Riley v. Wooten ( 1993 )

UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 91-3916
JAY H. RILEY,,
Plaintiff-Appellant,
versus
ERNEST WOOTEN, Individually and in his
capacity as Sheriff of Plaquemines Parish, Et Al.,
Defendants,
ERNEST WOOTEN, Etc., and
PLAQUEMINES PARISH COUNCIL,
Defendants-Appellees.
Appeals from the United States District Court
for the Eastern District of Louisiana
(August 18, 1993)
Before REYNALDO G. GARZA, HIGGINBOTHAM, and DeMOSS, Circuit Judges.
DeMoss, Circuit Judge:
I. FACTS AND PROCEDURAL HISTORY
On June 18, 1989, Plaquemines Parish Sheriff's deputies and a
representative of the Louisiana Office of Alcohol and Beverage
Control entered Jay Riley's business, the J.U. Lounge, and removed
his state and parish alcohol permits and other permits and licenses
necessary for him to operate, which effectively closed down his
business. In his federal suit, Riley alleges that such actions
were unlawful because the Council and sheriff closed his business
and suspended his licenses without prior notice or an opportunity
for a hearing violating his right to procedural due process.
1
Because of those allegedly unlawful actions, Riley claims that the
Council and Sheriff damaged his business.
On August 24, 1989, Riley filed a petition for damages, writ
of mandamus, and temporary restraining order in Louisiana state
court against Ernest Wooten, in his capacity as Sheriff of
Plaquemines Parish; Luke Petrovich, in his capacity as President of
Plaquemines Parish; Larry Dickenson, in his capacity as
Commissioner of the Office of Alcohol and Beverage Control; and the
State of Louisiana.
The next week, Luke Petrovich filed a petition for revocation
and/or suspension of Riley's liquor permit and occupational license
with the Plaquemines Parish Council (the Council) alleging that
Riley served alcohol to intoxicated persons, operated a disorderly
house, violated Plaquemines Parish building codes, and that
representatives of Riley possessed and sold drugs on the premises.
At a public hearing on September 28, 1989, the Council adopted
Resolution Numbers 89-334 and 89-335, which revoked Riley's
Plaquemines Parish occupational license and liquor permit.
Meanwhile, in the state court suit the defendants filed an
exception of prematurity, which the court granted on September 1,
1989. Riley appealed the trial court's ruling. On appeal, because
the Council had conducted a hearing and revoked Riley's permit and
license, the Louisiana appellate court sustained the dismissal of
Riley's case as moot as far as he was seeking the return of his
license and permit.
On October 16, 1989, Riley filed a motion and order for
devolutive appeal in Louisiana state court challenging the decision
of the Council to revoke his permits. The Louisiana trial court
2
dismissed the suit since Riley had not timely brought it under
Louisiana law, which required an aggrieved party to appeal the
suspension of their permits within 10 days of being notified of the
suspension. See La. R.S. 33:4788.
Not to be deterred, Riley again sued Sheriff Wooten,
Petrovich, and the Council in the United States District Court for
the Eastern District of Louisiana (USDC) asserting that they
violated his right to procedural due process.1 Petrovich filed a
motion for summary judgment based on absolute immunity, which was
unopposed, and the USDC granted the motion. The Council then filed
a motion to dismiss on the ground of res judicata, and on October
8, 1991, the USDC granted the motion. Riley appealed the October
8 dismissal on October 25. Thereafter, on December 2, the USDC
dismissed Sheriff Wooten on the ground of res judicata. Riley
appealed the December 2 dismissal on January 6.
II. DISCUSSION
1. Appellate Jurisdiction
The Council contends when Riley appealed the order dismissing
his claim against it, this Court did not have jurisdiction because
the order was interlocutory and there was no Rule 54(b)2
certification. That is so, because when the USDC dismissed the
Council, it had not adjudicated Riley's claim against Sheriff
Wooten and; therefore, there was not a final judgment. After the
1
We have subject matter jurisdiction of this appeal pursuant to 28 U.S.C. § 1331, which states "[t]he district
courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the
United States."
2
Fed. R. Civ. P. 54(b) states "[w]hen more than one claim for relief is presented in an action, whether as a
claim, counterclaim, cross-claim, or third-party claim, or when multiple parties are involved, the court may direct
the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express
determination that there is no just reason for delay and upon an express direction for the entry of judgment."
3
USDC dismissed Sheriff Wooten, Riley appealed the order as to
Sheriff Wooten, but did not appeal the order relating to the
Council. Therefore, according to the Council, this Court has no
appellate jurisdiction over it.
In a multi-party suit, a court's order is final only if it
meets one of two conditions: (1) it must adjudicate all the claims
of all the parties, or (2) the court must expressly determine there
is no just reason for delay and direct an entry of judgment under
Rule 54(b). Jetco Electronic Industries, Inc., v. Gardiner, 473
F.2d 1228, 1231 (5th Cir. 1973).
