d.c. council motion to intervene

8/7/2019 D.C. Council Motion to Intervene

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SUPERIOR COURT OF THE DISTRICT OF COLUMBIA

CIVIL DIVISION

__________________________________________

)

BANNEKER VENTURES, LLC, )

)Plaintiff, )

)

v. ) Case No. 2010 CA 06067

)

DISTRICT OF COLUMBIA, ) Judge Alfred Irving, Jr.

)

Defendant. )

_________________________________________ )

MEMBERS OF THE COUNCIL

OF THE DISTRICT OF COLUMBIAMOTION TO INTERVENE

Pursuant to Super. Ct. Civ. R. 24, the Members of the Council of the District of Columbia,

by and through undersigned counsel, respectfully move to intervene in the above-referenced matter.

Pursuant to Super. Ct. Civ. R. 12-I(a), the undersigned counsel discussed the subject motion with

counsel for each of the parties, who did not consent to the relief requested herein.

A proposed order granting the requested relief, and a proposed Opposition to the Joint Motion

for Consent Judgment, required by Super. Ct. Civ. R. 24(c), are attached.

In support of this motion, the Members of the Council rely upon the statements and argument set

forth in the accompanying memorandum of supporting points and authorities.

WHEREFORE, the Members of the Council respectfully request that the Court grant its motion

to intervene.

DATE: November 29, 2010 Respectfully submitted,

___/s/_____________________

BRIAN K. FLOWERS #358241

General Counsel


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Council of the District of Columbia

1350 Pennsylvania Avenue, N.W.

Washington, D.C. 20001

(202) 724-8026 (o) 724-8129 (facsimile)[email protected]

_/s/_____________________________

JOHN HOELLEN #450354

Deputy General [email protected]
mailto:[email protected]:[email protected]


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1


CIVIL DIVISION

__________________________________________

)


)

Plaintiff, )

)

v. ) Case No. 2010 CA 06067

)


)

Defendant. )

_________________________________________ )

MEMORANDUM OF POINTS AND AUTHORITIES

IN SUPPORT OF MEMBERS OF THE COUNCILOF THE DISTRICT OF COLUMBIA

MOTION TO INTERVENE

Pursuant to Super. Ct. Civ. R. 24, the Members of the Council of the District of

Columbia, by and through counsel, respectfully move to intervene in the above-captioned matter

for the reasons set forth in this memorandum.

In support of the motion to intervene, the Members of the Council of the District of

Columbia (Council Intervenors) state as follows:

STATEMENT OF THE CASE

1. This is a breach of contract action filed by Banneker Ventures, LLC, alleging that the

District of Columbia government breached a settlement agreement entered into on July 1, 2010,

to settle claims related to District of Columbia Housing Enterprises Contract No. 2009-05 for the

performance of project management services (Banneker contract). Complaint 2, 3, and 13-15.

2. The Banneker contract was a contract obligating the District government to make

payments in excess of $1 million during a 12-month period. Section 451 of the District of


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2

Columbia Home Rule Act, which is the Districts Charter, empowers and requires the

Council to approve or disapprove contracts obligating the District government to pay more than

$1 million during a 12-month period. D.C. Official Code 1-204.51.

3. The Banneker contract was not submitted to the Council prior to the award of the

contract and the initiation of work under the contract. Work began under the proposed Banneker

contract on or about May of 2009, but the proposed contract was not transmitted to the Council

for its approval or disapproval until December 10, 2009.

4. The Council acted quickly to initiate an investigation, partly because of the Executive

Branchs continued refusal during the fall of 2009 to transmit the contract to the Council for its

review and possible ratification, as required by section 451, until the Council provided

assurances to the Executive Branch that the Council would ratify the contract.

5. On November 2, 2009, pursuant to the broad authority conferred upon the Council by

section 413 of the District of Columbia Home Rule Act to investigate any matter relating to the

affairs of the District, the Committee on Libraries, Parks and Recreation passed the Committee

on Libraries, Parks and Recreation Budget Transparency Investigation Authorization Resolution

of 2009. The committee subsequently authorized a Special Counsel to conduct an investigation

into possible malfeasance in the awarding, execution, and implementation of the Banneker

contract. The investigation by the Special Counsel is ongoing, but is expected to conclude by the

end of the calendar year.

6. On December 10, 2009, the Mayor transmitted to the Council a proposed act to ratify

the Banneker contract. The emergency legislation transmitted by the Mayor pursuant to his

power under the District of Columbia Home Rule Act, was designated as Bill 18-569. On


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1 See Contracts for Project Management and General Contractor Services for the Revitalization

of District Recreation Centers, Schools, and Public Parks Approval and Payment AuthorizationEmergency Act of 2009, effective January 4, 2010 (D.C. Act 258; 57 DCR 334). Section 5 of the act

stated that pursuant to section 451 of the District of Columbia Home Rule Act, approved December 24,

1973 (87 Stat. 803; D.C. Official Code 1-204.51), and notwithstanding the requirements of section

105a of the District of Columbia Procurement Practices Act of 1985, effective March 8, 1991 (D.C. Law

8-257; D.C. Official Code 2-301.05a), Contract No. 2009-05 with Banneker Ventures for project

management services for the renovation of certain recreation centers is disapproved.

3

December 15, 2009, the Council voted unanimously to disapprove the proposed Banneker

contract as part of its adoption of Bill 18-569. On December 18, 2009, the bill adopted by the

Council was transmitted to the Mayor for his signature or veto as required by the District of

Columbia Home Rule Act. The Mayor signed the act on January 4, 2010 (D.C. Act 18-258).1

7. On or about December 21, 2009, representatives of the Executive Branch of the

District government met with Banneker representatives to negotiate settlement of claims

Banneker believed it had against the District government as a result of the disapproval of the

Banneker contract by the Council on December 15, 2009. Complaint, 18.

