Case 4:22-cv-00760-ALM Document 36 Filed 01/18/23 Page 1 of 10 PageID #: 515
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`United States District Court
`EASTERN DISTRICT OF TEXAS
`SHERMAN DIVISION
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`Civil Action No. 4:22-cv-00760
`Judge Mazzant
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`AT&T MOBILITY LLC,
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`Plaintiff,
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`v.
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`T-MOBILE USA INC.,
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`Defendant.
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`MEMORANDUM OPINION AND ORDER
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`Pending before the Court is Plaintiff AT&T Mobility LLC’s Application for Preliminary
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`Injunction (Dkt. #3). Having considered the motion and the relevant pleadings, the Court finds
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`that Plaintiff’s Application for Preliminary Injunction (Dkt. #3) should be DENIED.
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`BACKGROUND
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`This case involves allegations of false advertising between competitors in the wireless
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`communication industry. Plaintiff AT&T Mobility LLC (“AT&T”) and Defendant T-Mobile USA
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`Inc. (“T-Mobile”) are wireless service providers (Dkt. #3, Exhibit 1 ¶ 4). Both parties do extensive
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`business nationwide, and they are engaged in a “fierce,” ongoing competition to grow their
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`customer bases (Dkt. #1 ¶ 1).
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`I.
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`T-Mobile’s “Banned Seniors” Campaign
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`As a part of that competition, T-Mobile launched its “Banned Seniors” advertising
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`campaign in August 2022 (Dkt. #3 at p. 3). “Banned Seniors” is a nationwide marketing and
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`advertising initiative intended to attract customers over the age of fifty-five (Dkt. #1 ¶ 26). It
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`consists of a website, www.BannedSeniors.com (the “Website”), which states that AT&T “ban[s]
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`senior discounts” outside of Florida (Dkt. #19, Exhibit C). According to the Website, “92% of
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`seniors in the U.S. can’t get a 55+ discount from . . . AT&T because they don’t live in Florida”
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`(Dkt. #19, Exhibit C).1 The Website includes a graphic that presents interested seniors outside of
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`Florida with three options for obtaining a “55+ Discount”: (1) Switch to T-Mobile; (2) Move to
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`Florida; or (3) Get a Virtual Florida Mailbox (Dkt. #19, Exhibit C).
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`The Website also includes a comparative map of the continental United States that
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`highlights the states in which T-Mobile and AT&T offer “discounted 55+ plans” (Dkt. #19,
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`Exhibit C). In that map, Florida is the only state in which customers can receive AT&T’s
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`“discounted 55+ plan,” while T-Mobile is shown offering discounts in each of the lower forty-
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`eight states.
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`II.
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`AT&T’s Service Offerings
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`AT&T offers two discount programs that are relevant to this case. The first is its Unlimited
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`55+ plan, which AT&T markets as a “special deal for Floridians 55 and over” (Dkt. # 19, Exhibit
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`D). As its name implies, AT&T’s Unlimited 55+ plan is restricted to customers who are “55 years
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`of age or over” and have a Florida billing address (Dkt. #19, Exhibit D). It is undisputed that the
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`Unlimited 55+ plan is AT&T’s only discount program that is age restricted (Dkt. #25 at p. 63).
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`The second is its “member savings” program for members of the American Association of Retired
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`Persons (“AARP”) (Dkt. #19, Exhibit E). AT&T’s AARP discount is available to all AARP
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`members irrespective of their age or billing address.
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`III.
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`Procedural History
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`On September 6, 2022, AT&T brought this case in which it alleges that T-Mobile violated
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`§ 43(a) of the Lanham Act by making false advertisements on the Website (Dkt. #1 ¶ 27). AT&T
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`1 The Website’s headline initially stated that “92% of seniors in the U.S. can’t get a wireless discount from . . . AT&T
`because they don’t live in Florida” (Dkt. #19, Exhibit B). After AT&T filed this case, T-Mobile modified the Website
`by including the term “senior” or “55+” before every reference to a “discount” (Dkt #19 at p. 9).
