Grayson v. At & T Corp.., s. 07–CV–1264

Decision Date20 January 2011
Docket NumberNos. 07–CV–1264,08–CV–1089.,s. 07–CV–1264
PartiesAlan GRAYSON, Appellant,v.AT & T CORPORATION, et al., Appellees.Paul M. Breakman, Appellant,v.AOL LLC, Appellee.
CourtD.C. Court of Appeals

OPINION TEXT STARTS HERE

Victor Kubli, Vienna, VA, and Walter Dierks, with whom Frederick D. Cooke, Jr., was on the brief, and with whom Frederick D. Cooke, Jr., Jeffrey Harris, Washington, DC, Kevin F. Rooney, Andrew A. August, and Giancarlo Terilli, New York, NY, were on the reply brief, for appellants.Jay P. Lefkowitz, New York, NY, with whom Daniel Forman, Aryeh S. Portnoy, Thomas E. Gilbertsen, John E. Villafranco, Michael F. Williams, Gregory L. Skidmore, Arjun Garg, Washington, DC, John D. Wilburn, Anand V. Ramana, McLean, VA, and Daniel T. Donovan, Washington, DC, were on the brief, for appellees.Bonnie I. Robin–Vergeer, with whom Deepak Gupta, Washington, DC, was on the brief, for amicus curiae the Legal Aid Society of the District of Columbia, Public Citizen, Inc., Center for Science in the Public Interest, National Association of Consumer Advocates, and National Consumer Law Center, supporting appellants.Bennett Rushkoff, Chief Public Advocacy Section, Office of the Attorney General, District of Columbia, with whom Peter J. Nickles, Attorney General, Todd S. Kim, Solicitor General, Donna M. Murasky, Deputy Solicitor General, and John L. Davie, Special Assistant Attorney General, for amicus curiae the District of Columbia, supporting appellees.Paul D. Cullen, Sr., and Joyce L. Mayers, Washington, DC, filed a brief for amicus curiae Brit A. Shaw, supporting appellants.Hassan Zavareei, Melanie Williamson, Tracy D. Rezvani, Donald J. Enright, and Karen Marcus, Washington, DC, filed a brief for amicus curiae the National Consumers League and Individual Consumers Jarrod Beck, Keerthi Reddy, and Erin Galloway, supporting appellants.Evan M. Tager, Archis A. Parasharami, Kevin Ranlett, Washington, DC, Scott M. Noveck, Robin S. Conrad, and Amar D. Sarwal, Washington, DC, filed a brief for amicus curiae the Chamber of Commerce of the United States, supporting appellees.Theodore Hadzi–Antich, Buffalo, NY, and Deborah J. La Fetra, filed a brief for amicus curiae the Pacific Legal Foundation, supporting appellees.Before WASHINGTON, Chief Judge, RUIZ, REID, GLICKMAN, KRAMER, FISHER, BLACKBURNE–RIGSBY, THOMPSON, and OBERLY, Associate Judges.REID, Associate Judge:

In these consolidated cases 1 appellant Alan Grayson appeals the trial court's judgment granting appellees' 2 Super. Ct. Civ. R. 12(b) motion to dismiss his District of Columbia Consumer Protection Procedures Act (“CPPA”) claims for unlawful trade practices.3 These claims involve the unused balance on telephone calling cards (escheated telephone calling card prepayments), and Mr. Grayson describes his lawsuit as “a ‘whistleblower’ action” to recover funds belonging to the District. The trial court dismissed Mr. Grayson's CPPA claim on the ground that he lacked standing ( Rule 12(b)(1)), and even if he suffered injury, his complaint failed to state a claim for which relief may be granted ( Rule 12(b)(6)).

Appellant Paul M. Breakman appeals the trial court's judgment granting the Super. Ct. Civ. R. 12(b)(1) motion of appellee, AOL LLC (AOL), to dismiss his CPPA claim for unlawful trade practice on the ground that he does not have standing. He alleged, in essence, that AOL failed to disclose to its current and existing members the cheaper option for monthly Dial–Up ISP Service charged to new members.

Confronting us in both cases is a fundamental threshold issue of standing, which is not to be confounded with the question of whether appellants can prevail on the merits of their respective claims. Rather, we must determine whether the trial court properly dismissed these claims, in response to appellees' motions to dismiss, because appellants do not have standing to assert their CPPA claims. To answer that question, we focus first on the standing requirement in the District of Columbia. Second, we examine whether the Council of the District of Columbia intended to disturb or override this court's constitutional standing requirement. Third, we determine whether the factual allegations in Mr. Grayson's and Mr. Breakman's respective complaints are sufficient to enable them to survive a standing challenge on a motion to dismiss. Finally, because the trial court also dismissed Mr. Grayson's complaint under Super. Ct. Civ. R. 12(b)(6), we consider whether his complaint states a cause of action within the meaning of that rule.

