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Bannum, Inc. v. Citizens for a Safe Ward Five

August 10, 2005


The opinion of the court was delivered by: Paul L. Friedman United States District Judge


This matter came before the Court on defendants' motion to dismiss or, in the alternative, for summary judgment and on plaintiff's motion to dismiss defendants' counterclaim. Upon consideration of the motions, oppositions, replies, and the entire record in this case, the Court granted defendants' motion for summary judgment on Counts III, IV, V, VI and VII and dismissed the remainder of the plaintiff's claims (Counts I and II) as moot by Order of March 31, 2005. The Court also granted plaintiff's motion to dismiss defendants' counterclaims. This Opinion explains the reasoning of the Court's earlier Order.


Plaintiff Bannum Incorporated is a Kentucky corporation in the business of operating Community Corrections Centers ("CCCs") around the United States. See First Amended Complaint ("Compl.") ¶ 8. Bannum bids for contracts to operate CCCs with the United States Bureau of Prisons ("BOP") on a competitive basis and operates 17 CCC facilities nationwide. See Compl. ¶¶ 8-10. At issue in this case is a CCC Bannum proposed to construct and operate in Ward 5 in Northeast Washington, D.C.

Defendants are Citizens for a Safe Ward Five ("Ward Five"), Darryle A. Carter, Advisory Neighborhood Commission 5B ("ANC5B"), and Regina James. Ward Five is a corporation organized under the laws of the District of Columbia that opposes the location of Bannum's CCC in Ward 5. See Compl. at 3. Darryle Carter is a community activist and a resident of Ward 5. See id. ANC5B is an advisory neighborhood commission that also opposes the location of a Bannum's CCC in Ward 5. See id.*fn1 Regina James is an ANC5B commissioner. See id.

In March and April 2000, plaintiff received two Requests for Proposals ("RFPs") from the BOP for Bannum to provide CCC services in Washington, D.C. The BOP requested that Bannum submit a bid proposal containing, among other things, a description of a suitable facility that would meet all zoning requirements, as well as documentation of local zoning officials' concurrence with the proposed CCC. See Compl. ¶¶ 9-10; see also Ex. 5 to Defendants' Memorandum of Points and Authorities in Support of its Motion to Dismiss and/or in the Alternative for Summary Judgment ("Def. Mot. Dism."). Bannum located an acceptable property in Ward 5, a warehouse located at 2210 Adams Place, N.E., in the District of Columbia. The warehouse is located in a district zoned for commercial light manufacturing (zoning designation C-M-2). See Def. Mot. Dism. at 1.

In furtherance of its bid proposal, Bannum negotiated a lease for the proposed CCC site and began contacting District of Columbia government officials and community leaders in an attempt to secure zoning approval. See Compl. ¶¶ 11-12. In December 2000, Bannum, through counsel, wrote a letter to then Zoning Administrator Michael Johnson stating its position that Bannum could operate the CCC as a "matter of right" in the C-M-2 zone. See Letter from Carolyn Brown to Michael Johnson (Dec. 11, 2000) ("Johnson Concurrence"), Ex. 7 to Def. Mot. Dism.

Bannum categorized the proposed CCC as a "[t]emporary detention or correctional institution on leased property," which under District of Columbia Municipal Regulations could operate as of right in a district zoned C-M "for a period not to exceed three (3) years." See D.C. MUN. REG. tit 11 § 801.7(k). By contrast, "halfway houses," or "community-based residential facilities" ("CBRFs"), have no right to operate in a C-M district without approval of the Board of Zoning Adjustment ("BZA"). See D.C. MUN. REG. tit 11 § 801.2; D.C. MUN. REG. tit 11 § 199.1 (defining CBRFs to include halfway houses).*fn2 Plaintiff stated in its letter (and has maintained since) that the proposed CCC at Adams Place would be a temporary correctional institution rather than a CBRF and therefore could operate in Ward 5 as a matter of right, so the project could proceed without BZA approval. See Johnson Concurrence.

Mr. Johnson concurred in writing with Bannum's assertions about the zoning classification of the proposed facility. See Johnson Concurrence. In November 2001, Bannum contacted then Acting Zoning Administrator Olutoye Bello and also received his concurrence.

See Letter from Carolyn Brown to Olutoye Bello (Nov. 26, 2001), Ex. 8 to Def. Mot. Dism. In its letters, Bannum referred to the proposed facility as a "residential Community Corrections Center." In addition to contacting community leaders and zoning officials, Bannum also paid for two round trip air-fares to Orlando, Florida for two officials of ANC5B, Rhonda Chappelle and James Bowser, in June 2002. See Black v. District of Columbia, Civil No. 03-1639, Transcript (D.C. Super. April 4, 2003), Ex. 11 to Def. Mot. Dism. The ostensible purpose of the trip was to allow Chappelle and Bowser to inspect Bannum's CCC operations in Florida.

