In September, a class action lawsuit filed against the American Psychological Association saw new life when the U.S. Court of Appeals for the D.C. Circuit ruled to reverse a decision by a lower court that had dismissed the case in 2012.
The class action lawsuit was originally brought in 2010 by Ellen G. Levine, Ph.D., Ruth Fallenbaum, Ph.D., both of California, and Eric S. Engum, Ph.D, of Tennessee, on behalf of themselves and all others “similarly situated,” as the suit explains. (Levine et al. v. American Psychological Association and American Psychological Association Practice Organization). The plaintiffs contended that, since 2002, the APA has “falsely represented to its members that a ‘mandatory’ practice or special assessment over and above the annual dues was required for membership in the APA.”
These fees, the lawsuit explains, should have been listed as voluntary since they constitute membership in the APA’s practice organization (American Psychological Association Practice Organization or APAPO). As the function of each of the two organizations falls under a different legal status, the suit claims that it is not lawful for the APA to collect funds for the APAPO as a condition of membership without jeopardizing its own tax status as a 501(c)(3) entity.
“The case was filed because members of the APA were being told they were required to pay an assessment of more than $100 that was being used for lobbying purposes,” says Hassan Zavareei, J.D., the lead attorney for the plaintiffs. “Members were tricked into paying for lobbying for things that they didn’t necessarily want to support, including issues that are highly controversial within the profession like advocating on behalf of prescription privileges for psychologists.”
The case was dismissed by the District of Columbia Court in May of 2012 because it did not agree that members would believe the extra fee was mandatory. On appeal, however, the appeals court found that the APA did include “misleading language on the dues statement in order to deceive plaintiffs into overpaying for APA membership.”
“The D.C. Circuit court sided with the plaintiffs and found that the representations were deceptive,” says Zavareei.
The APA does not agree with the Appeals Court’s ruling, and points out that not all of the District Court’s decision was reversed. The Appeals Court did affirm the decision that the state of California did not have any jurisdiction in the case as well as the denial of plaintiffs’ requests to add claims for rescission and negligent misrepresentation.
“The September 5th Appeals Court ruling partially affirmed the original dismissal and partially reversed it,” says Rhea Farberman, APR, executive director of communications for APA. “We obviously disagree with the Appeals decision to the degree it overturned the earlier dismissal. APA will continue to aggressively defend against the allegations in the lawsuit. We believe them to be groundless.”
The case will be heard next by the U.S. District Court for D.C. If the plaintiffs win, they will seek to have funds returned to members.
“If we win a complete victory and knock it out of the park,” says Hassan, “we hopefully would get it all back for as many years as this fee was paid. In 2012, this fee was $140.”
A pre-trial settlement could also be a possible outcome, he adds.
By Catherine Robertson Souter