TrafficSchool.com, Inc. v. Edriver Inc.
653 F.3d 820
| 9th Cir. | 2011Background
- DMV.org is a for-profit site that presents itself as a government-affiliated DMV resource and earns referral fees from traffic-school and driver-education vendors.
- TrafficSchool.com, Inc. and Drivers Ed Direct, LLC compete with DMV.org for referral revenue and allege false advertising and unfair competition.
- The district court found a Lanham Act violation but declined California unfair-competition relief and issued a splash-screen injunction; no damages or attorney’s fees were awarded.
- Evidence included DMV.org’s site design mimicking state DMVs, use of ca./california. prefixes, and numerous consumer-confusion emails.
- The court admonished the need for an independent Article III standing analysis and recognized a presumed commercial injury from direct competition, leading to appellate-reversal in part and remand for fees and injunction reconsideration.
- The opinion ultimately affirms in part, reverses in part, and remands with instructions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs have Article III and Lanham Act standing | TrafficSchool.com argues they have injury-in-fact and competitive injury | DMV.org contends insufficient injury and lack of standing | Yes, plaintiffs have standing under Article III and Lanham Act |
| Whether DMV.org’s advertising was misleading and violated the Lanham Act | Plaintiffs contend the site misleads about government affiliation | Defendants argue no deception or insufficient proof of injury | Yes, the site’s overall presentation tended to deceive a substantial audience and violated the Lanham Act |
| appropriateness and scope of the injunction and First Amendment concerns | Splash screen remedy essential to correct deception | Injunction overbroad and burdens protected speech | Remand to reconsider injunction duration; potential narrowing or modification allowed |
| whether attorney’s fees could be awarded given lack of damages and unclean-hands finding | Fees appropriate due to exceptional case and public-benefit | Fees denied due to lack of damages and unclean-hands issues | Overturned; remand to reconsider award in light of benefits and willfulness |
Key Cases Cited
- Jack Russell Terrier Network of Northern California v. American Kennel Club, Inc., 407 F.3d 1027 (9th Cir. 2005) (tests standing for Lanham Act claims: commercial injury plus competitive harm)
- Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134 (9th Cir. 1997) (requires showing deception that affects a substantial portion of audience)
- Waits v. Frito-Lay, Inc., 978 F.2d 1093 (9th Cir. 1992) (presumption of commercial injury when direct competition and misrepresentation)
- U-Haul Int’l, Inc. v. Jartran, Inc., 793 F.2d 1034 (9th Cir. 1986) (injunctions may burden protected speech but can be justified for false advertising)
- Earthquake Sound Corp. v. Bumper Indus., 352 F.3d 1210 (9th Cir. 2003) (willfulness supports exceptional-case fees and enforcement actions)