United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 24, 2009 Decided May 28, 2010
No. 08-7142
BRITT A. SHAW, ET AL.,
APPELLANTS
v.
MARRIOTT INTERNATIONAL, INC.,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 1:05-cv-01138-GK)
Paul D. Cullen Sr. argued the cause for appellants. With
him on the briefs was Joyce E. Mayers. Daniel E. Cohen
entered an appearance.
Charles P. Scheeler argued the cause for appellee. With
him on the brief were Holly Drumheller Butler, Bruce V.
Spiva, and Kathleen R. Hartnett. Benjamin S. Boyd entered an
appearance.
Before: SENTELLE, Chief Judge, and GRIFFITH and
KAVANAUGH, Circuit Judges.
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Opinion for the Court filed by Circuit Judge GRIFFITH.
GRIFFITH, Circuit Judge: Plaintiffs brought this action
under the District of Columbia consumer protection statute to
challenge the pricing practices of Marriott’s Russian hotels.
The district court granted summary judgment in favor of
Marriott. We affirm in part and reverse in part.
I.
The plaintiffs allege a scheme by Marriott International
to overcharge guests at its Russian hotels. Customers
reserving rooms at Marriott hotels in Russia received their
rate quotes in U.S. dollars. Marriott did not inform customers
until checkout that payment would be due in Russian rubles,
which the hotels calculated at an exchange rate less favorable
than the official rate set by the Central Bank of Russia. As a
result, guests paid up to 18 percent more than the price they
had been quoted when making their reservations.
Plaintiff Britt Shaw’s experience shows how Marriott’s
system worked. In April 2005, Shaw made a one-night
reservation at the Marriott Renaissance Moscow during a
business trip for his law firm. He was quoted a price of $425.
When Shaw checked out of the hotel, he learned that he could
only pay in rubles, not in dollars. Marriott used its own
exchange rate of $1 to 32 rubles and charged Shaw 13,600
rubles for what he had been told would be a $425 room. At
that day’s official exchange rate of $1 to 27.7543 rubles,
13,600 rubles equaled $490. Shaw paid $65 more than the
price quoted to him when he reserved his room. The
remaining plaintiffs were treated similarly.
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Shaw and the other plaintiffs filed suit in District of
Columbia Superior Court on behalf of themselves and
similarly situated customers. They alleged Marriott’s pricing
practices violated the District of Columbia Consumer
Protection Procedures Act (CPPA), D.C. CODE §§ 28-3901 to
-3913 (2009), and constituted unjust enrichment. Marriott
removed the case to federal district court under 28 U.S.C.
§ 1332(d) (2006).
The other named plaintiffs are the Center for Strategic
and International Studies (CSIS), a Washington, D.C. think
tank that funded its employees’ professional travel to Russia;
Sarah Mendelson, a CSIS employee whose business takes her
frequently to Russia; and Neal Charness, a Michigan resident
who stayed at Marriott hotels during personal visits to Russia.
Plaintiffs moved for class certification, and the parties
filed cross-motions for summary judgment. The district court
granted summary judgment for Marriott, mooting the motion
for class certification. Shaw v. Marriott Int’l, Inc., 570 F.
Supp. 2d 78, 89 (D.D.C. 2008). The court held that CSIS,
Shaw, and Mendelson were not “consumers” entitled to
protection under the CPPA because CSIS was a business
entity and Shaw and Mendelson stayed at Marriott’s Russian
hotels only for business purposes. Id. at 85. The court also
held that Charness, as a Michigan resident, could not invoke
the protection of the CPPA because D.C. law did not govern
his dispute with Marriott, a Delaware corporation
headquartered in Maryland. Id. at 88. Finally, the court
granted summary judgment for Marriott on plaintiffs’ unjust
enrichment claim. Id. at 89.
On appeal, plaintiffs drop their claim of unjust
enrichment and challenge only the district court’s reading and
4
application of the CPPA. We have jurisdiction under 28
U.S.C. § 1291, conclude that Shaw and Mendelson lack
standing to pursue their actions in federal court, and affirm
the judgment of the district court on the claims of CSIS and
Charness.
II.
At the outset, Marriott argues that CSIS, Mendelson, and
Shaw lack standing to bring this suit. “Because the question
of standing goes to our jurisdiction over the case, we must
consider it first.” AT&T Corp. v. FCC, 317 F.3d 227, 237
(D.C. Cir. 2003). To be heard in federal court, every plaintiff
must satisfy the “irreducible constitutional minimum” of
Article III standing: injury-in-fact, causation, and
redressability. Young Am.’s Found. v. Gates, 573 F.3d 797,
799 (D.C. Cir. 2009) (quoting Lujan v. Defenders of Wildlife,
504 U.S. 555, 560–61 (1992)). To demonstrate standing on a
motion for summary judgment, a plaintiff “must set forth by
affidavit or other evidence specific facts,” establishing each of
these three elements. Lujan, 504 U.S. at 561 (internal
quotation marks omitted).
