Supreme Court Resolves Circuit Split On Standing In Lanham Act False Advertising Cases

Today, the U.S. Supreme Court resolved a circuit split on the crucial issue of who has standing to sue for false advertising under the Lanham Act. In a unanimous decision authored by Justice Scalia, the Court held that to have standing, a plaintiff simply must plead "an injury to a commercial interest in sales or business reputation proximately caused by the defendant's misrepresentations."¹

Prior to this decision, the federal appellate courts had adopted one of three competing approaches to what often has been referred to as "prudential standing" to bring a Lanham Act false advertising suit.² The Third, Fifth, Eighth and Eleventh Circuits used a multi-factor test derived from an antitrust case, Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 537-45 (1983).³ The Seventh, Ninth, and Tenth Circuits employed a categorical test, which limited standing to direct competitors.⁴ Finally, the Second Circuit applied a "reasonable