Opinion
NO: 00-2206, SECTION: "1" (4)
December 23, 2002
ORDER AND REASONS
The plaintiff, Louis R. Koerner, Jr., filed a Ex Parte Motion to File First Amended Complaint (doc. #135) seeking to amend his pleadings to add additional parties and additional allegations. The Garden District Association (GDA) and Michelle O. Landrieu oppose the motion.
I. Background
Koerner filed the instant suit claiming that the defendants violated his civil rights and his Constitutional rights to Equal Protection, Procedural Due Process and Substantive Due Process. He has also alleged that the defendants violated the laws of Louisiana and the Louisiana Constitution. Koerner seeks injunctive relief and a Writ of Mandamus.
In 1979, Koerner purchased property located at 1204 Jackson Avenue in a neighborhood of New Orleans, Louisiana known as the Garden District, which has been zoned for residential, noncommercial use. Since purchasing the property, Koerner has operated a law office from the location, which is allowed within strict limits under the applicable zoning ordinance. Koerner also used the property to operate the Jackson Avenue Foundation, the Jackson Avenue Task Force, the French Coalition of New Orleans, and the Hispanic Cultural Coalition of New Orleans. Koerner claims that he has had numerous problems with the zoning authorities since 1979.
In 1997, Koerner applied for a permit to operate a "bed and breakfast" at his residence. His request was denied by Paul May, then Zoning Administrator for the City of New Orleans. The ruling was appealed to the City of New Orleans Board of Zoning Adjustment which affirmed the decision of Paul May. Thereafter, Koerner filed suit in Civil District Court where the Board of Zoning Adjustments's ruling was affirmed. The Fourth Circuit Court of Appeals also affirmed the decision and the Louisiana Supreme Court denied writs.
Thereafter, residents of the Garden District complained to the GDA that Koerner continued to use the property in a manner that failed to comply with the zoning ordinances. The GDA brought these complaints to the City. The City subsequently filed a Motion for Contempt seeking to hold Koerner in contempt for his continued violation of the zoning ordinance. The motion was dismissed in March 2000. The City also investigated Koerner's use of the property and issued a citation upon finding that Koerner did not have an occupational license.
Koerner's Original Complaint alleges that the GDA and Michelle Landrieu, Executive Director of the GDA, encouraged the City of New Orleans, Paul May, and Betty Jefferson, assessor for the Fourth Municipal District in the City of New Orleans, to violate his rights. He alleges that the City's issuance of a citation for his failing to obtain an occupational license and the City's filing of a Motion for Contempt were encouraged by the GDA and Landrieu. Koerner also alleges that the GDA and Landrieu encouraged Jefferson to revoke his homestead exemption for 1204 Jackson Avenue.
Koerner claims that his home and office is located in the Fourth Municipal District of the City of New Orleans.
Koerner also asserts claims against the GDA and Landrieu under the Louisiana Constitution, the Louisiana Unfair Trade Practices Act and Louisiana tort law.
William Ridlon intervened in this action alleging that the City of New Orleans violated his rights when it denied his application for an occupational license. Ridlon sought injunctive relief and the issuance of a writ of mandamus.
The GDA and Landrieu filed an Answer on August 31, 2000 denying Koerner's claims. The GDA and Landrieu also filed a Counterclaim on the same date alleging that Koerner's claims are frivolous and as such, they are entitled to an award of attorneys' fees and costs in having to defend against the claim. Koerner filed an Answer to the Counterclaim on September 18, 2000.
Rec.Doc. No. 11.
Rec. Doc. No. 29.
On September 26, 2000, the GDA and Landrieu filed a Motion to Dismiss seeking to dismiss Koerner's claims filed pursuant to the United States Constitution and Title 42 U.S.C. § 1983 for failure to state a claim and lack of subject matter jurisdiction. They also sought to dismiss Koerner's state law claims contending that the Court should decline to exercise supplemental jurisdiction as Koerner's federal claims are meritless. The GDA and Landrieu contended that because the GDA and Landrieu are not state actors and have not taken any action under color of state law, Koerner failed to state a valid claim under federal law. They also contended that no liability could be established from their lobbying and petitioning of public officials as such contacts are protected activities under the First Amendment of the United States Constitution.
The Motion also sought to dismiss the claims of the intervenor, Ridlon.
Rec. Doc. No. 48.
On October 10, 2000, prior to a ruling on the Motion to Dismiss, the plaintiff filed a Motion for Leave to File Amended Complaint seeking to add the Garden District Security District ("GDSD") and the insurers of the GDA and GDSD as defendants. Koerner claimed that a memorandum from Paul May to Evelyn Pugh, Deputy City Attorney, was copied to Landrieu, Executive Director of the GDA and the GDSD, and supports his allegation that the GDSD, through Landrieu and officers of the GDSD, was a conspiring party in the filing of the Motion for Contempt.
