In re Manson Constr. Co.

• Decision Date: 26 July 2012
• Docket Number: 11–3092.,Civil Action Nos. 11–3041
• Parties: In the Matter of MANSON CONSTRUCTION CO.
• Court: U.S. District Court — Eastern District of Louisiana

883 F.Supp.2d 659

In the Matter of MANSON CONSTRUCTION CO.

Civil Action Nos. 11–3041, 11–3092.

United States District Court, E.D. Louisiana.

July 26, 2012.

Evans Martin McLeod, Phelps Dunbar, LLP, New Orleans, LA, for Manson Construction Co.

ORDER AND REASONS

JAY C. ZAINEY, District Judge.

Before the Court is a Motion to Dismiss Plaintiffs' Complaint Pursuant to Fed.R.Civ.P. 12(b)(1) On Grounds of Eleventh Amendment Immunity (Rec. Doc. 15) filed by third-party defendants the State of Louisiana, through the Office of Coastal Protection and Restoration (“the State”). Third-party plaintiffs Pelican Island Oysters, Inc., Mitchell B. Jurisich, Jr., Mitchell B. Jurisich, Sr., Frank Jurisich, Althea Lynn Jurisich, Dannell Jurisich, Gulf Wave Oysters, Inc., Gulf Star Oysters, Inc., Little Mitch, Inc., Little Frank, Inc., Shell Island, Inc., Bayou Canard, Inc., Grasshopper Oysters, Inc., Prince Charming, Inc., Jurisich Oysters, L.L.C., and G.I. Joe, Inc. (Collectively, “Claimants”) oppose the motion. The motion, set for hearing on June 20, 2012, is before the Court on the briefs without oral argument.

I. BACKGROUND

This case involves losses allegedly incurred by numerous Southeast Louisiana oyster harvesters as a result of dredging operations performed by vessel owners at the direction of an agency of the State of Louisiana.

Vessel owners Manson Construction Co. and Great Lakes Dredge & Dock Co., LLC, (collectively “Complainants”) assert that between June of 2010 and April of 2011, Complainants' vessels performed certain dredging operations and offloaded materials in designated rehandling sites as a part of the “Barrier Berm Project.” ¹ According to Claimants, who are commercial oyster harvesters with oyster leases located in the coastal waters of Southeast Louisiana, said operations involved dredging and pumping sand near or upon Claimants' oyster leases.

Claimants subsequently alleged that they sustained damage to their oyster leases as a result of the dredging operations, and filed suit in the Twenty–Fifth Judicial District on June 10, 2011.² Claimants sued the State, as well as Complainants, two state contractors, and several subcontractors, ³ based on those defendants' participation in the Barrier Berm Project. In the state court complaint, Claimants assert that they have a proprietary interest in and were the lease holders of numerous state waterbottoms used for oyster bedding purposes located in the Parish of Plaquemines, Louisiana. Claimants allege that Complainants' vessels and tows crossed their oyster leases, causing wheel washing, and that these operations rendered the leases unsuitable for oyster evaluation purposes. According to Claimants, Complainants' activities resulted in a dramatic increase in oyster mortality rates on the oyster leases and water bottoms. Claimants further alleged that the State should be held liable for negligently authorizing and supervising Complainants' operations.

On December 9 and December 16, 2012, Complainants Manson Construction Co. and Great Lakes Dredge & Dock Co. filed separate Complaints for Exoneration from or Limitation of Liability in this Court.⁴ Complainants each sought statutory relief under the Shipowner's Limitation of Liability Act, 46 U.S.C. §§ 30501 et seq., as a result of damage allegedly caused to the oyster leases owned by Claimants. Said complaints were later consolidated into the instant action (Rec. Doc. 5).

On March 19, 2012, Claimant oyster harvesters filed an Answer and Claim in the instant consolidated limitation proceedings (Rec. Doc. 13). The claim essentially reiterates the allegations of the state court complaint: that Complainants negligently conducted dredging operations upon and in the vicinity of Claimants' oyster leases, and that Complainants' activities have resulted in excessive siltation, damage to oysters, and other harmful effects to the water and waterbottoms on said oyster leases which make them unsuitable for oyster cultivation purposes. According to Claimants, Complainants' actions have diminished the value of Claimants' leasehold interests and have resulted in severe losses of income to Claimants.

Claimants also filed a third-party complaint against the State, asserting jurisdiction based on 1) admiralty pursuant to Rule 9(h) of the Federal Rules of Civil Procedure and 28 U.S.C. § 1333; 2) federal question jurisdiction pursuant to 28 U.S.C. § 1331, because Complainants have indicated that they are exempt from liability under the Oil Pollution Act, 33 U.S.C. § 1321; and 3) federal question jurisdiction pursuant to 28 U.S.C. § 1331, because Complainants have indicated that the activities causing the alleged injuries were “removal actions” designed to contain and remove oil associated with the Deepwater Horizon oil spill disaster on the Outer Continental Shelf, thus triggering OCSLA jurisdiction pursuant to 43 U.S.C. § 1349.

