                                                                       FILED
                                                            United States Court of Appeals
                                                                    Tenth Circuit

                                                                    July 31, 2015
                      UNITED STATES COURT OF APPEALS
                                                   Elisabeth A. Shumaker
                                                                    Clerk of Court
                                   TENTH CIRCUIT


 GENERAL STEEL DOMESTIC
 SALES, LLC, d/b/a General Steel
 Corporation, a Colorado limited
 liability company,

           Plaintiff-Appellant/Cross-
           Appellee,
                                                   Nos. 14-1119 and 14-1121
 v.
                                             (D.C. No. 1:10-CV-01398-PAB-KLM)
                                                           (D. Colo.)
 ETHAN DANIEL CHUMLEY,
 individually; ATLANTIC BUILDING
 SYSTEMS, LLC, a Delaware
 corporation, d/b/a Armstrong Steel
 Corporation,

           Defendants-Appellees/Cross-
           Appellants.


                              ORDER AND JUDGMENT *


Before HARTZ, GORSUCH, and MATHESON, Circuit Judges.


          Most everyone expects a little audacity — maybe even a little mendacity —

in their advertising. Sometimes it can even prove amusing. Like the local greasy

spoon’s boast that it pours the “world’s best cup of coffee.” Or the weight loss


      *
      This order and judgment is not binding precedent except under the
doctrines of law of the case, res judicata, and collateral estoppel. It may be cited,
however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th
Cir. R. 32.1.
company’s promise that its miracle pill will “literally melt the pounds away.” But

sometimes advertising crosses the line from harmless hyperbole into underhanded

deception with material commercial consequences. That’s when laws like the

federal Lanham Act step in, allowing those harmed by false advertising to recover

for their injuries. In the district court’s judgment that’s the position General Steel

found itself in: entitled to relief under the Act after a campaign of misleading ads

by its competitor, Armstrong Steel. Neither by the end of it all can we find any

reversible error in that judgment.

                                          *

      The trouble began with a disgruntled employee. Ethan Chumley worked as

a salesperson for General Steel, a company that sells prefabricated steel buildings

directly to consumers. But the relationship eventually soured and, though the

parties dispute what led to his termination, everyone agrees the parting was hardly

friendly. Before long Mr. Chumley founded Armstrong, a rival in the steel

building business, and the company launched an aggressive online marketing

campaign.

      That’s where the lies began. One Internet posting purported to detail

Armstrong’s community service efforts in the Middle East, offering quotations

from the company’s Vice President of International Affairs, J.P. Remington, III.

The problem? The charity didn’t exist. Neither did Mr. Remington. And the

false claims didn’t stop with phony philanthropy: soon General Steel was in the

                                          2
crosshairs. Ads on Google, for example, claimed that Armstrong sold “General

Steel” buildings. It didn’t. The company’s website claimed that Armstrong

fabricates the steel it uses to assemble its buildings. It doesn’t. And one ad on

Armstrong’s website — entitled “May the Best Building Win” — offered a side-

by-side comparison of Armstrong’s and General Steel’s products and claimed that

General Steel provided consumers with fewer options than, in truth, it did.

      So it is that General Steel sued, pursuing claims under both the Lanham Act

and the Colorado Consumer Protection Act. While the district court granted

summary judgment to Armstrong and Mr. Chumley on the Colorado statutory

claims, the federal Lanham Act claims survived to a bench trial. There the court

found for General Steel and awarded monetary and injunctive relief for three false

statements — that Armstrong fabricated its own steel; that Armstrong offered

“general steel” buildings for sale; and that General Steel failed to offer

pregalvanized steel or stainless fasteners for its buildings. Both sides now appeal.

Armstrong and Mr. Chumley challenge the district court’s award of relief under

the Lanham Act, while General Steel argues that summary judgment was

inappropriate on its Colorado statutory claims.

