The Declaratory Judgment Action: Your Secret Weapon for Staying in State Court

by Tiffany Dupree, Senior Associate

Introduction

You’ve just filed your case in state court. You have a non-diverse party, but you’ve been down this road before. You know that the defendant will try to remove the case to federal court, claiming that you joined the non-diverse party solely to defeat diversity jurisdiction. Truth be told, maybe you did, but you have a duty to your client and know that a state court judge will be more inclined to decide the case in your favor.

The battle of removals and motions to remand is about to begin. If only you had a secret weapon, a surefire way to keep your case in state court. Under recent Louisiana court decisions, adding a claim for declaratory relief may be the secret weapon you’ve been waiting for.

Standards for Removal based on Improper Joinder

Pursuant to 28 U.S.C. § 1332(a)(1), United States district courts have original jurisdiction over civil actions in which the amount in controversy exceeds $75,000 and is between citizens of different states.[1] Under 28 U.S.C. § 1441(a), “any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.”[2]

A party seeking removal based on improper joinder of a non-diverse defendant bears a “heavy” burden of proving that joinder is improper.[3] To meet this burden, the removing party must show either “(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court.”[4] Typically, the removing party does not claim actual fraud in the recitation of the jurisdictional facts. Thus, the pertinent issue before a court faced with removal due to improper joinder is whether the plaintiff is able to establish a cause of action against the non-diverse party.

In determining whether a non-diverse party has been joined improperly, federal courts must consider if it is possible for the plaintiff to recover against the non-diverse defendant under state law.[5] If there is a cause of action for declaratory relief, however, the test is different.[6] The court in Bilyeu v. Wells Fargo Insurance Services, Inc., found that the Louisiana Declaratory Judgment Act (“LDJA”)[7] alters what it means to “recover against” a non-diverse defendant.[8]

The Power of a Declaratory Judgment Action

The LDJA is the applicable law concerning declaratory judgment actions initiated in Louisiana courts.[9] The LDJA provides that “[w]hen declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the proceedings.”[10] Therefore, the possibility to “recover against” a non-diverse defendant is met when the defendant is an affected, interested party.[11]

An action for a declaratory judgment is sought to determine the rights of the parties.[12] Thus, the analysis set forth in the LDJA begs the question: when would an action to determine the rights of a party ever not affect the party?

The LDJA’s meaning of “recover against” allows a plaintiff to join a non-diverse party solely to defeat diversity jurisdiction, provided that one of the claims asserted is for declaratory relief. The joinder of the non-diverse party is deemed proper because the party will be affected by the declaration regardless of the conclusion the court reaches. If the court concludes that the non-diverse party is liable to the plaintiff, the non-diverse party is affected. If the court concludes that the non-diverse party is not liable to the plaintiff, the non-diverse party is still affected.[13]

The standard under the LDJA for defeating an improper joinder claim is remarkably low. As noted by the court in Alfred Miller Construction Company v. Carboline Company, “[t]he mere fact that [a plaintiff states] a cause of action for a declaratory judgment explaining [his] rights and liabilities under [a contract] is sufficient to defeat a claim of improper joinder.”[14] The defendant’s “heavy” burden in proving improper joinder, coupled with the minuscule requirements the LDJA places on the plaintiff to defeat the claim, creates an easy win for the plaintiff, allowing the case to remain in state court.

Conclusion

Under recent Louisiana caselaw, a claim for declaratory relief seems to be an easy way to win the battle of removals and motions to remand. So, the next time you file an action in Louisiana state court but are concerned that the defendant will remove to federal court based on improper joinder of a non-diverse defendant, be sure to use your secret weapon, the declaratory judgment action.

[1] 28 U.S.C. § 1332(a)(1) (2012).

[2] 28 U.S.C. § 1441(a) (2012).

[3] Travis v. Irby, 326 F.3d 644, 649 (5th Cir. 2003).

[4] Id. at 647.

[5] Frank’s Int’l, LLC v. Nat’l Union Fire Ins. Co. Pittsburg, No. 16-5252-JJB-RLB, 2016 WL 7242565, at *3 (M.D. La. Nov. 15, 2016) (citing Bilyeu v. Wells Fargo Ins. Servs., Inc., No. 16-00023, 2016 WL 5721070, at *4–5 (W.D. La. Sept. 29, 2016)).

[6] Id.

[7] La. Code Civ. Proc. arts. 1871–1883 (2017).

[8] Bilyeu, 2016 WL 5721060, at *5–6.

[9] Frank’s Int’l, 2016 WL 7242565, at *3. Although there is disagreement among Louisiana courts as to which Declaratory Judgment Act—the LDJA or the Federal Declaratory Judgment Act—should be applied in such cases, both Acts render the same result. Cf Bilyeu, 2016 WL 5721070 with Phoenix Expl. Co. v. Am. Int’l Specialty Lines Ins. Co., 2017 WL 3159013, at *3 n.10 (W.D. La. May 23, 2017).

[10] La. Code Civ. Proc. art. 1880 (emphasis added).

[11] Id.; Bilyeu, 2016 WL 5721060, at *5–6.

[12] Declaratory Judgment, Black’s Law Dictionary (10th ed. 2014).

[13] Phoenix, 2017 WL 7242565, at *3) (stating that the defendant’s motion for summary judgment seeking to declare the defendant not liable to the plaintiff “establishes a reasonable basis for recovery against the defendant based on the plaintiff’s declaratory judgment claim.”).

[14] Alfred Miller Constr. Co. v. Carboline Co., No 13-00084, 2013 WL 4538901, at *4 n.7 (W.D. La. Aug. 26, 2013).

