Jackson v. Udr, Inc.

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

MATTHEW JACKSON,

Plaintiff, v. Civil Action No. 26-351 (JEB) UDR, INC.,

Defendant.

MEMORANDUM OPINION

According to the leasing website, an apartment in Capitol View on 14th — a residential

building here in Washington — comes with quartz countertops, triple-sliding glass doors, and a

walk-in closet. According to former resident Matthew Jackson, it also comes with a slew of

illegal fees. He originally brought this putative class-action suit against his former landlord and

building-management company UDR, Inc., in D.C. Superior Court, arguing that the company’s

practices of (1) charging a $250 pre-lease Holding Deposit and (2) including a $1250 Lease

Transfer Fee in rental agreements are unlawful under the D.C. Consumer Protection Procedures

Act. After removing the case to federal court, UDR now moves to dismiss, contending that

Jackson lacks standing to bring his claims. The Court agrees. Instead of dismissing, however, it

will remand the case to Superior Court as required by statute and deny Defendant’s Motion to

Dismiss as moot.

I. Background

The Court, as it must at this juncture, draws the following facts from the Complaint.

Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113 (D.C. Cir. 2000). It also considers

1 “documents upon which the plaintiff’s complaint necessarily relies, even if the document is

produced by a defendant in a motion to dismiss.” Ward v. D.C. Dep’t of Youth Rehab. Servs.,

768 F. Supp. 2d 117, 119 (D.D.C. 2011) (cleaned up).

On January 10, 2025, Jackson submitted a rental application to Capitol View on 14th

Apartments, a housing complex that promises “luxury DC apartments in the U Street Corridor.”

ECF No. 1-1 (Compl.), ¶¶ 1, 7; Capitol View on 14th, https://perma.cc/MY2T-MKTR. The

building is managed by UDR, which runs a slate of similar high rises around the District and

employs uniform leasing processes at each location. See Compl., ¶¶ 1, 6. As part of his

application, Jackson was required to pay a $50 “Application Fee” as well as a $250 “Holding

Deposit.” Id., ¶ 11. While the Application Fee became nonrefundable as soon as it was paid, the

fate of the Holding Deposit depended on the outcome of the application. See ECF No. 10-3

(Application Terms & Conditions) at ECF p. 2. If the application was not approved, the Holding

Deposit would be refunded. Id. If it was approved and the tenant then signed a lease, the

Holding Deposit would be credited towards the required security deposit. Id. And if the

applicant chose not to move forward with an approved application, UDR reserved the right to

keep the Holding Deposit as “liquidated damages.” Id.

Jackson’s application was accepted. He then signed his lease on January 11, and UDR

credited his Holding Deposit toward his security deposit. See Compl., Exh. A (Lease) at 1.

Among many other terms, the agreement stated that if he sought to sublet or transfer his lease,

Jackson would be charged a “Transfer fee” of $1250. Id. at 8; Compl., ¶ 1. A different provision

of the lease inconsistently stated that in the event of an approved transfer, a “reletting fee will not

be due.” Lease at 5. The Complaint does not allege that Jackson ever sought to transfer his lease

or that he was ever charged such a fee.

2 A few days before his one-year anniversary in the building, and in the midst of his 15-

month lease, see Lease at 1, Jackson brought this class-action lawsuit against UDR in D.C.

