Lopez v. Council on American-Islamic Relations Action Network, Inc. ( 2018 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUl\/IBIA
lFTIKHAR SAIYED,
Plaintiff,
v.
COUNCIL ON AMERICAN-ISLAMIC
RELATIONS ACTION NETWORK, lNC.,
Defendant.
RENE ARTURG LOPEZ, e_t al.,
Plaintiffs,
Civil Action No. 10-0023 (PLF)
V.
COUNCIL ON AMERICAN-ISLAMIC
RELATIONS ACTION NETWORK, INC.,
Defendant.
\/\/\/\/\/\/\/V\_/\/\/\/V\/\./\_/\/\/\./V\./V\/V
M_IU
Pending before the Court in these consolidated actions is the motion [Dkt. No.
135 in Civil Action No. 10-0022 and Dkt. No. 136 in Civil Action No. 10-0023] of defendant
Council on American-lslamic Relations Action Network, Inc. (“CAIR”) for partial summary
judgment on plaintiffs’ claim under the Virginia Consumer Protection Act (“VCPA”), VA. CODE
ANN. § 59.1-196, et M. Upon careful consideration of the parties’ papers, the relevant legal
authorities, and the entire record in this case, the Court will deny the motion.l
I. BACKGROUND
The Court’s prior Opinions summarize the factual and procedural history of this
case. § Lopez v. CAIR, 741 F. Supp. 2d 222 (D.D.C. 2010); Saiyed v. CAIR, 742 F. Supp. 2d
84 (D.D.C. 2010); Saiyed v. CAIR, 78 F. Supp. 3d 465 (D.D.C. 2015), rev. and remanded by
Lopez v. CAIR, 826 F.3d 492 (D.C. Cir. 2016). Briet1y, CAIR is a national “Muslim advocacy
group.” § Statement of Facts at 4. Between 2007 and 2008, plaintiffs sought legal assistance
from l\/Iorris Days, an individual who was hired to “act as resident attorney” of CAIR’s Virginia
chapter, CAIR-VA. §e_e § at 4-5. In particular, Mr. Days allegedly promised to assist plaintiffs
with claims relating to “immigration status, divorce proceedings, hostile work environment, and
employment discrimination.” § LQ}§; Am. Compl. 11 14; §_auy_e§ Am. Compl. 1111 54-55. l\/lr.
Days purportedly took money and other forms of payment from at least some of the plaintiffs in
exchange for these promises of representation, despite CAIR’s policy to provide legal services
pro bono. § Statement of Facts at 5; M Am. Compl. 11 6. l\/[r. Days, however, was not a
licensed attorney and “did not provide the services he represented he would provide Plaintiffs.”
l Unless otherwise noted, all references to the docket in this Opinion are to Civil
Action No. 10-0022. The Court reviewed the following filings and exhibits attached thereto in
resolving the pending motion: Saiyed Amended Complaint (“Saiyed Am. Compl.”) [Dkt. No.
3]; Lopez Amended Complaint (“Lopez Am. Compl.”) [Dkt. No. 5 in Civil Action No. 10-0023];
October 7, 2016 Memorandum Opinion and Order (“Oct. 7, 2016 Mem. Op. & Order”) [Dkt. No.
108]; CAIR’s Motion for Partial Summary Judgment (“Mot.”) [Dkt. No. 1351; Plaintiffs’
Memorandum in Opposition to Motion for Partial Summary Judgment (“Opp’n”) [Dkt. No. 136];
Plaintiffs’ Separate Statement of Facts (“Statement of Facts”) [Dkt. No. 136]; CAIR’s Reply in
Support of l\/Iotion for Partial Summary Judgment (“Reply”) [Dkt. No. 137]; CAIR’s Motion for
Summary Judgment “Def. l\/ISJ” [Dkt. No. 80 in Civil Action No. 10-0023]; CAIR’s l\/Iotion to
Dismiss and Request for Hearing “Def. l\/ITD” [Dkt. No. 9]; and December 14, 2017 Minute
Order by Magistrate Judge Deborah A. Robinson (“Dec. 14, 2017 Minute Order”).