Matal v. Tam: SCOTUS Terminates Selective Trademark Registration

by Endya L. Hash, Issue Editor

Introduction: The Story of One Band’s Journey to the Supreme Court

Simon Tam began his rock group to empower fellow Asian Americans experiencing the racial discrimination that Tam and his bandmates have endured throughout their lives.[1] As part of the band’s empowerment message, the group named themselves “THE SLANTS” and subsequently sought federal registration of their trademark.[2] The Patent and Trademark Office (“PTO”) denied the application for registration because of a provision of the Lanham Act that prohibited registration of trademarks that may “disparage . . . or bring . . . into contemp[t] or disrepute . . . [any] . . . persons, living or dead.”[3] PTO investigators unpredictably and selectively enforce this section of the Lanham Act, which commonly is referred to as the disparagement clause.[4] Tam appealed the registration denial all the way to the Federal Circuit, at which an en banc panel found the disparagement clause to be facially unconstitutional under the First Amendment’s Free Speech Clause.[5]

SCOTUS Steps in—Well, Sort-of at Least

The government asked the Supreme Court to review the Federal Circuit’s findings, and the Supreme Court agreed to hear the case.[6] Ultimately, the Court affirmed the judgment of the Federal Circuit, finding a violation of the First Amendment’s Free Speech Clause.[7] Although all justices agreed that a violation of the Free Speech Clause occurred, no majority of the justices could agree on the reason why the statute violated the Free Speech Clause.[8] In the plurality opinion, authored by Justice Alito and joined by Chief Justice Roberts, Justice Thomas, and Justice Breyer, the justices concluded that a decision regarding whether trademarks are commercial speech is unnecessary because, assuming that trademarks are commercial speech, the disparagement clause does not survive the Central Hudson intermediate scrutiny standard afforded forms of commercial speech.[9] Conversely, in the main concurring opinion, authored by Justice Kennedy and joined by Justices Ginsburg, Sotomayor, and Kagan, the justices found a violation of the Free Speech Clause because the statutory provision is subject to rigorous constitutional scrutiny whether it is commercial speech or other kinds of speech.[10] These justices found that, according to Sorrell v. IM Health Inc., when the government seeks to restrict speech to suppress the ideas conveyed, the courts must apply a strict scrutiny standard; in the present case, the disparagement clause results in clear viewpoint discrimination.[11]

The only portion of the opinion upon which every justice agreed was Part III(A), which addressed the government’s argument that trademarks were government speech and therefore subject to higher regulation than private speech.[12] This Blogpost briefly addresses the implications of this ruling on both Free Speech principles and trademark law.

The Scoop on Government Speech 

For years, the Supreme Court has acknowledged that the Free Speech Clause does not regulate forms of government speech.[13] Government speech is subject to greater regulation than private speech, and the Court emphasizes the importance of this distinction: “[i]f private speech could be passed off as government speech by simply affixing a government seal of approval, government could silence or muffle the expression of disfavored viewpoints.”[14] Although this principle seems simple, the line separating government speech from private speech is thin. Significantly, all of the justices agreed that trademarks are not government speech, and through their opinion, the Court finally outlined the outer boundaries of government speech doctrine by commenting on three major cases: (1) Johanns; (2) Summum; and (3) Walker.[15]

The oldest case cited by the Supreme Court in Tam provides an example of obvious government speech.[16] In Johanns v. Livestock Marketing Ass’n., the Court addressed whether a series of advertisements that were created by the government as a result of a federal statute consisted of government speech.[17] The Court classified the advertisements as government speech because (1) Congress and the Secretary of Agriculture provided the guidelines for the content of the ads, (2) the Department of Agriculture officials partook in discussions regarding the content of the ads, and (3) the Secretary could edit and reject any proposed ad.[18] Because the government was involved from beginning to end in the content and method of communication, the government clearly had established the speech.[19]

The Court then addressed a slightly more complicated case. In Pleasant Grove City v. Summum, the Court determined that monuments displayed in a public park but created and donated by private persons qualified as government speech.[20] In this case, the Court established several factors to determine whether speech qualifies as government speech: whether (1) governments commonly use this method of speech to communicate to the public; (2) the method of speech is known by the public to be highly selective in what is displayed; (3) the government would be overrun if obligated to accept all submissions from the public; (4) the method of speech is often closely identified in the public mind with the government; and (5) the method of speech is meant to convey a government message.[21]

Using the factors created in Summum, the Court identified “the outer bounds of the government speech doctrine” in Walker v. Texas Div., Sons of Confederate Veterans, Inc.[22] In this case, the Court determined whether the decorative elements of a license plate are considered government speech.[23] The Court found that license plates qualify as government speech because they are used commonly to convey state messages, often are closely associated with the government in the mind of the public, and are subject to the state’s direct control over decorative elements[24]

Applying the factors derived from Summum, the Tam Court found that trademarks are not government speech.[25] First, trademarks are not used traditionally to convey government messages.[26] Second, no evidence exists to show that the public associates a trademark’s content with the government.[27] Third, trademarks are not created or edited by the government.[28] In fact, if the trademark meets the Lanham Act’s viewpoint-neutral requirements, registration is mandatory, and the examiner has no discretion to edit or reject a trademark. [29] In short, the Court did not find that any of the factors indicated government speech applicable to trademark registration.[30]

Additionally, the Court noted several policy reasons why a trademark should not be classified as government speech. Perhaps the most convincing reason trademarks should not be considered government speech lies in the catastrophic implications of this ruling for other areas of intellectual property law.[31] A holding that registration of intellectual property converts private speech into government speech creates the most worrisome implication for copyright registration.[32] If registering forms of expression either as a trademark or a copyright removes First Amendment protections, the government could regulate all forms of expression, potentially restricting registration to messages that the government finds beneficial to their interests.[33] Interestingly, the Court does not address that such a ruling would resemble the very roots of copyrights found in the English Licensing of the Press Act of 1662.[34] The English government created the original copyright system to permit the owner of a printing press to make copies of particular written works.[35] These copyrights were granted exclusively for works that the government wanted to promulgate and denied for writings that the government wanted to suppress.[36] If today’s modern copyright registration could remove First Amendment protection from an expressive work, the government could return quickly to a system that censors all speech.[37]

Does Tam Really Change Trademark Law?

