Northern Star Industries, Inc. v. Douglas Dynamics LLC

Citations: 848 F. Supp. 2d 934; 2012 WL 252846; 2012 U.S. Dist. LEXIS 8943Docket: Case No. 11-C-1103

Court: District Court, E.D. Wisconsin; January 25, 2012; Federal District Court

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On January 5, 2012, an evidentiary hearing was conducted regarding a preliminary injunction sought by Northern Star Industries, Inc. against Douglas Dynamics LLC. Northern Star, a Michigan corporation known for its 'Boss' brand snow plows, alleges that Dynamics has engaged in false and misleading advertising that violates the Lanham Act, specifically 15 U.S.C. 1125(a). The Court examined the evidence and testimony presented during the hearing, as well as the parties' briefs, to render findings of fact and conclusions of law.

Northern Star has been selling 'Boss' brand snow plows for over 20 years, establishing a reputation for durability, reliability, and safety, primarily targeting professional contractors. Dynamics, based in Wisconsin and operating under the 'Fisher' and 'Western' brands, competes directly with Northern Star's products. The dispute arose from a comparative advertising campaign initiated by Dynamics, described by Northern Star’s marketing director as a “fear campaign” linked to safety concerns. Epic Creative's CEO indicated that such fears can significantly impact consumer decisions and brand reputation.

The document also outlines the operational mechanics of the Boss v-blade snow plow, which features a hinged design allowing for various configurations to improve efficiency in snow removal. The snow plow industry has historically addressed the risk of hidden obstacles through tripping technology, which enables the blade to rotate backward upon encountering such obstacles. Northern Star and Dynamics present differing views on the mechanics of this tripping function.

Tripping, as defined by Cashman, occurs when a snow plow blade folds forward to navigate an obstacle. Cashman indicated that in the V-mode, the two halves of a v-blade cannot fold forward; instead, the entire blade must tilt and lift over objects. Dynamics identified safety as a priority for snow plow dealers, operators, and customers, leading them to believe that the trip-edge design is both superior in performance and safer than the trip-blade design. Consequently, Dynamics sought to highlight these advantages in an advertising campaign developed by Epic, which included feature comparisons favoring Fisher and Western brands over Boss.

For the promotional videos, Dynamics constructed a test track in Epic’s parking lot, using steel pins as immovable obstacles. Dynamics Supervisor Chad Thomas Barker, who has extensive experience with obstacle testing and as a race car driver, oversaw the tests conducted on June 13, 2011. The tests involved three different snow plow models: Boss Power-V XT, Fisher XtremeV, and Western MVP Plus, using varying types of trucks which may have affected the outcomes due to differences in suspension and components.

Tests commenced at speeds of five miles per hour, with increments planned up to 15 miles per hour; higher speeds were abandoned due to safety concerns. Barker monitored speed via the truck's speedometer, acknowledging a margin of error he could not quantify. Throughout the tests, he maintained focus on both the speedometer and the pins, wearing a seat belt for safety. The Boss v-plow successfully cleared obstacles in three of four tests performed in scoop and V-modes at five and ten miles per hour.

Five cameras, including two GoPros, were utilized to capture the tests. Dynamics did not gather quantitative data from these runs. Selected video footage from the Boss v-plow, including one take in straight mode and two in scoop mode at five miles per hour, was featured in the comparison video, with cab footage sourced from either the fourth or fifth take.

The cab shot appears in two videos: one after the Boss v-plow is shown in scoop mode, and another in a split screen comparing drivers of Boss and Western/Fisher trucks. Both instances illustrate the driver's impact at five miles per hour when the truck fails to clear the pegs. Dynamics did not include footage of the Boss v-plow clearing the pegs at ten and fifteen miles per hour. Barker notes the absence of two pegs in a parking lot and explains that two pins were used for consistent hits across the blade. The Boss manual advises operators to not exceed 14 miles per hour and mandates the use of seatbelts. Similarly, the Western manual sets a maximum plowing speed of ten miles per hour and recommends wearing seatbelts.

The Fisher/Western trip edge may rotate if it strikes an object eight to nine inches above the six-inch mark but may not clear hidden obstacles due to interference with the moldboard. Barker emphasizes safety concerns, stating he wouldn't drive into pins protruding nine inches from the ground. Trip edges typically start at six inches but can wear down to four inches, increasing risk when encountering hidden obstacles. 

