Lexmark Int'l, Inc. v. Static Control Components, Inc. , 134 S. Ct. 1377 ( 2014 )

(Slip Opinion) OCTOBER TERM, 2013 1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
LEXMARK INTERNATIONAL, INC. v. STATIC
CONTROL COMPONENTS, INC.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE SIXTH CIRCUIT
No. 12–873. Argued December 3, 2013—Decided March 25, 2014
Petitioner Lexmark sells the only style of toner cartridges that work
with the company’s laser printers, but “remanufacturers” acquire and
refurbish used Lexmark cartridges to sell in competition with
Lexmark’s own new and refurbished ones. Lexmark’s “Prebate” pro-
gram gives customers a discount on new cartridges if they agree to
return empty cartridges to the company. Each Prebate cartridge has
a microchip that disables the empty cartridge unless Lexmark re-
places the chip. Respondent Static Control, a maker and seller of
components for the remanufacture of Lexmark cartridges, developed
a microchip that mimicked Lexmark’s. Lexmark sued for copyright
infringement, but Static Control counterclaimed, alleging that
Lexmark engaged in false or misleading advertising in violation of
§43(a) of the Lanham Act, 15 U.S. C. §1125(a), and that its misrep-
resentations had caused Static Control lost sales and damage to its
business reputation. The District Court held that Static Control
lacked “prudential standing” to bring the Lanham Act claim, apply-
ing a multifactor balancing test the court attributed to Associated
Gen. Contractors of Cal., Inc. v. Carpenters, 459 U.S. 519. In revers-
ing, the Sixth Circuit relied on the Second Circuit’s “reasonable in-
terest” test.
Held: Static Control has adequately pleaded the elements of a Lanham
Act cause of action for false advertising. Pp. 6–22.
(a) The question here is whether Static Control falls within the
class of plaintiffs that Congress authorized to sue under §1125(a). To
decide that question, this Court must determine the provision’s
meaning, using traditional principles of statutory interpretation. It
is misleading to label this a “prudential standing” question. Lexmark
2 LEXMARK INT’L, INC. v. STATIC CONTROL
COMPONENTS, INC.
Syllabus
bases its “prudential standing” arguments on Associated General
Contractors, but that case rested on statutory considerations: The
Court sought to “ascertain,” as a statutory-interpretation matter, the
“scope of the private remedy created by” Congress in §4 of the Clay-
ton Act, and the “class of persons who [could] maintain a private
damages action under” that legislatively conferred cause of action,
459 U.S., at 529, 532. And while this Court may have placed the
“zone of interests” test that Static Control relies on under the “pru-
dential” rubric in the past, see, e.g., Elk Grove Unified School Dist. v.
Newdow, 542 U.S. 1, 12, it does not belong there any more than As-
sociated General Contractors does. Rather, whether a plaintiff comes
within the zone of interests requires the Court to determine, using
traditional statutory-interpretation tools, whether a legislatively con-
ferred cause of action encompasses a particular plaintiff ’s claim.
See, e. g., Steel Co. v. Citizens for Better Environment, 523 U.S. 83,
97, and n. 2. Pp. 6–9.
(b) The §1125(a) cause of action extends to plaintiffs who fall with-
in the zone of interests protected by that statute and whose injury
was proximately caused by a violation of that statute. Pp. 10–18.
(1) A statutory cause of action is presumed to extend only to
plaintiffs whose interests “fall within the zone of interests protected
by the law invoked.” Allen v. Wright, 468 U.S. 737, 751. “[T]he
breadth of [that] zone . . . varies according to the provisions of law at
issue.” Bennett v. Spear, 520 U.S. 154, 163. The Lanham Act in-
cludes a detailed statement of its purposes, including, as relevant
here, “protect[ing] persons engaged in [commerce within the control
of Congress] against unfair competition,” 15 U.S. C. §1127; and “un-
fair competition” was understood at common law to be concerned
with injuries to business reputation and present and future sales.
Thus, to come within the zone of interests in a §1125(a) false-
advertising suit, a plaintiff must allege an injury to a commercial in-
terest in reputation or sales. Pp. 10–13.
(2) A statutory cause of action is also presumed to be limited to
plaintiffs whose injuries are proximately caused by violations of the
statute. See, e.g., Holmes v. Securities Investor Protection Corpora-
tion, 503 U.S. 258, 268–270. This requirement generally bars suits
for alleged harm that is “too remote” from the defendant’s unlawful
conduct, such as when the harm is purely derivative of “misfortunes
visited upon a third person by the defendant’s acts.” Id., at 268–269.
In a sense, all commercial injuries from false advertising are deriva-
tive of those suffered by consumers deceived by the advertising. But
since the Lanham Act authorizes suit only for commercial injuries,
the intervening consumer-deception step is not fatal to the proxi-
mate-cause showing the statute requires. Cf. Bridge v. Phoenix Bond
Cite as: 572 U. S. ____ (2014) 3
Syllabus
& Indemnity Co., 553 U.S. 639, 656. Thus, a plaintiff suing under
§1125(a) ordinarily must show that its economic or reputational inju-
ry flows directly from the deception wrought by the defendant’s ad-
vertising; and that occurs when deception of consumers causes them
to withhold trade from the plaintiff. Pp. 13–15.
(3) Direct application of the zone-of-interests test and the proxi-
mate-cause requirement supplies the relevant limits on who may sue
under §1125(a). These principles provide better guidance than the
multifactor balancing test urged by Lexmark, the direct-competitor
test, or the reasonable-interest test applied by the Sixth Circuit.
Pp. 15–18.
(c) Under these principles, Static Control comes within the class of
plaintiffs authorized to sue under §1125(a). Its alleged injuries—lost
sales and damage to its business reputation—fall within the zone of
interests protected by the Act, and Static Control sufficiently alleged
that its injuries were proximately caused by Lexmark’s misrepresen-
tations. Pp. 18–22.
697 F.3d 387, affirmed.
SCALIA, J., delivered the opinion for a unanimous Court.
