Banneker Ventures, LLC v. Graham ( 2016 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
__________________________________
)
BANNEKER VENTURES, LLC, )
)
Plaintiff, )
)
v. ) Civil Action No. 13-391 (RMC)
)
JIM GRAHAM, et al., )
)
Defendants. )
_________________________________ )
OPINION
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
1
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
1
WMATA submitted a response to Mr. Graham’s motion and Banneker’s opposition. See
WMATA Response [Dkt. 89]; WMATA Reply [Dkt. 91]. Banneker’s Notice of Supplemental
Evidence was also received by the Court, but not considered. See Notice [Dkt. 94].
2
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
3
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
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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
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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 local
jurisdiction, when such hearing is required because of a substantial
change to WMATA facilities on site or a change to the site access.
Id. at 5.
B. Mr. Graham’s Alleged Improper Actions
While Banneker repeatedly lists 16 allegedly improper actions undertaken by Mr.
Graham in its Amended Complaint,2 the Court has identified 5 categories of actions, which
include specific allegations of actual improper acts, in lieu of unspecific or conclusory
allegations of unfavorable behavior.
1. Extortion and Vote Bartering
Mr. Graham expected that “before approval of the joint development
agreement by WMATA, Banneker and [Mr.] Karim would host a
fundraiser for Graham’s D.C. Council race and contribute to his
Council campaign,” Am. Compl. ¶ 27;
Mr. Graham “sought to barter a vote in his capacity as member of
the D.C. Council for his vote as a WMATA Board member on the
Florida Avenue project,” Banneker II, 798 F.3d at 1141; see also
Am. Compl. ¶¶ 61, 77, 96-98, 106-109, 190, 195; and
Mr. Graham told Mr. Karim that “he wanted him to participate in a
U Street Business Improvement District (‘BID’) program that he
was spearheading” in exchange for support on the Project, Am.
Compl. ¶¶ 111, 121.
2
See Am. Compl. [Dkt. 18] ¶ 247 (allegations in support of Count III, tortious interference with
prospective business advantage); id. ¶¶ 208, 227 (allegations in support of Count I, breach of
contract); id. ¶ 239 (allegations in support of Count II, breach of implied covenant of good faith);
id. ¶ 275 (allegations in support of Count IV, tortious interference with contract); id. ¶ 286
(allegations in support of Count V, unjust enrichment); id. ¶ 294 (allegations in support of Count
VI, unlawful restraint of trade).
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2. Interference with Development Team Members and Actions
Mr. Graham convinced Donatelli Development, Inc. to withdraw
from the project and “to wait until the last minute to drop out of the
Project so that LaKritz Adler’s bid would be accepted,” id. ¶ 43;
Mr. Graham directed Banneker, through Buwa Binitie in the District
of Columbia Office of the Deputy Mayor for Planning and
Economic Development, not to attend a scheduled Oral Interview
for the Project, see id. ¶ 48;
Mr. Graham “told [Metropolis Development Company] not to
partner with Banneker,” id. ¶¶ 60, 112, 191;
Mr. Graham attempted to require Banneker to include Mr. Graham’s
favored development company (LaKritz Adler) as a member of
Banneker’s development team, id. ¶¶ 70, 119, 190; and
Mr. Graham attempted to require Banneker to purchase property
from Mr. Graham’s favored development company (LaKritz Adler),
id. ¶ 127.
3. Directing WMATA Staff
Mr. Graham ordered WMATA staff to investigate “alleged financial
obligations to the District by Banneker’s then principal, Williams,”
id. ¶ 72;
Mr. Graham directed WMATA staff to take specific actions with
regard to the Banneker proposal, id. ¶¶ 147-48, 150, 168; and
Mr. Graham instructed WMATA’s then-General Counsel (during
Banneker’s period of exclusivity) to provide a legal roadmap as to
how, when, and under what circumstances Mr. Graham could
request “Best and Final Offers” from additional developers, see id.
¶¶ 155, 160.
