author: PAMELA HARRIS, Circuit Judge:

text:
    VERISIGN, INC., Plaintiff-Appellant, v. XYZ.COM LLC; Daniel Negari, Defendants-Appellees.
    No. 15-2526
    United States Court of Appeals, Fourth Circuit.
    Argued: October 27, 2016
    Decided: February 8, 2017

      ARGUED: Lisa Schiavo Blatt, ARNOLD & PORTER LLP, Washington, D.C., for Appellant. Derek Alan Newman, NEWMAN DU WORS LLP, Seattle, Washington, for Appellees. ON BRIEF: Ronald L. Johnston, Los Angeles, California, Robert N. Weiner, Robert A. DeRise, Elisabeth S. Theodore, ARNOLD & PORTER LLP, Washington, D.C., for Appellant.
    Before WYNN, FLOYD, and HARRIS, Circuit Judges.
   PAMELA HARRIS, Circuit Judge:

Plaintiff Verisign, Inc. is in the business of selling internet domain names and operates the popular .com and .net top-level domains. In 2014, a competitor arrived on the scene: Defendant XYZ.COM, LLC (“XYZ”) launched “.xyz,” a new top-level domain, and began registering domain names ending in .xyz. As part of its marketing push, XYZ, along with its CEO Daniel Negari, made a series of statements touting the popularity of the .xyz domain and warning of a scarcity of desirable .com domain names. Verisign sued XYZ and Negari, alleging that those statements violated the Lanham Act’s false advertising provisions.

The district court granted summary judgment to XYZ, holding that Verisign could not establish the elements of a Lanham Act claim. We agree. As to XYZ’s self-promoting statements, most of which concern its registration numbers, we hold that Verisign failed to produce the required evidence that it suffered an actual injury as a direct result of XYZ’s conduct. Nor can Verisign establish, we hold, that XYZ’s statements about the availability of suitable .com domain names were false or misleading statements of fact, as required for Lanham Act liability. Accordingly, we affirm the district court’s grant of summary judgment.

I.

A.

We begin with a brief overview of the domain name industry. A domain name is the string of characters in an Internet address. In the domain name “usc-ourts.gov,” for instance, the “.gov” element of the name is referred to as a top-level domain. Verisign is the exclusive operator of both the .com and .net top-level domains. It operates the .com registry, selling domain names to registrars who in turn sell those names to end users. Over 100 million .com domain names have been registered. Among these 100 million registered domain names are 96 percent of all dictionary words — from apple.com to zebra.com.

The worldwide domain name system is overseen by the nonprofit Internet Corporation for Assigned Names and Numbers (“ICANN”). In the early 2000s, ICANN began to consider the introduction of new top-level domains, in order to enhance competition and consumer choice. In 2012, ICANN began to accept applications for new top-level domains, and by July 2015 it had approved nearly 700 of 1,930 applications. XYZ, founded by Negari, was among the hundreds of applicants granted the right to operate a new top-level domain. XYZ launched “.xyz” in 2014.

At the heart of this case are certain promotional efforts undertaken by XYZ to market its new .xyz domain. According to Verisign, a number of XYZ’s activities crossed the line into false or misleading advertising, violating the Lanham Act and injuring Verisign’s own business operations. The statements of which Verisign complains can be divided into two rough categories, which we describe in turn.

First is a series of affirmative statements about .xyz, promoting .xyz’s popularity and touting its high registration numbers. For instance, Negari wrote a post on XYZ’s blog — titled “.xyz, the most used new gTLD [generic top-level domain] — Boooooooom!”—stating that “.xyz has received the most registrations of all new gTLDs with 447,544 domains registered.” J.A. 358. An XYZ employee later told a domain-name reseller that XYZ had over 600,000 registrations. And XYZ also promoted its registration numbers in emails to individual registrars. ,

By August 2015, XYZ had secured over one million .xyz registrations. Verisign does not contest that figure, nor the literal truth of the registration numbers advanced by XYZ. Indeed, it is not disputed that those numbers match statistics maintained in the “zone file,” a database tracking domain names registered in domain extensions. Rather, the crux of Verisign’s claim is that XYZ’s registration numbers are false or misleading because they include not only registrations bought and paid for by consumers — indicating actual consumer demand — but also 375,000 .xyz registrations given away for free just after XYZ’s 2014 launch, through an agreement between XYZ and Web.com. By including those registrations in its numbers, Veri-sign contends, XYZ misrepresented actual consumer demand for its product.

Negari also promoted the popularity of the .xyz domain in media interviews. During one such interview, Negari, along with other domain operators, spoke with National Public Radio (“NPR”) as part of a story on the expansion of the top-level domain market. Introducing Negari, the NPR reporter said, “You could try to become the next .com, the next, all-purpose ending, the thing that you can stick on the back of any business name.” J.A. 593 (emphasis added). The statement of which Verisign complains appeared after the interview, on the XYZ corporate blog: In a post titled “.xyz — the Next .com,” J.A. 596, XYZ promotes Negari’s NPR interview and states that “NPR’s [reporter] described .xyz as the next .com,” id. (emphasis added) — diverging, Verisign argues, from the actual formulation (“You could try to become the next .com”) used by NPR. The post ends with a link to the full NPR interview. Id.

In addition to promoting the XYZ domain -with false statements, Verisign alleges, XYZ falsely disparaged Verisign’s competing .com domain. Here, Verisign points to a series of statements by XYZ and Negari calling into question the availability of suitable .com domain names. First, during his interview with NPR, Negari, referring to the .com domain, said, “All of the good real estate is taken. The only thing that’s left is something with a dash or maybe three dashes and a couple numbers in it.” J.A. 593. A few months later, a Negari blog post on XYZ’s website included this line: “Did you know that 99% of all registrar searches today result in a ‘domain taken’ page?” J.A. 628. (Negari echoed that claim in a subsequent radio interview, saying that “nine out of ten .com searches show up as unavailable.” J.A. 666.) Finally, XYZ posted a 35-second advertisement to video-sharing website YouTube, comparing a new Audi with a .xyz license plate to a dilapidated Honda with a .com plate, and saying, “With over 120 million .corns registered today, it’s impossible to find the domain name that you want.” J.A. 527. All of those statements, Verisign claims, are false or misleading.

B.

In December 2014, Verisign filed suit against XYZ and Negari, claiming that its new competitor had violated the Lanham Act’s false advertising provisions. 15 U.S.C. § 1125(a)(1)(B). As is customary in Lanham Act suits, Verisign undertook a consumer survey to support its claims. Verisign’s survey tested consumer reaction to XYZ’s self-promoting statements about its registration numbers and, according to Verisign, demonstrated that consumers understood XYZ’s references to “registrations” to signify actual consumer “purchases,” rather than .xyz registrations given away for free.

After extensive discovery, XYZ moved for summary judgment,- and the district court granted its motion. In an accompanying opinion, the court comprehensively rejected Verisign’s claim, finding that Veri-sign failed to establish a violation of the Lanham Act on multiple grounds, any one of which would have been sufficient justification for an award of summary judgment to XYZ.

First, on the threshold question of falsity, the district court held that Verisign could not show that any of the statements complained of was false or misleading. As to XYZ’s promotion of its registration numbers, the court found, those numbers were “verifiably true,” J.A. 838 — based on accurate statistics from the “zone file,” J.A. 839 — and “nothing in the record supports the notion” that XYZ’s statements were “false,” J.A. 838. The court also concluded that XYZ’s blog-post promotion of Negari’s NPR interview — including “the next .com” statement — was not false. J.A. 837.

Similarly, the district court held, Veri-sign could not establish that XYZ’s statements regarding .com availability were false or misleading. Statements like “all of the good real estate is taken” and “it’s impossible to find the domain name that you want,” the district court explained, reflect subjective opinion or “puffery,” neither of which is actionable under the Lan-ham Act. J.A. 833. And while Negari’s assertion that 99 percent of registrar searches result in a “domain taken” message is a verifiable statement of fact, the district court concluded, Verisign had not shown that statement to be false; on the contrary, Verisign’s own data demonstrated that .com names “are largely unavailable.” J.A. 837.

Because Verisign had “fail[ed] to meet the first element” of a Lanham Act claim, J.A. 839 — a false or misleading statement — the district court could have awarded summary judgment without further analysis. Instead-, it went on to identify other, independent defects in Verisign’s case. Under the Lanham Act, even a false statement is not actionable unless it is “material,” or likely to influence a consumer decision. Here, the district court held, Verisign had presented “no evidence to show that consumers were influenced by the statements” in question, having chosen not to test materiality in its consumer survey. J.A. 840. Nor, the district court held, could Verisign show that any of XYZ’s statements actually deceived consumers, as required under the Lanham Act, pointing again to shortcomings in Ver-isign’s survey evidence.

Finally, and providing yet another independent justification for its decision, the district court held that Verisign had failed to establish the requisite causal connection between the allegedly false statements and any damages actually suffered by Verisign. Verisign’s first theory of damages — that XYZ’s false advertising had diverted sales from Verisign’s domains to .xyz — rested on the analysis of expert Lauren Kindler. But the district court excluded that testimony on the ground that Kindler’s methods and conclusions were unreliable, primarily because Kindler relied on data “point[ing] only to correlation, not causation.” J.A. 843. As to Verisign’s second theory of damages — that XY'Z’s statements -disparaging the .com domain had lessened the goodwill associated with Verisign’s product — the court concluded that Verisign had failed to produce any evidence of lessened goodwill apart from its own subjective belief that its reputation had been harmed.

