Court Opinion

ID: 28178
Source: CourtListenerOpinion
Date Created: 2010-04-25 09:20:19+00
Date Added: 2024-06-11T14:56:26.070064
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS

            FOR THE FIFTH CIRCUIT
                       _______________

                         m 01-20610
                         m 01-21255
                       _______________

                    KENNETH FORD, DR.,

                                           Plaintiff-Appellant,

                           VERSUS

 NYLCARE HEALTH PLANS OF THE GULF COAST, INC., ET AL.,

                                           Defendants,

              AETNA U.S. HEALTHCARE, INC.,
                    A TEXAS CORPORATION;
     THE METRAHEALTH CARE PLAN OF TEXAS, INC.;
       THE METRAHEALTH INSURANCE COMPANY;
    UNITED HEALTHCARE INSURANCE COMPANY, INC.;
            AETNA U.S. HEALTHCARE, INC.,
                A PENNSYLVANIA CORPORATION,

                                           Defendants-Appellees.

                 _________________________

          Appeals from the United States District Court
               for the Southern District of Texas
                _________________________

                        August 1, 2002
Before SMITH, BENAVIDES, and                                                 II.
  PARKER, Circuit Judges.                                                    A.
                                                           The relevant portion of the Lanham Act
JERRY E. SMITH, Circuit Judge:                          provides for a cause of action as follows:

                       I.                                  (a) Civil action
   Kenneth Ford is an orthopedic surgeon who
has contracted with various health mainte-                 (1) Any person who, on or in connection
nance organizations (“HMO’s”) as a specialist.             with any goods or services, or any
In May 1996, he sued the defendant HMO’s,                  container for goods, uses in commerce
claiming multiple causes of action stemming                any word, term, name, symbol, or
from their allegedly deceptive advertising. All            device, or any combination thereof, or
of Ford’s claims were dismissed over a period              any false designation of origin, false or
of several years.                                          misleading description of fact, or false
                                                           or misleading representation of fact,
   Ford now appeals two of the district court’s            whichSS
rulings: its 1999 decision to deny class certifi-
cation to a proposed Lanham Act plaintiff                  (A) is likely to cause confusion, or to
class of all certified physicians who have con-            cause mistake, or to deceive as to the af-
tracted with the defendant HMO’s, and its                  filiation, connection, or association of
2001 summary judgment dismissing Ford’s in-                such person with another person, or as
dividual Lanham Act false advertising claim on             to the origin, sponsorship, or approval
the ground that he lacks prudential standing.              of his or her goods, services, or
                                                           commercial activities by another person,
    Ford contends that the HMO’s have used                 or
false advertising that claims that their manage-
ment techniques improve health care quality                (B) in commercial advertising or
and that they allow patients and doctors to                promotion, misrepresents the nature,
make their own treatment decisions. Ford                   characteristics, qualities, or geographic
argues that the defendants’ cost-control mea-              origin of his or her or another person’s
sures undercut quality and “ration” medical                goods, services, or commercial
careSSsometimes against the will of doctors                activities,
and patients. Ford contends that the defen-
dants’ cost-control policies reduce the incomes            shall be liable in a civil action by any
of doctors, including his own. He also claims              person who believes that he or she is or
that, by attracting new customers to the                   is likely to be damaged by such act.
HMO’s’ health plans, the allegedly deceptive
advertising further reduces doctors’ incomes            15 U.S.C. § 1125(a) (1994). The district
because it increases the HMO’s’ market power            court held that Ford lacks prudential Lanham
over the price of medical services. We affirm           Act standing under this section. See Procter &
the dismissal of Ford’s claims for lack of              Gamble Co. v. Amway Corp., 242 F.3d 539,
Article III standing.                                   560-62 (5th Cir.) (outlining test for de-
                                                        termining prudential Lanham Act standing),

