Banneker Ventures, LLC v. Jim Graham

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 21, 2015 Decided August 18, 2015

No. 14-7030

BANNEKER VENTURES, LLC,

APPELLANT

v.

JIM GRAHAM, ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:13-cv-00391)

Mark A. Grannis argued the cause for appellant. With

him on the briefs were Mark D. Davis and Anne K. Langer.

Brian K. McDaniel entered an appearance.

Douglas M. Bregman argued the cause for appellee

Washington Metropolitan Area Transit Authority. Daniel P.

Golden, Assistant General Counsel, Office of the General

Counsel for the Council of the District of Columbia, argued

the cause for appellee Jim Graham. With them on the joint

brief were Geoffrey T. Hervey, Gerard J. Stief, V. David

Zvenyach, General Counsel, Office of the General Counsel for

the Council of the District of Columbia, John R. Hoellen,

Deputy General Counsel, and Manasi Venkatesh, Assistant

General Counsel, Brian L. Schwalb, Seth A. Rosenthal, and

2

Moxila A. Upadhyaya. Bruce P. Heppen entered an

appearance.

Before: MILLETT and PILLARD, Circuit Judges, and

SENTELLE, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge PILLARD.

PILLARD, Circuit Judge: The Washington Metropolitan

Area Transit Authority (WMATA), like many transit

authorities across the country, does more than build and run

transit systems. WMATA is empowered to acquire, own, and

convey real property to promote transit-oriented development.

One way it does so is through a program that invites

developers to submit proposals to develop WMATA property,

and then grants the competitively selected developer an

exclusive period during which to negotiate for a final

development contract to carry out its proposal.

Plaintiff in this case, real estate developer Banneker

Ventures, LLC, alleges that WMATA signed a contractually

binding Term Sheet preliminarily selecting Banneker to

develop property above a Metrorail station and giving

Banneker the exclusive right to negotiate a final development

agreement. Banneker further alleges that one of WMATA’s

Board Members, Jim Graham, abused his Board position and

his seat on the Council of the District of Columbia to work

behind the scenes with one of Banneker’s rival bidders,

LaKritz Adler Development, to derail WMATA’s

negotiations with Banneker. According to Banneker,

Graham sought to steer the development job to LaKritz Adler,

a Graham supporter and campaign contributor. WMATA

dragged out its negotiating period with Banneker for many

months during which, the complaint alleges, Banneker met

WMATA’s every shifting demand. WMATA then let the

3

Term Sheet expire without consummating a final

development agreement. WMATA eventually sold the

property to another developer.

Banneker raises several distinct claims arising from its

dashed opportunity. It asserts that WMATA, through

Graham, breached the Term Sheet’s exclusivity provision and

obligation to negotiate in good faith, and that Graham and

LaKritz Adler conspired to interfere with Banneker’s contract

(the Term Sheet) and prospective business advantage. The

complaint exhaustively chronicles the facts underlying those

claims and, for the reasons discussed below, we conclude that

the district court erred in dismissing them.

Banneker also asserted tort claims against WMATA and

Graham. We affirm the district court’s dismissal of

Banneker’s fraud claim against WMATA as barred by

sovereign immunity. Graham’s asserted absolute official

immunity from suit for tortious interference requires further

consideration. The district court evaluated the complaint at

too high a level of generality and failed to place the burden on

Graham to establish his entitlement to official immunity.

Because the absolute official immunity questions have yet to

be analyzed by the district court at the requisite level of

factual specificity, we vacate the dismissal of the tort claims

against Graham and remand for further proceedings consistent

with this opinion.

4

I. Background

A. Allegations 1

In the spring of 2007, WMATA invited bids to redevelop

its property above the Shaw-Howard/Florida Avenue

Metrorail station. Banneker, Defendant LaKritz Adler

Development, and ten other developers submitted bids.

Banneker proposed building “The Jazz at Florida Avenue,” a

mixed-use development that would include 103 new

residential units and 11,750 square feet of retail space. At

first, things seemed to go Banneker’s way. Its bid received

the support of the local neighborhood commission, investors

expressed interest, and Banneker’s presentation to WMATA

staff was well received. WMATA made its initial selection of

Banneker to develop the site, and the parties negotiated a

Term Sheet that contained many of the material terms of the

deal and a contractually guaranteed, exclusive, five-month

negotiating period for Banneker and WMATA to arrive at a

final development agreement. See Term Sheet, J.A. 111 §§ 4,

7, 12. Banneker paid WMATA $100,000 in exchange for the

exclusive negotiation right, which fee was in addition to the

$100,000 it had already paid as a “proposal deposit.”

After its preliminary success, Banneker soon met

resistance. Defendant Jim Graham was a member of the D.C.

Council and one of the District’s two voting members on

1

This factual account is based on the allegations of the Amended

Complaint. J.A. 10. At the pleading stage, we accept all the well-

pleaded factual allegations of the complaint as true and draw all

reasonable inferences from those allegations in the plaintiff’s favor.

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The question is

whether Banneker will have an opportunity to try to prove in court

what it has alleged. We express no opinion as to the truth of what

is recited here as fact.

5

WMATA’s Board of Directors. 2 LaKritz Adler and its

principals Joshua Adler and Robb LaKritz (collectively,

LaKritz Adler) were major contributors to Graham’s

campaigns and projects, whereas Graham believed that

Banneker contributed to his political opponents. From the

start, Graham opposed Banneker and favored LaKritz Adler

for the Florida Avenue project. Graham and LaKritz Adler

colluded for the next two years to engineer an opportunity for

LaKritz Adler to wrest the contract or some of its benefits

from Banneker. That alliance was only half successful:

Banneker ultimately lost the project, but a different developer,

not LaKritz Adler, took its place.

Starting while WMATA’s staff was negotiating the Term

Sheet with Banneker, Graham sought to derail the process.

Graham told one of Banneker’s principals, Warren Williams,

that Graham would cast his D.C. Council vote in favor of

Williams on a lottery contract he sought if Williams would

pull Banneker out of the WMATA project. Graham solicited

campaign contributions and substantial financial support from

another Banneker principal in exchange for Graham’s support

of the Banneker bid. Graham also pressured two of

Banneker’s development partners to drop off of the project in

an effort to cause WMATA staff to abandon negotiations with

Banneker and give the project to LaKritz Adler instead.

Meanwhile, Banneker was in negotiations with Howard

University over a parcel adjacent to the WMATA Florida

2

WMATA is governed by a Board of Directors composed of eight

members, two from each signatory of the interstate compact that

formed it—the District of Columbia, Maryland, Virginia—and two

from the federal government. D.C. Code § 9-1107.01 ¶ 5(a). The

Board acts through majority vote but, in order for a vote to carry,

the majority must contain at least one member of each contributing

jurisdiction. Id. ¶ 8(a).

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Avenue property that Banneker wanted to develop at the same

time as the WMATA project. LaKritz Adler falsely told

Howard University that WMATA had already selected it to

develop the Florida Avenue property, not Banneker. Graham

also pressed Banneker at a lunch meeting to add LaKritz

Adler to its development team, claiming that doing so would

be a precondition of Board approval of the Term Sheet.

Immediately following the lunch, Banneker received

unsolicited calls and e-mail messages from LaKritz Adler

proposing transfer of Banneker’s option on the adjacent parcel

to LaKritz Adler—timing that Banneker alleges shows

Graham’s collusion with LaKritz Adler.

In June 2008, WMATA’s Board of Directors approved

the Term Sheet and Banneker executed it. But Graham did

not give up. He pressured his fellow WMATA Directors in a

closed-door session to impose an affordable housing

requirement on Banneker that, based on his experience,

Graham anticipated would “delay, interfere with or otherwise

scuttle Banneker’s efforts during the” negotiation period to

follow. Am. Compl. ¶ 88. Graham also directed WMATA

staff to “stop or delay negotiations” so as to “delay or destroy

Banneker’s ability to fully realize the benefit of its period of

exclusive negotiation.” Id. ¶ 127.

Upon becoming Chairman of the WMATA Board in

January 2009, Graham “me[t] with WMATA’s staff to

pressure the WMATA staff to find a way for LaKritz Adler to

be included” in Banneker’s development plan. Id. ¶ 131.

LaKritz Adler also called WMATA staff to tell them that

now-Chairman Graham had asked LaKritz Adler to “make a

deal” with Banneker. Id. ¶ 133. During the same period,

Graham shared Banneker’s confidential bid information with

LaKritz Adler to provide the rival firm with a competitive

advantage. Graham also forced a third Banneker

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development partner to drop out of the deal through delay,

and demanded that Banneker replace it with LaKritz Adler.

