The District Court of Maine recently provided a reminder that – even in the post-Lexmark world of Lanham Act false advertising standing – Article III standing requirements can still impose a meaningful barrier on plaintiffs.
On March 18, 2015, District of Maine Judge George Z. Singal dismissed Maine Springs, LLC’s complaint against Nestle Waters North America, Inc. In its suit, Maine Springs alleged that Nestle’s false advertising and marketing of its Poland Spring® Brand water violated the Lanham Act. Specifically, Maine Springs asserted that: (1) Nestle’s representation that the original Poland Spring is a source of its Poland Spring® water is literally false because the original Poland Spring has been dry for decades; and (2) the representation that Poland Spring® is “100% Natural Spring Water” is deceptive because the water’s sources include ground and well water. In addition to its Lanham Act claim, Maine Springs asserted a claim for tortious interference, alleging that supply bottling companies rejected Maine Springs’ proposals “for fear of threatened litigation by Nestle Waters.”
Nestle moved to dismiss, arguing that under the Supreme Court’s recent Lexmark decision, Maine Springs failed to sufficiently plead that it came within the “zone of interests” protected by the Lanham Act, and failed to plead proximate cause. Judge Singal agreed.
Judge Singal “discern[ed] two possible injuries” in Maine Springs’s complaint. The first injury was essentially lost sales. Maine Springs asserted that the alleged false statements in Poland Spring’s advertising caused consumers to purchase Poland Spring water instead of Maine Springs water. However, Maine Springs had no bottled water yet to sell and its plans of eventually selling bottled water could not salvage its claim as the Court found these plans to be too speculative to constitute an injury-in-fact. Thus, Maine Springs could not have been harmed by the “channeling of customers toward Poland Spring® Brand water.”
Maine Springs also asserted that it suffered injury because two water supply companies had rejected offers from Maine Springs. The Court found this alleged injury to be a sufficient injury-in-fact. However, it was insufficient to confer standing because there was nothing in the complaint to connect the suppliers’ refusal to provide water to Maine Springs to Poland Spring’s allegedly false and misleading advertising over the origin of its source of water.
The Court, finding Article III standing lacking for Maine Spring’s Lanham Act claim, declined to exercise supplemental jurisdiction over the tortious interference claim, opting instead to dismiss the complaint in its entirety. While this litigation has run dry, future false advertising plaintiffs not yet selling a product should take heed.
Want to talk advertising? We welcome your questions, ideas, and thoughts on our posts. Email or call us at email@example.com /212-969-3240 or firstname.lastname@example.org /212-969-3671. We are editors of Proskauer on Advertising Law and partners in Proskauer’s False Advertising & Trademark practice.