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DANO RESOURCE RECOVERY v. DISTRICT OF COLUMBIA

April 25, 1996

DANO RESOURCE RECOVERY, INC., Plaintiff,
v.
DISTRICT OF COLUMBIA, Defendant.



The opinion of the court was delivered by: HARRIS

Before the Court are defendant's motion to dismiss and plaintiff's opposition thereto. Upon consideration of the entire record, defendant's motion to dismiss is granted.

 BACKGROUND

 Because the past history of this case dictates its outcome here, that history is reviewed in some detail. On March 3, 1982, plaintiff Dano Resource Recovery, Inc., ("Dano") entered into a contract with the District of Columbia to build and operate a sludge and solid waste composting plant at the District's Blue Plains waste treatment facility. A standard dispute clause in the contract provided that any dispute "arising under" the contract would be decided by the Contracting Officer of the District of Columbia, and that a contractor could appeal the decision of the Contracting Officer within 30 days to the Contract Appeals Board ("CAB"). Pl.'s Compl., Ex. 1, ps. 16-17. Under the terms of the contract, the decision of the CAB would be "final and conclusive . . . subject to . . . review as may be provided by law." Id.

 On April 11, 1983, the District notified plaintiff of several concerns it had regarding plaintiff's failure to perform in accordance with certain contract specifications. On May 9, 1983, after plaintiff had failed to remedy most or all of its lapses, the District declared plaintiff to be in default and terminated the contract. Plaintiff appealed the District's decision to the Contracting Officer, and in September 1983, when its appeal to the Contracting Officer proved unsuccessful, plaintiff appealed the Contracting Officer's decision to the CAB.

 Relevant Procedural History

 Between 1983, when plaintiff appealed to the CAB, and 1990, when the CAB issued a lengthy determination upholding the decision of the Contracting Officer, several pertinent developments occurred. First, in 1985, the District of Columbia City Council passed the District of Columbia Procurement Practices Act ("DCPPA"), D.C. Code Ann. § 1-1181.1 et seq. (1992 Repl. & 1995 Supp.). The DCPPA provides that "all claims by a contractor against the District government arising under or relating to" a contract shall be submitted to the Director of the Department of Administrative Services (hereinafter "Director") for an informal hearing and decision. *fn1" D.C. Code Ann. § 1-1188.5(a). The DCPPA further provides that the CAB is "the exclusive hearing tribunal for" any appeal by an aggrieved party from a final decision by the Director. D.C. Code Ann. § 1-1189.3 (1992 Repl.) In essence, the DCPPA did away with previous distinctions between claims "arising under" a contract and claims "relating to" the contract. See District of Columbia v. Savoy Constr. Co., 515 A.2d 698 (D.C. 1986) (pre-DCPPA case, holding that provision of dispute clause for resolution of "any dispute arising under the contract" by the Contracting Officer, with right of appeal to the CAB, did not apply to claims for breach of contract).

 On July 6, 1987, while plaintiff's appeal to the CAB was pending, plaintiff filed an action for breach of contract against the District in the Superior Court of the District of Columbia. The Superior Court judge dismissed plaintiff's action because plaintiff had failed to exhaust its available administrative remedies, and on November 15, 1989, the District of Columbia Court of Appeals affirmed the dismissal. Dano Resource Recovery v. District of Columbia, 566 A.2d 483, 487 n.8 (D.C. 1989) ("Dano I"). *fn2" In its opinion affirming the decision of the Superior Court, the Court of Appeals noted that the DCPPA applied to plaintiff's contract with the District, rejecting plaintiff's contention that the particular breach alleged did not fall within the purview of the DCPPA. Id. at 485 n.6; see Casualty Co. v. District of Columbia, 566 A.2d 480 (D.C. 1989) (holding that the DCPPA applied to contracts entered into prior to the date of enactment of the DCPPA). *fn3"

 On December 7, 1990, after years of discovery and following an administrative hearing which consumed 84 days, the CAB issued a 73-page decision upholding the contract termination, sustaining the District's claim for certain costs of equipment removal and site clean-up, but awarding Dano approximately $ 152,000 improperly withheld by the District. On January 9, 1991, plaintiff appealed the decision of the CAB to the District of Columbia Court of Appeals, pursuant to the DCPPA. See D.C. Code Ann. § 1-1189.5(a).

 In its notice of appeal from the CAB decision, and in its concurrently-filed "Petition for Review" of the CAB decision, plaintiff stated that it was filing an appeal "solely as a protective appeal," and that it "contended that the [DCPPA] is not applicable to this matter." Suppl. Mem. in Supp. of Def.'s [First] Mot. to Dismiss, Attachs. 1, 2. On July 19, 1991, the District of Columbia Court of Appeals issued an Order requiring the parties to brief the issue whether the DCPPA applied to plaintiff's appeal.

 In response to that Order, on July 31, 1991, Dano filed a "motion to dismiss" its appeal. Plaintiff argued in its brief that the DCPPA conflicted with the District of Columbia Self-Government and Governmental Reorganization Act, D.C. Code Ann. §§ 1-201 to 1-299.7 (1992 Repl.) ("Self-Government Act"), because it allegedly altered the jurisdiction of the District of Columbia courts; *fn4" Therefore, plaintiff argued, the DCPPA was unconstitutional. See Def.'s [Second] Mot. To Dismiss, Ex. B, at 6-12. Dano also argued in its motion to dismiss its appeal that the CAB "was not the proper forum to hear Dano's breach of contract claims," id. at 14, and that it "was entitled to a trial de novo " on its breach of contract claims, id. at 18.

 Defendant filed an opposition to Dano's motion to dismiss its appeal, responding to Dano's constitutional claims and its claims that the CAB lacked jurisdiction to hear its appeal from the adverse decision of the Contracting Officer. See Def.'s [Second] Mot. To Dismiss, Ex. C. On January 13, 1992, the Court of Appeals denied Dano's motion to dismiss its appeal. On February 23, 1993, the Court of Appeals issued an opinion affirming the decision of the CAB. Dano Resource Recovery, Inc. v. District of Columbia, 620 A.2d 1346 (D.C.), cert. denied, 510 U.S. 931, 126 L. Ed. 2d 308, 114 S. Ct. 343 (1993) ("Dano II"). Plaintiff petitioned the Supreme Court for a writ of certiorari to the Court of Appeals. Plaintiff's petition for writ of certiorari presented the following question:

 
Whether the enactment by the District of Columbia City Council of the Procurement Practices Act of 1985, which purports to grant exclusive jurisdiction over disputes between contractors and the District of Columbia to the District of Columbia Contract Appeals Board, and which thereby deprives the District of Columbia trial courts of jurisdiction over breach of contract claims brought by contractors against the District, was beyond the authority delegated to the Council by the District of Columbia Home Rule Act.

 Def.'s [Second] Mot. To Dismiss, at 4. The Supreme Court denied plaintiff's petition for a writ of certiorari on October 18, 1993. See Dano Resource Recovery, Inc. v. District of Columbia, 510 ...


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