We previously reported on a surge of mislabeling suits filed in District of Columbia Superior Court, following lower court decisions that purported to grant “tester” plaintiffs—individuals and organizations that purchase products simply to test whether the representations about a product are true—a right to sue on behalf of the general public under the District of Columbia Consumer Protection Procedures Act (“CPPA”). A year later, the District of Columbia Court of Appeals has endorsed an even more expansive interpretation of the CPPA, permitting a public interest organization to bring such actions even if the organization fails to satisfy Article III’s standing requirements. We expect even more lawsuits to be filed in the wake of this decision.
The CPPA Purports to Allow Public Interest Organizations to Assert Mislabeling Claims on Behalf of Consumers Generally.
The CPPA prohibits misleading or deceptive trade practices. It purports to give public interest organizations the right to sue on behalf of the consumer or class of consumers likely to be deceived or misled by those practices, as long as the organization has a “sufficient nexus” to the interest of such consumers to adequately represent those interests. D.C. Code § 28-3905(k)(1)(D). Public interest organizations have increasingly embraced this provision of the CPPA to argue that they may stand in the shoes of consumers and bring any lawsuit that an individual consumer might bring, even if the organization itself has not suffered any injury.
Defendants have attempted to dismiss these cases on Article III standing grounds, but trial courts have reached inconsistent decisions. Some courts have dismissed CPPA claims brought by public interest organizations for lack of Article III standing where the organization failed to show that it suffered an injury-in-fact. Others, however, have held that public interest organizations need not establish Article III standing to bring a deceptive trade practices claim under the CPPA.
The D.C. Court of Appeals Clarifies that Article III Standing Requirements Do Not Apply to Certain CPPA Claims.
The District of Columbia Court of Appeals decision in Animal Legal Defense Fund v. Hormel Foods Corp., 258 A.3d 174 (D.C. 2021), resolved this disagreement, holding that a public interest organization may bring suit under the CPPA free from any requirement to demonstrate its own Article III standing. Although Article III’s standing requirements usually apply in District of Columbia courts, the Hormel Foods court held that the legislative history of the CPPA reflected an intent by the District of Columbia Council to displace Article III’s standing requirements with a more lenient statutory test for standing.
The key takeaways from the decision include:
- Only Statutory Standing Required. A public interest organization—defined by the CPPA as “a nonprofit organization that is organized and operating, in whole or in part, for the purpose of promoting interests or rights of consumers,” D.C. Code § 28-3901(a)(15)—need not satisfy traditional Article III standing requirements to bring a CPPA claim in District of Columbia courts. Rather, such organizations need only satisfy the CPPA’s statutory standing requirement that the organization have a “sufficient nexus” to the interests of the consumers they seek to represent.
- Broad Nexus Requirement. In determining whether such a nexus exists, the Court of Appeals suggested that protecting consumer interests need not be the organization’s primary purpose. The plaintiff in Hormel Foods satisfied this requirement by showing that one of its “subsidiary purposes” was to ensure that consumers of meat have accurate information about factory farming conditions and practices so they can make informed decisions about meat consumption—even though the organization’s primary mission was to protect the lives and advance the interests of animals.
- Loose Pleading Standards. The Court of Appeals embraced a loose pleading standard for asserting standing under § 28-3905(k)(1)(D). Although the plaintiff in Hormel Foods did not invoke this provision as a basis for standing in its complaint—indeed, it did not invoke that provision until summary judgment—the Court allowed the lawsuit to proceed on the ground that the facts alleged in the complaint nonetheless supported this theory of standing.
CPPA Claims Brought by Public Interest Organizations Require Creative Defenses.
Hormel Foods removes one arrow from a defendant’s quiver in CPPA cases brought by public interest organizations. Companies that sell products in the District of Columbia should prepare to be targeted by this statute by organizations purporting to act in the public interest. And because many of these lawsuits seek only injunctive and declaratory relief, they can be difficult to remove to a federal court.
Yet despite Hormel Foods’s expansive interpretation of standing under the CPPA, companies can still avail themselves of creative arguments to defeat CPPA claims.
- Other CPPA Provisions Still Require Article III Standing. The holding in Hormel Foods applies only to lawsuits brought by public interest organizations on behalf of a consumer or class of consumers under § 28-3905(k)(1)(D). It does not apply to consumers seeking direct relief from a deceptive trade practice (§ 28-3905(k)(1)(A)), nor does it apply to individuals or organizations that bring a CPPA claim—on behalf of themselves or the general public—based on products they purchased simply to test whether the representations about the product are true (§ 28-3905(k)(1)(B), (C)). Individual and organizational plaintiffs, including “tester” plaintiffs, who sue under these other provisions of the CPPA must still show Article III standing.
- Personal Jurisdiction. Notwithstanding Hormel Foods, personal jurisdiction requirements continue to apply in District of Columbia courts to the same extent as in federal courts. Even if a public interest organization has statutory standing under the CPPA, it still must demonstrate that the District of Columbia court has personal jurisdiction over the defendant.
- No Underlying Claim By Consumers. While a public organization need not demonstrate injury to itself, it must still identify a consumer or class of consumers who have or will be injured by the alleged deceptive practices. D.C. Code § 28-3905(k)(1)(D) permits public interest organizations to bring private attorney-general lawsuits only to the extent an individual consumer or class of consumers could bring a CPPA claim. In other words, showing that an individual consumer cannot maintain a deceptive practices claim against a company remains a viable defense to a claim by a public interest organization.