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Fetty v. Louisiana State Board of Private Security Examiners

United States District Court, M.D. Louisiana

July 8, 2019

NICHOLAS A. FETTY, ET AL.
v.
THE LOUISIANA STATE BOARD OF PRIVATE SECURITY EXAMINERS, ET AL.

          RULING AND ORDER

          JOHN W. DEGRAVELLES JUDGE

         This matter comes before the Court on the Motion to Dismiss Plaintiff[s'] Claims Pursuant to F.R.C.P. 12(B)(6) (Doc. 34) filed by Defendants Jeff Landry, Louisiana Attorney General (“Landry”), and James LeBlanc, Secretary of the Louisiana Department of Public Safety & Corrections (“LeBlanc”) (collectively, “Defendants”). Plaintiffs Nicholas A. Fetty (“Fetty”) and Delta Tactical, LLC (“Delta Tactical” or “Delta”) (collectively, “Plaintiffs”) oppose the motion. (Doc. 40.) Defendants filed a reply. (Doc. 37.) Oral argument is not necessary. The Court has carefully considered the law, the facts in the record, and the arguments and submissions of the parties and is prepared to rule. For the following reasons, Defendants' motion is granted in part and denied as moot in part.

         I. Introduction

         Plaintiff Fetty is the sole and managing member of Delta Tactical. (Amended and Supplemental Complaint (“Amended Complaint” or “Am. Compl.”) ¶ 7, Doc. 27.) “Plaintiffs are engaged in the business of providing private security agents and security services” in Louisiana. (Id. ¶ 6.) This requires a license from the state. (Id.)

         Pursuant to La. Rev. Stat. Ann. § 37:2371 et seq. (specifically § 37:2373), Louisiana established the Louisiana State Board of Private Security Examiners (the “Board”) as an agency within the Department of Public Safety and Corrections (“DPSC”). The Board requires private security agents and businesses to satisfy certain statutory and administrative requirements to obtain a license to engage in this practice. (Id. ¶ 6.)

         LeBlanc is the Secretary of DPSC. (Am. Compl. ¶¶ 5(A), 6, Doc. 27.) Fabian P. Blache, III, (“Blache”) “is responsible for supervising all employees of the Board, performing all administrative duties of the Board, supervising all inspectors, performing administrative inspections, and performing any duties as may be prescribed by the Board for the proper administration of the practice of private security agents and businesses.” (Id. ¶ 5(B).) Members of the Board include Ritchie Rivers, Mark A. Williams, Marian H. Pierre, Wilbert Sanders, Jr., Ector Echegoyen, Maria V. Landry, Edward Robinson, Sr., Durell P. Pellegrin, and Misty Finchum (collectively, “the Board Members”). (Id. ¶ 5(C).)

         On March 22, 2017, Plaintiffs were issued their license by the Board. (Id. ¶ 7.) This suit involves Plaintiffs' loss of that license. In short, Plaintiffs claim that Defendants have deprived Plaintiffs of their rights under the Fourteenth Amendment to the United States Constitution and Article I, Sections 2 and 24 of the Louisiana Constitution of 1974. (Id. ¶ 6.)

         LeBlanc, Landry, Blache, and the Board Members have all been named as defendants, but this ruling deals only with the instant motion to dismiss brought by Defendants Landry and LeBlanc.[1] Here, they seek dismissal of all claims they believe are brought against them, including (1) Plaintiffs' alleged attack on the constitutionality of the Board, Louisiana's Private Security Regulatory and Licensing Law, and its implementing regulations; (2) Plaintiffs' claims under 42 U.S.C. § 1983 against them in their individual and official capacities; (3) Plaintiffs' claims for emotional distress and punitive damages.

         Preliminarily, the Court notes that it is very sympathetic to the claims brought by Plaintiffs. Though the Amended Complaint is inartful at times, Plaintiffs present allegations which, if true, are troubling.

         But the key issue for the instant motion is whether Plaintiffs have stated viable claims against two specific Defendants, Landry and LeBlanc. In short, they have not. Plaintiffs concede that they do not attack the constitutionality of the Board or the relevant statutes and regulations. Plaintiffs also admit that they bring no official capacity claims against Defendants. Thus, these parts of the motion are denied as moot. However, Plaintiffs have failed to adequately state a claim against Defendants in their individual capacity under § 1983. Supervisor liability claims such as these require allegations of deliberate indifference, and here Plaintiffs have failed to adequately plead this against Landry or LeBlanc. Further, even if Plaintiffs had stated a viable claim against Defendants, neither Plaintiff can recover emotional distress damages; Delta cannot recover such damages because it is a LLC, and Fetty has not sufficiently alleged facts to show he is entitled to such damages. Lastly, Plaintiffs have failed to plead that Landry and LeBlanc engaged in any culpable conduct, much less the type of conduct required for punitive damages. Accordingly, Defendants' motion will be granted in these respects. But, Plaintiffs will be given leave to amend the operative complaint to cure the deficiencies therein.

