UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
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JAMES KELLY LAMBERT, et al. |
CIVIL ACTION |
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VERSUS |
SECTION T (PORTEOUS) |
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Board of CommissionERs of the Orleans Levee District, ET AL. |
MEMORANDUM IN SUPPORT OF MOTION OF PLAINTIFFS
TO CERTIFY CLASS ACTION FILED IN ACCORDANCE
WITH THE MINUTE ENTRY OF APRIL 26, 2007
MAY IT PLEASE THE COURT:
I.
NATURE OF THE MOTION
Plaintiffs, James Kelly Lambert, Donald Scott, and Robin Lovelock, have filed a renewed motion, pursuant to FRCP Rule 23(a), to certify this matter as a class action.
II.
ADDITIONAL PROCEDURAL HISTORY SUBSEQUENT
TO THE FILING OF MOTION TO CERTIFY CLASS
ACTION ON FEBRUARY 10, 2006
This suit was filed on behalf of all tenants of the
OLD marinas in
On February 10, 2006, plaintiffs filed a motion to certify class action with a substantial memorandum of facts and law, Dkts. 41-43.[1] In light of the several motions to dismiss that were the pending, Judge Vance found that plaintiffs’ motion for class certification was premature and denied it on February 21, 2006 [Dkt. 44] without prejudice to plaintiffs’ right to re-file the motion after the motions to dismiss had been resolved.
By order of April 4, 2006, Judge Vance denied the many motions of defendants’ motion to dismiss [Dkt. 61] in an opinion in which she considered the civil rights allegations and LUTPA allegations in sufficient detail for class certification purposes. The antitrust allegations are considered hereinafter.
Plaintiffs filed detailed answers to interrogatories, which are attached hereto as Exhibits 1-3. On April 6, 2007, defendants deposed named Plaintiffs Don Scott and Robin Lovelock, copies of which depositions are attached as Exhibits 4-5.
On April 10, 2007, defendants jointly submitted a letter to Judge Vance, requesting that the class action allegations be stricken on the grounds that any class certification motion would be untimely and because the named class members do not fit with the definition of the proposed class. This resulted in a status conference that was held on April 26, 2007 at which an order was issued setting a briefing schedule and potential hearing date.
The parties attempted to obtain mutual dates for discovery. A discovery conference was held on May 31, 2007 to address defendants’ failure to provide any dates for depositions. A certificate of discovery conference was sent the same day to defendants’ attorneys in which they basically refused to set dates for discovery until the certification issue had been resolved. All of the facts contained in this discovery certificate, filed herewith as Exhibit 6, were confirmed by all defense counsel.
On June 1, 2006, defendants filed a Motion to set deposition date of James Kelly Lambert, who had recently underwent surgery and was not yet strong enough to be deposed. In that motion, defendants admitted their unwillingness to grant any deposition dates to plaintiff contending a temporal right to depose Mr. Lambert and to refuse any other discovery until that was done.
On June 11, 2007, Magistrate Judge Roby denied the motion to set deposition [Dkt. 107], stating that that there is no priority of discovery and that the defendants could not excuse a refusal to provide discovery because they did not have the deposition of Mr. Lambert. A copy of the affidavit of his treating physician, explaining why Mr. Lambert is not strong enough to undertake a deposition is attached as Exhibit 7. A separate motion to deal with this issue is being filed by plaintiffs.
Plaintiffs have requested deposition dates and have prepared deposition notices for all defendants and a number of witnesses. One of the purposes of these depositions is to discover true facts, such as to the number and whereabouts of class members, and so to eliminate potential arguments by defendants as to the appropriateness of class certification.
III.
THE CLASS AS PROPOSED
The damage class consists of all owners of vessels in the Orleans Marina and Southshore Harbor Marina as of the Hurricane Katrina (and Rita), who were denied the right to access, salvage, and repair their vessels or had the use of such rights delayed or made more difficult or expensive, had their vessels damaged or moved by defendants or under the authority of defendants without their permission after Katrina, were forced to pay substantially higher than market prices set by Marine Recovery and Salvage (“MRS”) and Resolve Marine Group (“Resolve”) pursuant to the authority granted by the Orleans Levee District (“OLD) as a result of a conspiracy between MRS, its principals, OLD, and its principles, and, inter alia, Resolve, and/or were denied, under color of law, constitutional, property, and/or contractual rights concerning their vessels and access to their vessels by salvors.