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Statement of Facts at 5. CAIR-VA was dissolved in 2008. §§§ Statement of Facts at 4; Def.
MSJ at 12.
In 2010, plaintiffs filed two separate lawsuits against CAIR based on Mr. Days’
misrepresentations The Court subsequently granted CAIR’s motion to consolidate the cases.
§ Saiyed v. CAIR, 742 F. Supp. 2d at 89; Lopez v. CAIR, 741 F. Supp. 2d at 239. Plaintiffs
filed their first amended complaints in 2010 asserting five causes of action: (1) violations of the
District of Columbia Consumer Protection Procedures Act (Count One); (2) violations of the
VCPA (Count Two); (3) common law fraud and conspiracy to commit fraud (Count Three);
(4) breach of fiduciary duties (Count Four); and (5) infliction of emotional distress (Count Five).
§ §iiye_d Am. Compl.111184-129;L_0_M Am. Compl.1111 127-172.
In 2010, the Court granted CAIR’s motion to dismiss plaintiffs’ claim brought
under the District of Columbia Consumer Protection Act (Count One), holding that “Virginia’s
consumer protection law, not the District of Columbia’s . . . controls the plaintiffs’ claims.” _S__e_e
Lopez v. CAIR, 741 F. Supp. 2d at 235; Saiyed v. CAIR, 742 F. Supp. 2d at 88. In 2015, the
Court granted summary judgment in favor of CAIR and dismissed the remaining claims. S_ee_
Saiyed v. CAIR, 78 F. Supp. 3d 465. ln 2016, the D.C. Circuit reversed this Court’s grant of
summaryjudgment on the ground that plaintiffs had “presented sufficient evidence in this case to
raise a genuine issue of material fact” as to whether an “actual agency relationship existed
between Days and CAIR National,” §_e_e Lopez v. CAIR, 826 F.3d at 497.
On remand, this Court ruled that three causes of action would proceed to trial:
(1) common law fraud under Virginia law (Count Three); (2) common law breach of fiduciary
duty under Virginia law (Count Four); and (3) violation of the VCPA (Count Two). § Oct. 7,
2016 Mem. Op. & Order at 2. CAIR moved for partial summary judgment on the VCPA claim
(Count Two) in January 2018. § l\/lot. at 1.
II. LEGAL STANDARD
Summary judgment is appropriate only if “the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the movant is entitled to judgment as a matter of
law.” Anderson v. Liberty Lobbv, Inc., 477 U.S. 242, 248 (1986); g:_e_ Baumann v. District of
Columbia, 795 F.3d 209, 215 (D.C. Cir. 2015); FED. R. Cl\/. P. 56(a), (c). In making that
determination, the Court must view the evidence in the light most favorable to the nonmoving
party and draw all reasonable inferences in its favor. Baumann v. District of Columbia, 795 F.3d
at 215; g iolan v. Cotton, 134 S. Ct. 1861, 1866 (2014) (per curiam); Anderson v. biberty
Lobby, Inc., 477 U.S. at 255; Talavera v. Shah, 638 F.3d 303, 308 (D.C. Cir. 2011).
A disputed fact is “material” if it “might affect the outcome of the suit under the
governing law.” Talavera v. Shah, 638 F.3d at 308 (quoting Anderson v. Liberty hobbv, lnc.,
477 U.S. at 248). A dispute over a material fact is “genuine” if it could lead a reasonable jury to
return a verdict in favor of the nonmoving party. S_ee_ Scott v. Harris, 550 U.S. 372, 380 (2007);
Grimes v. District of Columbia, 794 F.3d 83, 94-95 (D.C. Cir. 2015); Paige v. DEA, 665 F.3d
1355, 1358 (D.C. Cir. 2012). “Credibility determinations, the weighing ofthe evidence, and the
drawing of legitimate inferences from the facts are jury functions, not those of a judge at
summary judgment Thus, [the Court] do[es] not determine the truth of the matter, but instead
decide[s] only whether there is a genuine issue for trial.” Barnett v. PA Consulting Grp., Inc.,
715 F.3d 354, 358 (D.C. Cir. 2013) (quoting Pardo-Kronemann v. Donovan, 601 F.3d 599, 604
(D.C. Cir. 2010)). §Qe LY Tolan v. Cotton, 134 S. Ct. at 1866; Baumann v. District of
Columbia, 795 F.3d at 215; Allen v. Johnson, 795 F.3d 34, 38 (D.C. Cir. 2015).
