Prebensen & Blakstad v. Board of Commissioners

• Decision Date: 20 May 1965
• Docket Number: No. 6725.,6725.
• Citation: 241 F. Supp. 757
• Parties: PREBENSEN & BLAKSTAD, Libelant, v. BOARD OF COMMISSIONERS OF the PORT OF NEW ORLEANS and T. Smith & Son, Inc., Respondents.
• Court: U.S. District Court — Eastern District of Louisiana

241 F. Supp. 757

PREBENSEN & BLAKSTAD, Libelant, v. BOARD OF COMMISSIONERS OF the PORT OF NEW ORLEANS and T. Smith & Son, Inc., Respondents.

No. 6725.

United States District Court E. D. Louisiana, New Orleans Division.

May 20, 1965.

Terriberry, Rault, Carroll, Yancey & Farrell, M. D. Yager, New Orleans, La., for libelant.

Phelps, Dunbar, Marks, Claverie & Sims, Harry S. Redmon, Jr., New Orleans, La., for Board of Com'rs of Port of New Orleans.

Lemle & Kelleher, Thomas W. Thorne, Jr., New Orleans, La., for T. Smith & Son, Inc.

AINSWORTH, District Judge:

Presented for decision in this case is the applicability of the sovereign immunity provisions of the Eleventh Amendment to the Federal Constitution, in regard to the Board of Commissioners of the Port of New Orleans, an agency of the State of Louisiana.

Libelant, Prebensen & Blakstad, as owner of the Norwegian SS FOLKE BERNADOTTE has alleged (and for the purposes of this motion it is taken as true¹) that the vessel was damaged by respondent's negligent operation of certain machinery while cargo was being discharged at respondent's Bulk Handling Facility in the Port of New Orleans. Recovery is claimed in personam in both tort and contract.

Respondent, Board of Commissioners of the Port of New Orleans, has filed motions to dismiss for lack of jurisdiction, claiming sovereign immunity as a State agency. The Eleventh Amendment to the Federal Constitution provides that:

"The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State."

We must decide whether an action against the Dock Board would constitute an action against a state within the meaning of the Eleventh Amendment. Helpful to our decision is an inquiry into the decisions of Louisiana appellate courts which have involved the defense of sovereign immunity in suits against the Board.

First: Is the Board immune from tort actions? That this question must be answered in the affirmative is well supported by the decisions of the Louisiana courts. The Board has never been successfully subjected to an action in tort. Fouchaux v. Board of Com'rs, La.App. (Orleans), 186 So. 103 (1939), affirmed 193 La. 182, 190 So. 373 (1939), cert. den. 308 U.S. 554, 60 S.Ct. 112, 84 L.Ed. 466 (1939); Miller, Royal Indemnity Co., Intervener v. Board of Com'rs, 199 La. 1071, 7 So.2d 355 (1942), Fouchaux involved a tort claim against the Board by an employee of the International Harvester Company, a Board lessee. The Louisiana Supreme Court rejected the claim on the basis of the Board's sovereign immunity and held that the Board may not be sued in tort. Miller involved a claim in tort against the Board for the death of an employee of a Board lessee. The Louisiana Supreme Court held that "From an examination of the Constitution and the Acts of the legislature dealing with the Dock Board, it is apparent that the right to sue the Dock Board in tort has not been granted."

Accordingly, it is our opinion that the motion to dismiss the action in tort should be granted.

Second: Is the Board immune from actions arising in contract? Respondent has cited no case in which the Board has been held immune from contract liability. After exhaustive research, we have likewise been unable to supply such authority. The Louisiana decisions are contrary to the Board's defense.

