The Honorable Ortrie D. Smith, United States District Judge

1

for the Western District of Missouri, sitting by designation.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 96-1552

___________

Porous Media Corporation, *

*

Plaintiff - Appellee, *

* Appeal from the United States

v. * District Court for the

* District of Minnesota.

Pall Corporation, *

*

Defendant - Appellant. *

___________

 Submitted: December 9, 1996

 Filed: April 8, 1997

___________

Before BOWMAN and LAY, Circuit Judges, and SMITH , District Judge. 1

___________

LAY, Circuit Judge.

Porous Media Corporation (Porous) and Pall Corporation (Pall) are

manufacturers of industrial filters. They produce competing products for

certain applications in various industries, including the oil and natural

gas markets (oil/gas markets) and the paper and power generation markets

(paper/power markets).

Porous claims that in 1985 and 1986 it began penetrating the market

for filters in the paper/power markets and the oil/gas markets. Porous

contends that Pall then began a concerted effort to disparage Porous’s

products and make false comparisons of Pall’s products and Porous’s

products. Among other things, Porous
The jury, and the district court sitting as finder of fact

2

for Porous’s claim for injunctive relief, found that Pall made

numerous false and misleading statements about Porous’s products

and about its own products. Those findings are not directly

challenged in this appeal.

The Honorable Michael J. Davis, United States District Judge 3

for the District of Minnesota.

The district court also entered an injunction against Pall

4

which was not appealed.

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suggests that Pall distributed false anecdotal statements that Porous’s

filters had collapsed in the field and caused major problems, that Pall

made false and disparaging statements about Porous’s filters which were not

supported by Pall’s own testing data, and that Pall made false comparisons

of its own filters for certain applications with Porous filters that Porous

had never recommended as interchangeable for those applications.2

Porous brought this action against Pall for common-law product

disparagement and for false misrepresentation under Lanham Act § 43(a), 15

U.S.C. § 1125(a) (1982); Pall counterclaimed for trademark and trade dress

infringement and unfair competition. Following a nearly two-month trial,

the jury returned a verdict in favor of Porous and against Pall on all of

the claims and counterclaims. The jury found that Pall made false

statements about Porous’s products, that Porous had proven special damages,

and awarded Porous $5.5 million on the common-law product disparagement

claim. On the Lanham Act claim, the jury found that Pall made false or

misleading statements about its own products in its comparative

advertising, that Pall had acted willfully and in bad faith, and awarded

$1.5 million in damages. In addition, the district court awarded Porous 3

its attorneys’ fees in the amount of $560,564 and costs in the amount of

$261,712.39.4
The Lanham Act was substantially revised in 1988. Porous’s 5

claim for damages under the revised Lanham Act was dismissed by

the district court before trial, and this ruling is not appealed. 

The district court held that the amendments were not retroactive. 

For a thorough discussion of the relevant amendments to § 43(a)

of the Lanham Act and the question of their retroactivity, see

ALPO Petfoods, Inc. v. Ralston Purina Co., 913 F.2d 958, 963 n.6

(D.C. Cir. 1990).

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Pall filed post-trial motions for judgment as a matter of law or in

the alternative for a new trial. The district court denied the motions,

and Pall appeals. Pall challenges the judgment under both the Lanham Act

and the common-law disparagement claim. We affirm.

I. LANHAM ACT

 The district court allowed Porous to proceed with its claim under

the pre-1988 version of the Lanham Act for relief based on false or

5

misleading statements made by Pall about Pall’s own products alone and in

comparison to Porous’s products. The claim encompassed statements made in

both the oil/gas and paper/power markets.

Pall argues that the judgment on the Lanham Act claim must be

reversed because the district court improperly instructed the jury

regarding causation and injury, and because Porous failed to prove an

element of the claim by failing to offer extrinsic evidence of customer

confusion to show that Pall’s statements were misleading. We reject both

arguments.

A. Jury instruction

The trial court instructed the jury as to the elements of Porous’s

Lanham Act claim:
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To establish its claim that Pall violated the Lanham Act,

Porous Media must prove by a preponderance of the evidence the

following elements. Those elements are:

Pall made false or misleading statements of fact which

misrepresented the nature, characteristics or qualities of

Pall’s own filter products, alone or in comparison with Porous’

products;

Any such false or misleading statements actually deceived

or had the tendency to deceive a substantial segment of their

audience;

Such statements were material because they were likely to

influence buying decisions; and

Pall caused its advertised products to enter interstate

commerce; and

Porous has been injured as a result of those activities

either by direct diversion of sales to Pall or by a lessening

of its goodwill.

To prove its claim under the Lanham Act, any false

statements made by Pall must concern Pall’s, not Porous

Media’s, products. Pall need not produce any evidence to show

that the statements made are true. 

