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District of Columbia v. Greene

September 05, 2002

DISTRICT OF COLUMBIA, PETITIONER,
v.
THE HONORABLE NATALIA M. COMBS GREENE, ET AL., RESPONDENTS.
VERIZON SOUTH, INC., PETITIONER,
v.
DISTRICT OF COLUMBIA CONTRACT APPEALS BOARD, RESPONDENT.
DISTRICT OF COLUMBIA, APPELLANT,
v.
VERIZON SOUTH, INC., APPELLEE.



Petition for Review of a Decision of the Contract Appeals Board (CAB D-1182) Appeal from the Superior Court of the District of Columbia (CA-8563-01) (Hon. Natalia M. Combs Greene, Trial Judge)

Before Farrell and Ruiz, Associate Judges, and Nebeker, Senior Judge.

The opinion of the court was delivered by: Per Curiam

Argued August 16, 2002

The District of Columbia and Verizon South, Inc. *fn1 have a dispute arising out of a contract for services entered into in 1999 in anticipation of computer-generated problems resulting from the Y2K bug. The District claims that Verizon South did not fully perform and Verizon South claims that the District still owes $2 million. The substance of their contract claims has not been finally decided, however, because of a preliminary disagreement over the proper forum to resolve the contract dispute. In short, Verizon South claims that the parties agreed to submit their contract disputes to arbitration and the District contends it did not so agree because it could not. *fn2 We tend strongly to agree with the District that the proper forum to resolve the question of whether there is an agreement to arbitrate is, in the first instance, the Contract Appeals Board, with recourse to this court, and, further, that the District is likely to succeed on the question of arbitrability. Thus we enjoin the parties from proceeding to arbitration so that we may preserve our jurisdiction to finally decide the issue.

The procedural history of this case reflects a fast and furious pace of filings and counter-filings in different fora: the Superior Court, the American Arbitration Association, and the Contract Appeals Board (CAB). As a result, we have several pending matters for resolution: the District's petition for mandamus directed to the Superior Court judge who ordered the parties to arbitration; the District's appeal from the Superior Court's denial of its motion to alter or amend the order compelling arbitration on the ground that the Superior Court lacked jurisdiction; Verizon South's petition for review of the CAB's decision that it has primary jurisdiction over the matter and the District's request that we enjoin the parties from proceeding to arbitrate. We need not involve ourselves in the procedural complexities of our review of the Superior Court's order as we treat the matter as if it were an original request by the District for injunctive relief. *fn3 In granting that request, we necessarily determine that Verizon South's petition for review of the CAB's interlocutory decision asserting jurisdiction is premature as it is not "plainly in excess of its delegated powers." Bender v. District of Columbia Dep't of Employment Servs., 562 A.2d 1205, 1209 (D.C. 1989).

The All Writs Act

"The All Writs Act provides that `all courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.'" District of Columbia v. Group Ins. Admin., 633 A.2d 2, 14 (D.C. 1993) (quoting 28 U.S.C. § 1651 (a) (1988)). The Act "does not constitute a concurrent basis for original jurisdiction" and is "designed to grant relief in extraordinary circumstances." District of Columbia v. L.G. Indus., 758 A.2d 950, 955 (D.C. 2000). As the Supreme Court has observed:

decisions of this Court "have recognized a limited judicial power to preserve the court's jurisdiction or maintain the status quo by injunction pending review of an agency's action through the prescribed statutory channels. . . . Such power has been deemed merely incidental to the courts' jurisdiction to review final agency action . . . ." FTC v. Dean Foods Co., 384 U.S. 597, 604 (1966) (quoting Arrow Transp. Co. v. Southern Ry. Co., 372 U.S. 658, 671 n.22 (1963)).

We also have recognized this power to issue preliminary injunctions under the All Writs Act in order to preserve our appellate jurisdiction pending the completion of administrative review, see Capitol Hill Hosp. v. District of Columbia State Health Planning & Dev. Agency, 600 A.2d 793, 799 (D.C. 1991), and in the Superior Court to preserve its jurisdiction to review the CAB's final decision in a bid protest, see Group Ins. Admin., 633 A.2d at 15. In this case, there is no question that our appellate jurisdiction is implicated in the ultimate resolution of the issues of 1) the jurisdiction of the CAB to decide, in the first instance, the arbitrability of contract disputes under the District of Columbia Procurement Practices Act, D.C. Code § 2-301.01 et seq. (2001) (PPA), and 2) whether such contract disputes are arbitrable. See D.C. Code § 2-309.05 (vesting D.C. Court of Appeals with exclusive jurisdiction to review decisions of CAB on claims arising from government contracts) and D.C. Code § 11-722 (2001) (vesting exclusive jurisdiction in D.C. Court of Appeals to decide "contested cases").

In determining whether to exercise our power of injunction under the All Writs Act, an extraordinary remedy, we consider whether the moving party, in this case the District, has "clearly demonstrated" (1) that there is a substantial likelihood [it] will prevail on the merits; (2) that [it] is in danger of suffering irreparable harm during the pendency of the action; (3) that more harm will result to [it] from the denial of the injunction than will result [to Verizon South] from its grant; and, in appropriate cases, (4) that the public interest will not be disserved by the issuance of the requested order. Group Ins. Admin., 633 A.2d at 21 (quoting Wieck v. Sterenbuch, 350 A.2d 384, 387 (D.C. 1976)).

1. Likelihood that the District will succeed on the merits

The District argues in effect that it never agreed to arbitrate disputes arising under the contract with Verizon South, because the PPA vests sole authority to hear such disputes in the CAB, and under well-settled agency principles, the District cannot be bound by the ultra vires act of a contracting officer purporting to agree to arbitration. Verizon South responds, first, that nothing in the PPA prohibits the District from agreeing to submit contract disagreements to arbitration; and second, that if the statute indeed precludes that means of dispute resolution, the Federal Arbitration Act (FAA) preempts the local statute by generally barring states from interfering with the execution of private arbitration agreements. With respect to both parts of Verizon South's argument, we conclude that the District is substantially likely to prevail on the merits.

A. The Statute

As the District points out, the PPA could scarcely be plainer in establishing the CAB as the exclusive hearing tribunal for determination of government contract disputes of the kind underlying this controversy. D.C. Code § 2-308.03 (a)(1) states that, in the first instance, "[a]ll claims by the District government against a contractor arising under or relating to a contract shall be decided by the contracting officer . . . ." In like fashion, § 2-308.05 (a) provides that "[a]ll claims by a contractor against the District government arising under or relating to a contract shall be . . . submitted to the contracting officer for a decision." In § 2-309.03 (a), the statute goes on to declare that "[t]he [Contract Appeals] Board shall be the exclusive hearing tribunal for, and shall have jurisdiction to review and determine de novo: . . . (2) Any appeal by a contractor from a final ...


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