Fifth Circuit vacates District Court ruling in Katrina Canal Breaches Litigation

The Fifth Circuit posted two unpublished opinions today and both vacated the ruling of the District Court in Katrina Canal Breaches Litigation re: Jefferson Parish. Actually, the Fifth Circuit posted one of the two unpublished opinions under two different numbers! That I realized after spending more time than I’ll confess to spending pouring over each to find the difference – before I had the presence of mind to hit the zoom and saw each had the same number (#$%&!)

This is a consolidated appeal of the district court’s dismissal of claims against Jefferson Parish, Louisiana in two cases concerning property damage from flooding that occurred as a result of the levee breaches in New Orleans during Hurricane Katrina.The plaintiffs-appellants, property owners in Jefferson Parish and Orleans Parish, allege that the property damage resulted from deficiencies in the New Orleans flood protection system. In their original complaints, filed on August 28, 2006, the plaintiffs-appellants named as defendants the Board of Commissioners of the Orleans Levee District, the Board of Commissioners of the Port of New Orleans, the Sewerage & Water Board of New Orleans, the East Jefferson Levee District, Jefferson Parish, and the Louisiana Department of Transportation and Development.

In their second amended complaints filed on April 11, 2007, the plaintiffs-appellants added the United States as a defendant. On October 12, 2007, the district court dismissed the claims against Jefferson Parish in both actions. On March 27, 2008, the district court entered final judgments under Federal Rule of Civil Procedure 54(b) with regard to those claims, and the plaintiffs-appellants appealed. This appeal solely concerns the plaintiffs-appellants’ claims against Jefferson Parish. The plaintiffs-appellants’ claims against other defendants, including the United States, are still pending in the district court.

The district court recognized two distinct categories of claims asserted by the plaintiffs-appellants against Jefferson Parish: (1) claims based on actions taken by the Parish during Hurricane Katrina; and (2) claims based on the Parish’s alleged general failure to maintain certain levees and drainage features. The district court dismissed the first category of claims because it found that La. Rev. Stat. § 29:735 granted immunity to the Parish for all actions taken at the time of Hurricane Katrina.

The district court dismissed the second category of claims for two reasons. First, the district court held that La. Rev. Stat. § 9:2800 retroactively immunized public bodies from all damages arising from Hurricane Katrina. Second, the district court held that the Parish was not under a duty to maintain the levees under Louisiana state law.

Both parties agree in their briefing that the district court erred in holding that La. Rev. Stat. § 9:2800 insulated Jefferson Parish from liability, as the Louisiana Supreme Court has held this statute unconstitutional as applied to claims accruing prior to the law’s passage. See Burmaster v. Plaquemines Parish Gov’t, 982 So. 2d 795 (La. 2008).

Additionally, at oral argument, the plaintiffs-appellants conceded that La. Rev. Stat. § 29:735 immunized Jefferson Parish against any claims relating to its actions taken during Hurricane Katrina. Thus, the parties’ only remaining substantive dispute is over whether Jefferson Parish was under a general duty to maintain the levees under Louisiana law.

However, we decline to reach the merits of this dispute because the district court exercised subject matter jurisdiction over this case on improper grounds. Although Jefferson Parish did not appeal the district court’s ruling on jurisdiction, this panel must nonetheless consider whether federal subject matter jurisdiction exists. See E.E.O.C. v. Agro Distrib., LLC, 555 F.3d 462, 467 (5th Cir. 2009) (“Although neither party raises the issue of subject matter jurisdiction, this court must consider jurisdiction sua sponte.”). The district court exercised jurisdiction over the plaintiffs-appellants’ claims against Jefferson Parish on the basis of supplemental jurisdiction.

Specifically, the district court held that it had original jurisdiction over the plaintiffs-appellants’ federal tort claims act claims against the United States that were added in the second amended complaint, and that those claims and the claims against Jefferson Parish arose out of a common nucleus of operative fact, thus warranting the exercise of supplemental jurisdiction over the claims against the Parish.

