[00:00:00] Speaker 01:
Our first case is BPI Sports LLC versus Thermal Life International LLC.

[00:00:07] Speaker 01:
Counselor Dowd, you have reserved two minutes of time for rebuttal, is that correct?

[00:00:12] Speaker 03:
Yes, Your Honor.

[00:00:13] Speaker 01:
Counselor Hiller, you have 13 minutes for your response and two minutes for your cross-appeal, is that correct?

[00:00:21] Speaker 01:
Correct, Your Honor.

[00:00:23] Speaker 01:
Okay, I think we're ready to go.

[00:00:26] Speaker 03:
If I may, I'd like to start with the literal falsity issue, then turn to the speculative nature of the damages with respect to the injury element of the Lanham Act claim, and then spend some time on the sanctions issue.

[00:00:44] Speaker 03:
On the literal falsity issue, in our brief we set it forth pretty clearly, but I think the most straightforward path to understand why Jane Auster would have been granted was looking solely at BPI's evidence.

[00:00:57] Speaker 03:
And so if you look at what their expert testified to, their expert testified that when a user takes our product, the CRTN3 product, and when the user

[00:01:09] Speaker 03:
weighs 113 pounds or less, that user will experience vasodilation.

[00:01:15] Speaker 03:
So it cannot be unambiguously false, and therefore it does not qualify as literal falsity.

[00:01:22] Speaker 03:
That alone resolves the J-Mol issue.

[00:01:25] Speaker 03:
And so there's a really good quote from the Second Circuit in the Appitex versus Accord case.

[00:01:33] Speaker 03:
And there, the Second Circuit.

[00:01:34] Speaker 01:
Isn't it claimed that you have vascular dilation?

[00:01:39] Speaker 01:
Vascular dilation.

[00:01:41] Speaker 01:
But it only works if you're 113 pounds.

[00:01:44] Speaker 01:
Isn't that misleading?

[00:01:46] Speaker 03:
Your honor, it may be misleading.

[00:01:48] Speaker 03:
And this is solely looking at BPI's evidence.

[00:01:52] Speaker 03:
And the jury didn't find us liable based on a misleading claim.

[00:01:55] Speaker 03:
So that's the first point.

[00:01:57] Speaker 03:
The second point is BPI's burden to prove that it was misleading.

[00:02:00] Speaker 03:
They never did so because the second element of proving... Did the jury find that statement was false?

[00:02:06] Speaker 03:
Literally false, but not misleading.

[00:02:08] Speaker 03:
And that's the key distinction here.

[00:02:10] Speaker 00:
Was the material misleading theory presented to the jury, or only the literally false theory?

[00:02:17] Speaker 03:
That's a good question.

[00:02:18] Speaker 03:
And I don't think BPI ever made it clear, but the jury verdict form did.

[00:02:22] Speaker 03:
They gave the jury the option to select whether it was misleading or not.

[00:02:26] Speaker 03:
They did not.

[00:02:27] Speaker 03:
Again, that resolves the J-MAL issue in terms of literal falsity.

[00:02:30] Speaker 03:
The second point I'll add on that, and this is important as well, too.

[00:02:33] Speaker 02:
Yes, Your Honor.

[00:02:36] Speaker 02:
Can you give us a specific page for the jury verdicts and look at it in terms of that?

[00:02:38] Speaker 03:
Yes, Your Honor.

[00:02:40] Speaker 03:
That is at the very end of volume three of the appendix.

[00:02:45] Speaker 03:
And if you, sorry, if you bear with me for one second.

[00:02:50] Speaker 03:
Let's see.

[00:02:54] Speaker 03:
I had that a moment ago, but I could find that in a second, Your Honor.

[00:03:00] Speaker 00:
5263, 64, something like that.

[00:03:02] Speaker 00:
5263.

[00:03:02] Speaker 03:
Yes, that sounds right, Judge Stark.

[00:03:04] Speaker 03:
Thank you.

[00:03:05] Speaker 03:
And when you look at that jury voted form, you see the first question for the jury was whether the statement was literally false.

[00:03:13] Speaker 03:
And then the second question is about misleading.

[00:03:16] Speaker 03:
And the way the jury voted form was, if the jury selected literally false, then they skipped misleading.

[00:03:23] Speaker 03:
Now, let me just add another important point, and this is, we emphasize this in our brief as well, too.

[00:03:28] Speaker 03:
If you look at pages 46 and 47 of the blue brief and page one of our replied brief, the yellow brief,

[00:03:38] Speaker 03:
If it's a misleading claim under the Lanham Act, the plaintiff has to present evidence of actual consumer deception.

[00:03:45] Speaker 03:
And there's zero evidence of this.

[00:03:47] Speaker 03:
There's zero evidence of any consumer deception.

[00:03:50] Speaker 03:
There's zero evidence of any consumer buying our product instead of their product.

[00:03:56] Speaker 03:
And so even if the jury reached the misleading claim, then it still would have been right for J-Mall, Your Honor.

