A federal appeals court on Tuesday revived for a second time a 11-year-old defamation lawsuit by bedding retailer Mattress Firm Inc against adjustable bed maker Sleep Number Corp., Reuters reported. The U.S. Court of Appeals for the Second Circuit said that a lower court judge misinterpreted New York law in dismissing claims first brought in March 2007 by Sleepy’s, now part of Mattress Firm, against Select Comfort, renamed Sleep Number last November. Mattress Firm, part of South Africa’s Steinhoff International Holdings NV, emerged from chapter 11 bankruptcy protection last week. The case concerned whether Select Comfort violated a 2005 contract that let Sleepy’s sell Select Comfort’s wood framed “Personal Preference” beds, while Select Comfort sold its plastic-and-polymer framed “Core” beds in its own stores. Sleepy’s sued after “secret” shoppers it hired to visit Select Comfort stores reported that salespeople disparaged the quality and comfort of Personal Preference beds, whose sales were poor, and said Sleepy’s offered inferior warranties. U.S. District Judge Joanna Seybert in Central Islip, New York dismissed the case in Sept. 2015, saying that the alleged disparagements were not “published to a third party” under New York law because only Sleepy’s secret shoppers heard them.
