Cherdak v. American Arbitration Association Inc

• Court: District Court, District of Columbia
• Decided: March 9, 2020
• Docket: Civil Action No. 2019-3767
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

HARRISON M.C. CHERDAK, et al., Plaintiffs v. Civil Action No. 19-3767 (CKK) AMERICAN ARBITRATION ASSOCIATION INC., Defendant

MEMORANDUM OPINION (March 9, 2020)

Pro se Plaintiffs Harrison Cherdak and Erik Cherdak bring this suit against Defendant

American Arbitration Association, Inc. (“AAA”) concerning a now-denied motion to compel

arbitration filed in a separate case by third-party ACT. Inc. Plaintiffs argue that the AAA has

failed to act in accord with its own requirements to determine whether or not the relevant

arbitration clause, the Individual Score Review Arbitration Clause (“ISR Clause”) from the

2017-2018 testing year, complies with the AAA’s Consumer Arbitration Rules and Consumer

Due Process Protocol. Plaintiffs bring two claims for relief. In Count I, Plaintiffs request relief

under the Declaratory Judgment Act and ask the Court to declare that the AAA has not fulfilled

its requirement to determine whether or not the ISR Clause complies with due process

requirements. In Count II, Plaintiffs contend that the AAA has violated the Maryland Consumer

Protection Act (“MCPA”) by falsely representing that it ensures due process compliance of

arbitration clauses. Md. C.L. § 13-301(2). Defendant has moved for dismissal on multiple

grounds, including jurisdictional grounds.

Upon consideration of the pleadings,1 the relevant legal authorities, and the record as a

whole, the Court will GRANT Defendant’s Motion to Dismiss for multiple, independent reasons.

1 The Court’s consideration has focused on the following documents: 1 First, the Court finds that Plaintiffs do not have standing to bring their claims. Second, the Court

finds that it does not have personal jurisdiction over the AAA. Third, the Court concludes that

venue is improper in the District of Columbia. Fourth, the Court concludes it lacks subject matter

jurisdiction over Plaintiffs’ claims. Fifth, the Court finds that both claims are barred by arbitral

immunity. For these independent reasons, the Court DISMISSES this case.

I. BACKGROUND

For the purposes of the Motion before the Court, the Court accepts as true the well-pled

allegations in Plaintiffs’ Amended Complaint. On a motion to dismiss, the Court does “not

accept as true, however, the plaintiff’s legal conclusions or inferences that are unsupported by the

facts alleged.” Ralls Corp. v. Comm. on Foreign Inv. in the United States, 758 F.3d 296, 315

(D.C. Cir. 2014). Ordinarily, when a plaintiff proceeds pro se, the Court must consider not only

the facts alleged in the plaintiff’s complaint, but also the facts alleged in the plaintiff’s opposition

to the defendant’s motion to dismiss. See Brown v. Whole Foods Mkt. Grp., Inc., 789 F.3d 146,

152 (D.C. Cir. 2015) (“[A] district court errs in failing to consider a pro se litigant’s complaint

‘in light of’ all filings, including filings responsive to a motion to dismiss.”); Fillmore v. AT & T

Mobility Servs. LLC, 140 F. Supp. 3d 1, 2 (D.D.C. 2015) (“The Court, as it must in a case

brought by a pro se plaintiff, considers the facts as alleged in both the Complaint and Plaintiff's

Opposition to Defendant's Motion to Dismiss.”). However, the Court notes that Plaintiff Erik

Cherdak, the father of Plaintiff Harrison Cherdak, has trained as a lawyer. The Court takes

• Def.’s Mot. to Dismiss Pls.’ First Am. Compl. (“Def.’s Mot.”), ECF No. 16; • Pls.’ Opp’n to Def. AAA’s Mot. to Dismiss (“Pls.’ Opp’n”), ECF No. 23; • Def.’s Reply in Support of Def.’s Mot. to Dismiss (“Def.s’ Reply”), ECF No. 25. Plaintiffs have requested a hearing in relation to Defendant’s Motion to Dismiss. ECF No. 22. In an exercise of its discretion, the Court finds that holding oral argument in this action would not be of assistance in rendering a decision. See LCvR 7(f). 2 judicial notice of Fitistics, LLC v. Cherdak, No. 16-cv-112-LO-JFA, 2018 WL 4059375 (E.D. Va.

Aug. 23, 2018). See Dupree v. Jefferson, 666 F.2d 606, 608 n.1 (D.C. Cir. 1981) (allowing for

judicial notice of cases). In Fitistics, the court noted that Plaintiff Erik Cherdak was a “trained

attorney,” “ha[d] litigated cases before th[at] very [c]ourt in the past,” and claimed that he “was

recently employed by a top international law firm.” 2018 WL 4059375 at *1. Accordingly, the

Court finds that Plaintiff Erik Cherdak is not entitled the consideration normally due to pro se

plaintiffs. See Youkelsone v. FDIC, 910 F. Supp. 2d 213, 228 (D.D.C. 2012) (not affording pro se

litigant who was trained as an attorney the flexibility normally given pro se litigants); Halvonik v.

Kappos, 759 F. Supp. 2d 31, 32 n.1 (D.D.C. 2011) (explaining that a pro se attorney is

“presumed to have knowledge of the legal system” and is “not entitled to the same level of

solicitude often afforded” pro se litigants).

This case concerns the AAA’s alleged failure to determine whether or not the ISR Clause

contained in the ACT’s 2017-2018 testing materials complies with the AAA’s Consumer Due

Process Protocol. According to Plaintiffs, the AAA asserts that it “administers consumer disputes

that meet the due process standards contained in the Consumer Due Process Protocol and the

Consumer Arbitration Rules.” Am. Compl., ECF No. 5, ¶ 15 (quoting Ex. 3, ECF No. 5-3,

Consumer Arbitration Rules). Plaintiffs further allege that the AAA represents that it “will accept

cases after the AAA reviews the parties’ arbitration agreement and if the AAA determines the

agreement substantially and materially complies with the due process standards of these Rules

and the Consumer Due Process Protocol.” Id. Despite these internal requirements, Plaintiffs

contend that the AAA has not determined whether or not the ISR Clause complies with the AAA

Consumer Due Process Protocol. Id. at ¶ 23.

3 Plaintiffs further claim that the AAA maintains a Consumer Clause Registry which “lists

businesses whose consumer arbitration clauses have been submitted for review by the AAA and

determined to substantially and materially comply with the due process standards of the AAA

Consumer Due Process Protocol.” Id. at ¶ 15 (quoting Ex. 6, ECF No. 5-4, Consumer Clause

Registry). According to Plaintiffs, the AAA has never listed the ISR Clause on the Consumer

Clause Registry. Id. at ¶ 13. Instead, Plaintiffs allege that “the AAA has combined the ISR

Clause with other contractual type language and other arbitration clauses into what can only be

described as a ‘combined text’ and has deceivingly registered that combined text on behalf of

arbitration customer on the AAA Consumer Clause Registry in order to provide knowingly false

impressions of the quality and compliance of the ISR Clause.” Id.

Despite the AAA’s failure to comply with its requirements, Plaintiffs allege that the

“AAA has threatened Plaintiffs that it will administer an arbitration proceeding involving

Plaintiffs under the ISR Clause without making a threshold determination of ISR Clause

compliance with the AAA Consumer Due Process Protocol.” Id. at ¶ 9. Plaintiffs’ allegation

relates to a separate, ongoing proceeding before the United States District Court for the District

of Maryland, Cherdak v. ACT, Inc., No 19-cv-1513-TDC (D. Md.). The Court takes judicial

notice of the records and proceedings in this related case. See Dupree, 666 F.2d at 608 n.1

(allowing for such judicial notice).

In Cherdak, these same Plaintiffs brought various claims against the defendant ACT.

Plaintiffs’ claims all stemmed from the ACT’s threat to cancel Plaintiff Harrison Cherdak’s ACT

score based on suspicion of cheating. Cherdak v. ACT, Inc., No 19-cv-1513-TDC, Am. Compl.,

ECF No. 19, 2. Following Plaintiffs’ initiation of suit to bar the ACT from cancelling Plaintiff

Harrison Cherdak’s score, the ACT filed a Motion to Compel Arbitration and to Stay

4 Proceedings Pending Arbitration. Id. at ECF No. 21. The ACT argued that under both the ISR

Clause as well as the “General Arbitration Agreement,” an arbitration clause not at issue in this

lawsuit, Plaintiffs could challenge the ACT’s decision to cancel Plaintiff Harrison Cherdak’s

score and bring other claims against the ACT only through arbitration. Id. at ECF No. 21-1, 8-10.