                                          *

      We start with Armstrong’s appeal. To win a false advertising claim under

the Lanham Act, a plaintiff generally must establish among other things that the

defendant’s commercial advertising contained a false or misleading representation

                                          3
of fact that was likely to cause confusion about the defendant’s products or

services and that injured the plaintiff. 15 U.S.C. § 1125(a); Sally Beauty Co. v.

Beautyco, Inc., 304 F.3d 964, 980 (10th Cir. 2002). Armstrong argues that

General Steel failed to demonstrate all of these essential elements and we take

each argument in turn.

      To show a qualifying false or misleading statement, a plaintiff must

demonstrate that the defendant’s statement was either (1) literally false or (2)

literally true or ambiguous but implicitly false, misleading in context, or likely to

deceive. Hot Wax, Inc. v. Turtle Wax, Inc., 191 F.3d 813, 820 (7th Cir. 1999);

accord Cottrell, Ltd. v. Biotrol Int’l, Inc., 191 F.3d 1248, 1252 (10th Cir. 1999).

The district court found the three statements mentioned above — that Armstrong

fabricated steel, that Armstrong sold “general steel” buildings, and that General

Steel didn’t provide pregalvanized steel or stainless fasteners — satisfied the first

test because they were literally false. The parties spend much time fighting over

the standard of review we should apply to these determinations and whether

Armstrong properly preserved all of the arguments for reversal it now advances.

But nothing turns on these disputes, for we would affirm the district court even

assessing all of Armstrong’s arguments and doing so de novo.

      Take Armstrong’s representation that it fabricated its own steel. The

district court held this suggestion literally false because the evidence at trial

showed that Armstrong isn’t a steel manufacturer but purchases steel from others

                                           4
and then assembles it into buildings. Armstrong contends that its statements were

at least ambiguous because, when discussing “each piece of steel we fabricate,” a

reader could’ve taken the company to mean that it merely supplies buildings made

of steel that others fabricate. But we agree with the district court: that’s just not

a plausible reading. In referring to “each piece of steel we fabricate,”

Armstrong’s ads conveyed not only that the company supplies steel buildings or

assembles pieces of steel made by others, but that it fabricates the steel pieces

itself. And that much is just not true.

      Next come Armstrong’s representations that it offered “general steel”

buildings for sale. The district court found these statements literally false

because Armstrong wasn’t licensed to (and didn’t) sell its rival’s products. Again

Armstrong claims ambiguity, arguing that its references to “general steel” didn’t

necessarily mean “Armstrong makes ‘General Steel’ (i.e., the plaintiff’s)

buildings” because they could also mean “Armstrong makes ‘general’ (i.e., all-

purpose) steel buildings.” Again, we cannot see how. There’s no credible

evidence in the record that the term “general steel” is used in the industry to

describe steel buildings sold by anyone else. Armstrong’s ads, meanwhile,

included side-by-side comparisons between its products and those offered by the

General Steel company. They even used General Steel’s logo and sometimes

capitalized “General Steel.” In this light, there’s just no doubt what Armstrong’s

ads were talking about — or that they were literally false.

                                           5
      Last in line are Armstrong’s statements about “pre-galvanized secondary

framing” and “stainless steel fasteners.” Armstrong says its advertisements —

representing that it provided these accessories where General Steel didn’t — were

literally true because Armstrong includes these items unless the customer declines

them while General Steel doesn’t include them unless the customer requests them.

But Armstrong’s “May the Best Building Win” web advertisements failed to draw

any distinctions of this sort. They didn’t, for example, compare “standard”

features. Instead, they flatly compared features supposedly available in

Armstrong buildings against those supposedly available in General Steel

buildings. And the ads were literally false because the evidence at trial showed

that both companies provide these features at additional cost and that customers

can choose whether to purchase them.