Verisign timely noted this appeal.

II.

A.

We review de novo the district court’s grant of summary judgment, viewing the evidence in the light most favorable to Verisign, the nonmoving party, and drawing all reasonable inferences in Verisign’s favor. Design Res., Inc. v. Leather Indus. of Am., 789 F.3d 495, 500 (4th Cir. 2015). To show that summary judgment should not be awarded, Verisign “must provide more than a scintilla of evidence— and not merely conclusory allegations or speculation — upon which a jury could properly find in its favor.” Id. (internal quotation marks and citation omitted). We review the district court’s evidentiary ruling regarding Verisign’s expert testimony for abuse of discretion. Meyers v. Lamer, 743 F.3d 908, 915 (4th Cir. 2014).

B.

The Lanham Act prohibits the “false or misleading description of fact, or false or misleading representation of fact, which ... in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities[J” 15 U.S.C. § 1125(a)(1). Accordingly, a plaintiff asserting a false advertising claim must establish each of five elements, showing that:

(1) the defendant made a false or misleading description of fact or representation of fact in a commercial advertisement about his own or another’s product; (2) the misrepresentation is material, in that it is likely to influence the purchasing decision; (3) the misrepresentation actually deceives or has the tendency to deceive a substantial segment of its audience; (4) the defendant placed the false or misleading statement in interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result of the misrepresentation, either by direct diversion of sales or by a lessening of goodwill associated with its products..

Design Resources, 789 F.3d at 501 (quoting PBM Prods., LLC v. Mead Johnson & Co., 639 F.3d 111, 120 (4th Cir. 2011)). “[FJailure to establish any one” of these five elements is “fatal” to a plaintiffs claim. Id. And importantly, Verisign must be able to point to at least one challenged statement that satisfies all five Lanham Act requirements; as the parties agree, a Lanham Act claimant may not mix and match statements, with some satisfying one Lanham Act element and some satisfying others. See Johnson & Johnson Vision Care, Inc. v. 1-800 Contacts, Inc., 299 F.3d 1242, 1248 (11th Cir. 2002) (rejecting argument that challenged statements should be evaluated “in concert” to determine whether any or all violated Lanham Act).

Here, we agree with the district court that Verisign failed to present evidence sufficient to show that any of XYZ’s challenged statements violated the Lanham Act. We address in turn the two categories of statements at issue: self-promotional statements about .xyz’s registration numbers and popularity, and disparaging statements about the availability of Veri-sign’s .com domain names.

1.

The crux of Verisign’s claim is that XYZ used deceptive statements about its registration numbers and popularity to manufacture an unwarranted “gold rush” for .xyz domains. By touting registration numbers that included free registrations and claiming that NPR had dubbed it the “next .com,” Verisign argues, XYZ created a false picture of consumer demand that was intended to drive up .xyz sales to registrars and website owners. XYZ, for its part, insists that its registration numbers were true; that it had no obligation to separate out registrations arising from a legitimate commercial promotion; and that as the district court found, Verisign’s consumer survey evidence failed to establish that consumers were misled by XYZ’s numbers. The blog post stating that it had been deemed the “next .com” by NPR, XYZ argues, is either true when viewed in context of the NPR story or harmless exaggeration, non-actionable as “puffery.”

As described above, the district court sided thoroughly with XYZ, holding that XYZ’s statements were not false as a matter of law and that Verisign also had' failed to establish materiality and deception, two additional and independent elements of a Lanham Act claim. Without casting any doubt on those holdings by the district court, we find that we need not review them here. We agree with the district court that Verisign failed to establish yet another Lanham Act element — that it suffered an injury flowing directly from the challenged statements — and affirm the grant of summary judgment to XYZ on that ground alone.

To recover damages under the Lanham Act, Verisign must show not only false advertising by XYZ, but also that XYZ’s statements caused Verisign actual damages. See PBM Products, 639 F.3d at 122 (summary judgment properly awarded to defendant in Lanham Act case because plaintiff could not prove that allegedly false statements caused any damages); Xoom, Inc. v. Imageline, Inc., 323 F.3d 279, 286 (4th Cir. 2003) (Lanham Act plaintiff must “prove actual damages and a causal link between those damages and the Lanham Act violation”), abrogated on other grounds by Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154, 130 S.Ct. 1237, 176 L.Ed.2d 18 (2010). This is not a minor or technical element of a Lanham Act claim; indeed, as the Supreme Court has explained, it is the core requirement that a plaintiff “show economic or reputational injury flowing directly from the deception wrought by the defendant’s advertising” that assures Article III standing in Lanham Act cases. Lexmark Int’l, Inc. v. Static Control Components, Inc., — U.S. -, 134 S.Ct. 1377, 1391, 188 L.Ed.2d 392 (2014). Accordingly, we have made clear that the indispensable fifth element of a Lanham Act claim is that “the plaintiff has been or is likely to be injured as a result of the [alleged] misrepresentation, either by direct diversion of sales or by a lessening of goodwill associated with its product.” Design Resources, 789 F.3d at 501 (quoting PBM Products, 639 F.3d at 120).

With respect to XYZ’s self-promoting statements, Verisign proceeded under the first of these damages theories, claiming that XYZ’s fake “gold rush” directly diverted sales from Verisign’s .net registry to XYZ’s new .xyz domain. For support, Verisign rested on its expert, Lauren Kindler, who indeed opined that XYZ’s statements sapped Verisign’s profits by redirecting registrations away from Veri-sign’s .net registry. Relying on Verisign’s claim that XYZ’s false statements were the reason consumers signed up for .xyz domains, Kindler also suggested that Ver-isign was entitled to disgorgement of XYZ’s profits.

Exercising its gatekeeping function under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), the district court excluded Kindler’s report, leaving Verisign with nothing to show injury in the form of diversion of sales. Acting as gatekeepers, district courts are charged with ensuring that expert testimony of all kinds is relevant and reliable. See Cooper v. Smith & Nephew, Inc., 259 F.3d 194, 199 (4th Cir. 2001) (citing Daubert); see also Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 147, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999) (district court’s “basic gatekeeping obligation” applies to all expert testimony). Here, citing Daubert, the district court concluded that Kindler’s “methods ... are questionable” and that her “conclusions are not reliable,” primarily because Kindler’s analysis failed to distinguish between “correlation” and “causation.” J.A. 843. We agree with the district court.

Kindler concluded that Verisign lost approximately $527,000 in profits as a result of .xyz registrations diverted from .net. To arrive at that figure, she began by identifying a decline in registrations on the .net domain between June 2014 and May 2015 — the time period during which XYZ made the allegedly false statements at issue. She then attributed to XYZ a percentage of those lost registrations, based on .xyz’s market share of the new top-level domain market. Multiplying that percentage by what would have been Verisign’s profits on the lost registrations, she arrived at her figure for lost profits. And Kindler followed a similar approach to calculating potential disgorgement damages, starting with the total registration fees XYZ collected during the relevant time period and subtracting various costs to find the total profits XYZ earned as a result of its alleged misrepresentation.

That analysis suffers from what we have identified as a “fatal flaw” in calculating Lanham Act damages: It assumes rather than demonstrates that every .xyz registration during the relevant time period was the result of XYZ’s allegedly false statements. See PBM Products, 639 F.3d at 122 (“The fatal flaw in [plaintiffs] economic information was that its expert assumed that every sale [defendant] made was attributable to the [allegedly false statement].”) Kindler’s report does show that Verisign experienced a drop in .net registrations after .xyz — along with other new top-level domains — became available, and while XYZ was making the statements of which Verisign complains. What it' does not show, however, is anything other than a temporal link between XYZ’s statements and the drop-off in .net registrations— “correlation,” in the district court’s words, but not “causation.” J.A. 843. And that is not enough under the Lanham Act, where the plaintiff bears the burden of proving a “causal link between actual damages and [the defendant’s] actions.” Xoom, 323 F.3d at 286; see Lexmark, 134 S.Ct. at 1391 (plaintiff must show injury “flowing directly” from defendant’s advertising).

To be sure, Kindler does suggest that XYZ’s profits during the time period in question were “at least in part due to the alleged false and misleading advertising,” and opines that “participants [in the domain-name market] view registration numbers as a measure of demand,” so that “inflated registration figures [like XYZ’s] are likely to entice market participants.” S.A. 904. But Kindler’s analysis does not quantify any such effect, beyond establishing a temporal connection. And a conclusory repetition of Verisign’s “gold rush” theory of the case does little, if anything, to advance the proximate-cause showing demanded by Lexmark and PBM Products.

Finally, we note that it is perhaps not surprising that Verisign would experience difficulty in proving damages directly caused by XYZ’s self-promoting statements. The record suggests that XYZ’s boasts about its registration numbers and NPR interview were distributed to a narrow audience, comprised mostly of readers of XYZ’s blog and a small percentage of registrars. Indeed, XYZ argues that its statements were disseminated to so small a group that they do not even constitute “commercial advertising or promotion” covered by the Lanham Act. See 15 U.S.C. § 1125(a)(1)(B) (prohibiting misrepresentations in “commercial advertising or promotion”); Fashion Boutique of Short Hills, Inc. v. Fendi USA, Inc., 314 F.3d 48, 56 (2d Cir. 2002) (statement qualifies as “commercial advertising or promotion” only if it is “disseminated sufficiently to the relevant purchasing public”). We need not decide that question here. We simply'observe that XYZ’s statements appear to have had limited potential to influence the domain-name market, particularly at a time when hundreds of new top-level domains were clamoring for attention in a newly competitive market.