8. On December 24, 2009, during the 10-day period allotted by the District of Columbia

Home Rule Act for a Mayor to sign or veto an act adopted by the Council, a payment of $2.5

million was made by the District to Banneker pursuant to a settlement agreement entered into the

same day between Banneker Ventures, LLC and Regan Associates, LLC, and DC Housing

Enterprises and the District of Columbia Housing Authority. Early inquiries made as part of the

Council investigation focused upon the validity and appropriateness of the December 24, 2009

settlement agreement and the expedited payment made pursuant to that agreement. The Council

was not notified of the settlement or the payment until after both acts were done deeds.

9. On July 1, 2010, the District executed the settlement agreement at issue in this case

and the subject of the Joint Motion for Consent Judgment filed November 16, 2010. The


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2 Bill 19-949, the District Settlement Payment Integrity Emergency Act of 2010.

4

settlement agreement was executed on behalf of the District by the Attorney General for the

District of Columbia, who also was in charge of the negotiations that led to its execution.

10. The July 1, 2010 settlement agreement calls for the District to make 2 payments to

Banneker to resolve any and all claims Banneker may have related to the Banneker contract. It

also unconditionally releases Banneker and Regan from any and all claims the District might

have against either of the general contractors relating to the Banneker contract that had been

disapproved by the Council on December 15, 2009, and was at the time, and continues to be, the

subject of an ongoing investigation by the Special Counsel appointed by the Council. The

settlement agreement expressly states:

The District hereby remises, releases, and forever discharges Banneker and Regan,

each of their successors and assigns, and any other person claiming by, through, or

under Banneker or Regan, of and from all agreements, actions, cases, causes of

action, claims, compromises, controversies, costs, damages, debts, demands,

disputes, expenses, judgments, liabilities, payments, promises, and suits of any

nature whatsoever . . . WITHOUT EXCEPTION, for project services for capital

projects to the District . . .

(Emphasis in original).

11. On July 13, 2010, the Council unanimously approved emergency legislation that

prohibits the District from executing a settlement of a claim, or disbursing payments under such a

settlement, related to a contract that has been disapproved by the Council and subject to an active

investigation of the Council or other authorized investigative bodies until 90 days after the

completion of the investigation.2 The measure was expressly made retroactive to June 30, 2010,

the day before the settlement agreement at issue was executed.

12. Bill 18-949 was transmitted to the Mayor for his signature or veto, but because the


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3 During a recess period of 10 or more days, the Council, under section 602 of the District of

Columbia Home Rule Act, cannot vote to override a pocket veto. The Council summer recess runs from

July 15 until September 15.

5

Mayors 10-day period for signing or vetoing the measure extended into the Councils summer

recess, the bill was subject to a pocket veto by the Mayor under section 602 of the District of

Columbia Home Rule Act. The pocket veto was effectuated when the Mayor did not return the

bill with either signature or veto.3 This process was repeated later in the summer when the

Council, by unanimous vote on August 12, 2010, passed a second, identical emergency measure

(Bill 18-974), which was pocketed vetoed by the Mayor.

13. On July 13, 2010, the last scheduled legislative meeting, before Council summer

recess, the Council approved a temporary version of the emergency legislation on the first of 2

required votes by the Council. On September 21, 2010, the Council approved Bill 18-950, the

District Settlement Payment Integrity Temporary Act of 2010, on its second and final reading

before the Council and the measure was transmitted to the Mayor for his signature or veto. The

Mayor returned the act unsigned on October 13, 2010, one day after the expiration of the 10-day

period allotted to him for signing or vetoing the bill. Because the Mayor had not exercised his

power to veto the legislation, Bill 18-950 was enacted, designated D.C. Act 18-562, and

transmitted to Congress on October 18, 2010 to begin its 30-day passive review period required

by the District of Columbia Home Rule Act. D.C. Act 18-562 is projected to complete its

congressional review period and become law on or before December 8, 2010. Its prohibition of

settlement of a claim relating to a contract that is disapproved by the Council and subject to an

authorized and pending investigation is made expressly retroactive to June 30, 2010.

14. The Council also has adopted a permanent version of the legislation. Bill 18-889,


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4 A copy of the authorizing resolution (Res. 18-678) is attached.

6

the District Settlement Payment Integrity Act of 2010, was passed unanimously on first and

second readings by the Council on November 5 and November 23, 2010. Like the emergency

and temporary versions, it makes the prohibition on a settlement of a claim relating to a contract

disapproved by the Council and subject to an authorized and pending investigation retroactive to

June 30, 2010. Bill 18-889 is pending before the Mayor for his signature or veto.

15. On August 11, 2010, Banneker filed this action against the District of Columbia for

breach of contract. Upon learning that the case had been filed, the Council began monitoring the

proceedings to determine whether its interests would be adequately protected.

16. On October 25, 2010, the case was dismissed for failure to comply with SCR-4(m).

Shortly after the case was reinstated, on November 16, 2010, the Joint Motion for Consent

Judgment was filed with the court. The Office of the Attorney General provided a courtesy copy

of the filed motion to the Councils Office of the General Counsel on November 16, 2010.

17. At its next legislative meeting, on November 23, 2010, the Council authorized its

General Counsel to file a motion to intervene in the case and to take any other action necessary to

represent and protect the interest of the Council and that of the public by ensuring that the

legislative process as mandated by the District of Columbia Home Rule Act is not distorted and

the legislative votes of the Members of the Council related to this matter are not nullified.4

ARGUMENT

Stated simply, the Council seeks to intervene in this case because it believes the

settlement agreement executed on July 1, 2010 that is the subject of this action is ultra vires, and

its execution and enforcement by officials of the Executive Branch of the District government


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has distorted the legislative process set forth in the Districts Charter and nullified the votes of

the Members of the Council acting pursuant to powers conferred upon them by the Charter.

It is the Councils position that, under the circumstances of this case, the execution of the

settlement agreement of July 1, 2010, executed on behalf of the District government by the

Attorney General for the District of Columbia, was unlawful. The practical and legal effect of the

Executive Branchs agreement to settle claims relating to a contract that had been disapproved by

the Council is to undermine and impermissibly intrude upon the Councils authority under

section 451 of the District of Columbia Home Rule Act, and to nullify the votes of the Members

of the Council duly exercised pursuant to that Charter authority. It also undermines and

impermissibly intrudes upon the Councils authority under section 413 of the District of

Columbia Home Rule Act to investigate possible malfeasance in the awarding, execution, and

implementation of the contract.

