United States District Court, D. Maryland
RICHARD D. BENNETT, District Judge.
Plaintiff Fru-Con Construction, LLC ("Fru-Con" or "Plaintiff") brings this action against Defendants Mayor and City Council of Baltimore ("the City" or "Defendants"), seeking declaratory relief pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201. Fru-Con asks this Court to determine the rights and responsibilities of each party to the Contract S.C. 855-Enhanced Nutrient Removal (ENR) Modifications to Existing Facilities at Patapsco Wastewater Treatment Plant. Currently pending before this Court is the City's Motion to Dismiss (ECF No. 15). The parties' submissions have been reviewed and this Court held a telephone conference on the record on October 14, 2014 to discuss the pending motion. For the reasons that follow, Defendants Mayor and City Council of Baltimore's Motion to Dismiss (ECF No. 15) is GRANTED.
In a ruling on a motion to dismiss, this Court must accept the factual allegations in the plaintiff's complaint as true and construe those facts in the light most favorable to the plaintiffs. See, e.g., Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999).
Plaintiff Fru-Con Construction, LLC, now known as Balfour Beatty Infrastructure, Inc.,  is a construction company organized under Delaware law and authorized to do business in Maryland. Compl. ¶ 14, ECF No. 1. On November 10, 2010, Fru-Con and the City of Baltimore entered into Contract S.C. 855-Enhanced Nutrient Removal (ENR) Modifications to Existing Facilities at Patapsco Wastewater Treatment Plant (the "Contract"). Id. at ¶ 1. Fru-Con agreed to perform the requisite construction work to replace, renovate, and upgrade seven discrete waste water process systems at the Patapsco Wastewater Treatment Plant ("the Plant"). Id. at ¶ 2. During the construction period, the Plant was to remain fully operational. Id.
The Contract sets forth detailed specifications of the work to be performed, the proposed timing of the contract, and, among other provisions, the procedures governing dispute resolution. See Compl. Ex. F, ECF No. 1-6. Specifically, the Contract provides a multi-step administrative process by which a Contractor's claim is reviewed. See id. at 64-66. If, at the end of the administrative review, the Contractor disagrees with the final decision, then it may submit the claim to "review on the record by a court of competent jurisdiction pursuant to the Baltimore City Charter." Id. at 66.
As Fru-Con upgraded the Plant, it disagreed with the City over the proper interpretation of specific terms of the Contract. Compl. at ¶ 4. The relationship between the parties quickly soured. Id. After Fru-Con "substantially completed" all specified modifications on August 12, 2013, the City proceeded to use each of the modified waste water systems. Id. at ¶ 3. Shortly thereafter, the City informed Fru-Con that Fru-Con must pay liquidated damages of $5, 000 per day for the period of August 12, 2013 until Fru-Con achieved "Conditional Acceptance." A flurry of correspondence between Fru-Con and the City commenced, as each party attempted to assert its own interpretation of the terms of the Contract. See id. at ¶¶ 6, 8, 100-10.
Finally, Fru-Con filed the subject Complaint (ECF No. 1) seeking declaratory relief in this Court to resolve any ambiguities and determine the proper interpretations of specific terms in the Contract. See id. at ¶¶ 112-114. Plaintiff argues that a declaratory judgment is appropriate due to the fundamental disagreements between the parties over their respective legal rights and obligations. Id. at ¶ 113. Defendants moved to dismiss the Complaint pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure (ECF No. 15). The City contends that this Court lacks subject matter jurisdiction over the dispute, as Fru-Con has failed to exhaust the administrative procedures set forth in the Contract. See Mem. in Supp. of Def.'s Mot. to Dismiss, 1-2. In response, Fru-Con argues that this Court does indeed have subject matter jurisdiction, such that declaratory relief is appropriate. Pl.'s Resp. in Opp. to Def.'s Mot. to Dismiss, ECF No. 16.
STANDARD OF REVIEW
I. Motion to Dismiss Under Rule 12(b)(1)
A motion to dismiss under Rule 12(b)(1) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction challenges a court's authority to hear the matter brought by a complaint. See Davis v. Thompson, 367 F.Supp.2d 792, 799 (D. Md. 2005). This challenge under Rule 12(b)(1) may proceed either as a facial challenge, asserting that the allegations in the complaint are insufficient to establish subject matter jurisdiction, or a factual challenge, asserting "that the jurisdictional allegations of the complaint [are] not true." Kerns v. United States, 585 F.3d 187, 192 (4th Cir. 2009) (citation omitted). When, as in this case, the challenge is facial, a court will grant a motion to dismiss for lack of subject matter jurisdiction "where a claim fails to allege facts upon which the court may base jurisdiction." Davis, 367 F.Supp.2d at 799. The plaintiff carries the burden of establishing subject matter jurisdiction. Lovern v. Edwards, 190 F.3d 648, 654 (4th Cir. 1999).
II. Declaratory Judgment
The Declaratory Judgment Act provides that "[i]n a case of actual controversy within its jurisdiction, ... any court of the United States, upon filing of appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought." 28 U.S.C. § 2201(a). The Act, however, does "not provide a source of jurisdiction which is independent of substantive federal law." Gibralter, P.R., Inc. v. Otoki Group, Inc., 104 F.3d 616, 619 (4th Cir. 1997) (citing Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 16-17 n.14 (1983)).
The United States Court of Appeals for the Fourth Circuit has "held that district courts have great latitude in determining whether to assert jurisdiction over declaratory judgment actions." Aetna Cas. & Sur. Co. v. Ind-Com Elec. Co., 139 F.3d 419, 422 (4th Cir. 1998); see also Wilton v. Seven Falls Company, 515 U.S. 277, 286 (1995. Further, the Fourth Circuit has provided guidance on the exercise of this discretion. Declaratory judgment should not be used "to try a controversy by piecemeal, or to try particular issues without settling the entire controversy, or to interfere with an action which has ...