In sum, the district court did not abuse its discretion in excluding Kindler’s report, and we agree that Verisign has not established that XYZ’s statements regarding registration numbers or the NPR interview were causally linked to damages in the form of diverted registrations. For that reason alone, Verisign cannot prevail on its Lanham Act claim with respect to XYZ’s self-promoting statements.

2.

We turn next to the second category of statements at issue: statements by XYZ that call into question the availability of desirable .com domain names. The thrust of Verisign’s claim here is that XYZ falsely disparaged Verisign’s product— the .com domain — by telling the consuming public that Verisign’s inventory of .com names was so depleted that only cumbersome or unsightly names remained: XYZ’s YouTube advertisement warned that “[w]ith over 120 million .corns registered today, it’s impossible to find the domain name that you want,” J.A. 527, and Negari said in an interview that “[a]ll of the good [.com] real estate is taken,” leaving “only .. 1 something with a dash or maybe three dashes and a couple of numbers,” J.A. 593. And XYZ bolstered those claims, Verisign alleges, with “phony statistics” asserting that “99% of all registrar searches today result in a ‘domain taken’ page[J” J.A. 628.

XYZ, naturally, takes a different view. According to XYZ, claims as to whether “all of the good [.com] real estate is taken,” or it is “impossible to find the domain name that you want,” are either statements of opinion or harmless “puffery,” or exaggeration, neither of which is actionable under the Lanham Act. As for the 99 percent statistic, XYZ insists, even Veri-sign concedes that it is literally true, and there is no evidence that it tended to mislead consumers.

Here again, the district court sided with XYZ, concluding that Verisign could not satisfy the very first element of a Lanham Act claim by showing that any of the statements in question was a false or misleading factual statement. We agree, and therefore need not consider the district court’s alternative grounds for ruling against Verisign with respect to this group of statements.

As we have explained, the threshold element of a Lanham Act claim is a showing that the defendant “made a false or misleading description of fact or representation of fact” about his own product or, as relevant here, the product of a competitor. Design Resources, 789 F.3d at 501. That showing has two distinct components: “[T]he contested statement must be false, and it must be a representation of fact.” Id. As to falsity, a plaintiff may show either literal falsity — a statement that is “false on its face” — or that a statement, while literally true, is misleading, in that it is “likely to mislead and to confuse consumers given the merchandising context.” Scotts Co. v. United Indust. Corp., 315 F.3d 264, 273 (4th Cir. 2002). But in order to be “false” in any way cognizable under the Lanham Act, a statement must also be one of fact — that is, a “specific and measurable claim, capable of being proved false or of being reasonably interpreted as a statement of objective fact.” Design Resources, 789 F.3d at 502 (quoting Pizza Hut, Inc. v. Papa John’s Int’l, Inc., 227 F.3d 489, 496 (5th Cir. 2000)).

The requirement that an actionable statement be one of fact necessarily excludes certain other kinds of statements from liability. See Am. Italian Pasta Co. v. New World Pasta Co., 371 F.3d 387, 390 (8th Cir. 2004) (outside the category of actionable statements of fact “a category of non-actionable statements exists”). Statements of opinion, rather than fact, cannot be the basis of a Lanham Act claim. See id. at 391; Design Resources, 789 F.3d at 502. And the Act does not reach what is known as “puffery” — “exaggerated advertising, blustering, and boasting,” or “vague” and “general claim[s] of superiority” — on the theory that no reasonable person would rely on such superlatives. Pizza Hut, 227 F.3d at 496 (quoting 4 J. Thomas McCarthy, McCarthy on Trademark and Unfair Competition § 27.38 (4th ed. 1996)); see Am. Italian Pasta Co., 371 F.3d at 391 (“[p]uffery and statements of fact are mutually exclusive”).

Like the district court, we think that XYZ’s statements concerning the availability of desirable .com names constitute opinion or puffery, not statements of fact on which reasonable consumers could rely. XYZ’s YouTube video claim that it is “impossible to find the domain name that you want,” J.A. 527, we conclude, cannot be interpreted as a verifiable statement of objective fact. Cf. Design Resources, 789 F.3d at 502. That is in part thanks to the indefinite nature of the referenced “you”: Whether an anonymous “you” can find the domain name of his or her choosing is not something that can be proven true or false. See Am. Italian Pasta Co., 371 F.3d at 391 & n.5 (phrase “America’s Favorite Pasta” cannot be construed as verifiable statement of fact in part because no “specific person or [ ] identifiable group” is indicated as favoring the product). Instead, taken as a whole — with the exaggerated “impossible” and the implied supposition about what “you” might want — the statement conveys an opinion about consumer preferences, a blustery assertion of the subjective value (or lack thereof) of available .com names that qualifies as puffery, or some combination of the two.

So, too, .with Negari’s claim during his interview that “[a]ll of the good real estate is taken.” J.A. 593. As the district court explained, what counts as a “good” domain name is a matter of opinion, not fact: “[Wjhether a domain is a ‘good’ domain is subjective to the registrant.” J.A. 837. Verisign leans heavily on Negari’s next sentence — “The only thing that’s left is something with a dash or maybe three dashes and a couple of numbers in it,” J.A. 593— and insists that it is literally false, because there are at least some available .com names that do not include dashes and numbers. But we read the two sentences together, see Castrol Inc. v. Pennzoil Co., 987 F.2d 939, 946 (3d Cir. 1993) (“court must view the face of the statement in its entirety”), and in context, we think that the overall message must be construed as one of subjective opinion: The available .com names are not “good” because they involve dashes and numbers. And while Negari may have exaggerated when he said that the “only [.com names] left” are of the dashes and numbers variety, that is precisely the kind of puffery or bluster on which no reasonable consumer would rely. See id. at 945 (describing puf-fery as “exaggeration or overstatement”). Particularly when it comes to spoken statements like Negari’s, which may be offered more casually than their written counterparts, we must take care not to label as “literally false” what really is no more than a colloquial exaggeration, readily understood as such. See Schering-Plough Healthcare Prods., Inc. v. Schwarz Pharma, Inc., 586 F.3d 500, 512-13 (7th Cir. 2009) (doctrine of “literal falsity” must take account of fact that “Americans ... say things like T am literally out of my mind.’ ”).

Finally, there are XYZ’s statistics: the claim that “99% of all registrar searches today result in a ‘domain taken’ page,” J.A. 628, repeated by Negari on a local radio show in a slightly different form, J.A. 666 (“nine out of ten .com searches show up as unavailable”). The district court agreed with Verisign that these statements qualify as statements of verifiable fact; the problem for Verisign, the district court held, is that they are verifiably true. As the district court explained, Verisign’s own data shows that out of approximately two billion requests it receives each month to register a .com name, fewer than three million — less than one percent — actually are registered. And indeed, Verisign’s expert on domain name availability conceded the accuracy of the data behind the 99 percent statistic.

Verisign’s real argument is that even if literally true, the 99 percent figure qualifies as “false” for Lanham Act purposes because it is misleading. See Scotts Co., 315 F.3d at 273 (to show falsity, plaintiff may establish either that statement is literally false or that it is misleading). Specifically, Verisign insists that the 99 percent number is a “naive” metric of unmet demand because it includes automated searches undertaken as part of a highly competitive fight among registrars for high-demand, previously registered domain names. Appellant Br. at 35. Even on its face, this argument is perplexing: It is not clear why the fact that registrars battle fiercely and on a daily basis over a limited supply of desirable .com names would make it misleading to use a statistic — literally true — that conveys the difficulties associated with registration of a preferred .com name.

But even if we were to credit the logic of this argument, Verisign’s position could not prevail. When a Lanham Act plaintiff relies on literal falsity, no evidence of consumer confusion is required. See Scotts Co., 315 F.3d at 274. But where, as here, a plaintiff argues that a statement is literally true but nevertheless misleading, then it is incumbent on the plaintiff to present “extrinsic evidence of consumer confusion,” generally in the form of consumer survey evidence. Id. at 274, 276; Design Resources, 789 F.3d at 501; see also, e.g., PBM Products, 639 F.3d at 120 (“A court may find on its own that a statement is literally false, but, absent a literal falsehood, may find that a statement is impliedly misleading only if presented with evidence of actual consumer deception.”) (internal quotation marks and citation omitted). Verisign cannot meet that burden here.

That a literally true statement “tend[s] to mislead or confuse consumers” is “most often proved by consumer survey data.” Scotts Co., 315 F.3d at 276 (internal quotation marks and citation omitted); see also Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer Pharm. Co., 290 F.3d 578, 588 (3d Cir. 2002) (plaintiff “should have been required to prove through a consumer survey that the [statement] actually misled or had a tendency to mislead consumers”). But while Verisign did conduct a consumer survey, it tested only consumer reaction to XYZ’s self-promoting statements about its .xyz registration numbers, and not consumer reaction to XYZ’s claims regarding .com availability. As a result, Verisign can offer no consumer survey evidence bearing on the 99 percent statistic cited by XYZ and whether it had the misleading effect posited by Verisign. Nor did Verisign advance any other evidence showing that the literally true 99 percent figure misled or tended to mislead consumers. And while we have considered whether an intent to deceive might be enough to trigger a presumption of consumer confusion, see Scotts Co., 315 F.3d at 281-82, Verisign could not rely on any such presumption here, having failed to produce evidence that XYZ intended to mislead consumers by sharing a statistic supported by Verisign’s own data.