                                                    2
cert. denied, 122 S. Ct. 329 (2001). Although                   Standing “is an essential and unchanging
Article III constitutional standing was not                  part of the case-or-controversy requirement of
raised by the parties or considered by the                   Article III.” Lujan v. Defenders of Wildlife,
district court, we mustSSwhere neces-                        504 U.S. 555, 560 (1992).
sarySSraise it sua sponte. SEC v. Forex Asset
Mgmt., LLC, 242 F.3d 325, 328 (5th Cir.                         [The irreducible constitutional minimum
2001).1                                                         of standing contains three elements.
                                                                First, the plaintiff must have suffered an
                                                                ‘injury in fact’SSan invasion of a legally
   1                                                            protected interest which is (a) concrete
      In his special concurrence, Judge Benavides
contends that this case should be decided on the                and particularized . . . and (b) actual or
basis of Lanham Act prudential standing rather                  imminent not conjectural or hypothetical
than Article III constitutional standing, because the           . . . Second, there must be a causal con-
parties did not have an opportunity to brief the                nection between the injury and the
latter. This issue ignores the fundamental point                conduct complained of . . . Third, it
that wherever possible, Article III standing must be            must be likely, as opposed to merely
addressed before all other issues “because it
determines the court’s fundamental power even to
                                                                1
hear the suit.” Rivera, 283 F.3d at 319. In the ab-               (...continued)
sence of Ar ticle III standing, we have no right to          causation that is central to our holding on Article
opine on issues of prudential standing.                      III standing was extensively contested as part of
                                                             the ongoing dispute over Lanham Act prudential
    The Third Circuit has explicitly recognized that         standing.
Lanham Act prudential standing cannot be                         In any inquiry into Lanham Act prudential
addressed so long as Article III standing remains in         standing, the court must weigh “(1) the nature of
doubt, because “[c]onstitutional standing is a               the plaintiff’s alleged injury: Is the injury of a type
threshold issue that we should address before                that Congress sought to redress in providing a
examining issues of prudential standing.” Joint              private remedy for violations of the [Lanham
Stock Soc’y v. UDV N. Am., Inc., 266 F.3d 164,               Act]?; (2) the directness or indirectness of the
175 (3d Cir. 2001). Although the special                     asserted injury; (3) the proximity or remoteness of
concurrence attempts to distinguish Joint Stock on           the party to the alleged injurious conduct; (4) the
its facts, the Third Circuit did not rest its hold-          speculativeness of the damages claim; and (5) the
ingSSthat Article III standing should be addressed           risk of duplicative damages or complexity in
firstSSon the specifics of the case before it, but           apportioning damages.” Procter & Gamble, 242
instead adopted this principle as a broad general            F.3d at 562. Causation is undeniably relevant to at
rule. We see no reason to create a circuit split on          least the second, third, and fourth prongs of this
this issue.                                                  test, and defendants have consistently argued that
                                                             Ford lacked prudential standing in part because he
    Even if we did have the authority to forego              failed to provide adequate evidence of causation.
consideration of Article III standing, there would               Despite this repeated challenge, Ford has not
be no need to exercise it. As the special                    provided evidence demonstrating that he has suf-
concurrence recognizes, “to the extent that identical        fered even a small loss as a result of defendants’
issues have already been raised in the litigation, the       advertising. He therefore has failed to meet his
threat of procedural prejudice is greatly                    burden to “set forth by affidavit or other evidence
diminished.” In this litigation, the issue of                specific facts” validating his right to standing.
                                      (continued...)         Lujan, 504 U.S. at 561 (citations omitted).

