govinfo:USCOURTS-azd-2_21-cv-01700-3

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WO 
 
 
 
 
IN THE UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF ARIZONA 
 
 
Before the Court is Plaintiffs’ Motion to Dismiss Defendants’ First Amended 
Counterclaim for Failure to State a Claim. (Doc. 47). The Motion will be granted in part 
and denied in part as follows. 
I. BACKGROUND 
Plaintiff Scott Chaverri is the founder and CEO of Plaintiff Mito Red Light, Inc. 
(“Mito Red”), a red -light therapy company based in Scottsdale, Arizona that sells its 
products exclusively via the internet. (Doc. 19 at 1–4). Defendant Mark Sawyer is the CEO, 
manager, and principal agent of Defendant Platinum LED Lights LLC (“Platinum”), 
collectively referred to as the “Platinum Defendants,” which is a red-light therapy company 
based in Lake Mary, Florida and a direct competitor of Mito Red. (Doc. 19 at 2–4). 
Defendant Michael Volkin is the CEO and principal agent of Defendant Volkinator 
Enterprises, Inc. (“Volkinator”), collectively referred to as the “Volkin Defendants,” which 
provides marketing services. (Doc. 19 at 2, 6). 
Around March 2020, Mito Red began advertising on its website that unlike its 
Scott Chaverri, et al., 
 
Plaintiffs, 
vs. 
 
Platinum LED Lights LLC, et al., 
 
Defendants. 
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No. CV-21-01700-PHX-SPL 
 
 
ORDER 
 

 
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competitors, which used two - or three-watt bulbs in their devices, Mito Red’s red -light 
therapy device used five -watt LED lightbulbs (hereafter referred to as “the five -watt 
statement”). (Doc. 46 at 4). Mito Red further claimed that because of the five-watt bulbs, 
its product offered greater power and higher irradiance than competing brands. (Doc. 46 at 
4–5). Defendants allege that from 2020 through 2021, Platinum’s customer service 
representatives “found that Mito Red’s 5-watt claims were having a significant impact with 
consumers,” as they received “many” calls asking about the five-watt statement and “it was 
evident that Platinum was losing sales to Mito Red as a result.” (Doc. 46 at 6). 
Platinum then hired Volkinator to investigate Mito Red’s claims about the wattage 
and irradiance of their product. Michael Volkin allegedly found that Mito Red used three-
watt bulbs, not five-watt bulbs as claimed, and that the resultant irradiance of the product 
was two-thirds less than Mito Red had advertised. (Doc. 46. at 6–7). In October 2020, 
Platinum published a blog post entitled “MYTH BUSTED: SETTLING THE 3-WATT VS 
5-WATT LED DEBATE” to counter Mito Red’s five-watt statement. (Doc. 46 at 7). 
In response to the blog post and other alleged acts of defamation and false 
advertising, Plaintiffs initiated an action in Maricopa County Superior Court, which was 
removed to this Court on October 5, 2021. (Doc. 1). On November 1, 2021, Plaintiffs filed 
their Second Amended Complaint alleging six counts: (1) false advertising and unfair 
competition under the Lanham Act, (2) defamation and defamation per se, (3) false light 
invasion of privacy, (4) tortious interference with current and prospective business 
relationships, (5) aiding and abetting, and (6) conspiracy. (Doc. 19). On December 2, 2021, 
Defendants filed a M otion to Dismiss for Failure to State a Claim. (Doc. 29). The 
Defendants’ Motion to Dismiss was granted in part and denied in part on January 24, 2022. 
(Doc. 37). On February 8, 2022, Defendants answered the Plaintiffs’ Second Amended 
Complaint, asserting various defenses and counterclaims. (Doc. 39). 
On March 17, 2022, Defendants filed their First Amended Counterclaim (“FAC”) 
alleging four counts: (1) false advertising and unfair competition under the Lanham Act, 
(2) Racketeering Influenced and Corrupt Org anizations Act (“RICO”) violations, 

 
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(3) deceptive trade practices under Florida’s Deceptive and Unfair Trade Practices Act 
(“FDUTPA”), and (4) abuse of process. (Doc. 46). On March 30, 2022, Plaintiffs filed a 
Motion to Dismiss for Failure to State a Claim. (Doc. 47). Defendants responded in 
opposition to the motion on April 14, 2022 (Doc. 48), and Plaintiffs replied on April 21, 
2022 (Doc. 52). The issues raised in the Motion to Dismiss will now be addressed in turn. 
II. LEGAL STANDARD 
a. Rule 12(b)(6), Federal Rules of Civil Procedure 
To survive a Fed. R. Civ. P. 12(b)(6) motion to dismiss, “a complaint must contain 
sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its 
face.’” Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly , 
550 U.S. 544, 570 (2007) ). A claim is facially plausible when it contains “factual content 
that allows the court to draw the reasonable inference” that the moving party is liable. Id. 
Factual allegations in the complaint should be assumed true, and a court should then 
“determine whether they plausibly give rise to an entitlement to relief.” Id. at 679. Facts 
should be viewed “in the light most favorable to the non -moving party.” Faulkner v. ADT 
Sec. Servs., Inc., 706 F.3d 1017, 1019 (9th Cir. 2013). 
b. Rule 9(b), Federal Rules of Civil Procedure 
Under Fed. R. Civ. P. 9(b), “In alleging fraud or mistake, a party must state with 
particularity the circumstances constituting fraud or mistake. ” Such allegations must be 
“specific enough to give defendants notice of the particular misconduct which is alleged to 
constitute the fraud charged so that they can defend against the charge and not just deny 
that they have done anything wrong.” Semegen v. Weidner , 780 F.2d 727 , 731 (9th Cir. 
1985). Plaintiffs contend that Defendants’ Lanham Act, RI CO, and F DUTPA claims are 
subject to the heightened 9(b) pleading standard because the claims are grounded in fraud. 
(Doc. 47 at 3–5). 
Even where fraud is not a required element of a claim, if a plaintiff alleges “a unified 
course of fraudulent conduct” by the defendant, and then relies “entirely on that course of 
conduct as the basis of a claim ,” then the claim is considered “‘ grounded in fraud ’ or to 

