PETTIGREW, J.
In this consolidated proceeding, three parish school boards have sought declaratory and injunctive relief against the Louisiana School Employees' Retirement System (LSERS), State Treasurer John N. Kennedy, and the Louisiana Department of Education to prohibit the withdrawal of funds available for their benefit from the state treasury pursuant to La. R.S. 11:1202. The trial court denied the school boards' request for declaratory and injunctive relief and overruled an exception of res judicata raised by the Pointe Coupee Parish School Board. The suits were dismissed with prejudice, and the school boards now appeal. After a thorough review of the record and the arguments presented, we find no merit to the school boards' assignments of error and affirm the judgment of the trial court.
This suit arises out of the privatization of bus transportation services by the Pointe Coupee, Evangeline, and St. James Parish school boards. Between 2005 and 2011, the school boards independently contracted with Laidlaw Education Services and/or an affiliate company, First Student, Inc. (hereinafter collectively referred to as "Laidlaw"), to be the private provider of student transportation services. The contracts provided that Laidlaw would be awarded individual school bus routes as
As a result of the alleged privatization of these positions, LSERS made demands upon the school boards for payment of a claimed portion of its unfunded accrued liability (UAL) pursuant to La. R.S. 11:1195.1 and La. R.S. 11:1195.2.
In response, the school boards each individually brought suit in the 19th Judicial District Court, seeking to enjoin LSERS from invoking collection procedures pursuant to La. R.S. 11:1202. The Pointe Coupee Parish School Board argued in its petition that LSERS was collaterally estopped and barred by a final consent judgment rendered in a prior proceeding entitled Pointe Coupee Parish School Board v. The Louisiana School Employees' Retirement System, 19th Judicial District Court, Docket No. 574,462. Also, the school boards sought declaratory judgment that the amounts due were calculated incorrectly and that the provisions of La. R.S. 11:1202 purporting to authorize LSERS to collect from the state treasurer monies
On December 13, 2012, the consolidated matter proceeded to trial. On February 11, 2013, the trial court issued written reasons finding no merit to the Pointe Coupee Parish School Board's claim of collateral estoppel. Moreover, the court found that the statutes in question do not conflict with the provisions of the Louisiana Constitution. Also, the court found that the school boards failed to prove by a preponderance of the evidence that they would suffer irreparable injury so as to warrant injunctive relief. On February 25, 2013, the trial court signed a written judgment denying the school boards' requests for declaratory and injunctive relief, overruling the Pointe Coupee Parish School Board's exception of res judicata, and dismissing the plaintiffs' petitions with prejudice. The school boards have now appealed that judgment.
On appeal, the school boards argue that the procedure for deducting funds from the state treasury pursuant to La. R.S. 11:1202 conflicts with the provisions of La. Const. Art. 3, § 16(A), Article 7, § 10(D), and Article 8, § 13(B). Alternatively, the school boards argue that the provisions of La. R.S. 11:1195.1 and La. R.S. 11:1195.2 do not apply to employees who retire or resign without termination or whose routes are eliminated through merger or consolidation. Also, the school boards argue that the UAL attributable to the identified employees was erroneously calculated and that the UAL allegedly attributable to resigning employees would be extinguished by their withdrawal of retirement contributions. The school boards additionally argue that the doctrine of collateral estoppel bars LSERS from enforcing collection from the Pointe Coupee Parish School Board. Lastly, the school boards submit that they would sustain irreparable harm without recourse if LSERS is allowed to withdraw funds held for their benefit from the state treasury or Department of Education.
At the outset, we note that the constitutionality of La. R.S. 11:1202 is a legal question, which is subject to de novo review. La. Mun. Ass'n v. the State of La. and the Firefighters' Retirement Sys., 2004-0227, p. 45 (La.1/19/05), 893 So.2d 809, 842. Statutes are generally presumed to be constitutional and the party challenging the validity of the statute has the burden of proving it is unconstitutional. State v. Fleury, 2001-0871, p. 5 (La. 10/16/01), 799 So.2d 468, 472. The provisions of the Louisiana Constitution are not grants of power but instead are limitations on the otherwise plenary power of the people exercised through the legislature. Bd. of Comm'rs of North Lafourche Conservation, Levee and Drainage Dist. v. Bd. of Comm'rs of Atchafalaya Basin Levee Distr., 95-1353, p. 3 (La.1/16/96), 666 So.2d 636, 639. Therefore, the legislature may enact any legislation that the state constitution does not prohibit. Bd. of Comm'rs, 95-1353 at 4, 666 So.2d at 639. In that context, the party challenging the constitutionality of a statute must cite to the specific provision of the constitution which prohibits the legislative action. Fleury, 2001-0871 at 5, 799 So.2d at 472;
The school boards argue that the collection mechanism in La. R.S. 11:1202 violates La. Const. Art. 3, § 16(A) and La. Const. Art. 7, § 10(D). Louisiana Constitution Article 3, § 16(A) states that "[e]xcept as otherwise provided by this constitution, no money shall be withdrawn from the state treasury except through specific appropriation, and no appropriation shall be made under the heading of contingencies or for longer than one year." Similarly, La. Const. Art. 7, § 10(D)(1) deals with the expenditure of state funds and provides that "[e]xcept as otherwise provided by this constitution, money shall be drawn from the state treasury only pursuant to an appropriation made in accordance with law." Insofar as La. R.S. 11:1202 authorizes the transmission of school board funds based upon a "certification" by the board of trustees of LSERS that a payment is delinquent, the school boards argue that the statute violates the constitutional appropriations requirement.