                                                         3
   speculative, that the injury will be                                               B.
   redressed by a favorable decision.                            Ford claims that his injury consists of a re-
                                                              duction in his income from his medical practice
Id. at 560-61 (quotations omitted).                           caused by the defendants’ restrictive cost-
                                                              containment policies, which allegedly have the
    “The party invoking federal jurisdic-                     effect of reducing payments to contract spe-
tion”SSFordSSbears the burden of proof in es-                 cialists. He contends that the HMO’s have
tablishing all three elements. Id. at 561.                    been able to lower their payments to contract
“Failure to establish any one [of them]                       physicians as a result of increased market pow-
deprives the federal courts of jurisdiction to                er gained by attracting patients through
hear the suit.” Rivera v. Wyeth-Ayerst Labs.,                 deceptive advertising. This argument fails to
283 F.3d 315, 319 (5th Cir. 2002). At the                     satisfy the causation prong of standing.
summary judgment stage, “the plaintiff can no
longer rest on . . . mere allegations, but must                  To meet the causation requirement, Ford
set forth by affidavit or other evidence specific             would have to present evidence affirmatively
facts” validating his right to standing. Lujan,               proving that the reduction in his income was a
504 U.S. at 561 (citations omitted). The ques-                consequence of the HMO’s’ restrictive policies
tion of Article III standing must be decided                  and that those policies in turn were established
prior to the prudential standing and class cer-               or at least made more onerous as a result of
tification issues raised in this appeal, “because             increased market power created by the
it determines the court's fundamental power                   acquisition of new customers through the de-
even to hear the suit.”2 Rivera, 283 F.3d at                  fendants’ allegedly deceptive ads.4 Nothing in
319.3 Ford cannot prove the causation                         the record establishes the validity of either of
necessary to establish Article III standing.                  the two links in this causal chain, and Ford
                                                              must provide evidence of both if he is to es-
                                                              tablish the causation necessary for Article III
   2
     As we noted in Rivera, “there is a limited ex-           standing. Otherwise, he cannot show that his
ception for suits in which the class certification is-        injury is “fairly traceable to the challenged ac-
sues are “‘logically antecedent to the existence of           tion of the defendant.” Lujan, 555 U.S. at 560
any Article III issues.’” Rivera, 283 F.3d at 319             (quotations and ellipses omitted).
n.6 (quoting Amchem Prods., Inc. v. Windsor, 521
U.S. 591, 612 (1997)); see also Ortiz v.                         There is no evidence in the record to show
Fibreboard Corp., 527 U.S. 815, 831 (1999)                    that Ford’s income has in fact declined any
(same). This exception does not apply here,                   more than would be expected as a result of
however, for the same reason it was inapplicable in           events completely unrelated to the HMO’s’
Rivera: “In the instant case, in contrast to Ortiz            activities. When asked by opposing counsel
and Amchem, the standing question would exist
whether [the plaintiff] filed h[is] claim alone or as
part of a class; class certification did not create the
                                                                 4
jurisdictional issue.” Rivera, 283 F.3d at 319 n.6.                 See Joint Stock Soc’y, 266 F.3d at 178
                                                              (holding that Article III standing for a Lanham Act
   3
      Cf. Joint Stock Soc’y, 266 F.3d at 175                  false advertising claim is lacking where the
(holding that Article III “constitutional standing”           plaintiff’s injuries cannot be traced to the
must be addressed before considering Lanham Act               defendants’ challenged advertisements “but are
“prudential standing”).                                       rather the result of an independent cause”).

                                                          4
whether he “could identify a single patient you
lost as a result of the defendants’ ads,” Ford
admitted that he could not. There is also no
evidence demonstrating that Ford ever re-
ceived a lower payment for his services than he
would have in the absence of the
advertisements.

   In its ruling denying Ford’s petition for
class certification, the district court noted that,
during the 1992-96 period, Ford’s income did
indeed decline, but the income of all of his
partners went up. Ford v. NYLCare Health
Plans, Inc., 190 F.R.D. 422, 426 (S.D. Tex.
1999). The district court also pointed out that
some or all of the decrease in Ford’s income
might have been a result of the fact that “he is
not employed full time as a physician . . . and
spends a significant period of time filming a
fishing show for a sports network.” Id. Ford
bears the burden of proving otherwise, and he
has not met it.5

   AFFIRMED.

   5
     See Johnson v. Bd. of Regents of the Univ. of
Ga., 263 F.3d 1234, 1268 (11th Cir. 2001)
(holding that “a plaintiff cannot serve as a class
representative if she lacks standing to advance the
class’s claim”).

                                                      5
FORTUNATO P. BENAVIDES, Circuit Judge, Specially Concurring:

      Although I would reach the same result as the majority, I write separately because I would base

my analysis not on Article III standing, but on prudential standing under the Lanham Act. As the

majority notes, Article III has never been raised as an issue in this case. It was never briefed by the

parties, questioned by the district court , or even mentioned at oral argument. The parties did not

have the benefit of a hearing to present evidence on the issue. Nevertheless, despite the complete

absence of any suggestion that Article III standing might be deficient, the majority requires Dr. Ford

to have adduced evidence of causation between the alleged false advertising and his asserted

economic injury. Concluding that he has not met this burden, it holds that Article III standing is

lacking.

      Of course, the jurisdictional issue of standing may be raised sua sponte despite the parties’ failure

to raise it. Henderson v. Stalder, 287 F.3d 374, 379 n.5 (5th Cir. 2002). The burden of establishing

standing, which rests on the party invoking federal court jurisdiction, varies depending upon the stage

at which standing becomes an issue. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). At

the pleading stage, we look only to the sufficiency of the allegations. Id. “In response to a summary

judgment motion, however, t he plaintiff can no longer rest on such ‘mere allegations,’” but must

adduce evidence in support of the elements of standing. Id. (quoting Fed. R. Civ. P. 56(e)). At the

final stage of the litigation, standing must be supported adequately by the evidence offered at trial.

