Shaw v. Marriott Int'l Inc, No. 08-7142.

• Citation: 605 F.3d 1039
• Decision Date: 28 May 2010
• Docket Number: No. 08-7142.
• Parties: Britt A. SHAW, et al., Appellantsv.MARRIOTT INTERNATIONAL, INC., appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

605 F.3d 1039

Britt A. SHAW, et al., Appellantsv.MARRIOTT INTERNATIONAL, INC., appellee.

No. 08-7142.

United States Court of Appeals, District of Columbia Circuit.

Argued Sept. 24, 2009.

Decided May 28, 2010.

Paul D. Cullen Sr. argued the cause for appellants. With him on the briefs was Joyce E. Mayers. Daniel E. Cohen entered an appearance.

Charles P. Scheeler argued the cause for appellee. With him on the brief were Holly Drumheller Butler, Bruce V. Spiva, and Kathleen R. Hartnett. Benjamin S. Boyd entered an appearance.

Before: SENTELLE, Chief Judge, and GRIFFITH and KAVANAUGH, Circuit Judges.

Opinion for the Court filed by Circuit Judge GRIFFITH.

GRIFFITH, Circuit Judge:

Plaintiffs brought this action under the District of Columbia consumer protection statute to challenge the pricing practices of Marriott's Russian hotels. The district court granted summary judgment in favor of Marriott. We affirm in part and reverse in part.

I.

The plaintiffs allege a scheme by Marriott International to overcharge guests at its Russian hotels. Customers reserving rooms at Marriott hotels in Russia received their rate quotes in U.S. dollars. Marriott did not inform customers until checkout that payment would be due in Russian rubles, which the hotels calculated at an exchange rate less favorable than the official rate set by the Central Bank of Russia. As a result, guests paid up to 18 percent more than the price they had been quoted when making their reservations.

Plaintiff Britt Shaw's experience shows how Marriott's system worked. In April 2005, Shaw made a one-night reservation at the Marriott Renaissance Moscow during a business trip for his law firm. He was quoted a price of $425. When Shaw checked out of the hotel, he learned that he could only pay in rubles, not in dollars. Marriott used its own exchange rate of $1 to 32 rubles and charged Shaw 13,600 rubles for what he had been told would be a $425 room. At that day's official exchange rate of $1 to 27.7543 rubles, 13,600 rubles equaled $490. Shaw paid $65 more than the price quoted to him when he reserved his room. The remaining plaintiffs were treated similarly.

Shaw and the other plaintiffs filed suit in District of Columbia Superior Court on behalf of themselves and similarly situated customers. They alleged Marriott's pricing practices violated the District of Columbia Consumer Protection Procedures Act (CPPA), D.C. Code §§ 28-3901 to -3913 (2009), and constituted unjust enrichment. Marriott removed the case to federal district court under 28 U.S.C. § 1332(d) (2006).

The other named plaintiffs are the Center for Strategic and International Studies (CSIS), a Washington, D.C. think tank that funded its employees' professional travel to Russia; Sarah Mendelson, a CSIS employee whose business takes her frequently to Russia; and Neal Charness, a Michigan resident who stayed at Marriott hotels during personal visits to Russia.

Plaintiffs moved for class certification, and the parties filed cross-motions for summary judgment. The district court granted summary judgment for Marriott, mooting the motion for class certification. Shaw v. Marriott Int'l, Inc., 570 F.Supp.2d 78, 89 (D.D.C.2008). The court held that CSIS, Shaw, and Mendelson were not “consumers” entitled to protection under the CPPA because CSIS was a business entity and Shaw and Mendelson stayed at Marriott's Russian hotels only for business purposes. Id. at 85. The court also held that Charness, as a Michigan resident, could not invoke the protection of the CPPA because D.C. law did not govern his dispute with Marriott, a Delaware corporation headquartered in Maryland. Id. at 88. Finally, the court granted summary judgment for Marriott on plaintiffs' unjust enrichment claim. Id. at 89.

On appeal, plaintiffs drop their claim of unjust enrichment and challenge only the district court's reading and application of the CPPA. We have jurisdiction under 28 U.S.C. § 1291, conclude that Shaw and Mendelson lack standing to pursue their actions in federal court, and affirm the judgment of the district court on the claims of CSIS and Charness.

II.

At the outset, Marriott argues that CSIS, Mendelson, and Shaw lack standing to bring this suit. “Because the question of standing goes to our jurisdiction over the case, we must consider it first.” AT&T Corp. v. FCC, 317 F.3d 227, 237 (D.C.Cir.2003). To be heard in federal court, every plaintiff must satisfy the “irreducible constitutional minimum” of Article III standing: injury-in-fact, causation, and redressability. Young Am.'s Found. v. Gates, 573 F.3d 797, 799 (D.C.Cir.2009) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). To demonstrate standing on a motion for summary judgment, a plaintiff “must set forth by affidavit or other evidence specific facts,” establishing each of these three elements. Lujan, 504 U.S. at 561, 112 S.Ct. 2130 (internal quotation marks omitted).