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`2
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`also filed an application for a preliminary injunction on the same day that it filed its original
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`complaint (Dkt. #3). On September 16, 2022, T-Mobile filed its response to AT&T’s application
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`for a preliminary injunction (Dkt. #19). 2 On September 20, 2022, AT&T filed its reply (Dkt. #22).
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`On September 22, 2022, T-Mobile filed its sur-reply (Dkt. #23). On September 23, 2022, the
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`Court held a preliminary injunction hearing (Dkt. #24).
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`LEGAL STANDARD
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`A party seeking a preliminary injunction must establish the following elements: (1) a
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`substantial likelihood of success on the merits; (2) a substantial threat that plaintiffs will suffer
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`irreparable harm if the injunction is not granted; (3) that the threatened injury outweighs any
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`damage that the injunction might cause the defendant; and (4) that the injunction will not disserve
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`the public interest. Nichols v. Alcatel USA, Inc., 532 F.3d 364, 372 (5th Cir. 2008). “A preliminary
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`injunction is an extraordinary remedy and should only be granted if the plaintiffs have clearly
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`carried the burden of persuasion on all four requirements.” Id. Nevertheless, a movant “is not
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`required to prove its case in full at a preliminary injunction hearing.” Fed. Sav. & Loan Ins. Corp.
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`v. Dixon, 835 F.2d 554, 558 (5th Cir. 1985) (quoting Univ. of Tex. v. Comenisch, 451 U.S. 390,
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`395 (1981)). The decision whether to grant a preliminary injunction lies within the sound
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`discretion of the district court. Weinberger v. Romero-Barcelo, 456 U.S. 305, 320 (1982).
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`ANALYSIS
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`AT&T asks the Court to enjoin T-Mobile from continuing its “Banned Seniors” advertising
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`campaign. For the reasons set forth below, the Court denies AT&T’s request because it concludes
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`2 On September 16, 2022, T-Mobile also filed its Motion to Dismiss the Complaint Pursuant to Rule 12(b)(2)
`(Dkt. #18). Before turning to the merits of AT&T’s request for injunctive relief, the Court had to decide the threshold
`issue of personal jurisdiction. See, e.g., Enter. In’l, Inc. v. Corporacion Estatal Petrolera Ecuatoriana, 762 F.2d 464,
`470–71 (5th Cir. 1985) (“As we stated long ago in reviewing the injunctive power of the district court: The question
`of jurisdiction is always vital. A court must have jurisdiction as a prerequisite to the exercise of discretion.”) (cleaned
`up). On January 13, 2023, the Court issued its Memorandum Opinion and Order denying T-Mobile’s motion to
`dismiss (Dkt. #35).
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`3
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`that AT&T has failed to carry its burden of demonstrating a substantial likelihood of success on
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`the merits.
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`I.
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`Substantial Likelihood of Success on the Merits
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` A plaintiff seeking a preliminary injunction must present a prima facie case of its
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`substantial likelihood to succeed on the merits but need not prove that it is conclusively entitled to
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`summary judgment. See Daniels Health Scis., LLC v. Vascular Health Scis., 710 F.3d 579, 582
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`(5th Cir. 2013). That said, the existence of significant factual conflicts “may create sufficient
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`doubt about the probability of plaintiff’s success to justify denying a preliminary injunction.” 11A
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`Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2948.3 (3d ed. 1998);
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`Marshall Durbin Farms, Inc. v. Nat’l Farmers Org., Inc., 446 F.2d 353, 358 (5th Cir. 1971)
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`(“[U]nderstandably, the courts are more cautious about invoking the extraordinary remedy of the
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`preliminary injunction where critical facts are in dispute.”). In assessing the likelihood of the
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`plaintiff’s success on the merits, the Court looks to “the standards provided by substantive law.”
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`Janvey v. Alguire, 647 F.3d 585, 596 (5th Cir. 2011).
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`Here, AT&T asserts a single claim for false advertising under § 43(a) of the Lanham Act.