 
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‘sound in fraud, ’ and the pleading of that claim as a whole must satisfy the particularity 
requirement of Rule 9(b).” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 , 1103–04 (9th 
Cir. 2003). However, where a plaintiff alleges both fraudulent and non-fraudulent conduct 
in the complaint, and fraud is not an essential element of a claim, “ only allegations 
(‘averments’) of fraudulent conduct must satisfy the heightened pleading requirements of 
Rule 9(b).” Id. at 1105. Such averments of fraud “must be accompanied by ‘the who, what, 
when, where, and how of the misconduct charged. ’” Id. at 1106 (citing Cooper v. Pickett, 
137 F.3d 616, 627 (9th Cir. 1997)). Additionally, like dismissals under Rule 12(b)(6), 
“dismissals for failure to comply with Rule 9(b) should ordinarily be without prejudice ,” 
giving the party leave to amend. Vess, 317 F.3d at 1108. 
III. DISCUSSION 
Platinum argues that Plaintiffs have failed to state a claim for violations of the 
Lanham Act, RICO, FDUTPA, or for abuse of process. The Court will address the claims 
in turn. 
a. False Advertising and Unfair Competition under the Lanham Act 
The Lanham Act, 15 U.S.C. § 1125(a), “authorizes suit by ‘any person who believes 
that he or she is likely to be damaged ’ by a defendant’s false advertising.” Lexmark Int’l, 
Inc. v. Static Control Components, Inc. , 572 U.S. 118, 129 (2014) (quoting 15 U.S.C. § 
1125(a)(1)). 
The elements for a false advertising claim under the Lanham Act are: 
(1) a false statement of fact by the defendant in a commercial 
advertisement about its own or another’s product; (2) the 
statement actually deceived or has the tendency to deceive a 
substantial segment of its audience; (3) the deception is 
material, in that it is likely to influence the purchasing decision; 
(4) the defendant caused its false statement to enter interstate 
commerce; and (5) the plaintiff has been or is likely to be 
injured as a result of the false statement . . . . 
Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1139 (9th Cir. 1997). 
/// 
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i. Whether Defendants’ Lanham Act Allegations Are Subject to Rule 9(b) 
The Ninth Circuit has not definitively ruled on whether Rule 9(b) applies to Lanham 
Act claims. Clorox Co. v. Reckitt Benckiser Grp. PLC, 398 F. Supp. 3d 623, 634 (N.D. Cal. 
2019). Most district court authority in the Ninth Circuit has held that the 9(b) standard does 
apply to false advertising claims, which therefore “requires the plaintiff to plead the ‘time, 
place, and specific content of the false representations,’ the identities of the parties to the 
misrepresentation, and what about the statement is claimed to be misle ading.” Epicor 
Software Corp. v. Alternative Tech. Sols., Inc. , No. SACV 13 -00448-CJC, 2013 WL 
2382262, at *4 (C.D. Cal. May 9, 2013) (internal citation omitted); see also World 
Nutrition Inc. v. Advanced Enzymes USA , No. CV -19-00265-PHX-GMS, 2019 WL 
5802001 (D. Ariz. Nov. 7, 2019) ; Bobbleheads.com, LLC v. Wright Bros., Inc. , 259 F. 
Supp. 3d 1087 (S.D. Cal. 2017); Seoul Laser Dieboard Sys. Co. v. Serviform, S.r.l., 957 F. 
Supp. 2d 1189 (S.D. Cal. 2013). 
Defendants’ false advertisement allegations expressly allege that “ Mito Red’s 
conduct was undertaken willfully and with the intention of causing confusion, mistake or 
deception.” (Doc. 46 at 11). Notably, Defendants’ Response provides no argument as to 
why the Court should not adopt the heightened 9(b) plead ing standard for their Lanham 
Act claims ; indeed, they fail to address Plaintiffs’ Rule 9(b) argument at all. Because 
Defendants’ false advertising claim is grounded in a “knowing and intentional 
misrepresentation,” Rule 9(b)’s heightened pleading requirem ent applies to this Lanham 
Act claim. 23andMe, Inc. v. Ancestry.com DNA, LLC, 356 F. Supp. 3d 889, 908 (N.D. Cal. 
2018), aff’d per curiam, 778 F. App’x 966 (Fed. Cir. 2019). 
ii. Whether Defendants’ Lanham Act Allegations Are Adequately Pled 
1. False Statement of Fact 
Defendants’ FAC divides the false advertising claim into three components, alleging 
that Mito Red engaged in false advertising by: 
(i) falsely claiming that its products contained 5 -watt bulbs 
when it contained 3-watt bulbs from at least March 3, 2020 to 
November 2021; (ii) inflating the claimed power of its products 

 
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based on the false 5 -watt claim during this period; and (iii) in 
substantially overstating the irradiance of its products as 
demonstrated by Volkinator in 2020. 
(Doc. 46 at 10). However, the only false statement Defendants allege with specificity is the 
five-watt statement ; furthermore, in Defendants’ Opposition, they do not make any 
mention of power or irradiance as separate claims from the five -watt statement. 1 For the 
purpose of considering Defendants’ Lanham Act claim, this Court will only look to the 
five-watt statement. 
Defendants allege that the claim that appeared on Plaintiffs’ website—“At Mito Red 
we use 5w LEDs ”—is literally false according to an investigation perfo rmed by Mike 
Volkin on Defendants’ behalf , as well as an investigation performed by an independent 
party hired by Defendants. (Doc. 46 at 4, 6, 8). Plaintiffs argue that the independent party’s 
findings are “conclusory,” “unreliable,” and “need not be take n as true on a motion to 
dismiss.” (Doc. 47 at 6). Neither party disputes that the alleged false statement constitutes 
commercial advertising. 
The nature of the statement at issue—whether it is a statement of fact or mere non-
actionable “puffery”—is a legal question for the Court. The five-watt statement is certainly 
a “quantifiable” statement making a claim about the “specific or absolute characteristics of 
a product,” and is therefore an actionable statement of fact. Newcal Indus., Inc. v. Ikon Off. 
Sol., 513 F.3d 1038, 1053 (9th Cir. 2008) (internal citation omitted). 
However, whether Plaintiffs’ statement about using five-watt bulbs is literally false 
is a question of fact. eMove Inc. v. SMD Software Inc, No. CV-10-02052-PHX-JRG, 2012 
WL 1379063, at *4 (D. Ariz. Apr. 20, 2012). To demonstrate falsity, “a plaintiff may show 
that the statement was literally false, either on its face or by necessary implication, or that 
 