Rec. Doc. No. 80.
On the same date, Koerner filed a Motion for Partial Summary Judgment against the City of New Orleans. The defendants, Paul May and the City of New Orleans, also filed a Motion to Dismiss and for Summary Judgement seeking to dismiss the claims of William Ridlon who intervened in the suit. On January 10, 2001, the defendant, Betty Jefferson, filed a Motion to Dismiss seeking to dismiss Koerner's claims for failure to state a claim, prematurity, and lack of subject matter jurisdiction.
The Motion was also filed on behalf of the intervenor, William Ridlon. Rec. Doc. No. 81.
Rec. Doc. No. 82. Ridlon intervened based upon the City's denial of his application for an occupational license.
Rec. Doc. No. 114.
On February 2, 2001, the undersigned noted that several motions to dismiss for lack of subject matter jurisdiction were currently pending before the Court and issued an Order dismissing without prejudice, Koerner's Motion for Leave to File Amended Complaint. The undersigned also ordered that the Motion was to be re-filed following a ruling on the jurisdictional issues.
Rec. Doc. No. 116.
On December 18, 2001, District Judge G. Thomas Porteous, Jr. issued an Order granting the Motion to Dismiss filed by the GDA and Landrieu. Judge Porteous found that there was no basis supporting a cause of action against the GDA and Landrieu as they were private actors and were not acting "under color of state law." He also found that the actions of the GDA and Landrieu were protected by the First Amendment under the Noerr-Pennington doctrine. Judge Porteous further refused to exercise supplemental jurisdiction over Koerner's state law claims. Koerner's claims against the GDA and Landrieu were dismissed with prejudice.
Rec. Doc. No. 126.
As noted by Judge Porteous, the Noerr-Pennington doctrine provides that parties who petition the government for governmental action favorable to them cannot be prosecuted under federal antitrust law, regardless of motivation. See Eastern Railroad President Conference v. Noerr Motor Freight, 365 U.S. 127 (1961); United Mine Workers v. Pennington, 381 U.s. 657 (1965). This doctrine has been applied to protect First Amendment petitioning of the government from claims brought under federal and state laws including 42 U.S.C. § 1983. See Video International Production, Inc. v. Warner-Amex Cable Communications, Inc., 858 F.2d 1075 (5th Cir. 1988); Bayou Fleet, Inc. v Alexander, 68 F. Supp.2d 734 (E.D.La. 1999).
Judge Porteous also dismissed the claims of the intervenor, William Ridlon. Judge Porteous also noted that although Koerner asserted arguments concerning the GDSD, those arguments would not be considered since GDSD was not a party to the action as leave to amend the complaint had not been granted.
On March 28, 2002, Judge Porteous issued Orders denying Koerner's Motion for Partial Summary Judgment against the City of New Orleans. He also denied the City's and Paul May's Motion to Dismiss and for Summary Judgment, and denied Betty Jefferson's Motion to Dismiss.
Rec. Doc. Nos. 127, 128.
II. The Instant Motion
Koerner thereafter filed the instant motion again seeking to amend his complaint to add the GDSD, the insurers of the GDA and the GDSD, and the Louisiana Tax Commission as defendants. The Amended Complaint further seeks to add several factual allegations.
Koerner claims that the Louisiana Tax Commission is legally responsible for the monetary and other damaging consequences of Betty Jefferson.
The GDA and Landrieu, have opposed the amendment. They contend that Koerner has not alleged any new factual allegations against them and is only attempting to re-litigate issues that the Court has previously dismissed. The GDA and Landrieu further contend that Koerner's amended complaint is futile as Koerner has failed to make any allegations against the GDSD and has failed to state a cause of action under the jurisdiction of this Court. They claim that Koerner has failed to allege facts sufficient to establish that they acted "under color of state law" or that their actions were not protected by the First Amendment and the Noerr-Pennington doctrine.
Koerner responds by stating that he should be allowed to amend his complaint as Rule 15(a) of the Federal Rules of Civil Procedure favors the granting of such amendments. Koerner claims that although Judge Porteous dismissed his claims against the GDA and Landrieu with prejudice, there was no disposition of the GDA and Landrieu's counterclaim for attorney's fees. He also claims that there was no separate judgment against the GDA and Landrieu in accordance with Rule 58 of the Federal Rules of Civil Procedure. He claims that as a result, he did not and could not seek reconsideration as the actions of Judge Porteous remained interlocutory and unappealable.
Rule 58 of the Federal Rules of Civil Procedure requires that "every judgment and amended judgment must be set forth on a separate document. . . ."