In short, like the district court, we conclude that none of XYZ’s challenged statements about .com availability is a false or misleading statement of fact, as required to meet the first element of a Lanham Act claim. For that reason alone, the district court properly awarded summary judgment to XYZ with respect to these statements.

III.

For the foregoing reasons, we affirm the district court’s grant of summary judgment to defendants XYZ and Negari.

AFFIRMED

      . Under the agreement, Web.com gave a $3 million dollar advertising credit to XYZ, and, in exchange, XYZ gave Web.com $3 million dollars’ worth of .xyz domain names (375,000 names). Those names were then given by Web.com to its subscribers for free trial periods.

      . Although the challenged statements refer to the .com domain, Verisign’s lost profit calculation rests on a decline in sales associated with its .net domain, on the theory that .net and .xyz are closer substitutes. Verisign’s reliance on lost .net registrations may also be explained by the fact that .com registrations continued to increase after XYZ’s statements.

      . With respect to XYZ’s statements regarding .com availability, Verisign advances a separate theory of injury, alleging that those statements caused a "lessening of goodwill associated with its products." See Design Resources, 789 F.3d at 501 (identifying both diversion of sales and lessening of goodwill as cognizable Lanham Act injuries). As noted above, the district court rejected that theory, too, finding that Verisign had failed to produce sufficient evidence of lost goodwill. Because we hold below that XYZ's disparaging statements do not violate the Lanham Act for other reasons, we have no occasion to review that determination.

      . Verisign has taken the position that in assessing the dissemination and impact of XYZ’s statements, the relevant market is not the general public but rather the registrars who purchase domain names and then resell them to end users. It strikes us as especially unlikely that these savvy industry players would construe XYZ's claims about .com availability as factual statements and rely on them accordingly.


source: Caselaw Access Project

author: FLOYD, Circuit Judge:

license: Public Domain

text:
    Jacob E. ABILT, Maryland, United States, Plaintiff-Appellant, v. CENTRAL INTELLIGENCE AGENCY; John O. Brennan, Director, In his official capacity only, Defendants-Appellees.
    No. 15-2568
    United States Court of Appeals, Fourth Circuit.
    Argued: October 27, 2016
    Decided: February 8, 2017

      ARGUED: Donna Renee Williams Rucker, TULLY RINCKEY PLLC, Washington, D.C., for Appellant. Jaynie Randall Lilley, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellees. ON BRIEF: Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Sharon Swingle, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.; Dana J. Boente, United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Alexandria, Virginia, for Ap-pellees.
    Before WYNN, FLOYD, and HARRIS, Circuit Judges.
   FLOYD, Circuit Judge:

This is an appeal from the dismissal of a complaint under the state secrets doctrine. After careful consideration of the public and classified pleadings, the district court correctly concluded that the information in question is properly privileged and that litigation of the case would present an unjustifiable risk of disclosure of that information. Accordingly, we affirm.

I.

Appellant Jacob E. Abilt was hired by the Central Intelligence Agency (CIA or the “Agency”) in June 2006 as an Applications Developer. Around the time he was hired, Abilt informed the Agency that he had a diagnosis of narcolepsy. Beginning in May 2008 until the ultimate termination of his employment in October 2011, Abilt was a covert employee. Many of the basic facts regarding Abilt’s employment with the Agency are classified, as are the job responsibilities and even the identities of most of his former supervisors and coworkers.

In early 2009, Abilt began experiencing difficulty with his narcolepsy and asked his then-supervisor for permission to take periodic naps, which his then-supervisor granted. Around the same time, Abilt was cleared by the Agency’s Medical Officer for a temporary duty yonder (TDY) assignment overseas, as well as to a war-zone.

Abilt was then assigned a new supervisor, referred to in the record only as “Lee.” When Lee witnessed Abilt sleeping at his desk, Lee delayed Abilt’s TDY assignment by 30 days in March 2009. When Abilt complained, he was told that his TDY assignment was delayed six months due to potential concerns about his narcolepsy, and a few weeks later told that he could not travel overseas for six months, or to a warzone for twelve months. Abilt was instructed that any future decision would be based in part on his ability to manage his narcolepsy.

At the end of the six-month period, Abilt requested TDY assignment, and was told there were no plans to send anyone overseas. Abilt alleges that multiple of his coworkers without disabilities were subsequently sent overseas. Abilt was evaluated again by the Agency’s Medical Officer, and both Abilt and Lee were informed that Abilt was medically cleared to travel to a warzone. At the end of the twelve-month period, Abilt was given a list of new requirements he would have to meet to be assigned, overseas or to a warzone. Abilt alleges that the new requirements applied only to him.

In March 2011, Abilt was authorized for TDY overseas, but denied a TDY assignment to a warzone. The Agency informed him that he needed to complete a TDY overseas assignment before he could be authorized for a TDY assignment to a warzone. Abilt successfully completed his TDY overseas assignment, and then requested a TDY assignment to a warzone. After undergoing two examinations, both of which Abilt passed, he was still denied, allegedly because of safety concerns related to his narcolepsy.

During this time, Abilt complained to the Equal Employment Opportunity (EEO) office about his treatment, and he alleges that as a result, Lee delayed his TDY overseas assignment and also refused to provide him with the same training and opportunities offered to his co-workers. Abilt filed administrative complaints in both 2009 and 2010 alleging disability discrimination, failure to accommodate, and retaliation. The Agency issued a decision rejecting his claims as unsupported in 2011. The Equal Employment Opportunity Commission (EEOC) affirmed the Agency’s decision. Abilt’s employment with the Agency was ultimately terminated in October 2011.

Abilt first filed suit' against the Agency and Director John Brennan (collectively, still the “Agency”) in February 2014, alleging discrimination and ultimately termination based on his disability, failure to accommodate, and retaliation. The Agency invoked the state secrets privilege over various information related to Abilt’s employment. The district court held that the Agency properly invoked the privilege, and dismissed the complaint without prejudice, finding that Abilt could not prove his pri-ma facie case of discrimination without resorting to privileged information. See Abilt v. C.I.A. (Abilt I), No. 14-cv-1031, 2015 WL 566712 (E.D. Va. Feb. 10, 2015).

While the motion for summary judgment was pending in his first suit, Abilt filed this suit (Abilt II) against the same defendants on December 1, 2014, under the Rehabilitation Act of 1973, Pub. L. No. 93-112, 87 Stat. 355 (codified as amended at 29 U.S.C. § 791, et seq.), and Title VII of the Civil Rights Act of 1964, Pub.. L. No. 88-352, 78 Stat. 241, 253-66 (codified as amended at 42 U.S.C. § 2000e to § 2000e-17), alleging disability discrimination and failure to accommodate, as well as retaliation. In particular, Abilt alleged that the CIA canceled his TDY assignment to a warzone because of his disability, denied him other .assignments and training opportunities available to his coworkers, and falsely reported that he was failing to satisfactorily perform his clandestine work assignments. After Abilt I was dismissed, the Agency moved for summary judgment in Abilt II based on the state secrets privilege. In support, the Agency submitted two declarations from Dir. Brennan — one public, which explained how disclosure of information would harm national security and compromise the Agency, and one ex parte, in camera, that further explained the scope of information subject to the assertion of privilege. The district court held that the Agency had properly invoked the state secrets privilege, and found that because the un-ap-pealed decision in Abilt I covered many of the same categories of information, Abilt was barred from relitigating those same issues. The court then dismissed the action because (1) privileged information was at the core of Abilt’s prima facie case; (2) the Agency could not defend its case without resorting to privileged information; and (3) further litigation would risk disclosure of privileged information.

Abilt timely appealed the district court’s decision in this suit, arguing that the district court misapplied the state secrets doctrine.

II.

“We review de novo a district court’s ‘legal determinations involving state secrets,’ including its decision to grant dismissal of a complaint on state secrets grounds.” El-Masri v. United States, 479 F.3d 296, 302 (4th Cir. 2007) (quoting Sterling v. Tenet, 416 F.3d 338, 342 (4th Cir. 2005)).

“Under the state secrets doctrine, the United States may prevent the disclosure of information in a judicial proceeding if ‘there is a reasonable danger’ that such disclosure ‘will expose military matters which, in the interest of national security, should not be divulged.’” Id. at 302 (quoting United States v. Reynolds, 345 U.S. 1, 10, 73 S.Ct. 528, 97 L.Ed. 727 (1953)). The doctrine’s modern form was set forth by the Supreme Court in Reynolds, and its continued validity has been repeatedly confirmed by the Supreme Court and by this Court. See, e.g., Tenet v. Doe, 544 U.S. 1, 125 S.Ct. 1230, 161 L.Ed.2d 82 (2005); El-Masri, 479 F.3d at 302-03; Sterling, 416 F.3d at 342.

