Capitol Services Management v. Vesta Corporation

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 12, 2019 Decided August 13, 2019
No. 18-7135
CAPITOL SERVICES MANAGEMENT, INC.,
APPELLANT
v.
VESTA CORPORATION,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 1:17-cv-01756)
Donald M. Temple argued the cause and filed the briefs for
appellant.
Lindsay D. Breedlove argued the cause and filed the brief
for appellee.
Before: TATEL, MILLETT, and KATSAS, Circuit Judges.
Opinion for the Court filed by Circuit Judge MILLETT.
MILLETT, Circuit Judge: This case concerns the proper
application of the discovery rule to tortious interference claims
under District of Columbia law. The district court determined
that the lawsuit filed by plaintiff Capitol Services Management,
2
Inc. was barred by the statute of limitations because Capitol
Services was on “inquiry notice” of the defendant’s alleged
interference with its contract long before the limitations period
expired. But at the motion-to-dismiss stage, dismissal on
statute-of-limitations grounds is permissible only if a plaintiff’s
claims are conclusively time-barred on the face of the
complaint. That strict standard was not met here, so we reverse
and remand the case for further proceedings.
I
A
The Park Southern building (the “Property”) is an
apartment complex located in Southeast Washington, D.C. In
2006, the Park Southern Neighborhood Corporation (“Park
Southern”) acquired the Property from its prior owner, the
District of Columbia, subject to a Deed of Trust. Under the
terms of their agreement, if Park Southern defaulted on the
terms of the Deed, the District could resume control of the
Property.
Park Southern contracted with Vesta Corporation to serve
as the Property’s manager. However, Park Southern eventually
became dissatisfied with Vesta’s performance and, in March
2014, terminated its contract. Park Southern and Capitol
Services then entered into a one-year management agreement
that would then continue on a “year-to-year basis,” unless
either party terminated it with three months’ notice. Complaint
¶¶ 9–10, J.A. 6.
District officials began talking almost immediately about
Park Southern’s management reshuffle. Milton Bailey, a
District employee, emailed the Mayor’s chief of staff advising
that “‘[w]e already have enough to send default and foreclosure
3
notices’ to effectively takeover [sic] the property.” Complaint
¶ 13, J.A. 7. In a telephone call in late March, Vesta relayed to
Bailey its intent to “continue to manage the property and to
provide [the District with] whatever assistance [it] need[s] with
respect to the ongoing condition of the property.” Id. ¶ 16, J.A.
7. Vesta also communicated with the District by private email,
and participated in at least five other conference calls regarding
Capitol Services, the Property’s “management issues,” and
Vesta’s “interests.” Id. ¶¶ 17–18, J.A. 8.
Things came to a head on May 2, 2014, when the District
exercised its default remedy under the Deed of Trust and
immediately took over the Property. That same day, without
providing any notice to Capitol Services, the District entered
into an “emergency contract” with Vesta, authorizing it to take
over property management duties from Capitol Services the
very next day.
Capitol Services filed suit against the District in Superior
Court in July 2014. It filed an amended complaint against the
District in October 2014, asserting (as relevant here) claims of
tortious interference with contract and with business
opportunity. In July 2016, as part of discovery in that action,
Capitol Services deposed Milton Bailey. In Capitol Services’
view, Bailey’s testimony “revealed considerable evidence” of
Vesta’s alleged tortious interference. J.A. 57. Yet with respect
to its claims against the District, Capitol Services came up
short. In a May 2017 opinion, the Superior Court entered
judgment for the District, finding that the court lacked
jurisdiction because the District was entitled to sovereign
immunity. The court also ruled that Capitol Services had failed
to establish a prima facie case of tortious interference by the
District.
4
B
On August 28, 2017, Capitol Services filed suit against
Vesta in the United States District Court for the District of
Columbia. Its complaint asserted claims for tortious
interference with business relations and tortious interference
with reasonable expectation of prospective economic
advantage. Vesta moved to dismiss, asserting that (i) Capitol
Services’ claims were time-barred; (ii) Capitol Services was
collaterally estopped from relitigating issues decided in the
Superior Court action; and (iii) Capitol Services failed to state
claims for which relief could be granted.