In response, Plaintiffs filed an opposition presenting multiple arguments as to why the arbitration

clauses were invalid and unenforceable. Id. at ECF No. 26. However, in their initial response,

Plaintiffs failed to raise the argument that the AAA was an unavailable arbitration forum.

Plaintiffs later moved for leave to file a sur-reply arguing that the ACT had no good faith basis to

compel arbitration because the arbitration clauses did not comply with the AAA’s Consumer Due

Process Protocol. Id. at ECF No. 39. However, the District Court of Maryland denied leave to

file a sur-reply, finding that there was no basis for such a filing. Id. at ECF No. 42. Leave to file

Plaintiffs’ requested sur-reply was denied on December 9, 2019. On December 18, 2019,

Plaintiffs filed this case against the AAA which is currently pending before the Court.

On February 4, 2019, the District Court of Maryland resolved Defendant ACT’s motions

to compel arbitration and to dismiss. As is relevant to this case, the court denied the ACT’s

motion to compel arbitration. The Court concluded that the ISR clause was unenforceable

because Plaintiff Harrison Cherdak had not been provided any consideration. Additionally, the

Court concluded that both arbitration clauses, the ISR Clause and the General Arbitration

Agreement, were unenforceable because Plaintiff Harrison Cherdak was a minor when he signed

the contracts. Id. at ECF No. 51, 11-20.

Turning back to the case currently pending before the Court, the Court notes a somewhat

lengthy and convoluted procedural history. As is relevant here, Plaintiffs filed this case on

December 18, 2019 and also filed an Emergency Motion for a Temporary Restraining Order.

5 ECF No. 1. The Court held a teleconference and set a briefing schedule for the motion. Prior to

the AAA’s response deadline, on January 2, 2020, Plaintiffs withdrew their Emergency Motion.

ECF No. 4. Plaintiffs then filed an Amended Complaint and a new Emergency Motion on

January 13, 2020. ECF Nos. 5, 6. On January 17, 2019, Plaintiffs filed a Motion for Partial

Summary Judgment. ECF No. 10. The Court ordered the AAA to file a response to both the

pending Emergency Motion and the Motion for Partial Summary Judgment. ECF No. 11. In

addition to both responses, on February 5, 2020, the AAA also filed a Motion to Dismiss. ECF

Nos. 16, 17, 18. In the Motion to Dismiss, the AAA argued that this Court does not have

jurisdiction over this case. ECF No. 16. Also on February 5, 2020, Plaintiffs filed a Motion to

dismiss defense counsel based on an alleged conflict of interest. ECF No. 19. On February 7,

2020, the Court issued an order setting a briefing schedule for the AAA’s Motion to Dismiss.

ECF No. 21. Because the AAA’s Motion argued for dismissal on jurisdictional grounds, the

Court stayed the briefing and the consideration of all other pending motions until the Court could

ascertain its own jurisdiction. Id.

In its Motion to Dismiss, the AAA moves for dismissal of Plaintiffs’ claims on multiple

jurisdictional grounds as well as for the failure to state a claim for which relief may be granted.

The briefing for the AAA’s Motion is now complete. And, that Motion to Dismiss is the subject

of this Memorandum Opinion.

II. LEGAL STANDARD

Defendants move to dismiss Plaintiffs’ Amended Complaint under Federal Rules of Civil

Procedure 12(b)(1), for lack of subject matter jurisdiction; 12(b)(2), for lack of personal

jurisdiction; 12(b)(3), for improper venue; and 12(b)(6), for failure to state a claim for which

relief may be granted.

6 A court must dismiss a case pursuant to Federal Rule 12(b)(1) when it lacks subject

matter jurisdiction. In determining whether there is jurisdiction, the court may “‘consider the

complaint supplemented by undisputed facts evidenced in the record, or the complaint

supplemented by undisputed facts plus the court's resolution of disputed facts.’” Coal. for

Underground Expansion v. Mineta, 333 F.3d 193, 198 (D.C. Cir. 2003) (quoting Herbert v. Nat'l

Acad. of Scis., 974 F.2d 192, 197 (D.C. Cir. 1992)); see also Jerome Stevens Pharm., Inc. v.

Food & Drug Admin., 402 F.3d 1249, 1253 (D.C. Cir. 2005) (“[T]he district court may consider

materials outside the pleadings in deciding whether to grant a motion to dismiss for lack of

jurisdiction.”). In reviewing a motion to dismiss pursuant to Rule 12(b)(1), courts must accept as

true all factual allegations in the complaint and construe the complaint liberally, granting

plaintiff the benefit of all inferences that can be drawn from the facts alleged. See Settles v. U.S.

Parole Comm'n, 429 F.3d 1098, 1106 (D.C. Cir. 2005) (“At the motion to dismiss stage,

counseled complaints, as well as pro se complaints, are to be construed with sufficient liberality

to afford all possible inferences favorable to the pleader on allegations of fact.”). Despite the

favorable inferences that a plaintiff receives on a motion to dismiss, it remains the plaintiff's

burden to prove subject matter jurisdiction by a preponderance of the evidence. Am. Farm

Bureau v. United States Envtl. Prot. Agency, 121 F. Supp. 2d 84, 90 (D.D.C. 2000).

When personal jurisdiction is challenged under Rule 12(b)(2), the plaintiff bears the

burden of establishing a factual basis for asserting personal jurisdiction over a defendant. See

Crane v. N.Y. Zoological Soc'y, 894 F.2d 454, 456 (D.C. Cir. 1990). At the motion to dismiss

stage, a plaintiff “‘can satisfy that burden with a prima facie showing.’” Mwani v. bin Laden, 417

F.3d 1, 7 (D.C. Cir. 2005) (quoting Edmond v. United States Postal Serv. Gen. Counsel, 949 F.2d

415, 424 (D.C. Cir. 1991)). To do so, the plaintiff cannot rest on bare allegations or conclusory

7 statements but “must allege specific acts connecting [the] defendant with the forum.” Second

Amendment Found. v. U.S. Conference of Mayors, 274 F.3d 521, 524 (D.C. Cir. 2001) (internal

quotation marks omitted). “To make such a showing, the plaintiff is not required to adduce

evidence that meets the standards of admissibility reserved for summary judgment and trial[;]”

but rather, the plaintiffs may “rest [their] arguments on the pleadings, ‘bolstered by such

affidavits and other written materials as [they] can otherwise obtain.’” Urban Inst. v. FINCON

Servs., 681 F. Supp. 2d 41, 44 (D.D.C. 2010) (quoting Mwani, 417 F.3d at 7).

When presented with a motion to dismiss for improper venue under Rule 12(b)(3), the

Court “accepts the plaintiff's well-pled factual allegations regarding venue as true, draws all

reasonable inferences from those allegations in the plaintiff's favor and resolves any factual

conflicts in the plaintiff's favor.” James v. Verizon Servs. Corp., 639 F. Supp. 2d 9, 11 (D.D.C.

2009). “The court, however, need not accept the plaintiff's legal conclusions as true.” Id.

“Because it is the plaintiff's obligation to institute the action in a permissible forum, the plaintiff

usually bears the burden of establishing that venue is proper.” Freeman v. Fallin, 254 F. Supp.

2d 52, 56 (D.D.C. 2003). “Unless there are pertinent factual disputes to resolve, a challenge to

venue presents a pure question of law.” Williams v. GEICO Corp., 792 F. Supp. 2d 58, 62

(D.D.C. 2011).

Finally, pursuant to Rule 12(b)(6), a party may move to dismiss a complaint on the

grounds that it “fail[s] to state a claim upon which relief can be granted.” Fed. R. Civ. P.

12(b)(6). “[A] complaint [does not] suffice if it tenders ‘naked assertion[s]’ devoid of ‘further

factual enhancement.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 557 (2007)). Rather, a complaint must contain sufficient factual

allegations that, if accepted as true, “state a claim to relief that is plausible on its face.”

8 Twombly, 550 U.S. at 570. “A claim has facial plausibility when the plaintiff pleads factual

content that allows the court to draw the reasonable inference that the defendant is liable for the

misconduct alleged.” Iqbal, 556 U.S. at 678.

III. DISCUSSION

As the Court previously indicated, there are multiple, independent grounds which justify

the dismissal of Plaintiffs’ suit. First, the Court finds that Plaintiffs do not have standing to bring

their claims. Second, the Court finds that it does not have personal jurisdiction over the AAA.

Third, the Court concludes that venue is improper in the District of Columbia. Fourth, the Court

concludes it lacks subject matter jurisdiction over Plaintiffs’ claims. Finally, the Court finds that

both claims are barred by arbitral immunity. The Court will address each ground for dismissal

seriatim.

A. Standing

First, the Court concludes that this case should be dismissed for want of standing.

