FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2018-03901,
DIVISION "I-14" Honorable Piper D. Griffin, Judge
William D. Aaron, Jr. DeWayne L. Williams Anna A. Rainer
AARON & GIANNA, PLC COUNSEL FOR PLAINTIFF/APPELLEE
Boyle Alex H. Glaser PHELPS DUNBAR LLP
Kimberly K. Smith Assistant City Attorney Tanya L. Irvin
Assistant City Attorney Cherrell S. Taplin Senior Chief
Deputy City Attorney Sunni J. LeBeouf City Attorney COUNSEL
composed of Judge Roland L. Belsome, Judge Joy Cossich
Lobrano, Judge Tiffany G. Chase
COSSICH LOBRANO JUDGE
ad valorem tax matter, defendants/appellants, the City of New
Orleans and Norman White in his official capacity as Director
of Finance for the City of New Orleans (collectively the
"City"), appeal the August 1, 2018 judgment of the
district court, which, in pertinent part, granted a
preliminary injunction in favor of plaintiff/appellee, the
Downtown Development District of the City of New Orleans
("DDD"), prohibiting the City from withholding
certain proceeds of a special ad valorem tax. The DDD answers
the appeal herein, seeking reversal of the district
court's denial of the DDD's request for writ of
mandamus. The City also raises peremptory exceptions of no
cause of action and no right of action, as well as a motion
for this Court to take judicial notice of certain DDD budget
hearing testimony. For the reasons that follow, the judgment
of the district court is affirmed, and the exceptions and
motion are denied.
is a special taxing district, located within the City,
which was created effective January 1, 1975, pursuant to La.
R.S. 33:2740.3 (its "enabling statute"). The
enabling statute authorizes the city council to levy and
collect a special ad valorem tax (the "DDD tax") on
all taxable real property located in the DDD boundaries to be
used for public improvements, facilities, and services within
the DDD geographical area. Thus, owners of property within the DDD
boundaries are assessed the DDD tax in addition to the
regular ad valorem taxes levied on their property. In 2001,
pursuant to the enabling statute, a ballot proposition for
the continuation of the DDD tax was presented to the voters
OF NEW ORLEANS (DOWNTOWN DEVELOPMENT DISTRICT)
SUMMARY: CONTINUED AUTHORITY TO LEVY A NOT EXCEEDING 22.97
MILLS PROPERTY TAX IN THE DOWNTOWN DEVELOPMENT DISTRICT FOR
AN ADDITIONAL 25 YEARS, BEGINNING WITH THE YEAR 2005 AND
ENDING WITH THE YEAR 2029, FOR PUBLIC IMPROVEMENTS,
FACILITIES AND SERVICES, AND DEBT SERVICE ON BONDS OF THE
CITY ISSUED FOR CAPITAL IMPROVEMENTS AND FACILITIES WITHIN
Shall the City of New Orleans, State of Louisiana (the
"City"), acting through its Council as the
governing authority thereof, continue to be authorized to
levy a special tax of not exceeding Twenty-Two and
Ninety-Seven Hundredths (22.97) mills upon all taxable real
property situated within the boundaries of the Downtown
Development District of the City of New Orleans (the
"District") as defined by La. R.S. 33:2740.3, as
amended (the "Act"), for an additional twenty-five
(25) years, beginning with the year 2005 and ending with the
year 2029, said tax to be for the use and benefit of the
District with the proceeds of said tax to be dedicated and
used solely for public improvements, facilities and services
within the District, and shall the City be further authorized
to issue such bonds in a principal amount not exceeding $10,
000, 000, which bonds shall be payable solely from the
proceeds of special tax?
April 20, 2018, the DDD filed a Petition for Preliminary and
Permanent Injunction, Writ of Mandamus, and/or Alternatively,
Declaratory Judgment, and Damages, alleging that in or about
2007, the City began withholding money from the net tax
receipts due to the DDD, which totaled $393, 207.00 as of
December 31, 2016. The DDD alleges that the City illegally
withheld these tax proceeds from the DDD in an effort to
finance the City's indebtedness to certain state pension
funds. According to the DDD, the City is required to pay its
obligations to the pension funds from ad valorem taxes due to
the City, not from the DDD tax. Rather, the DDD alleges, the
enabling statute requires that DDD tax proceeds be used
solely and exclusively for the purposes and benefit of the
petition, the DDD sought preliminary and permanent
injunctions prohibiting the City from withholding and/or
diverting the proceeds of the DDD tax, for a purpose other
than the exclusive benefit of the DDD. The DDD also sought a
writ of mandamus ordering the City to immediately direct
payment to the DDD of all illegally withheld tax proceeds.
Alternatively, the DDD sought a declaratory judgment that the
City's actions are unlawful and monetary damages.