However, the new claims against the United States added in the second amended complaint cannot be relied upon to establish subject matter jurisdiction because while a plaintiff may amend a complaint to cure inadequate jurisdictional allegations, amendment may not create subject matter jurisdiction when none exists. See 3 James Wm. Moore et al., Moore’s Federal Practice § 15.14[3], at 15–34 (3d ed. 1999) (“Essentially, a plaintiff may correct the complaint to show that jurisdiction does in fact exist; however, if there is no federal jurisdiction, it may not be created by amendment.”). That is, an amendment may remedy jurisdictional problems of the “technical” or “formal” variety,2 but it may not “create an entirely new jurisdictional basis to provide competence in a court which lacked authority over the case ab initio.” Falise v. Am. Tobacco Co., 241 B.R. 63, 67 (E.D.N.Y. 1999) (Weinstein, J.). This court has specifically held that an amendment may not remedy a jurisdictional defect by asserting a cause of action to serve as a statutory basis for federal question jurisdiction…

Thus, supplemental jurisdiction based on the plaintiffs-appellants’ federal tort claims act claims against the United States does not provide a valid basis for subject matter jurisdiction over the plaintiffsappellants’ claims against the Parish. Although Jefferson Parish did not object to the plaintiffs-appellants amending the complaint to add the federal tort claims act claims, “[s]ubject matter jurisdiction can neither be conferred nor destroyed by the parties’ agreement or waiver.” Buchner v. FDIC, 981 F.2d 816, 821 (5th Cir. 1993).

The plaintiffs-appellants asserted another basis for supplemental jurisdiction over their claims against the Parish in the district court: a common nucleus of operative fact with third-party beneficiary claims in the original complaint based on Acts of Assurance that several defendants signed in favor of  the United States.

Those third-party beneficiary claims as pleaded arise under Louisiana state law, but the plaintiffs-appellants argued that they trigger original subject matter jurisdiction because federal law controls the interpretation of the underlying Acts of Assurance, specifically the hold harmless provisions contained therein that were executed for the benefit of the United States and which the plaintiffs-appellants argued should be interpreted to create a duty to third parties. Federal law arguably does control the interpretation of the Acts of Assurance because the federal government entered into them pursuant to authority conferred by federal statute. See United States v. Seckinger, 397 U.S. 203, 210 (1970) (“[F]ederal law controls the interpretation of the contract. This conclusion results from the fact that the contract was entered into pursuant to authority conferred by federal statute and, ultimately, by the Constitution.” (citations omitted)).

However, the mere presence of a federal issue in a state cause of action is not sufficient to permit federal jurisdiction; this court has held that the presence of such a federal issue is sufficient to create federal jurisdiction only where: (1) resolving the federal issue is necessary to resolution of the state-law claim; (2) the federal issue is actually disputed; (3) the federal issue is substantial; and (4) federal jurisdiction will not disturb the balance of federal and state judicial responsibilities. See Singh v. Duane Morris LLP, 538 F.3d 334, 337–38 (5th Cir. 2008).

Although the parties did not raise the issue of whether the third-party beneficiary claims give rise to federal jurisdiction on appeal, it was briefed in the district court, and we fail to see any substantial federal question implicated in the third-party beneficiary claims based on the hold harmless provisions in the Acts of Assurance. Further, the plaintiffs-appellants failed to meet their burden of demonstrating a common nucleus of operative fact between the third-party beneficiary claims and the claims against Jefferson Parish, making only conclusory and unsupported assertions to that effect. See New Orleans & Gulf Coast Ry. Co. v. Barrois, 533
F.3d 321, 327 (5th Cir. 2008) (“The party seeking to assert federal jurisdiction. . . has the burden of proving by a preponderance of the evidence that subject matter jurisdiction exists.”).

Accordingly, we VACATE the judgment of the district court and DISMISS this suit for lack of jurisdiction.4

Tomorrow, I suppose, will bring a correction and the second opinion – or this same opinion with another number.