III. DISCUSSION
In its motion, CAIR contends that the legal services at issue do not qualify as
“consumer transactions” under the VCPA. S_e§ Mot. at 7. CAIR further argues that even if the
legal services at issue qualify as “consumer transactions,” they are excluded under the terms of
the statute _S__€§ § at 10. For the reasons that follow, the Court disagrees Concluding that
CAIR is not entitled to judgment as a matter of law, it therefore will deny the motion for
summary judgment
A. Preliminary Matlers
As a preliminary matter, plaintiffs argue that the motion is untimely under Rule
56 of the Federal Rules of Civil Procedure. w Opp’n at 1 1. The Court disagrees Rule 56
provides that “[u]nless a different time is set by local rule or the court orders otherwise, a party
may file a motion for summary judgment at any time until 30 days after the close of all
discovery.” FED. R. Clv. P. 56(b). In December 2017, Magistrate Judge Deborah A. Robinson
- to whom this case was referred for the management of discovery - issued an order permitting
plaintiffs to take a “follow-on deposition” of CAIR’s legal expert on February 12, 2018. w
Dec. 14, 2017 Minute Order. lt thus appears that discovery remained open until at least February
12, 2018. Given that CAIR filed its motion on January 24, 2018, the motion is timely.
Plaintiffs next argue that the Court already decided this issue when it determined
there to be a “cause of action . . . stated under the VCPA.” § Opp’n at 12. Plaintiffs are
incorrect. ln its motion to dismiss filed in 2010, CAIR argued that attorneys are not covered by
the VCPA as “suppliers” because “the majority of jurisdictions that have addressed this issue
have held that the regulation of attorneys does not fall within the ambit of consumer protection
laws.” §_e§ Lopez v. CAIR, 741 F. Supp. 2d at 236 (citations omitted). w a_l_sg Def. l\/ITD at
41. In rejecting this argument, the Court reasoned that plaintiffs “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.” W Lopez v. CAIR, 741 F.Supp.2d at 236. In contrast, the question
now pending before the Court is whether the legal services at issue qualify as a “consumer
transaction” for purposes of the VCPA, irrespective of Mr. Days’ and CAIR’s status as non-
lawyers.' This is a separate issue which the Court has not previously addressed. Accordingly, the
Court declines plaintiffs’ invitation to construe this motion as a motion for reconsideration of the
Court’s Order denying CAIR’s motion to dismiss the VCPA claim. §§e_ Opp’n at 12.
B. “Consumer Transactl``on” Una'er the VCPA
The VCPA establishes a cause of action for any individual “who suffers loss,”
VA. CODE ANN. § 59.1-204(A), as a result of a “fraudulent act[] or practice[] committed by a
supplier in connection with a consumer transaction.” § i_d_. § 59.1-200. “To state a cause of
action under the VCPA, Plaintiff must allege (1) fraud [or misrepresentation], (2) by a supplier,
(3) in a consumer transaction.” Enomoto v. Space Adventures, Ltd., 624 F. Supp. 2d 443, 456
(E.D. Va. 2009). The VCPA defines a “consumer transaction” to include “[t]he advertisement,
sale, lease, license or offering for sale, lease or license, of goods or services to be used primarily
for personal, family or household purposes.” VA. CODE ANN. § 59.1-198. The VCPA further
defines “services” to include “(i) work performed in the business or occupation of the supplier
[or] (ii) work performed for the supplier by an agent whose charges or costs for such work are
transferred by the supplier to the consumer or purchaser as an element of the consumer
6
transaction.” §ee _i_d. While the parties agree that the dealings between CAIR, Mr. Days, and
plaintiffs are “1ega1 services,” they disagree about whether those legal services qualify as a
“consumer transaction” under the VCPA.