4. Aggressively Advocating for His Preferences
“[Mr.] Graham knowingly made false representations about
Banneker, its financial wherewithal and its capabilities during . . .
closed door [Board meetings],” id. ¶ 88;
Mr. Graham orchestrated the addition of “components to the Project
(such as an affordable housing requirement for which WMATA had
no guidelines and WMATA staff did not know how to implement)
to make it both less profitable to Banneker and less financially
attractive or feasible to WMATA,” id. ¶ 247;
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Mr. Graham “advocate[d] (as a WMATA Board Member, Chair of
the PDRE Committee3 or Chair of the WMATA Board) and
demonstrate his preference for LaKritz Adler to either become the
Selected Developer or to otherwise gain a financial benefit from the
Project with the very same WMATA staff charged with negotiating
exclusively with Banneker under the contract,” id.; and
Mr. Graham “use[d] his jurisdictional vote (either voting ‘no’ or
‘abstaining’) [in] both his capacity as a PDRE Committee Member
and WMATA Board Member to exercise undue influence over the
terms and conditions that WMATA staff was authorized to and
responsible for negotiating with Banneker,” id.
5. Sharing Confidential Information
Mr. Graham “provided confidential Board information to LaKritz
Adler about Banneker’s proposal,” id. ¶¶ 134-35.
II. JURISDICTION AND LEGAL STANDARDS
A. Jurisdiction
The Court has jurisdiction because the parties are diverse and there is a sufficient
amount in controversy. See Banneker I, 19 F. Supp. 3d at 243 (citing 28 U.S.C. § 1332(a)); see
also Am. Compl. at 99 (Relief Requested); Banneker Notice of Citizenship [Dkt. 37]; Graham
Notice of Citizenship [Dkt. 36]; LaKritz Notice of Citizenship [Dkt. 38].
B. Motion to Dismiss for Failure to State a Claim
Mr. Graham moves to dismiss pursuant to Federal Rule of Civil Procedure
12(b)(6) for failure to state a claim. A complaint must be sufficient “to give a defendant fair
notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555 (2007) (internal citations omitted). Although a complaint does not need
detailed factual allegations, a plaintiff’s obligation to provide the grounds of his entitlement to
3
The PDRE Committee is the Planning, Development and Real Estate Committee of the
WMATA Board of Directors. See Am. Compl. ¶ 63.
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relief “requires more than labels and conclusions, and a formulaic recitation of the elements of a
cause of action will not do.” Id. The facts alleged “must be enough to raise a right to relief
above the speculative level.” Id. “[A] complaint needs some information about the
circumstances giving rise to the claims.” Aktieselskabet Af 21. Nov. 2001 v. Fame Jeans, Inc.,
525 F.3d 8, 16 n.4 (D.C. Cir. 2008). A complaint must contain sufficient factual matter to state a
claim for relief that is “plausible on its face.” Twombly, 550 U.S. at 570. When a plaintiff
pleads factual content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged, then the claim has facial plausibility. Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009). “The plausibility standard is not akin to a ‘probability requirement,’ but it
asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. A court must
treat the complaint’s factual allegations as true, “even if doubtful in fact.” Twombly, 550 U.S. at
555. But a court need not accept as true legal conclusions set forth in a complaint. Iqbal, 556
U.S. at 678.
In deciding a motion under Rule 12(b)(6), a court may consider the facts alleged
in the complaint, documents attached to the complaint as exhibits or incorporated by reference,
and matters about which the court may take judicial notice. Abhe & Svoboda, Inc. v. Chao, 508
F.3d 1052, 1059 (D.C. Cir. 2007). Generally, when a court relies upon matters outside the
pleadings, a motion to dismiss must be treated as one for summary judgment and disposed of
pursuant to Rule 56. See Fed. R. Civ. P. 12(d). “However, where a document is referred to in
the complaint and is central to the plaintiff’s claim, such a document attached to the motion
papers may be considered without converting the motion to one for summary judgment.” Nat’l
Shopmen Pension Fund v. Disa, 583 F. Supp. 2d 95, 99 (D.D.C. 2008) (citation omitted).
