Dixie Brewing Co. v. U.S. Department of Veterans Affairs
Opinion of the Court
ORDER AND REASONS
Before the Court is Dixie Brewing Company’s motion for a preliminary and permanent injunction. For the reasons that
Background
This dispute arises out of the ongoing construction of the Louisiana State University-Veterans Affairs Medical Center located in the New Orleans Mid-City neighborhood, which will replace Charity Hospital and the downtown New Orleans VA Medical Center.
The construction of the LSU-VA Medical Center has been controversial,
On April 29, 2010, LSU filed a petition in state court for access to the Dixie property for the purpose of inspecting and evaluating the property to make a just compensation offer. The petition was granted, and, after inspection, LSU tendered an offer of compensation to Dixie, which Dixie rejected. On February 16, 2011, Dixie filed a petition for a declaratory judgment, temporary restraining order, and injunctive relief in state court to prevent LSU from expropriating the Dixie parcel. The temporary restraining order was granted and subsequently dissolved on February 25, 2011; LSU’s exception was upheld and the suit was dismissed with prejudice. Dixie did not seek appellate review. On February 25, 2011, relying on its quick-take authority, LSU filed a petition for expropriation of the Dixie parcel in state court, which was granted. LSU took possession of the Dixie property the same day, and the land was ultimately transferred to the VA. On June 3, 2011, Dixie filed a motion to dismiss LSU’s petition for expropriation in state court, challenging the constitutionality of LSU’s quick-take authority. The motion has yet to be ruled on and it appears no hearing date is currently set.
Approximately six months later, on January 27, 2012, Dixie filed a petition for a
On March 12, 2013, Dixie sued the VA, Clark Construction Group, LLC, and McCarthy Building Companies, Inc. in this Court,
Legal Standard
It is well settled that “preliminary injunction is an extraordinary remedy that should not be granted unless the party seeking it has clearly carried the burden of persuasion.” Bluefield Water Ass’n v. City of Starkville, Miss., 577 F.3d 250, 253 (5th Cir. 2009) (quoting Lake Charles Diesel, Inc. v. Gen. Motors Corp., 328 F.3d 192, 196 (5th Cir. 2003)); see also Mazurek v. Armstrong, 520 U.S. 968, 972, 117 S.Ct. 1865, 138 L.Ed.2d 162 (1997) (noting that preliminary injunctions are “extraordinary and drastic” forms of judicial relief that should’ not be granted absent “a clear showing”); PCI Transp., Inc. v. Fort Worth & W. R.R. Co., 418 F.3d 535, 545 (5th Cir. 2005). The Court can issue an injunction only if the movant shows:
(1) a substantial likelihood of prevailing on the merits;
(2) a substantial threat of irreparable injury if the injunction is not granted;
(3) the threatened injury outweighs any harm that will result to the nonmovant if the injunction is granted; and
(4) the injunction will not disserve the public interest.
Ridgely v. Fed. Emergency Mgmt. Agency, 512 F.3d 727, 734 (5th Cir. 2008).
I. Discussion
Dixie seeks an injunction barring the VA, Clark Construction Group, and McCarthy Building Companies, from demolishing the Dixie property until the ongoing state-court litigation is decided. Specifically, Dixie posits that construction should not proceed when the constitutionality of LSU’s expropriation remains unresolved. The Court need not address the merits of Dixie’s motion because the Court lacks subject-matter jurisdiction.
A. •
Federal courts are courts of limited jurisdiction, possessing only the authority granted by the United States Constitution and conferred by the United States Congress. Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001). The Court “must presume that a suit lies outside this limited jurisdiction, and the burden of, establishing federal jurisdiction rests on the party seeking the federal forum.” Id. (citing Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377,114 S.Ct. 1673, 128 L.Ed.2d 391 (1994)). Dixie contends that this Court has subject-matter jurisdiction in two ways: federal question jurisdiction and diversity jurisdiction. See 28 U.S.C. §§ 1331, 1332 (2006). The Court addresses each in turn.
B.