Id.

      Citing Lujan for support, the majority assumes that the summary judgment standard should govern

even when the issue is raised sua sponte by an appellate court without notice to the parties. Lujan,

however, does not go so far. It holds only that the summary judgment standard is appropriate in

                                                      6
reviewing a party’s “response to a summary judgment motion.” Id. (emphasis added). This

distinction is significant because it implicates concerns of notice and fairness. If the defendant

challenges standing in a motion for summary judgment, then the plaintiff is able to direct the court

to the evidence that supports federal jurisdiction. Similarly, if the court provides an opportunity for

briefing after the issue is raised sua sponte, there is no risk of unfairness to the plaintiff. By contrast,

if the appellate court raises the issue sua sponte without notice to the parties, the plaintiff is deprived

of a meaningful opportunity to address the court’s concerns by identifying record evidence to satisfy

the standing requirements. Cf. St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425, 435 (5th Cir.

2000) (requiring the district court to provide party with ten days notice and opportunity to respond

before summary judgment is entered sua sponte).

   In situations where a party has not been afforded an opportunity to respond to a court’s sua sponte

concerns about standing, it would be unfair to broaden review beyond the sufficiency of the pleadings.

For example, in Church v. City of Huntsville, 30 F.3d 1332, 1336 (11th Cir. 1994), the Eleventh

Circuit confronted the issue of what standard to apply when the litigation had progressed beyond the

stage of a motion to dismiss, but without any challenge to standing in the district court. In that case,

the plaintiffs had obtained a preliminary injunction, but neither the defendants nor the district court

ever questioned the existence of standing. The Eleventh Circuit recognized that although it was

proper for the issue to be raised for the first time on appeal, “as a matter of fairness, the [defendant’s]

failure to question the plaintiffs’ standing in the district court does affect the standard to which we

will hold plaintiffs at this stage of the proceedings.” Id. A plaintiff should be expected, without

prodding from the court or the opposing party, to file a complaint that sufficiently alleges standing

and to prove such facts at trial. Still, the Eleventh Circuit understood that “[i]t might well be unfair,

                                                     7
however, to impose a standing burden beyond the sufficiency of the allegations of the pleadings on

a plaintiff seeking a preliminary injunction, unless the defendant puts the plaintiff on notice that

standing is contested.” Id. Accordingly, the court determined that the standing issue should be

judged based on the allegations in the complaint. Id. I see no reason why this same concern about

notice and fairness should not affect the standard of review at the summary judgment stage.

   Certainly, in some cases it will make no difference which standard is applied to a sua sponte

challenge to standing. In such cases, the potential for prejudice is de minimis because the party’s

response will be futile. For example, a review of the record by the appellate court might indicate that

there is an independent factor that precludes the plaintiff from ever demonstrating that his injury flows

from the defendant’s wrongful conduct. Such a factor was present in Joint Stock Soc’y v. UDV N.

Am., Inc., 266 F.3d 164 (3d Cir. 2001), which is cited by the majority. In Joint Stock, the Third

Circuit affirmed a district court’s determination that constitutional standing was lacking in a Lanham

Act false advertising case brought by producers of Russian vodka against the American makers of

the “Smirnoff” brand of vodka. Id. at 168. The Russian producers alleged inter alia that the

Americans were misrepresenting the origin and historical pedigree of their Smirnoff vodka, which in

fact was made in the United States and not endorsed by the original Smirnov family. See id. at 177-

78. Holding that there was no evidence of a causal connection between the asserted injury and the

allegedly false ads, the court pointed to the fact that the plaintiffs did not have superior trademark

rights to the Smirnoff brand, without which they could not have marketed their vodka in the United

States under the Smirnoff name. See id. at 178. In light of this “independent cause,” the Russian

producers would be unable to use the Smirnoff name in the United States regardless of whether the

American makers were engaging in false advertising. See id. In cases like Joint Stock, where it will

                                                   8
be logically impossible to establish standing, there is no need t o provide the party with an extra

opportunity to identify evidence in support of a fatally flawed theory.