[00:04:01] Speaker 00:
If we were to reverse the denial of your J-Mall and order that the J-Mall be granted,

[00:04:08] Speaker 00:
What if any other issues in your appeal do we have to reach?

[00:04:13] Speaker 03:
Well, that's the only issue in terms of liability, but that would bring us to the sanctions appeal.

[00:04:20] Speaker 00:
So the jury instruction question about the materiality would become moot, correct?

[00:04:24] Speaker 03:
Correct, because you don't necessarily have to reach the materiality issue at all.

[00:04:29] Speaker 03:
And I wasn't going to bring that up today.

[00:04:30] Speaker 00:
The sanctions question, though,

[00:04:33] Speaker 00:
It was a little unclear, but I had understood you to be challenging the jury instruction about credibility.

[00:04:42] Speaker 00:
And of course, there would be no jury instruction if you get Jamal, because there would not be a new trial subject to their appeal, correct?

[00:04:49] Speaker 03:
Yes, Your Honor.

[00:04:51] Speaker 00:
Is it something else you're seeking on the sanctions besides just, hey, if there's a new trial, we don't want this jury instruction?

[00:04:58] Speaker 03:
Yes, your honor, because there was an award of attorney's fees and just the decision that Mr. Kramer committed a fraud on the court, that should be reversed for multiple reasons.

[00:05:08] Speaker 00:
I didn't see anywhere in your brief that you said we want the attorney's fees we were ordered to pay returned to us.

[00:05:14] Speaker 00:
Is that something you're asking?

[00:05:15] Speaker 03:
Well, I think it's subsumed within the argument that we presented.

[00:05:18] Speaker 03:
Because if the court were to vacate that decision on the sanctions, that would necessarily vacate any order on the attorney's fees.

[00:05:27] Speaker 03:
And I would like to turn, since we brought up the sanctions issue, and I think- Before- Yes, Your Honor.

[00:05:35] Speaker 01:
So if we reverse on causation, then the case falls, right?

[00:05:40] Speaker 01:
The entire case is over.

[00:05:42] Speaker 01:
Correct, Your Honor.

[00:05:43] Speaker 01:
Yes.

[00:05:44] Speaker 00:
Let me ask you this.

[00:05:45] Speaker 00:
Thank you.

[00:05:46] Speaker 00:
Before we move on, there was the unfair competition claim, I think, under Florida law, correct?

[00:05:52] Speaker 00:
Correct, Your Honor.

[00:05:52] Speaker 00:
And the jury found you were liable under that theory as well, correct?

[00:05:56] Speaker 03:
Yes.

[00:05:56] Speaker 03:
And the way it was presented and the way it's been argued to this court is that the liability under Florida state law for unfair competition is wholly

[00:06:08] Speaker 01:
Dependent on the Lanham Act claim, so there's no difference in the law it rises and falls depending on what we do with the other Yes, is that how do I know that I?

[00:06:20] Speaker 00:
Understand you have asserted that they haven't disagreed with it, but I'm a little concerned that that may not actually be Florida law I

[00:06:26] Speaker 03:
So the main case that we cite is the Suntree case, and this is the 11th Circuit case, and it stands for that proposition, and that is in our brief.

[00:06:36] Speaker 03:
And I think if I recall correctly in the pre-trial order and the jury instruction, it was never disputed that the elements to prove the unfair competition of the state law were essentially identical to the elements under the Landmass Act.

[00:06:54] Speaker ?:
Thank you.

[00:06:54] Speaker 03:
And I was going to bring up the damages, speculation.

[00:06:58] Speaker 03:
It's entirely speculative.

[00:06:59] Speaker 03:
The one point I will say on that, Your Honors, is going back to briefs, I just honestly have to apologize.

[00:07:07] Speaker 03:
There's a key case that we do cite, but we don't discuss in enough detail.

[00:07:12] Speaker 03:
And that's the air turbine, sorry.

[00:07:17] Speaker 03:
the air technology turbine, air turbine technology versus Atlas.

[00:07:21] Speaker 03:
It's a federal circuit case from 2005 written by Judge Schall, Judge Laurie and Judge Percival on the panel as well too.

[00:07:29] Speaker 03:
And it presents the almost identical theory

[00:07:32] Speaker 03:
of damages in terms of Lanham Act, in terms of the injury element.

[00:07:37] Speaker 03:
In that case, the party presented a theory of poisoning the entire tool industry market.

[00:07:42] Speaker 03:
And that's exactly what BPI did here, because they haven't shown a single devoted sale from them to us.

[00:07:50] Speaker 03:
They expressly disclaimed any responsibility to share this direct connection between their supposed lost profits and our sales.

[00:08:01] Speaker 03:
At the end of the day, their theory was nonsensical because they were claiming X amount of damages, which was far exceeded the sales of our product.

[00:08:09] Speaker 03:
And on top of that, their sales were declining before our product even entered the market.