If Council Intervenors are right that the settlement agreement is ultra vires and they are

allowed to present their defenses the breach of contract action fails. If Council Intervenors are

right that the settlement agreement is ultra vires but they are not allowed to present their

defenses the settlement agreement is enforced and the Councils Charter powers to disapprove

contracts in excess of $1 million and to investigate are rendered nullities in this instance. If the

Council investigation concludes that there has been malfeasance in the execution of the contract,

the settlement agreement would preclude the District from seeking civil redress in the absence of

fraud in the procurement of the settlement agreement itself.

In sum, allowing the Executive Branch to settle a claim under a contract that has been

disapproved by the Council pursuant to its authority under section 451 of the District of


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5 The Attorney General for the District of Columbia explained his legal opinion concerning the

validity of the settlement agreement in a letter to Councilmember Phil Mendelson dated October 28,

2010. A copy of the letter was filed with the Court on November 19, 2010. The Attorney General

concludes that he believes there is no defense to the breach of contract action that could be brought in

good faith. Members of the Council obviously disagree that their contentions set forth here are frivolous,

and assert that the letter of the Attorney General further establishes that the Office of the Attorney

General is not in a position to adequately represent the interests of the Council on this matter, thereby

justifying intervention under Rule 24. The Attorney General also has a duty to inform the Mayor of theneed to appoint a special counsel to litigate a District matter normally under the control of the Attorney

General if the Attorney General determines that his or her duty to represent the public interest in a

particular matter may prevent him or her from adequately representing the government, an agency, or an

official. Section 109 of the Attorney General for the District of Columbia Clarification and Elected

Term Amendment Act of 2010, effective May 27, 2010 (D.C. Law 18-160; D.C. Official Code 1-

301.89).

8

Columbia Home Rule Act, at a time that the contract itself is the subject of an investigation

conducted by the Council pursuant to its authority under section 413 of the District of Columbia

Home Rule Act, would sanction an impermissible intrusion into the core functions of the Council

under the Districts Charter. See D.C. Official Code 1-301.44(a) (establishing Council as an

independent and coordinate branch of the District of Columbia government.);Hessey v.

Burden, 548 A.2d 1, 4-6 (analyzing separation of powers issue concerning overlapping powers

by employing tests of whether the intrusion of one branch would unduly trammel or

impermissibly burden another branchs core functions).

The Office of the Attorney General negotiated the settlement agreement at issue. It

obviously differs from the Council on the question of its legal authority to have done so.

Therefore, it is axiomatic that it is not in a position to adequately represent the interests of the

Council in this case. In fact, its filing of the Joint Motion for Consent Judgment, and its decision

not to consent to this motion to intervene, stand as proof that the Office of the Attorney General

not only disagrees with the Council Intervenors legal defenses to this action, but is unwilling to

have them presented to the court for resolution.5


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This disagreement might qualify as just a difference over legal tactics if the question

presented did not go to the heart of the Councils Charter powers and require a determination as

to whether the actions of the Executive Branch in this case, and under these unusual

circumstances, improperly intruded on those legislative powers in violation of separation of

powers principles and, in the process, nullified votes of the Members of the Council.Raines v.

Byrd, 521 U.S. 811, 823 (1997)(Coleman holding stands for proposition that legislators whose

votes would have been sufficient to defeat (or enact) a specific legislative act have standing to

sue if that legislative action goes into effect (or does not go into effect), on the ground that their

votes have been completely nullified.); Coleman v. Miller, 307 U.S. 433, 438 (1939);

Chenoweth v. Clinton, 181 F.3d 112, 1160117 (1999) (votes effectively nullified by the

machinations of the Executive can confer standing); Chavousv. District of Columbia Financial

Responsibility and Management Assistance Authority, 154 F. Supp. 2d. 40, 45-46 (D.D.C. 2001)

(Councilmembers had standing because if allegation that Control Board lacked authority to

execute a contract were proven correct, then votes of Councilmembers to disapprove contract

should have been determinative and it was the Control Boards direct override of the

Councils authority which had the effect of nullifying their votes.).

The Council Intervenors assert that the only way to resolve these critical questions is for

this court to grant the motion to intervene and let the Council Intervenors give full voice to their

arguments. At this early stage of the proceedings, with the first conference scheduled for January

14, 2011, the intervention of the Council members would not unduly delay or prejudice the

adjudication of the rights of the original parties.

I. Rule 24 intervention standards.


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6 The Council Intervenors are applying under Super. Ct. Civ. R. 24(a)(2). Rule 24(a)(1) provides

for a right to intervene when an applicable law confers an unconditional right to intervene. Super. Ct.

Civ. R. 24(a)(1).

10

A motion for intervention is governed by Rule 24 of the Superior Court Rules of Civil

Procedure. Under Rule 24, intervention may be either of right or permissive. Super. Ct. Civ.

R. 24(a) and(b). The Council Intervenors assert that they qualify for intervention under both.

Rule 24(a)(2) provides for intervention as of right if the applicant: (1) has an interest

relating to the property or transaction which is the subject of the action; (2) the protection of that

interest may as a practical matter be impaired or impeded by the disposition of the action; and (3)

the interest is not adequately represented by the existing parties.6 Vale Properties, Ltd., v.

Canterbury Tales, Inc., 431 A.2d 11 (D.C. 1981); Calvin-Humphrey v. District of Columbia, 340

A.2d 795, 798 (D.C. 1975). An applicant who satisfies these requirements is entitled to

intervene as a matter of right provided that the application itself is timely.Robinson v. First Natl

Bank of Chicago, 765 A.2d 543, 545 (D.C. 2001).

The Court of Appeals for the District of Columbia has recognized that the requirements

should be liberally interpreted. McPherson v. District of Columbia Hous. Auth., 833 A.2d 991,

994 (D.C. 2003), quoting Robinson v. First Natl Bank of Chicago, 765 A.2d 543, 544 (D.C.

