Orleans Par. Sch. Bd. v. City of New Orleans

• Decision Date: 03 June 2020
• Docket Number: NO. 2020-CA-0043,2020-CA-0043
• Parties: ORLEANS PARISH SCHOOL BOARD v. THE CITY OF NEW ORLEANS AND NORMAN WHITE, IN HIS OFFICIAL CAPACITY AS THE CHIEF FINANCIAL OFFICER FOR THE CITY OF NEW ORLEANS
• Court: Court of Appeal of Louisiana — District of US

ORLEANS PARISH SCHOOL BOARD
v.
THE CITY OF NEW ORLEANS AND NORMAN WHITE,
IN HIS OFFICIAL CAPACITY AS THE CHIEF FINANCIAL OFFICER
FOR THE CITY OF NEW ORLEANS

NO. 2020-CA-0043

COURT OF APPEAL FOURTH CIRCUIT STATE OF LOUISIANA

JUNE 3, 2020

APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH
NO. 2019-05174, DIVISION "J"
Honorable D. Nicole Sheppard,

Judge Daniel L. Dysart

(Court composed of Judge Edwin A. Lombard, Judge Daniel L. Dysart, Judge Tiffany G. Chase)

William D. Aaron, Jr.
Anna A. Rainer
AARON & GIANNA, PLC
201 St. Charles Avenue, Suite 3800
New Orleans, LA 70170
COUNSEL FOR PLAINTIFF/APPELLANT

James M. Garner
Debra J. Fischman
Timothy B. Francis
Ashley Gremillion Coker
Stuart D. Kottle
SHER GARNER CAHILL RICHTER KLEIN & HILBERT, L.L.C.
909 Poydras Street, 28th Floor
New Orleans, LA 70112-1033

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Sunni J. LeBeouf
CITY ATTORNEY
Donesia D. Turner
SENIOR CHIEF DEUPTY CITY ATTORNEY
Kimberly K. Smith
ASSISTANT CITY ATTORNEY
Tanya L. Irvin
ASSISTANT CITY ATTORNEY
1300 Perdido Street, Room 5E03
New Orleans, LA 70112

Ike Spears
Diedre Pierce Kelly
SPEARS & SPEARS
909 Poydras Street, Suite 1825
New Orleans, LA 70112
COUNSEL FOR DEFENDANT/APPELLEE

AFFIRMED IN PART, REVERSED IN PART, VACATED IN PART, AND REMANDED

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DLD
EAL
TGC

The Orleans Parish School Board ("OPSB") appeals a judgment from the Civil District Court for the Parish of Orleans, which denied its request for a writ of mandamus and a preliminary injunction. The City of New Orleans answered the appeal, seeking a reversal of the trial court's denial of two exceptions should this Court reverse the trial court's judgment denying the preliminary injunction and the mandamus.

For the reasons that follow, we find that the trial court erred in denying the OPSB's request for a preliminary injunction. We do not, however, find any error in its denial of the request for a mandamus. Nor do we find any abuse of the trial court's discretion in denying the City's exceptions of improper cumulation of actions and improper use of a summary proceeding, which were raised by the City in its answer to the appeal. However, we find that the trial court erred in its partial grant of the City's peremptory exception of no cause of action.

FACTUAL BACKGROUND

On May 15, 2019, the Orleans Parish School Board filed a "Petition for a Writ of Mandamus, or in the Alternative, for Preliminary and Permanent Injunction, Declaratory Judgment, and Damages." The Petition names as

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defendants the City of New Orleans and Norman White, in his capacity as the Chief Financial Officer for the City of New Orleans (collectively, the "City").

According to the Petition, the City, through the authority vested in it by the Louisiana Constitution, various statutes and the New Orleans Home Rule Charter, has collected ad valorem taxes and sales and use taxes on behalf of the OPSB. Those taxes, the OPSB maintains, are "dedicated and to be used exclusively for local elementary and secondary schools." However, according to the OPSB's Petition, the City has failed to disburse all of those taxes it has collected on the OPSB's behalf.

The OPSB further alleges that, since 2007, the City has been improperly using some of the taxes collected on the OPSB's behalf to fund its statutory obligations to various retirement funds. Those funds include the pension funds of the "City Clerks, the Assessors, New Orleans Firefighters, District Attorneys, Registrars of Voters, and Sheriffs."

Additionally, the Petition alleges that the City "has been unconstitutionally collecting an administrative fee for its collection of OPSB's taxes." The sums that the City has allegedly withheld amount to more than $7.6 million, which the City has used pay its pension fund obligations, and "approximately $3.4 million in administrative fees that City withholds each year." In addition to these sums, the OPSB alleges that, "[u]pon information and belief," that "the amount of funds improperly withheld by the City far exceeds" these amounts.

