Lopez v. Council on American-Islamic Relations Action Network, Inc. ( 2010 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
__________________________________________
)
RENE ARTURO LOPEZ, et al., )
)
Plaintiffs, )
)
v. ) Civil Action No. 10-0023 (PLF)
)
COUNCIL ON AMERICAN-ISLAMIC )
RELATIONS ACTION NETWORK, INC., )
)
Defendant. )
__________________________________________)
OPINION
This matter is before the Court on motions by the defendant to dismiss the
plaintiffs’ complaint or, in the alternative, to consolidate this case with a related civil action and
reassign the consolidated cases to Judge Urbina. After careful consideration of the parties’
arguments, the relevant legal authorities, and the entire record in this case and in related cases,
the Court will grant the defendant’s motion to dismiss with regard to the plaintiffs’ claim
alleging violations of the District of Columbia Consumer Protection Act, but will deny the
defendant’s motion to dismiss the remainder of the plaintiffs’ claims. The Court will grant the
defendant’s motion to consolidate this case with a related matter, but deny the motion to reassign
the consolidated cases to Judge Urbina.1
1
The documents reviewed by the Court in connection with the motions in question
include the following: plaintiffs’ first amended complaint (“Compl.”); defendant’s motion to
dismiss the complaint (“MTD”); plaintiffs’ opposition to the motion to dismiss (“Opp.”);
defendant’s reply in support of its motion to dismiss (“Reply”); defendant’s motion to transfer
and consolidate related cases (“Trans. Mot.”); plaintiffs’ opposition to defendant’s motion to
transfer and consolidate; and defendant’s reply in support of the motion to transfer and
consolidate.
I. BACKGROUND
A. Plaintiffs’ Claims
According to the plaintiffs’ first amended complaint, defendant Council on
American-Islamic Relations Action Network, Inc. (“CAIR”) operates as a public interest law
firm formed to protect the civil liberties of Muslims in the United States. Compl. ¶ 15. CAIR
has a main office in the District of Columbia and a variety of branch offices located throughout
the country. Id. Until recently, one of those branch offices (“CAIR-VA”) was located in
Herndon, Virginia. Id. ¶ 3.
Beginning in 2006, CAIR-VA employed as a staff attorney an individual named
Morris J. Days III. Compl. ¶ 4. Mr. Days was tasked with “provid[ing] legal representation to
Muslims complaining of various civil rights abuses,” id., and CAIR-VA referred to him as its
“resident attorney” in promotional materials. Id. ¶ 17. Mr. Days, however, was not a licensed
attorney, and the plaintiffs contend that CAIR-VA “knew or should have known” that he was not.
Id. ¶ 5. In February of 2008, after receiving complaints about Mr. Days from his clients, CAIR-
VA terminated his employment. Id. ¶¶ 33-35.
At various points during 2007 and 2008, plaintiffs Rene Lopez, Aquilla Turner,
Mohammed Abdussalaam, and Bayenah Nur each sought legal services from Mr. Days. See
Compl. ¶¶ 55, 83, 100. Mr. Abdussalaam came to Mr. Days in February of 2007 claiming that he
had been the victim of employment discrimination and seeking legal representation from CAIR.
Id. ¶ 55.2 Although Mr. Days promised that he would file a complaint in federal district court on
2
The complaint does not actually make specific allegations about Mr. Abdussalaam
by name, but for reasons unknown refers to one plaintiff only as “MB.” See Compl. ¶¶ 55-82.
The Court assumes, by a process of elimination, that “MB” is Mohammed Barakatullah
Abdussalaam. If that reasoning proves to be incorrect, and the complaint in fact includes no
2
Mr. Abdussalaam’s behalf and accepted $250 from Mr. Abdussalaam as a payment towards the
cost of filing fees, no complaint was ever filed. Id. ¶¶ 60, 67-68. Mr. Abdussalaam did not learn
that Mr. Days was not actually a licensed attorney until after the statute of limitations applicable
to his claims had already run. Id. ¶¶ 68, 75.
In June of 2007, plaintiffs Rene Lopez and Aquilla Turner approached Mr. Days
at CAIR-VA and requested help with an immigration matter and a divorce, respectively. Compl.
¶ 83. Mr. Days asked for $1,100 in legal fees, id. ¶ 84, which Mr. Lopez and Ms. Turner paid
partly in cash and partly by performing “some chores at Days’ home.” Id. ¶¶ 85-86. In February
of 2008, Ms. Turner learned that Mr. Days was no longer employed by CAIR-VA. Id. ¶ 89. She
and Mr. Lopez continued to communicate with Mr. Days by phone until Mr. Days’ phone line
was disconnected and he could no longer be reached. Id. ¶ 90. Although Ms. Turner spoke to
multiple CAIR-VA employees after the termination of Mr. Days’ employment, none of those
employees informed her that Mr. Days had never been a licensed attorney. Id. ¶¶ 92-94.
Whether Mr. Days ever performed any significant legal services related to Mr. Lopez’s or Ms.
Turner’s case is unclear from the complaint.
Plaintiff Bayenah Nur called CAIR-VA in November of 2007 regarding her belief
that her employer was illegally discriminating against her. Compl. ¶ 100. Mr. Days told Ms. Nur
that he, acting on behalf of CAIR, would represent her. Id. ¶ 101. He then contacted Ms. Nur’s
employer, Star Tek, Inc., and informed a “senior company official” that Ms. Nur had retained
him to represent her in connection with a discrimination claim against the company. Id. ¶ 102.
