U.S. District Judge Brian R. Martinotti/courtesy photo U.S. District Judge Brian R. Martinotti/courtesy photo

A federal judge has tossed out a false advertising and libel suit lodged against Princeton Insurance by a competitor, New Jersey Physicians United Reciprocal Exchange.

NJ PURE claimed that its financial condition was mischaracterized in a publication called “Princeton Marketplace Update” that was published by Princeton Insurance annually from 2005 to 2012 and distributed to that company’s agents.

The suit brought claims for false advertising under the Lanham Act, as well as state law claims for libel, libel per se and trade libel, and tortious interference with prospective contractual relations, asserting that some medical practices opted not to buy policies from NJ PURE based on what they read in Princeton Marketplace Update.

But U.S. District Judge Brian Martinotti on Sept. 20 granted Princeton summary judgment on the Lanham Act claims, finding that no false information about NJ PURE was published in the marketplace updates. The judge also found that two medical practices that opted not to buy NJ PURE didn’t base their decisions on content from those publications.

According to Martinotti, the updates contained a chart on the first page listing financial indicators for NJ PURE, Princeton and other companies selling medical malpractice insurance in the state. Some of the information came from the companies’ filings of data with the state Department of Banking and Insurance, and the report also included narrative content about the data.

But the updates didn’t disclose that NJ PURE is a nonprofit company, while Princeton is for-profit. NJ PURE said this distinction is significant because the updates described net income as a determining factor in an insurer’s surplus. NJ PURE said its surplus contributions are not considered in calculating net income because it is a not-for-profit entity.

NJ PURE claimed Princeton falsely depicted it as suffering a net loss in four of the seven years that the report was published.

Princeton began publishing after A.M. Best, a company that issues grades of the financial stability of certain insurance companies, stopped issuing ratings for the carrier. Princeton continued issuing the marketplace updates but stopped in 2012, when it rejoined A.M. Best’s ratings.

In 2010, NJ PURE wrote to the Department of Banking and Insurance, asking it to order Princeton to halt its production of marketplace updates, prompting the agency to issue a directive requiring insurance companies whose advertisements include financial data for competitors to provide the same data for the advertising insurer.

But NJ PURE conceded that “virtually every sentence” contained in the updates “probably could be construed as true,” Martinotti said in his decision.

Princeton Insurance bills itself as the state’s largest issuer of health care liability insurance. It was purchased in 2012 by MedPro Group, a subsidiary of Berkshire Hathaway.

Martinotti said the suit’s libel and trade libel claims could not be sustained because the plaintiff could not demonstrate it was harmed by the defendant’s acts.

“There is no evidence NJ PURE was harmed by the Princeton Marketplace Updates,” Martinotti said. The claim for libel per se failed because the plaintiff conceded that the data in the updates was accurate, so that extrinsic evidence was needed to prove their alleged falsity, Martinotti said.

Finally, the judge rejected the claim for tortious interference with prospective contractual relations. Such a claim requires proof of: a plaintiff’s existing or reasonable expectation of economic benefit or advantage; the defendant’s knowledge of that expectancy; the defendant’s wrongful, intentional interference with that expectancy; the reasonable probability that the plaintiff would have received the anticipated economic benefit in the absence of interference; and damages resulting from the defendant’s interference.

“Because this claim also requires causation, it fails because there is no evidence the alleged damage was caused by the Princeton Marketplace Updates,” Martinotti said.

Anthony Argirpoulos of Epstein, Becker & Green in Princeton represented NJ PURE.

The company’s complex claims litigation officer, Eric Poe, said in a statement about the case: “Although NJ PURE is disappointed by the outcome, it remains undaunted. As one of New Jersey’s not-for-profit reciprocal exchanges, NJ PURE will continue to take appropriate and vigilant action to protect its insureds and consumers from misleading or false statements.”

Walter Fleischer Jr. of Drinker Biddle in Florham Park, who represented Princeton Insurance, said the outcome of the case came down to the plaintiff’s failure to demonstrate that Princeton made any false statements about it, or that NJ CURE lost any business due to Princeton’s actions. But dismissal took more than five years because the judges assigned to the case changed several times, and because of some lengthy discovery disputes, according to Fleischer.