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Filed D.C.

Superior Court 01/16/2014 17:51PM Clerk of the Court

IN THE SUPERIOR COURT OF THE DISTRICT OF COLUMBIA Civil Division ______________________________________ ) DISTRICT OF COLUMBIA, ) ) Plaintiff, ) Case No. 2013 CA 005874 B ) v. ) Judge Craig Iscoe ) EXXONMOBIL OIL CORP., et al., ) ) Defendants. ) ______________________________________ ) DISTRICT OF COLUMBIAS SUPPLEMENTAL MEMORANDUM IN SUPPORT OF ITS OPPOSITION TO DEFENDANTS MOTIONS TO DISMISS As requested by the Court at oral argument on January 9, 2014, the District of Columbia (District), through its Attorney General, presents the Court with the following clarifying responses to two questions the Court raised at oral argument regarding the Districts parens patriae standing to enforce the Districts Retail Service Station Act (RSSA or Act). I. The Courts inquiry into the Districts use of a partial quotation from Connecticut v. Physicians Health Servs. of Connecticut.

At oral argument, the Court asked about the Districts omission from its opposition brief where it quotes from the decision in Connecticut v. Physicians Health Servs. of Connecticut, 287 F.3d 110 (2d Cir. 2002) of the Second Circuits statement that federal statutes under which states have been granted parens patriae standing all contain broad enforcement provisions that permit suit by any person. Id. at 121 (internal quotations omitted). This statement by the Second Circuit is factually inaccurate. Had the District included the statement as part of its quotation, which would admittedly have been the better course, the District would have been obligated to disclose to the Court that the statement is incorrect.

The Second Circuits statement that statutory parens patriae standing has always rested on either express authority or broad civil enforcement provisions is incorrect. It ignores, among other decisions, the Supreme Courts holding in the seminal case of Alfred L. Snapp & Son, Inc. v. Puerto Rico, 458 U.S. 592 (1982), a case accepted as persuasive authority by all the parties in this case. See Districts Opp. at 13; CPG Mot. Dismiss at 13.1 In Snapp, the Supreme Court held that Puerto Rico had parens patriae standing, but the statutes in question (i) did not provide any state with an express right of action and (ii) did not contain broad enforcement provisions expressly enforceable by any person. As discussed in further detail in the opinion, Snapp dealt with the interaction between two statutes: the Wagner-Peyser Act (WPA), 29 U.S.C. 49, et seq., and the Immigration and Nationality Act of 1952 (INA), 8 U.S.C. 1101, et seq. Snapp at 594. These two statutes, and their associated regulations, created (i) a nationwide employee service system whereby domestic workers could be matched with job opportunities in other states and (ii) a certification process whereby employers could seek foreign workers when domestic workers were unavailable through the employee service system. Id. at 594-596. Puerto Rico brought suit, as parens patriae, alleging that a group of Virginia farms had discriminated against Puerto Ricos migratory farm workers in favor of foreign workers. Id. at 597-99. Puerto Rico sought, inter alia, an injunction prohibiting future violations of the WPA and INA. Id. at 598-99. The Supreme Court held that Puerto Rico had parens patriae standing, and reached this conclusion without discussing whether or not the statutes in question granted Puerto Rico express enforcement authority, or contained broad civil enforcement provisions. In fact, the

In its motion to dismiss, Defendant Exxon adopted the reasoning of the CPG Defendants as to the Districts parens patriae standing. See Exxon Mot. Dismiss at 6.

WPA and INA do not contain (i) express authority for states to seek injunctive relief or (ii) broad enforcement provisions enforceable by any person. First, the INA, WPA, and their associated regulations do not provide express enforcement authority for any state. The INA does not provide any oversight role for states, instead empowering the Department of Labor to investigate potential violations and administratively bar offending employers from seeking foreign worker certification for a period of time. See 20 C.F.R. 655.210 (1978) (amended and recodified as 655.1318 (2009). Similarly, the WPA does not provide states with civil enforcement authority, and limits states to administratively investigating potential violations involving the employee service system, but only when (i) an aggrieved worker files an administrative complaint and (ii) the alleged violation took place within the state itself. 2 See 20 C.F.R. 658, et seq. (1978). States were further limited in that they could not enjoin violations or compel compliance, but merely administratively bar an offending employer from using the employee service system in the future. Id. at 658.501(a). Furthermore, the INA, WPA, and their associated regulations do not contain broad civil enforcement provisions similar to the any person provisions in the statutes discussed in Physicians Health Servs. The INA and its associated regulations do not contain any express private enforcement provisions, and one post-Snapp court has read the Supreme Courts decision as, at most, implying a private right of action that is limited to workers. See Vega v. Nourse Farms, Inc., 62 F. Supp. 2d 334, 344 (D. Mass. 1999). Similarly, the WPA and its regulations do not expressly provide any private right of action outside of the administrative complaint process described above. Instead, leading up to Snapp, federal courts interpreted the WPA as also providing an implied private right of action. See Gomez v. Florida State Employment Service, 417 F.2d 569 (5th Cir. 1969). However, while the WPAs employee service system involved