To determine whether the VCPA applies to the legal services at issue, this Court
must interpret and apply the Virginia statute. §§§ Mot. at 7. In interpreting a state statute, a
federal court sitting in diversity must apply the state’s substantive law. w Erie R. Co. v.
Tomp_kins, 304 U.S. 64, 78 (1938) (“Except in matters governed by the Federal Constitution or
by acts of Congress, the law to be applied in any case is the law of the state. And whether the
law of the state shall be declared by its Legislature in a statute or by its highest court in a
decision is not a matter of federal concern.”). w also Burke v. Air Serv lnt’l, Inc., 685 F.3d
1102, 1107 (D.C. Cir. 2012). To determine state substantive law - whether state common law or
state statutory law -the Court is bound by the decisions of the state’s highest court interpreting
that state’s law. § Wainwright v. Goode, 464 U.S. 78, 84 (1983). § alj Animal Sci. Prod.
Inc. v. Hebei Welcome Pharm. Co., 138 S. Ct. 1865, 1874 (2018); Rogers v. Ingersoll~Rand Co.,
144 F.3d 841, 843 (D.C. Cir. 1998); IN ExDl. & Prod. v. W. Gas Res., Inc., 153 F.3d 906, 913
(8th Cir. 1998).
Here, the parties agree that the highest court of the Commonwealth of Virginia
has not interpreted the meaning of “consumer transaction” under the VCPA. In the absence of a
decision by the state’s highest court, a federal court’s role in interpreting and applying state law
is to attempt to “achieve the same outcome [it] believe[s] would result if the [state’s highest
court] considered this case.” g Metz v. BAE Svs. Tech. Sol. & Serv. Inc., 774 F.3d 18, 21-22
(D.C. Cir. 2014) (quoting Novak v. Capital Mgmt. and Dev. Corp., 452 F.3d 902, 907 (D.C. Cir.
2006)). w also Kellv v. Richard Wright Pub. Charter Sch., 317 F. Supp. 3d 564, 566 (D.D.C.
2018); Easaw v. Newport. 253 F. Supp. 3d 22, 33-34 (D.D.C. 2017). “[T]his Court’s duty is to
35
predict, as best it can, how the [state’s highest court1 would decide the issue . . . Kelly v.
Richard Wright Pub. Charter Sch., 317 F. Supp. 3d at 566. g al_sg 19 CHARLES ALAN WRIGHT,
ARTHUR R. MiLLER & EDwARD H. CooPER, FEDERAL PRACTiCE AND PRoCEDuRE § 4507, at
124-25 (3d ed. 2018) (“[T]he federal court must determine issues of state law as it believes the
highest court of the state would presently determine them, not necessarily (although usually this
will be the case) as they previously have been decided by other state courts.”).
To determine how the highest court of a state would rule on an issue of state law,
federal courts “consider all of the resources to which the highest court of the state could look,"’
§_e_§ Leon’s Bakerv, Inc. v. Grinnell Corp., 990 F.2d 44, 48 (2d Cir. 1993), giving some deference
tojudgments by intermediate appellate courts _S_e§ West v. Ami Tel. & Tel. Co., 311 U.S. 223,
237 (1940) (“[I]t is the duty of [federal courts] in every case to ascertain from all the available
data what the law is and apply it . . . .”). While the decision of a state intermediate appellate
court is not controlling, a judgment by an intermediate appellate court “is a datum for
ascertaining state law which is not to be disregarded by a federal court unless it is convinced by
other persuasive data that the highest court of the state would decide otherwise.” § We_st\L
Am. Tel. & Tel. Co., 311 U.S. at 237. §e_e also Allstate lns. v. Menards Inc.. 285 F.3d 630, 637
(7th Cir. 2002); Howe ex rel. Howe v. Scottsdale Ins., 204 F.3d 624, 627 (5th Cir. 2000);
Richardson v. United States, 841 F.2d 993, 996 (9th Cir. 1988).
