DC Circuit Allows Class Action against American Psychological Association to Proceed on Unjust Enrichment Claims

Very interesting case!  The American Psychological Association (APA) listed as “mandatory” an optional assessment that members paid annually with their dues.  The additional fees went to support the lobbying efforts of an affiliated organization, jthe American Psychological Association Practice Organization (APAPO).

Upon discovery that the fee was optional, members of the APA experienced a range of emotions consistent with symptoms of outrage and moral indignation and filed a class action lawsuit to recover the fees.  The complaint stated three causes of action, but we are here concerned only with the first, unjust enrichment and constructive trust.  The District Court opined that the plaintiffs were unreasonable, if not delusional, if they thought the fees lobbying fees were mandatory, and it dismissed the suit.  Diagnosed as crazy, Plaintiffs asked for a second option, to which the District Court replied, “Okay, you’re ugly too!”

*Rimshot*

But seriously folks, Plaintiffs sought their second opinion in the D.C. Circuit.

In In re: APA Assessment Litigation, the D.C. Circuit disagreed with District Court and reversed in part.  The District Court had dismissed the quasi-contract claim on the ground that such a claim cannot exist where there is an actual contract on the same subject matter.  The D.C. Circuit agreed with the District Court’s statement of the law but disagreed with its application to these facts.  The special assessment to support APAPO formed no part of the plaintiffs’ contractual agreement with the APA.  As the Court noted, citing the Restatement (Third) of Restitution & Unjust Enrichment, mistaken payment of money not due is one of the core cases of restitution.  It typically applies in a contractual context in which one party negligently or fraudulently charges the other excessive fees for services that exceed the sope of the contract.

The Court was unmoved by the APA’s arguments that it was not unjustly enriched because the plaintiffs benefited from APAPO’s lobbying efforts.  The plaintiffs had no interest in APAPO’s functions.  They were induced to make the payments because they wanted to retain their APA membership, not because they wanted to support APAPO.  Finally, the Court found that it was not unreasonable for Plaintiffs to believe that the payments were mandatory.

Nor were they ugly.