United States District Court, District of Columbia
PETITION OF THE UNITED STATES, on behalf of and for the benefit of THE SMITHSONIAN INSTITUTION, Donee.
MEMORANDUM OPINION ADOPTING REPORT &
RECOMMENDATION OF THE MAGISTRATE JUDGE
KETANJI BROWN JACKSON UNITED STATES DISTRICT JUDGE.
On
December 30, 2013, the United States, acting on behalf of the
Smithsonian Institution (“the Smithsonian”),
filed a petition in this Court to modify restrictions on a
charitable gift that Dr. Carl J. Drake gave the Smithsonian
in 1965. (See Pet. for Modification of a Restricted
Endowment Fund and Restricted Gift (“Pet.”), ECF
No. 1, at 1, 3.)[1] Dr. Drake was a former professor of
Zoology and Entomology at Iowa State College who bequeathed a
sizable and valuable collection of insect specimens to the
Smithsonian (the “Drake Collection”), as well as
almost all of his financial estate (see id.
at ¶¶ 9-12, 15, 16, 18); the latter was placed in a
trust fund known as “the Drake Foundation”
(see Id. ¶ 18). In its petition, the United
States invokes the trust law doctrines of equitable deviation
and cy pres, and requests modification of three
existing restrictions on the Drake Collection and Drake
Foundation: (1) the requirement that the museum use Drake
Foundation funds only to acquire additional specimens of the
suborder of insect known as Hemiptera-Heteroptera; (2) the
requirement that the Smithsonian keep the Drake Collection
separate and apart from other Hemiptera-Heteroptera specimens
housed at the Smithsonian; and (3) the requirement that the
Smithsonian not loan out Hemiptera-Heteroptera specimens from
the Drake Collection. (See Pet. ¶¶ 33-46;
see also Id. ¶¶ 15, 19 (laying out
restrictions).)[2]
Before
this Court at present is the United States' petition and
its motion for summary judgment concerning its request to
modify the restrictions on Dr. Drake's bequest.
(See Pet; Mot. for Summ. J., ECF No. 3; see
also Mot. to Supp. Summ. J. Record, ECF No. 5.) On July
17, 2018, this Court referred this matter to a Magistrate
Judge for full case management, and the Clerk's Office
randomly assigned the case to Magistrate Judge G. Michael
Harvey. (See Min. Order of July 17, 2018; Min. Entry
of July 17, 2018.) On July 10, 2019, Magistrate Judge Harvey
issued a 42-page Report and Recommendation
(“R&R”) that recommends that this Court grant
the United States' petition and motion for summary
judgment, in part. (See R&R, ECF No.
9.)[3]
In the
R&R, Magistrate Judge Harvey thoughtfully and extensively
reviews the United States' request to modify certain
restrictions governing the Smithsonian's use of the Drake
Collection and Drake Foundation funds and carefully considers
whether or not this Court should grant the petition. (See
generally R&R.) In particular, the R&R first
addresses three threshold issues: the source of the
Court's jurisdiction over a case that “involves
determining the extent of the Smithsonian's obligation to
comply with the conditions of Dr. Drake's will”
(id. at 17); the applicability of the Uniform Trust
Code and District of Columbia trust law (see id. at
19-21); and the appropriateness of the United States'
request to proceed ex parte (see id. at
21-25). Magistrate Judge Harvey rightly concludes that,
because the Smithsonian seeks to proceed under section 55 of
Title 20 of the United States Code, see 20 U.S.C.
§ 55 (provision of the Smithsonian charter authorizing
the acceptance of money and other property by gift or
bequest), the Court has federal question jurisdiction under
section 1331 of Title 28 of the United States Code (see
Id. at 17), and that this matter constitutes a
justiciable case or controversy “because the United
States seeks to do something it is currently barred from
doing” (id. at 18). The R&R also correctly
determines that the Uniform Trust Code is applicable; that
Dr. Drake's will should be interpreted according to D.C.
trust law; and that it is appropriate for the United States
to proceed with its petition ex parte. (See
id. at 19-25.)
Magistrate
Judge Harvey next considers the merits of the United
States' petition. The R&R finds that regulatory
changes and institutional challenges have rendered
impracticable the condition that the Smithsonian use the
Drake Foundation funds only to purchase
Hemiptera-Heteroptera. (See id. at 30-31.)
