paying a referral fee is a consumer injury, not a competitor injury, for Lanham Act standing purposes

Lewis v. Acuity Real Estate Services, LLC, 63 F.4th 1114 (6th
Cir. 2023)

Acuity operates a website that connects people looking to
buy or sell homes with a local real-estate agent in their area. Acuity offers
its services for free to home buyers and sellers but requires realtors to pay a
fee for referrals. Lewis’s employer required him to pay Acuity’s fee out of his
commissions from home sales. Lewis sued under the Lanham Act, alleging false
statements to home buyers and sellers.

Lewis lacked a “commercial injury” because he was suing as a
customer—he alleged that the “product” he bought was defective and sought to
recover the referral fee. (The facts do sound frustrating: Lewis paid a
referral fee to a different site, which he considered the one that brought him
the client, but because Acuity was also involved, it successfully sued him and
also collected.)

The court held that “no reasonable person would describe
Lewis’s payment of this referral fee as a commercial injury to his ‘reputation
or sales.’” Rejecting Lewis’s specific factual situation as relevant, the court
reasoned, “whenever this injury arose (that is, whenever Acuity requested its
fee), Lewis will have gained, not lost, a sale.” (This arguably makes sense
because the falsity alleged is misrepresentations that lead consumers to use
Acuity’s site rather than continuing to search for agents on their own.) Lewis
didn’t allege that his payment of this referral fee injured his status in the
realtor market in any way. Nor did he allege any reputational harm from, say,
Acuity’s online description of the realtors in its network (including Lewis) as
“top talent.”

The court commented that other realtors could have standing:

To be sure, it is not difficult to
imagine a potential commercial injury to realtors arising from Acuity’s
allegedly false advertising. Instead of identifying the referral fee as the
injury, suppose that a different group of realtors refused to join Acuity’s
network. Suppose further that these realtors alleged that they lost business
because Acuity’s purportedly false advertising caused home buyers and sellers
to use Acuity’s referral services and the competing realtors in Acuity’s
network. Even though this different group of realtors would not directly
compete with Acuity (as compared to its network of realtors), this purported
lost business may well qualify as “an injury to a commercial interest in …
sales” that falls within the Act’s zone of interests.

But that wasn’t the case presented.

from Blogger

This entry was posted in Uncategorized and tagged , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s