The court then read to the jury Instruction No. 19:

If you should find that Pall made any false or misleading

statements in its representations concerning its filter

products alone or in comparison to Porous’ filter products

deliberately—that is with knowledge of their false or

misleading nature—and you find that Pall engaged in making any

such deliberately false statements as an important part of its

marketing efforts, then you may presume that customers and

prospective customers were deceived by any such statements and

that Porous has suffered damages as a result of such deception.

The effect of this instruction is, of course, to transfer the burden

of proof to Pall regarding false deception of Porous’s
In this regard, the court further instructed the jury that 6

it could only award Porous damages in the form of lost profits

where they were shown to be the natural and probable consequence

of Pall’s unlawful conduct.

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customers and the fact of harm Porous incurred by reason of the deception.

The court further instructed:

You are instructed that Pall may overcome the presumption

by proof that customers and/or prospective customers were not

deceived by any such statements and/or by evidence that Porous

has not suffered any damages as a result of any such

statements.

In Instruction 20, the district court directed the jury:

Porous Media has the burden of proving damages by a

preponderance of the evidence. Damages, for purposes of this

claim, means the amount of money which will reasonably and

fairly compensate Porous Media for any injury you find was

caused by Pall’s misrepresentations of fact concerning Pall’s

filter products or concerning Pall’s filter products as

compared to Porous’ filter products. 

Porous Media may recover any damages which it proves it

sustained as a result of Pall’s false and misleading

representations of fact which misrepresented the nature,

characteristics and qualities of filters manufactured by Pall.

Porous Media may recover past and future profits lost by Porous

Media as a result of lost sales attributable to Pall’s wrongful

acts.6

This instruction also told the jury that “[i]n determining Porous’ damages,

you should not include any amounts for the purpose of punishing Pall, but

you are to fully compensate Porous for the damages, if any, that it has

sustained.” (our emphasis). Thus, the jury was instructed that upon a

finding that Pall had engaged in deliberate deception in its comparative

advertising, as a major part of its marketing effort, Porous was entitled

to a presumption
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that Pall’s statements had caused injury. However, in order to recover any

damages, Porous had the burden of proving both the loss sustained and that

it was caused by Pall’s statements. In other words, Porous still had to

prove an evidentiary basis, showing actual harm caused by Pall, for any

damages award.

Instruction No. 19 contains two separate rebuttable presumptions.

The first, which we refer to as a presumption of deception, allowed the

jury to assume actual deception, the second element of the cause of action,

upon a finding that the defendant acted deliberately to deceive. The

second, which we refer to as a presumption of causation and injury,

instructed the jury that upon a finding that the defendant deliberately

deceived the public it could assume that the defendant’s statements caused

harm to the plaintiff, satisfying the fifth element of the cause of action.

The presumption of deception, which was not objected to and not appealed

herein, has been approved by several courts. See U-Haul Int’l., Inc. v.

Jartran, Inc., 793 F.2d 1034, 1041 (9th Cir. 1986) (Jartran II) (“The

expenditure by a competitor of substantial funds in an effort to deceive

consumers and influence their purchasing decisions justifies the existence

of a presumption that consumers are, in fact, being deceived.”); Harper

House, Inc. v. Thomas Nelson, Inc., 889 F.2d 197, 209 (9th Cir. 1989)

(approving the presumption of deception from Jartran II upon a jury’s

finding that the defendants engaged in intentional deception); Resource

Developers, Inc. v. Statue of Liberty-Ellis Island, 926 F.2d 134, 140 (2d

Cir. 1991) (approving the use of the presumption of deception once

plaintiff establishes that defendant acted with intent to deceive).

At the charging conference, Pall objected to the presumption of

causation and injury arguing that it improperly collapses two separate

presumptions and that Porous must be required to prove
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that any deceptive advertising caused damage to Porous. Here, Pall argues

that the presumption of causation and injury improperly relieved Porous of

its burden to prove causation and injury, an essential element of its

Lanham Act claim. 

Pall relies primarily on the Ninth Circuit opinion in Harper House.

There a producer of personal organizers sued a competitor for copyright

infringement and violation of the Lanham Act. The jury found for Harper

House on all claims and awarded substantial damages on both claims. Harper

House, 889 F.2d at 201. Harper House’s claim for deceptive advertising

under the Lanham Act was that “defendants deceived consumers by showing

Time Maker I in its promotion and advertisements and then selling Time

Maker II,” id. at 208, where “many changes” were made between the

advertised Time Maker I and the production version, Time Maker II. Id. at

200. The court approved the presumption of deception from Jartran II,

provided that the jury found that defendants engaged in intentional

deception. Id. at 209. The court noted that the district court had upheld

the jury verdict without referring to any actual injury, instead apparently

relying on a second presumption from Jartran II, that a plaintiff’s damages

equal the amount of money spent by defendants on the deceptive advertising.

