A federal judge has dismissed the remaining claims in Philadelphia plaintiffs firm Larry Pitt & Associates' lawsuit against competitor Lundy Law, despite acknowledging “evidence of years of wrongdoing by the defendants.”

In a Feb. 15 opinion that reserved its harshest rebuke for the winning party, U.S. District Judge Cynthia M. Rufe of the Eastern District of Pennsylvania granted summary judgment in favor of Lundy Law, dismissing the Pitt firm's suit, which included false advertising claims in addition to claims for wrongful use of civil proceedings and trade secret misappropriation. The court had earlier dismissed the Pitt firm's Sherman Antitrust Act and tortious interference claims.

But it was in the course of explaining the dismissal of Pitt's false advertising claims under the Lanham Act—along with a nearly identical deceptive marketing claim under Section 2 of the Restatement (Third) of Unfair Competition—that Rufe sharply criticized a handful of Lundy Law advertisements in which the firm claimed to handle Social Security disability benefits cases during a period when it referred all of those cases to other firms.

“The court is aware that its decision today denies a plaintiff relief despite evidence of years of wrongdoing by the defendants,” Rufe said. “There is every indication here that a prominent personal injury law firm in Philadelphia essentially rented out its name in exchange for referral fees and that its managing partner lied on television that his firm handled Social Security disability claims when it did not. But when a plaintiff fails to meet its burden of establishing causation of harm or likelihood of future violations, the Lanham Act and Pennsylvania law do not permit a court to grant relief based solely on a defendant's past misrepresentations.”

Rufe made clear, however, that there are other avenues of recourse for plaintiffs alleging false advertising by law firms.

“Nonetheless, courts are not the only institutions to review deceptive attorney advertising; nor are they typically the most appropriate or efficient forum,” she continued. ”In many instances, a complaint to the state attorney disciplinary boards may be the most effective means for quickly ending and sanctioning plainly unethical conduct. Thus the court's decision should not be read to condone or excuse defendants' alleged actions, but should instead serve as a reminder of the burden that plaintiffs bear when they choose to seek relief against their competitors in court.”

The Pitt firm's lawsuit against Lundy Law and its managing partner, L. Leonard Lundy, came after the Lundy parties withdrew their own trademark infringement suit against the Pitt firm alleging its “Remember This Number” slogan was too similar to Lundy Law's “Remember This Name” slogan.

The Pitt firm alleged the trademark suit was a Dragonetti Act violation and further claimed that Lundy Law's advertisements for workers' compensation and Social Security disability benefits cases violated the Lanham Act. Pitt also alleged common law unfair competition claims based on deceptive marketing and trade secret misappropriation.

Rufe said the Pitt firm failed to show how Lundy Law's workers' compensation advertisements were false or misleading. Rufe noted that Lundy Law had an of counsel relationship with workers' compensation attorney Lenard Cohen, who, while maintaining a separate solo firm, is covered under Lundy Law's liability insurance policy, keeps Lundy Law business cards and a Lundy Law email address and has an office physically located within Lundy Law's Philadelphia office.

“While the use of the label, 'of counsel,' is not dispositive of whether an attorney can be fairly advertised as an attorney of the firm (since there may be circumstances where the use of the title itself is meant to mislead), Pitt has not provided sufficient evidence to show that the nature of Lenard Cohen's relationship with Lundy differed materially from a consumer's reasonable understanding of the relationship between a law firm and its attorneys,” Rufe said. ”A potential workers' compensation client who contacted Lundy Law would meet with an attorney physically present in the office and would have recourse to Lundy Law's malpractice insurance for the attorney's conduct, if necessary.”

Some of Lundy Law's advertisements targeted to Social Security benefits work, however, were a different story.

In 2012 and 2013, according to Rufe, Lundy Law aired two television commercials that made specific statements including, among others: “Lundy Law gets you the Social Security benefits you deserve” and, “We'll help you through the process. That's what we do.”

Additionally, Lundy Law distributed a print advertisement to clients between 2012 and 2016 that included Social Security as one of the firm's practice areas, Rufe said.

In reality, between Nov. 8, 2008, and Oct. 31, 2013, Lundy Law referred all Social Security benefits cases to Indiana-based Fleschner, Stark, Tanoos & Newlin and later Philadelphia-based Pond Lehocky Stern Giordano, according to Rufe. It wasn't until November 2013 that Lundy Law hired an attorney named Michael Squires to handle Social Security cases for the firm.

“While Lundy maintains that these advertisements do not 'suggest that Lundy Law employees will themselves handle the viewers' Social Security disability claims from beginning to end,' this argument misapprehends both the standard for literal falsity and the nature of the asserted misrepresentation,” Rufe said.

