. Rather, Defendants should file a motion to strike 

Plaintiff’s prayer for relief on its UCL claim. See Hosp. Mktg. Concepts, LLC v. Six 

Continents Hotels, Inc., No. SACV1501791JVSDFMX, 2016 WL 9045621, at *7 

(C.D. Cal. Jan. 28, 2016) (declining to address similar argument on a motion to 

dismiss); Jung Jae Lee v. Fed. St. La LLC, No. 2:14-CV-06264-CAS-SS, 2015 WL 

179787, at *6 (C.D. Cal. Jan. 12, 2015) (addressing similar argument on a motion to 

strike).

5 Although Plaintiff appears to rely solely on the “unfair” prong of the UCL in the 

FAC, Plaintiff contends in its opposition that it also invokes the unlawful and 

fraudulent prongs of the UCL. The Court notes, however, the FAC as currently 

pleaded is insufficient to state a claim under those prongs.

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Defendant’s motion to dismiss the UCL claim is granted with leave to amend. See 

C.F. ex rel. Farnan v. Capistrano Unified Sch. Dist., 654 F.3d 975, 985 (9th Cir. 

2011) (“Rule 15(a) provides that ‘[t]he court should freely give leave [to amend] 

when justice so requires.... This policy is ‘to be applied with extreme liberality.’” 

(quoting Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 

2003)).

iii. Trade Libel

Defendants argue the trial libel claim should be dismissed for failure to 

adequately plead special damages. Under California law, trade libel is “‘an 

intentional disparagement of the quality of property, which results in pecuniary 

damage to plaintiff....’” Hartford Cas. Ins. Co. v. Swift Distribution, Inc., 59 Cal. 

4th 277, 290 (Cal. 2014) (quoting Erlich v. Etner, 224 Cal. App. 2d 69, 73 (Ct. App. 

1964)). To state a claim for trade libel, a plaintiff must allege: “(1) a publication, 

(2) which induces others not to deal with plaintiff, and (3) special damages.” Aetna 

Cas. & Sur. Co. v. Centennial Ins. Co., 838 F.2d 346, 351 (9th Cir. 1988). The 

special damages element is subject to the heightened pleading standard under 

Federal Rule of Civil Procedure 9(g). See Fed. R. Civ. P. 9(g) (“[i]f an item of 

special damage is claimed, it must be specifically stated.”); Azco Biotech Inc. v. 

Qiagen, N.V., No. 12-CV-2599-BEN DHB, 2013 WL 4500782, at *13 (S.D. Cal. 

Aug. 20, 2013). 

Plaintiff alleges Defendants’ false statements have deterred customers from 

purchasing Plaintiff’s medical waste product and conducting business with Plaintiff. 

As a result, Plaintiff claims it has suffered “pecuniary loss in a sum in excess of 

$75,000.00, the specific amount of which will be proven at the time of trial or 

judgment.” (FAC ¶ 51.) Plaintiff, however, does not identify the customers or 

transactions lost as a result of the disparaging statements. See Zero Motorcycles, 

Inc. v. Pirelli Tyre S.p.A., 802 F. Supp. 2d 1078, 1090 (N.D. Cal. 2011) (“To properly 

allege damages [for trade libel], the pleader must specifically identify the customers 

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or transactions lost as a result of the disparagement; a general decline in business 

will not suffice.”). Moreover, the alleged pecuniary loss of $75,000 is the same 

amount that Plaintiff alleges as damages in other claims. As such, it is difficult to 

determine what, if any, damage Plaintiff claims to have suffered solely as a result of 

disparaging statements. See First Advantage Background Servs. Corp. v. Priv. Eyes, 

Inc., 569 F. Supp. 2d 929, 938 (N.D. Cal. 2008). Because Plaintiff has failed to 

adequately plead a claim for trade libel, Defendants’ motion to dismiss this claim is 

granted with leave to amend.

iv. Intentional Interference with Contractual Relations

Defendants move to dismiss the intentional interference with contractual 

relations claim, arguing Plaintiff has failed to allege sufficient facts underlying this 

claim. Under California law, the tort of intentional interference with contract 

requires a plaintiff to allege the following elements: “‘(1) a valid contract between 

plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant’s 

intentional acts designed to induce a breach or disruption of the contractual 

relationship; (4) actual breach or disruption of the contractual relationship; and (5) 

resulting damage.’” CRST Van Expedited, Inc. v. Werner Enter., Inc., 479 F.3d 

1099, 1105 (9th Cir. 2007) (quoting Quelimane Co. v. Stewart Title Guar. Co., 19 

Cal. 4th 26, 55 (Cal. 1998)). Here, Plaintiff’s conclusory allegations are insufficient 

to state a claim for intentional interference with contractual relations as they merely 

recite the elements of this claim and are devoid of further factual development. For 

example, Plaintiff alleges “as a result of DEFENDANTS’ said intentional conduct, 

an actual breach and/or disruption of PLAINTIFF’S contractual relations with Dr. 

