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Council of Dist. of Columbia v. Gray

United States District Court, D. Columbia.

May 19, 2014

VINCENT C. GRAY, in his official capacity as Mayor of the District of Columbia, and JEFFREY S. DeWITT, in his official capacity as Chief Financial Officer for the District of Columbia, Defendants

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[Copyrighted Material Omitted]

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For Council of The District of Columbia, Plaintiff, Counter Defendant: Breanne A. Gilpatrick, LEAD ATTORNEY, PRO HAC VICE, Brian D. Netter, LEAD ATTORNEY, MAYER BROWN LLP, Washington, DC; Karen L. Dunn, LEAD ATTORNEY, Alexander Platt, BOIES, SCHILLER & FLEXNER, LLP, Washington, DC.

For Vincent C. Gray, Mayor of the District of Columbia, Defendants, Counter Claimant: Nicholas Alan Bush, Andrew J. Saindon, DC OFFICE OF THE ATTORNEY GENERAL, Washington, DC.

For Jeffrey S. Dewitt, CFO of the District of Columbia, Defendant, Counter Claimant: Andrew J. Saindon, LEAD ATTORNEY, Nicholas Alan Bush, D.C. OFFICE OF ATTORNEY GENERAL, Washington, DC.

For Alice M. Rivlin, Thomas M. Davis, Anthony A. Williams, Amici: Richard Bress, LEAD ATTORNEYS, LATHAM & WATKINS LLP, Washington, DC.

For Carolyn B Lamm, Ronald Jessamy, Charles Miller, Paul Smith, Daniel Solomon, Bruce Spiva, Marc Fleischaker, Amici: Lorelie S. Masters, LEAD ATTORNEY, Perkins Coie LLP, Washington, DC.

For Dc Appleseed Center For Law & Justice, Dc Vote, D.C. For Democracy, Dc Fiscal Policy Institute, League of Women Voters of The District of Columbia, Amici: Barbara S. Wahl, LEAD ATTORNEY, ARENT FOX, LLP, Washington, DC.

For Jacques B. Depuy, Jason I. Newman, Daniel M. Freeman, Linda L. Smith, Amici: Kenneth A. Letzler, LEAD ATTORNEY, ARNOLD & PORTER LLP, Washington, DC.

For Bipartisan Legal Advisory Group of The United States House of Representatives, Amicus: Kerry William Kircher, LEAD ATTORNEY, U.S. HOUSE OF REPRESENTATIVES, Office Of The General Counsel, Washington, DC.

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EMMET G. SULLIVAN, United States District Judge.

In 2012, the Local Budget Autonomy Act of 2012 (hereinafter " Budget Autonomy Act" ), D.C. Law 19-321, 60 DCR 1724, was enacted by the Council of the District of Columbia (hereinafter " Council" ), signed by Mayor Vincent C. Gray, and ratified by voters of the District of Columbia (hereinafter " District" ) in an April 2013 referendum. The law, if upheld, would grant the District the right to spend its local tax and fee revenue without seeking an annual appropriation from Congress. Mayor Gray and Jeffrey S. DeWitt, Chief Financial Officer for the District of Columbia (hereinafter " CFO" ), both passionate advocates for budget autonomy, have refused to implement the Budget Autonomy Act. Although they wholeheartedly agree with the Council as a matter of policy, they do not agree that the Budget Autonomy Act is valid as a matter of law. On the basis of this refusal, the Council has sued the Mayor and the CFO in their official capacities. The Council seeks a declaration that the Budget Autonomy Act is valid, and an injunction compelling the Mayor and the CFO to comply with the law.

The fight for budget autonomy in the District is not new. The District has had a measure of control over its own affairs since the enactment of the Home Rule Act in 1973, and has been fighting -- unsuccessfully -- for budget autonomy ever since. In 1981, Congressional Delegate Walter Fauntroy introduced the District of Columbia Budget Autonomy Act, which would, if passed, have ended the congressional appropriation requirement for locally derived funds. Similar bills have been introduced in nearly every Congress thereafter. As recently as 2011 and 2012, bills were introduced in the House and the Senate that would have provided for local control of the local portion of the District's budget.[1] These efforts have continued even after the Budget Autonomy Act purportedly became effective. The President has included budget autonomy for the District in his fiscal year 2013, 2014, and proposed 2015 budgets, and yet another

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bill was introduced in Congress on April 10, 2014.

Despite this long history of seeking budget autonomy through Congress, the Council now argues that since the Home Rule Act was enacted in 1973, it has possessed the authority to grant itself control over its own local spending. This argument, which the Council advances for the first time in this litigation, simply cannot withstand judicial scrutiny. As more fully set forth below, it is contrary to the plain language of the Home Rule Act, which prohibits the Council from changing the role of the federal government in the appropriation of the total budget of the District. It cannot be reconciled with the legislative history of the Home Rule Act, during which Congress explicitly considered, and rejected, budget autonomy for the District. And it violates a separate federal statute, the Anti-Deficiency Act, which prohibits District employees from spending public money unless it has been appropriated by Congress.