Soon afterward, Star Tek offered to address Ms. Nur’s claims of discriminatory harassment by
specific allegations concerning Mr. Abdussalaam, the defendant certainly will be welcome to file
an appropriate motion to dismiss his claims.
3
transferring her to another division of the company. Id. ¶ 105. Acting on Mr. Days’ advice, Ms.
Nur rejected that offer. Id. ¶¶ 107-08. Star Tek responded by placing Ms. Nur on unpaid leave
in November of 2007. Id. ¶ 108.
In December of 2007, a CAIR-VA employee helped Ms. Nur file state and federal
administrative claims alleging employment discrimination. Compl. ¶ 109. The federal claim
was rejected by the EEOC in January 2008. Id. ¶ 111. Mr. Days and another CAIR-VA
employee told Ms. Nur in the following months that they were preparing an appeal of the
EEOC’s decision and a complaint to be filed in federal court, but in reality, neither Mr. Days nor
any other CAIR employee initiated an administrative appeal or a case in federal court. Id. ¶ 118.
In May of 2008, Ms. Nur, still on unpaid leave from Star Tek, moved from
Virginia to North Carolina “in order to find employment.” Compl. ¶ 116. When she phoned
CAIR-VA to check on the status of her case, she was told by a CAIR-VA staff member that Mr.
Days no longer worked with CAIR, but that other CAIR staffers would continue to handle her
legal claims. Id. ¶¶ 116-18. After July of 2008, however, Ms. Nur received no further
communications from CAIR or CAIR-VA. The period in which she could have timely filed an
administrative appeal or a complaint based on her EEOC claim expired in 2008. Id. ¶ 120.
B. Prior Lawsuit
The plaintiffs first attempted to pursue claims against CAIR in federal court by
filing a complaint in this Court on November 18, 2008, initiating a case that the Court will call
Lopez I. See Lopez v. Council on American-Islamic Relations Action Network, Inc., Civil
Action No. 08-1989, Complaint at 1 (D.D.C. Nov. 18, 2009). The Lopez I complaint named as
defendants CAIR, Morris Days, numerous CAIR/CAIR-VA employees, and an assortment of
4
individuals and companies alleged to be connected to CAIR in some capacity. It set out the same
core set of facts contained in the complaint currently before the Court and framed those facts as
the basis for a claim brought under the Racketeer Influenced and Corrupt Organizations Act
(“RICO”), 18 U.S.C. § 1962(d), which deems unlawful, among other things, the formation of a
conspiracy “to participate . . . in the conduct of [an] enterprise’s affairs through a pattern of
racketeering activity.” 18 U.S.C. § 1962(c)-(d). According to the Lopez I complaint, Morris
Days and CAIR violated RICO by conspiring to defraud Mr. Days’ clients and then to conceal
that fraud. See Lopez I, 657 F. Supp. 2d 104, 111 (D.D.C. 2009). In addition to their RICO
claim, the plaintiffs alleged that the defendants were liable for violations of the consumer
protection statutes of Virginia and the District of Columbia and for common law fraud, breach of
fiduciary duty, infliction of emotional distress, conversion, and unjust enrichment. See id. at
108.
The plaintiffs claimed in Lopez I that a federal court could exercise subject
matter jurisdiction over their complaint because it alleged a RICO violation and thus presented a
question of federal law. See Lopez I, Civil Action No. 08-1989, Complaint ¶ 9 (D.D.C. Nov. 18,
2008). Judge Urbina, however, determined that the complaint failed to state a viable claim under
RICO. See Lopez I, 657 F. Supp. 2d at 114-15. He ruled that the plaintiffs’ allegations did not
“indicate that the RICO Defendants engaged in a ‘pattern of racketeering activity’” or state facts
showing the existence of a conspiracy, id., and that the plaintiffs lacked standing to bring a RICO
claim because, while they alleged that they had been injured by Days, they had failed to assert
facts from which it could be inferred that they had been injured by any joint action of Days and
CAIR. Id. at 111-12. Plaintiffs’ RICO claim therefore was dismissed. See id. at 116. In the
5
absence of the RICO claim, the asserted basis for federal question jurisdiction no longer existed.
Id. at 115-16. Lacking jurisdiction over the plaintiffs’ case, Judge Urbina also dismissed the
plaintiffs’ state law claims. Id. That ruling was affirmed on appeal. See Lopez I, No. 09-7129,
2010 WL 2689367 (D.C. Cir. June 8, 2010).
On January 6, 2010, the plaintiffs initiated the instant litigation by filing a new
incarnation of the Lopez I complaint. They filed an amended complaint on January 13, 2010.
The complaint currently before the Court alleges the same core set of facts that were presented in
Lopez I. Unlike the complaint in Lopez I, however, it names a single defendant, CAIR, and
invokes the Court’s jurisdiction pursuant to 28 U.S.C. § 1332, alleging that the parties are diverse
and that the amount in controversy is greater than $75,000. See Compl. ¶ 10. All references to
RICO have been eliminated from the pending complaint, which asserts claims for fraud, breach
of fiduciary duty, intentional infliction of emotional distress, and violations of D.C. Code
§ 28-3901 and Va. Code § 59.1-204 — all state law causes of action.
Also on January 6, 2010, counsel for plaintiffs in this case filed a second case,
Saiyed v. Council on American-Islamic Relations Action Network, Inc., Civil Action No.
