Whitney Hancock v. Urban Outfitters, Inc.

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 19, 2015 Decided July 26, 2016
No. 14-7047
WHITNEY HANCOCK, ON BEHALF OF HERSELF AND ALL OTHERS
SIMILARLY SITUATED, AND JAMIE WHITE, ON BEHALF OF
HERSELF AND ALL OTHERS SIMILARLY SITUATED,
APPELLANTS
v.
URBAN OUTFITTERS, INC. AND ANTHROPOLOGIE, INC.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:13-cv-00939)
Mikhael D. Charnoff argued the cause for appellants.
With him on the briefs was Scott M. Perry.
James M. Burns argued the cause and filed the brief for
appellees.
Before: MILLETT, Circuit Judge, and EDWARDS and
SENTELLE, Senior Circuit Judges.
Opinion for the Court filed by Circuit Judge MILLETT.
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MILLETT, Circuit Judge: Whitney Hancock and Jamie
White made purchases with their credit cards at two clothing
stores in the District of Columbia. As part of those credit-
card transactions, the cashiers asked each for her zip code,
and each provided it. Hancock and White then filed suit in
federal court, alleging that those zip code requests violated
two D.C. consumer protection laws. The district court
dismissed the complaint with prejudice for failure to state a
claim. But neither plaintiff has alleged a concrete Article III
injury tied to disclosure of her zip code that could support
standing, so the district court lacked jurisdiction to decide the
merits of the case. Accordingly, we vacate the district court’s
decision and remand for dismissal of the case.
I
A
The District of Columbia’s Use of Consumer
Identification Information Act (“Identification Act”), D.C.
Code § 47-3151 et seq., provides in relevant part that “no
person shall, as a condition of accepting a credit card as
payment for a sale of goods or services, request or record the
address or telephone number of a credit card holder on the
credit card transaction form,” id. § 47-3153.
The District of Columbia’s Consumer Protection
Procedures Act (“Consumer Protection Act”), D.C. Code
§ 28-3901 et seq., provides that, “whether or not any
consumer is in fact misled, deceived or damaged thereby,” no
person may make a “misrepresent[ation] as to a material fact
which has a tendency to mislead”; “fail to state a material fact
if such failure tends to mislead”; or “use deceptive
representations” in “connection with goods or services,” id.
§ 28-3904(e), (f), (t).
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B
In May 2013, Whitney Hancock made a credit card
purchase at an Anthropologie retail clothing store in
Washington, D.C. Hancock alleges that the cashier first
swiped her credit card in a credit card machine. Then the
cashier asked for her zip code and entered it into the store’s
point of sale register, rather than into the credit card machine.
The next month, Jamie White made two credit card
purchases at an Urban Outfitters retail clothing store in
Washington, D.C. Her factual allegations are identical in
every relevant way: in both transactions, the cashier swiped
her credit card in a credit card machine, asked for her zip
code, and then entered it into the point of sale register.
Hancock and White filed a putative class action in the
United States District Court for the District of Columbia.
They allege that Urban Outfitters’ and Anthropologie’s (the
“Stores”) zip code requests violated the Identification Act and
the Consumer Protection Act. More specifically, Hancock
and White allege that, because their zip codes are part of their
addresses, the Stores’ request for zip codes violated the
Identification Act’s ban on obtaining addresses as a condition
of a credit card transaction. They also allege that the requests
for their zip codes violated the Consumer Protection Act by
(i) falsely implying to consumers that disclosure of their zip
codes is required to complete their credit-card transactions;
(ii) failing to state the material fact that the provision of a zip
code is optional; and (iii) deceptively representing that
requests for zip codes are legal and necessary to complete
credit-card transactions.
The district court dismissed the complaint for failure to
state a claim. See Fed. R. Civ. P. 12(b)(6). The court
acknowledged the Stores’ contention that Hancock and White
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had not pled an injury sufficient for Article III standing, but
found it “unnecessary” to address that jurisdictional question
because the complaint failed to state a claim. J.A. 165. With
respect to the Identification Act, the court held that a zip code
is not by itself an “address” that the law protects from
disclosure. Id. at 165–167 (quoting D.C. Code § 47-3153).