Rufe noted that an advertisement that is not verbally explicit can still be literally false if it implies a false message to consumers.

“In this case, when a law firm releases a commercial directed specifically at Social Security disability cases, and tells viewers that it will help them through the process of obtaining Social Security benefits because 'that's what [they] do,' such a message necessarily implies that lawyers within the law firm handle their clients' Social Security claims,” Rufe said. “Similarly, when a law firm lists 'Social Security' among its 'practice areas,' it unambiguously implies that attorneys at the firm handle cases within that practice area.”

Rufe added that Lundy Law's advertisements did not need to claim that the firm's attorneys would handle all aspects their clients' Social Security cases in order to be false.

“If Pitt has provided evidence that Lundy Law's attorneys handled no aspect of their client's Social Security claims, then any advertisement that represents that Lundy Law's attorneys handled any portion of the claims process would be literally false,” Rufe said. “Here, the court concludes that the statements in at least the three advertisements discussed above are sufficiently specific and definitive to constitute unambiguous representations that Lundy Law's attorneys handle Social Security disability claims.”

Nevertheless, the Pitt firm failed to show that clients with Social Security benefits claims engaged Lundy Law specifically in response to allegedly false statements made in the firm's advertisements, Rufe said.

“Because Pitt has not established a causal link between the claimed misrepresentations and any clients or cases obtained by the firm, Pitt has not established that Lundy was unjustly enriched as a result of its false statements,” Rufe said.

The Pitt firm also failed in its bid for injunctive relief.

“Because Lundy has ceased its offending activity, and there is no evidence of an inclination to repeat the offense, there are no genuine disputes of fact that would support granting injunctive relief based on Lundy Law's allegedly false advertisements before November 2013,” Rufe said.

The Lundy defendants' attorney, Robert C. Heim of Dechert in Philadelphia, said he and his clients were “very pleased” with the ruling.

“And I think we were particularly pleased that the court found no evidence that anyone had been deceived by the Lundy advertisements,” Heim said.

While he acknowledged that Rufe had some harsh words for his clients, he noted that the advertisements that drew the judge's criticism represented only a fraction of those at issue in the case.

“There, the court was referring to a small number of ads that ran years ago among a much larger volume of ads that were not of concern to the court,” Heim said.

Counsel for the Pitt firm, Maurice Mitts of Mitts Law in Philadelphia, could not immediately be reached for comment.

As for the Dragonetti Act claim, Rufe said the Pitt firm failed to show that Lundy Law's trademark suit was filed without probable cause.

The Pitt firm had argued that Lundy Law's voluntary withdrawal of the suit one day after learning the Pitt firm was being indemnified by an insurance carrier was evidence that Lundy Law anticipated defeat.

Rufe disagreed.

“First, even if one could infer from the timing of Lundy Law's withdrawal of its suit that its decision was based on Pitt's financial ability to fully litigate the case, the mere desire to avoid protracted litigation is not proof of anticipated defeat,” Rufe said. “Moreover, Pitt does not dispute that both parties are still actively litigating Lundy Law's attempt to obtain registration for its 'Remember this Name' slogan before the Trademark Trial and Appeals Board.”

Rufe also rejected the Pitt firm's argument that Leonard Lundy's inability during a deposition to identify any specific individuals who told him they were confused by the Pitt firm's slogan was evidence that the infringement lawsuit was baseless.

“Indeed, a plaintiff asserting trademark infringement can prove likelihood of confusion without any evidence of actual confusion,” the judge said.

The Pitt firm's allegations of trade secret misappropriation, meanwhile, related to communications between Leonard Lundy and his daughter Sara Lundy, an account executive at an advertising firm formerly known as Titan Outdoor. Titan is the exclusive advertising company for the Southeastern Pennsylvania Transportation Authority and Lundy Law has advertised on SEPTA vehicles and at SEPTA stations and stops for years.

The Pitt firm had alleged that Sara Lundy improperly provided Lundy Law with photographs of advertisements used by other law firms, including the Pitt firm, along with information about the locations of those ads and transit ridership information.

“However, while the nepotistic interactions between Leonard and Sara Lundy may be concerning for Titan and SEPTA, Pitt has not established that any of the information exchanged between Titan and Lundy was confidential,” Rufe said. “There is no evidence that Titan provided Lundy with copies of any internal advertising strategy documents, unpublished draft advertisements, or extensive compilations of advertising data that might reasonably carry an expectation of confidentiality. Nor has Pitt identified any confidentiality agreements between Titan and any law firm that prohibited Titan from sharing the locations or photographs of law firms' advertisements with other Titan customers.”