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Asurion, LLC v. SquareTrade, Inc.

United States District Court, M.D. Tennessee, Nashville Division

August 30, 2019

ASURION, LLC, Plaintiff,
v.
SQUARETRADE, INC., Defendant.

          HOLMES, MAGISTRATE JUDGE

          MEMORANDUM

          WILLIAM L. CAMPBELL, JR., UNITED STATES DISTRICT JUDGE

         Pending before the Court is Defendant SquareTrade, Inc.'s Motion to Dismiss Complaint of Plaintiff Asurion LLC (Doc. No. 30). Asurion filed a memorandum in opposition to the motion (Doc. No. 38) and SquareTrade filed a reply (Doc. No. 45). Defendant SquareTrade also filed a Request for Judicial Notice of three printouts of online promotional materials from other companies (Doc. No. 32). For the following reasons, the request to take judicial notice of matters outside the pleadings is DENIED, and the motion to dismiss is DENIED.

         I. BACKGROUND

         Asurion and SquareTrade are direct competitors in the provision of extended warranties for mobile phones. Asurion offers what it calls “mobile phone insurance, ” which covers damage and failures, and also provides coverage for theft and loss. (Id. ¶ 19.) Asurion's mobile phone insurance is available for purchase from wireless carriers such as AT&T, Sprint, and Verizon. (Id. ¶ 4.) Typically, the wireless carriers bundle Asurion's mobile phone insurance with an extended warranty and technical support and sell the combined “Carrier Protection Plan” to customers at a single price. (Id.) SquareTrade sells an extended warranty it refers to as a “Protection Plan.” The Protection Plan provides protection against defects and accidental damages for a variety of consumer products, including cell phones, but does not cover products for theft or loss. (Id. ¶¶ 5, 15, 20; Def. Br., Doc. No. 31 at 2.)

         The distinguishing feature between Asurion's mobile phone insurance and SquareTrade's Protection Plan, appears to be that Asurion's mobile phone insurance provides coverage for theft and loss and SquareTrade's does not. (Id. ¶¶ 3-5.) As compared with the bundled Carrier Protection Plan, SquareTrade's Protection Plan provides less coverage because it does not cover theft or loss and does not include the technical support that comes with the Carrier Protection Plans. (Id. ¶¶ 19.)

         Asurion's allegations concern the following SquareTrade advertisements:

         Mailed Advertisement

         Online Advertisement

         (Image Omitted)

         (Compl., Doc. No. 1, ¶ 15.) The fine print in both advertisements states:

         (Image Omitted)

All plans are continuous until cancelled. A $25-149 deductible applies per claim. Price comparisons based on smart phone protection for the following providers: SquareTrade Smartphone Protection Plan, Sprint Total Equipment Protection Plus, T-Mobile Premium Device Protection Plus, Verizon Total Mobile Protection, AT&T Mobile Protection Pack. Prices and terms are as of 08/01/2018 and may change. SquareTrade plans do not cover loss or theft. Refer to SquareTrade's Terms & Conditions.

         Asurion complains that the side-by-side comparison in the advertisements falsely and misleadingly implies that SquareTrade offers coverage equivalent to the Carrier Protection Plans for a lower price. (Compl., Doc. No. 1 ¶ 6.) Asurion further argues that using the name of its affiliate, Allstate, in the online advertisement misleadingly implies SquareTrade offers insurance (i.e. theft and loss protection). Asurion brings claims for false advertising under Section 43(a) of the Trademark Act of 1946 (the “Lanham Act”), 15 U.S.C. § 1125(a) and for violations of the Tennessee Consumer Protection Act ...


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