Harold H. Huggins Realty, Inc. v. FNC, INC.
634 F.3d 787
| 5th Cir. | 2011Background
- Plaintiffs are residential real-estate appraisers seeking to represent themselves and a class against FNC, Inc. under §43(a) of the Lanham Act for false advertising.
- FNC develops AppraisalPort (data-transmittal service) and the National Collateral Database for the mortgage industry.
- AppraisalPort marketing claimed data transmitted would be confidential and unseen by others, only accessible to the client lender and paying appraisers.
- FNC's CEO stated in 2005 that FNC can access and extract data from appraisals transmitted through AppraisalPort, facilitating database construction.
- The National Collateral Database competes with plaintiffs’ appraisal services and allegedly caused lost business and diminished goodwill; district court dismissed for lack of prudential standing, which this court reverses and remands.
- The court finds plaintiffs plead concrete economic injury to a commercial interest caused by anti-competitive conduct and have prudential standing under the Lanham Act.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Prudential standing under §43(a) of the Lanham Act. | Huggins argues injury to competitive interests supports standing. | FNC argues plaintiffs lack standing as competitors/consumers; injury too indirect. | Plaintiffs have prudential standing. |
| Directness of injury (factor 2). | Injury linked to misappropriation and competition with the Database. | Injury is indirect because tied to third-party lender choices. | Injury is relatively indirect but falls within standing. |
| Proximity to the misrepresentation (factor 3). | Plaintiffs are the closest market participants injured by data misappropriation and subsequent competition. | Other market actors may be more proximate in some contexts; potential harms are more remote. | Plaintiffs are sufficiently proximate to support standing. |
| Damages and non-speculative injury (factor 4). | Plaintiffs pleaded specific damages: lost business/profits and FNC's profits from the Database. | Damages may be speculative or not personally tied to each plaintiff. | Damages are concrete and non-speculative; supported. |
| Risk of duplicative damages (factor 5). | No closer claimants exist; class is properly situated. | Potential for multiple claims in a larger market. | Low risk of duplicative damages; factor weighs in favor of standing. |
Key Cases Cited
- Conte Bros. Auto., Inc. v. Quaker State-Slick 50, Inc., 165 F.3d 221 (3d Cir. 1998) (Lanham Act prudential standing five-factor test; proximity and injury discussed)
- Joint Stock Soc'y v. UDV N. Am., Inc., 266 F.3d 164 (3d Cir. 2001) (Directness and proximity considerations in Lanham Act standing)
- Procter & Gamble Co. v. Amway Corp., 242 F.3d 539 (5th Cir. 2001) (Lanham Act false advertising; consumer standing limitations; damages requirements)
- Seven-Up Co. v. Coca-Cola Co., 86 F.3d 1379 (5th Cir. 1996) (Consumer involvement; standing and injury scope under §43(a))
- Schlotzky's, Ltd. v. Sterling Purchasing & Nat'l Distrib. Co., 520 F.3d 393 (5th Cir. 2008) (Damages and standing standards under Lanham Act)
- Ford v. NYLCare Health Plans of Gulf Coast, Inc., 301 F.3d 329 (5th Cir. 2002) (Article III and prudential standing considerations in Lanham Act context)