Opinion
Civil Action No. 04-2192 Section "L" (1).
January 5, 2005
ORDER REASONS
Pending before the Court is the Louisiana Department of Transportation and Development's Motion to Dismiss Plaintiff's Complaint. The motion was taken under submission by the Court on December 8, 2004. For the following reasons, the Motion to Dismiss Plaintiff's Complaint is GRANTED.
I. BACKGROUND
Plaintiff Laurence Lambert, a Mississippi citizen doing business as Laurence Lambert Associates, Engineers, was awarded a professional services contract ("Original Engineering Agreement") by the City of Kenner ("Kenner") to provide the engineering services in a project to build a new North-South roadway from Louis Armstrong New Orleans International Airport to connect with Interstate 10 in Kenner ("the Project"). The Plaintiff alleges that, without notice to the Plaintiff, Kenner entered into an agreement with the Louisiana Department of Transportation and Development ("DOTD") to provide engineering services during the first phase of the Project. This first phase consisted of constructing a tunnel and roadway under the East-West runway at the airport ("the Tunnel Work"). The Plaintiff claims that he designed the Tunnel Work. According to the Plaintiff, Kenner and/or DOTD solicited public bids for the construction of the Tunnel Work and awarded the contract to Boh Brothers, Inc.
The Tunnel Work ended in litigation when, on July 7, 1992, the Plaintiff filed a federal lawsuit against Kenner, DOTD, and others for copyright infringement due to their use of the Plaintiff's engineering work. The Plaintiff entered into an agreement with the parties to settle the lawsuit. In his complaint, the Plaintiff explains that, under the terms of the settlement agreement, the Original Engineering Agreement was left as a valid enforceable contract between the Plaintiff and Kenner, with some modifications ("Revised Engineering Agreement"). The Revised Engineering Agreement allegedly provided that Kenner was obligated to have the Plaintiff perform all of the remaining engineering work on the Project and provided a formula for the imposition of stipulated damages if Kenner breached the terms of the Revised Engineering Agreement.
Laurence L. Lambert d/b/a Laurence L. Lambert Associated, Engineers v. The City of Kenner and the Louisiana Department of Transportation and Development, CA 92-2287 (Judge Livaudais).
Due to insufficient funding, the Project was postponed while Kenner lobbied for federal funding. Years later, once the funding was received, Kenner, through the Regional Planning Commission for Jefferson, Orleans, Plaquemines, St. Bernard, and St. Tammany Parishes ("RPC"), allegedly resumed the Project without contacting the Plaintiff. Instead, Richard C. Lambert Consultants, L.L.C. was awarded an engineering contract that the Plaintiff claims contained a scope of work similar to that of the Revised Engineering Agreement. On April 15, 2004, the Plaintiff sent a letter to Kenner indicating that Kenner was in breach of the Revised Engineering Agreement, but the Plaintiff claims that Kenner never responded.
On August 4, 2004, the Plaintiff filed suit against Kenner, DOTD, and the RPC, asserting diversity jurisdiction. In his complaint, the Plaintiff claims that Kenner breached the settlement agreement by not having the Plaintiff perform the federally funded phase of the Project. The Plaintiff claims that he is entitled to receive payment from Kenner for the next phase of the Project, pursuant to the payment clause of the Revised Engineering Agreement. The Plaintiff claims that Kenner owes him $1,148,446. Furthermore, the Plaintiff claims that both DOTD and RPC are liable for intentional interference with a contract by which the Plaintiff has suffered loss of income and profits, damage to his professional reputation, loss of ability to contract for other projects, as well as other damages.
II. MOTION TO DISMISS PLAINTIFF'S COMPLAINT
DOTD moves to dismiss the Plaintiff's complaint pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction. DOTD argues that it is an arm of the state and is therefore immune from suit in federal court pursuant to the Eleventh Amendment of the United States Constitution. The Plaintiff responds that this Court does have jurisdiction over DOTD. According to the Plaintiff, this case arises out of the breach of an agreement settling an action that was brought in U.S. District Court. Therefore, the Plaintiff reasons that the U.S. District Court clearly has jurisdiction and DOTD should not be allowed to hide behind the Eleventh Amendment.
