Colligan v. Activities Club of New York Petition for a Writ of Certiorari to the US Court of Appeals for the Second Circuit

    V W - y

«

I n the

(&mxt iif ilrx lutfrfc States
Octobeb Teem, 1971

No..!hrjyi

Jo A nn  Colligan, by her mother and next friend, Josephine 
G. Colligan, and V alebie Shine, by her father and 
next friend, W illiam Shine, on behalf of themselves 
and all those similarly situated,

Petitioners,
vs.

A ctivities Club of New Y ork, Ltd., also known as New 
Y ork W inter Ski Club, a corporation; F red K rasny; 
Mrs. A lbert ; Peninsula Bus Company, I nc., a corpora­
tion; Champion Bus Company, I nc., a corporation; 
and B and C Bus L ine, Inc., a corporation.

PETITION FOR A WRIT OF CERTIORARI TO THE 
UNITED STATES COURT OF APPEALS FOR THE 

SECOND CIRCUIT

Jack Greenberg 
James M. Nabrit III 
E ric S chnapper

10 Columbus Circle, Suite 2030 
New York, New York 10019

Philip G. S chrag

Columbia University 
Law School 

435 W. 116th Street 
New York, New York 10027

Counsel for Petitioners



I N D E X

Opinions Below .................................... ................... . 1

Jurisdiction ............................... ........... ............ ............ . 2

Questions Presented ............................................ ...........  2

Statutory Provision Involved .........................................  3

Statement of the Case ...................................................... 4

Reasons for Granting the Writ .................... ............. 5

Conclusion .........................................      16

Appendix ...........................................................................  la
Opinion of the Court of Appeals ............................ la

Judgment of the Court of Appeals.......................... 17a
Opinion of the District Court .................................  18a

Table op A uthorities

Cases:

American Medical Association v. United States, 317
U.S. 519 (1943) ...............   11

American Stevedores v. Porello, 330 U.S. 446 (1947)..11,12

Barlow v. Collins, 397 U.S. 159 (1970)..........................2,10
Barr v. United States, 324 U.S. 83 (1945)...................... 12
Bibb v. Navajo Freight Lines, 359 U.S. 520 (1959)....... 7

Chicago, etc. R. Co. v. Acme Fast Freight, 336 U.S.
465 (1949)

PAGE

12



11

In re Camden Shipbuilding Co., 227 F. Supp. 751 (D.
Me., 1964) .......................................................................  13

Data Processing Service v. Camp, 397 U.S. 150 (1970)
2,10

PAGE

General Atlas Carbon Co. v. Sheppard, 37 F. Supp. 51 
(W.D. Tex. 1940) ............................................................  13

Hall v. Coburn Corporation of America, 26 NY2d 281 
(1970) .............................................................................  15

International Shoe Co. v. Washington, 326 U.S. 310 
(1945) ................................................................................  6

Masszonia v. Washington, 315 F. Supp. 529 (D.D.C., 
1970) ..........................................     14

Nigro v. United States, 276 U.S. 332 (1928)..................  11

Office of Communication of Church of Christ v. F.C.C.,
359 F.2d 994 (D.C. Cir., 1966) ........................................  9

Price v. Forrest, 173 U.S. 410 (1899) .............................  13

Robinson v. Difford, 92 F. Supp. 145 (E.D. Pa., 1950) 13

Samson Crane Co. v. Union Nat. Sales, 87 F. Supp.
218 (D. Mass., 1949) .....................................................   6

Telephone Users Assn., Inc, v. Public Service Commis­
sion of D.C., 271 F. Supp. 393 (D.D.C., 1967)........... 14

Tenants Council, etc. v. DeFranceaux, 305 F. Supp. 560 
(D.D.C., 1969) 14



Ill

PAGE

United States v. Bowen, 100 U.S. 508 (1879).............. . 11
United States v. Oregon, 366 U.S. 643 (1961)................  11

Vogel v. Tenneco Oil Co., 276 F. Supp. 1008 (D.D.C., 
1967) ................ ........................ - ...................................  14

Woods v. Bauhan, 84 F. Snpp. 243 (D.N.J., 1949)....... 13

Yazoo and Mississippi Valley R. Co. v. Thomas, 132
U.S. 174 (1889) ............. ................................................  13

Young v. Ridley, 309 F. Supp. 1308 (D.D.C., 1970)....... 14

Statutes:

15 U.S.C. §1121 ...............................................................  3, 5
15 U.S.C. §1125 (a) ......................................................passim
15 U.S.C. §1127 ............................................................. 10,13

28 U.S.C. §1254(1) .........................................................  2
28 U.S.C. §1963 ...............................................................  7
46 Stat. 2907 .....................................................................  10

Congressional Hearings:

Joint Hearings Before the Committee on Patents, 68th 
Cong., 2d Sess. (1925) ............................ .....................  10

Hearings Before the House Committee on Patents, 69th 
Cong., 1st Sess. (1926) ................................................  10

Hearings Before the Senate Committee on Patents,
69th Cong., 2d Sess. (1927) ......................................... 10

Hearings Before the Senate Committee on Patents, 
78th Cong., 2d Sess. (1944) .................. ...................... 10



IV

Hearings Before the Subcommittee on Improvements 
in Judicial Machinery of the Senate Judiciary Com­
mittee, 91st Cong., 1st Sess. (1969) ............................ 14

Hearings Before the Consumer Subcommittee of the 
Senate Commerce Committee on S. 2246, 91st Cong.,
2d Sess. (1969) .............................................................. 6, 8

Gongressionall Reports:

House Rep. 944 (1939) 76th Cong., 1st Sess....................  10
Senate Rep. 1562 (1940), 76th Cong., 3d Sess..............  10
Senate Rep. 568 (1941) 77th Cong., 1st Sess..............  10
House Rep. 2283 (1942) 77th Cong., 2d Sess..............  10
House Rep. 603 (1943), 78th Cong., 1st Sess.............. 10
Senate Rep. 1303 (1944) 78th Cong., 2d Sess.............. 10

House Rep. 219 (1945) 79th Cong., 1st Sess..........   10
Senate Rep. 1333 (1946) 79th Cong., 2d Sess.............. 10
Senate Rep. 91-1124 (1970) 91st Cong., 1st Sess............. 9

Periodicals:

Crimes, “Control of Advertising in the United States 
and Germany: Volkswagen Has a Better Idea,” 84 
Harv. L. Rev. 1769 (1971) ........................................... 15

Starrs, “The Consumer Class Action—Part I : Consid­
erations of Equity,” 49 Boston U. L.Rev. 211 (1969) 15

“Developments in the Law Competitive-Torts,” 77 
Harv. L. Rev. 888 (1964) ........................................... 9

Comment, 114 U. Pa. L. Rev. 395 (1966)........................ 8

PAGE



V

PAGE

Miscellaneous:

President Nixon’s Message on the Protection of Inter­
ests of Consumers, 91st Cong. 1st Sess. (1969)...... 14

92 Cong. Rec. 7522 (79th Cong. 2d Sess., 1946)..............  10
Report of the National Advisory Commission on Civil 

Disorders, 274-78 (1968) ..............................................  8

Moore Federal Practice ..................................................  8
Federal Rules of Civil Procedure .................................  14



I n  t h e

drntrt of %  United States
October T erm, 1971 

No.............

Jo A nn  Colligan, by her mother and next friend, Josephine 
G. Colligan, and V alerie Shine, by her father and 
next friend, W illiam Shine , on behalf of themselves 
and all those similarly situated,

Petitioners,
vs.

A ctivities Club of New  Y ork, L td., also known as New 
Y ork W inter Ski Club, a corporation; F red K basny; 
Mrs. A lbert ; Peninsula Bus Company, I nc ., a corpora­
tion; Champion B us Company, I nc., a corporation; 
and B and C Bus L ine, I nc., a corporation.

PETITION FOE A WRIT OF CERTIORARI TO THE 
UNITED STATES COURT OF APPEALS FOR THE 

SECOND CIRCUIT

The petitioners Jo Ann Colligan, by her mother and 
next friend, Josephine G. Colligan, and Valerie Shine, 
by her father and next friend, William Shine, respectfully 
pray that a writ of certiorari issue to review the judgment 
of the United States Court of Appeals for the Second 
Circuit entered in this proceeding on May 6, 1971.

Opinion Below

The opinion of the Court of Appeals, not yet reported, 
appears in the Appendix hereto, p. la. The opinion of the



2

District Court for the Southern District of New York which 
is not reported, appears in the Appendix hereto, p. 18a,

Jurisdiction

The judgment of the Court of Appeals for the Second 
Circuit was entered on May 6, 1971 and appears in the 
Appendix hereto, p. 17a. This Court’s jurisdiction is in­
voked under 28 U.S.C. §1254(1).

Questions Presented

1. Whether section 43(a) of the Lanham Act, 15 U.S.C. 
§1125(a), which explicitly authorizes actions for damages 
and injunctive relief by “any person” damaged by false 
representations regarding goods and services in commerce, 
confers upon consumers injured by such false representa­
tions a right to sue for actual damages and for injunctive 
relief to prevent such false representations.

