Board of Com'rs of Port of New Orleans v. Louisiana Com'n on Ethics for Public Employees

• Decision Date: 25 May 1982
• Docket Number: No. 14846,14846
• Citation: 416 So.2d 231
• Parties: BOARD OF COMMISSIONERS OF the PORT OF NEW ORLEANS, et al. v. LOUISIANA COMMISSION ON ETHICS FOR PUBLIC EMPLOYEES.
• Court: Court of Appeal of Louisiana — District of US

Page 231

416 So.2d 231

BOARD OF COMMISSIONERS OF the PORT OF NEW ORLEANS, et al. v. LOUISIANA COMMISSION ON ETHICS FOR PUBLIC EMPLOYEES.

No. 14846.

Court of Appeal of Louisiana First Circuit.

May 25, 1982.

Rehearing Denied July 13, 1982.

Charles M. Lanier, New Orleans, for plaintiff-appellant Board of Com'rs of the Port of New Orleans, Leander N. Bubrig, J. W. Clark, G. Frank Purvis, Jr., C. Alvin Bertel, Jr., Norman R. Kerth, Roy J. Gross, Joseph J. Krebs, Jr., and Michael J. Molony, Jr.

Mack E. Barham, David A. Marcello, Jacob J. Meyer, New Orleans, for Joseph C. Domino.

Walter J. Leger, Jr., New Orleans, for George J. Schiro.

R. Gray Sexton, Baton Rouge, for defendant-appellee Com'n on Ethics for Public Employees.

David Williams, Asst. Atty. Gen., Baton Rouge, for William J. Guste, Jr., Atty. Gen. for the State of La.

Ronald G. Coleman, Baton Rouge, for amicus curiae.

Before LEAR, CARTER and LANIER, JJ.

LANIER, Judge.

This is a suit for declaratory judgment and preliminary and permanent injunctive relief filed by the Board of Commissioners of the Port of New Orleans (hereinafter referred to as the Dock Board) and its seven commissioners, individually, against the Commission on Ethics for Public Employees (hereinafter referred to as Ethics Commission) seeking to stop the Ethics Commission from conducting private investigations of the business affairs of the Dock Board members on the grounds that the Code of Governmental Ethics of the State of Louisiana (hereinafter referred to as the Code), La.R.S. 42:1101 et seq., is not applicable to the individual Dock Board members. The Ethics Commission filed a dilatory exception of prematurity and peremptory exceptions of no right of action and no cause of action. The declinatory exception of prematurity asserts that the Code is applicable to the Dock Board members and that they have failed to exhaust their administrative remedies. The peremptory exception of no cause of action alleges that the petition failed to state facts supporting the conclusion that the challenged provisions of the Code were unconstitutional or why the plaintiffs were exempt from the provisions of the Code. The exception of no right of action alleges that the Dock Board as a legal entity had no justiciable interest in this litigation because the Code is only applicable to the individual members of the Dock Board. The trial judge fixed the hearing on these exceptions on the same day as the trial of the preliminary injunction, but tried the exceptions first. After hearing evidence on the exceptions, the trial judge sustained the exception of prematurity and the exception of no right of action and vacated the rule for the preliminary injunction. Because of his rulings on the exceptions of prematurity and no right of action, the trial judge determined there was no necessity to rule on the exception of no cause of action. The Dock Board was cast for all costs of the proceedings. The Dock Board and its members took this devolutive appeal. ¹ The Ethics Commission answered this devolutive appeal seeking damages for frivolous appeal.

I. FACTS

By letter dated December 17, 1979, the Louisiana Commission on Governmental Ethics (the predecessor of the present Commission on Ethics for Public Employees) advised the Executive Director and General Manager of the Dock Board of its rendition of Opinion No. 37 and transmitted a copy of this opinion. ² Opinion No. 37 interpreted the existing Code of Ethics ³ as prohibiting members of State Boards and Commissions from rendering goods and services on a contractual basis to firms doing business with the Board or Commission upon which the individual members served and further prohibited members of State Boards and Commissions from doing business with or contracting with firms or businesses which conducted operations governed or regulated by the Board or Commission upon which the individual member served. By letter dated February 8, 1980, the Louisiana Commission on Governmental Ethics advised the Executive Director and General Manager of the Dock Board that it was "firmly of the opinion that the Board of Commissioners of the Port of New Orleans is governed by the expressions of the Commission contained in Opinion No. 37 and that members of the Board should be advised accordingly." By resolutions dated March 27, 1981, the Louisiana Commission on Ethics for Public Employees directed its Executive Secretary to conduct private investigations of the seven individual commissioners of the Dock Board to determine if they, or corporations or partnerships in which they had a substantial interest, were rendering services to persons who had or were seeking contractual or other business or financial relationships with the Dock Board or were engaged in or seeking contracts with individuals or corporate businesses which were regulated by the Dock Board in possible violation of La.R.S. 42:1111 C(2)(d) and La.R.S. 42:1116. ⁴ This suit followed.