1 There is no mention of “irradiance” at all in the Opposition. The only mention of 
“power” is in relation to the five -watt statement, as Defendants reiterate that “as stated in 
the FAC, Mito Red’s marketing campaign that promoted its false five-watt claims deceived 
consumers into believing that wattage was the most important measurement and that Mito 
Red’s five -watt bulbs were the most powerful.” (Doc. 48 at 5). This suggests that the 
“power” and “irradiance” claims follow from the five-watt statement and are so related that 
they need not be presented as separate false statements for the Court to consider. 

 
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the statement was literally true but likely to mis lead or confuse consumers.” Nat’l Prod., 
Inc. v. Gamber-Johnson LLC, 699 F. Supp. 2d 1232, 1237 (W.D. Wash. 2010), aff’d, 449 
F. App’x 638 (9th Cir. 2011). When assessing literal falsity, statements must be considered 
in their full context. Id. 
It cannot simultaneously be true that Mito Red uses five -watt bulbs, as Plaintiffs 
claim, and that they use three -watt bulbs, as Defendants claim . As a threshold matter for 
this 12(b)(6) motion, it is not for the Court to weigh the factual veracity of these statements. 
The Court must credit the non -moving party’s facts as true, making it plausible that the 
Plaintiffs made a literally false statement of fact on their website , which is sufficient to 
meet the first element of a claim for false advertising. See, e.g., Guardant Health, Inc. v. 
Natera, Inc., No. 21-CV-04062-EMC, 2022 WL 162706 , at *7 (N.D. Cal. Jan. 18, 2022) 
(“[A]t this early stage of the proceedings . . . the issue is simply the plausibility of the 
asserted claims.”). 
2. Consumer Deception 
 To meet the second element, the false statement must “actually [deceive] or [have] 
the tendency to deceive a substantial segment of its audience.” Southland, 108 F.3d at 1139. 
When a statement is literally false, most courts in the Ninth Circuit presume consumer 
deception. See, e.g., Del Webb Communities, Inc. v. Partington , No. 2:08-cv-00571-RCJ-
GWF, 2009 WL 3053709, at *13 (D. Nev. Sept. 18, 2009) (citing William H. Morris Co. 
v. Grp. W, Inc. , 66 F.3d 255, 266 (9th Cir. 1995) ) (“Where an advertisement is literally 
false, ‘a presumption arises that consumers were in fact deceived and the burden shifts to 
the defendant to prove otherwise.’”).2 
 
2 Notably, the William H. Morris Co. case cited here does predicate the presumption 
on the statement not only being literally false, but also being deliberately or intentionally 
false. 66 F.3d at 258–59; see also Nat’l Prod., Inc., 699 F. Supp. 2d at 1241 (“Deliberate 
falsity yields a presumption of consumer deception in cases of non -comparative 
advertising” (emphasis added)). However, other Courts in this Circuit have found the literal 
falsity of a statement sufficient to establish a presumption of consumer deception, even 
without the additional requirement that the falsity be deliberate or intentional. See, e.g., 
AECOM Energy & Constr., Inc. v. Ripley , 348 F. Supp. 3d 1038, 1056 (C.D. Cal. 2018), 
rev’d on other grounds, (“Where a statement is literally false or the defendant intentionally 
set out to deceive, both actual deception and materiality are presumed.” (emphasis added)); 
Collegenet, Inc. v. XAP Corp., 442 F. Supp. 2d 1070 , 1079 (D. Or. 2006) (presuming 

 
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 Plaintiffs do not dispute that if Mito Red’s five-watt statement is held to be literally 
false, deception will be presumed. (Doc. 47 at 7). Thus, Plaintiffs have presented no cogent 
reason the Court should not credit the Defendants’ allegations as adequately pled to 
establish a presumption of consumer deception. 
3. Materiality 
 The questio n remains whether Plaintiffs’ five -watt statement was material, i.e., 
whether it was likely to influence consumers’ purchasing decisions. Southland, 108 F.3d 
at 1139. “The materiality requirement is based on the premise that not all deceptions affect 
consumer decisions.” Johnson & Johnson Vision Care, Inc. v. 1 -800 Contacts, Inc. , 299 
F.3d 1242, 1250 (11th Cir. 2002). Materiality is “typically” proven through consumer 
surveys, but may also be proven by a consumer’s declaration, which can show how the 
false or misleading representations have actually confused customers. Skydive Arizona, 
Inc. v. Quattrocchi , 673 F.3d 1105 , 1110–11 (9th Cir. 2012) ; see also ThermoLife Int’l, 
LLC v. Gaspari Nutrition Inc. , 648 F. App ’x at 615 (finding a triable issue of materiality 
where “survey results and Internet message board posts” indicated that details of the 
statements at issue were “important factors in consumer purchasing decisions”). 
Plaintiffs argue that the Defendants have failed to sufficiently “show that the 
deception was material in influencing a buyer’s purchasing decision ,” citing the Skydive 
Arizona case to support their proposition . (Doc. 47 at 7). Plaintiffs misstate the l egal 
standard, however, as Defendants do not yet have to show or prove materiality, they must 
simply allege a likelihood of materiality with sufficient particularity to state a plausible 
claim. 
Defendants’ FAC alleges that the five-watt statement had a “significant impact with 
 
consumer deception where Plaintiff asserted Defendant’s statements were literally false); 
San Diego Cnty. Credit Union v. Citizens Equity First Credit Union, 360 F. Supp. 3d 1039, 
1052 (S.D. Cal. 2019); ITEX Corp. v. Glob. Links Corp., 90 F.Supp. 3d 1158, 1171–72 (D. 
Nev. 2015); FLIR Sys., Inc. v. Sierra Media, Inc., 903 F. Supp. 2d 1120 , 1129 (D. Or. 
2012). These cases tend to cite the same decision from the Second Circuit, also cited in 
Defendants’ Opposition (Doc. 48 at 4), holding that “[w]hen an advertisement is shown to 
be literally or facially false, consumer deception is presumed.” Time Warner Cable, Inc. v. 
DIRECTV, Inc. , 497 F.3d 144, 153 (2d Cir. 2007) (emphasis added) . Plaintiffs did not 
present any argument that this Court should not presume deception based on the alleged 
literal falsity of the statement alone. 