Reynolds dealt with suits filed under the Federal Tort Claims Act arising from the deaths of three civilians in the crash of a military aircraft that had been testing secret electronic equipment. 345 U.S. at 2-3, 73 S.Ct. 528. The government filed a “formal ‘Claim of Privilege’ ” arguing that the plane had been on “a highly secret mission of the Air Force,” and that disclosure of the requested materials would “seriously hamper[] national security, flying safety and the development of highly technical and secret military equipment.” Id. at 4-5, 73 S.Ct. 528 (internal quotation marks omitted). The Court sustained the government’s claim of privilege, finding that “the privilege against revealing military secrets ... is well established in the law of evidence.” Id. at 6-7, 73 S.Ct. 528. The Court in a footnote cited a long line of decisions, both American and English, recognizing the government’s privilege against revealing state secrets. Id. at 7, 73 S.Ct. 528, n.11 (collecting cases and secondary sources).

The resolution of a claim of state secrets privilege requires a three-step analysis. Elr-Masri, 479 F.3d at 304. First, “the court must ascertain that the procedural requirements for invoking the state secrets privilege have been satisfied.” Id. Second, “the court must decide whether the information sought to be protected qualifies as privileged under the state- secrets doctrine.” Id. Third, if the “information is determined to be privileged, the ultimate question to be resolved is how the matter should proceed in light of the successful privilege claim.” Id.

A.

The procedural requirements for invoking the state secrets privilege were established by the Supreme Court in Reynolds, 345 U.S. at 7-8, 73 S.Ct. 528. First, the state secrets privilege must be asserted by the United States government; it “can neither be claimed nor waived by a private party.” Id. at 7, 73 S.Ct. 528 (footnotes omitted). Second, “[t]here must be a formal claim of privilege, lodged by the head of the department which has control over the matter.” Id. at 7-8, 73 S.Ct. 528. Third, the department head’s formal claim of the state secrets privilege may be made only “after actual personal consideration by that officer.” Id. at 8, 73 S.Ct. 528.

B.

“After a court has confirmed that the Reynolds procedural prerequisites are satisfied, it must determine whether the information that the United States seeks to shield is a state secret, and thus privileged from disclosure.” El-Masri, 479 F.3d at 304. This determination “places on the court a special burden to assure itself that an appropriate balance is struck between protecting national security matters and preserving an open court system.” Al- Haramain Islamic Found., Inc. v. Bush, 507 F.3d 1190, 1203 (9th Cir. 2007).

The state secrets privilege “performs a function of constitutional significance, because it allows the executive branch to protect information whose secrecy is necessary to its military and foreign-affairs responsibilities.” El-Masri, 479 F.3d at 303. As such, the executive’s determination that disclosure of information might pose a threat to national security is entitled to “utmost deference.” United States v. Nixon, 418 U.S. 683, 710, 94 S.Ct. 3090, 41 L.Ed.2d 1039 (1974), superseded by statute on other grounds as recognized by Bourjaily v. United States, 483 U.S. 171, 177-79, 107 S.Ct. 2775, 97 L.Ed.2d 144 (1987).

Yet at the same time, “ ‘[judicial control over the evidence in a case cannot be abdicated to the caprice of executive officers’ — no matter how great the interest in national security.” El-Masri, 479 F.3d at 304 (quoting Reynolds, 345 U.S. at 9-10, 73 S.Ct. 528) (alteration in quoting source); see also Sterling, 416 F.3d at 343 (noting the importance of “[j]udicial involvement in policing the privilege”). When the privilege is validly asserted, “the result is unfairness to individual litigants,” Fitzgerald v. Penthouse Int'l Ltd., 776 F.2d 1236, 1238, n.3 (4th Cir. 1985); thus, “to ensure that the state secrets privilege is asserted no more frequently and sweepingly than necessary, it is essential that the courts continue critically to examine instances of its invocation.” Ellsberg v. Mitchell, 709 F.2d 51, 58 (D.C. Cir. 1983). “We take very seriously our obligation to review the [government’s claims] with a very careful, indeed a skeptical, eye, and not to accept at face value the government’s claim or justification of privilege.” Al-Haramain, 507 F.3d at 1203. Appropriate judicial oversight is vital to protect against the “intolerable abuses” that would follow an “abandonment of judicial control,” Reynolds, 345 U.S. at 8, 73 S.Ct. 528.

The Supreme Court balanced these concerns in Reynolds “by leaving the judiciary firmly in control of deciding whether an executive assertion of the state secrets privilege is valid, but subject to a standard mandating restraint in the exercise of its authority.” El-Masri, 479 F.3d at 304-05. As such, “[a] court is obliged to honor the Executive’s assertion of the privilege if it is satisfied, ‘from all the circumstances of the case that there is a reasonable danger that compulsion of the evidence will expose military matters which, in the interest of national security, should not be divulged.’ ” Id. at 305 (quoting Reynolds, 345 U.S. at 10, 73 S.Ct. 528).

The burden is on the government to satisfy the “reviewing court that the Reynolds reasonable-danger standard is met.” Id. “Frequently, the explanation of the department head who has lodged the formal privilege claim, provided in an affidavit or personal declaration, is sufficient to carry the Executive’s burden.” Id.; citing Sterling, 416 F.3d at 345 (relying on declarations of CIA Director); Reynolds, 345 U.S. at 5, 73 S.Ct. 528 (relying on a claim of privilege by Secretary of the Air Force and an affidavit of the Air Force Judge Advocate General).

Once this burden is carried, “the claim of privilege will be accepted without requiring further disclosure.” Reynolds, 345 U.S. at 9, 73 S.Ct. 528. Although it is for the court to determine “whether the circumstances are appropriate for the claim of privilege,” we must “do so without forcing a disclosure of the very thing the privilege is designed to protect.” Reynolds, 345 U.S. at 7-8, 73 S.Ct. 528. “[B]oth Supreme Court precedent and our own cases provide that when a judge has satisfied himself that the dangers asserted by the government are substantial and real, he need not — indeed, should not— probe further.” Sterling, 416 F.3d at 345.

C.

Once the information is found to be properly privileged, the final step in the state secrets privilege analysis is for the court to determine whether the case can proceed without the privileged information.

Information that is properly privileged under the state secrets doctrine “is absolutely protected from disclosure — even for the purpose of in camera examination by the court.” El-Masri, 479 F.3d at 306. The Supreme Court was explicit as to this point in Reynolds: “When ... the occasion for the privilege is appropriate, ... the court should not jeopardize the security which the privilege is meant to protect by insisting upon an examination of the evidence, even by the judge alone, in chambers.” 345 U.S. at 10, 73 S.Ct. 528.

Furthermore, “no attempt is made to balance the need for secrecy of the privileged information against a party’s need for the information’s disclosure; a court’s determination that a piece of evidence is a privileged state secret removes it from the proceedings entirely.” El-Masri, 479 F.3d at 306 (citing Reynolds, 345 U.S. at 11, 73 S.Ct. 528). “[E]ven the most compelling necessity cannot overcome the claim of privilege if the court is ultimately satisfied that military secrets are at stake.” Reynolds, 345 U.S. at 11, 73 S.Ct. 528.

As such, “[i]f a proceeding involving state secrets can be fairly litigated without resort to the privileged information, it may continue.” El-Masri, 479 F.3d at 306. On the other hand, “a proceeding in which the state secrets privilege is successfully interposed must be dismissed if the circumstances make clear that privileged information will be so central to the litigation that any attempt to proceed will threaten that information’s disclosure.” Id. at 308 (citations omitted); see also Sterling, 416 F.3d at 347-48 (“We have long recognized that when ‘the very subject of [the] litigation is itself a state secret,’ which provides ‘no way [that] case could be tried without compromising sensitive military secrets,’ a district court may properly dismiss the plaintiffs case.” (quoting Fitzgerald, 776 F.2d at 1243) (alterations in original)); Bowles v. United States, 950 F.2d 154, 156 (4th Cir. 1991) (per curiam) (“If the case cannot be tried without compromising sensitive foreign policy secrets, the case must be dismissed.”). “To be sure, dismissal is appropriate ‘[o]nly when no amount of effort and care on the part of the court and the parties will safeguard privileged material,’ ” Sterling, 416 F.3d at 348 (quoting Fitzgerald, 776 F.2d at 1244) (alteration in original); however, “dismissal follows inevitably when the sum and substance of the case involves state secrets,” id. at 347.

We have identified three examples of circumstances in which the privileged information is so central to the litigation that dismissal is required. First, dismissal is required if the plaintiff cannot prove the prima facie elements of his or her claim without privileged evidence. See Farnsworth Cannon, Inc. v. Grimes, 635 F.2d 268, 281 (4th Cir. 1980) (en banc) (per curiam) (“[A]ny attempt on the part of the plaintiff to establish a prima facie case would so threaten disclosure of state secrets that the overriding interest of the United States and the preservation of its state secrets precludes any further attempt to pursue this litigation.”). Second, even if the plaintiff can prove a prima facie case without resort to privileged information, the case should be dismissed if “the defendants could not properly defend themselves without using privileged evidence.” El-Masri, 479 F.3d at 309; see also Sterling, 416 F.3d at 347. Finally, dismissal is appropriate where further litigation would present an unjustifiable risk of disclosure. See El-Masri, 479 F.3d at 308 (“[A] proceeding in which the state secrets privilege is successfully interposed must be dismissed if the circumstances make clear that privileged information will be so central to the litigation that any attempt to proceed will threaten that information’s disclosure.”).

