Mid-City Auto., L.L.C. v. State
| Decision Date | 08 April 2022 |
| Docket Number | s. 2021 CA 1024,2021 CW 0680 |
| Citation | 342 So.3d 50 |
| Parties | MID-CITY AUTOMOTIVE, L.L.C. v. State of Louisiana, The DEPARTMENT OF PUBLIC SAFETY AND CORRECTIONS, OFFICE OF STATE POLICE |
| Court | Court of Appeal of Louisiana — District of US |
Dennis J. Phayer, Jenna H. Lin, Metairie, Louisiana, Attorney for Defendant/Appellant, The State of Louisiana, through the Department of Public Safety and Corrections, Office of State Police
Larry S. Bankston, Baton Rouge, Louisiana, Attorneys for Plaintiffs/Appellees, Mid-City Automotive, LLC, Riverside Towing, Inc., and similarly Situated individuals and entities
BEFORE: McDONALD, LANIER, AND WOLFE, JJ.
The State of Louisiana, through the Department of Public Safety and Corrections, Office of State Police, appeals a summary judgment ordering it to reimburse the plaintiff class $851,185.83, which was collected pursuant to a schedule of fines that was declared unconstitutional, as well as judicial interest and costs. A supervisory writ application filed by the Office of State Police that seeks review of the trial court's denial of its exception of lack of subject matter jurisdiction was also referred to this panel for consideration. We deny the writ application and affirm the summary judgment.
The facts and procedural history of this matter are set forth in this court's prior decisions of Mid-City Automotive, L.L.C. v. Department of Public Safety and Corrections, 2018-0056 (La. App. 1st Cir. 11/7/18), 267 So.3d 165 (Mid-City I), and Mid-City Automotive, L.L.C. v. Department of Public Safety and Corrections, 2019-1429 (La. App. 1st Cir. 9/21/20), 314 So.3d 36 (Mid-City II). In short, Mid-City Automotive, LLC, instituted this suit for declaratory judgment and injunctive relief, challenging the constitutionality of certain provisions of LAC 55:1.1907(A), including the schedule of fines promulgated by the Office of State Police pursuant to its regulatory authority under The Louisiana Towing and Storage Act. See La. R.S. 32:1714. In Mid-City I, this court rendered judgment declaring that the schedule of fines set forth in LAC 55:1.1907(A)(4) was invalid due to an unconstitutional delegation of legislative authority to the Office of State Police and issued an injunction against further enforcement of the fines.1 Mid-City I, 267 So.3d at 178.
Mid-City then amended its petition to add Riverside Towing, Inc., as a plaintiff and assert a class action seeking reimbursement of all fines paid under the provision declared invalid in Mid-City I. The trial court granted the plaintiffs’ motion for class certification and certified the class of plaintiffs to include "all persons, natural and/or juridical, who have paid a fine pursuant to the Schedule of Fines, LAC 55:1.1907(A), in the state of Louisiana from October 20, 2009, through the present, as a result of the application of LAC 55:1.1907(A)." Mid-City II, 314 So.3d at 39. The Office of State Police appealed and this court affirmed the trial court's judgment, rejecting the Office of State Police's argument that the plaintiffs’ claims were prescribed. Mid-City II, 314 So.3d at 42.
Following this court's decision in Mid-City II, the plaintiff class filed a motion for summary judgment, seeking full repayment of the amounts the Office of State Police fined and collected from them under LAC 55:1.1907(A), which totaled $851,185.83. The plaintiffs argued that since this court declared the schedule of fines to be unconstitutional, the provision is void ab initio and all acts done pursuant thereto are void and of no effect. The plaintiffs further argued that since the unlawfully collected fines were their private property, the Office of State Police was obligated to refund them.
The Office of State Police then filed an exception of lack of subject matter jurisdiction based on sovereign immunity. The Office of State Police contended the plaintiffs’ claims were for unjust enrichment and "[could] only be characterized as quasi-contractual in nature." Consequently, the Office of State Police argued, the plaintiffs’ claims do not fall within the scope of the state's waiver of sovereign immunity from suits in contract or tort found in La. Const. art. XII, Sect. 10 (A), and the court lacked jurisdiction to entertain them. The plaintiffs’ disputed the Office of State Police's characterization of their claims as quasi-contractual. The plaintiffs argued that the state is not immune from suits brought against it where a public entity is proceeding in violation of law, which they point out has been determined in this case; therefore, the plaintiffs contended, due process demands the return of the plaintiffs’ unconstitutionally taken property. They further argued that the licensee and licensor relationship between the plaintiffs and the state is contractual and falls within the state's waiver of sovereign immunity.