 
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consumers” based on the calls their customer service representatives received about the 
five-watt claims, and further alleges that “it was evident that Platinum was losing sales to 
Mito Red as a result.” (Doc. 46 at 6). Defendants’ latter statement that “it was evident that 
Platinum was losing sales” is conclusory in nature. However, the Court must construe as 
true, for the purposes of this Motion to Dismiss, their claim that “Platinum’s c ustomer 
service representatives fielded many calls from consumers asking about the claimed 
superiority of Mito Red’s five -watt bulbs.” (Doc. 46 at 10). This claim, if true, gives rise 
to a reasonable inference that the five -watt statement materially influe nced numerous 
buyers’ purchasing decisions.3 
Furthermore, some courts in this Circuit have presumed both consumer deception 
and materiality when a statement is literally false . See, e.g., AECOM Energy & Constr., 
Inc., 348 F. Supp. 3d at 1056 ; Jerome’s Furniture Warehouse v. Ashley Furniture Indus., 
Inc., No. 20CV1765 -GPC(BGS), 2021 WL 1541649 at *6 (S.D. Cal. Apr. 20, 2021) 
(“Because Plaintiff alleged that Defendant ’s advertisements are literally false, the court 
may presume that actual deception and mater iality are sufficiently alleged ”); Russell v. 
Walmart Inc., No. CV 19 -5495-MWF (JCX), 2020 WL 9073046, at *12 (C.D. Cal. Oct. 
16, 2020); ITEX Corp., 90 F. Supp. 3d at 1173. But see Obesity Rsch. Inst., LLC v. Fiber 
Rsch. Int’l, LLC, 310 F. Supp. 3d 1089, 1125 (S.D. Cal. 2018) (“The Court is not convinced 
that the Ninth Circuit has . . . determined that materiality is presumed for actually false 
statements . . . .”); Pestube Sys., Inc. v. HomeTeam Pest Def., LLC, No. CV 05-2832-PHX-
MHM, 2008 WL 114480 28, at *8 (D. Ariz. Mar. 31, 2008) (“The Court has found no 
instance where a court in the Ninth Circuit held that the rebuttable presumption applies to 
the element of materiality in either comparative false advertising or non-comparative false 
advertising cases.”). The Ninth Circuit has yet to rule definitively on whether a plaintiff 
 
3 In Skydive Arizona, the Ninth Circuit references, and affirms, the district court’s 
finding of materiality based in part on “ evidence of numerous consumers who telephoned 
or came to Skydive Arizona’s facility after having been deceived into believing there was 
an affiliation between Skydive Arizona and SKYRIDE .” 673 F.3d at 1111. However, as 
stated in the cited Skydive Arizona and ThermoLife Int’l, LLC cases above, most questions 
of materiality are proven through consumer surveys or direct testimony, so Defendants will 
have a higher burden to prove materiality past the pleading stage. 

 
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may presume materiality along with deception when a defendant’s statement has been 
found literally false. Other circuits have acknowledged that there is a circuit split on this 
issue. See Select Comfort Corp. v. Baxter, 996 F.3d 925, 940 (8th Cir. 2021), cert. denied 
sub nom. Dires, LLC v. Select Comfort Corp. , 142 S. Ct. 561 (2021) (declining to adopt a 
presumption of materiality in the Eighth Circuit); Johnson & Johnson Vision Care, 299 
F.3d at 1250–51 (declining to adopt the presumption in the Eleventh Circuit); Pizza Hut, 
Inc. v. Papa John ’s Int’l, Inc., 227 F.3d 489, 497 (5th Cir. 2000) (presuming materiality 
where statements were literally false). However, because the Ninth Circuit has not clearly 
ruled against such a presumption, and especially given that the Defendants have alleged at 
least some facts indicating that the five - or three-watt issue is likely a material factor in 
customers’ purchasing decisions, this Court fi nds materiality, like actual deception, is 
adequately alleged. 
4. Interstate Commerce 
 Plaintiffs do not dispute that they caused their statement to enter interstate 
commerce by posting it on their website , and therefore waive any argument as to this 
element of the claim. 
5. Injury 
The standard for the fifth element of a Lanham Act false advertising claim (whether 
the plaintiff has been or is likely to be injured as a result of the false statement) is the same 
standard required to establish a presumption of injury in the context of Article III standing. 
Gaspari Nutrition Inc. , 648 F. App ’x at 616 (“[T]he two standards —which are derived 
from the same statutory language —are one and the same.”). Standing requires a plaintiff 
to “plead (and ultimately prove) an injury to a commercial interest in sales or business 
reputation proximately caused by the defendant’s misrepresentations.” Lexmark Int’l, Inc., 
572 U.S. at 140. The test applied to Lanham Act claims by the Ninth Circuit requires a 
plaintiff to show “(1) a commercial injury based upon a misrepresentation about a product; 
and (2) that the injury is ‘competitive,’ or harmful to the plaintiff’s ability to compete with 
the defendant.” TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820, 826 (9th Cir. 2011) 