“Article III of the United States Constitution limits the judicial power to deciding ‘Cases’ and

‘Controversies.’” In re Navy Chaplaincy, 534 F.3d 756, 759 (D.C. Cir. 2008) (quoting U.S.

Const. art. III, § 2). A party has standing for purposes of Article III if his claims “spring from an

‘injury in fact’—an invasion of a legally protected interest that is ‘concrete and particularized,’

‘actual or imminent,’ and ‘fairly traceable’ to the challenged act of the defendant, and likely to

be redressed by a favorable decision in the federal court.” Navegar, Inc. v. United States, 103

F.3d 994, 998 (D.C. Cir. 1997) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61

(1992)). Standing may be denied to a litigant who seeks to present abstract legal questions of

wide public interest or to assert the rights of a third party. Navegar, 103 F.3d at 998. “[P]laintiffs

bear the burden of pleading … concrete facts showing the defendant’s actual action has caused

9 the substantial risk of harm.” Clapper v. Amnesty International, USA, 568 U.S. 398, 414 n.5

(2013).

In their Opposition, Plaintiffs assert multiple arguments as to why they have standing in

this case. The Court will address each argument.

First, Plaintiffs argue that they have standing in this case because they could, at some

undetermined future date, be compelled into arbitration by the ACT under the 2017-2018 ISR

Clause, which the AAA has not determined to comply with due process. The Court finds this

harm to be speculative and the risk of harm to be not imminent.

As an initial matter, the Amended Complaint does not allege that Plaintiff Erik Cherdak

is a party to the ISR Clause. That contract is between Plaintiff Harrison Cherdak and the ACT. It

is unclear how Plaintiff Erik Cherdak could be forced into arbitration based on a contract to

which he is not a party.

Moreover, Plaintiff Harrison Cherdak does not allege that he is party to any arbitration

currently set to be administered by the AAA. Instead, he appears to rely on the ACT’s motion to

compel arbitration which was filed in the case pending before the District Court of Maryland.

However, that motion to compel arbitration was recently denied by the court. The court found

that the ISR Clause was unenforceable because it was not supported by consideration. The court

further determined that both the ISR Clause and the General Arbitration Agreement were

unenforceable because Plaintiff Harrison Cherdak was a minor at the time of signing. Cherdak v.

ACT, Inc., No 19-cv-1513-TDC, ECF No. 51, 11-20. Because the court found that the ACT’s

arbitration agreements are unenforceable as to Plaintiff Harrison Cherdak, there is no imminent

risk of Plaintiffs facing arbitration before the AAA.

10 Plaintiffs contend that, even if the court denied the ACT’s motion to compel arbitration,

there is a risk that the denial could be overturned on reconsideration or on appeal. The Court

finds such a risk of harm to be speculative and not imminent. This theory of standing “relies on a

highly attenuated chain of possibilities [that] does not satisfy the requirement that threatened

injury must be certainly impending.” Clapper, 568 U.S. at 410. The ACT has filed a notice of

appeal as to the dismissal of its motion to compel arbitration. Cherdak v. ACT, Inc., No 19-cv-

1513-TDC, ECF No. 70. However, it remains entirely speculative as to whether or not such relief

will be granted. See id. at ECF No. 72 (motion by Plaintiffs for order finding as frivolous the

ACT’s appeal). And, even if on appeal the arbitration clauses were to be found viable, it remains

speculative as to whether or not a renewed motion to compel arbitration would be filed by the

ACT or granted by the District Court of Maryland. The Court finds that “[s]uch a protracted

chain of causation fails both because of the uncertainty of several individual links and because of

the number of speculative links that must hold for the chain to connect the challenged acts to the

asserted particularized injury.” Florida Audubon Society v. Bentsen, 94 F.3d 658, 670 (D.C. Cir.

1996).

As a second theory of standing, Plaintiffs argue that they “would not have had to face and

defend against a court-battle relative to ACT’s motion to compel arbitration” but for “the AAA’s

admitted failure to perform a due process compliance determination relative to ACT’s 2017-2018

ISR Clause.” Pls.’ Opp’n, ECF No. 23, 17. In order to establish standing in this method, “the

injury has to be ‘fairly ... trace [able] to the challenged action of the defendant, and not ... th[e]

result [of] the independent action of some third party not before the court.’” Lujan, 504 U.S. at

560-61 (quoting Simon v. Eastern Ky. Welfare Rights Organization, 426 U.S. 26, 41-42 (1976)).

When a third party, here the ACT, bears some responsibility for Plaintiffs’ harm, standing may

11 be established where, for example, “the record present[s] substantial evidence of a causal

relationship between the [defendant’s alleged action] and the third-party conduct, leaving little

doubt as to causation and the likelihood of redress.” Nat'l Wrestling Coaches Ass'n v. Dep't of

Educ., 366 F.3d 930, 941 (D.C. Cir. 2004). Here, the Court finds that the alleged injury,

Plaintiffs’ defense against the ACT’s motion to compel arbitration in a case pending before the

District Court of Maryland, is not fairly traceable to the AAA’s alleged failure to ensure that the

2017-2018 ISR Clause complies with due process.

This is not a case where the ACT filed to compel arbitration against Plaintiffs ex nihilo.

Instead, Plaintiffs filed suit against the ACT in the District Court of Maryland in order to bar the

ACT from cancelling Plaintiff Harrison Cherdak’s ACT score. Cherdak v. ACT, Inc., No 19-cv-

1513-TDC, Am. Compl., ECF No. 19, 2. It was only in response to Plaintiffs’ lawsuit that the

ACT filed a motion to compel arbitration. Id. at ECF No. 21.

Moreover, in its motion to compel arbitration, the ACT did not rely solely on the disputed

ISR Clause. Instead, the ACT argued that the claims in Plaintiffs’ lawsuit were subject to

arbitration based on the ISR Clause and the General Arbitration Agreement. As the ACT

explained, “[t]o the extent that any of Harrison’s claims do not fit within the ISR Arbitration

Agreement, they fall within the scope of the General Arbitration Agreement, which applies to

‘all disputes’ (other than disputes involving Individual Score Reviews or infringement of ACT’s

intellectual property rights) that ‘relate in any way’ to registering for or taking the ACT test, the

reporting of ACT test scores, or the use or disclosure of personal information by ACT.” Id. at

ECF No. 21-1, 14. Accordingly, even if the AAA had, as Plaintiffs request, found the 2017-2018

ISR Clause to be non-compliant with due process, the ACT would still have had grounds to

move for arbitration under the General Arbitration Clause.

12 The Court also considers that, in denying the ACT’s motion to compel arbitration, the

District Court of Maryland concluded that the ACT’s arbitration clauses were unenforceable

because no consideration had been provided for the ISR clause and because Plaintiff Harrison

Cherdak was a minor when he signed the agreements. Id. at ECF No. 51, 11-20. Accordingly,

regardless of whether or not the AAA could conduct the arbitration, the ACT’s arbitration

clauses were unenforceable. This argument as to the unenforceability of the ACT’s arbitration

clauses was available to Plaintiffs whether or not the AAA determined that the ISR Clause was

due process compliant. In fact, as leave to file a sur-reply was denied, Plaintiffs did not even

raise the issue of whether or not the AAA was an appropriate forum in litigating the motion to

compel.

Any injury to Plaintiffs based on defending the ACT’s motion to compel was caused by

either Plaintiffs’ filing of their lawsuit in the District Court of Maryland or by the ACTs’ filing

of a motion to compel arbitration. The AAA’s alleged failure to ensure that the ISR Clause

complied with due process was simply not at issue in Plaintiffs’ litigation of the motion to

compel. As such, the injury is not “fairly traceable” to the AAA’s alleged inaction in ensuring

the ISR Clause’s compliance with internal due process protocols. Mideast Systems and China

Civil Const. Saipan Joint Venture, Inc. v. Hodel, 792 F.2d 1172, 1176 (D.C. Cir. 1986). The

connection between Plaintiffs’ alleged harm and the AAA’s alleged failure to review the ISR

clause is too tenuous to establish standing. The AAA’s alleged contribution to Plaintiffs’ harm

“is based on a chain of questionable inferences that concern how [the ACT] … would have acted

differently had” the AAA conducted a due process review of the ISR Clause. Id. at 1777. And,

“[a]ssuming these inferences are true, it is clear that [the AAA’s] involvement in the harm was

13 remote at best.” Id.; see also Warth v. Seldin, 422 U.S. 490, 505 (1975) (indirectness of the

injury may make it “substantially more difficult to meet the minimum requirements of Art. III”).

