WASHINGTON, DC Councilmembers David Catania (At-Large) and Kevin Chavous (Ward 7) have filed motions in the United States District Court for the District of Columbia asking the Court to rule in their favor against the Control Board for its actions to force the privatization of D.C. General Hospital. The two Councilmembers, along with the Committee of Interns and Residents, filed suit against the Control Board on April 30, 2001. While Judge Richard Roberts denied the plaintiffs' request for a temporary restraining order to prevent implementation of the Privatization Contract, the case is still pending, and a hearing will be held before the Judge on June 8 to decide the legal merits of the plaintiffs' Complaint.

In their suit, filed on behalf of the plaintiff's by their attorneys, LeBoeuf, Lamb, Greene & MacRae, L.L.P., the Councilmembers contend that the Control Board acted without statutory authority and that implementing the Privatization Contract over the objections of the Council was unlawful and unconstitutional. In their Motion for Summary Judgment, filed on May 14, the plaintiffs petition the Court to declare the Privatization Contract and related orders null and void and stop their implementation.

"In one day the Control Board took a series of unprecedented actions to privatize the entire public health system of the District of Columbia," said Councilmember Catania. "They entered into a five-year, $500 million contract with the financially troubled Greater Southeast Community Hospital Corp.; they enacted legislation to repeal the Public Benefit Corporation; and ordered D.C. Department of Health to oversee the privatization process. They took these actions despite the fact that the Council unanimously rejected the Privatization Contract because it was in our judgment against the interest of the District of Columbia and its citizens."

In the papers filed with the Court, the plaintiffs explain why the actions of the Control Board went beyond their authority and are in violation of the United States Constitution. The plaintiffs contend that since the Control Board has certified the financial well-being of the District and their operation is winding down, they have no authority to enter into the Privatization Contract, enact laws, or issue orders. In addition, the plaintiffs state that the Control Board has no power to order the Council to take particular legislative action and has no authority to enter into a five-year, $500 million contract, since that authority rests solely with the Council. Moreover, when the Control Board executed the Privatization Contract it refused to allow the citizens of the District to be present, in violation of the District's Open Meetings Act.

"The predicted devastating effects upon the healthcare of District residents are now coming true," said Councilmember Chavous. "Residents are dying due to the closing of D.C. General's emergency room to ambulances and because of the inability of Greater Southeast to accept trauma patients despite its contractual obligations. Walkin emergency room patients requiring hospitalization are waiting more than a day for transfer to Greater Southeast, and long-term care patients are unsure where they will receive treatment. This increasing health care disaster not only violates the standards of human decency in a civilized society, it is indisputable proof that the express requirements of health care standards outlined by the Control Board are being violated".

In a separate motion, the plaintiffs moved to compel the Control Board to produce the Due Diligence Report submitted by PriceWaterhouseCoopers LLP to the Control Board regarding the proposed plan to provide healthcare to the uninsured population of the District. The Council has repeatedly expressed its concerns over the financial viability of Greater Southeast Hospital Corp. and requested that a Due Diligence Report be performed. To date, the Council has not been able to review this document.

Plaintiffs' attorney, Elizabeth Sandza, a partner in LeBoeuf's Washington D.C. office, stated that "the PriceWaterhouseCoopers report is essential to an understanding of the financial viability of the Greater Southeast Contract. The failure of the Control Board to allow public scrutiny of these financial documents is particularly troubling given that the Control Board's primary justification for privatization was the financial condition of the Public Benefit Corporation and the potential threat that posed to the community."

A hearing on this matter has been scheduled before a Magistrate Judge on May 18, 2001. This hearing will also resolve a motion to quash depositions of Alice Rivlin, the Chair of the Control Board and Francis Smith, the Executive Director of the Control Board.

[NOTE: Copies of the motions and memorandum filed by the Plaintiffs can be obtained by contacting Councilmember Catania's office at 202/724-7772.]

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

KEVIN P. CHAVOUS and DAVID A. CATANIA, individually and in their capacity as MEMBERS of the COUNCIL OF THE DISTRICT OF COLUMBIA, One Judiciary Square, 441 Fourth Street, NW, Washington, D.C. 20001, and

THE COMMITTEE OF INTERNS AND RESIDENTS, 1925 K Street, N.W., Suite 410, Washington, D.C. 20006, Plaintiffs,

DISTRICT OF COLUMBIA FINANCIAL RESPONSIBILITY AND MANAGEMENT ASSISTANCE AUTHORITY, serve: Alice M. Rivlin, Chair, One Thomas Circle, Suite 900, Washington, D.C. 20001, and

GREATER SOUTHEAST COMMUNITY HOSPITAL CORPORATION I, serve: Ana Raley, Chief Executive Officer, 1310 Southern Avenue, S.E., Washington, D.C. 20032, and

THE DISTRICT OF COLUMBIA, serve: secretary to the Deputy Corporation of the Civil Division and the Office of the Mayor, One Judiciary Square, 441 Fourth Street, N.W., Washington, D.C. 20001, Defendants.

