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Banneker Ventures LLC v. Graham

United States District Court, District of Columbia

December 22, 2016

BANNEKER VENTURES, LLC, Plaintiff,
v.
JIM GRAHAM, et al., Defendants.

          OPINION

          ROSEMARY M. COLLYER United States District Judge

         Banneker Ventures, LLC (Banneker) is a developer that had an exclusive right to negotiate with Washington Metropolitan Area Transit Authority (WMATA) for the lease and development of certain real property, but failed to reach a final agreement. In this lawsuit, Banneker alleges tortious interference with contract and business expectancy and civil conspiracy. Defendant Jim Graham moves to dismiss. The motion will be denied.

         I. FACTS

         The facts are set forth in detail in this Court's prior opinion and the opinion of the D.C. Circuit and will not be repeated here. See Banneker Ventures, LLC v. Graham, 798 F.3d 1119, 1124-28 (D.C. Cir. 2015) (Banneker II); Banneker Ventures, LLC v. Graham, 19 F.Supp.3d 231, 238-42 (D.D.C. 2014) (Banneker I).

         On August 18, 2015, the D.C. Circuit reversed this Court's decision granting Mr. Graham's motion to dismiss based on absolute immunity and remanded for additional briefing.

         The Circuit specified that:

[o]n remand, the district court should evaluate, for each action complained of: (1) whether the alleged action, if established at trial, would be one that manifestly exceeded the scope of Graham's official duties or was carried out through manifestly excessive means; or (2) whether the alleged action, if established at trial, would manifestly violate any statute, regulation, or policy governing WMATA Board Members' conduct. Any action that would be unauthorized under either standard is unprotected by immunity. The district court should therefore evaluate whether the actions that it concludes would not be immunized, taken together, state a claim against Graham for tortious interference or civil conspiracy.

Banneker II, 798 F.3d at 1145. Consistent with the Circuit opinion, the Court permitted limited discovery into Mr. Graham's official duties and, following completion of that discovery, Mr. Graham again moved to dismiss all claims against him. See Graham 2nd Mot. [Dkt. 88]. Banneker opposed, see Opp'n [Dkt. 90], and Mr. Graham replied, see Reply [Dkt. 92].[1] The motion is ripe for review.

         A. Mr. Graham's Official Duties

         Mr. Graham's official duties as a member of the WMATA Board can be determined through review of a combination of documents: (1) the WMATA Compact, Graham 2nd Mot., Ex. 1 [Dkt. 88-2] (Compact); (2) Procedures for WMATA Board of Directors, Graham 2nd Mot., Ex. 4 [Dkt. 88-5] (WMATA Board Procedures & Standards of Conduct); (3) Standards of Conduct for Members of the WMATA Board of Directors, id.; and (4) the Joint Development Policies and Guidelines, Graham 2nd Mot., Ex. 6 [Dkt. 88-7] (Joint Development Guidelines). First, the WMATA Compact is the document that governs the practice and procedure of WMATA, including the role of its Board of Directors. The Compact proscribes that the Board shall “adopt rules and regulations governing its meeting, minutes and transactions, ” and provides specific rules to limit conflicts of interest. Compact at 3, 4. The following official duties are also included in the sections of the Compact dealing with particular actions and roles of WMATA:

(1) “The Board shall develop and adopt, and may from time to time review and revise, a mass transit plan for the immediate and long-range needs of the Zone, ” id. at 6;
(2) “It shall be the duty and responsibility of each member of the Board to serve as liaison between the Board and the body which appointed him to the Board, ” id.;
(3) “[T]he Board shall create technical committees concerned with planning and collection and analyses of data relative to decision-making in the transportation planning process, ” id.;
(4) “Before a mass transit plan is adopted, altered, revised or amended, the Board shall transmit such proposed plan, alteration, revision or amendment for comment” to a number of agencies, id. at 7;
(5) The Board may temporarily borrow funds, see id. at 10;
(6) “The Board shall annually adopt a capital budget, including all capital projects it proposes to undertake or continue during the budget period, ” id. at 11;
(7) “The Board shall annually adopt a current expense budget for each fiscal year, ” id.;
(8) The Board may take a number of actions with respect to bonds, both selling and purchasing, see id. at 13-15;
(9) “The Board shall have power to execute agreements, leases and equipment trust certificates with respect to the purchase of facilities or equipment such as cars, trolley buses and motor buses, or other craft, ” id. at 15;
(10) “The Board shall enter into an operating contract only after formal advertisement and negotiations with all interested and qualified parties, including private transit companies rendering transit service within the Zone, id. at 19; and
(11) “The Board is authorized to locate, construct and maintain any of its transit and related facilities in, upon, over, under or across any streets, highways, freeways, bridges and any other vehicular facilities, ” id. at 29.