Graham used his power on the Board to delay and

undermine negotiations between Banneker and WMATA staff

over a final agreement. Repeatedly, when Banneker and

WMATA staff reached agreement on material terms, and

WMATA staff recommended that the Board approve a final

agreement, Graham initiated changes or otherwise prevented

closure. He delayed Board consideration of a final

agreement, directed staff to stop negotiations, switched the

deal from a lease to a sale and then back to a lease again, and

ordered the staff to re-appraise the property, giving rise to a

new round of negotiations.

It was in the midst of that extended back and forth that

Banneker learned Graham had instructed the WMATA staff

to “obtain Best and Final Offers from Banneker and the two

other firms who WMATA [had already] considered before

selecting Banneker,” including LaKritz Adler. Id. ¶ 155.

WMATA’s General Counsel prepared a memo at Graham’s

request regarding whether WMATA had the authority to

solicit “Best and Final” offers from other developers during

the period that the Term Sheet set for exclusive negotiations

between WMATA and Banneker. (The memo, however,

concluded that WMATA could not do so until Banneker’s

exclusivity period expired.)

In January 2010, the Board instructed WMATA staff to

negotiate a larger up-front fee from Banneker to develop the

site, and extended the negotiation period again. Banneker

agreed to the Board’s terms. By March, “all material terms of

the Revised Term Sheet, including price, were agreed to by

Banneker and WMATA staff at which time the WMATA

staff, for the final time, recommended that the WMATA

8

Board approve the agreement.” Id. ¶ 166; see also id. ¶ 213.

But, rather than approve the final agreement as the staff had

negotiated it with Banneker, the Board indefinitely tabled

approval of the deal “for the purpose of allowing Banneker’s

exclusive right to ‘time out.’” Id. ¶ 174. WMATA then re-

issued a solicitation for bids, this time for a sale of the site,

and sold the property to another developer. WMATA

returned half of the $200,000 in deposits Banneker had paid

it.

After The Washington Post began reporting allegations

that Graham tried to barter his D.C. Council vote and

pressured Banneker and its development partners to drop out

of the project, WMATA retained the law firm Cadwalader,

Wickersham & Taft, LLP, to conduct an investigation. (The

parties dubbed the resulting report the Bondi Report, after the

Cadwalader partner Bradley J. Bondi, who was its lead

investigator and author.) The Bondi Report concluded that

Graham failed to remain impartial, showed favoritism toward

a competing vendor, appeared to barter a WMATA project for

his vote on the D.C. Council, and attempted to circumvent the

WMATA Board by pressuring Banneker to drop out of the

project. A separate report by the Director of the Office of

Integrity and Oversight in the office of the District of

Columbia Chief Financial Officer concluded that Graham’s

offer to support Williams to obtain the lottery contract was

“inappropriate.” Id. ¶¶ 9 & n.3, 109. The District of

Columbia Board of Ethics and Government Accountability

also investigated, and found sufficient evidence to conclude

that Graham violated applicable ethical guidelines. As a

result, the Council reprimanded Jim Graham—making that

only the second time in the D.C. Council’s thirty-eight-year

history of home rule that the Council formally reprimanded

one of its members.

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B. Procedural History

Banneker filed this lawsuit in 2013, alleging that

WMATA breached the Term Sheet and the implied covenant

of good faith and fair dealing by violating the exclusivity

provision and negotiating without genuine intention of

reaching agreement. Banneker also claims that WMATA

staff defrauded Banneker by repeatedly telling Banneker’s

principals that a deal was close when staff members knew or

should have known that the WMATA Board would not

approve it. It further claims that Graham, LaKritz Adler, and

that firm’s principals engaged in civil conspiracy and tortious

interference with Banneker’s prospective business advantage

and its contract with WMATA. 3

The district court dismissed all of Banneker’s claims at

the pleading stage. The court held that Banneker had failed to

state a claim against WMATA for breach of the contract or

the implied covenant because, it concluded, Banneker did not

adequately allege that WMATA negotiated with LaKritz

Adler, and because the Term Sheet did not bind WMATA to

execute a final development agreement. See Banneker

Ventures, LLC v. Graham, 20 F. Supp. 3d 184, 198-201

(D.D.C. 2013) (Banneker I). The court also held that

WMATA and Graham were immune from suit on the tort

claims, and that Banneker failed adequately to state a claim

against LaKritz Adler for tortious interference. Id. at 192-98;

Banneker Ventures, LLC v. Graham, 19 F. Supp. 3d 231, 245-

51 (D.D.C. 2014) (Banneker II). Banneker filed a timely

notice of appeal. Our jurisdiction rests on 28 U.S.C. § 1291.

3

The complaint also asserted claims for unlawful restraint of trade

and unjust enrichment, and a civil conspiracy claim against

WMATA, but Banneker does not press those claims on appeal.

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II. Legal Standards

We review de novo the district court’s Rule 12(b)(6)

dismissal of Banneker’s claims. Fed. R. Civ. P. 12(b)(6);

Muir v. Navy Fed. Credit Union, 529 F.3d 1100, 1108 (D.C.

Cir. 2008). The Federal Rules of Civil Procedure require that

a complaint contain a “short and plain statement of the claim

showing that the pleader is entitled to relief.” Fed. R. Civ. P.

8(a)(2). Except for allegations of fraud or mistake, see Fed.

R. Civ. P. 9(b), we do not require “detailed factual

allegations” for a claim to survive a motion to dismiss.

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.

Corp. v. Twombly, 550 U.S. 544, 555 (2007)). We accept all

the well-pleaded factual allegations of the complaint as true

and draw all reasonable inferences from those allegations in

the plaintiff’s favor. Id. Nevertheless, “[t]hreadbare recitals

of the elements of a cause of action, supported by mere

conclusory statements, do not suffice,” nor do we assume the

truth of legal conclusions. Id. Thus, “[t]o survive a motion to

dismiss, a complaint must contain sufficient factual matter,

accepted as true, to ‘state a claim to relief that is plausible on

its face.’” Id. (quoting Twombly, 550 U.S. at 570).

Plausibility requires “more than a sheer possibility that a

defendant has acted unlawfully,” but it is not a “probability

requirement.” Id. (quoting Twombly, 550 U.S. at 556). A

claim crosses from conceivable to plausible when it contains

factual allegations that, if proved, would “allow[] the court to

draw the reasonable inference that the defendant is liable for

the misconduct alleged.” Id.

The Twombly Court stated that a well-pleaded complaint

should be allowed to proceed “even if it strikes a savvy judge

that actual proof of [the alleged] facts is improbable, and that

a recovery is very remote and unlikely.” 550 U.S. at 556

(internal quotation marks omitted). A complaint survives a

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motion to dismiss even “[i]f there are two alternative

explanations, one advanced by [the] defendant and the other

advanced by [the] plaintiff, both of which are plausible.”

Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). It is

inevitable that the defendant’s version will sometimes prove

to be the true one, but that does not relieve defendants of their

obligation to respond to a complaint that states a plausible

claim for relief, and to participate in discovery.

Defendants moved to dismiss certain tort claims based on

sovereign immunity. As it must on motions to dismiss for

failure to state a claim, a district court considering a motion to

dismiss for lack of subject matter jurisdiction accepts the

allegations of the complaint as true. Herbert v. Nat’l Acad. of

Sciences, 974 F.2d 192, 197 (D.C. Cir. 1992). Where

necessary to resolve a jurisdictional challenge under Rule

12(b)(1), “the court may consider the complaint supplemented

by undisputed facts evidenced in the record, or the complaint

supplemented by undisputed facts plus the court’s resolution

of disputed facts.” Id. Here, however, the district court did

not purport to resolve any disputed facts, nor did it give notice

to the parties of any intention to do so. We therefore review

de novo the district court’s dismissal on jurisdictional

grounds, taking the allegations of the complaint as true. Id.

III. Contract Claims

Banneker claims that WMATA breached its Term Sheet

because Graham, acting as WMATA’s agent, negotiated with

LaKritz Adler in violation of Banneker’s exclusivity rights.

Banneker also asserts that WMATA violated the implied

covenant of good faith and fair dealing by unilaterally

abandoning negotiations before a final agreement was

12

reached. 4 We hold that Banneker adequately stated both

claims and accordingly reverse.

