Tuesday, October 17, 2006

Burger King franchisee appeals McDonald's victory in class action

Several months ago, I blogged about a really bad dismissal of a complaint by Burger King franchisees based on false claims of the likelihood of winning McDonald's contests. The putative class plaintiff has now appealed, arguing that prudential standing tests are only appropriate when considering whether to expand Lanham Act standing beyond direct competitors; since Burger King is a direct competitor of McDonald's, standing to bring a false advertising claim is appropriate.

Plaintiff's appeal brief refers to that very post, among other (ahem) authorities. The brief is available here, courtesy of the plaintiff-appellant's lawyers. Among the interesting points raised, plaintiff argues that the existence of potential consumer plaintiffs ought not be part of the prudential standing inquiry, since consumers lack Lanham Act standing even if they can sue for other torts. In other words, the Lanham Act exists to give businesses a remedy for business harm, and only potential Lanham Act plaintiffs ought to count. I like this argument, and it fits well with another point in the brief, which is that the harm to the consumer (the difference in value between what a consumer paid for and what s/he received, or perhaps what s/he would otherwise have bought) is different from the harm to the competitor, who loses the full value of a sale. Full restitution to the consumer still leaves the competitor worse off than it would have been absent the false advertising.

Slight correction: the brief occasionally refers to me as Rachel. Rachel is a classic Jewish name beginning with R, but it's not my classic Jewish name beginning with R.

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