The injunctive class consists of all present tenants of Orleans Marina and Southshore Marina who are seeking to obtain permanent injunctive relief against a repetition, in the event of another hurricane or similar destructive catastrophe, from those actions taken by defendants and their successors after Katrina that are contended to be violations of the lease agreements, unlawful, and/or anticompetitive.
IV.
BRIEF SUMMARY OF THE PERTINENT FACTS
A far more detailed factual analysis is contained in the memorandum in support of the original motion to certify class and in Judge Vance’s opinion denying the motions to dismiss [Dkt. 61] to which the Court is respectfully referred.
Hurricane Katrina caused catastrophic damage to the vessels that harbored in the Orleans Marina and the Southshore Marina, two non-flood protection properties of the Orleans Levee District. Boats were sunk, on land, on the piers, and in various other states of peril and disrepair.
Almost immediately after the hurricane, James Huey, OLD president, and George Carmouche, and OLD outside counsel, conceived of a scheme to make money for friends and relatives by the formation of Marine Recovery and Salvage, owned by Scott Carmouche and Michael Meyer. Without proper authorization from OLD but with the full power of OLD’s color of law, MRS was to be the exclusive salvor for all of the vessels in the marina. Inasmuch as MRS had neither equipment, training, nor experience, MRS contracted principally with Resolve, but also with two other entities, to actually perform the salvage and lifting of vessels with MRS to receive at least a 10% kickback.
Beginning in the middle of October and on account of the efforts of the attorneys for plaintiffs as well of those of the insurance companies who filed suit in the 19th Judicial District Court, there was supposed to be a significant lifting of the restricted access to salvors, particularly those hired by these insurance companies, but access to vessels and restrictions on salvors remained significant and tenants were adversely affected, with many vessel owners being denied access to their vessels, being required to pay over-market fees to Resolve, not having access to salvors of their choice, or being denied the opportunity to salvage their own vessels based on reasons that were untrue.
Resolve, with the aid of OLD’s marina managers and the Levee Board police, successfully enforced this policy, turning away other salvors and discouraging or preventing self help, so that Resolve, inter alia, was able to charge supracompetitive and monopolistic prices to members of the class.
The restriction of access of tenants/class members to their vessels, including access for salvage or repair and a limitation of salvage and repair services to MRS, Resolve, and St. Tammany/Pearl River, imposed from the beginning by the OLD and enforced by its employees and agents, including the named defendants, affected and damaged every tenant from the period immediately after Katrina, throughout all of September and Hurricane Rita, and until the middle of October, when the restrictions began to be modified.
Only months after Katrina and after FBI and IRS investigations, intense media scrutiny, the pendency of this litigation, and the resignation of defendant, James Huey, did access to vessel owners and salvors other than Resolve became more commercially reasonable.
V.
SUMMARY OF THE ARGUMENT
1. Every damage class member suffered some harm from the actions of the defendants through denial of contractually-entitled access, through delay or denial of salvage, through unauthorized salvage, and through damage to vessels, all of which caused additional harm to their vessels, by having to pay supracompetitive prices to Resolve and others, and by having to be victimized by yet another corrupt governmental scheme, cronyism, kick-backs, and the perception of “business as usual” in Louisiana. Accordingly, the class meets the numerousity requirements, but is not so numerous as to be unmanageable.
2. Every injunctive class member is faced with a repetition of the same types of violations of law in the event of another hurricane or catastrophic event by whatever entity succeeds to the ownership of the two marinas and is entitled to injunctive and declaratory relief against its reoccurrence.
3. Both classes number in the hundreds, are geographically diverse, and have been dispersed by Katrina so that the numerousity requirement is met.
4. The classes present common issues of law and fact in that there was a post-Katrina conspiracy to monopolize salvage services and restrict tenant access so that the favored salvage services, with Resolve predominant, had to be used that was enforced under color of law and which violated the tenant leases. Every tenant as of Katrina was affected by this conspiracy and/or by the means that were taken to enforce it. Every present tenant wants a degree of certainty to prevent its repetition.
5. The class representatives, just as was every other tenant and vessel owner, were directly affected by the actions of the defendants and suffered monetary and/or moral damages. Accordingly, the claims of the class representatives are typical. Moreover, Lambert still maintains his dock lease, so that his desire for certainty and to prevent a repetition of the illegal post-Katrina actions of defendants is typical of those of current slip tenants.