The court further ruled that Hancock’s and White’s failure to
allege that the transactions would not have been completed if
they had not provided their zip codes foreclosed their claims
under the Consumer Protection Act.
Hancock and White appealed. Following oral argument,
the Supreme Court granted review in Spokeo v. Robins, No.
13-1339, to decide whether a procedural violation of the Fair
Credit Reporting Act, 15 U.S.C. § 1681 et seq., can give rise
to Article III standing. On May 20, 2015, we ordered this
appeal held in abeyance pending the Supreme Court’s
decision in Spokeo, which was issued on May 16, 2016. See
Spokeo v. Robins, 136 S. Ct. 1540 (2016).
II
Federal courts cannot address the merits of a case until
jurisdiction—the power to decide—is established. One
“essential and unchanging” component of federal court
jurisdiction is the “requirement that a litigant have standing to
invoke the authority of a federal court.” DaimlerChrysler
Corp. v. Cuno, 547 U.S. 332, 342 (2006). Until that
jurisdictional threshold is crossed, “the court cannot proceed
at all in any cause.” Steel Co. v. Citizens for a Better
Environment, 523 U.S. 83, 94 (1998) (quoting Ex parte
McCardle, 74 U.S. (7 Wall.) 506, 514 (1868)).
The district court erred at the outset when it bypassed the
jurisdictional question of Hancock’s and White’s standing and
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dove into the merits of this case. In doing so, the district
court stepped where the Constitution forbade it to tread. That
is because Hancock and White lack Article III standing in this
case.
“[T]he doctrine of standing serves to identify those
disputes which are appropriately resolved through the judicial
process.” Whitmore v. Arkansas, 495 U.S. 149, 155 (1990).
“[T]he irreducible constitutional minimum of standing”
requires “an injury in fact” that is both “concrete and
particularized,” and “actual or imminent, not conjectural or
hypothetical.” Lujan v. Defenders of Wildlife, 504 U.S. 555,
560 (1992). Plaintiffs must also demonstrate “a causal
connection between the injury and the conduct complained
of,” and “a likelihood that a court ruling in [plaintiffs’] favor
would remedy their injury.” Id. at 561, 595.
Those requirements of injury, causation, and
redressability “confine[] the federal courts to a properly
judicial role” of resolving actual disputes between parties,
rather than questions more appropriately addressed to the
other branches of government. Spokeo, 136 S. Ct. at 1547.
Because this case arises at the motion to dismiss stage, the
complaint need only “state[] a plausible claim” that each
element of standing is satisfied. Ashcroft v. Iqbal, 556 U.S.
662, 678–679 (2009). We accept facts alleged in the
complaint as true and draw all reasonable inferences from
those facts in the plaintiffs’ favor. See, e.g., Bregman v.
Perles, 747 F.3d 873, 875 (D.C. Cir. 2014).
The complaint here does not get out of the starting gate.
It fails to allege that Hancock or White suffered any
cognizable injury as a result of the zip code disclosures.
Indeed, at oral argument, Hancock’s and White’s counsel
candidly admitted that “the only injury * * * that the named
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plaintiffs suffered was they were asked for a zip code
when * * * [under] the law they should not have been.” Oral
Arg. Tr. 5. In other words, they assert only a bare violation of
the requirements of D.C. law in the course of their purchases.
In arguing for standing, Hancock and White simply assert
that “[t]he actual or threatened injury required by Art. III may
exist solely by virtue of statutes creating legal rights, the
invasion of which creates standing.” Pet. Br. at 20 (quoting
Warth v. Seldin, 422 U.S. 490, 500 (1975) (internal quotation
marks omitted)). But they vastly overread that case. The
Supreme Court has been clear that the legislature “cannot
erase Article III’s standing requirements by statutorily
granting the right to sue to a plaintiff who would not
otherwise have standing” under Article III. Spokeo, 136 S.