Koerner further claims that his amendment is not futile because Judge Porteous did not consider the Amended Complaint and the GDSD had not been joined at the time Judge Porteous issued his ruling. He also claims that Judge Porteous did not consider the Supreme Court's decision in Brentwood Academy v. Tennessee Secondary School Athletic Association, 531 U.S. 288 (2001), as the decision was rendered while the instant matter was pending. Koerner contends that Brentwood supports his claim that the actions of the GDA and Landrieu constitute state action.
On July 16, 2002, a Status Conference was held before District Judge Lance M. Africk. During the conference, Judge Africk allowed the parties to supplement their memoranda in order to address the Supreme Court's ruling in Brentwood. Judge Africk also referred the instant motion to the undersigned.
This matter was reassigned to Judge Africk on April 22, 2002. Rec. Doc. No. 129.
Rec. Doc. No. 143.
On July 23, 2002, the GDA and Landrieu submitted a Supplemental Memorandum addressing the Brentwood decision contending that the decision does not affect Judge Porteous' dismissal of the GDA and Landrieu. They contend that the Fifth Circuit has ruled that Brentwood does not change the law as applied to a "state actor." They further contend that the facts of Brentwood are clearly distinguishable from the instant case and are not applicable to the instant matter.
Rec. Doc. No. 145.
In support, the GDA and Landrieu cite the Fifth Circuit decision in Morris v. Dillard Department Stores, Inc., 277 F.3d 743 (5th Cir. 2001), which stated that "the Supreme Court recently reiterated that the focus of the inquiry into whether a private actor can be subjected to constitutional liability is whether `such a close nexus between the State and the challenged action' exists "that seemingly private behavior may be fairly treated as that of the State itself." The GDA and Landrieu contend that the Fifth Circuit, thus, does not see a change in the law, but rather a "reiteration" of the prior law.
On September 3, 2002, Koerner also filed a Supplemental Memorandum. He contends that the statements made by the GDA about the Brentwood matter are at a variance with the instant case. He also states that the Court can read the decision and reach its own conclusion.
III. Legal Standard
Rule 15(a) of the Federal Rules of Civil Procedure, which governs the amendment of pleadings, provides that leave to amend pleadings "shall be freely given when justice so requires." Fed.R.Civ.P. 15(a). This and other federal rules "reject the approach that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome and accept the principle that the purpose of pleading is to facilitate a proper decision on the merits." Conley v. Gibson, 355 U.S. 41, 48 (1957).
However, leave to amend is by no means automatic. Addington v. Farmer's Elevator Mut. Ins. Co., 650 F.2d 663, 666 (5th Cir. 1981). The decision to grant or deny a motion for leave to amend lies within the sound discretion of the trial court. Id. In exercising its discretion, the trial court may consider such factors as "undue delay, bad faith, or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the, opposing party by virtue of allowance of the amendment, and futility of the amendment." Gregory v. Mitchell, 634 F.2d 199, 203 (5th Cir. 1981). Nonetheless, Rule 15(a) evinces a liberal amendment policy and a motion to amend should not be denied absent a substantial reason to do so. See Jacobsen v. Osborne, 133 F.3d 315, 318 (5th Cir. 1998).
Here, the GDA and Landrieu do not contend that Koerner's request to amend is dilatory, the result of bad faith or untimely. The GDA and Landrieu do contend, however, that Koerner's amendment is futile to the extent it seeks to assert claims against the GDA, Landrieu and the GDSD. It is well established that if a complaint, as amended, would be subject to dismissal, leave to amend need not be granted. Foman v. Davis, 371 U.S. 178, 183 (1962). In order to determine whether Koerner's Amended Complaint asserts viable claims against the GDA, Landrieu and the GDSD, the Court will compare the allegations made against these parties in the Amended Complaint with those made in the Original Complaint.
A. Original Complaint
Koerner's Original Complaint was filed on July 26, 2000 and alleges that the City was joined by the GDA in wrongfully filing a Motion for Contempt against him. It also alleges that the GDA provided information to the City's Department of Finance who subjected him to unfounded taxes based on his alleged violation of a licensing statute. Koerner further alleged that the GDA published and distributed fliers which provided false information about him. He alleged that discovery information obtained from the GDSD reveals that the constitutional litigation captioned: " Kruger, et al v. Garden District Association, et al" CDC 99-4685(N), is consistently referred to as "Louis Koerner's lawsuit."
Rec. Doc. No. 1. Complaint, ¶ 10.
Id. at ¶ 11.
Id. at ¶ 24.
Id. at ¶ 26.
