United States District Court, District of Columbia
RUDOLPH CONTRERAS UNITED STATES DISTRICT JUDGE
Defendants' Motions to Dismiss
case involves a group of individuals who believe that they
have been defrauded by a government institution established,
in part, to protect their interests; an institution that they
claim has been corrupted by private interests opposed to
their own. Plaintiffs are a group of taxicab drivers who have
brought several common law, District of Columbia law, and
federal law claims against a District of Columbia regulatory
agency, the Department of For-Hire Vehicles
(“DFHV”), and Jeffrey Schaeffer, an owner of
various taxi-related companies (together,
“Defendants”). Plaintiffs allege that DFHV
misrepresented important taxicab licensing information and
then worked alongside Mr. Schaeffer to draft and implement
new licensing regulations which effectively preclude them
from obtaining licenses to operate their own taxicabs. Now
before the Court are DFHV's motions to dismiss for
insufficient service of process and lack of subject-matter
jurisdiction, and both Defendants' motions to dismiss for
failure to state a claim for relief. For the reasons stated
below, the Court grants both motions to dismiss for failure
to state a claim.
claims arise from their inability to obtain
“H-Tag” permits and, consequently, their
inability to own and operate taxicabs. An “H-Tag”
is a license necessary to operate a public for-hire vehicle
in the District of Columbia. See D.C. Code §
47-2829 (2018); Mem. P. & A. Supp. Def. Dep't
For-Hire Vehicles Mot. Dismiss (“DFHV Mem.”) Ex.
1 (“H-Tag Report”) at 1, ECF No.
18-3. DFHV determines the criteria for H-Tag
“a subordinate agency within the executive branch of
the District government with exclusive authority for
intrastate regulation of the public-vehicle-for-hire
industry.” D.C. Code § 50-301.04 (2018). It is led
by a Director who is appointed by the Mayor with the advice
and consent of the District of Columbia Council. D.C. Code
§ 50-301.05. “The DFHV is charged with the
continuance, further development, and improvement of the
vehicle-for-hire industry within the District, and for the
overall regulation of limousines, sedans, taxicabs, taxicab
companies, taxicab fleets, and taxicab associations.”
D.C. Code § 50-301.07(a). Among other powers, it has the
authority to establish “criteria, standards, and
requirements for the licensing of public vehicle-for-hire
owners, operators, companies, associations, and
fleets.” D.C. Code § 50-301.07(c)(2).
Jeffrey Schaeffer's Involvement in the Taxicab
Schaeffer allegedly owns several taxicab companies, insurance
companies, and a car repair shop in the District of Columbia,
has a personal office in the same building as DFHV,
has held a large share of the District's taxicab market
for more than 20 years. Compl. ¶¶ 5, 25, ECF No. 1.
Plaintiffs assert that Mr. Schaeffer's market share and
proximity to DFHV allow him to influence DFHV's actions;
specifically, its implementation of H-Tag regulations.
Id. ¶¶ 5-6, 25. Mr. Schaeffer allegedly
has a history of lobbying for favorable taxicab regulations
to maintain his grip on the taxicab market. See Id.
¶¶ 7, 13, 36.
2009, the District of Columbia operated on an
open-taxicab-licensing system, with no limit on the number of
H-Tags that could be issued. See H-Tag Report at 3.
In 2009, the District of Columbia Taxicab Commission
(“DCTC” or the “Commission”),
DFHV's predecessor, placed a moratorium on H-Tags,
effectively halting any new issuances to individual taxicab
drivers and taxicab companies. See Compl. ¶ 26,
ECF No. 1; H-Tag Report at 4. While the moratorium was in
effect, Plaintiffs-taxicab drivers in the District of
Columbia who leased their cabs from H-Tag holders-inquired
about the steps that would be necessary to obtain their own
H-Tags once DFHV decided to lift the moratorium. Compl.
¶ 26. During a series of meetings from 2011 to
2015, DFHV officials allegedly informed Plaintiffs that they
would be eligible for H-Tags so long as they registered with
DFHV, successfully completed a “Taxicab Operator's
Course, ” and earned the requisite certificate of
completion. Id. Accordingly, Plaintiffs each
registered with DFHV as for-hire candidates and paid $800 to
attend and complete the course. Id. ¶¶ 26-27;
see Certificate of Completion, ECF No. 1-2.