To support its contention that we do not have appellate
jurisdiction over it, the Council directs us to the cases of
Kirtland v. J. Ray McDermott & Co., 568 F.2d 1166 (5th Cir. 1978)
and United States v. Taylor, 632 F.2d 530 (5th Cir. 1980). In
Kirtland, the plaintiff sued his employer, McDermott, under the
Jones Act and general maritime law. Kirtland, at 1168. Later he
sued an additional defendant, Columbia Gulf Transmission Company.
Id. The trial court then granted a summary judgment to Columbia
and the plaintiff appealed. Id. One day after the appeal was
docketed, the trial court entered a Rule 54(b) order stating there
was no just reason for delaying an entry of final judgment. Id.
On appeal, this court dismissed the appeal holding that when "more
than one claim for relief is presented in an action, an express
determination pursuant to Rule 54(b) is required as a prerequisite
to an appeal from an order disposing of fewer than all the claims."
Id.
In Taylor, the defendant appealed the trial court's denial of
his motion to join and the dismissal of his counter-claim. Taylor,
4
at 530. After the defendants appealed, the plaintiff dismissed the
case, which ended the litigation. Id. at 531. On appeal, this
court refused to exercise its jurisdiction holding that the
defendant's failure to appeal from the final judgment making the
joinder denial and the counter-claim dismissal a final and
appealable decision deprived the court of jurisdiction. Id. The
court also held the final judgment did not retroactively validate
the premature notice of appeal. Id.
To refute the Council's contention, Riley relies on the Rule
first announced in Jetco Electric Industries, Inc., v. Gardiner,
473 F.2d 1228 (5th Cir. 1973). In Jetco, the plaintiffs
prematurely appealed an order dismissing only one of three
defendants. Id. at 1231. Several months later, the trial court
entered an agreed judgment disposing of the claims against the two
remaining defendants. Id. On appeal, while recognizing that the
appeal met neither the requirements of Rule 54(b) nor a final
judgment, this court nevertheless concluded that it had
jurisdiction to consider the premature appeal. Id. at 1231. The
court stated the "two orders, considered together, terminated this
litigation just as effectively as would have been the case had the
district judge gone through the motions of entering a single order
formally reciting the substance of the earlier two orders." Id.;
See also Alcorn County, Miss. v. U.S. Interstate Supplies Inc., 731
F.2d 1160, 1166 (5th Cir. 1984) (interpreting Jetco) ("[W]e may
consider a premature appeal in those cases where judgment becomes
final prior to disposition of the appeal.").
This court has followed the Jetco rule in many decisions.
See, Levron v. Gulf Intern. Marine, Inc., 854 F.2d 777, 779-80 (5th
5
Cir. 1988); Crowley Maritime Corp., v. Panama Canal Comm., 849 F.2d
951, 953 (5th Cir. 1988); Alcom Electric Exchange, Inc., v.
Burgess, 849 F.2d 964, 966-69 (5th Cir. 1988) (expressly rejecting
Taylor); Sandidge v. Salen Offshore Drilling Co., 764 F.2d 252, 255
(5th Cir. 1985); Tower v. Moss, 625 F.2d 1161, 1164-65 (5th Cir.
1980). More recently, this court reaffirmed the efficacy of the
Jetco Rule in Simmons v. Willcox, 911 F.2d 1077, 1080 (5th Cir.
1990). In Simmons, the trial court granted summary judgment to
four of six defendants, thus leaving two defendants remaining in
the case. Id. at 1080. Without seeking a Rule 54(b)
certification, the plaintiff appealed. Id. After that, the trial
court dismissed the remaining two defendants and the plaintiff
filed a second appeal. This court held that it had appellate
jurisdiction over all of the defendants in that the defect in the
initial appeal was cured by the later dismissal of the remaining
defendants, which ended the litigation before the disposition of
the appeal. Id.
In our view, the Jetco Rule controls the present case and we
should exercise jurisdiction over this appeal. Similar to Jetco
and Simmons, here, the defect in Riley's original appeal was cured
by the trial court's subsequent dismissal of Sheriff Wooten from
the case before we disposed of the appeal. The cases relied upon
by the Council, Kirtland and Taylor, are distinguishable. In
Kirtland, the original premature notice of appeal was not cured by
a later dismissal of the remaining defendant before the court
disposed of the appeal, and in Taylor the litigation was ended by
the plaintiff's voluntary dismissal of the case. To the extent the
opinions in Kirtland and Taylor conflict with the opinion in Jetco,
6
we hold that Jetco controls as this Circuit has applied it more
prevalently and for a longer period.