A. Breach of the Exclusivity Provision

WMATA concedes that the Term Sheet bound it to

negotiate exclusively with Banneker, but argues that it never

negotiated with LaKritz Adler and so never breached the

agreement. The complaint’s allegations make a powerful

circumstantial case to the contrary: WMATA, through

Graham, communicated frequently and in detail with LaKritz

Adler concerning the Florida Avenue site. Graham leaked to

LaKritz Adler confidential information about Banneker’s

plans so that LaKritz Adler could develop a competitively

attractive alternative to Banneker’s proposal. LaKritz Adler

called WMATA staff directly and, during that call, pressed its

interest in the project subject to the Term Sheet and discussed

Banneker’s confidential bid information. Am. Compl. ¶ 261.

Before Banneker’s Term Sheet expired, Graham sought to

formally solicit bids from Banneker’s competitors, including

LaKritz Adler, during the exclusivity period. Though

WMATA did not follow through, it is reasonable to infer

from all of those allegations taken together that Graham

negotiated with LaKritz Adler regarding its possible

development of the Florida Avenue site, in violation of the

exclusivity term of WMATA’s agreement with Banneker.

WMATA seizes on separate allegations that Graham also

helped LaKritz Adler in its efforts to become part of

Banneker’s development team. WMATA argues that neither

Graham nor any other WMATA personnel entered into

negotiations with LaKritz Adler to replace Banneker—only to

4

In the district court, Banneker also claimed that the Term Sheet

was a contract for conveyance of the property, but it does not press

that claim on appeal.

13

see whether LaKritz Adler might join Banneker’s team.

Allegations pointing to Graham’s efforts to help LaKritz

Adler benefit by getting a piece of Banneker’s projected work

are not, however, inconsistent with allegations that Graham

simultaneously sought to help LaKritz Adler to displace

Banneker from the project altogether. Banneker is entitled to,

and does, allege that Graham did both.

B. Breach of the Implied Covenant of Good Faith and Fair

Dealing

Banneker’s second contract claim is that WMATA

breached its obligation under the Term Sheet to negotiate in

good faith by interposing terms and conditions extraneous to

the Term Sheet and unilaterally abandoning negotiations

toward a final agreement. The allegations of Banneker’s

complaint make clear that it had a contract that imposed on

the parties a duty to negotiate in good faith. The parties’

Term Sheet, although preliminary to any binding development

contract, was itself a binding contract to negotiate. That

acknowledged, contractually binding obligation to negotiate

carried with it the implied duty to do so in good faith. See

Allworth v. Howard Univ., 890 A.2d 194, 201 (D.C. 2006);

Restatement (Second) of Contracts § 205 (1981); 23 Williston

on Contracts § 63:22 (4th ed.).

Under an often-cited typology of preliminary agreements

to negotiate final agreements, the Term Sheet was a “Type II”

agreement, or one that “expresses mutual commitment to a

contract on agreed major terms, while recognizing the

existence of open terms that remain to be negotiated.”

Teachers Ins. & Annuity Ass’n of Am. v. Tribune Co., 670 F.

Supp. 491, 498 (S.D.N.Y. 1987) (Leval, J.); see Stanford

Hotels Corp. v. Potomac Creek Associates, L.P., 18 A.3d 725,

735-36 (D.C. 2011) (applying Tribune). In contrast to a Type

14

I agreement, which is “preliminary only in form” because the

parties have reached “complete agreement” and need only to

formalize it, Tribune, 670 F. Supp. at 498, parties to a Type II

agreement have not reached complete agreement, but “can

bind themselves to a concededly incomplete agreement in the

sense that they accept a mutual commitment to negotiate

together in good faith in an effort to reach final agreement

within the scope that has been settled in the preliminary

agreement,” id.

The Term Sheet on its face is manifestly a Type II

agreement. The Term Sheet recites that it is “intended to

summarize the principal terms of a proposal being considered

by” the parties, and to express the parties’ “wish to negotiate a

Definitive Agreement.” Term Sheet, Preamble. It states that

its “binding effect” is to give Banneker “the exclusive right to

negotiate a Definitive Agreement with WMATA.” Id. § 12.

And it sets forth many of the material terms of the deal,

including the definition of the property to be leased, the base

rent for the property, formulas for how the rent would change

based on time, occupancy, and the density of the

development, the security deposit Banneker would pay upon

execution of a final agreement, an outline of the

improvements Banneker intended to build on the property,

and the corporate structure of the development team.

Through the Term Sheet, Banneker and WMATA established

“a general framework within which they could proceed while

preserving flexibility in the face of future uncertainty,” Brown

v. Cara, 420 F.3d 148, 157-58 (2d Cir. 2005), and after

executing the Term Sheet at significant expense to Banneker,

they proceeded under that rubric.

As a Type II agreement, the Term Sheet did not

guarantee the parties would reach complete agreement, but it

was nonetheless binding. Type II agreements contemplate

15

that negotiations may fail, either because “good faith

differences in the negotiation of the open issues may prevent a

reaching of final contract” or because the parties mutually

abandon the negotiation. Tribune, 670 F. Supp. at 498. But a

duty to negotiate in good faith under a Type II agreement is

violated by a party unilaterally “renouncing the deal,

abandoning the negotiations, or insisting on conditions that do

not conform to the preliminary agreement.” Id.; see also

Stanford Hotels, 18 A.3d at 735-36 (quoting Tribune).

Banneker’s allegations that Graham directed cessation

of negotiations and interjected new terms and conditions that

were not part of Banneker’s Term Sheet suffice to show lack

of good faith. According to the complaint, Banneker and

WMATA staff reached final agreement on the open terms

multiple times over twenty months, but the WMATA Board

repeatedly altered the deal, delayed it, and ultimately tabled it

for the purpose of letting the negotiation period “time out”

with no final agreement. Those allegations show that

WMATA “simply refused to proceed further” in the

negotiations, even though it had no justification and no good

faith disagreement had arisen with Banneker—conduct

inconsistent with the duty of good faith. United House of

Prayer for All People v. Therrien Waddell, Inc., 112 A.3d

330, 344 (D.C. 2015); see also L-7 Designs, Inc. v. Old Navy,

LLC, 647 F.3d 419, 430-31 (2d Cir. 2011). Much of

Graham’s alleged misconduct occurred before Banneker and

WMATA executed the Term Sheet, but Graham also acted to

interfere with Banneker’s ability to secure a final agreement

during the twenty months of negotiations after the Term Sheet

was signed. He pressured Banneker to drop a development

partner in favor of LaKritz Adler, instructed WMATA staff to

stop or delay negotiations, and explored the possibility of

soliciting more bids.

16

The decisions in Tribune, Stanford Hotels, and United

House of Prayer are instructive. In Tribune, a prospective

borrower’s commitment letter established a Type II

agreement to negotiate. 670 F. Supp. at 496, 499. When the

borrower “broke off negotiations, declining to negotiate

further unless the lender agreed” to a new term not anticipated

by the commitment letter, the court found a breach. Id. at

491, 506. The court noted that the borrower had reserved to

its Board of Directors the right to approve or reject the loan,

but held that the borrower could not abuse that condition by

going through the motions of negotiating the loan to the

parties’ mutual satisfaction, only to “defeat its obligations

under the binding agreement of commitment merely by

having its Board do nothing.” Id. at 503. Similarly, in

Stanford Hotels, the parties entered an agreement to negotiate

the final purchase of a hotel. The seller thereby “obligated

itself to negotiate exclusively and in good faith with [the

purchaser] and to sign a Definitive Agreement if they were

able to agree on terms.” 18 A.3d at 734-35. When the

purchaser showed itself “willing to concede” on all of the

open issues “if necessary to close on the sale,” id. at 731 n.5,

the seller who responded by holding out for a more

advantageous alternative, stringing the purchaser along, and

ultimately abandoning the negotiations, was in breach, id. at

731-33. In United House of Prayer, a party violated an

enforceable Type II agreement when it “terminated

discussions . . . without offering any explanation of what

terms its lawyer purportedly found unacceptable and by

declining to negotiate . . . or even to discuss the matter,” even

though the counterparty communicated its willingness to

discuss any remaining issues or concerns. 112 A.3d at 344.

So too, here: Banneker’s allegations that Graham, in his

capacity as an agent of WMATA, acted to delay, interfere

with, and ultimately defeat a final development agreement

17

between WMATA and Banneker adequately state a claim for

breach of the implied covenant of good faith and fair dealing.

Further, we find no relevance, in the context of the agreement

at issue in this case, that WMATA’s Board reserved for itself

the right to approve or disapprove a final agreement.

