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The studio can't escape Incarcerated Entertainment's lawsuit that claims the film was marketed as a true story when it isn't one.

Cast and crew saying or implying that War Dogs is a "true story" is enough to keep a false advertisement lawsuit against Warner Bros. alive, a Florida federal judge ruled Wednesday.

Efraim Diveroli, a former arms dealer portrayed by Jonah Hill in the 2016 film, is suing Warners for false advertising and unfair competition, among other claims.

Instead of optioning Diveroli's manuscript, Once a Gun Runner, Warner Bros. enlisted Guy Lawson, a Rolling Stone writer who had interviewed him in prison and written a magazine feature that was expanded into a book. The ex-con takes issue with how he was portrayed and how the film was promoted.

"The gravamen of the Amended Complaint is that Warner grossed more than $85 million by promoting War Dogs as Diveroli’s 'true story' when it was not the true story," writes U.S. District Judge Mary Scriven. "The Amended Complaint identifies a number of allegedly false advertisements, including statements in movie trailers, social media posts, and promotional interviews with War Dogs’ director, Todd Phillips, screenwriter Stephen Chin, and stars Jonah Hill, Miles Teller, and Bradley Cooper."

Warners, meanwhile, argued that the statements regarding the truth of the story aren't actionable because they're protected by the First Amendment.

Scriven found that Diveroli plausibly alleged in his amended complaint that the comments are "commercial speech" and therefore subject to the Lanham Act, which prohibits false advertising in connection with commercial advertising or promotion. The judge found that the statements were promotional, referred to a specific product and that Warners had an economic motivation for making them.

"Warner knew that representing the story as 'true' would induce consumers to see War Dogs," writes Scriven. "Although movies are works of artistic expression and must be protected, 'they are also sold in the commercial marketplace like other more utilitarian products, making the danger of consumer deception a legitimate concern that warrants some government regulation.'"

The studio also argued that Diveroli failed to allege facts necessary to state a false advertising claim, but Scriven disagrees, noting that, while Warner Bros. is right to insist the statements be considered in their full context, the argument is not well-suited to a motion to dismiss.

"[A]part from advancing that argument, Warner neglects to address the relevant question: whether the statements, read in their full context, falsely or misleadingly portray War Dogs as a true story," writes Scriven. "Warner implies that they do not, but that conclusion calls for a fact-intensive inquiry and that the Court draw inferences in Warner’s favor, neither of which is appropriate on a motion to dismiss."

The decision isn't a total loss for the studio, though. The judge found that allegations involving the War Dogs website and Facebook page and comments Lawson made while promoting his own book "are not, in and of themselves, actionable."
(The full order is posted below.)

were false or misleading, the accuracy of the movie is not relevant to the issue of materiality.
3. Zone of interests and proximate causation

Warner next argues that the Amended Complaint omits the necessary allegations of injury and causation. (Dkt. 89 at 22-23) In Lexmark International, Inc. v. Static Control Components, Inc., the Supreme Court held that, in order to state a false-advertising claim under the Lanham Act, a plaintiff “ordinarily must show economic or reputational injury flowing directly from the deception wrought by the defendant’s advertising . . . .” 134 S. Ct. 1377, 1391 (2014).

With respect to injury, the Amended Complaint alleges that Warner’s advertising has caused “loss of goodwill” and “loss of sales.” (Dkt. 78 at ¶ 113) Those allegations are similar to the allegations in Lexmark, and Warner cites no authority to support its contention that Plaintiff must allege in “detail” how its goodwill was damaged or how its sales declined. (Dkt. 89 at 22); Lexmark, 134 S. Ct. at 1393 (explaining that the counterclaimant’s “alleged injuries – lost sales and damage to its business reputation – are injuries to precisely the sorts of commercial interests the [Lanham] Act protects”). Warner may instead seek discovery on the nature and extent of Plaintiff’s damages. With respect to causation, Lexmark instructs that the necessary showing is present when “deception of consumers causes them to withhold trade from the plaintiff.” Lexmark, 134 S. Ct. at 1391. In contrast to the facts at issue in Lexmark, which involved a claim by a downstream supplier, Plaintiff alleges that it is a direct victim of Warner’s advertising because
War Dogs

diverted book sales from Plaintiff. In particular, the Amended Complaint alleges that “consumers who desire to learn the true story are most likely to purchase a ticket to the movie, after being bombarded with promotional material, rather

