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Shaw v. Marriott International

May 28, 2010

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).

The opinion of the court was delivered by: Griffith, Circuit Judge

Argued September 24, 2009

Before: SENTELLE, Chief Judge, and GRIFFITH and KAVANAUGH, Circuit Judges.

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.

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 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.

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 ...


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