Marriott contends that it could not have caused any harm
to CSIS and Mendelson because CSIS employees stayed only
at Marriott-franchised hotels, which are not owned and
operated by Marriott, but by independent corporations. CSIS
and Mendelson have met their burden. They have proffered
evidence that Marriott was responsible for their loss because
it exercises some control over the franchised hotels, including
capping the rates they charge for rooms. See Plaintiffs’
Statement of Undisputed Facts ¶¶ 9–11, 20, 28–32.
5
CSIS has standing. It used its own funds to pay for stays
at Marriott’s Russian hotels, and suffered pecuniary harm as a
result of Marriott’s pricing practices. See Ciba-Geigy Corp. v.
EPA, 801 F.2d 430, 438 n.10 (D.C. Cir. 1986) (“[E]conomic
loss clearly constitutes a distinct and palpable injury . . . .”)
(internal quotation marks omitted). Damages under the CPPA
would remedy that loss. Article III requires no more.
Whether Shaw and Mendelson have standing is more
complicated. They concede having suffered no pecuniary
injury because their employers paid for their hotel stays. See
Reply Br. at 27–28. Nonetheless, they maintain that they have
suffered a legally cognizable injury because Marriott invaded
their interest in being free from improper trade practices, an
interest protected under the CPPA. The deprivation of such a
statutory right may constitute an injury-in-fact sufficient to
establish standing, even though the plaintiff “would have
suffered no judicially cognizable injury in the absence of [the]
statute.” Warth v. Seldin, 422 U.S. 490, 514 (1975); see also
Zivotofsky ex rel. Ari Z. v. Sec’y of State, 444 F.3d 614, 619
(D.C. Cir. 2006) (“Although it is natural to think of an injury
in terms of some economic, physical, or psychological
damage, a concrete and particular injury for standing purposes
can also consist of the violation of an individual right
conferred on a person by statute.”).
But the violation of a statute can create the particularized
injury required by Article III only when “an individual right”
has been “conferred on a person by statute.” Zivotofsky, 444
F.3d at 619. The question is whether Shaw and Mendelson are
within the class of individuals protected by the CPPA. To
answer that, we must apply the substantive law of the District
of Columbia. Smith v. Wash. Sheraton Corp., 135 F.3d 779,
782 (D.C. Cir. 1998). “Our duty, then, is to achieve the same
6
outcome we believe would result if the District of Columbia
Court of Appeals considered this case.” Novak v. Capital
Mgmt. & Dev. Corp., 452 F.3d 902, 907 (D.C. Cir. 2006).
The CPPA provides that “[a] person . . . may bring an
action under this chapter in the Superior Court of the District
of Columbia seeking relief from the use by any person of a
trade practice in violation of a law of the District of
Columbia.” 28 D.C. CODE § 3905(k)(1). Though the statute
defines “person” broadly, id. § 3901(a)(1), the District of
Columbia Court of Appeals has held that the CPPA protects
only consumers, see Ford v. ChartOne, Inc., 908 A.2d 72, 81
(D.C. 2006); Dist. Cablevision Ltd. P’ship v. Bassin, 828
A.2d 714, 717 (D.C. 2003).
We first look to the statute’s text to determine whether
Shaw and Mendelson engaged in “consumer” transactions
within the meaning of the Act. The CPPA defines “consumer”
both as a noun and an adjective. In relevant part, the noun
“consumer” means “a person who does or would . . . receive
consumer goods or services,” D.C. CODE § 28-3901(a)(2), or
“a person who does or would provide the economic demand
for” “any act which does or would create, alter, repair,
furnish, make available, provide information about, or,
directly or indirectly, solicit or offer for or effectuate, a sale,
lease or transfer, of consumer goods or services,” id.
§ 3901(a)(2), (6). When used as an adjective, as in the phrase
“consumer goods,” the word means “primarily for personal,
household, or family use.” Id. § 3901(a)(2). We read these
provisions together to define “consumer” as a person who
receives or demands goods or services that are primarily for
personal, household, or family use.
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Precedent from the District of Columbia Court of
Appeals confirms this reading of the Act. In Ford v.