Ct. at 1547–1548 (quoting Raines v. Byrd, 521 U.S. 811, 820
n.3 (1997)) (internal quotation mark omitted). Instead, an
asserted injury to even a statutorily conferred right “must
actually exist,” Spokeo, 136 S. Ct. at 1548, and must have
“affect[ed] the plaintiff in a personal and individual way,” id.
at 1543 (quoting Lujan, 504 U.S. at 560 n.1).
The Supreme Court’s decision in Spokeo thus closes the
door on Hancock and White’s claim that the Stores’ mere
request for a zip code, standing alone, amounted to an Article
III injury. Spokeo held that plaintiffs must have suffered an
actual (or imminent) injury that is both particularized and
“concrete * * * even in the context of a statutory violation.”
136 S. Ct. at 1549. For that reason, a plaintiff cannot “allege
a bare procedural violation, divorced from any concrete harm,
and satisfy the injury-in-fact requirement of Article III.” Id.
The plaintiff must allege some “concrete interest” that is “de
facto,” “real,” and “actually exist[s].” See id. at 1548, 1549.
Accordingly, while a legislature may “‘elevat[e] to the status
of legally cognizable injuries concrete, de facto injuries that
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were previously inadequate in law,’” the legislature cannot
dispense with the constitutional baseline of a concrete injury
in fact. Spokeo, 136 S. Ct. at 1549 (quoting Lujan, 504 U.S.
at 578) (alteration in Spokeo).
Indeed, the Supreme Court cautioned in Spokeo that some
statutory violations could “result in no harm,” even if they
involved producing information in a way that violated the
law. 136 S. Ct. at 1550. The Court elaborated that, in the
context of the Fair Credit Reporting Act at least: “An
example that comes readily to mind is an incorrect zip code.
It is difficult to imagine how the dissemination of an incorrect
zip code, without more, could work any concrete harm.” Id.
If, as the Supreme Court advised, disclosure of an
incorrect zip code is not a concrete Article III injury, then
even less so is Hancock and White’s naked assertion that a zip
code was requested and recorded without any concrete
consequence. Hancock and White do not allege, for example,
any invasion of privacy, increased risk of fraud or identity
theft, or pecuniary or emotional injury. Cf. Spokeo, 136 S. Ct.
at 1549 (A “risk of real harm” or an “intangible” harm may
satisfy Article III’s requirement of concrete injury.). And
without any plausible allegation of Article III injury, the
complaint fails to state a basis for federal court jurisdiction.
Finally, Hancock and White ask this court to change the
district court’s dismissal from one with prejudice to one
without prejudice so that they can amend their complaint to
allege standing. But having failed to request the opportunity
to amend their complaint in district court, Hancock and White
are in no position to ask this court to permit amendment in the
first instance. “When a plaintiff fails to seek leave from the
District Court to amend its complaint, either before or after its
complaint is dismissed, it forfeits the right to seek leave to
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amend on appeal.” City of Harper Woods Employees’
Retirement System v. Olver, 589 F.3d 1292, 1304 (D.C. Cir.
2009). To be sure, Hancock and White included a passing
reference to amendment in a footnote in their opposition to
the motion to dismiss. But that does not suffice. See United
States ex rel. Williams v. Martin-Baker Aircraft Co., 389 F.3d
1251, 1259 (D.C. Cir. 2004) (“While Federal Rule [of Civil
Procedure] 15(a) provides that leave to amend shall be freely
given when justice so requires, a bare request in an opposition
to a motion to dismiss—without any indication of the
particular grounds on which amendment is sought—does not
constitute a motion within the contemplation of Rule 15(a).”).
In short, Hancock and White are seeking leave to amend from
the wrong court at the wrong time.
III
Because the plaintiffs have not alleged any concrete
injury in fact stemming from the alleged violations of D.C.
law, the district court lacked jurisdiction. We accordingly
take the only action open to us: we vacate the district court’s
judgment on the merits and remand with instructions to
dismiss the complaint.
So ordered.