The State subsequently filed the instant motion to dismiss the third-party complaint for lack of jurisdiction under Fed.R.Civ.P. 12(b)(1) (Rec. Doc. 15), requesting that the Court dismiss the claims against it in this matter on the grounds of the State's Eleventh Amendment right to sovereign immunity against suits in federal court. The State asserts that it has not waived its sovereign immunity by any actions or by legislative enactment. Claimants counter that the State waived its right to claim state sovereign immunity in this Court when it filed multiple lawsuits seeking to recover its expenses from third parties for the same actions which allegedly caused Claimants' damages.

II. STANDARD OF REVIEW

Federal courts are courts of limited jurisdiction and possess power over only those cases authorized by the United States Constitution and federal statutes. Coury v. Prot, 85 F.3d 244, 248 (5th Cir.1996). If a district court lacks jurisdiction over the subject matter of a plaintiff's claims, dismissal is required. See Fed.R.Civ.P. 12(b)(1). The lack of subject matter jurisdiction may be raised at any time during the pendency of the case by any party or by the court. See Kontrick v. Ryan, 540 U.S. 443, 456, 124 S.Ct. 906, 157 L.Ed.2d 867 (2004) (“A litigant generally may raise a court's lack of subject-matter jurisdiction at any time in the same civil action, even initially at the highest appellate instance.”); McDonal v. Abbott Labs., 408 F.3d 177, 182 n. 5 (5th Cir.2005) (“[A]ny federal court may raise subject matter jurisdiction sua sponte.”).

In ruling on a Rule 12(b)(1) motion to dismiss, the court may rely on (1) the complaint alone, presuming the allegations to be true, (2) the complaint supplemented by undisputed facts, or (3) the complaint supplemented by undisputed facts and by the court's resolution of disputed facts. Den Norske Stats Oljeselskap As v. HeereMac Vof, 241 F.3d 420, 424 (5th Cir.2001); see also Barrera–Montenegro v. United States, 74 F.3d 657, 659 (5th Cir.1996). A court's dismissal of a case for lack of subject matter jurisdiction is not a decision on the merits, and the dismissal does not ordinarily prevent the plaintiff from pursuing the claim in another forum. See Hitt v. City of Pasadena, 561 F.2d 606, 608 (5th Cir.1977).

The burden of proof for a Rule 12(b)(1) motion to dismiss is on the party asserting jurisdiction. Ramming v. United States, 281 F.3d 158, 161 (5th Cir.2001) (citing McDaniel v. United States, 899 F.Supp. 305, 307 (E.D.Tex.1995)). The standard for review of a motion to dismiss under Rule 12(b)(1) is the same as that for a motion to dismiss pursuant to Rule 12(b)(6); that is, a court may not dismiss a claim unless it appears certain that the “plaintiff cannot prove any set of facts in support of [his] claim which would entitle [him] to relief.” United States v. City of New Orleans, 2003 WL 22208578, at *1, No. Civ. A. 02–3618 (E.D.La. Sept. 19, 2003) (quoting Benton v. United States, 960 F.2d 19, 21 (5th Cir.1992)); See also Williams v. Wynne, 533 F.3d 360, 364–65 n. 2 (5th Cir.2008) (observing that the Rule 12(b)(1) and Rule 12(b)(6) standards are similar, but noting that applying the Rule 12(b)(1) standard permits the Court to consider a broader range of materials in resolving the motion).

III. LAW AND ANALYSISA. The Eleventh Amendment and Sovereign Immunity in General

The Eleventh Amendment of the U.S. Constitution provides as follows:

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.

This language expressly encompasses not only suits brought against a state by citizens of another state, but suits against a state by citizens of that same state as well. See Hans v. Louisiana, 134 U.S. 1, 10 S.Ct. 504, 33 L.Ed. 842 (1890) and Papasan v. Allain, 478 U.S. 265, 276, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986); see also Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 98, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984); Edelman v. Jordan, 415 U.S. 651, 663, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974). Although the amendment refers only to suits “in law or equity,” a state's sovereign immunity under the Eleventh Amendment extends also to suits brought under the admiralty and maritime jurisdiction of the federal courts. Ex parte Madrazzo, 32 U.S. (7 Pet.) 627, 8 L.Ed. 808 (1833); Ex parte State of New York, 256 U.S. 490, 41 S.Ct. 588, 65 L.Ed. 1057 (1921); Intracoastal Transportation, Inc. v. Decatur County, Georgia, 482 F.2d 361 (5th Cir.1973) (overruled on other grounds). In addition, “a state's Eleventh Amendment immunity extends to any state agency or entity deemed an alter ego or arm of the state. Perez v. Region 20 Educ. Service Center, 307 F.3d 318, 326 (5th Cir.2002).

In general, therefore, a suit in which the State or one of its agencies or departments is named as the defendant is proscribed by the Eleventh Amendment. Lewis v. University of Texas Medical Branch at Galveston, 665...