N. Atl. Sec. Co. v. Blache

• Decision Date: 10 November 2020
• Docket Number: CIVIL ACTION NO. 19-379-EWD (CONSENT)
• Parties: NORTH ATLANTIC SECURITY COMPANY v. FABIAN BLACHE, ET AL.
• Court: U.S. District Court — Middle District of Louisiana

NORTH ATLANTIC SECURITY COMPANY v. FABIAN BLACHE, ET AL.

CIVIL ACTION NO. 19-379-EWD (CONSENT)

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF LOUISIANA

November 10, 2020

RULING AND ORDER ON MOTION TO DISMISS

Before the Court is a Motion To Dismiss the Revised Complaint (the "Motion"),¹ filed by Defendant Fabian Blache ("Blache"). The Motion is opposed by Plaintiff North Atlantic Security Company ("North Atlantic"),² and Blache has filed a reply memorandum.³ As North Atlantic has alleged sufficient information to survive dismissal, and questions of fact preclude resolution of the claims at this time, the Motion is denied.⁴

I. Background

On or about March 29, 2019, North Atlantic filed a "Petition for Damages under 42 USC 1983" (the "Petition") naming Ritchie Rivers ("Rivers") and Blache as defendants in their individual capacities.⁵ The Petition alleges that Blache, the executive director of the Louisiana Board of Private Security Examiners (the "Board"), and Rivers, a member of the Board, improperly fined North Atlantic and revoked North Atlantic's license to operate as a private security company in Louisiana in violation of the Eighth and Fourteenth Amendments to theUnited States Constitution.⁶ The facts of the Petition, which are accepted as true for purposes of the Motion, are as follows:

The revocation arose as the result of a tip from Rivers, who also operates a security company, to Blache that the firearms certification of security guard Joshua Lands ("Lands") had lapsed on August 11, 2018. Lands worked for North Atlantic at an armed post, and for Rivers at an unarmed post.⁷ Rivers or someone employed by Rivers told Lands not to worry about attending firearms refresher training.⁸ Rivers and Blache orchestrated this "power play" using Lands as an "unwitting pawn" in order to effect the revocation of North Atlantic's license because North Atlantic, a Mississippi company, had secured "lucrative contracts in Louisiana" which Rivers and Blache believed should have gone to Louisiana companies.⁹ Acting on the tip, Blache conducted an unannounced inspection of Lands at his North Atlantic post on August 14, 2018, and learned that the Lands' firearm certification had lapsed three days earlier and Lands did not have the proper paperwork.¹⁰ Later that day, Blache issued a cease and desist order to North Atlantic; advised North Atlantic that its license was being revoked for having a guard with an unauthorized weapon, which was grounds for immediate action; fined North Atlantic $9,500; and notified all of North Atlantic's clients that its license had been revoked.¹¹ However, at the request of the State of Louisiana, the revocation was made effective on August 31,2018 so that the State could get other companies to handle North Atlantic's contracts.¹²

As a result of Rivers' and Blache's actions, all of North Atlantic's clients "began scrambling to get other security companies to take over" North Atlantic's contracts, some of which companies also sat on the Board and thus had conflicts of interest.¹³ By the end of August 2018, North Atlantic "had been destroyed as a viable company in Louisiana" and "lost millions of dollars."¹⁴ Blache's actions in immediately revoking North Atlantic's license without a board vote or a hearing was in violation of La. R.S. 37:3289 and North Atlantic's Fourteenth Amendment due process rights.¹⁵ North Atlantic's damages "exceed $2 million" and include "loss of income, past, present and future;" "[v]iolation of Constitutional rights of due process before deprivation of property under the Fourteenth Amendment to the Constitution;" "[e]xcessive fines, in violation of the Excessive fines clause of the Eighth Amendment...;" as well as punitive damages and attorney fees.¹⁶

On June 11, 2019, Rivers filed a Notice of Removal asserting this Court has federal subject matter jurisdiction pursuant to both 28 U.S.C. § 1331¹⁷ and § 1332.¹⁸ On August 20, 2019, North Atlantic filed a Motion for Leave to File First Amended Complaint,¹⁹ which was granted in part,²⁰permitting North Atlantic to add a due process claim under Article I, Section 2 of the Louisiana Constitution.²¹ North Atlantic was also permitted to assert that Blache's testimony at the hearing in support of immediate revocation, i.e. that Lands' weapon was "unauthorized," was a "tortured application of the law" because Lands' .38 caliber handgun was an authorized weapon according to the Board's regulations.²² Thereafter, both Rivers and Blache filed Motions to Dismiss.²³ North Atlantic dismissed its claims against Rivers with prejudice.²⁴