Superior Court. The Complaint alleged that UDR’s practices of charging a Holding Deposit at

the application stage (Holding Deposit Subcount) and of including a $1250 Transfer Fee in the

lease (Transfer Fee Subcount) are both unlawful under the CPPA. See Compl., ¶ 41. For the

Holding Deposit Subcount, Jackson contended that the District’s Rental Housing Act defines an

application fee as all fees charged prior to the lease signing and limits that amount to $52. Id.,

¶ 14; see also D.C. Code § 42-3501.03(2A) (defining application fee). Because the Holding

Deposit was charged before the lease was signed, Jackson reasoned, it constituted part of the

application fee, and the total application fee of $300 thus exceeded the statutory cap. See

Compl., ¶¶ 11–12. As for the Transfer Fee Subcount, Jackson pointed to a provision in the RHA

limiting such charges to $53, a number dwarfed many times over by UDR’s $1250. Id., ¶¶ 23–

24. Jackson’s proposed classes map straightforwardly onto these subcounts: one class of

plaintiffs who paid the Holding Deposit and one class of plaintiffs who signed leases including

the Lease Transfer Fee term. Id., ¶ 28.

Citing the Class Action Fairness Act, UDR then removed the case here to federal court.

See ECF No. 1 (Not. of Removal), ¶ 5. It now moves to dismiss, contending primarily that

Jackson lacks standing as to both subcounts. See ECF No. 10-1 (MTD) at 1–2, 7, 9–17.

II. Legal Standard

When a defendant files a Rule 12(b)(1) motion to dismiss for lack of subject-matter

jurisdiction, the plaintiff generally “bears the burden of establishing jurisdiction by a

preponderance of the evidence.” Bagherian v. Pompeo, 442 F. Supp. 3d 87, 91–92 (D.D.C.

2020) (quoting Didban v. Pompeo, 435 F. Supp. 3d 168, 172–73 (D.D.C. 2020)); see Lujan v.

3 Defs. of Wildlife, 504 U.S. 555, 561 (1992). In evaluating motions to dismiss, a court

“assume[s] the truth of all material factual allegations in the complaint and ‘construe[s] the

complaint liberally, granting plaintiff the benefit of all inferences that can be derived from the

facts alleged.’” Am. Nat’l Ins. Co. v. FDIC, 642 F.3d 1137, 1139 (D.C. Cir. 2011) (quoting

Thomas v. Principi, 394 F.3d 970, 972 (D.C. Cir. 2005)).

III. Analysis

The Court first reviews Jackson’s standing; finding it lacking, the Court next considers

whether remand or dismissal is the appropriate resolution.

A. Standing

Article III of the Constitution limits the jurisdiction of the federal courts to resolving

“Cases” or “Controversies.” U.S. Const. art. III, § 2, cl. 1. A party’s standing — that is, his

“personal stake in the case,” TransUnion LLC v. Ramirez, 594 U.S. 413, 423 (2021) (cleaned

up) — “is an essential and unchanging part of the case-or-controversy requirement of Article

III.” Lujan, 504 U.S. at 560. To have standing, a party must show that he “(1) suffered an injury

in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely

to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 578 U.S. 330, 338

(2016). A “deficiency on any one of the three prongs suffices to defeat standing.” US Ecology,

Inc. v. U.S. Dep’t of Interior, 231 F.3d 20, 24 (D.C. Cir. 2000). As “standing is not dispensed in

gross,” plaintiffs must establish their standing as to each claim brought. DaimlerChrysler Corp.

v. Cuno, 547 U.S. 332, 353 (2006) (quoting Lewis v. Casey, 518 U.S. 343, 358 n.6 (1996)).

UDR devotes its standing arguments entirely to the first prong, contending that Jackson

has not met the constitutional minimum in his alleged injury for either subcount. See MTD at 1–

2, 9–13. The Court likewise focuses its attention there.

4 Courts define an injury-in-fact as “‘an invasion of a legally protected interest’ that is

‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.’” Spokeo,

578 U.S. at 339 (quoting Lujan, 504 U.S. at 560). For example, a broken leg or a totaled car

undoubtedly would suffice. In contrast, the “violation of some abstract legal right without real-

world effect on the plaintiff,” Cherokee Nation v. U.S. Dep’t of the Interior, 643 F. Supp. 3d 90,

106 (D.D.C. 2022), cannot create an injury sufficient for standing purposes. TransUnion, 594

U.S. at 426. In determining what constitutes a concrete injury, courts often consider “whether

the alleged injury . . . has a ‘close relationship’ to a harm ‘traditionally’ recognized as providing

a basis for a lawsuit in American courts.” Id. at 424 (quoting Spokeo, 578 U.S. at 341).