Cite as: 572 U. S. ____ (2014) 1
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash­
ington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
No. 12–873
_________________
LEXMARK INTERNATIONAL, INC., PETITIONER v.
STATIC CONTROL COMPONENTS, INC.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE SIXTH CIRCUIT
[March 25, 2014]
JUSTICE SCALIA delivered the opinion of the Court.
This case requires us to decide whether respondent,
Static Control Components, Inc., may sue petitioner, Lex-
mark International, Inc., for false advertising under the
Lanham Act, 15 U.S. C. §1125(a).
I. Background
Lexmark manufactures and sells laser printers. It also
sells toner cartridges for those printers (toner being the
powdery ink that laser printers use to create images on
paper). Lexmark designs its printers to work only with its
own style of cartridges, and it therefore dominates the
market for cartridges compatible with its printers. That
market, however, is not devoid of competitors. Other
businesses, called “remanufacturers,” acquire used Lex-
mark toner cartridges, refurbish them, and sell them in
competition with new and refurbished cartridges sold by
Lexmark.
Lexmark would prefer that its customers return their
empty cartridges to it for refurbishment and resale, rather
than sell those cartridges to a remanufacturer. So
Lexmark introduced what it called a “Prebate” program,
2 LEXMARK INT’L, INC. v. STATIC CONTROL
COMPONENTS, INC.
Opinion of the Court
which enabled customers to purchase new toner cartridges
at a 20-percent discount if they would agree to return the
cartridge to Lexmark once it was empty. Those terms
were communicated to consumers through notices printed
on the toner-cartridge boxes, which advised the consumer
that opening the box would indicate assent to the terms—
a practice commonly known as “shrinkwrap licensing,”
see, e.g., ProCD, Inc. v. Zeidenberg, 86 F.3d 1447, 1449
(CA7 1996). To enforce the Prebate terms, Lexmark in­
cluded a microchip in each Prebate cartridge that would
disable the cartridge after it ran out of toner; for the car­
tridge to be used again, the microchip would have to be
replaced by Lexmark.
Static Control is not itself a manufacturer or remanu­
facturer of toner cartridges. It is, rather, “the market
leader [in] making and selling the components necessary
to remanufacture Lexmark cartridges.” 697 F.3d 387, 396
(CA6 2012) (case below). In addition to supplying remanu­
facturers with toner and various replacement parts, Static
Control developed a microchip that could mimic the micro­
chip in Lexmark’s Prebate cartridges. By purchasing
Static Control’s microchips and using them to replace the
Lexmark microchip, remanufacturers were able to refur­
bish and resell used Prebate cartridges.
Lexmark did not take kindly to that development. In
2002, it sued Static Control, alleging that Static Control’s
microchips violated both the Copyright Act of 1976, 17
U.S. C. §101 et seq., and the Digital Millennium Copy­
right Act, 17 U.S. C. §1201 et seq. Static Control counter­
claimed, alleging, among other things, violations of §43(a)
of the Lanham Act, 60 Stat. 441, codified at 15 U.S. C.
§1125(a). Section 1125(a) provides:
“(1) Any person who, on or in connection with any
goods or services, or any container for goods, uses in
commerce any word, term, name, symbol, or device, or
Cite as: 572 U. S. ____ (2014) 3
Opinion of the Court
any combination thereof, or any false designation of
origin, false or misleading description of fact, or false
or misleading representation of fact, which—
“(A) is likely to cause confusion, or to cause mistake,
or to deceive as to the affiliation, connection, or asso­
ciation of such person with another person, or as to
the origin, sponsorship, or approval of his or her
goods, services, or commercial activities by another
person, or
“(B) in commercial advertising or promotion, mis­
represents the nature, characteristics, qualities, or geo­
graphic origin of his or her or another person’s goods,
services, or commercial activities,
“shall be liable in a civil action by any person who be­
lieves that he or she is or is likely to be damaged by
such act.”
Section 1125(a) thus creates two distinct bases of liability:
false association, §1125(a)(1)(A), and false advertising,
§1125(a)(1)(B). See Waits v. Frito-Lay, Inc., 978 F.2d
1093, 1108 (CA9 1992). Static Control alleged only false
advertising.
As relevant to its Lanham Act claim, Static Control
alleged two types of false or misleading conduct by
Lexmark. First, it alleged that through its Prebate pro­
gram Lexmark “purposefully misleads end-users” to be­
lieve that they are legally bound by the Prebate terms and
are thus required to return the Prebate-labeled cartridge
to Lexmark after a single use. App. 31, ¶39. Second, it
alleged that upon introducing the Prebate program,
Lexmark “sent letters to most of the companies in the
toner cartridge remanufacturing business” falsely advising
those companies that it was illegal to sell refurbished
Prebate cartridges and, in particular, that it was illegal to
use Static Control’s products to refurbish those cartridges.
Id., at 29, ¶35. Static Control asserted that by those
4 LEXMARK INT’L, INC. v. STATIC CONTROL
COMPONENTS, INC.
Opinion of the Court
statements, Lexmark had materially misrepresented “the
nature, characteristics, and qualities” of both its own
products and Static Control’s products. Id., at 43–44, ¶85.
It further maintained that Lexmark’s misrepresentations
had “proximately caused and [we]re likely to cause injury
to [Static Control] by diverting sales from [Static Control]
to Lexmark,” and had “substantially injured [its] business
reputation” by “leading consumers and others in the trade
to believe that [Static Control] is engaged in illegal con­
duct.” Id., at 44, ¶88. Static Control sought treble dam­
ages, attorney’s fees and costs, and injunctive relief.1
The District Court granted Lexmark’s motion to dismiss
Static Control’s Lanham Act claim. It held that Static
Control lacked “prudential standing” to bring that claim,
App. to Pet. for Cert. 83, relying on a multifactor balanc­
ing test it attributed to Associated Gen. Contractors of
Cal., Inc. v. Carpenters, 459 U.S. 519 (1983). The court
emphasized that there were “more direct plaintiffs in the
form of remanufacturers of Lexmark’s cartridges”; that
Static Control’s injury was “remot[e]” because it was a
mere “byproduct of the supposed manipulation of consum­
ers’ relationships with remanufacturers”; and that
Lexmark’s “alleged intent [was] to dry up spent cartridge
supplies at the remanufacturing level, rather than at
[Static Control]’s supply level, making remanufacturers
Lexmark’s alleged intended target.” App. to Pet. for Cert.
