We know D.C. Get our free newsletter to stay in the know.

This afternoon, Legal Times’ Mike Scarcella notes that an odd dispute between D.C.’s federal and local prosecutors has been settled by the D.C. Court of Appeals.

The District lost.

The implications of the ruling are narrow but sharp: It pretty much puts the kibosh on any attempts, short of congressional action, to expand the Office of the Attorney General’s prosecutorial bailiwick beyond the smattering of low-rent misdemeanors it already handles.

As Scarcella noted in his original story back in June, the dispute pitted Attorney General Peter Nickles and his congressionally castrated office against the federal Department of Justice, which prosecutes the vast majority of District crimes, in a “rare public turf battle.”

The conflict is rooted in the misdealings of Emerson Crawley, a D.C. Public Schools employee who stuck the city with $7,400 in bills for fancy meals that turned out not to be work-related. His bosses found out, told the U.S. attorney’s office about it, but the federal prosecutors decided in 2007 not to bring charges—-apparently the offense was too piddling to warrant the feds’ valuable time.

OAG decided they wanted a crack at Crowley anyway, and filed charges against him under the District’s “false claims” statute. Back in 1997, when the D.C. Council passed that law, making it illegal to defraud the D.C. government, they mandated that OAG prosecute those offenses.

But Crowley had a very good lawyer who happened to have once run the city legal shop—-Fred Cooke, noted for his representation of Marion Barry, was in charge back when it was called the Office of Corporation Counsel—-and Cooke questioned whether OAG had the authority to press the case.

After all, under the District’s home-rule charter, the feds are entitled to prosecute all crimes, save for violations of “police or municipal regulations, where the maximum punishment is a fine only or imprisonment not exceeding one year.” Moreover, the D.C. Council, Scarcella notes, is “specifically prohibited from enacting any law ‘relating to the duties or powers’ of the U.S. attorney’s office.”

So Crowley’s trial judge sent the matter to the appeals court. In a hearing there last June, Scarcella reported, the District argued that the restrictions on the local AG’s authority ran only to laws in place prior to home rule. After that, the council can make new crimes and let OAG prosecute them. The U.S. attorney’s office “argued that Congress never meant to give the D.C. Council free rein to create new crimes and assign a prosecutor.”

The court didn’t buy the District’s arguments. If the city wants more local prosecutorial power, it’s going to have to go to Congress to get it.

The weird part about all this is that the feds can allow the District to prosecute cases it doesn’t want to handle. They didn’t do that in this case—-meaning at DOJ made an affirmative decision that Crowley shouldn’t be prosecuted by themselves or anyone else.

Nobody knows why, Scarcella writes: “Federal prosecutors have not stated their reasons for declining to file charges against Crawley.”

UPDATE, 5:05 P.M.: Asked why he hasn’t been able to reach an agreement with the feds to prosecute the case, Nickles says, “As best as I can fathom, it’s a matter of establishing jurisdictional prerogatives.”

Nickles points out that the District has a pointed interest in prosecuting crimes against the government itself and seems perplexed that there would be a dispute over doing so: “It seems to me awfully strange. It seems part and parcel of the whole home rule idea.”

In the wake of today’s decision, by a three-judge appeals panel, Nickles says he’s considering either an appeal to the full appeals court, an appeal to the U.S. Supreme Court, or lobbying Congress to change the law.

“We’re not just going to accept it, that’s for sure,” he says. “To me, this is serious.”