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C. Absolute Immunity
“A motion to dismiss is an appropriate vehicle to assert a claim of absolute
immunity.” Stoddard v. Wynn, 168 F. Supp. 3d 124, 129 (D.D.C. 2016). “The burden of
establishing immunity must be borne by the official claiming it.” Banneker II, 798 F.3d at 1140
(citing Westfall v. Erwin, 484 U.S. 292, 299 (1988)). Absolute immunity is determined by
applying the two-part test established in Westfall v. Erwin. 484 U.S. 292. Absolute immunity
only shields an official if the “challenged conduct is within the outer perimeter of an official’s
duties and is discretionary in nature.” Id. at 300.
The purpose of granting immunity to officials when acting within their official
duties is to “insulate the decisionmaking process from the harassment of prospective litigation.”
Id. at 295. If officials are tailoring their actions or making decisions due to potential suit, they
will act less effectively than otherwise, if not so fearful. See Forrester v. White, 484 U.S. 219,
223 (1988). Absolute immunity is justified only when the benefits outweigh the potential harms;
its use is intended to be sparing. “[C]ourts may, where appropriate, answer the question of
whether an official has acted within the outer perimeter of official duties through limited
evidentiary analysis focusing on the nature and scope of the job duties in question.” Banneker II,
798 F.3d at 1142.
III. ANALYSIS
The D.C. Circuit directed this Court to conduct a two-part analysis to determine
whether Banneker’s claims against Mr. Graham should be dismissed. First the Court must
determine whether Mr. Graham’s alleged actions were “within the outer perimeter” of his official
duties or discretionary in nature. Westfall, 484 U.S. at 300. An official is not entitled to absolute
immunity from suit for actions that were clearly outside the realm of his official duties or that
10
were not discretionary. Second the Court assesses whether the remaining allegations sufficiently
state claims of tortious interference or civil conspiracy.
A. Absolute Immunity
Official duties extend beyond the “‘title of [the] office’” to cover “‘the duties with
which [the official] is entrusted.’” Banneker II, 798 F.3d at 1140 (quoting Barr v. Matteo, 360
U.S. 564, 573 (1959). To determine official duties, a court looks beyond the specific language of
the roles and responsibilities in order to determine the “outer perimeter” of such duties. Westfall,
484 U.S. at 300. An official is not protected by absolute immunity if he “act[ed] in a manner that
is manifestly or palpably beyond his authority,” including the use of “manifestly excessive
means” when acting within his scope of authority. Banneker II, 798 F.3d at 1140 (citing Simons
v. Bellinger, 643 F.2d 774, 786 (D.C. Cir. 1980) and McKinney v. Whitfield, 736 F.2d 766, 769-
70 (D.C. Cir. 1984)).
If an action is part of official duties, a court must then determine if it is
discretionary in nature. As to the latter, the inquiry begins with determining whether “any
statute, regulation, or policy specifically prescribes a course of action for an employee to
follow.” KiSKA Constr. Corp. v. WMATA, 321 F.3d 1151, 1159 (D.C. Cir. 2003). An action is
discretionary unless the statute, regulation, or policy leaves “‘no room for choice.’” Banneker II,
798 F.3d at 1143 (quoting U.S. v. Gaubert, 499 U.S. 315, 324 (1991)). “Only alleged conduct
that manifestly violates an ethical proscription or other statute, regulation, or policy that
constrains the exercise of discretion may be subject to liability.” Id. at 1144. If these kinds of
prescribed limitations do not apply, the inquiry must determine whether “the exercise of
discretion is grounded in social, economic, or political goals.” Id. at 1143. Discretionary actions
grounded in such goals “retain governmental function immunity.” Id.
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The Court will consider each category of actions identified above to evaluate the
applicability of absolute immunity. For these purposes, the Court assumes the truthfulness of all
well-plead factual allegations. See Iqbal, 556 U.S. at 696 (citing Twombly, 550 U.S. at 555).