Dixie submits that the Court has federal question jurisdiction pursuant to the Tucker Act, 28 U.S.C. § 1491 (2006), which waives the federal government’s sovereign immunity for certain contract claims. The Tucker Act states:
Both the United States Court of Federal Claims and the district courts of the United States shall have jurisdiction to render judgment on an action by an interested party objecting to a solicita*814 tion by a Federal agency for bids or proposals for a proposed contract or to a proposed award or the award of a contract or any alleged violation of statute or regulation in connection with a procurement or a proposed procurement. Both the United States Court of Federal Claims and the district courts of the United States shall have jurisdiction to entertain such an action without regard to whether suit is instituted before or after the contract is awarded.
28 U.S.C. § 1491(b)(1). Congress, however, clearly and unequivocally terminated district court jurisdiction under this Act as of January 1, 2001. See Rothe Dev., Inc. v. U.S. Dep’t of Def., 666 F.3d 336, 338 (5th Cir. 2011) (“Congress subjected the district courts’ jurisdiction to a sunset provision, terminating district court jurisdiction as of January 1, 2001. (citing Administrate Dispute Resolution Act of 1996, Pub.L. No. 104-320, 110 Stat. 3870, 3875 (1996)”)). Congress did not renew the district courts’ jurisdiction, and the Court of Federal Claims now retains exclusive jurisdiction over “action[s] by an interested party” objecting to the bid or award of a contract by a federal agency.
Dixie fails to identify any other statute that presents a federal question or that waives the VA’s sovereign immunity. The Court notes that “[t]he basic, rule of federal sovereign immunity is that the United States cannot be sued at all without the consent of Congress.” Block v. North Dakota, 461 U.S. 273, 287, 103 S.Ct. 1811, 75 L.Ed.2d 840 (1983). The Fifth Circuit mandates that “a waiver of sovereign immunity must be specific and explicit and cannot be implied by construction of an ambiguous statute.” Petterway v. Veterans Admin. Hosp., Rous., Tex., 495 F.2d 1223, 1225 n. 3 (5th Cir. 1974). By relying on the Tucker Act, which no longer confers jurisdiction on this Court, Dixie cannot establish federal question jurisdiction or waiver of sovereign immunity.
C.
Dixie also contends that the Court has diversity jurisdiction under 28 U.S.C. § 1332. Again, as movant, Dixie bears the burden of proving that “complete diversity” exists and that the amount in controversy exceeds $75.000.
Generally, jurisdiction is determined at the time the lawsuit is filed. The U.S. Supreme Court has stated that “if jurisdic
Here, Dixie is a citizen of Louisiana; McCarthy Building Companies a citizen of Missouri; and Clark Construction Group a citizen of Maryland.
In Freeport-McMoRan, Inc. v. KN Energy, Inc., the U.S. Supreme Court addressed the substitution of a nondiverse plaintiff under Rule 25(c) of the Federal Rules of Civil Procedure, and held that “if jurisdiction exists at the time any action is commenced, such jurisdiction may not be divested by subsequent events.” 498 U.S. at 428, 111 S.Ct. 858. Although this sweeping language is arguably applicable here, the Fifth Circuit, and numerous other courts, have rejected a broad interpretation of Freeporb-McMoRan and have limited its application to cases involving the addition of parties under Rule 25. See Cobb v. Delta Exports, Inc., 186 F.3d 675, 680 (5th Cir. 1999) (explaining that Freeporb-McMoRan is limited to the context of an additional party substituted pursuant to Rule 25); Ingram v. CSX Transp., Inc., 146 F.3d 858, 861 (11th Cir. 1998) {‘Freeporb-McMoRan does not stand for the proposition that all additions of nondiverse parties are permissible as long as complete diversity existed at the time of the commencement of the lawsuit.”); see also In re
(1) Intervention
The magistrate judge granted LSU’s motion to intervene; however, it is unclear whether LSU was allowed to intervene under Rule 24(a)(2) or (b)(1)(B). The Court finds that LSU intervened as of right under Rule 24(a)(2).
The Fifth Circuit has developed a four-prong test for determining whether intervention should be as of right: (1) the application must be timely; (2) the applicant must have an interest relating to the subject matter of the litigation; (3) the applicant must be so situated that the outcome of the case may, as a practical matter, impair or impede the applicant’s ability to protect that interest; and (4) the interest must be one not adequately represented by the existing parties.
