                       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, is a developer who, despite an exclusive right to

negotiate, failed to reach a final agreement with Washington Metropolitan Area Transit

Authority for the lease and development of certain real property. Banneker sues alleging, inter

alia, breach of contract and fraud. Washington Metropolitan Area Transit Authority moves to

dismiss for lack of jurisdiction over the tort and quasi-contract claims due to its sovereign

immunity and for failure to state a breach of contract claim. The motion will be granted.

                                            I. FACTS

               The Amended Complaint sets forth more than fifty pages of alleged facts,

summarized here. Washington Metropolitan Area Transit Authority (WMATA) sought to

improve certain real property located above the Shaw-Howard/Florida Avenue Metrorail Station

(the Site), consisting of three lots located in the 700 and 800 blocks of Florida Avenue, NW, in

Washington, D.C. Am. Compl. [Dkt. 18] ¶¶ 1, 22. In the spring of 2007, WMATA issued a

Request for Expressions of Interest for development of the Site. Id. ¶ 22.

               Banneker Ventures, LLC, (Banneker) is a firm that specializes in construction and

property development. Banneker and eleven other developers submitted responses to the

                                                 1
Request for Expressions of Interest. Id. ¶ 23. In August 2007, WMATA issued a Joint

Development Solicitation to six of the developers, including Banneker and LaKritz Adler

Development, LLC (LaKritz Adler), requesting that they submit more detailed proposals. The

Joint Development Solicitation provided that a developer would be selected, a term sheet would

be negotiated, and a Joint Development Agreement would be negotiated and completed within

150 days after the WMATA Board’s approval of the selected developer and the term sheet. Id.

¶ 28.

               Banneker proposed a project that would be known as “The Jazz at Florida

Avenue” (Project), id. ¶ 50, and Banneker and WMATA staff negotiated a draft term sheet for

presentation to the WMATA Board. Id. ¶ 59. On June 26, 2008, the WMATA Board chose

Banneker as the “Selected Developer” for the Project. Id. ¶¶ 2, 92, 115. The Board

simultaneously directed its staff to negotiate an affordable housing set aside as part of the

Project. Id. ¶ 89.

               On July 17, 2008, WMATA and Banneker signed a Term Sheet, which provided

that Banneker had the exclusive right, for a limited period of time, to negotiate a Joint

Development Agreement with WMATA for development of the Site. Id. ¶¶ 2, 18, 116; see

WMATA Mot. [Dkt. 22], Ex. 3 [Dkt. 22-5] (Term Sheet). The Term Sheet provided: “This

Term Sheet will have no binding effect on the parties except that [Banneker] shall have the

exclusive right to negotiate a Definitive Agreement with WMATA for a period of five (5)

months from the date of this Term Sheet.” Term Sheet at 11. Through March 2010, Banneker

and WMATA staff continued to negotiate and revise the Term Sheet, but the WMATA Board

did not approve a revised Term Sheet and the parties never agreed on a final Joint Development




                                                  2
Agreement. Am. Compl. ¶¶ 3, 154–176. Despite three extensions of time, Banneker’s exclusive

right to negotiate expired on March 31, 2010. Id. ¶¶ 12, 18, 176.

               Banneker alleges that Jim Graham, a District of Columbia Council member and

then a voting member of the WMATA Board of Directors, engaged in “bid suppression and bid

rigging,” i.e., he objected to the decision to choose Banneker as the Selected Developer and

interfered with Banneker’s attempts to finalize the Term Sheet and a Joint Development

Agreement. Id. ¶¶ 4–11, 127. Mr. Graham’s alleged goal was to designated LaKritz Adler as

the Selected Developer for the Project. Id. ¶ 7. LaKritz Adler was a major contributor to Mr.

Graham’s campaign and constituent services fund. Id. ¶¶ 5, 26.

               Specifically, Banneker alleges that Mr. Graham interfered with Banneker’s

exclusive right to negotiate a Joint Development Agreement by offering his vote as a member of

the D.C. Council to approve a D.C. lottery contract that would benefit one of Banneker’s then

principals, Warren Williams, in exchange for Banneker’s withdrawal as the Selected Developer

for the Project. Id. ¶¶ 7, 98, 109. Mr. Williams refused. Id. ¶ 8. Mr. Graham also allegedly

interfered by falsely reporting to the WMATA Board that Banneker did not have the capability

to develop the Site, id. ¶ 65, and questioning whether the deal was financially viable, id. ¶¶ 93,

137. In addition, it was Mr. Graham who allegedly convinced the WMATA Board to add

affordable housing requirements to the Project, decreasing the value of the Project to the

detriment of Banneker. Id. ¶ 10, 89, 111. Further, Mr. Graham allegedly pressured Banneker to

include LaKritz Adler on the Project as a co-developer, id. ¶¶ 11, 70–71, 111, and to purchase a

high-priced option on adjacent property from LaKritz Adler, id. ¶¶ 119, 127. Also, Mr. Graham

allegedly pressured Banneker to help fund a U Street Business Improvement District. Id. ¶¶ 111,

121.



                                                 3
               Mr. Graham’s actions to frustrate Banneker’s efforts and to advance LaKritz

Adler’s financial interests were found to have violated the WMATA Standards of Conduct 1 and

the D.C. Code of Conduct. Id. ¶¶ 6, 18, 131. In February 2012, the WMATA Board launched an

independent investigation into allegations that Mr. Graham had offered to support Mr. Williams’

bid for the D.C. lottery contract in exchange for Banneker’s withdrawal from the Project. Id.

