In 2009, the International
Bottled Water Association
(“IBWA”), a nonprofit corporation
whose members are bottled water
producers, distributors, and suppliers,
filed suit against Eco Canteen,
Inc. in the U.S. District Court for
the Western District of North
Carolina. In its lawsuit, IBWA
challenged Eco-Canteen’s marketing
claims that there are specific
health risks associated from drinking
water from plastic bottles containing
polyethylene terephthalate
(“PET”) and Bisphenol-A (“BPA”)
as (i) false advertising under the
Lanham Act and (ii) unfair and
deceptive trade practices under
a North Carolina statute. On
September 17, 2010, the Court
issued an order granting IBWA’s
motion for default judgment. In
that order, however, the Court
inquired into whether IBWA had
standing to bring the lawsuit.

IBWA asserted that it had both
“organizational standing,” the
right to sue on its own behalf, as
well as “associational standing,”
the right to sue on behalf of its
individual members. After applying
the standing test for organizations
articulated by the Supreme
Court in Hunt v. Washington State
Apple Adver. Comm’n, 432 U.S. 333,
343 (1977), the Court agreed that
IBWA had associational standing
to seek injunctive relief because of
the allegations of injury suffered
by its members, the interests IBWA
is seeking to protect are germane
to its purpose, and the members
are not required to participate in
the lawsuit. However, while IBWA
had associational standing to seek
injunctive relief that that would
benefit its members which were
actually injured, it lacked associational
standing to assert claims
for money damages because these
claims would require examination
of each member’s unique injury.
Further, as IBWA had not alleged
an injury suffered by the organization
itself, it lacked organizational
standing.

Trade associations should take
note of this ruling and ensure that
its court papers address all of the
applicable aspects of standing
when they participate in lawsuits.