Mitchell’s did occur.” (FAC ¶ 57.) Plaintiff, however, does not explain the facts 

underlying such breach or disruption. Such “threadbare” allegations that merely 

recite the elements of a cause of action cannot withstand a motion to dismiss. See 

Iqbal, 129 S. Ct. at 1949–50. Accordingly, Defendants’ motion to dismiss this claim 

is granted with leave to amend.

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v. Intentional Interference with Prospective Economic Advantage

Defendants also move to dismiss the intentional interference with prospective 

economic advantage claim, arguing Plaintiff’s allegations simply recite the elements 

of this claim without any actual facts to support such elements. To state a claim for 

tort of intentional interference with prospective economic advantage, a plaintiff must 

allege the following: “‘(1) an economic relationship between the plaintiff and some 

third party, with the probability of future economic benefit to the plaintiff; (2) the 

defendant’s knowledge of the relationship; (3) intentional [wrongful] acts on the part 

of the defendant designed to disrupt the relationship; (4) actual disruption of the 

relationship; and (5) economic harm to the plaintiff proximately caused by the acts 

of the defendant.’” Sybersound Records, Inc. v. UAV Corp., 517 F.3d 1137, 1151 

(9th Cir. 2008) (quoting Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 

1134, 1153 (Cal. 2003)). Plaintiff simply recites the elements of the claim and has 

failed to allege sufficient facts underlying the claim. As indicated above, such 

conclusory allegations embody the type of formulaic recitation of a cause of action’s 

elements that Twombly and Iqbal deem insufficient. Because the FAC fails to 

“contain sufficient allegations of underlying facts to give fair notice and to enable 

[Defendants] to defend [themselves] effectively[,]” Defendants’ motion to dismiss 

this claim is granted with leave to amend. Starr v. Baca, 652 F.3d 1202, 1216 (9th 

Cir. 2011). 

B. Motion for Preliminary Injunction

Plaintiff seeks an order enjoining Defendants from “their pattern and practice 

of wrongfully disparaging [Plaintiff’s] product.” (Mem. of P. & A. in Supp. of Mot. 

at 12.) “A plaintiff seeking a preliminary injunction must establish that he is likely 

to succeed on the merits, that he is likely to suffer irreparable harm in the absence of 

preliminary relief, that the balance of equities tips in his favor, and that an injunction 

is in the public interest.” Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 

(2008). Alternatively, “‘serious questions going to the merits’ and a balance of 

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hardships that tips sharply towards the plaintiff can support issuance of a preliminary 

injunction, so long as the plaintiff also shows that there is a likelihood of irreparable 

injury and that the injunction is in the public interest.” All. for Wild Rockies v. 

Cottrell, 632 F.3d 1127, 1131–32 (9th Cir. 2011). A preliminary injunction “‘should 

not be granted unless the movant, by a clear showing, carries the burden of 

persuasion.’” Mazurek v. Armstrong, 520 U.S. 968, 972 (1997) (quoting 11A C. 

Wright, A. Miller, & M. Kane, Federal Practice and Procedure § 2948, pp. 129–130 

(2d ed. 1995)). This “clear showing” requires plaintiffs to show more than a mere 

“possibility” of irreparable harm, but instead they must “demonstrate that irreparable 

injury is likely in the absence of an injunction.” Winter, 555 U.S. at 22; see Am. 

Trucking Ass’ns Inc. v. City of L.A., 559 F.3d 1046, 1052 (9th Cir. 2009). This is an 

“extraordinary remedy that may only be awarded upon a clear showing that the 

plaintiff is entitled to such relief.” Winter, 555 U.S. at 22. Whether to grant or to 

deny a motion for preliminary injunction is within the equitable discretion of the 

court. Chalk v. U.S. Dist. Ct., 840 F.2d 701, 704 (9th Cir. 1988).

i. Likelihood of Success on the Merits

As discussed above, two of Plaintiff’s claims survive Defendants’ motion to 

dismiss: (1) false advertising in violation of the Lanham Act and (2) a violation of 

the FAL. To prevail on a claim for false advertising under the Lanham Act, a 

plaintiff must prove, inter alia, “a false statement of fact by the defendant in a 

commercial advertisement about its own or another's product.”6 Southland Sod 

Farms v. Stover Seed Co., 108 F.3d 1134, 1139 (9th Cir. 1997). Similarly, false 

advertising under Cal. Bus. & Prof. Code § 17500 requires a plaintiff to prove 

defendants engaged in “false, unfair, misleading, or deceptive advertising” that had 

the tendency to deceive members of the public. Day v. AT & T Corp., 63 Cal. App. 