¶¶ 181-82. Bradley Bondi, a partner in the law firm of Cadwalader, Wickersham & Taft LLP,

led the investigation. In October 2012, Mr. Bondi issued a Report of Investigation for the Board

of Directors for WMATA, i.e., the “Cadwalader Report.” See WMATA Mot., Ex. 1 [Dkt. 22-3]

(Cadwalader Report). The Cadwalader Report described why Banneker and WMATA were

unable to negotiate a final contract:

               Metro and Banneker Ventures confronted numerous obstacles to
               finalizing a term sheet, including Banneker’s lack of development
               experience, the absence of a clear Metro policy on key aspects of
               the term sheet, concerns and inquiries raised by Metro Board
               Members, and the financial and economic crisis that impacted the
               real estate market. The inability of Banneker and Metro to
               anticipate and solve these problems caused numerous delays that
               ultimately prevented the parties from presenting a final term sheet
               to the Metro Board before Banneker Ventures’s exclusive
               negotiation period expired.

Cadwalader Report at 21–22. The Cadwalader Report also explained that after Banneker was

told to include affordable housing in the Project, Banneker reduced its bid from $14 million to

$5.8 million, below the bids of other proposed developers and below the Site’s $7.5 million

appraised value. Id. at 23. In May 2009, the Site was reappraised at a lower value, which caused

Banneker to reduce its bid even further. Id. Banneker was unable to retain an experienced

development partner, as required by WMATA from the outset, and was unable to make a


1
 The Amended Complaint mistakenly refers to the WMATA “Code of Conduct.” Banneker
corrected its error in its response to WMATA’s motion. See Opp’n [Dkt. 24] at 4.

                                                4
financial offer acceptable to the WMATA Board. Id. at 51-52. Mr. Bondi concluded that “[i]n

the two years that Banneker Ventures spent negotiating with Metro, Banneker Ventures did not

adequately address the concerns raised by the Metro Board and did not solve various other

problems that it faced.” Id. at 50.

               Despite finding business reasons for the failure of Banneker and WMATA to

reach a final contract, the Cadwalader Report also determined that Mr. Graham violated Article

III § A of the WMATA Standards of Conduct, which provides:

               Public funds must be expended in a manner which assures the
               highest degree of confidence and public trust in WMATA. 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
               toward any individual, private organization, consultant, contractor
               or potential consultant or contractor. 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 53. Mr. Graham violated Article III § A in two ways: by telling Mr. Williams that he

would support his bid for the lottery contract if Banneker withdrew as Selected Developer for the

Project, Mr. Graham “pitted the interests” of the D.C. Council against the interests of WMATA,

thereby creating a conflict of interest, or at least the appearance of one; and by supporting

LaKritz Adler’s inclusion in the Project and opposing Banneker’s participation in the Project,

Mr. Graham breached his duty to remain impartial. Id.; see also Am. Compl. ¶ 190.

               WMATA did not sell or lease the Site to LaKritz Adler. In July 2011, WMATA

sold the Site to JBG Construction for $10.2 million. Cadwalader Report at 28. As of October

2012, the Site remained undeveloped and JBG Construction was awaiting the requisite approval

from the D.C. Historic Preservation Review Board. Cadwalader Report at 28 n.103.
                                                 5
              After the Cadwalader Report was issued, the D.C. Board of Ethics and

Government Accountability initiated an investigation and issued an Ethics Report. The Ethics

Report allegedly found that Mr. Graham violated the D.C. Code of Conduct by inappropriately

favoring his campaign contributor, LaKritz Adler, over Banneker in the negotiation for

development of the Site. Am. Compl. ¶ 195. On February 25, 2013, the D.C. Council adopted a

resolution reprimanding Mr. Graham for improperly offering to support Mr. Williams’ bid for

the D.C. lottery contract in exchange for Banneker’s withdrawal from the Project. Id. ¶¶ 197–

202.

                  As a result, Banneker filed suit against WMATA, Mr. Graham, Mr. LaKritz, Mr.

Adler, and LaKritz Adler. The Amended Complaint alleges eight counts:

              Count I–Breach of Contract (against WMATA);

              Count II–Breach of Covenant of Fair Dealing (against WMATA);

              Count III–Tortious Interference with a Prospective Economic
              Advantage (against Messrs. Graham, LaKritz, Adler, and LaKritz
              Adler);

              Count IV–Tortious Interference with a Contract (against Messrs.
              Graham, LaKritz, Adler, and LaKritz Adler);

              Count V–Unjust Enrichment (against WMATA);

              Count VI–Unlawful Restraint of Trade (against Messrs. Graham,
              LaKritz, and Adler);

              Count VII–Fraud, Constructive Fraud, and Negligent
              Misrepresentation (against WMATA); and

              Count VIII–Civil Conspiracy (against all Defendants).

Id. ¶¶ 203-330.

              WMATA moves to dismiss the tort and quasi-contract claims against it (Counts

V, VII, and VIII), arguing that sovereign immunity bars such claims and, thus, the Court lacks


                                                6
jurisdiction over them. See WMATA Mot.; WMATA Reply [Dkt. 32]. WMATA also moves to

dismiss the contract claims against it (Counts I and II) for failure to state a claim. Id. Banneker

opposes. See Opp’n [Dkt. 24].

                       II. JURISDICTION AND LEGAL STANDARDS

       A. Jurisdiction

               The Court has jurisdiction in this case under the Washington Metropolitan Area

Transit Regulation Compact. See D.C. Code § 9-1107.01 (formerly D.C. Code § 1-2431)

(adopting and amending the Compact). The Compact provides that “[t]he United States District

Courts shall have original jurisdiction, concurrent with the courts of Maryland, Virginia, and the

District of Columbia, of all actions brought by or against [WMATA] . . . .” Id., Compact, Title

III, Art. XVI (General Provisions) § 81 (Jurisdiction of Courts). Because WMATA is a

defendant here, this Court has original jurisdiction.

       B. Motion to Dismiss for Lack of Subject Matter Jurisdiction

               WMATA contends its sovereign immunity from Counts V, VII, and VIII requires

that these Counts be dismissed for lack of subject matter jurisdiction. See Fed. R. Civ. P.