LAW AND ANALYSIS
The Eleventh Amendment of the U.S. Constitution has been interpreted to bar suits brought in federal court against an unconsenting State by that State's own citizens or by citizens of another State. Employees of the Dept. of Pub. Health Welfare v. Dept. of Public Health Welfare, 411 U.S. 279, 280 (1973); Edleman v. Jordan, 415 U.S. 651, 663 (1974); Pennhurst State Sch. Hosp. v. Halderman, 465 U.S. 89, 100 (1984). This sovereign immunity does not extend to suits against municipal corporations or other governmental entities that are not arms of the state. Alden v. Maine, 527 U.S. 706, 756 (1999). The general rule is that a suit is against the State "if the judgment sought would expend itself on the public treasury or domain, or interfere with the public administration, or if the effect of the judgment would be to restrain the Government from acting, or to compel it to act." Pennhurst, 465 U.S. at 102, citing, Dugan v. Rank, 372 U.S. 609, 620 (1963). The two issues presented in this case are: (A) whether DOTD is an arm of the state; and, if so, (B) whether DOTD waived is immunity.
A. Arm of the State
The Fifth Circuit has held that a federal court must use the following factors to examine an entity, in order to determine whether a suit against that entity is actually a suit against the State itself:
(1) whether the state statutes and case law characterize the agency as an arm of the state;
(2) the sources of the funds for the entity;
(3) the degree of local autonomy the entity enjoys;
(4) whether the entity is concerned primarily with local, as opposed to state-wide problems;
(5) whether the entity has authority to sue and be sued in its own name; [and]
(6) whether the entity has the right to hold and use property.Delahoussave v. City of New Iberia, 937 F.2d 129, 131 (5th Cir. 1986). The foregoing factors weigh in favor of concluding that DOTD is an arm of the State of Louisiana.
The Louisiana Department of Transportation and Development was created by state law, La.R.S. 36:501, though, this fact alone is not determinative of whether DOTD is characterized as an arm of the state. Delahoussaye, 937 F.2d at 147. However, the statute creating DOTD does so by including DOTD as part of the executive branch of the state government. La.R.S. 36:501, et seq. The Fifth Circuit has found that, when a state statute creates an entity as a part of the state executive branch, that entity is characterized as an arm of the state by state law. Delahoussaye, 937 F.2d at 147; see also Darlak v. Bobear, 814 F.2d 1055, 1059-1060 (5th Cir. 1987). The Plaintiff points to Louisiana cases in which DOTD's predecessor, the Louisiana Department of Highways, was characterized as a distinct legal entity from the State. See Saint v. Allen, 134 So.2d 246, 249 (La. 1931); see also Kallemberg v. Klause, 162 So.2d 73 (La.App. 4th Cir. 1964). However, the Plaintiff has not cited any recent Louisiana cases which characterize the current DOTD as an entity that should not be regarded as an arm of the state.
"[B]ecause 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, 937 F.2d at 147-148, citing, McDonald v. Board of Miss. Levee Comm'rs, 832 F.2d 901, 907, 95 th Cir. 1987). Pursuant to La.R.S. 48:76, DOTD's budgetary and fiscal operations are under the control of the legislative budget committee and the commissioner of administration, and DOTD receives funding based on appropriations made by the state legislature. Furthermore, Louisiana Constitution Article XII § 10 (C) provides that "[n]o judgment against the state, a state agency, of a political subdivision shall be exigible, payable, or paid except from funds appropriated therefor by the legislature or by the political subdivision against which the judgment is rendered." Therefore, it is clear that DOTD receives funding from the State, and any judgment rendered against DOTD would be paid from funds appropriated by the State.
