Fiberlight, LLC v. Washington Metropolitan Area Transit Authority
Civil Action No. 2016-2248
D.D.C.Jun 12, 2017Background
- FiberLight and WMATA entered a 2006 License Agreement allowing FiberLight to install and operate fiber in WMATA’s rights-of-way in exchange for annual fees; Article 14.1 contains WMATA’s representation that it has authority to lease conduit rights in the WMATA ROW.
- In 2014 FiberLight discovered portions of WMATA’s network lie beneath public rights-of-way that FiberLight already had authority to occupy, prompting questions about whether WMATA actually held underlying property rights.
- FiberLight wrote to WMATA requesting the source and nature of WMATA’s authority; WMATA replied citing the WMATA Compact and a 1969 Master Agreement but did not produce land records or deeds.
- FiberLight stopped paying 2014–2015 invoices, asserting Article 14.1 was materially untrue; WMATA demanded payment, declared default, and threatened termination and ownership of FiberLight’s system under Article 2.4.
- FiberLight sued (breach of contract, declaratory relief, breach of implied covenant of good faith and fair dealing); WMATA counterclaimed and moved to dismiss for lack of jurisdiction, statute of limitations, failure to state a claim, and Rule 9(b) deficiencies.
- The Court denied WMATA’s motion to dismiss, holding WMATA’s sovereign immunity did not bar the contract-based claims and that FiberLight’s pleadings survived statute-of-limitations and plausibility challenges.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether WMATA’s sovereign immunity bars FiberLight’s claims | FiberLight: Section 80 waives immunity for contract claims; its breach claims are contract-based | WMATA: Compact immunizes it; equitable remedies/declaratory relief not waived; actions discretionary | Court: Sovereign immunity waived for contract claims; contract language and forum selection waived immunity for equitable adjustment and federal court; dismissal denied |
| Whether FiberLight’s claims are time‑barred (3‑year) | FiberLight: discovery rule — misrepresentation discovered in 2014, so claims timely | WMATA: accrual at contract formation in 2006, claims untimely | Court: factual dispute on discovery rule; reasonable inference supports accrual in 2014; cannot dismiss on limitations ground |
| Whether complaint pleads breach and reliance sufficiently to state breach of contract and declaratory claims | FiberLight: alleged facts (certification, ROW rights, lack of deeds) support claim that Article 14.1 was materially untrue and that WMATA failed to negotiate per contract | WMATA: complaint lacks factual detail on what was discovered; alleges only conclusions; fails essential elements | Court: Allegations suffice at pleading stage to support misrepresentation and contractual breaches; Twombly/Iqbal not defeated |
| Whether Rule 9(b) applies / heightened pleading required | FiberLight: claims are breach of contract, not fraud; 9(b) inapplicable (or satisfied) | WMATA: claim is fraud in disguise; 9(b) should apply and complaint fails | Court: 9(b) does not apply to pure contract claim; even if it did, pleadings meet particularity requirements; claim survives |
Key Cases Cited
- KiSKA Const. Corp. v. Washington Metro. Area Transit Auth., 321 F.3d 1151 (D.C. Cir. 2003) (describing WMATA as product of interstate compact and discussing compact-related issues)
- Beebe v. Washington Metro. Area Transit Auth., 129 F.3d 1283 (D.C. Cir. 1997) (compact confers sovereign immunity; Section 80 waiver explained)
- Watters v. Washington Metro. Area Transit Auth., 295 F.3d 36 (D.C. Cir. 2002) (limitations on waiver of immunity for equitable claims)
- Jerome Stevens Pharm., Inc. v. Food & Drug Admin., 402 F.3d 1249 (D.C. Cir. 2005) (courts may consider materials outside pleadings on Rule 12(b)(1) jurisdictional review)
- Moms Against Mercury v. Food & Drug Admin., 483 F.3d 824 (D.C. Cir. 2007) (plaintiff bears burden to establish subject-matter jurisdiction)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (Twombly/Iqbal plausibility standard for Rule 12(b)(6))
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must state a claim that is plausible on its face)
- Gen. Ry. Signal Co. v. Washington Metro. Area Transit Auth., 625 F. Supp. 22 (D.D.C. 1985) (contractual waiver of immunity via equitable adjustment language)