NYU Langone Health System v. Northwell Health, Inc.

Background

NYU Langone Health System and NYU Langone Hospitals sued Northwell Health, Inc. The plaintiffs alleged that the two not-for-profit health systems compete in the New York City metropolitan region and that Northwell changed some of its advertising beginning in 2021 to resemble NYU Langone’s advertising. NYU Langone alleged that its advertising had a distinctive look based on prominent use of purple, accent colors, particular fonts and headline styles, and specified layouts.

NYU Langone also challenged a Northwell advertisement stating that Lenox Hill Hospital was “NYC’s only hospital in the Nation’s Top 50” and offered “the best care in Manhattan.” The advertisement cited a Healthgrades ranking. NYU Langone questioned Healthgrades’ methodology and alleged that the statements were false or misleading.

Northwell moved to dismiss the entire complaint for failure to state a claim under Rule 12(b)(6), which tests whether a complaint alleges enough facts to support a legally recognized claim.

Trade Dress, Unfair Competition, and False Designation

The court dismissed NYU Langone’s federal and common-law trade-dress claims. Trade dress is the overall design and appearance of an advertisement or product that identifies its source. A plaintiff must clearly identify the specific design features that make up the claimed trade dress.

The court found NYU Langone’s description confusing and too expansive. It included examples rather than fixed requirements for accent colors, fonts, headline styles, color combinations, and layouts. The photographs attached to the complaint also showed substantial variation in the advertisements, including differences in shades of purple, text colors and capitalization, and vertical or horizontal layouts. The court concluded that the allegations described categories of features rather than a single, specific trade dress.

Because the court found that the trade-dress allegations were inadequate, it also dismissed the federal unfair-competition and false-designation claim and the New York common-law unfair-competition claim. The court stated that these claims rise and fall with the trade-dress claim.

The trade-dress claims and the unfair-competition and false-designation claims were dismissed without prejudice. The court did not conclude that amendment would necessarily be futile because a narrower and more specific set of advertising features might be actionable.

False Advertising

The court dismissed the Lanham Act and New York General Business Law § 350 false-advertising claims. It held that the statement that Lenox Hill was the only New York City hospital in the “Nation’s Top 50” was not literally false because the advertisement identified Healthgrades as the source of the ranking. NYU Langone challenged Healthgrades’ methodology but did not allege that Northwell misrepresented what Healthgrades’ ranking said.

The court also found that NYU Langone did not adequately allege that the advertisement was misleading. Its allegation that Northwell’s statements deceived or tended to deceive consumers was conclusory and did not provide facts supporting a plausible inference of consumer confusion.

The statement that Lenox Hill offered “the best care in Manhattan” was treated as subjective opinion, or advertising puffery. The court held that such a statement could not be proven true or false and therefore was not actionable as false advertising. The court reached the same result under New York law, reasoning that the Healthgrades citation clarified the ranking claim and that puffery was not actionable.

The court concluded that amendment of the false-advertising claims would be futile and dismissed those claims with prejudice.

New York General Business Law § 349

NYU Langone also sued under New York General Business Law § 349, which prohibits deceptive business practices. The court explained that this claim requires allegations of consumer-oriented conduct, material misleadingness, and injury resulting from the conduct.

The court found that NYU Langone based the claim on the same advertising allegations underlying its trade-dress claim. It further held that NYU Langone did not allege facts showing a specific and substantial injury to the public interest beyond the ordinary harm associated with alleged trademark or trade-dress infringement. The conclusory assertion of consumer injury or harm to the public interest was insufficient.

Disposition

The court granted Northwell’s motion to dismiss. In the conclusion, the court stated that Counts II and V, described there as false-advertising claims under the Lanham Act and New York General Business Law, were dismissed with prejudice. The remaining claims were dismissed without prejudice to NYU Langone moving for leave to file an amended complaint. Any motion for leave had to be filed by March 22, 2024, with a redlined proposed amended complaint. The clerk was directed to terminate the motion at Docket 26.