WMATA’s Board approved the Term Sheet, which obligated

WMATA to negotiate in good faith. As in Tribune, because

WMATA had committed to negotiate the project to the

parties’ mutual satisfaction, it could not then “defeat its

obligations under the binding agreement of commitment

merely by having its Board do nothing.” Tribune, 670 F.

Supp. at 503.

WMATA responds, relying exclusively on the Bondi

Report, that it was not required to extend the negotiation

period any further because the parties had reached an

intractable, good faith impasse over contract terms. WMATA

attached the Bondi Report to its motion to dismiss. In

WMATA’s view, the Bondi Report exonerates it of any claim

of failure to negotiate in good faith because the report pegged

the parties’ failure to reach agreement under the Term Sheet

on “business reasons.” In particular, the report concluded

that, while Graham acted unethically, there were good faith

disagreements between Banneker and WMATA and other

business reasons that prevented them from reaching a final

development agreement. See, e.g., Bondi Rpt., J.A. 140, at

50.

Defendants argue that we must assume the veracity of the

Bondi Report, even at the pleading stage, by virtue of the

incorporation-by-reference doctrine. Banneker’s complaint

refers to the Bondi Report, commissioned by WMATA and

released in 2012, as a source of Banneker’s knowledge of

certain facts, such as Defendants’ “behind-the-scenes and

closed-door actions.” Am. Compl. ¶ 81. Banneker did not

18

attach the report to its complaint or purport to endorse its

overall analysis. Defendants contend that we must treat the

report as adopted in toto by Banneker. We disagree.

Federal Rule of Civil Procedure 10(c) permits a plaintiff

to attach an exhibit to the complaint, rendering the exhibit

“part of the pleading for all purposes.” Incorporation by

reference can also amplify pleadings where the document is

not attached by the plaintiff, but is “referred to in the

complaint and [] integral to [the plaintiff’s] claim.” Kaempe

v. Myers, 367 F.3d 958, 965 (D.C. Cir. 2004). A district court

may consider a document that a complaint specifically

references without converting the motion into one for

summary judgment. See id.; 5A Charles Alan Wright &

Arthur R. Miller, Federal Practice and Procedure § 1327 (4th

ed. 2014); see also Fed. R. Civ. P. 12(d).

The prototypical incorporation by reference occurs where

a complaint claims breach of contract, and either party

attaches to its pleading an authentic copy of the contract itself.

Because the contract is a legally operative document that is a

necessary element of the claim, the contract is “integral” to

the plaintiff’s claim—it “form[s] the basis for a claim or part

of a claim.” Carroll v. Yates, 362 F.3d 984, 986 (7th Cir.

2004) (internal quotation marks omitted). 5 A pleading’s

5

Defendants cite several cases similarly involving incorporation of

documents upon which the plaintiffs’ claims were based, the

authenticity of which was not in question. See Clorox Co. Puerto

Rico v. Proctor & Gamble Commercial Co., 228 F.3d 24, 32 (1st

Cir. 2000) (incorporating advertising copy alleged to have been

misleading); In re Burlington Coat Factory Sec. Litig., 114 F.3d

1410, 1426 (3d Cir. 1997) (incorporating annual report where

plaintiffs’ claim rested on report’s failure to disclose facts); Kramer

v. Time Warner Inc., 937 F.2d 767, 773-74 (2d Cir. 1991)

(incorporating documents alleged to contain misrepresentations

19

reference to even a part of a fully integrated and authentic

contract thus incorporates the contract as a whole into the

complaint.

The incorporation by reference doctrine has limits,

however. If a document itself comes before the court only as

an attachment to the defendant’s motion to dismiss, it may not

be appropriate for the court to treat the entire document as

incorporated into the complaint. Some of our sister circuits

have rejected the “fantastic argument” that “all facts

contained in any attachments to a complaint are automatically

deemed facts alleged as part of the complaint.” Carroll, 362

F.3d at 986 (internal quotation marks and alterations omitted).

Rule 10(c) “does not require a plaintiff to adopt every word

within the exhibits as true for purposes of pleading simply

because the documents were attached to the complaint to

support an alleged fact.” N. Ind. Gun & Outdoor Shows, Inc.

v. City of South Bend, 163 F.3d 449, 454-56 (7th Cir. 1998);

see also Jones v. City of Cincinnati, 521 F.3d 555, 561 (6th

Cir. 2008); West-Anderson v. Missouri Gaming Co., 557 F.

App’x 620, 622 (8th Cir. 2014). For example, the Second

Circuit has explained that a written contract “will defeat

invocation of the Statute of Frauds, and a document that

discloses what the complaint alleges it concealed will defeat

the allegation of concealment,” but a libel plaintiff who

attaches to her complaint the allegedly libelous writing does

not adopt the libelous statement as true, thereby defeating her

own claim. Gant v. Wallingford Bd. of Educ., 69 F.3d 669,

674 (2d Cir. 1995). When considering incorporation, it is

necessary to consider “why a plaintiff attached the

forming basis of plaintiff’s claim); Hinton v. Corrections Corp. of

Am., 624 F. Supp. 2d 45, 47 (D.D.C. 2009) (incorporating contract

where plaintiff’s case rested on breach of contractual duty).

20

documents, who authored the documents, and the reliability of

the documents.” N. Ind. Gun, 163 F.3d at 455.

In evaluating Banneker’s claims, we will not rely on

those portions of the Bondi Report not adopted by Banneker.

Banneker’s claims here are not based on the Bondi Report.

The report is not necessary to Banneker’s claims. It was

commissioned by a defendant and its reliability is unknown. 6

Banneker referred to some of the report’s recitations to show

how it learned some facts in the complaint, but it did not

purport to and was not required to adopt the factual contents

of the report wholesale.

Ignoring, as we must at the pleading stage, the opinions

and conclusions of the Bondi Report, we find nothing in the

complaint substantiating WMATA’s position that Banneker

has failed to state a claim for breach of the duty to negotiate

in good faith.

IV. Tortious Interference and Conspiracy Claims against

LaKritz Adler

Banneker asserts claims against LaKritz Adler for

tortious interference with contract, tortious interference with

prospective business advantage, and civil conspiracy. To

state claims for tortious interference under District of

Columbia law, a plaintiff must allege the existence of a

6

Defendants would have been entitled to rely on the Bondi Report

to show any inaccuracy in Banneker’s allegations about its

contents, because a referenced document may always be read “to

evidence what it incontestably shows.” Gant, 69 F.3d at 674

(emphasis added). But that is not the same as treating the report’s

contents as though they were alleged by Banneker itself, and thus

taking them all as true. And Defendants do not assert, in any case,

that Banneker has mischaracterized the Bondi Report.

21

contract or business expectancy, the defendant’s knowledge

of the contract or business expectancy, intentional

interference causing the breach of the contract or termination

of the business expectancy, and damages. See Sturdza v.

United Arab Emirates, 281 F.3d 1287, 1305 (D.C. Cir. 2002);

Bennett Enters., Inc. v. Domino’s Pizza, Inc., 45 F.3d 493,

499 (D.C. Cir. 1995). Banneker argues that LaKritz Adler,

acting in concert with Graham, (1) interfered with its Term

Sheet by causing WMATA to breach its exclusivity and good

faith obligations, and (2) interfered with its business

expectancy in a final agreement by causing WMATA to

abandon negotiations. The district court dismissed both

tortious interference claims because it concluded that

Banneker had alleged neither a valid contract nor a valid

business expectancy. Banneker II, 19 F. Supp. 3d at 248-51.

We hold that Banneker adequately stated its claims and

therefore reverse.

First, our resolution of the contract claims establishes that

Banneker alleges the existence of a valid contract. The

district court held that the Term Sheet was not enforceable.

As we have discussed, however, the Term Sheet was a valid

Type II agreement that bound WMATA to negotiate

exclusively and in good faith with Banneker.

Banneker also alleges a valid business expectancy in the

completion of a final development agreement. A business

expectancy “must be commercially reasonable to anticipate”

before its loss may be actionable. Browning v. Clinton, 292

F.3d 235, 242 (D.C. Cir. 2002) (internal quotation marks

omitted). In holding that Banneker lacked a valid business

expectancy, the district court reasoned that, after signing the

Term Sheet, Banneker could “only hope[] to enter into a final

contract with WMATA” because the possibility that the

Board would approve a final deal “was too remote to establish

22

a valid business expectancy.” Banneker II, 19 F. Supp. 3d at

249. The district court relied extensively on Carr v. Brown,

395 A.2d 79, 82 (D.C. 1978). There, a real estate developer

applied for a permit to relocate a portion of an alley and for a

zoning variance that would enable him to develop his

property. When another property owner and his attorney

expressed their opposition and “incite[d] . . . area residents to

oppose the alley closing and relocation,” the developer sued

them for losses caused by the resultant delay in approval of

the permit. Id. at 83. The D.C. Court of Appeals held that the

developer’s business expectancy was “too remote, depending

as [it does] on governmental approval,” particularly because

the opponents to the permit were “participating in procedures

fixed by statute which specifically invite opposition.” Id. at

84. Carr itself distinguishes its facts from the type of

expectancy at issue here, as it expressly does not purport to

apply to “a claim by the plaintiff that he has an expectancy of

doing business with a governmental body and that expectancy

is unjustifiably interfered with by the defendant.” Id.