First, LSU’s motion to intervene was timely, having been filed nine days after Dixie filed suit in this Court. Second, LSU has an interest relating to the subject matter of the litigation — an understatement to say the least. The Fifth Circuit has defined “interest” as one that is “direct, substantial, [and] legally protectable.” Saldano v. Roach, 363 F.3d 545, 551 (5th Cir. 2004) (alteration in original) (quoting John Doe 1 v. Glickman, 256 F.3d 371, 379 (5th Cir. 2001)). The thrust of Dixie’s argument challenges the actions of LSU, not the VA. Specifically, Dixie alleges that “[t]o this date, Dixie has not received an offer to buy back their property. Instead, LSU has, without proper title or a final judgment designating that its taking of the property passed constitutional muster, LSU has ‘sold’ the property to the VA.” Dixie emphasizes that “LSU transferred the Dixie Parcel, in knowing and willful
(2) Indispensability
Having concluded that LSU is an intervenor as of right, and because LSU’s presence would destroy complete diversity, the Court must determine whether LSU is an indispensable party under Rule 19(b). The factors the Court must consider include: •
(1) the extent to which a judgment rendered in the person’s absence might prejudice that person or the existing parties;
(2) the extent to which any prejudice could be lessened or avoided by:
(A) protective provisions in the judgment;
(B) shaping the relief;
(C) other measures;
(3) whether a judgment rendered in the person’s absence would be adequate; and
(4) whether the plaintiff would have an adequate remedy if the action were dismissed for nonjoinder.
Fed.R.CivJP. 19(b). The Court is mindful that a Rule 19(b) inquiry is a “highly-practical, fact-based endeavor.” Hood ex rel. Miss. v. City of Memphis, Tenn., 570 F.3d 625, 628 (5th Cir. 2009); AT & T Commc’n v. BellSouth Telecomm. Inc., 238 F.3d 636, 658 (5th Cir. 2001) (“The determination of whether a party is ‘indispensable’ is thus a pragmatic one.”).
(a) Any Prejudice to Intervenor or Existing Parties
As previously mentioned, the Court notes that any judgment rendered in LSU’s absence would prejudice LSU, especially if the Court were to address the merits of the action. An examination of the state’s expropriation power, without input from LSU, would be prejudicial. Therefore this factor weighs in favor of finding LSU as indispensable.
(b) Lessening or Avoidance of Prejudice
As to the extent to which any prejudice could be lessened or avoided, no alternative remedies or forms of relief have been proposed to the Court or appear to be
(c) Adequacy of Judgment in Intervenor’s Absence
In the Rule - 19(b) context, “adequacy refers to the public stake in settling disputes by wholes, whenever possible.” Republic of Philippines v. Pimentel, 553 U.S. 851, 870, 128 S.Ct. 2180, 171 L.Ed.2d 131 (2008). The third Rule 19(b) factor focuses on the “social interest in the efficient administration of justice and the avoidance of multiple litigation.” Id. (quoting III. Brick Co. v. Illinois, 431 U.S. 720, 738, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977)). The Court finds that going forward with this action without LSU would not further the public interest in settling this dispute as a whole, especially in light of the fact that LSU is a party to all ongoing state-court litigation. This factor weighs .heavily toward indispensability.
(d) Adequacy of Dixie’s Remedy if Action Dismissed
The Court finds that Dixie would not be severely prejudiced by dismissal of this action. Specifically, the Court notes that the case is in its early stage' (at least at the federal level) and no-hearings-have been held. All discovery would have been previously conducted for purposes of the state court litigation. State court provides Dixie with an adequate, although perhaps not strategically preferred, remedy. See Scoggins v. Fredrick, 629 F.2d 426, 427 (5th Cir. 1980) (explaining that the final factor under Rule 19(b) is to consider whether there is an adequate forum to determine the interests of all parties if the suit is dismissed).
Under these circumstances in which LSU is a nondiverse intervenor as of right, and where common sense and the law compel- a finding of indispensability, the Court lacks diversity jurisdiction and dismissal is required. See, e.g., Lawyers Title, 2009 WL 2032406, at *7 (finding that the postfiling, nondiverse, intervenor defendant divests the court of subject-matter jurisdiction and that the ease must be dismissed); see also Fed.R.Civ.P. 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”); In re Olympic Mills, 477 F.3d at 7 (“If [intervenor] is entitled to intervene as a matter of right under Rule 24(a)(2) and is an indispensable party under Rule 19(b), the litigation must be dismissed because there would not be complete diversity.” (quoting Kellogg, 440 F.3d at 544)); Brown, 462 F.3d at 393 (“If a person who qualifies under Rule 19(a) cannot be made a party because, for example, joinder would destroy subject-matter jurisdiction, a federal court must determine whether that person is ‘indispensable.’”).