[00:08:14] Speaker 03:
And I would ask that the court, I know you've read it, but if you want to go back, it's a nearly identical basis for rejecting their theory of injury under the Lanham Act.

[00:08:28] Speaker 03:
So with that, I could turn to the sanctions issue, Your Honor.

[00:08:31] Speaker 03:
And I think this is a really critical point here, because this was not a sanction for violation of Rule 37 or violation of Rule 11.

[00:08:43] Speaker 03:
This is the court invoking its inherent authority.

[00:08:47] Speaker 03:
And the Supreme... Yes, Your Honor?

[00:08:50] Speaker 03:
That's absolutely not accurate, Your Honor, and if I could just give a second of the background on that.

[00:08:59] Speaker 03:
Mr. Kramer is essentially the controlling member of both Muscle Beach and Thermalife.

[00:09:06] Speaker 03:
At a minimum, he had an implied license between the two companies in terms of their patents.

[00:09:12] Speaker 03:
They probably had an oral license.

[00:09:14] Speaker 03:
It could have been a mental license because he's the one who controls both companies.

[00:09:17] Speaker 03:
And what happened was when you look at the timeline of the case, this is going back to March 20, 2020, the first R production in terms of their first RFPs.

[00:09:31] Speaker 03:
And what Mr. Kramer did in good faith was to memorialize in a written document what he believed was the license at the time in 2017.

[00:09:43] Speaker 03:
And this ties back to a really important point because what BPI did here was they essentially sued the wrong party.

[00:09:52] Speaker 03:
The product at issue is not a thermalized product.

[00:09:55] Speaker 03:
It's a muscle beach product.

[00:09:56] Speaker 03:
It's always been that way.

[00:09:58] Speaker 02:
We told Muscle Beach the same day.

[00:10:14] Speaker 03:
So, Your Honor, I think that goes to BPI's question or attempt to make hay about the fact that there is no date of the signature, but there is an effective date.

[00:10:26] Speaker 03:
And what we tried to show is that this is entirely consistent with all of the other licenses that Thurman Life had.

[00:10:31] Speaker 03:
Always an effective date, right?

[00:10:33] Speaker 03:
And that's actually quite good.

[00:10:35] Speaker 00:
But that sounds like the answer to Judge Cunningham's question is yes.

[00:10:39] Speaker 00:
The document was created in 2020, but purported to be effective as of 2017.

[00:10:44] Speaker 00:
That's not in dispute, correct?

[00:10:46] Speaker 03:
Yes, Judge.

[00:10:47] Speaker 03:
And I apologize for not answering the question directly.

[00:10:49] Speaker 03:
And in fact, that's what Mr. Cramer told in his interrogatory response, truthfully.

[00:10:56] Speaker 03:
That's what he depended on.

[00:10:58] Speaker 00:
But I think the problem for you is it's an abusive discretion standard.

[00:11:04] Speaker 00:
your side did not disclose the discrepancy in timing between the effective date and the memorialization date until you were pushed on it and that looked suspicious to the trial court and the court acted on that suspicion.

[00:11:20] Speaker 00:
And I don't know how we say that's an abuse of discretion.

[00:11:23] Speaker 03:
Here's a response to that, Judge Stark, is that the main legal error that was committed here was that there was this repeated assertion that the creation of the license agreement and the details of how it was created remained relevant in the case.

[00:11:39] Speaker 03:
And once Thermalife assumed liability for Muscle Beach in June of 2020, and this is after we sent them a rural resident letter saying, you need to sue Muscle Beach, not us, they amended the complaint.

[00:11:56] Speaker 03:
For several reasons, Your Honor, because it doesn't reach the level of clear and convincing evidence of a fraud upon the court.

[00:12:04] Speaker 03:
The judge repeatedly made, and this is both the magistrate judge and the district court judge, repeatedly continued this mistaken belief that it remained relevant in the case.

[00:12:16] Speaker 03:
And it was never relevant in the case once we assumed liability.

[00:12:20] Speaker 00:
Right, but it was relevant.

[00:12:21] Speaker 00:
You were sanctioned for a course of conduct in connection with discovery.

[00:12:25] Speaker 00:
That's why I thought you were only appealing the adverse jury instruction.

[00:12:30] Speaker 00:
There'd be some weight to your argument that it was irrelevant at trial, but that doesn't help you if you want to vacate things that happened before trial.

[00:12:38] Speaker 03:
So here's the response, and I don't think that we did justice to this point in our brief.

[00:12:45] Speaker 03:
The hearings and the motion to compel, and this is where it came from, were June 19, 2020.

[00:12:51] Speaker 03:
At the end of that hearing,

[00:12:54] Speaker 03:
the magistrate judge concluded that both parties were substantially justified.

[00:12:59] Speaker 03:
And this is in terms of their objections to discovery.

[00:13:02] Speaker 03:
We were compelled to provide a response to the interrogatory.

[00:13:05] Speaker 03:
The interrogatory response is truthful.

