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Jones and Associates, Inc., and James Jones v. the District of Columbia

July 18, 2011

JONES AND ASSOCIATES, INC., AND JAMES JONES, PLAINTIFFS,
v.
THE DISTRICT OF COLUMBIA, AND ROQUE GERALD, DEFENDANTS.



The opinion of the court was delivered by: John D. Bates United States District Judge

MEMORANDUM OPINION

Jones and Associates, Inc., ("J&A") and Dr. James Jones (collectively, "plaintiffs") have brought suit against the District of Columbia and Roque Gerald, Director of the District Child and Family Services Agency ("defendants"), regarding contracts J&A had with the District to provide independent living services to older youth in the D.C. foster care system. Jones is suing both "[i]ndividually and [i]n [his] [c]apacity as CEO" of J&A, and J&A is suing on its own behalf and on behalf of foster care youth who qualify for its services. Am. Compl. [Docket Entry 7] at 1. Plaintiffs' only federal claim is that defendants' contracting process has violated their Fifth Amendment due process rights.*fn1 The vast majority of plaintiffs' suit consists of various contract claims under D.C. law. Defendants have moved to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). They argue that J&A does not have standing to sue on behalf of foster care youth who qualify for its supervision and that Jones does not have standing to sue in his individual capacity. Defendants also contend that plaintiffs fail to state a claim in any of their six counts. Significantly, defendants argue that because plaintiffs fail to state a federal claim, this Court "should decline to exercise supplemental jurisdiction over any of plaintiffs' remaining claims." Defs.' Mot. to Dismiss [Docket Entry 11] at 13.

For the reasons detailed below, the Court finds that plaintiffs fail to state a federal claim. Moreover, the Court declines to exercise supplemental jurisdiction over plaintiffs' remaining D.C.-law claims. Hence, the case will be dismissed in its entirety.

BACKGROUND

J&A has provided independent living program (ILP) services to foster care youth between the ages of sixteen and twenty-one for the District of Columbia's Child and Family Services Agency since 2003. Am. Compl. ¶¶ 5-6. Plaintiffs allege that defendants underpaid them for ILP services that plaintiffs rendered between 2004 and 2009. Specifically, plaintiffs contend that during the 2004 to 2005 contract period, the District of Columbia "threaten[ed] J&A with" a series of "'take it or leave it' deal[s]," and insisted on a significantly lower rate than J&A's best offer. Id. ¶ 35. Plaintiffs allege that they signed these contracts with the District "under protest."

¶¶ 52, 55. With respect to contracts between 2005 and 2008, plaintiffs maintain that defendants engaged in a "bait and switch" scheme whereby they would accept a proposed price for services and then unilaterally reduce that price. Id. ¶¶ 55, 70, 76, 83. Moreover, plaintiffs contend that they rendered services for the first week of 2009 without payment. Id. ¶¶ 87-91.

Finally, plaintiffs allege that they "(J&A and Dr. Jones) made a series of loans to [d]efendant (CFSA) as mandated by" D.C. Mun. Regs. tit. 29, § 6307.2(d) (2011). Id. ¶ 93. That regulation provides that in order to operate an ILP, an operator, such as J&A, must show "[d]ocumentation of sufficient funds on hand to operate the independent program for at least three months." D.C. Mun. Regs. tit. 29, § 6307.2(d). Plaintiffs state that "J&A has made repeated requests to the [d]efendant (CFSA) for repayment of these loans." Id. ¶ 94. To evidence these "loans," plaintiffs have attached personal checks from Jones made out to J&A and describe these checks as "funds loaned to J&A ILP." Id. Ex. 30.

Based on these allegations, Jones has brought suit both "[i]ndividually and [i]n [his] [c]apacity as CEO" of J&A and J&A has brought suit on its own behalf and on behalf of the foster care youth who qualify for its services. Plaintiffs' sole federal claim is that the "policies and practices of the [d]efendants . . . deprived [them] of . . . property rights without due process of law" in violation of the Fifth Amendment. Id. ¶¶ 96-98. Plaintiffs seek a declaration that this treatment is unconstitutional and request damages under 42 U.S.C. § 1983. Id. ¶¶ 143(a), 145. Plaintiffs also include multiple D.C.-based contract claims supported by these same allegations.

Defendants have moved to dismiss for lack of subject-matter jurisdiction and for failure to state a claim upon which relief can be granted. Defendants only object to subject-matter jurisdiction as to Jones's suit in his individual capacity and as to J&A's suit on behalf of foster care youth who qualify for its services. Although defendants contend that all of plaintiffs' claims fail to state a claim upon which relief can be granted, they specifically argue that "[i]n light of [plaintiffs'] failure to identify a viable claim under federal law, the Court should decline to exercise supplemental jurisdiction over any of [p]laintiffs' remaining claims." Defs.' Mot. to Dismiss 13.

STANDARD OF REVIEW

Under Fed. R. Civ. P. 12(b)(1), "the plaintiff bears the burden of establishing that the court has jurisdiction." Grand Lodge of Fraternal Order of Police v. Ashcroft, 185 F. Supp. 2d 9, 13 (D.D.C. 2001). A court must accept as true all the factual allegations contained in the complaint when reviewing a motion to dismiss pursuant to Rule 12(b)(1), and the plaintiff should receive the benefit of all favorable inferences that can be drawn from the alleged facts. See Leatherman v. Tarrant Cnty. Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 164, (1993); EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624-25 n.3 (D.C. Cir. 1997). However, "the court need not accept inferences drawn by plaintiffs if such inferences are unsupported by the allegations set out in the complaint. Nor must the court accept legal conclusions cast in the form of factual allegations." Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994).

With respect to a motion to dismiss for failure to state a claim, all that the Federal Rules of Civil Procedure require of a complaint is that it contain "'a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to 'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Although "detailed factual allegations" are not necessary to withstand a Rule 12(b)(6) motion to dismiss, to provide the "grounds" of "entitle[ment] to relief," a plaintiff must furnish "more than labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555-56. "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570). A complaint is plausible on its face "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S. Ct. at 1949. This amounts to a "two-pronged approach" under which a court first identifies the factual allegations entitled to an assumption of truth and then determines "whether they plausibly give rise to an entitlement to relief." Id. at 1950-51.

The notice pleading rules are not meant to impose a great burden on a plaintiff. See Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 347 (2005); see also Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512-13 (2002). When the sufficiency of a complaint is challenged by a motion to dismiss under Rule 12(b)(6), the plaintiff's factual allegations must be presumed true and should be liberally construed in his or her favor. See Leatherman, 507 U.S. at 164; Phillips v. Bureau of Prisons, 591 F.2d 966, 968 (D.C. Cir. 1979); see also Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citing Twombly, 550 U.S. at 555-56). The plaintiff must be given every favorable inference that may be drawn from the allegations of fact. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113 (D.C. Cir. 2000). However, "the court need not accept inferences drawn by plaintiffs if such inferences are unsupported by the facts set out in the complaint." Kowal, 16 ...


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