Accordingly, IT IS HEREBY ORDERED that Dixie Brewing’s motion for a preliminary and -permanent injunction is DENIED and the case is DISMISSED for lack of subject-matter jurisdiction. IT IS FURTHER ORDERED that the Veterans Affairs’ motion to quash subpoenas is DENIED AS MOOT; LSU’s motion to quash subpoenas and, alternatively, for a protective order is DENIED, AS MOOT; and Eskew Dumas .Ripple PC’s motion to quash subpoenas is DENIED AS MOOT.
. A cursory search of the Times-Picayune Web site proves this much. See, e.g., Bill Barrow, Opponents of LSU-VA Hospital Project Call on Jindal, City Officials To Modify Planning Process, NOLA.com (Mar. 25, 2009), http://www.nola.com/news/index.ssf/2009/03/ groups_want_jindaLcity_more_i.html; Kate Moran, LSU and VA To Build Joint Medical Campus in Downtown New Orleans; VA Expected To Open by 2013, NOLA.COM (Nov: 24, 2009), http://www.nola.com/news/index.ssf/ 2008/1 l/lsuva_shared_hospitaLsite_is.html; Richard A. Webster, Program To Move Homes from LSU-VA Hospital Site, Rehab Them, Remains In Disarray, NOLA.com (Nov. 24, 2012), http://www.nola.com/politics/index.ssf/ ■ 2012/11/ program_to_move_homes_from_lsu. html.
. Hurricane Katrina significantly damaged . the Dixie Brewing Company building, rendering the property unusable. Notably, Dixie Brewing has not used the building post-Katrina, and the company currently brews Dixie beer in Wisconsin.
. The VA has contracted with Clark Construction and McCarthy Building Companies for the demolition of the Dixie property. Neither company has been issued a "notice'to'proceed” by the VA to start the construction/demolition work.
. The Court further ordered that to the extent Dixie invokes the Court’s diversity jurisdiction, it must amend its complaint within ten days to properly allege the citizenship of all parties. Dixie filed an amended complaint on March 22, 2013, in compliance with the Court’s order.
. The Court notes with some curiosity that Dixie wholly fails to address the standard for a preliminary injunction, which, as movant, it carries the burden to prove. After belaboring the facts of this case, Dixie, in one sentence, states: "VA's destruction of the property will cause irreparable injury, loss, and damages to Dixie, and there is no economic remedy for Dixie's damages in violation of its Constitutionally mandated property rights.” The case literature clearly establishes the four prerequisites for the issuance of an injunction. Even after the VA and LSU cite (and argue) dle appropriate legal standard in their opposition papers, Dixie failed to submit reply papers, which the Court expressly allowed for in its briefing schedule. The Court reminds counsel that a preliminary injunction is an extraordinary remedy, which the Fifth Circuit has instructed "should not be granted unless the party seeking it has clearly carried the burden of p'ersuasion.” Bluefield, 577 F.3d at 253 (emphasis added). This would require, at a minimum, addressing the test for a preliminary injunction.
. Because the Court lacks jurisdiction, it is unnecessary to address whether Dixie qualifies as an "interested party” under the statute.
. Dixie apparently concedes this point — it failed to address the subject-matter jurisdiction concerns raised by the VA.
. The amount in controversy is not at issue in this motion.
. According to Dixie’s first amended complaint, Dixie is a corporation incorporated in Louisiana and has its principal place of business in New Orleans. McCarthy is a corporation incorporated in Missouri and has its principal place of business in St. Louis. Each member of Clark, LLC, is domiciled in Maryland and, therefore, Clark is a citizen of Maryland.
. Rule 24(a) provides:
On timely motion, the court must permit anyone to intervene who ... claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest.
Fed.R.Civ.P. 24(a)(2).
Reference
- Full Case Name
- DIXIE BREWING COMPANY, INC. v. U.S. DEPARTMENT OF VETERANS AFFAIRS, Clark Construction Group, L.L.C., and McCarthy Building Companies, Inc.
- Cited By
- 3 cases
- Status
- Published