Court Opinions: 10th Circuit Court of Appeals Opinion from June 21

The 10th Circuit Court of Appeals

Editor’s Note: Law Week Colorado edits court opinion summaries for style and, when necessary, length.

Vivos Therapeutics v. Ortho-Tain

Vivos Therapeutics and Ortho-Tain are competing manufacturers of dental devices. In 2020, OT CEO Leslie Stevens sent a letter to Benco Dental Supply — an affiliate of VT — accusing Benco of hosting seminars where VT misrepresented OT’s products as its own. 

In the series of communications that followed in the spring, OT’s lawyer, Nathan Neff, repeatedly stated that VT and Benco were violating state and federal law — including the Lanham Act, which provides a private right of action against any person who uses false or misleading statements in commercial advertising.

Neff demanded that Benco notify seminar attendees of the alleged misrepresentations, cited legal authority for OT’s position and threatened legal action. On June 1, 2020, Neff sent Benco a draft complaint, naming VT and Benco as defendants. Then, in a June 3 letter titled “Settlement Discussions – Lanham Act Violations,” Neff asserted he was “privileged to defame” so long as his statements related to the proposed legal claims. 

VT filed the suit several days later, asserting claims for libel per se, slander per se, intentional interface with contractual relations and declaratory relief that it had not violated the Lanham Act. The following month, OT filed its revised complaint in the Northern District of Illinois against VT and Benco. The district court dismissed VT’s complaint with leave to amend.

In December 2020, OT’s sales department sent emails to VT clients, disparaging VT and its products. When VT filed its amended complaint, it reasserted its previous claims and added two new claims for violations of the Lanham Act and the Colorado Consumer Protection Act.

OT moved to dismiss, contending it had absolute immunity from claims based on its spring communications because they were related to the litigation and were privileged. OT also argued that the entire amended complaint should be dismissed for impermissibly incorporating allegations into subsequent counts and that the declaratory judgment claim should be dismissed as an improper anticipatory filing intended to preempt the Illinois litigation.

The district court rejected OT’s motion and directed the parties to schedule a status conference. Instead, OT filed this appeal. VT moved to dismiss the appeal for lack of jurisdiction and the Illinois litigation has been stayed, pending the outcome of this appeal and the underlying district court action. 

The district court rejected OT’s immunity claim in part because the pleadings were insufficient to make a predicate factual determination. Distinguishing between the letter written by Stevens and the communications from Neff, the district court determined that the litigation privilege protects an attorney’s prelitigation statements only if they relate to litigation contemplated in good faith. Although the district court did not expressly say the pleadings were inadequate to make a finding as to good faith, it noted the good faith requirement and declined to make the necessary factual finding.

As the denial of immunity for Neff’s statements didn’t turn on a legal question, it’s not immediately appealable and the 10th Circuit Court of Appeals dismissed the appeal to the extent it challenged that ruling. However, because the privilege can apply to attorneys and parties alike, as determined by the Colorado Court of Appeals in Begley v. Ireson, the circuit court ruled that the district court should have analyzed all of the spring 2020 communications, including Stevens’ letter and Neff’s follow-up communications, together. The circuit remanded to the district court for proper analysis. 

VT’s motion to dismiss was denied in part and granted in part by the 10th Circuit Court. To the extent the denial of immunity turned on a question of law, the district court’s decision was reversed and remanded for further proceedings. To the extent the denial of immunity turned on the factual inadequacy of the record, the court dismissed the appeal. The court declined to exercise pendent jurisdiction over the balance of this appeal as the case didn’t satisfy either prerequisite.

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