Some scholars suggest that dilution laws[38] and other expansive trademark doctrines in which the government prohibits non-misleading uses of protected trademarks may not survive constitutional scrutiny after Tam.[39] In the past, the dilution claims have survived First Amendment scrutiny; commentators argue, however, that this case represents a heightening of the scrutiny of commercial speech regulations, which may create a stronger case for litigants who argue for the unconstitutionality of dilution laws.[40]

Some commentators, however, disagree with the implications of this case on dilution law, arguing that this interpretation confuses the meaning of dilution by tarnishment.[41] One scholar argues that trademarks possess a dual nature of both speech and property interest.[42] When the mark is diluted in a way that potentially can alter the mark’s meaning, this dilution has the power to harm a property interest, which validates the regulation of this use by the government.[43] In other words, “[j]ust because the government cannot refuse to register a car bearing a racist bumper sticker does not mean it cannot prohibit others from vandalizing that racist sticker.”[44] Trademarks fulfill their function because of the owner’s ability to shape their content and preserve the owner’s goodwill[45]—a function that is harmed through dilution by blurring and tarnishment.[46] Essentially, these scholars assert that the disparagement decision in Tam did not factor into the purposes and goals of trademark law.[47]

Other commentators counter that the Tam Court did not resolve the First Amendment answer by strict analysis of language from prior cases but from analyzing public policy, conflicts in policies, and the implications of application.[48] Therefore, these commentators do not think Tam will be controlling in a dilution by tarnishment case.[49]

In the end, this case has greater implications for its definitive analysis of the government speech doctrine and does not change trademark law in any meaningful way. As for the disparagement clause of the Lanham Act, it’s “hasta la vista, baby.”[50]

 

[1] Matal v. Tam, 137 S. Ct. 1744, 1747 (2017).

[2] Id.

[3] 15 U.S.C. § 1052(a) (2012); Tam, 137 S. Ct. at 1747.

[4] Tam, 137 S. Ct. at 1756−57, n.5. See, e.g., Carl J. Minniti, III, The Lanham Act’s Unconstitutional Hodgepodge, 17 Rutgers J. L. & Religion 315, 325, 327, 340 (2016); Roni A. Elias, Where Never is Heard a Disparaging Word: The Anti-Disparagement Provision of the Lanham Act and the Problem of Trademarks Based on Derogatory Descriptions of Native Americans, 64 Fed. Law. 27, 28−32 (2017); James Stewart & Sarah Waidelich, Redskins and Slants: The Lanham Act and the First Amendment on a Collision Course, 31 Comm. Law. 11, 15 (2015).

[5] Id. at 1747. Once a trademark registration is denied by an examining attorney at the Patent and Trademark Office, the applicant may appeal the denial to the Trademark Trial and Appeal Board (“TTAB”). See generally U. S. Patent and Trademark Office, Trademark Trial and Appeal Board Manual of Procedure, https://tbmp.uspto.gov/RDMS/TBMP/current (last visited Sept. 20, 2017). The Federal Circuit reviews judgments from the TTAB [https://perma.cc/UQ5H-3659]. See generally id.

[6] Tam, 137 S. Ct. at 1747.

[7] Id.

[8] See id. at 1747.

[9] Id. at 1763−65. Commercial speech is speech that proposes a commercial transaction and therefore exists in a regulated marketplace. Ohralik v. Ohio State Bar Ass’n, 436 U.S. 447, 455–56 (1978). Because regulation of commercial speech is more constitutionally tolerable than regulation of private speech, commercial speech regulations are subject to a specific intermediate scrutiny test. Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n, 447 U.S. 557 (1980). The intermediate scrutiny test states that regulations affecting commercial speech do not violate the First Amendment if any of the following are true: (1) the regulated speech proposes an economic transaction involving an illegal activity; (2) the regulated speech is misleading; and (3) the regulation substantially advances an important government interest, and the regulation is tailored narrowly to serve the government’s interest. Id. at 562.

[10] Tam, 137 S. Ct. at 1767. Lisa Ramsey, Symposium: Increasing First Amendment scrutiny of Trademark Law after Matal v. Tam, SCOTUSblog (June 20, 2017, 2:33 PM), http://www.scotusblog.com/2017/06/symposium-increasing-first-amendment-scrutiny-trademark-law-matal-v-tam/ [https://perma.cc/G6Z6-HZMQ].

[11] Tam, 137 S. Ct. 1744, 1767−69. Justice Gorsuch did not take part in this opinion. Id. at 1750.

[12] Id. at 1757–60.

[13] Id. (citing Pleasant Grover City v. Summum, 555 U.S. 460, 467 (2009); Johanns v. Livestock Mktg. Ass’n., 544 U.S. 550, 553 (2005) (“[T]he Government’s own speech . . . is exempt from First Amendment Scrutiny.”); Bd. of Regents of Univ. of Wis. Sys. v. Southworth, 529 U.S. 217, 235 (2000)).

[14] Id. at 1758.

[15] Id. at 1759–60.

[16] Id. at 1759 (citing Johanns, 544 U.S. 550, 560).

[17] Id. (citing Johanns, 544 U.S. 550).

[18] Id. (citing Johanns, 544 U.S. 550).

[19] Id. (citing Johanns, 544 U.S. 550).

[20] Id. (citing Pleasant Grove City v. Summum, 555 U.S. 460, 472 (2009)).

[21] Id. at 1759–60 (citing Summum, 555 U.S. at 472).

[22] Id. at 1760 (citing Walker v. Texas Div., Sons of Confederate Veterans, Inc., 135 S. Ct. 2239 (2015)).

[23] Id. (citing Walker, 135 S. Ct. 2239).

[24] Id. (citing Walker, 135 S. Ct. 2239).

[25] Id.at 1759.

[26] Id. at 1760.

[27] Id.

[28] Id. at 1758.