Therefore, it recommends applying cy pres to modify
the conditions on the Smithsonian's use of funds from the
Drake Foundation. (See id. at 28-31.) Turning to the
United States' proposals for alternate uses of Drake
Foundation Funds, the R&R then recommends that this Court
allow the funds to be used to support scientific research
into the Hemiptera-Hoptera and to maintain the entire
Smithsonian Hemiptera-Hopetera collection. (See id.
at 31-36.) However, Magistrate Judge Harvey concludes that a
modification that permits Drake Foundation funds to be used
“‘to purchase cabinets, drawers, and other
standard entomological museum supplies, '” as the
petition requests, is too far removed from Dr. Drake's
intended use of the money from his estate. (Id. at
36 (quoting Pet. at 3).)
Regarding
the specimens of the Drake Collection, the R&R finds that
“modifying the requirement to maintain the Drake
Collection separate from the rest of the Smithsonian's
Hemiptera-Heteroptera [collection] is warranted because the
requirement is wasteful[, ]” given the museum's
limited storage space and modern museum practice.
(Id. at 38-39.) But the R&R recommends denying
the United States' request to allow the Smithsonian to
loan out specimens from the Drake Collection, because the
United States “has not introduced any evidence”
that this restriction “is impossible, impracticable, or
wasteful.” (Id. at 40.)
Finally,
Magistrate Judge Harvey's R&R specifically alerts the
United States of the requirement that any objections to his
findings and conclusions must be filed in writing within 14
days. (See Id. at 42.) The R&R further informs
the United States that any objections “must
specifically identify the portion of the report and/or
recommendation to which objection is made, and the basis for
such objections.” (Id.) It also advises
“that failure to file timely objections to the findings
and recommendations set forth in this report may waive [the]
right of appeal from an order of the District Court that
adopts such findings and recommendation.”
(Id.)
After
Magistrate Judge Harvey issued the R&R summarized above,
the United States filed a notice that it did not object to
Magistrate Judge Harvey's conclusions, but requested that
this Court deny its request to permit the Smithsonian to lend
out specimens from the Drake Collection without
prejudice. (See Notice of No. Objection to the
Mag. J.'s Proposed Findings & Recommendations, ECF
No. 10, at 1.) This Court concludes that Magistrate Judge
Harvey has thoroughly considered the issues raised in this
action and has made reasonable findings and recommendations
that comport with the evidence presented, and the Court will
grant the United States' request.
Consequently,
and especially in light of the fact that the United States
does not object to the R&R's recommendations, this
Court will ADOPT the attached R&R's
findings and conclusions in full. The Court will also
GRANT IN PART and DENY IN PART the United
States' motion for summary judgment. The motion will be
granted insofar as the Smithsonian will be permitted to use
funds from the Drake Foundation to support scientific
research into Hemiptera-Heteroptera and to curate and
maintain the Smithsonian's entire Hemiptera-Heteroptera
collection. The Smithsonian will also be permitted to
integrate the Drake Collection into its other collection of
Hemiptera-Heteroptera specimens, rather than keeping the
Drake Collection separate. The summary judgment motion is
denied insofar as the Smithsonian will not be permitted to
use Drake Foundation funds to purchase cabinets, drawers, and
other supplies to house the Smithsonian's
Hemiptera-Heteroptera collection, nor will the Smithsonian be
allowed to lend out specimens from the Drake Collection. The
Court's denial of the Smithsonian's petition with
respect to loans of Drake Collection specimens is without
prejudice.
A
separate Order consistent with this Memorandum Opinion will
follow.
APPENDIX
A
Civil
Action No. 1:13-mc-1454 (KBJ/GMH)
REPORT
AND RECOMMENDATION
This
case is about death, bugs, and trust law. Specifically, at
his death in 1965, renowned entomologist Dr. Carl J. Drake
gave to the Smithsonian Institution (“the
Smithsonian”) his extensive collection of
Hemiptera-Heteroptera, a suborder of insects known as
“true bugs.” Dr. Drake also gave to the
Smithsonian the residue of his estate, which was valued at
approximately $250, 000 in the 1960s and is now worth more
than $4 million. Dr. Drake's will included a number of
restrictions. It required the Smithsonian to maintain the
specimens in Dr. Drake's collection apart from its other
Hemiptera-Heteroptera holdings and not to loan them out. It
also required the Smithsonian to spend funds from Dr.