In its opposition to the motion for summary judgment, the Office of State Police contended that the plaintiffs failed to demonstrate they were entitled to judgment as a matter of law, raising the same issue of sovereign immunity. Alternatively, the Office of State Police argued that issues of fact precluded the retroactive application of Mid-City I and this court's declaration that LAC 55:1.1907(A) is unconstitutional. In essence, the Office of State Police argued that reimbursement would result in injustice and hardship on the state and its citizens because the money has already been spent on governmental operations and programs.
The trial court denied the Office of State Police's exception of lack of subject matter jurisdiction and granted the plaintiffs’ motion for summary judgment, ordering the Office of Sate Police to repay the plaintiffs $851,185.83, plus judicial interest and court costs. The Office of State Police suspensively appealed the summary judgment and filed an application for supervisory writ that seeks review of the trial court's ruling on the exception.
Subject matter jurisdiction is the legal power and authority of a court to adjudicate a particular matter involving the legal relations of the parties and to grant the relief to which the parties are entitled. La. Code Civ. P. arts. 1 and 2. It cannot be conferred by the consent of the parties or waived. La. Code Civ. P. art. 3. The issue of subject matter jurisdiction may be raised at any stage of the proceeding and must be considered as a threshold issue even if it is not raised by the parties. See Boudreaux v. State, Department of Transportation and Development, 2001-1329 (La. 2/26/02), 815 So.2d 7, 12-13.
Sovereign immunity bars a court from exercising jurisdiction in suits against the state unless the state has elected to waive its immunity. See Coleman v. Court of Appeals of Maryland, 566 U.S. 30, 132 S.Ct. 1327, 1333, 182 L.Ed.2d 296 (2012). Article XII, Section 10 2 of the Louisiana Constitution of 1974 contains an unequivocal, self-executing waiver of the state's sovereign immunity as to suit and liability in contract and tort cases. Fulmer v. State, Department of Wildlife and Fisheries, 2010-2779 (La. 7/1/11), 68 So.3d 499, 503, cert. denied 565 U.S. 1198, 132 S.Ct. 1622, 182 L.Ed.2d 165 (2012). The plain language of the provision does not include a waiver of immunity for quasi-contractual unjust enrichment claims. Canal/Claiborne, Limited v. Stonehedge Development, LLC, 2014-0664 (La. 12/9/14), 156 So.3d 627, 634. Accordingly, courts lack subject matter jurisdiction to entertain quasi-contractual unjust enrichment claims against the state. Canal/Claiborne, 156 So.3d at 640.
The Office of State Police likens the plaintiffs’ claims to the unjust enrichment claims presented in Canal/Claiborne. That case involved a property owner's claims for lost rental income against a state agency that sub-leased the plaintiff's property. Canal/Claiborne, 156 So.3d at 630-31. The Louisiana Supreme Court found there was no privity of contract between the plaintiff and state agency under the sublease contract and that the agency was not liable to the plaintiff pursuant thereto. Canal/Claiborne, 156 So.3d at 633. The Court then determined that the plaintiff's claim for unjust enrichment under La. Civ. Code art. 22 983 was not within the scope of the state's waiver of sovereign immunity from suit in liability in contract or for injury to person or property found in La. Const. Art. XII, Sect. 10 (A). Canal/Claiborne, 156 So.3d at 634, 640.
We agree with the plaintiffs that Canal/Claiborne is factually distinguishable from the case sub judice. Canal/Claiborne did not involve a claim for repayment of fines determined to be unconstitutional and the plaintiffs in this case have not asserted clams for unjust enrichment. "The root principle of unjust enrichment is that the plaintiff suffers an economic detriment for which he should not be responsible, while the defendant receives an economic benefit for which he has not paid." Quaternary Resource Investigations, LLC v. Phillips, 2018-1543 (La. App. 1st Cir. 11/19/20), 316 So.3d 448, 462, writ denied, 2020-01450 (La. 3/2/21), 311 So.3d 1059. Here, the plaintiffs seek reimbursement of unconstitutional fines collected by the Office of State Police as an exercise of its police power. See La. R.S. 32:1711 ; Mid-City I, 267 So.3d at 177. The plaintiffs’ claims do not sound in unjust enrichment.
It is a well-settled principle of law that sovereign immunity does not shield the state (or its agencies) from suits challenging the constitutionality of the state's acts. See Carso v. Board of Liquidation of State Debt, 205 La. 368, 374, 17 So.2d 358, 360 (La. 1944) ; City of Natchitoches v. State, 221 So.2d 534, 539 (La. App. 3rd Cir.), writs denied, 254 La. 463 and 464, 223 So.2d 870 (1969) ; see also Stanwood R. Duval, Sovereign Immunity, Anachronistic or Inherent: A Sword or A Shield?, 84 Tul. L. Rev. 1471, 1479 (2010) (...
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