With these principles in mind, and “being cognizant of the delicate balance to be struck in applying the state secrets doctrine,” El-Masri, 479 F.3d at 308, we proceed to our analysis of Abilt’s claim.

III.

A.

The district court correctly found that the government satisfied each of the first two steps of the state secrets inquiry outlined by this Court in El-Masri, 479 F.3d at 304. The government satisfied the first step, the Reynolds procedural requirements, by submitting the declaration of John Brennan, in his capacity as the Director of the CIA, asserting the state secrets privilege after personal consideration of Abilt’s claims and determining that the disclosure of information relating to “intelligence sources, methods, and activities that may be implicated by the allegations in the plaintiffs Amended Complaint ... are at risk of disclosure in this case.” J.A. 44. Furthermore, after a review of the public and classified declarations filed by Dir. Brennan in support of the invocation of the state secrets privilege, we are satisfied that the government has satisfied the Reynolds “reasonable danger” standard. There is little doubt that there is a reasonable danger that if information the government seeks to protect from disclosure — information regarding the specific CIA programs on which Abilt worked; the identities of certain CIA officers; the job titles, duties, and work assignments of Abilt, his coworkers, and his supervisors; the criteria for making work assignments; the sources and methods used by the CIA; the targets of CIA intelligence collection and operations; the training preparations-required to send a CIA officer overseas; and the location of CIA covert facilities— were revealed, that disclosure would threaten the national security of the United States. As such, it falls squarely within the ambit of the state secrets privilege. Finding the information in question to be properly privileged, we necessarily “remove[ ] it from the proceedings entirely.” See El-Masri, 479 F.3d at 306 (citing Reynolds, 345 U.S. at 11, 73 S.Ct. 528).

B.

Finding that the information is properly privileged, “the ultimate question to be resolved is how the matter should proceed in light of the successful privilege claim.” El-Masri, 479 F.3d at 304.

Our analysis, then, properly begins with an examination of the information required to litigate Abilt’s claims. See El-Masri, 479 F.3d at 308. Abilt brings two claims, one under the Rehabilitation Act for alleged disability discrimination and failure to accommodate, and another under Title VII for alleged retaliation for his EEO activities. Abilt may succeed on these claims either by presenting direct evidence of his superiors’ discriminatory intent, or by proceeding under the burden shifting framework set out in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). It appears, based on his briefs, that Abilt is attempting to proceed under the McDonnell Douglas framework.

The McDonnell Douglas framework has been utilized to evaluate discrimination and retaliation claims under both Title VII and the Rehabilitation Act. See Ennis v. Nat’l Ass’n of Bus. & Educ. Radio, Inc., 53 F.3d 55, 57-58 (4th Cir. 1995). Under McDonnell Douglas, the plaintiff has the initial burden of proving his or her prima facie case by a preponderance of the evidence. Id. at 58. If the plaintiff succeeds, the burden shifts to the defendant to articulate some legitimate, nondiscriminatory reason for its actions. Id. Finally, once the defendant proffers its justification for the action, the burden shifts back to the plaintiff to “prove by a preponderance of the evidence that the legitimate reasons offered by the defendant were not its true reasons, but were a pretext for discrimination.” Texas Dep’t of Cmty. Affairs v. Burdine, 450 U.S. 248, 253, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981) (citing McDonnell Douglas, 411 U.S. at 804, 93 S.Ct. 1817).

Establishing each of the prima facie elements of his claims without resort to privileged information is an extremely high hurdle given the facts of this case, one that the district court felt Abilt could not clear. However, even if we assume that Abilt can make his prima facie case, we find that our precedent nonetheless requires dismissal because any defense to these claims that the government could offer would undoubtedly rely on privileged information.

We have consistently upheld dismissal when “the defendants could not properly defend themselves without using privileged information” and the “main avenues of defense available” would require privileged information. El-Masri, 479 F.3d at 309-10 (finding dismissal proper because “virtually any conceivable response to El-Masri’s allegations would disclose privileged information”); see also Sterling, 416 F.3d at 347. For instance, in Sterling, a covert employee filed a complaint against the CIA under Title YII alleging employment discrimination and retaliation. 416 F.3d at 341. Specifically, Sterling alleged that he was denied “advantageous opportunities, subjected ... to disparate treatment, [was given work plans] that contained more rigorous requirements” than similarly situated coworkers. Id. He also alleged retaliation for using the EEO process to report this alleged discrimination. Although we found that Sterling could not make out his prima facie case, we reasoned that “[e]ven assuming Sterling were somehow able to manage the impossible feat of making out all the elements of a Title VII claim without revealing state secrets, further issues would remain” because the government would still be “entitled to present, as a defense to Sterling’s prima facie case, legitimate nondiscriminatory reasons for its actions.” Id. at 347. The evidence required to mount this defense, we explained, “would inescapably reveal the criteria inherent in sensitive CIA decisionmaking.” Id.

In the present case, even if Abilt establishes the prima facie case for either of his claims, the CIA is entitled to proffer a legitimate, non-discriminatory reason for its actions as a defense. St. Mary’s Honor Ctr. v. Hicks, 509 U.S. 502, 506-07, 113 S.Ct. 2742, 125 L.Ed.2d 407 (1993). Yet, based on the nature of Abilt’s claims, virtually any reason the CIA could offer for its actions would require the disclosure of information about Abilt’s performance as a covert operative, the nature of the jobs he sought, the requirements of those jobs, the job performance of his colleagues, and/or the criteria used by the CIA to make assignments. Abilt’s claims allege that his supervisor at the CIA canceled his temporary duty assignment to a warzone, denied him other assignments and training opportunities available to his coworkers, and falsely reported that he was failing to satisfactorily perform his clandestine work assignments. Just as in Sterling, any explanation that the CIA could offer for these actions “would inescapably reveal the criteria inherent in sensitive CIA deci-sionmaking.” 416 F.3d at 347. This information is properly protected from disclosure, thus, dismissal is required.

Abilt points to the lower burden at step two of the McDonnell Douglas framework as evidence that the CIA can defend itself without resort to privileged information. See Burdine, 450 U.S. at 254, 101 S.Ct. 1089 (“The defendant need not persuade the court that it was actually motivated by the proffered reasons. It is sufficient if the defendant’s evidence raises a genuine issue of fact as to whether it discriminated against the plaintiff.” (citations omitted)). However, even if the CIA enjoys a lower burden at step two of the McDonnell Douglas framework, its responsibilities do not end there. Under step three of the McDonnell Douglas analysis, “[t]he plaintiff then has ‘the full and fair opportunity to demonstrate,’ through presentation of his [or her] own case and through cross-examination of the defendant’s witnesses, ‘that the proffered reason was not the true reason for the employment decision.’ ” Hicks, 509 U.S. at 507-08, 113 S.Ct. 2742 (quoting Burdine, 450 U.S. at 256, 101 S.Ct. 1089). To be clear, even if the CIA could, as Abilt suggests, proffer a legitimate nondiscriminatory reason for its actions without resort to privileged information, in properly litigating that reason, Abilt would be entitled to probe deeper into the CIA’s justifications “through cross-examination of the [CIA] ’s witnesses.” Id. In doing so, Abilt “would have every incentive to probe as close to the core secrets as the trial judge would permit.” Farnsworth, 635 F.2d at 281. “Such probing ... would so threaten disclosure of state secrets that the overriding interest of the United States and the preservation of its state secrets precludes any further attempt to pursue this litigation.” Id.

Abilt further contends that “the Agency does not need classified information to advance its defense” because “[a]ny argument that he could not perform his duties overseas or overseas in a warzone is contradicted by non-classified information.” Appellant’s Br. 22-23. However, the simple fact that Abilt believes he can show that the CIA’s proffered nondiscriminatory reasons for its actions are pretextual does not mean that the CIA is not entitled to present its justifications, or that we should ignore the fact that any such justification is properly privileged. The CIA is entitled to proffer legitimate, nondiscriminatory reasons for its actions. If those reasons are properly privileged — as is the case here— then the case must be dismissed.

C.

Abilt also argues that “protective measures,” particularly in camera review, are adequate to protect the state secrets at issue here. To the contrary, this Court has held that an ex parte trial is “expressly foreclosed” by the Supreme Court’s decision in Reynolds. El-Masri, 479 F.3d at 311. Indeed, “[ijnadvertent disclosure during the course of a trial — or even in camera — is precisely the sort of risk that Reynolds attempts to avoid. At best, special accommodations give rise to added opportunity for leaked information. At worst, that information would become public, placing covert agents and intelligence sources alike at grave personal risk.” Sterling, 416 F.3d at 348.

Although Abilt points to procedures developed by the district court in Roule v. Petraeus, No. C 10-04632 LB, 2012 WL 2367873, at *7 (N.D. Cal. June 21, 2012), designed to “avoid presenting sensitive information,” that case is easily distinguishable in that at the time of that court’s decision, the government had not asserted the state secrets privilege. Once the privilege has been asserted, we are obliged to evaluate that claim under the three-step analysis put forward by this Court in El-Masri, 479 F.3d at 304. As explained above, those steps require dismissal.

D.