Drake's residuary gift only on acquiring additional
Hemiptera-Heteroptera specimens. Because it believes
complying with these restrictions is now impracticable or
wasteful, the United States has filed a petition on behalf of
the Smithsonian seeking relief from them under the trust law
doctrines of cy pres and equitable deviation.
This
case was referred to the undersigned for a Report and
Recommendation. Pending before the Court are (1) the petition
for modification of a restricted endowment fund and
restricted gift and (2) a motion for summary judgment. After
reviewing the entire record, [1] the undersigned recommends that
the Court grant in part and deny in part the United
States' motions.
I.
BACKGROUND
A.
Hemiptera-Heteroptera, the Smithsonian, and Dr. Drake's
Will
Hemiptera-Heteroptera
is the scientific name for a suborder of insects also known
as “true bugs.” ECF No. 5-1 at 2. The suborder
includes all manner of bugs including cicadas, plant bugs,
water bugs, stink bugs, and bed bugs.[2] The fossil record and
genetic testing suggest Hemiptera-Heteroptera emerged on this
planet over 200 million years ago, sometime in the Triassic
period.[3]These creatures have persisted across
millennia over a period that included several mass-extinction
events on Earth.[4] At least for Hemiptera-Heteroptera, it is
true that “life finds a way.”[5]
In
1846, little more than 170 years ago-a flash in ecological
terms-Congress established the Smithsonian “for the
increase and diffusion of knowledge among men.” 20
U.S.C. § 41. Congress directed that the Smithsonian
would serve as the federal government's central
repository for “all objects of art and of foreign and
curious research, and all objects of natural history, plants,
and geological and mineralogical specimens belonging to the
United States.” 20 U.S.C. § 50. Congress
authorized the Board of Regents of the Smithsonian to obtain
new “specimens in natural history, geology, or
mineralogy” either by purchase or by donation.
Id. Congress also authorized the Smithsonian to
“receive money [and] other property by gift, bequest,
or devise” so long as it uses these non-appropriated
funds in a manner “best suited for the promotion of the
purpose of the testator.” 20 U.S.C. §§ 55,
56.
Not
quite three decades after the establishment of the
Smithsonian, in 1883, Carl J. Drake was born in Seneca
County, Ohio. ECF No. 2-1 at 2. As a young man, Carl Drake
studied at Heidelberg College for two years before graduating
from Baldwin-Wallace College in Berea, Ohio. Id. He
completed a master's degree at the Ohio State University
and attained his Ph.D. from Syracuse University. Id.
A professor of zoology and entomology, Dr. Drake taught at
Syracuse for four years before moving to Ames, Iowa, where he
taught at Iowa State University for twenty more. Id.
Over the course of his academic career, Dr. Drake became
world-renowned as an entomologist. Id. Dr. Drake
traveled the world in service of his entomological research,
and, after retiring from active teaching, he spent the last
twenty or so years of his life working with the Smithsonian.
Id. An avid collector of Hemiptera-Heteroptera
specimens, Dr. Drake obtained over the course of his life an
extensive private collection of that suborder of insects. ECF
No. 3-2 at 2.
In
December 1956, when he was 73 years old, Dr. Drake signed a
document titled “Agreement” and drafted and
signed his will in Ames, Iowa. ECF No. 1-1 at 5; ECF No. 1-2
at 2.[6] The agreement provided that Dr.
Drake's collection of Hemiptera-Heteroptera (“the
Drake Collection”) would “be presented to the
Smithsonian Institution as a permanent deposit subject to the
provision that he will exercise full control over the use and
further development of this collection during his
lifetime.” ECF No. 1-2 at 2. The agreement further
stated that “unrestricted title” in the Drake
Collection would vest “in the Smithsonian, subject to
such provisions concerning use and further development of
said collection as are provided in Dr. Drake's will, the
provisions of this will being fully known to both
parties.” Id. The agreement also stated that
the Smithsonian would provide facilities for the storage of
the Drake Collection and for Dr. Drake's “continued
studies and use of the collection.” Id.
Dr.
Drake's will provided, in relevant part:
I hereby give, devise and bequeath to the Smithsonian
Institute of Washington, D.C. my entire Hemiptera-Heteroptera
collection, on condition, however, that the said collection
shall be kept intact as a separate unit, and that the
specimens therein shall not be loaned out or sold to other
institutions or individuals. The entire collection, however,
shall be available for scientific study by institutions or
individuals accredited for that purpose by the Smithsonian
Institute.
. . . .