2. Res Judicata
We must first decide whether the state or federal rules of
claim preclusion apply. In University of Tennessee v. Elliott, 478
U.S. 788, 799 (1986), the Supreme Court held that federal courts
apply state rules of issue preclusion after a state administrative
adjudication. Since this case involves the preclusive effect to
give the Council's administrative adjudication, Louisiana's res
judicata law governs this appeal.
Both parties agree that under Louisiana law once the time to
appeal an administrative ruling has run, the ruling becomes final
and has res judicata effect. See, Robinson v. City of Baton Rouge,
566 So. 2d 415 (La. App. 1st Cir. 1990); La. R.S. 33:4788.3 What
the parties disagree on is the scope of the preclusive effect to be
given to Riley's failure to appeal timely the Council's ruling.
Louisiana Revised Statute Annotated 13:4231 determines the scope of
the preclusive effect of a prior suit. For a former judgment to
bar a subsequent suit on the ground of res judicata, the statute
required that:
[t]he thing demanded must be the same; the demand must be
founded on the same cause of action; the demand must be
3
La. R.S. 33:4788 states:
[t]he holder of the permit who is aggrieved by a decision of the governing body of the
municipallity or parish or a municipal alcoholic beverage control board to suspend or revoke
his permit, may within ten days of the notification of the decision take a devolutive appeal to
the district court having jurisdiction of his place of business and on such appeal the trial shall
be do novo . . . .
La. R.S. 33:4788.
7
between the same parties, and formed by them against each
other in the same quality.4
La. R.S. 13:4231.
Riley contends that the state suit challenging the Council's
ruling does not preclude him on the ground of res judicata from
bringing the present suit, because neither the state suit nor the
Council hearing addressed the same relief or the same cause of
action, the propriety of and damages flowing from the initial
closing of his business on June 18, which he now pursues in the
present suit. To support his contention that the present action is
not barred by res judicata, Riley relies on the Fifth Circuit case
of Frazier v. King, 873 F.2d 820, 824 (5th Cir.), cert. denied, 493
U.S. 977 (1989).5
In Frazier,6 the plaintiff, after obtaining a favorable ruling
in a Louisiana Civil Service Commission (LCSC) hearing, sued in
federal court for damages alleging that her employer violated her
constitutional rights under the First and Fourteenth amendments and
committed several state law torts. In response, the defendants
answered, and the trial court agreed, that the LCSC adjudication
4
Sheriff Wooten points out the Louisiana Legislature has recently amended La. R.S. 13:4231, so that it now
adopts the broader common law theory of res judicata which is based on a transactional or occurrence test. The
comments to the recent amendments to the legislation succinctly state "R.S. 13:4231 makes a substantial change
in the law. Under the present law a second action would be barred by the defense of res judicata only when the
plaintiff seeks the same relief based on the same cause or grounds. This interpretation of res judicata is too
narrow to fully implement the purpose of res judicata which is to foster judicial efficiency and also to protect the
defendant from multiple lawsuits. . . ." Under the new La. R.S. 13:4231, Wooten contends Riley's federal suit
would be barred. What Wooten omits is that the comments to the Act specifically state that "the preclusive effect
and authority of a judgment rendered in an action filed before the effective date of this Act, shall be determined
by the law in effect prior to January 1, 1991."
5
See also Cantrelle Fence & Supply Co., Inc. v. Allstate Ins. Co., 515 So. 2d 1074 (La. 1987), which
recognizes that the common law rule allowing preclusive effect to be given to all matters that might have been
pled or raised is inapplicable in Louisiana.
6
In Frazier, the court did not decide whether state or federal rules of claim preclusion apply after a state
agency, rather than a state administrative, adjudication. Under either the federal or state rule of claim preclusion,
the court held that the plaintiff's federal claims were not barred.
8
barred the federal claims on the ground of res judicata. On
appeal, this Court reversed, holding that the "thing" demanded by
the plaintiff in the agency hearing, reinstatement with back pay,
differed from the relief she sought in federal court, money damages
and attorney's fees, and; indeed, could not have been granted in
the agency hearing. In the present case, Riley argues the
administrative hearing conducted by the Council did not decide the
propriety of or the damages resulting from the initial closing of
his business, and, therefore, did not adjudicate his rights
regarding the initial June 18 closing. Riley contends, just as in
Frazier, neither the "thing" demanded by him nor the present cause
of action was adjudicated by the Council or the state court, and
consequently Louisiana's law of res judicata does not bar the
present suit.
