The Supreme Court Embraces AAI’s Position on Plaintiff Standing to Pursue False Advertising Claims

In a unanimous decision, the U.S. Supreme Court in Lexmark v. Static Control held that the “zone-of-interests” test should be applied to decide whether parties have standing to challenge false advertising under the Lanham Act. It ruled that plaintiffs who show that they suffered “an injury to a commercial interest in reputation or sales” and establish proximate causation between their injury and the defendant’s false statement can bring claims.

The American Antitrust Institute (AAI) was the only amicus curiae to file a brief endorsing the zone-of-interests test, which best effectuates the Lanham Act’s core policy goal of policing deceptive behavior by market participants.  The zone-of-interests test encourages courts to focus on congressional intent rather than manufacture a test on self-imposed “prudential standing” grounds. On this basis, the Court rejected the two restrictive tests advanced by Lexmark—standing only for direct competitors of the defendant and the Associated General Contractors (AGC) test from antitrust—as well as the reasonable interest test applied by the Sixth Circuit. In declining to adopt the AGC test, the Court observed that it duplicates factors—an argument made in the AAI’s brief—and can lead to unpredictable results. The ruling ensures that fewer cases of false advertising will go unchallenged. It will help deter the dissemination of false or misleading information in the marketplace and thereby protect consumers and the competitive process.

The AAI brief was written by AAI Senior Counsel Randy Stutz and AAI Special Counsel Sandeep Vaheesan, with assistance from AAI General Counsel Rick Brunell.