All of the rest, residue, and remainder of my estate, real or
personal, of which I die seized or possessed, I give, devise
and bequeath to the Smithsonian Institute of Washington, D.C.
to be used and administered by the said institute, in a
manner as follows:
A. Said assets, whether in cash or in securities shall be
placed in a trust fund to be known as the Drake Foundation.
B. The Directors of the institute shall have full control of
the management and investment of said funds.
C. The income from the said funds shall be used by the
institute as follows:
a. For the purchase of specimens and collections of
Hemiptera-Heteroptera to be added to my collection. I direct
that the man in charge of the Hemiptera-Heteroptera shall
determine and recommend the purchases to be made. During the
first 10 years 50% of the income shall be used for that
purpose and the balance added to the principal.
b. After the first 10 years, 75% of the income shall be used
for that purpose and the balance added to the principal.
ECF No. 1-1 at 3-4.
Early
the next year, Dr. Drake moved to Washington, D.C. to accept
an appointment as an Honorary Research Associate at the
Smithsonian. ECF No. 1 at 3. Dr. Drake spent the next eight
years working at the Smithsonian, until his death in 1965.
Id. His will was then filed in probate court in
Washington, D.C., along with an unsigned copy of the 1956
agreement. Id. By letter to the attorney for Dr.
Drake's estate, the Smithsonian accepted all legacies
specified in the will. ECF No. 1 at 5; ECF No. 1-3 at 2. The
Smithsonian has since managed the funds from the proceeds of
Dr. Drake's estate-valued at approximately $250, 000 in
1969-under the name “the Drake Foundation.” ECF
No. 1 at 5; ECF No. 3-2 at 4. The Smithsonian has maintained
the Drake Collection in Washington, D.C. since Dr.
Drake's death. ECF No. 1 at 5.
B.
The Drake Collection
The
Drake Collection is kept within the Department of Entomology
at the Smithsonian's National Museum of Natural History.
ECF No. 3-2 at 3. The National Museum of Natural History is
“a bureau of the Smithsonian.” Crowley v.
Smithsonian Inst., 636 F.2d 738, 741 (D.C. Cir. 1980).
Smithsonian employees use the collections at the Department
of Entomology “for research and dissemination of
knowledge, including scholarly papers, public exhibits, and
responses to queries from other government agencies, the
media, and the general public.” ECF No. 3-2 at 2. The
Department of Entomology routinely hosts visiting researchers
from around the world and also loans parts of its collections
to qualified researchers domestically and internationally.
Id. While in Dr. Drake's lifetime transporting
insect specimens was difficult and routinely led to their
destruction, advances in safe handling and transportation
techniques have made insect lending commonplace today.
Id. at 7-8. Additionally, entomological researchers
for the U.S. Department of Agriculture and U.S. Department of
Defense use the Department of Entomology's collections to
research the ways insects affect agriculture and spread
disease. Id. at 2. Since 1995, the Department of
Entomology's Hemiptera-Heteroptera collection, including
the Drake Collection, has been curated by Dr. Thomas J.
Henry, a research entomologist for the U.S. Department of
Agriculture. ECF No. 8-1 at 2. It is currently uncertain who
will take over these responsibilities should Dr. Henry
retire. Id.
The
Drake Collection is “broad” and
“scientifically significant, ” comprising
approximately 30% of the Smithsonian's total
Hemiptera-Heteroptera collection, which is itself “one
of the most scientifically valuable collections in the world
in terms of its size and representation of species.”
ECF No. 3-2 at 3, 7. Several decades ago, the Smithsonian
integrated “a small part” of the Drake Collection
consisting of specimens of Plant Bugs into the rest of the
Department of Entomology's Hemiptera-Heteroptera Plant
Bug collection, evidently “to facilitate a research
project.” Id. at 8 n.2. The remainder of the
Drake Collection is maintained as a separate unit, and the
specimens in it are currently arranged separately from those
of similar family, genus, and species in the rest of the
Smithsonian's Hemiptera-Heteroptera collection.
Id. at 8.
According
to the Smithsonian's entomologists, maintaining the Drake
Collection separate from the rest of the
Hemiptera-Heteroptera is inefficient and inconsistent with
modern museum practice because specimens should be arranged
taxonomically rather than by accession source. Id.
Keeping Drake Collection specimens separate “doubles
the number of trips to the collections that researchers have
to make to retrieve specimens and to record biological data,
such as the countries in which a species occurs.”