2. Whether consumers are within the zone which Con­
gress sought to protect when it enacted section 43(a) of 
the Lanham Act, 15 U.S.C. §1125(a), prohibiting false 
representations regarding goods and services in commerce, 
and therefore have standing to seek injunctive relief to 
prevent such forbidden false representations even without 
an express grant of standing, under the principles of Data 
Processing Service v. Camp, 397 U.S. 150 (1970) and Bar- 
low v. Collins, 397 U.S. 159 (1970).



3

Statutory Provisions Involved

United States Code, Title 15, §1125(a), 60 Stat. 441, c.
540 (1946) :

“Any person who shall affix, apply or annex, or use 
in connection with any g*oods or services, or any con­
tainer or containers for goods, a false designation 
of origin, or any false description or representation, 
including words or other symbols tending falsely to 
describe or represent the same, and shall cause such 
goods or services to enter commerce, and any person 
who shall with knowledge of the falsity of such desig­
nation of origin or description or representation cause 
or procure the same to be transported or used in com­
merce or deliver the same to any carrier to be trans­
ported or used shall be liable to a civil action by any 
person doing business in the locality falsely indicated 
as that of origin or in the region in which said locality 
is situated, or by any person who believes that he is 
or is likely to be damaged by use of any such false 
description or representation.”

United States Code, Title 15, §1121, 60 Stat. 440, c. 541
(1946):

The district and territorial courts of the United 
States shall have original jurisdiction and the courts 
of appeal of the United States shall have appellate 
jurisdiction, of all actions arising under this chapter, 
without regard to the amount in controversy or to 
diversity or lack of diversity of citizenship of the 
parties.



4

Statement of the Case

Petitioners, two parochial school children, by their par­
ents and next friends, brought the instant action in the 
United States District Court for the Southern District of 
New York alleging the following facts.

Petitioners and 151 of their classmates at the Sacred 
Heart Academy of Hempstead, New York, contracted with 
defendant, Activities Club of New York, Ltd. (the Club) 
for a ski tour to Great Barrington, Massachusetts, to be 
conducted during the weekend of January 24, 1970, for 
which each of the students paid $44.75 in advance. The 
tour was purchased in reliance on the Club’s representa­
tions that each child would be provided with adequate ski 
equipment and qualified instruction, that safe and reliable 
transportation certified by the Interstate Commerce Com­
mission would be provided between New York and Great 
Barrington, and that all meal costs would be included in 
the prepaid tour price. The Club further represented to 
petitioners and the other children that it was a member­
ship club rather than an ordinary commercial tour operator 
and suggested, by means of flyers closely resembling those 
of a major interstate firm known as National Ski Tours, 
that the Club was affiliated with National. Some of these 
representations were written, some were oral, and others 
were disseminated by means of the United States mail.

Each of these representations was alleged to have been 
false. Only 88 pairs of boots and skis were provided for 
the 153 children. Only one qualified instructor was pro­
vided, and he spent a substantial portion of his time fitting 
the children with such skis and boots as were available. 
Of the buses used to transport the children, one poured 
exhaust fumes into its interior, another had faulty brakes



5

and only one headlight, a third broke down completely 
stranding 40 children and two nuns on a country road in 
the middle of the night. Neither the buses nor the Club 
was licensed or certified by the Interstate Commerce Com­
mission. One busload of children was forced to pay for 
an extra meal because of the unsafe bus transportation, 
the cost of which defendants refused to refund. The Club 
was not a club at all, but a purely commercial venture, 
and was in no way connected to National Sid Tours whose 
literature it had simulated.

Petitioners brought this class action, on behalf of them­
selves, their classmates, and all others similarly situated, 
under section 43(a) of the Lanham Act (15 U.S.C. §1125 
(a)). Jurisdiction was based on section 39 of the Act, 15 
U.S.C. §1121. Petitioners sought damages on behalf of 
themselves and the other injured children as well as an 
injunction forbidding defendants from continuing to make 
the alleged misrepresentations.

The District Court dismissed the complaint on its own 
motion, concluding that it lacked jurisdiction for the sole 
reason that section 43(a) authorized actions by commercial 
parties but not by consumers. The Court of Appeals af­
firmed on the same ground. The Court of Appeals ac­
knowledged that the instant case fell within the literal 
language of section 43(a), and that the question was one 
of first impression, but reasoned that the sole purpose of 
the section was to protect businessmen and that only 
businessmen could therefore bring an action thereunder.

Reasons for Granting the Writ

This case presents an important and recurring question 
regarding the jurisdiction of federal courts over inter­
state consumer fraud which has not been, and should be,



6

resolved by this Court. Without the exercise of federal 
jurisdiction under section 43(a), consumers will be power­
less to prevent or remedy false advertising, false labeling 
or other misrepresentations in interstate commerce. The 
Court of Appeals, in denying jurisdiction, rejected basic 
maxims of statutory construction set out in the applicable 
decisions of this Court.

Section 43(a) of the Lanham Act authorizes private ac­
tions for damages and injunctive relief by any person 
injured by false representations in connection with goods 
or services in commerce. While the Act defines “ commerce” 
as “all commerce which may lawfully be regulated by 
Congress,” this definition is not all inclusive. “Business 
essentially local in nature is still outside the scope of its 
terms in the absence of some relationship to interstate 
commerce sufficient to bring it within the limits of Congres­
sional power.” Samson Crane Co. v. Union Nat. Sales, 87 
F. Supp. 218, 221 (D. Mass., 1949). The need for federal 
jurisdiction over interstate commerce, recognized by Con­
gress in the passage of this law, is substantial. In a time 
of rapid transportation and nationwide advertising cam­
paigns, the ability of states to protect their citizens from 
consumer fraud is seriously limited. Footloose vendors of 
worthless merchandise can and do elude the jurisdiction of 
state law when their practices are uncovered merely by 
crossing “ the State line.” Hearings Before the Consumer 
Subcommittee of the Senate Commerce Committee on S. 
2246, 91st Cong., 2d Sess. (1969) 30, 43 (Remarks of Mrs. 
Knauer, Senator Tydings). Thus the instant defendants, 
if an injunction were obtained against their activities in 
New York, could merely cross the Hudson and resume 
their misrepresentations the next day in New Jersey. The 
due process clause, as expounded in International Shoe Co. 
v. Washington, 326 TJ.S. 310 (1945), and its progeny, lim­



7

its the long arm jurisdiction of the states over persons 
and corporations which do business within their boundaries 
to transactions actually occurring within the state. Thus 
in most cases fifty separate state lawsuits would be re­
quired to enjoin a nationwide advertising campaign or to 
obtain damages for a consumer fraud of national scope. 
Even when in personam jurisdiction existed over the mer­
chant, relief of a more than local nature could be obtained 
only if injured consumers from each of the many states 
concerned, with standing to seek enforcement of their own 
state law under applicable conflict of law principles, could 
be brought together to join in a civil action. Problems of 
barratry aside, it would as a practical matter be virtually 
impossible to organize such plaintiffs representing as many 
as fifty different jurisdictions and, so far as is known, such 
a x>roject has never been attempted or succeeded in any 
state court. If the accuracy of representations must be 
adjudicated in a multiplicity of lawsuits applying different 
legal tests in a variety of states, a crazy-quilt pattern will 
emerge, forbidding a label or advertisement in some states, 
permitting it in others, and generating uncertainty in the 
rest.

The exercise of federal jurisdiction affords the only solu­
tion to these problems. The federal courts alone are 
authorized to issue nationwide injunctions. Unlike state 
courts, the District Courts can entertain as part of a class 
action claims arising among parties and regarding trans­
actions entirely outside their districts. Efficient national 
enforcement of federally awarded damages can be ob­
tained by merely registering the original judgment in any 
federal court. 28 U.S.C. §1963. Resolution in the federal 
courts of issues as to the accuracy of labels and representa­
tions will assure the national uniformity of decisions in 
the commercial area essential to the free flow of commerce 
among the states. Compare Bibb v. Navajo Freight Lines,



8

359 U.S. 520 (1959); 1 Moore Federal Practice §0.71 [3.-1], 
p. 701.

The prevention and remedying of false advertising and 
labeling is of paramount national importance:

[C]onsumer fraud is an insidious economic cancer 
which eats at the very vitals of our society. The fact 
that it continues to the extent that it does erodes the 
respect of the individual, especially the poor, for law 
enforcement. It rots their faith in the equal applica­
tion of the law to the white-collar fraud robber and 
to the family who cannot pay for shoddy merchandise 
they were tricked into buying by that self-same op­
erator. It withers our moral fiber. It misdirects our 
economic resources. It saps the strength of our free 
enterprise system. (Hearings before the Consumer 
Subcommittee of the Senate Commerce Committee on 
S. 2246, 91st Cong., 1st Sess., 15 (1969) (Remarks of 
Mrs. Knauer, President Nixon’s Special Assistant For 
Consumer Affairs).