2001). Courts have adopted a broad reading of the word interest for purposes of evaluating a

motion to intervene, eschewing any attempt to define precisely the nature of the interest

contemplated by the rule. Vale Properties, 431 A.2d at 14, citing Calvin-Humphrey, 340 A.2d at

798. The interest test is more of a practical guide. Vale Properties, 431 A.2d at 14; Calvin-

Humphrey, 340 A.2d 797-798 (favoring a more flexible and practical approach);Nuesse v.

Camp, 385 F.2d 694, 700 (D.C. Cir. 1967) (We know of no concise yet comprehensive


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definition of what constitutes a litigable interest for purposes of standing and intervention

under Rule 24(a)).

The court inNuesse, noting that Rule 24 is obviously tailored to fit ordinary civil

litigation, recognized that these provisions require other than literal application in atypical

cases. Id. The unusual circumstances surrounding Contract No. 2009-05, including pitting the

Executive Branchs authority to settle claims against the Councils Charter powers to approve $1

million contracts and to conduct unfettered investigations, makes this an atypical case.

Given the preferred flexible and practical approach to analyzing the nature of an interest,

the Court of Appeals has recognized the importance of focusing on the adequacy of

representation. Vale Properties, 431 A.2d at 15; Calvin-Humphrey, 340 A.2d at 800 (In our

view the focus in suits of this nature should not be on a rigid definition of the interest required

for taxpayer intervention, but on the adequacy of representation afforded by municipal

authorities.). Although there is an assumption that government officials will adequately

represent the interests of the public, that presumption does not necessarily preclude intervention:

We will indulge the presumption in most cases that government officials

adequately represent the public. We cannot agree with the appellees in this case,

however, that representation by the District must always be deemed adequate

unless it can be shown that there is collusion between the parties, that the interest

of the representative is adverse to that of the intervenor, or that the representative

has failed in his duty vigorously to prosecute or defend the suit. See United States

v. Board of School Commissioners, 466 F.2d 573 (7th Cir. 1972), cert denied, 410

U.S. 909, 93 S.Ct. 964, 35 L. Ed. 2d 271 (1973). The Supreme Court has in our

view rejected such a rigid approach to the representation requirement. In Trbovich

v. United Mine Workers, supra, the Court held that it was unnecessary for the

proposed intervenor to demonstrate that the public official on whose side he

wished to intervene had failed in fulfillment of his statutory duty of

representation. It was sufficient in that case that the representative was under two

duties which might dictate different approaches to the litigation, and that the

intervenor wanted to assert grounds in addition to those asserted by the


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representative.

Calvin-Humphrey, 340 A.2d at 801.

A presumption of adequate representation will arise, however, when an existing party

seeks the same ultimate objective as the applicant. Vale Properties, 431 A.2d at 9, citing United

States Postal Service v. Brennan, 579 F.2d 188, 191 (2nd Cir. 1978). [A] slight difference in

interests between the applicant and the supposed representative will not suffice to show

inadequacy of representation. Vale Properties, 431 A.2d at 10, quoting Nuesse, 385 F.2d at 703.

Here, there is no doubt that the objectives of the District, as represented by the Office of the

Attorney General, are not the same as those of the applicants. This is not a case where the

Council Intervenors have a friend in the litigation. SeeDistrict of Columbia v. American

University, 2 A.3d 175, 2010 D.C. App. LEXIS 491 at 25 (D.C. 2010), citing Atlantis Dev.

Corp., Ltd. v. United States, 379 F.2d 818, 825 (5th Cir. 1967).

The D.C. Circuit has held that the burden is on those opposing intervention to show that

representation for the absentee will be adequate. United States v. American Telephone and

Telegraph Co., 642 F.2d 1285 (D.C. Cir. 1980); Smuck v. Hobson, 132 U.S. App. D.C. 372, 408

F.2d 175, 181 (D.C.Cir.1969). The Court of Appeals for the District has not decided the issue of

where the burden of proof on this issue falls. Vale Properties, 431 A.2d at 15; Calvin-

Humphrey, 340 A.2d at 800, n. 20. However, the court inNuesse explained that a change in the

language of Federal Rule 24 in 1966 underscores both the burden on those opposing

intervention to show the adequacy of the existing representation and the need for a liberal


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The prior text of Rule 24 spoke in terms of whether representation by existing parties is ormay be inadequate. The present rule provides for intervention unless the applicants interest is

adequately represented by existing parties.Nuesse, 385 F.2d at 702.

8 Super. Ct. Civ. R. 24 is identical in all relevant respects to Fed. R. Civ. P. 24. Therefore,

District courts look to federal court decisions as persuasive authority in interpreting the local rule. Vale

Properties., 431 A.2d at 13, n.3 (D.C. 1981).

13

application in favor of permitting intervention.7Nuesse, 385 F.2d at 702. Courts agree that

intervention should be allowed when "there is a serious possibility that the (absentee's) interest

may not be adequately represented by any existing party."AT&T, 642 F.2d 1285, quoting Nuesse,

385 F.2d at 704.8

The circumstances in this case are analogous in critical aspects to those in Calvin-

Humphrey. In both cases, the application for intervention is based upon the intervenor seeking to

present defenses to a claim that the Districts representatives have chosen not to make. Calvin-

Humphrey, 340 A.2d at 797 (Greens principal contention in support of his effort to intervene is

that the District has by its actions to date in the pending litigation failed to make any substantive

defense to Calvin-Humphreys suit . . . Green, if permitted to intervene, intends to urge the

substantive ground that the dual assessment system employed by the District for so many years is

valid.). In reversing the trial courts denial of the motion to intervene, the court stated:

The only question before us is whether the present lawsuit should be broadened to

include the Green taxpayers, giving them an opportunity to be heard on an issue

already put in litigation. Calvin-Humphrey having attacked the legality of the use

of dual levels of assessment, and the District having refused to join issue on thequestion, we believe that the position sought to be asserted by the Green taxpayers

should be heard, and that it can be heard most efficiently and effectively in the

context of this litigation.

Calvin-Humphrey, 340 A.2d at 799-800 (citations omitted)(emphasis in original).

Both Rule 24(a) and 24(b) require that a motion to intervene be made timely. Super. Ct.