6. The named plaintiffs, especially Lambert, played dramatic roles in the government investigation, with Lambert even wearing a wire in connection with FBI and IRS investigations, and in confronting OLD officials with tenant dissatisfaction as to the illegal actions and violations of the leases by OLD. Lovelock and Scott were also directly impacted by the actions of the defendants. Each of them is and has been an articulate and energetic advocate for the interests of past and present tenants.
Moreover, proof of what happened and of its illegality benefits both past, present, and future tenants. The named plaintiffs have every incentive to prove that the post-Katrina actions of the defendants were wrongful and illegal so that injunctive and declaratory relief might be of assistance to present tenants.
7. Koerner has been an attorney for over forty years. From 1972 to 1983, a predominance of his practice involved the antitrust laws and national class actions. He has successfully handled many civil rights and other complex business-type litigations against governmental entities and has previously litigated against the Orleans Levee District.
8. Declaratory and injunctive relief within the meaning of Rule 23(b)(2) is appropriate and will benefit the class, including Lambert, who are current tenants, who either suffered through the actions taken by OLD and its co-conspirators after Katrina, or who fear a repetition of the same in the event of another similar disaster.
9. Based on the limited review of the merits that was made by Judge Vance upon consideration of the contractual and civil rights issues common to the class in her opinion denying the motions to dismiss and the per se violations of the antitrust laws by a horizontal price fixing conspiracy resulting in supracompetitive pricing to all tenants for lifting and salvage services and the prevention of the self-help traditionally permitted, common issues predominate within the meaning of Rule 23(b)(3). Proof of prices actually charged and paid as compared to competitive pricing will be formulaic. In like manner, the imposition of punitive damages will depend on how the jury considers the actions of the defendants taken under color of law and not on an individualized basis. The issue of damages other than excessive pricing, which will be more individualized, can be bifurcated with common issues being handled on a class basis.
10. There appears to be no
interest in individually controlling separate actions, there is no other
pending litigation, this forum is natural and appropriate, and there should be
few difficulties in managing of a homogeneous class with no choice of law or
11. Conduct of this matter as a class action appears superior to individual actions, because the amounts in controversy, particularly considering the formidable defense team, are relatively small, all of the players and most of the class members are from Louisiana and the marinas are located here, there are only hundreds and not thousands or millions of class members, and there has been no jury demand.
VI.
STANDARDS OF CONSIDERATION
A. General Rules of Consideration
This Court should “conduct a rigorous analysis of Rule 23 prerequisites” Unger v. Amedisys, Inc., 401 F.3d 316, 320-21 (5th Cir. 2005). As per Robinson v. Texas Automobile Dealers Association; 387 F.3d 416, 421 (5th Cir. 2004), "The party seeking certification bears the burden of demonstrating that the requirements of rule 23 have been met." Such requirements include both the four factors of rule 23(a)--numerosity, commonality, typicality, and adequacy - and the two requirements of rule 23(b)(3).
B. As to Whether the Requirement of Rule 23(a) Are Met
1. Numerousity:
Any number of class members more than forty should
raise a presumption that joinder is impractical. Transiency and geographic
dispersal are plus factors as are ease of member identification as well as
relatively small size of the claims. Mullen v. Treasure Chest Casino, LLC;
186 F.3d 620, 624 (5th Cir. 1999). Objective criteria for identifying class
member are helpful but unnecessary. Mullen; 186 F.3d at 624.
Furthermore, when the facts concerning numerousity are within the control of
the defendants, the plaintiff may to rely on reasonable inferences drawn from
the available facts. J.S. v. Attica Central Schools, 2006
2. Commonality:
“The test for commonality is not demanding and is met
‘where there is at least one issue, the resolution of which will affect all or
a significant number of the putative class members.’" Mullen; 186
F.3d at 624; Payne, 216 F.R.D. at 25. “The reality that differing fact
patterns underlie the claims of individual class members will not necessarily
prevent a finding of commonality, so long as the class members have at least
one issue in common.” George Lussier Enterprises, Inc. v. Subaru of New
England, Inc., 2001
3. Typicality:
While the “claims and defenses” of the class
representatives should be typical of those of the members of the class,
however, “Like commonality, the test for typicality is not demanding. It
‘focuses on the similarity between the named plaintiffs' legal and remedial
theories and the theories of those whom they purport to represent.’" There
can be some variety without affecting or defeating typicality. Mullen;
186 F.3d at 625. It is helpful if the named plaintiffs allege the same injury
as each member of the plaintiff class. Lussier, 2001
4. Adequacy of Representation:
While ideally the interests of the named plaintiffs and the members of the class should be identical, differences render named plaintiffs inadequate representatives “only if those differences create conflicts between the named plaintiffs' interests and the class members' interests.” While there may be variances in the ways that class plaintiffs and class members may prove causation and damages, “Such a difference, however, does not affect the alignment of their interests.” Mullen; 186 F.3d at 626.