For these same reasons, the Court notes that the alleged harm caused from Plaintiffs’

defending against the ACT’s motion to compel arbitration is not redressable by actions on the

part of the AAA. Even if the AAA were to find the ISR Clause violative of its due process

requirements, Plaintiffs’ injury, the necessity of defending against the ACT’s motion to compel

arbitration, would not be redressed. First, the motion to compel arbitration has already been

denied. Second, if for some reason the motion was reinstated, the ACT could move for

arbitration, causing Plaintiffs to litigate such a motion, regardless of the AAA’s position on the

ISR Clause’s due process compliance. And, it is conceivable that the ACT could conduct

arbitration in a forum other than the AAA. Ex. 1, ECF No. 5-1 (ISR allowing arbitration in a

forum other than the AAA if “both you and the ACT agree to submit the matter to an alternative

forum”). Third, the ACT presented multiple grounds for compelling arbitration. Even if the AAA

found the ISR clause violative of due process, the ACT could still make the same motion under

the General Arbitration Clause, which is not at issue in this lawsuit. Plaintiffs’ proffered

remedy—that the AAA conduct a due process review of the ISR clause—would not alleviate the

complained-of harm.

As a final attempt, Plaintiffs appear to argue that they have standing based on possible

injuries to the public and to third parties. In their Amended Complaint, Plaintiffs allege that “[a]

genuine dispute has arisen between the parties as the AAA has refused to adhere to its published

duties to determine and announce to Plaintiffs and to millions of others whether the ISR Clause

satisfies and complies with the AAA Consumer Due Process Protocol.” Am. Compl., ECF No. 5,

14 ¶ 9. Plaintiffs further allege that the “AAA has wrongfully administered arbitration proceedings

under the ISR Clause.” Id. at ¶ 22.

Insofar as the Plaintiffs are alleging a generalized harm from the AAA’s failure to ensure

that the ISR Clause complies with due progress, such a generalized harm is not sufficient for

standing. “[W]hen the asserted harm is a ‘generalized grievance’ shared in substantially equal

measure by all or a large class of citizens, that harm alone normally does not warrant exercise of

jurisdiction.” Warth, 422 U.S. at 499. Moreover, Plaintiffs cannot take advantage of the alleged

harm that third parties have suffered from the AAA’s administration of arbitrations pursuant to

the ISR Clause. Plaintiffs bring claims only on behalf of themselves, not on behalf of a class.

Plaintiffs “generally must assert [their] own legal rights and interests, and cannot rest [their]

claim[s] to relief on the legal rights or interests of third parties.” Id. And, here, Plaintiffs have

alleged no facts which would establish their standing based on the alleged harm to third parties.

For the reasons provided above, the Court finds that Plaintiffs have failed to allege that

they have “suffered a concrete and particularized injury that is: 1) actual or imminent; 2) caused

by, or fairly traceable to, an act that the litigant challenges in the instant litigation; and 3)

redressable by the court.” Fl. Audubon Soc., 94 F.3d at 663 (internal quotation marks and

citations omitted). Accordingly, the Court concludes that this case should be DISMISSED

because Plaintiffs lack standing.

B. Personal Jurisdiction

Plaintiffs bear the burden of making a prima facie showing that the Court has personal

jurisdiction over the AAA. Mwani v, 417 F.3d at 7. To make this prima facie showing, Plaintiffs

“must provide sufficient factual allegations, apart from mere conclusory assertions, to support

15 the exercise of personal jurisdiction over the defendant.” Howe v. Embassy of Italy, 68 F. Supp.

3d 26, 29 (D.D.C. 2014).

As a separate, independent ground for dismissal, the Court concludes that it does not have

personal jurisdiction over the AAA. First, the AAA’s contacts with the District of Columbia are

not so systematic and continuous as to establish general personal jurisdiction. Second, because

Plaintiffs’ claims do not arise out of the AAA’s contacts with the District of Columbia, specific

personal jurisdiction is also not applicable.

Plaintiffs make the same core allegations to support both general personal jurisdiction

and specific personal jurisdiction. In their Amended Complaint, Plaintiffs generally allege that

personal jurisdiction is proper because “the AAA regularly and purposefully avails itself of the

jurisdiction and benefits of the District of Columbia by consistently and regularly seeking and

doing business with citizens of the District of Columbia and, in particular, to administer

arbitration proceedings in lieu of litigation under the FAA.” Am. Compl., ECF No. 5, ¶ 5. As

support for this conclusory allegation, in their Opposition, Plaintiffs allege that lawyers in the

District of Columbia work on arbitrations conducted by the AAA; that the AAA advertises its

services nationally, including in the District of Columbia; that the AAA’s website is accessible

worldwide, including in the District of Columbia; that the AAA performs arbitrations in the

District of Columbia, including arbitrations involving the ACT and students in the District of

Columbia; that some lawyers in the District of Columbia perform services for the AAA; and that

arbitration between Plaintiffs and the ACT could be conducted by the AAA in the District of

Columbia. Pls.’ Opp’n, ECF No. 23, 29-33.

The Court begins by examining general personal jurisdiction over the AAA. General

personal jurisdiction “permits a court to assert jurisdiction over a defendant based on a forum

16 connection unrelated to the underlying suit.” Livnat v. Palestinian Auth., 851 F.3d 45, 56 (D.C.

Cir. 2017) (internal quotation marks omitted). District of Columbia law “permits courts to

exercise ‘general jurisdiction’ over a foreign corporation as to claims not arising from the

corporation's conduct in the District[ ] if the corporation is ‘doing business' in the District.”

Gorman v. Ameritrade Holding Corp., 293 F.3d 506, 509 (D.C. Cir. 2002) (quoting D.C. Code §

13-334(a). “Under the Due Process Clause, such general jurisdiction over a foreign corporation

is only permissible if the defendant's business contacts with the forum are ‘continuous and

systematic.’” Id. at 510 (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S.

408, 415 (1984)). The District of Columbia Court of Appeals “has indicated that the reach of

‘doing business' jurisdiction under § 13–334(a) is co-extensive with the reach of constitutional

due process.” Id. (citing Hughes v. A.H. Robins Co., Inc., 490 A.2d 1140, 1148 (D.C.1985)). The

Court finds that Plaintiffs have not alleged that the AAA conducts business in the District of

Columbia in a manner continuous and systematic enough to make the AAA “essentially at

home” here. Daimler AG v. Bauman, 571 U.S. 117, 122 (2014) (internal quotation marks

omitted).

To begin, the parties agree that the AAA is a foreign corporation because it is not

“domiciled in, organized under the laws of, or maintaining ... its principal place of business in,

the District of Columbia.” D.C. Code § 13-422. Instead, the AAA is incorporated in New York

and has its principal place of business in New York. Dec. of Tracey Frisch, ECF No. 16-1, ¶¶ 2-

3.

Turning now to Plaintiffs’ allegations concerning the AAA’s contacts with the District of

Columbia, the Court finds that those allegations do not establish that the AAA’s contacts are

continuous or systematic.

17 Plaintiffs’ allegations that lawyers in the District of Columbia either perform services for

the AAA or provide representation in arbitrations conducted by the AAA are not sufficient for

general personal jurisdiction. The AAA’s limited professional contacts with select District of

Columbia residents cannot confer general personal jurisdiction. See, e.g., AGS Int'l Servs. S.A. v.

Newmont USA Ltd., 346 F. Supp. 2d 64, 75-77 (D.D.C. 2004), abrogation rec’d on other

grounds in Bigelow v. Garrett., 299 F.Supp.3d 34 (D.D.C. 2018) (finding company with a D.C.

office which received funding from a D.C. bank and met with D.C. residents was not “doing

business” in D.C.); Bigelow, 299 F. Supp. 3d at 42 (finding that receiving payments from donors

in D.C., making payments to companies in D.C. for services, and maintaining professional

relationships with individuals in D.C. was not sufficient for general personal jurisdiction).

Plaintiffs’ allegations concerning the AAA’s advertising and website are similarly

unavailing. Plaintiffs acknowledge that the AAA advertises nationwide, and Plaintiffs fail to

allege anything special about the AAA’s advertisements in the District of Columbia.

“[H]istorically, advertisements have not been sufficient to establish personal jurisdiction.” Myers

v. Holiday Inns, Inc., 915 F. Supp. 2d 136, 141 (D.D.C. 2013). And, here, Plaintiffs make no

factual allegation that the advertisements were particularly targeted to the District of Columbia.