Dynamics began a comparative advertising campaign in August 2011, featuring four print ads and two videos comparing Boss with Fisher and Western plows. Notable ads include a Fisher print with a bloody-faced man and a shattered windshield, both highlighting the need for safety equipment. Another Fisher ad shows a physician examining skull x-rays, while a Western ad features a raised manhole cover. These advertisements aim to provoke concern over safety and direct viewers to websites for further information on v-plow safety and comparisons.

Print advertisements were published in trade magazines targeting snow removal professionals and landscapers, with circulations ranging from 5,000 to 120,000. Each ad included links to Dynamics' websites for Fisher and Western snow plows, featuring videos that highlight the advantages of their products. 

The Fisher video, accessible via a prominent link titled 'GET THE FACTS' on the Fisher homepage, explains the limitations of Boss’ trip blade, which can only trip in a straight configuration, and contrasts this with Fisher's V-plow, which utilizes trip edge protection allowing it to trip in any configuration. The video emphasizes that this feature prevents issues when encountering hidden obstacles.

Similarly, the Western video, linked as 'TRUTH IN SNOWPLOWING' on the Western homepage, conveys the same message regarding trip edge protection versus Boss’ trip blade. Both videos include footage demonstrating the limitations of the Boss plow, reiterating that Fisher and Western v-plows provide safety and functionality across all plowing configurations. The narrative in both videos underscores the importance of trip edge protection for operational safety, illustrating their products' superiority in various plowing scenarios.

On September 30, 2011, Northern Star issued a cease and desist letter to Dynamics, demanding the immediate cessation of any false or misleading claims regarding Fisher, Western, and Boss Snow Plows. The letter required Dynamics to remove all such claims from promotional materials and to initiate a corrective advertising campaign within two business days, warning that failure to comply would lead to legal action. In response, Dynamics agreed on October 21, 2011, to halt further production of print advertisements and edited specific video content on its websites. However, original video versions remained available on dealer websites and other platforms. Dynamics conveyed its position in a letter on the same day, referencing prior discussions.

On November 10, 2011, Northern Star sent a lengthy letter reiterating concerns about Dynamics' advertising practices, expressing a preference to avoid litigation but indicating that continued non-compliance could necessitate legal remedies. From August to November 2011, the disputed print advertisements circulated in trade publications, with lingering copies still accessible online and in waiting areas. The videos had also gone viral, exacerbating concerns among customers, including a Boss customer who expressed worry over safety issues related to the videos.

Northern Star's engineering manager, Jody Christy, conducted tests using only the information from Dynamics' videos, without requesting additional data from Dynamics. The tests employed a standard 2003 F-250 truck on Northern Star's Boss test track.

Pins used in the Northern Star tests measured eight inches long and were set six inches deep in steel sleeves within concrete, protruding 2.5 inches above ground and placed on springs to prevent tire punctures. A 20-pound load cell was mounted on the truck, with testimony indicating that neither the springs nor the load cell influenced tripping. Northern Star engaged consultant Jeff Gwaltney from the Keweenaw Research Center for access to high-speed imaging and speed sensors. Tests utilized a Photron Fastcam for recording and a calibrated Racelogic Speed Sensor, accurate to within one-tenth of a mile.

Results indicated that at speeds of 15, 10, 5, 3, and 2 mph, the Boss v-blade in scoop mode tripped and cleared the pins (tests 1, 2, 4, 6, and 8). In tests 3, 5, and 7 at 10, 5, and 3 mph, the v-blade in v-mode rotated, tripped, and cleared the pins. Additional runs (tests 9 and 10) were conducted at 10 and 7 mph with the v-plow in scoop mode. One pin dislodged during testing. Data from a spring potentiometer during the 7 mph test indicated the maximum speed was 6.7 mph, with the truck coasting down to 4.9 mph as blade rotation cleared the obstacle. In the 5 mph v-mode test, the truck initially recorded 5.1 mph, slowing by one mph upon hitting the pins.

Unrelated tests with manhole covers showed the Boss v-plow successfully tripping and clearing obstacles. Post-hearing actions revealed that Dynamics removed contested print advertisements from its website and Facebook page as of January 19, 2012, with no intention of future circulation. Dynamics indicated it would review its web videos following discrepancies noted in the hearing. By January 24, 2012, Dynamics reported changes to web advertisements for the Fisher and Western lines, including raw test footage and accurate cab-shot alignment, with plans to post revised advertisements on January 30, 2012, pending court approval.