In addition, “Class representatives must satisfy the court that they, and not counsel, are directing the litigation. To do this, class representatives must show themselves sufficiently informed about the litigation to manage the litigation effort.” Unger, 401 F.3d at 321.
C. As to Whether the Requirements of Rule 23(b)(2) Are Met
According to Rule 23(b)(2), an action may be maintainable as a class action if "the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole."
For example, in Ridgely v. Federal Emergency Management Agency, 2007 U.S. Dist. LEXIS 43009 (EDLA 2007), this Court (Judge Berrigan) dealt with Rule 23(b)(2) in a case against FEMA that involved a “Repayment Class” and an “Injunctive Class” and held:
Here, all of the class members seek the same procedural safeguards. The misconduct sought to be remedied derives from the allegedly faulty process used, not the individual determination made. Even FEMA treats the proposed class members by groups during the process because of the sheer numbers, and despite the fact that each individual ultimately receives an individualized determination of eligibility.
The plaintiffs have adequately defined a Rule 23(b)(2) class action for injunctive and declaratory relief, focusing on the process used by the defendants to determine ineligibility for Section 408 assistance. * * * * The Court also finds that the requirements of Rule 23(b)(2) have been met: "because of the group nature of the harm alleged and the broad character of the relief sought, the (b)(2) class is, by its very nature, assumed to be a homogenous and cohesive group with few conflicting interests among its class members." Allison, 151 F.3d at 412. See, McWaters v. FEMA, 237 F.R.D. 155 (E.D.La. 2006).
D. As to Whether the Requirements of Rule 23(b)(3) Are Met
Rule 23(b)(3) lists some of the considerations the predominance and superiority inquiries should include. They are "(A) the interest of members of the class in individually controlling . . . separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action."
1. Predominance:
"The questions of law or fact common to the members of the class predominate over any questions affecting only individual members." Fed. R. Civ. P. 23(b)(3). "In order to 'predominate,' common issues must constitute a significant part of the individual cases." Mullen; 186 F.3d at 626. Plus factors in predominance are a single choice of law, a common policy applied to all class members during a limited temporal period, no novel claims, and time-tested bases for liability. Mullen; 186 F.3d at 626-627.
While the
"predominance" element is "far more demanding" than the
"commonality" test of Rule 23(a), it does not require uniformity of
claims across the entire class. Amchem, 521
The predominance requirement is satisfied when
"the issues in the class action that are subject to generalized proof, and
thus applicable to the class as a whole, predominate over those issues that are
subject only to individualized proof." The obvious alternative to class
certification, for class members to bring individual suits, would be grossly inefficient
if the parties, witnesses, and courts would be forced to endure duplicative
litigation. Lussier, 2001
2. Individual Damages
The "individuation of damages in consumer class actions is rarely determinative . . . where, as here, common questions, predominate, then courts generally find the predominance requirement to be satisfied even if individual damages issues remain." Smilow, 323 F.3d at 40. Indeed, the same argument could be used to defeat any putative class action. There is no reason to suspect that the parties and the court could not come up with a fair and workable damages formula or claims procedure. . . . Payne, 216 F.R.D. at 28-29.
In Bertulli v. Independent Association of Continental Pilots; 242 F.3d 290, 298 (5th Cir. 2001) (citations omitted), in its consideration of “Predominance,” the court stated:
Regarding predominance, defendants argue that the necessity of individualized inquiry into each plaintiff's injury to determine damages means that individual issues predominate over class issues. Although calculating damages will require some individualized determinations, it appears that virtually every issue prior to damages is a common issue. The plaintiffs' suit boils down to one basic factual claim: the Pilots' Association took a single act that caused every plaintiff to lose seniority. Every aspect of liability in the case involves this common issue. Further, not all of the relief requires individualized determination. Injunctive relief undoing the restoration of the eleven pilots' seniority levels requires no individualized determinations, except for the recalculation of seniority rankings by the defendants.