September 2016, DFHV lifted the moratorium, but contrary to
its alleged representations to Plaintiffs it adopted a
regulation that gave priority licensing only to previous
H-Tag holders, effectively barring Plaintiffs from obtaining
H-Tags. See Compl. ¶¶ 28, 30, 66; D.C.
Mun. Regs. tit. 31, § 1010.20 (2017). The current H-Tag
regulation requires Plaintiffs to have previously surrendered
H-Tags to DFHV-which Plaintiffs have not done because they
never owned H-Tags-or to register a wheelchair-accessible or
electric vehicle-vehicle types which Plaintiffs allegedly do
not own, or claim are impractical. See Compl. ¶
15; D.C. Mun. Regs. tit. 31, § 1010.20 (2017).
late-2017, Plaintiffs filed the complaint initiating this
action. Plaintiffs allege that, under the semblance of the
H-Tag regulation, DFHV and Mr. Schaeffer conspired and
attempted to monopolize the District of Columbia's
taxicab market. See generally Compl. Plaintiffs
argue that this alleged anticompetitive conduct was made
possible by Mr. Schaeffer's significant market share in
the District's taxicab industry and his lobbyist's
efforts to advocate for favorable taxicab regulations.
See Id. ¶¶ 5, 48, 81. Plaintiffs also
argue that DFHV officials misrepresented the H-Tag
eligibility requirements to Plaintiffs, knowing that
Plaintiffs would be unable to obtain H-Tags once the new
regulations were issued. Id. ¶ 58. They assert
six claims against DFHV: (1) promissory estoppel, (2)
fraudulent misrepresentation, (3) negligent supervision, (4)
equal protection, (5) attempted monopolization, and (6)
conspiracy to monopolize. See generally id.
Plaintiffs assert the equal protection and monopolization
claims against Mr. Schaeffer as well. See generally
the Court are DFHV's ripe motions to dismiss pursuant to
Federal Rules of Civil Procedure 12(b)(1), 12(b)(5), and
12(b)(6), and Mr. Schaeffer's ripe motion to dismiss
pursuant to Rule 12(b)(6). DFHV argues that (1) the Court
lacks standing because Plaintiffs fail to allege injury in
fact; and (2) Plaintiffs' claims are unripe because they
have neither applied for nor been denied H-Tags. See
DFHV Mem. at 5-7, ECF No. 18-1. Alternatively, DFHV argues
that Plaintiffs' complaint is factually and legally
insufficient, and therefore that it fails to state a claim
upon which the Court may grant relief. See generally
DFHV Mem. Mr. Schaeffer also argues that Plaintiffs'
allegations are factually and legally insufficient. See
generally Schaeffer Mem. As discussed below, the Court
denies DFHV's motion to dismiss for lack of
subject-matter jurisdiction but grants both Defendants'
motions to dismiss for failure to state a claim for relief.
motion to dismiss for lack of standing and ripeness
constitutes a motion under Rule 12(b)(1) of the Federal Rules
of Civil Procedure, because both defects are “defects
in subject-matter jurisdiction.” Haase v.
Sessions, 835 F.2d 902, 906 (D.C. Cir. 1987).
“Because subject-matter jurisdiction focuses on the
court's power to hear the plaintiff's claim, a Rule
12(b)(1) motion imposes on the court an affirmative
obligation to ensure that it is acting within the scope of
its jurisdictional authority.” Grand Lodge of
Fraternal Order of Police v. Ashcroft, 185 F.Supp.2d 9,
13 (D.D.C. 2001) (citing 5A Charles A. Wright & Arthur R.
Miller, Federal Practice and Procedure § 1350).