Such consumer frauds involve billions of dollars worth of 
goods and services every year, Comment, 114 U. Pa. L. 
Rev. 395 (1966), and exploitation of poor consumers has 
been one of the principal causes of the urban riots of the 
last decade. Report of the National Advisory Commission 
on Civil Disorders, 274-78 (1968). Even if the federal 
agencies with responsibilities in this area overcome the 
failures of the past noted by the Court of Appeals (Appen­
dix, p. 16a, n. 37), their resources will continue to be 
grossly inadequate to oversee a trillion dollar economy.1

1 “ The FTC and the Justice Department— the staffs and budgets 
of which will inevitably remain limited— must therefore choose 
from among the hundreds of thousands of potential consumer ac­
tions only those limited number of cases which their systems of 
priorities identify as germane to [the elimination of unfair and



9

The Court of Appeals below did not question the need 
for federal jurisdiction over interstate consumer frauds, 
but held that jurisdiction should be limited to actions 
brought by commercial parties. Experience with section 
43(a) demonstrates that business initiated actions under 
the section will not stop the use of interstate commerce 
for the distribution of misrepresented goods and services. 
Since its enactment in 1946 there have been fewer than two 
reported decisions a year under section 43(a) in the entire 
country. “Developments in the Law-—Competitive Torts” 
77 Harv. L. Rev. 888, 908 (1964). Businessmen have pre­
ferred to respond to a competitor’s misrepresentations by 
a countering advertising campaign, or by joining in the 
misrepresentation. The losses to competitors caused by 
such consumer fraud, and the incentive to sue, is gener­
ally far less than that suffered by the defrauded consumers. 
At times there may be “a ‘gentleman’s agreement’ of defer­
ence to a fellow [businessman] in the hope that he will 
reciprocate on a propitious occasion.” Office of Communi­
cation of Church of Christ v. F.C.C., 359 F.2d 994, 1004 
(D.C. Cir., 1966). Not surprisingly none of the tour com­
panies deprived of plaintiff’s business by the defendant’s 
misrepresentations have initiated any legal proceedings.

This Court has repeatedly held that, even without an 
express grant of standing, individuals have standing to

deceptive acts and practices]. For example, the FTC might find 
that a particular case involving notorious fraud, but affecting only 
several thousand residents of a smaller city should be rejected in 
favor of an action against the national advertiser whose product 
claims are on the borderline of deception and hence require the 
Commission’s expert delineation. The necessity to allocate legal 
resources will necessarily leave unsatisfied hundreds, if not thou­
sands, of valid cases in which consumers have suffered significant 
damages but which the government might choose not to prosecute.” 
S. Rep. No. 91-1124, 91st Cong., 2d Sess. (1970).



10

sue to enforce a federal law, at least by means of injunc­
tion, if they are arguably within the zone of interest to 
be protected by the statute. Association of Data Processing 
Service Organisations, Inc. v. Camp, 397 U.S. 150 (1970); 
Barlow v. Collins, 397 U.S. 159 (1970). That the protection 
of the public from imposition by the use of false trade 
descriptions was one of the foremost purposes of section 
43(a) was reiterated in eig’ht Congressional committee 
reports,2 in hearings before the patent committees of both 
houses of Congress,3 and on the floor of the Congress which 
passed the Act by Congressman Lanham himself.4 Primary 
among the treaty obligations which the Lanham Act was 
intended to satisfy was a duty to provide a cause of action 
for “ any party injured” by the use of false or deceptive 
descriptions of goods §45. 15 U.S.C. §1127; Inter-American 
Convention for Trademark and Commercial Protection, 
§§20 and 21, 46 Stat. 2907 (1931).

In reaching its conclusion that section 43(a) gives a 
cause of action to commercial parties only, the Court of 
Appeals repeatedly and at times expressly disregarded

2 See e.g. Senate Rep. 1333, 79th Cong., 2d Sess., pp. 1-3 (1946); 
Senate Rep. 1303, 78th Cong., 2d Sess., pp. 3-4 (1944); Senate Rep. 
568, 77th Cong., 1st Sess., pp. 1-2 (1941); Senate Rep. 1562, 76th 
Cong., 3rd Sess., p. 1 (1940); House Rep. 219, 79th Cong., 1st Sess., 
pp. 2-3 (1945); House Rep. 603, 78th Cong., 1st Sess., pp. 2-3 
(1943); House Rep. 2283, 77th Cong., 2d Sess., p. 19 (1942); House 
Rep. 944, 76th Cong., 1st Sess., pp. 2-3 (1939).

3 Hearings Before the Senate Committee on Patents, 78th Cong., 
2d Sess., pp. 25, 50, 73 (1944) (remarks by Daphne Robert of the 
A.B.A., W. T. Kelley, Chief Counsel of the Federal Trade Commis­
sion, and Congressman Lanham); Hearings Before the Senate Com­
mittee on Patents, 69th Cong., 2d Sess., pp. 70-71 (1927) (Letter 
from Edward Rogers); Hearings Before the House Committee on 
Patents, 69th Cong., 1st Sess., pp. 49-59 (1926) (Remarks of Ed­
ward Rogers); Joint Hearings Before the Committee on Patents, 
68th Cong., 2d Sess., p. 5 (1925) (remarks of William L. Symons).

4 92 Cong. Rec. 7522 (79th Cong., 2d Sess., 1946).



1 1

basic maxims of statutory construction laid down in the 
decisions of this Court.

Section 43(a) provides a cause of action for “any person” 
who is or believes himself likely to be “damaged” by a 
misrepresentation. This language literally includes the 
instant plaintiffs. This Court has consistently refused to 
read into the broad phrase “any person” or the general 
term “ damage” any unstated restriction as to the type 
of person or injury covered. American Stevedores v. 
Porello, 330 U.S. 446 (1947) (“damage” ) ; American Medical 
Association v. United States, 317 U.S. 519 (1943) (“any 
person” ) ; Nigro v. United States, 276 U.S. 332 (1928) 
(“any person” ). The Court of Appeals read in just such 
an unstated limitation (Appendix, pp. 6a-7a, 16a-17a).

The language of the section, which if read literally would 
authorize jurisdiction in this case, involves, as the Court 
of Appeals conceded, neither vague words nor inconsistent 
phrases (Appendix, p. 6a). For almost a century this 
Court has insisted that resort shall not be had in the 
construction of a statute to its legislative history when 
its language is clear and unambiguous. United States v. 
Bowen, 100 U.S. 508, 513 (1879), United States v. Oregon, 
366 U.S. 643, 648 (1961). The Court of Appeals nonetheless 
expressly resorted to such history to overturn the plain 
meaning of the statute (Appendix, pp. 7a-10a).

Even if resort to the legislative history of the statute 
were proper, the conclusions which the Court of Appeals 
drew from that history were clearly erroneous. Both the 
predecessor statute to section 43(a) and early drafts 
thereof expressly limited civil actions to businessmen in­
jured in their trade, but this limitation was dropped in 
the final version of the bill. (See Appendix, pp. 9a-10a). 
Under such circumstances this Court has held that the 
inference to be drawn is that Congress intended to change



12

in this respect the restricted scope of the earlier statute 
and drafts. American Stevedores v. Porello, 330 U.S. 446 
(1947). The Court of Appeals not only declined to draw 
such an inference, but reasoned to the contrary, that the 
deletion of the restriction showed that Congress omitted 
the restriction as surplusage and thus believed that the 
same restriction was already implicit in the section (Ap­
pendix, p. 10a).

During hearings before the House and Senate Patent 
Committees an industry representative noted that the 
proposed provision would authoi’ize suits by consumers 
and suggested it be altered to exclude such actions; neither 
Congressman Lanham nor the original drafter of the bill, 
both present, disagreed with this construction, and the 
suggestion was not adopted. This Court has held that, 
where any inference can be drawn from the silence of 
proponents in the face of a preferred construction, it is 
that they concur in it. Chicago, etc. R. Co. v. Acme Fast- 
Freight, 336 U.S. 465, 474-5 (1949). The Court of Appeals 
held that in this case the silence of the bill’s proponents 
showed they thought the construction so patently erroneous 
as not to merit comment (Appendix, p. 9a).

Although the language of the statute literally covers the 
instant case, the Court of Appeals urged that when the 
Lanham Act was passed Congress did not foresee the con­
sumer protection explosion or, by implication, the possi­
bility that consumers might use the new law to protect 
themselves (Appendix, pp. lla-12a). This Court has re­
peatedly held that “ if Congress [has] made a choice of lan­
guage which fairly brings a given situation within a stat­
ute, it is unimportant that the particular application may 
not have been contemplated by the legislatures.” Barr v. 
United States, 324 U.S. 83, 90 (1945). The Court of Appeals 
declined to follow this rule (Appendix, pp. 15a-16a).



