Lanham Act preempted by Petroleum Marketing Practices Act, but California unfair competition law is not
VP Racing Fuels, Inc. v. General Petroleum Corporation, 673 F.Supp.2d 1073 (E.D. Cal, 2009)
Plaintiff (a competitor of defendant) sued defendant for claiming its racing fuel was 100Octane when in fact it was less. Plaintiff filed both unfair competition claims under California law and Lanham Act false advertising claims. Defendant filed a motion to dismiss alleging the claims were preempted by the federal Petroleum Marketing Practices Act. The court held that the state claims were not preempted but the Lanham act claims were.
The PMPA requires that Octane levels be accurately listed for consumers. It does not have a private right of action, but rather relies on enforcement by the FTC. The law preempts other laws from expanding the requirements under the act. However, in 1992, Congress amended the PMPA to allow states to enforce regulations as long as they are the same as the applicable provisions of the PMPA.
California Unfair Business Practices Act and Unfair Competition Law allow private enforcement of other laws that lack private rights of action. Therefore, the state is not attempting to set stricter standards but instead is just tranferring its enforcement power to private individuals.
In the case of the Lanham Act, the court applied federal statutory construction rules which states more specific statuory frameworks trump more general prohibitions. Because the court found that the Lanham Act section 43(a) and the PMPA could not coexist, then “the more specific provisions of the PMPA must prevail.”