‘Puffery’ Claim Leads to Another Delay in Maxava-Vision Trial
October 28, 2013 Alex Woodie
The judge overseeing the legal dispute between IBM i high availability software vendors Maxava and Vision Solutions last month delayed the trial, which was scheduled to begin October 22. The judge decided to continue the pretrial conference until Halloween to give him time to respond to Vision’s request to restrict Maxava’s ability to introduce evidence of alleged statements by the defendants that were “mere puffery” and not violations of the law.
At the September 23 pretrial conference, Judge George Wu rejected the Vision and Sirius “motion in limine” for an entry of judgment. That was one of two filings that the defendant made in late August, the other being the claims about the puffery and the attempt to prevent PowerPoint slides from being presented as evidence at trial.
Vision and Sirius filed their motion in limine in an attempt to get the court to throw out the remaining two complaints against them. In May, you will remember, Judge Wu threw out Maxava’s claims of federal Lanham Act violations, leaving just the two lesser claims relating to violations of California’s Unfair Competition Law (UCL) and False Advertising Law (FAL).
Vision and Sirius argued that it’s impossible for Maxava to get what it wants with respect to the remaining claims, and that therefore they should be thrown out. For starters, Maxava apparently is not seeking restitution, Vision says (although apparently Maxava hasn’t stated that formally to the court). Indeed, Maxava executives have told IT Jungle several times over the years that it seeks its day in court. This would further explain why the two parties have not settled out of court, which is how the vast majority of civil lawsuits end. Few lawsuits ever make it to trial, and the California civil justice system is designed in part to keep disputes out of the courtroom.
Besides restitution, the only other form of relief under the California laws is a permanent injunction. But that’s not reasonable either, for a variety of reasons, Vision and Sirius argue. For starters, the names of Maxava’s company and its products have changed. “As a result, the allegedly false documents no longer refer to a company or product that is known to consumers,” Vision and Sirius claim.
Further, no injunction could be issued by the court, the defendants argue. “Courts generally do not issue injunctions requiring a civil defendant to obey the law. Both federal and state law prohibit false advertising and, thus, entry of such a broad injunction would be duplicative and unnecessary,” their lawyers wrote.
Also, Vision and Sirius have stopped using the marketing materials at issue, and promise to be good in the future. “No evidence exists that Defendants intend to redistribute the competitive documents or continue to make the alleged false statements absent a permanent injunction,” they write. “In the absence of any evidence that Defendants are likely to redistribute the documents, Maximum cannot show that it is likely to suffer immediate irreparable harm.”
Finally, Vision and Sirius are taking the First. “. . .[A]ny injunction Maximum might seek would most likely violate Defendants’ First Amendment Rights,” the lawyers argue. “Defendants have the right to make true statements regarding Maximum’s (now Maxava’s) products.”
Judge Wu didn’t buy any of those arguments. In his ruling, he explained his reasoning. “Here, at the pretrial stage, the Court obviously cannot determine whether Plaintiff has actually succeeded on the merits of its UCL and FAL claims,” he wrote in his September 23 opinion. “Assuming Plaintiff does succeed, the Court would reject Defendants’ assertion that any kind of permanent injunction would be untenable. The Court is not convinced that subsequent events have ‘made it absolutely clear that the allegedly wrong behavior cannot reasonably be expected to recur.'”
It looks as though Judge Wu is entertaining the idea of leveling a permanent injunction against Vision and Sirius, if Maxava wins in trial. “Plaintiff also offers several examples of proposed permanent injunctions that could potentially be viable,” the judge wrote. These include ordering defendants to “‘cease repeating that Maximum does not offer 24/7 global support’ and/or that Defendants could be barred from publishing ‘replacement slides’ that involve multiple competitors but do not distinguish between which companies were former customers of which competitor.”
On the second matter before Judge Wu, concerning the defendants’ joint motion regarding the “competitive replacement slides” and statements that it deems non-actionable “puffery,” the judge did not rule. Instead, he continued the pre-trial conference until October 31 at 8:30 a.m. PT, when he is expected to issue a ruling.
The legalese gets dense here, and it’s unclear exactly what Vision and Sirius are after. In their filing, the defendants say they want the court to prevent Maxava “from introducing evidence regarding the truth or falsity or otherwise arguing that liability should be based on those statements the Court finds are, or has already found to be, ‘mere puffery.'” It also wants the court to keep Maxava from “introducing any evidence regarding or otherwise arguing that liability should be based on the PowerPoint slides…”
In other words, it wants to keep the PowerPoint slides away from potential jurors. Maxava has listed hundreds of pieces of evidence it wants to introduce at trial, and many of them are PowerPoint slides that Vision, Sirius, and others used during client engagements during the 2006 to 2008 period at issue. Maxava has given these PowerPoint slides names, such as The Deceptive Corporate Logo Slides, the Deceptive Narrative Competitive Replacement Slides, and the False Six Former Maxava Customers Competitive Replacement Slides. Vision and Sirius, for their part, have already raised objections to most, if not all of them.
Instead, Vision and Sirius want to restrict Maxava’s evidence to the 18 allegedly false statements contained in two “competitive brief” documents that were the original basis of Maxava’s lawsuit back in December 2009. Those statements include items such as “Vision HA has replaced *noMax 80+ times;” “*noMax products are less mature and require careful implementation, custom coding and testing;” “Missing many key HA functionality requirement;” very immature enterprise, IFS, spool file, monitoring, and role swap functionality; and “Little or no 24/7 support (only available in New Zealand).”
In support of this approach, Vision and Sirius cite testimony made by Maxava CEO Allan Campbell. There are two components to Campbell’s testimony at issue. The first has to do with his inability to identify the PowerPoint slides. The second is the fact that he “confirmed that the 18 allegedly false statements . . . were the only ones at issue in this Action.”
The defendants hope that, by restricting Maxava’s evidence to those 18 allegedly false statements, it can weaken Maxava’s case, because there’s a good chance that those 18 statements constituted nothing more than “mere puffery” and were not violations of UCL and FAL.
Maxava responded by saying the defendants are trying to “create an unlevel playing field” and to shortcut the legal process. “Defendants cannot honestly deny that all parties knew Maximum was asserting claims of deception with regard to the PowerPoint slides ever since they were first discovered by Maximum,” the company’s lawyers write in a response. “Maximum identified the slides in its interrogatory responses, and Vision’s witnesses were exhaustively questioned on them.”
Concerning the failure of Campbell to identify the slides during questioning by Vision and Sirius attorneys, Maxava had this to say: “Defendants fail to point out to the Court that because defendants designated all slides ‘Attorneys’ Eyes Only’ throughout discovery, nobody at Maximum–including its Chief Executive Officer–was allowed to see the full extent of the false statements disseminated by Vision. Further, Maximum did identify the replacement slides in its sworn responses to Vision’s interrogatories. Defendants’ attempt to bar this evidence is without merit, and should be rejected.”