Even less weight is accorded to the decision of a state trial court. E, gg,
Hampton Co. Nat. Sur., LLC. v. Tunica Countv, Mississippi, 543 F.3d 221, 226 (5th Cir. 2008);
Bryant Elec. Co., Inc. v. City of Fredericksburg, 762 F.2d 1192, 1194 (4th Cir. 1985). “State
trial court decisions are . . . entitled to consideration as an indication of what state law is, but in
and of themselves they are not controlling on the federal courts, especially if they are not
regarded as' precedents within the state itself.” 19 WRIGHT, MILLER & COOPER, M, § 4507, at
152-53. A federal court is tasked with evaluating lower court decisions just as the state’s highest
court would - that is, it is “empowered to change state law and correct what it believes to be
erroneous rulings of lower state courts.” §§ § at 120.
CAIR relies exclusively on two Virginia Circuit Court decisions holding that the
VCPA does not apply to legal services because legal services do not meet the statutory definition
of“consumer transaction.” _S_e§ Oberto v. Grogan, No. CL14-138, 88 Va. Cir. 188, 2014 WL
8383045, at *2 (Va. Cir. Ct. Apr. 18, 2014); Bd. of Dirs. ofthe Port Royal Condo. Unit Owners"
Ass’n v. Crossland Sav. FSB, No. (Chancery) 18453, 1989 Va. Cir. LEXIS 80, 15 Va. Cir. 239,
241 (Va. Cir. Ct. Jan. 5, 1989). Although Virginia Circuit Courts are “[t]he only trial court of
general jurisdiction in Virginia,” qualifying civil decisions are appealable from them directly to
the Supreme Court of Virginia by petition, meaning that there can be no intermediate appellate
rulings on these cases or this issue.2 Notwithstanding this hybrid model, Virginia Circuit Court
precedent is nonbinding, and “it would be incongruous indeed to hold the federal court bound by
a decision which would not be binding on any state court.” King v. Order of United Com.
Travelers ofAm., 333 U.S. 153, 161 (1948). § also Brvant Elec. Co. v. Citv of
Fredericksburg, 762 F.2d at 1194 (“[S]uch lower court opinions . . . are not binding on the
Virginia Supreme Court or on [the Fourth Circuit][;] these decisions ‘are entitled to
consideration as an indication of what state law is . . . .”’ (citing WRIGHT, l\/lILtER & COOPER,
2 § Office of the Exec, Sec’y, Supreme Court of Virginia, Virginia Courts in
Brief, ViRGINIA’S JUDICIAL SYSTEM, http://www.courts.state.va.us/courts/home.html (last visited
Sept. 25, 2018).
FEDERAL PRACTICE AND PRoCEDURE: JuRisDiCTioN § 4507 (1981))); Harris v. Lukhard, 733 F.2d
1075, 1082 (4th Cir. 1984).
Without further explanation, two Virginia Circuit Court judges have stated that
“legal services” do not fit the definition of a “consumer transaction” under the VCPA and that
“[i]t would be [an] anomalous result to conclude that some legal services are covered by the
[VCPA] while others are not.” g Oberto v. Grogan, 88 Va. Cir. 188, 2014 WL 8383045, at *2
(quoting Bd. of Dirs. of the Port Roval Condo. Unit Owners’ Ass’n v. Crossland Sav. FSB, 1989
Va. Cir. LEXIS 80, 15 Va. Cir. at 241-42). But both of those cases involved malpractice claims
against atto'rneys, not individuals or organizations who improperly held themselves out as
licensed attorneys and provided legal services The Court therefore finds those decisions
inapposite and unpersuasive More importantly, they are not binding on this Court in discerning
how the highest court of the Commonwealth of Virginia would interpret the VCPA.
ln projecting or predicting how the highest court of the state would interpret a
state statute, the Court may consider state trial court precedent, even though it is not binding, @,
sup§, at 8-9, and should also consider all other resources that the highest court of the state would
itself consider. See, e.g., Leon’s Bakerv, Inc. v. Grinnell Corp., 990 F.2d at 48. lt then applies
established methods of statutory interpretation that the highest court of the state would apply.