See Rundquist v. Vapiano SE, 798 F. Supp. 2d 102, 117 (D.D.C. 2011) (finding that

advertisements do not create personal jurisdiction where the advertisements did not specifically

target D.C.). Considering the AAA’s website, “[t]he mere accessibility of [a] defendant['s]

website[ ] ... does not establish[] the necessary minimum contacts” for general personal

jurisdiction. Gorman v. Ameritrade Holding Corp., 293 F.3d 506, 512 (D.C. Cir. 2002) (internal

quotation marks omitted). It is not sufficient that residents of the District of Columbia can access

the AAA’s website. In order to establish sufficient contacts based on a website, that website must

18 be interactive and District of Columbia residents must use the website in a continuous and

systematic way. Id.; see also Atlantigas Corp. v. Nisource, Inc., 290 F. Supp. 2d 34, 52 (D.D.C.

2003) (“[T]he question is not whether District of Columbia residents ‘can’ transact business in

the District with the non-resident defendant through the defendant's website, but if they actually

‘do’ engage in sustained business activities in a continuous and systematic way.”). Plaintiffs

have not alleged that the AAA’s website is anything more than an “essentially passive website

through which customers merely access information.” Id. at 512 (internal quotation marks

omitted). Nor have Plaintiffs met their burden to provide non-conclusory factual allegations that

District of Columbia residents use the website to conduct business with the AAA in a continuous

and systematic way.

Finally, the Court considers Plaintiffs’ allegation that if an arbitration were to be held

between the ACT and Plaintiffs, such an arbitration would occur in the District of Columbia. As

the Court has previously explained, the ACT’s motion to compel arbitration with Plaintiffs was

denied by the District Court of Maryland. Cherdak v. ACT, Inc., No 19-cv-1513-TDC, ECF No.

51,11-20. As such, any arbitration between Plaintiffs and ACT is, at this point, hypothetical and

speculative. The location of such a hypothetical arbitration is even more speculative. Under

Plaintiffs’ theory, even though the AAA does not have continuous and systematic contacts with

the District of Columbia, the AAA could be forced to litigate here because at some undisclosed

future time Plaintiffs may be compelled to arbitrate with a third party and that arbitration could

occur in the District of Columbia. “Mere speculation as to all these claims will not establish

personal jurisdiction over the defendant[].” Shaheen v. Smith, 994 F. Supp. 2d 77, 85 (D.D.C.

2013) (citing GTE New Media Servs. Inc. v. BellSouth Corp., 199 F.3d 1343, 1349 (D.C. Cir.

2000)).

19 For these reasons, the Court finds that Plaintiffs have not met their burden to provide

sufficient factual allegations that this Court has general personal jurisdiction over the AAA.

Plaintiffs have not shown that the AAA’s contacts with the District of Columbia are sufficiently

continuous and systematic as to make the AAA essentially at home in the District of Columbia.

The Court next considers whether or not Plaintiffs have established this Court’s specific

personal jurisdiction over the AAA. Even if general personal jurisdiction is unavailable, a court

retains jurisdiction over a “suit that arises out of or relates to the defendant’s contacts with the

forum.” Bigelow, 299 F. Supp. 3d at 44. “To establish [specific] personal jurisdiction over a non-

resident like [the AAA], we must first decide whether statutory jurisdiction exists under the

District's long-arm statute and, if it does, then we must determine whether an exercise of

jurisdiction would comport with constitutional limitations.” Forras v. Rauf, 812 F.3d 1102,

1105-06 (D.C. Cir. 2016). Pursuant to the D.C. long arm statute, a court may exercise personal

jurisdiction over a defendant as to

“a claim for relief arising under the person’s—(1) transacting any business in the District of Columbia; (2) contracting to supply services in the District of Columbia; (3) causing tortious injury in the District of Columbia by an act or omission in the District of Columbia; (4) causing tortious injury in the District of Columbia by an act or omission outside the District of Columbia [in certain circumstances]…; (5) having an interest in, using, or possessing real properly in the District of Columbia; (6) contracting to insure or act as surety for or on any person, property, or risk, contract, obligation, or agreement located, executed, or to be performed within the District of Columbia…; (7) marital or parent and child relationship in the District of Columbia.”

D.C. Code § 13-423.

To support the Court’s exercise of specific personal jurisdiction, Plaintiffs offer the same

factual allegations as they offered to support general personal jurisdiction. Plaintiffs do not cite

to any particular provision of the D.C. statute which would provide specific personal jurisdiction.

And, the Court finds that Plaintiffs have alleged no “nexus between [the AAA’s] particular

20 contact with the District of Columbia and the claim that the [Plaintiffs] assert[].” Toumazou v.

Turkish Republic of N. Cyprus, 71 F. Supp. 3d 7, 15 (D.D.C. 2014) (internal quotation marks

Plaintiffs’ first claim requests a declaratory judgment ordering the AAA to determine

whether or not the 2017-2018 ISR Clause complies with its due process requirements. This claim

has no nexus to the AAA’s contacts with the District of Columbia. Plaintiffs reside in Maryland

and Plaintiff Harrison Cherdak signed the ISR Clause in Maryland. The only possible connection

between this claim and the District of Columbia is Plaintiffs’ allegation that any arbitration

between Plaintiffs and the ACT could be carried out in the District of Columbia. However, as the

Court previously explained, this allegation—concerning a remote future possibility—is

speculative and insufficient to establish personal jurisdiction over AAA.

Plaintiffs’ second claim concerns a violation of the MCPA. The Court notes that

Plaintiffs elected to bring their consumer claim under Maryland’s statute rather than under the

District of Columbia’s statute, showing the tenuousness of any connection to the District of

Columbia. Plaintiffs’ MCPA claim concerns the AAA’s allegedly false assertions that it ensures

that arbitration clauses comply with due process. Again, this claim does not arise from the

AAA’s contacts with the District of Columbia. Plaintiffs allege that they accessed the AAA’s

website and statements in Maryland, not in the District of Columbia. As such, Plaintiffs have not

alleged a nexus between the AAA’s alleged violation of the MCPA and the AAA’s contacts with

the District of Columbia.

In their Opposition, Plaintiffs argue that, in a Second Amended Complaint, “[i]t would be

enough for Plaintiffs … to plead allegations … that the same advertisements received by

Plaintiffs in Maryland were also received by them in the District of Columbia.” Pls.’ Opp’n, ECF

21 No. 23, 32-33. The Court begins by noting that no such allegation is made in Plaintiffs’

Amended Complaint, which is the legally operative document. Moreover, Plaintiffs’ attempt to

manufacture personal jurisdiction in this manner would fail. Under the MCPA, “any person may

bring an action to recover for injury or loss sustained by him as a result of the practice prohibited

by this title.” Md. C.L. § 13-408(a). Simply opening the AAA’s website in the District of

Columbia, after all relevant events of this lawsuit have already taken place, would not cause

Plaintiffs an injury or a loss and would not be sufficient to state a MCPA claim. As such, the

addition of the proffered allegation would not be sufficient to establish specific personal

jurisdiction over the AAA.

The Court finds that Plaintiffs have not met their burden to provide sufficient factual

allegations that this Court has specific personal jurisdiction over the AAA. Plaintiffs have not

shown that either of their claims arise from the AAA’s contacts with the District of Columbia.

For the reasons provided above, the Court finds that Plaintiffs have failed to make factual

allegations alleging that this Court has personal jurisdiction over the AAA. The AAA’s contacts

with the District of Columbia are not so continuous and systematic as to establish general

personal jurisdiction. And, Plaintiffs’ claims do not arise from the AAA’s contacts with the

District of Columbia so as to establish specific personal jurisdiction. Accordingly, the Court

concludes that this case should be DISMISSED because the Court lacks personal jurisdiction

over the AAA.

C. Venue

In their Amended Complaint, Plaintiffs allege that venue “is proper under 28 USC §

1391, generally, as the AAA maintains significant offices in the District of Columbia.” Am.

Compl., ECF No. 5, ¶ 6. Pursuant to § 1391, a civil action may be brought in “(1) a judicial

22 district is which any defendant resides, if all defendants are residents of the State in which the

district is located; (2) a judicial district in which a substantial part of the events or omissions

giving rise to the claim occurred, or a substantial part of property that is the subject of the action

is situated; or (3) if there is no district in which an action may otherwise be brought as provided

in this section, any judicial district in which any defendant is subject to the court’s personal

jurisdiction with respect to such action.” 28 U.S.C. § 1391(b). The Court concludes that, under

all of the three statutory alternatives, the District of Columbia is an improper venue for this

lawsuit.

First, the AAA does not reside in the District of Columbia. 28 U.S.C. § 1391(b)(1). A

defendant, which is not a natural person, resides “in any judicial district in which such defendant

is subject to the court's personal jurisdiction with respect to the civil action in question.” 28

U.S.C. § 1391(c)(2). The Court has already explained that it does not have personal jurisdiction

over the AAA in this matter. See Supra Sec. III.B. Accordingly, the AAA does not reside in the

District of Columbia, and the District of Columbia is not a proper venue under 28 U.S.C. §

1391(b)(1).