On January 25, 2012, Northern Star responded to proposed revised videos, indicating that these videos contain additional legal deficiencies, which will be detailed in future legal actions. Northern Star asserts that the revised videos do not remedy the damage already inflicted on the Boss brand and its reputation. 

A preliminary injunction is described as an extraordinary remedy that is not automatically granted; Northern Star must demonstrate a likelihood of success on its claims, potential for irreparable harm without the injunction, that this harm outweighs any harm to Dynamics from granting the injunction, and that the injunction serves the public interest. The likelihood of success assesses the strength of the underlying lawsuit, while the likelihood of irreparable harm considers the urgency for equitable relief, with both factors being interdependent. 

For an injunction to be granted, the potential harm must be more than a mere possibility; it must be likely, although it does not need to be currently occurring. False or misleading commercial speech can be prohibited, and to establish a claim under the Lanham Act, a plaintiff must prove five elements, including that a false statement was made in a commercial advertisement that deceived or had the tendency to deceive a substantial audience, and that the plaintiff suffered harm as a result. False statements can be either literally false or misleading in context. For literal falsity, the plaintiff must show that the defendant's claims are unproven or provide proof of falsity. If the statements are literally true or ambiguous, the plaintiff must demonstrate that they are misleading and have caused consumer confusion.

Northern Star asserts that Dynamics makes three advertising claims that are either literally false or misleading. 

**Claim One**: Dynamics' advertisements state that the Boss Power V-XT V-Blade cannot trip in 'V' or 'scoop' mode. Northern Star argues this is false, supported by Dynamics’ own video evidence showing the Boss plow successfully tripping and clearing obstacles in these modes during tests. Specific details reveal that the plow tripped in three out of four tests at various speeds. Both Dynamics' driver and Northern Star's engineer confirmed this capability. Northern Star also challenges the reliability of Dynamics' testing methods, citing issues with speed measurement and the use of different truck models, which could affect test comparisons. Despite Dynamics' challenges to Northern Star’s testing methodology, the latter's oversight and results suggest a more reliable approach. Ultimately, Northern Star demonstrates that Dynamics' claim is literally false, negating the need to prove consumer confusion, and establishes that Dynamics caused this false assertion to spread in interstate commerce, potentially harming Northern Star's goodwill.

**Claim Two**: Northern Star claims Dynamics' advertising implies that users of Boss plows will be injured, while users of Fisher and Western plows will not. Northern Star contends that Dynamics falsely presents its advertisements as providing essential safety information.

Northern Star is not seeking to enjoin a specific statement but challenges the misleading nature of a comparison between the risks of injury associated with Boss trip-blade v-plows and Fisher/Western trip-edge v-plows. Northern Star asserts that Dynamics' claims about the dangers of using Boss v-plows, including the necessity of wearing a crash helmet and the severe consequences of obstacles, are derived from outdated print ads and videos, failing to substantiate a false statement of fact. The statements regarding being in the "crash zone" and the lack of protection from the trip blade are found on Fisher/Western websites and are deemed literally false. Northern Star has not received any complaints regarding Boss v-plows failing to trip, and the evidence presented by Dynamics regarding injuries is considered unreliable or anecdotal. Postings on plow-site.com are given little credence due to their questionable authenticity. Northern Star has established that the false statements have materially affected its goodwill, although it did not present evidence of direct sales diversion. 

Regarding Dynamics' claim about Fisher and Western plows safely tripping over obstacles in any configuration, Northern Star has shown that failures to trip can occur due to obstacle height or wear, but not due to blade configuration. The claim is not literally false but is misleading in suggesting universal trip capability. Northern Star has not provided evidence of actual consumer deception related to this claim, thus failing to establish a likelihood of success under the Lanham Act for this aspect. Overall, Northern Star is likely to succeed on its first two claims, with the first claim of literal falsity being the most compelling.