Case 8:16-cv-01302-MSS-AAS Document 117 Filed 05/10/17 Page 16 of 19 PageID 2528

than purchasing Diveroli’s memoir.” (Dkt. 78 at ¶ 75) Accordingly, Plaintiff plausibly alleges that its injuries “flow[ ] directly” from Warner’s advertising. Lexmark, 134 S. Ct. at 1393. Again, whether Plaintiff will actually be able to prove its theory is a separate question that is not appropriate for resolution on a motion to dismiss.
C. Florida’s Anti-SLAPP Statute
At the conclusion of the motion to dismiss, Warner asserts that Plaintiff’s complaint falls within Florida’s anti-SLAPP (Strategic Lawsuits Against Public Participation) statute, Fla. Stat. § 768.295. (Dkt. 89 at 24-25) As a result, Warner contends that “if and when” the Court grants its motion to dismiss, Warner will file a motion for an award of fees and costs. (Id. at 25); see Fla. Stat. § 768.295(4) (“The court shall award the prevailing party reasonable attorney fees and costs incurred in connection with a claim that an action was filed in violation of this section.”). Currently, Warner does not appear to ask for any relief under the anti-SLAPP statute. For instance, Warner does not contend that resolution of this motion is evaluated under a summary-judgment standard and it does not request an expedited hearing. See Fla. Stat. § 768.295(4) (providing that a defendant may file a motion for summary judgment seeking a determination that the anti-SLAPP statute has been violated). The Court therefore declines to address the application of Fla. Stat. § 768.295 at this juncture. Compare Royalty Network, Inc. v. Harris, 756 F.3d 1351, 1357-62 (11th Cir. 2014) (holding that verification requirement imposed by Georgia’s anti-SLAPP statute did not apply in a diversity case), and Abbas v. Foreign Policy Grp., LLC, 783 F.3d 1328, 1337 n.5 (D.C. Cir. 2015) (holding that attorney’s fees were not available under Washington D.C.’s anti-SLAPP statute), with Edward Lewis Tobinick, MD, 848 F.3d at 944-45 & n.8

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(applying California’s anti-SLAPP statute, which allowed a special motion to strike, where the appellants waived their challenge to its application in the district court), and Adelson v. Harris, 774 F.3d 803, 809 (2d Cir. 2014) (holding that mandatory fee shifting provision in Nevada’s anti-SLAPP scheme applied in federal court).
D. Consideration of Exhibits
Warner filed a separate request for the Court to consider twenty-two exhibits in support of its motion to dismiss, which are designated as Exhibits A through V. (Dkts. 90, 91) After the parties conferred, Warner withdrew its request as to Exhibits F through H, and Plaintiff stipulated to the Court’s consideration of Exhibits A and N through V (Dkt. 96), which are referred to, excerpted in, or attached to the Amended Complaint or original complaint, and which are central to Plaintiff’s claims. (Dkt. 91 at ¶¶ 4, 17-25; Dkt. 78 at ¶¶ 29-30, 55, 60, 62-67, 70); see Day v. Taylor, 400 F.3d 1272, 1276 (11th Cir. 2005) (holding that documents may be considered on a Rule 12(b)(6) motion if they are undisputed and central to the plaintiff’s claims). The remaining exhibits—Exhibits B through E and I through M—include documents from Diveroli’s criminal and civil cases, a U.S. Congressional committee report about Diveroli’s company, and a related news article. (See Dkt. 91 at ¶¶ 5-8, 12-16) Although Warner asserts that these exhibits are relevant to Diveroli’s “misconduct and notoriety” (Dkt. 90 at 5), the Court declines to consider the documents because Diveroli’s misconduct and notoriety are not relevant to the motion to dismiss. For its part, Plaintiff submits screenshots from four websites that offer movies on-demand and in which
War Dogs
is described as a “true story.” (Dkt. 98) Plaintiff contends that these descriptions were “located after filing the Amended Complaint,” and that they

Case 8:16-cv-01302-MSS-AAS Document 117 Filed 05/10/17 Page 18 of 19 PageID 2530


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