[29] Id. The PTO also has argued that registration does not constitute approval of a mark. Id. at 1759 (citing Old Glory Condom Corp., 26 U.S.P.Q.2d 1216, 1220 n.3 (T.T.A.B. 1993) (“[I]ssuance of a trademark registration . . . is not a government imprimatur.”)).

[30] Id.

[31] Id. at 1760.

[32] Id.

[33] Id.

[34] See Mark Rose, The Public Sphere and the Emergence of Copyright: Areopagitica, the Stationers’ Company, and the Statute of Anne, 12 Tul. J. Tech. & Intell. Prop. 123, 138 (2009).

[35] See id. at 138.

[36] See id. at 138.

[37] See L. Ray Patterson & Craig Joyce, Copyright in 1791: An Essay Concerning the Founders’ View of the Copyright Power Granted to Congress in Article I, Section 8, Clause 8 of the U.S. Constitution, 52 Emory L.J. 909, 952 (2003).

[38] The Lanham Act creates a cause of action to protect the use of famous marks regardless of the presence or likelihood of any confusion or economic injury or whether the trademark is used commercially. 15 U.S.C. §1125(c) (2012); See also Dilution, Black’s Law Dictionary (10th ed. 2014) (defining “dilution” as the “impairment of a famous trademark’s strength, effectiveness, or distinctiveness through the use of a mark on an unrelated product”).

[39] Ramsey, supra note 10.

[40] Id; Christine Farley, Symposium: Free Speech Comes to Trademark Law, SCOTUSblog (June 20, 2017, 2:25 PM), http://www.scotusblog.com/2017/06/symposium-free-speech-comes-trademark-law/ [https://perma.cc/2UZK-7SR9]; Hugh Hansen, Symposium: Most Important Free Speech Case in Many Years, SCOTUSblog (June 22, 2017, 11:52 AM), http://www.scotusblog.com/2017/06/symposium-important-free-speech-case-many-years/ [https://perma.cc/DRF9-MR6L].

[41] Irina Manta, Symposium: The cacophony of trademarks is not government speech, SCOTUSblog (June 20, 2017, 5:06 PM), http://www.scotusblog.com/2017/06/symposium-cacophony-trademarks-not-government-speech/ [https://perma.cc/LF8P-4WXX]; Hansen, supra note 40. Tarnishment is a “form of dilution that occurs when a trademark’s unauthorized use degrades the mark and diminishes its distinctive quality.” Tarnishment, Black’s Law Dictionary (10th ed. 2014).

[42] Manta, supra note 41.

[43] Id.

[44] Id.

[45] Goodwill refers to “[a] business’s reputation, patronage, and other intangible assets that are considered when appraising the business . . . . Because an established business’s trademark or servicemark is a symbol of goodwill, trademark infringement is a form of theft of goodwill. By the same token, when a trademark is assigned, the goodwill that it carries is also assigned.” Goodwill, Black’s Law Dictionary (10th ed. 2014).

[46] Manta, supra note 41. Blurring refers to “[a] form of dilution in which goodwill in a famous mark is eroded through the mark’s unauthorized use by others on or in connection with dissimilar products or services.” Blurring, Black’s Law Dictionary (10th ed. 2014).

[47] Manta, supra note 41.

[48] Hansen, supra note 40..

[49] Id.

[50] HASTA LA VISTA, BABY, Registration No. 87567844.

Defining Race: Muting All That is Not Immutable

by Jade Shaffer, Senior Associate

INTRODUCTION

In the midst of a racially tense society, courts have been struggling to decide what exactly “race” is and what constitutes “discrimination based on race” in the employment context. Two statutory provisions exist under which employees can bring racial discrimination claims against their employers. Title VII of the Civil Rights Act of 1964 prohibits an employer from discriminating against an employee or applicant because of race, color, religion, sex, or national origin,[1] whereas § 1981 exclusively prohibits discrimination based on race.[2] Significantly, neither Title VII nor § 1981 provides a definition of “race,” forcing courts to rely on other sources—such  as dictionaries and encyclopedias, the literature of anthropologists and biologists, and the legislative history of Title VII and § 1981—to fashion a definition.

 

DEFINING “RACE”

Ethnicity as a Proxy 

In a 1987 Supreme Court case, St. Francis College v. Al-Khazraji, an associate professor at St. Francis College brought an action under § 1981 alleging that he was denied tenure based on his “Arabian race.”[3] The employer argued that at the time the suit was brought, a variety of ethnic groups, including Arabs, were considered to be within the Caucasian race. Further, all individuals that might be deemed Caucasians in 1987 were thought to be of the same race in the 19th century when § 1981 became law.[4] The Court explained in a footnote that this reasoning was based on a common understanding that there are three major human races—Caucasian, Mongoloid, and Negroid; however the Court went on to say that many biologists and anthropologists had criticized these racial classifications as arbitrary and that some scientists had concluded that racial classifications are more sociopolitical than biological in nature.[5]

The Court rejected the employer’s argument, stating that the understanding of “race” in the 19th century was different from the contemporary understanding of “race.”[6] Citing to 19th-century dictionaries defining “race” as “descendants of a common ancestor” or “people from the same stock” and encyclopedias describing race in terms of ethnic groups, the Court concluded that although the sources were somewhat diverse, “they do not support the claim that for the purposes of § 1981, Arabs, Englishmen, Germans, and certain other ethnic groups are to be considered a single race.”[7] It was not until the 20th century that sources began to identify three races.[8] Additionally, the Court went on to state that the legislative history of § 1981 reflected the understanding of “race” as it existed in the 19th century.[9] Consequently, the Court held that “at a minimum, §1981 reaches discrimination directed against an individual because he or she is genetically part of an ethnically and physiognomically distinctive sub-grouping of homo sapiens,” although they noted that a “distinctive physiognomy is not essential to qualify for § 1981 protection.”[10] Thus, the Court explained, if the employee could prove on remand that he had been subjected to intentional discrimination based his Arab ancestry, he would have established a case under § 1981.[11]