To secure injunctive relief, Northern Star must prove the absence of an adequate legal remedy, indicating it will suffer irreparable harm. The Seventh Circuit recognizes a presumption that injuries from Lanham Act violations are irreparable, even without evidence of business loss. This presumption arises from the challenge of quantifying intangible damages like reputational harm and loss of goodwill. Northern Star asserts it is likely to demonstrate that two claims against Dynamics are literally false, thereby invoking this presumption of irreparable harm. However, Dynamics argues Northern Star failed to provide admissible evidence of imminent irreparable harm and delayed in addressing Dynamics’ advertising campaign, which may undermine its claim. 

Northern Star became aware of the campaign on July 18, 2011, but only issued a cease and desist letter on September 30, 2011, allowing Dynamics minimal time to comply. Following Dynamics’ non-compliance, Northern Star delayed further action, responding to Dynamics’ concessions 20 days later and ultimately filing for injunctive relief nearly a month after that. Courts have viewed such delays as detrimental to a claim for urgent preliminary relief, suggesting that a lack of prompt action can weaken the presumption of irreparable harm.

The court denied a preliminary injunction for Northern Star despite a presumption of irreparable harm due to the plaintiff's three-month delay in filing the action and substantial marketing efforts by the defendant, Dynamics. The court referred to previous cases noting that a significant delay may indicate a lack of irreparable harm. It emphasized that without evidence showing that Dynamics was misled by Northern Star's delay, the claim of irreparable injury remained intact. Consequently, the presumption of irreparable harm was not rebutted, allowing the court to forgo discussing additional claims of injury from Northern Star. 

The court also considered whether the harm to Northern Star without an injunction outweighed the potential harm to Dynamics and whether the injunction served the public interest. Dynamics argued that an injunction would disrupt its ongoing marketing campaign and cause confusion. However, the court found Northern Star likely to succeed in proving that certain claims made in Dynamics' campaign were false, concluding that the harm to Northern Star was greater. Furthermore, the public interest favored the injunction as it would protect consumers from misleading advertising under the Lanham Act.

Northern Star's request for the preliminary injunction included demands for Dynamics to cease its false advertising immediately and to publish corrective advertisements to counter the misleading statements made in its promotional materials.

Douglas Dynamics is prohibited from publishing false or misleading statements about Northern Star's Boss snow plows and Dynamics' Fisher and Western snow plows, encompassing all forms of communication, including emails and advertisements. Additionally, Dynamics must submit a detailed, sworn report to the Court within ten days of the preliminary injunction order, demonstrating compliance with the injunction. Dynamics argues that the broad injunction sought by Northern Star is unwarranted at this time, noting that not all aspects of its 2011 advertising campaign have been challenged, and it plans to update certain videos on its website. Northern Star maintains there are legal deficiencies in these revised videos. The court acknowledges the potential need for corrective advertising, as supported by precedent, citing its importance in promoting truthful advertising under the Lanham Act, especially given the misleading nature of Dynamics' campaign. 

However, the initial request for the preliminary injunction lacks sufficient specificity as required by Rule 65(d), which aims to clearly outline the injunction's terms and protect against contempt due to ambiguity. Northern Star's recent brief offers more detail, yet it must draft a revised injunction order to be submitted to Dynamics. Any mutually agreed-upon injunction must be filed by February 10, 2012. If an agreement cannot be reached by that date, Northern Star must file its proposed injunction, and Dynamics must submit its objections. The Court will also expedite discussions regarding the necessary bond for the injunction's issuance.

Northern Star's motion for a preliminary injunction has been partially granted. Northern Star is required to draft a revised proposed preliminary injunction order that aligns with the Court’s Decision and Order and submit it to Dynamics. Any mutually agreed proposed injunction must be filed by February 10, 2012. If no agreement is reached by that date, Northern Star will need to submit its revised order, while Dynamics must file any objections. Additionally, the Court mandates expedited submissions regarding the bond amount: Dynamics must present its statement on the bond by February 1, 2012, and Northern Star must respond by February 9, 2012. The excerpt also references 15 U.S.C. 1125(a)(1)(B), which addresses civil liability for false or misleading representations in commercial advertising. Furthermore, it notes that Barker claimed "extended-cab, three-quarter ton pick-up trucks" were used in tests, and mentions the Klossner Declaration and the McCarthy Affidavit, previously filed as Docket Nos. 6 and 8, respectively. Northern Star claims original videos are located on the Facebook pages of Fisher and Western, though the cited paragraph from the Klossner Declaration indicates that these are current videos.