   In other cases, prejudice will be minimized by the fact that the party has notice of the need to

adduce evidence in support of Article III even though neither the court nor the defendant makes a

formal motion. For example, in Bischoff v. Osceola County, Fla., 222 F.3d 874, 882 n.8 (11th Cir.

2000), the Eleventh Circuit held that it was proper for the district court to apply a summary judgment

standard on a sua sponte challenge to standing because the plaintiffs were on notice that standing was

an issue, as they raised it themselves in briefs. Similarly, to the extent that identical issues have

already been raised in the litigation, the threat of procedural prejudice is greatly diminished. See

Bridgeway Corp. v. Citibank, 201 F.3d 134, 140 (2d Cir. 2000) (recognizing reduced threat of

procedural prejudice where court’s sua sponte determination is based on issues identical to the raised

by the moving party). In the present case, although defendants had already attacked Dr. Ford’s

prudential standing under the Lanham Act, this issue is not identical to constitutional standing under

Article III.

   Applying these principles to the present case, before reaching sua sponte the conclusion that Dr.

Ford has not met his summary judgment burden, I would ask whether a response would be futile.

Notwithstanding the majority’s well-written and thoughtful analysis, I am unconvinced that affording

Dr. Ford an opportunity to respond to our concerns about standing would be an exercise in futility.

There is no dispute that Dr. Ford could survive a challenge to standing based solely on the sufficiency

of his pleadings. His complaint alleges that the defendants have increased their customer base

through deceptively false advertising, have leveraged that increased customer base to obtain lower

fee arrangements for Dr. Ford’s contract services, and have therefore caused him economic injury.

                                                  9
Clearly, these allegations satisfy the requirements of Article III. The issue, as the majority notes, is

whether there is evidence to support these links in the causal chain. The majority cites several failings

in the record evidence, but none of them are fatal to Dr. Ford’s theory. It notes that in a deposition,

Dr. Ford was unable to identify a single patient lost as a result of the HMOs’ ads. Although such

evidence would undoubtedly be helpful to his case, it is by no means a necessary element. In Lanham

Act § 43(a) cases, it is often difficult, if not impossible, to point to specific evidence of lost sales. See

Coca-Cola Co. v. Tropicana Products, Inc., 690 F.2d 312, 316 (2d Cir. 1982) (“It is virtually

impossible to prove that so much of one’s sales will be lost or that one’s goodwill will be damaged

as a direct result of a competitor’s advertisement. Too many market variables enter into the

advertising-sales equation.”); Grant Airmass Corp. v. Gaymar Indus., Inc., 645 F. Supp. 1507, 1514

(S.D.N.Y. 1986) (rejecting requirement that plaintiff must identify “a lost customer actually misled

by the advertising literature”). This difficulty in identifying specific lost sales is further exacerbated

by the immense complexity of the market at issue in this case. Decisions about plans and providers

are influenced by a myriad of factors, and the ads are targeted at both the users (employees) and the

purchasers (employers) of the managed care plans. It is not unsurprising, therefore, that Dr. Ford

could not name a single lost patient, and his failure to do so certainly does not mean that standing is

lacking.

   Similarly, the fact that Dr. Ford now spends part of his time hosting a fishing show on a sports

television network does not preclude standing. As the majority notes, this observation was part of

the district court’s analysis of Dr. Ford’s petition for class certification. Specifically, it found Dr.

Ford’s television work relevant to the typicality issue under Fed. R. Civ. P. 23(a)(3), as Dr. Ford’s

economic situation might not be similar to that of the other putative class members. See Ford v.

                                                     10
NYLCare Health Plans, Inc., 190 F.R.D. 422, 426 (S.D. Tex. 1999). Typicality aside, however, the

possibility that Dr. Ford’s income has declined due to an increase in the hours he spends fishing does

not mean that he has not also suffered economic injury as a result of the defendants’ false ads. Such

evidence goes not to the existence, but the quantum of injury. All that is required for Dr. Ford to

have standing is “an identifiable trifle” of an injury. Assoc. of Cmty. Orgs. for Reform Now v. Fowler,

178 F.3d 350, 358 (5th Cir. 1999) (citations omitted). His work on the fishing program therefore is

practically irrelevant to the standing issue.

   In sum, I think it is premature to apply the summary judgment standard to Dr. Ford’s standing

under Article III. He has not been given an opportunity to identify the evidence in support of

standing, and there has been no convincing argument that such an opportunity would be futile.