In support, the school boards cite Firefighters' Ret. Sys. v. Landrieu, 572 So.2d 1175 (La.App. 1 Cir.1990), writ denied 575 So.2d 811 (La.1991). In Firefighters, the police and firefighter retirement systems sought judgment declaring that they were entitled to possession of funds collected pursuant to La. R.S. 22:1419(A) and held by the state treasurer.
We do not find the school boards' constitutional arguments under La. Const. Art. 3, § 16(A) and Art. 7, § 10(A) to be persuasive. Louisiana Revised Statute 11:1202(A)(2) clearly states that "the state treasurer or the Department of Education shall deduct the amount thereof from any monies then available for distribution to or for the benefit of that parish or city school board (emphasis added)." The statute is clear that a deduction is allowed only if funds have already been appropriated and are available.
Monies are made available to parish school boards through allocation and disbursements pursuant to the Minimum Foundation Program (MFP) formula. Louisiana Constitution Article 8, § 13, dealing with funding and apportionment for education, provides, in relevant part:
Article 8, § 13(B) dictates specific and unique procedures for educational expenditures made through the MFP. The MFP formula originates with the State Board of Elementary and Secondary Education and is approved by the legislature. La. Const. Art. 8, § 13(B). Once approved, the legislature is required to fully fund the current cost to the state of such a program as determined by applying the approved formula. Id. The funding is accomplished via concurrent resolution and appropriated through a bill passed by both houses of the legislature. La. Const. Art. 8, § 13(B); see also La. Fed'n of Teachers v. State, 2013-0120, p. 15 (La.5/7/13), 118 So.3d 1033, 1044 citing Joint Rules of the Louisiana Senate and House, Rule No. 20(A)(1)(b)(iii). Once appropriated, MFP funds are available for allocation or distribution to the school systems. La. Const. Art. 8, § 13(B).
In light of the detailed funding and apportionment provisions of La. Const. Art. 8, § 13, it is clear that the MFP funds are appropriated by the legislature and are then available for allocation or distribution to the school systems. The school boards have failed to cite any constitutional provision that prohibits LSERS from deducting from the allocated funds the amounts it is owed pursuant to La. R.S. 11:1202. When La. R.S. 11:1202 is read in conjunction with La. Const. Art. 8, § 13, it is apparent that the school boards' argument that the statute allows LSERS to unilaterally withdraw funds from the state treasury is unfounded. If there are no appropriated funds available for distribution, then no deduction can be made under La. R.S. 11:1202(A)(2). Moreover, the school boards' reliance on Firefighters is misplaced, because this case does not involve an attempt to withdraw unappropriated state funds. Thus, we find that the school boards failed to satisfy the burden of proving La. R.S. 11:1202 is unconstitutional.
Also, we reject the school boards' arguments that LSERS' invocation of La. R.S. 11:1202 violates La. Const. Art. 8,
We next turn to the school boards' arguments that LSERS misapplied La. R.S. 11:1195.1 and La. R.S. 11:1195.2. Insofar as the school boards' arguments relate to the factual findings of the trial court as to whether the relevant driver positions were privatized or eliminated within the meaning of the statutes, we shall review those claims using a manifest error standard of review.
The school boards show on appeal that, except for one Pointe Coupee employee who was terminated, all of the employees identified in LSERS' demands either resigned or retired.
In considering the school boards' arguments, we first turn to the language of
Our interpretation of the statutory law is supported by the testimony of LSERS Executive Director Charles Bujol. Although the statutes do not define the term "privatization," Mr. Bujol confirmed at trial that a "privatized position" is "that which is normally part of the employment of the school board that has been outsourced to a private entity that no longer participates in the LSERS. retirement system." Mr. Bujol further explained that "[i]f an existing school board employee takes the position of the person who retired or left for whatever reason, and down the line it creates a privatized position, that is a privatized position and the school system is assessed that-informed that they have to pay that debt."
