The D.C. Court of Appeals has cleared the way for a lawsuit against several major phone companies accused of keeping millions of dollars that a whistleblower lawyer says belong to the District.
In a ruling Thursday, a unanimous panel said that the lawyer, Alan Grayson, could proceed with his case under a D.C. law that bans misrepresentations to consumers. The ruling overturns part of a 2007 ruling by D.C. Superior Court Judge Melvin Wright, though the appeals panel agreed with Wright that Grayson cannot proceed under the District’s False Claims Act because he does not meet that law’s whistleblower requirements.
Grayson, who represented whistleblowers as a partner in the McLean, Va., firm Grayson & Kubli, won election to the U.S. House of Representatives in 2008 from a Florida district. The Democrat no longer practices law but he plans to proceed with the case, which he filed as a plaintiff in 2002.
“These defendant telephone companies have been operating a shell game and cheating D.C. calling card users for years,” Grayson said in a statement. “We will continue to press hard to end their misrepresentations, false advertising and overcharges, which have cost consumers millions of dollars.”
The exact amount of money involved is unclear because discovery hasn’t begun, a spokesman said, but Grayson’s complaint argues that it’s in the millions. The complaint says there are unused balances on hundreds of thousands of prepaid calling cards issued by AT&T, MCI Worldcom, Sprint, Verizon, or their subsidiaries. The money, Grayson says, belongs in the District’s unclaimed-property fund.
Under the District’s Consumer Protection Procedures Act, Grayson could be entitled to punitive and other damages if he prevails in Superior Court.
Crowell & Moring partner Daniel Forman and Kirkland & Ellis partner Jay Lefkowitz are among those representing the phone companies. They were not immediately available for comment. Frederick D. Cooke Jr. of Rubin, Winston, Diercks, Harris & Cooke is representing Grayson.
In the appellate decision (pdf), Judge Inez Smith Reid wrote for the panel that the Consumer Protection Procedures Act does not require Grayson to have experienced an injury himself before claiming an unlawful trade practice. “If the Council had intended for the CPPA to have a narrower reach, it would not have eliminated, with its 2000 Amendment, language which expressly limited the persons permitted to bring claims,” she wrote.
Judge Noël Anketell Kramer and Senior Judge James Belson joined in the opinion.