Here, by contrast, Banneker was doing business with

WMATA. LaKritz Adler is alleged to have interfered with a

prospective final agreement. We hold that it was

commercially reasonable for Banneker to anticipate the

consummation of the deal anticipated by the Term Sheet.

Banneker had far more than a “hope” of closing the deal; the

very purpose of the Term Sheet was to produce a final

agreement. Indeed, Banneker and WMATA staff reached

agreement many times. WMATA staff repeatedly

recommended approval. And the Board had in the past rarely

voted against a development agreement recommended by the

staff. On these facts, as alleged, Banneker had a justified

expectation that a development agreement would be finalized.

23

Banneker also adequately alleged the remaining elements

of tortious interference. Banneker alleged that LaKritz Adler

had knowledge of its Term Sheet, and therefore of its

exclusivity rights and expectancy in a final agreement, and

Banneker has also made the requisite “strong showing of

intent,” Bennett, 45 F.3d at 499 (internal quotation marks

omitted), or “bad faith,” Sorrells v. Garfinckel’s, Brooks

Bros., Miller & Rhoads, 565 A.2d 285, 292 (D.C. 1989)

(internal quotation marks omitted). The allegations that

LaKritz Adler and Graham embarked on a long campaign to

induce WMATA to partly or wholly displace Banneker

suffice to plead causation. And Banneker alleged that the

campaign to undermine its bid caused WMATA to breach its

exclusivity and good faith obligations, and ultimately cost

Banneker the project. 7

LaKritz Adler argues that Banneker failed adequately to

allege that LaKritz Adler’s conduct was the cause of any

breach of the Term Sheet or WMATA’s abandonment of

negotiations because it is Graham who is alleged to have been

the “primary wrongdoer in the entire affair.” Appellee Br. 53

(quoting Appellant Br. 32). We disagree. Banneker alleges

that LaKritz Adler “used [its] relationship with Graham to

induce Graham and WMATA’s staff and Board to breach its

contract to negotiate exclusively with Banneker,” Am. Compl.

¶ 270, and to cause WMATA to abandon negotiations.

District of Columbia courts have adopted the Restatement’s

7

We reject the argument made by Defendants that LaKritz Adler

could not have caused the failure of negotiations because WMATA

was an independent decision maker. The crux of Banneker’s claim

against LaKritz Adler is that its conspiracy with Graham, a

WMATA Board Member, impaired Banneker’s competitiveness

and prompted the Board to end the negotiations without

consummating a final agreement. The merits of that theory must

await the proof.

24

formulation of the claim of tortious interference. Havilah

Real Prop. Servs., LLC v. VLK, LLC, 108 A.3d 334, 345

(D.C. 2015). The Restatement recognizes Banneker’s

inducement theory:

One who intentionally and improperly interferes with

the performance of a contract . . . between another

and a third person by inducing . . . the third person

not to perform the contract, is subject to liability to

the other for the pecuniary loss resulting to the other

from the failure of the third person to perform the

contract.

Onyeoziri v. Spivok, 44 A.3d 279, 286-87 (D.C. 2012)

(second ellipsis added) (quoting Restatement (Second) of

Torts § 766 (1979) (“Restatement”)); see also Restatement §

766B (defining tortious interference with prospective business

advantage to include interference consisting of “inducing . . .

a third person not to enter into or continue the prospective

relation).

In support of its claim of tortious interference against

LaKritz Adler, Banneker alleges a circumstantial case that

LaKritz Adler, both by its direct actions and its inducement of

Graham, undermined the exclusivity term and helped to

scuttle any final development agreement with WMATA.

Banneker alleges that LaKritz Adler was in frequent

communication with Graham, that Graham leaked to LaKritz

Adler confidential bid information, that LaKritz Adler,

knowing that information to be confidential, used it in a

phone call with WMATA, and that Graham sought to re-open

the bidding process in the middle of Banneker’s exclusivity

period. In addition, Banneker alleges that LaKritz Adler was

a major contributor to Graham’s campaigns and projects, that

it made contributions during Banneker’s exclusivity period,

25

Am. Compl. ¶ 26, and that, despite knowing and

understanding the nature of WMATA’s exclusivity

obligations, LaKritz Adler exercised its financial influence

over Graham to induce WMATA to breach the exclusivity

clause of the Term Sheet. Finally, Banneker alleges that

LaKritz Adler made repeated calls to WMATA staff for the

purpose of disparaging Banneker, id. ¶ 272, that it interfered

in Banneker’s attempts to develop the Florida Avenue site

alongside a parcel owned by Howard University, and that it

formulated a plan with Graham to delay and obstruct

Banneker’s negotiations with WMATA. At the pleading

stage, those allegations, taken together, state a claim for

inducement of WMATA’s breach of the exclusivity term. See

supra Part III.A. (discussing breach of contract claim).

Banneker also alleges that LaKritz Adler’s conduct and its

inducement of Graham’s conduct resulted in WMATA’s

ultimate abandonment of negotiations. Given the minimal

showing required at this early procedural stage, those

allegations suffice to state a claim for tortious interference

with prospective business advantage.

Contrary to LaKritz Adler’s position, Banneker need not

allege inducement through egregious means, such as libel,

slander, coercion, or disparagement. See Appellee Br. 55.

“[I]nducement may be any conduct conveying to the third

person the actor’s desire to influence him not to deal with the

other.” Restatement § 766 cmt. k. Such conduct may include

“intimidation,” but it also includes “persuasion,” such as the

persuasion coupled with financial influence alleged here. Id.

§ 766 cmt. h. Even were egregious means required,

moreover, Banneker alleged not only that LaKritz Adler

stayed in frequent communication with Graham, but also that

it called WMATA staff “every few months to disparage

Banneker while attempting to convince WMATA” to give

LaKritz Adler the project. Am. Compl. ¶ 272.

26

Nor may LaKritz Adler claim as a defense that it was

merely pursuing its “financial interest.” Appellee Br. 57. In

the District of Columbia, the defendant bears the burden of

establishing legal justification or privilege for the inducement

of a breach. Onyeoziri, 44 A.3d at 287. Economic

competitors are free to use means that are not wrongful to

cause third parties not to enter into prospective contractual

relations “or not to continue an existing contract terminable at

will.” Restatement § 766B. “A party may not, however,

under the guise of competition actively and affirmatively

induce the breach of a competitor’s contract in order to secure

an economic advantage over that competitor.” Dunn v. Cox,

163 A.2d 609, 610 (D.C. 1960) (internal quotation marks

omitted); see also Restatement § 766B cmt. h (“[W]hen B is

legally obligated to deal with C, A is not justified by the mere

fact of competition in inducing B to commit a breach of his

legal duty.”).

Here, Banneker alleges that its contract with WMATA

was not terminable at will. The Term Sheet secured to

Banneker an exclusive negotiation period designed to bring

about a final agreement. LaKritz Adler allegedly knew of the

exclusivity term, but induced WMATA, through Graham, to

breach that term. And LaKritz Adler’s means of

inducement—financial influence and persuasion—would, if

substantiated, suffice to make out a claim against LaKritz

Adler. See Chaves v. Johnson, 335 S.E.2d 97, 103 (Va.

1985); cf. Angle v. Chicago, St. P., M. & O. Ry. Co., 151 U.S.

1, 14 (1894) (citing Lumley v. Gye, 2 El. & Bl. 216, 118, Eng.

Rep. 749 (Q.B. 1853)); Beekman v. Marsters, 80 N.E. 817,

819 (Mass. 1907).

We conclude that Banneker, at this early procedural

stage, has stated claims for interference with contract and

27

prospective business advantage. 8 We therefore reverse the

district court’s dismissal of Banneker’s tortious interference

claims against LaKritz Adler. Because LaKritz Adler does

not argue that the conspiracy claim is otherwise inadequately

stated, we also reverse the dismissal of that claim.