Id. The court found that Harper House had “presented no evidence of any

injury causally related to the defendants’ deception,” and reversed the

judgment on the Lanham Act claim for insufficient evidence of injury. Id.

at 210. Pall urges that Harper House should govern here. However, as will

be discussed, we find the facts and law of Harper House distinguishable and

therefore not controlling.

In the present case, the evidence established that Pall made false

or misleading statements involving Pall’s product in comparison to

Porous’s. For example, one of the documents which Porous urges violates

the Lanham Act is a publication by Pall
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entitled “Competitive Filter Evaluation For Optimizing Gas Operations: Pall

versus Porous Media.” Porous submits that this document, which purports

to compare the performance of a Pall filter with a Porous filter, includes

both false comparisons and false statements about the performance of a Pall

filter. Moreover, Porous urges in order to trigger the presumption of

deception and the presumption of causation and injury, the jury had to

find, and did so find, that Pall made the false or misleading statements

deliberately, “that is with knowledge of their false or misleading nature.”

In fact, here the jury found in its special verdict that Pall’s actions

were “willful and done in bad faith.”

In Harper House, the defendant made false statements about its own

product with no reference to another’s product. Under the circumstances,

the court required specific proof of causation and damage. This is in

contrast to a case of comparative advertising where the plaintiff’s product

is specifically targeted. Judge Goodwin noted the factual difference when

he stated that Harper House differed from Jartran II, a comparative

advertising case, in that “[Harper House] involves not a deceptive

comparison of plaintiff’s and defendants’ products, but deception regarding

defendants’ product with little overt reference to plaintiff or plaintiff’s

product.” Harper House, 889 F.2d at 209.

As Judge Goodwin points out, where a defendant is guilty of

misrepresenting its own product without targeting any other specific

product, it is erroneous to apply a rebuttable presumption of harm in favor

of a competitor. Otherwise, a plaintiff might enjoy a windfall from a

speculative award of damages by simply being a competitor in the same

market. Thus, in cases where there is no comparative advertising involved,

the plaintiff must shoulder
Pall has not cited any other case of comparative 7

advertising which holds the presumption of harm to be error.

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the full burden of proof of both cause in fact and injury. The issue we 7

face in the present case is whether the rule applied by Harper House should

govern in a false comparative advertising case. In other words, the

question we must resolve is whether the district court correctly instructed

the jury to presume causation and harm from Pall’s deceptive comparative

advertising. 

In applying the presumption of harm in cases where injunctive relief

is sought under the Lanham Act, the Second Circuit has specifically

contrasted the rules to be applied where false comparative advertising is

involved from the rules governing where a defendant simply misrepresents

its own product. In McNeilab, Inc. v. American Home Products Corp., 848

F.2d 34 (2d Cir. 1988), the defendant advertised that its pain reliever,

Advil, was as safe as Tylenol, a pain reliever manufactured by the

plaintiff. The district court had reasoned that where false or misleading

advertising is shown, irreparable harm was to be presumed and injunctive

relief was granted. The Second Circuit affirmed, limiting the presumption

to cases of comparative advertising. It stated that “an important

distinction must be drawn” between cases applying the general rule, that

causation and injury must be proved, and cases of false advertising where

the plaintiff-competitor’s product is specifically compared or referenced.

The court observed:

This case, by contrast, presents a false comparative

advertising claim. Thus, the concerns voiced in Coca-Cola and

Johnson & Johnson regarding speculative injury do not arise.

A misleading comparison to a specific competing product

necessarily diminishes that product’s value in the minds of the

consumer. By falsely implying
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that Advil is as safe as Tylenol in all respects, AHP deprived

McNeil of a legitimate competitive advantage and reduced

consumers’ incentive to select Tylenol rather than Advil. This

is analogous to a Lanham Act trademark dispute. An infringing

mark, by its nature, detracts from the value of the mark with

which it is confused. In that context, we recently confirmed

that irreparable harm will be presumed. See Home Box Office,

Inc. v. Showtime/The Movie Channel Inc., 832 F.2d 1311, 1314

(2d Cir. 1987); Charles of the Ritz Group, 832 F.2d at 1321;

Standard & Poor’s Corp. v. Commodity Exchange, Inc., 683 F.2d

704, 708 (2d Cir. 1982). Consequently, the district court did

not err in presuming harm from a finding of false or misleading

advertising.

McNeilab, 848 F.2d at 38; see also Ortho Pharmaceutical Corp. v.