13

This Court has repeatedly held that recitals of intent 
enacted as part of a statute can only be used to interpret 
statutory language which is ambiguous. Price v. Forrest, 
173 U.S. 410 (1899); Yazoo v. Mississippi Valley R. Co. v. 
Thomas, 132 U.S. 174 (1889).5 In the instant case section 
45 of the Act, subject to the express caveat that it was 
inapplicable if “the contrary is plainly apparent from the 
context,” stated that the purposes of the Act were, inter 
alia, to protect persons engaged in interstate commerce 
from unfair competition, and, as noted above, to carry out 
certain treaty obligations. 15 U.S.C. '§1127. The Court of 
Appeals, disregarding the rule set out in Price and Yazoo, 
the caveat to section 45, and the reference to treaty obli­
gations which in fact included obligations to give consumers 
rights of action, reasoned that the protection of business­
men was the sole purpose of section 43(a) and refused to 
permit the consuming public to sue under the section either 
to protect themselves or under circumstances when such 
suits might benefit the business community.

The Court of Appeals expressed understandable but 
unwarranted concern as to the possible impact on the work­
load of the federal courts of consumer actions under sec­
tion 43(a). That section is limited to misrepresentations 
of goods and services in commerce, and thus does not deal 
with ordinary local business practices but concerns pri­
marily regional or national sales and advertising which 
the states lack adequate authority to effectively control.

5 For instances in which the lower federal courts refused to 
depart from the clear meaning of an unambiguous provision in 
order to give effect to a statement of purpose or policy enacted as 
part of the statute at issue, see e.g. In re Camden Shipbuilding Co., 
227 F. Supp. 751, 752-3 (D. Me., 1964) ; Robinson v. Difford, 92 
F. Supp., 145,148 (E.D. Pa., 1950); Woods v. Bauhan, 84 F. Supp., 
243, 244 (D.N.J. 1949); General Atlas Carbon Co. v. Sheppard, 37 
F. Supp. 51, 54 (W.D. Tex., 1940).



14

Even where intrastate commerce is involved, individual 
actions are unlikely:

The damage suffered by any one consumer would not 
ordinarily be great enough to warrant costly, indi­
vidual litigation. One would probably not go through 
a lengthy court proceeding, for example, merely to 
recover the cost of a household appliance.
President Nixon’s Message on the Protection of Inter­
ests of Consumers, 91st Cong., 1st Sess., (1969).

Civil damage actions are only likely when a large group 
of consumers have been victimized by fraudulent practices 
so standardized as to meet the requirements of Rule 23, 
Federal Rules of Civil Procedure. Since the last amend­
ment to Rule 23 on July 1, 1966, only four of 424 reported 
decisions in the District Court for the District of Columbia 
involved local consumer initiated actions,6 even though 
that District Court has the same plenary law and equity 
jurisdiction of a base line state court. Vogel v. Tenneco 
Oil Co., 276 F. Supp. 1008 (D.D.C., 1967). The President’s 
Special Assistant for Consumer Affairs has advised the 
Congress that the authorization of federal class actions 
for all violations affecting commerce of federal and state 
consumer protection laws—a grant of jurisdiction far 
broader than that claimed here—would not impose any 
great burden on the Federal judicial machinery. Hear­
ings before the Subcommittee on Improvements in Judi­
cial Machinery of the Senate Judiciary Committee, 91st 
Cong., 1st Sess., 20 (1969) (Remarks of Mrs. Knauer). 
The use of injunctions by consumer groups and public in­

6 Telephone Users Assn., Inc. v .Pullic Service Comm, of D.C., 
271 F. Supp. 393 (1967); Tenants Council, etc. v. DeFranceaux, 305 
F. Supp. 560 (1969); Young v. Ridley, 309 F. Supp. 1308 (1970); 
Masszonia v. Washington, 315 F. Supp. 529 (1970).



15

terest law firms to prevent misrepresentations will serve 
to reduce consumer fraud, and ultimately decrease the liti­
gation growing out of such transactions.

The exercise of federal jurisdiction is especially appro­
priate in the instant case, because it is only in the federal 
courts that the instant plaintiffs have any hope of obtain­
ing relief. Neither New York case law nor its statutes au­
thorize consumers to obtain injunctions against business 
frauds, as these plaintiffs seek to do. The Uniform De­
ceptive Trade Practices Act, which the Court of Appeals 
speculated might provide for such relief (Appendix p. 15a, 
n. 35) has not been enacted in New York. Collection of 
adequate damages for the 153 defrauded consumers is 
also not feasible in state courts, since New York has effec­
tively closed its courts to consumer class actions. Hall v. 
Coburn Corporation of America, 26 N.Y. 2d 281 (1970). 
Plaintiffs have already sought, without success, to obtain 
assistance from the New York Attorney General and from 
the New York City Department of Consumer Affairs 
which referred them to private counsel. In short, plain­
tiffs have brought this action in federal court, not, as the 
Court of Appeals suggested, because they are “imagina­
tive” (Appendix, p. 4a), but because they have no place 
else to turn.

The use of section 43(a) by consumers victimized by 
interstate consumer frauds continues to be urged within 
the legal community. See e.g., Grimes, “Control of Adver­
tising in the United States and Germany: Volkswagen Has 
a Better Idea,” 84 Harv. L. Rev. 1769, 1774-6 (1971); Starrs, 
“ The Consumer Class Action—Part I: Considerations of 
Equity,” 49 Boston U. L.Rev. 211, 246-47 (1969). The 
jurisdiction of the federal courts over such interstate frauds 
and misrepresentations is a continuing problem which 
should be finally resolved by this Court.



16

CONCLUSION

For these reasons, a writ of certiorari should issue to 
review the judgment and opinion of the Second Circuit.

Respectfully submitted,

Jack Greenberg 
James M. Nabrit III 
E ric Schnapper

10 Columbus Circle, Suite 2030 
New York, N. Y. 10019

Philip G. Schrag

Columbia University 
Law School 

435 W. 116th Street 
New York, New York 10027

Counsel for Petitioners



APPENDIX



Opinion of the Court of Appeals
UNITED STATES COURT OF APPEALS

F ob the Second Circuit

No. 100—September Term, 1970.

(Argued October 8, 1970 Decided May 6, 1971.)

Docket No. 34737

Jo A nn  Colligan, by her mother and next friend, Josephine 
Gr. Colligan, and V alebie Shine, by her father and 
next friend, W illiam Shine , on behalf of themselves 
and all those similarly situated,

Plaintiff s-Appellants,
—against—

A ctivities Club op New  Y ork, L td., also known as New 
Y ork W inter Ski Club, a corporation; F red K rasny; 
Mbs. A lbert ; Peninsula B us Company, I nc., a corpora­
tion; and B and C Bus L ine, I nc,, a corporation,

Defendants-Appellees.

B e f o r e  :
M oore, Smith and A nderson,

Circuit Judges.

Appeal from an order of the United States District Court 
for the Southern District of New York, Murphy, Judge, 
dismissing an action brought by consumers seeking in­
junctive relief and money damages under §43(a) of the 
Lanham Act on the ground that they lacked standing to 
maintain suit under the Act. Affirmed.

la



Appendix

Jack Greenberg, New York, N. Y. (Eric Schnap- 
per, New York, N. Y., of counsel), for Plain­
tiff s-Appellants.

Sidney J. Leshin, New York, N. Y., for Defen­
dants-Appellees.

Moore, Circuit Judge:

This is an appeal from an order dismissing appellants’ 
class action for money damages, an accounting for profits 
and an injunction brought under §43(a) of the Lanham 
Act,1 on the ground that their claim failed to state a cause 
of action. The district court ruled on its own motion that 
the suit could not be maintained, because, as consumers, as 
opposed to commercial plaintiffs, appellants lacked stand­
ing to sue under §43(a). Without the benefit of any opposi­
tion on appeal to appellants’ counsel’s able brief, which 
sets forth the issues with beguiling simplicity, for the rea­
sons stated below we nevertheless affirm.

USU.S.C. §1125(a).
Section 43(a) provides as follows:

“Any person who shall affix, apply or annex, or use in con­
nection with any goods or services, or any container or con­
tainers for goods, a false designation of origin, or any false 
description or representation, including words or other sym­
bols tending falsely to describe or represent the same, and shall 
cause such goods or services to enter commerce, and any person 
who shall with knowledge of the falsity of such designation of 
origin or description or representation cause or procure the 
same to be transported or used in commerce or deliver the same 
to any carrier to be transported or used shall be liable to a 
civil action by any person doing business in the locality falsely 
indicated as that of origin or in the region in which said 
locality is situated, or by any person who believes that he is or 
is likely to be damaged by use of any such false description or 
representation.”



3a

The two appellants, parochial school children, by their 
parents and next friends, brought this suit on behalf of 
themselves and as members of two classes: (1) 153 students 
of the Sacred Heart Academy of Hempstead, New York, 
who allegedly were deceived and damaged by “defendants’ 
use of false descriptions and representations of the nature, 
sponsorship, and licensing of their interstate ski tour ser­
vice” ;2 3 and (2) all high school students within the New 
York metropolitan area who are likely to be deceived and 
thereby injured by defendants’ similarly deceptive prac­
tices in the future. The factual substance of the complaint 
is summarized below.