Bannum was the only bidder on the project that complied with the conditions of the RFPs, and on November 16, 2001 the BOP awarded Bannum a contract for the proposed CCC. See Compl. ¶¶ 13-14. In October 2002, Bannum applied to the District of Columbia Department of Consumer and Regulatory Affairs ("DCRA") for a permit for the construction of a 150-bed CCC.*fn3 The permit was granted on December 12, 2002.

In January 2003, defendants Darryle Carter and Ward Five began to notify the community of Bannum's proposal to operate a CCC in Ward 5. See Def. Mot. Dism. at 4. Ward Five released a flyer advertising a community meeting to discuss the proposed CCC, stating that Bannum planned to bring "criminals including sex offenders, arsonists and child molesters into our community." See Ex. 13. to Def. Mot. Dism. On February 8, 2003, Ward Five released another flyer stating that Bannum had attempted to "buy local official's [sic] votes by taking them to Orlando, Florida" and that Bannum had used "intentional deception" to gain zoning approval. Compl. ¶ 15. Residents of Ward 5 began to express concern over the close proximity of the CCC to an elementary school, the prospect of felons coming into their community, and the possible impact on property values. See Def. Mot. Dism. at 4. Some residents also believed that Bannum improperly had circumvented zoning laws by obtaining a permit for the CCC without seeking BZA approval. See Ex. 13 to Def. Mot. Dism.

In their public campaign to stop the Bannum project, defendants claimed that plaintiff had sought to circumvent the legal requirement of BZA approval by improperly characterizing its project as a "temporary detention or correctional institution." Defendants claimed that the CCC was actually a halfway house properly categorized as a CBRF and therefore subject to BZA review. See Def. Mot. Dism. at 2, 6.

On January 13, 2003, Ward 5 Councilmember Vincent Orange wrote to DCRA director David Clarke, protesting the DCRA's issuance of a building permit to Bannum on the ground that the 5-year term of the BOP contract exceeded the 3-year period in which Bannum could operate its CCC as a matter of right, even assuming that BZA approval was not required for the project. See Letter from Vincent Orange to David Clarke (Jan. 13, 2003), Ex. 14 to Def. Mot. Dism. While maintaining that Bannum's operation of the CCC in Ward 5 was consistent with zoning regulations, Clarke agreed to modify Bannum's certificate of occupancy so that it would expire in three years. See Letter from David Clarke to Vincent Orange (Jan. 31, 2003), Ex. 16 to Def. Mot. Dism. The DCRA issued a revised building permit on January 17, 2003, indicating that the use of the facility was limited to three years. See Appeal No. 16998 of Advisory Neighborhood Commission 5B, Order (D.C. Bd. Zoning Adjustment Sept. 9, 2003) ("BZA Decision") at 6, Suppl. Ex. 27 to Defs. Mot. Dism.

On January 24, 2003, ANC5B appealed to the BZA the DCRA's issuance of a permit to Bannum. See Memorandum from Regina James to BZA, Ex. 15 to Defs. Mot. Dism. Regina James, Darryle Carter and other residents of Ward 5 then filed suit in the Superior Court of the District of Columbia, seeking an injunction to prevent the DCRA from issuing a final occupancy permit to Bannum and to stop Bannum from operating the facility.

See id.

On April 8, 2003, Superior Court Judge Neal Kravitz denied defendants' request for injunctive and declaratory relief. See Black v. District of Columbia, Civil No. 03-1639, Order Denying Plaintiffs' Motion for Preliminary Injunction Pendente Lite (D.C. Super. April 8, 2003). Judge Kravitz was not persuaded that defendants would be irreparably harmed and noted that "it remains unclear whether the Bannum facility is properly viewed under the District's zoning law as a 'community based residential facility' or as a 'temporary detention or correctional institution.'" See id. at 4. He stated, however, that in the absence of a BZA determination on the issue, plaintiffs could not demonstrate success on the merits of their claims. See id. at 4-5.

On the day of the Superior Court's ruling, Bannum filed its complaint in this Court, asserting claims of libel, tortious interference with contracts and business relations, and abuse of process and seeking declaratory, injunctive and compensatory relief. On April 17, 2003, plaintiff filed a motion for a temporary restraining order and preliminary injunction to prevent defendants' further "interference with plaintiff's business relationship," and to prevent them ...

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