Case 3:25-cv-06162-JSC Document 71 Filed 11/10/25 Page 3 of 13
associated with its products.
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AECOM Energy & Constr., Inc. v. Morrison Knudsen Corp. , 748 F. App'x 115, 118 (9th Cir.
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2018). To have standing under the Lanham Act, Plaintiffs “must show: (1) a commercial injury
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based upon a misrepresentation about a product; and (2) that the injury is ‘competitive,’ or harmful
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to Plaintiff[s’] ability to compete with [Kalshi] .” TrafficSchool.com, Inc. v. Edriver Inc. , 653 F.3d
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820, 826 (9th Cir. 2011).
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“ To demonstrate falsity within the meaning of the Lanham Act, a plaintiff may show that
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the statement was literally false, either on its face or by necessary implication, or that the
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statement was literally true but likely to mislead or confuse consumers. ” Southland Sod Farms v.
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Stover Seed Co. , 108 F.3d 1134, 1139 (9th Cir. 1997) (citing Castrol Inc. v. Pennzoil Co. , 987
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F.2d 939, 943, 946 (3d Cir. 1993)). “Only an unambiguous message, however, can be literally
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false,” meaning “if the graphic is susceptibl e to more than one reasonable interpretation, the
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advertisement cannot be literally false.” Suzie’s Brewery Company v. Anheuser -Bush Companies,
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LLC , 519 F. Supp. 3d 839, 846 (D. Or. 2021) (citing Time Warner Cable, Inc. v. DIRECTV, Inc. ,
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497 F.3d 144, 158 (2d Cir. 2007)). “When evaluating whether an advertising claim is literally
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false, the claim must always be analyzed in its full context. ” Southland , 108 F.3d at 1139 (citing
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Castrol , 987 F.2d at 946).
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Plaintiffs argue two of Kalshi’s advertisements violate the Lanham Act. First, Kalshi
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advertises “Sports Betting [is] Legal in all 50 States on Kalshi.” (Dkt. No. 1 at 59; Dkt. No. 35 at
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13 n.2; Dkt. No. 35-22 at 2.) Plaintiffs contend this statement is “ literally or facially false” due to
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federal and state prohibitions on sports gambling. ( Id. at 20-21.) Second, Plaintiffs identify a
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Kalshisports social media post saying “Really hope kids in high school still do this,” with a photo
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of four screens playing basketball games. (Dkt. No. 35-38 at 2.) A Kalshisports reply to this post
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says “Bet on March Madness in all 50 states” followed by a URL. ( Id. ) Plaintiffs argue these
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posts “necessarily imply” people under 18 can gamble on sports, which is false. (Dkt. No. 35 at
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22 (citing Southland , 108 F.3d at 1139).)
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A. “ Sports Betting [is] Legal in all 50 States ”
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Plaintiffs have not shown a likelihood of success on the merits regarding Kalshi’s first
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