 
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(internal citation omitted). “[A] false advertising plaintiff need only believe that he is likely 
to be injured in order to bring a Lanham Act claim. ” Id. at 825. Even without direct 
evidence of lost sales or concrete proof of injury, a plaintiff may “ establish an injury by 
creating a chain of inferences showing how defendant ’s false advertising could harm 
plaintiff’s business.” Id. Direct competition betwe en a plaintiff and defendant is “strong 
proof that plaintiffs have a stake in the outcome of the suit” sufficient to establish an injury 
for Article III standing. Id. at 825–26; see also Gaspari Nutrition Inc. , 648 F. App ’x at 
615–16 (determining that a reasonable jury could infer a presumption of commercial injury 
because the defendants did not dispute that they directly competed with the plaintiffs in the 
relevant market, and some of the statements at issue were literally false). 
In this case, Plaintiffs and Defendants have attested to being direct competitors 
within the red-light therapy industry, providing strong evidence of a potential likelihood of 
commercial injury if Defendants’ allegation that Plaintiff falsely advertises on its website 
is true. (Doc. 19 at 3; Doc. 46 at 6). Defendants have also specifically alleged that they lost 
sales to Plaintiffs as a result of the statements at issue in this false advertising claim. (Doc. 
46 at 6). Although Defendants’ allegations as to lost sales are vague and conclusory in 
nature, the direct competitive relationship between Platinum and Mito Red gives rise to a 
presumption of commercial injury sufficient to establish standing under the Lanham Act. 
See TrafficSchool.com, 653 F.3d at 826–27. This presumption is also sufficient to meet the 
pleading standard for the fifth element of this Lanham Act claim. Because the parties are 
direct competitors , Defendants need not plead specific facts regarding lost sales or a 
lessening of goodwill, despite Plaintiffs’ argumen t to the contrary (Doc. 52 at 4) , for this 
Court to presume that a likelihood of injury is sufficiently alleged. 
6. Heightened Pleading Standard 
Plaintiffs further allege that Defendants have failed to meet the higher Rule 9(b) 
burden of identifying “the who, what, when, where, and how of the misconduct charged .” 
(Doc. 47 at 4). Plaintiffs’ argument is that because Defendants’ fraud allegations are based 
on the findings of an independent report, and because Defendants “ fail to identify who 

 
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specifically made the findings, how they arrived at the findings, or any reasoning on why 
or how the company came to its conclusion,” the 9(b) standard has not been met. (Id. at 5). 
However, Plaintiffs mischaracterize the application of the “who, what, when, where, 
and how” standard to Defendants’ pleadings. The 9(b) particularity requirement ensures 
that a charged party receives notice “of the particular misconduct which is alleged to 
constitute the fraud charged” —which in this case, is the five -watt statement, not the 
independent report referenced by Defendants as potential evidence of the falsity of that 
statement. Semegen, 780 F.2d at 731. Looking to the Defendants’ Lanham Act claim , it 
clearly identifies who (Mito Red), what (“engaged in unfair competition and false 
advertising”), when (“from at least March 3, 2020 to November 2021 ”), where (“through 
its website”), and how (“falsely claiming that its products contained 5 -watt bulbs when it 
contained 3 -watt bulbs ”) the alleged misrepresentation occurred. (Doc. 46 at 1 0). 
Furthermore, Mito Red was clearly put on actual notice of Platinum’s opposition to the 
five-watt statement, given that “[b]y November 25, 2021, Mito Red dropped claims that it 
used 5-watt bulbs from its website.” (Doc. 46 at 8), a fact which Plaintiffs do not dispute. 
Accordingly, Defendants’ Lanham Act claim is adequately pled, even under the heightened 
Rule 9(b) standard. 
iii. Conclusion 
In sum, Defendants’ Lanham Act claim survives, as the Court concludes that 
Defendants have alleged sufficient facts to support a claim for false advertising under both 
the Rule 12(b)(6) and Rule 9(b) pleading standards. Accordingly, t he Court denies 
Plaintiffs’ motion to dismiss the first cause of action for false advertising under the Lanham 
Act. 
b. Racketeering Influenced and Corrupt Organizations Act (“RICO”) 
The Racketeering Influenced and Corrupt Organizations Act (“RICO”) allows a 
plaintiff to bring civil suit for certain injuries to “business or property” caused by a 
defendant’s “pattern of racketeering acti vity.” 18 U.S.C. §§ 1964(c), 1962(c) . “To state a 
civil RICO claim, a plaintiff must allege: ‘(1) conduct (2) of an enterprise (3) through a 

 
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pattern (4) of racketeering activity (known as ‘predicate acts’) (5) causing injury to 
plaintiff’s business or property.’” Children's Health Def. v. Facebook Inc., 546 F. Supp. 3d 
909, 938 (N.D. Cal. 2021) (quoting Living Designs, Inc. v. E.I. Dupont de Nemours & Co., 
431 F.3d 353, 361 (9th Cir. 2005)). 
Defendants allege that Plaintiffs Mito Red and Scott Chaverri as an enterprise have 
violated RICO by committing a pattern of racketeering activity through wire fraud, mail 
fraud, and theft by false pretenses under Florida state law. (Doc. 46 at 14). 
i. Pleading Standard 
The Ninth Circuit has determined that “[a] RICO claim predicated on mail or wire 
fraud must be pleaded in conformity with Rule 9(b).” Sugarman v. Muddy Waters Cap. 
LLC, No. 19-CV-04248-MMC, 2020 WL 633596, at *4 (N.D. Cal. Feb. 3, 2020); see also 
Alan Neuman Prods., Inc. v. Albright, 862 F.2d 1388, 1392 (9th Cir. 1999) . Furthermore, 
Defendants’ counterclaim specifically alleges that Plaintiffs engaged in a pattern of 
racketeering activity “for the purpose of intentionally defrauding consumers.” (Doc. 46 at 
14). Such a claim is subject to the heightened pleading standard for allegations of fraud 
under Rule 9(b). 
Plaintiffs argue that Defendants have not alleged facts with particularity to establish 
that Plaintiffs had the requisite intent to defraud , and thi s Court agrees . (Doc. 47 at 13). 
Other courts in the Ninth Circuit have clarified that the existence of false advertisements 
alone does not necessarily imply an intent to defraud customers. JST Distrib ., LLC v. 
CNV.com, Inc., No. CV176264PSGMRWX, 2018 WL 6113092, at *6 (C.D. Cal. Mar. 7, 
2018). Although Defendants have adequately pled the requisite “who, what, when, where, 
and how” of the false advertising claim, they have pled no additional facts to support the 
mail fraud, w ire fraud, or theft by false pretenses claims underlying the alleged RICO 
violation. Vess, 317 F.3d at 1106. Defendants’ pleadings here mirror those presented to the 
court in JST Distrib., LLC, where the “conclusory allegations of a ‘scheme to defraud and 
mislead consumers of their products’” were insufficient to meet the 9(b) pleading standard. 
2018 WL 6113092, at *6. Defendants’ broad and bare assertion that the Mito Red Parties 

