RICHARD J. LEON, District Judge.
Plaintiffs/third-party plaintiffs Fuentes-Fernandez & Company, PSC ("FFC") and Joseph Fuentes ("Fuentes"), together with defendant/cross-plaintiff/third-party plaintiff Caballero & Castellanos, PL ("C & C") (collectively, "plaintiffs"), bring this action against cross- and third-party defendants Housing Authority of New Orleans ("HANO") and David Gilmore ("Gilmore") (collectively, "defendants"), seeking damages for breach of contract, unjust enrichment, and negligent administration of a contract. Before this Court is defendants' Motion To Dismiss. Upon consideration of the parties' pleadings, relevant law, and the entire record herein, defendants' motion is GRANTED.
The Housing Authority of New Orleans ("HANO"), a state-created agency, is the
HANO awards procurement and service contracts to vendors and specifically encourages certified Disadvantaged Business Enterprises and Woman Business Enterprises to compete for its contracts. Id. ¶ 4. According to the Third-Party Complaint, HANO awarded an $8,526,524 contract to third-party plaintiff C & C in 2006. Id. ¶¶ 5, 6, 8. Under the contract, C & C was tasked with providing Financial Operations Recovery Services to HANO. C & C, in turn, awarded a $1,500,000 sub-contract to plaintiff FFC,
According to plaintiffs, HANO paid C & C $7,182,237.63 for completed work but failed to pay more than $350,000 under the contract. Id. ¶ 6. At the same time, plaintiffs also acknowledge that Elias Castellanos, a principal of C & C who HANO installed as its Chief Financial Officer, pleaded guilty to violating 18 U.S.C. § 666(a)(1)(A) (theft concerning a program receiving federal funds), and that HANO has refused to pay the balance because of Mr. Castellanos' conduct and the restitution he owes pursuant to his plea agreement.
Under Rule 12(b)(2), a plaintiff bears the burden of "alleg[ing] specific facts on which personal jurisdiction can be based; it cannot rely on conclusory allegations." Moore v. Motz, 437 F.Supp.2d 88, 90-91 (D.D.C.2006). Unlike a motion to dismiss under Rule 12(b)(6), the Court is not required to treat as true all of plaintiffs' allegations when determining whether personal jurisdiction exists. United States v. Philip Morris, Inc., 116 F.Supp.2d 116, 120 n. 4 (D.D.C.2000) (internal citation omitted).
Defendants also move to dismiss under Fed.R.Civ.P. 12(b)(6). A Rule
As an initial matter, plaintiffs' claims must be dismissed because plaintiffs cannot, and do not, establish personal jurisdiction. To establish personal jurisdiction, plaintiffs must (1) plead facts sufficient to show that jurisdiction is appropriate under the District of Columbia's long-arm statute and (2) satisfy the "minimum contacts" demands of constitutional due process. United States v. Ferrara, 54 F.3d 825, 828 (D.C.Cir.1995) (internal citation omitted). Plaintiffs satisfy neither requirement here. With respect to the long-arm statute, plaintiffs do not allege that defendants HANO and Gilmore meet any of the criterion—e.g., transacting business in, contracting services in, causing tortuous injury in, regularly soliciting business in, engaging in a persistent course of conduct in, or deriving substantial revenue from goods used or consumed in, Washington, D.C.—which would confer personal jurisdiction in the District. D.C.Code § 13-423(a)(2010). Nor do plaintiffs allege facts which would satisfy due process. That is, plaintiffs do not allege that defendants HANO and Gilmore had minimum contacts "grounded in some act by which the defendant[s] purposefully avail[ed] [themselves] of the privilege of conducting activities with the forum state, thus invoking the benefits and protections of its laws." Agee v. Sebelius, 668 F.Supp.2d 1, 5 (D.D.C.2009) (internal citations and quotations omitted). HANO is a state agency, and the HANO contract addressed work performed in Louisiana and governed by Louisiana law. Conspicuously absent is any allegation that HANO conducts business or any other activity in the District of Columbia.
Moreover, allegations that HUD (a federal agency) manages HANO (a state agency) in administrative receivership, Third-Party Compl. ¶ 3; that HANO "works through the office of Receivership Oversight" in Washington, D.C., Pls.' Opp'n to Mot. to Dismiss, Aug. 19, 2010, ¶ 6 [Dkt. #75]; and that HUD has authority to approve HANO contracts, id. ¶ 7, fall into the "government contacts" exception to the long-arm statute and do not establish personal jurisdiction. Coal on Sensible Transp., Inc. v. Dole, 631 F.Supp. 1382, 1384 (D.D.C.1986). Under that exception, certain contacts with the federal government—such as meeting with federal officials in Washington, D.C., or receiving federal funding—are insufficient to establish personal jurisdiction. Id. at 1384-85; see also Siam Kraft Paper Co., Ltd. v. Parsons & Whittemore, Inc., 400 F.Supp. 810, 812 (D.D.C.1975) (government-contacts
Even if this Court were to find personal jurisdiction, however, plaintiffs' claims of breach, unjust enrichment, and negligent administration would still fail under Fed. Rule Civ. P. 12(b)(6) because the plain language of the parties' contract—a contract that plaintiffs do not dispute and one which plaintiffs seek to enforce—bars recovery. Under the contract between plaintiff C & C and defendant HANO, all disputes "arising under or relating to th[e] contract" must be resolved under the "disputes clause." Contract for Servs. Between HANO and C & C, Sept. 15, 2006 ("Contract"), Defs.' Ex. 3-C, ¶ 3(a) [Dkt. #71-3 at 17]. Importantly, that clause requires specific action before filing suit: "[a]ll claims by the Contractor shall be made in writing and submitted to the [housing authority]." Id. ¶ 3(b).
Finally, paragraph 16 of the Contract plainly releases and "save[s] harmless" HANO and its employees from "claims suits, actions and costs of every description resulting from the Contractor's activities on behalf of the [housing authority] in connection with this Agreement." Contract, Defs.' Ex. 3-C, ¶ 16 [Dkt. #71-3 at 20]; see also Supp. Contract Conditions, Defs.' Ex. 3-D at 1 [Dkt. #71-3 at 23]. Plaintiffs' claims of breach of contract, unjust enrichment, and negligent administration with respect to third-party plaintiff FFC directly relate to, and arise out of, C & C's contract performance with HANO. Because defendants are released from claims relating to C & C's contract performance, actions, or omissions, plaintiffs' claims are also barred by paragraph 16 of the Contract.
For all of the foregoing reasons, the Court GRANTS the cross- and third-party defendants' Motion to Dismiss Third Party Complaint [Dkt. #70] and DISMISSES the action without prejudice. An order consistent with this decision accompanies this Opinion.
For the reasons set forth above, it is this ___ day of March, 2011 hereby ORDERED that the Defendants Housing Authority of New Orleans' ("HANO") and David Gilmore's ("Gilmore") Motion to Dismiss [Dkt. #70] is GRANTED, and it is further
ORDERED that the above-captioned case be dismissed as to Defendants HANO and Gilmore without prejudice.
SO ORDERED.