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`See 15 U.S.C. § 1125(a)(1)(B). To prevail on a claim for false advertising under § 43(a), AT&T
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`must establish the following elements:
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`(1) A false or misleading statement of fact about a product;
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`(2) Such statement either deceived, or had the capacity to deceive a substantial segment of
`potential consumers;
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`(3) The deception is material, in that it is likely to influence the consumer’s purchasing
`decision;
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`(4) The product is in interstate commerce; and
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`(5) The plaintiff has been or is likely to be injured as a result of the statement at issue.
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`Pizza Hut, Inc. v. Papa John’s Int’l, Inc., 227 F.3d 489, 495 (5th Cir. 2000) (citing 4 J. Thomas
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`McCarthy, McCarthy on Trademarks and Unfair Competition § 27:24 (4th ed. 1996)). “The
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`failure to prove the existence of any element of the prima facie case is fatal to the plaintiff’s claim.”
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`Id. at 495.
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`AT&T’s ability to establish a substantial likelihood of the merits of its false advertising
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`claim rises and falls on the first element, which requires it show that T-Mobile’s advertising is
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`false. IQ Prods. Co. v. Pennzoil Prod. Co., 305 F.3d 368, 375 (5th Cir. 2002). There are two types
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`of actionable false advertisements—those that are literally false and those that are not literally false
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`but likely to “mislead and confuse consumers.” Pizza Hut, 227 F.3d at 495. “If the statement is
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`shown to be literally false, the court must assume that it actually misled consumers, without
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`requiring any evidence of such deception from the plaintiff.” IQ Prods. Co., 305 F.3d at 375. On
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`the other hand, if the statement is misleading or ambiguous, the plaintiff must demonstrate actual
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`deception. Id. Here, AT&T argues that the statements at issue are literally false rather than merely
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`misleading, and, therefore, that it need not present evidence of deception to meet its burden on the
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`first element (Dkt. #3 at p. 6). Thus, the threshold question for the Court is whether AT&T has
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`carried its burden of establishing that T-Mobile’s advertisements are literally false.
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`A.
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`Literal Falsity
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`The standard for proving literal falsity is rigorous. Greater Hous. Transp. Co. v. Uber
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`Techs., Inc., 155 F. Supp. 3d 670, 699 (S.D. Tex. 2015) (citing Buetow v. A.L.S. Enters., Inc., 650
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`F.3d 1178, 1185 (8th Cir. 2011)). “For a statement to be literally false, the statement must be false
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`on its face.” Boltex Mfg. Co., L.P. v. Ulma Piping USA Corp., 389 F. Supp. 3d 507, 511
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`(S.D. Tex. 2019) (internal citations omitted). A literally false statement is one that is “bald-faced,
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`egregious, undeniable, [and] over the top.” Schering-Plough Healthcare Prod., Inc. v. Schwarz
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`Pharma, Inc., 586 F.3d 500, 513 (7th Cir. 2009); Novartis Consumer Health, Inc. v. Johnson &
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`Johnson-Merck Consumer Pharms. Co., 290 F.3d 578, 587 (3d Cir. 2002) (noting that “only an
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`unambiguous message can be literally false”) (emphasis in original). Thus, “if the language at
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`issue is susceptible to more than one reasonable interpretation, the advertisement cannot be
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`literally false.” Greater Hous. Transp., 155 F. Supp. 3d at 700.
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`The Court does not assess the falsity of a statement in isolation but, rather, “in light of the
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`overall context in which it appears.” Pizza Hut, 227 F.3d at 496. This means that the Court must
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`“analyze the message conveyed within its full context.” Buetow, 650 F.3d at 1185. Put differently,
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`the Court “must view the face of the statement in its entirety, rather than examining the eyes, nose,
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`and mouth separately and in isolation from each other.” Greater Hous. Transp., 155 F. Supp. 3d
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`at 700 (quoting Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1139 (9th Cir. 1997)).