12(b)(1). When reviewing a motion to dismiss for lack of jurisdiction under Rule 12(b)(1), a

court must review the complaint liberally, granting the plaintiff the benefit of all inferences that

can be derived from the facts alleged. Barr v. Clinton, 370 F. 3d 1196, 1199 (D.C. Cir. 2004).

Nevertheless, “the court need not accept factual inferences drawn by plaintiffs if those inferences

are not supported by facts alleged in the complaint, nor must the Court accept plaintiff=s legal

conclusions.” Speelman v. United States, 461 F. Supp. 2d 71, 73 (D.D.C. 2006).

               A court is not limited to the pleadings when deciding whether it has jurisdiction

over a claim. Settles v. U.S. Parole Comm’n, 429 F.3d 1098, 1107 (D.C. Cir. 2005). No action

of the parties can confer subject matter jurisdiction on a federal court because subject matter

                                                  7
jurisdiction is an Article III and a statutory requirement. Akinseye v. District of Columbia, 339

F.3d 970, 971 (D.C. Cir. 2003). The party claiming subject matter jurisdiction bears the burden

of demonstrating that such jurisdiction exists. Khadr v. United States, 529 F.3d 1112, 1115

(D.C. Cir. 2008); see Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)

(noting that federal courts are courts of limited jurisdiction and “[i]t is to be presumed that a

cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon

the party asserting jurisdiction.”) (internal citations omitted).

        C. Motion to Dismiss for Failure to State a Claim

                WMATA also argues that the contract claims against it (Counts I and II) should

be dismissed for failure to state a claim. A motion to dismiss pursuant to Federal Rule of Civil

Procedure 12(b)(6) challenges the adequacy of a complaint on its face, testing whether a plaintiff

has properly stated 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 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



                                                   8
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) (internal quotation marks and citation omitted). 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). The Amended Complaint refers to the Term Sheet and

the Cadwalader Report as central to Banneker’s claim, and the Court considers these documents,

filed by WMATA, in reviewing WMATA’s motion to dismiss. See Cadwalader Report [Dkt.22-

3] & Term Sheet [Dkt. 22-5].

                                         III. ANALYSIS

       A. Sovereign Immunity for Tort Claims

               WMATA is a quasi-governmental agency created by an Interstate Compact,

enacted by Congress and adopted by the District of Columbia, the State of Maryland, and the

Commonwealth of Virginia. See Martin v. WMATA, 667 F.2d 435 (4th Cir. 1981). State

agencies, like the States, are covered by sovereign immunity, and by signing the Compact, the



                                                  9
District of Columbia, Maryland, and Virginia extended sovereign immunity to WMATA. Beatty

v. WMATA, 860 F.2d 1117, 1126 (D.C. Cir. 1988).

               Under Section 80 of the Compact, WMATA is immune from liability for torts

committed by its agents in performing governmental functions and WMATA waives its

immunity from liability for tort claims where the claims arise out of WMATA’s proprietary,

non-governmental functions. Section 80 provides:

               [WMATA] shall be liable for its contracts and for its torts and
               those of its directors, officers, employees, and agents committed in
               the conduct of any proprietary function, in accordance with the
               applicable [Compact] signatory (including rules of conflict of
               laws), but shall not be liable for any torts occurring in the
               performance of a governmental function.

D.C. Code § 9-1107.01, Compact, Title III, Art. XVI (General Provisions) § 80 (Liability for

Contract and Torts). Unless the waiver of sovereign immunity applies, a district court lacks

jurisdiction to enter a judgment against WMATA. Watters v. WMATA, 295 F.3d 36, 39-40 (D.C.

Cir. 2002).

               To determine whether WMATA is qualified for immunity from a particular claim,

a court engages in a two-step process. First, it determines whether the challenged actions were

taken in pursuit of a “quintessential” governmental function; if so, the activities fall within the

scope of WMATA’s immunity. James v. WMATA, 649 F. Supp. 2d 424, 430 (D. Md. 2009).

That is, even if WMATA performed a quintessential government function negligently, it is

immune from tort liability. Id. An example of a quintessential government function is law

enforcement. Burkhart v. WMATA, 112, F.3d 1207, 1216 (D.C. Cir. 1997).

               If a “quintessential governmental function” is not involved, a court proceeds to

the second step of the inquiry and determines whether the challenged activity was “discretionary

or ministerial,” i.e., non-discretionary. James, 649 F. Supp. 2d at 430. “[A] duty is discretionary


                                                 10
if it involves judgment, planning, or policy decisions. It is not discretionary if it involves

enforcement or administration of a mandatory duty at the operational level, even if professional

expert evaluation is required.” Beatty, 860 F.2d at 1127. In other words, if a statute, regulation,

or policy specifically prescribes a required course of action, then the action is ministerial. KiSKA

Constr. Corp. v. WMATA, 321 F.3d 1151, 1159 (D.C. Cir. 2003). Sovereign immunity does not

bar suits based on WMATA’s alleged failure to follow a prescribed course of conduct. Id.

Sovereign immunity does bar suits based on WMATA’s discretionary activities so long as its

actions were “grounded in social, economic, or political goals.” Id. The D.C. Circuit has

explained that Congress intended to insulate policy decisions from liability in order to permit

governmental entities to govern freely:

               By insulating from liability decisions involving the balancing of
               social, political, and economic factors . . . Congress presumably
               did intend to allow government to create immunity by carefully
               considering a question in policy terms. It is true . . . that such
               immunity could have substantial and even on occasion undesirable
               impact if those policies are ill-considered. But the hard fact
               remains that insulating policy determinations, good and bad, is the
               raison d’etre of the discretionary function exception.

Souders v. WMATA, 48 F.3d 546, 549 (D.C. Cir. 1995) (internal quotations omitted).