[00:13:07] Speaker 03:
It's not false.

[00:13:09] Speaker 03:
There's never been a false statement in this case.

[00:13:10] Speaker 03:
There's never been a violation of any court order.

[00:13:14] Speaker 03:
And what I would say, Your Honors, is that there's a complete disconnect when we get to the point of

[00:13:21] Speaker 03:
the magistrate judge concluding that in the context of a discovery dispute, we were substantially justified, therefore no fee shifting, and then three months later, when BPI continues this, it's a fictional narrative to say that all of these things, but when they say that, there's a disconnect to say that we committed a fraud on the court, but then just a few months earlier,

[00:13:48] Speaker 03:
The judge concluded that we were substantially justified for not providing an interrogatory response at that time.

[00:13:56] Speaker 03:
There's never been a false statement about the creation of the document.

[00:14:01] Speaker 03:
they don't assert that to this day.

[00:14:04] Speaker 03:
There's never been a dispute, at least from June of 2020, that the document had any relevance to... Would you agree that the document was fabricated for litigation purposes?

[00:14:16] Speaker 03:
Absolutely not, Your Honor.

[00:14:18] Speaker 03:
It was Mr. Kramer's good faith attempt to provide a written memorialization of

[00:14:24] Speaker 03:
an agreement between two parties.

[00:14:26] Speaker 02:
There's never been a valid dispute that there's not at least an oral and implied license between them.

[00:14:43] Speaker 03:
Yes, Your Honor, there's no dispute about that.

[00:14:46] Speaker 03:
And that happens all the time.

[00:14:48] Speaker 03:
We explain that in a brief.

[00:14:49] Speaker 00:
Parties routinely create... But your client did not voluntarily disclose that fact.

[00:14:58] Speaker 00:
It looked to the district court as if you were fabricating evidence and trying to mislead.

[00:15:03] Speaker 00:
That's how it looked to them, correct?

[00:15:06] Speaker 03:
I think that's what they concluded.

[00:15:07] Speaker 03:
But what I would say is that at most, that rises at most to the level of recklessness.

[00:15:13] Speaker 03:
And we have to remember the Supreme Court in Chambers v. Nassau, they say, when we're invoking the inherent authority of the court to sanction somebody, the court has to exercise discretion and restraint.

[00:15:25] Speaker 03:
Every case that BPI cites in this brief presents facts that come nothing close to this case.

[00:15:35] Speaker 03:
You have instances where parties have fabricated actual fabricated evidence and then found and actually later admitted under oath that they didn't fabricate evidence.

[00:15:48] Speaker 01:
So for example, the McGowan versus-

[00:15:52] Speaker 01:
You used up the rebuttal time and everything, so I'll restore your rebuttal time when it's your turn again, okay?

[00:15:58] Speaker 01:
Thank you, Judge.

[00:16:00] Speaker 01:
Let me just make sure Judge Cunningham will have any... I'm fine, thank you.

[00:16:17] Speaker 03:
Good morning, Lawyers.

[00:16:18] Speaker 03:
Gregory Hellier on behalf of BPI Sports, both in Appellia and across Appellant in this matter.

[00:16:25] Speaker 03:
I'm going to please the Court.

[00:16:27] Speaker 03:
I'd like to use most of my time addressing some of the arguments that were made by Mr. Dodd as well as the questions that were posed by the Court.

[00:16:34] Speaker 03:
First, I want to take on this issue of literal falsity.

[00:16:39] Speaker 03:
The jury found that the claims that CRTM 3 caused visa dilation were literally false.

[00:16:47] Speaker 03:
because the product is marketed to an adult population.

[00:16:51] Speaker 03:
You cannot market a dietary supplement to children.

[00:16:55] Speaker 03:
So that means that for the average weighted person,

[00:17:01] Speaker 03:
not the smallest or the largest, but the average consumer did not experience a sedentary shot.

[00:17:06] Speaker 00:
Why do we, how do you get credit for the average?

[00:17:09] Speaker 00:
You're not here to say that the record proved there's no adults that are under 113 pounds, correct?

[00:17:15] Speaker 00:
No.

[00:17:16] Speaker 00:
So how could a jury reasonably find it literally false when it's undisputed that if you are an adult under 113 pounds and you take the dose that's recommended on the label,

[00:17:29] Speaker 00:
you will experience increased value of dilation.

[00:17:31] Speaker 00:
How can it be literally false?

[00:17:32] Speaker 03:
First of all, there is evidence deduced at trial through our expert that the amount in question would not affect an average adult by using the opinion of the expert as to what constitutes that.

[00:17:49] Speaker 03:
The expert declined on what an average weighted adult was based on empirical data taken from various sources.

[00:17:59] Speaker 00:
What's the legal relevance of that, I think, is what we're asking.

[00:18:03] Speaker 00:
The average adult standard, where does the law say that that's relevant?