Determining damages may require the district court to reconsider class treatment of damages, but given the great significance of common issues in this case, we find no abuse of discretion in the district court's determination that common issues predominated.
3. The Very Limited Consideration of the Merits:
While class certification hearings should not be mini-trials on the merits of the class or individual claims, so that there should be no expansion of the “certification analysis to include consideration of whether the proposed class is likely to prevail ultimately on the merits," Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177-78, 94 S. Ct. 2140, 2152-53, 40 L. Ed. 2d 732 (1974), this Court, as part of its consideration of “predominance” for purposes of Rule 23(b)(3), should go beyond the pleadings as necessary, as a court must understand the claims, defenses, relevant facts, and applicable substantive law in order to make a meaningful determination of the certification issues." Unger, 401 F.3d 316, 320-21 (5th Cir. 2005). As explained in the concurrence of Judge Dennis, 401 F.3d at 326:
The only
"standards" that have ever been required in class certifications are
more open textured: e.g., "close look," Amchem Products,
Inc. v. Windsor, 521 U.S. 591, 615, 138 L. Ed. 2d 689, 117 S. Ct. 2231
(1997); "rigorous analysis," Falcon, 457 U.S. at 161; Spence
v. Glock, Ges.m.b.H, 227 F.3d 308 (5th Cir. 2000); Castano v. American
Tobacco Co., 84 F.3d 734, 740 (5th Cir. 1996). On the other hand, the
Supreme Court in Eisen v. Carlisle and Jacquelin, 417 U.S. 156, 177-178,
40 L. Ed. 2d 732, 94 S. Ct. 2140 (1974), admonished that a "more than
likely to prevail" standard is inappropriate in a Rule 23 certification
analysis. In fact, we recently held that a court must conduct an "intense
factual investigation" while at the same time "taking care to inquire
into the substance and structure of the underlying claims without passing on
their merits." Robinson v.
Despite the fact that such an inquiry "does not
resolve the case on its merits," it helps "prevent[] the class from degenerating
into a series of individual trials." Making a meaningful determination of
the certification issues "entails identifying the substantive issues that
will control the outcome, assessing which issues will predominate, and then
determining whether the issues are common to the class. Robinson, 387
F.3d at 421-422. For purposes of the certification motion, the plaintiffs'
allegations are treated as true, much like the standard utilized by Judge Vance
denying the motions to dismiss. Payne v. The Goodyear Tire & Rubber Co.,
216 F.R.D. 21, 24 (D.
4. Violations of the Antitrust Laws:
Price fixing cases involving allegations of supracompetitive pricing are particularly appropriate for class treatment.
"Private antitrust liability under § 4 of the
Clayton Act requires the showing of (1) a violation of the antitrust laws, (2)
the fact of damage, and (3) some indication of the amount of damage." On
class certification, the only issue is whether the facts and law necessary to
sustain a horizontal price-fixing action predominate in the proposed class.
"The requirement of the "fact of damage,'
also called 'impact,' means that the antitrust violation must cause injury to
the antitrust plaintiff." "In a price fixing case, impact may be
shown simply by proof of purchase at a price higher than the competitive
rate." Although it "is generally true [that] 'antitrust price-fixing
cases are particularly suitable for class action treatment,'" the proposed
class still has to meet the three aforementioned requirements. It is helpful
that "All legal and factual issues relating to the conspiracy" bear a
uniform relationship "to all those allegedly harmed," and "the
products involved [and] the purchasers [should] be standardized."
Moreover, class members do not necessarily have to
demonstrate impact through individualized evidence. Instead, "by
demonstrating, through generalized proof, that the competitive [price] for groups
of or for individual class members existed at least over a range, the highest
point of which was less than the [price] actually paid[,]" a party may
rely on more general proof. Consequently, the baseline or
"competitive" price determines whether a party may use generalized
proof to sustain a claim of horizontal price fixing.
5. Superiority:
The class action must be “superior to other available
methods for the fair and efficient adjudication of the controversy." Plus
factors are a lack of “managerial complexities,” a “lack of any complex
choice-of-law or
In Bertulli, 242 F.3d at 298-99, the court in dismissing contentions that “the interests of class members in individual actions and the unmanageability of the class means this class fails the superiority requirement,” because substantial potential damages make individual actions under both claims feasible, (2) the availability of attorney's fees . . . makes individual actions under that claim feasible, and (3) individualized calculation of damages makes a class action unmanageable,” stated:
The damages that most members of the class would be entitled to seek are small. According to the plaintiffs, some class members may be entitled to damages of about $29,000 in back pay for lost work assignments, but for the vast majority of plaintiffs, their only damages stem from loss of seniority itself and not lost work assignments. For them, damages will be nominal and their primary relief will be injunctive. A large group of plaintiffs, each with small damages, seeking injunctive relief that benefits the group as a whole, is the prototypical class.