Id. Over time, this arrangement makes research less
efficient and causes “wasted effort [that] does not
make sense.” Id. at 9. Additionally, keeping
the Drake Collection specimens separate from the rest of the
Smithsonian's Hemiptera-Heteroptera collection takes up
approximately 20-25% more storage space than integrating the
collections would, making inefficient use of the Department
of Entomology's already scarce collection space. ECF No.
8-1 at 9-10. As of 2014, the Department expected to
exhaust its collection space at the National Museum of
Natural History by about 2024. ECF No. 3-2 at 9.
Maintaining
the collections separately also leads to inefficient upkeep
of the specimens because “[c]uration of one collection
. . . often necessarily neglects curation of the
other.” ECF No. 8-1 at 10. For example, the Smithsonian
has recently endeavored to integrate a collection of 95, 000
aquatic bug specimens purchased with Drake Foundation funds
into the Drake Collection. Id. at 3, 10. This
curation process involves relabeling existing Drake
Collection specimens, updating their names, adding new
species, and cataloging them in databases. Id. at
10. Yet, because the Drake Collection is maintained
separately from the Smithsonian's broader
Hemiptera-Heteroptera collection, all of this curation work
will need to be replicated separately for the aquatic bugs
not in the Drake Collection. Id. According to the
Smithsonian, if the two collections were merged, “it
would be much more efficient, and less wasteful, to curate
all the Heteroptera holdings, Drake and non-Drake, in a
single process.” Id.
C.
The Drake Foundation
The
Drake Foundation funds were valued at approximately $250, 000
in January 1969, some four years after Dr. Drake's death.
ECF No. 3-2 at 4. The terms of Dr. Drake's will grant the
Smithsonian “full control of the management and
investment of said funds.” ECF No. 1-1 at 4. For the
first ten years of the Drake Foundation's existence, the
will required the Smithsonian to reinvest 50% of the income
from the Drake Foundation into the fund's principal, and
since 1979 has required the Smithsonian to reinvest 25% of
the fund's annual income. Id. The will requires
the Smithsonian to use the rest of the income from the funds
“[f]or the purchase of specimens and collections of
Hemiptera-Heteroptera to be added to [the Drake Collection],
” with the person “in charge of the
Hemiptera-Heteroptera [to] determine and recommend the
purchases to be made.” Id. The Smithsonian has
used Drake Foundation funds to acquire new
Hemiptera-Heteroptera specimens both by purchasing
collections and by funding field collection. The amount of
Drake Foundation funds the Smithsonian has spent each year
has declined substantially since 2005, as illustrated in the
table below:
-
Fiscal Year
|
Income Payout
|
Expenditures
|
Income Unspent
|
Percent of Income Payout Spent
|
2003
|
$93, 983.34
|
$205, 851.16
|
($111, 867.82)
|
219.03%
|
2004
|
$94, 993.77
|
$94, 001.94
|
$991.83
|
98.96%
|
2005
|
$96, 846.42
|
$102, 546.82
|
($5, 700.40)
|
105.89%
|
2006
|
$97, 043.25
|
$48, 358.32
|
$48, 684.93
|
49.83%
|
2007
|
$98, 244.17
|
$8, 382.42
|
$89, 861.75
|
8.53%
|
2008
|
$102, 789.96
|
$22, 052.12
|
$80, 737.84
|
21.45%
|
2009
|
$108, 273.28
|
$14, 662.40
|
$93, 610.88
|
13.54%
|
2010
|
$109, 804.96
|
$6, 643.67
|
$103, 161.29
|
6.05%
|
2011
|
$111, 233.95
|
$17, 246.03
|
$93, 987.92
|
15.50%
|
2012
|
$113, 280.58
|
$30, 166.89
|
$83, 113.69
|
26.63%
|
2013
|
$139, 406.69
|
$9, 922.30
|
$129, 484.39
|
7.12%
|
2014
|
$135, 896.18
|
$15, 789.62
|
$120, 106.56
|
11.62%
|
2015
|
$138, 539.90
|
$3, 622.01
|
$134, 917.89
|
2.61%
|
2016
|
$146, 477.59
|
$3, 870.34
|
$142, 607.25
|
2.64%
|
2017
|
$162, 886.19
|
$19, 471.66
|
$143, 414.53
|
11.95%
|
2018
|
$178, 367.63
|
$0.00
|
$178, 367.63
|
0.00%
|