We acknowledge once again the unfortunate burden, on behalf of the entire country, that our decision places on Abilt. See Sterling, 416 F.3d at 348 (“We recognize that our decision places, on behalf of the entire country, a burden on Sterling that he alone must bear.”); El-Masri, 479 F.3d at 313 (“As we have observed in the past, the successful interposition of the state secrets privilege imposes a heavy burden on the party against whom, the privilege is asserted.”). Abilt suffers dismissal of his claim “not through any fault of his own, but because his personal interest in pursuing his civil claim is subordinated to the collective interest in national security.” El-Masri, 479 F.3d at 313; see also Fitzgerald, 776 F.2d at 1238 n.3 (“When the state secrets privilege is validly asserted, the result is unfairness to individual litigants— through the loss of important evidence or dismissal of a case — in order to protect a greater public value.”). We however find that “in limited circumstances like these, the fundamental principle of access to court must bow to the fact that a nation without sound intelligence is a nation at risk.” Sterling, 416 F.3d at 348.

IV.

For the foregoing reasons, the judgment of the district court is

AFFIRMED.

      . Due to the sensitive nature of his job responsibilities, Abilt is proceeding under a pseudonym.

      . Agency employees who go on TDY assignment to a warzone earn income above their standard salary.

      . "State secrets and military secrets are equally valid bases for invocation of the evi-dentiary privilege.” Sterling, 416 F.3d at 343 (internal quotation marks and alterations omitted).

      . See, e.g., Totten v. United States, 92 U.S. 105, 107, 23 L.Ed. 605 (1875) ("[P]ublic policy forbids the maintenance of any suit in a court of justice, the trial of which would inevitably lead to the disclosure of matters which the law itself regards as confidential, and respecting which it will not allow the confidence to be violated.”).

      . It is important to note that, by itself, "an executive decision to classify information is insufficient to establish that the information is privileged.” Mohamed v. Jeppesen Dataplan, Inc., 614 F.3d 1070, 1082 (9th Cir. 2010); see also Ellsberg, 709 F.2d at 57 ("[T]he privilege may not be used to shield any material not strictly necessary to prevent injury to national security....”). "Although classification may be an indication of the need for secrecy, treating it as conclusive would trivialize the court’s role.” Mohamed, 614 F.3d at 1082.

      . The district court held that collateral estop-pel applies to the government’s invocation of the state secrets privilege because the issues in this case are identical to the issues settled in Abilt I. Finding that the information is properly privileged regardless, we do not reach the collateral estoppel issue.

      . See, e.g., Sterling 416 F.3d at 346 (holding that "information that would result in ... disclosure of intelligence-gathering methods or capabilities, and disruption of diplomatic relations with foreign govérnments falls squarely within the definition of state secrets” (alterations in original) (internal quotation marks omitted) (quoting Molerio v. F.B.I., 749 F.2d 815, 820-21 (D.C. Cir. 1984))); Mohamed, 614 F.3d at 1086 (holding that "information concerning CIA clandestine intelligence operations that would tend to reveal intelligence activities, sources or methods” is protected by state secrets privilege); Al-Haramain, 507 F.3d at 1204 (applying the state secrets privilege to "the means, sources and methods of intelligence gathering”).

      . Abilt does not reasonably contend that the information the government seeks to protect is not properly privileged. Although Abilt asserts that the district court erred in determining "that there were no genuine issues of material fact that the agency properly invoked the state secrets privilege,” Appellant’s Br. 9, Abilt’s brief fails to make any argument to support this assertion. Abilt’s only argument regarding this issue is simply that the district court misstated his concession that the privilege applied and that "non-privileged information exists and/or can be discovered, which would enable the Appellant to support a pri-ma facie case and enable Defendants to support a defense to Mr. Abilt’s claims.” Appellant’s Br. 11 (emphasis in original). This, however, is an argument that the case may go forward under the third El-Masri step, not whether the privilege has been properly invoked. Accordingly, we address this argument in Section III.B.

      . To establish his prima facie claim of disparate treatment discrimination Abilt must show that: (1) he has a disability; (2) suffered a material adverse action; (3) was performing the essential functions of his position at a level that met his employer's legitimate expectations; and (4) the adverse action occurred under circumstances that raise a reasonable inference of unlawful discrimination. Ennis, 53 F.3d at 58. Likewise, in order to establish his prima facie case of retaliation, Abilt would need to show that he engaged in protected activity, that he was subject to an adverse employment- action, and that there is a causal link between the two. See Laing v. Fed. Express Corp., 703 F.3d 713, 720 (4th Cir. 2012).

      . Although Abilt attempts to distinguish Sterling on the grounds that he does not need comparator evidence to establish his prima facie case, the nature of the information required for the CIA to defend itself in the two cases is indistinguishable.


text:
    Calvin Garrett GRAY, Petitioner-Appellant, v. David BALLARD, Respondent-Appellee.
    No. 15-6719
    United States Court of Appeals, Fourth Circuit.
    Argued: December 8, 2016
    Decided: February 8, 2017

      ARGUED: Erin Galliher, Brennan Curtis, UNIVERSITY OF VIRGINIA SCHOOL OF LAW, Charlottesville, Virginia, for Appellant. Elbert Lin, OFFICE OF THE ATTORNEY GENERAL OF WEST VIRGINIA, Charleston, West Virginia, for Appellee. ON BRIEF: Stephen L. Braga, Appellate Litigation Clinic, UNIVERSITY OF VIRGINIA SCHOOL OF LAW, Charlottesville, Virginia, for Appellant. Patrick Morrisey, Attorney General, Gordon L. Mowen, II, Assistant Attorney General, OFFICE OF THE ATTORNEY GENERAL OF WEST VIRGINIA, Charleston, West Virginia, for Ap-pellee.
    Before TRAXLER, FLOYD, and THACKER, Circuit Judges.
   FLOYD, Circuit Judge:

Appellant Calvin Gray filed a petition for a writ of habeas corpus pursuant to 28 U.S.C. § 2254, which the district court denied as untimely. Gray appeals this denial, arguing that his petition was timely because it was filed within one year of his discovery of his petition’s factual predicates, which Gray contends he could not have discovered sooner than he did. We disagree, and find that had Gray exercised due diligence, he would have discovered these factual predicates far earlier. For this reason, we affirm the district court’s denial of Gray’s petition.

I.

In 1991, Appellant Calvin Gray was convicted by a West Virginia court of murder in the first degree. We detail his crime to the extent the facts are relevant to his § 2254 petition. On or about November 12, 1990, Christopher Dillard and Artissa Bennett were stabbed to death, and their bodies found on Tank Hill in Mercer County, West Virginia. Earlier that day, Dillard and Bennett had visited Gray at his home, and became engaged in an altercation with Gray and Gray’s half-brother, Karl Finney. Finney stabbed and killed Dillard at the house, and was later convicted of his murder. Gray’s young nephew, Omega Rosire, testified at Gray’s trial that after Finney stabbed Dillard, Gray and Finney dragged Dillard to Gray’s van, and then forced Bennett into the van as well. Rosire stated that he and Gray then drove the van to Tank Hill, and that upon their arrival, Gray took Bennett out of the van and walked her down the hill. Rosire heard Bennett scream and ' then heard the screaming abruptly stop, and saw the white coat that Bennett had been wearing fly up in the air.

At his trial, Gray testified on his own behalf. He admitted to fighting with Dillard and transporting Dillard and Bennett to Tank Hill; however, he claimed that Finney stabbed both Bennett and Dillard at the house, and that both Bennett and Dillard were already dead when he left their bodies on the hill.

At Gray’s trial, Trooper H.B. Myers from the Serology Division of the West Virginia State Police Crime Laboratory testified about serology evidence found at Gray’s home and on Tank Hill. Myers testified that blood found on leaves on the hill, on Bennett’s coat and scarf, and on a pair of Gray’s pants was consistent with Bennett’s blood, and not with that of Gray, Finney, or Dillard. He also testified that one blood stain found on Gray’s van was consistent with Dillard’s blood, and not with the others’ blood. He further testified that another sample from the van was inconclusive, because it was consistent with both Gray’s and Finney’s blood. Myers prepared an expert report regarding this evidence, but the report was not submitted to the jury. The jury was not informed of Gray’s blood type at any time, and Myers was the only witness to testify regarding serological testing. Prior to trial, Gray’s attorney made a motion for Gray’s blood to be tested independently, which was granted. However, the attorney did not follow up on this matter. Therefore, Gray’s blood was never independently tested.

The jury found Gray guilty of murder in the first degree. He was sentenced on August 30, 1991, to life in prison. He filed a petition for appeal with the Supreme Court of Appeals of West Virginia on March 6, 1992, which the court refused on June 10,1992.

On November 8, 1998, Gray filed his first state petition for a writ of habeas corpus. Gray asserted several claims, including a claim that tainted serology evidence had been presented at his trial by Myers. Namely, Gray claimed that his blood type was not Type B, as reflected in Myers’s serology report, but rather, Type A. Gray discovered that his blood type was Type A after undergoing medical testing in February of 1998. Gray’s petition as it pertains to the blood evidence is still pending.