Complaint for Declaratory Judgment and Injunctive Relief

Plaintiffs Kevin P. Chavous ("Councilmember Chavous") and David A. Catania (Councilmember Catania), individually and in their capacity as members of the Council of the District of Columbia, by counsel, bring this action seeking declaratory and injunctive relief to redress the statutory and constitutional violations arising out of efforts by the Defendant District of Columbia Financial Responsibility and Management Assistance Authority to privatize D.C. General Hospital.

Jurisdiction and Venue

1. This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331 and the District of Columbia Financial Responsibility and Management Assistance Act of 1995, Pub.L. 104-8 (HR 1345) § 105 (codified at D.C. Code §§ 47-391.1, et seq.).

2. Venue is proper in this Court under 28 U.S.C. § 1391.

Parties

3. Plaintiffs are competent adults over the age of eighteen years.

4. Plaintiffs are citizens of the United States.

5. Plaintiffs are citizens and residents of the District of Columbia.

6. Plaintiffs Kevin P. Chavous and David A. Catania are members of the Council of the District of Columbia ("D.C. Council") and bring this action in both their individual and official capacities.

7. The Committee of Interns and Residents is a national union affiliated with the Service Employees International Union, the largest union of health care workers in the United States. The Committee of Interns and Residents represents interns and residents at D.C. General Hospital.

8. Defendant District of Columbia Financial Responsibility and Management Assistance Authority (the "Control Board") is an entity within the government of the District of Columbia, established in 1995 with the passage of the District of Columbia Financial Responsibility and Management Assistance Act (the "Act"), consisting of five members appointed by the President of the United States.

9. Defendant Greater Southeast Community Hospital Corporation I is a Delaware corporation doing business in the District of Columbia.

10. Defendant District of Columbia is a municipal corporation with responsibility for oversight of the agency of the District of Columbia Department of Health.

Factual Background

11. In 1973, Congress passed the District of Columbia Self-Government and Governmental Reorganization Act ("Home Rule Act"), which granted greater rights of self-determination to District citizens and set forth the structural framework of the District government in the District Charter. Pub.L. 93-198, 87 Stat. 774 (Dec. 24, 1973). The D.C. Council is the legislative branch of the District of Columbia government, and all legislative powers of the District of Columbia government are vested in it.

12. As part of its statutory authority under the Home Rule Act, the D.C. Council established the District of Columbia Health and Hospitals Public Benefit Corporation ("PBC"), codified at D.C. Code §§ 32-261.1 and 32-262.1 through 262.20, et seq. The PBC was established as a non-profit public benefit corporation to provide comprehensive community-centered health care for the benefit of District of Columbia residents. The health care functions performed by the D.C. General Hospital and the community clinics of the Commissions of Public Health of the Department of Human Services were transferred to the PBC. D.C. Code § 32-261.1.

13. In 1995, Congress passed the District of Columbia Financial Responsibility and Management Assistance Act of 1995, which created the Control Board. Provisions governing the Control Board are codified at D.C. Code §§ 47-391.1, et seq. As set forth in Section 47.392(a), the Control Board may submit recommendations to the D.C. Council and, under subsection (b), the D.C. Council then has 90 days in which to approve or reject those recommendations. These recommendations are sometimes referred to as "Section 207 Recommendations" in reference to the Section number in the Control Board's enabling act. The Control Board's powers, as set forth in Section 47392.7, include the authority to issue orders to the Mayor and departments of agencies of the District of Columbia government, but does not authorize it to give orders to the D.C. Council or act in the stead of the D.C. Council.

14. As part of the appropriations for the District of Columbia for the fiscal year ending September 30, 2001, Congress allocated $90,000,000 "for the purpose of restructuring the delivery of health services in the District of Columbia." H.R. 5633, 106 `h Cong., 2d Sess. (2000). The appropriations act further provided that, "such restructuring shall be pursuant to a restructuring plan approved by the Mayor of the District of Columbia, the [D.C. Council], the [Control Board], and the Board of Directors of the [PBC]." Id.