Culture and Style as a Proxy

The United States Court of Appeals for the Eleventh Circuit revisited the definition of race last year in EEOC v. Catastrophe Management Solutions.[12] In this case, the EEOC filed suit under Title VII on behalf of a black job applicant whose offer of employment was rescinded by Catastrophe Management Solutions under its race-neutral grooming policy when the employee refused to cut off her dreadlocks.[13] The district court dismissed the complaint stating that Title VII prohibits discrimination of immutable characteristics and “[a] hairstyle, even one more closely associated with a particular ethnic group, is a mutable characteristic.”[14] On appeal, the EEOC asserted four arguments in support of its claim: first, that race “is a social construct and has no biological definition”; second, “the concept of race is not limited to or defined by immutable physical characteristics”; third, according to the EEOC Compliance Manual, the “’concept of race encompasses cultural characteristics related to race or ethnicity,’ including ‘grooming practices”’; and fourth, “although some non-black persons ‘have a hair texture that would allow the hair to lock, dreadlocks are nonetheless a racial characteristic, just as skin color is a racial characteristic.’” [15]

The court stated that the primary consideration in the case was what “race” encompasses under Title VII “because the EEOC maintains that ‘if [] individual expression is tied to a protected trait, such as race, discrimination based on such expression is a violation of the law.’”[16] Noting the absence of a definition of “race” in Title VII, the court stated that words are defined by looking to their ordinary, contemporary, common meaning, and “one of the ways to figure out that meaning is by looking at dictionary definitions around the time of [the statute’s] enactment.”[17]

Similar to the definitions cited in St. Francis, the commonality among the 1960s sources led the court to conclude that “race” referred to “common physical characteristics shared by a group of people and transmitted by their ancestors over time.”[18] And, although the dictionaries did not use the word “immutable” to describe those characteristics, the court concluded that it was not a “linguistic stretch” to think that such characteristics “are a matter of birth, and not culture.”[19] Additionally, the court cited prior jurisprudence to support the proposition that Title VII protects discrimination based on immutable characteristics.[20] Despite recognizing that the distinction between immutable and mutable characteristics can be a fine and difficult line to draw, the court held that nonetheless, courts have drawn this line.[21] The court further held that the EEOC’s complaint did not state a plausible claim of intentional discrimination based on race because a hairstyle is not an immutable characteristic.[22]

COULD NATIONAL ORIGIN SAVE THE DAY?

In a concurring opinion in St. Francis, Justice Brennan attempted to point out that the line between discrimination based on “race”—that is, discrimination based on “ancestry or ethnic characteristics”—and discrimination based on national origin—that is, discrimination based on “place or nation of . . . origin is not a bright one.”[23] Brennan noted that although discrimination based on ancestry is not necessarily the same as discrimination based on national origin, the two are often identical as a factual matter.[24] Specifically, in the Title VII context, the regulations defining national origin discrimination state that such discrimination “include[s], but [is] not limited to, the denial of equal employment opportunity because of an individual’s, or his or her ancestor’s place of origin; or because an individual has the physical, cultural, or linguistic characteristics of a national origin group.”[25]

Although the Eleventh Circuit conceded that dreadlocks are most commonly associated with the African-American race, it rejected that the association of that hairstyle with the African-American race as an “immutable trait” so as to constitute racial discrimination.[26] However, with the “fine line” between racial discrimination and national-origin discrimination, and the definition of national-origin discrimination that prohibits discrimination “because an individual has the physical or cultural characteristics of a national origin group,”[27] perhaps the EEOC might have been more successful arguing that dreadlocks are a cultural characteristic of African ancestry under a theory of national origin discrimination.

CONCLUSION

In the absence of a statutory definition of “race,” courts have struggled in deciding what constitutes racial discrimination. Although the Supreme Court has rejected contemporary understandings of the word, St. Francis seemed to take a more expansive approach to the historical understanding of race by classifying discrimination based on Arab ancestry as racial discrimination. However, in Castrophe the Eleventh Circuit set a narrow limitation on what constitutes racial discrimination, holding that Title VII protects only against immutable traits and not cultural associations, despite the fact that immutability is not a requirement for any other Title VII protected classes. Ultimately, because the line between racial and national-origin discrimination is a fine one, national-origin discrimination could serve as a net to catch Title VII claims that no longer fit under the umbrella of racial discrimination if the Eleventh Circuit’s decision in Catastrophe becomes the national standard.

 

[1] 42 U.S.C. § 2000e-2 (2012).

[2] Id. § 1981.

[3] St. Francis College v. Al-Khazraji, 481 U.S. 604 (1987).

[4] Id. at 609.

[5] Id. at n.4.

[6] Id.

[7] Id. at 612.

[8] Id.

[9] Id.

[10] Id.

[11] Id. at 6.

[12] EEOC v. Catastrophe Mgmt. Sols., No. 14-13482, 2016 WL 7210059 (11th Cir. Dec. 13, 2016).

[13] Id. at *1.

[14] Id. at *3 (citing EEOC v. Catastrophe Mgmt. Solns., 11 F. Supp. 3d 1139, 1143 (S.D. Ala. 2014) (order granting motion to dismiss)).

[15] Id. at *2.

[16] Id. at *6.

[17] Id.

[18] Id. at *7.

[19] Id.

[20] Id. at *8–9 (first citing Willingham v. Macon Tel. Publ’g Co., 507 F.2d 1084 (5th Cir. 1975) (holding that an employer’s refusal to hire a male applicant with long hair under its neutral grooming policy was not a violation of Title VII’s prohibition on sex discrimination because length of hair is not an immutable trait); and then citing Garcia v. Gloor, 618 F.2d 264 (5th Cir. 1980) (applying the immutable characteristic limitation to national origin and holding that the firing of a Mexican-American employee for speaking Spanish to a co-worker on the job in violation of his employer’s English-only policy did not violate Title VII’s prohibition on discrimination because of nation origin)).

[21] Id. at *9.

[22] Id.