83.
The Sixth Circuit reversed the dismissal of Static Con­
trol’s Lanham Act claim. 697 F.3d, at 423. Taking the
lay of the land, it identified three competing approaches to
——————
1 Lexmark contends that Static Control’s allegations failed to describe
“commercial advertising or promotion” within the meaning of 15
U.S. C. §1125(a)(1)(B). That question is not before us, and we express
no view on it. We assume without deciding that the communica­
tions alleged by Static Control qualify as commercial advertising or
promotion.
Cite as: 572 U. S. ____ (2014) 5
Opinion of the Court
determining whether a plaintiff has standing to sue under
the Lanham Act. It observed that the Third, Fifth,
Eighth, and Eleventh Circuits all refer to “antitrust stand­
ing or the [Associated General Contractors] factors in
deciding Lanham Act standing,” as the District Court had
done. Id., at 410 (citing Conte Bros. Automotive, Inc. v.
Quaker State-Slick 50, Inc., 165 F.3d 221, 233–234 (CA3
1998); Procter & Gamble Co. v. Amway Corp., 242 F.3d
539, 562–563 (CA5 2001); Gilbert/Robinson, Inc. v. Carrie
Beverage-Missouri, Inc., 989 F.2d 985, 990–991 (CA8
1993); Phoenix of Broward, Inc. v. McDonald’s Corp., 489
F.3d 1156, 1162–1164 (CA11 2007)). By contrast, “[t]he
Seventh, Ninth, and Tenth [Circuits] use a categorical
test, permitting Lanham Act suits only by an actual com­
petitor.” 697 F.3d, at 410 (citing L. S. Heath & Son, Inc.
v. AT&T Information Systems, Inc., 9 F.3d 561, 575 (CA7
1993); Waits, supra, at 1108–1109; Stanfield v. Osborne
Industries, Inc., 52 F.3d 867, 873 (CA10 1995)). And the
Second Circuit applies a “ ‘reasonable interest’ approach,”
under which a Lanham Act plaintiff “has standing if the
claimant can demonstrate ‘(1) a reasonable interest to be
protected against the alleged false advertising and (2) a
reasonable basis for believing that the interest is likely to
be damaged by the alleged false advertising.’ ” 697 F.3d,
at 410 (quoting Famous Horse, Inc. v. 5th Avenue Photo
Inc., 624 F.3d 106, 113 (CA2 2010)). The Sixth Circuit
applied the Second Circuit’s reasonable-interest test and
concluded that Static Control had standing because it
“alleged a cognizable interest in its business reputation
and sales to remanufacturers and sufficiently alleged that
th[o]se interests were harmed by Lexmark’s statements to
the remanufacturers that Static Control was engaging in
illegal conduct.” 697 F.3d, at 411.
We granted certiorari to decide “the appropriate ana-
lytical framework for determining a party’s standing to
maintain an action for false advertising under the Lanham
6 LEXMARK INT’L, INC. v. STATIC CONTROL
COMPONENTS, INC.
Opinion of the Court
Act.” Pet. for Cert. i; 569 U. S. ____ (2013).2
II. “Prudential Standing”
The parties’ briefs treat the question on which we
granted certiorari as one of “prudential standing.” Be­
cause we think that label misleading, we begin by clarify­
ing the nature of the question at issue in this case.
From Article III’s limitation of the judicial power to
resolving “Cases” and “Controversies,” and the separation­
of-powers principles underlying that limitation, we have
deduced a set of requirements that together make up the
“irreducible constitutional minimum of standing.” Lujan
v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). The
plaintiff must have suffered or be imminently threatened
with a concrete and particularized “injury in fact” that is
fairly traceable to the challenged action of the defendant
and likely to be redressed by a favorable judicial decision.
Ibid. Lexmark does not deny that Static Control’s alle-
gations of lost sales and damage to its business reputa-
tion give it standing under Article III to press its false­
advertising claim, and we are satisfied that they do.
Although Static Control’s claim thus presents a case or
controversy that is properly within federal courts’ Article
III jurisdiction, Lexmark urges that we should decline to
adjudicate Static Control’s claim on grounds that are
“prudential,” rather than constitutional. That request is
in some tension with our recent reaffirmation of the prin­
ciple that “a federal court’s ‘obligation’ to hear and decide”
cases within its jurisdiction “is ‘virtually unflagging.’ ”
Sprint Communications, Inc. v. Jacobs, 571 U. S. ___, ___
(2013) (slip op., at 6) (quoting Colorado River Water Con-
——————
2 Other aspects of the parties’ sprawling litigation, including
Lexmark’s claims under federal copyright and patent law and Static
Control’s claims under federal antitrust and North Carolina unfair­
competition law, are not before us. Our review pertains only to Static
Control’s Lanham Act claim.
Cite as: 572 U. S. ____ (2014) 7
Opinion of the Court
servation Dist. v. United States, 424 U.S. 800, 817 (1976)).
In recent decades, however, we have adverted to a “pru­
dential” branch of standing, a doctrine not derived from
Article III and “not exhaustively defined” but encompass­
ing (we have said) at least three broad principles: “ ‘the
general prohibition on a litigant’s raising another person’s
legal rights, the rule barring adjudication of generalized
grievances more appropriately addressed in the repre­
sentative branches, and the requirement that a plaintiff ’s
complaint fall within the zone of interests protected by the
law invoked.’ ” Elk Grove Unified School Dist. v. Newdow,
542 U.S. 1, 12 (2004) (quoting Allen v. Wright, 468 U.S.
737, 751 (1984)).