The Petition seeks relief in the following ways. First, it seeks a writ of mandamus, directing "the ministerial duty" of disbursing all past, present and future tax proceeds. Second, it seeks a preliminary and permanent injunction to bar the City from "withholding and/or diverting the proceeds of an ad valorem tax

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and sales and use taxes . . . for a purpose other than the exclusive benefit of the OPSB." Third, the Petition seeks, in the alternative, a declaratory judgment declaring that the City's actions in withholding and/or diverting the ad valorem taxes and sales and use taxes for purposes other than the OPSB's exclusive use violates Louisiana's Constitution and the New Orleans Home Rule Charter. The Petition also seeks a determination that La. R.S. 47:1997.1 is unconstitutional. Finally, and in the alternative, the Petition seeks damages in the amount "of all sums illegally withheld/diverted" by the City, judicial interest and costs.

The City responded to the Petition by filing several exceptions - declinatory exceptions of insufficiency of service of process, lack of subject matter jurisdiction, unauthorized use of a summary proceeding and improper use of summary proceeding; peremptory exceptions of no cause of action and prescription; and dilatory exceptions of improper cumulation of actions, and vagueness, which the OPSB opposed. Shortly before the City's exceptions and the OPSB's request for a preliminary injunction were scheduled for a hearing, the City filed a Motion to Stay the proceedings until the Supreme Court ruled on an application for a writ of certiorari in the matter entitled Downtown Dev. Dist. of City of New Orleans v. City of New Orleans, as it raised many of the same issues in the instant matter.¹ The trial court granted the motion to stay on July 19, 2019. The OPSB filed an application for a writ of supervisory review with this Court, seeking expedited relief. This Court granted the writ application, vacating the judgment granting the motion to stay, and ordering that the trial court conduct a

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hearing on the request for a preliminary injunction and mandamus. Orleans Parish School Board v. The City of New Orleans, et al, 19-C-0659 (La. App. 4th Cir. 8/8/19)(unpub.).

The matter then proceeded to a hearing on September 25, 2019 on the OPSB's Petition as well as the City's various exceptions.² By judgment dated October 25, 2019, the trial court denied the OPSB's request for a writ of mandamus, and its request for a preliminary injunction. The City's exceptions pertaining to subject matter jurisdiction, and insufficiency of service of process, were denied as moot. The exceptions raising the use of summary proceedings, the improper cumulation of actions, and vagueness were denied. The exception of prescription was deferred, while the exception of no cause of action was granted in part and deferred in part.

The OPSB timely appealed this judgment. The City answered the appeal, seeking to have the trial court's denial of its exceptions of improper use of a summary proceeding, improper cumulation of actions and vagueness reversed, in the event that this Court reverses the trial court's judgment denying the OPSB's request for a mandamus and preliminary injunction.³

DISCUSSION

In this appeal, the OPSB raises the following assignments of error. First, it contends that the trial court erred in denying its request for a preliminary

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injunction. It next contends that the trial court abused its discretion in denying its request for a writ of mandamus. Lastly, it contends that the trial court erred in granting, in part, the City's exception of no cause of action. As discussed more fully below, we agree with the OPSB that the trial court erred in denying its request for a preliminary injunction. We base this finding on our decision in the Downtown Dev. Dist. case, which addressed similar issues in the same context.⁴ We do not, however, find that the trial court erred in denying the request for a writ of mandamus. That issue, too, was addressed and rejected by the Downtown Dev. Dist. Court. Finally, we agree that the trial court erred in granting, in part, the exception of no cause of action, as our jurisprudence does not recognize a partial grant of an exception of no cause of action.

Turning to the trial court's denial of the City's exceptions, we find no abuse of the trial court's discretion in denying the exceptions of improper cumulation of actions and improper use of summary proceedings.

Statutory provisions

The authority for the OPSB, an agency of the State,⁵ to levy taxes is derived from the Louisiana Constitution. Article VIII of the Louisiana Constitution of 1974, entitled "Education," provides in Section 13(C) provides that "[l]ocal funds for the support of elementary and secondary schools shall be derived" from the sources provided therein. For the OPSB, the Article states:

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The Orleans Parish School Board shall levy annually a tax not to exceed thirteen mills on the dollar of the assessed valuation of property within the city of New Orleans assessed for city taxation, and shall certify the amount of the tax to the governing authority of the city. The governing authority shall have the tax entered on city tax rolls. The tax shall be collected in the manner, under the conditions, and with the interest and penalties prescribed by law for city taxes. The money thus collected shall be paid daily to the Orleans Parish School Board.

This is not the sole source of taxing authority vested with the OPSB by the Louisiana Constitution. Article VI of the Constitution, entitled "Local and Government" provides additional authority in Section 29 for a local governmental entity and a school board to levy taxes. It authorizes local governmental subdivisions, including school boards, to "levy and collect a tax upon the sale at retail, the use, the lease or rental, the consumption, and the storage for use or consumption, of tangible personal property and on sales of services as defined by law," except as otherwise...