V. Tort Claims and Sovereign and Official Immunity

Defenses

Banneker asserts a fraud claim against WMATA,

alleging it misled Banneker as to its chances of securing

Board approval. Banneker also asserts claims for tortious

interference and civil conspiracy against Graham for his

attempts to undermine Banneker’s bid. The district court

8

We also reject LaKritz Adler’s argument that its conduct is

shielded by the Noerr-Pennington doctrine, “under which

petitioning the Government for redress of grievances, whether by

efforts to influence legislative or executive action or by seeking

redress in court, is immune from liability.” Covad Commc’ns Co.

v. Bell Atl. Corp., 398 F.3d 666, 677 (D.C. Cir. 2005). To our

knowledge, we have never applied the Noerr-Pennington doctrine,

which arose in the context of the antitrust laws, to bar liability for

common law torts; Defendants cite no case to the contrary. Cf.

Whelan v. Abell, 48 F.3d 1247, 1254 (D.C. Cir. 1995). Even were

we to do so now, and we take no position on the matter, the

doctrine does not apply to parties “engaged in private commercial

activity, no element of which involved seeking to procure the

passage or enforcement of laws.” Cont’l Ore Co. v. Union Carbide

& Carbon Corp., 370 U.S. 690, 707 (1962). “Private efforts to

influence governmental bodies acting in an economic rather than a

political framework, e.g., a governmental procurement agency,

have been held unprotected” because they are business, not

political, activity. Fed. Prescription Serv., Inc. v. Am. Pharm.

Ass’n, 663 F.2d 253, 263 (D.C. Cir. 1981); see also George R.

Whitten, Jr., Inc. v. Paddock Pool Builders, Inc., 424 F.2d 25, 33

(1st Cir. 1970).

28

dismissed those claims for lack of subject matter jurisdiction

on the ground that WMATA and Graham enjoy immunity

from suit. We affirm as to WMATA but vacate and remand

as to Graham.

A. WMATA’s Sovereign Immunity From Claims of Fraud

During Negotiations

Banneker alleges that it relied to its detriment on

WMATA’s rosy predictions of Banneker’s chances of

securing a final deal, and that WMATA should have disclosed

Graham’s attempts to prevent the deal from closing. 9 The

district court held that Banneker’s fraud claim against

WMATA was barred by sovereign immunity. We affirm.

WMATA, a quasi-governmental entity created by an

interstate compact, is protected against common law tort

actions by sovereign immunity. See KiSKA Construction

Corp., N.S.A. v. WMATA, 321 F.3d 1151, 1158 (D.C. Cir.

2003). District courts lack subject matter jurisdiction to enter

judgment against WMATA unless its limited waiver of

immunity applies. Id. Section 80 of the WMATA Compact

waives immunity for contract claims and claims of torts

“committed in the conduct of any proprietary function,” but

not torts committed “in the performance of a governmental

function.” D.C. Code § 9-1107.01(80); see also KiSKA, 321

F.3d at 1158. “Because it is difficult to distinguish between

public and private sector functions with any precision,” we

ask whether the claim seeks to impose liability for conduct

that is discretionary, in which case the claim is barred by

immunity, or ministerial, in which case the claim may

proceed—a dichotomy we have imported from the Federal

9

Banneker’s fraud claim against WMATA below was broader. We

address here only the narrowed theory of liability for fraud that

Banneker presses against WMATA on appeal.

29

Tort Claims Act. Beebe v. WMATA, 129 F.3d 1283, 1287

(D.C. Cir. 1997); see also Burkhart v. WMATA, 112 F.3d

1207, 1216 (D.C. Cir. 1997). 10 Discretionary duties generally

“involve[] judgment, planning, or policy decisions” and are

immunized as reflecting sovereign choices. KiSKA, 321 F.3d

at 1159 n.9 (internal quotation marks omitted). Merely

ministerial duties, which can “involve[] enforcement or

administration of a mandatory duty at the operational level,

even if professional expert evaluation is required,” are treated

as not exercising distinctively sovereign powers and so are

not immunized. Id. (internal quotation marks omitted).

We apply a two-part test to determine whether

WMATA’s conduct is immunized as discretionary. Because

“sovereign immunity does not bar suits based on an

employee’s failure to follow [a] prescribed course of

conduct,” we ask first whether “any statute, regulation, or

policy specifically prescribes a course of action for an

employee to follow.” Id. at 1159 (internal quotation marks

omitted). If the tort claim arises from a WMATA employee’s

failure to act as the law specifically prescribes, the conduct is

not shielded by immunity. If the law leaves the conduct in

question to the official’s discretion, we then ask “whether the

exercise of discretion is grounded in social, economic, or

political goals.” Id. (internal quotation marks omitted). Only

actions grounded in such discretion retain “governmental

function” immunity.

Our decision in KiSKA governs Banneker’s fraud claim

against WMATA. There, a contractor on a tunnel project

10

We have also held that “quintessential” governmental functions

such as law enforcement are entitled to immunity. See Beebe, 129

F.3d at 1287. WMATA concedes that Banneker’s fraud claim is

not directed at the performance of a quintessential government

function.

30

sued WMATA for fraud, claiming that WMATA’s Invitation

for Bids (IFB) failed to disclose the report of a technical

expert that WMATA had retained in developing the IFB’s

requirements. Id. at 1154-55. The contractor alleged that its

project cost double its bid, and that it would have bid

differently had WMATA disclosed the expert’s report

recommending more extensive measures for keeping the

tunnel dry. Id. at 1155-56. In the absence of “any statute,

regulation or policy that ‘specifically prescribe[d]’ the content

of WMATA’s IFBs,” and because the duties of good faith and

fair dealing and of accurate project description did not

“specifically prescribe” that content, the court held that

WMATA retained “broad discretion to determine the contents

of the tunnel project’s bid package.” Id. at 1160. WMATA

was thus immune.

The same is true here. The parties agree that WMATA

has broad discretion to select appropriate bidders and to

negotiate final agreements. Banneker argues only that

WMATA lacked the discretion to lead bidders to believe they

would receive approval from the Board when, in fact, one of

its Board Members was actively working to prevent it.

Nothing of which we are aware, however, so limits

WMATA’s discretion. See also Greenbelt Ventures LLC v.

WMATA, 481 F. App’x 833, 839-40 (4th Cir. 2012) (holding

no statute, regulation, or policy governed WMATA’s course

of conduct while negotiating joint development agreement);

Monument Realty LLC v. WMATA, 535 F. Supp. 2d 60, 78

(D.D.C. 2008). Banneker invokes the WMATA Standards of

Conduct for Board Members, but it does not argue that those

standards apply to WMATA staff. It is only the conduct of

the staff that Banneker challenges with its fraud claim.

Banneker does not contend that WMATA’s challenged

conduct, if discretionary, is nonetheless not immunized.

31

Banneker apparently accepts that whatever discretion

WMATA exercises in selecting bidders and negotiating

agreements is the kind of discretion that is “susceptible to

policy judgment,” and so immunized. We therefore affirm

the district court’s dismissal of Banneker’s claim for fraud

against WMATA because it is barred by sovereign immunity.

B. Graham’s Official Immunity Defense to Tort and

Conspiracy Claims

Graham’s immunity is a more complicated matter. As it

does against LaKritz Adler, Banneker asserts claims against

Graham personally for tortious interference with prospective

business advantage and contract, and for civil conspiracy. 11

By virtue of his role as a member of WMATA’s Board,

Graham enjoys absolute official immunity for discretionary

conduct within the scope of his office. The district court

dismissed all of Banneker’s claims against Graham as barred

by immunity. We find that the district court committed three

errors: The court failed to apply federal common law to

Graham’s claim of immunity, it failed to place the burden on

Graham to establish his entitlement to immunity, and it

analyzed Graham’s conduct at too high a level of generality.

Because the record and briefing before us do not enable us

definitively to apply the correct immunity analysis to the

claims against Graham, we vacate the district court’s

dismissal of the claims against Graham and remand for

further proceedings.

“When officials are threatened with personal liability for

acts taken pursuant to their official duties, they may well be

induced to act with an excess of caution or otherwise to skew

their decisions in ways that result in less than full fidelity to

11

Banneker asserted the same claims against Graham in his official

capacity, but does not press those claims on appeal.

32

the objective and independent criteria that ought to guide their

conduct.” Forrester v. White, 484 U.S. 219, 223 (1988).

Absolute official immunity is thus meant “not to protect an

erring official, but to insulate the decisionmaking process

from the harassment of prospective litigation.” Westfall v.