               Here, WMATA concedes that the activities at issue in this litigation were not part

of any quintessential government function. See WMATA Mot. at 11. Thus, the Court must

determine (1) if WMATA’s actions were ministerial or discretionary and (2) if they were

discretionary, whether they were grounded in social, economic, or political goals. As explained

below, the Court finds that Banneker’s tort claims against WMATA for fraud, constructive fraud,

and negligent misrepresentation (Count VII) and civil conspiracy based on the underlying fraud

(Count VIII) are barred by sovereign immunity because WMATA’s decisions regarding the

conveyance and development of real estate were discretionary.


                                                 11
               WMATA has discretion in deciding how to dispose of its real property, as

exemplified by three recent cases. For example, in KiSKA, a contractor on a subway

construction project brought suit against WMATA. WMATA had issued an invitation for bid on

tunnel construction for expansion of the Green Line, but the invitation did not include

information regarding engineering obstacles that might occur on the project. 321 F.3d at 1155.

The contractor responded to the invitation for bid and received the contract; it then encountered

engineering problems that caused costs to double. As a result, the contractor sued WMATA for

fraud. The D.C. Circuit affirmed the district court’s dismissal of the fraud claim on sovereign

immunity grounds. The contractor pointed to no statute, regulation, or policy that specifically

dictated the content of WMATA’s invitations for bid and instead argued that (1) WMATA had a

non-discretionary duty of good faith to disclose relevant facts and (2) a Federal Transit

Administration (FTA) circular required that all contract solicitations must include “a clear and

accurate description of the technical requirements for the material, product, or service to be

procured.” Id. at 1160. The court held that the duty of good faith and fair dealing is not a

specific dictate rendering WMATA’s activity non-discretionary. Similarly, the FTA circular was

too general to mandate any particular course of conduct. Id. The D.C. Circuit affirmed the

finding that sovereign immunity applied because WMATA’s discretionary decision regarding the

content of the invitation for bid was based on a policy judgment relating to budget constraints

and economic expediency. Id. at 1161-62.

               In another real property case, Monument Realty LLC v. WMATA, 535 F. Supp. 2d

60 (D.D.C. 2008), WMATA selected Monument as the “master developer” for a project known

as the Navy Yard/Southeast Bus Garage and granted Monument the exclusive right to negotiate a

final development agreement. 535 F. Supp. 2d at 65. The project was organized in phases,



                                                12
whereby Monument purchased the Navy Yard Metro Station and developed that property, and

later bid on the purchase of the Bus Garage. WMATA failed to inform Monument that the

District of Columbia retained a right of first refusal on all WMATA property sales in the District,

and, when the District exercised its right of first refusal to purchase the Bus Garage, WMATA

had to reject Monument’s bid. Id. 2

                Monument sued, alleging that WMATA committed fraud and breached its

fiduciary duty by failing to inform Monument that it did not, in fact, have an exclusive right to

purchase the Bus Garage since the District of Columbia held a right of first refusal. Monument,

535 F. Supp. 2d at 78. However, Monument failed to point to any statute or provision of the

Compact that prescribed a course of action for WMATA while engaging in negotiations for the

sale of real estate. Id. The district court found that sovereign immunity barred Monument’s tort

claims because WMATA’s discretion in deciding how to dispose of its property was grounded in

policy considerations regarding cost, expediency, and the interests of residents and businesses in

the area. Id. at 79.

                In Greenbelt Ventures, LLC v. WMATA, 481 F. App’x 833 (4th Cir. 2012), the

Fourth Circuit also considered the question of WMATA’s sovereign immunity from tort claims.

There, WMATA entered into a contract with Metroland Developers LLC to develop land owned

by WMATA near a metro station in Prince George’s County, Maryland. The contract provided

that Metroland could not assign its rights under the contract without prior written approval by the

WMATA Board. Metroland sought approval for assignment to Greenbelt Ventures LLC.

Despite oral approval by WMATA staff, the WMATA Board never approved the assignment.
2
 The District, however, ultimately decided not to purchase the Bus Garage, and WMATA issued
another invitation for bid for the Bus Garage. The winning bidder was a different contractor,
John Akridge Company. See Monument Realty LLC v. WMATA, No. 07-cv-1821-EGS (D.D.C.
Feb. 28, 2008) (Op. at Dkt. 75) at 8.

                                                13
Metroland and Greenbelt Ventures sued for fraud and tortious interference based on WMATA’s

alleged unreasonable withholding of consent to the assignment. The Fourth Circuit held that the

contract was not the equivalent of a regulation and it did not compel WMATA to take any

particular action. 481 F. App’x at 839-40. Further, the Fourth Circuit agreed with the district

court that WMATA exercised discretion in withholding consent and the exercise of such

discretion was protected by sovereign immunity because it involved social and economic

considerations. Id. at 840. Because the project involved the interests of “many stakeholders and

governments, representing millions of dollars and tens of thousands of people with a stake in

transit oriented development,” WMATA was required to “weigh all of these social and economic

considerations in the selection of the developer who will be responsible for completing the

[p]roject.” Id. (citation and internal quotations omitted).

               The question in the present case is whether WMATA’s decisions not to extend

Banneker’s exclusive negotiating period a fourth time and not to enter a Joint Development

Agreement with Banneker were discretionary or ministerial. These activities were discretionary.

Banneker points to no statute, regulation, or policy specifying WMATA’s actions in negotiating

a real estate development contract. Instead, Banneker contends that the WMATA Standards of

Conduct specifically prescribe a course of action, i.e., that these Standards render non-

discretionary WMATA’s activities vis-à-vis Banneker and the failed real estate transaction. Id.

at 4. 3 Banneker does not cite to any particular section of the Standards of Conduct, but asserts

that the Standards required WMATA Board Members to “either do or not do certain designated

things” including the following:
3
 While the Amended Complaint also alleges that Mr. Graham violated the D.C. Code of
Conduct and the D.C. Rules of Council, see Am. Compl. ¶¶ 6, 18, 131, in response to
WMATA’s motion to dismiss, Banneker limits its argument to the WMATA Standards of
Conduct, see Opp’n at 3-7.

