453 P.3d 434
N.M.2019Background
- GandyDancer and Rock House are competing railroad contractors; BNSF awarded contracts to Rock House.
- GandyDancer filed a CID complaint alleging Rock House performed unlicensed work; CID and Rock House entered a stipulated settlement.
- GandyDancer sued Rock House in district court, alleging Rock House made misrepresentations about licensure and obtained contracts in violation of the New Mexico Unfair Practices Act (UPA), seeking lost-profits damages.
- Rock House moved to dismiss, arguing the UPA does not grant competitors standing to sue for competitive injury; the district court certified that legal question for interlocutory appeal.
- The Court of Appeals held a business may sue a competitor under the UPA when the conduct concerns consumer protection or trade practices addressed to the market; the Supreme Court granted certiorari and reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the UPA creates a private cause of action for competitive injury (competitor standing to recover lost profits). | The UPA's text ("any person" who suffers loss) and its remedial consumer-protection purpose support competitor suits for losses caused by unlawful trade practices. | Statutory text and history show the Legislature removed "unfair methods of competition" from the UPA in 1971, limiting the Act to consumer protection and excluding competitor claims. | The Supreme Court held the UPA does not authorize competitor lost-profit claims; competitor standing under the UPA is not available and the UPA claim was dismissed. |
| Whether prior New Mexico dicta and out-of-state authority support competitor standing under the UPA. | Reliance on Page & Wirtz dicta and decisions from other jurisdictions that allowed competitor suits under different statutory schemes. | Page & Wirtz's competitor dicta was unnecessary to its holding and is disavowed; out-of-state cases are unpersuasive because their statutes differ and some expressly include "unfair methods of competition." | The Court disavowed the Page & Wirtz dicta and rejected out-of-state authority as persuasive precedent for interpreting New Mexico's UPA. |
Key Cases Cited
- Page & Wirtz Constr. Co. v. Soloman, 110 N.M. 206, 794 P.2d 349 (N.M. 1990) (dicta speculating the UPA might reach competitors; Supreme Court here disavows that dictum)
- Lexmark Int'l, Inc. v. Static Control Components, Inc., 572 U.S. 118 (U.S. 2014) (discusses historic scope of "unfair competition" and zone-of-interests analysis)
- Key v. Chrysler Motors Corp., 121 N.M. 764, 918 P.2d 350 (N.M. 1996) (applies zone-of-interests test to statutorily created causes of action)
- Stevenson v. Louis Dreyfus Corp., 112 N.M. 97, 811 P.2d 1308 (N.M. 1991) (describing UPA as modeled on the Uniform Deceptive Trade Practices Act and its consumer-protection focus)
- Mascarenas v. Jaramillo, 111 N.M. 410, 806 P.2d 59 (N.M. 1991) (explains CILA remedies against unlicensed contractors and consumer recovery principles)
- Santa Fe Custom Shutters & Doors, Inc. v. Home Depot U.S.A., Inc., 137 N.M. 524, 113 P.3d 347 (N.M. Ct. App. 2005) (UPA construed to give standing primarily to buyers/consumers, not sellers)
- Lohman v. Daimler-Chrysler Corp., 142 N.M. 437, 166 P.3d 1091 (N.M. Ct. App. 2007) (UPA may reach upstream misrepresentations affecting downstream consumer sales; did not create competitor standing)
- Hicks v. Eller, 280 P.3d 304 (N.M. Ct. App. 2012) (clarifies Lohman: plaintiff must have sought or acquired goods/services and defendant must have provided them)