         II. Relevant Factual Background

         The following factual allegations are taken from Plaintiffs' Amended Complaint (Doc. 27). They are assumed to be true for purposes of this motion. Thompson v. City of Waco, Tex., 764 F.3d 500, 502-03 (5th Cir. 2014).

         A. The Notice and Cease and Desist Order

          On October 16, 2017, the Board, through Blache, issued a “Notice of Revocation of Company License Number 0966” (the “Notice”), which “purportedly revoked” Plaintiffs' license. (Am. Compl. ¶ 8, Doc. 27.) The Notice to Delta allegedly said, “[T]his letter serves to notify you that pursuant to LSA - R.S. 37:3289(A)(9), the [Board] is revoking your company license to engage in the private security business in Louisiana . . .” (Id.)

         Plaintiffs further allege in the Amended Complaint (sic throughout):

Additionally, on October 16, 2017, the [Board], purportedly acting through Blache, issued a “Cease and Desist Order” ordering that Delta and/or Fetty nor Delta Technical has been served with the Cease and Desist Order as required by LSA - R.S. 37:3293 and/or LAC, Title 46, Part LIX, Chapter 6, ¶ 601, and/or Chapter 9, § 901. . . . The Cease and Desist Order directed to Delta to “forthwith to CEASE & DESIST from engaging in the contract security business within the State of Louisiana.”

(Id. ¶¶ 9-10.)

         Plaintiffs claim that both the Notice and the Cease and Desist Order are illegal and unlawful. (Id.¶ 11.) Plaintiffs specifically point to La. Rev. Stat. Ann. § 37:3288, which provides for a criminal penalty and revocation of these licenses for those committing “egregious acts” “after reasonable notice and opportunity for a fair and impartial hearing held in accordance with the Administrative Procedure Act.” (Am. Compl. ¶ 12 (quoting La. Rev. Stat. Ann. § 37:3288), Doc. 27.) Plaintiffs also quote provisions of the Louisiana Administrative Code. The first provides that, “before revoking or suspending a license or registration card, or imposing fines or costs over $500, the board will afford the applicant an opportunity for a hearing after reasonable notice of not less than 15 days, ” except in certain inapplicable cases. (Id. ¶ 13 (quoting La. Admin. Code tit. 46, Pt LIX, § 601(A).) The second regulation provides that any person who has violated a provision of La. Rev. Stat. Ann. § 37:3270 et seq. or other applicable rule is subject to a penalty or suspension or revocation of his license, but this occurs “after reasonable notice and opportunity for a fair and impartial hearing held in accordance with the Administrative Procedure Act[.]” (Id. ¶ 14 (quoting La. Admin. Code tit. 46, Pt LIX, § 901).) Plaintiffs allege that, contrary to these laws, they were denied notice and an opportunity for a fair and impartial hearing before the Notice and Cease and Desist Order were issued. (Id. ¶¶ 15-16.)

         B. The Sham Hearing

         On October 31, 2017, Plaintiffs requested a “fair an impartial hearing, . . . notwithstanding the requirement” that this should have happened anyway before the Board's actions. (Am. Compl. ¶ 17, Doc. 27.) In response, the Board “scheduled a purported fair and impartial hearing” on Plaintiffs' “license revocation for Thursday, January 25, 201[8].” (Id. ¶ 18.)

         Delta had two employees-Dalton Miller and Colt Miller. (Id. ¶ 19.) According to Plaintiffs, since the revocation and Cease and Desist Order, “Colt had numerous and significant contact with Blache.” (Id. ¶ 20.) The Amended Complaint alleges: “On information and belief, Colt made application to the [Board] for licensure, which was been approved (sic), pending compliance with the [Board's] insurance requirements.” (Id. ¶ 21.)

         On November 17, 2017, Colt and Dalton had a conversation, during which “Colt volunteered and told Dalton that he, [Colt, ] had talked to Blache about the hearing requested by Fetty, that the hearing is not about whether or not Fetty loses his license, [and] that it would be about whether Fetty could ever get another license.” (Am. Compl. ¶¶ 22-23, Doc. 27.) Colt also advised Dalton “that Blache had already talked to the . . . Board members, and that the Board had already decided that Fetty's license would be revoked, and that Fetty would not be getting his license back.” (Id. ¶ 24.) According to Plaintiffs, “Colt further advised Dalton that the hearing before the . . . Board was merely a formality intended, only, to satisfy the due process requirements.” (Id. ¶ 25.)