§e_e_ Travelers Ins. Co. v. 633 Third Assocs., 14 F.3d, 114, 119 (2d Cir. 1994). According to the
Virginia Supreme Court, “[t]he primary objective in statutory construction is to determine and
give effect to the intent of the legislature as expressed in the language of the statute. When a
statute is unambiguous we must apply the plain meaning of that language. If the statute is
subject to more than one interpretation, we must apply the interpretation that carries out the
legislative intent.” § Appalachian Power Co. v. State Corp. Com’n, 733 S.E.2d 250, 256 (Va.
10
2012) (citations omitted). w also Halifax Corp. v. First Union Nat. Bank, 546 S.E.2d 696, 702
(Va. 2001) (“[T]he intention ofthe legislature . . . must be gathered from the words used, unless
a literal construction would involve a manifest absurdity.” (quoting Watkins v. Hall, 172 S.E.
445, 447 (Va. 1934))); Barr v. Town & Countrv Properties, Inc., 396 S.E.2d 672, 674 (Va.
1990); Brown v. Lukhard, 330 S.E.2d 84, 87 (Va. 1985) (“[W]hen the language of an enactment
is free from ambiguity, resort to legislative history and extrinsic facts is not permitted because
we take the words as written to determine their meaning.” (citing Citv of Portsmouth v. City of
Chesapeake, 136 S.E.2d 817, 825 (Va. 1964))). On the other hand, when statutory language is
ambiguous or uncertain, courts attempt to predict how the highest court of the state would
resolve the uncertainty by looking at “statutory language, pertinent legislative history, the
statutory scheme set in historical context, how the statute can be woven into the state law with
the least distortion of the total fabric, state decisional law, federal cases which construe the state
statute, scholarly works and any other reliable data tending to indicate how the [higher state
court1 would resolve the issue.” w Travelers lns Co. v. 633 Third Assocs, 14 F.3d at 1 19
(citation omitted). w alj Yurecka v. Zappala, 472 F.3d 59, 62 (3d Cir. 2006); N. Am.
Specialtv lns. v. Lapalme, 258 F.3d 35, 38 (1st Cir. 2001).
The first question here is whether the statutory term “consumer transaction” in the
VCPA is ambiguous For the VCPA to apply to dealings between a consumer and a supplier, a
supplier must commit “fraudulent acts or practices . . . in connection with a consumer
transaction.” VA. CODE ANN. § 59.1-200. To qualify as a “consumer transaction,” the dealings
between a consumer and a supplier must constitute “[t]he advertisement, sale, lease, license or
offering for sale, lease or license, of goods or services to be used primarily for personal, family
or household purposes.” § § 59.1-198. The “services” to be used “include but shall not be
11
limited to (i) work performed in the business or occupation of the supplier [or] (ii) work
performed for the supplier by an agent. . . .” _I_d. “Supplier” is defined as “a seller, lessor or
licensor who advertises, solicits or engages in consumer transactions . . . .” §.
The Court concludes that the pertinent statutory language is clear by its terms and
covers the legal services at issue here. The dealings between plaintiffs (the consumers) and
CAIR and/or Mr. Days (the supplier) qualify as “services” because l\/lr. Days’ activities
constituted"‘work performed in the business or occupation of the supplier.” VA. CODE ANN.
