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Larry Thomas

Ruling keeps bonded leather lawsuit active

GREENSBORO, N.C. — A federal judge here has denied a motion to dismiss a lawsuit accusing Ashley Furniture Inds. and a trade association of denigrating a supplier of bonded leather through false advertising and other misrepresentations.

U.S. District Judge William Osteen Jr. ruled that a complaint filed by Design Resources Inc. and its president, Alan Naness, contained allegations that "are sufficiently plausible" to allow the case to proceed.

Design Resources accused Ashley, Ashley President Todd Wanek, the trade association Leather Industries of America, and its research director, Nicholas Cory, of numerous violations of the federal Lanham Act and North Carolina statutes that prohibit unfair trade practices.

The suit, filed in February 2010, claims that Ashley conducted a "smear campaign" against NextLeather, a bonded leather product Design Resources introduced to the U.S. market in January 2007.

The suit claims the campaign largely was conducted through advertisements in Furniture/Today, as well as a July 2, 2007, news story in the trade publication. In the news story, Cory is quoted extensively about his concerns over characterizing bonded leather as "leather."

Although Osteen denied the motion to dismiss the lawsuit, he did grant separate motions by Cory and Wanek to drop them as individual defendants.

Osteen ruled the two could not be sued in North Carolina because they are residents of Ohio and Wisconsin, respectively.

No date has been set for further court action.

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