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Civ. R. 24(a) and (b). As this case is in its very early stages, with the initial scheduling

conference set for January 14, 2011, allowing the Council to intervene would not unduly delay or

prejudice the adjudication, and, therefore, it is timely. See Robinson, 765 A.2d at 545 (Trial court

incorrectly denied motion to intervene based on it not being timely filed when the motion to

intervene was filed 3 months after the complaint was filed and no proceedings had taken place

that intervention would require repeating.); cf. Vale Properties, 431 A.2d at 15 (motion to

intervene made after final judgment had been announced was not timely because (i)ntervention

at that stage necessitates an especially wasteful and duplicative expenditure of judicial

resources.).;Emmco Ins. Co. v. White House Corp., 429 A.2d 1385, 1387 (D.C. 1981)(motion

not timely when filed 4 years after filing of complaint and at time when discovery had been

completed, parties had submitted pretrial statements, and pretrial conference had commenced.)

Here, no proceedings before the court have occurred. The only argument against

intervention at this stage is that the District government, represented by the Office of the

Attorney General, has filed a consent motion for judgment to be entered against the District. The

decision to eschew presenting defenses to the action, however, underscores the need for the

Council to seek to intervene to protect its interests and that of the public. See Calvin-Humphrey,

340 A.2d at 801 (More importantly, the city has chosen not to assert, on a concrete question of

law, a defense to support their common interest in preventing the award of refunds which the

intervenors wish to present to the trial court. On the particular facts of this case, we cannot say

that the intervenors are adequately represented by the District government, notwithstanding its

good faith belief that it is acting in the best interest of the city at large.).

Rule 24(b) provides that an applicant may be permitted to intervene . . . when an


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applicants claim or defense and the main action have a question of law of fact in common.

Here, this requirement is met because Council Intervenors seek only to present defenses to the

plaintiffs only count that the District has breached the settlement agreement of July 1, 2010 by

not making payments required under its provisions.

The only other factor to be considered for permissive intervention is whether the

intervention will unduly delay or prejudice the adjudication of the rights of the original parties.

Super. Ct. Civ. R. 24(b). The analysis of this factor often merges with that for the requirement

that a motion to intervene be timely. See Emmco, 429 A.2d at 1387. As stated, the motion to

intervene is being filed at a very early stage, at a time when no proceedings have occurred.

II. Abrogation of Council Charter Powers

Section 451 of the District of Columbia Home Rule Act confers upon the Council the

power to approve or disapprove any District contract in excess of $1 million over a 12-month

period. D.C. Official Code 1-204.51. It not only confers upon the Council this power, it

requires that any contract in excess of $1 million during a 12-month period or any multiyear

contract be submitted to the Council for its approval or disapproval. A proposed contract that

has been disapproved by the Council is not a legal contract. It is void. Fairman v. District of

Columbia, 934 A.2d 438, 448 (D.C. 2007).

There is no dispute that the Banneker contract (Contract No. 2009-05) was in excess of

$1 million during a 12-month period, and, therefore, section 451 required that it be approved by

the Council prior to its award. There also is no dispute that the Banneker contract was not

timely submitted to the Council for its approval as required by section 451. Nor is it disputed

that when approval of the Council was sought some 6 months after work had begun under the


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contract the contract was disapproved.

According to plaintiffs complaint, negotiations between the Executive Branch and

Banneker to settle claims related to the Councils unanimous vote to disapprove the contract

began on December 21, 2009, 6 days after the Councils vote to disapprove. Complaint, 18.

Those negotiations resulted in a settlement agreement being executed on December 24, 2009 and

a payment of $2.5 million being disbursed that same day pursuant to that settlement agreement.

Members of the Council, who had voted to disapprove the contract 6 days earlier, and were

conducting an investigation into the awarding, execution, and implementation of the contract in

violation of section 451 of the District of Columbia Home Rule Act, were not notified of this

settlement agreement or the $2.5 million payment under it until after the fact.

According to plaintiffs complaint, negotiations continued over the next half year or so,

and ultimately culminated with the District executing the July 1, 2010 settlement now at issue.

Complaint, 18, 19, 20, 21, 22, and 23. That settlement agreement was executed on behalf of

the District by Attorney General for the District of Columbia Peter Nickles, who also was in

charge of the negotiations that led to it. On July 7, 2010, Attorney General Nickles provided a

copy of the settlement to Councilmembers Phil Mendelson, Mary Chey, and Harry Thomas, Jr.,

per their request of July 6, 2010.

The publics interest is at its zenith when a contract obligates more than $1 million in

taxpayer dollars during a 12-month period and the contract is awarded and work under it

commences without the Council having approved the contract as required by section 451 of the

District of Columbia Home Rule Act. The settlement agreement itself, and payments made

under it, effectively undermine the Councils authority under the District of Columbia Home


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9. The Attorney General has opined in his October 28, 2010 letter filed with the court on

November 19, 2010, that this law would be unconstitutional under separation of powers principles

because it purportedly usurps the authority of the Executive Branch to settle claims, and unconstitutional

17

Rule Act to approve contracts in excess of $1 million and its broad authority to conduct

investigations into District matters under section 413 of the District of Columbia Home Rule Act,

including allegations of possible misconduct by the Executive Branch or of those contracting

with the Executive Branch. The Councils legislative actions protect not only the Districts

financial interests, but also ensure that the public does not lose confidence in the awarding and

execution of public contracts.

The execution of the settlement agreement effectively nullifies the votes of the Members

of the Council to disapprove the contract.

III. Nullification of Council votes on legislation

The Council quickly and definitively responded to news of the settlement of claims under

the contract it had unanimously disapproved and that was the subject of an ongoing Council

investigation. At its next scheduled meeting, on July 13, 2010, the Council adopted legislation

that prohibits execution of a settlement agreement, or the disbursement of payments under such a

settlement, pertaining to a claim related to a contract that has been disapproved by the Council

pursuant to its authority under section 451 of the District of Columbia Home Rule Act and is

subject to an active Council investigation until 90 days after the completion of the investigation.