                                                 14
               1) avoid engaging in actions which create a conflict of interest or
               the appearance of a conflict of interest; 2) to act in an impartial
               manner in their official conduct by avoiding any actions which
               might result in favored treatment or appearances thereof toward
               any individual, private organization, . . . contractor; 3) not to use or
               permit others to use information not generally available to the
               public to further the direct or indirect financial interests of any
               party to any actual or prospective financial transaction with
               WMATA; and 4) not disclose or permit others to disclose to
               anyone outside WMATA information obtained through their
               official position with WMATA that’s [sic] not generally available
               to the public.

Opp’n at 4-5. 4 Banneker argues that WMATA had no discretion because the WMATA

Standards “are flat-out prescriptions, leaving no room for Board members to exercise discretion

(i.e. weighing economic considerations) in deciding whether to engage in some conflicting

actions not others.” Id. at 5. Bannker asserts that WMATA had:

               no discretion whether to act in a partial manner or show favoritism
               (i.e. weighing political considerations) for a favored vendor in
               some instances but not in others [sic] vendors whom the Board
               member does not favor; no room to exercise discretion that some
               situations may call for the sharing of non-public information to
               further the financial interests of a vendor in some circumstances
               but not share it with other vendors; and, no room for the exercise
               of discretion (i.e. weighing social consideration) for deciding to
               disclose non-public information to persons outside of WMATA in
               certain circumstances but not others.

Id.

               This argument incorrectly frames the issue. The issue is not whether WMATA

had discretion to act impartially or to disclose non-public information, the issue is whether

WMATA had discretion to decide whether or not to extend Banneker’s exclusive right to


4
  Banneker’s first and second points appear to quote Article III § A of the Standards of Conduct.
See Cadwalader Report at 53 (quoting Standards of Conduct Art. III § A). The basis for the third
and fourth points is unknown. The WMATA Standards of Conduct have not been filed as part of
the record in this case. Further, Banneker does not allege facts that support its claim that
WMATA or Mr. Graham shared non-public information.

                                                 15
negotiate and whether or not WMATA had discretion to decide if the proposed terms were

acceptable. Like the federal circular and the duty of good faith cited in KiSKA, see 321 F.3d at

1160, the Standards of Conduct do not dictate a course of action with regard to a real property

transaction. In fact, the Standards of Conduct prescribe ethical conduct and do not prescribe any

particular course of action. Decisions such as how long to negotiate a final contract and the

terms to include are discretionary.

               Further, WMATA’s non-ministerial decisions regarding the negotiations with

Banneker were based on economic, political, and social considerations. Courts have determined

in similar cases that WMATA has discretion in deciding how to dispose of its real property and

that the exercise of such discretion requires that WMATA “weigh issues of cost and expediency

to determine which alternative would provide WMATA with the best net return.” Monument,

535 F. Supp. 2d at 79. In Greenbelt Ventures, WMATA’s decision to withhold consent to

assignment of the development contract involved the interests of “many stakeholders and

governments, representing millions of dollars and tens of thousands of people with a stake in

transit oriented development,” requiring WMATA to “weigh all of these social and economic

considerations in the selection of the developer who will be responsible for completing the

[p]roject.” 481 F. App’x at 840 (citation and internal quotations omitted). In the present case,

WMATA faced the same considerations. WMATA asserts:

               In the case at bar, the interests of many stakeholders and
               governments, representing tens of thousands of people with a stake
               in transit[-]oriented development, will be affected by the decisions
               regarding the disposition of the Site. The decision regarding how
               long to give a developer to negotiate a contract and what its terms
               should be are exactly the type of discretionary judgment, involving
               social, political and economic factors that immunity is intended to
               protect.




                                                16
WMATA Mot. at 15. Banneker does not contest that WMATA weighed social, economic,

and/or political factors in making decisions regarding the Project. Banneker argues only that

WMATA’s activities were not discretionary because they were governed by the Standards of

Conduct. An argument without response is treated as conceded. See Hopkins v. Women’s Div.,

Gen. Bd. of Global Ministries, 284 F. Supp. 2d 15, 25 (D.D.C. 2003) (“It is well understood in

this Circuit that when a plaintiff files an opposition to a dispositive motion and addresses only

certain arguments raised by the defendant, a court may treat those arguments that the plaintiff

failed to address as conceded.”), aff’d, 98 F. App’x 8 (D.C. Cir. 2004).

               Because WMATA’s discretionary actions here are entitled to sovereign immunity,

Banneker’s tort claims based on these actions are barred. Thus, Count VII (alleging fraud,

constructive fraud, and negligent misrepresentation) and Count VIII (alleging civil conspiracy

based on fraud) will be dismissed due to lack of jurisdiction.

       B. Sovereign Immunity for Unjust Enrichment Claim

               Sovereign immunity also applies to Count V of the Amended Complaint––

Banneker’s claim of unjust enrichment against WMATA. Count V alleges that WMATA

breached its promise to exclusively negotiate with Banneker and Banneker reasonably relied on

this promise to its detriment.

               A waiver of sovereign immunity must be clear and unequivocal, and it must be

strictly construed in favor of the government. United States v. Nordic Village Inc., 503 U.S. 30,

33-34 (1992); Kingston Constructors, Inc. v. WMATA, 860 F. Supp. 886, 888-89 (1994). Section

80 of the Compact waives sovereign immunity for tort and contract claims where the claims arise

out of WMATA’s proprietary, non-governmental function, see D.C. Code § 9-1107.01,

Compact, Title III, Art. XVI § 80, but it does not mention claims of promissory estoppel. Thus,



                                                17
WMATA has not clearly waived its sovereign immunity from liability for promissory estoppel

claims. Martin v. WMATA, 273 F. Supp. 2d 114, 119 (D.D.C. 2003); accord Fulcrum Int’l, Inc.

v. Prince George Center I, Inc., 503 F. App’x 193, 195 (4th Cir. 2012) (the Compact does not

waive immunity regarding claim of estoppel based on detrimental reliance). Banneker argues

that it should be permitted to maintain an estoppel claim because WMATA is guilty of

affirmative and egregious conduct. The Court rejects this argument, as Banneker cites no

authority to support it and the sound reasoning of Martin and Fulcrum is to the contrary.

