Bill Summary – FastDemocracy

ENROLLED ORIGINAL

                                          A RESOLUTION

                                               25-725

                    IN THE COUNCIL OF THE DISTRICT OF COLUMBIA

                                         November 26, 2024

To declare the existence of an emergency with respect to the need to amend Chapter 39 of Title

       28 of the District of Columbia Official Code to clarify that the District government is not

       a “merchant” under the District’s consumer protection law, except with respect to the

       application of that chapter’s landlord-tenant relations provisions to the District of

       Columbia Housing Authority.

        RESOLVED, BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this

resolution may be cited as the “Consumer Protection Clarification Emergency Declaration

Resolution of 2024”.

        Sec. 2. (a) There exists an immediate need to amend Chapter 39 of Title 28 of the District

of Columbia Official Code (the “CPPA”) to clarify that the term “merchant” does not apply to

the District, its agents, or its employees acting within the scope of their employment, except for

the District of Columbia Housing Authority’s activities as a landlord.

        (b) Section 28-3901(a)(3) of the District of Columbia Official Code defines a “merchant”

as “a person, whether organized or operating for profit or for a nonprofit purpose, who in the

ordinary course of business does or would sell, lease (to), or transfer, either directly or indirectly,

consumer goods or services, or a person who in the ordinary course of business does or would

supply the goods or services which are or would be the subject matter of a trade practice.”

Section 28-3901(e) of the District of Columbia Official Code explicitly provides that “this

chapter’s application to landlord-tenant relations shall include the District of Columbia Housing

Authority’s activities as a landlord,” but that provision “shall not be construed to otherwise

apply this chapter to the District of Columbia or any agency thereof.” The Council enacted D.C.

Official Code § 28-3901(e) in 2022 as part of emergency legislation, the Housing Authority

Accountability Emergency Amendment Act of 2022, effective November 3, 2022 (D.C. Act 24-

629, 69 DCR 14026), and made this subsection permanent in 2023, in section 2133(a) of the

Fiscal Year 2024 Budget Support Act of 2023, effective September 6, 2023 (D.C. Law 25-50; 70

DCR 10366).

        (c) In prior cases weighing the applicability of the CPPA to the District, the Court of

Appeals held that the District was not a merchant. See, e.g., Snowder v. District of Columbia,

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949 A.2d 590, 599 (D.C. 2008) (“[W]e agree with the District and hold that it is not a merchant

for purposes of the CPPA.”). The Court of Appeals further made clear that the CPPA “was

designed to police trade practices arising only out of consumer-merchant relationships,” Howard

v. Riggs Nat’l Bank, 432 A.2d 701, 709 (D.C. 1981), and that only a “merchant” could commit

an unfair or deceptive trade practice, DeBerry v. First Gov’t Mortg. & Investors Corp., 743 A.2d

699, 701 (D.C. 1999). In recently enacting D.C. Official Code § 28-3901(e), the Council

intended to maintain for the District a categorical exemption from CPPA liability.

        (d) Omitting the District and its agencies from coverage under the CPPA plays an

important role in protecting the public fisc. Except for the District of Columbia Housing

Authority’s functions as a landlord, the District does not act as a “merchant” who “in the

ordinary course of business” sells or supplies consumer goods or services. If the District were a

“merchant,” it could be sued for its provision of public services and funds if someone believed

such provision constituted an unfair or deceptive trade practice. Litigation of this type would

hinder the efficient provision of services and funds and increase legal expenses for the District.

        (e) In September 2024, in May v. River East at Grandview, 322 A.3d 557 (D.C. 2024),

however, the Court of Appeals held that neither its decision in Snowder nor D.C. Official Code

§ 28-3901(e) provided the District with a categorical exemption from the CPPA and that the

District may be liable for unfair and deceptive trade practices under the CPPA when it is acting

as a merchant.

        (f) The May decision could render the District liable under the CPPA for activities that

until now were routine provisions of services and funds and that the Council did not intend to be

subject to the CPPA.

        (g) Emergency action is needed to clarify that, under the CPPA, the District is not a

“merchant” except when the District of Columbia Housing Authority acts as a landlord.

       Sec. 3. The Council of the District of Columbia determines that the circumstances

enumerated in section 2 constitute emergency circumstances making it necessary that the

Consumer Protection Clarification Emergency Amendment Act of 2024 be adopted after a single

reading.

       Sec. 4. This resolution shall take effect immediately.

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