      Failing to persuade us of error in the district court’s falsity analysis,

Armstrong next directs our attention to the question of materiality. Though not

explicitly mentioned in the text of the Lanham Act, many courts require plaintiffs

to prove that a false or misleading advertisement is “likely to influence the

purchasing decision” before permitting recovery based on it. Cashmere & Camel

Hair Mfrs. Inst. v. Saks Fifth Avenue, 284 F.3d 302, 311 (1st Cir. 2002) (quoting

Clorox Co. P.R. v. Proctor & Gamble Commercial Co., 228 F.3d 24, 33 n.6 (1st

Cir. 2000)); see also 5 J. Thomas McCarthy, McCarthy on Trademarks and Unfair

Competition §§ 27:24 n.1, 27:35 (2015). Circuits that have imposed a materiality

                                          6
requirement are, however, split over who bears the burden of proof: some keep it

with the plaintiff while others are willing to presume that at least some

misstatements — usually literally false ones — are material. Compare, e.g.,

Cashmere & Camel Hair Mfrs. Inst., 284 F.3d at 310-11 (keeping the burden with

the plaintiffs), with, e.g., Pizza Hut, Inc. v. Papa John’s Int’l, Inc., 227 F.3d 489,

497 (5th Cir. 2000) (presuming that a literally false statement is material). This

court has yet to decide whether the Lanham Act imposes a materiality inquiry

and, if so, the lines that inquiry should follow or the standard we would use to

review a district court’s materiality determination. But here again this case does

not require us to answer these questions.

      It doesn’t because, on the record before us, we would find one of

Armstrong’s false statements — that only Armstrong offered pregalvanized steel

or stainless fasteners — material under any conceivable standard. That’s because

Armstrong’s own evidence at trial established that the statement was likely to

influence consumer purchasing decisions. Armstong’s Chief Operating Officer

testified that steel fasteners and pregalvanized framing were important to

Armstrong’s brand, giving the company a competitive edge and improving the

quality of its buildings.

      That leaves the other two statements: Armstrong’s claim that it fabricated

its own steel and sold “general steel” buildings. But here, too, Armstrong fails to

provide a basis for reversing the district court’s judgment. For while the

                                            7
company didn’t concede at trial that these false statements were material to

consumer purchasing decisions, the company does accept on appeal the premise

that “statements that misrepresent an inherent quality or characteristic of a

product” are always material. Appellee/Cross-Appellant’s Br. 19-20 (citing

Sunlight Saunas, Inc. v. Sundance Sauna, Inc., 427 F. Supp. 2d 1032, 1060 (D.

Kan. 2006)). The district court found these statements misrepresented inherent

qualities of Armstrong’s products and thus qualified for the presumption of

materiality. On appeal, Armstrong’s brief offers no convincing reason why this

was error. Maybe such a reason exists, but if it does it hasn’t been presented to

this court.

       Moving past materiality to injury, the argument proceeds this way. The

district court found that Armstrong’s false statements appear in direct side-by-

side comparative advertising. It found, too, that Armstrong made these false

statements willfully. Given these two facts, the district court held that it would

presume they caused injury to General Steel. In doing so, the court relied on

cases that have employed such a presumption “in comparative advertising cases

where money damages are sought and where there exists proof of willful

deception.” Porous Media Corp. v. Pall Corp., 110 F.3d 1329, 1336 (8th Cir.

1997); see also Hutchinson v. Pfeil, 211 F.3d 515, 522 (10th Cir. 2000).

Armstrong accepts this presumption as a matter of law, so we will assume

(without deciding) that it is a correct statement of the law. The company argues,

                                          8
however, that the presumption isn’t warranted here because, as a factual matter,

some of its false statements simply were not made in the course of a comparative

advertisement. Yes, they were all found in its “May the Best Building Win”

webpage — and, yes, that advertisement expressly compared Armstrong and

General Steel products. But Armstrong attaches significance to the fact that two

of the three statements at issue were located in small print after side-by-side

columnar comparisons between the two brands. And the small print, Armstrong

says, is for all practical purposes a separate advertisement unto itself.