The temporary version of this legislation, the District Settlement Payment Integrity

Temporary Act of 2010 (D.C. Act 18-562), has not yet become law. It is expected to complete

its 30-day passive review period before Congress and become law on or before December 8,

2010 at which time, it would be applicable to this case.9 The legislation is expressly made


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under the Contracts Clause if applied to the July 1, 2010 settlement agreement because it purportedly

would substantially impair that contract. The Council disagrees with both positions, and again asks for

the opportunity to present its arguments on both questions to the court for its decision.

10See Menna v. Plymouth Rock Assur. Corp., 987 A.2d 458, 463, n.12 (When the legislature

makes clear that a new law is retroactive (i.e., applies to pending cases), an appellate court must apply

that law on appeal,District of Columbia v. Beretta U.S.A. Corp., 940 A.2d 163, 176 (D.C. 2008), unless

to do so would result in manifest injustice or engender substantial due process concerns.Holzsager v.

District of Columbia Alcoholic Bev. Control Bd., 979 A.2d 52, 57 (D.C. 2009).)

18

retroactive to June 30, 2010.10

Significantly for the purposes of this motion to intervene, the Council and the Mayor have

completed their respective constitutional functions pertaining to legislation in the case of D.C.

Act 18-562. The Council voted twice to approve the measure, as required by section 602 of the

District of Columbia Home Rule Act, and the Mayor returned it without his signature but without

veto, thereby allowing it to be enacted and transmitted to Congress. The votes of the

Councilmembers on this measure are not being nullified by the manner prescribed by the

legislative process a mayoral veto. Rather, they are being nullified by actions of Executive

Branch officials based on their opinions that the measure would be determined to be unlawful if

decided by a court. See Chenoweth v. Clinton, 181 F.3d at 117 (Pocket veto that made

ineffective a bill that both houses of Congress had approved could confer standing (b)ecause it

was the Presidents veto not a lack of legislative support that prevented the bill from

becoming law, and, therefore, one could plausibly describe the Presidents actions as a

complete nullification of their votes.).

A permanent version of the legislation has been adopted by the Council with the two

votes required by the Districts Charter having occurred on November 9 and November


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11 A copy of the committee report on Bill 18-889 is publicly available on the Council website at

http://dccouncil.us/images/00001/20101129131609.pdf

19

23, 2010, respectively.11 The votes were unanimous. Like the temporary, the permanent is made

expressly retroactive in its application to June 30, 2010.

The Council Intervenors, as a basis for their motion to intervene, are asking that the court

decide the legality of this measure, as allowing the Executive Branch to do so under these

circumstances constitutes a distortion of the legislative process and nullification of the votes of

the Councilmembers. The denial of the Councils motion to intervene and granting of the Joint

Motion for Consent Judgment would do just that.

The legislation adopted by the Council protects not only the Councils authority to

approve or disapprove contracts under section 451 of the District of Columbia Home Rule Act,

but also its broad authority under section 413 of the District of Columbia Home Rule Act to

conduct investigations into any District matter. D.C. Official Code 1-204.13 and 1-204.51. A

significant question pertaining to the latter is whether the effect of the Districts unconditional

release of Banneker and Regan from any and all claims of the Districts would render the

investigation conducted by the Council superfluous.

CONCLUSION

The votes of the Councilmembers to disapprove the Banneker contract and to adopt

legislation that would prohibit payments under the July 1, 2010 settlement of that disapproved

contract until after the conclusion of the Council investigation would be effectively nullified by

the District entering into the consent judgment and payments being made under the settlement
http://dccouncil.us/images/00001/20101129131609.pdf


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20

agreement. That nullification of votes confers standing upon the Councilmembers, and justifies

their intervention under the circumstances. Their interests are not adequately represented by the

Office of the Attorney General, which has stated it will not defend the suit on grounds that the

settlement the Attorney General negotiated and executed on behalf of the District is unlawful.

The Council Intervenors should be given the opportunity to oppose the Joint Motion for

Consent Judgment and to defend their interests and that of the public in opposing the payment of

District funds to settle a claim brought under a contract that has been disapproved by the Council

and remains the subject of an investigation into possible malfeasance concerning it.

WHEREFORE, for the reasons set forth, the Council Intervenors respectfully request that

this court grant their motion to intervene.

Respectfully submitted,

__\s\_____________________________________

BRIAN FLOWERS #358241

General Counsel

__\s\_____________________________________

JOHN HOELLEN, #450354Legislative Counsel


1350 Pennsylvania Avenue, N.W. - Suite 4


(202) 724-8026

(202) 724-8129 (facsimile)

[email protected]

Counsel for Council Intervenors


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21

CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing Members of the Council of the District of

Columbia Motion to Intervene, with accompanying memorandum of points and authorities, was

eFiled and eServed upon the following persons on this 29 th day of November, 2010.

:

A. Scott Bolden

Lawrence S. Sher

Keith D. Coleman

REED SMITH LLP

1301 K Streeet, N.W.Suite 1100 East Tower


[email protected]

[email protected]

[email protected]

Counsel for Plaintiff Banneker Ventures, LLC

Robert L. Dillard, Esq.

Assistant Attorney General

Office of the Attorney Generalfor the District of Columbia

441 4th Street, N.W., 6th Floor South


[email protected]

Counsel for Defendant District of Columbia

/s/ John Hoellen

______________________________
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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1


CIVIL DIVISION

__________________________________________

)


)Plaintiff, )

)

v. ) Case No. 2010 CA 06067

)


)

Defendant. )

_________________________________________ )

MEMBERS OF THE COUNCIL OF THE DISTRICT OF COLUMBIAOPPOSITION TO THE JOINT MOTION FOR CONSENT JUDGMENT

AND MEMORANDUM OF POINTS AND AUTHORITIES

IN SUPPORT OF THE OPPOSITION

Members of the Council of the District of Columbia, by and through undersigned

counsel, respectfully submit their opposition to the Joint Motion for Consent Judgment filed by

the original parties, Banneker Ventures, LLC and District of Columbia, on November 16, 2010,

as part of their motion to intervene, as required by Super. Ct. Civ. R. 24(c).