 
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“have willfully participated in the scheme to defraud . . . with the specific intent to defraud 
. . . and actually used interstate wires and mail to further Mito Red Parties’ scheme” fails 
to allege any specific instances of mail or wire fraud , and therefore fails to allege the 
predicate acts with the particularity required by Rule 9(b). (Doc. 46 at 14:18–23). See also 
Alan Neuman Prods., Inc., 862 F.2d at 1393 (finding a complaint insufficient to plead the 
predicate acts of mail fraud where the allegations only generally referred to “‘many acts of 
mail fraud,’ ‘many acts of wire fr aud,’ and ‘many victims.’”); Nutrition Distrib. LLC v. 
Custom Nutraceuticals LLC, 194 F. Supp. 3d 952 , 957–58 (D. Ariz. 2016) (finding that a 
plaintiff had not adequately alleged a pattern of racketeering activity where they merely 
asserted that “Defendant s have engaged in the illegal sale and distribution of 
pharmaceuticals” without identifying “any particular instance in which Defendants 
engaged in such activity”). 
However, because this Court will grant leave to amend, it will also consider 
Plaintiffs’ additional grounds for dismissal of the RICO claim. 
ii. Statutory Standing to Allege a RICO Claim 
“To have standing under § 1964(c), a civil RICO plaintiff must show: (1) that his 
alleged harm qualifies as injury to his business or property; and (2) that his harm was ‘by 
reason of’ the RICO violation, which requires the plaintiff to establish proximate 
causation.” Canyon Cnty. v. Syngenta Seeds, Inc. , 519 F.3d 969, 972 (9th Cir. 2008) 
(internal citation omitted) . To plead causation, a complaint must allege facts showing 
“some direct relation between the injury asserted and the injurious conduct alleged.” Id. at 
981 (quoting Holmes v. Sec. Inv. Prot. Corp., 503 U.S. 258, 268 (1992)). 
 Plaintiffs argue that as a threshold matter, Defendants lack standing to bring this 
RICO claim because (1) Defendants fail to allege a qualifying injury to their business or 
property, and (2) Defendants have failed to establish proximate causation between the 
alleged RICO violations and the claimed injuries. (Doc. 47 at 9–12). This Court agrees. 
Defendants claim that as a result of Plaintiffs’ racketeering scheme, 
/// 

 
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[B]eginning in 2020 Platinum’s customer service fielded many 
calls from consumers who were deceived by Mito Red’s 
campaign and were asking about the claimed superiority of 
Mito Red’s five-watt bulb. In responding to these calls it was 
became [sic] clear that P latinum was losing sales and market 
share to Mito Red as a result of Mito Red’s false claims. 
(Doc. 46 at 15). Defendants do not claim they were directly deceived or defrauded by the 
allegedly false five -watt statement; rather, they make the more speculati ve claim that 
because consumers were allegedly defrauded by the five -watt statement, Platinum “los[t] 
sales and market share to Mito Red.” 
 The Ninth Circuit in Diaz v. Gates determined that RICO only provides a cause of 
action “for injuries resulting in ‘concrete financial loss.’” 420 F.3d 897, 898 (9th Cir. 2005) 
(quoting Oscar v. Univ. Students Co -op. Ass ’n, 965 F.2d 783 , 785 (9th Cir. 1992) ). 
Furthermore, “[w]ithout a harm to a specific b usiness or property interest —a categorical 
inquiry typically determined by reference to state law —there is no injury to business or 
property within the meaning of RICO. ” Id. at 900. Defendants have made vague, 
conclusory assertions about “lost sales and ex penses incurred ,” but they have failed to 
allege any specific injury to a valid business expectancy with respect to Arizona state law. 
(Doc. 48 at 7). 
Even if this Court were to accept Defendants’ allegations as sufficient to plead a 
“market injury,” (i.e., that Platinum received fewer sales than it otherwise would have in 
the absence of Mito Red’s unlawful conduc t—a counterfactual which would be highly 
difficult to prove ), Defendants still must establish proximate causation connecting the 
alleged RICO violation and the asserted injury. See Mendoza v. Zirkle Fruit Co., 301 F.3d 
1163, 1169–70 (9th Cir. 2002) . In contrast to the Defendants’ Lanham Act claim, where 
injury can be inferred because the parties are competitors, for the RICO claim, Defendants 
must demonstrate that the RICO violation was a “substantial factor” in causing injury. JST 
Distrib., LLC, 2018 WL 6113092, at *8 (citing Oki Semiconductor Co. v. We lls Fargo 
Bank, Nat’l Ass’n, 298 F.3d 768, 773 (9th Cir. 2002)). 
To determine whether an injury is too remote from an alleged RICO violation to 