In a section of the Original Complaint titled "The Extensive Participation of the GDA, GDSD, and Landrieu", Koerner alleged that the GDA and Landrieu encouraged the violations of law and the constitutional violations of the defendants, May, Jefferson, and the City. He alleged that the GDA and Landrieu exerted political pressure upon those defendants to deny him his constitutional rights as a result of his having successfully litigated against the GDSD and the City in a separate matter. Koerner further alleged that the GDA and Landrieu are motivated by spite and vindictiveness and are liable for defamation, libel, slander, malicious civil and criminal prosecution, intentional infliction of economic harm, and unfair trade practices. Despite the title, there are no direct allegations against the GDSD.
Id. at ¶ 28, 29.
Id. at ¶ 41.
B. Dismissal of Claims Against the GDA and Landrieu
Thereafter, the GDA and Landrieu filed their Motion to Dismiss. On December 18, 2001, Judge Porteous granted their request and issued a ruling dismissing Koerner's claims against the GDA and Landrieu with prejudice. Judge Porteous found that the GDA and Landrieu were private actors and had not acted "under color of state law." He also found that Koerner had only alleged that the GDA and Landrieu elicited action on the part of public officials, however, the mere encouragement of a public official to act or attend judicial proceedings, as alleged by Koerner, were not facts sufficient to substantiate a cause of action for civil conspiracy. Judge Porteous further found that the GDA's and Landrieu's encouragement of the City, May and Jefferson was protected action under the First Amendment and the Noerr-Pennington doctrine.
C. Amended Complaint
Koerner now seeks to file the instant amended complaint. The amended complaint reasserts each of the claims made in the Original Complaint. It also adds the GDSD as a defendant and adds the GDSD to the allegations made against the GDA. Koerner alleges that the GDSD is a political subdivision of the State of Louisiana and is created by state statute.
The GDSD is created by La. Rev. Stat. 33:9091.2. The GDSD was established for the primary object and purpose of promoting and encouraging the security of the Garden District. La. Rev. Stat. 33:9091.2(C).
Rec. Doc. No. 135; First Amended Complaint and Jury Demand, ¶ 6A.
The amended complaint also asserts additional allegations against the GDA and Landrieu. For instance, it is alleged that Paul May, the City's Zoning Administrator, was contacted by Landrieu on behalf of the GDA and pressured to take action against Koerner. It is also alleged that a September 14, 1999 memorandum sent to Evelyn Pugh, Chief Deputy City Attorney, by May, with a copy to Landrieu, evidences a conspiracy between the GDA, Landrieu and the GDSD to file a Motion for Contempt against him.
Id. at ¶ 8C.
Id. at, ¶ 8F.
It is further alleged that in April 2000, the City, "aided and abetted" by the GDA, caused actions to be taken by the Department of Finance and Revenue in an effort to subject Koerner to criminal sanctions. Koerner also references a matter pending in the Civil District Court for the Parish of Orleans and claims that such suit should have been filed as a compulsory counterclaim in the instant suit.
Id. at ¶ 10A.
Id. at ¶ 10B.
Koerner claims that the GDA and the GDSD published and distributed fliers which provided false information about him, even though they were aware that the information contained in the fliers was untrue. He further alleges that discovery information obtained from the GDSD reveals that the constitutional litigation captioned: " Kruger, et al v. Garden District Association, et al" CDC 99-4685(N), is consistently referred to as the "Louis Koerner's lawsuit" and the GDSD sends written material to the residents of the district in which the Kruger case is referenced.
Id. at ¶ 24.
Id. at ¶ 26.
In a section of the Amended Complaint entitled "Insurance", Koerner has alleged that Acceptance Insurance Company, as the insurer of GDSD and Landrieu, is liable jointly and severally with GDA and Landrieu. He also has alleged that St. Paul Mercury Insurance Company, as the insurer of the GDA and Landrieu, is liable jointly and severally with the GDA and Landrieu for their alleged wrongful actions.
Id. at ¶ 44A.
Id. at ¶ 44B.
IV. Analysis
A. GDA, GDSD and Landrieu
After a review of the claims raised in both complaints, the Court finds that the Amended Complaint is futile to the extent is seeks to assert claims against the GDA, Landrieu and the GDSD. The allegations raised in the Amended Complaint are virtually identical to those raised by Koerner in the Original Complaint. The only difference in the two Complaints is that the Amended Complaint adds the GDSD to the claims made against the GDA and Landrieu in the Original Complaint and adds additional facts to the allegations made in the Original Complaint.
Koerner has cited Brentwood Academy v. Tennessee Secondary School Athletic Association, 531 U.S. 288 (2001), to support his claim that the actions of the GDA and Landrieu constitute state action. Koerner alleges that Judge Porteous did not have the benefit of the Brentwood decision as it was decided while this case was under submission. The Court notes that this contention is one that should be made to the District Judge in proper from. Nevertheless, the Court has reviewed the Brentwood decision and has determined that it does not support Koerner's contentions. According to Brentwood, a private entity may be classed as a state actor "when it is `entwined with governmental policies' or when government is `entwined in [its] management or control.'" Brentwood, 531 U.S. at 296 (quoting Evans v. Newton, 382 U.S. 296, 299 (1966)).