      We disagree. Every statement complained of was found on a single web

page (no clicking through needed). All followed under the heading “May the Best

Building Win” and the logos of General Steel and Armstrong. So Armstrong’s

suggestion that we should cleave this single piece in two — treating the columns

and the small print as separate ads — seems a bit like suggesting we should find

two separate ads in the sales pitch at the front end of a thirty-second radio spot

and the fast-talking disclaimers at the end — or in the large print at the top of a

newspaper ad and the small print at the bottom. Neither does the case on which

Armstrong primarily relies, Pom Wonderful LLC v. Ocean Spray Cranberries,

Inc., No. CV 09-00565 DDP (RZx), 2011 WL 4852472 (C.D. Cal. Oct. 12, 2011),

suggest such an unlikely conclusion. Indeed, the court there didn’t attempt to

sever a single ad into multiple ones. Instead, it held that the case before it didn’t

involve a comparative advertisement at all because the defendant’s advertising —

                                          9
however false and misleading — never referred to the plaintiff’s product by name.

Id. at *2. And that’s just not a problem we face for, as we’ve seen, Armstrong’s

“May the Best Building Win” advertisements expressly referenced General Steel’s

products.

      Moving beyond liability to the question of remedy, the court ordered

disgorgement of profits, a move Armstrong doesn’t challenge in principle. In

calculating the amount of disgorgement, the district court adopted a burden-

shifting framework that required General Steel to prove Armstrong’s gross profits

during the period in question and Armstrong to prove which portion of those

profits wasn’t attributable to its Lanham Act violations. Armstrong never came

forward with the latter type of evidence, and it now argues that the whole burden-

shifting endeavor was an improper way to go about figuring the appropriate

amount of profits to disgorge.

      Once again we cannot agree. The Act’s remedial provision says that when

a plaintiff proves false advertising or trademark infringement, he is “entitled, . . .

subject to the principles of equity, to recover . . . defendant’s profits.” 15 U.S.C.

§ 1117(a). The statute goes on: “In assessing profits the plaintiff shall be

required to prove defendant’s sales only; defendant must prove all elements of

cost or deduction claimed.” Id. Pretty plainly this language anticipates the sort

of burden shifting the district court applied. Indeed, this framework is routinely

used in trademark infringement cases. See, e.g., Mishawaka Rubber & Woolen

                                          10
Mfg. Co. v. S.S. Kresge Co., 316 U.S. 203, 206-07 (1942); Lindy Pen Co. v. Bic

Pen Corp., 982 F.2d 1400, 1408 (9th Cir. 1993). And many courts have employed

it in false advertising cases too. See, e.g., Merck Eprova AG v. Gnosis S.p.A, 760

F.3d 247, 251, 261-62 (2d Cir. 2014); Rexall Sundown, Inc. v. Perrigo Co., 707 F.

Supp. 2d 357, 359 (E.D.N.Y. 2010); Aviva Sports, Inc. v. Fingerhut Direct Mktg.,

Inc., 829 F. Supp. 2d 802, 819 (D. Minn. 2011). That shouldn’t come as much of

a surprise, for not only does the statutory text speak to both sorts of claims in the

same voice, it more or less tracks common law remedies for false advertising. At

common law, after all, once a plaintiff proved slander per se or libel, general

damages were often presumed. See 50 Am. Jur. 2d Libel and Slander § 478;

Marc A. Franklin & Daniel J. Bussel, The Plaintiff’s Burden in Defamation:

Awareness and Falsity, 25 Wm. & Mary L. Rev. 825, 826 & n.4 (1984).

