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Could the District of Columbia become the nation’s capital for spurious
lawsuits alleging violations of consumer protection law? While readers
may remember the absurd abuse of the District’s consumer protection
law by former administrative law judge Roy Pearson Jr. in waging a
notorious $54 million “pantsuit” against his neighborhood dry cleaners,
the District’s highest local court is now deciding whether anyone can
use the law to sue, regardless of whether he or she lives in the District or experienced an actual loss. The case involves the claim of Florida resident, personal injury lawyer, and recently ousted one-term Congressman Alan Grayson. He wants companies that issue telephone calling cards to be required to turn over any leftover balances on said cards. But Mr. Grayson is not arguing that he has suffered a personal loss or injury as a result of a company’s failure to reimburse card balances. No, he instead claims that the remaining balances are “unclaimed property,” and that phone card companies should give such funds to the District government.

Because the District’s well-intentioned but loosely written consumer law authorizes damages of $1,500 per violation plus recovery of plaintiff attorney’s fees, regardless of actual damages, Mr. Grayson could cash in nicely for himself, too, as he transitions out of his career as a member of Congress. If the court decides that plaintiffs such as Mr. Grayson are not required to demonstrate any actual injury, then it will be open season for creative plaintiffs’ lawyers to bring their claims from around the country to the District. A trial court judge sensibly tossed Mr. Grayson’s shamelessly speculative case, but a three-judge appellate panel reinstated it in 2009. As of this report’s publication deadline, the full appellate court had decided to review the case but had not yet ruled.

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