ChartOne, the District of Columbia Court of Appeals held
that a person who had purchased his medical records for the
purpose of future litigation had engaged in a consumer
transaction under the CPPA because pursuing compensation
for injuries was a personal motive. 908 A.2d at 83. Ford also
noted with approval a district court decision that held that a
cab driver’s purchase of gasoline was not covered by the
CPPA, id. at 84 n.12, because it was made “in connection
with his role as an independent businessman,” and not
primarily for personal use, id. at 81 (quoting Mazanderan v.
Indep. Taxi Owners’ Ass’n, 700 F. Supp. 588, 591 (D.D.C.
1988)). These cases teach that purpose is the touchstone of the
CPPA’s definition of “consumer” and that the statute does not
reach transactions intended primarily to promote business or
professional interests.
Plaintiffs argue that the District of Columbia Court of
Appeals has not always focused on the purpose of the
transaction, but has looked instead to the role of the purchaser
within the supply chain. In Adam A. Weschler & Son, Inc. v.
Klank, the court held that an individual who purchased an
antique chest for resale was not a consumer under the CPPA.
561 A.2d 1003, 1005 (D.C. 1989). In dicta, the court,
focusing on the difference between retail and wholesale
purchasers, stated that if a “purchaser is not engaged in the
regular business of purchasing this type of goods or service
and reselling it, then the transaction will usually fall within
the Act.” Id. (emphasis added). But usually does not mean
always, and an individual who purchases a good without the
intent to resell is not always a consumer. That is why the Ford
court indicated that the CPPA would not apply to a business’s
purchase of office supplies, “even though such goods would
8
not be resold.” 908 A.2d at 84 n.12 (citing Mazanderan, 700
F. Supp. at 591).
Under the CPPA, an employer’s payment for its
employee’s hotel stay is not meaningfully different than its
purchase of a stapler for the office. Both are done for a
business purpose. Shaw stayed in Marriott’s Moscow hotels
only while meeting with his law firm’s clients, and
Mendelson did so only while travelling on behalf of CSIS.
Appellants’ Br. at 8–9. Both stayed in the hotels to further the
business purposes of their employers. They did not engage in
consumer transactions within the meaning of the Act and are
not entitled to its protections. Because they lack any rights
under the Act, they could not have suffered any injury-in-fact
stemming from a violation of the statute. They accordingly
lack Article III standing to sue in federal court.
Following oral argument, plaintiffs filed a motion asking
us to direct the district court to remand the entire case to the
District of Columbia Superior Court should we conclude that
plaintiffs lack standing. See Appellants’ Motion to Remand at
1 (Oct. 5, 2009) (moving “for a mandate directing that the
District Court remand this matter to the Superior Court for the
District of Columbia” (emphasis added)). Section 1447(c) of
Title 28 provides that a “case” removed from state court
“shall be remanded” “[i]f at any time before final judgment it
appears that the district court lacks subject matter
jurisdiction.”
Plaintiffs’ argument for remand is foreclosed by
Wisconsin Department of Corrections v. Schacht, 524 U.S.
381 (1998). In Schacht, the Supreme Court refused the very
remand the plaintiffs seek. Schacht held that § 1447(c) did not
require a district court to relinquish its removal jurisdiction
9
over a case with multiple claims once it determined that one
of the claims was barred by the Eleventh Amendment. Id. at
392. Because “[a]n ordinary reading of the language indicates
that [§ 1447(c)] refers to an instance in which a federal court
‘lacks subject matter jurisdiction’ over a ‘case,’ and not
simply over one claim within a case,” § 1447(c) does not
require remand of the entire case in these circumstances. Id.
(quoting 28 U.S.C. § 1447(c)). The federal court may hear the
claims for which federal jurisdiction exists. Cf. Lee v. Am.
Nat’l Ins. Co., 260 F.3d 997, 1006 (9th Cir. 2001)
(determining, in a case in which a plaintiff lacked standing to
sue only one of multiple defendants, that Schacht prohibited
remand of the entire case). We therefore remand the claims of
Shaw and Mendelson to the district court so that it may
determine the appropriate disposition.
III.
CSIS and Charness challenge the district court’s grant of
summary judgment against them. We will affirm the district
court’s grant of summary judgment where, viewing the record
in the light most favorable to the non-moving party, there is
no genuine issue of material fact and the moving party is
entitled to judgment as a matter of law. FED. R. CIV. P. 56; see
U.S. Postal Serv. v. Am. Postal Workers Union, 553 F.3d 686,
692 (D.C. Cir. 2009).