At the motion-to-dismiss stage, the question is not whether plaintiffs have proved their

injuries, but rather whether they have “sufficiently pled claims” of injury in their complaints.

Jerome Stevens Pharms., Inc. v. Food & Drug Admin., 402 F.3d 1249, 1253 (D.C. Cir. 2005).

“[G]eneral factual allegations of injury resulting from the defendant’s conduct may suffice” for

now because courts “presume that general allegations embrace those specific facts that are

necessary to support the claim.” Lujan, 504 U.S. at 561 (cleaned up). In the class-action

context, named plaintiffs must “show that they personally have been injured.” Warth v. Seldin,

422 U.S. 490, 502 (1975).

The Court will examine Jackson’s various theories of injury in turn.

1. Holding Deposit Subcount

After Jackson signed his lease, the $250 Holding Deposit he paid was converted into part

of his security deposit, which everyone agrees was a lawful charge. See Lease at 1; Compl.,

¶¶ 12–15; MTD at 10–11. UDR maintains that because the Deposit was ultimately credited

toward a different, lawful bill, Jackson suffered no financial loss — and thus no injury — from

5 being charged. See MTD at 10–11. Put another way, UDR’s collecting of the Deposit did not

cause Jackson to wrongfully lose $250 because he would have had to pay that amount for the

security deposit anyway.

Jackson ultimately concedes this point in his briefing. See ECF No. 14 (Opp.) at 8. He

suggests, however, that because the $250 was collected on January 10 and he signed the lease the

next day, see Compl., ¶¶ 7–8, 11, that one-day-early deprivation of money itself constitutes an

injury. See Opp. at 7–8. The D.C. Circuit has, in the damages context, acknowledged that

money has time value; a delay in the return of owed money (or, in this case, an early payment)

can thus constitute an “actual, tangible” injury. In re OPM Data Sec. Breach Litig., 928 F.3d 42,

66 (D.C. Cir. 2019). The question here is whether the Complaint has sufficiently alleged such a

theory of injury when that pleading makes no mention of time value.

Appellate courts in other circuits and courts in this district have split on what constitutes

sufficient pleading of a time-value injury. The Eleventh Circuit and some courts in this district

have required plaintiffs alleging such injury to specifically state what they would have done with

the money such that the inability to use it for the time period caused an injury. Taylor v. Fed.

Aviation Admin., 2019 WL 3767512, at *3 (D.D.C. Aug. 9, 2019) (“[I]t is incumbent on the

plaintiff to plead how the lost use of money resulted in actual harm.”); Kawa Orthodontics, LLP

v. Sec’y, U.S. Dep’t of the Treasury, 773 F.3d 243, 246 (11th Cir. 2014) (declining to recognize

time-value injury where complaint “does not mention the word ‘interest,’ let alone allege that

[plaintiff] had specific plans to invest its money into an interest-bearing asset”). On the other

hand, the Ninth Circuit and other D.D.C. courts have treated time value as an inherent injury. In

their view, if money has such value, then a delayed return of money (or a forced early payment)

is facially an injury and there is no need for additional specific pleading. Buckner v. CONSOL

6 Energy Inc., 2024 WL 2382941, at *7 (D.D.C. May 23, 2024) (“Plaintiffs have alleged that

Defendants’ failure to pay the premiums will cause them injury, and that is sufficient [to plead a

time-value injury].”); Van v. LLR, Inc., 962 F.3d 1160, 1165 (9th Cir. 2020) (explaining that

plaintiff’s injury is loss of “the use of her money,” and complaint need not mention investment

interest, as that “is simply a way of measuring and remedying [plaintiff’s] injury, not the injury

itself”).