Lexmark bases its “prudential standing” arguments
chiefly on Associated General Contractors, but we did not
describe our analysis in that case in those terms. Rather,
we sought to “ascertain,” as a matter of statutory interpre­
tation, the “scope of the private remedy created by” Con­
gress in §4 of the Clayton Act, and the “class of persons
who [could] maintain a private damages action under”
that legislatively conferred cause of action. 459 U.S., at
529, 532. We held that the statute limited the class to
plaintiffs whose injuries were proximately caused by a
defendant’s antitrust violations. Id., at 532–533. Later
decisions confirm that Associated General Contractors
rested on statutory, not “prudential,” considerations. See,
e.g., Holmes v. Securities Investor Protection Corporation,
503 U.S. 258, 265–268 (1992) (relying on Associated Gen-
eral Contractors in finding a proximate-cause requirement
in the cause of action created by the Racketeer Influenced
and Corrupt Organizations Act (RICO), 18 U.S. C.
§1964(c)); Anza v. Ideal Steel Supply Corp., 547 U.S. 451,
456 (2006) (affirming that Holmes “relied on a careful
interpretation of §1964(c)”). Lexmark’s arguments thus do
not deserve the “prudential” label.
Static Control, on the other hand, argues that we should
8 LEXMARK INT’L, INC. v. STATIC CONTROL
COMPONENTS, INC.
Opinion of the Court
measure its “prudential standing” by using the zone-of­
interests test. Although we admittedly have placed that
test under the “prudential” rubric in the past, see, e.g., Elk
Grove, supra, at 12, it does not belong there any more than
Associated General Contractors does. Whether a plain-
tiff comes within “the ‘zone of interests’ ” is an issue
that requires us to determine, using traditional tools of
statutory interpretation, whether a legislatively conferred
cause of action encompasses a particular plaintiff ’s claim.
See Steel Co. v. Citizens for Better Environment, 523 U.S.
83, 97, and n. 2 (1998); Clarke v. Securities Industry Assn.,
479 U.S. 388, 394–395 (1987); Holmes, supra, at 288
(SCALIA, J., concurring in judgment). As Judge Silberman
of the D. C. Circuit recently observed, “ ‘prudential stand­
ing’ is a misnomer” as applied to the zone-of-interests
analysis, which asks whether “this particular class of
persons ha[s] a right to sue under this substantive stat­
ute.” Association of Battery Recyclers, Inc. v. EPA, 716
F.3d 667, 675–676 (2013) (concurring opinion).3
——————
3 The zone-of-interests test is not the only concept that we have previ­
ously classified as an aspect of “prudential standing” but for which,
upon closer inspection, we have found that label inapt. Take, for
example, our reluctance to entertain generalized grievances—i.e., suits
“claiming only harm to [the plaintiff ’s] and every citizen’s interest in
proper application of the Constitution and laws, and seeking relief that
no more directly and tangibly benefits him than it does the public at
large.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 573–574 (1992).
While we have at times grounded our reluctance to entertain such suits
in the “counsels of prudence” (albeit counsels “close[ly] relat[ed] to the
policies reflected in” Article III), Valley Forge Christian College v.
Americans United for Separation of Church and State, Inc., 454 U.S.
464, 475 (1982), we have since held that such suits do not present
constitutional “cases” or “controversies.” See, e.g., Lance v. Coffman,
549 U.S. 437, 439 (2007) (per curiam); DaimlerChrysler Corp. v. Cuno,
547 U.S. 332, 344–346 (2006); Defenders of Wildlife, supra, at 573–574.
They are barred for constitutional reasons, not “prudential” ones. The
limitations on third-party standing are harder to classify; we have
observed that third-party standing is “ ‘closely related to the question
Cite as: 572 U. S. ____ (2014) 9
Opinion of the Court
In sum, the question this case presents is whether Static
Control falls within the class of plaintiffs whom Congress
has authorized to sue under §1125(a). In other words, we
ask whether Static Control has a cause of action under the
statute.4 That question requires us to determine the
meaning of the congressionally enacted provision creating
a cause of action. In doing so, we apply traditional princi-
ples of statutory interpretation. We do not ask whether in
our judgment Congress should have authorized Static
Control’s suit, but whether Congress in fact did so. Just
as a court cannot apply its independent policy judgment to
recognize a cause of action that Congress has denied, see
Alexander v. Sandoval, 532 U.S. 275, 286–287 (2001), it
cannot limit a cause of action that Congress has created
merely because “prudence” dictates.
——————
whether a person in the litigant’s position will have a right of action on
the claim,’ ” Department of Labor v. Triplett, 494 U.S. 715, 721, n. **
(1990) (quoting Warth v. Seldin, 422 U.S. 490, 500, n. 12 (1975)), but
most of our cases have not framed the inquiry in that way. See, e.g.,
Kowalski v. Tesmer, 543 U.S. 125, 128–129 (2004) (suggesting it is an
element of “prudential standing”). This case does not present any issue
of third-party standing, and consideration of that doctrine’s proper
place in the standing firmament can await another day.
4 We have on occasion referred to this inquiry as “statutory standing”
and treated it as effectively jurisdictional. See, e.g., Steel Co. v. Citizens
for Better Environment, 523 U.S. 83, 97, and n. 2 (1998); cases cited
id., at 114–117 (Stevens, J., concurring in judgment). That label is an
improvement over the language of “prudential standing,” since it
correctly places the focus on the statute. But it, too, is misleading,
since “the absence of a valid (as opposed to arguable) cause of action
does not implicate subject-matter jurisdiction, i.e., the court’s statutory
or constitutional power to adjudicate the case.’ ” Verizon Md. Inc. v.
Public Serv. Comm’n of Md., 535 U.S. 635, 642–643 (2002) (quoting
Steel Co., supra, at 89); see also Grocery Mfrs. Assn. v. EPA, 693 F.3d
169, 183–185 (CADC 2012) (Kavanaugh, J., dissenting), and cases cited
therein; Pathak, Statutory Standing and the Tyranny of Labels, 62
Okla. L. Rev. 89, 106 (2009).
10 LEXMARK INT’L, INC. v. STATIC CONTROL
COMPONENTS, INC.