[00:18:06] Speaker 03:
Sure, so if the population exists in a distribution of weight, let's say it's a bell curve, there's going to be a middle for an average adult.

[00:18:14] Speaker 02:
One of the legal basis that we have for that legal standard as opposed to just

[00:18:19] Speaker 03:
the evidence was based on the expert's opinion offered at trial that an average adult would not experience vasodilation and in order to do that he'd have to apply it on the alleged false statement as I understand it was not

[00:18:38] Speaker 00:
for the average adult, this is false.

[00:18:41] Speaker 00:
The allegation was that it was literally false for all adults.

[00:18:46] Speaker 03:
Which is why he went on to say that in order for this to even theoretically be effective, and I want to get back to that in a second.

[00:18:54] Speaker 03:
Theoretically be effective, you'd have to at least have this much weight.

[00:18:59] Speaker 03:
This much what?

[00:19:01] Speaker 03:
Weight?

[00:19:03] Speaker 03:
Correct.

[00:19:03] Speaker 03:
You'd have to at least weigh 113 pounds even for this to theoretically have an effect.

[00:19:08] Speaker 03:
Now, what Thermalife has done is taken a leap and said, well, this establishes that somebody of that weight or lower would necessarily experience phase of dilation.

[00:19:20] Speaker 03:
And that was never reduced to a trial.

[00:19:23] Speaker 03:
I don't think there was a single question asked about it.

[00:19:25] Speaker 03:
And there was certainly no evidence admitted that showed that anyone having that weight or less would or did experience phase of dilation.

[00:19:34] Speaker 03:
That's just a myth.

[00:19:35] Speaker 00:
Okay, but the burden is on you.

[00:19:38] Speaker 00:
to have proven to the jury by a preponderance.

[00:19:40] Speaker 00:
that their statement increases vasodilation is literally false.

[00:19:44] Speaker 00:
What evidence, if at all, could a jury reasonably interpret in your favor as supporting that finding?

[00:19:52] Speaker 03:
Well, let's just take a common sense approach.

[00:19:55] Speaker 03:
If a consumer walks into a CVS and buys aspirin, and it says it alleviates headaches, it takes it home, and they take it, and it doesn't alleviate headaches, and you find out later, oh, you have to weigh 115 pounds for this to work.

[00:20:08] Speaker 03:
That's a literally false statement.

[00:20:10] Speaker 00:
I don't think that there's a... What's left to a materially misleading theory if that's literally false?

[00:20:18] Speaker 03:
because if you were well, I mean, a literally false statement is the epitome of a false statement.

[00:20:24] Speaker 00:
If the evidence at trial was that one person walked into the drug store, took that dosage, and their headache got better, it seems to me the statement is now not literally false.

[00:20:35] Speaker 03:
Does the panel really believe that you can market a product that says it causes a certain condition and not inform the purchaser that, you know,

[00:20:45] Speaker 03:
higher than 90% of the population is not going to experience that.

[00:20:49] Speaker 03:
And the answer is that no jury could find this literally false.

[00:20:52] Speaker 02:
I don't believe that that...

[00:21:01] Speaker 03:
that you would because it wasn't our job to show that at these smaller rates, the product worked.

[00:21:14] Speaker 03:
There was no evidence.

[00:21:15] Speaker 03:
What we showed was the majority of population, a far higher than the majority of population, would not experience this.

[00:21:22] Speaker 03:
And that's certainly sufficient for a jury to find, based on the standard on appeal, that the statement was false.

[00:21:30] Speaker 00:
What evidence do you have that any consumer had a purchase decision that was at all impacted by this one statement, one out of six that I saw on the label?

[00:21:43] Speaker 00:
increases vasodilation.

[00:21:45] Speaker 00:
Did you show, how could a jury have found that anybody's decision was impacted by this?

[00:21:51] Speaker 03:
Yeah, through our brief we give instances of testimony in which both sides indicated that getting a so-called pump from these products is what bodybuilders look for.

[00:22:01] Speaker 03:
And of those indications of that label, they're all related to vasodilation.

[00:22:06] Speaker 00:
You don't allege that five out of six are false.

[00:22:09] Speaker 00:
The only thing you allege on that label that's false is, quote, increases vasodilation, right?

[00:22:14] Speaker 03:
Sure, but that doesn't necessarily mean that no one based their purchasing decision on that particular condition.

[00:22:22] Speaker 03:
Both sides agree throughout the case.

[00:22:24] Speaker 03:
In fact, in one of Mr. Dowd's questions that he posed to the witness, he said, maybe they're buying it for the pumps.

[00:22:30] Speaker 03:
Because that's what this product is meant to do.

[00:22:32] Speaker 03:
If you're a bodybuilder and you buy a product that says you're going to increase athletic performance, you're going to increase

[00:22:39] Speaker 03:
performance, blood flow, things like dilation, those are all related to the same condition, which is that you're trying to get a muscular pump.

[00:22:47] Speaker 03:
That's the entirety of what bodybuilders try to do.

