Court Denies AT&T’s Request for a False-Advertising Injunction vs. T-Mobile

U.S. District Court Judge Amos Mazzant for Eastern Texas in Sherman denied AT&T’s Sept. 6 application for a preliminary injunction to stop T-Mobile’s allegedly false BannedSeniors.com ad and marketing campaign. The memorandum opinion and order the judge signed Wednesday (docket 4:22-cv-00760) came five days after he denied T-Mobile’s motion to dismiss AT&T’s application (see 2301170040).

AT&T’s underlying complaint, also filed Sept. 6, alleges T-Mobile’s statements are false under the Lanham Act when they claim that AT&T bans senior discounts and that “92% of seniors in the U.S. can’t get a wireless discount from Verizon or AT&T because they don’t live in Florida.”

The decision about whether to grant a preliminary injunction “lies within the sound discretion of the district court,” said Mazzant’s order. The court denied AT&T’s request for injunctive relief because it concluded the company “has failed to carry its burden of demonstrating a substantial likelihood of success on the merits,” it said.

A plaintiff seeking a preliminary injunction “must present a prima facie case of its substantial likelihood to succeed on the merits but need not prove that it is conclusively entitled to summary judgment,” said Mazzant’s order. But the existence of “significant factual conflicts” may create sufficient doubt about the probability of plaintiff’s success to justify denying a preliminary injunction, it said.

AT&T asserts a single claim for false advertising under the Lanham Act, said the order. To prevail on that claim, AT&T must establish several “elements,” including a false or misleading statement of fact about a product, and that the statement “had the capacity to deceive a substantial segment of potential consumers,” it said. AT&T also needs to show that the deception “is material, in that it is likely to influence the consumer’s purchasing,” and that the company “has been or is likely to be injured as a result of the statement at issue,” it said.

AT&T’s ability to establish a substantial likelihood of the merits of its false advertising claim “rises and falls on the first element,” which requires that it show that T-Mobile’s advertising is false, said the order. AT&T argues the statements at issue “are literally false rather than merely misleading, and, therefore, that it need not present evidence of deception to meet its burden on the first element,” it said.

But the court said “significant factual disputes prevent it from determining that AT&T is likely to prevail on the merits of its false advertising claim at this stage,” in the order. That’s because two “key phrases” at the heart of this dispute -- “senior discount” and “ban” -- are subject to “multiple reasonable interpretations,” it said.

The court agrees with T-Mobile that its interpretation of the term “senior discount” is reasonable, said the order. The term itself “necessarily implies that age, rather than membership in any organization,” like AARP, as AT&T advertises the scope of its senior discounts, “is the sole quality that defines eligibility for the discount,” said the order. It's undisputed that the only discount AT&T makes available to any person over a threshold age is its Unlimited 55+ plan, which is available only to consumers in Florida, it said. Because T-Mobile’s use of the term “senior discount” is subject to more than one reasonable interpretation, “it does not support a finding of literal falsity,” it said.

The parties also offer competing definitions of the word “ban,” said the order. The court said T-Mobile’s use of the word ban is not “unambiguously false” when it argues that AT&T “refuses to allow customers outside of Florida to obtain the Unlimited 55+ discount.”

When read in context, T-Mobile’s statements “can be reasonably interpreted as merely stating that AT&T chooses not to offer its Unlimited 55+ plan -- its only discount that is available to all consumers over a threshold age -- outside of Florida,” said the order. “This statement is objectively true.”

Because AT&T hasn't established that the ads at issue are literally false, “it has failed to carry its burden of demonstrating a substantial likelihood of success on the merits of its false advertising claim,” it said. “This failure is fatal to AT&T’s application for a preliminary injunction.”

AT&T is pleased "the court recognized that we can prevail at trial and look[s] forward to proving to a jury the untruthful carrier misled customers,” emailed a spokesperson Thursday. T-Mobile didn't comment.