In Brentwood, the defendant was a non-profit association that set and enforced standards for athletic competition among schools both private and public. A private high school sued a state interscholastic athletic association under 42 U.S.C. § 1983 seeking to prevent the enforcement of a rule that prohibited the use of undue influence in the recruitment of student athletes. Id. at 293. The issue before the Court was whether the enforcement of the association's rules constituted state action. A closely divided Supreme Court applied the state action label to the association based upon the "pervasive entwinement" of state school officials in the association's structure.
The Court reasoned that "the nominally private character of the association is overborne by the pervasive entwinement of public institutions and public officials in its composition and workings, and there is no substantial reason to claim unfairness in applying constitutional standards to it." Id. The opinion stressed two points: that the membership of the association was comprised overwhelmingly (84 percent) of "public schools represented by their officials acting in their official capacity to provide an integral element of secondary public schooling," and that in substance the association (replacing previous state school board regulation) set binding athletic standards for state schools, including the recruiting standards at issue in the case. Id. at 299-301.
The Court was persuaded that the private interscholastic athletic association was a state actor because it found that there would be no recognizable association, legal or tangible, without the public school officials, who do not merely control but overwhelmingly perform all but the purely ministerial acts by which the association exists and functions in practical terms. Id. at 299. Because of the "pervasive entwinement" of public school officials, who were clearly state actors, in the structure of the organization, and the fact that the organization had historically regulated state high school athletics in lieu of the state Board of Education, the Court held the association's regulatory activity constituted state action.
In the instant case, the actions taken against Koerner, the Motion for Contempt and the citations issued, qualify as state functions. However, the indicia of entwinement, much less pervasive entwinement, are missing. The Supreme Court in Brentwood stated: "We have treated a nominally private entity as a state actor when it is `entwined with governmental policies' or when government is `entwined in [its] management or control.'" Id. at 295. Koerner's Amended Complaint fails to meet this standard.
Koerner does not allege that the state exercises coercive power over the GDA or provides such significant "encouragement" that its actions must be deemed to be that of the state. In fact, the opposite is alleged. Koerner alleges that private actors, the GDA and Landrieu, encouraged the City and its officials to violate his constitutional rights. However, his conclusory allegations fail to establish that the GDA and Landrieu were state actors or that their actions were entwined with that of the City or its officials. Thus, he has not alleged facts sufficient to meet the pervasive entwinement standard discussed in Brentwood. Therefore, the Court is of the opinion that the Brentwood decision would not have affected Judge Porteous' decision to dismiss the GDA and Landrieu.
The Court also finds that as the Amended Complaint arises out of the same nucleus of facts as the Original Complaint, the Amended Complaint fails to assert any allegations to overcome Judge Porteous' finding that Koerner failed to allege facts sufficient to establish that the GDA and Landrieu are private actors who were not acting "under color of state law." Koerner has also failed to allege facts sufficient to overcome the finding that the GDA and Landrieu did not engage in a civil conspiracy and that their acts were protected by the First Amendment and the Noerr-Pennington doctrine.
In support of his allegation of conspiracy, Koerner has referenced a September 14, 1999 memorandum from Paul May to Eveyln Pugh. The memorandum, however, does not provide any evidence of the alleged conspiracy. It simply indicates that Koerner's property was in violation of the City's Zoning Ordinance and that action need be taken to secure compliance. Thus, the Court finds that the claims against the GDA and Landrieu made in the Amended Complaint arise from the same nucleus of facts as those made in the Original Complaint. As such, Koerner's claims against the GDA and Landrieu in the Amended Complaint are futile as the claims in the Original Complaint were dismissed with prejudice and are barred by the doctrines of res judicata and issue preclusion. See Ellis v. Amex Life Ins. Co., 211 F.3d 935, 937 (5th Cir. 2000); In Re Southmark Corp., 163 F.3d 925, 932 (5th Cir. 1999).
The memorandum from Paul May to Evelyn Pugh, Deputy City Attorney, reads as follows: "Attached please find a copy of an inspection report relative to 1204 Jackson Avenue. It is requested that appropriate action be instituted to secure compliance with the provisions of the Comprehensive Zoning Ordinance." See Rec. Doc. No. 134, Memorandum in Opposition, Exhibit A.
