D.C. court tosses former Congressman's lawsuit

By John O'Brien | Jan 25, 2011


WASHINGTON (Legal Newsline) - The District of Columbia's highest court has rejected two lawsuits that some claimed would have expanded the ability of citizens to file consumer protection lawsuits.

The D.C. Court of Appeals ruled Friday that two plaintiffs who hoped to bring claims under the Consumer Protection Procedures Act did not have reason to do so. One of those plaintiffs was former U.S. Rep. Alan Grayson, who called himself a "whistleblower" when he sued AT&T over unused balances on calling cards.

The court called Grayson's complaint "legally insufficient" and that the plaintiff in the other case, Paul Breakman, did not even purchase the product over which he was suing.

"(Grayson) has identified no statement or practice in his amended complaint made or employed by any of the defendants which directly or through reasonable inference shows that the defendants knew that consumers would not receive substantial benefits from their calling cards," Judge Inez Reid wrote.

"Other than conclusory allegations pertaining to vulnerable members of the District's population - the elderly and the disabled - Mr. Grayson's complaint is devoid of allegations demonstrating even by innuendo that defendants have issued calling cards in the District that enable them to take advantage of these segments of the population."

Judge Vanessa Ruiz, concurring in part and dissenting in part, wrote that both had standing to bring suit. Although she agreed that Grayson's suit was properly dismissed, she said Breakman's case should have been remanded and progressed to the summary judgment phase.

Breakman alleges that AOL customers were not informed that the company offered cheaper plans to new customers. Breakman was not an AOL customer.

The lawsuits drew plenty of attention. Six amicus briefs were filed, including one by the U.S. Chamber of Commerce. Legal Newsline is owned by the Institute for Legal Reform, an affiliate of the U.S. Chamber of Commerce.

Peter Nickles, when he was still D.C.'s attorney general, was one of the officials who joined in the District's amicus brief.

In the American Tort Reform Association's recently released Judicial Hellholes report, the group said the lawsuits threatened to make D.C. "the nation's capital for spurious lawsuits alleging violations of consumer protection law.

"The requirement of standing, the Court recognized, ensures that a person who sues has a personal stake in the outcome of a controversy and that judicial power is used only to redress or otherwise protect a person against injury," ATRA wrote on its website judicialhellholes.org.

"The broader message of the decision is that a person or organization that sues for the generous damages and attorneys fees authorized by the District's consumer protection statute must show 'concrete injury-in-fact to himself.'"

Grayson, a Democrat, lost his re-election bid in November to Daniel Webster. He was defeated by 20 percentage points.

From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.

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