      The cases Armstrong cites in support of its contrary position don’t address

the propriety of a burden-shifting regime for determining the quantum of

monetary relief — let alone reject it. Instead, they stand for the proposition that

“unless there is some proof that plaintiff lost sales or profits, or that defendant

gained them, the principles of equity do not warrant an award of defendant’s

profits.” Balance Dynamics Corp. v. Schmitt Indus., Inc., 204 F.3d 683, 695 (6th

Cir. 2000); see also Logan v. Burgers Ozark Country Cured Hams Inc., 263 F.3d

447, 464 (5th Cir. 2001). We don’t question the propriety of this principle, only

its relevance when it comes to determining not whether monetary relief should be

                                          11
awarded but whether (as here) to employ the statutorily prescribed burden-

shifting procedure to ascertain its amount.

      Without an argument based in statutory text or precedent, Armstrong at

times seems to suggest that employing a burden-shifting process in false advertising

cases might create a policy problem that does not arise in trademark infringement

cases. Trademark infringement cases involve discrete product lines, the argument

goes, so disgorgement of profits can be easily limited to affected lines. But a

product line–by–product line analysis is impossible in false advertising cases, so

when ordering disgorgement of profits in those cases there’s a risk a court will

wrongly award disgorgement for product lines unaffected by any wrongdoing.

      We just don’t see this dichotomy. We have no difficulty imagining a

trademark case involving the wrongful use of a mark that affects multiple product

lines (for example, if Armstrong had stamped various separate product lines with

General Steel’s logo). Likewise, we can imagine a false advertising case in which

the misstatements are limited to one product line and not others (for example, a

car company falsely advertising qualities of its luxury sedan but not its other

models). Of course, it very well may be that when ordering disgorgement a

district court should (if possible) disaggregate affected and unaffected product

lines to avoid overcompensation, whether the case involves trademark

infringement or false advertising. But Armstrong doesn’t identify any problem of

this sort here for it doesn’t claim to produce any product line unrelated to its false


                                         12
advertising. To the contrary, its ads all concerned the steel buildings it sells and,

as best we can tell from the record, steel buildings are all it sells.

       Armstrong’s only other response is to direct us to the Supreme Court’s

decision in Mishawaka and the Ninth Circuit’s ruling in Lindy Pen. But it’s not

clear to us how either case helps the company’s cause for both endorse the very

burden-shifting regime Armstrong challenges, if again in the trademark context.

See Mishawaka, 316 U.S. at 206 (“Infringement and damage having been found,

the Act requires the trade-mark owner to prove only the sales of articles bearing

the infringing mark . . . . If it can be shown that the infringement had no relation

to profits made by the defendant, . . . the burden of showing this is upon the

poacher.”); Lindy Pen, 982 F.2d at 1408 (“Once the plaintiff demonstrates gross

profits, they are presumed to be the result of the infringing activity.”). 1



   1
       In passing Armstrong suggests another reason why disgorgement here was
improper: its representations that it fabricated steel or sold “general steel”
buildings didn’t appear on the “May the Best Building Win” webpage during the
particular period of time covered by the district court’s disgorgement order. But
the company doesn’t dispute that its statement about stainless fasteners was on
the website during the relevant time. Neither does it dispute that it sponsored
Google ads during the relevant period claiming to sell “General Steel” buildings,
using capitalization in a clear reference to its rival. So it would still fall to
Armstrong to show which of its profits from the relevant time period weren’t
attributable to false statements that it made in comparative ads. Something it has
never attempted to do: it has only attacked the district court’s use of the burden-
shifting process and never suggested its ability to nullify or reduce the relief the
court awarded using that process. Put differently, any challenge under Lindy Pen
or Mishawaka to the court’s application of the statutory burden-shifting
framework fails because Armstrong never contested or claimed deductions from
General Steel’s sales data.

                                           13
                                           *

      Having concluded that none of Armstrong’s arguments warrants reversal,

we turn to General Steel’s half of this appeal. Here our analysis can be a good

deal briefer. The company argues that the district court erred in granting

summary judgment to Armstrong on General Steel’s claims under the Colorado

Consumer Protection Act. The district court held that, at least at the time of

summary judgment, General Steel had failed to come forward with evidence

suggesting that it suffered sufficient harm at the hands of Armstrong’s deceptive

trade practices to give rise to a state law claim. On appeal, General Steel argues

that the district court erred by effectively requiring it (as the nonmoving plaintiff)

to point to evidence of injury in the record to oppose summary judgment.