Second, a substantial part of the events or omissions giving rise to Plaintiffs’ claims did

not occur in the District of Columbia. 28 U.S.C. § 1391(b)(2). Plaintiffs allege no events which

occurred in the District of Columbia. Plaintiffs are residents of Maryland, and Plaintiff Harrison

Cherdak signed the relevant ISR Clause in Maryland. Plaintiffs do not allege that the AAA took

any actions in the District of Columbia which contributed to their claims. Plaintiffs’ conclusory

allegation that the AAA “maintains significant offices in the District of Columbia” is insufficient

to confer venue because Plaintiffs do not allege that any events or omissions giving rise to their

claims occurred in that District of Columbia office. Am. Compl., ECF No. 5, ¶ 6; Murdoch v.

23 Rosenberg & Associates, LLC, 875 F. Supp. 2d 6, 10 (D.D.C. 2012) (“Defendants' general

business connections to the District of Columbia do not suffice to show that this district is where

a substantial part of the events or omissions giving rise to the claim[s] occurred.”). The only

allegation related to the District of Columbia was made in Plaintiffs’ Opposition. Plaintiffs allege

that a future, hypothetical arbitration between Plaintiffs and the ACT may be conducted in the

District of Columbia. However, as the Court has already explained, this allegation is speculative.

See Supra Sec. III.B. And, as it has yet to occur and may never occur, such a possible, future

arbitration is woefully insufficient to show that a “substantial part of the events … giving rise to

[Plaintiffs’] claim occurred” in the District of Columbia. 28 U.S.C. § 1391(b)(2). Accordingly, a

substantial part of the events giving rise to Plaintiffs’ claims did not occur in the District of

Columbia, and the District of Columbia is not a proper venue under 28 U.S.C. § 1391(b)(2).

Third, the final avenue for venue applies only “if there is no district in which an action

may otherwise be brought.” 28 U.S.C. § 1391(b)(23); see also Saudi v. Northrop Grumman

Corp., 273 F. Supp. 2d 101, 104-05 (D.D.C. 2003) (explaining that venue was improper under §

1391(b)(3) because there were other districts where the action could have been brought). And,

there are other districts in which this action could be brought. Pursuant to 28 U.S.C. §

1391(b)(1), this action could be brought in the United States District Court for the Southern

District of New York, as that is where AAA resides and general personal jurisdiction could be

had. Dec. of Tracey Frisch, ECF No. 16-1, ¶¶ 2-3. And, under 28 U.S.C. § 1391(b)(2), this action

could have been brought in the United States District Court for the District Court of Maryland

because that is where a substantial part of the events giving rise to Plaintiffs’ claims occurred. As

there are other districts where venue is proper, Plaintiffs cannot assert venue in the District of

Columbia pursuant to 28 U.S.C. § 1391(b)(3). Moreover, even if there was no other district in

24 which this case could be brought, the Court has already determined that it does not have personal

jurisdiction over the AAA in this matter. See Supra Sec. III.B. Accordingly, the District of

Columbia is not a proper venue under 28 U.S.C. § 1391(b)(3).

For the reasons provided above, the Court finds that Plaintiffs have failed to make factual

allegations showing that the District of Columbia is a proper venue for their claims. The AAA

does not reside in the District of Columbia, a substantial part of the events or omissions giving

rise to Plaintiffs’ claims did not occur in the District of Columbia, and this Court does not have

personal jurisdiction over the AAA in this matter. Accordingly, the Court concludes that this

case should be DISMISSED because the District of Columbia is an improper venue.

D. Subject Matter Jurisdiction

The Court next considers whether or not it has subject matter jurisdiction over Plaintiffs’

claims. The Court concludes that the only possible ground for subject matter jurisdiction is

diversity of citizenship under 28 USC § 1332. The Court further concludes that Plaintiffs have

failed to make factual allegations showing damages worth the minimum amount in controversy.

As such, the Court does not have subject matter jurisdiction in this case.

In their Amended Complaint, Plaintiffs assert two grounds for subject matter

jurisdiction—federal question jurisdiction and diversity jurisdiction. Plaintiffs assert federal

question jurisdiction because their “counts concern disputes under the U.S. Federal Arbitration

Act at 9 USC § 1, et seq., and federal questions related thereto.” Am. Compl., ECF No. 5, ¶ 4.

Plaintiffs fail to acknowledge that the Federal Arbitration Act “does not create any independent

federal-question jurisdiction under 28 U.S.C. § 1331 or otherwise.” Southland Corp.v. Keating,

465 U.S. 1, 15, n.9 (1984); see also Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460

U.S. 1, 25, n.32 (explaining that the Federal Arbitration Act requires “diversity of citizenship or

25 some other independent basis for federal jurisdiction”). And, Plaintiffs fail to present any other

ground for asserting federal question jurisdiction. Plaintiffs bring their Count 1 claim under the

Declaratory Judgement Act; but, that Act also does not confer federal question jurisdiction. See

Skelly Oil Co. v. Phillips Petroleum, Co., 339 U.S. 667, 673-4 (1950) (recognizing that the

Declaratory Judgment Act is procedural only and cannot confer jurisdiction). Plaintiffs’ Count 2

claim for relief fares no better as it arises under Maryland state law. Am. Compl., ECF No. 5, ¶

32. In their Opposition, Plaintiffs present no argument as to why the Court should find subject

matter jurisdiction based on a federal question. Accordingly, the Court finds that federal question

jurisdiction is inapplicable in this case.

Perhaps recognizing the futility of asserting federal question jurisdiction, in their

Opposition, Plaintiffs defend their claim pursuant to only diversity jurisdiction. “A federal court

has diversity jurisdiction when (1) there is complete diversity of citizenship among the parties

(that is, no plaintiff is a citizen of the same state as any defendant) and (2) the ‘amount in

controversy’ is greater than $75,000.” Witte v. Gen. Nutrition Corp., 104 F. Supp. 3d 1, 4 (D.D.C.

2015) (citing 28 U.S.C. § 1332(a)). There is no dispute that the parties are citizens of different

states. Accordingly, the only issue before the Court is whether or not the amount in controversy

is greater than $75,000. Plaintiffs alleged damages that “include pain and suffering, loss of

opportunities, sleepless nights, and attorneys’ fees.” Am. Compl., ECF No. 5, ¶ 47. In their

Opposition, Plaintiffs also claim damages related to the “meritless litigation to compel

arbitration” in their pending District Court of Maryland case against the ACT. Pls.’ Opp’n, ECF

No. 23, 36.

Plaintiffs have failed to allege factual support for damages from pain and suffering, loss

of opportunities, or sleepless nights. It appears that Plaintiffs base these ephemeral damages on

26 their uncertainty as to whether or not they would be compelled into arbitration by the ACT in

their case pending before the District Court of Maryland. The ACT did not file a motion to

compel arbitration until August 1, 2019; that motion was denied on February 4, 2020. Cherdak v.

ACT, Inc., No 19-cv-1513-TDC, ECF Nos. 21, 51. As such, any pain and suffering, loss of

opportunities, or sleepless nights were limited in duration. And, Plaintiffs provide no allegations,

such as declining a job offer or a need for therapy, to show that these damages are anything other

than nominal.

Moreover, these special damages were not caused by the AAA. Instead, they were caused

by Plaintiffs’ initiation of a lawsuit to stop the cancellation of Plaintiff Harrison Cherdak’s ACT

score and by the ACT’s filing of a motion to compel arbitration. Regardless of whether or not the

AAA reviewed the ISR Clause for due process compliance, Plaintiffs would have incurred these

special damages. As was previously explained, the ACT moved to compel arbitration under both

the ISR Clause and the General Arbitration Agreement. See Supra Sec. III.A. Regardless of the

due process compliance of the ISR Clause, the ACT could have moved to compel arbitration

under the General Arbitration Agreement which is not at issue in this case. And, the District

Court of Maryland ultimately denied the motion to compel arbitration on the grounds that the

ISR Clause was not supported by consideration and that both arbitration clauses were

unenforceable as Plaintiff Harrison Cherdak signed them as a minor. Id. In fact, as leave to file a

sur-reply was denied, Plaintiffs did not even raise the issue of whether or not the AAA was an

appropriate forum in litigating the motion to compel. As such, the availability of the AAA as a

forum for arbitration under the ISR Clause was irrelevant to Plaintiffs’ litigation concerning the

ACT’s motion to compel arbitration and to any effects such litigation allegedly had on Plaintiffs.