 
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establish proximate causation, “[T]he Court applies the following three -factor 
“remoteness” test: (1) whether th ere are more direct victims of the alleged wrongful 
conduct who can be counted on to vindicate the law as private attorneys general; 
(2) whether it will be difficult to ascertain the amount of the plaintiff ’s damages 
attributable to defendant’s wrongful conduct; and (3) whether the courts will have to adopt 
complicated rules apportioning damages to obviate the risk of multiple recoveries.” Or. 
Laborers-Emps. Health & Welfare Tr. Fund v. Philip Morris Inc. , 185 F.3d 957, 963 (9th 
Cir. 1999). The direct vict ims of the alleged fraudulent scheme are, according to 
Defendants’ own allegations, consumers, making Platinum Defendants more remote 
victims of the alleged wrongful conduct. Furthermore, the difficulty of ascertaining how 
much economic loss is attributable to Mito Red’s actions weighs heavily in the 
“remoteness” evaluation here. 
Plaintiffs cite the Supreme Court’s decision in Anza v. Ideal Steel Supply Corp. , 
which speaks to “the difficulty that can arise when a court attempts to ascertain the damages 
caused by some remote action.” 547 U.S. 451, 458 (2006). In Anza, the plaintiff brought a 
RICO claim against the defendants under the premise that they “defraud[ed] the New York 
tax authority and us[ed] the proceeds from the fraud to offer lower prices designed to attract 
more customers,” resulting in an injurious loss of sales for the plaintiff. Id. at 457–58. The 
Court concluded that such a connection was too attenuated to establish proximate 
causation, since “[plaintiff]’s lost sales could have resulted from factors other than 
[defendant]s’ alleged acts of fraud. Businesses lose and gain customers for many reasons, 
and it would require a complex assessment to establish what portion of [plaintiff]'s lost 
sales were the product of [defendants’] decreased prices.” Id. at 459. 
Analogously, in this case, Platinum is claiming an injurious loss of sales caused by 
Mito Red allegedly defrauding third -party consumers, but Defendants have given no 
concrete factual basis for this Court to draw a reasonable inference that there is a dire ct 
relation between th ese two claims. Defendants do not address whether their alleged 
economic injury might have been caused by other factors, “ such as price, productive 

 
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effectiveness, familiarity with the seller, or purchasing habits of customers .” JST Distrib., 
LLC, 2018 WL 6113092, at *8 (holding that the Plaintiffs failed to adequately plead an 
injury under a civil RICO claim where they “d[id] not plausibly allege that it was 
Defendant’s alleged RICO conduct and not one or more of various other factors that 
resulted in diverted sales”). Since the inference of competitive injury —which Defendants 
relied upon as the basis of their Lanham Act claim—does not apply to RICO, Platinum has 
failed to show a direct and proximate causal relationship between the asse rted injury and 
alleged misconduct. 
iii. Conclusion 
Defendants have failed to allege a specific intent to defraud to meet the Rule 9(b) 
pleading standard for the acts of wire and mail fraud predicating their RICO claim. 
Furthermore, because Defendants have fai led to plead a qualifying injury and proximate 
causation sufficient to establish statutory standing, their RICO claim against Plaintiffs will 
be dismissed. 
c. Florida Deceptive and Unfair Trade Practices Act Under Fla. Stat. 
§ 501.204 
Florida’s Deceptive and Unfair Trade Practices Act (“FDUTPA”) allows any 
“aggrieved” parties to bring claims against “those who engage in unfair methods of 
competition, or unconscionable, deceptive, or unfair acts or practices in the conduct of any 
trade or commerce.” Fla. Stat. Ann. §§ 501.202, 501.211. 
Defendants allege that “ Mito Red has engaged in unfair trade practices and false 
advertising in violation of Fla. Stat. §501.204 through its website and marketing,” primarily 
because of the allegedly false five-watt claim that appeared on their website and “deceived” 
consumers. (Doc. 46 at 11–12). 
i. Article III Standing 
“To have standing to bring a FDUTPA claim in federal court, a plaintiff must satisfy 
the Article III standing requirements set forth in Lujan and its progeny.” ThermoLife Int’l 
LLC v. BPI Sports LLC , No. CV-20-02091-PHX-SPL, 2021 WL 661981, at *6 (D. Ariz. 

 
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Feb. 19, 2021), aff’d, No. 21-15339, 2022 WL 612669 (9th Cir. Mar. 2, 2022) . The three 
elements to meet the constitutional minimum of standing are (1) that the plaintiff “suffered 
an ‘injury in fact ’—an invasion of a legally protected interest which is (a) concrete and 
particularized . . . and (b) ‘actual or imminent, not conjectu ral or hypothetical, ’” (2) a 
“fairly traceable” causal connection between the injury and the defendant’s action, and 
(3) a likelihood, more than mere speculation, that the injury can be redressed by the court. 
Lujan v. Defs. of Wildlife , 504 U.S. 555, 560–61 (1992) (internal citations omitted). 
However, “[a]t the pleading stage, general factual allegations of injury resulting from the 
defendant's conduct may suffice.” Id. at 561. 
Plaintiffs argue that Defendants have failed to meet this constitutional mini mum 
because they have not adequately pled a concrete, traceable “injury in fact” sufficient to 
meet the first element of the test laid out in Lujan. (Doc. 47 at 14–15). However, unlike 
BPI Sports LLC, cited by Plaintiffs, where the business bringing the FDUTPA claim failed 
to “assert actual damages caused as a result of a defendant’s ‘unfair’ conduct,” as discussed 
in previously in Part III(a), Defendants have alleged a commercial injury based on Mito 
Red and Platinum’s direct competitive relationship. 2021 WL 661981, at *6. Plaintiffs have 
presented no case law to distinguish why commercial injury sufficient to meet the standing 
requirements under the Lanham Act would not also be sufficient to establish standing under 
the FDUTPA, and this Court has found no case law precluding such an inference as 
sufficient to establish standing for an FDUTPA claim. 
Although Plaintiffs make a compelling point that Defendants’ allegations of lost 
sales were speculative and conclusory, t hey do not sufficiently address the likelihood of 
competitive injury for either the Lanham Act or the FDUTPA claims. Construing all facts 
in the light most favorable to Defendants, then, this Court finds a reasonable inference of 
commercial injury sufficient to meet the minimum of constitutional standing. 
ii. Pleading Standard 
In addition to their Article III standing argument, Plaintiffs argue that as with the 
Lanham Act and RICO claims discussed above, Defendants have failed to meet the 9(b) 