[23] St. Francis College v. Al-Khazraji, 481 U.S. 604, 614 (1987) (Brennan, J., concurring).

[24] Id.

[25] Id.

[26] Id. at 614 (citing 29 C.F.R. §1606.1 (1986)).

[27] Id. at 614.

A Question of Nullities, Relative and Absolute

By Henry S. Rauschenberger, Articles Editor for the Louisiana Law Review

Introduction

Louisiana Civil Code article 2329 provides the legal framework for spouses who wish to, by matrimonial agreement before or during their marriage, modify or terminate their matrimonial regime.[1] Spouses may freely enter into such agreements before their marriage with very few restrictions as to content[2] or form.[3] During the marriage, however, spouses who wish to modify or terminate their matrimonial regime must not only follow the form requirement common to all matrimonial agreements,[4] they must also seek approval of the agreement by a court via joint petition.[5] But what if they did not get approval? What if they were not aware of the need for judicial approval? What if they filed a separate petition? It has remained an open question for family law practitioners and scholars as to what effect a failure to get judicial approval would have on a matrimonial agreement . . . until now.

 

The Case

In Radcliffe 10, L.L.C. v. Burger, the Louisiana Supreme Court, for the first time, weighed in on the validity of matrimonial agreements that are not judicially approved and provided a definitive, somewhat troubling, answer.[6] The story of Radcliffe begins at the end of another legal story, one in which Radcliffe 10, L.L.C. (“Radcliffe”) received a judgment against Ronald Burger that exceeded $3.4 million dollars.[7] After the judgment was rendered, but before it was signed by the court, Ronald and his wife Lynda entered into a matrimonial agreement that terminated their community property regime and partitioned their community property between them.[8] The Burgers sought and received judicial approval of their agreement—again before the signing of Radcliffe’s judgment—but the petition filed was not joint, naming Lynda as a defendant rather than as a joint petitioner.[9] Radcliffe, taking note of this irregularity, sought to have the matrimonial agreement declared an absolute nullity, and the trial court ruled as such.[10] Hearing the case on appeal, the Louisiana First Circuit Court of Appeal split evenly, five to five, on the issue of whether the failure to file a joint petition rendered the matrimonial agreement an absolute nullity—which can be raised by any party at any time, including in this instance the judgment creditor, Radcliffe—or a relative nullity—which can only be raised by the party whom the nullity protects.[11] Being split evenly, no executable majority judgment could be issued, and the trial court decision was left standing.[12] Writs were subsequently sought and granted.[13]

 

The Decision

To determine whether the procedural defect at the heart of the case rendered the matrimonial agreement between Ronald and Lynda an absolute or a relative nullity, the Louisiana Supreme Court looked to prior case law and the writings of prominent Louisiana legal scholars.[14] If the object of the requirement of judicial approval in article 2329 was a “rule of public order,” intended to protect a large class of persons, then the violation of it would render the agreement an absolute nullity; if it was “a rule intended for the protection of private parties,” the violation of it would only render the agreement a relative nullity.[15] After considering all of the aforementioned sources, the Louisiana Supreme Court determined that the requirement for judicial approval found in article 2329 was intended to protect the “less worldly” spouse in a marriage from entering into disadvantageous matrimonial agreements he or she did not fully understand.[16] Therefore, the Court held that the failure of the Burgers to get proper judicial approval rendered the agreement only a relative nullity and, as such, this nullity could only be raised by the parties it protected—the Burgers themselves.[17] Without being an absolute nullity, Radcliffe as a non-protected party had no right to raise the issue.[18] The Louisiana Supreme Court reversed the trial court judgment and dismissed Radcliffe’s action with prejudice.[19]

 

The Dissents

Both Justice Guidry and Justice Clark dissented.[20] Although the justices dissented separately, both dissents focused on the same two points: (1) that article 2329 is clear and unambiguous in its requirement of a joint petition and (2) that although article 2329 primarily protects the spouses, it does afford protections to other persons, such as creditors, heirs, and legatees, and should thus be considered a rule of public order.[21] Both justices would have affirmed the trial court’s holding that the agreement between the Burgers was an absolute nullity.

 

So What? What’s the Big Deal?

The Louisiana Supreme Court’s determination that failure to properly seek and obtain judicial approval of a matrimonial agreement under article 2329 only renders such an agreement a relative nullity is troubling. A close look at the facts of Radcliffe reveals why. Ronald Burger had a significant judgment rendered against him and before that judgment could be signed, he and his wife Lynda terminated their matrimonial regime and partitioned their marital property. While the timing of the Burger’s matrimonial agreement may have been—but likely was not—coincidental, it effectively prevented Ronald’s judgment creditor, the party whom Ronald had been adjudged to have harmed, from going after any of the formerly marital property that had been partitioned to Lynda or any of Lynda’s future earnings to satisfy the lawful judgment that had been rendered in their favor. The Louisiana Supreme Court’s ruling has essentially opened the door for any married person to avoid judgments against him or her in the same manner. As the Supreme Court has determined that the requirement of judicial approval is only for the protection of the spouses, why should two spouses, against one of whom a judgement has been rendered, not simply terminate their matrimonial regime?

This decision opens the door for married couples to manipulate their matrimonial regimes to avoid their responsibilities to creditors. The law should not condone and permit creative manipulation of the law to avoid one’s responsibilities, and it should certainly not condone the manipulation of the marital regime for patrimonial gain or protection. This decision, together with the law underlying it, should be revisited and this open door to wanton manipulation shut and locked.

[1] La. Civ. Code art. 2325 (2017) (“A matrimonial regime is a system of principles and rules governing the ownership and management of the property of married persons as between themselves and towards third persons.”).

[2] Id. art. 2330.

[3] Id. art 2331 (“A matrimonial agreement may be executed by the spouses before or during marriage. It shall be made by authentic act or by an act under private signature duly acknowledged by the spouses.”).

[4] Id.

[5] Id. art. 2329.