The undisputed facts herein are that each of the school boards contracted with Laidlaw to be the private provider of student transportation services and thereafter eliminated several positions previously held by public employees. When the identified employees retired, there became one less bus route that was driven by a public employee, with the exception of the sole Pointe Coupee employee whose route was merged. Regardless of who filled the eliminated positions, the result was that there was one less public employee contributing to LSERS. Thus, there is no real dispute that the positions at issue were eliminated as contemplated by La. R.S. 11:1195.1 and La. R.S. 11:1195.2. We, therefore, conclude that the trial court did not manifestly err in finding as a factual matter that the positions were eliminated as contemplated by the statutes and that the school boards are liable to LSERS for that portion of the UAL lost as a result of the removal of these positions.
Alternatively, the school boards argue that LSERS incorrectly calculated the UAL under La. R.S. 11:1195.1 and La. R.S. 11:1195.2 and, therefore, the trial court erred in denying declaratory relief. Louisiana Revised Statute 11:1195.1 requires payment of "the unfunded accrued liability existing on June thirtieth, immediately prior to the date of termination attributable to the employees being terminated." Likewise, La. R.S. 11:1195.2 requires payment of "the unfunded accrued liability existing on June thirtieth, immediately prior to the date of termination of the employee in that position, which is attributable to that position." The school boards argue that calculation of the UAL requires identification of the benefits liability for the terminated employees to be factored by that portion of the accrued liability that is unfunded. Instead, LSERS based its calculations on the portion of the UAL that was attributable to each of the respective school boards as a whole. Those portions were determined by factoring privatized payroll
Further, it is the position of the school boards that the UAL attributable to resigning employees were extinguished by the withdrawal of their retirement contributions. In all, the school boards point out that four of the identified employees withdrew their contributions from LSERS before demand was made for payment of the UAL attributable to their positions.
At trial, LSERS actuary Charles Hall testified in detail as to how he determined the amount due for the privatized positions. Mr. Hall testified that La. R.S. 11:102 has very extensive instructions as to how to construct the funding of the plan and that he complied with those instructions. To calculate retirement system funding, Mr. Hall identified the normal cost of the plan, which is the cost of accrued benefits for a year, along with the UAL which is amortized over a prescribed period. The total calculation is then divided by the total active payroll, as required by the legislature. To determine the UAL resulting from the privatized positions at issue for each parish, Mr. Hall then determined the percentage of the payroll attributable to the position that was privatized and allocated this percentage to the UAL.
Mr. Hall further testified that a withdrawal of retirement benefits does not extinguish the UAL for the former employee's position. Rather, Mr. Hall explained that the obligation to repay the UAL exists, regardless of what action the former employee takes. Mr. Hall defined the UAL as "the present value of future contentioned events," which takes into consideration unforeseen circumstances including early retirement and withdrawal of benefits, among others.
We note that the school boards did not present any testimony or evidence that a different method of calculation would be preferable or that any such method would have produced a different result. The school board also failed to produce any testimony that the UAL attributable to retiring employees was extinguished by the withdrawal of their retirement contributions. Indeed, no evidence was presented to contradict the testimony of Mr. Hall at all. Accordingly, we find no merit to the school board's claim that the UAL was improperly calculated.
The school boards argue on appeal that collateral estoppel bars LSERS from enforcing collection against the Pointe Coupee Parish School Board pursuant to La. R.S. 11:1202. The school boards rely on the outcome of a prior case, captioned as Pointe Coupee Parish School Board v. The Louisiana School Employees' Retirement System, Docket No. 574,462, which matter was also filed in the 19th Judicial District Court and involved similar issues. Specifically, in Suit No. 574,462, a petition was filed by the Pointe Coupee Parish School Board, seeking declaratory and injunctive relief precluding LSERS from collecting the sum of $106,136.23 plus interest as a claimed portion of its UAL following the
The doctrine of res judicata is set forth in La. R.S. 13:4231. The statute states:
The statute, as amended in 1990, embraces both claim preclusion (traditional res judicata) and issue preclusion (collateral estoppel). Gabriel v. Lafourche Parish Water Dist., 2012-0797, p. 5 (La.App. 1 Cir. 2/25/13), 112 So.3d 281, 285, writ denied, 2013-0653 (La.4/26/13), 112 So.3d 848. Under issue preclusion or collateral estoppel, resolution of an issue of fact or law essential to the determination of the dispute precludes relitigation of the same issue in a different action between the same parties. Gabriel, 2012-0797 at 5, 112 So.3d at 285 citing Chaisson v. Central Crane Serv., 2010-0112, pp. 5-6 (La.App. 1 Cir. 7/29/10), 44 So.3d 883, 886-87; also citing Mandalay Oil & Gas, L.L.C. v. Energy Dev. Corp., 2001-0993, p. 9 (La.App. 1 Cir. 8/4/04), 880 So.2d 129, 135-36, writ denied, 2004-2426 (La.1/28/05), 893 So.2d 72.
