MARTIN L.C. FELDMAN, District Judge.
Before the Court is Dixie Brewing Company's motion for a preliminary and permanent injunction. For the reasons that
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,
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:
Ridgely v. Fed. Emergency Mgmt. Agency, 512 F.3d 727, 734 (5th Cir.2008).
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.
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.
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:
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., Hous., 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.
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 jurisdiction
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 Freeport-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 Freeport-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) ("Freeport-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
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
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:
Fed.R.Civ.P. 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.").
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.
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
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 Ill. 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.
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. Frederick, 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 case 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.
Fed.R.Civ.P. 24(a)(2).