20, 2018, the district court held a hearing, and on August 1,
2018, it rendered judgment granting the DDD's request for
preliminary injunction, which ordered as follows:
…the City of New Orleans and Norman White in his
Capacity as Director of Finance, are prohibited from
withholding and/or diverting the proceeds of the special ad
valorem tax, specifically approved by a vote of the citizens
of New Orleans for the exclusive benefit of the DDD, for any
purpose other than the exclusive benefit of the DDD, except
for a 2% collection fee, in compliance with La. R.S.
DDD's request for writ of mandamus, however, was denied.
This appeal followed. Before reaching the merits of the
City's appeal and the DDD's answer to appeal, we
address the exceptions filed by the City.
first time on appeal, the City filed in this Court a combined
exception of no right of action and no cause of action,
disputing the DDD's power to sue and contending that the
City is entitled to dismissal of all claims against it by the
The City argues that: (1) the DDD's enabling statute does
not grant it the power to sue; (2) the DDD is not a separate
juridical entity from the City; (3) the doctrine of confusion
would extinguish any award against the City because the DDD
is not a separate entity from the City; and (4) the city
council has not authorized the DDD to sue the City.
exception of no right of action and the exception of no cause
of action are peremptory exceptions. La. C.C.P. art. 927.
"The appellate court may consider the peremptory
exception filed for the first time in that court, if pleaded
prior to a submission of the case for a decision, and if
proof of the ground of the exception appears of record."
La. C.C.P. art. 2163. Both the exception of no right of
action and the exception of no cause of action involve
questions of law. Hornot v. Cardenas, 2006-1341, p.
12 (La.App. 4 Cir. 10/3/07), 968 So.2d 789, 798. "[O]ne
of the primary differences between the exception of no right
of action and no cause of action lies in the fact that the
focus in an exception of no right of action is on whether the
particular plaintiff has a right to bring the suit, while the
focus in an exception of no cause of action is on whether the
law provides a remedy against the particular defendant."
Badeaux v. Sw. Computer Bureau, Inc., 2005-0612, p.
6 (La. 3/17/06), 929 So.2d 1211, 1216-17 (citations omitted).
exception of no right of action questions whether the
particular plaintiff has standing to bring the lawsuit,
"but it assumes that the petition states a valid cause
of action for some person and questions whether the plaintiff
in the particular case is a member of the class that has a
legal interest in the subject matter of the litigation."
Howard v. Administrators of Tulane Educ. Fund,
2007-2224, p. 17 (La. 7/1/08), 986 So.2d 47, 60 (citations
omitted). "If the pleadings fail to disclose a right of
action, the claim may be dismissed without evidence, but the
plaintiff should be permitted to amend to state a right of
action if he or she can do so." Gisclair v.
Louisiana Tax Comm'n, 2010-0563, p. 1 (La. 9/24/10),
44 So.3d 272, 273 (citations omitted). "If the pleadings
state a right of action in the plaintiff, the exceptor may
introduce evidence to controvert the pleadings on the trial
of the exception, and the plaintiff may introduce evidence to
controvert any objections." Id., 2010-0563, p.
2, 44 So.3d at 274.
contrast, an exception of no cause of action questions
whether the law extends a remedy against the defendant to
anyone under the factual allegations of the petition."
Badeaux, 2005-0612, p. 7, 929 So.2d at 1217
(citation omitted). The exception of no cause of action is
tried "on the face of the petition" and, "to
determine the issues raised by the exception, each
well-pleaded fact in the petition must be accepted as
a party has the power to sue or be sued is an issue typically
raised in the dilatory exception of lack of procedural
capacity. See La. C.C.P. art. 926;
Bridges v. Anderson, 2016-0432, p. 7 (La.App. 4 Cir.
12/7/16), 204 So.3d 1079, 1083; Stonecipher v. Caddo
Par., 51, 148 (La.App. 2 Cir. 4/7/17), 219 So.3d 1187,
1192, reh'g denied (5/11/17), writ
denied, 2017-0972 (La. 10/9/17), 227 So.3d 830.
"The determination of whether a party has the procedural
capacity to sue or be sued involves a question of law."
Woodard v. Upp, 2013-0999, p. 5 (La.App. 1 Cir.
2/18/14), 142 So.3d 14, 18.
capacity of a party to sue or be sued "shall be
presumed, unless challenged by the dilatory exception."