VII.
OTHER HELPFUL AUTHORITY
The foregoing details the applicable law. But see also, Doiron v. Conseco Health Insurance Company, 240 F.R.D. 247 (MDLA 2007) (certification under Rule 23(b)(3) of subclasses of persons denied radiation benefits and chemotherapy benefits under cancer insurance policies despite many differing issues because the underlying issue, improper denial of benefits, was the predominant issue); Gene & Gene, LLC v. Biopay, LLC, 240 F.R.D. 239 (MDLA 2006) (violation of Telephone Consumer Protection Act as to contentions that recipients were difficult to define and the class difficult to manage); Stoffels v. SBC Communications, Inc., 238 F.R.D. 446 (WD Tex. 2006) (classes of retirees of various subsidiaries of SBC were certified over strenuous objections); Verdow v. Sutkowy, 209 F.R.D. 309; (ND NY 2002) (Medicaid applicants with self-settling trusts); Disability Rights Council of Greater Washington v. Washington Metropolitan Area Transit Authority, 239 F.R.D. 9 (D.DC 2006) (class challenge to adequacy of paratransit services certified under Rule 23(b)(2) certified under 23(b)(2) with remedy certification to be considered after development of a fuller record); M.K.B v. Eggleston, 445 F.Supp. 2d 400 (SD NY 2006) (class action certified of battered immigrant wives and children of lawful U.S. residents left destitute because their abusive husbands are no longer supporting them or providing them with a basis for obtaining aid, who because of bureaucratic customs and usages, have fallen between the cracks of New York's welfare system.); Staley v. Wilson County, 2006 U.S. Dist. LEXIS 58904 (MD Tenn. 2006) (class of persons arrested for minor offenses whose bail was set at amount so that the premium was the same as the fine was certified under Rule 23(b)(2) for injunctive relief even though damages were also requested on account of the excessive bail); Schwarm v. Craighead, 233 F.R.D. 655 (ED Cal. 2006) ((23(b)(2) and 23(b)(3) classes certified against debt collectors using abusive practices); Rodriguez v. Maricopa County Community College District, 2006 U.S. Dist. LEXIS 1483 (D. Ariz. 2006) (all governmentally-employed Hispanics on a listserv on which a white employee used white supremacist language and argument were certified as a class pursuant to Rule 23(b)(2) although there was some possibility of damages); Logan v. City of Pullman Police Department, 2005 U.S. Dist. LEXIS 37811 (ED Wash. 2005) (1983 excessive force claim on behalf of persons in a night club for excessive force in being sprayed with tear gas, capsicum, etc. or who were there and not sprayed was certified even though damages were different as to persons sprayed and persons not sprayed); Sunn v. City of Chicago, 2005 U.S. Dist. LEXIS 30888 (ND Ill. 2005) (classes certified on account of civil rights violations by governmental entities under Rule 23(b)(3)); Coco v. Belle Terre, 233 F.R.D. 109 (ED NY 2005) (alleged traffic trap racket resulted in certifications of classes under Rule 23(b)(2) and 23(b)(3)); Sparks v. Seltzer, 2005 U.S. Dist. LEXIS 28924 (EDNY 2005) (Rule 23(b)(2) certification challenging visitation policies at state mental hospital).
VIII.