This case presents a unique situation in which all involved strongly support the policy of budget autonomy for the District of Columbia. Indeed, the policy arguments advanced by the Council are extraordinarily powerful. As all District residents know, the budget procedure in the Home Rule Act makes for extremely difficult governance in the District. First, Congress habitually fails to enact a budget by the start of the October 1 fiscal year; it has done so on only three occasions in the last 25 years. In the remaining 22 years, Congress has either passed a continuing resolution or no budget at all, leading to a shutdown. Second, because of the lengthy congressional appropriations process, the District budget is necessarily outdated by the time it is enacted by Congress. Finally, the uncertainty in the congressional appropriations process often negatively impacts assessment of the District's finances by bond rating agencies. Notwithstanding these challenges, the District has demonstrated an unprecedented track record of fiscal responsibility in recent years, including seventeen balanced budgets, sixteen years of clean financial audits, and a reduction in the federal portion of the District's budget from over 40 percent to only one percent. The Council makes a compelling argument that the time has come for budget autonomy.

As a native Washingtonian, the Court is deeply moved by Plaintiff's argument that the people of the District are entitled to the right to spend their own, local funds. Nevertheless, the Court is powerless to provide a legal remedy and cannot implement budget autonomy for the District. Notwithstanding the sound policy preferences of conscientious District lawmakers, members of Congress, and the President, the Court must interpret and apply the law as enacted. Both Congress and the President have expressed their support for budget autonomy for the District, but have failed to act to achieve that goal. Congress has plenary authority over the District, and it is the only entity that can provide budget autonomy.

In sum, having carefully considered the parties' cross motions for summary judgment, the responses and replies thereto, the submissions by amici, the supplemental briefing requested by the Court, the applicable law, the oral argument, and the record as a whole, Plaintiff's motion for summary judgment is DENIED and Defendants' cross motion for summary judgment is GRANTED. Mayor Vincent C. Gray, CFO Jeffrey S. DeWitt, the Council of the District of Columbia, its officers, agents, servants, employees, and all persons in active concert or participation with them who receive actual notice of the injunction, are hereby permanently ENJOINED

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from enforcing the Local Budget Autonomy Act of 2012 pending further order of the Court.

I. Factual and Procedural Background

A. Local Autonomy in the District of Columbia and the Home Rule Act

The District of Columbia is " an exceptional community . . . established under the Constitution as the seat of the National Government." District of Columbia v. Murphy, 314 U.S. 441, 452, 62 S.Ct. 303, 86 L.Ed. 329 (1941). The Constitution grants Congress the power to " exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square), as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States." U.S. Const., Art. I, § 8, cl. 17. Pursuant to that authority, Congress established the District of Columbia in 1801. See District of Columbia Organic Charter Act, ch. 15, 2 Stat. 103 (1801). The City of Washington was incorporated in 1802, and a local government authorized to provide services was established. Plaintiff's Mem. of Points and Authorities in Support of Motion for Summary Judgment or Remand (hereinafter " Pl.'s MSJ" ) at 3. From 1802 to about 1871, the local powers of the District were expanded, and there was a trend toward increased self-government. Id. ; see also Jason I. Newman & Jacques B. DePuy, Bringing Democracy to the Nation's Last Colony: The District of Columbia Self-Government Act, 24 AM. U. L. REV. 537, 541 (1975) (hereinafter " Newman & DePuy" ). In 1871, Washington City, Georgetown, and Washington County were merged to create the District of Columbia, and Congress granted greater home rule authority to the District. During that time, the Organic Act provided for a District Governor, appointed by the President, and a legislature that could exercise limited power. See District of Columbia v. John R. Thompson Co., 346 U.S. 100, 104-05, 73 S.Ct. 1007, 97 L.Ed. 1480 (1953). However, this gradual increase was temporary, and in 1874 Congress imposed a commission system to govern the District. Adams v. Clinton, 90 F.Supp.2d 35, 47 n. 19 (D.D.C. 2000), aff'd, 531 U.S. 941, 121 S.Ct. 336, 148 L.Ed.2d 270 (2000). In 1878, Congress repealed the home rule provisions of the Organic Act and disbanded the territorial government entirely; the District was henceforth to be governed by a three-person commission appointed by the President. Id. Under this system of Government, " [l]egislative powers . . . ceased, and the municipal government [was] confined to mere administration." Metro R.R. Co. v. District of Columbia, 132 U.S. 1, 7, 10 S.Ct. 19, 33 L.Ed. 231 (1889). From 1878 to the 1970s, Congress exercised its plenary power through direct legislation for the District, with very little input from District residents. Banner v. United States, 303 F.Supp.2d 1, 4 (D.D.C. 2004), aff'd, 428 F.3d 303, 368 U.S. App.D.C. 224 (D.C. Cir. 2005).

This continued until 1973, when Congress enacted the District of Columbia Self-Government and Governmental Reorganization Act, Pub. L. No. 93-198, 87 Stat. 774 (1973) (codified as amended at D.C. Off. Code § 1-201.01 et seq.), now known as the " Home Rule Act." Pl.'s MSJ at 4. The Home Rule Act was a compromise, granting " the people of the District of Columbia an opportunity in exercising their rights once more and yet with adequate safeguards for the Federal interest component." Home Rule for the District Columbia, 1973-1974: Background and Legislative History of H.R. 9056, H.R. 9682, and Related Bills ...

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