[00:22:51] Speaker 03:
So the idea that you could promote it for a particular purpose and then take the position after saying at trial that everybody's looking for pumps, that there was no material reliance,

[00:23:03] Speaker 03:
It just evades reality.

[00:23:06] Speaker 03:
Again, it's like promoting something for curing headaches and then say, well, how do you know they bought it to cure headaches?

[00:23:12] Speaker 03:
Well, that's what it was marketed for.

[00:23:15] Speaker 03:
This isn't an esoteric indication on the label.

[00:23:18] Speaker 03:
This is what Thermolite blasted out in every advertisement they ever had.

[00:23:22] Speaker 00:
Can I ask about the materiality instruction that was not given?

[00:23:27] Speaker 00:
Do you disagree that this instruction that they proposed that was not given

[00:23:33] Speaker 00:
was a correct statement of the law?

[00:23:40] Speaker 03:
I agree with the instruction.

[00:23:41] Speaker 03:
I'm not going to get caught up in the double negative, but I agree with the instruction that's given.

[00:23:46] Speaker 03:
No apologies necessary.

[00:23:48] Speaker 03:
I'm a little hoarse myself.

[00:23:50] Speaker 03:
The issue I think you're referring to is this J.B.

[00:23:54] Speaker 03:
Welland sign of cases concerning what I might call an esoteric quality that a consumer might not necessarily know about.

[00:24:03] Speaker 03:
This isn't an esoteric quality.

[00:24:05] Speaker 03:
This is the performance of the drug itself.

[00:24:07] Speaker 00:
Let me see if I can speak literally.

[00:24:09] Speaker 00:
They wanted the jury to be told BPI must prove materiality of defendant's advertising by showing that defendant's deception is likely to influence consumers' purchasing decisions.

[00:24:21] Speaker 00:
I understand that to be the instruction they requested that wasn't given.

[00:24:24] Speaker 00:
I understand you don't think it had to be given, but is it a correct statement of the law?

[00:24:31] Speaker 03:
Is it a correct statement of the law?

[00:24:35] Speaker 03:
Not if it's an inherent quality of the product.

[00:24:39] Speaker 03:
Again, I hate to beat a dead horse, but if you come back to the aspirin and headache analogy, is it necessary to share after you've advertised aspirin to alleviate headaches that somebody would lie on the fact that the specific reliance on the

[00:24:59] Speaker 03:
the therapeutic effect of the product, but not when it's the only or a large part of the basis for the advertisement in the first instance.

[00:25:09] Speaker 03:
It just doesn't make any sense.

[00:25:11] Speaker 03:
It's like selling a sports car.

[00:25:13] Speaker 01:
The problem with your hypothetical or the scenario that you're pointing out

[00:25:20] Speaker 01:
is that in CVS, when you go in to buy the aspirin, you're buying it for any age group, and here, the product is designed for, it seems to me, to be muscle builders, individuals.

[00:25:38] Speaker 01:
Generally, I agree with that, Your Honor.

[00:25:39] Speaker 01:
Okay.

[00:25:42] Speaker 03:
But again, in as much as we've defined a broad category of what the purchasers might fall into,

[00:25:50] Speaker 03:
Those purchases are looking for a certain thing.

[00:25:53] Speaker 03:
They don't need to be told this is good for building muscles, or you didn't show anybody bought this to build muscles, because it would be somewhat absurd to suggest that that's not what they bought it for.

[00:26:06] Speaker 03:
It's like saying, well, you didn't show somebody bought a car to get from here to there.

[00:26:10] Speaker 03:
Where's your evidence of that?

[00:26:11] Speaker 03:
Or a sports car.

[00:26:12] Speaker 03:
You didn't show that they wanted to go fast.

[00:26:15] Speaker 03:
It's promoted as a car that goes fast.

[00:26:17] Speaker 00:
Do you agree that the unfair competition appeal rises or falls with the Lanham Act appeal?

[00:26:25] Speaker 03:
No, I don't, because it's reflected in the verdict sheet, which Judge Cunningham has to see.

[00:26:30] Speaker 03:
The copy to the jury was, did somebody involved in a fraudulent or septic conduct?

[00:26:35] Speaker 01:
Wouldn't there be an agreement to tie the two together, that the state claims would rise or fall with the Lanham Act claims?

[00:26:44] Speaker 03:
Well, no, because a major part of this case was false patent marking.

[00:26:48] Speaker 00:
We're not talking about false fat, Marty.

[00:26:49] Speaker 00:
That's not correct.

[00:26:52] Speaker 03:
Well, you're right.

[00:26:54] Speaker 03:
MFRA competition is an umbrella term under Florida law that it goes to any fraudulent or deceptive conduct.

[00:27:00] Speaker 03:
It's not limited to the Lanham Act claims.

[00:27:04] Speaker 00:
So you deny that there was an agreement at the trial court?

[00:27:07] Speaker 00:
that the Florida unfair competition law claim would rise or fall with the Lanham Act claim.