[6] No. 2016–C–0768, 2017 WL 362085 (La. Jan. 25, 2017).

[7] Id. at *1.

[8] Id. Although the record does not mention it, one would guess that Mrs. Burger received the bulk—if not all—of the martial property.

[9] Id.

[10] Id.

[11] Radcliffe 10, L.L.C. v. Burger, 191 So. 3d 79, 84 (La. Ct. App. 2016).

[12] Id.

[13] Radcliffe 10, L.L.C. v. Burger, 204 So. 3d 998 (La. 2016).

[14] Radcliffe 10, L.L.C. v. Burger, 2017 WL 362085 at *4–5.

[15] Id. at *6.

[16] Id. at *4.

[17] Id. at *6.

[18] Id. The Supreme Court did note that the creditor had a separate action under Louisiana Civil Code article 2376 through which he could challenge any allegedly fraudulent transfers made pursuant to the agreement. Id. at *5–6.

[19] Id. at *6.

[20] Id. at *7.

[21] Id. at *7–9.

[22] Id.

The Catahoula Basin: Historically a River, Currently a Lake—Who Owns It?

 

by Ryan King, Senior Associate

Catahoula Lake is the largest freshwater lake in Louisiana, covering over 46 square miles.[1] During the 20th century, this body of water experienced significant geographical modifications because of man-made water control structures.[2] What was once a meandering stream that seasonally flooded thousands of acres within the river basin for several months each year has permanently flooded the basin since 1973, creating what is currently known as “Catahoula Lake.”[3]

Changing the designation of a body of water from “lake” to “river” has serious implications for landowners and the state. Currently, the Catahoula Basin is commonly known as a “lake”—a designation that would preserve ownership of the land below the ordinary high-water mark for the state.[4] However, in the recent case Crooks v. State, the court analyzed the historical background of the water body, concluding that the Catahoula Basin is legally a “river”[5] —which would preserve the ownership of the banks, the area between the ordinary low and high watermarks, for the riparian landowners.[6]

That conclusion also resulted in a finding that the State had unlawfully expropriated the river banks and owed the landowner plaintiffs over 30,000 acres of flooded land and nearly $38 million in damages, as well as over $4.5 million in unpaid oil and gas royalties.[7] This comment will provide a summary of the analysis used by the court in determining the legal identity of the historically non-permanent water body, commonly known as Catahoula Lake.

  1. Legal Background of the Catahoula Basin

Upon joining the Union in 1812, Louisiana “acquired title, by virtue of its inherent authority, to the beds of navigable water bodies situated within its boundaries.”[8] Additionally, much of the Catahoula Basin was specifically designated as “swampland” and transferred to the state by the federal government under the Swampland Acts of 1849 and 1850.[9] Both the plaintiff landowners and the State stipulated in Crooks that Catahoula Lake was navigable in 1812;[10] therefore, Louisiana acquired ownership of the water body up to its ordinary high-water mark upon admission to the Union and had the power to determine the rights of the riparian owners.[11] Louisiana law dictates that the area of land between the ordinary low mark and ordinary high mark of navigable rivers is privately owned,[12] but that the land below the ordinary high mark of a lake is owned by the state.[13] Thus, the legal classification of the Catahoula Basin as a river or a lake determines whether the plaintiff landowners or the State owns the lands beneath the ordinary low-water and ordinary high-water marks of Catahoula Lake.

  1. The Catahoula Basin in 1812

The expert witnesses for the plaintiffs and the State agreed that the historical evidence is the best evidence for determining the status of the basin in and around 1812. The Crooks court extensively reviewed the historical reports from the early 1800’s through the 1960’s to determine whether the area is legally a river or a lake.

The reports indicated that in 1804, Thomas Jefferson sent William Dunbar on an expedition that included the Catahoula Basin.[14] Dunbar described the body of water as having an inflow from Little River “[that] preserves a channel running water at all season, meandering along the bed of the lake; but all other parts of it superficies during the dry season from July to November . . . are completely drained & become clothed in the most luxuriant herbage,” which becomes grazing land for “immense herds of deer.”[15] This description presents the primary basis for the court’s analysis of the water body’s legal classification.

Historically, the basin was composed of a small meandering stream for half of the year with extremely gradual banks, such that the seasonal overflow of waters from backed up tributaries caused the flooding of thousands of acres, turning the meandering stream into a lake.[16] In short, for half of the year, the basin contained a meandering stream, called Little River, surrounded by thousands of acres of grassland; for the other half of the year, Little River overflowed and flooded the thousands of acres of grassland creating what seemed to be a seasonal lake.[17] Based on Dunbar’s description and the expert testimony, the court concluded that Dunbar’s description of a meandering water body is entirely consistent with a river, not a lake.[18]

Next, the court relied upon the initial boundaries of Catahoula Parish adopted by the legislature in 1808. Most noteworthy is the fact that the legislature set Little River as the southern boundary, and not Catahoula Lake, thus implying that the channel of Little River traversed the entire Catahoula Basin.[20]  If the water body was considered a lake at the time, the parish boundary would have likely terminated at the edge of the lake, and not at the edge of the stream meandering through the lake.

In 1816, William Darby, another explorer, published a journal and map of his observations of the Catahoula Basin.[21] The court honed in on Darby’s assertion that designating the basin as a “lake” is a misnomer that would mislead individuals into believing it was a “constant repository of water,” when in fact it is “reservoirs filled annually by the hand of nature.”[22] Darby further noted that as the water is seasonally drained by the river depression, the lakebed becomes “a meadow of succulent herbage, with channels for the waters that continue meandering through them.”[23] This description was bolstered by the map, which also showed the channel of the Little River traversing the entirety of the Catahoula Basin.[24]

The court also examined later historical evidence from the mid 1900s,[25] which confirmed the earlier findings of Darby and Dunbar regarding the permanent and complete transversal of the basin by Little River and the seasonal inundation of the surrounding low lands.