27 In their Opposition, Plaintiffs also claim additional damages related to the “meritless”

litigation in the District Court of Maryland. Pls.’ Opp’n, ECF No. 23, 36. However, Plaintiffs do

not specify what additional damages they have incurred or approximate the value of those

damages. Moreover, as with the special damages alleged by Plaintiffs, other damages related to

the ACT’s motion to compel arbitration have too tenuous a connection to the AAA to make the

AAA bear the cost. The damages pertaining to the ACT’s motion to compel arbitration should be

assessed in Plaintiffs’ case against the ACT currently pending before the District Court of

Maryland, not in this case.

Plaintiffs’ only other claim for meeting the amount in controversy is attorneys’ fees.

“Attorney fees are part of the amount in controversy if they are provided for by statute or

contract.” Zuckman v. Monster Beverage Corp., 958 F. Supp. 2d 293, 301 (D.D.C. 2013).

Attorneys’ fees are provided for by the MCPA. Md. C.L. § 13-408(b). And, attorneys’ fees are

allowable under the Declaratory Judgment Act at the Court’s discretion. See Horn & Hardart Co.

v. National Rail Passenger Corp., 843 F.2d 546, 548 (D.C. Cir. 1988) (explaining that the

Declaratory Judgment Act allows relief which is necessary or proper). However, in this case,

attorneys’ fees are not available as both Plaintiffs are pro se. Such fees are unavailable even

though Plaintiff Erik Cherdak is an attorney by training. “[I]t is well established that pro se

litigant lawyers cannot recover fees for actions that they have brought on their own behalf, no

matter how talented and typically well-compensated that lawyer might be when working on

behalf of a client.” Apton v. Volkswagen Group of America, Inc., 233 F. Supp. 3d 4, 19 (D.D.C.

2017) (citing Kay v. Ehrler, 499 U.S. 432, 435-36 (1991) (concluding that pro se litigant lawyer

could not recover attorneys' fees in civil rights action)). Under the Declaratory Judgment Act,

attorneys’ fees are a matter of the Court’s discretion. Because Plaintiffs are pro se and have thus

28 incurred no fees, the Court finds that, regardless of the merit of their claims, Plaintiffs would not

be entitled to attorneys’ fees under the Declaratory Judgment Act. The Court also finds that,

because they are pro se, Plaintiffs would not be entitled to attorneys’ fees under the MCPA. See

Horn v. FDIC, No. ELH-11-2127, 2011 WL 6132309, at *2 (D. Md. Dec. 8, 2011) (finding that

pro se plaintiff was not entitled to attorneys’ fees under a statutory scheme similar to the MCPA);

see also Bond v. Blum, 317 F.3d 385, 389-99 (4th Cir. 2003) (explaining that pro se attorneys are

not entitled to attorneys’ fees).

Even if the Court were to ignore Plaintiffs’ pro se status and find that they were entitled

to attorneys’ fees, Plaintiffs have failed to make allegations showing that those attorneys’ fees

would meet the amount in controversy requirement. In their Amended Complaint, Plaintiffs

make no allegation even estimating the ultimate cost of attorneys’ fees in this matter. In their

Opposition, Plaintiffs make the conclusory allegation that “[r]easonable attorney’s fees far and

away exceed any jurisdictional requirement and are currently estimated to be on the range of

over $300,000.” Pls.’ Opp’n, ECF No. 23, 36. However, Plaintiffs provide no support for this

number; instead, the number appears to be purely speculative. It is unclear if Plaintiffs based this

figure on a hypothetical billing rate (especially given that Plaintiffs are pro se) multiplied by the

number of hours worked or if Plaintiffs simply pulled this figure out of thin air. Courts have

rejected attempts to establish the amount in controversy, and thus create diversity jurisdiction, by

speculatively asserting a conclusory fee. See, e.g., Animal Legal Defense Fund v. Hormel Foods

Corp., 249 F. Supp. 3d 53, 62-63 (D.D.C. 2017) (finding that the “[d]efendant’s showing

regarding attorneys' fees is too speculative” to establish diversity jurisdiction); National

Consumers League v. Bimbo Bakeries USA, 46 F. Supp. 3d 64, 73-74 (D.D.C. 2014)

29 (“Defendant's speculation or conclusory statements as to the amount of attorneys fees is

insufficient to establish a jurisdictional amount.”).

Accordingly, the Court concludes that Plaintiffs have not satisfactorily alleged that the

amount in controversy exceeds $75,000. Damages related to pain and suffering, loss of

opportunities, and sleepless nights are unspecified, conclusory, and appear to be primarily related

to the ACT’s motion to compel arbitration rather than to the AAA’s actions. Other damages

related to Plaintiffs’ case pending in the District Court of Maryland are likewise insufficiently

connected to the allegations against the AAA in this matter. Additionally, appearing pro se,

Plaintiffs are not entitled to attorneys’ fees. And, even if Plaintiffs could receive attorneys’ fees,

they have provided no more than speculation as to the amount of those attorneys’ fees. Absent

satisfactory allegations as to the amount in controversy, this Court’s exercise of diversity

jurisdiction is inappropriate.

For the reasons provided above, the Court finds that Plaintiffs have failed to make factual

allegations showing that this Court has subject matter jurisdiction over Plaintiffs’ claims. Neither

the Federal Arbitration Act nor the Declaratory Judgment Act provides grounds for federal

question jurisdiction. And, Plaintiffs have failed to provide factual allegations showing that their

claims meet the amount in controversy requirement for diversity jurisdiction. Accordingly, as an

independent ground, the Court concludes that this case should be DISMISSED because the Court

lacks subject matter jurisdiction.

E. Arbitral Immunity

As a final independent ground for dismissal, the Court concludes that Plaintiffs cannot

state a claim for which relief may be granted. The Court finds that both of Plaintiffs’ claims are

barred by the doctrine of arbitral immunity.

30 When acting in a judicial capacity, judges, advocates, witnesses, and others have

“absolute immunity … because of the special nature of their responsibilities.” Butz v. Economou,

438 U.S. 478, 511 (1978). This grant of absolute immunity in the judicial sphere ensures that the

judiciary can function without “harassment or intimidation.” Id. at 512. Due to the similarities

between the judicial process and the arbitral process, courts have recognized the doctrine of

arbitral immunity. Typically, arbitral immunity has been applied in cases when plaintiffs

challenge the authority of an arbitrator to resolve a dispute. See, e.g., International Medical

Group, Inc. v. AAA, 312 F.3d 833, 843 (7th Cir. 2002) (“We have held, for example, that arbitral

immunity should extend to cases where the authority of an arbitrator to resolve a dispute is

challenged.”); New England Cleaning Services, Inc. v. AAA, 199 F.3d 542, 545 (1st Cir. 1999)

(“As with judicial and quasi-judicial immunity, arbitral immunity is essential to protect decision-

makers from undue influence and protect the decision-making process from reprisals by

dissatisfied litigants.”).

As a district court within this Circuit noted, “[t]he majority of circuit courts have

extended arbitral immunity to cover not only the individual arbitrator, but the arbitration forum

as well.” Young Habliston v. Finra Regulation, Inc., No. 15-2225, 2017 WL 396580, *6 (D.D.C.

Jan. 27, 2017) (citing Pfannenstiel v. Merrill Lynch, 477 F.3d 1155, 1159 (10th Cir. 2007)

(“[C]ourts uniformly hold that arbitration forums and sponsors, like courts of law, are immune

from liability for actions taken in connection with administering arbitration.”); Int'l Med. Grp.,

Inc. v. Am. Arbitration Ass'n., Inc., 312 F.3d 833, 844 (7th Cir. 2002) (finding arbitration forum

immune from suit); New England Cleaning Servs., Inc. v. Am. Arbitration Ass'n, 199 F.3d 542,

545 (1st Cir. 1999) (“[O]rganizations that sponsor arbitrations, as well as arbitrators themselves,

enjoy this immunity from civil liability.”); Hawkins v. Nat'l Ass'n of Sec. Dealers Inc., 149 F.3d

31 330, 332 (5th Cir. 1998) (“The NASD enjoys arbitral immunity from civil liability for the acts of

its arbitrators in the course of conducting contractually agreed-upon arbitration proceedings.”),

abrogated on other grounds by Merrill Lynch, Pierce, Fenner & Smith v. Manning, 136 S. Ct.

1562 (2016); Olson v. Nat'l Ass'n of Sec. Dealers, 85 F.3d 381, 383 (8th Cir. 1996) (“Arbitral

immunity protects all acts within the scope of the arbitral process,” including those by

“sponsoring organizations”); Austern v. Chi. Bd. Options Exch., Inc., 898 F.2d 882, 886 (2d Cir.

