Houston v. Pavilion USA 2020, Inc.

District Court, District of Columbia·Decided February 9, 2023·No. Civil Action No. 2022-0383·Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

GREGORY HOUSTON, Plaintiff

v. Civil Action No. 22-00383 (CKK)

PAVILION USA 2020, INC., et al., Defendants.

MEMORANDUM OPINION

(February 9, 2023)

Plaintiff Gregory Houston (“Plaintiff”) filed a Complaint in this case against Defendants Pavilion USA 2020, Inc. (“Pavilion”); Frederick Bush, then-Chairman of the Pavilion Board; and Alan M. Dunn, then-Chief Legal Officer and a Director of the Pavilion Board (collectively, “Defendants”) alleging that Bush and Dunn terminated his employment as Pavilion’s Chief Executive Officer after calling attention to Bush and Dunn’s misconduct. See Compl. at 1–2. Plaintiff brings claims of wrongful termination in violation of 41 U.S.C. § 4712, wrongful termination in violation of public policy, and tortious interference with contract. Id. at 14–18. Defendants filed the pending [13] Motion to Dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Defendants argue that Plaintiff has failed to plausibly state a claim under § 4712 because he is not an employee of a government contractor and, for the same reason, Plaintiff has therefore failed to demonstrate subject matter jurisdiction under 28 U.S.C. § 1331. See Defs.’ Mot. at 8, 12.

Upon consideration of the pleadings, 1 the relevant legal authorities, and the record for

1 The Court’s consideration has focused on the following documents:

purposes of this motion, the Court finds that the record is not sufficiently developed to decide the material factual dispute regarding whether Plaintiff is an employee of a government contractor such that he can bring a claim under § 4712, which would be necessary for the Court to have subject matter jurisdiction. Accordingly, the Court DENIES WITHOUT PREJUDICE Defendants’ Motion to Dismiss and recommends the parties engage in limited jurisdictional discovery upon a motion by Plaintiff under Federal Rule of Civil Procedure 56(f).

I. BACKGROUND

The Court does “not accept as true… the plaintiff’s legal conclusions or inferences that are unsupported by the facts alleged.” Ralls Corp. v. Comm. on Foreign Inv. in U.S., 758 F.3d 296, 315 (D.C. Cir. 2014). Additionally, as will be discussed later, the Court does not accept as true the allegations in Plaintiff’s Complaint in considering Defendants’ factual challenge to the Court’s jurisdiction. However, for the purposes of presenting a factual background, the Court recites allegations from Plaintiff’s Complaint.

A. Bid Submitted to the State Department and the Creation of Pavilion The United States participates in each World’s Fair by constructing a pavilion to represent the country. Compl. at 2. On February 16, 2018, the State Department announced a Request for Proposals (“RFP”) for a partner to run the United States’ participation in the 2020 World Expo in Dubai, United Arab Emirates. Id. ¶¶ 8–9. Plaintiff Gregory Houston and Defendant Frederick Bush decided to try to win the RFP. Id. ¶ 11. Along with Defendant Alan M. Dunn, they

• Pl.’s First Am. Compl. (“Compl.”), ECF No. 12;

• Defs.’ Mot. to Dismiss (“Defs.’ Mot.”), ECF No. 13;

• Pl.’s Opp’n to Defs.’ Mot. to Dismiss (“Pl.’s Opp’n”), ECF No. 14; and • Defs.’ Reply to Pl.’s Opp’n to Defs.’ Mot. to Dismiss (“Defs.’ Reply”), ECF No. 15.

In an exercise of its discretion, the Court finds that holding oral argument in this action would not be of assistance in rendering a decision. See LCvR 7(f).

incorporated Big Things Group, LLC (“BTG”) on March 9, 2018 to submit a bid to the State Department. Id. ¶ 12. Thomas Downing also assisted in the bid by lending his expertise in international financial management. Id. Because the RFP required the use of a 501(c)(3) organization as the primary vehicle for fundraising, the entity Expo Group 2020 was incorporated on April 6, 2018 and applied for 501(c)(3) status. Id. ¶ 18.

The submitted bid designated Bush as Chief Executive Officer, Dunn as External Counsel, and Plaintiff as Deputy Chief Executive Officer. Id. ¶ 15. Downing was to serve as Chief Financial Officer. Id. In its bid, BTG stated that it was the prime implementer on behalf of a collaborative consortium and that “upon signing a LOI with the Department of State, all activities… shall commence under Expo Group 2020.” Id. ¶ 19.

On May 30, 2018, the State Department issued a Letter of Intent (“LOI”) selecting BTG as the successful bidder. Id. ¶ 20 (citing Compl. Ex. 1). The LOI stated that “[t]his letter initiates the Project Launch phase” and that “Big Things Group may now proceed with fundraising to complete the project.” Compl. Ex. 1. It continued that the second phase of the project––the construction and participation––“can only begin once Big Things Group has demonstrated that sufficient funding is available to build, operate, and dismantle the Pavilion and the Department has signed a Memorandum of Agreement with the organization.” Id. The LOI also included a set of priority topics for BTG to address, the first of which was whether the names Expo Group 2020 or EG2020 complied with the expo organizer’s guidelines. Id. On June 26, 2018, Expo Group 2020 was renamed Pavilion USA 2020, Inc. Compl. ¶ 21.

After the LOI was issued, Bush decided that he only wanted to be an independent contractor rather than an employee of Pavilion USA. Id. ¶ 22. Bush therefore became Chairman of Pavilion’s Board of Directors and Plaintiff became President and Chief Executive Officer of

Pavilion. Id.

Pavilion began carrying out the functions required by the LOI. Id. ¶ 23. Plaintiff was identified by the State Department as the primary contact for the expo’s organizers. Id. (citing Compl. Ex. 2). Plaintiff allegedly asked the State Department whether it required a formal novation agreement between BTG and Pavilion and was told that was unnecessary. Id.

B. Alleged Mismanagement by Dunn and Bush and Retaliation Against Plaintiff During 2018, Plaintiff and Downing became concerned that Dunn and Bush were mismanaging the organization to their own benefit. Id. ¶ 25. As a result, Downing announced he was resigning on January 16, 2019. Id. ¶ 26. He submitted a financial report and a report on contracts and services agreements to the Pavilion Board as a whistleblower, id., and also explained to Plaintiff how Bush and Dunn were enriching themselves with charitable funds at the expense of the organization, id. ¶ 27. After Downing’s resignation, Plaintiff informed Bush that he intended to retain outside legal counsel to review Downing’s reports and disputed transactions and provide an opinion for the Board and the State Department, as was required under the commitments of the bid and in compliance with 41 U.S.C. § 4712(a)(2)(G). Id. ¶ 34. Plaintiff also notified Bush in writing that he intended to suspend Dunn pending the consultation with outside counsel. Id. ¶ 35. Bush instructed Plaintiff not to hire outside counsel nor suspend Dunn and instead required Plaintiff to confer with Dunn concerning Downing’s whistleblower reports. Id. ¶ 37. Nevertheless, and despite threats from Dunn, Plaintiff brought Downing’s concerns to Independent Directors of the Board (the Board members not including Bush and Dunn) and also sought review by independent outside counsel. Id. ¶¶ 36, 40.

Bush and Dunn distributed an altered version of Downing’s reports to the Board on January 21, 2019 and instructed Board members not to discuss with Plaintiff. Id. ¶ 41. On

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Houston v. Pavilion USA 2020, Inc., (D.D.C. 2023).

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