§ 59.1-198. Whether the “supplier” is CAIR or l\/Ir. Days, the work promised to plaintiffs was
legal services w Statement of Facts at 5; Reply at 8. Mr. Days was hired by CAlR-VA as “its
‘resident attorney’ and ‘manager’ of its civil rights department to provide legal representation to
Muslims complaining of various civil rights abuses.” Mygl Am. Compl. 11 4; Statement of
Facts at 4-5. Mr. Days failed to deliver the legal services promised to plaintiffs while'he was
acting as an employee of CAIR. Whether Mr. Days acted as an “agent “of CAIR is an issue that
is disputed by the parties § Lopez v. CAIR, 826 F.3d at 496-99. Nonetheless, Mr. Days’
conduct qualifies as the provision of “services” under the VCPA because it was work performed
while he was employed by CAIR, in the course of the organization’s activities as a “l\/luslim
advocacy group.” Statement of Facts at 4. Furthermore, even though CAIR’s “stated policy
[was] to provide pro bono legal services to the public,” plaintiffs contend that “Days fraudulently
obtained money from CAIR clients for CAIR’s legal representation,” qualifying as a “sale” of
services for purposes of the statute. §a_iy_e_d Am. Compl. 11 6.
The services that Mr. Days promised to provide were also “used primarily for
personal . . . purposes” by plaintiffs S_e§ VA. CODE ANN. § 59.1-198. “Personal purposes” are
those which are not commercial in nature. Compare Daughtrv v. Grav’s Bodv Shop, Inc., No.
12
CL09-2973 79 Va. Cir. 539, 2009 WL 7416523, at *2 (Va. Cir. Ct. Nov.'25, 2009), _w§ Rl\/IL
Corp. v. Lincoln Window Prod., Inc., No. CL03-1885, 67 Va. Cir. 545, 2004 WL 3568223, at
*11 (Va. Cir. Ct. Dec. 3, 2004). §e_e also ln re All Pending Chinese Drvwall Cases, l
No. CL09-3105, 80 Va. Cir. 69, 2010 WL 7378659, at *12-13 (Va. Cir. Ct. Mar. 29, 2010);
Bindra v. Michael Bowman & Assocs., Inc., No. 191866, 58 Va. Cir. 47, 2001 WL 1829999, at
*2 (Va. Cir. Ct. Sep. 19, 2001). Plaintiffs sought legal counsel from Mr. Days for claims related
to “immigration status divorce proceedings hostile work environment, and employment
discrimination” - all personal legal matters for non-commercial purposes _S_e_e LLsz Am.
Compl.11 14;M Am. Compl.1111 54-55. 3
Even if the language defining “consumer transaction” was ambiguous the
legislative intent in passing the VCPA leads the Court to conclude that the Virginia General
Assembly intended for this type of transaction to be included within the auspices of the statute.
The Virginia General Assembly established the VCPA to “be applied as remedial legislation to
promote fair and ethical standards of dealing between suppliers and the consuming public.” VA.
CODE ANN. § 59.1-197. According to the Virginia Supreme Court, the VCPA’s stated statutory
intent is particularly significant because “[t]he legislature seldom chooses to expressly direct the
courts how to apply a statute When it does so we must pay special attention to that choice and
ensure that it is given full effect. The General Assembly chose to include such direction in the
VCPA . . . . We construe remedial legislation liberally, in favor of the injured party.” Ballagh v.
Fauber Enters. Inc., 773 S.E.2d 366, 368 (Va. 2015) (citing VA. CODE ANN. § 59.1-197).
3 ln making this determination, the Court need not decide whether all legal services
qualify as consumer transactions under the VCPA, but rather only that the legal services in this
case so qualify.
13
Construing the statute liberally in favor of plaintiffs the Court concludes that the VCPA extends
to the “legal services” allegedly provided here.
The Court concludes that the Virginia Supreme Court would not agree with the
conclusion of the two Virginia Circuit Court judges if this case were to come before it. The plain
meaning of the VCPA explicitly encompasses this type of consumer transaction, and its inclusion
would more effectively realize the statute’s legislative intent.