In general, the doctrine of res judicata, as set forth in La. R.S. 13:4231, bars a subsequent action when all of the following elements are satisfied in a prior action: (1) the judgment is valid; (2) the judgment is final; (3) the parties are the same; (4) the cause or causes of action asserted in the second suit existed at the time of the final judgment in the first litigation; and (5) the cause or causes of action in the second suit arose out of the transaction or occurrence that was the subject matter of the first litigation. Burguieres v. Pollingue, 2002-1385, p. 8 (La.2/25/03), 843 So.2d 1049, 1053. Herein, elements four and five do not appear to be satisfied. Suit No. 574,462 was filed on
We also dismiss the school board's arguments of issue preclusion under La. R.S. 13:4231(3). There is no indication in the Consent Permanent Injunction that the court ever considered the merits of the constitutional and other arguments raised by the Pointe Coupee Parish School Board, and no ruling was made as to those issues. The consent judgment in Suit No. 574,462 was limited and only enjoined LSERS for the unfunded accrued liability sought in the October 22, 2008 demand letter. The injunction made no mention of future demands. We, therefore, do not find any merit to the school board's claims of res judicata or collateral estoppel. The trial court did not err in overruling the exception of res judicata.
Lastly, the school boards argue that the trial court committed legal error in denying their request for injunctive relief Louisiana Code of Civil Procedure Article 3601(A) provides that "[a]n injunction shall be issued in cases where irreparable injury, loss, or damage may otherwise result to the applicant or in other cases specifically provided by law." Alternatively, a petitioner is entitled to injunctive relief without the requisite showing of irreparable injury when the conduct sought to be restrained is unconstitutional or unlawful, i.e., when the conduct sought to be enjoined constitutes a direct violation of a prohibitory law and/or a violation of a constitutional right. Jurisich v. Jenkins, 99-0076, p. 4 (La.10/19/99), 749 So.2d 597, 599 citing South Cent. Bell Tel. Co. v. La. Pub. Serv. Comm'n, 555 So.2d 1370 (La.1990). Once a plaintiff has made a prima facie showing that the conduct to be enjoined is reprobated by law, the petitioner is entitled to injunctive relief without the necessity of showing that no other adequate legal remedy exists. Jurisich, 99-0076 at 4, 749 So.2d at 599-600 citing Ouachita Parish Police Jury v. Am., Waste & Pollution Control, 606 So.2d 1341 (La.App. 2 Cir.), writ denied, 609 So.2d 234 (La.1992), cert. denied, 508 U.S. 909, 113 S.Ct. 2339, 124 L.Ed.2d 249 (1993).
For reasons previously discussed herein, we find that the school boards have failed to make a prima facie showing that La. R.S. 11:1202 violates any provision of the Louisiana Constitution. Also, we find that the use of MFP funds for retirement is consistent with the purpose of and is for
Based on our review of the record and the arguments presented by the school boards on appeal, we find that the trial court did not err in denying the school boards' requests for declaratory and injunctive relief and in overruling the exception of res judicata raised by the Pointe Coupee Parish School Board. Accordingly, we affirm the judgment of the trial court dated February 25, 2013. Costs of this appeal in the amount of $3,888.50 are assessed against the plaintiffs-appellants, the Pointe Coupee Parish School Board, the Evangeline Parish School Board, and the St. James Parish School Board.
Former Employee Parish Means Disposition Clarence Christophe Pointe Coupee Retired Merger/Consolidation Terri Saizan Pointe Coupee Retired Privatized Linda Batiste Pointe Coupee Retired Privatized Diedre Clark Pointe Coupee Retired Position Assumed by Another Driver Sylvia Cook Pointe Coupee Retired Position Assumed by Another Driver Marcella Field Pointe Coupee Retired Privatized Virginia Lejeune Pointe Coupee Terminated Position Assumed by Another Driver Stacie Myers Pointe Coupee Retired Privatized Hosey Guillory Evangeline Disability/Retired Privatized Warren Guillory Evangeline Retired Privatized Brenda Frank Evangeline Retired Privatized Elizabeth Lafleur Evangeline Disability/Retired Privatized Jimmy Menier Evangeline Retired Privatized Morris Bowser St. James Retired Position Assumed by Another Driver Jerome Bradford St. James Resigned Position Assumed by Substitute Drivers, then Privatized Terry Felton St. James Resigned Privatized Alinda Johnson St. James Resigned Position Assumed by Substitute Drivers, then Privatized Mildred Malarcher St. James Retired Position Assumed by Other Drivers Catherine Morton St. James Retired Privatized Oscar Stewart St. James Retired Position Assumed by Another Driver Gloria Gaudet St. James Retired Position Assumed by Another Driver Maelise Millet St. James Retired Privatized Gwen Patterson St. James Retired Privatized, Then Assumed by Another Driver David Winchester St. James Resigned Privatized, Then Assumed by Another Driver