Opinion of the Court
III. Static Control’s Right To Sue Under §1125(a)
Thus, this case presents a straightforward question of
statutory interpretation: Does the cause of action in
§1125(a) extend to plaintiffs like Static Control? The
statute authorizes suit by “any person who believes that
he or she is likely to be damaged” by a defendant’s false
advertising. §1125(a)(1). Read literally, that broad lan­
guage might suggest that an action is available to anyone
who can satisfy the minimum requirements of Article III.
No party makes that argument, however, and the “unlike­
lihood that Congress meant to allow all factually injured
plaintiffs to recover persuades us that [§1125(a)] should
not get such an expansive reading.” Holmes, 503 U.S., at
266 (footnote omitted). We reach that conclusion in light
of two relevant background principles already mentioned:
zone of interests and proximate causality.
A. Zone of Interests
First, we presume that a statutory cause of action ex­
tends only to plaintiffs whose interests “fall within the
zone of interests protected by the law invoked.” Allen, 468
U.S., at 751. The modern “zone of interests” formulation
originated in Association of Data Processing Service Or-
ganizations, Inc. v. Camp, 397 U.S. 150 (1970), as a limi­
tation on the cause of action for judicial review conferred
by the Administrative Procedure Act (APA). We have
since made clear, however, that it applies to all statutorily
created causes of action; that it is a “requirement of gen­
eral application”; and that Congress is presumed to “legis­
lat[e] against the background of ” the zone-of-interests
limitation, “which applies unless it is expressly negated.”
Bennett v. Spear, 520 U.S. 154, 163 (1997); see also
Holmes, supra, at 287–288 (SCALIA, J., concurring in
judgment). It is “perhaps more accurat[e],” though not
very different as a practical matter, to say that the limita­
tion always applies and is never negated, but that our
Cite as: 572 U. S. ____ (2014) 11
Opinion of the Court
analysis of certain statutes will show that they protect a
more-than-usually “expan[sive]” range of interests. Ben-
nett, supra, at 164. The zone-of-interests test is therefore
an appropriate tool for determining who may invoke the
cause of action in §1125(a).5
We have said, in the APA context, that the test is
not “ ‘especially demanding,’ ” Match-E-Be-Nash-She-Wish
Band of Pottawatomi Indians v. Patchak, 567 U. S. ___,
___ (2012) (slip op., at 15). In that context we have often
“conspicuously included the word ‘arguably’ in the test to
indicate that the benefit of any doubt goes to the plaintiff,”
and have said that the test “forecloses suit only when a
plaintiff ’s ‘interests are so marginally related to or incon­
sistent with the purposes implicit in the statute that it
cannot reasonably be assumed that’ ” Congress authorized
that plaintiff to sue. Id., at ___ (slip op., at 15–16). That
lenient approach is an appropriate means of preserving
the flexibility of the APA’s omnibus judicial-review provi­
sion, which permits suit for violations of numerous stat­
utes of varying character that do not themselves include
causes of action for judicial review. “We have made clear,
however, that the breadth of the zone of interests varies
according to the provisions of law at issue, so that what
comes within the zone of interests of a statute for purposes
of obtaining judicial review of administrative action under
——————
5 Although we announced the modern zone-of-interests test in 1971,
its roots lie in the common-law rule that a plaintiff may not recover
under the law of negligence for injuries caused by violation of a statute
unless the statute “is interpreted as designed to protect the class of
persons in which the plaintiff is included, against the risk of the type of
harm which has in fact occurred as a result of its violation.” W. Keeton,
D. Dobbs, R. Keeton, & D. Owen, Prosser and Keeton on Law of Torts
§36, pp. 229–230 (5th ed. 1984); see cases cited id., at 222–227; Gorris
v. Scott, [1874] 9 L. R. Exch. 125 (Eng.). Statutory causes of action are
regularly interpreted to incorporate standard common-law limitations
on civil liability—the zone-of-interests test no less than the require­
ment of proximate causation, see Part III–B, infra.
12 LEXMARK INT’L, INC. v. STATIC CONTROL
COMPONENTS, INC.
Opinion of the Court
the ‘ “generous review provisions” ’ of the APA may not
do so for other purposes.” Bennett, supra, at 163 (quot-
ing Clarke, 479 U.S., at 400, n. 16, in turn quoting Data
Processing, supra, at 156).
Identifying the interests protected by the Lanham Act,
however, requires no guesswork, since the Act includes an
“unusual, and extraordinarily helpful,” detailed statement
of the statute’s purposes. H. B. Halicki Productions v.
United Artists Communications, Inc., 812 F.2d 1213, 1214
(CA9 1987). Section 45 of the Act, codified at 15 U.S. C.
§1127, provides:
“The intent of this chapter is to regulate commerce
within the control of Congress by making actionable
the deceptive and misleading use of marks in such
commerce; to protect registered marks used in such
commerce from interference by State, or territorial
legislation; to protect persons engaged in such com­
merce against unfair competition; to prevent fraud
and deception in such commerce by the use of repro­
ductions, copies, counterfeits, or colorable imitations
of registered marks; and to provide rights and reme­
dies stipulated by treaties and conventions respect-
ing trademarks, trade names, and unfair competition
entered into between the United States and foreign
nations.”
Most of the enumerated purposes are relevant to false­
association cases; a typical false-advertising case will
implicate only the Act’s goal of “protect[ing] persons en­
gaged in [commerce within the control of Congress]
against unfair competition.” Although “unfair competi­
tion” was a “plastic” concept at common law, Ely-Norris
Safe Co. v. Mosler Safe Co., 7 F.2d 603, 604 (CA2 1925)
(L. Hand, J.), it was understood to be concerned with
injuries to business reputation and present and future
sales. See Rogers, Book Review, 39 Yale L. J. 297, 299
Cite as: 572 U. S. ____ (2014) 13
Opinion of the Court
(1929); see generally 3 Restatement of Torts, ch. 35, Intro­
ductory Note, pp. 536–537 (1938).