C. Exemptions
CAlR argues that even if the legal services at issue qualify as a “consumer
transaction,” they are exempt under the statute. lt again cites Oberto v. Grogan, 88 Va. Cir. 188,
2014 WL 83 83045, at *2. ln that case, the Circuit Court first found that legal services “do not fit
the VCPA’s definition of consumer [transaction].” §. at *2 (citing Bd. of Dirs. of the Port Roval
Condo. Unit Owners’ Ass’n v. Crossland Sav. FSB, 1989 Va. Cir. LEXIS 80, 15 Va. Cir. at
241). lt also concluded that even if it did, the VCPA would be preempted by other law under
which attorneys are licensed to practice law. E §. at *2. § alj Caruth v. Clark, No. 16-0149,
2017 WL 1363314, at *5-6 (E.D. Va. Apr. 12, 2017) (reasoning that the VCPA “comprehensive
licensing” exemption for attorneys applies to dentists). The Court disagrees
The VCPA expressly excludes from its reach certain transactions including those
provided by “[b]anks savings institutions credit unions small loan companies public service
corporations [and] mortgage lenders,” among others §§ VA. CODE ANN. § 59.1-199(D). Legal
services however, are not listed among these express exclusions
The VCPA also exempts “[a]ny aspect of a consumer transaction which aspect is
authorized under laws or regulations of [the] Commonwealth [of Virginia] or the United States.”
S_ee_ VA. CODE ANN. § 59.1-199(A). ln interpreting this provision, the Virginia Supreme Court
14
has distinguished between those consumer transactions that are “authorized” and those that are
“regulated.” §§_e l\/lanassas Autocars, Inc. v. Couch, 645 S.E.2d 443, 447 (Va. 2007). The
Virginia Supreme Court has ruled that Section 59.1-199(A) “exempts only those aspects of a
consumer transaction that are ‘authorized.’ Authorized actions are those sanctioned by statute or
regulation.” §. ln so ruling, the Virginia Supreme Court declined to extend the exemption to
other aspects of a consumer transaction “on the sole ground [that they are] regulated by other
statutory provisions and regulations” §
This Court must draw the same distinction CAIR asserts that “the VCPA is
preempted because both rules of Virginia Supreme Court and Virginia State Bar regulate legal
services.” § Mot. at 10. To support its contention, CAIR points to a statute that governs the
“practice of law” and the licensing of attorneys to practice law. VA. CODE ANN. § 54.1-3900
§t_s_e_q. But as the Supreme Court of Virginia has observed, the word “regulated” is not
synonymous with the word “authorized.” M Manassas Autocars lnc. v. Couch, 645 S.E.2d at
447. To qualify for the VCPA exemption, the provision of the legal services at issue here must
have been authorized under some regulation or statute. g § at 447. While the practice oflaw
by a licensed attorney is authorized, the unauthorized practice of law is by definition not
“authorized” by law or regulation To the contrary, under the Rules of the Virginia Supreme
Court and at least one other statute, the practice of law by an unlicensed non-lawyer is expressly
prohibited _S_e§ VA. SUP. CT. R. 6:1 PRACTICE oF LAw el s_egg, (Mar. 1, 2018) (“No non-lawyer
shall engage in the practice of law in the Commonwealth of Virginia or in any manner hold
himself out as authorized or qualified to practice law in the Commonwealth of Virginia except as
may be authorized by rule or statute.”); VA. CODE ANN. § 54.1-3904 (“Any person who practices
law without being authorized or licensed shall be guilty of a Class 1 misdemeanor.”).
15
Mr. Days misrepresented himself as a lawyer and promised to assist plaintiffs
with their legal matters in his capacity as CAlR’s “resident attorney.” l\/lr. Days was not licensed
to practice law, and thus the legal services he provided to plaintiffs were categorically not
authorized under Virginia Supreme Court rules and at least one statute governing the licensed
practice of law. This exemption, therefore, does not preclude the VCPA from applying to the
legal services at issue.4
IV. CONCLUSION
For the reasons set forth in this Opinion, the Court will deny CAIR’s motion for
partial summary judgment with respect to plaintiffs’ VCPA claim. An Order consistent with this
Opinion shall issue this same day.
SO ORDERED.
PAUL L. FRIEDMAN
United States District Judge
DATi-:; q1 191\€
4 The parties did not identify any separate statute or regulation that authorizes the
provision of legal services by a non-lawyer or legal service entity.
16