MEMORANDUM OF DECISION

RYA ZOBEL, District Judge

Plaintiff, Welch Foods, Inc. ("Welch"), manufactures and sells fruit juice including what it describes as "White Grape and Pomegranate" juice. In the forefront the label on this product prominently pictures pomegranates when, in fact, the primary ingredients are white grape and apple juice. It similarly describes its product in "other forms of marketing and advertising." See POM Wonderful LLC v. Welch Foods Inc., CV09-00567 (C.D.Cal. Jan. 23, 2009), ¶ 21. A competitor, POM Wonderful, LLC ("POM"), which produces its own blended pomegranate juices, sued Welch in 2009 for false and misleading advertising. Shortly thereafter a putative class of disaffected consumers also brought suit against Welch for false advertising and deceptive labeling. Welch tendered these complaints (the "underlying complaints") to three of its insurers. Two, Zurich American Insurance Company ("Zurich") and National Union Fire Insurance Co. of Pittsburgh, PA ("National Union"), denied coverage and declined to defend. The third, Axis Surplus Insurance Company ("Axis"), denied coverage under two policies, but agreed to defend under a third while reserving its rights.

Plaintiff brought this suit against all three for declaratory judgment, breach of contract and violation of Mass. Gen. Laws chs. 176 and 93A. Axis has counterclaimed for declaratory judgment and now all defendants have moved for summary judgment; plaintiff has cross-moved for partial summary judgment against each. The policy or policies of each defendant provide different coverages and contain different exclusions. I will therefore address each defendant's motion separately.

I. Analysis

A. Legal Standard

Under Massachusetts law, an insurer has a duty to defend or reimburse an insured's defense costs when, comparing the third-party complaint with the policy provisions, "the allegations of the complaint are reasonably susceptible of an interpretation that they state or adumbrate a claim covered by the policy terms." Sterilite Corp. v. Continental Cas. Co., 17 Mass. App. Ct. 316, 318 (1983) (internal citations omitted). In general, "the policyholder bears the initial burden of proving coverage within the policy description of covered risks."Markline v. Travelers Ins. Co., 384 Mass. 139, 140 (1981). Once the insured meets this initial burden, the burden shifts to the insurer, who may defeat coverage by establishing applicability of one of the policy's exclusionary provisions. See B T Masonry Constr. Co. v. Public Servs. Mut. Ins., 382 F.3d 36, 39 (1st Cir. 2004).

B. The National Union Insurance Policy

Insofar as relevant, the National Union policy covers Welch's loss "arising from a Claim . . . for any actual of alleged Wrongful Act of [Welch]." It defines "[w]rongful act" as "[] any breach of duty, neglect, error, misstatement, misleading statement, omission or act by [or on behalf of the Organization]." Welch's Statement of Facts, ¶ 35(2) (emphasis added).

Both parties have moved for summary judgment, Welch on the ground it is entitled to coverage (Docket # 52); National Union on the ground that its claim is excluded (Docket # 45). National Union does not dispute that the underlying complaints allege a "wrongful act" under the policy. Assuming the allegations of the underlying complaint are true, Welch's statements that its product contained "pomegranate juice" (if in reality, the juice was primarily comprised of apple and white grape juice) could be deemed to be "misleading statement[s]" and thus fall within the ambit of the policy. National Union instead disclaims coverage based on Exclusion 4(c) of the policy, which provides:

ANTITRUST EXCLUSION

The Insurer shall not be made liable to make any payment for Loss in connection with a Claim made against the insured:

alleging, arising out of, based upon or attributable to, or in any way involving either directly or indirectly, antitrust violations, price fixing, price discriminations, unfair competition, deceptive trade practices and/or monopolies, including actions, proceedings, claims or investigations related thereto. . . ."

Nat'l Union's L.R. 56.1 Statement of Material Facts, ¶ 4 (emphasis added).

Here, Welch is sued by POM for "unfair, unlawful, and fraudulent business practices" (POM Complaint ¶ 9), and by consumers for "unfair competition" (Burcham Complaint ¶ 1) as well as making false statements which "actually deceive, or have a tendency to deceive" (POM Complaint ¶ 29) or were "untrue, misleading and likely to deceive." (Burcham Complaint ¶ 63). The question, then, is whether the underlying complaints allege claims that fall within the rubric of "unfair competition" or "deceptive trade practices" in Exclusion 4(c). The Policy defines neither term.

Welch contends that Exclusion 4(c) applies exclusively to antitrust claims for two reasons. First, it points to the section's header ("[a]ntitrust exclusion") as evidence that the exclusion is limited to antitrust claims. Next, it notes that, under the well-established principle of construction noscitur asociis ("known from its associates"), the court must construe the terms at issue in accordance with the surrounding words; here, those words relate entirely to antitrust claims.