Reaching only the first issue, the district court agreed that
the statute of limitations barred the suit. The court ruled that
the District’s three-year statute of limitations for tortious
interference claims began to run on May 3, 2014, when the
District terminated Capitol Services’ contract and substituted
Vesta in its place. Because Capitol Services did not file suit
until August 28, 2017, the court dismissed the lawsuit as
untimely.
In so ruling, the district court rejected Capitol Services’
rejoinder that the discovery rule delayed the start of the
limitations period until July 2016, when Capitol Services
deposed Milton Bailey as part of the Superior Court action. In
the district court’s view, Capitol Services was on inquiry notice
of its claims against Vesta as soon as the District ended the
contract because, at that point, Capitol Services had “reason to
suspect that [Vesta] did some wrong.” J.A. 111. The court
added that Capitol Services surely was on inquiry notice far
earlier than Bailey’s deposition because Capitol Services’
Superior Court amended complaint against the District alleged
Vesta’s involvement in terminating its management agreement.
5
Capitol Services timely appealed.
II
The district court had diversity jurisdiction under 28
U.S.C. § 1332(a)(1). This court’s jurisdiction rests on 28
U.S.C. § 1291.
We review de novo a Rule 12(b)(6) dismissal on statute-
of-limitations grounds, accepting plaintiff’s well-pleaded
factual allegations as true and drawing all reasonable
inferences in plaintiff’s favor. Momenian v. Davison, 878 F.3d
381, 387 (D.C. Cir. 2017). At the motion to dismiss stage,
dismissal on statute-of-limitations grounds is proper “only if
the complaint on its face is conclusively time-barred.”
Commonwealth Land Title Ins. Co. v. KCI Techs., Inc., 922
F.3d 459, 464 (D.C. Cir. 2019); accord Firestone v. Firestone,
76 F.3d 1205, 1209 (D.C. Cir. 1996).
Capitol Services argues that the district court effectively
converted the case to summary judgment by considering its
pleadings in the Superior Court action, and so the summary-
judgment standard of review should govern. But no such
conversion occurred. District courts may, at the Rule 12(b)(6)
stage, take judicial notice of publicly filed pleadings in related
actions as evidence of what was alleged in the other actions,
although they may not treat as true the matter alleged. Hurd v.
District of Columbia, 864 F.3d 671, 686 (D.C. Cir. 2017); see
also FED. R. EVID. 201(b).
That is all the district court did here. The district court
properly took notice of Capitol Services’ allegations in the
Superior Court action not for their truth, but for the fact that
Capitol Services believed those allegations to be true and
6
viable as legal claims at the time they were made. See Watkins
v. United States, 854 F.3d 947, 949 (7th Cir. 2017).
So this remains an appeal of a motion to dismiss under
Federal Rule of Civil Procedure 12(b)(6).
III
On appeal, Capitol Services asserts that its complaint
against Vesta was timely because the three-year statute of
limitations did not begin to run until it had inquiry notice of
“all of the essential elements of its cause[s] of action” against
Vesta. Capitol Servs. Br. 32. In Capitol Services’ view, that
did not happen until it deposed Milton Bailey in July 2016.
Capitol Servs. Br. 33–39. From that deposition, reports Capitol
Services, it learned that Vesta had the motive or purpose to
“intentional[ly] interfere[]” with its business dealings
managing the Property. Capitol Servs. Br. 34–39. Vesta, for
its part, insists that Capitol Services had sufficient notice to
trigger the statute of limitations at the earliest when it was
ousted from its contract in May 2014 and Vesta took over, and
at the latest in July 2014 when it filed suit against the District.
See Vesta Br. 23–33.
As it happens, neither party is correct. As explained
below, inquiry notice was triggered sometime after the filing of
the original July 2014 complaint against the District, but before
the filing of the October 2014 amended complaint, which
referenced Vesta’s interference. When exactly during that
three-month period Capitol Services was on inquiry notice of
Vesta’s alleged role is an unresolved factual question on this
record, making dismissal under Rule 12(b)(6) erroneous.
