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TRANSWORLD PRODS. CO. v. CANTEEN CORP.

November 16, 1995

TRANSWORLD PRODUCTS CO., INC., Plaintiff,
v.
CANTEEN CORPORATION and WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY, Defendants.



The opinion of the court was delivered by: HARRIS

 Before the Court is a motion for judgment on the pleadings by defendant Washington Metropolitan Area Transit Authority ("WMATA") in an action brought by plaintiff TransWorld Products Co., Inc. ("TWP") alleging, inter alia, violation of federal and District of Columbia Disadvantaged Business Enterprise ("DBE") statutes as well as fraud and misrepresentation.

 A court will grant a motion for judgment on the pleadings only if, after the close of the pleadings, no material fact remains in dispute, and the moving party is entitled to judgment as a matter of law. Peters v. Nat'l R.R. Passenger Corp., 296 U.S. App. D.C. 202, 966 F.2d 1483, 1485 (D.C. Cir. 1992); Fed. R. Civ. P. 12(c). A trial court will not grant a motion for judgment on the pleadings merely because the court doubts plaintiff's ability to prove the allegations of the complaint at trial. Haynesworth v. Miller, 261 U.S. App. D.C. 66, 820 F.2d 1245, 1254 & n. 73 (D.C. Cir. 1987).

  The standard of review on a motion for judgment on the pleadings is virtually identical to the standard for a motion to dismiss. Haynesworth, 820 F.2d at 1254; UPS v. Int'l Bhd. of Teamsters, 859 F. Supp. 590, 592 & n.1 (D.D.C. 1994); Fed. R. Civ. P. 12(c), 12(b)(6). The Court will not dismiss plaintiff's complaint unless it appears beyond doubt that plaintiff can prove no set of facts in support of his claim that would entitle plaintiff to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957); UPS, 859 F. Supp. at 593. The Court must accept as true all factual allegations and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party. Hishon v. King & Spalding, 467 U.S. 69, 73, 81 L. Ed. 2d 59, 104 S. Ct. 2229 (1984); Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974); Peters, 966 F.2d at 1485. Conversely, a plaintiff's legal conclusions, opinions, or unwarranted averments of fact will not be deemed admitted. Haynesworth, 820 F.2d at 1254; Webb v. District of Columbia, 864 F. Supp. 175, 179-180 (D.D.C. 1994).

 The Court grants defendant WMATA's motion for judgment on the pleadings. The Court finds that the federal DBE statutes allegedly violated do not apply to the contract between defendant WMATA and defendant Canteen Corporation because the transaction was not federally-assisted, thereby placing the contract outside the scope of the federal DBE statutes. Plaintiff subcontractor's claim against WMATA for violation of the federal DBE statutes is conditioned on a finding that the contract between the two defendants is covered by the federal DBE statutes. Because the Court finds that this condition is not satisfied, plaintiff's claim against WMATA is rejected. Further, the Court holds that plaintiff TWP has conceded Counts Three and Four of its amended complaint by failing to respond to WMATA's arguments that the D.C. DBE statutes do not apply to WMATA (Count Three), and that TWP's fraud and misrepresentation claim is legally insufficient (Count Four). Although findings of fact and conclusions of law are unnecessary in ruling on a motion for judgment on the pleadings, see Fed. R. Civ. P. 52(a), the Court nonetheless sets forth its reasoning.

 Background

 In 1991, defendant Canteen Corporation ("Canteen") was awarded a contract with WMATA to supply vending machine services. Canteen was required to comply with WMATA's Minority Business Enterprise/Disadvantaged Business Enterprise (MBE/DBE) program as part of its solicitation for the WMATA contract. Answer to Amended Complaint at P 23. *fn1" Plaintiff TWP also provides vending machine services to various large businesses and was at the time a certified "Disadvantaged Business Enterprise" according to the rules and regulations in 49 C.F.R. §§ 23.62, 23.51, 23.53, and Subpart D generally. *fn2" Canteen selected plaintiff TWP as a subcontractor in order to satisfy WMATA's DBE requirement.

 TWP alleges that defendant Canteen failed to provide TWP with the required percentage of the WMATA contract revenue and ultimately terminated the contract with TWP on or about June 24, 1992. On June 17, 1992, TWP filed suit against Canteen in the Superior Court of the District of Columbia for breach of contract, seeking damages from the termination. Canteen counterclaimed, alleging that TWP failed to provide adequate quality vending machine services and failed to pay WMATA commissions required by the contract.

 After nearly two years in the Superior Court, plaintiff amended its complaint and added WMATA as a defendant on June 1, 1994. TWP's amended complaint includes five counts. Count One alleges breach of contract against defendant Canteen. Count Two alleges that both defendants Canteen and WMATA violated federal DBE statutes. Similarly, Count Three alleges that both defendants Canteen and WMATA violated District of Columbia DBE statutes. Count Four alleges fraud and misrepresentation against both defendants Canteen and WMATA. Finally, Count Five seeks punitive damages against defendant Canteen.

 TWP alleges that WMATA violated both federal and District of Columbia DBE statutes by accepting Canteen's continued performance of its contract with WMATA despite the termination of TWP and Canteen's failure to substitute another qualified DBE. Additionally, TWP alleges WMATA engaged in fraud and misrepresentation. On July 20, 1994, defendant WMATA removed the case to this Court pursuant to 28 U.S.C. § 1446 and Pub. L. No. 89-774, P 81, and now seeks to dismiss those counts applicable to it. *fn3"

 Discussion

 I. Count Two - Violation of Federal DBE Statutes

 TWP alleges that WMATA breached the statutory scheme of the federal DBE statutes codified at 49 C.F.R. § 23, et seq. Without citing any specific provision WMATA allegedly violated, TWP asserts that WMATA's continued acceptance of Canteen's performance, knowing Canteen had terminated its subcontract with TWP, violated the statutory scheme. Before turning to the merits of TWP's claim against WMATA, the Court considers it helpful to explicate the general statutory scheme under which plaintiff's claim arises. In O'Donnell Constr. Co. v. District of Columbia, 815 F. Supp. 473, 478-479 & n. 7-10 (D.D.C. 1992), Chief Judge Penn ...


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