U.S. Court of Appeals for the Fifth Circuit, Express Oil Change, L.L.C.; TE, L.L.C., doing business as Tire Engineers v. Mississippi Board of Licensure for Professional Engineers & Surveyors, Docket No. 18-60144, Circuit Judge Jerry E. Smith

Trademark

Use of the Term/Mark “Engineer”

State Regulation of the Term

First Amendment’s Commercial Speech

Disclaimer

Appeal from the United States District Court for the Southern District of Mississippi.

E. raises only its constitutional claim on appeal.

Mississippi regulates the practice of engineering and restricts the use of the term “engineer.” Express Oil Change (“Express”) operates several automotive service centers in Mississippi under the name “Tire Engineers.” In 2015, the Mississippi Board of Licensure for Professional Engineers & Surveyors (“the Board”) determined that the name “Tire Engineers” violated the pertinent statutes and requested that Express cease using it. Following protracted correspondence, the parties could not reach a compromise, and Express sued for a declaratory judgment and related relief. The company contended, inter alia, that the relevant statutory provisions violate the First Amendment as incorporated through the Due Process Clause of the Fourteenth Amendment. After discovery, the district court granted the Board’s motion for summary judgment and dismissed. Because the Board’s decision violates the First Amendment’s commercial speech protections, we reverse and render judgment for Express.

Express operates a number of automotive service centers in Mississippi under the Tire Engineers mark. According to Express, Tire Engineers provides “oil changes, car repairs, and tire services—repair, maintenance, and replacement—to customers in fifteen states, including Mississippi.”

(…) After the parties were unable to agree, Express sued, seeking a declaratory judgment and related relief on three theories: first, that the Board’s decision concerning the use of the term engineer violated Mississippi law; second, that it violated Express’s “rights of commercial free speech guaranteed by the First Amendment”; and third, that the decision violated Express’s “rights under preemptive federal trademark law pursuant to the Lanham Trademark Act of 1946, 15 U.S.C. §§ 1051–1127.”

(…) Commercial speech is “expression related solely to the economic interests of the speaker and its audience.” Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y., 447 U.S. 557, 561 (1980).

(…) At the outset, a court must determine whether the expression is protected by the First Amendment. For commercial speech to come within that provision, it at least must concern lawful activity and not be misleading. Next, a court asks whether the asserted governmental interest is substantial. If both inquiries yield positive answers, a court must determine whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that interest. Cent. Hudson, 447 U.S. at 566. “The party seeking to uphold a restriction on commercial speech carries the burden of justifying it.” Bolger v. Youngs Drug Prods. Corp., 463 U.S. 60, 71 n.20 (1983). This “burden is a ‘heavy’ one,” Pub. Citizen, Inc. v. La. Att’y Disciplinary Bd., 632 F.3d 212, 218 (5th Cir. 2011) (quoting 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484, 516 (1996)), and may not be “satisfied ‘by mere speculation or conjecture,’” id. (quoting Edenfield v. Fane, 507 U.S. 761, 770 (1993)).

(…) Statements that are only potentially misleading, however, are safeguarded by the First Amendment. In such a case, a state actor must “‘show that the restriction directly and materially advances a substantial state interest in a manner no more extensive than necessary to serve that interest.’” Am. Acad., 860 F.3d at 308–09 (alteration in original) (quoting Ibanez v. Fla. Dep’t of Bus. & Prof’l Reg., Bd. of Accountancy, 512 U.S. 136, 142 (1994)).

(…) The better view is that the district court erred in concluding that Express’s use of Tire Engineers is inherently misleading.