7
A
Before reaching the merits, we first address Vesta’s
argument that Capitol Services did not properly preserve its
statute-of-limitations argument for appellate review. We find
no merit to this objection.
As an appellate court, “we are a court of review, not of first
view[.]” Cutter v. Wilkinson, 544 U.S. 709, 718 n.7 (2005).
For that reason, absent “exceptional circumstances,” this court
does not entertain issues first raised on appeal. Woodruff v.
Peters, 482 F.3d 521, 525 (D.C. Cir. 2007).
Vesta objects that, before the district court, Capitol
Services argued that it had inquiry notice only upon learning of
the “depth and breadth of Vesta’s involvement and
communications with the District.” Vesta Br. 20 (quoting J.A.
57). According to Vesta, Capitol Services has shifted gears on
appeal in arguing that it lacked any knowledge of Vesta’s
“motive” or “intent” to interfere. Vesta Br. 20.
That is a distinction without a difference. Both before the
district court and this court, Capitol Services has argued that it
was not on inquiry notice of Vesta’s alleged tortious
interference at the time its contract was terminated in May 2014
and, indeed, until Bailey’s July 2016 deposition revealed
details about Vesta’s role. Although its emphasis has changed,
Capitol Services has argued consistently that the facts it learned
at that deposition were necessary for it to have inquiry notice
of its causes of action. See Yee v. City of Escondido, 503 U.S.
519, 534 (1992) (“Once a * * * claim is properly presented, a
party can make any argument in support of that claim; parties
are not limited to the precise arguments they made below.”); In
re Harman Int’l Indus., Inc. Sec. Litig., 791 F.3d 90, 100 (D.C.
Cir. 2015) (“On appeal, a party may refine and clarify its
8
analysis in light of the district court’s ruling, including citing
additional support.”) (formatting modified); Koch v. Cox, 489
F.3d 384, 391 (D.C. Cir. 2007) (A party may cite “additional
support for his side of an issue upon which the district court did
rule, much like citing a case for the first time on appeal.”).
On to the merits.
B
We take as given the parties’ agreement that District of
Columbia law governs this tort dispute. See Patton Boggs LLP
v. Chevron Corp., 683 F.3d 397, 403 (D.C. Cir. 2012)
(applying District of Columbia law “which both parties assume
applies”). Under District law, Capitol Services’ claims for
tortious interference with business relations and tortious
interference with reasonable expectation of prospective
economic advantage are subject to a three-year statute of
limitations. D.C. CODE § 12-301(8); see Beard v. Edmondson
& Gallagher, 790 A.2d 541, 546 (D.C. 2002); Carr v. Brown,
395 A.2d 79, 83 (D.C. 1978). See generally Hartford Accident
& Indem. Co. v. Pro-Football, Inc., 127 F.3d 1111, 1118 (D.C.
Cir. 1997) (“Since [plaintiff’s] claims arise under District law,
the applicable statute of limitations is also that of the
District.”).
Ordinarily under District law, the statute of limitations for
a tort claim starts to run when the plaintiff is injured. See
Amobi v. District of Columbia Dep’t of Corr., 755 F.3d 980,
994 (D.C. Cir. 2014). All agree that Capitol Services was
injured on May 3, 2014, when the District terminated its
management contract. If that were the end of the story, basic
math would render Capitol Services’ August 28, 2017 filing of
this lawsuit untimely.
9
But Capitol Services contends, and Vesta does not
meaningfully dispute, that the District of Columbia’s discovery
rule delays the start of the statute of limitations until Capitol
Services had actual or inquiry notice of its potential causes of
action against Vesta. See Momenian, 878 F.3d at 388. 1
Where Capitol Services and Vesta part ways is over (i)
what “inquiry notice” demands, and (ii) whether it is
“conclusive” on the face of the complaint that Capitol Services
was on inquiry notice of its claims against Vesta more than
three years before it filed suit.