1. Extortion and Vote Bartering.
The first category of actions includes Mr. Graham’s alleged attempts to extort
Banneker by seeking a contribution to his local political campaign and suggesting that Banneker
support a Business Development Project that Mr. Graham favored. Mr. Graham is also alleged
to have offered to exchange his vote for the D.C. Lottery project in return for Banneker’s
withdrawal from the Florida Avenue Project. Mr. Graham argues that these actions were
communications with developers and part of his official duties to investigate potential
agreements. The Court agrees that Mr. Graham could communicate with prospective WMATA
contractors as part of his official duties as a WMATA Board member and chair, but tying a
developer’s business prospects to Mr. Graham’s fundraising for his personal campaign to retain
his seat on the D.C. Council, as alleged, would exceed the “outer perimeter” of these official
duties.
The D.C. Circuit has found that Mr. Graham’s attempt to convince Warren
Williams, Banneker’s then-principle, to withdraw Banneker’s bid on the Florida Avenue Project
in exchange for Mr. Graham’s vote in favor of Mr. Williams for the D.C. Lottery contract and
alleged attempts to extort Banneker were outside his official duties. See Banneker II, 798 F.3d at
1141 (finding “to barter a vote in his capacity as member of the D.C. Council for his vote as a
WMATA Board member on the Florida Avenue Project, and attempt[] to extort Banneker . . . are
manifestly beyond the authority of a WMATA Board member”). Without such authority, Mr.
Graham is not protected by absolute immunity and must defend against these allegations.
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2. Interference with Development Team Members and Actions
Mr. Graham argues that his actions in connection with the Florida Avenue Project
are protected under absolute immunity because Board members are tasked with overseeing joint
development projects, authorizing solicitations, approving developer selection, and approving
terms of the contracts. He considers his actions with respect to Donatelli and Metropolis, and
encouraging Banneker to partner with or purchase land from LaKritz Adler to be within the outer
perimeter of his responsibly to research and approve developers. Mr. Graham stresses that his
actions “bear some reasonable relationship to” his duty to investigate and vote on joint
development projects. Kumar v. George Washington University, No. 15-120, 2016 WL
1273186, at *6 (D.D.C. March 31, 2016).
While a director may take actions not specifically defined or described by the
Joint Development Guidelines to investigate and decide whether to approve a developer, such
actions must be reasonably related to those tasks. Just as “absolute immunity is lost when a
supervisor adopts means beyond the outer perimeter of his authority,” Mr. Graham’s immunity
may have been lost if he adopted unreasonable means in his dealings with prospective WMATA
contractors. McKinney, 736 F.2d at 771. Mr. Graham is alleged to have caused two partners to
withdraw from Banneker’s development team, attempted to cause Banneker to miss a meeting
with WMATA, and acted in his individual capacity to encourage Banneker to add LaKritz Adler
to the project and purchase land from LaKritz Adler. WMATA Board Procedures stress that the
Board acts as a unit and no individual Board member may direct “any WMATA employee or
contractor.” WMATA Board Procedures & Standards of Conduct at 1. Banneker alleges that
Mr. Graham was acting on his own and not as a representative of the Board as a whole. If
proved, such interference with a development team’s composition and proposal would be
13
“manifestly or palpably beyond [Mr. Graham’s] authority” as a Board member and would not
entitled to absolute immunity from suit. Bellinger, 643 F.2d at 786.
The facts alleged in the Amended Complaint are sufficient to overcome Mr.
Graham’s asserted absolute immunity from suit on these allegations.
3. Directing WMATA Staff
Mr. Graham argues that, despite the language in the Procedures for WMATA
Board of Directors—specifically noting that “[n]o member individually shall direct or supervise
the General Manager or any WMATA employee or contractor”—he was permitted, as chair, to
direct WMATA employees if it were related to the investigation or approval of a joint
development project. See Graham 2nd Mot. at 29-32. While it is possible that the custom and
practices of the WMATA Board modified the explicit statement limiting Members’ authority in
its Procedures, such a finding cannot be made on this record. Similarly, in light of the specificity
of the WMATA Board Procedures, the Court cannot find that Mr. Graham’s alleged instructions
to WMATA staff are protected by absolute immunity and that he does not have to defend against
these allegations.