Both doctrines can apply to one suit where the subject matter is the same as that in a prior action. See Meador v. Oryx Energy Corp., 87 F. Supp.2d 658, 663 (E.D.Tex. 2000). Res judicata is appropriate if: 1) the parties to both actions are identical (or at least in privity); 2) the judgment in the first action is rendered by a court of competent jurisdiction; 3) the first action concluded with a final judgment on the merits; and 4) the same claim or cause of action is involved in both suits. Ellis v. Amex Life Ins. Co., 211 F.3d 935 937 (5th Cir. 2000). The rule is that res judicata bars all claims that were or could have been advanced in support of the cause of action on the occasion of its former adjudication, . . . not merely those that were adjudicated. In re Howe, 913 F.2d 1138, 1144 (5th Cir. 1990).
Issue preclusion has only three elements: 1) the issue at stake must be identical to the one involved in the prior action; 2) the issue must have been actually and fully litigated in the prior action; and 3) the determination of that issue must have been a part of the judgment in the prior action. In Re Southmark Corp., 163 F.3d 925, 932 (5th Cir. 1999).
The Court further finds that Koerner's attempt to add GDSD as a defendant is futile. As discussed by Judge Porteous in ruling on the GDA's Motion to Dismiss, in an action under Title 42 U.S.C. § 1983, the plaintiff must establish that the conduct in question deprived a person of rights, privileges, or immunities secured by the Constitution or laws of the United States and that the conduct complained of was committed by a person acting "under color of state law," meaning that the individuals acted in an official capacity and in a manner authorized by state law. See Price v. Housing Authority of New Orleans, 2002 WL 31308421, *4 (E.D.La. 2002).
Although Koerner has alleged that the GDSD was created by the state, the Amended Complaint does not assert any actions taken by the GDSD. Rather it only extends the allegations made against the GDA and Landrieu in the Original Complaint to the GDSD and alleges that the GDSD acted under the direction of the private association, the GDA. However, even if the Court were to determine that the GDSD acted under the direction of the GDA, Judge Porteous found that the alleged actions of the GDA and Landrieu in "encouraging" an official to act, did not assert a claim upon which relief may be granted. Simply adding the GDSD to the same allegations does not overcome this finding.
Thus, as Koerner has not specified any facts or circumstances that support his claims, such as the GDSD acted in such a way to deprive him of his constitutional and statutory rights, or that the GDSD acted "under color of state law," and has simply added the GDSD to the conclusory allegations made against the GDA, the Court finds that Koerner's attempt to assert claims against the GDSD is futile. Accordingly, Koerner's request to amend his complaint to assert claims against the GDSD, the GDA and Landrieu is denied as futile.
The Court also notes that on September 3, 2002, the plaintiff filed a Supplemental Memorandum in which he provides additional evidence, including the Minutes of several Board meetings of the GDSD. Koerner claims that this evidence provides support for his claims against the GDA, Landrieu and the GDSD. However, because the evidence was discovered subsequent to the GDA and Landrieu's having been dismissed from this action based on the same factual allegations, such a request should be presented in some form to the District Court for consideration.
B. Insurance Companies
Koerner seeks to add Acceptance Insurance Company ("Acceptance") as a defendant contending that Acceptance provided a policy of insurance to the GDSD and Landrieu, and as such is liable for the wrongful actions of the GDSD and Landrieu. Koerner also seeks to add St. Paul Mercury Insurance Company ("St. Paul") as a defendant contending that St. Paul provided a policy of insurance to the GDA and Landrieu, and as such is liable for the wrongful actions of the GDA and Landrieu. However, as the Court has determined that his claims against the GDA, Landrieu and the GDSD are futile, Koerner's attempt to name Acceptance and St. Paul as defendants is also futile as the alleged insureds are not parties to this action. Accordingly, Koerner's request to add Acceptance and St. Paul as defendants is denied.
C. Louisiana Tax Commission
Koerner's Amended Complaint also seeks to add the Louisiana Tax Commission ("LTC") as a defendant. He alleges that the LTC is legally responsible for the monetary and other damaging consequences of the actions of Betty Jefferson, Assessor for the Fourth Municipal District of the City of New Orleans. He also alleges that the LTC is liable jointly, severally, and in solido with Jefferson. The LTC is a part of the Louisiana Department of Revenue, a state agency. Therefore, the Court must consider whether the LTC is immune from suit pursuant to the doctrine of Eleventh Amendment immunity.
Rec. Doc. No. 135; First Amended Complaint and Jury Demand, ¶ 6D, 20A.
In the absence of consent, a suit in which the State or one of its agencies is named as a defendant is proscribed by the Eleventh Amendment. Brandley v. Keeshan, 64 F.3d 196, 199 (5th Cir. 1995) (citing Pennhurst State Sch. Hosp. v. Halderman, 465 U.S. 89, 99 (1984)); Voisin's Oyster House, Inc. v. Guidry, 799 F.2d 183, 186 (5th Cir. 1986); Jett v. Dallas Indep. Sch. Dist., 798 F.2d 748, 762 n. 13 (5th Cir. 1986). Although a state may waive its Eleventh Amendment sovereign immunity, the State of Louisiana has not done so. See Edelman v. Jordan, 415 U.S. 651, 673 (1974) (holding that a state's consent to suit against it in federal court must be expressed "unequivocally"). In fact, La. Rev. Stat. § 13:5106(a) provides: "No suit against the state or a state agency or political subdivision shall be instituted in any court other than a Louisiana state court."