10-0022 (“Saiyed”). The complaint filed in that case named a single plaintiff, Iftikhar Saiyed,
and contained precisely the same allegations against CAIR made in the instant case, except that
allegations concerning Mr. Saiyed’s interactions with Mr. Days replaced those regarding Mr.
Lopez, Ms. Turner, Mr. Abdussalaam, and Ms. Nur. Mr. Saiyed’s complaint also enumerated the
same claims as the complaint in the instant case: fraud, breach of fiduciary duty, intentional
infliction of emotional distress, and violations of D.C. Code § 28-3901 and Va. Code § 59.1-204.
6
On February 24, 2010, CAIR moved to consolidate the instant case with Saiyed
and to reassign both cases to Judge Urbina for adjudication, since Judge Urbina had presided
over Lopez I. See Trans. Mot. at 1. The next day, CAIR filed the pending motion to dismiss the
plaintiffs’ complaint for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) and 12(b)(7)
of the Federal Rules of Civil Procedure. See MTD at 2-3. In the alternative, CAIR seeks the
dismissal of each count of the complaint for failure to state a claim pursuant to Rule 12(b)(6) of
the Federal Rules.
II. SUBJECT MATTER JURISDICTION
The plaintiffs have invoked the Court’s jurisdiction in this case under 28 U.S.C.
§ 1332, claiming that complete diversity of citizenship exists among opposing parties and that
the amount in controversy exceeds $75,000. CAIR argues that in fact, neither the requisite
diversity of citizenship nor a sufficient amount in controversy is present in this case. See MTD
at 2. The Court disagrees.
A. Standard of Review
Federal courts are courts of limited jurisdiction, with the ability to hear only cases
entrusted to them by a grant of power contained in either the Constitution or in an act of
Congress. See, e.g., Beethoven.com LLC v. Librarian of Congress, 394 F.3d 939, 945 (D.C. Cir.
2005); Hunter v. District of Columbia, 384 F. Supp. 2d 257, 259 (D.D.C. 2005). On a motion to
dismiss for lack of subject matter jurisdiction, the plaintiffs bear the burden of establishing that
the Court has jurisdiction. See Brady Campaign to Prevent Gun Violence v. Ashcroft, 339 F.
Supp. 2d 68, 72 (D.D.C. 2004). In determining whether to grant a motion to dismiss for lack of
7
subject matter jurisdiction, the Court must construe the complaint in the plaintiffs’ favor and treat
all well-pled allegations of fact as true. See Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d
1249, 1253-54 (D.C. Cir. 2005). The Court need not accept unsupported inferences or legal
conclusions cast as factual allegations. See Primax Recoveries, Inc. v. Lee, 260 F. Supp. 2d 43,
47 (D.D.C. 2003). Under Rule 12(b)(1), the Court may dispose of the motion on the basis of the
complaint alone or it may consider materials beyond the pleadings, “as it deems appropriate to
resolve the question whether it has jurisdiction to hear the case.” Scolaro v. D.C. Board of
Elections and Ethics, 104 F. Supp. 2d 18, 22 (D.D.C. 2000).
B. Diversity of Citizenship
Under 28 U.S.C. § 1332, this Court has subject matter jurisdiction over a case not
presenting a federal question only if “the matter in controversy exceeds the sum or value of
$75,000, . . . and is between . . . citizens of different States . . . .” 28 U.S.C. § 1332(a). On its
face, the complaint filed by the plaintiffs in this case appears to present a dispute between
“citizens of different States”; defendant CAIR is a citizen of the District of Columbia, Compl.
¶ 13, while each of the plaintiffs is a citizen of Virginia or, in the case of Ms. Nur, possibly North
Carolina. Id. CAIR does not dispute those facts, but instead argues that the plaintiffs have met
the diversity requirement only by failing to name as defendants Morris Days and CAIR-VA, both
said to be Virginia citizens who, according to CAIR, are indispensable parties and therefore must
be joined in this matter under Rule 19 of the Federal Rules of Civil Procedure. See MTD at
9-10.3
3
Defendant invokes both Rule 12(b)(1) of the Federal Rules of Civil Procedure,
which identifies lack of subject matter jurisdiction as a ground for dismissal of a civil complaint,
8
Rule 19(a) provides:
(1) Required Party. A person who is subject to service of process
and whose joinder will not deprive the court of subject-matter
jurisdiction must be joined as a party if:
(A) in that person's absence, the court cannot accord
complete relief among existing parties; or
(B) that person claims an interest relating to the subject of
the action and is so situated that disposing of the action in the
person’s absence may:
(i) as a practical matter impair or impede the
person’s ability to protect the interest; or
(ii) leave an existing party subject to a substantial
risk of incurring double, multiple, or otherwise inconsistent
obligations because of the interest.
FED . R. CIV . P. 19(a)(1). If CAIR-VA or Morris Days is a “required party” as defined by Rule
19(a), then the Court must join that party “if feasible.” See FED . R. CIV . P. 19(a). Of course, the
Court cannot join a Virginia citizen as a defendant in this action; if it did so, it would run afoul of
the express terms of Rule 19(a) because diversity of citizenship would no longer exist between
opposing parties, and the Court would lack subject matter jurisdiction. See FED . R. CIV . P.
19(a)(1) (person whose joinder meets criteria of Rule 19 must be joined unless joinder will
deprive court of subject matter jurisdiction). Because joinder of Mr. Days or CAIR-VA thus is
not “feasible,” the Court would, if either party were “required” within the terms of Rule 19(a), be
forced to decide whether either party was “indispensable” by determining “whether, in equity and
good conscience, the action should proceed among the existing parties or be dismissed.” FED . R.