In support of their opposition, Council Intervenors state as follows:

1. This is a breach of contract action filed by Banneker Ventures, LLC, alleging that the

District of Columbia government breached a settlement agreement entered into on July 1, 2010,

to settle claims related to District of Columbia Housing Enterprises Contract No. 2009-05 for

the performance of project management services (Banneker contract). Complaint 2, 3, and

13-15.

2. The Banneker contract was a contract obligating the District government to make


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2

payments in excess of $1 million during a 12-month period. Section 451 of the District of

Columbia Home Rule Act, which is the Districts Charter, empowers and requires the

Council to approve or disapprove contracts obligating the District government to pay more than

$1 million during a 12-month period. D.C. Official Code 1-204.51.

3. The Banneker contract was not submitted to the Council prior to the award of the

contract and the initiation of work under the contract. Work began under the proposed Banneker

contract on or about May of 2009, but the proposed contract was not transmitted to the Council

for its approval or disapproval until December 10, 2009.

4. The Council acted quickly to initiate an investigation, partly because of the Executive

Branchs continued refusal during the fall of 2009 to transmit the contract to the Council for its

review and possible ratification, as required by section 451, until the Council provided

assurances to the Executive Branch that the Council would ratify the contract.

5. On November 2, 2009, pursuant to the broad authority conferred upon the Council by

section 413 of the District of Columbia Home Rule Act to investigate any matter relating to the

affairs of the District, the Committee on Libraries, Parks and Recreation passed the Committee

on Libraries, Parks and Recreation Budget Transparency Investigation Authorization Resolution

of 2009. The committee subsequently authorized a Special Counsel to conduct an investigation

into possible malfeasance in the awarding, execution, and implementation of the Banneker

contract. The investigation by the Special Counsel is ongoing, but is expected to conclude by

the end of the calendar year.

6. On December 10, 2009, the Mayor transmitted to the Council a proposed act to ratify

the Banneker contract. The emergency legislation transmitted by the Mayor pursuant to his


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12 See Contracts for Project Management and General Contractor Services for the Revitalization

of District Recreation Centers, Schools, and Public Parks Approval and Payment AuthorizationEmergency Act of 2009, effective January 4, 2010 (D.C. Act 258; 57 DCR 334). Section 5 of the act

stated that pursuant to section 451 of the District of Columbia Home Rule Act, approved December 24,

1973 (87 Stat. 803; D.C. Official Code 1-204.51), and notwithstanding the requirements of section

105a of the District of Columbia Procurement Practices Act of 1985, effective March 8, 1991 (D.C. Law

8-257; D.C. Official Code 2-301.05a), Contract No. 2009-05 with Banneker Ventures for project

management services for the renovation of certain recreation centers is disapproved.

3

power under the District of Columbia Home Rule Act, was designated as Bill 18-569. On

December 15, 2009, the Council voted unanimously to disapprove the proposed Banneker

contract as part of its adoption of Bill 18-569. On December 18, 2009, the bill adopted by the

Council was transmitted to the Mayor for his signature or veto as required by the District of

Columbia Home Rule Act. The Mayor signed the act on January 4, 2010 (D.C. Act 18-258). 12

7. On or about December 21, 2009, representatives of the Executive Branch of the

District government met with Banneker representatives to negotiate settlement of claims

Banneker believed it had against the District government as a result of the disapproval of the

Banneker contract by the Council on December 15, 2009. Complaint, 18.

8. On December 24, 2009, during the 10-day period allotted by the District of Columbia

Home Rule Act for a Mayor to sign or veto an act adopted by the Council, a payment of $2.5

million was made by the District to Banneker pursuant to a settlement agreement entered into

the same day between Banneker Ventures, LLC and Regan Associates, LLC, and DC Housing

Enterprises and the District of Columbia Housing Authority. Early inquiries made as part of the

Council investigation focused upon the validity and appropriateness of the December 24, 2009

settlement agreement and the expedited payment made pursuant to that agreement. The Council

was not notified of the settlement or the payment until after both acts were done deeds.


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13 Bill 19-949, the District Settlement Payment Integrity Emergency Act of 2010.

4

9. On July 1, 2010, the District executed the settlement agreement at issue in this case

and the subject of the Joint Motion for Consent Judgment filed November 16, 2010. The

settlement agreement was executed on behalf of the District by the Attorney General for the

District of Columbia, who also was in charge of the negotiations that led to its execution.

10. The July 1, 2010 settlement agreement calls for the District to make 2 payments to

Banneker to resolve any and all claims Banneker may have related to the Banneker contract. It

also unconditionally releases Banneker and Regan from any and all claims the District might

have against either of the general contractors relating to the Banneker contract that had been

disapproved by the Council on December 15, 2009, and was at the time, and continues to be, the

subject of an ongoing investigation by the Special Counsel appointed by the Council. The

settlement agreement expressly states:

The District hereby remises, releases, and forever discharges Banneker and

Regan, each of their successors and assigns, and any other person claiming by,

through, or under Banneker or Regan, of and from all agreements, actions, cases,

causes of action, claims, compromises, controversies, costs, damages, debts,

demands, disputes, expenses, judgments, liabilities, payments, promises, and

suits of any nature whatsoever . . . WITHOUT EXCEPTION, for project servicesfor capital projects to the District . . .

(Emphasis in original).

11. On July 13, 2010, the Council unanimously approved emergency legislation that

prohibits the District from executing a settlement of a claim, or disbursing payments under such

a settlement, related to a contract that has been disapproved by the Council and subject to an

active investigation of the Council or other authorized investigative bodies until 90 days after

the completion of the investigation.13 The measure was expressly made retroactive to June 30,


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14 During a recess period of 10 or more days, the Council, under section 602 of the District of

Columbia Home Rule Act, cannot vote to override a pocket veto. The Council summer recess runs from

July 15 until September 15.

5

2010, the day before the settlement agreement at issue was executed.

12. Bill 18-949 was transmitted to the Mayor for his signature or veto, but because the

Mayors 10-day period for signing or vetoing the measure extended into the Councils summer

recess, the bill was subject to a pocket veto by the Mayor under section 602 of the District of

Columbia Home Rule Act. The pocket veto was effectuated when the Mayor did not return the

bill with either signature or veto.14 This process was repeated later in the summer when the

Council, by unanimous vote on August 12, 2010, passed a second, identical emergency measure

(Bill 18-974), which was pocketed vetoed by the Mayor.