In Tradigrain, Inc. v. Mississippi State Port Auth., 701 F.2d 1131 (5th Cir. 1983), the Fifth Circuit set out the test to determine when an entity is entitled to Eleventh Amendment immunity. The process involves weighing several factors to determine whether the state is the real party in interest in the lawsuit nominally brought against the agency. Id. The Court should consider: (1) Whether state statutes and case law characterize the agency as an arm of the state; (2) The source of entity funding; (3) The degree of local autonomy; (4) Whether the entity is concerned primarily with local, as opposed to statewide problems; (5) The authority to sue and be sued in its own name; and (6) The right to hold and use property. Id. at 1059.
The first factor, whether state statutes and case law characterize the entity as an arm of the state weighs in favor of Eleventh Amendment immunity. Although, the Court is not aware of any case law which explicitly states that the LTC is an arm of the state, La. Rev. Stat. § 47:1831 provides that the LTC is a agent of the state of Louisiana.
La. Rev. Stat § 47:1831 provides: there shall be a state agency to be known as the Louisiana Tax Commission, hereinafter referred to as the tax commission which shall be a continuation of the commission created in Act 140 of 1916, and which succeeded to certain powers and duties of the State Board of Appraisers and the State Board of Equalization.
La. Rev. Stat. § 36:459(D) provides that "the Louisiana Tax Commission (R.S. 47:1831-1837; R.S. 47:1951-1998) is placed within the Department of Revenue. . . ." La. Rev. Stat. 36:459(C) provides that "the Department of Revenue is hereby abolished and its powers, duties, functions, and responsibilities are transferred to the secretary of the Department of Revenue and Taxation. . . ." Thus, the LTC is under the domain of the Louisiana Department of Revenue.
The second factor, the source of funds for the entity, is the most critical factor in the Court's analysis. Chaney v. New Orleans Public Facility Management, Inc., 1997 WL 705541, *2 (E.D.La. 1997). "Because an important goal of the Eleventh Amendment is the protection of state treasuries, the most significant factor in assessing an entity's status is whether a judgment against it will be paid with state funds." Delahoussaye v. New Iberia, 937 F.2d 144, 147 (5th Cir. 1991) (quoting McDonald v. Board of Miss. Levee Comm'rs, 832 F.2d 901, 907 (5th Cir. 1987)).
La. Rev Stat. § 47:1835(B) provides that "[t]here is hereby established in the state treasury the `Tax Commission Expense Fund', hereinafter referred to as the `expense fund'." It further provides that "monies on deposit in the expense fund may be expended only pursuant to appropriation. . . . Appropriations from the expense fund shall only be made for expenses and costs of the tax commission, including but not limited to expenses and costs of operations. . . . and the defense, determination, or development of assessments. . . ." La. Rev Stat. § 47:1835(B). Thus, the LTC's expenses are paid from the state treasury and the Court finds that the second factor favors Eleventh Amendment immunity.
The third factor, the degree of local autonomy, also favors Eleventh Amendment immunity. La. Rev Stat. § 47:1832 provides that "the tax commission shall be composed of three members appointed by the governor from the state at large to serve at his pleasure. Vacancies in unexpired terms shall be filled by appointment by the governor. Each appointment by the governor shall be submitted to the Senate for confirmation." La. Rev Stat. § 47:1832(A). It further provides that "the governor shall designate one of the members as chairman. The salaries of the chairman and members of the tax commission shall be set by the governor." La. Rev Stat. § 47:1832(B). Thus, the LTC is managed and governed by the state and cannot be characterized as an autonomous entity.
The fourth and fifth factors point against a finding of Eleventh Amendment immunity, however, these factors are not controlling when the other factors point to immunity. See Darlak v. Bobear, 814 F.2d 1055, 1060 (5th Cir 1987); Thomason v. Medical Center of Louisiana at New Orleans, 2001 WL 839030, *2 (E.D.La. 2001). The fourth factor considers whether an entity is concerned primarily with local as opposed to state-wide problems. The LTC's duties are to administer and enforce all laws related to the state supervision of local property tax assessments. La. Rev Stat. § 47:1837(A). The LTC shall also measure the level or appraisals or assessments for type of property in each parish throughout the state. La. Rev Stat. § 47:1837(B)(1). In these regards, the LTC is primarily focused on local as opposed to state-wide problems. However, the LTC conducts its duties throughout the state.