Erwin, 484 U.S. 292, 295 (1988). Even so, immunity “comes

at a great cost,” as it contravenes “the basic tenet that

individuals be held accountable for their wrongful conduct.”

Id. The Supreme Court “has generally been quite sparing in

its recognition of claims to absolute official immunity,”

Forrester, 484 U.S. at 224, and has held absolute official

immunity “justified only when the contributions of immunity

to effective government in particular contexts outweigh the

perhaps recurring harm to individual citizens,” Westfall, 484

U.S. at 295-96 (internal quotation marks omitted). We are

careful not to “lose sight of the purposes of the official

immunity doctrine” when determining if an official is, in the

context of a particular case, entitled to absolute immunity. Id.

at 299-300.

We have repeatedly held that the federal common law of

absolute immunity governs the scope of immunity for

WMATA officials. E.g., Griggs v. WMATA, 232 F.3d 917,

920 (D.C. Cir. 2000); Beebe, 129 F.3d at 1288. The district

court here applied the law of the District of Columbia to

determine whether Graham is entitled to absolute immunity.

See Banneker II, 19 F. Supp. 3d at 246-48. That holding is in

error, and requires reversal to the extent that District of

Columbia immunity law produced a different result than that

which would have obtained under federal law.

33

In weighing claims of absolute immunity, we apply the

two-part test of Westfall v. Erwin. 12 WMATA officials enjoy

absolute immunity when their conduct falls “within the scope

of their official duties and the conduct is discretionary in

nature.” Westfall, 484 U.S. at 297-98; see also Beebe, 129

F.3d at 1289. The Supreme Court has endorsed a “functional”

approach to the inquiry. Forrester, 484 U.S. at 224; see also

Barr v. Matteo, 360 U.S. 564, 573-74 (1959). The burden of

establishing immunity must be borne by the official claiming

it. Westfall, 484 U.S. at 299.

1. Scope of Official Duties

Banneker asserts that all of Graham’s allegedly tortious

conduct fell beyond the scope of his official duties, and is thus

not immunized under Westfall. 13 Our inquiry into the scope

of an official’s duties depends “not [on] the title of [the]

office but the duties with which [the official] is entrusted.”

Barr, 360 U.S. at 573 (internal quotation marks omitted).

Conduct that is at least “within the outer perimeter of [an

official’s] line of duty” is shielded by absolute immunity. Id.

at 575; see also Griggs, 232 F.3d at 922. By contrast, an

official loses the protection of immunity when he crosses that

line and acts in a manner that is “manifestly or palpably

beyond his authority.” Simons v. Bellinger, 643 F.2d 774,

12

Westfall was superseded by statute for claims brought under the

Federal Tort Claims Act, but still applies to claims of personal

liability against WMATA officials. See Beebe, 129 F.3d at 1289.

13

Banneker acknowledges the apparent tension between its theories

that Graham acted within the scope of his employment for purposes

of the contract claims against WMATA and beyond the scope of his

official duties for purposes of immunity from his own personal

liability for tort. We need not resolve that tension now, at the

pleading stage, because Banneker is permitted to plead both in the

alternative.

34

786 (D.C. Cir. 1980) (quoting Spalding v. Vilas, 161 U.S.

483, 498 (1896)). One way that an official acts manifestly

beyond his authority is through the use of “manifestly

excessive means,” even if he does so in the conduct of duties

otherwise within his official purview. McKinney v. Whitfield,

736 F.2d 766, 769-70 (D.C. Cir. 1984) (emphasis omitted); cf.

Butz v. Economou, 438 U.S. 478, 495 (1978). 14

The district court considered all of Graham’s alleged

tortious conduct immune because it conceived of the inquiry

at too high a level of generality. Rather than analyzing each

challenged act, the district court read Banneker’s complaint as

attempting to impose liability on Graham for his

“involvement[] as a WMATA Board Member . . . in setting

contract terms for the development of the Site.” Banneker II,

19 F. Supp. 3d at 248. The appropriate focus, however, is on

the relationship between “the act complained of” and the

corresponding “matters committed by law to [the official’s]

control or supervision.” Barr, 360 U.S. at 573 (internal

quotation marks omitted). At a high enough level of

generality, almost any act that has any relationship to an

overarching duty, such as the duty to vote on real estate

projects, will be immunized. We must instead evaluate the

relationship of each of the challenged acts to Graham’s

relevant, official duties. With respect to each act, we ask

14

See also Griggs, 232 F.3d at 922 (officer empowered to make

arrests was not immunized because he used manifestly excessive

means when he commanded his dog to attack the plaintiff after the

plaintiff complied with the officer’s order, and failed to command

the dog to cease its attack); Bishop v. Tice, 622 F.2d 349, 359 (8th

Cir. 1980) (supervisors empowered to make employment decisions

were not immunized because they “did not simply misuse their

authority but went clearly beyond it by threatening [their employee]

with criminal charges [in order to force him to resign] instead of

attempting to dismiss him for cause”).

35

whether it was among those entrusted to Graham and, if so,

whether Graham’s means of accomplishing his official duties

were manifestly excessive. Graham is entitled to immunity

only if he persuades us that each alleged act was taken

appropriately in performance of a corresponding official duty.

Some of Banneker’s allegations are aimed at the core of

Graham’s official duties. For example, Banneker alleges that

Graham persuaded his fellow Board members to add an

affordable housing requirement to the project when approving

the original Term Sheet. That plainly constitutes an exercise

of Graham’s authority as a Board member to urge a Board

resolution to impose conditions on development projects, and

there is no allegation that Graham pursued the affordable

housing requirement through excessive means.

Other allegations challenge conduct manifestly beyond

Graham’s authority. Banneker alleged that Graham sought to

barter a vote in his capacity as member of the D.C. Council

for his vote as a WMATA Board member on the Florida

Avenue project, and attempted to extort Banneker. Those acts

are manifestly beyond the authority of a WMATA Board

Member and so not immunized.

That leaves allegations of particular acts by Graham that

do not fall clearly within or without the outer perimeter of his

official duties as we currently understand them. Banneker

alleges that Graham exceeded the scope of his authority by

leaking confidential bid information to LaKritz Adler in

violation of applicable regulations, pressuring Banneker’s

development partners to drop out, pressuring Banneker to add

LaKritz Adler to its team, seeking to steer the project to

LaKritz Adler in violation of Banneker’s exclusivity rights,

and giving direction to WMATA staff in connection with the

Florida Avenue project in violation of WMATA policy.

36

Banneker’s allegations, however, are not enough for us to

decide the question. The scope of Graham’s duties is

determined by “controlling law,” Butz, 438 U.S. at 489, which

here includes the WMATA Compact and the regulations

governing WMATA Board Members’ conduct. Graham bore

the burden of establishing his entitlement to official immunity

by reference to those sources of law and WMATA policy, but

he made no effort in the district court to do so. The record

does not contain, for example, any reliable information about

the authority of a Board Member to direct WMATA staff, or

to participate in or influence negotiations. Without that

information, the district court was left only with Banneker’s

allegations.

Although the immunity issue may be identified through a

motion directed to the pleadings, courts may, where

appropriate, answer the question of whether an official has

acted within the outer perimeter of official duties through

limited evidentiary analysis focusing on the nature and scope

of the job duties in question. The “functional analysis

governing absolute immunity” may call for a “limited factual

inquiry” to determine “in what role the challenged function

was exercised” and “preclud[e] on occasion disposition at the

Rule 12 stage.” Gray v. Bell, 712 F.2d 490, 496 (D.C. Cir.

1983) (internal quotation marks omitted). For example, in

some cases, affidavits from superiors elucidating an

employee’s duties are required to support “[t]his type of

limited inquiry.” Expeditions Unlimited Aquatic Enters., Inc.

v. Smithsonian Inst., 566 F.2d 289, 292 n.5 (D.C. Cir. 1977).

In the context of the Federal Tort Claims Act, scope-of-

employment questions sometimes are resolved in that manner.

We have held that, in cases in which factual disputes over the

scope of employment arise at the pleading stage, “limited

discovery” may be appropriate. See Stokes v. Cross, 327 F.3d

1210, 1214 (D.C. Cir. 2003). Such inquiries primarily

37

involve matters already known to the defendant official; they

tend to be discrete inquiries, the general prospect of which is

“unlikely to deter any official in the vigorous pursuit of his

responsibilities,” Expeditions, 566 F.2d at 292 n.5, and

comport with the essential character of official immunity

questions as ones that “should be decided at the earliest

opportunity,” Osborn v. Haley, 549 U.S. 225, 253 (2007).