1
A claim accrues under the discovery rule when the plaintiff
“either has actual knowledge of a cause of action” or is
otherwise “charged with knowledge of that cause of action.”
Cevenini v. Archbishop of Wash., 707 A.2d 768, 771 (D.C.
1998). The latter is known as “inquiry notice.” Inquiry notice
is “that notice which a plaintiff would have possessed after due
investigation.” Diamond v. Davis, 680 A.2d 364, 372 (D.C.
1996). It does not refer to “the amount of information that
triggers a duty to investigate,” but rather the “quantum of
knowledge required to” “charge[] [a plaintiff] with knowledge
1
Vesta dedicated a measly three parenthetical words in its brief
to the applicability of the discovery rule. See Vesta Br. 27 (“In the
case at bar, the district court * * * concluded that even if the
discovery rule applied (it does not), Capitol Services’ claim
nonetheless accrued in March 2014.”) (emphasis added). That was
not enough to put the issue in controversy. See Davis v. Pension
Benefit Guar. Corp., 734 F.3d 1161, 1166–1167 (D.C. Cir. 2013) (A
party may not “mention a possible argument in the most skeletal way,
leaving the court to do counsel’s work, create the ossature for the
argument, and put flesh on its bones.”) (internal quotation marks
omitted).
10
of [his] cause of action[.]” Id.; see BDO Seidman v. Morgan,
Lewis & Bockius LLP, 89 A.3d 492, 500 (D.C. 2014). Under
District of Columbia law, the time at which a plaintiff acquires
inquiry notice “is a question of fact.” Diamond, 680 A.2d at
372.
Following multiple decisions of the District of Columbia
Court of Appeals, this Court has repeatedly applied the
discovery rule to postpone the running of a statute of
limitations until the plaintiff “knows or by the exercise of
reasonable diligence should know: (1) of the injury; (2) the
injury’s cause in fact; and (3) of some evidence of
wrongdoing.” Commonwealth Land, 922 F.3d at 464 (quoting
Capital Place I Assocs. L.P. v. George Hyman Constr. Co., 673
A.2d 194, 199 (D.C. 1996)). 2
Under that test, Capitol Services’ claims accrued when,
after due investigation, it would have learned of its injury, the
injury’s cause in fact, and “some evidence” of Vesta’s
wrongdoing. Commonwealth Land, 922 F.3d at 464. Yet as
Capitol Services notes, the District’s Court of Appeals has
sometimes articulated its discovery rule differently, stating that
claims do not accrue until the plaintiff has “discovered or
reasonably should have discovered all of the essential elements
of his possible cause of action.” Price v. Washington Metro.
2
Accord Hancock v. HomEq Servicing Corp., 526 F.3d 785,
786 (D.C. Cir. 2008) (quoting Diamond, 680 A.2d at 381); Bradley
v. National Ass’n of Sec. Dealers Dispute Resolution, Inc., 433 F.3d
846, 849 (D.C. Cir. 2005) (quoting Bussineau v. President & Dirs.
of Georgetown College, 518 A.2d 423, 425 (D.C. 1986)); Jung v.
Mundy, Holt & Mance, P.C., 372 F.3d 429, 433 (D.C. Cir. 2004)
(quoting Knight v. Furlow, 553 A.2d 1232, 1234 (D.C. 1989));
Goldman v. Bequai, 19 F.3d 666, 671–672 (D.C. Cir. 1994) (quoting
Knight, 553 A.2d at 1234); Williams v. Mordofsky, 901 F.2d 158, 162
(D.C. Cir. 1990) (quoting Knight, 553 A.2d at 1234).
11
Area Transit Auth., 41 A.3d 526, 533 (D.C. 2012) (formatting
modified); accord Owens-Corning Fiberglass Corp. v. Henkel,
689 A.2d 1224, 1231 (D.C. 1997); Arrington v. District of
Columbia, 673 A.2d 674, 678 (D.C. 1996); Colbert v.
Georgetown Univ., 641 A.2d 469, 473 (D.C. 1994) (en banc).