Cosprophar, Inc., 32 F.3d 690, 694 (2d Cir. 1994); Castrol, Inc. v. Quaker

State Corp., 977 F.2d 57, 62 (2d Cir. 1992); McNeil-P.C.C., Inc. v.

Bristol-Myers Squibb Co., 938 F.2d 1544, 1549 (2d Cir. 1991).

In Ortho Pharmaceutical, the court emphasized:

While there may be room for such a presumption in cases where

there is a question of false designation of goods, our circuit

has expressly disfavored presumptions of harm in cases where

the products are not obviously in competition or where the

defendant’s advertisements make no direct reference to any

competitor’s products. See McNeilab, Inc., 848 F.2d at 38;

Coca-Cola Co., 690 F.2d at 316; Johnson & Johnson, 631 F.2d at

190.

Ortho Pharmaceutical Corp. v. Cosprophar, Inc., 32 F.3d 690, 696 (2d Cir.

1994).

We are cognizant, however, that cases involving injunctive relief and

those seeking monetary damages under the Lanham Act have different

standards of proof. A plaintiff suing to enjoin conduct that violates the

Lanham Act need not prove specific damage. In
A leading commentator demonstrates the fundamental 8

difference in cases dealing with injunctions and those dealing

with money damages:

Since § 43(a) was passed to protect consumers as

well as competitors, the courts are not and should not

be reluctant to allow a commercial plaintiff to obtain

an injunction even where the likelihood of provable

impact on the plaintiff may be subtle and slight. 

Congressional policy appears to encourage commercial

firms to act as the fabled “vicarious avenger” of

consumer rights. An injunction, as opposed to money

damages, is no windfall to the commercial plaintiff. 

An injunction protects both consumers and the

commercial plaintiff from continuing acts of false

advertising. Money damages, on the other hand,

primarily aid only the competitor, and he is required

to satisfy a much higher standard of proof as to injury

in order to recover damages.

3 J. Thomas McCarthy, McCarthy on Trademarks and Unfair

Competition § 27.04(3)(d), at 27-48 (3rd ed. 1996) (footnotes

omitted).

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contrast, courts require a heightened level of proof of injury in order to

recover money damages. See, e.g., Black Hills Jewelry Mfg. v. Gold Rush,

Inc., 633 F.2d 746, 753 n.7 (8th Cir. 1980). In a suit for money damages 8

where a defendant misrepresented its own product but did not specifically

target a competing product, plaintiff may be only one of many competitors,

and without proof of causation and specific injury each competitor might

receive a windfall unrelated to its own damage. See Harper House, 889 F.2d

at 209 n.8. In addition, we note that the statutory language regarding

damages, § 35(a) of the Lanham Act, provides that recovery for violation

of the Act “shall constitute compensation and not a penalty.” Lanham Act

§ 35(a), 15 U.S.C. § 1117(a) (1984). 

We find that in comparative advertising cases where money damages are

sought and where there exists proof of willful
The court recited this statement of a commentator: “Having 9

established falsity, the plaintiff should be entitled to both

injunctive and monetary relief, regardless of the extent of

impact on consumer purchasing decisions.” Id. at 272-73 (citing

Joseph P. Bauer, A Federal Law of Unfair Competition: What Should

Be the Reach of Section 43(a) of the Lanham Act?, 31 UCLA L.Rev.

671, 744 n. 277 (1984)).

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deception, as here, the reasoning of the injunction cases set forth

primarily in the Second Circuit cases is applicable. What little case law

exists supports the district court’s use of the presumption of causation

and harm to the plaintiff.

In PPX Enterprises v. Audiofidelity Enterprises, Inc., 818 F.2d 266

(2d Cir. 1987), the district court had granted defendant’s motion for

judgment notwithstanding the verdict on plaintiff’s claim for damages under

the Lanham Act, reasoning that plaintiff was not entitled to damages

because it had failed to present evidence of actual consumer confusion.

The Second Circuit reversed, holding that a plaintiff need not provide

evidence of actual consumer confusion “in order to prove entitlement to

damages.” Id. at 272. The court reasoned that the plaintiff had provided

sufficient evidence to establish its claim, but noted that on remand the

plaintiff would “of course, be required to provide ‘an evidentiary basis

on which to rest’” an award of damages. Id. at 273 (citation omitted).9

The requisite evidentiary basis for an award of damages was described

in ALPO. In ALPO, the D.C. Circuit affirmed the district court’s holding

that Ralston Purina had violated § 43(a) of the Lanham Act through its

false advertising, but vacated the district court’s choice of remedies.