While the exclusion at issue is entitled "[a]ntitrust exclusion," its scope is not so limited. Indeed, the very next exclusion in the contract, Exclusion 19, states that "[t]he headings in this policy are there purely for the convenience of the parties and they form no part of the definition of the scope of the coverage provided." Moreover, the plain language of the exclusion is broad enough to include a variety of anti-competitive behavior. Nothing in the text of the exclusion limits it solely to antitrust claims. To the contrary, the fact that it includes a range of anti-competitive conduct suggests that its scope is broader than antitrust claims. Plaintiff's remaining arguments are equally unpersuasive.

Since the exclusion applies, National Union has no duty to defend, and no duty to advance defense costs. Accordingly, National Union's Motion for Summary Judgment (Docket # 45) is ALLOWED, and Welch's partial motion for summary judgment (Docket # 52) seeking declaratory judgment on Count I is DENIED.

C. The Zurich American Insurance Policy

The Zurich policy covers Welch's loss resulting from "personal and advertising injury" arising from a claim "for any actual or alleged Wrongful Act of [Welch]." Welch's Statement of Facts, ¶ 34. The Policies define "personal and advertising injury" as follows:

injury, including consequential bodily injury, arising out of one or more of the following offenses: . . . d. [o]ral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services; f. [t]he use of another's advertising idea in your advertisement.

Welch's L.R. 56.1 Statement of Material Facts, ¶ 40 (emphasis added).

Both parties have moved for summary judgment. Welch on the ground that subsections (d) and (f) of the policy cover the alleged wrongs in the underlying complaints (see Docket # 55), and Zurich on the ground that they do not. (Docket # 42).

1. Subsection (d): Written Publication that Disparages

Welch contends that there is coverage under the policy because both the Burcham and POM plaintiffs have alleged that Welch disparaged POM's product by falsely advertising that Welch's product contained pomegranate juice, and thereby damaged POM's reputation. Welch further posits that the labeling and marketing of Welch's pomegranate juice were "written publication[s]" that disparaged its product under the terms of the policy. The POM complaint contains objections to specific advertisements of Welch, such as "[a] prominent display of pomegranates of the labels and packaging" and a "website where it advertises and markets the misleading [Welch Pomegranate] juice." See Welch's L.R. 56.1 Statement of Material Facts, ¶¶ 9-11, 12.

While the advertisements at issue here constitute "written publications," they did not disparage POM or its products by making false claims about them; rather Welch is alleged to have misrepresented the content of its own product. See, e.g., Altapac Trading Company, Inc. v. American Motorists Ins. Co., No. CV97-0781 (C.D. Cal. 1997) (competing olive oil company accused competitor-insured of falsely labeling and advertising its products as "pure olive oil"; court held no coverage under insurance policy covering injury arising out of disparagement because the complaint alleged that the insured misrepresented its own products, not that the insured misrepresented competitor's goods).

Nor is this a case in which one competitor is suing another for false claims about the superiority of its own products. See E.piphany, Inc. v. St. Paul Fire Marine Ins. Co., 590 F. Supp.2d 1244, 1253-54 (N.D. Cal. 2008) (holding that the allegations of the underlying complaint alleged disparagement by implication where the plaintiff made statements that its product was the "only" software product in its market with certain capabilities). The gravamen of the underlying claim here is false advertising, not product disparagement. Accordingly, the claims in the underlying complaint are not covered by subsection (d).

2. Subsection (f): Use of Another's Advertising Idea in Your Advertisement

Next, Welch contends that the allegations that it used POM's advertising idea as its own is covered by subsection (f).

The essence of the argument is that Welch has "used" POM's advertising idea by claiming that pomegranate juice is an ingredient (with the attendant implication that Welch's product has salutary health effects). However, "the phrase 'advertising idea' relates to the manner in which one advertises its goods" and does not include the content of such advertisements.Accessories Biz., Inc. v. Linda Jay Keane, Inc., 533 F. Supp.2d 381, 387 (S.D.N.Y. 2008). The coverage provision is limited to Welch's use, in its advertisements, of POM's ideas about how to solicit business and customers. See Continental Cas. v. Consol. Graphics, Inc., 656 F. Supp. 2d 650, 658-59 (S.D. Tex. 2009). Welch has not done that.

Since the underlying complaints do not allege a covered offense under the Zurich policies, there is no duty to defend. Thus, Welch's Motion for Summary Judgment (Docket # 55) is denied. Zurich's Motion for Summary Judgment with respect to Welch's declaratory judgment and breach of contract claims (Docket # 42) is allowed.