It is important to note that the alleged violations in Snapp took place in Virginia, not Puerto Rico.

workers in all areas, Id. at 570, the right of action was limited to migratory farm workers given that the legislative history behind the WPA regulations showed a special concern with the rights of that limited group of workers. Id. at 575-76.3 Lower federal courts, applying the analysis in Snapp, have also found statutory parens patriae standing warranted where express authority or any person language are not present. In In re Volpert, the court held that Illinois had parens patriae standing to file a nondischargeability complaint under 11 U.S.C. 523 on behalf of state individuals and entities who had purchased fraudulent securities. In re Volpert, 175 B.R. 247 (Bankr. N.D. Ill. 1994). The court reached this conclusion despite the fact that (i) the statute limited standing to a creditor to whom such debt is owed under 523(c), and (ii) Illinois was admittedly not such a creditor. Id. at 253-57; see also In re Edmond, 934 F.2d 1304 (4th Cir. 1991); In re Bartel, 403 B.R. 173 (Bankr. D. Mass. 2009); In re DeFelice, 77 B.R. 376 (Bankr. D. Conn. 1987); but see In re Lacy, 74 B.R. 23 (Bankr. D. Or. 1987). In short, the statement in Physicians Health Servs. is factually inaccurate, since, in Snapp and subsequent cases, the Supreme Court and lower federal courts have found parens patriae standing to be appropriate despite the fact that the statutes at issue (i) did not grant states express enforcement authority and (ii) did not contain broad civil enforcement provisions enforceable by any person. II. The Courts inquiry into what authority the D.C. Council proposed giving the Attorney General in the 2011 Amendments to the RSSA. At oral argument, the Court also inquired about the specific authority that the D.C. Council proposed granting to the Districts Attorney General under the 2011 Amendments to the

Similarly, a private right to enforce the specific provisions at issue in this case, D.C. Code 36303.01(a)(6) and (a)(11), also is not express but can likely be implied. Cf. Davis v. Gulf Oil Corp., 485 A.2d 160, 171 n.12 (D.C. 1984) (finding implied private right of action under D.C. Code 36303.01(a)(10)).

RSSA (2011 Amendments). The relevant text of these proposed amendments is attached hereto as Exhibit A.4 In the 2011 Amendments, the Council proposed that the Districts Attorney General have the express authority to: Sue to enjoin violations by any refiner, distributor, or retail dealer; Sue to enjoin violations by any person or entity acting in concert with any refiner, distributor, or retail dealer; Recover a civil penalty of up to $5,000 for each violation of the RSSA; Recover attorneys fees and costs incurred for RSSA enforcement actions; and Issue and seek enforcement of pre-complaint, investigatory subpoenas. The extensive enforcement authority that the 2011 Amendments would have granted the District contrasts with the limited authority claimed by the District as parens patriae: the authority to seek injunctive relief on behalf of the general public against widespread violations. Thus, the 2011 Amendments attempted to legislate much more than the limited authority that the District has as parens patriae. Further, as the District noted at oral argument, even without the broad enforcement powers proposed by the 2011 Amendments, express authority would be a more powerful enforcement tool than parens patriae authority. As Defendants themselves point out, parens patriae authority requires that a violation be widespread and affect the Districts quasi-sovereign interest in the economic well-being of its residents. In contrast, with express authority, the District could prosecute one violation at a single D.C. station, even if that violation occurred for only one day. Violations that are too isolated to support parens authority could be the basis for government enforcement if the District were expressly empowered to enforce the RSSA.

The proposed text of the bill was included in the D.C. Council Committee Report for the 2011 Amendments. The CPG Defendants provided the Court with a portion of the Councils Report in their reply brief.

Dated: January 16, 2014

Respectfully submitted, IRVIN B. NATHAN Attorney General for the District of Columbia ELLEN A. EFROS Deputy Attorney General, Public Interest Division /s/ Bennett Rushkoff BENNETT RUSHKOFF (Bar #386925) Chief, Public Advocacy Section /s/ Nicholas A. Bush CATHERINE A. JACKSON (Bar #1005415) Assistant Attorney General NICHOLAS A. BUSH (Bar #1011001) Assistant Attorney General Office of the Attorney General 441 Fourth Street, N.W., Suite 600-S Washington, DC 20001 (202) 727-5173 Email: Attorneys for the District of Columbia

CERTIFICATE OF SERVICE I hereby certify that on January 16, 2014, copies of the foregoing District of Columbias Supplemental Memorandum in Support of its Opposition to Defendants Motions to Dismiss were served by the Courts electronic service on all counsel of record.

/s/ Nicholas A. Bush NICHOLAS A. BUSH (Bar #1011001)