NUMEROUSITY
A. Factual Basis for the Claim of Numerousity
As may be seen from the annexed lists, Exhibits 8-9, provided by the Orleans Levee District of tenants as of the date of Katrina, which lists have not been updated,[4] the statistics on the number of tenants as of the date of Katrina and their actual and likely geographic distribution are as follows, which demonstrates a likely membership far in excess of 40, and a substantial geographic distribution, particularly because many addresses in Orleans and St. Bernard were in areas of New Orleans which were flooded or were within the marinas and to which many people could not or did not return:
ORLEANS MARINA
|
Total Named Tenants |
340 |
|
Tenants with addresses outside of Louisiana |
20 |
|
Louisiana Tenants with addresses outside of Orleans, Jefferson, and St. Bernard Parishes |
48 |
|
Orleans, Jefferson, and St. Bernard |
272 |
|
Orleans in non-flooded areas (70114, 70115, 70116, 70118, 70123, 70130, 70131) |
68 |
SOUTHSHORE MARINA
|
Total Named Tenants |
397 |
|
Tenants with addresses outside of Louisiana |
6 |
|
Louisiana Tenants with addresses outside of Orleans, Jefferson, and St. Bernard Parishes |
63 |
|
Orleans, Jefferson, and St. Bernard |
330 |
|
Orleans in non-flooded areas (70115, 70116, 70118, 70114, 70123, 70130, 70131) |
72 |
TOTAL FOR BOTH MARINAS
|
Total |
737 |
|
Tenants with addresses outside of Louisiana |
26 |
|
Louisiana Tenants with addresses outside of Orleans, Jefferson, and St. Bernard Parishes |
111 |
|
Orleans, Jefferson, and St. Bernard |
602 |
|
Orleans in non-flooded areas (70115, 70116, 70118, 70114, 70123, 70130, 70131) |
140 |
B. The Numbers
The damage class as defined includes the more than seven hundred tenants of the two marinas and accordingly meets the numerousity requirement of Rule 23(a)(1). Moreover, the damage class was geographically diverse even before Katrina and is certainly more geographically diverse after Katrina because most tenants and vessel owners lived either on the boats or in the flooded areas of Orleans and St. Bernard Parishes and had to relocate either temporarily or permanently. Although the injunctive class as defined probably does not equal the number prior to Katrina, the ongoing salvage and removal activities mean that the class has or will approach that number prior to the final disposition of this case.
IX.
COMMON QUESTIONS OF LAW AND FACT
Hurricane Katrina devastated both marinas and affected every tenant and vessel owner. The actions taken by James Huey, former OLD president, George Carmouche, Scott Carmouche, and Michael Meyer, pursuant to their illegal conspiracy to monopolize the trade and commerce in salvage and removal of damaged vessels, were enforced against all tenants by the OLD staff, the marina managers, and the Levee Board police. The purpose of this scheme was so that MRS, Resolve, and other favored salvors could charge unfair and anticompetitive prices for lifting and other salvage services with a kickback to MRS. This is also alleged to be a violation of the lease agreements and the previous policies of OLD to permit free access for salvage and repair.
These actions are alleged to violated constitutional rights under the Fourteenth Amendment and to be redressable under 42 U.S.C. § 1983. The price fixing and supracompetitive pricing is alleged to be a per se violation of the Sherman Act. The entire process of restricting access and reasonable self help is alleged to violate the lease. The class is alleged to be entitled to actual and punitive damages and attorney’s fees under 42 U.S.C. §§ 1983 and 1988, actual and treble damages under § 4 of the Clayton Act, and actual damages under Louisiana law.
Plaintiffs have evidence of the reasonable price for salvage services and defendants have records of the supracompetitive price which will make a calculation of actual damages formulaic. Punitive damage will also depend on the Court’s perception of the perfidiousness of the actions of the defendants and can be calculated on a class-wide basis. Declaratory and injunctive relief will be granted classwide and will depend on the Court’s decision as to the illegality and inappropriateness of what the defendants did and the likelihood of repetition without court intervention.
Individual plaintiffs suffered actual damages because their vessels were damaged by the actions and inactions of the defendants and because the general situation was indifferent to theft, collateral damage, and individual rights. Other plaintiffs suffered moral damages on account of the illegal actions of the defendants. These can be dealt with on separate trials, after the common issues of fact and law have been resolved.
There are questions of law and fact common to the class within the meaning of Rule 26(a)(2), because there was an unlawful restriction of access common to all class members and a conspiracy among the defendants to profit from the Katrina catastrophe that resulted in damage to vessels, uncompetitive fees, and other moral and monetary damages to the members of the class. Judge Vance, in her opinion of April 4, 2006 denying the various motions of defendants to dismiss, discussed many of the common questions or law and fact and concluded that the plaintiffs stated claims upon which relief could be granted involving the Civil Rights Laws, particularly the 14th Amendment and 42 U.S.C. § 1983, color of law, and violations of the antitrust laws by a horizontal conspiracy to monopolize and to fix prices. Every damage class member was victimized by this conspiracy, the ambiguous but heavy-handed manner in which it was implemented, and the clear violations of law and the leases that were the subject of newspaper publicity and governmental investigations.