                   Since sovereign immunity has not been waived for promissory estoppel claims,

the Court lacks jurisdiction to enter a judgment against WMATA on Count V. See Watters, 295

F.3d at 39-40. Count V, alleging unjust enrichment against WMATA, will be dismissed for lack

of jurisdiction.

        C. Failure to State a Claim for Breach of Contract

                   WMATA also moves to dismiss Banneker’s claims for breach of contract and

breach of duty of good faith and fair dealing. The Term Sheet, executed on July 17, 2008,

provided that Banneker had the exclusive right to negotiate a final Joint Development

Agreement, referred to as a “Definitive Agreement,” with WMATA “for a period of five (5)

months from the date of this Term Sheet.” Term Sheet at 11. Banneker and WMATA staff

continued to negotiate and revise the Term Sheet through March 2010, but the WMATA Board

did not approve a revised Term Sheet and the parties never agreed on a final Joint Development

Agreement. Am. Compl. ¶¶ 3, 154-176. Despite three extensions of time, the Banneker’s

exclusive right to negotiate expired on March 31, 2010. Id. ¶¶ 12, 18, 176.

                   Banneker asserts two bases for its breach of contract and breach of duty of good

faith and fair dealing claims: (1) WMATA breached Banneker’s exclusivity period; and (2) the



                                                   18
July 2008 Term Sheet itself constituted a final contract for the lease and development of the Site,

and that WMATA breached this final contract. Am. Compl. ¶¶ 210-229. In support of its claims

of breach, Banneker sets forth a list of sixteen actions taken by Mr. Graham:

               1) interfer[ing] with Banneker’s period of exclusivity;

               2) . . . prevent[ing] Banneker from being able to successfully
               negotiate a Definitive Agreement with WMATA;

               3) execut[ing] a bid-suppression scheme to get Banneker out of the
               WMATA Project in exchange for a pay-off of an unrelated D.C.
               [l]ottery contract award to a then Banneker [p]rincipal;

               4) requir[ing] Banneker to include Graham’s favored development
               company (LaKritz Adler) as a member of Banneker’s development
               team in order to provide a financial benefit to LaKritz Adler at
               Banneker’s expense;

               5) requir[ing] Banneker to purchase property from Graham’s
               favored development company (LaKritz Adler) in order to provide
               a financial benefit to LaKritz Adler at Banneker’s expense;

               6) add[ing] 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;

               7) interfer[ing] with Banneker Development Team composition
               ...;

               8) provid[ing] the LaKritz Adler defendants with access to
               information not available to the public to enhance LaKritz Adler’s
               competitive advantage and reduce or destroy Bannekers’
               competitive advantage;

               9) continu[ing] to advocate (as a WMATA Board Member, Chair
               of the PDRE Committee 5 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


5
 The PDRE Committee is the WMATA Board of Directors Planning, Development and Real
Estate Committee. See Am. Compl. ¶ 63.

                                                19
               the Project with the very same WMATA staff charged with
               negotiating exclusively with Banneker under the contract;

               10) using his jurisdictional vote (either voting “no” or
               “abstaining”) as 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;

               11) instructing WMATA’s then General Counsel (during
               Banneker’s period of exclusivity) to provide a legal roadmap [as
               to] how, when and under what circumstances Graham could
               request “Best and Final Offers” so that his favored developer
               (LaKritz Adler) would have another opportunity to financially
               benefit from the Project––which . . . was provided on November
               30, 2009;

               12) entering into an agreement, scheme or plan with LaKritz, Adler
               and LaKritz Adler defendants to engage in a continuous course of
               conduct both before and all-during [sic] Banneker’s period of
               exclusivity designed to interfere with the rights of Banneker and
               provide a financial benefit to LaKritz Adler at Banneker’s expense;

               13) violating the WMATA [Standards] of Conduct by losing his
               impartiality with respect to Banneker as a vendor in favor of
               LaKritz Adler as found by the WMATA Board of Directors
               following the issuance of the [Cadwalader] Report;

               14) violating the District’s Code of Conduct by failing to act in the
               public interest as found by the District’s Board of Ethics and
               Government Accountability in its Report issued on February 7,
               2013;

               15) violating the D.C. Council’s Rules as found by the D.C.
               Council at the time it publicly reprimanded D.C. Council Member
               Graham on February 25, 2013; and

               16) orchestrating and achieving the end goal (which culminated on
               March 25, 2010) of sowing enough delay, obstacles and
               interference such to allow Banneker’s period of exclusivity [to]
               expire on March 31, 2010.

Am. Compl. ¶ 208 (part of Count I, breach of contract); see id. ¶ 239 (identical; part of Count II,

breach of duty of good faith and fair dealing). Banneker summarizes these allegations by

asserting that Graham “pressured and advocated” to Banneker, WMATA staff, and WMATA
                                                20
Board Members to include LaKritz Adler in the Project “in some fashion,” and that WMATA

was aware that Mr. Graham was advocating for LaKritz. Opp’n at 12-13.

               The Amended Complaint does not state a claim for breach of the exclusivity

agreement because it does not allege that WMATA negotiated with another developer for

development of the Project during Banneker’s exclusivity period. Mr. Graham’s suggestion to

Banneker that it include LaKritz Adler in the Project and/or purchase property from LaKritz

Adler was part of a negotiation with Banneker and was not a negotiation with a third party.

