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Lexmark Int'l, Inc. v. Static Control Components, Inc. - 572 U.S. 118, 134 S. Ct. 1377 (2014)

Rule:

Whether a plaintiff comes within the zone of interests is an issue that requires the court to determine, using traditional tools of statutory interpretation, whether a legislatively conferred cause of action encompasses a particular plaintiff's claim. Prudential standing is a misnomer as applied to the zone-of-interests analysis, which asks whether this particular class of persons has a right to sue under a substantive statute. 

Facts:

Petitioner Lexmark Int'l, Inc. sold toner cartridges for laser printers. It had a "Prebate" program, which gave customers a discount on new cartridges if they agreed to return empty cartridges to the company. Each Prebate cartridge had a microchip that disabled the empty cartridge unless Lexmark replaced the chip. Respondent Static Control Components, Inc., a maker and seller of components for the remanufacture of Lexmark cartridges, developed a microchip that mimicked Lexmark's chips. Lexmark sued for copyright infringement, but Static Control counterclaimed, alleging that Lexmark engaged in false or misleading advertising in violation of §43(a) of the Lanham Act, 15 U.S.C. §1125(a), and that its misrepresentations had caused Static Control lost sales and damage to its business reputation. The United States District Court for the Eastern District of Kentucky held that Static Control lacked "prudential standing" to bring the Lanham Act claim, applying a multifactor balancing test. In reversing, the United Stated Court of Appeals for the Sixth Circuit relied on the Second Circuit's "reasonable interest" test.

Issue:

Did Static Control have standing to sue Lexmark?

Answer:

Yes

Conclusion:

To come within the zone of interests in a suit for false advertising under § 1125(a), Static Control had to allege an injury to a commercial interest in reputation or sales. Static Control also had to show economic or reputational injury flowing directly from the deception allegedly wrought by the Lexmark's advertising. To determine the relevant limits on who could sue, the Court directly applied the zone-of-interests test and the proximate-cause requirement. Under those tests, Static Control came within the class of plaintiffs whom Congress authorized to sue under§ 1125(a). Its alleged injuries included lost sales and damage to its business reputation due to Lexmark's statements that Static Control's business was illegal. Moreover, it adequately alleged proximate causation by alleging that it designed, manufactured, and sold microchips that both (1) were necessary for, and (2) had no other use than, refurbishing Lexmark's toner cartridges. Nonetheless, Static Control had to supply evidence of injury.

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