A judgment finding these actions to be illegal would permit the injunctive class to benefit from final injunctive relief against their repetition that would provide some certainty in the event of another similar catastrophe.
X.
TYPICALITY
The claims of the class representatives are typical of the claims of the members of the class within the meaning of Rule 26(a)(3) because each of the class representatives was a vessel owner and a tenant of one of the marinas under the OLD standard form lease, and each was victimized, as were all of the members of the class, by the wrongful and unlawful actions of the defendants. While the experience of each class representative was different and Mr. Lambert was much more personally involved, the claims of the class representative are typical of the claims of the other members of the class, even though the details and extent of damage may be different.
XI.
FAIR AND ADEQUATE PROTECTION OF THE
INTERESTS OF THE MEMBERS OF THE CLASS
The class representatives will fairly and adequately protect the interest of the members of the class as follows:
a. The claims and the factual and legal bases of the claims of Lambert, Scott, and Lovelock are entirely consistent with the claims of absent damage class members, all of whom were victims, to a lesser or greater degree, of the wrongful and illegal actions of the defendants. The claims of Lambert for permanent injunctive relief against a repetition of what happened after Katrina seeks certainty and will protect the present tenants against the same kind of illegal actions taken by the defendants in this case.
b. As may be seen from the declarations of Louis R. Koerner, Jr. and Adam Lambert, these are lawyers who are skilled and experienced in class actions, antitrust litigation, business litigation, and litigation against governmental entities on account of constitutional violations and who can be expected to fairly and adequately protect the interests of the members of the class.
XII.
COMPLIANCE WITH RULE 23(b)(3)
The subsection of Rule 23(b) that is most clearly applicable to the damage class is Rule 23(b)(3), since this action attempts to recover the damages caused to the members of the class by the illegal actions of the defendants. “The questions of law or fact common to the members of the class predominate over any questions affecting only individual members." Every class member some monetary or moral damage on account of the wrongful and illegal actions of the defendants.
Other than as to extent of damages and proof of damage, there are no questions of laws or fact that are not common, but this is to be anticipated and does not affect certification.
XIII.
COMPLIANCE WITH RULE 23(b)(2)
Although the named plaintiffs and the members of the damage class have suffered actual damages on account of the actions of the defendants, the entire circumstances of what happened after Katrina and the efforts of government officials and their favorites to enrich themselves at the expenses of the tenants and vessel owners with whom they had contractual and other obligations are susceptible of repetition so that injunctive relief against its repetition is appropriate within the meaning of Rule 23(b)(2) to protect current and future tenants of these two marinas from efforts of governmental officials and those acting in concert with them from enriching themselves at the expense of and by damaging the property of tenants and from the frustration of a protracted, unreasonable, and illegal refusal to permit reasonably unrestricted access to the marinas for use, inspection, repair, and salvage.
Plaintiffs’ request for injunctive relief on behalf of a class of current tenants is appropriate and well suited for certification, inasmuch as defendants' illegal policies, practices, and conspiracies that were applied generally or universally against post-Katrina tenants are susceptible of repetition this hurricane season or in future hurricane seasons. Plaintiffs have defined an appropriate Rule 23(b)(2) class that would be the beneficiary of injunctive and declaratory relief, as the suit focus on the process used by the defendants in the alleged scheme against the class as a whole, and injunctive relief is requested to prevent its repetition.
CONCLUSION
This is an ideal case for certification of both requested classes. Every tenant and vessel owner as of Katrina was the target of the wrongful and illegal actions taken by defendants. In their greed and avarice, defendants became a law unto themselves causing delay, frustration, additional damage, all enforced under color of law, and all meant to enrich a favored few at the expense of the class. Moreover, the present tenants are entitled to a guarantee against a repetition that can only come from this Court.
Respectfully submitted,
(PLAINTIFFS’ COUNSEL)
[1] The Court is respectfully referred to the extensive discussion of the facts in the supporting memorandum. The facts set forth therein will not be repeated except as it is necessary to illustrate compliance with a particular section of Rule 23.
[2] Payne, 216 F.R.D. at 28.
[3] Payne, 216 F.R.D. at 29.
[4] Undoubtedly OLD has updated information. Such updated information is requested in a separate motion. OLD is also being asked to send class notices in the July communications to tenants.