1990) (holding that the “commercial sponsoring organization” is “entitled to immunity for all

functions that are integrally related to the arbitral process”); Corey v. N.Y. Stock Exch., 691 F.2d

1205, 1211 (6th Cir. 1982) (“Extension of arbitral immunity to encompass boards which sponsor

arbitration is a natural and necessary product of the policies underlying arbitral immunity.”)).

The extension of arbitral immunity to the arbitration forum is logical because, otherwise,

immunity would be “illusory” as plaintiffs would “merely shift the liability [from the arbitrators]

to the sponsoring association.” Corey, 691 F.2d at 1211; see also Olson, 85 F.3d at 383 (“Without

this extension, arbitral immunity would be almost meaningless because liability would simply be

shifted from individual arbitrators to the sponsoring organization.”). While the United States

Court of Appeals for the District of Columbia Circuit has yet to opine on this issue, the Court is

persuaded by the purposes of arbitral immunity, as well as the bulk of case law, that arbitral

immunity extends to arbitration forums, such as AAA.

With this background in mind, the Court finds that the AAA is immune from Plaintiffs’

Count 1 claim under the Declaratory Judgment Act. “Arbitral immunity protects all acts within

the scope of the arbitral process.” Olson, 85 F.3d at 383. In their Count 1 claim, “Plaintiffs seek a

declaration from this Court declaring that the AAA has not performed a threshold determination

as to whether the ISR Clause … complies with the AAA Consumer Due Process Protocol and

32 Rules.” Am. Compl., ECF No. 5, ¶ 29. Plaintiffs further contend that the AAA cannot administer

arbitration prior to making such a determination. Id. However, the AAA’s determination of

whether or not it can conduct an arbitration pursuant to a particular clause is an “act[] within the

scope of the arbitral process.” Olson, 85 F.3d at 383. The alleged omission of which Plaintiffs

complain, ensuring that the 2017-2017 ISR Clause is due process compliant, is part of the AAA’s

adjudicative functions because such a review determines which arbitrations the AAA will and

will not adjudicate. The performance of such a gatekeeping function is a decisional act “within

the scope of the arbitral process.” Austern, 898 F.2d at 886.

Plaintiffs argue that arbitral immunity should not provide protection for the AAA’s own

wrongdoing in failing to follow its due process requirements. However, if an arbitration forum

could not claim immunity because a plaintiff alleged that the forum acted wrongfully, “the

exception would swallow the rule.” Young Habliston, 2017 WL 396580 at *7. Moreover, courts

in similar situations have applied arbitral immunity even when the arbitration forum is alleged to

have violated its own regulations and requirements. Id. (applying arbitral immunity despite

allegations that the arbitration forum had violated its own regulations); Olson, 85 F.3d at 383 (“A

sponsoring organization is immune from civil liability for improperly selecting an arbitration

panel, even when the selection violates the organization’s own rules.”); Austern, 898 F.2d at 886-

87.

Because the AAA’s decision regarding whether or not it has performed a sufficient

review of an arbitration clause’s due process compliance is an act within the arbitral process, the

Court finds that the AAA is immune from Plaintiffs’ Count 1 claim.

The Court next considers whether or not the AAA is immune from Plaintiffs’ Count 2

claim under the MCPA. In support of the argument that their MCPA claim is not barred by

33 arbitral immunity, Plaintiffs cite primarily to Hopper v. American Arbitration Association, Inc.,

708 Fed. App’x 373 (9th Cir. 2017) (unpublished). In Hopper, the plaintiff appealed the

dismissal, on the basis of arbitral immunity, of his false advertising claim against the AAA. 708

Fed. App’x at 373. The court reversed the dismissal finding that “[c]ommercial advertisement,

designed to sway individuals to choose AAA over its competitions … is distinct and distant from

the decisional act of an arbitrator.” Id. As such, the court found that arbitral immunity for the

plaintiff’s false advertising claims was inappropriate.

The Court begins by noting that Hopper in not a decision within this Circuit and is not

binding on this Court. Moreover, because Hopper is unpublished, the decision is not even

binding on those courts within the Ninth Circuit. And, the entirety of the Hopper opinion is two-

paragraphs and includes little analysis. Finally, in Hopper, the plaintiff brought challenges under

a California law which is not at issue in this case.

Plaintiffs did not point to any cases which have followed the result in Hopper. And, the

only case that the Court could find which cites Hopper rejected its analysis. In Vogt v. American

Arbitration Association, No. CC-02-2019-C-94, 2019 WL 2618065 (W. VA. Cir. Ct. June 22,

2019), the plaintiff brought a false advertising claim against the AAA. Refusing to follow

Hopper, the court determined that “permitting such a claim would seriously undermine the

immunity conferred by statute and would present and would elevate the form of the cause of

action over the absolute immunity afforded arbitrators.” Vogt, 2019 WL 2618065 at *4. As with

the court in Vogt, this Court finds unpersuasive the limited analysis in Hopper.

In Hopper, the plaintiff claimed that misleading statements in the AAA’s direct mail and

various website pages convinced him, and others, to choose the AAA over other arbitration

companies. Hopper v. AAA, No. CV-16-1124-RGK-AGRx, 2016 WL 7443240, *1 (C. D. Cal.

34 March 22, 2016). Conversely, here, Plaintiffs’ MCPA challenge is focused on the AAA’s

published arbitration rules and consumer clause registry. Plaintiffs do not allege that they

received any direct mail containing alleged misstatements. And, Plaintiffs do not even claim that

alleged misstatements caused them to choose the AAA over another arbitration forum. Instead,

Plaintiffs’ challenge is based only on the AAA’s non-compliance with its published regulations

concerning which arbitration clauses it will accept. While Plaintiffs attempt to present their

MCPA claim under the guise of false advertising, the Court considers the substance of Plaintiffs’

claim rather than its framing. And, in substance, Plaintiffs are challenging whether or not the

AAA complied with its internal regulations. The AAA’s statement of its own procedures and

requirements is not analogous to the commercial actions which were challenged in Hopper.

As such, Plaintiffs’ Count 2 claim under the MCPA is barred by arbitral immunity for the

same reasons that Plaintiffs’ Count 1 claim is barred. Looking to the substance of Plaintiffs’

MCPA claim, Plaintiffs challenge the AAA’s compliance with their own requirements and rules

of procedure. This is the same challenge Plaintiffs make in their Declaratory Judgment Act

claim. The Court concludes that Plaintiffs’ MCPA claim is barred by arbitral immunity because it

challenges the performance or omission of the AAA’s gatekeeping function in reviewing

arbitration clauses for due process compliance, which is a decisional act “within the scope of the

arbitral process.” Austern, 898 F.2d at 886. The “failure to extend immunity to the AAA in these

circumstances”—a challenge to the AAA’s compliance with its internal regulations—"could

discourage it from sponsoring future arbitrations.” New England Cleaning Servs., 199 F.3d at

546.

For the reasons provided above, the Court finds that Plaintiffs have failed to state a claim

for which relief can be granted. Both of Plaintiffs’ claims challenge the AAA’s acts or omissions

35 within the scope of the arbitral process and are barred by arbitral immunity. Accordingly, the

Court concludes that this case should be DISMISSED because Plaintiffs have failed to state a

claim for which relief may be granted.

IV. CONCLUSION

For the foregoing reasons, the Court GRANTS the AAA’s Motion to Dismiss. This case

is dismissed for five independent reasons. First, the Court concludes that Plaintiffs do not have

standing to bring their claims. Second, the Court concludes that it does not have personal

jurisdiction over the AAA. Third, the Court concludes that venue is improper in the District of

Columbia. Fourth, the Court concludes that it does not have subject matter jurisdiction over

Plaintiffs’ claims. And, finally, the Court concludes that Plaintiffs have failed to state a claim for

which relief may be granted as Plaintiffs’ claims are barred by the doctrine of arbitral immunity.

For these reasons, this case is DISMISSED.

Because the Court lacks jurisdiction over this case, the Court cannot resolve the other

pending motions.2

An appropriate Order accompanies this Memorandum Opinion. The Clerk of the Court

shall mail a copy of this Memorandum Opinion to Plaintiffs at their addresses of record.

/s/ COLLEEN KOLLAR-KOTELLY United States District Judge

2 Such pending Motions include Plaintiffs’ Emergency Motion for a Temporary Restraining Order, ECF No. 6; Plaintiffs’ Motion for Partial Summary Judgment as to Count II of their First Amended Complaint, ECF No. 10; Defendant’s Motion for Pro Hac Vice Admission of Theodore L. Hecht, ECF No. 14; and Plaintiffs’ Cross-Motion for an Order Disqualifying the Law Firm of Schnader, Harrison, Segal & Lewis LLP, ECF No. 19. 36