And because a prima facie case of tortious interference with
business relations or with reasonable expectation of
prospective economic advantage requires that a plaintiff plead
“intentional interference,” Jankovic v. International Crisis
Group, 593 F.3d 22, 29 (D.C. Cir. 2010); NCRIC, Inc. v.
Columbia Hosp. for Women Med. Ctr., Inc., 957 A.2d 890, 900
(D.C. 2008), Capitol Services reasons that the statute of
limitations did not begin running until it “received notice that
Vesta intentionally interfered with [its] expectation that it
would continue to perform property management services” at
the Property, Capitol Servs. Br. 34.
Predicting whether the District’s Court of Appeals would
find light between the “some evidence of wrongdoing” and “all
elements” tests would be no easy task. See Earle v. District of
Columbia, 707 F.3d 299, 310 (D.C. Cir. 2012). There is
caselaw on both sides of the ledger. Compare Hardi v.
Mezzanotte, 818 A.2d 974, 979 (D.C. 2003), and East v.
Graphic Arts Indus. Joint Pension Trust, 718 A.2d 153, 157
(D.C. 1998), with Morton v. National Med. Enters., Inc., 725
A.2d 462, 469 (D.C. 1999), and Cevenini, 707 A.2d at 771.
Ultimately, that is a job for another day. Even assuming the
“some evidence of wrongdoing” standard is stricter for
plaintiffs, Capitol Services’ lawsuit is timely.
2
There is no dispute that, as of May 3, 2014, Capitol
Services had “actual notice” of its injury—the cancellation of
its property management contract. And Capitol Services knew
12
then that the injury was caused by the District’s decision to
award an “emergency contract” to Vesta. See Vesta Br. 27–28;
Capitol Servs. Br. 33–34. There is also no meaningful dispute
that Capitol Services lacked “actual notice” of Vesta’s
wrongdoing as of that date. See Vesta Br. 28–31; Capitol
Servs. Br. 30, 36–37.
The district court, instead, ruled that Capitol Services was
on inquiry notice as of May 3rd. Specifically, the district court
reasoned that Capitol Services had “reason to suspect that
Vesta did some wrong” because it knew that (i) the District had
issued an “emergency contract” to Vesta, (ii) the District
“inappropriately terminated” Capitol Services’ agreement, and
(iii) Capitol Services’ relationship with Park Southern “ended.”
J.A. 110–111.
While those facts certainly put Capitol Services on notice
of its claims against the District, there is nothing in the
description of the District’s actions that hinted at Vesta’s role
in the contract’s termination. “[P]laintiff’s knowledge of
wrongdoing on the part of” the District itself “did not cause
accrual of his action against another[.]” Diamond, 680 A.2d at
380; see also Cevenini, 707 A.2d at 773 (“[K]nowledge of
misconduct on the part of one defendant will not automatically
create inquiry notice of claims against a potential co-
defendant[.]”).
Nor did the district court identify what evidence a “diligent
investigation” at that point would have uncovered about
Vesta’s participation in the District’s decisionmaking.
Diamond, 680 A.2d at 372; see Commonwealth Land, 922 F.3d
at 464. Because Capitol Services had reported to Park
Southern, not the District, and because the District had declined
to provide notice to Capitol Services of its ouster, nothing in
the initial complaint suggests that Capitol Services had any
13
knowledge or even suspicions of background relationships or
connections between Vesta and the District government. Even
the written communication between the District and Vesta were
by “private e-mails, which effectively circumvented FOIA
scrutiny.” Complaint ¶ 17, J.A. 8. The complaint does not
“conclusively establish” any facts uncoverable by Capitol
Services on May 3, 2014, or even by August 28, 2014 (that is,
three years before the complaint against Vesta was first filed)
that would have implicated Vesta in its injury within the three-
year limitations period.
Vesta argues, in the alternative, that Capitol Services was
on inquiry notice in July 2014, when it filed its complaint
against the District in Superior Court. This is so, Vesta
explains, because the complaint repeatedly alleges Vesta’s role
in inducing Capitol Services’ contract termination. See, e.g.,
J.A. 32 ¶ 18 (The District “terminated the contract and awarded
it immediately to Vesta because of political and personal
connections on the pretense of an ‘emergency contract’ award.