CIV . P. 19(b).
and Rule 12(b)(7), which relates to dismissal for failure to join a party under Rule 19, in support
of this argument.
9
The Court need not proceed far along this line of analysis because neither CAIR-
VA nor Mr. Morris is a required party as defined by Rule 19(a). CAIR contends that Mr. Morris’
joinder is required because (1) the plaintiffs attempt to hold CAIR liable for Mr. Days’ torts
under the doctrine of respondeat superior; (2) Mr. Days “has an interest in the subject matter of
this action” because it concerns the alleged tortiousness of his own behavior; and (3) if Mr. Days
is not joined as a party, CAIR will be left “vulnerable to a substantial risk of incurring
inconsistent obligations.” MTD at 11. None of those arguments withstands scrutiny. First, an
“employee is not a necessary party to a suit against his employer under respondeat superior.”
Rieser v. District of Columbia, 563 F.2d 462, 469 (D.C. Cir. 1977). Second, CAIR’s argument
regarding Mr. Days’ “interest” in this litigation is wholly conclusory. To qualify as a required
party, a person must have not just any interest, but a “legally protected” interest in the litigation.
See, e.g., Three Affiliated Tribes of the Fort Berthold Indian Reservation v. United States, 637 F.
Supp. 2d 25, 30 (D.D.C. 2009). CAIR has made no attempt to demonstrate that Mr. Days has
such an interest.4 Finally, CAIR has failed to specify in what manner Mr. Days’ absence from
this litigation leaves it “vulnerable to a substantial risk of incurring inconsistent obligations.”
Such a conclusory assertion is insufficient to establish that a substantial risk actually exists.
Similarly, CAIR’s arguments concerning the need for CAIR-VA’s presence in this
litigation are conclusory and unpersuasive. CAIR’s reasoning on this point consists almost
entirely of the statement that “there can be no dispute that CAIR-VA has an interest in the subject
matter of the action, and that the disposition of the action could both impede CAIR-VA’s ability
4
The plaintiffs have also asserted, without rebuttal from the defendant, that Mr.
Days has died and left no estate. See Opp. at 26. That circumstance would seem to limit the
extent of Mr. Days’ interest in any litigation.
10
to protect that interest and/or leave CAIR vulnerable to a substantial risk of incurring inconsistent
obligations as a result of that interest.” MTD at 11. But again, CAIR does not explain what sort
of “interest” CAIR-VA has in this action, and not just any interest will suffice to render CAIR-
VA a required party.5 Nor has CAIR explained how CAIR-VA’s absence from this litigation will
subject it to a significant risk of “inconsistent obligations.” Furthermore, complete relief can
easily be apportioned among the existing parties, since the plaintiffs seek damages and may, if
they prevail, receive those in full from CAIR. In the absence of any concrete example of a
substantial risk to CAIR-VA or CAIR resulting from CAIR-VA’s absence from this lawsuit, the
defendant has not shown that CAIR-VA is a required party under Rule 19(a). The parties to this
case remain as they are named in the complaint, and diversity of citizenship exists between them.
C. Amount in Controversy
The diversity statute, 28 U.S.C. § 1332(a), provides for federal jurisdiction over
civil actions between citizens of different states, but only where the amount in controversy,
exclusive of interest and costs, exceeds $75,000. See 28 U.S.C. § 1332(a). When the court
considers whether a claim meets the amount-in-controversy requirement, “the sum claimed by
the plaintiff controls if the claim is apparently made in good faith.” St. Paul Mercury Indem. Co.
v. Red Cab Co., 303 U.S. 283, 288 (1938) (footnotes omitted). Dismissal is justified only if it
“appear[s] to a legal certainty that the claim is really for less than the jurisdictional amount,” Id.In short, “the Supreme Court’s yardstick demands that courts be very confident that a party
5
Indeed, the Court is not even certain, based on the allegations in the complaint and
the representations of CAIR, that CAIR-VA is an entity legally distinct from CAIR itself. The
complaint alleges that CAIR-VA is either (1) a branch office of CAIR, see Compl. ¶¶ 15-16, or
(2) a subsidiary of CAIR that operates as its alter ego. See id. ¶ 16. If the former is the case,
then CAIR-VA has no legal identity independent of CAIR and functionally is a party in this case.
11
cannot recover the jurisdictional amount before dismissing the case for want of jurisdiction.”
Rosenboro v. Kim, 994 F.2d 13, 17 (D.C. Cir. 1993).
As the Supreme Court has held:
where the other elements of jurisdiction are present and at least one
named plaintiff in [an] action satisfies the amount-in-controversy
requirement, [28 U.S.C.] § 1367 . . . authorize[s] supplemental
jurisdiction over the claims of other plaintiffs in the same Article
III case or controversy, even if those claims are for less than the
jurisdictional amount specified in the statute setting forth the
requirements for diversity jurisdiction.
Exxon Mobil Corp. v. Allapattah Servs., 545 U.S. 546, 549 (2005); see id. at 558-60. The claims
of all plaintiffs in this case form part of a single case or controversy because they arise from “a
common nucleus of operative fact,” United Mine Workers v. Gibbs, 383 U.S. 715, 725 (1966);
each plaintiff claims injuries resulting from CAIR/CAIR-VA’s employment of Mr. Morris and
his false representation that he was a licensed attorney. Consequently, under Allapattah, this
Court may exercise supplemental jurisdiction over the claims of the remaining plaintiffs so long
as at least one plaintiff makes satisfactory allegations of a right to damages equal to or exceeding
$75,000.