15. On November 3, 2000, Councilmembers Chavous and Catania, along with D.C. Council member Sandy Allen, submitted a proposal to develop a comprehensive urban healthcare campus on the grounds of D.C. General Hospital to address the health care needs of the residents of the District of Columbia.

16. On December 4, 2000, the Control Board issued a Resolution, Recommendations and Orders Concerning the Public Benefit Corporation ("Control Board Resolution"), purportedly pursuant to its authority under Section 47-391.7(a). A copy of the Control Board Resolution is attached hereto as Exhibit A. The "Recommendations" set out in the Control Board Resolution were as follows:

1. The Authority recommends, pursuant to Section 207 of Public Law 104-8, that the Council, pursuant to its statutory authority under the Home Rule Act, repeal D.C. Act 13-454, "District of Columbia Health and Hospitals Public Benefit Corporation Emergency Amendment Act of 2000;"
2. The Authority recommends, pursuant to Section 207 of Public Law 104-8, that the Council, pursuant to its statutory authority under the Home Rule Act, repeal D.C. Act 11-389, codified at Title 32 of the D.C. Code, §§ 261.1 and 262.1 through 262.20, et. seq. ;
3. The Authority recommends, pursuant to Section 207 of Public Law 104-8, that the Council work with the Mayor to prepare and approve a plan to establish an alternative publicly-financed health care delivery system in the District of Columbia that a) is consistent with the current mufti-year financial plan and budget for the District of Columbia, b) provides for equivalent volumes and types of services as currently provided by the PBC to uninsured District residents, and c) ensures that the services meet standards of quality and accessibility;
4. The Authority recommends, pursuant to Section 207 of Public Law 104-8, that the Council, pursuant to its statutory authority under the Home Rule Act, approve and/or enact legislation, regulations, and reprogrammings, and take any and all other actions necessary to authorize and implement an alternative publicly-financed health care delivery system;
5. The Authority recommends, pursuant to Section 207 of Public Law 104-8, that the Council, pursuant to its statutory authority under the Home Rule Act, act to approve the restructuring plan required by Public Law 106-522, which plan is to be submitted to by the Mayor to the Committees on Government Reform of the House of Representatives, the Committee on Governmental Affairs of the Senate, and the Committees on Appropriations of the House of Representatives and the Senate; and,
6. All of the above Recommendations must be enacted by the Council and approved by the Mayor within 90 calendar days of the adoption of these Recommendations and Orders by the Authority.
7. If the Council and the Mayor fail to adopt these Recommendations, pursuant to Section 207 of Public Law 1048, the Authority will enact and implement them in accordance with the provisions of Section 207 after consultation with the appropriate Committees of Congress.

17. The Control Board Resolution was distributed to the Members of the D.C. Council on December 6, 2000.

18. On December 15, 2000, a Request for Proposal ("RFP") was issued by the Control Board seeking to "obtain the services of one qualified health care provider or team of qualified health care providers to provide comprehensive, integrated and coordinated health care services to the uninsured population of the District of Columbia". A copy of the RFP is attached hereto as Exhibit B. The stated closing date for response to the RFP was January 10, 2001, but was later extended.

19. The RFP included an "Anticipated Proposal Schedule" setting forth dates for the events that were to take place prior to the implementation of the selected contract. Those events, as listed in the RFP, included submission of the contract to both the Mayor and the D.C. Council for review prior to the contract being finalized.

20. On January 30, 2001 Greater Southeast Community Hospital Corporation I ("Greater Southeast") presented its proposal to the Control Board. A second proposal was submitted by Urban Healthcare Associates, LLC on February 5, 2001. The committee designated to assist with the RFP process recommended the acceptance of the proposal submitted by Greater Southeast.

21. Once Greater Southeast was recommended, the Control Board moved forward in negotiating a contract with Greater Southeast, refusing to allow the Council or its representatives to participate any further in the contracting process. It was not until last week that the D.C. Council was even made aware of the terms of the contract.

22. On March 6, 2001, the D.C. Council unanimously adopted Resolution 1455, titled the "Sense of the Council on the District of Columbia Health and Hospitals Public Benefit Corporation and D.C. General Hospital Emergency Resolution of 2001." A copy of Resolution 1455 is attached as Exhibit C. In that Resolution, the D. Council expressed its many concerns regarding the proposal submitted by Greater Southeast and the impact that a contract arising out of that proposal would have on the health care services in the District of Columbia.

23. On April 12, 2001, the D.C. Council approved a Fiscal Year 2001 supplemental Appropriation Act which, inter alia, provided $21 million in additional funding in order to fund the PBC through the end of the fiscal year.