We thus hold that to come within the zone of interests in
a suit for false advertising under §1125(a), a plaintiff must
allege an injury to a commercial interest in reputation or
sales. A consumer who is hoodwinked into purchasing a
disappointing product may well have an injury-in-fact
cognizable under Article III, but he cannot invoke the
protection of the Lanham Act—a conclusion reached by
every Circuit to consider the question. See Colligan v.
Activities Club of N. Y., Ltd., 442 F.2d 686, 691–692 (CA2
1971); Serbin v. Ziebart Int’l Corp., 11 F.3d 1163, 1177
(CA3 1993); Made in the USA Foundation v. Phillips
Foods, Inc., 365 F.3d 278, 281 (CA4 2004); Procter &
Gamble Co., 242 F.3d, at 563–564; Barrus v. Sylvania, 55
F.3d 468, 470 (CA9 1995); Phoenix of Broward, 489 F.3d,
at 1170. Even a business misled by a supplier into pur­
chasing an inferior product is, like consumers generally,
not under the Act’s aegis.
B. Proximate Cause
Second, we generally presume that a statutory cause of
action is limited to plaintiffs whose injuries are proxi-
mately caused by violations of the statute. For centuries, it
has been “a well established principle of [the common] law,
that in all cases of loss, we are to attribute it to the proxi­
mate cause, and not to any remote cause.” Waters v.
Merchants’ Louisville Ins. Co., 11 Pet. 213, 223 (1837); see
Holmes, 503 U.S., at 287 (SCALIA, J., concurring in judg­
ment). That venerable principle reflects the reality that
“the judicial remedy cannot encompass every conceivable
harm that can be traced to alleged wrongdoing.” Associ-
ated Gen. Contractors, 459 U.S., at 536. Congress, we
assume, is familiar with the common-law rule and does
not mean to displace it sub silentio. We have thus con­
strued federal causes of action in a variety of contexts to
14 LEXMARK INT’L, INC. v. STATIC CONTROL
COMPONENTS, INC.
Opinion of the Court
incorporate a requirement of proximate causation. See,
e.g., Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336,
346 (2005) (securities fraud); Holmes, supra, at 268–270
(RICO); Associated Gen. Contractors, supra, at 529–535
(Clayton Act). No party disputes that it is proper to read
§1125(a) as containing such a requirement, its broad
language notwithstanding.
The proximate-cause inquiry is not easy to define, and
over the years it has taken various forms; but courts have
a great deal of experience applying it, and there is a
wealth of precedent for them to draw upon in doing so.
See Exxon Co., U. S. A. v. Sofec, Inc., 517 U.S. 830, 838–
839 (1996); Pacific Operators Offshore, LLP v. Valladolid,
565 U. S. ___, ___ (2012) (SCALIA, J., concurring in part
and concurring in judgment) (slip op., at 3). Proximate­
cause analysis is controlled by the nature of the statutory
cause of action. The question it presents is whether the
harm alleged has a sufficiently close connection to the
conduct the statute prohibits.
Put differently, the proximate-cause requirement gener­
ally bars suits for alleged harm that is “too remote” from
the defendant’s unlawful conduct. That is ordinarily the
case if the harm is purely derivative of “misfortunes visited
upon a third person by the defendant’s acts.” Holmes,
supra, at 268–269; see, e.g., Hemi Group, LLC v. City of
New York, 559 U.S. 1, 10–11 (2010). In a sense, of course,
all commercial injuries from false advertising are deriva­
tive of those suffered by consumers who are deceived by
the advertising; but since the Lanham Act authorizes suit
only for commercial injuries, the intervening step of con­
sumer deception is not fatal to the showing of proximate
causation required by the statute. See Harold H. Huggins
Realty, Inc. v. FNC, Inc., 634 F.3d 787, 800–801 (CA5
2011). That is consistent with our recognition that under
common-law principles, a plaintiff can be directly injured
by a misrepresentation even where “a third party, and not
Cite as: 572 U. S. ____ (2014) 15
Opinion of the Court
the plaintiff, . . . relied on” it. Bridge v. Phoenix Bond &
Indemnity Co., 553 U.S. 639, 656 (2008).
We thus hold that a plaintiff suing under §1125(a)
ordinarily must show economic or reputational injury
flowing directly from the deception wrought by the de­
fendant’s advertising; and that that occurs when deception
of consumers causes them to withhold trade from the
plaintiff. That showing is generally not made when the
deception produces injuries to a fellow commercial actor
that in turn affect the plaintiff. For example, while a
competitor who is forced out of business by a defendant’s
false advertising generally will be able to sue for its losses,
the same is not true of the competitor’s landlord, its elec­
tric company, and other commercial parties who suffer
merely as a result of the competitor’s “inability to meet
[its] financial obligations.” Anza, 547 U.S., at 458.6
C. Proposed Tests
At oral argument, Lexmark agreed that the zone of in-
terests and proximate causation supply the relevant back­
ground limitations on suit under §1125(a). See Tr. of
Oral Arg. 4–5, 11–12, 17–18. But it urges us to adopt, as
the optimal formulation of those principles, a multifactor
balancing test derived from Associated General Contrac-
——————
6 Proximate causation is not a requirement of Article III standing,
which requires only that the plaintiff ’s injury be fairly traceable to the
defendant’s conduct. Like the zone-of-interests test, see supra, at 8–9,
and nn. 3–4, it is an element of the cause of action under the statute,
and so is subject to the rule that “the absence of a valid (as opposed to
arguable) cause of action does not implicate subject-matter jurisdic­
tion.” Steel Co., 523 U.S., at 89. But like any other element of a cause
of action, it must be adequately alleged at the pleading stage in order
for the case to proceed. See Ashcroft v. Iqbal, 556 U.S. 662, 678–679
(2009). If a plaintiff ’s allegations, taken as true, are insufficient to
establish proximate causation, then the complaint must be dismissed; if
they are sufficient, then the plaintiff is entitled to an opportunity to
prove them.
16 LEXMARK INT’L, INC. v. STATIC CONTROL
COMPONENTS, INC.