The court summarized the district court’s task on remand:
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When assessing these actual damages, the district court may

take into account the difficulty of proving an exact amount of

damages from false advertising, as well as the maxim that “the

wrongdoer shall bear the risk of the uncertainty which his own

wrong has created.” Otis Clapp & Son v. Filmore Vitamin Co.,

754 F.2d 738, 745 (7th Cir. 1985) (quoting Bigelow v. RKO Radio

Pictures, Inc., 327 U.S. 251, 265 (1946)). At the same time,

the court must ensure that the record adequately supports all

items of damages claimed and establishes a causal link between

the damages and the defendant’s conduct, lest the award become

speculative or violate [Lanham Act] section 35(a)’s prohibition

against punishment.

ALPO, 913 F.2d at 969 (citations and footnote omitted).

The court’s application of the presumption of causation and injury

to the facts of this case, in concert with the damages instructions, was

not erroneous. A predicate finding of intentional deception, as a major

part of the defendant’s marketing efforts, contained in comparative

advertising, encompasses sufficient harm to justify a rebuttable

presumption of causation and injury in fact. Once it had established its

claim, Porous still bore the burden of proving an evidentiary basis to

justify any monetary recovery. These instructions, properly reconciled,

balanced a recognition of the basic harm to a plaintiff who is targeted by

deliberately deceptive comparative advertising with the statutory

requirement that any monetary recovery under the Lanham Act must represent

compensatory damages shown to have been caused by the defendant. We have

no reason to believe that the jury failed to follow instructions in its

formulation of the $1.5 million damages award. See Forbes v. Arkansas

Educational Television Comm’n, 93 F.3d 497, 501 (8th Cir. 1996), cert.

granted, 1997 WL 114947 (March 17, 1997) (“We have great faith in juries,

and their desire and ability to follow instructions and make distinctions

among the various issues put before them.”). In addition, after presiding

over the extensive trial, the district
The only evidence cited by Pall for the assertion that 10

Porous attempted to prove Pall’s statements were misleading is a

demonstrative exhibit used during the testimony of Michael

Spearman. However, in response to Pall’s objection, Porous

deleted use of the term “misleading” from the exhibit.

 Instruction No. 17 provides in relevant part: “Where, on 11

the other hand, Porous’ claim is that the advertising is

misleading, Porous must demonstrate, by extrinsic evidence, that

the challenged advertisement or statement tends to mislead or

confuse customers.”

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court rejected Pall’s motion for judgment as a matter of law, concluding

that “there is sufficient evidence to support the jury’s verdict on the

Lanham Act claim.”

B. Evidence of Customer Perception

Pall argues that it was entitled to judgment as a matter of law on

the Lanham Act claim because Porous failed to offer extrinsic evidence of

customer perception to prove Pall’s statements were misleading. In order

to prove that a statement was misleading, “proof that the advertising

actually conveyed the implied message and thereby deceived a significant

portion of the recipients becomes critical.” William H. Morris Co. v. Group

W, Inc., 66 F.3d 255, 258 (9th Cir. 1995) (citations omitted). Pall

asserts that in proving Pall’s statements about its own products were

misleading, Porous utilized improper opinion testimony and failed to

provide the necessary market research or customer surveys to show how a

significant number of customers perceived Pall’s statements. We reject

this argument.

First, Pall’s conclusory statements that the district court permitted

improper opinion testimony are insufficient to establish that the district

court abused its discretion in admitting this testimony. Second, the case

was tried by Porous primarily, if not exclusively, on the ground that

Pall’s statements were literally 

false rather than misleading. Third, the jury instruction, which 10 11
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provided liability for both false and misleading statements, required

Porous to demonstrate by extrinsic evidence that any allegedly misleading

statement was confusing. This properly states the law urged by Pall.

Finally, given the facts of this case, Porous need not have been required

to present extrinsic evidence of confusion. Because the jury found that

Pall violated the Lanham Act willfully and in bad faith, “we see no need

to require [Porous] to provide consumer surveys or reaction tests in order

to prove entitlement to damages.” PPX, 818 F.2d at 272.

II. PRODUCT DISPARAGEMENT CLAIM

The district court properly instructed the jury that in order to

prevail on its claim of product disparagement, Porous had to prove that

Pall published a false or disparaging statement concerning Porous’s

products and that special damages resulted from the publication. The

product disparagement claim covered statements Pall made about Porous’s

products, and was limited to statements in the paper/power markets.

