## Facts

- U-Haul International, Inc., an Oregon corporation, long dominated the national self-move consumer truck and trailer rental market.
- Jartran, Inc., a Florida corporation, entered the market nationally in mid-1979.
- From summer 1979 through December 1980, Jartran ran comparative newspaper advertisements nationwide in 41 states and the District of Columbia, comparing Jartran’s services to U-Haul’s.
- During the campaign, Jartran’s revenues rose sharply (approximately $7 million in 1979 to $80 million in 1980), while revenues associated with the U-Haul system declined (approximately $395 million to $378 million), the first such decline in U-Haul’s history.
- U-Haul alleged the advertisements were false or misleading and caused lost sales and the need for corrective advertising to counteract marketplace confusion.
- The district court found Jartran liable under Lanham Act § 43(a) and common law, awarded $40 million plus attorney’s fees, entered a permanent injunction restricting certain advertising, and held Jartran’s principal (Ryder) personally liable as Jartran’s alter ego under Florida law.
- Jartran and Ryder appealed, challenging liability, damages (including enhancement), the injunction, real-party-in-interest treatment within the “U-Haul system,” and Ryder’s personal liability.

## Issues

1. Whether Jartran’s comparative advertising violated Lanham Act § 43(a) as false or misleading advertising.
2. Whether the damages award—using Jartran’s advertising expenditures and U-Haul’s corrective-advertising costs and enhancing damages—was permissible under the Lanham Act.
3. Whether U-Haul International was the proper party to recover damages attributable to multiple entities within the U-Haul system, and how any recovery should be allocated.
4. Whether the permanent injunction impermissibly restricted lawful advertising and was constitutionally overbroad.
5. Whether Ryder could be held personally liable as Jartran’s alter ego under Florida law.
6. Whether appellate attorney’s fees should be awarded to U-Haul.

## Decision

- Affirmed the finding of Lanham Act § 43(a) liability for false comparative advertising.
- Affirmed the district court’s damages methodology, including recovery tied to corrective-advertising expenses and the discretionary enhancement of damages.
- Modified the judgment on the real-party-in-interest issue and remanded for the district court to supervise distribution of the recovery among the relevant U-Haul system entities.
- Reversed the injunction to the extent it was unconstitutionally overbroad and required narrowing to the proven unlawful conduct.
- Reversed the finding that Ryder was Jartran’s alter ego under Florida law and vacated his personal liability.
- Denied U-Haul’s request for attorney’s fees for the appeal.

## Legal Principles

- Lanham Act § 43(a) imposes liability for materially false or misleading commercial advertising likely to cause marketplace deception and injury to a competitor.
- Lanham Act damages may include amounts reasonably incurred for corrective advertising necessary to remedy confusion caused by false advertising, along with other proven losses.
- A court may enhance damages under the Lanham Act in its discretion to achieve full compensation and address unjust enrichment, consistent with the statute’s remedial aims.
- When an integrated business system includes multiple entities affected by false advertising, a court may allow suit by a principal entity while structuring relief to prevent double recovery and to align distribution with the parties actually harmed.
- Injunctive relief in false-advertising cases must be narrowly tailored to the specific unlawful representations; broad restraints that reach beyond proven falsity may be constitutionally overbroad.
- Alter-ego liability under Florida law requires a strong evidentiary showing warranting disregard of the corporate form; substantial involvement alone does not justify piercing the corporate veil.

## Conclusion

The Ninth Circuit upheld Jartran’s Lanham Act liability and substantial damages (including corrective-advertising costs and enhanced damages), required supervised allocation of the recovery within the U-Haul system, narrowed an overbroad injunction, and reversed personal alter-ego liability against Ryder while denying appellate attorney’s fees.


U-Haul Int’l, Inc. v. Jartran, Inc., 793 F.2d 1034 (9th Cir. 1986)