Opinion of the Court
tors. In the alternative, it asks that we adopt a categorical
test permitting only direct competitors to sue for false
advertising. And although neither party urges adoption of
the “reasonable interest” test applied below, several amici
do so. While none of those tests is wholly without merit,
we decline to adopt any of them. We hold instead that a
direct application of the zone-of-interests test and the
proximate-cause requirement supplies the relevant limits
on who may sue.
The balancing test Lexmark advocates was first articu­
lated by the Third Circuit in Conte Bros. and later adopted
by several other Circuits. Conte Bros. identified five rele­
vant considerations:
“(1) The nature of the plaintiff ’s alleged injury: Is
the injury of a type that Congress sought to redress in
providing a private remedy for violations of the [Lan­
ham Act]?
“(2) The directness or indirectness of the asserted
injury.
“(3) The proximity or remoteness of the party to the
alleged injurious conduct.
“(4) The speculativeness of the damages claim.
“(5) The risk of duplicative damages or complexity
in apportioning damages.” 165 F.3d, at 233 (citations
and internal quotation marks omitted).
This approach reflects a commendable effort to give con­
tent to an otherwise nebulous inquiry, but we think it
slightly off the mark. The first factor can be read as re­
quiring that the plaintiff ’s injury be within the relevant
zone of interests and the second and third as requiring
(somewhat redundantly) proximate causation; but it is not
correct to treat those requirements, which must be met in
every case, as mere factors to be weighed in a balance.
And the fourth and fifth factors are themselves problem­
atic. “[T]he difficulty that can arise when a court attempts
Cite as: 572 U. S. ____ (2014) 17
Opinion of the Court
to ascertain the damages caused by some remote action” is
a “motivating principle” behind the proximate-cause re­
quirement, Anza, supra, at 457–458; but potential diffi­
culty in ascertaining and apportioning damages is not, as
Conte Bros. might suggest, an independent basis for deny­
ing standing where it is adequately alleged that a defend­
ant’s conduct has proximately injured an interest of the
plaintiff ’s that the statute protects. Even when a plaintiff
cannot quantify its losses with sufficient certainty to re-
cover damages, it may still be entitled to injunctive re-
lief under §1116(a) (assuming it can prove a likelihood of
future injury) or disgorgement of the defendant’s ill-gotten
profits under §1117(a). See TrafficSchool.com, Inc. v.
Edriver Inc., 653 F.3d 820, 831 (CA9 2011); Johnson &
Johnson v. Carter-Wallace, Inc., 631 F.2d 186, 190 (CA2
1980). Finally, experience has shown that the Conte Bros.
approach, like other open-ended balancing tests, can yield
unpredictable and at times arbitrary results. See, e.g.,
Tushnet, Running the Gamut from A to B: Federal
Trademark and False Advertising Law, 159 U. Pa. L. Rev.
1305, 1376–1379 (2011).
In contrast to the multifactor balancing approach, the
direct-competitor test provides a bright-line rule; but it
does so at the expense of distorting the statutory lan­
guage. To be sure, a plaintiff who does not compete with
the defendant will often have a harder time establishing
proximate causation. But a rule categorically prohibiting
all suits by noncompetitors would read too much into the
Act’s reference to “unfair competition” in §1127. By the
time the Lanham Act was adopted, the common-law tort of
unfair competition was understood not to be limited to
actions between competitors. One leading authority in the
field wrote that “there need be no competition in unfair
competition,” just as “[t]here is no soda in soda water, no
grapes in grape fruit, no bread in bread fruit, and a clothes
horse is not a horse but is good enough to hang things
18 LEXMARK INT’L, INC. v. STATIC CONTROL
COMPONENTS, INC.
Opinion of the Court
on.” Rogers, 39 Yale L. J., at 299; accord, Vogue Co. v.
Thompson-Hudson Co., 300 F. 509, 512 (CA6 1924); 1 H.
Nims, The Law of Unfair Competition and Trade-Marks,
p. vi (4th ed. 1947); 2 id., at 1194–1205. It is thus a mis­
take to infer that because the Lanham Act treats false
advertising as a form of unfair competition, it can protect
only the false-advertiser’s direct competitors.
Finally, there is the “reasonable interest” test applied by
the Sixth Circuit in this case. As typically formulated,
it requires a commercial plaintiff to “demonstrate ‘(1) a
reasonable interest to be protected against the alleged
false advertising and (2) a reasonable basis for believing
that the interest is likely to be damaged by the alleged
false advertising.’ ” 697 F.3d, at 410 (quoting Famous
Horse, 624 F.3d, at 113). A purely practical objection to
the test is that it lends itself to widely divergent appli-
cation. Indeed, its vague language can be understood as
requiring only the bare minimum of Article III standing.
The popularity of the multifactor balancing test reflects its
appeal to courts tired of “grappl[ing] with defining” the
“ ‘reasonable interest’ ” test “with greater precision.” Conte
Bros., 165 F.3d, at 231. The theoretical difficulties with
the test are even more substantial: The relevant question
is not whether the plaintiff ’s interest is “reasonable,” but
whether it is one the Lanham Act protects; and not
whether there is a “reasonable basis” for the plaintiff ’s
claim of harm, but whether the harm alleged is proximately
tied to the defendant’s conduct. In short, we think the
principles set forth above will provide clearer and more
accurate guidance than the “reasonable interest” test.
IV. Application
Applying those principles to Static Control’s false­
advertising claim, we conclude that Static Control comes
within the class of plaintiffs whom Congress authorized to
sue under §1125(a).
Cite as: 572 U. S. ____ (2014) 19
Opinion of the Court
To begin, Static Control’s alleged injuries—lost sales
and damage to its business reputation—are injuries to
precisely the sorts of commercial interests the Act pro­
tects. Static Control is suing not as a deceived consumer,
but as a “perso[n] engaged in” “commerce within the con­
trol of Congress” whose position in the marketplace has
been damaged by Lexmark’s false advertising. §1127.
There is no doubt that it is within the zone of interests
protected by the statute.