Appellants and their 151 classmates prepaid defendant 
Activities Club of New York, Inc. (the Club), $44.75 per 
person as the full price for a ski tour to Great Barrington, 
Massachusetts to be conducted during the weekend of Jan­
uary 24, 1970, in reliance upon the Club’s representations 
that: each child would be provided with adequate ski equip­
ment and qualified instruction; safe, reliable and properly 
certified transportation would be provided between New 
York and Great Barrington; and all meal costs would be 
included in the prepaid tour price.3 These representations 
were conveyed by means of flyers, allegedly deceptively 
similar to those of National Ski Tours, a well known and 
reputable ski service, and by means of other written and 
oral communications.

The ski weekend began as represented but was cut short 
and proved otherwise unsatisfactory by the following de­

Appendix

2 Complaint at 4a.
3 Complaint at 5a.



4a

velopments, which, for purposes of reviewing the dismissal 
of a complaint we assume to be true: only 88 pairs of skis 
and boots were provided for the 153 children; only one 
“qualified” ski instructor was provided, who because of the 
equipment shortage spent all of Saturday morning fitting 
the children with such skis and boots as were available ; 
the other “instructors” were high school and college stu­
dents whose agreements with defendants provided for only 
a few hours of instruction per day; one of the buses broke 
down on a country road en route to Great Barrington, 
stranding 40 children and two chaperones in the middle of 
the night; another bus had faulty brakes and only one head­
light and was ticketed by the Massachusetts police; another 
bus en route back to New York poured exhaust fumes into 
its interior; one of the bus drivers was intoxicated and 
therefore unable ot drive his bus on the return trip to New 
York; neither the buses nor the Club were licensed or cei'- 
tified by the Interstate Commerce Commission; and one 
busload of children was required to pay an unrefunded 
total of $71.75 for an extra meal in Great Barrington due 
to unsafe bus transportation.

In seeking redress of this apparently misfortune-strewn 
ski weekend brought about by the Club’s misrepresenta­
tions, appellants have sought to invoke the jurisdiction of 
a federal court, rather than turning to traditionally avail­
able state court forums and remedies and have appended 
their state common law claims by way of invoking the 
doctrine of pendent jurisdiction. Seemingly unable to bring 
themselves within other federal statutes specially confer­
ring federal court jurisdiction, and additionally unable to 
meet the minimum monetary requirements of 28 U.S.C. 
§1331 or 28 IT.S.C. §1332, appellants imaginatively have

Appendix



5a

brought this action pursuant to §§394 and 43(a) of the 
Lanham Act.

The issue of consumer standing to sue under §43(a) is 
one of first impression for this and apparently any federal 
court. In concluding that it lacked jurisdiction, the dis­
trict court below relied on Marshall v. Procter & Gamble 
Mfg. Co.,5 6 which in turn relied without discussion on this 
court’s per curiam opinion in the first reported §43(a) case, 
Carpenter v. Erie B. C o5 Because both these cases are 
clearly distinguishable from the issue at bar,7 and there­

Appendix

415U.S.C. §1121.
Section 39 provides as follows:

“ The district and territorial courts of the United States shall 
have original jurisdiction and the courts of appeal of the United 
States shall have appellate jurisdiction, of all actions arising 
under this chapter, without regard to the amount in contro­
versy or to diversity of citizenship of the parties.”

5170 F. Supp. 828 (D. Md. 1959).
In Marshall, the district court concluded without discussion but 

in very clear language that in an action under §43 (a) “ a member 
of the public, as such, has no right of action under this section for 
personal injuries based upon alleged misrepresentation,” that “ the 
very broad language of Section 1125(a) [referring to 43 (a )’s use 
of “ any person . . .” ] cannot be taken literally” and that “ the in­
jury, to be actionable under the statute, must be one which occurs 
in the area of commercial relations [though] the plaintiff . . . need 
not be a direct competitor of the defendant.”  170 F. Supp. at 836, 
n. 8.

6178 F.2d 921 (2d Cir. 1949), cert, denied, 339 U.S. 939 (1950).
7 Marshall is distinguishable because the court grounded its dis­

missal on the inability of the plaintiff, suing in his capacity as an 
inventor, to show the required commercial injury. Carpenter is 
distinguishable on several grounds. First there were a number of 
grounds for decision of which lack of standing under §43 (a) was 
one ( “ [T]hat. section is applicable to no such circumstances as those 
alleged in support of his claim” ), but a totally unnecessary one. 
The statute of limitations on Carpenter’s previous claims had run



6a

fore not conclusive authority for the district court’s posi­
tion, we find it necessary to explore in detail whether there 
is any basis for appellants’ standing to sue under §§39 
and 43(a).

Section 43(a) and “Plain Meaning”

Appellants’ principal contention is that the language of 
§43(a), specifically the term “any person,” is so unambigu­
ous as to admit of no other construction than that of per­
mitting consumers the right to sue under its aegis. On 
the face of the complaint all the prerequisites of §43(a) 
seem to be met: (1) defendants are persons (2) who used 
false descriptions and misrepresentations (3) in connection 
with goods and services, (4) which defendants caused to 
enter commerce; (5) appellants are also persons (6) who 
believe themselves to have been in fact damaged by defen­
dants’ misdescriptions and misrepresentations.

Viewing the terms of §43(a) in isolation there do not 
appear to be any vague words or inconsistent phrases which 
might permit any other inference than that which appel­
lants would have us draw—i.e., that “ any person” means 
exactly what it says.8 It is further suggested that if Con­

Appendix

some ten years before the Lanham Act was enacted, and he was 
“precluded from recovery in the present suit under the rule of res 
judicata”  178 F.2d at 922. Finally, Carpenter, suing for “ mis­
representation of services” in his capacity as an injured former 
employee of the Brie Railroad, seems to have been a rather litigious 
person; by the time he raised the §43 (a) claim, the court had grown 
somewhat impatient with Carpenter’s reassertion of previously 
barred claims, which the court said “ can never justify a recovery.” 
Id.

8 We note that the key language in §43 (a) is not “ any person” 
but “ any person who believes that he is or is likely to be damaged 
by the use of any such false description or representation.” The 
proper focus therefore is whether appellants’ claims partake of the 
nature of the injury sought to be prevented and/or remedied by 
Congress through §43 (a ).



7 a

gress had desired, it could and would have limited or nar­
rowed the class of protected plaintiffs to commercial parties 
merely by saying so. We reject this line of maxims of 
statutory construction in favor of Judge Learned Hand’s 
more practical instruction that “ [wjords are not pebbles 
in alien juxtaposition,” 9 and therefore turn first to §43(a)’s 
legislative history.

Appendix

Legislative H istory

We agree with appellants that “ [t]he Lanham Act of 
1946 has a very long and convoluted legislative history,” 10

9 NLRB v. Federbush Company, Inc., 121 F.2d 954, 957 (2d Cir. 
1941).

10 Br. at 16.
For bills containing versions of the measure ultimately enacted, 

see H.R. 8637, 68th Cong., 1st Sess., S. 2679, 68th Cong., 2d Sess.; 
H.R. 6348, 69th Cong., 1st Sess.; S. 4811, 69th Cong., 2d Sess.; H.R. 
13486, 69th Cong., 2d Sess.; H.R. 6683, 70th Cong., 1st Sess.; H.R.
11988, 70th Cong., 1st Sess.; H.R. 2828, 71st Cong., 2d Sess.; H.R.
9041, 75th Cong., 3rd Sess.; H.R. 4744, 76th Cong., 1st Sess.; H.R.
6618, 76th Cong., 1st Sess.; H.R. 102, 77th Cong., 1st Sess.; H.R.
5461, 77th Cong., 1st Sess. S. 895, 77th Cong., 1st Sess.; H.R. 82, 
78th Cong., 2d Sess.; H.R. 1654, 79th Cong., 2d Sess.

Congressional hearings on a trademark bill were held on 14 
occasions. See Joint Hearings Before the Committees on Patents, 
68th Cong., 2d Sess. (1925) ; Hearings Before the House Committee 
on Paterits, 69th Cong., 1st Sess. (1926); id., 69th Cong., 2d Sess. 
(1927) ; Hearings Before the Senate Committee on Patents, 69th 
Cong., 2d Sess. (1927) ; Hearings Before the House Committee on 
Patents, 70th Cong., 1st Sess. (1928); id., 71st Cong., 2d Sess. 
(1930) ; id,., 72nd Cong., 1st Sess. (1932) ; id., 75th Cong., 3rd Sess. 
(1938) ; id., 76th Cong., 1st Sess. (March 1939); id., 76th Cong., 1st 
Sess. (June 1939) ; id., 77th Cong., 1st Sess. (1941); Hearings 
Before the Senate Committee on Patents, 77th Cong., 2d Sess. 
(1942) ; Hearings Before the House Committee on Patents, 78th 
Cong., 1st Sess. (1943) ; Hearings Before the Senate Committee on 
Patents, 78th Cong., 2d Sess. (1944).