II. Legal Standard on Fed. R. Civ. P. 12(b)(6) Challenge

In Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal,²⁵ the United States Supreme Court addressed the standard of pleading that a plaintiff must meet in order to survive a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6). Specifically, "[f]actual allegations must be enough to raise a right to relief above the speculative level."²⁶ "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'"²⁷ "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."²⁸ It follows that, "where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not 'show[n]' - 'that the pleader is entitled to relief.'"²⁹ "Where a Complaint pleads facts that are 'merely consistent with' adefendant's liability, it 'stops short of the line between possibility and plausibility of entitlement to relief.'"³⁰

On a motion to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6), the Court "must accept as true all of the factual allegations contained in the Complaint."³¹ While factual assertions are presumed to be true, "labels and conclusions" or "a formulaic recitation of the elements of a cause of action" alone are not enough to withstand a Fed. R. Civ. P.12(b)(6) motion.³²

III. Analysis

A. Louisiana Laws, Regulations, and Administrative Procedures Regarding Private Security Businesses and Governance by the Board

Three sets of laws and administrative provisions are applicable to private security businesses in Louisiana; namely: (1) Louisiana's Private Security Regulatory and Licensing Law, at La. R.S. 37:3270 et seq.; (2) the Board's regulations set forth in Title 46, Part LIX of the Louisiana Administrative Code ("La. Admin. Code") and (3) Louisiana's Administrative Procedures Act ("APA"), La. R.S. 49:950, et seq.³³

Powers and Duties of the Board

La. R.S. 37:3273 creates the Board as an agency of the State of Louisiana within the Department of Public Safety and Corrections, which is authorized to adopt rules and regulations governing the practice of private security, and is also authorized to suspend, modify or revoke license or registration cards to provide private security.³⁴ The Board is authorized to investigatealleged violations of the law, rules, and regulations related to private contract security companies.³⁵ Likewise, according to the regulations, the Board "may investigate the actions of any licensee. The investigation shall be conducted for the purpose of determining whether a licensee is in compliance with R.S. 37:3270-3298" and the Board's regulations.³⁶ Such investigations "are of alleged violations by a licensee or registrant as a result of a complaint" and prior written and verbal notification of the investigation is not required.³⁷

Private Security Businesses and Security Officers

Security officers must apply to the Board for a registration card. They must carry the card when performing the duties for which they are registered and must show the card to authorized Board representatives upon request. The registration card entitles the officer to perform the duties described in the law as long as the officer maintains his legal eligibility.³⁸ Among other registration requirements, and pertinent to the instant Motion, security officers are required to complete firearms training and range qualifications prior to their initial armed assignment, as well as an annual firearms retraining course.³⁹

Cease and Desist Orders

In addition to, or in lieu of, the criminal penalties and administrative sanctions otherwise provided (see below), the Board "is empowered to issue an order to any person or firm engaged inany activity, conduct, or practice constituting a violation..., directing such person or firm to forthwith cease and desist from such activity, conduct, or practice. Such order shall be issued in the name of the state of Louisiana, under the official seal of the board."⁴⁰ The regulations provide for the appointment of an executive secretary to serve as the Chief Administrative Officer of the Board, e.g., Blache, who has the authority to "sign off on" cease and desist orders.⁴¹

Administrative Penalties

La. R.S. 37:3288, "Administrative Penalties," provides, in pertinent part:

A. (1) Any person who is determined by the board, after reasonable notice and opportunity for a fair and impartial hearing held in accordance with the Administrative Procedure Act, to have committed an egregious act that is a violation of this Chapter or regulation or rule issued thereunder is subject to an administrative penalty of not more than five thousand dollars per violation per day and shall subject such person to revocation of his license. Such egregious acts shall include but not be limited to the following:

...

(e) Operating a private security business without obtaining the required firearms training.

(2) Any person committing any non-egregious acts in violation of this Chapter or any regulation or rule issued thereunder is subject to an administrative penalty of not more than one thousand dollars per violation per day.⁴²

Further, 46 La. Admin. Code, tit. 46, Pt LIX, §...