La. C.C.P. art 855. The dilatory exception is waived if not
pleaded prior to or in the answer. La. C.C.P. arts. 926(B),
928(A); Bridges, 2016-0432, pp. 7-8, 204 So.3d at
1083. The City raises the DDD's capacity to sue for the
first time for appeal. As this issue was not raised in the
lower court or preserved for appellate review, it is not
properly before us, and this Court cannot consider it.
to assert a dilatory exception in the lower court, however,
does not dispose of the City's remaining arguments. This
Court must next consider whether the DDD is a separate
juridical entity from the City in order to determine whether
any obligation that the City owes the DDD is extinguished by
confusion and whether the DDD's right to proceed is
barred for failing to obtain city council approval to sue the
juridical person is an entity to which the law attributes
personality, such as a corporation or a partnership."
La. C.C. art. 24. "[J]uridical persons are classified
either as private persons or public persons."
Williams v. New Orleans Ernest N. Morial Convention
Ctr., 2011-1412, p. 5 (La.App. 4 Cir. 5/11/12), 92 So.3d
572, 576 (quoting La. C.C. art. 24, cmt. c). "The
capacity of a juridical person is governed by provisions in
its charter, governing legislation, and customs." La.
C.C. art. 24, cmt. d.
Constitution Article VI, §44 defines a political
subdivision as "a parish, municipality, and any other
unit of local government, including a school
board and a special district authorized by
law to perform governmental functions." (Emphasis
added). The Louisiana Supreme Court, in reviewing an
exception of no cause of action, has considered whether a
local government unit qualifies as a separate juridical
person from the City. Roberts v. Sewerage & Water Bd.
of New Orleans, 92-2048 (La. 1994), 634 So.2d 341. In
Roberts, the Supreme Court found that the Sewerage
and Water Board of New Orleans ("SWB") was a
separate juridical entity from the City and, therefore, a
"third person" for the purposes of the Louisiana
Workers' Compensation Act. Id., 92-2048, pp.
8-11, 634 So.2d at 346-47.
Supreme Court explained that "[l]ocal government units
such as the SWB are generally treated as separate and
distinct public juridical persons or corporations for certain
purposes whether they are called that or not."
Id., 92-2048, p. 10, 634 So.2d at 346. The Court
further set forth its "functional approach" for
determining whether a political subdivision is a separate and
distinct juridical person:
The important determination with respect to the juridical
status or legal capacity of an entity is not its creator, nor
its size, shape, or label. Rather the determination that must
be made in each particular case is whether the entity can
appropriately be regarded as an additional and separate
government unit for the particular purpose at issue. In the
absence of positive law to the contrary, a local government
unit may be deemed to be a juridical person separate and
distinct from other government entities, when the organic law
grants it the legal capacity to function independently and
not just as the agency or division of another governmental
Such a determination will depend on an analysis of
specifically what the entity is legally empowered to do.
Id., 92-2048, p. 10, 634 So.2d at 346-47 (internal
concluding that the SWB is a separate juridical entity from
the City, the Roberts court "refuse[d] to
disregard the autonomy and independence of the SWB from the
City of New Orleans in regards to its management and
operations; its source of revenues; and its employment,
deployment, direction and control of its work force."
Id., 92-2048, pp. 20-21, 634 So.2d at 352.
to its enabling statute, the DDD is a special taxing
district. La. R.S. 33:2740.3(A). The enabling statute creates
an eleven-member board of commissioners to provide for the
"orderly planning, development, acquisition,
construction and effectuation of the services, improvements
and facilities to be furnished by the [DDD], and to provide
for the representation in the affairs of the [DDD] of those
persons and interests immediately concerned with and affected
by the purposes and development of the district…"
La. R.S. 33:2740.3(C). Nine of those board members are
appointed by the mayor, with city council approval, but five
of those mayor-appointees must come from a list of nominees
generated by the New Orleans Chamber of Commerce. La. R.S.
33:2740.3(D)(1)(a). The remaining two board members
"shall be jointly appointed by the state senators and
state representatives who represent the [DDD] district."
La. R.S. 33:2740.3(D)(2)(a). The board has the authority to
elect officers "from their number,"
"select" or "employ" a secretary of
the board, "engage such assistants and employees as 
needed to assist the board in the performance of its
duties," and "adopt such rules and regulations as
it deems necessary or advisable for conducting its business
and affairs…" La. R.S. 33:2740.3(D)(3). The board
has the power to contract with the City for services and
capital improvements in the DDD, for which the DDD must pay,
to the City, from the proceeds of the DDD tax. La. R.S.
33:2740.3(H)(2). With prior approval from the mayor and city
council, the DDD may contract with other entities to obtain
services not ordinarily provided by the City, and the DDD
must pay for the contracted services from the DDD's
budgeted funds. La. R.S. 33:2740.3(H)(3). City council is
authorized to levy and collect the DDD tax. La. R.S.
33:2740.3(I). The DDD tax proceeds "shall be used solely
and exclusively for the purposes and benefit" of the DDD
and be "maintained in a separate account."
Id. The DDD, with city council approval, can