Court rejects Burger King operator appeal in suit against McDonald's

WASHINGTON -- The Supreme Court today rejected an appeal by the operator of a Florida Burger King franchise that accused McDonald's of false advertising.

The justices, without comment, let stand a lower court ruling that dismissed the lawsuit by Phoenix of Broward, Inc., which operates a Burger King in Ft. Lauderdale, Fla. The suit stems from the controversy surrounding Oak Brook, Ill.-based McDonald's Monopoly game promotions in the late 1990s, which were later found to have been rigged.

McDonald's advertised that every customer had a "fair and equal chance" to win the games, lawyers for Phoenix said in court filings, even after the FBI began investigating the games for fraud. Those ads harmed its business, Phoenix said, by depriving it of customers. Burger King Corp. isn't a party to the suit.

The FBI announced in August 2001 that it had arrested an employee of a contractor hired to run the games for funneling at least $20 million in prizes to several accomplices over six years.

McDonald's lawyers said in court papers that the company spent $15 million to settle a raft of consumer fraud suits stemming from the incident.

The 11th U.S. Circuit Court of Appeals, based in Atlanta, dismissed the case, concluding that Phoenix didn't have standing to sue because it was unlikely to have been directly harmed by the fraud.

The case is Phoenix of Broward, Inc. v. McDonald's, 07-659. Justice Samuel Alito, who owns McDonald's stock, did not participate in the court's decision.

Shares of McDonald's fell 59 cents to $54.19 in morning trading.