Porous’s common-law product disparagement claim is governed by

Minnesota law. Pall asserts that Porous failed to claim or prove special

damages, an essential element of a claim for product disparagement under

Minnesota law. Therefore, Pall contends that the district court erred in

failing to grant Pall judgment as a matter of law, or in the alternative,

a new trial based on the insufficiency of the evidence to support the

verdict.
We find merit, as indicated below, in some of Porous’s 12

argument that Pall failed to preserve for appeal its challenge to

the sufficiency of the evidence supporting the product

disparagement verdict. However, this legal question, whether

Porous’s theory of damages constitutes special damages cognizable

in a product disparagement case in Minnesota, was preserved for

appeal because it was argued to the district court before the 

case was submitted to the jury. See Ruyle v. Continental Oil Co.,

44 F.3d 837, 841 (10th Cir. 1994) (“A party who properly raises

an issue of law before the case goes to the jury <need not

include the issue in a motion for a directed verdict in order to

preserve the question on appeal.’”) (citing Landes Constr. Co.,

Inc. v. Royal Bank of Canada, 833 F.2d 1365, 1370 (9th Cir.

1987)); Bottineau Farmers Elevator v. Woodward-Clyde Consultants,

963 F.2d 1064, 1073 (8th Cir. 1992) (holding that legal issue

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We review the district court’s interpretation of state law de novo.

Sondel v. Northwest Airlines, Inc. 56 F.3d 934, 937 (8th Cir. 1995)

(citations omitted). We also review the district court’s denial of a

motion for judgment as a matter of law de novo. Keenan v. Computer Assoc.

Int’l, Inc., 13 F.3d 1266, 1268 (8th Cir. 1994) (citation omitted). In

determining whether there exists sufficient evidence to support the jury

verdict, we must view the evidence in the light most favorable to the

prevailing party, remembering that “[j]udgment as a matter of law is

appropriate only when all of the evidence points one way and is

<susceptible of no reasonable inference sustaining the position of the

nonmoving party.’” Id. at 1269 (citation and footnote omitted). The

district court’s denial of a motion for a new trial under Fed. R. Civ. P.

59 is reviewed for a abuse of discretion. Where the basis of the decision

is that the verdict is not against the weight of the evidence, the district

court’s denial of the motion “is virtually unassailable.” Pulla v. Amoco

Oil Co., 72 F.3d 648, 656 (8th Cir. 1995) (citing Keenan, 13 F.3d at 1269).

A. Damages Theory

Pall argues that Porous’s theory of damages to support the product

disparagement claim does not satisfy, as a matter of law, the element of

special damages. Pall asserts that Minnesota law does not allow use of a

lost growth opportunity measure of damages in a product disparagement claim

and that therefore it was entitled to judgment as a matter of law.12
raised in motion for summary judgment did not have to be

reasserted in subsequent motions for directed verdict in order to

be preserved for appeal). 

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Porous’s claim for special damages was based on lost growth

opportunities and specific lost sales. Porous demonstrated that it

initially achieved sales growth in the paper/power markets but that its

sales plateaued or declined after the disparagement by Pall. In fact, the

paper/power markets were the only markets in which Porous failed to achieve

significant growth in sales. Porous introduced marketing reports from Pall

which claimed that Pall’s sales literature, which included false or

misleading information about Porous’s products, was helpful in competing

against companies like Porous and had resulted in regaining some lost sales

for Pall. One of Pall’s distributors, Bill Brown, testified that his use

of Pall’s negative literature regarding Porous was helpful in retaining

business. Steven Edwards, a salesman for one of Pall’s distributors,

testified that his use of Pall’s comparative literature influenced

customers and that a specific customer had switched back to Pall’s products

from Porous’s after reviewing the negative literature. Porous introduced

the “Will-Fit Alert,” a memo prepared by an employee of Pall, which Porous

argued contained false and deceptive comparisons between Porous’s and

Pall’s filters. The memo states that Pall’s comparison to Porous’s filters

caused Consolidated Paper to abandon Porous and use only Pall’s filters.

Patrick Spearman, a vice president of Porous in charge of marketing,

testified that Porous lost a number of specific customers because of Pall’s

disparaging statements, and
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that Porous was also unable to approach numerous other potential customers.

Spearman and his brother, Michael Spearman, another principal for Porous,

were both qualified as experts in the filter industry. They testified that

Pall’s disparagement was the cause of the harm to Porous and excluded other

potential causes for Porous’s failure to grow in the paper/power markets.

Finally, Porous’s expert economist, Dr. Michael Brookshire, testified as

to Porous’s lost growth opportunity by comparing Porous’s sales in the

paper/power markets with the geometric average growth rate of Porous’s

sales in all of its markets, and in the pneumatics and instrumentation

markets, which Porous argues are the markets most similar to the

paper/power markets.

In Advanced Training Sys. v. Caswell Equip. Co., Inc., 352 N.W.2d 1

(Minn. 1984), the trial court reversed a jury verdict for the plaintiffs

on a product disparagement claim, holding, in relevant part, that the

plaintiffs had failed to prove special damages, which are an essential

element of the cause of action. Id. at 6. The Minnesota Supreme Court

affirmed this ruling, reasoning that

plaintiff may not recover for product disparagement unless

plaintiff is able to prove special damages in the form of

pecuniary loss directly attributable to defendant’s false

statements. Where plaintiff cannot show loss of specific

sales, the modern view allows plaintiff to prove a general

decline of business, so long as this is shown to be the result

of defendant’s disparaging statements and other possible causes

are eliminated.