The Court reconciles the conflict using its (limited?) common sense: in situations where

the time-value injury is obvious, such as cases involving a long delay or a plaintiff who plainly

lost an opportunity related to the money, specific pleadings about the precise damage caused by

loss of use may be less important. But in cases like this one, where the alleged deprivation lasted

just a single day, harm begins to look implausible without more detailed pleadings to nudge the

time-value injury into believability. For instance, one common quantification of this kind of

injury is investment interest. $250 invested at 5% annually would yield just three cents in one

day — assuming the market was even open on that day. If that is the basis of Plaintiff’s injury,

he needed to say so. The Court is disinclined to assume such loss on his behalf.

On this front, Jackson falls short. The Complaint makes no mention of time value or

even of the payment being early; instead, it states only that Jackson was “injured by paying

rental application fees exceeding the District’s application fee cap.” Compl., ¶ 21. Although

Plaintiff’s briefing briefly mentions time value, see Opp. at 8, “a plaintiff’s standing to pursue a

claim rests on the theory of injury presented in the complaint.” Haase v. Sessions, 835 F.2d 902,

907 (D.C. Cir. 1987) (emphasis added). This dooms Plaintiff’s first subcount.

Finally, Jackson claims that, financial loss aside, the overcharge is an injury akin to those

that animated suits for conversion at common law, rendering his harm concrete under

7 TransUnion’s historical-analog test. See Opp. at 8–9; TransUnion, 594 U.S. at 425 (accepting as

sufficiently concrete “harms traditionally recognized as providing a basis for lawsuits in

American courts”). That analogy is inapt. “Conversion has generally been defined as any

unlawful exercise of ownership, dominion or control over the personal property of another in

denial or repudiation of his rights thereto.” Duggan v. Keto, 554 A.2d 1126, 1137 (D.C. 1989)

(internal quotation marks and citation omitted). This tort is concerned principally with false acts

of ownership taken while the rightful owner protests. Accordingly, where a “plaintiff concedes

that he voluntarily transferred ownership, there is no unlawful exercise of control over plaintiff’s

property.” Gharib v. Wolf, 518 F. Supp. 2d 50, 56 (D.D.C. 2007) (citing Equity Grp., Ltd. v.

Painewebber Inc., 839 F. Supp. 930, 933 (D.D.C. 1993)). Here, Jackson paid the deposit to

UDR. Whatever issues exist with UDR’s requesting the money, there can be no trampling on

Jackson’s property rights after he willingly relinquished ownership and UDR became the true

owner of the funds.

Seeing as every hallway has led to a dead end on the question of injury, this Court will

accordingly direct the Holding Deposit Subcount to the exit.

2. Transfer Fee Subcount

Jackson’s second subcount faces a similar fate. UDR points out that Plaintiff never paid

the Transfer Fee, nor was he ever charged it, and the Complaint does not allege that he was even

interested in transferring his lease in the first place. See MTD at 13. Jackson instead takes a

different tack, contending that the “inclusion of an illegal lease term” in the agreement was itself

injurious. See Compl., ¶ 26. Drawing again on TransUnion’s historical-analog test, he likens his

injury to a “contractual injur[y]” resulting from UDR’s interfering with his “rights pursuant to a

contract.” Opp. at 11.

8 An undesirable contract provision is not a contractual injury. Jackson might not like

what he has agreed to, but the Transfer Fee’s existence standing alone does not harm him. His

argument that the fee provision is illegal looks more like a defense that a defendant may raise to

avoid liability in a breach-of-contract suit. Steiner v. Am. Friends of Lubavitch (Chabad), 177

A.3d 1246, 1255 (D.C. 2018) (explaining that “fraud in the inducement [is a] ground[] for

rescission and may be used as a defense to a breach of contract suit”); HVAC Specialist, Inc. v.

