George A. Fuller Company v. Coastal Plains, Inc., Civ. A. No. 68-782.

• Decision Date: 14 October 1968
• Docket Number: Civ. A. No. 68-782.
• Citation: 290 F. Supp. 911
• Parties: GEORGE A. FULLER COMPANY, Inc., Plaintiff, v. COASTAL PLAINS, INC., and the Board of Commissioners of the Port of New Orleans, Defendants.
• Court: U.S. District Court — Eastern District of Louisiana

290 F. Supp. 911

GEORGE A. FULLER COMPANY, Inc., Plaintiff, v. COASTAL PLAINS, INC., and the Board of Commissioners of the Port of New Orleans, Defendants.

Civ. A. No. 68-782.

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

October 14, 1968.

Ewell P. Walther, Jr., Campbell C. Hutchinson, of Stone, Pigman, Walther, Wittman & Hutchinson, New Orleans, La., for plaintiff.

Sumter D. Marks, Jr., Charles M. Lanier, of Phelps, Dunbar, Marks, Claverie & Sims, New Orleans, La., for Board of Commissioners, Port of New Orleans, defendant.

Paul A. Nalty of Chaffe, McCall, Phillips, Burke, Toler & Sarpy, New Orleans, La., and William J. Adams and C. Douglass Forde, Jr. (co-counsel), New Orleans, La., for Coastal Plains, Inc., defendant.

Gibbons Burke, amicus curiae of Chaffe, McCall, Phillips, Burke, Toler & Sarpy, New Orleans, La.

MEMORANDUM OF REASONS

COMISKEY, District Judge.

The plaintiff George A Fuller Co., Inc. sued the Board of Commissioners of the Port of New Orleans (The Dock Board) based on a general construction contract between the plaintiff and the Dock Board for the construction of a facility described generally as the Bulk Terminal Facility in New Orleans, Louisiana. The plaintiff is a citizen of the state of Texas and the plaintiff contends the defendant Dock Board is for jurisdictional purposes a citizen of Louisiana. This alleged diversity of citizenship is denied by the Dock Board and it contends it is the State of Louisiana and not a citizen thereof.

The defendant Dock Board has filed a motion to dismiss on several grounds, all of which we view to be without merit, and two of which we will discuss in this memorandum, namely, that the Dock Board cannot be sued in the federal courts and the suit is premature under the Louisiana Public Works Act. The Dock Board contends that it is not a citizen of Louisiana for purposes of diversity of citizenship jurisdiction. 28 U.S.C. 1332(a) (1).¹ Under the Eleventh Amendment to the United States Constitution² the Dock Board contends that it is immune from suit in federal court since it is the State of Louisiana and therefore enjoys the sovereign immunity granted to the several states.

The creation and the powers of the Dock Board are found in the Constitution of Louisiana and in the Acts of the Legislature of Louisiana³.

At least three times the Louisiana Constitution states the sources of the power of the Dock Board.

"Article 6 § 16. Powers and authority. The Board of Commissioners of the Port of New Orleans shall, except as herein otherwise changed and amended, have and exercise all power now conferred upon it by the Constitution, and such other authority as may be conferred by the Legislature."

"Article 6, § 16.1. The Board of Commissioners of the Port of New Orleans shall except as otherwise herein changed and amended, have and exercise all powers now conferred by the Constitution or statutes upon them; * * *."

"Article 6 § 16.4. Additional authority of board. That the Legislature may confer further any additional authority upon said Board of Commissioners of the Port of New Orleans not inconsistent herewith."

The Louisiana Constitution proceeds to endow the Dock Board with a series of powers including, among others, the following: To borrow money and issue notes and bonds secured by the credit of the State of Louisiana, to lease land to tenants, to create industrial districts, to acquire land by purchase, lease or expropriation, to exempt property from taxation, to levy assessments against lands, to issue bonds for which neither the credit of the State of Louisiana or the Board itself shall be pledged, to enter into contracts, to enact ordinances, to organize the departments of the Board and to determine the duties, powers and compensation of all personnel in such departments.

The Legislature of Louisiana acting on the several grants of authority referred to above has likewise endowed the Dock Board with a series of powers including, among others, the following: To regulate commerce of the port and harbor of New Orleans, to administer the wharves of the Port of New Orleans, to construct new wharves and other structures, to maintain wharves and other structures in good condition, to maintain the water depths of the wharves, to provide mechanical facilities for the use of the wharves, to provide utilities and police protection for the wharves, to finance, build and operate locks, canals and wharehouse elevators, to charge, for the use of the wharves and its facilities, fees, rates, tariffs or other charges that the Dock Board may establish, to acquire, by purchase or expropriation, properties, to render statistical and financial reports, to enact ordinances containing criminal penalties, to maintain a port and harbor police force, to issue certificates of indebtedness conditioned as the Board may direct and secured by real estate mortgages and property assessments without the credit of the State of Louisiana or the Board itself.

