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Court Cuts Unfair Competition, Lanham Act Claims in Latest Round of Tracy Anderson Suit

Post Time:2023-06-27 Source:thefashionlaw.com Author: Views:

The court has sided with Megan Roup in the latest round ofa lawsuit waged against herby fellow fitness figure, Tracy Anderson. On the heels of Tracy Anderson Mind and Body (“Anderson” or “TA”)filing suitagainst Megan Roup – who worked as a TA trainer for six years – and her company, The Sculpt Society, (collectively, “Roup”) in July 2022 for allegedly co-opting TA’s proprietary fitness program to start her own fitness venture, a California federal judge granted Roup’s motion to dismiss Anderson’s false designation of origin and unfair competition claims (with prejudice) and also gave the green-light to Roup’s special motion to strike Anderson’s unfair competition law claim on anti-SLAPP grounds.

Some Background: In the lawsuit that Tracy Anderson filed with the U.S. District Court for the Central District of California, she asserted that in addition to stealing her choreography-based fitness routines in order to launchThe Sculpt Societyin 2017, Roup breached the employment agreement she entered into with TA – which bars trainers from using or disclosing confidential information, including TA’s “proprietary choreography movements,” even after leaving the company – in the process. As a result, Anderson set out claims of copyright infringement, false designation of origin, breach of contract, and unfair competition law (“UCL”).

In response, Roupargued for dismissal, claiming that TA not only failed to adequately plead its claims, but is engaging in astrategic lawsuit against public participation(“SLAPP”) “aimed at chilling [Roup’s] expression through costly, time- consuming litigation.”The court dismissedAnderson’s false designation of origin and UCL claims with leave to amend in December, and at the same time, deferred its decision on the anti-SLAPP motion.

All the while, the court has kept TA’s copyright infringement and breach of contract claims in place, even though Roup argued that “functional exercise sequences – even if aesthetically pleasing or incorporating choreographic elements – are unprotectable ideas or processes under [the Copyright Act] and non-copyrightable.” According to the court, a decision on the copyrightability of the works is a “factual inquiry not appropriate for determination on a motion to dismiss.” The court also refused to dismiss Anderson’s contract claim, finding that by alleging that Roup used and “disclosed its confidential information to third parties, including employees, affiliates, and/or customers of her company, TSS,” and caused TA to “suffer substantial monetary damages” as a result, Anderson has alleged a plausible breach of contract claim.

After TA failed to amend its false designation of origin and UCL claims “pursuant to the court’s order,” Roup sought to get them tossed out with prejudice.

First taking on Roup’s motion to dismiss, Judge Philip Gutierrez stated in an order this month that since “dismissal with prejudice is considered a sanction under these circumstances,” she “must assess five factors to determine whether dismissal is warranted.” Those factors consist of: (1) the public’s interest in expeditious resolution of litigation; (2) the court’s need to manage its docket; (3) the risk of prejudice to the defendants; (4) the public policy favoring disposition of cases on their merits; and (5) the availability of less drastic alternatives.

The first two factors weigh in favor of dismissal, according to the court, as TA’s “failure to amend [its claims] has resulted in further motion practice, thereby prolonging this litigation” and requiring court resources for issues “that could have been resolved by [TA’s] amendment or notice that they declined to amend.” The third factor also weighs in favor of dismissal, as TA has “not offer[ed] a reason for failure to amend its complaint.”

In terms of factor four, while public policy generally means that “resolution of the merits weighs against dismissing an action with prejudice,” since TA failed to amend its complaint, it “does not strongly weigh for or against dismissal with prejudice,” according to the court. And finally, the fifth factor weighs on favor of TA, as “less drastic alternatives to dismissal include warning a party that dismissal could result from failure to obey a court order,” and the court issued no such warning here. (The court noted that “oftentimes, a[n] order to show cause warning the plaintiff that failure to amend will result in dismissal with prejudice satisfies this” prong, but again, the court issued no such order in this case.)

With the foregoing in mind, the court held that three factors strongly weigh in favor of dismissal, thereby, warranting dismissal with prejudice appropriate for TA’s false designation of origin and UCL claims.

Turning to Roup’s anti-SLAPP motion, the court stated that TA contends that its “failure to amend [its] UCL claim” – which Roup’s anti-SLAPP claim centers on – and the court’s earlier dismissal of the UCL claim without prejudice prevents Roup from prevailing on her Special Motion to Strike. Unpersuaded, Judge Gutierrez asserted that “courts have repeatedly held that dismissal of a claim does not moot an anti-SLAPP motion.”

Against that background, the court assessed Roup’s motion to strike in accordance with the two-part test, in which “the court [first] decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity,” namely, whether a defendant’s activity is in connection with a public issue, and if it is, “the cause of action shall be stricken unless the plaintiff can establish ‘a probability that [it] will prevail on the claim.’”

Here, Judge Gutierrez determined that Roup “adequately pled that [she] is a person or entity in the public eye by stating that she is a ‘celebrity fitness trainer and influencer’ with a substantial number of customers and a significant social media following.” And beyond that, the statements at issue – including Roup’s assertions on The Sculpt Society website that she “spent years teaching fitness and developing The Sculpt Society method before launching [it]” – are “biographical.” As such, she has “shown that the statements concern a person or entity in the public eye.”

(Tracy Anderson has alleged in furtherance of her lawsuit that these statements are false and misleading because they imply that Roup developed The Sculpt Society through years of science-based research, development, data collection, analysis, etc. and that it is significantly different from the TA Method – when it is really based on the TA Method that Anderson created.)

As to the second part of the analysis, Roup argued that TA cannot carry its burden to show a likelihood of prevailing on the portion of their UCL claim based on such biographical statements, and the court stated that it “has already established that [TA] did not pled a plausible UCL claim because they do not claim they actually relied upon [Roup’s] alleged misrepresentations.” As a result, the court found that TA’s UCL claim fails and therefore, granted Roup’s Special Motion to Strike.

THE BIGGER PICTURE: As usual, this is hardly just a fight over fitness classes and the copyrightability of (or lackthereof) fitness sequences – although the latter will almost certainly prove interesting. It appears to be a clash over competition in the … well, highly competitive fitness market.

The case isTracy Anderson Mind and Body, LLC, et al. v. Megan Roup, et al., 2:22-cv-04735 (C.D. Cal.)