Because its essential character is not deceptive, Tire Engineers is not inherently misleading. The name, first trademarked in 1948, apparently refers to the work of mechanics using their skills “not usually considered to fall within the scope of engineering” to solve “technical problems” related to selecting, rotating, balancing, and aligning tires. That this definition of “engineer” does not meet the Board’s preferred definition does not make its use inherently misleading. The term “engineer” can mean many things in different contexts, and it is certainly not limited to those professionals licensed by Mississippi to practice engineering. It is not, therefore, “devoid of intrinsic meaning.” Joe Conte Toyota, 24 F.3d at 756 (quoting Peel, 496 U.S. at 112 (Marshall, J., concurring)). Additionally, as Express explains, “the district court’s analysis failed to account for the manner in which the Tire Engineers mark is transmitted—on the company’s website, which describes its automotive services (not any professional engineering services), and at its retail stores, which appear like any other store that performs automotive services . . . .” Consequently, viewing the evidence in a light most favorable to the non-moving party—here, Express—the use of Tire Engineers is not inherently misleading under our precedent.

(…) Actually misleading: evidence of deception is necessary to sustain a finding that commercial speech is actually misleading (…) The Board was required to present evidence of deception. Because it did not, the district court erred in concluding that the Tire Engineers mark was actually misleading. Given that the name is neither actually nor inherently misleading, it enjoys limited First Amendment protections, as discussed in Central Hudson.

(…) “Under Central Hudson, a restriction on commercial speech survives First Amendment scrutiny if: (1) ‘the asserted governmental interest is substantial,’ (2) the regulation ‘directly advances’ that interest, and (3) the regulation ‘is not more extensive than is necessary to serve that interest.’” Pub. Citizen, 632 F.3d at 219 (quoting Thompson v. W. States Med. Ctr., 535 U.S. 357, 367 (2002)). “Each of these latter three inquiries must be answered in the affirmative for the regulation to be found constitutional.” Thompson, 535 U.S. at 367.
(…) ad 1) the evidence in the record establishes that the asserted interests of the Board are substantial.
(…) ad 2) the evidence supports a holding that the ban directly advances the Board’s asserted interest.
(…) ad 3) the final inquiry is whether the regulation is “‘more extensive than is necessary to serve’” the identified interest. Pub. Citizen, 632 F.3d at 219 (quoting Thompson, 535 U.S. at 367). “‘The free flow of commercial information is valuable enough to justify imposing on would-be regulators the costs of distinguishing . . . the harmless from the harmful . . . .’” Bd. of Trs. of State Univ. of N.Y. v. Fox, 492 U.S. 469, 480 (1989) (quoting Shapero v. Ky. Bar Ass’n, 486 U.S. 466, 478 (1988)). The means employed by the government actor need not be the “least restrictive means,” but it must be narrowly tailored to achieve (…)

(…) In Byrum, 566 F.3d at 449, concerning the terms “interior design” and “interior designer,” we held that “the State could have eliminated any constitutional challenge here by not limiting use of the terms ‘interior design’ and ‘interior designer’ but by allowing only designers who satisfy its licensing qualifications to represent themselves as ‘licensed’ interior designers.” See also Am. Acad., 860 F.3d at 311–12. Further, this court and others have identified “sufficient disclaimers as a means to address consumer deception.” This remedy seemingly derives from Peel, Bates, and earlier Supreme Court cases that “described various regulatory safeguards which the state may impose in place of a total ban on commercial speech.” Abramson, 949 F.2d at 1577.

The record does not support the need for a total ban on the use of Tire Engineers. Evidence offered by both parties, particularly when viewed in the light most favorable to Express as the non-moving party, demonstrates that other states with similar statutes have not challenged the use of the trademark. Thus, despite claims to the contrary, the Board is an outlier in this respect, and it fails to address why alternative, less-restrictive means, such as a disclaimer, would not accomplish its stated goal of protecting the public. The Board thereby fails to satisfy the required burden of demonstrating a reasonable fit between its regulation and the constitutionally-protected speech.

Summary judgment is REVERSED, and judgment is RENDERED for Express.

(U.S. Court of Appeals for the Fifth Circuit, February 19, 2019, EXPRESS OIL CHANGE, L.L.C.; TE, L.L.C., doing business as Tire Engineers v.  MISSISSIPPI BOARD OF LICENSURE FOR PROFESSIONAL ENGINEERS & SURVEYORS, Docket No. 18-60144, Circuit Judge Jerry E. Smith)