According to General Steel, Armstrong should have first come forward with

affirmative evidence showing a lack of injury.

      But these arguments, like the cases General Steel cites to support them,

come from a pre-Celotex world. The Supreme Court long ago established that a

defendant may support its motion for summary judgment on an issue on which the

plaintiff bears the burden of proof by arguing that the record lacks any evidence

in the plaintiff’s favor. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-25

(1986). Rule 56 doesn’t require that “the moving party support its motion with

affidavits or other similar materials negating the opponent’s claim” — so long as

it explains why the record doesn’t support the opponent’s position. Id. at 323.


                                          14
And Armstrong did just that here: its motion for summary judgment explained

why General Steel’s theories of injury were lacking under Colorado law. General

Steel’s failure to come forward with any evidence to rebut this argument was thus

a real problem, just as the district court held. See, e.g., Libertarian Party of N.M.

v. Herrera, 506 F.3d 1303, 1309 (10th Cir. 2007) (“If, however, the moving party

does not bear the burden of persuasion at trial, it need not negate the nonmovant’s

claim. Such a movant may make its prima facie demonstration by pointing out to

the court a lack of evidence on an essential element of the nonmovant’s claim.”

(citation omitted)); Thom v. Bristol-Myers Squibb Co., 353 F.3d 848, 851 (10th

Cir. 2003) (same). 2

                                          *

       At this point only a couple of odds and ends remain to tie up. First,

General Steel would have us overturn the district court’s finding that its CCPA

claim was “groundless.” But General Steel fails to explain how an alternate

   2
       In its opening appellate brief General Steel cites an interrogatory response
in which it claimed injury. But under Rule 56, that’s not enough to survive
summary judgment: General Steel had an obligation to come forward with
evidence suggesting injury, not a conclusory claim of one. Adler v. Wal-Mart
Stores, Inc., 144 F.3d 664, 674 (10th Cir. 1998) (“Vague, conclusory statements
do not suffice to create a genuine issue of material fact.”). Neither did General
Steel meet its burden by pointing to several receipts for its own advertising
expenses, for the company never explained how these costs were associated with
any alleged injury. Finally, General Steel’s suggestion that it amassed evidence
sufficient to support a state law claim after summary judgment is of course
insufficient to undo the district court’s ruling. See id. at 671 (noting that our
review of a summary judgment disposition is limited to the same record that was
before the district court at the time of the judgment’s entry).

                                          15
finding would make any difference. In addressing whether Armstrong is entitled

to attorney fees under state law, the district court held that General Steel’s CCPA

claims were “groundless” but declined to award fees anyway because Armstrong

couldn’t satisfy other statutory prerequisites. Nor does General Steel suggest that

the finding is relevant to some other presently live dispute. Second, Armstrong

tells us the district court erred in finding that Mr. Chumley was responsible for

creating a website that disparaged General Steel. But the court went on to

hold — despite this finding — that Mr. Chumley and Armstrong should win on

the trademark and unfair competition claims, the only claims for which this

factual finding was relevant. And again Mr. Chumley fails to suggest this finding

is relevant to any other live question. Without any explanation how these

findings affect anyone’s legal rights in these proceedings, or even collateral

interests elsewhere, it appears these are but academic questions and for this

reason we decline to tangle with them. Cf. Wyoming v. Dep’t of Interior, 587

F.3d 1245, 1247 (10th Cir. 2009) (“[U]nder Article III of our Constitution federal

courts may answer only questions whose resolutions will have an actual effect in

the real world.”).

      The district court’s judgment is affirmed.

                                       ENTERED FOR THE COURT

                                       Neil M. Gorsuch
                                       Circuit Judge



                                         16