Upon information and belief, certain [District] representatives
jointly engaged in this decision. Said officials also
collaborated with Vesta regarding the government’s actions in
advance of [the District’s] May 3 * * * takeover of the
property.”); J.A. 32 ¶ 19 (The District’s “purported
qualification of the contract award to Vesta as an ‘Emergency’
was pretextual. It was intended to cause the removal of
[Capitol Services] and the substitution of Vesta as the
property’s property manager.”); J.A. 34 ¶ 29 (“Upon
information and belief, * * * one or more [District] officials
consulted improperly and illegally with yet known [sic] Vesta
officials to achieve the termination of [Capitol Services’]
Agreement and the award of an ‘emergency’ contract to Vesta
in order to block [Capitol Services’] business opportunities.”);
J.A. 38 ¶ 48 (The District “impeded [Capitol Services’]
business relationship and prospective advantages/opportunities
14
in order to advantage the interests of [Vesta], declared a non-
existing pretextual ‘emergency’ situation and awarded an
illegal ‘emergency [contract]’ to [Vesta].”); J.A. 39 (asserting
a claim against the District for civil conspiracy); see also D.C.
R. CIV. P. 11(b)(3) (imposing an obligation on counsel to assert
only factual contentions having evidentiary support).
That would be a really good argument if Vesta were
discussing the right version of the complaint. But those
allegations appear nowhere in Capitol Services’ July 2014
complaint against the District. The allegations in the July 2014
complaint reference Vesta only in innocuous and fleeting
factual recitations. See Complaint ¶ 17, Capitol Servs. Mgmt.
Inc. v. District of Columbia, No. 2014 CA 004551 B (D.C.
Super. Ct. July 24, 2014) (The District “entered into an
‘emergency contract’ with Vesta * * * on May 2, 2014, to
authorize Vesta to take over the management of Park Southern
Apartments on May 3, 2014.”); id. ¶ 18 (“In executing said
contract with Vesta, [the District] immediately terminated the
management agreement between [Park Southern] and [Capitol
Services].”); id. ¶ 31.
The allegations that Vesta cites and on which Vesta’s
argument relies come from Capitol Services’ amended
Superior Court complaint. That was filed in October 2014—
squarely within the three-year period preceding the lawsuit
against Vesta.
Finally, in light of the allegations in its amended
complaint, Capitol Services’ insistence that it had no notice
until its deposition of Milton Bailey in July 2016 pushes things
too far. Inquiry notice commences when, with due diligence, a
plaintiff would have been on notice that a particular
defendant’s wrongdoing caused or contributed to a potential
injury. See, e.g., Diamond, 680 A.2d at 372. It does not wait
15
until a plaintiff has actually assembled the evidence in
deposition form.
So all that the limited record shows at this Rule 12(b)(6)
stage is that Capitol Services was not on actual or inquiry
notice in either May or July of 2014, but was on inquiry notice
at least by October 2014. The record is inconclusive as to
Capitol Services’ knowledge about Vesta’s role prior to August
28, 2014—three years before this suit against Vesta was filed.
When during that intervening period Capitol Services had
inquiry notice of Vesta’s potential role thus is an open factual
question that cannot be resolved at this early juncture.
IV
This court can affirm a district court’s judgment on any
basis supported by the record. See United States v. Hicks, 911
F.3d 623, 626 (D.C. Cir. 2018). Vesta asks this court to do just
that, arguing that even if the complaint is timely, Capitol
Services nonetheless is collaterally estopped from relitigating
the question of alleged tortious interference with its contract.
Vesta points to the prior Superior Court judgment dismissing
Capitol Services’ case against the District arising from
termination of the Property contract. See J.A. 43–49.
Vesta fares no better on this front. The Superior Court held
that it lacked jurisdiction to adjudicate the suit against the
District, and so a central element for collateral estoppel is
missing.
Collateral estoppel, also known as issue preclusion,
generally confines plaintiffs to one bite at the litigation apple.