4. Aggressively Advocating for His Preferences.
Mr. Graham argues that his actions to promote his preferred developer and shape
the components of the Florida Avenue Project were part of his official duties and protected by
absolute immunity. Banneker complains loudly of nefarious motivations behind Mr. Graham’s
promotion of LaKritz Adler and his efforts to add affordable housing requirements to the Florida
Avenue Project. Contrary to its argument, subjective motives are irrelevant to immunity from
suit for official acts. See Gray v. Poole, 243 F.3d 572, 575 (D.C. Cir. 2001) (recognizing that
suits are prohibited act within the scope of official duties, “even if the official is alleged to have
14
acted in bad faith”); Barr, 360 U.S. at 570. The question is resolved not by considering Mr.
Graham’s alleged personal motives, but by whether he, as Board chair or member, had
corresponding official duties in connection with joint development projects.
The WMATA Board as a whole establishes policies, exercises approval,
maintains oversight, authorizes solicitations, approves selections, and approves agreements. In
furtherance of those duties, a Board member may and should express his opinion of development
candidates, suggest additions or changes to projects, show preferences between and among
candidates, and vote accordingly. Thus, advocating for his preferences, even aggressively, was
within the scope of Mr. Graham’s official duties. See Banneker II, 798 F.3d at 1141 (finding that
“persuad[ing] his fellow Board members to add an affordable housing requirement to the project
with approving the original Term Sheet” was “an exercise of Graham’s authority as a Board
member”). The Court also finds that WMATA Board members have considerable discretion in
how they might review projects, assess options, and approve selections. As a result, Mr. Graham
is entitled to absolute immunity from suit for his alleged actions as they related to advocating for
a particular developer or adding components to the Florida Avenue Project.
5. Sharing Confidential Information.
Mr. Graham argues that “speaking with developers did not manifestly exceed, but
instead was closely related to, a director’s duties.” Graham 2nd Mot. at 38. Further, he contends
that Banneker’s allegations that information was leaked are neither accurate nor advanced in the
Amended Complaint with supporting facts. See id. The applicable Standards of Conduct
prohibit sharing confidential information. See WMATA Board Procedures & Standards of
Conduct at 14 (“Board members shall not . . . disclose or permit others to disclose to anyone
outside the Authority information obtained through their official position with the Authority and
15
not generally available to the public except where and to the extent necessary to fulfill the Board
Member’s public responsibility.”). The Standards leave no room for discretion; and Banneker is
afforded a presumption of truth to its allegations of fact at this stage in the proceedings. See
Iqbal, 556 U.S. at 696. Mr. Graham is not protected by absolute immunity from defending
against these allegations.4
B. Tortious Interference with Prospective Economic Advantage
Mr. Graham moves to dismiss Banneker’s claim for tortious interference with
prospective business advantage, also called tortious interference with business expectancy,
because the remaining allegations are not sufficient to state a claim. Under D.C. law, the
elements of a successful claim for tortious interference with a prospective business advantage
are:
(1) the existence of a valid business relationship or expectancy;
(2) knowledge of the relationship or expectancy on the part of the
interferer;
(3) intentional interference inducing or causing termination of the
relationship or expectancy; and
(4) resultant damage.
McNamara v. Picken, 866 F. Supp. 2d 10, 15 (D.D.C. 2012).
A plaintiff must allege a business expectancy, not grounded in a present
contractual relationship, which is commercially reasonable to expect. See id. at 15. “A valid
business expectancy requires a probability of future contractual or economic relationship and not
a mere possibility.” Robertson v. Cartinhour, 867 F. Supp. 2d 37, 55 (D.D.C. 2012). Because
4
Notably, the Circuit concluded that Mr. “Graham’s alleged leaking of confidential information
manifestly violated the Standards.” Banneker II, 798 F.3d at 1144.
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Banneker had a valid Term Sheet, which was an “agreement that bound WMATA to negotiate
exclusively and in good faith with Banneker,” “Banneker had a justified expectation that a
development agreement would be finalized.” Banneker II, 798 F.3d at 1134-35. The Amended
Complaint sufficiently alleges Mr. Graham’s knowledge of the Term Sheet and Banneker’s
resulting damage from the failure to consummate a final contract for the Florida Avenue Project.