Marriott contends that it could not have caused any harm to CSIS and Mendelson because CSIS employees stayed only at Marriott-franchised hotels, which are not owned and operated by Marriott, but by independent corporations. CSIS and Mendelson have met their burden. They have proffered evidence that Marriott was responsible for their loss because it exercises some control over the franchised hotels, including capping the rates they charge for rooms. See Plaintiffs' Statement of Undisputed Facts ¶¶ 9-11, 20, 28-32.

CSIS has standing. It used its own funds to pay for stays at Marriott's Russian hotels, and suffered pecuniary harm as a result of Marriott's pricing practices. See Ciba-Geigy Corp. v. EPA, 801 F.2d 430, 438 n. 10 (D.C.Cir.1986) (“[E]conomic loss clearly constitutes a distinct and palpable injury ....”) (internal quotation marks omitted). Damages under the CPPA would remedy that loss. Article III requires no more.

Whether Shaw and Mendelson have standing is more complicated. They concede having suffered no pecuniary injury because their employers paid for their hotel stays. See Reply Br. at 27-28. Nonetheless, they maintain that they have suffered a legally cognizable injury because Marriott invaded their interest in being free from improper trade practices, an interest protected under the CPPA. The deprivation of such a statutory right may constitute an injury-in-fact sufficient to establish standing, even though the plaintiff “would have suffered no judicially cognizable injury in the absence of [the] statute.” Warth v. Seldin, 422 U.S. 490, 514, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975); see also Zivotofsky ex rel. Ari Z. v. Sec'y of State, 444 F.3d 614, 619 (D.C.Cir.2006) (“Although it is natural to think of an injury in terms of some economic, physical, or psychological damage, a concrete and particular injury for standing purposes can also consist of the violation of an individual right conferred on a person by statute.”).

But the violation of a statute can create the particularized injury required by Article III only when “an individual right” has been “conferred on a person by statute.” Zivotofsky, 444 F.3d at 619. The question is whether Shaw and Mendelson are within the class of individuals protected by the CPPA. To answer that, we must apply the substantive law of the District of Columbia. Smith v. Wash. Sheraton Corp., 135 F.3d 779, 782 (D.C.Cir.1998). “Our duty, then, is to achieve the same outcome we believe would result if the District of Columbia Court of Appeals considered this case.” Novak v. Capital Mgmt. & Dev. Corp., 452 F.3d 902, 907 (D.C.Cir.2006).

The CPPA provides that “[a] person ... may bring an action under this chapter in the Superior Court of the District of Columbia seeking relief from the use by any person of a trade practice in violation of a law of the District of Columbia.” D.C. Code § 28-3905(k)(1). Though the statute defines “person” broadly id. § 28-3901(a)(1), the District of Columbia Court of Appeals has held that the CPPA protects only consumers see Ford v. ChartOne, Inc., 908 A.2d 72, 81 (D.C.2006); Dist. Cablevision Ltd. P'ship v. Bassin, 828 A.2d 714, 717 (D.C.2003).

We first look to the statute's text to determine whether Shaw and Mendelson engaged in “consumer” transactions within the meaning of the Act. The CPPA defines “consumer” both as a noun and an adjective. In relevant part, the noun “consumer” means “a person who does or would ... receive consumer goods or services,” D.C. Code § 28-3901(a)(2), or “a person who does or would provide the economic demand for” “any act which does or would create, alter, repair, furnish, make available, provide information about, or, directly or indirectly, solicit or offer for or effectuate, a sale, lease or transfer, of consumer goods or services,” id. § 28-3901(a)(2), (6). When used as an adjective, as in the phrase “consumer goods,” the word means “primarily for personal, household, or family use.” Id. § 28-3901(a)(2). We read these provisions together to define “consumer” as a person who receives or demands goods or services that are primarily for personal, household, or family use.

Precedent from the District of Columbia Court of Appeals confirms this reading of the Act. In Ford v. ChartOne, the District of Columbia Court of Appeals held that a person who had purchased his medical records for the purpose of future litigation had engaged in a consumer transaction under the CPPA because pursuing compensation for injuries was a personal motive. 908 A.2d at 83. Ford also noted with approval a district court decision that held that a cab driver's purchase of gasoline was not covered by the CPPA id. at 84 n. 12, because it was made “in connection with his role as an independent businessman,” and not primarily for personal use id. at 81 (quoting Mazanderan v. Indep. Taxi Owners' Ass'n, 700 F.Supp. 588, 591 (D.D.C.1988)). These cases teach that purpose is the touchstone of the CPPA's definition of “consumer” and that the statute does not reach...