Based on the historical evidence, the court found that in 1812, the Little River was a permanent body of water that completely traversed the Catahoula Basin and would seasonally overflow the otherwise vegetated surrounding low land, flooding thousands of acres.[26]

  1. Analysis

            In State v. Placid Oil, the court developed a several-factor test that is useful in determining whether a body of water is a lake or a river. However, the Crooks court determined that the Placid Oil test is applicable only to permanent bodies of water[28] and relied upon out-of-state authority to determine the treatment of seasonably flooded areas.

The court adopted the rule from the Illinois case Nottolini v. Lasalle National Bank, concluding that a “mere temporary body of water and specifically . . . the so-called Catahoula Lake, cannot be classified as a ‘Lake.’”[29] The court bolstered its conclusion by the Nebraska Supreme Court decision in Cooper v. Sanitary District No.1, finding that a stream seasonally flooding adjacent lands in its flood plain retains its character as a stream.[30] Finally, the court looked to the Louisiana case Schoeffler v. Drake Hunting Club for the principle that “the mere fact that privately-owned land or waterways are flooded or navigable does not render them public.”[31]

Based on the interpretation of Nottolini, Cooper, and Schoeffler, the court concluded that, in 1812, the Catahoula Basin did not meet the reasonably permanent requirement to be considered a lake,[32] but that it “was a permanent river that seasonally overflowed and covered its banks.”[33] Ultimately, this holding establishes the seasonally flooded lands of the Catahoula Basin as the banks of a river, which are privately owned by the riparian landowners.

III.      Damages & Conclusion

The plaintiffs argued that the permanent flooding of thousands of acres in the Basin caused by the construction of the Jonesville Lock and Dam structure in 1973 constituted an inverse condemnation for which they are due compensation.[34] The State raised exceptions of prescription[35] and no right of action because of a lack of property interest by the landowners.[36] The court concluded that the constant interference with the plaintiffs’ natural servitude of drain caused by the dam structure established a continuing tort, preventing the running of prescription.[37] Additionally, the court determined that the plaintiffs have a right of action against the State for unlawful expropriation of their lands because the “Act of Assurances” portion of the contract between the state and the federal government required the state to acquire all drainage servitudes around the Catahoula Basin necessary for the construction and maintenance of the dam structure.[38] The state was also required to hold the federal government harmless against all damages arising from the dam project.[39]

Consequently, the court found that an unlawful expropriation occurred and that the plaintiffs are due compensation for the full extent of their loss of enjoyment of the lands that were once seasonally dry.[40] The damages from the expropriation were fixed at $1,260 per acre for the entire class of plaintiffs, who were legally determined to be the owners of the 30,393.84 acres at issue.[41] Additionally, the riparian owners were awarded $4,694,309.68 for mineral royalties received by the state from their lands.[42]

Whether the holding in Crooks will affect the legal identification of other Louisiana water bodies remains to be seen. Its impact will likely be limited to water bodies with the similar geologic trait of being non-permanent and seasonally flooded, while permanent water bodies will likely continue to be analyzed under the Placid factors.

 

[1] Crooks v. State, No. 224,262, 2016 WL 3197532, at *5 (La. Dist. Ct. May 17, 2016).

[2] Id. at * 1.

[3] Id. at *2.

[4] Id. at *7 (citing State v. Placid Oil Co., 300 So. 2d 154, 172 (La. 1973)).

[5] Id. at *26–27.

[6] Id. at *7 (citing LA. Civ. Code art. 456 (2016)).

[7] Id. at *45.

[8] Id. at *6 (citing Act of April 8, 1812, ch. 50, 2 Stat. 701 (admitting the State of Louisiana to the Union)).

[9] Id.

[10] Id. at *3.

[11] Id. at *6 (first citing Shively v. Bowlby, 152 U.S. 1 (1894), and then citing State v. Richardson, 72 So. 984 (La. 1916)).

[12] LA. Civ. Code art. 456 (2017).

[13] Crooks, 2016 WL 3197532, at *6 (first citing State v. Placid Oil Co., 300 So. 2d 154 (La.1973), and then citing McCormick Oil & Gas Corp. v. Dow Chem. Co., 489 So. 2d 1047 (La. Ct. App. 1986)).

[14] William Dunbar, The Forgotten Expedition, 1804-1805: The Louisiana Purchase Journals of Dunbar and Hunter (Trey Berry et al. eds., 2006).

[15] Id. at 20.

[16] Crooks, 2016 WL 3197532, at *18.

[17] Id.

[18] Id. at *9.

[19] Id.

[20] Id. at *10.

[21] William Darby, A Geographical Description of the State of Louisiana (Johann P. Homann ed., 1817).

[22] Id. at 195.

[23] Id.  

[24] Crooks, 2016 WL 3197532, at *12.

[25] Id. at *13­–14 (citing Willian Chawner, Geology of Catahoula and Concordia Parishes, 32–33 35­ (1936); LA. Dep’t of Pub. Works, Catahoula Lake Area Report, 3–5 (1954)).

[26] Id. at * 13.

[27] See generally State v. Placid Oil Co., 300 So. 2d 154 (La.1973).

[28] Crooks, 2016 WL 3197532, at *24.

[29] Id. at *25 (citing Nottolini v. Lasalle Nat’l Bank, 782 N.E.2d 980 (Ill. 2d Dist. 2003)).

[30] Id. (citing Cooper v. Sanitary Dist. No. 1, 19 N.W. 2d 619, 624 (Neb. 1945)).

[31] Id. (citing Schoeffler v. Drake Hunting Club, 919 So. 2d 822, 827 (La. Ct. App. 2006)).

[32] Id. at *26.

[33] Id. at *27.

[34] Id. at *41.

[35] Id. at *28­–31.

[36] Id. at *33.

[37] Id. at *31.

[38] Id. at *33.

[39] Id.

[40] Id. at *41.

[41] Id. at *45 (The total acreage shown combines the “lake plaintiffs” and the “swamp plaintiffs.”).

[42] Id.