Dominion Mech. Contractors, Inc., 201 A.3d 1205, 1211 (D.C. 2019) (explaining public policy

as contract defense). Those defenses are not bases for suit themselves. Contract law therefore

provides little assistance to Plaintiff’s efforts to establish an injury-in-fact through common-law

analogs. As Jackson puts forth no other theory of harm, this subcount too must fail for lack of

standing.

Finally, Plaintiff asks that the Court permit him to amend his Complaint and add factual

allegations to his Transfer Fee Subcount that might remedy these shortcomings. See Opp. at 14.

“It is axiomatic,” however, “that a complaint may not be amended by the briefs in opposition to a

motion to dismiss.” Richardson v. Cap. One, N.A., 839 F. Supp. 2d 197, 203 (D.D.C. 2012)

(quoting Coleman v. Pension Benefit Guar. Corp., 94 F. Supp. 2d 18, 24 n.8 (D.D.C. 2000)). As

it stands now, the Complaint does not assert that Jackson was ever affected by the Transfer Fee,

financially or otherwise, or was even at imminent risk of being so affected. The Court thus

cannot find an adequate injury.

B. Remand

Having concluded that this suit cannot be housed in federal court, the Court must now

determine its next steps. Plaintiff suggests that the Court must send the case back to the D.C.

Superior Court, see Opp. at 15, while UDR pushes for dismissal. See ECF No. 17 (Reply) at 14.

9 When a federal court “lacks subject matter jurisdiction” over a removed case, “the case

shall be remanded.” 28 U.S.C. § 1447. The plain text of the statute is unambiguous: remand is

required. Republic of Venezuela v. Philip Morris Inc., 287 F.3d 192, 196 (D.C. Cir. 2002)

(“When it appears that a district court lacks subject matter jurisdiction over a case that has been

removed from a state court, the district court must remand the case . . . .”); Travelers United, Inc.

v. Hyatt Hotels Corp., 761 F. Supp. 3d 97, 109 (D.D.C. 2025) (same).

UDR protests that remand would be pointless — the D.C. courts also adhere to Article III

requirements for standing, which means that the case will likely also be dismissed there. See

Reply at 14; Grayson v. AT&T Corp., 15 A.3d 219, 224 (D.C. 2011) (“[T]his court has followed

consistently the constitutional standing requirement embodied in Article III.”). Perhaps, but the

removal statute does not include a futility exception to § 1447’s command of remand, nor has the

Supreme Court or D.C. Circuit ever recognized one. Ctr. For Sci. In The Pub. Int. v. Burger

King Corp., 534 F. Supp. 2d 141, 144 & n.1 (D.D.C. 2008) (remanding case to Superior Court

for lack of standing and declining to apply futility exception when none existed in Circuit);

Sibley v. Alexander, 916 F. Supp. 2d 58, 63–64 (D.D.C. 2013) (same). If the ping-ponging of

this case between local and federal court strikes Defendant as wasteful, the Court notes only that

UDR itself started the game. Hettinger v. Bozzuto Mgmt. Co., 2025 WL 2029747, at *12

(D.D.C. July 21, 2025) (discussing defendant’s “dubious strategy” of removing case before

arguing dismissal for lack of standing). In any event, given that Jackson has expressed interest in

amending his Complaint, this Court will not attempt to predict how the case may unfold back in

Superior Court. Int’l Primate Prot. League v. Adm’rs of Tulane Educ. Fund, 500 U.S. 72, 89

(1991) (“declin[ing] to speculate” on whether remand would be futile under § 1447). It will

therefore send this case back to its former home in the local courts.

10 IV. Conclusion

For the foregoing reasons, the Court will remand the case to D.C. Superior Court for lack

of subject-matter jurisdiction and deny Defendant’s Motion to Dismiss as moot. A separate

Order so stating will issue this day.

/s/ James E. Boasberg JAMES E. BOASBERG Chief Judge Date: July 15, 2026