Marriott argues that CSIS cannot state a claim under the
CPPA because its employees stayed in Marriott’s Russian
hotels only to further its business purposes and did not engage
in “consumer transactions” within the meaning of the Act. We
agree. As we already discussed in concluding that Shaw and
Mendelson lack standing, the CPPA does not protect
businesses engaged in commercial activity. See Part II, supra.
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CSIS employees stayed in Marriott’s Russian hotels to
promote the policy objectives of CSIS, not “primarily for
personal, household, or family” reasons. D.C. CODE § 28-
3901(a)(2). CSIS engaged in no consumer transactions within
the meaning of the CPPA, so we affirm the district court’s
grant of summary judgment to Marriott on CSIS’s claim.
We also agree with Marriott that Charness cannot state a
claim under the CPPA. Charness invokes the protection of the
Act even though he is a resident of Michigan, Marriott is a
Delaware corporation headquartered in Maryland, and
nothing related to the dispute between the two occurred in the
District of Columbia.
We apply the law of the forum—in this case, the District
of Columbia—to determine whether the law of the District of
Columbia—in this case, the CPPA—reaches this dispute. See
Muir v. Navy Fed. Credit Union, 529 F.3d 1100, 1107 (D.C.
Cir. 2008). District of Columbia courts apply two tests to
determine which jurisdiction’s law should govern a dispute: a
“governmental interests analysis” and a “most significant
relationship” test. See Oveissi v. Islamic Republic of Iran, 573
F.3d 835, 842 (D.C. Cir. 2009) (discussing Hercules & Co. v.
Shama Rest. Corp., 566 A.2d 31, 40–41 & n.18 (D.C. 1989));
see, e.g., Washkoviak v. Student Loan Mktg. Ass’n, 900 A.2d
168, 180 (D.C. 2006) (following this approach when making
choice-of-law determinations under the CPPA). Although
these tests may at times produce conflicting results, in this
case both confirm that D.C. law does not govern Charness’s
dispute with Marriott.
The “governmental interests analysis” requires the court
to “evaluate the governmental policies underlying the
applicable laws and determine which jurisdiction’s policy
11
would be most advanced by having its law applied to the facts
of the case under review.” Hercules, 566 A.2d at 41. The
District of Columbia has an interest in protecting its own
citizens from being victimized by unfair trade practices and
an interest in regulating the conduct of its business entities.
The Act speaks to both. But Charness is not a citizen of the
District and neither the Russian Marriott hotels nor their
corporate head is a business entity located in the District. The
District has little interest in the resolution of their dispute.
Charness fares no better under the most significant
relationship test. When using this test, the District of
Columbia Court of Appeals looks to the factors set forth in
the Restatement (Second) of Conflict of Laws: (1) “the place
where the injury occurred”; (2) “the place where the conduct
causing the injury occurred”; (3) “the domicile, residence,
nationality, place of incorporation and place of business of the
parties”; and (4) “the place where the relationship, if any,
between the parties is centered.” RESTATEMENT (SECOND) OF
CONFLICT OF LAWS § 145(2) (1971); see Oveissi, 573 F.3d at
842. Neither Charness’s injury nor Marriott’s conduct
occurred in the District of Columbia. Neither party has a
domicile, residence, place of incorporation, or principal place
of business in Washington, and it is clear that the relationship
between them is not centered in the District. In sum, the
Restatement factors confirm that D.C. law does not apply.
Charness contends that the District of Columbia has an
interest in applying the CPPA to Marriott in this case because
Marriott held itself out as a resident of the District. Marriott
does list a D.C. address on its website and on corporate
documents, but all mail sent to that address is forwarded to
Bethesda. The company has no corporate office in
Washington, D.C. and the call centers and Internet servers
12
through which plaintiffs made their reservations are not in the
District. Although we are willing to assume Marriott’s
representations give the District of Columbia some interest in
this dispute, that interest does not outweigh the interest of
Maryland in ensuring corporations domiciled there do not
mislead consumers or of Michigan in protecting its citizens
from unfair trade practices. Moreover, Marriott’s
representations do not implicate any of the Restatement
factors.
Charness argues that no constitutional principles would
be offended were he permitted to invoke the CPPA against
Marriott. That may be so, but it is no answer to the more
fundamental question: Does the CPPA protect him on these
facts? As we have said, it does not. We therefore affirm the
district court’s grant of summary judgment for Marriott.
IV.
We reverse the judgment entered against plaintiffs Shaw
and Mendelson because they lack standing to sue in federal
court. We remand those claims to the district court for further
proceedings consistent with this opinion. We affirm the
judgment in favor of Marriott with respect to the remaining
plaintiffs.
So ordered.