One thought on “Fifth Circuit vacates District Court ruling in Katrina Canal Breaches Litigation”

  1. Although dated yesterday, these opinions have actually been “out there” for a few weeks. The Fifth “Circus” Panel in these cases was entirely “gutless”, and I aver part of a conspiracy to deprive innocent “Victims of KATRINA” of due process of law in cases against Jefferson Parish, which is a political subdivision of the State of Louisiana. THINK for a moment: “Fifth Circuit vacates District Court decision in Jefferson Parish case.” One might read the “headline” and conclude that the plaintiffs, who were thrown out of Court by Judge Duval-Daley-Fayard, were back “in” Court, courtesy of the Fifth “Circus”. WRONG! Duval-Daley-Fayard’s District Court decision was “so-screwed-up”, even relying on an overruled opinion, ie. Burmaster, that the Fifth “Circus” three-Judge Panel had to become “creative”, which they accomplished by ruling that they had no jurisdiction over the appeal. GUTLESS, and the result is the same: Plaintiffs “out of Court”, and on their ears, on the sidewalk. But the Panel is “justified” in the result by written reasons which contain so much legal “mumbo-jumbo” that even the SCOTUS would be unable to follow and understand it. Now ask yourselves: “WHY?” Well, the answer is really very simple. Remember Danny Becnel and Calvin Fayard (and a host of “other” unethical and unscrupulous plaintiffs’ lawyers with whom Danny and Calvin have associated themselves)? These are the lawyers who Duval-Daley-Fayard has handed “control and management” of the “Victims of KATRINA” litigation. Yes, the same guys who secretly represented the State of Louisiana for an undetermined period of time prior to 8/29/07, and then “on the record” between 8/29/07 and 10/09/08, when they were ‘fired” by Buddy Caldwell. They had an patently obvious conflict of interests by virtue of serving on Plaintiffs’ Committees in the litigation, “annointed” by Duval-Daley-Fayard, so how could they represent “the Class” and the State, simultaneously? ANSWER: They couldn’t. But their’s and Duval-Daley-Fayard’s “fix” to the problem was to eliminate the State and ALL State entities, Levee Boards, Sewerage and Water Boards, and Parishes, as parties defendant in the litigation. Hence Duval-Daley-Fayard’s dismissal of claims against Jefferson Parish, the recently “Court-Approved” settlement with the Levee Boards for a ridiculously low figure, and the voluntary dismissal of claims against the New Orleans Sewerage and Water Board in Federal Court (Duval-Daley-Fayard presiding, of course) which is presently “hanging fire” and has not yet been ruled on. It is perfectly obvious to me that these SCOUNDRELS still harbor the “hope” that they will be re-hired by Caldwell after all of the conflicts of interests are resolved in their favor, following which they can make their “pitch” to the Democratic Obama Administration (and AG Eric Holder) that a political settlement of all KATRINA cases would be “the right thing to do”, all to their great (actually, on an unimaginable scale) financial gain. The Fifth “Circus” Panel(s) in question (the same in both cases) is “IN” on the conspiracy, which has involved prohibited ex parte communications on a scale unprecedented, even in the Louisiana judicial system. Just look at what they did: Aaron Broussard shut down the pumps and sent the pump workers 200 miles away at the precise time they were needed the very MOST, and the Court said that the Parish had IMMUNITY for this malfeasance. Are you kidding me? I mean, I’ve been disbarred, but I went to law school, you know, and I’ve “been around”, you know, and no one EVER tried to “learn” me THAT kind of BULLSHIT. And as for the “Acts of Assurances”, which are Federal contracts, well THEY HAVE TO MEAN SOMETHING. I mean the Federal Government wouldn’t require political subdivisions of the State of Louisiana (and perhaps even the State itself, through “agencies and instrumentalities” like the Department of Transportation and Development, which acted as the “engineering arms” of the Levee Boards) to sign documents that have no legal meaning whatsoever. But you won’t find the meaning in the referenced Fifth “Circus” opinions! The whole goddamned “system” is CORRUPT. WHERE IS THE GODDAMNED FBI?

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