[00:27:15] Speaker 03:
I do disagree with that because I believe I even argued in closing that the fact is that we've got several instances of deceptive contact.

[00:27:26] Speaker 03:
We've got false advertising.

[00:27:28] Speaker 03:
We've got false marketing.

[00:27:29] Speaker 03:
And the verdict sheet indicates that the jury was inclined to agree with us

[00:27:33] Speaker 03:
But these products were falsely marked, which is a false.

[00:27:36] Speaker 00:
What about on appeal?

[00:27:37] Speaker 00:
Have you made that argument to us?

[00:27:40] Speaker 03:
I think what we argued in response to that argument is that the only thing that they've raised is the random act claim.

[00:27:46] Speaker 03:
So that's the only thing we addressed.

[00:27:48] Speaker 03:
Certainly never jettisoned the idea.

[00:27:49] Speaker 00:
I understood them to say,

[00:27:52] Speaker 00:
They were appealing to liability finding on unfair competition, the denial of their J-MAL, and that the argument they would offer for that part of their appeal is the same, essentially, as their argument on the Lanham Act.

[00:28:10] Speaker 00:
And I thought I understood your brief to say, essentially, that's fine with us.

[00:28:14] Speaker 03:
No, it wasn't trying with us.

[00:28:16] Speaker 03:
It was their decision to limit their appeal.

[00:28:18] Speaker 01:
Can you address a statement that's made in the web brief on page 57?

[00:28:22] Speaker 03:
Go ahead, John.

[00:28:40] Speaker 01:
Do you have it under number six, page 57?

[00:28:46] Speaker 01:
seems to me that that's contrary to what you're telling us right now.

[00:28:50] Speaker 03:
With due respect to it, I don't think it is inconsistent, because it says that parents represent, parents represent, therefore we rely on the same arguments.

[00:28:59] Speaker 03:
We never said that was our position.

[00:29:01] Speaker 03:
We said that they limit it to this, so this is what we're going to argue.

[00:29:04] Speaker 03:
But to come in there now and say that the false advertising claim was the only thing considered under unfair competition just defies the gravity of the entire trial.

[00:29:16] Speaker 00:
But when you say to us you're relying on the same arguments for unfair competition that you were relying on for Lanham Act,

[00:29:25] Speaker 00:
I understand my job as an appellate judge is to evaluate only the same arguments that I've already evaluated with respect to the Lanham Act, and therefore if I agree for the sake of argument with the appellates on the Lanham Act, it must logically follow that I agree with the appellates on

[00:29:44] Speaker 00:
the unfair competition.

[00:29:47] Speaker 00:
And therefore, on appeal, at least, those claims would rise or fall together.

[00:29:50] Speaker 03:
Only if you're willing to accept the premise, which has been handed to you, which is that an unfair competition claim is limited.

[00:29:58] Speaker 03:
Who ever said that?

[00:29:59] Speaker 03:
In fact, it's even more narrow in our brief.

[00:30:02] Speaker 03:
We say they represent that the legal analysis is the same.

[00:30:07] Speaker 00:
Yeah.

[00:30:08] Speaker 00:
And you don't say, hey, we disagree.

[00:30:10] Speaker 00:
Don't fall for that, Judge.

[00:30:13] Speaker 00:
That's wrong.

[00:30:13] Speaker 00:
I think it's manifest.

[00:30:14] Speaker 00:
That's not how the case was tried.

[00:30:15] Speaker 00:
That's not what Florida law is.

[00:30:16] Speaker 00:
Don't you have some obligation to tell me that?

[00:30:19] Speaker 03:
But the beauty is you're not here hearing it from me now.

[00:30:21] Speaker 03:
And there's nothing in this brief that precludes me from making that argument, because we never agreed to the argument.

[00:30:27] Speaker 02:
Did she ever make that argument framework into it?

[00:30:31] Speaker 02:
Because the pages that are listed in this particular page that Judge Rediffend took in assessing the Judge Stoltz case that had been reviewed, seems to indicate that these arguments are largely involved in the other.

[00:30:41] Speaker 02:
Where did you take him in common with that?

[00:30:44] Speaker 03:
Yeah, I think this may have been the sentinel of addressing Affirmative Life and the other appellants' arguments, because that's what we were doing.

[00:30:53] Speaker 03:
It was a responsive brief.

[00:30:56] Speaker 03:
But you can see from the verdict sheet alone that this is not the same standard.

[00:31:01] Speaker 03:
Talking about fraudulent and deceptive conduct.

[00:31:04] Speaker 03:
And so, inasmuch as pat marking sounds in fraud, that journey instruction was written to encompass any fraudulent acceptable conduct that they underwent.

[00:31:15] Speaker 01:
That's not the argument you made before, where that's being made in your red brief.

[00:31:19] Speaker 01:
If it is, I'd like for you to show me where that's at.