The Council contends that Riley's argument that its
administrative hearing did not have as its focus the initial
closing of his business, and, therefore, did not adjudicate his
procedural due process rights regarding the initial closing misses
the point. According to the Council, whether its administrative
hearing addressed the initial closing of his business is not
essential to the core of its res judicata argument. Rather, the
Council contends that its administrative ruling revoking Riley's
permits is final and acts as res judicata on the issue of the
revocation of the permits in that Riley failed to appeal timely its
ruling. Therefore, the Council contends the issue of the
revocation of the permits is final, and consequently any claim for
damages by Riley resulting from the revocation of those permits is
barred, even his claim for damages resulting from the initial
9
closing of his business. If Louisiana did not take such a narrow
view of res judicata, the Council's argument might carry the day.
The Council contends that Myers v. City of Lafayette, 537 So.
2d 1269, 1275 (La. App. 3rd Cir. 1989) supports its argument that
because Riley failed to appeal the administrative ruling, he has no
claim for damages resulting from the closing of his business in any
regard. In Myers, the court held that the plaintiff's failure to
appeal timely the Louisiana Office of Alcoholic Beverage Control's
denial of her alcohol beverage permits to the court as the statute
required, made the decision of the state and the city not to issue
the permits final and binding on all of the parties. Further, the
court stated "[s]ince plaintiff had no legal right to compel the
issuance of permits or to even now challenge the non-issuance of
the permits she has no cause of action for damages resulting from
the non-issuance of the permits." Id. at 1275. In sum, the
Council contends Riley's failure to appeal timely its
administrative ruling revoking his permits bars him from now
bringing a procedural due process claim for the initial closing of
his business.
The Council's argument relying on Myers is unpersuasive,
however, because Myers involved neither the revocation of an issued
permit nor the closing of an ongoing business, but the denial of an
application for a permit. In Myers, therefore the issue of the
propriety of the closing of the plaintiff's business, initial or
otherwise, was not before the court. Consequently, we conclude
that the holding in Myers does not foreclose Riley from bringing
his procedural due process claim in the present case. Moreover,
our conclusion is buttressed by the Louisiana Supreme Court case of
10
Paillot v. Wooton, 559 So. 2d 758 (La. 1990), in which the court
struck down the Council ordinances7 in issue on this appeal.
In Paillot, the plaintiff, Paillot, sued seeking damages and
an order enjoining the Council from suspending her permits on the
ground of due process, after the sheriff and the Council shut down
her bar without prior notice or a hearing. The Louisiana trial
court issued a preliminary injunction ordering the Council to
return all of Paillot's permits, pending a hearing. After the
court issued the injunction, the Council conducted a hearing and
suspended Paillot's permits. On appeal, the Louisiana Supreme
Court held the Plaquemine's ordinances allowing the revocation of
Paillot's permits and the closing of her business without prior
notice and a hearing violated her right to procedural due process.
In so holding, the court rejected the Council's argument that the
administrative hearing after the initial closing cured the
illegality of the initial closing. In rejecting that argument, the
court stated:
[b]ecause in this case the license and permits were again
suspended when a hearing was finally held by the council
almost a month after the initial government action, there
is reason to believe plaintiff may have committed
violations which justified suspension of the permits.
However ``to one who protests against the taking of his
7
Plaquemines Parish Ordinance 4-14 provided:
[i]f any disturbance of the peace, public nuisance or other violation of state law or this chapter is committed on
said premises [businesses licensed to sell alcoholic beverages], the president of the council with the approval of
the commissioner of finance or the sheriff, is hereby authorized to suspend or revoke said permit [to sell liquor
or beer] . . . In case of such suspension or revocation, permittee may appeal to the council for a hearing, to
remove or recall the suspension or revocation, pending which hearing no liquor or beer shall be sold by permittee
....
Plaquemines Parish Ordinance 14-26 provided:
if any violation of Louisiana law or parish ordinance is committed on said [licensed] premise, the council, through
its president, with recommendations from the director of administration or the sheriff, may suspend or revoke the
occupational license to continue to conduct such business . . . .
11
property without due process of law, it is no answer to
say that in his particular case due process of law would
have led to the same result because he had no adequate
defense on the merits.'
Id. at 762 (quoting Wilson v. City of New Orleans, 479 So. 2d 891,
894 (La. 1985)).
We are obligated to follow the Louisiana courts'
interpretation of its law regarding res judicata. In our view, the
Louisiana Supreme Court would not bar Riley from suing the Council
or Sheriff Wooten on the ground of res judicata for the initial
closing of his business although the Council held a later
administrative hearing, which Riley lost.
In sum, the Council hearing did not address the propriety of
the initial closing of Riley's business or whether Riley suffered
any damages because of the closing. That fact, coupled with
Louisiana's narrow view of res judicata supports our holding that
the USDC erred in granting summary judgment to the Council and
Sheriff Wooten.
III. CONCLUSION
For the foregoing reasons, the judgment of the district court
is REVERSED and the case is REMANDED.
12