Prior to the adoption of the Louisiana Revised Statutes of 1950, some of the powers of the Dock Board were enumerated in Acts 1915, Ex. Session No. 14 § 1 (now LSA-RS 34:21) and included the following sentence:

"They the Dock Board shall have and enjoy all the rights and powers and immunities incident to corporations."

This sentence was not carried over into the Louisiana Revised Statutes of 1950 and is not now contained in LSA-RS 34:21. However, as Judge Rubin pointed out in Board of Commissioners of Port of New Orleans v. The M/V Gotama Jayanti, 274 F.Supp. 265 (E.D. La.1967), "the omission from LSA-RS 34:21 of the phrase in the prior law granting the Board the powers and immunities incidental to corporations appears to embody no change in policy or alteration in the powers of the Board. Instead it seems more likely that the purpose of the revision was to delete words that referred to a body which is not a corporation as if it were."

From an examination of the enumerated powers of the Dock Board, it is apparent that it has many rights, powers and purposes which are usually enjoyed by corporations.⁴ As early as 1896 the Louisiana Supreme Court recognized this in Duffy v. City of New Orleans, 49 La.Ann. 114, 21 So. 179 (1896) when it said that the Dock Board "* * may possess some of the incidents of a corporation * * *." It is not administered by the executive branch of government of the State of Louisiana. Rather, the Dock Board administers itself through an independently selected Board of Directors which is known as Board of Commissioners consisting of members possessing certain qualifications and tenure set out in Article 6 § 17 of the Louisiana Constitution. While the board members are appointed by the Governor of Louisiana, he must select the appointees from nominees submitted by a Nominating Council composed of heads of several Nominating Organizations like the Chamber of Commerce of the New Orleans Area, New Orleans Board of Trade, and others. Therefore, we have an entity administered by a Board of Commissioners with rights, powers and purposes found in statutory and constitutional law.

It is recognized that a state agency like the Dock Board need not be a separate corporation in order to be a citizen. The Fifth Circuit Court of Appeals has had occasion to consider the status of the Department of Highways of Louisiana in two cases with an issue similar to the question raised before this Court. In Louisiana Highway Commission v. Farnsworth, 74 F.2d 910 (5th Cir., 1935), that court held that the Highway Commission was a citizen for diversity of citizenship purposes. At that time the statute creating the Highway Commission provided that it was a "body corporate". However, subsequent to the Farnsworth decision the law was changed and the Department of Highways was created to take the place of the Highway Commission. The new statute, LSA-R.S. 48:22, omitted the designation of the Department of Highways as a "body corporate" and instead provided that it "shall have and enjoy all the rights, powers and immunities incident to corporations * * *" In Department of Highways of Louisiana v. Morse Brothers & Associates, Inc., 211 F.2d 140 (5th Cir. 1954), the effect of the amendment of the statute relating to the Department of Highways upon the Farnsworth decision was considered by the Fifth Circuit Court of Appeals. Counsel for the Department of Highways argued that the Act creating the Department of Highways was changed to conform to the law governing the Dock Board by omitting the express declaration that the Department should be a body corporate. So the court was faced with the question of "whether or not the appellant the Department of Highways is an entity, corporate or otherwise, constituting it a citizen subject to suit by a non-resident in the Federal Courts." 211 F.2d at 141. (Emphasis added) The Fifth Circuit held that the Department of Highways of the State of Louisiana was still a citizen for diversity purposes even though it was no longer a corporation created by any statute.

In Henning v. Lake Charles Harbor and Terminal District, 387 F.2d 264 (5th Cir., 1968), an expropriation suit by the Lake Charles Harbor and Terminal District was removed to federal court on grounds of diversity of citizenship. The Lake Charles Harbor and Terminal District has powers similar to those exercised by the Dock Board, and the District was not created as a corporation separate from the State. If the Fifth Circuit had felt that it did not have jurisdiction because the District was not a citizen, it could have ordered the case remanded to state court. But this issue was not even raised by the Court.

The issue in this motion is the question of whether or not this entity described heretofore should be considered a "citizen" for purposes of diversity of citizenship jurisdiction in this court, or rather is this entity the State of Louisiana, and therefore not a "citizen" for diversity jurisdictional purposes. In...