[00:31:23] Speaker 01:
Sorry, Your Honor, that the unfair competition claim includes... It seems to me that what your summary red brief is that your state claims are going to rise and fall with your Nanomac claims.

[00:31:35] Speaker 03:
But again, due respect, that was never our premise, nor did we represent that.

[00:31:40] Speaker 03:
But the best I could do, no matter how I take time out, is look through the trial transcript, which I certainly encourage the court to do.

[00:31:48] Speaker 03:
Let's see that that was what was argued below.

[00:31:50] Speaker 01:
So it's not really back in.

[00:31:51] Speaker 01:
We'll look at that.

[00:31:52] Speaker 01:
But you are out of time now.

[00:31:54] Speaker 01:
Let me see if my colleagues have any questions.

[00:31:57] Speaker 00:
I just want other questions, if I might.

[00:31:59] Speaker 00:
Under the 11th Circuit, which is governing authority here, do you agree that

[00:32:05] Speaker 00:
When the court sanctions based on inherent authority, bad faith has to be the only explanation for the alleged sanctionable conduct.

[00:32:14] Speaker 03:
I don't agree with that, no.

[00:32:16] Speaker 00:
And what authority would you cite for saying that's not the 11th Circuit standard?

[00:32:20] Speaker 03:
Being out of time.

[00:32:21] Speaker 03:
Is it?

[00:32:22] Speaker 00:
It's in your brief.

[00:32:23] Speaker 03:
It would be manifested out brief.

[00:32:25] Speaker 03:
I think we do take that hat on in the argument and argument in the alternative.

[00:32:31] Speaker 03:
If we don't believe that is the standard, and to the extent we have cite cases, we rely on those.

[00:32:36] Speaker 03:
But even if it were, the standard arguing there was never any reasonable basis for them to fabricate a license agreement other than to do so in bad faith.

[00:32:46] Speaker 03:
Okay.

[00:32:47] Speaker 01:
Judge Cunningham, do you have anything?

[00:32:50] Speaker 01:
Nothing, brother.

[00:32:51] Speaker 01:
Okay, thank you.

[00:32:51] Speaker 01:
Thank you very much, counsel.

[00:32:54] Speaker 01:
Mr. Dodd, you have two minutes.

[00:32:56] Speaker 03:
Thank you, Your Honor.

[00:32:58] Speaker 03:
I shall be quick.

[00:33:00] Speaker 03:
Your Honor, on the Florida state law claim, I think you're exactly on point.

[00:33:05] Speaker 03:
Red brief 58.

[00:33:07] Speaker 03:
BPI especially says BPI relies on the same argument.

[00:33:10] Speaker 03:
So they clearly rise and fall.

[00:33:12] Speaker 03:
They especially waive any other argument.

[00:33:15] Speaker 03:
Let me turn back to the sanctions issue.

[00:33:17] Speaker 03:
And Judge Stark, you asked a question which I should have answered better before.

[00:33:22] Speaker 03:
in terms of the legal basis for why the court's decision is wrong, and this goes to the purchasing power case from the 11th Circuit.

[00:33:30] Speaker 03:
And BPI does not cite any other law, and in that case the 11th Circuit is clear that it has to be the sole reason for

[00:33:39] Speaker 03:
the alleged conduct.

[00:33:41] Speaker 03:
And if you go back to, or when you go back to the district court's order adopting the R&R, and I believe this is at Appendix 13, and there's a footnote, and the district court judge tried to distinguish purchasing power on the fact that, well, that's sanctions in the context of attorneys.

[00:34:00] Speaker 03:
But the court had it backwards, because sanctions with respect to attorney conduct should be held to an even higher standard than

[00:34:08] Speaker 03:
a party who is not an attorney, by the way.

[00:34:13] Speaker 03:
The other important legal point is that in all of the cases that BPI cites, essentially, the issue that was the cause of the conduct went to a linchpin issue in the case.

[00:34:28] Speaker 03:
So, for example, the Vargas case was an employment discrimination case.

[00:34:32] Speaker 03:
and the plaintiff there fabricated evidence in terms of ladies' undergarments.

[00:34:38] Speaker 03:
They actually went to Target to buy undergarments and claim that these were related to the case, that their falsity were not, and they actually admitted that falsity under oath of declaration later in the case.

[00:34:50] Speaker 03:
You have none of that here in terms of there's no violation of a prior court order,

[00:34:55] Speaker 03:
There's actually no assertion that Mr. Kramer ever lied under oath.

[00:35:01] Speaker 03:
There is no violation of a motion to compel.

[00:35:06] Speaker 03:
We comply with the motion to compel.

[00:35:08] Speaker 03:
And I think most importantly, the disconnect between the later finding of inherent authority to sanction with the earlier finding on the motion to compel and substantially justified cannot be reconciled.

[00:35:24] Speaker 03:
We thank you.

[00:35:25] Speaker 03:
Thank you, Your Honor.

[00:35:26] Speaker 01:
We thank the party for the arguments, and we'll take this case under review.