Id. at 7-8 (citations omitted). Pall argues that the Minnesota Supreme

Court’s discussion of special damages in Advanced Training does not support

Porous’s award for product disparagement. We must disagree.
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First, we do not agree that Advanced Training precludes Porous’s

claim for special damages. In Advanced Training, the plaintiff failed to

prove loss of a specific sale or a general decline in business due to the

alleged disparagement, and in fact the plaintiff company had captured about

ninety-seven percent of the relevant market. Advanced Training, 352 N.W.2d

at 8. The Minnesota Supreme Court ruled that the plaintiffs’ claim that

they would have been more successful earlier but for the disparagement was

“too speculative”. Id. While recognizing that the element of special

damages is an important restriction on the product disparagement cause of

action, the logic of Advanced Training does not preclude Porous’s damages

award. See Prosser & Keeton on Torts, § 128 n.22 (5th ed. 1984 & Supp.

1988) (stating that the holding in Advanced Training that decline in

business due to disparagement was sufficient but failure to grow after the

disparagement was too speculative “is presumably an assessment of the

evidence as to loss, not a rule of law”). Porous presented evidence of

specific lost sales and lost growth opportunity, which established

pecuniary loss that the jury could reasonably believe was directly

attributable to Pall’s disparaging statements.

Second, the district court instructed the jury that Porous had to

prove special damages in order to establish its product disparagement

claim. See Instructions Nos. 25 & 26. In describing what Porous had to

prove in order to establish special damages, the jury instructions tracked

the relevant language of Advanced Training and described the necessity of

proof of special damages in a product disparagement claim. Therefore, the

district court applied the proper legal standard based on Minnesota law.

Given our holding that Porous’s theory of damages was not deficient as a

matter of law, the remaining question is whether there is sufficient

evidence to sustain the damages award.
Although Porous urges that Pall has waived its right to 13

challenge the insufficiency of the evidence of the product

disparagement claim by failing to renew by post-verdict motion

under Federal Rules of Civil Procedure 50(b), we need not address

that argument in light of our finding that there was sufficient

evidence to sustain the verdict.

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B. Sufficiency of the Evidence13

Under Advanced Training, Porous had the burden not only of proving

that Pall’s statements caused injury, but also of excluding other causes

for its loss. 352 N.W.2d at 8. Pall argues that Porous failed to satisfy

this method of proving special damages because the testimony of Porous’s

principals, the Spearmans, was too speculative to support special damages,

and other causes were at least in part responsible for Porous’s failure to

meet its sales projections. The district court rejected these arguments,

finding that “there is sufficient evidence to support the jury’s verdict

on the claim of common-law product disparagement.” District Court Order at

3. After reviewing the evidence in the record, viewing it in the light

most favorable to the verdict, we agree and affirm the district court’s

ruling. 

First, the testimony of the Spearmans was not too speculative as a

matter of law to support the jury’s finding of exclusive causation. Pall

argues, citing several antitrust cases, that Porous cannot prove the

exclusive cause of its damages through the testimony of its principals.

However, these cases do not present a rule of law that the testimony of a

company’s principals is too speculative to establish a material fact.

Rather, they focus on the lack of proof specific to each case. See e.g.

Argus Inc. v. Eastman Kodak Co., 801 F.2d 38, 45 (2d Cir. 1986) (affirming

summary judgment for the defendant because plaintiffs failed to present a

triable issue of fact on the element of causation);
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Foremost-McKesson, Inc. v. Instrumentation Laboratory, Inc., 527 F.2d 417

(5th Cir. 1976) (affirming directed verdict for defendant because plaintiff

failed to present sufficient evidence of causation). Additionally, as

qualified experts in the filter industry, the Spearmans could offer

opinions regarding the industry.

Second, Porous presented competent evidence excluding causes other

than Pall’s disparagement for its lost business. Pall contends that other

factors were responsible at least in part for Porous’s losses, citing

evidence that three Porous customers stopped buying Porous products for

other reasons, that competition increased in the paper/power markets during

this time, and that Porous reduced its marketing efforts in the paper/power

markets in the spring of 1990. However, Porous presented evidence that it

was successful initially in the paper/power markets, that its sales leveled

off or fell after the disparagement by Pall, that the markets in which it

was disparaged by Pall were the only markets in which Porous failed to

achieve significant growth during this time, and that Porous enjoyed the

same competitive advantages in the paper/power markets that led to great

success in the other markets. The Spearmans testified that Pall’s

disparagement was the exclusive cause of the harm to Porous and

specifically excluded other possible factors. Porous concedes that it

reduced its marketing effort in the paper/power markets in 1990, but argues

that this was done in order to counteract Pall’s attacks in the oil/gas

markets and was therefore a way of mitigating its overall losses.