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`AT&T asserts that the Website contains two literally false statements: (1) that AT&T
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`“ban[s]” senior discounts and (2) that “92% of seniors in the U.S. can’t get a wireless discount
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`from . . . AT&T unless they live in Florida” (Dkt. #3 at p. 6). According to AT&T, those
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`statements, which are also reflected in the Website’s graphics, are literally false because AT&T
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`partners with the AARP—”an interest and advocacy group serving the 50+ population”—to offer
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`discounts to AARP members in every state (Dkt. #3 at pp. 6–7). Ultimately, AT&T argues that
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`the Website “conveys the false message that Florida is the only state in which AT&T customers
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`over 55 can receive discounted wireless service” (Dkt. #3 at p. 8).
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`Conversely, T-Mobile argues that the statements on the Website are not literally false
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`because it is undisputed that AT&T’s Unlimited 55+ plan—which AT&T does not offer outside
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`of Florida—is the only AT&T discount program that is offered exclusively to senior citizens
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`(Dkt. #19 at p. 9). According to T-Mobile, the existence of AT&T’s AARP discount does not
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`change the veracity of the statements at issue because AT&T’s AARP discount is a “member
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`discount” available to all AARP members, rather than a “senior discount,” which T-Mobile defines
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`as a discount that is available to all customers over a threshold age age (Dkt. 19 at p. 9).
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`Ultimately, T-Mobile asserts that its advertisements are true because AT&T chooses not to offer
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`its Unlimited 55+ plan to seniors who do not reside in Florida, whereas T-Mobile offers its
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`comparable senior discount plans across the country (Dkt. #19 at p. 10).
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`Upon review of the Banned Seniors advertisements in their full context, and considering
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`the parties’ briefing and evidence, the Court finds that significant factual disputes prevent it from
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`determining that AT&T is likely to prevail on the merits of its false advertising claim at this stage.
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`See Goodman v. Dell Publ’g Co., No. 94-CV-3028, 1995 WL 301380, at *2 (E.D. La. May 15,
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`1995) (finding that a factual dispute “preclude[d] the Court from determining the likelihood of
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`success on the merits” and concluding plaintiff therefore “failed to meet her heavy burden” on the
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`likelihood-of-success element); Marshall Durbin Farms, Inc., 446 F.2d at 358. After all, literally
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`false statements are those that are “patently false” and “mean what [they] say[] to any linguistically
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`competent person.” Schering-Plough Healthcare Prod., 586 F.3d at 513. But both parties have
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`presented reasonable interpretations of the statements at issue here.
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`Specifically, the Court finds that two key phrases at the heart of this dispute are subject to
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`multiple reasonable interpretations: the terms (1) “senior discount” and (2) and “ban.”
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`1.
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`“Senior Discount”
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`T-Mobile contends that a senior discount is one that is “available to all consumers over a
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`threshold age” (Dkt. #23 at p. 2). In support of this contention, T-Mobile points to several other
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`businesses who advertise senior discount programs as “discounts that are available to any person
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`over a specified age” (Dkt. #23 at p. 2) (citing definitions for “senior discounts” offered by
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`Marriott, Amtrak, and AMC Theatres). The Court agrees with T-Mobile that this interpretation of
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`the term “senior discount” is reasonable because the term itself necessarily implies that age, rather
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`than membership in any organization, is the sole quality that defines eligibility for the discount.
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`And, in the context of the entire Website, it is undisputed that the only discount that AT&T makes
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`available to any person over a threshold age is its Unlimited 55+ plan, which, as the Website
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`proclaims, is available only to consumers in Florida.
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`AT&T argues that the Banned Seniors advertisements are literally false because AT&T
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`offers a discount that is available to seniors through the AARP (Dkt. #3 at p. 7). According to
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`AT&T, a “senior discount” is simply “a discount available to seniors,” and its AARP discount
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`meets this definition (Dkt. #22 at p. 3). Although the Court agrees with AT&T that its definition
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`of “senior discount” is one reasonable interpretation of the phrase, it is not the only reasonable
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`interpretation. Accordingly, because T-Mobile’s use of the term “senior discount” is subject to
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`more than one reasonable interpretation, it does not support a finding of literal falsity. Greater
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`Hous. Transp., 155 F. Supp. 3d at 700.
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`2.