See B&B Hardware, Inc. v. Hargis Indus., Inc., 135 S. Ct.
1293, 1302–1303 (2015). Specifically, collateral estoppel bars
successive litigation of an issue of fact or law when
16
(1) the issue is actually litigated; (2) determined by a
valid, final judgment on the merits; (3) after a full and
fair opportunity for litigation by the parties or their
privies; and (4) under circumstances where the
determination was essential to the judgment, and not
merely dictum.
Walker v. FedEx Office & Print Servs., Inc., 123 A.3d 160, 164
(D.C. 2015) (quoting Hogue v. Hopper, 728 A.2d 611, 614
(D.C. 1999)). See generally Bode & Grenier, LLP v. Knight,
808 F.3d 852, 857–858 (D.C. Cir. 2015) (applying preclusion
rules of the jurisdiction in which the judgment was rendered).
Vesta directs our attention to language in the Superior
Court’s 2017 decision stating that it found “no evidence” “that
the District of Columbia actually interfered with [Capitol
Services’] contract or its business relationship with [Park
Southern] because neither the District of Columbia nor [Park
Southern] took any action to terminate it,” and instead “it
appear[ed] to the court that [Capitol Services] voluntarily
decided not to enforce its claimed rights[.]” J.A. 48. Because
Capitol Services failed to show any interference in that case,
Vesta argues, Capitol Services should be precluded from
relitigating whether it suffered tortious interference at Vesta’s
hands.
The Achilles heel of that argument is that, immediately
before remarking on contract interference, the Superior Court
ruled that it could not adjudicate the lawsuit because the
District enjoyed sovereign immunity from suit, and so was
“entitled to summary judgment” on that basis. J.A. 48. The
District’s sovereign immunity is a jurisdictional bar to
litigation—if it is not waived, the sovereign’s entitlement to
immunity deprives the court of subject matter jurisdiction over
17
the action. See Washington Metro. Area Transit Auth. v.
Barksdale-Showell, 965 A.2d 16, 21 n.4 (D.C. 2009). So once
the Superior Court concluded that it was without jurisdiction,
it could not “reach beyond that determination to consider
whether th[e plaintiff’s] claims would be meritorious if the
defect in [jurisdiction] were cured[.]” UMC Dev., LLC v.
District of Columbia, 120 A.3d 37, 49 (D.C. 2015).
The absence of jurisdiction meant the Superior Court
could not and did not actually resolve “on the merits” Capitol
Services’ tortious interference claim against the District, and so
the court’s comments on the subject were “merely dictum[,]”
in no way “essential to the judgment[.]” Walker, 123 A.3d at
164. 3 As a result, the critical elements of collateral estoppel
have not been established in this case.
V
Lastly, Vesta asks that we affirm on the ground that
Capitol Services failed to state a claim on the merits for either
tortious interference with business relations, or tortious
interference with reasonable expectation of prospective
economic advantage. Because the district court did not address
those questions and the parties have dedicated scant appellate
3
See also United States ex rel. Bledsoe v. Community Health
Sys., Inc., 501 F.3d 493, 507 (6th Cir. 2007) (holding that the
conclusion in a prior court’s opinion was “more properly
characterized as dicta than an alternative holding[]” because the
court had “concluded that it lacked subject matter jurisdiction”);
Moreland v. Federal Bureau of Prisons, 431 F.3d 180, 185 (5th Cir.
2005) (holding that the conclusion in a prior court’s opinion was
“dicta because the petition in [that opinion] was dismissed for lack
of subject-matter jurisdiction,” and was not an “alternative holding
because it could not support the actual judgment in that case, which
was dismissal for lack of subject-matter jurisdiction”).
18
briefing to the issues, it would be unwise for us to wade in at
this time and on this record. The issue, of course, remains open
for the district court to address on remand.
VI
For the foregoing reasons, we reverse the district court’s
judgment dismissing the case under Federal Rule of Civil
Procedure 12(b)(6) on statute-of-limitations grounds and
remand for further proceedings consistent with this opinion.
So ordered.