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Surety Corporation of America v. Cannizzaro

United States District Court, E.D. Louisiana

May 22, 2015

SURETY CORPORATION OF AMERICA,
v.
LEON A. CANNIZZARO, JR., ET AL, SECTION

ORDER AND REASONS

IVAN L.R. LEMELLE, District Judge.

I. NATURE OF MOTION AND RELIEF SOUGHT

Before the Court is Defendants' "Motion to Dismiss Pursuant to F.R.C.P 12 or Alternatively to [A]bstain" (Rec. Doc. 8), which seeks dismissal of Plaintiff's claims on the basis of a variety of jurisdictional and other defenses. Plaintiff opposes the motion (Rec. Doc. 15), and Defendants have filed a reply (Rec. Doc. 18). Following the initial round of briefing, the Court ordered additional briefing on issues of pleading standards for Monell municipal liability claims, absolute immunity doctrine, and procedural propriety of qualified immunity allegations. (Rec. Doc. 19). The parties submitted supplemental briefing in compliance with that order. (Rec. Docs. 20, 23). For the reasons that follow, IT IS ORDERED THAT Defendants' Motion (Rec. Doc. 8) is GRANTED, and Plaintiff's claims are dismissed with prejudice.

II. FACTS AND PROCEDURAL HISTORY

The substance of this action finds itself before the Court for the second time. Plaintiff, Surety Corporation of America ("SCA"), is a Florida corporation that serves as the contractual indemnitor of American Bankers Insurance Company ("ABIC"), an entity that issues bail bonds in various jurisdictions, including Orleans Parish. (Rec. Doc. 1). Made Defendants herein are Orleans Parish District Attorney, Leon Cannizzaro, First Assistant District Attorney, Graymond Martin, and Assistant District Attorney, Michael Redmann, all in their official and individual capacities. (Rec. Doc. 1). Plaintiff alleges Defendants improperly sought to execute on null or forged bail bonds, which resulted in judgments of bond forfeiture, for which SCA, as indemnitor of ABIC, ultimately suffered the consequences of the garnishment of ABIC's accounts. (Rec. Doc. 1).

Plaintiff initially filed suit in this Court on September 16, 2010. See Surety Corporation of America v. Leon A. Cannizzaro, Jr., 2011 WL 1870096, No. 10-3151 (E.D. La. Sep. 16, 2010). In the 2010 lawsuit, Plaintiff identified 54 bond forfeiture judgments, totaling in excess of $300, 000, exclusive of interests and costs, which it alleged to be nullities and/or otherwise clearly defective and obtained in violation of law, and which had been collected by Defendants through garnishment of ABIC's accounts. (Rec. Doc. 1 at 6). Invoking both the Court's diversity and federal question subject matter jurisdiction in that suit, Plaintiff sought: declaration that each of the underlying judgments was void and unenforceable under Louisiana law; prospective injunctive relief preventing further attempts to collect on the judgments; declarations that the garnishments violated Plaintiff's due process rights under the federal and Louisiana constitutions; and an award of return of the funds, together with compensatory damages, punitive damages, attorney fees, and legal interest on all sums due. (Rec. Doc. 1 at 6-7).

Following a motion to dismiss or abstain by Defendants in the 2010 lawsuit, the Court dismissed Plaintiff's claims on Younger abstention grounds. Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1970). In dismissing the 2010 lawsuit, the Court held:

In the case at bar, SCA seeks a declaration that the underlying state bond forfeiture judgments are nullities and challenges the enforcement of these judgments as well as the constitutionality of Louisiana's bond forfeiture scheme. As set forth above, Louisiana not only has an important interest in the enforcement of its orders and judgments, but also in the administration of its system regarding bond forfeiture. See also International Fidelity Ins. Co. v. City of New York, 263 F.Supp.2d 619, 633 (E.D.N.Y. 2003)(stating that a challenge to the constitutionality of New York's bond forfeiture scheme appears to implicate an important state interest). Moreover, as actions for nullity of a portion of these judgments and for injunctive relief against enforcement of some of these judgments are currently pending in Louisiana state court, not only should Louisiana have the opportunity to interpret its own regulations and review its own judgments, but SCA also has an avenue open and an adequate opportunity for review of its constitutional claims in the state proceedings. Accordingly, we conclude that the principles of Younger similarly warrant abstention in this case, and Defendants' motions... are hereby GRANTED.

Surety Corp. of America v. Cannizzaro, 2011 WL 1870096, No. 10-3151 (E.D. La. May 13, 2011)(Rec. Doc. 22 at 10-11).

Following this Court's dismissal, Plaintiff returned to the Louisiana state courts for redress. While the pleadings in the instant matter make it difficult to ascertain the precise posture of the state court matters, it appears that at one point in time, actions to annul various of the challenged forfeiture judgments were pending simultaneously in divisions of the Orleans Parish Criminal and Civil District Courts. (See Rec. Doc. 1 at 8). On July 2, 2012, the Civil District Court action was dismissed for lack of subject matter jurisdiction. Id. That ruling was affirmed on appeal to the Louisiana Fourth Circuit Court of Appeal, and the Supreme Court of Louisiana denied writs. (Rec. Doc. 1 at 8). On July 19, 2012, one of the nullity actions pending in Criminal District Court was dismissed sua sponte, also on the basis of a lack of subject matter jurisdiction. (Rec. Doc. 1 at 8). There is no indication that any appeal was taken from that ruling.

Relying on the foregoing refusals by state courts to hear Plaintiff's claims, it has returned to this Court arguing that it has been relegated to some Kafakaesque dimension wherein no court entertains subject matter jurisdiction over nullity actions in Orleans Parish, and that it has been entirely deprived of a forum for its claims. Plaintiff makes this claim in spite of the fact that the record indicates it never took the opportunity to advance its constitutional claims before the state courts and further that it failed to appeal the adverse Criminal District Court ruling. This latter failure is perplexing for many reasons, not least of which is the direct guidance of the Louisiana Fourth Circuit Court of Appeal, in the context of the appeal of the Civil District Court judgment, that: "[Plaintiff's] remedy was to seek relief... in Criminal District Court, and in the instance of an adverse judgment, to apply for relief with this court." State ex rel. Cannizzaro v. Am. Bankers Ins. Co., 12-1455, pp. 11-12 (La.App. 4 Cir. 7/10/13); 120 So.3d 853, 861 (emphasis added). In any event, Plaintiff has returned to federal court, arguing that the state court rulings indicate that it did not have an adequate opportunity to raise its constitutional claims and further that this Court should entertain jurisdiction over the underlying nullity actions. As best the Court is able to ascertain, Plaintiff seeks the following relief: (1) declarations that the challenged judgments of forfeiture are void under state law, (2) declarations that certain articles of the Louisiana Code of Criminal Procedure are unconstitutional, (3) declarations that the state courts' refusals to exercise subject matter jurisdiction over Plaintiff's claims amounted to due process violations, (4) determination that actions taken by the named Defendants in their individual capacities in executing the forfeiture judgments violated Plaintiff's procedural due process rights, and (5) determination the Defendants' actions in their official capacities also amounted to due process violations.

III. CONTENTIONS OF MOVANTS

Defendants move for dismissal of Plaintiff's claims on eight grounds:

(1) That the Court lacks subject matter jurisdiction over Plaintiff's claims because they require the Court to engage in substantive review of final state court judgments, as ...

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