         As required by the Compact, the WMATA Board developed and adopted its own set of procedures, which include the following official duties of the Board:

The WMATA Board of Directors determines agency policy and provides oversight for the funding, operation and expansion of transit facilities within the Transit Zone.
The authority of the Board of Directors is vested in the collective body and not in its individual members. Accordingly, the Board, in establishing or providing any policies, orders, guidance, or instructions to the General Manager or WMATA staff, shall act as a body. No member individually shall direct or supervise the General Manager or any WMATA employee or contractor.

         WMATA Board Procedures & Standards of Conduct at 1. Attached as Appendix 1 to the Procedures of the WMATA Board were the Standards of Conduct for Members of the WMATA Board of Directors. See id. at 10. The Standards specify how Board members should conduct themselves to avoid appearances of impropriety or conflicts of interest. While the Standards do not specifically denote official duties of the Board, they do impose restrictions on the power and authority of the Board members. The following Standards of Conduct are relevant to the Court's analysis:

(1) “It is imperative that Board Members in their private financial relationships and in their official conduct strictly avoid engaging in actions which create conflicts of interest or the appearance of a conflict of interest. It is likewise imperative that Board Members act impartially in their official conduct by avoiding any actions which might result in favored treatment or appearances thereof. . . . Each Board Member while acting in his/her capacity as a WMATA Board Member, has a duty to place the public interest foremost in any dealings involving WMATA, ” id. at 12;
(2) “Under the Compact, Board Members shall not (1) be financially interested, either directly or indirectly, in any contract, sale, purchase, lease or transfer of real or personal property to which the Board or the Authority is a party; (2) in connection with services performed within the scope of their official duties, solicit or accept money or any other thing of value in addition to the compensation or expenses paid to him by the Authority; (3) offer money or any thing of value for or in consideration of obtaining an appointment, promotion or privilege with the Authority, ” id.;
(3) “No Board Member nor household member may singly or in combination, be a party nor any or all of them have a direct financial interest in a party with an actual or prospective business relationship with the Authority, ” id.;
(4) “Except [if the gratuity is unsolicited and valued less than $75 or in connection with a widely attended gathering], a Board Member or household member shall not solicit or accept anything of value from a party with an actual or prospective business relationship with the Authority, ” id. at 13;
(5) “Board Members shall not use, nor give the appearance that they are using, their official position with the Authority in a manner inconsistent with their responsibilities to the Authority, ” id. at 14; and
(6) “Board members shall not: (1) use or permit others to use information not generally available to the public obtained from the Authority through the Board Member's official position with the Authority to further the direct or indirect financial interests of a Board Member, any household member, a Member's business associates, or any party to any actual or prospective financial transaction with the Authority; [or] (2) disclosure or permit others to disclose to anyone outside the Authority information obtained through their official position with the Authority and not generally available to the public except where and to the extent necessary to fulfill the Board Member's public responsibility, ” id.

         The final relevant document containing official duties of the WMATA Board is the WMATA Joint Development Policies and Guidelines, which specifically addresses duties with respect to joint development projects. See Joint Development Guidelines. The WMATA Board's roles and responsibilities are specifically set out in the guidelines as follows:

The WMATA Board of Directors establishes joint development policies, exercises specific approvals within the joint development process, and maintains oversight of the joint development program. The Board has specific responsibilities to authorize joint development solicitations, approve developer selection and a non-binding term sheet based on a staff recommendation, and approve terms of a lease or sales agreement (the final contract) with the designated developer. Additionally, the WMATA Board authorizes a public hearing, prior to final site plan approval by the ...

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