CAIR argues that the Court should disregard the plaintiffs’ claims for damages
related to emotional distress as having been made in bad faith. See MTD at 17-19. The Court
will not assume, and defendant has not demonstrated, that this claim is made in bad faith. But
even if the Court does disregard those claims for the purpose of this analysis, plaintiff Bayenah
Nur has stated a claim for damages in excess of $75,000. Ms. Nur alleges that, after taking
action in reliance on Mr. Days’ legal advice, she was placed on unpaid leave from her place of
employment and was forced to relocate to North Carolina in order to find paying work. See
12
Compl. ¶¶ 107-08, 116. She seeks compensatory damages (lost wages and moving expenses) in
the amount of $8,925. See id. ¶ 122. She also seeks punitive damages. See id. ¶ 176. It is
established that punitive damages count toward the amount in controversy so long as “the
punitive damage claim . . . has at least a colorable basis in law and fact.” Thomas v. Nat’l Legal
Prof’l Assocs., 594 F. Supp. 2d 31, 33 (D.D.C. 2009) (quoting Kahal v. J.W. Wilson & Assocs.,
Inc., 673 F.2d 547, 549 (D.C. Cir. 1982)) (internal quotation marks omitted); see also G. Keys
PC/Logis NP v. Pope, 630 F. Supp. 2d 13, 17 (D.D.C. 2009). Under Virginia law, a complaint
states a valid claim for punitive damages if it alleges that a defendant committed a tortious act
with “actual malice, or such recklessness or negligence as to evince a conscious disregard of the
rights of another.” Simbeck, Inc. v. Dodd Sisk Whitlock Corp., 508 S.E.2d 601, 604 (Va. 1999).
This cases involves such claims.
CAIR contends that Ms. Nur’s claims fail to meet the amount-in-controversy
requirement because to obtain damages of $75,000, she would have to receive punitive damages
of at least $66,075, which creates a ratio of punitive to compensatory damages of approximately
7.4. See MTD at 20. Upholding a damage award that creates such a ratio, argues CAIR, would
violate the limits placed on punitive damage awards by the Due Process Clause, as explained by
the Supreme Court in State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003). MTD at
20. The Court disagrees. “The closest the Supreme Court has come to establishing a hard ratio
cap on punitive damages is to admonish that ‘few awards exceeding a single-digit ratio between
punitive and compensatory damages, to a significant degree, will satisfy due process.’” Thomas
v. Nat’l Legal Prof’l Assocs., 594 F. Supp. 2d at 34 (quoting State Farm Mut. Auto. Ins. Co. v.
Campbell, 538 U.S. at 425). A 7 to 1 ratio is well within that presumptive outer boundary. At
13
this stage in this litigation, the Court cannot conclude to “a legal certainty,” Rosenboro v. Kim,
994 F.2d at 17, that an award against the defendant having such a ratio of punitive to
compensatory damages would violate the Due Process Clause. See Thomas v. Nat’l Legal Prof’l
Assocs., 594 F. Supp. 2d at 34 (refusing, on a motion to dismiss for failure to meet the amount-
in-controversy requirement, to find that an award creating a 6.5 to 1 ratio would be
unconstitutional and so unobtainable by the plaintiff). Ms. Nur thus has made a colorable claim
that the amount in controversy in this case exceeds $75,000. The plaintiffs’ claims therefore will
not be dismissed for failure to meet the requirements of 28 U.S.C. § 1332(a).
D. Standing
CAIR’s contention that the plaintiffs lack Article III standing to bring their claims,
see MTD at 21, merits little discussion. The plaintiffs allege that they paid wrongful legal fees or
were deprived of wages as a result of the tortious actions of Mr. Days and that CAIR bears legal
responsibility for Mr. Days’ conduct under the doctrine of respondeat superior. That allegation
alone is sufficient to demonstrate standing. CAIR is simply wrong in suggesting that “[p]laintiffs
are bound by this Court’s previous determination in Lopez I that they do not have standing to
bring their claims because they failed to demonstrate that their injuries were caused by CAIR.”
MTD at 21. Judge Urbina held in Lopez I that the plaintiffs lacked standing to bring a RICO
claim because the injuries they alleged did not result from any actions taken by CAIR in
furtherance of a racketeering conspiracy. See Lopez I, 657 F. Supp. 2d at 111-12. He did not
purport to decide whether the plaintiffs would have standing to bring tort claims predicated on
the theory that CAIR is vicariously liable for the actions of Mr. Days. Since Lopez I did not
decide the relevant issue, it does not control the outcome of the question of standing in this case.
14
III. SUFFICIENCY OF CLAIMS
Having determined that it may exercise jurisdiction over the subject matter of this
litigation, the Court now turns to the defendant’s claims that the plaintiffs’ complaint should be
dismissed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a
claim. In order to assess the legal sufficiency of the plaintiffs’ claims, the Court must first
determine which law applies.