Recognizing these factors, Mr. Graham’s argument focuses on the sufficiency of the Complaint’s
allegations of intentional interference.
As discussed above, the D.C. Circuit and/or this Court have already determined
that absolute immunity does not protect Mr. Graham from defending this suit with respect to the
allegations that he attempted to extort Banneker and trade votes, interfered with the composition
of Banneker’s development team and proposal, directed WMATA staff, and leaked confidential
information. These allegations are sufficient to allege intentional interference with prospective
business advantage. The motion to dismiss Count III will be denied.
C. Tortious Interference with Contract
Mr. Graham also moves to dismiss Banneker’s claim for tortious interference with
contract for failure to state a claim. The elements of a claim for tortious interference with
contract are: (1) the existence of a valid contract; (2) knowledge of the contract on the part of
the interferer; (3) intentional interference causing termination of the contract or causing a failure
of performance by one of the parties; and (4) resulting damages. See Nanko Shipping, USA v.
Alcoa, Inc., 107 F. Supp. 3d 174, 182-83 (D.D.C. 2015); Onyeoziri v. Spivok, 44 A.3d 279, 286
(D.C. 2012). A plaintiff cannot establish liability without a strong showing of intent to disrupt
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ongoing business relationships. See Genetic Sys. Corp. v. Abbott Labs., 691 F. Supp. 407, 423
(D.D.C. 1988).
As described above, the Amended Complaint adequately alleges knowledge,
interference, and damages with respect to the allegation of tortious interference with prospective
business advantage; those allegations suffice for the alternative theory of tortious interference
with contract, although double recovery may be scant. The Term Sheet was a contract in itself
with which Mr. Graham allegedly interfered by actions and means beyond his official position.
See Banneker II, 798 F.3d at 1134-35. The motion to dismiss Count IV will be denied.
D. Civil Conspiracy
Finally, Count VIII of the Amended Complaint alleges civil conspiracy. The
elements of civil conspiracy are:
(1) an agreement between two or more persons;
(2) to participate in an unlawful act, or in a lawful act in an unlawful
manner; and
(3) an injury caused by an unlawful overt act performed by one of
the parties to the agreement
(4) pursuant to, and in furtherance of, the common scheme.
Exec. Sandwich Shoppe, Inc. v. Carr Realty Corp., 749 A.2d 724, 738 (D.C. 2000) (citing Griva
v. Davison, 637 A.2d 830, 848 (D.C. 1994)). A claim of civil conspiracy “depends on the
performance of some underlying tortious act.” Halberstam v. Welch, 705 F.2d 472, 479 (D.C.
Cir. 1983). Because the Court finds Banneker has adequately alleged tortious interference and
resulting damage, the Complaint sufficiently alleges an underlying tort, or unlawful act, and
injury caused by that act. All well-plead allegations in the Complaint must be taken as true and
Banneker is entitled to the benefit of all reasonable inferences that may be drawn from the
allegations. See Iqbal, 556 U.S. at 676-77. The Complaint includes numerous allegations of
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concerted action in furtherance of the tortious interference by Mr. Graham and LaKritz Adler,
specifically through the sharing of confidential information about Banneker’s proposal and
attempts to involve LaKritz Adler in Banneker’s development team, which are sufficient to
allege an agreement. See Am. Compl. ¶¶ 70-71, 73-75, 134-35, 317. The motion to dismiss
Count VIII will be denied.
IV. CONCLUSION
For the reasons set forth above, Defendant Jim Graham’s Renewed Motion to
Dismiss, Dkt. 88, will be granted in part and denied in part. Allegations that Mr. Graham
exceeded the scope of his official duties by aggressively advocating for his positions, see Am.
Compl. ¶¶ 88, 247, 275, will be dismissed. The motion will otherwise be denied. A
memorializing Order accompanies this Opinion.
Date: December 22, 2016 /s/
ROSEMARY M. COLLYER
United States District Judge
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