Further, Mr. Graham’s offer to Mr. Williams that Banneker withdraw as the Selected Developer

on the Project in exchange for Mr. Graham’s D.C. Council vote to approve a D.C. lottery

contract benefitting Mr. Williams, was a negotiation with Banneker because Mr. Williams was a

principal of Banneker. Banneker’s assertion that LaKritz Adler sought to be included in the

Project during Banneker’s exclusivity period, see Opp’n at 13, points only to LaKritz Adler’s

desire to be part of the Project. The mere desire to be part of the Project does not constitute a

negotiation between WMATA and LaKritz Adler for LaKritz Adler’s work on the Project.

Further, while Banneker contends that Mr. Graham improperly pressured WMATA staff and

Board Members in favor of LaKritz Adler, there is no allegation that this resulted in actual

negotiations between WMATA and LaKritz Adler.

               The most pointed allegation of the sixteen listed above is that WMATA entered

“into an agreement, scheme or plan with LaKritz, Adler and LaKritz Adler defendants to engage

in a continuous course of conduct both before and all-during [sic] Banneker’s period of

exclusivity designed to interfere with the rights of Banneker and provide a financial benefit to

LaKritz Adler at Banneker’s expense.” Am. Compl. ¶ 208(12). This allegation, however, like

all the others, does not state that WMATA bargained with LaKritz Adler for its work as



                                                 21
developer of the Project during Banneker’s exclusivity period. It asserts only that Mr. Graham

and LaKritz Adler agreed to interfere with Banneker’s negotiation. Though Mr. Graham’s

interference was found to be unethical, an agreement to interfere does not constitute a

negotiation for work on the Project and thus was not a breach Banneker’s exclusivity agreement.

               With regard to the breach of contract claim alleging that the Term Sheet

constituted a final agreement, the claim will be dismissed for failure to allege a valid and binding

contract reflecting agreement as to all material terms. To assert a breach of contract claim under

D.C. law, a plaintiff must allege four elements: (1) a valid contract between the parties; (2) a

duty arising out of the contract; (3) breach of that duty; and (4) damages caused by the breach.

Paulin v. George Wash. Univ. Sch. of Med., 878 F. Supp. 2d 241, 246 (D.D.C. 2012); Tsintolas

Realty Co. v. Mendez, 984 A.2d 181, 187 (D.C. 2009). A valid and enforceable contract requires

the express intention of the parties to be bound and agreement to all material terms. Simon v.

Circle Assocs., 753 A.2d 1006, 1012 (D.C. 2000). “There must thus be an honest and fair

‘meeting of the minds’ as to all issues in a contract.” Id. “[P]arties will not be bound to a

preliminary agreement unless the evidence presented clearly indicates that they intended to be

bound at that point.” Jack Baker, Inc. v. Office Space Dev. Corp., 664 A.2d 1236, 1239 (D.C.

1995).

               Banneker alleges that the Term Sheet included all material terms, Am. Compl.

¶ 216, that WMATA “agreed that the Board would only decline to approve development of the

Site under certain conditions” that were not present, id. ¶¶ 217-18, and that WMATA breached

the Term Sheet by failing to formally memorialize a final Joint Development Agreement without

reason, id. ¶ 222. Banneker’s claim for breach of contract is facially implausible, as the Term

Sheet itself reveals there was no valid contract between the parties containing all material terms.



                                                 22
See Twombly, 550 U.S. at 570 (a complaint must contain sufficient factual matter, accepted as

true, to state a claim for relief that is “plausible on its face.”). Banneker conveniently overlooks

the explicit language of the Term Sheet setting forth the understanding that the parties “wished to

negotiate” a Definitive Agreement in the near future and that WMATA would not be bound by

such Definitive Agreement “unless and until” it was approved by the Board. The Term Sheet’s

preamble stated:

               This Term Sheet . . . is intended to summarize the principal terms
               of a proposal being considered by the undersigned parties
               regarding a lease of certain real property on the south side of
               Florida Avenue, NW between 7th and 9th streets, NW. The
               undersigned parties wish to negotiate a Definitive Agreement, as
               defined in Section 2.1 herein.

Term Sheet at 1 (emphasis added). Section 2.1 provided:

               2.1 Definitive Agreement

               The Definitive Agreement, to be prepared initially by WMATA and
               presented by WMATA to the WMATA Board for approval and
               signature within five months of Board Term Sheet approval, will
               be a Joint Development Agreement (JDA) that will include, as an
               exhibit, a 60-year ground lease agreement (Lease), together with
               all related documentation upon which WMATA and Developer
               mutually agree. The Lease term will begin with the earlier of
               twenty (20) months after the WMATA Board approves the
               Definitive Agreement or the start of construction of the Project.

Id. (emphasis added). Critically, the Term Sheet mandated certain conditions precedent to the

consummation of a Definitive Agreement, conditions that included mandatory Board approval:

               8. Conditions to Definitive Agreement Consummation

               8.4 Subsequent Approval: Developer acknowledges that WMATA
               will not be bound by the Definitive Agreement unless and until
               such Definitive Agreement is approved by WMATA’s Board of
               Directors and executed by WMATA.

Id. at 7 (emphasis added). Moreover, the Term Sheet expressly stated that it was non-binding in

all respects, except with regard to the exclusivity period: “This Term Sheet will have no binding

                                                 23
effect on the parties except that [Banneker] shall have the exclusive right to negotiate a

Definitive Agreement with WMATA for a period of five (5) months from the date of this Term

Sheet.” Term Sheet at 11 (emphasis added).

               The Term Sheet was not itself a Definitive Agreement between the parties, as it

clearly indicated that the parties wished to negotiate a Definitive Agreement in the near future.