13. On July 13, 2010, the last scheduled legislative meeting, before Council summer

recess, the Council approved a temporary version of the emergency legislation on the first of 2

required votes by the Council. On September 21, 2010, the Council approved Bill 18-950, the

District Settlement Payment Integrity Temporary Act of 2010, on its second and final reading

before the Council and the measure was transmitted to the Mayor for his signature or veto. The

Mayor returned the act unsigned on October 13, 2010, one day after the expiration of the 10-day

period allotted to him for signing or vetoing the bill. Because the Mayor had not exercised his

power to veto the legislation, Bill 18-950 was enacted, designated D.C. Act 18-562, and

transmitted to Congress on October 18, 2010 to begin its 30-day passive review period required

by the District of Columbia Home Rule Act. D.C. Act 18-562 is projected to complete its

congressional review period and become law on or before December 8, 2010. Its prohibition of

settlement of a claim relating to a contract that is disapproved by the Council and subject to an


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15 Res. 18-678 (November 23, 2010), the Banneker Ventures, LLC v. District of Columbia

Intervention Authorization Resolution of 2010.

6

authorized and pending investigation is made expressly retroactive to June 30, 2010.

14. The Council also has adopted a permanent version of the legislation. Bill 18-889,

the District Settlement Payment Integrity Act of 2010, was passed unanimously on first and

second readings by the Council on November 5 and November 23, 2010. Like the emergency

and temporary versions, it makes the prohibition on a settlement of a claim relating to a contract

disapproved by the Council and subject to an authorized and pending investigation retroactive to

June 30, 2010. Bill 18-889 is pending before the Mayor for his signature or veto.

15. On August 11, 2010, Banneker filed this action against the District of Columbia for

breach of contract. Upon learning that the case had been filed, the Council began monitoring

the proceedings to determine whether its interests would be adequately protected.

16. On October 25, 2010, the case was dismissed for failure to comply with Super Ct.

Civ. R. 4(m). Shortly after the case was reinstated, on November 16, 2010, the Joint Motion for

Consent Judgment was filed with the court. The Office of the Attorney General provided a

courtesy copy of the filed motion to the Councils Office of the General Counsel on November

16, 2010.

17. At its next legislative meeting, on November 23, 2010, the Council authorized its

General Counsel to file a motion to intervene in the case and to take any other action necessary

to represent and protect the interest of the Council and that of the public by ensuring that the

legislative process as mandated by the District of Columbia Home Rule Act is not distorted and

the legislative votes of the Members of the Council related to this matter are not nullified.15


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7

18. The Council Intervenors request that they be able to present their defenses to the

breach of contract action.

19. The settlement agreement that is the subject of this Joint Motion for Consent

Judgment is ultra vires. It purports to settle claims related to Contract No. 2009-05. Contract

No. 2009-05 was required by section 451 of the District of Columbia Home Rule Act to be

submitted to the Council for its approval or disapproval prior to its award. D.C. Official Code

1-204.51. The contract was not timely transmitted, and work began under this contract in May

of 2009 in violation of section 451. The contract was disapproved by the Council on December

15, 2009.

WHEREFORE, Council Intervenors respectfully request that the Joint Motion for

Consent Judgment be denied.

____/s/___________________________________

BRIAN FLOWERS #358241

General Counsel

____/s/___________________________________

JOHN HOELLEN, #450354Legislative Counsel


1350 Pennsylvania Avenue, N.W. - Suite 4


(202) 724-8026

(202) 724-8129 (facsimile)

[email protected]

Counsel for Council Intervenors


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ENROLLED ORIGINAL

1

A RESOLUTION

18-678

IN THE COUNCIL OF THE DISTRICT OF COLUMBIA

November 23, 2010

To authorize the General Counsel to the Council to intervene on behalf of the Council of the

District of Columbia in Banneker Ventures, LLC v. District of Columbia.

RESOLVED, BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this

resolution may be cited as the "Banneker Venutures, LLC v. District of Columbia Intervention

Authorization Resolution of 2010".

Sec. 2. The Council finds that:

(1) On August 11, 2010, Banneker Ventures, LLC (Banneker) filed a breach of

contract action in the Superior Court of the District of Columbia against the District of

Columbia seeking enforcement of a settlement agreement entered into on July 1, 2010, by the

District of Columbia. The case is Banneker Ventures, LLC v. District of Columbia, Civil

Action No. 2010 CA 006067 (Banneker case).(2) On November 16, 2010, a Joint Motion for Consent Judgment was filed by

counsel for Banneker and the Attorney General for the District of Columbia in the Banneker

case.

(3) Enforcement of the settlement agreement would result in payments for

claims related to work purported to have been done under District of Columbia Housing

Enterprises Contract No. 2009-05 on Department of Parks and Recreation capital projects.

(4) Contract No. 2009-05 was a contract in excess of $1 million over a 12-month

period. Section 451 of the District of Columbia Home Rule Act requires that such contracts be

transmitted to the Council for its approval or disapproval. Work under Contract No. 2009-05

began without the contract having been transmitted to or approved by the Council as required by

section 451.(5) On December 10, 2009, the Mayor transmitted to the Council the contract for

ratification by act (Bill 18-569). On December 15, 2010, Contract No. 2009-05 was

disapproved unanimously by the Council.

(6) On November 2, 2009, pursuant to Council authority conferred by section

413 of the District of Columbia Home Rule Act, the Committee on Libraries, Parks and


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ENROLLED ORIGINAL

3

necessary to protect the interests of the Council and that of the public.

Sec. 3. For the reasons set forth in section 2, the Council of the District of Columbia

directs its General Counsel to file a motion in the Superior Court of the District of Columbia on

behalf of the Council to intervene in the case of Banneker Ventures, LLC v. District of

Columbia to protect the Councils interests and that of the public.

Sec. 4. This resolution shall take effect immediately.

d.c. council motion to intervene

Documents