The various versions of the trademark bill were discussed in nine 
committee reports. See H.R. Rep. 944, 76th Cong., 1st Sess. (1939) ;



8a

which with respect to §43(a) we find to be inconclusive 
and therefore of little or no help in resolving the issue de­
cided today. We are cited by counsel to certain statements, 
actions and inactions and are asked to make certain causal 
connections among them and then to draw a set of pre­
ferred inferences therefrom. Counsel lay stress, for ex­
ample, on the following statement made before a joint con­
gressional committee in 1925 by a representative of the 
U.S. Trademark Association with respect to the language 
of a bill’s provision, which, in substantially modified form, 
became §43(a):

“It provides that any person who is damaged by the 
false description may start the suit. Obviously the 
purchaser might claim that he has been misled and 
damaged and start suit. At any rate, if it is intended 
to limit the right to start such a suit, that limitation 
should be stated.” 11

None of the committee members or draftsmen of §30 of the 
1925 bill expressed any disagreement with this statement, 
and the provision remained unchanged, containing no ex­
press limitation barring consumer suits.

We are asked to conclude from this ancient history that 
the committee’s silence, followed by its inaction with respect 
to amending this portion of the bill, must mean that Con­
gress clearly intended to create standing for consumers

Appendix

S. Rep. 1562, 76th Cong., 3rd Sess. (1940); S. Rep. 568, 77th Cong., 
1st Sess. (1941); H.R. Rep. 2283, 77th Cong., 2d Sess. (1942); H.R. 
Rep. 603, 78th Cong., 1st Sess. (1943); S. Rep. 1303, 78th Cong., 2d 
Sess. (1944); H.R. Rep. 219, 79th Cong., 1st Sess. (1945) ; S. Rep. 
1333, 79th Cong., 2d Sess. (1946); Conf. Rep. 2322, 79th Cong., 2d 
Sess. (1946), for which see 92 Cong. Rec. 7522.

11 Joint Hearings Before the Committee on Patents, 68th Cong., 
2d Sess., 127-128 (1925) (statement of Arthur W . Barber).



9a

under the 1946 Act. On this flimsy record, it would be self- 
serving for us to invoke the doctrine of “ silence as ac­
ceptance” as a. basis upon which to draw any consequential 
inference with respect to §43(a)’s legislative history.12 We 
believe it more likely that the committee members evidenced 
no disagreement or agreement with the interpretation given 
§30 by the above-quoted statement because neither was 
necessary; the committee members probably were suffi­
ciently confident of their own interpretation that they felt 
that no clarification by way of reply and/or amendment 
was needed to implement their intention to confer standing 
solely upon commercial plaintiffs.

It is also suggested that since the statutory predecessor 
of §43 (a), §3 of the Trademark Act of 1920,13 was addressed 
solely to the prohibition of false designations of origin and 
authorized suit only by persons, corporations, etc., “ doing 
business in the locality falsely indicated as that of origin 
[emphasis supplied],” 14 and since this type of language

12 Compare Chicago, M., St. P. B. Co. v. Acme Freight, Inc., 336 
XJ.S. 465, 474-475 (1949), in which the Supreme Court gave substan­
tial weight to the unchallenged and uncontradicted statement of a 
ranking minority congressional committee member who spoke in 
behalf of the bill [of which he was a principal draftsman and sup­
porter] and presented the only extended exposition of its provi­
sions” on the floor of the House in clear contradiction of the com­
mittee’s report.

13 41 Stat. 534,104, §3.
14 This provision, although relevant for purposes of this discus­

sion was in fact deemed to be a “ dead letter,”  due principally to 
the requirement of proof of wilfulness or intent to deceive, a defect 
corrected by successor draft bills and ultimately by §43(a). See 
Parkway Baking Co. v. Freihofer Baking Co., 255 F.2d 641, 648 
n 7 (3d Cir. 1958); California Apparel Creators v. Weider of 
California, 162 F.2d 893 (2d Cir.), cert._ denied, 332 U.S. 816 
(1947); see also Derenberg, Federal Unfair Competition Law at 
the End of the First Decade of the Lanham A ct: Prologue or Epi­
logue, 32 N.Y.U.L. Rev. 1029,1035 (1957) (hereinafter Derenberg).

Appendix



XOa

was preserved in several early drafts of what became 
§43(a)1E but was ultimately dropped by the A.B.A. Trade- 
Mark Committee in favor of a provision permitting suit by 
“any person, firm or corporation who is or is likely to be 
damaged by the use of any false description or representa­
tion,” 15 16 we should conclude that the A.B.A. rejection of the 
earlier colorably restrictive language and the congres­
sional acceptance of the colorably broader A.B.A. language 
“ clearly indicates an intent [attributable to Congress]17 
not to restrict the provision to actions by businessmen and 
tradesmen,” and “a [congressional] concern to expand the 
class and type of person authorized to sue.” 18 We, on the 
other hand, construe the deletion of the phrase “ in his trade 
or business” from the earlier A.B.A. drafts to be equally 
consistent with a clearly expressed congressional purpose19 
to create a federal statutory tort of unfair competition 
sui generis,20 thus rendering the subject phrase to the status 
of mere surplusage.

15 For example, an initial draft submitted by Mr. Edward S. 
Rogers to the A.B.A. Trade-Mark Committee authorized suit by 
“ any person . . . who is or is likely to be damaged in his trade or 
business by any false description . . . [emphasis supplied]” Mise. 
Bar Ass’n Reps., v. 22, item 26, §27, Ass’n of the Bar of N.Y. catal. 
no. BA Misc. 681, v. 22.

16 Id., item 27, §27 (Rogers Preliminary Draft with Revisions) 
item 28, §27 (Committee Preliminary Draft, Second Revision) ; 
item 25, §30 (Committee final d ra ft); item 29, §30 (Version ap­
proved by A.B.A. House of Delegates).

17 Cf. Shapiro v. United States, 335 U.S. 1, 12 n. 13 (1948).
18 Br. at 21.
19 See 15 U.S.C., §1127, to be diseussedm/ra.
20 Gold Seal Co. v. Weeks, 129 F. Supp. 928, 940 (D.D.C. 1955), 

aff’d sub nom, S. C. Johnson & Son, Inc. v. Gold Seal Co., 230 F.2d 
832 (D.C. Cir. 1956), cert, denied 352 U.S. 829 (1956) ; see also 
Maternally Yours v. Your Maternity Shop, 234 F.2d 538 (2d Cir. 
1956) (concurring opinion of Chief Judge Clark).

Appendix



11a

Purpose op §43(a) and P ublic P olicy

Appellants urge that under the test of Association of 
Data Processing Serv. Org. v. Camp,21 they as consumers 
have standing under the Lanham Act because they have 
demonstrated injury in fact and that they come within a 
group “ arguably within the zone of interests to be pro­
tected” 22 by the Act. Although the scope and effects of 
Data Processing have not yet been clearly delimited,23 we 
hold that that case does not bring these appellants under 
its protective wing.

The congressional statement of purpose of the Act24 * 26 is 
contained in §45,26 which in pertinent part states: “The 
intent of this chapter . . .  is to protect persons engaged 
in such commerce against unfair competition.” In this, 
the only phrase referring to the class of persons to be 
protected by the Act, as defined by their conduct and the 
source of the injuries sought to be protected against, no 
mention at all is made of the “public” or of “consumers.” 
The legislative history of the Act, such as it is, adds 
nothing. We do know to a reasonable certainty, however, 
that the consumer protection explosion and the wholesale 
displacement (though not preemption) of traditional state 
statutory and common law remedies—matters pregnant 
with manifold consequences of great importance—-were 
never considered or foreseen by Congress prior to the

21 397 U.S. 150 (1970).
22 397 U.S. at 153.
23 See Jaffe, Comment, Standing Again, 84 Harv. L. Rev. 633, 

634 (1971).
24 See Cousaw Mining Co. v. South Carolina, 144 U.S. 550, 563

(1892).
2615 U.S.C. §1127.

Appendix



12a

enactment of §43(a). We conclude, therefore, that Con­
gress’ purpose in enacting §43(a) was to create a special 
and limited unfair competition remedy, virtually without 
regard for the interests of consumers generally26 and al­
most certainly without any consideration of consumer 
rights of action in particular. The Act’s purpose, as defined 
in §45, is exclusively to protect the interests of a purely 
commercial class against unscrupulous commercial con­
duct.26 27 28

This view is supported by the leading case of L’Aiglon 
v. Lana Lobell, Inc.,M which, while expanding the statu­

26 See Standard Brands, Inc. v. Smidler, 151 F.2d 34, 37-43 (2d 
Cir. 1945) (concurring opinion of Judge Frank) for a learned 
discussion of the historical-legal relationship between protection of 
commercial interests and consumer interests under the rubric of 
unfair competition, which relationship comprises the background 
against which Congress enacted §43(a).