A. Choice of Law
In a diversity action, a federal district court applies the choice of law principles of
the state or jurisdiction in which it sits. See Rafferty v. NYNEX Corp., 60 F.3d 844, 849-50
(D.C. Cir. 1995) (citing Bledsoe v. Crowley, 849 F.2d 639, 641 (D.C. Cir. 1988)); Long v. Sears
Roebuck & Co., 877 F. Supp. 8, 10-13 (D.D.C. 1995). The District of Columbia employs a
“modified ‘governmental interest analysis,’” under which the court evaluates the governmental
policies underlying the applicable laws and determines which jurisdiction’s policy would be most
advanced by having its laws applied to the facts in the case. Thompson v. Islam, Civil Action
No. 01-585, 2005 WL 3262926, at *4 (D.D.C. July 29, 2005). Under District of Columbia
conflict of laws principles, the Court must conduct the choice of law analysis for each claim
being adjudicated. See Long v. Sears Roebuck & Co., 877 F. Supp. at 11; In re Air Crash
Disaster at Washington, D.C., 559 F. Supp. 333, 341 (D.D.C. 1983). Plaintiffs contend that
either District of Columbia law or Virginia law governs this action, while defendant maintains
that Virginia law controls. See Compl. ¶¶ 154, 160, 168; see also Opp. at 43, n. 37; see also
MTD at 27 n. 17.
15
For a tort claim, the state whose policy would be advanced the most is the state
with the most significant relationship to the case. District of Columbia v. Coleman, 667 A.2d
811 (D.C. 1995). The Court considers the place where the injury occurred, the place where the
conduct causing the injury occurred, the residence, domicile, place of incorporation or place of
business of the parties, and the place where the parties' relationship, if any, is centered. See
Restatement (Second) of Conflict of Laws § 145 (1971); Long v. Sears Roebuck & Co., 877
F.Supp. at 11. In light of the allegations contained in the plaintiffs’ complaint, the Court
concludes that Virginia has the most significant relationship with this case and that its policies
“would be more advanced by the application of its law to the facts of th[is] case.”
Although CAIR is incorporated in the District of Columbia and, according to the
complaint, a few of the phone calls between CAIR employees and the plaintiffs originated in the
District of Columbia, most of the relevant contacts occurred in Virginia. See Compl. ¶¶ 11-12,
55-110. Plaintiffs Lopez, Abdussalaam, and Turner are citizens of Virginia.6 Days worked out
of the CAIR branch in Herndon, Virginia, and all of the alleged misrepresentations made by Days
occurred in Virginia. Id. ¶¶ 19, 55-63, 83-87, 100-110. All of the phone calls, email
correspondence and face-to-face meetings between Mr. Days and the plaintiffs occurred in
Virginia. Id. ¶¶ 55-110. It appears that the few documents that Mr. Days actually filed were
mailed from Virginia. Id. ¶ 88. Thus, nearly all of the events at issue in this case occurred in
Virginia, and the injuries alleged were inflicted primarily on individuals living in Virginia.
Virginia law therefore applies to the plaintiffs’ tort claims.
6
Plaintiff Nur was a citizen of Virginia at the time of all of the relevant incidents in
the case. She has since relocated to North Carolina.
16
The same analysis applies to plaintiffs’ statutory claims, pled under both the
Virginia Consumer Protection Act and the District of Columbia Consumer Protection Act. See
Compl. ¶¶ 127-152; Washkoviak v. Student Loan Marketing Ass’n, 900 A.2d 168, 180 (D.C.
2006) (applying the “significant relationship” test to determine which state’s consumer protection
statute was applicable in a case where the victims of the alleged conduct lived in one state, while
the defendant was located in another). Virginia’s consumer protection law, not the District of
Columbia’s, therefore controls the plaintiffs’ claims. The plaintiffs’ claims under the District’s
statute will be dismissed, and the Court will apply Virginia’s statutory and common law to
determine whether the plaintiffs’ remaining claims survive under Rule 12(b)(6) of the Federal
Rules of Civil Procedure.
B. Standard of Review
Rule 12(b)(6) of the Federal Rules of Civil Procedure allows dismissal of a
complaint if a plaintiff fails “to state a claim upon which relief can be granted.” FED . R. CIV . P.
12(b)(6). In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the Supreme Court noted that
“Federal Rule of Civil Procedure 8(a)(2) requires only ‘a short and plain statement of the claim
showing that the pleader is entitled to relief,’ in order to ‘give the defendant fair notice of what
the . . . claim is and the grounds upon which it rests[.]’” Id. at 544 (quoting Conley v. Gibson,
355 U.S. 41, 47 (1957)); see also Erickson v. Pardus, 551 U.S. 89 (2007); Aktieselskabet AF 21
v. Fame Jeans Inc., 525 F.3d 8, 15 (D.C. Cir. 2008). Although “detailed factual allegations” are
not necessary to withstand a Rule 12(b)(6) motion to dismiss, to provide the “grounds” of
“entitle[ment] to relief,” a plaintiff must furnish “more than labels and conclusions” or “a
formulaic recitation of the elements of a cause of action.” Bell Atlantic Corp. v. Twombly, 550
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U.S. at 555; see also Papasan v. Allain, 478 U.S. 265, 286 (1986). The Court stated that there
was no “probability requirement at the pleading stage,” Bell Atlantic Corp. v. Twombly, 550
U.S. at 556, but “something beyond . . . mere possibility . . . must be alleged[.]” Id. at 557 The
facts alleged in the complaint “must be enough to raise a right to relief above the speculative
level,” id. at 555, because Rule 8(a)(2) requires a “showing,” rather than a “blanket assertion,” of
entitlement to relief, id. at 555 n.3. The complaint must be sufficient “to state a claim for relief
that is plausible on its face.” Id. at 570. The Court referred to this newly clarified standard as
“the plausibility standard.” Id. at 560 (abandoning the “no set of facts” language from Conley v.