 6 Because the elements required to prevail on a claim for false advertising under the 

Lanham Act are explained above, the Court need not repeat them here.

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4th 325, 331–32 (Cal. Ct. App. 1998). In the Ninth Circuit, a claim for false 

advertising under the FAL is “substantially congruent to claims made under the 

Lanham Act.” L.A. Taxi Coop., Inc. v. Uber Techs., Inc., 114 F. Supp. 3d 852, 860 

(N.D. Cal. 2015) (quotation omitted). 

Plaintiff contends it can establish the likelihood of success on each of the

requisite elements to prove a claim for false advertising under the Lanham Act. 

Defendants respond Plaintiff cannot establish that Defendants made a false 

statement. The parties’ moving papers and accompanying exhibits give rise to 

disputes of fact that preclude the Court from determining whether Plaintiff is likely 

to prevail on the merits of its claims. For example, the parties have submitted 

conflicting evidence as to whether Ms. McBee expressly informed Ms. Mandes that 

Isolyser/SMS is not compliant with the regulations in Arizona. “In deciding a 

motion for preliminary injunction, the district court is not bound to decide doubtful 

and difficult questions of law or disputed questions of fact.” Int’l Molders’ and 

Allied Workers’ Local Union No. 164 v. Nelson, 799 F.2d 547, 551 (9th Cir.1986) 

(internal citations omitted). Accordingly, the Court declines to resolve these factual 

disputes on such a limited record, and finds Plaintiff has not demonstrated a 

likelihood of success on the merits on the false advertising claim under the Lanham 

Act and likewise the FAL claim. 

ii. Irreparable Harm

Plaintiff argues it “has and will suffer irreparable harm to its reputation and 

goodwill” due to Defendants’ false representations. (Mem. of P. & A. in Supp. of 

Mot. at 17.) “Evidence of loss of control over business reputation and damage to 

goodwill could constitute irreparable harm.” Herb Reed Enterprises, LLC v. Fla.

Entm’t Mgmt., Inc., 736 F.3d 1239, 1250 (9th Cir. 2013) (citing Stuhlbarg Int’l Sales 

Co., Inc. v. John D. Brush and Co., Inc., 240 F.3d 832, 841 (9th Cir. 2001)). But 

“[s]peculative injury cannot be the basis for a finding of irreparable harm.” In re 

Excel Innovations, Inc., 502 F.3d 1086, 1098 (9th Cir. 2007). In support of its 

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argument, Plaintiff offers declarations of Janet Short, Plaintiff’s former in-house 

counsel, and James D. Panigall, Plaintiff’s Chief Operating Officer, who both 

declared that “PLAINTIFF has been injured as a result of the DEFENDANTS’ false 

statement, either by direct diversion of sales from PLAINTIFF to DEFENDANTS 

and/or by a lessening of the goodwill associated with PLAINTIFF’S product.” 

(Declaration of Janet Short ¶ 11; Declaration of James D. Panigall ¶ 17.) These 

declarations alone, however, are insufficient to support a finding that Plaintiff will 

suffer irreparable harm in the absence of a preliminary injunction. See Wells Fargo 

& Co. v. ABD Ins. & Fin. Servs., Inc., No. C 12-3856 PJH, 2014 WL 4312021, at 

*10 (N.D. Cal. Aug. 28, 2014) (“In order to establish harm to its reputation or its 

goodwill, [Plaintiff] must do more than simply submit a declaration insisting that its 

reputation and goodwill have been harmed.”). Without further evidence in support 

of its allegations of loss of reputation and goodwill, Plaintiff has failed to 

demonstrate that it will suffer irreparable harm without a preliminary injunction. 

Because the record fails to support findings of likelihood of success on the merits 

and likely irreparable harm, the Court need not address the balance of equities and 

public interest factors. Accordingly, Plaintiff’s motion for preliminary injunction is 

denied.

III.

CONCLUSION

For the foregoing reasons, Defendants’ motion to dismiss is granted in part 

and denied in part, and Plaintiff’s motion for preliminary injunction is denied. 

Plaintiff is granted leave to file a Second Amended Complaint (“SAC”) that cures 

the pleading deficiencies identified in this Order. The SAC shall be filed on or 

before November 1, 2017. Plaintiff is cautioned that the SAC may not add any other 

new causes of action or parties not addressed by the Court in this order. 

IT IS SO ORDERED.

/ / /

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Dated: October 2, 2017

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