II. EXCEPTION OF PREMATURITY

The Ethics Commission with its exception of prematurity claims that since it has only authorized the Executive Secretary to conduct a private investigation into possible violations of the Code, and has not made any formal findings or instituted disciplinary actions, that the plaintiffs have not exhausted their administrative remedies and these proceedings are premature, citing State Mineral Board v. Louisiana Commission on Governmental Ethics, 367 So.2d 1188 (La.App. 1st Cir. 1978), writs refused (1978). In the Mineral Board case, this court observed at page 1191 of the Southern Reporter, as follows:

"The Commission is exercising its statutory power to hold an investigation. That the investigation may lead to the possibility of a disciplinary hearing if violations of the Code of Ethics are found, is insufficient basis for an injunction against that investigatory hearing. The contentions of no adequate remedy, of irreparable harm and of vain and useless procedure are therefore without basis as applied to an investigatory hearing. It is conceivable that the Commission might decide that the conduct does not constitute a violation and so end the controversy."

The Dock Board members contend that the Code is not applicable to them and that the private investigations of them are not authorized by law. Article X, Section 21 of the Louisiana Constitution of 1974 mandates that "The legislature shall enact a code of ethics for all officials and employees of the state and its political subdivisions." (Emphasis added). Article VI, Section 44 of the Louisiana Constitution of 1974 defines a political subdivision as any "unit of local government, including a school board and a special district, authorized by law to perform governmental functions." In paragraph one of its petition in the instant case, the Dock Board alleges (and thus acknowledges) that it "is the instrument of local government of the State of Louisiana that is charged with the regulation and the maintenance and development of the commerce and traffic of the port and harbor of New Orleans, within the parishes of Orleans, Jefferson and St. Bernard." In the case of Board of Commissioners of Port of New Orleans v. Splendour Shipping & Enterprises Company, Inc., 273 So.2d 19 (La.1973) the Dock Board alleged that it was an agency of the State of Louisiana and claimed sovereign immunity from suit in tort. At page 20 of the Southern Reporter, the Supreme Court of Louisiana defined the status of the Dock Board as follows "The Board is a State agency carrying on a public business--the operation of the Port of New Orleans. It is given the complete power to operate and regulate the port, wharves, landings, buildings, to expropriate, to legislate, to maintain a police force. R.S. 34:21-44. Its powers are derived from the legislature and the Constitution. It is not 'the State of Louisiana,' but is part of the State, and it is an agency of the State."

The Code of Governmental Ethics, La.R.S. 42:1101, et seq., is specifically designed to establish a standard of ethical conduct for "officials and employees of this state and its political subdivisions,..." A political subdivision is defined therein as "any unit of local government, including a special district, authorized by law to perform governmental functions." R.S. 42:1102(17). A governmental entity for purposes of the Code is "the state or any political subdivision which employs the public employee or employed the former public employee or to which the elected official is elected, as the case may be." R.S. 42:1102(12). A public employee is defined as "anyone, whether compensated or not, who is: (a) An administrative officer or official of a governmental entity who is not filling an elective office." or "(b) Appointed by any elected official when acting in an official capacity, and the appointment is to a post or position wherein the appointee is to serve the governmental entity or an agency thereof, either as a member of an agency, or as an employee thereof." or "(c) Engaged in the performance of a governmental function." R.S. 42:1102(18). An agency for purposes of the Code is defined as "a department, office, division, agency, commission, board, committee, or other organizational unit of a governmental entity." R.S. 42:1102(2). It is clear from these definitions contained in the constitutional and statutory law of Louisiana that the ethical standards for public servants contained in the Code are applicable to the Dock Board commissioners.

The Dock Board and its members argue that because it is a deep water port commission and because the definition of a deep water port commission is separately provided for in Article VI, Section 44(7) of the Louisiana Constitution of 1974 that it is not a political subdivision of the State of Louisiana as defined in Article VI, Section 44(2) and the Code. This argument is without merit. Deep water port commissions are defined in Article VI, Section 44(7) as those "within...