D. The Axis Insurance Policy

Axis insured Welch against two types of loss. The relevant policies provide that Axis will provide Media Wrongful Act Coverage (Coverage A) and Professional Services Wrongful Act (Coverage B). Both parties have moved for summary judgment. Welch on the ground that the policies cover the alleged wrongs in the underlying complaints (see Docket # 58); Axis on the ground that they do not, and alternatively, that the alleged wrongs are expressly excluded from coverage. (Docket # 47.)

1. Media Wrongful Act

Under Coverage A, Axis agreed to pay "all Loss arising from any Claim for a Media Wrongful Act" occurring during the policy period. See Welch's Statement of Facts, ¶ 38. The agreement defines "Media Wrongful Act" as:

any actual or alleged act, error or omission when committed or allegedly committed by an Insured . . . in connection with the creation or dissemination of the Covered Media, or in connection with the creation or dissemination of Advertising Material relating to the Covered Media, including but not limited to any of the following: [] disparagement, or any other form of defamation or harm to the character or reputation of any . . . entity; misappropriation of . . . information or ideas; error or omission in [c]ontent. . . .

Welch's Statement of Material Facts, ¶ 39 (emphasis added). "Covered Media," in turn, is defined as the "[c]ontent of the publications, programs, films, broadcasts, internet sites . . . including any electronic or digital versions. . . ." Id. at ¶ 40. It broadly includes internet content. "Content" is defined as "any communicative material" excluding several exceptions relating to the delivery of such content. Id. at ¶ 43.

Welch contends that the allegations of the POM and Burcham complaints fit the requirements for coverage under this provision. Those allegations are that Welch's labeling and marketing its pomegranate juice was an act, error or omission made in connection with the creation or dissemination of advertising material relating to Covered Media, and it both (1) disparaged POM, and (2) misappropriated POM's information or ideas.

The argument presents several difficulties. First, the underlying allegations do not arise from "errors or omissions in content . . . in connection with the creation or dissemination of" covered media or advertising material. That is, the underlying complaints do not allege loss arising from thecreation or dissemination of Welch's advertising material, only from the content thereof. Second, the underlying complaints do not claim "disparagement, or any other form of defamation or harm to the character or reputation" of POM. To the contrary, the complaints allege that Welch marketed and sold a product that was not what was advertised. Welch mentions no competitors in its advertisements. Welch's alleged misrepresentations concern the contents and quality of its own product and imply nothing about the content or quality of POM's product. Nothing about the allegation implies harm to POM's reputation or character. Third, for the same reasons discussed above (see discussion regarding Zurich Policy, Section I.B.2,infra), the underlying complaints do not involve "misappropriation of information or ideas"; nor do they involve the misappropriation of POM's advertising idea, as Welch contends. For these reasons, the underlying complaints are not covered by the Policies.

2. Professional Services Wrongful Act

Under Coverage B, Axis has a duty to pay "all Loss arising from any Claim first made against [Welch] during the Policy Period . . . for a Professional Services Wrongful Act. . . ." Welch's L.R. 56.1 Statement of Material Facts ¶ 47. The Policy defines "Professional Services Wrongful Act" as:

any actual or alleged negligent act, error or omission committed or attempted solely in the performance of or failure to perform Professional Services by any Insured in his, her or its capacity as such. . . .

The question here is whether the false advertising claims that arise out of plaintiff's complaint fall under the definition of "promotional and marketing services." The underlying allegations here do not fit "Professional Services Wrongful Act" for two reasons. First, this provision is usually intended to provide liability protection for insureds whose clients hire them to provide professional services. See Nationwide Mut. Ins. Co. v. Am. Reins. Co., 796 F. Supp. 275, 280-281 (S.D. Ohio 1991) ("[a]n errors and omissions policy is intended to insure a member of a designated calling against liability arising out of the mistakes inherent in the practice of that particular profession or business") (internal citations omitted). Second, professional services coverage is not intended to cover claims by competitors. Such claims pertain to how the insured does business rather than breach of professional duties. See Visiting Nurse Ass'n v. St. Paul Fire Marine Ins. Co., 65 F.3d 1097, 1102 (3d Cir. 1995).

Accordingly, Welch's Motion for Partial Summary Judgment on Count II of the Second Amended Complaint (Docket # 58) is DENIED. Axis' Motion for Summary Judgment (Docket # 47) is ALLOWED.

II. Conclusion

For the reasons discussed above, Welch's Motions for Partial Summary Judgment against defendant insurance companies Axis, National Union, and Zurich (Docket # # 52, 55, 58) are each DENIED. The defendant insurance companies' respective Motions for Summary Judgment (Docket ## 42, 45, 47) are each ALLOWED. Judgment may be entered accordingly.

DATE October 1, 2010