On August 22, 2006, Gray filed a second petition for a writ of habeas corpus. This petition focused on separate issues with serological evidence used at Gray’s trial. Gray learned of these issues from the “Zain III report,” a report that was generated during a court-ordered investigation of the practices of the Serology Division of the West Virginia State Police Crime Laboratory. See In re Renewed Investigation of State Police Crime Lab., Serology Div. (Zain III), 219 W.Va. 408, 411-12,633 S.E.2d 762, 765-66 (2006). In conducting this investigation, the investigators retested the blood evidence from Gray’s case. They determined that Myers’s findings regarding the coat, pants, and car doors each contained certain aspects that were “not supported by data.” J.A. 350. The investigators also noted that the worksheets for the pants and coat appeared to have been altered.

In addition to filing this second habeas petition, Gray also amended his first habe-as petition to include his claims based on the Zain III report. The West Virginia court eventually consolidated Gray’s second habeas petition with the claims remaining in his first petition. This consolidated petition remains unresolved.

On September 27, 2013, Gray filed the underlying 28 U.S.C. § 2254 habeas petition in the United States District Court for the Southern District of West Virginia. Appellee David Ballard then moved to dismiss the petition as untimely. The motion was referred to Magistrate Judge Dwane L. Tinsley, who rendered a Proposed Findings and Recommendation.

The magistrate judge found that “[t]he only definitively false evidence asserted to have been discovered by [Gray] since his trial is the fact that his blood type was different than that presented by Myers in his report and suggested in his trial testimony.” Gray v. Ballard, Civ. No. 2:13—23807, 2015 WL 1292787, at *23 (S.D.W. Va. Mar. 23, 2015). The magistrate judge then explained that this fact was not relevant to Gray’s conviction, because Gray had admitted that the victims were at his house and that.he transported them in his van to Tank Hill. The magistrate judge added that Gray “received the serology report prior to his trial and had the opportunity to conduct his own serology testing if he believed that anything in the report was inaccurate or incomplete, including determining his own blood type,” and concluded that Gray had not exercised due diligence. Id: at *24. Accordingly, the magistrate judge recommended that the district court hold that neither the blood type evidence nor the Zain III report constituted a “factual predicate” that restarted the 1-year limitation period under 28 U.S.C. § 2244(d)(1)(D), and that the petition was therefore untimely. Id. at *24-25. The district court adopted the Proposed Findings and Recommendation, and dismissed the claim as untimely. Id. at *1-2. Gray now appeals.

II.

“We review de novo a district court’s denial of habeas corpus relief.” Waddell v. Dep’t of Correction, 680 F.3d 384, 392 (4th Cir. 2012) (citing DeCastro v. Branker, 642 F.3d 442, 449 (4th Cir. 2011)).

Gray was convicted in West Virginia state court, and thus brings his habeas petition under 28 U.S.C. § 2254. 28 U.S.C. § 2244(d)(1) sets a 1-year limitation on filing § 2254 claims. The statute provides:

(d)(1) A 1-year period of limitation shall apply to an application for a writ of habeas corpus by a person in custody pursuant to the judgment of a State court. The limitation period shall run from the latest of—
(A) the date on which the judgment became final by the conclusion of direct review or the expiration of the time for seeking such review; [or]
(D) the date on which the factual predicate of the claim or claims presented could have been discovered through the exercise of due diligence.

Gray contends that his claim is timely under § 2244(d)(1)(D), because he could not have earlier discovered either of the factual predicates for his claims with due diligence. “Due diligence does not require ‘the maximum feasible diligence,’ but it does require reasonable diligence in the circumstances.” Schlueter v. Varner, 384 F.3d 69, 74 (3d Cir. 2004) (quoting Moore v. Knight, 368 F.3d 936, 940 (7th Cir. 2004)).

Gray claims that his two state ha-beas petitions were based on two separate factual predicates: (1) his incorrect blood type on Myers’s report and (2) the factual findings in the Zain III report. We assume arguendo that these are in fact two distinct claims. If these claims do not fall under § 2244(d)(1)(D), then they are clearly untimely, as they needed to be filed by April 24, 1997, but were not filed until 1998 and 2006 respectively. We hold today that Gray would have discovered both factual predicates far earlier than he did had he exercised due diligence. For this reason, the district court was correct in holding that both his claims are untimely.

A.

Gray’s first habeas petition was filed in 1998, and was based on his discovery that his blood type is different from the blood type recorded in Myers’s report. Gray asserts that he could not have known that the blood type in the report was incorrect until he discovered his true blood type in 1998, after undergoing testing for medical purposes.

The Supreme Court has explained that a prisoner who attempts to use a DNA test as a factual predicate must act with reasonable promptness once the DNA sample and testing are available — he is not permitted to wait “untold years” to have the testing done, and then claim that he has “discovered*’ the result and “get the benefit of the rejuvenated 1-year period regardless of his lengthy delay.” Johnson v. United States, 544 U.S. 295, 310, 125 S.Ct. 1571, 161 L.Ed.2d 542 (2005). By this standard, Gray’s claim clearly fails: Blood typing technology existed for the entire length of his conviction, yet he claimed this new “discovery” after seven years had passed.

Gray claims that his case is distinguishable because his attorney was supposed to test his blood prior to the trial, but failed to do so. This argument is inapposite. An attorney’s actions are imputed to-his client, Holland v. Jackson, 542 U.S. 649, 653, 124 S.Ct. 2736, 159 L.Ed.2d 683 (2004), so this is not a valid reason for failing to exercise due diligence.

Gray further argues, however, that the discovery of his blood type should also be viewed as a factual predicate for an ineffective assistance of counsel claim for his counsel’s failure to have his blood tested. Gray claims he could not have known that his counsel failed to test the blood until after he found out his blood type was wrong in the report. This argument fails as well. Even after a prisoner has requested that his attorney take a certain action, a prisoner still must exercise due diligence himself. See, e.g., Ryan v. United States, 657 F.3d 604, 607-09 (7th Cir. 2011) (prisoner who requests that his attorney file an appeal is still obligated to check with his attorney within reasonable period of time to ensure the attorney has done so); Anjulo-Lopez v. United States, 541 F.3d 814, 818-19 (8th Cir. 2008) (same); Wims v. United States, 225 F.3d 186, 190-91 (2d Cir. 2000) (same). Gray’s attorney was supposed to have the testing conducted in 1991 before the trial. Gray, had he been exercising due diligence, would have discovered his attorney’s failure to do so long before 1998.

Gray did not exercise due diligence in discovering that his blood type was incorrect in Myers’s report. His habeas petition regarding his blood type is therefore untimely.

B.

The second factual predicate that Gray claims is that, after the release of the Zain III report in 2006, he discovered that other parts of Myers’s serology report were false. The magistrate judge found that Gray “received the serology report prior to his trial and had the opportunity to conduct his own serology testing if he believed that anything in the report was inaccurate or incomplete.” Gray, 2015 WL 1292787, at *24. This is correct; Gray could have requested that independent testing be conducted prior to his trial. See W. Va. R. Grim. P. 16(1)(C) (1991) (stating that the state must allow a defendant an opportunity to inspect physical evidence). Indeed, his attorney initially made such a request, which was granted, but the attorney never had the testing completed. Because Gray’s attorney could have independently tested the serology evidence and discovered that parts of Myers’s report were false prior to his trial, the Zain III report’s publication in 2006 clearly cannot not be used as the start date for the 1-year limitation period. For this reason, Gray’s habeas petition regarding the Zain III report is untimely as well.

III.

Gray did not exercise due diligence in discovering his blood type and the facts contained in the Zain III report. His petition is thus untimely under 28 U.S.C. § 2244(d)(1)(D). The district court’s order denying Gray’s petition is therefore

AFFIRMED.

      . A different claim in the petition regarding jury instructions was resolved against Gray on October 1, 2004, and the West Virginia Supreme Court of Appeals denied an appeal petition on March 9, 2005.

      . The Zain decisions are a trilogy of opinions issued by the Supreme Court of Appeals of West Virginia. Zain I recognized that serology evidence presented by Fred Zain, a serologist with the Serology Division of the State Police Crime Laboratory from 1979 to 1989, may have been tainted. In re W. Va. State Police Crime Lab., Serology Div. (Zain I), 190 W.Va. 321, 438 S.E.2d 501 (1993). Zain II held that criminal defendants could only challenge the West Virginia State Police Crime Lab’s evidence if Fred Zain was directly involved. In re W. Va. State Police Crime Lab., Serology Div. (Zain II), 191 W.Va. 224, 445 S.E.2d 165 (1994). Zain III then modified Zain II by permitting an individual to challenge serology evidence through a state habeas petition where serologists other than Fred Zain were involved. Zain III, 219 W.Va. 408, 633 S.E.2d 762.

      .The district court below did not reach the issue of failure to exhaust, so it need not be discussed here.

      . Gray’s conviction predated the enactment of the Antiterrorism and Effective Death Penalty Act of 1996, Pub. L. No. 104-132, 110 Stat. 1214, codified in relevant portion at 28 U.S.C. § 2244, thus the 1-year limitation period under § 2244(d)(1)(A) began to run for him on April 24, 1996, the day of the Act's enactment. Brown v. Angelone, 150 F.3d 370, 375 (4th Cir. 1998).

      . The dates that Gray's state habeas petitions were filed are the relevant dates here, as § 2244(d)(2) states that ''[t]he time during which a properly filed application for State post-conviction or other collateral review with respect to the pertinent judgment or claim is pending shall not be counted toward any period of limitation.”