Moreover, the Term Sheet expressly stated that WMATA would not be bound by any Definitive

Agreement unless and until it Board approved. It refers to a yet-to-be-negotiated Definitive

Agreement that “will include . . . related documentation upon which WMATA and Developer

mutually agree.” Term Sheet at 1. Banneker acknowledges in the Amended Complaint that it

was still negotiating with WMATA at the time the exclusivity expired and that the parties were

working on an “amended Term Sheet.” Banneker asserts that “[f]rom January 14, 2010, through

March 25, 2010, WMATA staff and Banneker engaged in negotiations to reach a final agreement

with regard to the amended Term Sheet for the Project . . . .” Am. Compl. ¶ 165. Banneker has

not alleged a valid and enforceable contract for conveyance and development of the Site which

bound the parties and contained all material terms.

               In sum, Banneker has failed to state a claim for breach of contract or for breach of

the duty of good faith and fair dealing. It has not alleged that WMATA breached the Term Sheet

by entering into a negotiation with another developer during Banneker’s exclusivity period. It

has not alleged that WMATA was bound to a valid contract containing all material terms

regarding the conveyance and development of the Site. Counts I and II, therefore, will be

dismissed for failure to state a claim.




                                                 24
       D. Jurisdiction Over the Remainder of the Case

               Since the claims against WMATA will be dismissed and jurisdiction here is based

on WMATA’s presence as a party, the question arises whether the Court has jurisdiction over the

claims against the remaining defendants: Mr. Graham, Mr. LaKritz, Mr. Adler, and LaKritz

Adler. The Amended Complaint alleges only violations of D.C. law and does not allege any

federal law claims. Thus, federal question jurisdiction does not apply. See 28 U.S.C. § 1331.

However, it may be that the Court has diversity jurisdiction. Diversity jurisdiction applies to

suits between citizens of different states where the amount in controversy exceeds the sum of

$75,000. See 28 U.S.C. § 1332(a).

               Diversity jurisdiction exists when the citizenship of each plaintiff is “diverse”

form the citizenship of each defendant. Caterpillar, Inc. v. Lewis, 519 U.S. 61, 68 (1996).

“[D]iversity jurisdiction is lacking if there are any litigants from the same state on opposing

sides.” Prakash v. American Univ., 727 F.2d 1174, 1178 n.25 (D.C. Cir. 1984). For diversity

purposes, an individual is a citizen of the State where he is domiciled. See Green, Inc. v.

Alfonzo–Larrain, 490 U.S. 826, 828 (1989). The citizenship of a non-corporate entity, such as a

limited liability company like Banneker, is determined by looking to the residency of all of its

members. Shulman v. Voyou, LLC, 305 F. Supp. 2d 36, 40 (D.D.C. 2004) (citing C.T. Carden v.

Arkoma Assoc., 494 U.S. 185, 195-96 (1990)); see, e.g., NIPMUC Props., LLC v. PDC–El Paso

Meriden, LLC, Civ. No. 301-2081(CFD), 2002 WL 1608324, at *6 (D. Conn. June 25, 2002)

(holding that a limited liability company organized in Connecticut is a citizen of Delaware,

where its sole member resided).

               The amount in controversy requirement is met here, as Banneker seeks to recover

$100 million. See Am. Compl. at 99 (Relief Requested). The Amended Complaint, however,



                                                 25
fails to allege the citizenship of the parties. See id. ¶ 13 (alleging original jurisdiction because

WMATA is a party, pursuant to D.C. Code § 9-1107.01). Diversity jurisdiction is determined

based on the citizenship of the parties at the time the suit was filed. Grupo Dataflux v. Atlas

Global Grp., LP, 541 U.S. 567, 570-71 (2004). Thus, at this juncture it cannot be determined

whether diversity jurisdiction applies.

               Even if it lacks diversity jurisdiction, the Court may exercise supplemental

jurisdiction over the local law claims. See 28 U.S.C. § 1367(c); Shekoyan v. Sibley Int’l, 409

F.3d 414, 423 (D.C. Cir. 2005). The decision whether to exercise supplemental jurisdiction

after dismissing every claim over which the court had original jurisdiction is “purely

discretionary.” Carlsbad Tech., Inc. v. HIF Bio, Inc., 129 S. Ct. 1862, 1866 (2009). In

exercising such discretion, district courts consider judicial economy, convenience, comity, and

fairness. Shekoyan, 409 F.3d at 424. In the usual case, these factors point toward declining

jurisdiction. Id. (citing Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n.7 (1988)).

“Certainly, if the federal claims are dismissed before trial, even though not insubstantial in a

jurisdictional sense, the state claims should be dismissed as well.” United Mine Workers v.

Gibbs, 383 U.S. 715, 726 (1966).

               It is unclear at this juncture whether the Court has diversity jurisdiction. This

determination should be made before the Court decides whether to exercise supplemental

jurisdiction over the D.C. law claims against the remaining defendants. Accordingly, all

remaining parties will be required to file a notice setting forth their citizenship for diversity

purposes as of the date this case was filed. 6



6
  The Court will determine jurisdiction before deciding the motions to dismiss filed by the
remaining defendants. See LaKritz Adler Mot. [Dkt. 20]; Graham Mot. [Dkt. 21].

                                                  26
                                        IV. CONCLUSION

                For the reasons set forth above, WMATA’s motion to dismiss, Dkt. 22, will be

granted. Count I (breach of contract), Count II (breach of duty of good faith and fair dealing),

Count V (unjust enrichment), and Count VII (fraud) will be dismissed in their entirety. Count

VIII (civil conspiracy) will be dismissed as against WMATA only. As a result, WMATA will be

dismissed as a defendant here. Since original jurisdiction was based on the presence of

WMATA in this case and WMATA will be dismissed as a party, the remaining parties will be

required to file a notice setting forth their citizenship for diversity purposes as of the date this

case was filed. A memorializing Order accompanies this Opinion.



Date: December 11, 2013                                               /s/
                                                        ROSEMARY M. COLLYER
                                                        United States District Judge




                                                  27
