Federal Court Rejects CAFA Removal Because Plaintiff Is Uninjured and Thus Lacks Standing
Reading National Consumers League v. General Mills, Inc., Civ. A. No. 09-10881 (HHK), Slip op. (D.D.C. Jan 15, 2010) will make you feel as if you have fallen through the looking glass. In this case, the National Consumers League ("NCL") sued General Mills for alleged misrepresentations about the cholesterol-lowering properties of Cheerios. The NCL brought suit under DC's Consumer Protection Procedures Act ("CPPA") for declaratory relief, injunctive relief, the "greater of 'treble damages or statutory damages in the amount of $1,500 per violation,'" and attorneys' fees, expenses and costs. Id. at 2. General Mills removed the case to federal court pursuant to the Class Action Fairness Act.
So far, so good. Sounds positively ordinary, right? Hang on.
The NCL made an emergency motion to remand, arguing that it had suffered no injury and thus lacked the Article III standing necessary to pursue a claim in federal court.
Yes, that's right. Plaintiff stipulated that it had suffered no injury and lacked standing.
How can a plaintiff do that and avoid ruining its prospects of pursuing its claim in "state" court, too? Indeed, don't state courts have standing rules that prevent the adjudication of "hypothetical" disputes and require a plaintiff to have injury and causation in order to establish a justiciable case or controversy? Nearly all do. Indeed, most people would have thought that DC courts, which are statutorily authorized to adjudicate only "cases or controversies" (D.C. Code sec. 11-705), have standing requirements as well. See, e.g., Speyer v. Barry, 588 A.2d 1147, 1160 (D.C. 1991); Cmty. Credit Union Servs . v. Fed. Express Servs. Corp., 534 A.2d 331, 333 (D.C. 1987).
Unfortunately, however, the District of Columbia held last year that the District's courts are "not required to abide by any of the constitutional or traditional standing principles that apply in federal courts 'when the [D.C.] Council has provided the cause of action.'" Archis A. Parasharami and Kevin Ranlett, The Nation's New Lawsuit Capital? D.C. High Court Eliminates Standing Requirements for Consumer Protection Lawsuits, Threatening Flood of Abusive Litigation, vol. 9, no. 20, Mealey's Litigation Report: Class Actions (Dec. 17, 2009) (discussing Grayson v. AT&T Corp.., 980 A.2d 1137 (D.C. 2009)). The DC Council had amended the CPPA in 2000 to allow any person to bring an action on behalf of the general public. Accordingly, the NCL was free to escape federal court by arguing that it had no injury because the District appears not require an injury for private attorneys general asserting CPPA claims.
The federal court in National Consumers League could have stopped there, but it didn't. It also opined that the case was not removable as a "mass action" under CAFA because it fell into the exception of being a non-removable suit "brought on behalf of the general public." Slip. op. at 8-9. This conclusion seems suspect, however, given that the suit seeks -- in addition to injunctive and declaratory relief -- damages, which the court stated were not payable to the uninjured plaintiff, but instead only to those consumers who had been actually harmed. Id. at 9-10. At least with the damages portion of the suit, then, the plaintiff (NCL) is representing a subset of the general public: Cheerios consumers who were actually injured by the defendant's alleged misconduct and can collect damages. That sounds much more like a "mass action" or "class action" than a suit on behalf of the "general public." Nevertheless, the court mandated remand to DC Superior Court.
The result in National Consumers League highlights the potential for a disturbing trend: unscrupulous litigants may file CPPA claims in DC Superior Court seeking damages for other people and, by disclaiming any injury themselves, effectively avoid CAFA's clear purpose of having such suits adjudicated in federal courts. That can hardly be what Congress intended when it enacted CAFA. And I continue to find it difficult to believe that it really is the law in the District of Columbia.