Accordingly, I would not decide this case on Article III grounds, but would reach the same result by

holding that Dr. Ford lacks prudential standing under the Lanham Act. Regardless of the oft-repeated

maxim that Article III standing is jurisdictional and must be resolved prior to any analysis of the

remaining issues in the case, “it is entirely appropriate to deny standing on prudential grounds if that

course is easier, or more clearly right, than to rule on constitutional grounds first.” 13A Charles Alan

Wright, et al., Federal Practice and Procedure, § 3531.15 (2d. ed. Supp. 2002); cf. Steel Co. v.

Citizens for a Better Env’t, 523 U.S. 83, 92 (1998) (disapproving of “hypothetical jurisdiction” cases

in which standing is assumed in order to address clear merits issue, but distinguishing “cases in which

a statutory standing question was decided before a question of constitutional standing”). In this case,

prudential standing was briefed by the parties and ruled on by the district court, so nothing prevents

us from holding Dr. Ford to his burden of identifying evidence demonstrating a genuine issue of

material fact on the issue.

                                                  11
   I would conclude that Dr. Ford has failed to satisfy his summary judgment burden on the issue of

prudential standing under the Lanham Act. In determining whether a plaintiff has prudential Lanham

Act standing, we have recently adopted the test articulated by the Third Circuit in Conte Bros. Auto.,

Inc. v. Quaker State-Slick 50, Inc., 165 F.3d 221, 233-34 (3d Cir. 1998). See Procter & Gamble Co.

v. Amway Corp., 242 F.3d 539, 562-63 (5th Cir 2001) (“P & G”). Under this test, five factors are

relevant to the prudential standing analysis: “(1) the nature of the plaintiff’s alleged injury . . . (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; and (5) the risk of duplicative

damages or complexity in apportioning damages.” Id. at 563. Although technically distinct, these five

factors can be distilled into an essential inquiry, i.e., whether, in light of the competitive relationship

between the parties, there is a sufficiently direct link between the asserted injury and the alleged false

advertising. Cf. id. at 562 n.51 (citing Restatement (Third) of Unfair Competition § 3 cmt. f (1995)).

   As the primary focus of the Lanham Act is on commercial harms that result from anti-competitive

behavior, the first factor looks to the nature of the plaintiff’s alleged injury. See id. at 563 (quoting

Conte Bros.,165 F.3d at 234). Dr. Ford’s asserted injury, while certainly a commercial harm, is

competitive only in the most attenuated sense. He describes his injury as the lost income resulting

from lower contract fees paid by HMOs. He attributes the HMOs’ ability to demand such reductions

to the increased bargaining power provided by a wider customer base, the fruits of the false

advertising. Dr. Ford’s essential complaint, therefore, is that the false ads are pulling customers away

from plans that compensate him better and into HMOs, which secure reduced fee arrangements. The

main competitive effect of the ads, therefore, is felt adversely by other insurance plans, not by Dr.

Ford. He himself is hurt only because the HMOs then exploit their competitive advantage over other

                                                     12
plans to press physicians to accept lower compensation arrangements. Because this harm is only

tangentially related to competition, it is not the “type that Congress sought to redress” in passing the

Lanham Act. See Conte, 165 F.3d at 234 (citation omitted).

   Turning to the second factor, we have never required a direct competitive relationship between

the plaintiff and the defendant. In fact, the Conte test specifically rejected such a requirement. See

Conte, 165 F.3d at 231-32. Instead, the central issue is whether a plaintiff has “a reasonable interest

to be protected against false advertising.” Id. at 231. Again, the complexity of the relationship

between Dr. Ford and the HMOs cuts against Lanham Act standing. Even though a plaintiff can

suffer a Lanham Act injury through indirect competition, such competition between Dr. Ford and the

HMOs is so tenuous that it borders on the hypothetical. He does not provide health insurance and

the HMOs do not provide direct patient care. In the absence of managed care plans, patients would

come to Dr. Ford though traditional indemnity or fee-for-service insurance coverage. Theoretically,

patients could seek his services without going through an insurance plan, but Dr. Ford has provided

no evidence that such customers represent a significant portion of the market. In the absence of a

group of consumers that would come to him directly but for the HMOs’ deceptive ads, his injury is

too indirect to support Lanham Act standing.

