D.C. Court of Appeals Upholds Injury-in-fact” Requirement for Standing Under the D.C. Consumer Protection Procedures Act

Yesterday, an en banc panel of the D.C. Court of Appeals upheld two separate trial court determinations that a plaintiff must suffer injury-in-fact” before initiating a claim under the District of Columbia Consumer Protection Procedures Act (“CPPA”). The 8-1 decision resolved the appeals in Grayson v. AT&T, No. 07-CV-1264, and Breakman v. AOL, No. 08-CV-1089. The plaintiffs in both cases appealed trial court rulings that granted the respective defendants’ motions to dismiss based on the plaintiffs’ failure to allege personal injury-in-fact.

In 2004, Grayson sued telecommunications carriers under the CPPA for allegedly defrauding the D.C. government by failing to report as unclaimed property the unused portion of prepaid calling cards. Grayson purchased a prepaid calling card two years before filing his claim, yet his card remained active and eligible for his use. Breakman’s original claim alleged that AOL violated the CPPA by imposing deceptive pricing on its customers who live in the District. Breakman was not an AOL customer, but brought the claim solely in a representative capacity on behalf of the interests of the general public . . .”

Both Grayson and Breakman argued on appeal that, because Congress created the D.C. court system under Article I of the U.S. Constitution, D.C. courts were not required to follow Article III standing requirements. To establish standing under Article III, a plaintiff must suffer an injury-in-fact; there must be a causal connection between the injury and the conduct at issue; and a favorable decision must be likely to redress the injury (as articulated in Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)). The Court rejected the appellants’ argument based on the D.C. court’s consistent application of the Article III requirements.

The Court then considered whether a 2000 amendment to the CPPA expanded the scope of the current standing doctrine. The amendment changed the language concerning who was eligible to bring a CPPA from any consumer who suffers any damage” to a person, whether acting for the interests of itself, its members, or the general public.” The Court acknowledged that the 2000 amendment enlarged the category of persons authorized to bring a CPPA enforcement action. Nevertheless, it found that the amendment’s legislative and drafting history lacked clear intent to override the current standing requirement. The Court further remarked that overturning the long-held standing principle would open [the] courts to any person from anywhere who decides to lodge a complaint...even though that person has suffered no injury-in-fact.” Thus, neither Grayson nor Breakman were relieved of demonstrating injury-in-fact.

The Court concluded that Breakman’s mere interest” in the alleged unlawfulness of AOL’s practices was insufficient to give standing, and the trial court properly dismissed his claim.

The Court determined that Grayson, on the other hand, sufficiently alleged injury-in-fact because his injury could be derived solely from a violation . . . of his statutory legal rights created by the CPPA.” The Court also held that Grayson’s allegations met the causal connection” and redressability” requirements in Lujan and, therefore, the trial court erred in dismissing Grayson’s claim based on lack of standing. The Court, nonetheless, upheld the dismissal of Grayson’s claim due to his failure to state a legally viable claim upon which relief could be granted.