Would-be competitor lacks standing to sue for false advertising

In a recent ruling, the United States District Court for the for the District of Maine ruled that a future competitor of Poland Springs® lacked Article III standing to bring a Lanham Act false advertising suit against the Nestlé Waters. Maine Springs, LLC v. Nestlé Waters North America, Inc., No. 2:14-cv-00321 (D. Me. Mar. 18, 2015).  See Order.

Maine Springs alleges Nestlé’s leading brand of water does not come from the Poland Spring

The Plaintiff in this suit, Maine Springs, was a seven-year old company created to establish bottling operations in Poland Spring, Maine. In September 2014, Maine Springs filed suit alleging that Nestlé Waters falsely advertised its Poland Springs brand – America’s leading brand of bottled water – by falsely implying that the water it used actually came from the now-dry Poland Spring.

Maine Springs’ future plans to sell water not enough to create standing

Nestlé Waters sought dismissal of the suit arguing that Maine Springs did not come within the zone of interests protected by the Lanham Act and had failed to sufficiently allege proximate causation as set forth by the Supreme Court in Lexmark Int’l Inc. v. Static Control Components, 134 S.Ct. 1377 (2014). The Court agreed.

While Maine Springs apparently owned the springs, facilities and equipment for bottled water operations and had even acquired the permits to begin bottling spring water, the Court held that there was “nothing in the Complaint to indicate that Maine Springs has entered or attempted to enter the bottled water market in any way.” Order at 8. Therefore, Nestlé Water’s allegedly false advertising could not have harmed Maine Springs “by channeling customers” to the Poland Springs brand “when Maine Springs has not even begun to offer bottled water.” Id. at 9. The court held that Maine Springs’ plans to eventually market and sell bottled water were too speculative to constitute an in injury-in-fact under the Lanham Act.

Analysis

By rejecting the so-called “prudential standing” requirement, the Supreme Court’s decision in Lexmark enlarged the pool of potential Lanham Act plaintiffs.  However, while Lexmark holds that a plaintiff can sue for false advertising even if it is not in direct competition with the defendant, Maine Springs reminds us that a would-be plaintiff must at least be open for business.