 
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standard in their FDUTPA claim (Doc. 47 at 4). 
Although “[f] ederal district courts have split as to whether FDUTPA claims are 
subject to Rule 9(b),” the heightened pleading standard of Rule 9(b) nonetheless applies to 
all claims “where the gravamen of the claim sounds in fraud.” State Farm Mut. Auto. Ins. 
Co. v. Performance Orthopaedics & Neurosurgery, LLC, 278 F. Supp. 3d 1307, 1328 (S.D. 
Fla. 2017). Clearly, Defendants’ allegation sounds in fraud given their characterization of 
Mito Red’s actions as “willful and intenti onal” and under “false pretenses.” (Doc. 46 at 
12). See also State Farm Mut. Auto. Ins. Co. v. Feijoo , No. 1:18 -cv-23329-KMM, 2019 
U.S. Dist. LEXIS 93343, at * 6 (S.D. Fla. June 3, 2019) (“Here, the gravamen of the 
Complaint is that Feijoo ‘knowingly caused the Clinic to report’. . . ‘false and misleading’ 
claims . . . .”). Thus, like its previous two claims, Defendants’ FDUTPA claim is subject 
to the heightened pleading standard under Rule 9(b). 
As discussed above in Part III(a)(ii)(6), Rule 9(b) puts a charged party on notice of 
their alleged misconduct constituting fraud. Here, because the misconduct giving rise to 
Defendants’ FDUTPA claim is the same as that giving rise to their Lanham Act false 
advertising claim—i.e., the false five-watt statement—and because Plaintiffs have clearly 
been put on notice regarding that misconduct, the FDUTPA claim meets the 9(b) pleading 
standard. 
iii. Conclusion 
The Court finds that Defendants’ pleadings sufficiently establish that they have 
Article III standing to bring their FDUTPA claim against Plaintiffs and meet the Rule 9(b) 
standard for allegations of fraud. 
d. Abuse of Process 
Finally, Defendants have asserted a claim for abuse of process, alleging that 
Plaintiffs “[ seek] to use the tool of litigation as a means to punish ” Defendants, and 
therefore “use the judicial process for an ulterior purpose not proper in the regular conduct 
of proceedings.” (Doc. 46, 16–17). 
In Arizona, the elements for an abuse of process claim ar e: “(1) a willful act in the 

 
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use of judicial process; (2) for an ulterior purpose not proper in the regular conduct of the 
proceedings.” Nienstedt v. Wetzel , 651 P.2d 876, 881 ( Ariz. Ct. App. 1982). Mere 
speculation that a defendant has used court proceedings with improper intent is insufficient 
to support a claim for abuse of process; rather, the plaintiff must show that the defendant 
“took an action that could not logically be explained without reference to the defendant's 
improper motives.” Crackel v. Al lstate Ins. Co. , 92 P.3d 882 , 889 (Ariz. Ct. App. 2004). 
Examples of improper motives include using the litigation process to extort an opponent 
or exhaust their financial resources. McCall v. Williams , No. CV -19-05126-PHX-SMB, 
2020 WL 6699493, at *5 (D. Ariz. Nov. 13, 2020), aff’d, No. 21-15638, 2022 WL 564604 
(9th Cir. Feb. 24, 2022) . “The initiation of a lawsuit alone is not enough to establish an 
abuse of process claim.” Wine Educ. Council v. Rangers , No. CV -19-02235-PHX-MTL, 
2020 WL 4003277, at *1 (D. Ariz. July 15, 2020). 
Here, Defendants’ abuse of process claim seems to be entirely based on Plaintiffs’ 
decision to initiate and pursue litigation, allegedly “while knowing full well that the 
Platinum Parties were right ” about the falsity of the five-watt statement. (Doc. 46 at 16). 
Defendants have failed to present the Court with any plausible, non -speculative reason to 
think Plaintiffs’ decision to pursue litigation cannot be explained without reference to an 
improper motive. Instead, Defendants simply repeat the allegations that form the basis of 
the other three counts in their FAC before jumping to the conclusion that Plaintiffs must 
be “act[ing] with malice” for some “ulterior purpose.” (Doc. 46 at 16–17). 
Mere recitation of the elements requi red for an abuse of process claim —coupled 
with speculative and conclusory allegations as to Plaintiffs’ intent —fails to meet the 
pleading standard set forth in Twombly and Iqbal and borders on frivolous .4 For these 
reasons, Defendants’ abuse of process claim must be dismissed. 
/// 
/// 
 
4 The Court cautions counsel for both parties against allowing the animosity that has 
colored this case at times ( see, e.g., Docs. 14, 15, 22, 30, 31) from interfering with their 
professional judgment and responsibilities. 

 
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IV. CONCLUSION 
This Court finds that Defendants’ claims under the Lanham Act and FDUTPA 
survive the Plaintiffs’ Motion to Dismiss; however, the RICO and abuse of process claims 
will be dismissed for failure to state a claim. 
Leave to amend a deficient complaint should be freely given “when justice so 
requires.” Fed. R. Civ. P. 15(a)(2). When dismissing for failure to state a claim, “a district 
court should grant leave to amend . . . unless it determines that the pleading could no t 
possibly be cured by the allegation of other facts.” Lopez v. Smith , 203 F.3d 1122, 1130 
(9th Cir. 2000) (internal quotation marks omitted). Here, it may be possible for Defendants 
to cure the deficiencies outlined in this Order, so the Court will grant leave to amend the 
two dismissed claims. Accordingly, 
IT IS THEREFORE ORDERED that Plaintiffs’ Motion to Dismiss (Doc. 47) is 
granted in part and denied in part as follows: 
1. The Motion to Dismiss is denied with respect to Defendants’ false advertising 
claim under the Lanham Act and Defendants’ FDUTPA claim. 
2. The Motion to Dismiss is granted with respect to Defendants’ RICO claim and 
abuse of process claim. 
IT IS FURTHER ORDERED that Defendants may file a Second Amended 
Counterclaim no later than July 13, 2022. 
 Dated this 22nd day of June, 2022. 
 
 
 
Honorable Steven P. Logan 
United States District Judge 
 
 
 
 

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