27 The court in Gold Seal Co. v. Weeks, 129 F. Supp. 928, 940 
(D.D.C. 1955), succinctly stated the import of §43 (a) :

“ It means that wrongful diversion of trade resulting from false 
description of one’s products invades that interest which an 
honest competitor has in fair business dealings— an interest 
which the courts should and will protect . . .  It represents, 
within this area, an affirmative code of business ethics whose 
standards may be maintained by anyone who is or may be 
damaged by this segment of the code. In effect it says: you 
may not conduct your business in a way that unnecessarily or 
unfairly interferes with and injures that of another; you may 
not destroy the basis of genuine competition by destroying the 
buyer’s opportunity to judge fairly between rival commodities 
by introducing such factors as false descriptive trademarks 
which are capable of misinforming as to the true qualities of 
the competitive products.”

Although the language of the Gold Seal court would seem to 
permit the interpretation suggested by appellants, it seems very 
clearly the other way when read in the light of Judge Frank’s 
concurring opinion in Smidler.

28 214 F.2d 649, 651 (3d Cir. 1954).

Appendix



13a

torily protected class by giving an expansionary reading 
to the substantive content of §43(a), still limited the pro­
tected class to commercial, though not necessarily com­
petitive,29 plaintiffs.30 Although admittedly the L’Aiglon 
court was not presented with the question of consumer 
standing under §43(a), we deem the court’s opinion in con­
text to set the outer limits of the class of §43(a) plaintiffs 
contemplated by Congress. As the court noted, although 
§43(a) was intended to create a federal unfair competition 
count, since “the Lanham Act was not intended to bring 
all unfair competition in commerce within federal juris­
diction,” 31 it was intended to be a special, limited one cov­

Appendix

29 Gold Seal Co. v. Weeks, 129 F. Supp. 928 (D.D.C. 1955), aff’d 
siob nom. S. C. Johnson & Son. Inc. v. Gold Seal Co., 230 F.2d 538 
(D.C. Cir. 1956), cert, denied, 352 U.S. 829 (1956); Yameta Co. v. 
Capitol Records, Inc., 279 F. Supp. 582, 586 (S.D.N.Y. 1968).

30 Appellants also rely on the famous passage in Chief Judge 
Clark’s concurring opinion in Maternally Yours v. Your Maternity 
Shop, 234 F.2d 538, 546 (2d Cir. 1956), that “ the bar has not yet 
realized the potential impact of this statutory provision.” We con­
strue that statement in context to refer to the federal courts’ re- 
lucance at that time to broaden the substantive scope of §43(a), as 
that section represented in Chief Judge Clark’s view an oppor­
tunity and an invitation to create a federal law of unfair competi­
tion, 'which embraces far more than mere “ passing off,” the unduly 
narrow application of the provision prevalent at that time. See 234 
F.2d at 546-547.

31214 F.2d at 654.
The Lanham Act originally included a specific section which 

read: “All acts of unfair competition in commerce are declared 
unlawful.” This language was later dropped because it was re­
garded as “ dangerously broad.” Derenberg at 1063. This court 
has rejected the view that the Lanham Act, through §44(i), 15 
U.S.C. §1126 (i), creates independent federal jurisdiction over the 
entire field of unfair competition. See American Auto. Ass’n v. 
Speigal, 205 F.2d 771, 774 (2d Cir.), cert, denied, 346 U.S. 887 
(1953) ; approved, Derenberg at 1061; compare Stauffer v. Exley, 
184 F.2d 962 (9th Cir. 1950).



14a

Appendix

ering only those cases in which false description and/or 
false designation of origin are alleged.82 Since Congress 
deliberately excluded from coverage virtually all categories 
of unfair competition but for false advertising, it could 
not have intended to create a whole new body of substan­
tive law completely outside the substantive scope of unfair 
competition. Yet this is what appellants would have us 
find, under the guise of granting them standing, for the 
question of consumer standing and that of the creation of 
wholly new federal common law of consumer protection 
under §43(a) cannot be disentwined.32 33

Moreover, consumers’ use of §39 of the Act, which re­
quires the allegation of neither a minimum monetary 
amount in controversy nor diverse citizenship, in combina­
tion with the expansive jurisdictional delineation given the 
phrase “in commerce,” 34 * and the procedural advantages of 
bringing suit in federal court, would lead to a veritable 
flood of claims brought in already overtaxed federal dis­
trict courts, while adequate private remedies for consumer 
protection, which to date have been left almost exclusively 
to the States, are readily at hand. Great strides are now

32 Chief Judge Hastie stated, “ This statutory tort bears closest 
resemblance to the . . . tort of false advertising to the detriment of 
a competitor, as formulated by the ALI . . which tort makes 
clear that consumers must rely on other sections. Section 761 of the 
Restatement of Torts in pertinent part provides as follows:

“ One who diverts trade from, a competitor by fraudulently rep­
resenting that the goods which he markets have ingredients 
which in fact they do not have but which the goods of the com­
petitor do have, is liable to the competitor . . .”  [emphasis, 
supplied].

33 See Textile Workers Union v. Lincoln Mills, 353 U.S. 448 
(1957) (dissenting opinion of Mr. Justice Frankfurter).

34 See Katzenbach v. McClung, 379 U.S. 294 (1964) and its
progeny.



15a

being made in this area to expand the already numerous 
remedies available in state courts,35 and this court has no 
desire to interfere with that process by an unprecedented 
interpretation of longstanding federal law.36

One of appellants’ arguments favoring a literal inter­
pretation of “any person” is that “ [h]ad Congress desired 
to limit actions under section 43(a) to those brought by 
competitors or by commercial concerns generally, it could 
and would have so provided.” Our analysis requires that 
the manner in which this issue be posed is precisely the 
reverse: had Congress contemplated so revolutionary a de-

Appendix

36 State authorities have been far from lethargic in responding 
to the current consumer protection explosion. See, e.g., the Revised 
Uniform Deceptive Practices Act in Handbook of the National 
Conference of Commissioners on Uniform State Laws 306-315 
(1966), which was initially approved by the Commissioners on Uni­
form State Laws and by the A.B.A. House of Delegates in 1964, 
and which has been adopted by eight- states (Connecticut, Deleware, 
Florida, Georgia, Idaho, Illinois, New Mexico and Oklahoma). Sec­
tion 3(a) of the Uniform Act has been construed unofficially to 
confer standing on defrauded consumers seeking injunctive relief 
(no money damages are provided) although the Uniform Act 
“ originated as an effort to reform the law of business torts, not 
consumer torts.”  See Dole, Consumer Class Actions Under the 
Uniform Deceptive Practices Act, 1968 Duke L.J. 1101, 1107, 1109. 
Mr. Dole was a consultant to the Special Committee on Unfair 
Competition of the National Conference of Commissioners on Uni­
form States Laws from 1962 to 1965. See also the recently amended 
Massachusetts “ Regulations of Business and Consumer Protection 
Act,” Mass. Acts, ch. 690, ch. 814 (1969), amending Mass. Ann. L. 
ch. 93A, §§1-8 (Supp. 1968); Goodman, An act to Prohibit Unfair 
and Deceptive Trade Practices, 7 Harv. J. Legis. 122, 146-153 
(1969).

36 Cf. Phillips v. Rockefeller, 435 F.2d 976, 980 (2d Cir. 1970) 
(construction of the Seventeenth Amendment).



16a

parture implicit in appellants’ claims, its intention conld 
and would have been clearly expressed.37 

Affirmed.

Appendix

37 Cf. Herpich v. Wallace, 430 F.2d 792, 809 (5th Cir. 1970) 
(scope of §10 (b) of the Securities Exchange Act of 1934) • 2 L. 
Loss, Securities Regulation 902-903 (2d ed. 1961) (scope of SEC 
power under §14 of the Securities Exchange Act of 1934).

Although we hold that consumers have no right of action under 
§43(a), we note that the federal government through the Federal 
Trade Commission has intervened in the marketplace and in the 
courts to vindicate the rights of the consuming public. Chief Judge 
Clark in his concurring opinion in the California Appeal case 
stated:

“ So far as the consumer is concerned, he is not dependent upon 
the private remedial actions brought by competitors for the 
remedies under the Federal Trade Commission A c t . . . are now 
extensive . . . ”

162 F.2d 896; accord, 1 R. Callman, Unfair Competition, Trade­
marks and Monopolies §18.2 (b ), at 626 (3d ed. 1967). That Chief 
Judge Clark’s faith in the FTC perhaps has proved excessive, see 
e.g., A.B.A. Committee to Study the Federal Trade Commission 
Report (1969); E. Cox, R. Fellmeth & J. Schulz, The Nader Report 
on the Federal Trade Commission (1969); Baum, The Consumer 
and the Federal Trade Commission, 44 J. Urb. L. 71 (1966), does 
not derogate from our conclusion that commercial and consuming 
classes intentionally have been provided separate remedies.