24. Greater Southeast submitted a written contract to the Control Board on April 12, 2001. A copy of the contract was transmitted to Mayor Williams on April 13, 2001. A copy of the transmittal letter to Mayor Williams is attached as Exhibit D.

25. Alice Rivlin, Chairman of the Control Board, wrote to Mayor Williams on April 18, 2001, regarding the contract submitted by Greater Southeast. In that letter, Ms. Rivlin stated that "it is essential that this proposed contract and the enabling legislation are approved before May 1, 2001." A copy of that letter is attached as Exhibit E.

26. Mayor Williams provided a copy of the contract submitted by Greater Southeast to the D.C. Council on April 23, 2001. On that same date, Mayor Williams submitted to Linda Cropp, Chairman of the D.C. Council, proposed legislation entitled the "Health Care Privatization Emergency Amendment Act of 2001" providing for, inter alia, the abolishment of the PBC and providing the Mayor with the authority to contract for the delivery of medical services to the District of Columbia's uninsured residents. A copy of that submission is attached as Exhibit F.

27. The D.C. Council rejected the contract submitted by Greater Southeast by unanimous vote on April 27, 2001.

28. Upon information and belief, the Control Board ignored the Council's vote that the contract be rejected and executed the contract with Greater Southeast on April 30, 2001.

29. The effective date of the contract is May 1, 2001, at which time Greater Southeast will immediately begin the privatization of public health in the District of Columbia.

Count One
The Control Board Unlawfully Exceeded the Scope of its Statutory Authority

30. Paragraphs 1 through 29 are incorporated by reference.

31. The Control Board violated Section 47-392.7(a) in issuing the Control Board Resolution.

32. While Section 47-392.7(a) gives the Control Board the authority to submit recommendations to the D.C. Council, it does not allow the Control Board to issue orders to the D.C. Council. While titled "Recommendations," the Control Board Resolution actually contained orders to the D.C. Council to perform certain specific actions, including repeal of existing legislation, while also ordering the D.C. Council, in a very broad and non-specific directive, to prepare and approve an as yet undetermined plan for an alternative publicly financed health care delivery system.

33. Section 47-392.7 provides that the D.C. Council shall have 90 days in which to adopt or reject the recommendations of the Control Board.

34. The Control Board Resolution, however, in paragraph (6) of the "Recommendations," stated that all of the recommendations "must be enacted by the Council and approved by the Mayor within 90 calendar days of the adoption of these Recommendations and Orders by the Authority." In paragraph (7) of the Recommendations, the Control Board further states that, if the D.C. Council and the Mayor fail to act as directed by the Control Board, the Control Board would "enact and implement" the recommendations.

35. The Control Board does not have the statutory authority to order the D.C. Council to enact or repeal legislation, nor does it have the authority to enact or repeal legislation by itself. As such, the Control Board exceeded its statutory authority, violating Section 47-392.7, in issuing the Control Board Resolution. The Control Board Resolution, therefore, must be declared null and void ab initio and any actions the Control Board purports to taken pursuant to it enjoined.

36. Further, the Control Board lacks the statutory authority to enter into this contract without the approval of the D.C. Council. Congress amended the Home Rule Act in 1995 to require that any contract involving expenditures in excess of S 1,000,000 during a 12-month period be submitted to the D.C. Council by the Mayor and approved by the D.C. Council. Pub.L. 104-8 (HR 1345) § 304(a)(3)(codified at D.C. Code § 11130). The Control Board lacks the statutory authority to enter into a multi-year, $85 million contract such as that proposed by Greater Southeast. Not only has the D .C. Council not approved the contract submitted by Greater Southeast, the D.C. Council unanimously rejected the contract when the Mayor submitted it to them.

37. The Control Board lacks any statutory authority for entering into or implementing the contract submitted by Greater Southeast. Any attempts by the Control Board to enter into or implement the contract exceed its statutory authority. As such, the Control Board must be enjoined from doing so.

38. As conceded by the Control Board, in the April 23, 2001, letter from Chairman Alice Rivlin to Mayor Williams, legislation to, inter alia, repeal the PBC and reorganize the Department of Health would have to be enacted by the D.C. Council prior to the implementation of the Greater Southeast contract.

39. Any attempt by the Control Board to enact the legislation necessary for the implementation of the Greater Southeast contract would exceed the Control Board's statutory authority. As such, the Control Board must be enjoined from doing so.

40. Permitting the Control Board to enter into and implement the contract with Greater Southeast would result in immediate and substantial harm. If Greater Southeast begins the privatization of D.C. General as contemplated in its contract, irreparable harm will begin immediately. Councilmembers Chavous and Catania will have their statutory right to approve or reject the contract ignored. The constituents of Councilmembers Chavous and Catania will suffer the loss of available and affordable medical care.