   Applying the third factor, which looks to “the proximity of the party to the alleged injurious

conduct,” we have held that the justification for Lanham Act standing is diminished if there is “an

identifiable class of persons whose self-interest would normally motivate them to vindicate the public

interest” by bringing a Lanham Act claim. P & G, 242 F.3d at 563 (citation omitted). As consumers

do not have standing under the Lanham Act, they should be irrelevant to this analysis. Cf. id. at 563-

64 (noting that consumers do not have standing under the Lanham Act and focusing on rights of

                                                  13
distributors). Moreover, we need not take into account consumers’ ability to sue for fraud.

Otherwise, as consumers would presumably almost always be able to bring an action for fraud, this

factor would never counsel in favor of standing. In the present case, however, Dr. Ford has presented

no evidence that physicians are the only class of persons motivated to bring a Lanham Act claim.

Certainly, we should exclude from the possible alternatives other HMOs, as the ads in question tout

the benefit s of HMOs in general, not some specific companies over others. Nevertheless, in the

broader health insurance market, HMOs compete with other plans, including fee-for-service or

preferred provider organizations (PPOs). Dr. Ford has provided no evidence that to the extent that

the defendants are making false claims about their HMO plans, purveyors of these other plans would

not be motivated to sue under the Lanham Act.

   The fourth factor, the speculative nature of the plaintiff’s damages, is neutral at best for Dr. Ford.

As the district court noted, Dr. Ford dropped his damages claim after class certification was denied,

but reserved it in the event that the district court’s decision was reversed. In his brief on appeal, he

concedes that quantifying any damages would be a complex task. Dr. Ford argues, however, that if

only injunctive relief is at issue, t his factor actually argues in favor of standing. He relies on the

Lanham Act doctrine that a plaintiff’s inability to definitively quantify his damages should not

preclude the granting of injunctive relief, as an injunction against false advertising benefits the public

without causing an undeserved windfall for the plaintiff. See Am. Council of Certified Podiatric

Physicians & Surgeons v. Am. Bd. of Podiatric Surgery, Inc., 185 F.3d 606, 618 (6th Cir. 1999). This

confuses the issue under the test for prudential standing, which “is to determine whether the plaintiff

is ‘a proper party to invoke judicial resolution of the dispute and the exercise of the court’s remedial

powers.’” Conte, 165 F.3d at 225 (emphasis added) (quoting Bender v. Williamsport Area Sch. Dist.,

                                                   14
475 U.S. 534, 546 n.8 (1986)). In other words, our focus in resolving Lanham Act standing issues

is not whether the uncertain calculation of damages precludes injunctive relief at all, but whether this

particular plaintiff should be allowed vindicate the public interest. See Joint Stock, 266 F.3d at 184

(holding that plaintiffs may not circumvent the requirements for prudential standing by relying on

forms of relief that benefit the public at large). Accepting Dr. Ford’s argument would essentially

render this factor meaningless in every case where injunctive relief is sought, as any plaintiff would

be able to cast himself as the “vicarious avenger of the general public’s right to be protected against

potentially false advertisements.” Id. (internal quotations omitted).

   Perhaps the strongest reason for denying prudential standing is the fifth factor’s concern about “the

risk of duplicative damages or the complexity of apportioning damages.” Id. Dr. Ford is but one of

innumerable physicians who have contracted with the HMOs, and who therefore have probably

lowered fees as a result of the HMOs’ bargaining power. If the HMOs’ ads were determined to be

false, all of these physicians would have damages claims. Moreover, as Dr. Ford concedes, the

calculation of these damages would be extremely complex. Finally, doctors are not even the most

direct victims of any allegedly false ads, which harm rival health plans more than contracting

physicians. In light of the complex and duplicative nature of such damages awards, the fifth factor

militates strongly against prudential standing.

   To summarize, Dr. Ford has suffered a commercial harm, but his injury is simply not the

competitive harm that is protected by the Lanham Act. Of the five factors that are relevant to this

analysis, none counsels in favor of prudential standing. Furthermore, there is nothing unfair or

premature about resolving this case on prudential standing grounds and applying the more rigorous

summary judgment standard, as Dr. Ford was fully aware of his burden to adduce evidence in support

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of each element of prudential standing. Because I cannot say that he had a sufficient opportunity to

address the majority’s concerns about constitutional standing, I respectfully concur in the result only.

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