We hold there is sufficient evidence to support the element of

special damages. Accordingly, the district court did not abuse its

discretion in denying Pall’s motion for a new trial on Porous’s common-law

claim for disparagement of its product.
Porous moved, pursuant to Rule 606(b) of the Federal Rules of Evidence, to strike 14

portions of the affidavit that attempted to relate the juror’s thoughts during the deliberation

process. The district court granted the motion, striking “those portions of the Flesher affidavit

that relate to juror statements regarding the effect the jury experiment had on the verdict.” 

See also Banghart v. Origoverken, A.B., 49 F.3d 1302, 1306 n.6 (8th Cir. 1995) (“Rule

606(b) establishes very strict requirements for accepting testimony from jurors about their

deliberations, and trial courts should be hesitant to accept such testimony without strict

compliance with the rule.”) (citation omitted). This ruling is not appealed.

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III. JURY MISCONDUCT

After trial, Pall discovered, through interviews with members of the

jury, that jurors had twisted and jumped on Porous’s filters during their

deliberations. Pall motioned the district court for relief from the

judgment, and a new trial, pursuant to Rule 60(b) of the Federal Rules of

Civil Procedure, for the alleged juror misconduct. Attached to the motion

was an affidavit from a legal assistant employed by Pall’s counsel

14

stating that she had contacted some of the jurors and that they told her

that the jurors had stepped and jumped on Porous’s filters to determine if

they would collapse. The district court held that the jury’s testing of

the strength of the filters constituted extraneous evidence, but it denied

Pall’s motion. The court held that Pall had failed to establish prejudice

from the misconduct, because it failed to prove, “by a preponderance of the

evidence, that the outcome of the trial would have been different had the

extraneous evidence not been introduced into deliberations.” 

We review the district court’s decision to deny a motion for a new

trial based on alleged juror misconduct for an abuse of discretion.

Banghart v. Origoverken, A.B. et al., 49 F.3d 1302, 1305 (8th Cir. 1995)

(citations omitted). In a civil case, the
The district court found that the award of attorneys’ fees was also warranted under the 15

Minnesota Deceptive Trade Practices Act, Minn. Stat. § 325D.45, subd. 2(2).

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exposure of extraneous evidence to the jury “mandates a new trial only upon

a showing that the materials are prejudicial to the unsuccessful party.”

Id. at 1306 (citing Peterson ex. rel. Peterson v. General Motors Corp., 904

F.2d 436, 440 (8th Cir. 1990) (other citations omitted)).

Pall argues that the district court was correct in finding that the

jurors’ “experiments” constituted extraneous evidence, but that it abused

its discretion in denying a new trial because the alleged misconduct

improperly impeached Pall’s statements about its own collapse testing of

Porous’s filters. We disagree. Porous’s filters were introduced into

evidence, and the jury was allowed to examine them in its deliberations.

We think, contrary to the district court’s reasoning, that the jury’s

examination of the filters did not constitute extraneous evidence, but was

merely part of the expected process of scrutinizing the evidence as part

of its deliberations. See Banghart, 49 F.3d at 1306-07. We find no

prejudicial error.

V. ATTORNEY FEES

The district court denied enhanced damages to Porous on the basis

that there was no evidence to support such an award under the Lanham Act.

This order was not appealed. 

However, the court proceeded to award attorneys’ fees and costs under

§ 35(a) of the Lanham Act on the basis that the facts presented constituted

an exceptional case. The district court stated: 15
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With respect to Plaintiff’s Lanham Act claim, the jury found

that Defendant acted willfully and in bad faith. This court

also finds that the record establishes Defendant intentionally

set out to deceive or confuse the public through the

publication of false statements about its product alone, and in

comparison to Plaintiff’s product, and that such conduct was

deliberate and willful.

. . .

Plaintiff submitted evidence of Defendant’s marketing reports

which established Defendant’s intent to regain clients from

what it called “willfitters.” This evidence, together with

evidence establishing Defendant published false statements

about its own products, cannot be characterized as a simple

disregard for Plaintiff’s rights. 

Our review of the record supports the district court’s determination.

 We hold the district court’s findings were not clearly erroneous and an

award of attorneys’ fees under the Lanham Act was fully justified. 

CONCLUSION

We affirm the verdict on both the product disparagement claim and the

Lanham Act claim.

JUDGMENT AFFIRMED.

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.