Wednesday, November 28, 2018

Restaurant can't bring unfair competition claim against Trump Old Post Office claim for using Trump's name to draw business

K&D, LLC v. Trump Old Post Office, LLC, No. 17-731 (RJL), 2018 WL 6173449 (D.D.C. Nov. 26, 2018)

Plaintiff owns Cork Wine Bar, located in the downtown Washington, D.C. area. Cork argued that it faced unfair competition from the Trump Old Post Office due to the desire of people to curry favor with the Administration by getting restaurant services (including both hosting and catering) there, encouraged by statements from people in the Administration.

The court found that this advantage, while perhaps looking bad (and, you know, violating the Emoluments Clause), was not unfair competition.  Even though D.C. common law doesn’t have specific elements, it’s understood to include “various acts that would constitute the tort if they resulted in damage.” These acts include “defamation, disparagement of a competitor’s goods or business methods, intimidation of customers or employees, interference with access to the business, threats of groundless suits, commercial bribery, inducing employees to sabotage, [and] false advertising or deceptive packaging likely to mislead customers into believing goods are those of a competitor.’ ”  But none of this was pled—interference with business isn’t anything that harms the business; it means tortiously interfering with access to the business. [After all, the problem doesn't seem to be commercial bribery, as such.]

Somewhat uncharitably, the court characterized Cork’s objection as being to “the process known as competition, which though painful, fierce, frequently ruthless, sometimes Darwinian in its pitilessness, is the cornerstone of our highly successful economic system.”  Prominent people are allowed to have equity in the companies they promote.  More to the point, given that a government official might be thought to have more power worth courting via purchases as opposed to simply a popular image, a forty-year-old case is (almost) directly on point.  In Ray v. Proxmire, 581 F.2d 998 (D.C. Cir. 1978), Ray alleged that Proxmire’s tour and hospitality service unfairly competed with Ray’s similar business by trading on the prestige and contacts that Proxmire had as the wife of the senior sitting United States Senator from Wisconsin. The court of appeals there held that “simple use of one’s status in society is not itself illegal .… financial success does not become unlawful simply because it is aided by prominence; nor could it be, without locking the famous out of the economy.” “[H]owever reprehensible it might be through political influence to use public [office] for private gain, that evil cannot provide a basis for” Cork’s unfair competition claim here.

Cork argued that the common law evolves, but provided no case law indicating that D.C. common law had evolved so far as to reject Ray.

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