The Board supports its claim of immunity in contract suits by citing Lamport & Holt v. Board of Com'rs, 137 La. 784, 69 So. 174 (1915), and Cobb v. Louisiana Board of Institutions, 229 La. 1, 85 So.2d 10 (1955). Lamport no longer reflects the law of Louisiana and Cobb is not applicable here. Lamport, decided in 1915, involved a claim against the Board to recover for water damage to bags of coffee which were stored in sheds owned by the Board. Recovery was denied because there were no funds from which damages could be paid. The basis of that holding is no longer valid because the Louisiana Legislature subsequently passed Act 14 of the Extraordinary Session of 1915 leaving to the discretion of the Board the right to fix such wharfage fees and charges as it deemed necessary. Prior to the legislative enactment the Board could charge only such fees as were necessary to maintain its docks, sheds and other facilities. Lamport was in effect overruled by the Louisiana Supreme Court in Fouchaux when the Court held:

"Therefore, since the effective date of the 1915 act the Board may charge, and, so far as we know, it may have charged rates sufficient to provide for payment of all judgments which may be rendered against it, * * * we think, therefore, that, since the Supreme Court, in Lamport, based its decisions squarely and solely on that fact — that there was not and could be no fund out of which such judgments could be paid — the result reached there is not necessarily controlling here."

It is true that in the Cobb case, supra, recovery was denied in contract in a suit against the Louisiana Board of Institutions, an admitted unincorporated administrative agency. The Louisiana Supreme Court in Cobb refused to make any distinction between actions in tort and those in contract in suits against the State. The decisions involving the immunity of the Dock Board were specific in granting "tort immunity," without reference to possible immunity in contract.

The Louisiana Supreme Court's decision in Cobb pointed out the fact that the Louisiana Board of Institutions is an unincorporated administrative agency, performing purely administrative functions and is in essence the State itself and there are no exceptions to sovereign immunity from suits against the State.

No Louisiana decision establishes such a status for the Dock Board.²

In Geary v. Board of Com'rs, 139 La. 781, 72 So. 245 (1916); Hartwig Moss Ins. Agency v. Board of Com'rs, 206 La. 395, 19 So.2d 178 (1944); and Leon Irwin & Co., Inc. v. Board of Com'rs of New Orleans, 176 La. 13, 145 So. 123

(1932), the Louisiana Supreme Court upheld suits in contract against the Dock Board. The defense of sovereign immunity was not raised by the Board in any of these cases. Geary involved a contract for the construction of wharves for the Board. After completion of the inner wharf, plaintiff was notified that the contract was being cancelled for the construction of the outer wharf. The Louisiana Supreme Court held that plaintiff was entitled to sue for damages for breach of contract resulting from the cancellation, but that plaintiff failed to prove the extent of his damages. Hartwig Moss Ins. Agency, supra, involved a brokerage contract for a five-year period. Upon cancellation of the contract by the Board, plaintiff brought suit. The Louisiana Supreme Court found the contract to be void as contravening public policy. However, the case was decided on the basis of public policy and contract law. The Court said (19 So.2d at 182):

"Unquestionably it Dock Board is vested with authority to employ an insurance agent or broker to procure the issuance of such policies. If the agreement entered into by the Board with plaintiff on April 7, 1931, had gone no further than that, its validity and binding effect could not be questioned." (Emphasis added.)

The Leon Irwin & Co. case, supra, involved another brokerage contract in a suit against the Dock Board. There the Louisiana Supreme Court found that, as a matter of law, there was no contract with the Board, but the case was decided on its merits employing contract law.

Since the filing of respondent's defense of sovereign immunity, libelant has pled in a supplemental libel that the Board is estopped from claiming immunity to suit as an agency of the State of Louisiana. The supplemental libel avers that libelant's application to the respondent Board for the services of discharging a cargo of bulk sugar from the SS FOLKE BERNADOTTE was subject to the Board's published tariff specifying rates, rules and regulations for handling of commodities through its Bulk Handling Facility; that libelant paid for these services on the Board's invoice to it based on the provisions of the tariff; that the Board's operation of the Facility is a purely private or proprietary function, not governmental and that the Board enters into contracts with persons for the use of the Facility; that libelant in entering into its agreement with the Board for use of the Facility relied on the provisions of the Board's tariff, particularly Section 6, in which no mention was made that the Board claimed sovereign immunity as a State agency to suits in contract or tort growing out of the use of the services at the Facility; that Section 6 of the tariff provided conditions and instances of vessel and equipment damage for which the Board would assume or accept no responsibility. Libelant concluded that the Board having received all of the benefits accruing to it under said tariff is now estopped from claiming that it cannot be sued for breach of contracts made thereunder because of sovereign immunity.

In Louisiana the doctrine of estoppel³ applies to the State and its subdivisions...