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`“Ban”
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`Likewise, the parties offer competing definitions of the word “ban.” AT&T points to
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`Merriam-Webster’s dictionary in arguing that the word “ban” means to “prohibit by legal means”
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`or to “prohibit the use, performance, or distribution of” (Dkt. #22 at pp. 2–3). Considering this
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`definition, AT&T argues that T-Mobile’s claim that AT&T “bans” senior discounts is literally
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`false because AT&T does not prohibit anyone from receiving its Unlimited 55+ discount—it
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`simply does not offer the discount outside of Florida (Dkt. #22 at p. 2). On the other hand, T-
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`Mobile relies on the Cambridge Dictionary in arguing that “ban” means to “refuse to allow”
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`(Dkt. #23 at p. 4). T-Mobile argues that this definition “describes AT&T’s actions” because
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`AT&T refuses to allow customers outside of Florida to obtain the Unlimited 55+ discount
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`(Dkt. #23 at p. 4). Given the competing dictionary definitions offered by both parties, the Court
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`finds that T-Mobile’s use of the word ban is not “unambiguously false.” Buetow, 650 F.3d at 1186
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`(concluding that a determination of literal falsity cannot be based on “the most absolute of
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`competing dictionary definitions” and that “a district court errs when it ignores the principle that
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`text must yield to context” and “makes a fortress out of the dictionary.”) (cleaned up).3
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`When read in context, the statements contained on the Website, including the graphics, can
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`be reasonably interpreted as merely stating that AT&T chooses not to offer its Unlimited 55+
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`plan—its only discount that is available to all consumers over a threshold age—outside of Florida.
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`This statement is objectively true. Thus, the Court concludes that AT&T has not met the
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`“rigorous” standard for showing that T-Mobile’s advertisements are unambiguously false on their
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`face. Greater Hous. Transp., 155 F. Supp. 3d at 699–700.
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`Because AT&T has not established that the advertisements at issue are literally false, it has
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`failed to carry its burden of demonstrating a substantial likelihood of success on the merits of its
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`false advertising claim. Pizza Hut, 227 F.3d at 495. This failure is fatal to AT&T’s application
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`for a preliminary injunction. See, e.g., Nichols, 532 F.3d at 372 (noting that a preliminary
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`injunction “should only be granted if the plaintiffs have clearly carried the burden of persuasion
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`on all four requirements”).
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`3 AT&T also argues that the Banned Seniors advertisements are literally false because they convey the message that
`AT&T bans seniors from obtaining “any wireless discounts” (Dkt. #3 at pp. 4–5; Dkt. #25 at pp. 10–11). The Court
`rejects this argument for two reasons. First, T-Mobile has modified the Website to provide additional context by
`including the term “senior” or “55+” before every reference to a “discount” (Dkt. #19 at p. 9). Given this additional
`context, the Court finds that the Website does not unambiguously convey the message that seniors are categorically
`ineligible for any AT&T discounts. See Bridal Expo, Inc. v. van Florestein, No. 4:08-CV-03777, 2009 WL 255862,
`at *8 (S.D. Tex. Feb. 3, 2009). Second, AT&T’s argument does not support a determination of literal falsity because
`it requires consumers to view the Website’s statements and make the inferential leap that AT&T categorically excludes
`seniors from all discount programs. United Indus. Corp. v. Clorox Co., 140 F.3d 1175, 1181 (8th Cir. 1998) (“The
`greater the degree to which a message relies upon the viewer or consumer to integrate its components and draw the
`apparent conclusion, however, the less likely it is that a finding of literal falsity will be supported.”).
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`Of course, AT&T can ultimately prevail at trial. But “a preliminary injunction is an
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`extraordinary and drastic remedy” that the Court cannot grant unless AT&T “by a clear showing,
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`carries the burden of persuasion.” Mazurek v. Armstrong, 520 U.S. 968, 972 (1997). AT&T has
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`failed to carry its burden here, and, as a result, the Court must deny its application for a preliminary
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`injunction.
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`It is therefore ORDERED that Plaintiff’s Application for Preliminary Injunction (Dkt. #3)
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`CONCLUSION
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`is DENIED.
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`IT IS SO ORDERED.
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