As for the fifth factor, the authority to sue or be sued, La Rev Stat § 47:1998(A)(1)(a) provides that "any taxpayer or bona fide representative of an affected tax-recipient body in the state dissatisfied with the final determination of the Louisiana Tax Commission. . . . shall have the right to institute suit within thirty days of the entry of any final decision of the Louisiana Tax Commission in the district court for the parish where the Louisiana Tax Commission is domiciled or the district court of the parish where the property is located. . . ."
Further, several cases exist where the LTC has been named as a party. See e.g., LOP, New Orleans, L.L.C. v. Louisiana Tax Commission, 2002 WL 31235591 (La.App. 1 Cir. 9/27/02); Johnson v. Louisiana Tax Commission, 828 So.2d 1150 (La.App. 4 Cir. 9/25/02). The Court notes, however, that the cases in which the LTC has been named as a party are cases involving the judicial review of a decision of the LTC regarding taxes paid in protest. The Court is not aware of any cases in which the LTC has been sued in tort.
La. Rev. Stat. § 47:1576 provides, in part:
C. This Section shall afford a legal remedy and right of action in any state court having jurisdiction of the parties and subject matter, for a full and complete adjudication of any and all questions arising in the enforcement of this Subtitle as to the legality of any tax accrued or accruing or the method of enforcement thereof. In such action, service of process upon the secretary shall be sufficient service, and he shall be the sole necessary and proper party defendant in any such suit. D. This Section shall be construed to provide a legal remedy in the state courts in case such taxes are claimed to be an unlawful burden upon interstate commerce, or the collection thereof, in violation of any Act of Congress or the United States Constitution, or the Constitution of Louisiana.
The sixth factor is the entity's right to hold and use property. The Court is not aware of any authority which suggests that the LTC may own property, nor is the Court aware of any property owned by the LTC. However, the Court notes that La. Rev. Stat. § 47:1834 provides that the LTC is domiciled at the Louisiana state capitol. Although the Court finds that the sixth factor is unclear, this determination should not affect the Court's ruling. See Darlak v. Bobear, 814 F.2d 1055, 1060 (5th Cir. 1987) (finding entity immune although fourth, fifth and sixth factors pointed against Eleventh Amendment immunity); Thomason v. Medical Center of Louisiana at New Orleans, 2001 WL 839030, *2 (E.D.La. 2001) (same).
After balancing the factors under listed in Tradigrain, Inc. v. Mississippi State Port Auth., 701 F.2d 1131 (5th Cir. 1983), the Court concludes that the state of Louisiana is the real party in interest in this suit and, therefore, the Eleventh Amendment to the United States Constitution bars this action against the LTC.
D. Paul May, Betty Jefferson, and the City of New Orleans
Koerner's Amended Complaint also seeks to add several factual allegations against the defendants Paul May, Betty Jefferson and the City of New Orleans. These defendants have not opposed the additional allegations made against them, nevertheless, the Court will determine whether such allegations are appropriate.
Koerner's Amended Complaint seeks to insert several allegations to the allegations made against Paul May, Betty Jefferson and the City of New Orleans in the Original Complaint. The Court notes that Koerner was aware of these facts well before he filed the instant motion and has not provided any explanation as to why such claims were not asserted sooner. Nevertheless, as these allegations only assert additional facts in support of allegations made in the Original Complaint, the Court finds that Paul May, Betty Jefferson and the City of New Orleans had sufficient notice of these claims and would not be prejudiced by them. Thus, Koerner's request to amend to assert such facts will be allowed.
The following paragraphs of Koerner's Amended Complaint assert additional allegations against Paul May, Betty Jefferson and/or the City of New Orleans: 5, 8D, 12, 13, 13A. 13B, 13C, 13d 13E, 13F, 15A, 15B, 15C, 16, 16B, 16C, 16D, 19A, 20, 20A, 22A, 23, 23A, 23B, 23C, 23C, 23d 27A, 27B, 27C, 33, 45, 46A, and 54. In a section of the Amended Complaint entitled "Jury Demand" the following paragraphs were added: 2, 3, 4, 5, 6, 8 and 9.
Accordingly,
IT IS ORDERED that the Ex Parte Motion to File First Amended Complaint (doc. #135) is GRANTED IN PART and DENIED IN PART as follows:
1) DENIED to the extent is seeks to assert claims against the GDA, the GDSD, Landrieu, Acceptance Insurance Company, St. Paul Mercury Insurance Company and the Louisiana Tax Commission.
2) GRANTED as to the additional allegations made against Paul May, Betty Jefferson and the City of New Orleans.
IT IS FURTHER ORDERED that Koerner shall file an Amended Complaint in compliance with this Order no later than January 8, 2003.