We conclude that even though Congress created the District of Columbia court system under Article I of the Constitution, rather than Article III, this court has followed consistently the constitutional standing requirement embodied in Article III. Thus, appellants must allege “some threatened or actual injury resulting from ... putatively illegal action” 4 in order for this court to assume jurisdiction. “The actual or threatened injury required by Art. III may exist solely by virtue of statutes creating legal rights, the invasion of which creates standing.’ 5

We hold that the Council of the District of Columbia did not disturb or override our constitutional standing requirement in amending the CPPA in 2000; the words of the 2000 amendments, viewed in the context of the legislative and drafting history of these amendments, do not reveal an explicit intent of the Council to erase the constitutional standing requirement 6 to which this court has adhered during the past several decades.7

Furthermore, we hold that the trial court properly dismissed Mr. Breakman's complaint under Rule 12(b)(1) because he failed to plead sufficient facts showing that he meets the constitutional standing requirement, that is that he suffered an injury in fact or that he is entitled to lodge a representative action. And, we hold that Mr. Grayson has individual standing to seek injunctive or other relief under the principle that the “actual or threatened injury required by Art. III [of the Constitution] may exist solely by virtue of statutes creating legal rights, the invasion of which creates standing.’ Warth.8 However, we conclude that Mr. Grayson failed to allege legally viable claims under D.C.Code § 28–3904(a), (e), (f), (h), and (r).

Accordingly, we affirm the trial court's dismissal of Mr. Breakman's complaint; we disagree with its ruling as to Mr. Grayson's standing, but affirm its dismissal of Mr. Grayson's complaint under Super. Ct. Civ. R. 12(b)(6). We also amend and reissue Grayson I as an opinion covering only Mr. Grayson's claim under the District of Columbia False Claims Act (“FCA”).

I.FACTUAL SUMMARY
Mr. Grayson's Amended Complaint and Mr. Breakman's Complaint

On March 26, 2004, Mr. Grayson filed an amended complaint in which he set forth a cause of action under the CPPA. He alleged the following, in part. He brought “this cause of action for the interests of himself and the general public.” Paragraph 157. He described himself essentially as a businessman who had served in 1990 and 1991 as the President of a Fortune 500 international communications company, with over $1 billion in assets, which “operates in a variety of different markets, including prepaid calling cards.” 9 He has obtained and used prepaid calling cards in [the] District, the unused value of which the Defendants have failed to report and pay to the Mayor.” Paragraph 6. Mr. Grayson alleges further that the unused portion of a prepaid calling card is “breakage,” and [t]he defendants have been retaining breakage since 1992,” in the amount of millions of dollars, instead of reporting and turning over the breakage to the Mayor of the District, as unclaimed property. Paragraphs 27–35. As of some time in 2003, “each of the[ ] Defendants held around $200,000 in communications prepayments received in 1999 from owners whose last known address was in the District”; these sums “had remained dormant during the statutory dormancy period,” but [t]he[ ] defendants failed to report and pay or deliver these deposits and advance payments to the Mayor by November 1, 2003.” Paragraph 64. When “the amount of communications prepayments that the [ ] with District addresses in other years since 1997,” are taken into consideration, “the total amount of communications prepayments that each of the [ ] [D]efendants had received from owners whose last known address was in the District that had remained dormant during the statutory dormancy period, as of June 30, 2003, exceeded $500,000 for Verizon, AT & T, MCI and Sprint.” These sums were not reported or paid to the District, and [a]s noted above, the ... Plaintiff has obtained and used prepaid calling cards in the District, the unused value of which the Defendants have failed to report and pay to the Mayor.” Paragraph 32.

The complaint alleged that by their actions, the Defendants engaged in unlawful trade practices under D.C.Code § 28–3904 (2003).10 Paragraph 165. “The Defendants have engaged in the trade practice of soliciting and accepting communications prepayments, and then failing to pay or deliver to the Mayor the unused balances of prepaid calling cards ..., in violation of [the District of Columbia Unclaimed Property Act, in particular, D.C.Code § 41–119 (2003) ].” Paragraph 164. Paragraphs 166 through 168 and 173 of Mr. Grayson's “Second Claim for Relief” specified that [t]his practice is unlawful under D.C.Code § 28–3904 ... for several reasons”:

166. § 28–3904(a) & (e). It is unlawful because the Defendants have represented to the owner that his or her prepayment equals the purchase price of the card. The Defendants have provided services whose price is less than the amount of prepayment. Thus the Defendants have represented that their services have characteristics, uses, benefits and quantities that they do not have. This violates D.C.Code § 28–3904(a) (2003). This also constitutes a representation of...

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