Gibson).
On a motion to dismiss under Rule 12(b)(6), the Court “must accept as true all of
the factual allegations contained in the complaint.” Erickson v. Pardus, 551 U.S. at 94; see also
Bell Atlantic Corp. v. Twombly, 550 U.S. at 555. The complaint “is construed liberally in the
[plaintiff’s] favor, and [the Court should] grant [the plaintiff] the benefit of all inferences that can
be derived from the facts alleged.” Kowal v. MCI Commc’ns Corp., 16 F.3d 1271, 1276 (D.C.
Cir. 1994). Nevertheless, the Court need not accept inferences drawn by the plaintiff if those
inferences are unsupported by facts alleged in the complaint, nor must the Court accept plaintiff’s
legal conclusions. See Kowal v. MCI Communications Corp., 16 F.3d at 1276; Browning v.
Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002).
C. Virginia Consumer Protection Act
CAIR argues that the allegations pled by the plaintiffs do not state a claim under
Virginia’s Consumer Protection Act, Va. Code §§ 59.1-196 et seq., because “the ‘majority of
jurisdictions that have addressed this issue have held that the regulation of attorneys does not fall
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within the ambit of consumer protection laws.” MTD at 26 (quoting Beyers v. Richmond, 594
Pa. 654, 660 & n.7 (2007)). The plaintiffs, however, do not challenge the conduct of attorneys;
they complain that CAIR knowingly employed and held out a non-attorney as a provider of legal
services. As a result, CAIR’s argument is inapposite.
D. Fraud
Under Virginia law, the elements necessary to state a claim of actual fraud are:
(1) a false representation (2) of a material fact (3) made intentionally or knowingly (4) with the
intent to mislead; (5) reliance by the misled party; and (6) injury. Winn v. Aleda Constr. Co.,
315 S.E.2d 193 (Va. 1984). Each element of the claim must be pled with particularity —
including identification of the agents, officers, and employees of the entities who are alleged to
have perpetrated the fraud and the details of the time and place of the fraudulent acts. Weiss v.
Cassidy Devel. Corp., 61 Va. Cir. 237 (Cir. Ct. 2003); accord FED . R. CIV . P. 9(b).
The complaint states that between February of 2007 and September of 2008, Days
knowingly and with the specific intent to defraud made representations to the plaintiffs regarding
his competency as an attorney. See Compl. ¶ 23. Defendant argues that this is a conclusory
statement and does not meet the heightened pleading requirements of Rule 9(b) of the Federal
Rules of Civil Procedure. See Mot. at 27-29. The Court disagrees. The statements made in
support of the plaintiffs’ fraud claim do not appear solely in Paragraph 23 of the complaint. On
the contrary, the complaint outlines specific instances in which Mr. Days told the plaintiffs that
he was an attorney and took money for his services. See Compl. ¶ ¶ 55, 60, 83, 85, 101. It also
recounts face-to-face meetings and telephone calls between Days and the plaintiffs and alleges
dates on which the meetings occurred. See Compl. ¶¶ 55-126, 153-157. The statements in the
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complaint are specific enough to meet the first four elements of fraud even when applying the
heightened requirements of Rule 9(b) of the Federal Rules of Civil Procedure.
The complaint also meets that heightened standard for elements five and six of the
definition of fraud under Virginia law. Mr. Lopez, Ms. Turner, and Mr. Abdussalam claim that,
in reliance on the representations of Mr. Days and/or CAIR that Mr. Days was a qualified
attorney, they paid Mr. Days legal fees for services that he was not licensed to perform and that
he never did perform. See Compl. ¶¶ 60, 85. Ms. Nur alleges that, in reliance on Mr. Days’ legal
advice, which he was not, in fact, qualified to give, she declined a settlement offer from her
employer and was placed on unpaid leave as a result. See id. ¶¶ 107-08. These are sufficiently
specific allegations to state a claim for fraud.
E. Breach of Fiduciary Duty
To prevail on a claim for breach of fiduciary duty in Virginia, plaintiffs must
prove facts sufficient to establish the following: (1) the defendant owed plaintiff a fiduciary duty;
(2) defendant breached that duty; and (3) the breach proximately caused an injury. Carstensen v.
Chrisland Corp., 442 S.E.2d 660 (Va. 1994). In Virginia, “[e]vidence of advice and counsel in
business matters involving a degree of trust is necessary to show a fiduciary relationship.” Oden
v. Salch, 379 S.E.2d 346, 351 (Va. 1989). An attorney has a fiduciary duty to his or her client.
Martin v. Phillips, 235 Va. 523, 527 (1988).
The defendant does not deny that the plaintiffs put their trust and confidence in
Mr. Days or that there was a fiduciary relationship between Mr. Days and the plaintiffs. Instead,
CAIR argues that it cannot be liable for breach of fiduciary duty because the plaintiffs put their
trust in Mr. Days, not in CAIR. See Mot at 29-30. Regardless of whether CAIR itself had a
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fiduciary duty to the plaintiffs, the complaint alleges sufficient facts to suggest that Mr. Days had
such a duty, that he breached it, and that CAIR is vicariously liable for his conduct. Plaintiffs
therefore state a claim for breach of fiduciary duty against CAIR.