Federal courts are courts of limited jurisdiction, and the
law presumes that “a cause lies outside this limited
jurisdiction . . . .” Kokkonen v. Guardian Life
Ins. Co. of Am., 511 U.S. 375, 377 (1994). Accordingly,
“[a]s a court of limited jurisdiction, ” this
Court “begin[s], and end[s], with an examination of
[its] jurisdiction.” Gen. Motors Corp. v. EPA,
363 F.3d 442, 448 (D.C. Cir. 2004).
the plaintiff's burden to establish that the court has
subject-matter jurisdiction. Lujan v. Defs. of
Wildlife, 504 U.S. 555, 561 (1992). In determining
whether the plaintiff has met this burden, a court must
accept “the allegations of the complaint as true,
” Banneker Ventures, LLC v. Graham, 798 F.3d
1119, 1129 (D.C. Cir. 2015), and “construe the
complaint liberally, granting the plaintiff the benefit of
all inferences that can be derived from the facts
alleged.” Barr v. Clinton, 370 F.3d 1196, 1199
(D.C. Cir. 2004) (internal quotation marks omitted). However,
“the plaintiff's factual allegations in the
complaint . . . will bear closer scrutiny in resolving a
12(b)(1) motion than in resolving a 12(b)(6) motion for
failure to state a claim.” Grand Lodge of Fraternal
Order of Police, 185 F.Supp.2d at 13-14 (citing 5A
Charles A. Wright & Arthur R. Miller, Federal
Practice and Procedure § 1350) (internal quotation
Federal Rules of Civil Procedure require that a complaint
contain “a short and plain statement of the
claim” to give the defendant fair notice of the claim
and the grounds upon which it rests. Fed.R.Civ.P. 8(a)(2);
accord Erickson v. Pardus, 551 U.S. 89, 93 (2007)
(per curiam). A motion to dismiss under Rule 12(b)(6) does
not test a plaintiff's ultimate likelihood of success on
the merits; rather, it tests whether a plaintiff has properly
stated a claim. See Scheuer v. Rhodes, 416 U.S. 232,
236 (1974), abrogated on other grounds by Harlow v.
Fitzgerald, 457 U.S. 800 (1982); Brewer v. District
of Columbia, 891 F.Supp.2d 126, 130 (D.D.C. 2012). A
court considering such a motion presumes that the
complaint's factual allegations are true and construes
them liberally in the plaintiff's favor. See, e.g.,
United States v. Philip Morris, Inc., 116 F.Supp.2d 131,
135 (D.D.C. 2000).
“[t]o survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its
face.'” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). This means that a plaintiff's
factual allegations “must be enough to raise a right to
relief above the speculative level on the assumption that all
the allegations in the complaint are true (even if doubtful
in fact).” Twombly, 550 U.S. at 555-56
(citations and footnote omitted). “Threadbare recitals
of the elements of a cause of action, supported by mere
conclusory statements, ” are therefore insufficient to
withstand a motion to dismiss. Iqbal, 556 U.S. At
678. A court need not accept a plaintiff's legal
conclusions as true, see id., nor must a court
presume the veracity of legal conclusions that are couched as
factual allegations, see Twombly, 550 U.S. at 555.
when a plaintiff alleges fraudulent misrepresentation, as
Plaintiffs do here, the complaint must “state with
particularity the circumstances constituting fraud or
mistake.” Fed.R.Civ.P. 9(b); see, e.g., Jefferson
v. Collins, 905 F.Supp.2d 269, 282 (D.D.C. 2012); 3D
Global Sols., Inc. v. MVM, Inc., 552 F.Supp.2d 1, 7-9
(D.D.C. 2008); Anderson v. USAA Cas. Ins. Co., 221
F.R.D. 250, 254 (D.D.C. 2004). This heightened pleading
standard requires a complaint to “state the time, place
and content of the false misrepresentations, the fact
misrepresented and what was retained or given up as a
consequence of the fraud.” United States ex rel.
Williams v. Martin-Baker Aircraft Co., 389 F.3d 1251,
1256 (D.C. Cir. 2004) (internal quotation marks omitted)
(quoting Kowal v. MCI Commc'ns Corp., 16 F.3d
1271, 1278 (D.C. Cir. 1994)). The plaintiff must also
“identify individuals allegedly involved in the
fraud.” United States ex rel. Williams, 389
F.3d at 1256.
noted above, Defendants move to dismiss the complaint on
several grounds. DFHV contends that the Court lacks
subject-matter jurisdiction because Plaintiffs fail to plead
any injury in fact, and because the issues raised are unripe
for judicial review, given that Plaintiffs have neither
applied for nor been denied H-Tags. See DFHV Mem. at
5-7. Alternatively, DFHV argues that Plaintiffs fail to state
a claim because their allegations are conclusory in nature.