41. Permitting the Control Board to enter into and implement the contract with Greater Southeast would also result in irreparable harm to the resident physician members of the Committee of Interns and Residents currently practicing at D.C. General. The privatization of D.C. General, as contemplated in the Greater Southeast contract will interrupt the three year contract currently in place between the District of Columbia and the members of the Committee of Interns and Residents, interrupting and potentially discontinuing the interns' and residents' graduate medical education. D.C. General operates the only publicly funded graduate medical program within the District of Columbia. The contract with Greater Southeast will terminate publicly funded support of medical education in the areas of general dentistry, surgery, pediatrics, and subspecialties such as cardiology, neurology and gastrointerology. The patient population currently served by these interns and residents will suffer irreparable harm if these programs are discontinued.

Count Two
The Actions of the Control Board Are Unconstitutional

42. Paragraphs 1 through 41 are incorporated by reference.

43. Councilmembers Chavous and Catania have a constitutionally protected right to cast unimpeded votes on issues of public importance. Brewer v. D. C. Financial Responsibility and Mgt. Assistance Auth., 953 F. Supp. 406, 408 (D.D.C.), aff'd., 132 F.3d 1480 (D.C. Cir. 1997). The quality and availability of health care services to the citizens of the District of Columbia is clearly such an issue.

44. The Control Board, through its Control Board Resolution and in its attempts to enter into and implement the contract with Greater Southeast, has violated the constitutionally protected rights of the Plaintiffs.

45. The actions of the Control Board, made up of Executive Branch appointees, in abrogating the rights and duties of the D.C. Council, a legislative body, violate the Separation of Powers required under the Constitution.

46. Because the actions taken and intended by the Control Board are unconstitutional, the Control Board Resolution must be declared null and void ab initio and the Defendants must be enjoined from entering into and implementing the Greater Southeast contract.

Count Three
Defendants Greater Southeast and The District of Columbia Must be Enjoined from Acting to Enter into or Implement The Greater Southeast Contract

47. Paragraphs 1 through 46 are incorporated by reference.

48. For the reasons stated above, the Greater Southeast contract is unlawful and must not be implemented. As such, Greater Southeast and the District of Columbia, acting by and through the District of Columbia Department of Health, must be enjoined from acting in furtherance of that contract.

Relief Sought

WHEREFORE, for the reasons stated above, Plaintiffs respectfully demand judgment and relief as follows:

(1) that the Court enter judgment declaring that the actions of the Control Board entering into the Pcrivatization Agreement and enacting the enabling legislation were ultra vires and violated the constitutional rights of Councilmembers Catania arid Chavous, making the contract illegal and, therefore, void;
(2) that the Court issue a temporary restraining order and preliminary injunction precluding the Defendants from taking any action to implement the contract with Greater Southeast;
(3) that the Court award Plaintiffs all costs and reasonable attorneys' fees and expenses arising from this action; and
(4) that the Court award Plaintiffs such other and further relief, as appropriate.

Dated: 4/30/01

By: Elizabeth B. Sandza, Esq. (D Bar #415283)
John M. Collins, Esq. (D.C. Bar #440356)
David M. Ross (D.C. Bar #461733)
LeBoeuf, Lamb, Greene & MacRae, LLP
1875 Connecticut Avenue, NW
Washington, DC 20009-5728
(202) 986-8000
Counsel for Plaintiffs

Chavous and Catania v. Control Board Motion for Summary Judgment May 15, 2001, 2001

Council of the District of Columbia

CATANIA AND CHAVOUS FILE MOTION FOR SUMMARY JUDGMENT IN SUIT AGAINST CONTROL BOARD OVER D.C. GENERAL

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

Complaint for Declaratory Judgment and Injunctive Relief

Jurisdiction and Venue

Parties

Factual Background

Count One The Control Board Unlawfully Exceeded the Scope of its Statutory Authority

Count Two The Actions of the Control Board Are Unconstitutional

Count Three Defendants Greater Southeast and The District of Columbia Must be Enjoined from Acting to Enter into or Implement The Greater Southeast Contract

Relief Sought

Chavous and Catania v. Control Board
Motion for Summary Judgment
May 15, 2001, 2001

Count One
The Control Board Unlawfully Exceeded the Scope of its Statutory Authority

Count Two
The Actions of the Control Board Are Unconstitutional

Count Three
Defendants Greater Southeast and The District of Columbia Must be Enjoined from Acting to Enter into or Implement The Greater Southeast Contract