F. Intentional Infliction of Emotional Distress
To establish a prima facie case for the tort of intentional infliction of emotional
distress (“IIED”) under Virginia law, plaintiffs must allege: “(1) the wrongdoer's conduct was
intentional or reckless; (2) the conduct was outrageous and intolerable; (3) there was a causal
connection between the wrongdoer's conduct and the emotional distress; and (4) the emotional
distress was severe.” Hatfill v. The New York Times Co., 532 F.3d 312 (4th Cir. 2008); Womack
v. Eldridge, 210 S.E.2d 145 (Va. 1974).
CAIR argues that the conduct of Mr. Days and of CAIR itself described in the
complaint does not “rise to the level of ‘outrageous’ or ‘intolerable.’” MTD at 32. The Court is
not so certain. The plaintiffs allege that Mr. Days held himself out as an attorney; that they
entrusted their legal problems, including a divorce petition and a personal immigration matter, to
him; and that Mr. Days mishandled those problems while, in some cases, demanding fees for
services he knew he would not provide. He did all of this when, it is alleged, he was not licensed
to practice law. While reasonable minds could differ as to whether Mr. Days’ conduct, for which
CAIR may be vicariously liable, was extreme and outrageous, “it is for the jury . . . to determine
whether, in the particular case, the conduct has been sufficiently extreme and outrageous to result
in liability.” Womack v. Eldridge, 210 S.E.2d at 148 (citation and internal quotation marks
omitted); see also Perk v. Worden, 475 F. Supp. 2d 565, 570 (E.D. Va. 2007).
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CAIR also contends that the plaintiffs have failed to allege that they have suffered
sufficiently severe emotional distress. This is a close question. Because the tort of intentional
infliction of emotional distress is disfavored under Virginia law, Virginia courts have defined the
tort narrowly. See, e.g., Ruth v. Fletcher, 377 S.E.2d 412, 415 (Va. 1989). In particular, to state
a claim for IIED, a plaintiff must allege that she has experienced emotional injury so severe that
“no reasonable person could be expected to endure it.” Russo v. White, 400 S.E.2d 160, 163
(Va. 1991).
The complaint contains the same rote allegations of emotional distress with regard
to each plaintiff in this action: the plaintiff is said to have “suffered severe emotional, mental,
and physical distress . . . , including anxiety, lack of appetite, inability to sleep, relationship
problems with . . . friends and family, inability to sustain employment resulting from . . . anxiety,
and other manifestations.” Compl. ¶¶ 79 (Mr. Abdussalaam); 96 (Ms. Turner and Mr. Lopez);
123 (Ms. Nur). Most of those alleged symptoms of distress fall into the category of injuries
judged insufficient by the Virginia courts to rise to the level of severe distress required to state a
claim for IIED. See Russo v. White, 400 S.E.2d at 163 (a plaintiff fails to allege sufficiently
severe distress where she merely claims that “she was nervous, could not sleep, experienced
stress and ‘its physical symptoms,’ withdrew from activities, and was unable to concentrate at
work”).
On the other hand, allegations of emotional distress have been upheld as sufficient
under Virginia law where they stated that the defendant’s conduct “rendered [the plaintiff]
functionally incapable of carrying out any of her work or family responsibilities.” Almy v.
Grisham, 639 S.E.2d 182, 188 (Va. 2007). Here, the plaintiffs claim that Mr. Days’ actions
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resulted in their “inability to sustain employment.” See Compl. ¶¶ 79, 96, 123. At this stage of
the litigation, such a statement alleges sufficient distress to satisfy the liberal pleading
requirements of Rule 8 of the Federal Rules of Civil Procedure. Cf. Hatfill v. New York Times
Co., 416 F.3d 320, 337 (4th Cir. 2005) (under liberal pleading requirements of the federal courts,
plaintiff alleged sufficient emotional distress under Virginia law where he merely claimed that he
suffered “severe emotional distress”). Whether this claim can withstand a motion for summary
judgment after discovery is a question for another day.
IV. DEFENDANT’S MOTION TO CONSOLIDATE AND REASSIGN THIS CASE
CAIR has requested that this case be consolidated with Saiyed v. Council on
American-Islamic Relations Action Network, Inc., Civil Action No. 10-0022, pending before the
undersigned, and that both cases be reassigned to Judge Urbina. See Trans. Mot. at 1. Because
the Court finds that both cases share “common question[s] of law or fact,” they will be
consolidated. FED . R. CIV . P. 42(a). Reassignment of this case to Judge Urbina, however, is
neither necessary nor desirable under this Court’s Local Civil Rules.
The defendant correctly points out that, under Local Civil Rule 40.5(a)(4), this
case is related to Lopez I. But where, as here, “the existence of related cases . . . is revealed after
the cases are assigned, the judge having the later-numbered case may transfer” it to “the judge
having the earlier case” if “good cause exists for the transfer.” LOC. CIV . R. 40.5(c)(2). No such
good cause exists in this case. Having considered and resolved the matters discussed in this
Opinion, this Court is more familiar with this case than Judge Urbina, having written the opinion
in Lopez I, would be. Reassignment of this case therefore would save neither time nor effort.
CAIR’s motion thus will be denied.
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V. CONCLUSION
For the foregoing reasons, the Court will grant in part and deny in part CAIR’s
motion to dismiss this case, grant the motion to consolidate this case with Saiyed, and deny the
motion to reassign this matter to Judge Urbina. An Order consistent with this Opinion shall be
issued this same day.
SO ORDERED.
/s/_______________________________
PAUL L. FRIEDMAN
United States District Judge
DATE: September 30, 2010
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