Judgment of the Court of Appeals
UNITED STATES COURT OF APPEALS

F ob the Second Circuit

At a Stated Term of the United States Court of Appeals, 
in and for the Second Circuit, held at the United States 
Courthouse in the City of New York, on the sixth day of 
May one thousand nine hundred and seventy-one.
P r e s e n t  :

H on. L eonard P. M oore,
H on. J. Joseph Smith ,
H on. R obert P. A nderson

Circuit Judges.

Jo A nn  Colligan, by her mother and next friend, Josephine 
G. Colligan, V alerie Shine, her father and next friend, 
W illiam S hine, on behalf of themselves and all others 
similarly situated,

Plaintiffs-Appellants, 
v.

A ctivities Club of New Y ork, L td., also known as New 
Y ork W inter Ski Club, a corporation, et al.,

Defendants-Appellees.

Appeal from the United States District Court for the 
Southern District of New York.

This cause came on to be heard on the transcript of 
record from the United States District Court for the 
Southern District of New York, and was argued by counsel.

On c o n s i d e r a t i o n  w h e r e o f , it is now hereby ordered, 
adjudged, and decreed that the order of said District Court 
be and it hereby is affirmed.

A. Daniel F usaro

Clerk
17a



18a

Opinion of the District Court

UNITED STATES DISTRICT COURT 

Southern D istrict of New  Y ork 

69 Civ. 2194

Jo A nn  Couligan, by her mother and nest friend, Josephine 
G. Colligan, and V alerie Shine , by her father and 
next friend, W illian Shine, on behalf of themselves 
and all others similarly situated,

— against-
Plaintiffs,

A ctivities Club of New Y ork, L td., also known as New 
Y ork W inter Ski Club, a corporation; F red K rasny; 
Mrs. A lbert ; Peninsula B us Company, I nc., a corpora­
tion, Champion Bus Company, I nc., a corporation; 
and B and C Bus L ines, Inc., a corporation,

Defendants.

M urphy, D. J.

Plaintiffs move for an order pursuant to Rule 23(c) 
of the Federal Rules of Civil Procedure declaring that 
this action may be maintained as a class action, defining the 
represented classes and subclasses, and declaring that said 
classes and subclasses have standing to maintain the action. 
The action is brought pursuant to sections 39 and 43(a) 
of the Lanham Act of 1946 (15 U.S.C. §§1121 and 1125(a)).

The two infant petitioners by their parents and next 
friends bring suit on behalf of themselves and as members 
of two classes: (1) 153 students of the Sacred Heart 
Academy, Hempstead, New York, who were allegedly



19a

deceived and damaged by defendants’ false representa­
tions as to the rendering of the defendants’ services, and; 
(2) all high school students within the New York metro­
politan area who may be deceived in the future by the 
alleged false representations of the defendants.

The plaintiffs and 151 others students of the Sacred Heart 
Academy, a parochial high school, purchased the services 
of the defendants pursuant to an advertisement. Three 
of the named defendants are ski tour operators, and the 
other three defendants are bus line companies. Each of 
the 153 students paid $44.75 for a ski tour. The plaintiffs 
allege that false representations were made by the defen­
dants and that they did not receive all of the services 
promised them.

The plaintiffs, as representatives of all high school 
children in the New York area, seek to enjoin the ski tour 
defendants from making further misrepresentations of 
goods or services in commerce and from using flyers 
imitating those of a competitor, and the bus company 
defendants from participating in any misrepresentations.

Assuming, without deciding, that the requirements of 
Rule 23(a) and (b) are met, we feel constrained to resolve 
first the question whether such an action is authorized 
under the Lanham Act (15 TT.S.C. §1125(a) which provides 
in part:

“Any person who shall . . .  use in connection with any 
goods or services . . . any false description or 
representation, including words or other symbols 
tending falsely to describe or represent the same, and 
shall cause such goods or services to enter into com­
merce, and any person who shall with knowledge or the 
falsity of such . . . description or representation cause

Appendix



20a

or procure the same to be transported or used in com­
merce or deliver the same to any carrier to be trans­
ported or used, shall be liable to a civil action by any 
person doing business in the locality falsely indicated 
as that of origin or in the region in -which said locality 
is situated, or by any person who believes he is or is 
likely to be damaged by the use of any such false 
description or representation. (Emphasis added.)

and section 39 which provides:

“ The district and territorial courts of the United States 
shall have original jurisdiction and the courts of appeal 
of the United States shall have appellate jurisdiction, 
of all actions arising under this chapter, without regard 
to the amount in controversy or to diversity or lack 
of diversity of the citizenship of the parties.”

It is the plaintiffs’ submission that “ [t] he clear language 
of this statute gives a right of action to a consumer or 
potential consumer who is damaged or likely to be damaged 
by misrepresentation of goods or services in interstate 
commerce” and concedes that there is little judicial au­
thority confirming consumer standing to invoke the statute. 
They point out that in the only two cases in which a non­
commercial plaintiff unsuccessfully attempted to invoke 
the Act the issue of consumer standing was not reached. 
Carpenter v. Erie R.R., 178 F.2d 921 (2d Cir. 1949) ; 
Carpenter v. Rohm & Wass Co., 109 F.Supp. 739 (D.Del. 
1952), aff’d, 201 F.2d 671 (3 Cir. 1953).

It is undoubtedly true that section 1125(a) creates a 
limited new federal statutory tort and does not merely 
codify the common law principles of unfair competition. 
L’Aiglon Apparel, Inc. v. Lana Lobell, Inc., 214 F.2d 649

Appendix



21a

(3d Cir. 1954); The American Eolex Watch Corp. v. Jack 
Laufer & Jan Voort, Inc., 176 F. Supp. 858 (EJD.N.Y. 1959); 
Mutation Mink .Breeders Ass’n v. Lou Nierenberg Corp., 
23 F.E.D. 155 (S.D.N.Y. 1959).

Judge Hastie, however, did observe in L’Aiglon :

“ This statutory tort is defined in language which differ­
entiates it in some particulars from similar wrongs 
which have developed and have become defined in the 
judge made law of unfair competition. Perhaps this 
statutory tort bears closest resemblance to the already 
noted tort of false advertising to the detriment of a 
competitor, as formulated by the American Law In­
stituted out of materials of the evolving common law 
of unfair competition. See Torts Eestatement, Section 
761, supra. But however similar to or different from 
pre-existing law, here is a provision of a federal statute 
which, with clarity and precision adequate for judicial 
administration, creates and defines rights and duties 
and provides for their vindication in the federal 
courts.” L’Aiglon Apparel, Inc. v. Lana Lobell, Inc., 
supra at 651 (emphasis added).

Of major importance is what Congress said the intent 
of the Act is. 15 U.S.C. §1127 states in part:

“ 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 reprodue-

Appendix



22a

tions, copies, counterfeits, or colorable imitations of 
registered marks; and to provide rights and remedies 
stipulated by treaties and conventions respecting trade­
marks, trade names, and unfair competition entered 
into between the United States and foreign nations.”

Its legislative history is not too revealing but Mr. 
Lanham’s remarks in House Report No. 2283, June 25, 
1942, are quite cogent. He stated:

“This bill, as any other proper legislation on trade­
marks, has as its object the protection of trademarks, 
securing to the owner the goodwill of his business and 
protecting* the public against spurious and falsely 
marked goods. . . .

“ There is no essential difference between trademark 
infringement and what is loosely called unfair competi­
tion. Unfair competition is the genus of which trade­
mark infringement is one of the species. . . .

“ To protect trade-marks, therefore, is to protect the 
public from deceit, to foster fair competition, and to 
secure to the business community the advantages of 
reputation and goodwill by preventing their diversion 
from those who have created them to those who have 
not. This is the end to which this bill is directed.”

While it is true that part of the purpose of the Act was 
to protect the public, we doubt that consumers such as the 
plaintiffs were intended by Congress to be given the right 
to prosecute a claim of the type herein enumerated without 
more explicit statutory authorization.

We agree with Judge Watkins in Marahall v. Proctor & 
Gambel Mfg. Co., 170 F.Supp. 828, 836 (D.Md. 1959), 
where he stated, “However, whether a ‘passing off’ be

Appendix



23a

necessary, or it suffices that a diversion of trade be shown, 
it is at least necessary that the action be one for unfair 
competition, in which a competitive injury is alleged.” 

As Judge Friendly* remarked, “After prolonged cerebra­
tion . . . but without profound conviction,” we hold that 
the plaintiffs have not stated a claim upon which relief can 
be granted, and their complaint is dismissed.

This is an order. No settlement is necessary.

T hos. F. Murphy 
U. S. D. J.

Appendix

Dated, New York, N. Y., January 26, 1970.

* Susi v. Belle Action Stables, Inc., 360 F.2d 704, 711 (2d Cir. 
1966).



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