In light of these principles, we hold that Graham failed to

bear his burden to establish the scope of his official duties and

to situate his conduct within its outer perimeter. On the

limited record we have, we have little trouble concluding that

the allegations of extortion and the alleged attempt to barter a

D.C. Council vote for a WMATA vote manifestly exceeded

the scope of Graham’s official duties; we have equally little

trouble concluding that Graham’s attempt to add an affordable

housing requirement fell within the scope of his official

duties. The remaining allegations are more difficult,

however, and require more fact-specific inspection. We

therefore vacate the district court’s dismissal and remand for

the district court to consider in the first instance which of

Graham’s other actions fell beyond the outer perimeter of his

official duties and whether those actions that did fall beyond

the outer perimeter, taken together, state claims against

Graham for tortious interference and civil conspiracy.

2. Discretionary Conduct

Turning to the second part of the Westfall analysis,

Banneker argues that, even if all of Graham’s conduct was

within the bounds of his official duties, his conduct was not

discretionary, and therefore not immune, because it violated

the WMATA Standards of Conduct. As we have discussed in

connection with WMATA’s claim of sovereign immunity, we

apply a two-part test to determine whether a decision is

38

immunized as discretionary. See Beebe, 129 F.3d at 1289

(applying sovereign immunity discretionary/ministerial

dichotomy to claim of official immunity). First, we ask

whether “any statute, regulation, or policy specifically

prescribes a course of action for an employee to follow”; if so,

the conduct is not shielded by immunity because it is not

discretionary. KiSKA, 321 F.3d at 1159 (internal quotation

marks omitted). If not, and the official has room to exercise

discretion, we next ask “whether the exercise of discretion is

grounded in social, economic, or political goals,” making it an

exercise of governmental judgment and so immune. Id.

The district court held that Graham had discretion in

voting on Banneker’s project, and considered all of

Banneker’s allegations as seeking to impose liability for the

exercise of that discretion. Here, again, the district court

reviewed the complaint at too high a level of generality. The

correct analysis is whether “the alleged tortious conduct is

discretionary.” Westfall, 484 U.S. at 296 (emphasis added).

Banneker does not seek to impose liability for Graham’s vote

on the project, but for various actions relating to the vote that

Banneker alleges were prohibited by the regulations

governing Board Members’ conduct. The district court must

parse Banneker’s allegations at a finer level of specificity in

order to address those claims of prohibited action and resolve

Graham’s claim of immunity.

The district court also held that the Standards of Conduct

did not cabin Graham’s discretion for purposes of immunity

because they do not “prescribe” a course of action for

WMATA Board Members to follow: they “describe how not

to act, not how to act.” Banneker II, 19 F. Supp. 3d at 246.

We disagree. “[C]onduct cannot be discretionary unless it

involves an element of judgment or choice.” Berkovitz v.

United States, 486 U.S. 531, 536 (1988). “If [an] employee

39

violates [a] mandatory regulation, there will be no shelter

from liability because there is no room for choice and the

action will be contrary to policy.” United States v. Gaubert,

499 U.S. 315, 324 (1991). For example, we have observed

that the limitation of an officer’s judgment during a high

speed chase—such as the limitation of “the speed of a vehicle

in hot pursuit—indicates that the [police department] already

had made the decision to limit the officer’s exercise of

discretion.” Biscoe v. Arlington Cty., 738 F.2d 1352, 1363

(D.C. Cir. 1984). Consequently, “effective law enforcement

would not be hindered by enforced adherence to such

regulations” through civil liability. Id.; see also Keller v.

United States, 771 F.3d 1021, 1024 (7th Cir. 2014) (holding

Federal Tort Claims Act discretionary function exception

does not apply “if prison personnel violate a mandatory

regulation”). We see no difference between a prescription by

policy that leaves no room for choice and a proscription that

does the same. In both cases, the public official’s discretion

is cabined such that violation of the regulation cannot by

definition “involve[] judgment, planning, or policy

decisions.” KiSKA, 321 F.3d at 1159 n.9 (internal quotation

marks omitted). Imposition of liability for operational actions

that violate mandatory policies phrased as prohibitions, like

liability for violation of policies phrased as affirmative duties,

does not “pose threats to the quality and efficiency of

government.” Biscoe, 738 F.2d at 1363 (internal quotation

marks omitted).

The Standards of Conduct are absent from the record, but

Banneker alleges that the standards clearly prohibited Graham

from leaking confidential information. Banneker also alleges

that the Bondi Report concluded Graham violated the

Standards of Conduct when he (1) created a conflict of

interest by seeking to barter his D.C. Council vote on the

lottery contract for his WMATA vote on Banneker’s project,

40

and (2) showed favoritism to LaKritz Adler “by appearing to

continue to support LaKritz Adler’s proposal for, or inclusion

in, the Florida Avenue Project while at the same time

opposing Banneker Ventures.” Bondi Rpt. 6. The Bondi

Report’s conclusions relied on and quoted portions of the

Standards of Conduct that require Board Members to “strictly

avoid engaging in actions which create conflicts of interest or

the appearance of a conflict of interest” and state that it is

“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.” Id. at 2. Those portions

of the Standards of Conduct purport to cabin the discretion of

Board Members.

Graham’s alleged leaking of confidential information

manifestly violated the Standards. But, unlike the alleged

prohibition on the leaking of confidential information, the

conflict of interest standards quoted in the Bondi Report

capture a wide swath of conduct more susceptible of

contextual judgment. Some actions may fall clearly within

the prohibition, such that the prohibition leaves “no room for

choice,” while others may fall into a gray area that cannot

fairly be characterized as clearly “contrary to policy.”

Gaubert, 499 U.S. at 324. In the context of demarcating the

scope of official duties, we have held that only conduct that is

“manifestly or palpably beyond” the scope of official duties is

unprotected by official immunity. Simons, 643 F.2d at 786

(quoting Spalding, 161 U.S. at 498). We hold that the same

rule applies to the question of whether conduct is

discretionary: Only alleged conduct that manifestly violates

an ethical proscription or other statute, regulation, or policy

that constrains the exercise of discretion may be subject to

liability. Both the scope-of-duties and discretionary-conduct

41

inquiries thus leave unprotected only conduct that is plainly

unauthorized.

As we have noted, the complete Standards of Conduct are

not in the record. It may be that Graham’s attempts to steer

the project to LaKritz Adler manifestly contravened the

regulations governing his conduct as a Board Member. It is

also possible that the regulations were not so clear as to

render Graham’s conduct plainly beyond his discretion.

Because the burden was Graham’s to rebut Banneker’s

allegations, dismissal was inappropriate. See, e.g., Keller,

771 F.3d at 1024-25 (reversing grant of summary judgment in

FTCA suit on “scant record” of “what procedures and

regulations applied” to employees for purposes of

discretionary function exception because government bore

burden of establishing entitlement to immunity).

However, without the benefit of the full Standards of

Conduct and briefing from the parties, together with

appropriate factual development, if any, that would clarify the

scope of the relevant Standards and place Banneker’s

allegations in context, we cannot finally distinguish which of

Banneker’s allegations are barred by official immunity and

which are not. For the same reason, we cannot decide in the

first instance whether any allegations that are not barred by

official immunity, taken together, suffice to state a claim for

tortious interference and civil conspiracy. We therefore

vacate the district court’s dismissal of Banneker’s claims

against Graham and remand for further consideration in light

of the foregoing principles.

* * *

As we have discussed, Graham will not enjoy official

immunity for any actions that either fall beyond the scope of

his official duties or are not discretionary in nature. See

42

Westfall, 484 U.S. at 297-98; Beebe, 129 F.3d at 1289. On

remand, the district court should evaluate, for each action

complained of: (1) whether the alleged action, if established

at trial, would be one that manifestly exceeded the scope of

Graham’s official duties or was carried out through manifestly

excessive means; or (2) whether the alleged action, if

established at trial, would manifestly violate any statute,

regulation, or policy governing WMATA Board Members’

conduct. Any action that would be unauthorized under either

standard is unprotected by immunity. The district court

should therefore evaluate whether the actions that it concludes

would not be immunized, taken together, state a claim against

Graham for tortious interference or civil conspiracy.

VI. Conclusion

For the foregoing reasons, we reverse the district court’s

dismissal of Banneker’s contract claims against WMATA and

its tort claims against LaKritz Adler. We affirm the dismissal

of Banneker’s claim for fraud against WMATA, vacate the

dismissal of Banneker’s tort claims against Graham, and

remand for further proceedings consistent with this opinion.

So ordered.