The Plaintiff argues that DOTD should not be immune from suit in federal court because it enjoys much more autonomy than do other state agencies, it is partially concerned with local problems, it has the authority to sue and be sued in its own name, and it has the right to hold and use property. DOTD does have the authority to sue and be sued and to hold and use property, however, these factors are not conclusive. See Cosey v. Dept. of Transp. Develop., 1992 WL 211643 at *1 (E.D. La. 1992), citing, Usry v. Louisiana Department of Highways, 459 F.Supp. 56, 63 (E.D. La. 1978) (holding that the authority to sue and be sued does not amount to a waiver of Eleventh Amendment Immunity). Furthermore, while DOTD does enjoy some autonomy, its overall operations are supervised by the Governor and the State. La.R.S. 36:504(7). Additionally, DOTD's primary purpose is its statewide, as opposed to local, duty to develop and implement programs in all areas of transportation. La.R.S. 36:501(B).
Based on all of the forgoing factors, the Fifth Circuit has repeatedly held that the DOTD is an arm of the state and protected by Eleventh Amendment sovereign immunity. Tillman v. CSX Trans., 929 F.2d 1023, 1025 (5th Cir. 1991); Fireman's Fund Ins. Co. v. Department of Transp., 792 F.2d 1371 (5th Cir. 1986); Fireman's v. Sea-Land Serv. Inc., 654 F.2d 1155 (5th Cir. 1981). For example, in Baker v. Murphy Oil USA, Inc., 2000 WL 526870 at *1 (E.D. La. 2000), the Fifth Circuit explained that "[b]ecause a state agency such as the Louisiana DOTD is in essence the alter ego of the State of Louisiana, it is also immune for suit in this Court." This Court finds no reason to depart from the clear line of cases in this jurisdiction holding DOTD to be immune from suit in federal court pursuant to the Eleventh Amendment.
B. Waiver of Immunity
As an arm of the state, DOTD is immune from suit in federal court unless it has consented to suit or Congress has clearly and validly abrogated the state's sovereign immunity. Perez v. Region 20 Educ. Service Center, 307 F.3d 318, 326 (5th Cir. 2002). The Plaintiff argues that DOTD did consent to suit in federal court by submitting to the jurisdiction of the U.S. District Court when entering into a settlement agreement for the original copyright infringement case. However, DOTD's consent must be clearly expressed in order to be regarded as a waiver of it's sovereign immunity. Mohler v. State of Mississippi, 782 F.2d 1291, 1293 (5th Cir. 1986). There was no such express consent given by DOTD. As DOTD points out, it moved to dismiss the Plaintiff's copyright claim on the grounds that DOTD was immune under the Eleventh Amendment. The Court in the original suit found that the Copyright Act abrogated the States' Eleventh Amendment immunity, and, therefore, the Federal Courts had jurisdiction over the claim. DOTD correctly argues that it has never consented to federal jurisdiction in the absence of abrogation by Congress.
Congress can abrogate Eleventh Amendment immunity through specific legislation in limited instances. Fitzpatrick v. Bitzer, 427 U.S. 445 (1976); Welch v. Texas Dept. of Highways and Public Transp., 483 U.S. 468 (1987). While, in the original suit, the Court found that Congress allowed for federal suits under the Copyright Act to be brought against a State, the Plaintiff's claim against DOTD in the instant suit is for the tort of intentional interference with a contract. Though this claim may have arisen from the settlement of the Plaintiff's copyright infringement action, the present case has nothing to do with the Copyright Act. Congress has not abrogated the State's sovereign immunity from federal suits in tort. Therefore, absent consent and abrogation by Congress (neither of which occurred), DOTD is immune from suit in federal court for the Plaintiff's claim of intentional interference with contract.
III. CONCLUSION
For the foregoing reasons, Defendant Louisiana Department of Transportation and Development's Motion to Dismiss Plaintiff's Complaint is GRANTED.