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Washington, D.C. Association of Realtors, Inc., et al v. District of Columbia

May 24, 2012

WASHINGTON, D.C. ASSOCIATION OF REALTORS, INC., ET AL., APPELLANTS,
v.
DISTRICT OF COLUMBIA, APPELLEE.



Appeal from the Superior Court of the District of Columbia Civil Division CAB-3775-09 (Hon. Alfred S. Irving, Jr., Trial Judge)

The opinion of the court was delivered by: Glickman, Associate Judge:

Argued May 3, 2012

Before GLICKMAN, FISHER, and BECKWITH, Associate Judges.

Appellants -- the Washington, D.C. Association of Realtors, Inc., the Greater Capital Area Association of Realtors, Inc., and the Greater Washington Commercial Association of Realtors, Inc. -- contend that the Council of the District of Columbia violated the Home Rule Act when it directed the transfer of monies from the Real Estate Guarantee and Education Fund to the District of Columbia's General Fund for the purpose of balancing the District's budget for Fiscal Year 2009. Appellants further assert that the diversion of funds contravened the Real Estate Licensure Act of 1982, the legislation that created the Real Estate Fund. In an effort to undo the transfer and to void subsequent special assessments levied to replenish the Real Estate Fund, appellants sued the District in Superior Court, seeking declaratory and injunctive relief. The Superior Court rejected appellants' arguments, upheld the lawfulness of the Council's actions, and granted summary judgment to the District. Because we agree that the Council acted within its legislative authority under the Home Rule Act and in accordance with law, we affirm the judgment of the Superior Court.

I. Factual and Statutory Background

In November 2008, facing unexpected revenue shortfalls and needing to meet its statutory obligation to present a balanced budget to Congress,*fn1 the Council commenced a series of remedial measures. The Council adopted the Fiscal Year 2009 Balanced Budget Support Emergency Declaration Resolution of 2008, which declared the existence of a fiscal emergency and outlined the steps that would be taken to meet it.*fn2 Next, the Council enacted the Fiscal Year 2009 Balanced Budget Support Emergency Amendment Act of 2008.*fn3 This Act (hereinafter referred to as the "December 2008 Act") directed the Chief Financial Officer to transfer the available balances in a total of 69 designated "O-type," or special, funds*fn4 to the District's General Fund,*fn5 "[n]otwithstanding any other provision of law limiting the use of O-type funds for special purposes."*fn6 Pursuant to this directive, a total of $48 million was transferred to the General Fund, including $3,252,618 from the Real Estate Guarantee and Education Fund (hereinafter, the "Real Estate Fund").

As the December 2008 Act was passed as emergency legislation, it was effective only for 90 days from its enactment.*fn7 However, the Council also enacted the Fiscal Year 2009 Balanced Budget Temporary Amendment Act of 2008*fn8 through the non-emergency legislative process.*fn9 This Act confirmed the transfers of special fund balances to the General Fund.*fn10 (The Act took effect on March 21, 2009, nineteen days after the December 2008 Act expired, but the interim period was covered by additional emergency legislation.*fn11

The Real Estate Fund, the only special fund at stake in the present litigation, was established by the District of Columbia Real Estate Licensure Act of 1982 for the purpose of "compensat[ing] victims of unlawful real estate practices."*fn12 To achieve that goal, the Licensure Act requires all licensed real estate brokers, salespersons, and property managers to pay a fee (in an amount to be established by the Mayor) for deposit into the Real Estate Fund.*fn13 Whenever the balance in the Fund falls below a predetermined minimum, the Mayor is required to assess each licensee an amount, not to exceed $50 during any license year, to replenish it.*fn14 In order to fulfill that obligation after the transfer of over $3.2 million from the Real Estate Fund to the General Fund, the Mayor directed the Board of Real Estate*fn15 to collect a supplemental $50 fee from each licensee in January 2009.

That directive triggered the instant litigation. Appellants are three associations of realtors that do business in the greater Washington, D.C., area, including licensed brokers, salespersons, and property managers who were subject to the supplemental assessment. On their behalf, appellants filed suit in Superior Court in May 2009, asking the court to declare the December 2008 Act violative of the Home Rule Act and the Real Estate Licensure Act; to enjoin the District from transferring monies from the Real Estate Fund to the General Fund and require the District to replace the monies already withdrawn for that purpose; and to enjoin further special assessments to replenish the Real Estate Fund and require the District to refund the special assessments already paid. The trial court granted the District's motion for summary judgment. Concluding that the Home Rule Act did not prohibit the Council from directing the transfer of monies in the Real Estate Fund and other special funds to the District's General Fund, the court refused to "second guess" such a legislative budgetary decision "absent clear authority showing the means employed to be invalid." The court further held that nothing in the Real Estate Licensure Act prohibited the funds transfer.*fn16

II. Legal Analysis

Whether the Council had the authority to direct the transfer of monies from the Real Estate Fund and other special funds to the General Fund is purely a legal question -- primarily one of statutory interpretation. There are no genuine issues of material fact, and the dispute was ripe for resolution on motion for summary judgment. Accordingly, our review of the trial court's legal determination in favor of the District is de novo.*fn17

In passing the District of Columbia Home Rule Act,*fn18 Congress declared its intent, inter alia, to "grant to the inhabitants of the District of Columbia powers of local self-government . . . and, to the greatest extent possible, consistent with the constitutional mandate [of Article I], relieve Congress of the burden of legislating upon essentially local District matters."*fn19 In furtherance of this goal, Congress directed that the legislative power of the District, which it vested in the Council, "shall extend to all rightful subjects of legislation within the District consistent with the Constitution of the United States and the provisions of [the Home Rule] Act . . . ."*fn20 In view of this broad delegation of authority and the policy of the Home Rule Act, we have held that limitations on the Council's legislative authority will be construed narrowly.*fn21

The Home Rule Act operates much like a state constitution, and it specifies that the Council has no authority to pass any act contrary to its provisions.*fn22 Appellants claim that the Council transgressed this limitation. They argue that § 450 of the Home Rule Act bars the Council from moving monies from special funds to the District's General Fund. We do not agree.

In ยง 450, Congress established the General Fund of the District and provided for special funds as well. ...


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