See Id. at 8-13. DFHV further argues that
Plaintiffs' antitrust claims fail because they do not
establish antitrust standing and because DFHV is immune to
antitrust liability. See Id. at 15-20. Mr. Schaeffer
contends that Plaintiffs fail to properly allege several
elements of their antitrust claims, that those claims fall
outside the statute of limitations, and that he is also
immune to antitrust liability. See generally
Schaeffer Mem. Addressing each argument in turn, beginning
with DFHV's jurisdictional arguments, the Court concludes
that, although it has jurisdiction over this action,
Plaintiffs' allegations fail to state a claim upon which
relief can be granted. Accordingly, Defendants' motions
to dismiss are granted.
Standing & Ripeness
Court first disposes of DFHV's motion to dismiss for lack
of subject-matter jurisdiction. “Article III of the
Constitution limits the jurisdiction of federal courts to
‘actual cases or controversies between proper
litigants.'” Mendoza v. Perez, 754 F.3d
1002, 1010 (D.C. Cir. 2014) (quoting Fla. Audubon
Soc'y v. Bentsen, 94 F.3d 658, 661 (D.C. Cir.
1996)). To demonstrate the existence of a case or controversy
at the pleading stage, a plaintiff must establish the
“irreducible minimum” of constitutional standing.
Lujan v. Defs. of Wildlife, 504 U.S. 555, 560
(1992). First, the plaintiff must allege a concrete and
particularized injury in fact. Id. Next, the
plaintiff must trace the challenged action to the defendant,
and not to any independent action of a third party.
Id. Last, the plaintiff must show that the injury is
redressable by a favorable decision. Id. at 561.
in fact is an invasion of a legally cognizable interest that
is “actual and imminent, not conjectural or
hypothetical.” Chlorine Inst., Inc. v. Fed. R.R.
Admin., 718 F.3d 922, 927 (D.C. Cir. 2013); Abulhawa
v. U.S. Dep't of Treasury, 239 F.Supp.3d 24, 32
(D.D.C. 2017); see also Parker v. District of
Columbia, 478 F.3d 370, 377 (D.C. Cir. 2007)
(“[W]hen the Supreme Court used the phrase
‘legally protected interest' as an element of
injury-in-fact, it made clear it was referring only to a
‘cognizable interest'”). Economic injuries,
however slight, suffice to establish injury in fact, even
when government action causes those injuries.
Neighborhood Assistance Corp. of Am. v. CFPB, 907
F.Supp.2d 112, 121 (D.D.C. 2012) (citing Clinton v. City
of N.Y., 524 U.S. 417, 432-33 (1998); Cal. Forestry
Ass'n v. Thomas, 936 F.Supp. 13, 17 (D.D.C. 1996));
see also Conservation Law Found. v. Pritzker, 37
F.Supp.3d 234, 243 (D.D.C. 2014) (holding that the economic
harm that the plaintiff claimed would arise from a Department
of Commerce decision was “undeniably a cognizable
interest for purposes of standing”) (quoting
Lujan, 504 U.S. at 562-63).
when pleading injury in fact, “[g]eneral factual
allegations of injury resulting from the defendant's
conduct may suffice, for on a motion to dismiss we presum[e]
that general allegations embrace those specific facts that
are necessary to support the claim.” Osborn v. Visa
Inc., 797 F.3d 1057, 1063-64 (2015). Thus, when
determining whether the plaintiff suffered an injury in fact,
the Court focuses “not on the availability of
alternative remedies, ” but on the plaintiff's
general allegations of injury. Cmty. Nutrition Inst. v.
Block, 698 F.2d 1239, 1247 (D.C. Cir. 1983); cf.
Chamber of Commerce v. SEC, 412 F.3d 133, 138 (D.C. Cir.
2005) (holding ...