Static Control also sufficiently alleged that its injuries
were proximately caused by Lexmark’s misrepresenta­
tions. This case, it is true, does not present the “classic
Lanham Act false-advertising claim” in which “ ‘one com­
petito[r] directly injur[es] another by making false state­
ments about his own goods [or the competitor’s goods] and
thus inducing customers to switch.’ ” Harold H. Huggins
Realty, 634 F.3d, at 799, n. 24. But although diversion of
sales to a direct competitor may be the paradigmatic direct
injury from false advertising, it is not the only type of
injury cognizable under §1125(a). For at least two rea­
sons, Static Control’s allegations satisfy the requirement
of proximate causation.
First, Static Control alleged that Lexmark disparaged
its business and products by asserting that Static Con­
trol’s business was illegal. See 697 F.3d, at 411, n. 10
(noting allegation that Lexmark “directly target[ed] Static
Control” when it “falsely advertised that Static Control
infringed Lexmark’s patents”). When a defendant harms
a plaintiff ’s reputation by casting aspersions on its busi­
ness, the plaintiff ’s injury flows directly from the audi­
ence’s belief in the disparaging statements. Courts have
therefore afforded relief under §1125(a) not only where a
defendant denigrates a plaintiff ’s product by name, see,
e.g., McNeilab, Inc. v. American Home Prods. Corp., 848
F.2d 34, 38 (CA2 1988), but also where the defendant
damages the product’s reputation by, for example, equat­
20 LEXMARK INT’L, INC. v. STATIC CONTROL
COMPONENTS, INC.
Opinion of the Court
ing it with an inferior product, see, e.g., Camel Hair and
Cashmere Inst. of Am., Inc. v. Associated Dry Goods Corp.,
799 F.2d 6, 7–8, 11–12 (CA1 1986); PPX Enterprises, Inc.
v. Audiofidelity, Inc., 746 F.2d 120, 122, 125 (CA2 1984).
Traditional proximate-causation principles support those
results: As we have observed, a defendant who “ ‘seeks to
promote his own interests by telling a known falsehood to
or about the plaintiff or his product’ ” may be said to have
proximately caused the plaintiff ’s harm. Bridge, 553
U.S., at 657 (quoting Restatement (Second) of Torts §870,
Comment h (1977); emphasis added in Bridge).
The District Court emphasized that Lexmark and Static
Control are not direct competitors. But when a party
claims reputational injury from disparagement, competi­
tion is not required for proximate cause; and that is true
even if the defendant’s aim was to harm its immediate
competitors, and the plaintiff merely suffered collateral
damage. Consider two rival carmakers who purchase
airbags for their cars from different third-party manufac­
turers. If the first carmaker, hoping to divert sales from
the second, falsely proclaims that the airbags used by the
second carmaker are defective, both the second carmaker
and its airbag supplier may suffer reputational injury, and
their sales may decline as a result. In those circumstances,
there is no reason to regard either party’s injury as de-
rivative of the other’s; each is directly and independently
harmed by the attack on its merchandise.
In addition, Static Control adequately alleged proximate
causation by alleging that it designed, manufactured, and
sold microchips that both (1) were necessary for, and
(2) had no other use than, refurbishing Lexmark toner
cartridges. See App. 13, ¶31; id., at 37, ¶54.7 It follows
——————
7 We understand this to be the thrust of both sides’ allegations con­
cerning Static Control’s design and sale of specialized microchips for
the specific purpose of enabling the remanufacture of Lexmark’s
Cite as: 572 U. S. ____ (2014) 21
Opinion of the Court
from that allegation that any false advertising that re­
duced the remanufacturers’ business necessarily injured
Static Control as well. Taking Static Control’s assertions
at face value, there is likely to be something very close to a
1:1 relationship between the number of refurbished Pre­
bate cartridges sold (or not sold) by the remanufacturers
and the number of Prebate microchips sold (or not sold) by
Static Control. “Where the injury alleged is so integral an
aspect of the [violation] alleged, there can be no question”
that proximate cause is satisfied. Blue Shield of Va. v.
McCready, 457 U.S. 465, 479 (1982).
To be sure, on this view, the causal chain linking Static
Control’s injuries to consumer confusion is not direct, but
includes the intervening link of injury to the remanufac­
turers. Static Control’s allegations therefore might not
support standing under a strict application of the “ ‘ “gen­
eral tendency” ’ ” not to stretch proximate causation “ ‘ “be­
yond the first step.” ’ ” Holmes, 503 U.S., at 271. But the
reason for that general tendency is that there ordinarily is
a “discontinuity” between the injury to the direct victim
and the injury to the indirect victim, so that the latter
is not surely attributable to the former (and thus also to
the defendant’s conduct), but might instead have resulted
from “any number of [other] reasons.” Anza, 547 U.S., at
458–459. That is not the case here. Static Control’s alle­
gations suggest that if the remanufacturers sold 10,000
fewer refurbished cartridges because of Lexmark’s false
advertising, then it would follow more or less automatically
that Static Control sold 10,000 fewer microchips for the
same reason, without the need for any “speculative . . .
proceedings” or “intricate, uncertain inquiries.” Id., at
459–460. In these relatively unique circumstances, the
remanufacturers are not “more immediate victim[s]” than
Static Control. Bridge, supra, at 658.
——————
Prebate cartridges.
22 LEXMARK INT’L, INC. v. STATIC CONTROL
COMPONENTS, INC.
Opinion of the Court
Although we conclude that Static Control has alleged an
adequate basis to proceed under §1125(a), it cannot obtain
relief without evidence of injury proximately caused by
Lexmark’s alleged misrepresentations. We hold only that
Static Control is entitled to a chance to prove its case.
* * *
To invoke the Lanham Act’s cause of action for false
advertising, a plaintiff must plead (and ultimately prove)
an injury to a commercial interest in sales or business
reputation proximately caused by the defendant’s mis-
representations. Static Control has adequately pleaded
both elements. The judgment of the Court of Appeals is
affirmed.
It is so ordered.