         On December 27, 2017, Plaintiffs filed a “Motion for En Banc Recusal of Members of the [Board] with supporting Memorandum.” (Id. ¶ 26.) Counsel for both Plaintiffs and the Board agreed to convert the January 25, 2018, hearing from one dealing with the revocation and order to a limited hearing on Plaintiffs' motion for recusal. (Id. ¶ 27.) On January 25, 2018, the Board held this hearing. (Id. ¶ 28.) The motion was denied. (Id.)

         C. Plaintiffs' Claims

         Plaintiffs assert that Louisiana's Private Security Regulatory and Licensing Law, “as applied to Delta, currently prevents and continually prevents [Plaintiffs] from fulfilling contracts for services, [and] employing competent, experienced private security agents.” (Am. Compl. ¶ 32, Doc. 27.) All Defendants have caused Fetty to terminate Delta's most qualified agents and contracts and to spend considerable resources to obtain new ones. (Id. ¶ 33.) Because of all Defendants, “Delta cannot effectively operate its business” and cannot “offer private security services to its customers.” (Id. ¶ 34.) Plaintiffs have also suffered a loss of goodwill. (Id. ¶ 35.)

         Plaintiffs' first claim is a violation of procedural due process under the federal and state constitutions. (Id. ¶¶ 36-50.) Plaintiffs complain about Blache's ex parte communications as well as the failure of the Board to provide a fair and impartial hearing. (Id. ¶¶ 45-48.) According to Plaintiffs, they were entitled to an en banc recusal of the Board. (Id.) Plaintiffs further assert that the Louisiana laws at issue, as applied, deprived Plaintiffs of their federal and state rights to procedural due process. (Id. ¶ 49.) Plaintiffs claim continuing irreparable harm from Defendants' conduct and seek injunctive relief.

         Plaintiffs also assert that Defendants violated Article I, Section 24 of the Louisiana Constitution. (Am. Compl. ¶ 52, Doc. 27.) This section provides: “The enumeration in this constitution of certain rights shall not deny or disparage other rights retained by the individual citizens of the state.” La. Const. Art. I, § 24. Plaintiffs maintain that this provision “protects Plaintiffs' right to economic liberty-that is, their right to earn a living and conduct business free from unreasonable governmental interference.” (Am. Compl. ¶ 53, Doc. 27.) Plaintiffs maintain that Louisiana's Private Security Regulatory Law, as applied, has “no real and substantial relationship to public health, safety, or welfare” and thus violated Article I, Section 24. (Id. ¶ 57.) According to Plaintiffs, on September 22, 2017, Blache drafted a letter to Plaintiffs alleging that “Fetty had stipulated to an administrative penalty and fine in the amount of . . . $5, 000.00[] . . ., for the same alleged violations which formed the basis for the revocation and cease and desist order.” (Id. ¶ 58.) If Plaintiffs had paid this fine, they would have been allowed to continue to operate. (Id. ¶ 59.) Meanwhile, Plaintiffs claim that “any and all necessary corrective action identified in Blache's writing had been completed.” (Id. ¶ 60.) Plaintiffs say that the Louisiana laws at issue, as applied, advance no legitimate governmental interest and are arbitrary and capricious. (Id. ¶¶ 61-62.) Again, Plaintiffs seek injunctive relief. (Id. ¶ 64.)

         Plaintiffs pray for the following: (a) a declaration that La. Rev. Stat. §§ 37:3270 et seq. and its implementing regulations are unconstitutional “when applied to Plaintiffs' practice of providing private security agents and private security services”; (b) a permanent injunction prohibiting Defendants from enforcing Louisiana's Private Security Regulatory Law and regulations against Plaintiffs' practice and services; (c) an award of damages for Defendants' violations of the state and federal constitutions; and (d) “all other relief to which Plaintiffs may show themselves entitled.” (Am. Compl., Doc. 27 at 17.) Plaintiffs also seek a number of separate items of damages, including:

Pecuniary losses; loss of good will; mental anguish and/or mental pain, humiliation, embarrassment, inconvenience, emotional distress, loss of enjoyment of life, and other non-pecuniary losses - past, present and future; punitive damages in the amount of $2, 315, 000.00; any other damages which may be proved at a trial on the merits, and reasonable attorney's fees and costs of the present action.

(Id. at 18.)

         D. Claims against LeBlanc

         Relevant here, Plaintiffs' allegations against LeBlanc are contained in a single paragraph. Specifically, Plaintiffs assert:

At all times pertinent hereto, Secretary LeBlanc was negligent in supervising and properly training the defendants, Blache and the members of the Board of the LSBPSE in the proper administration of the LSBPSE. Secretary LeBlanc failed to properly instruct or train Blache and the members of the Board of the LSBPSE, particularly in the grounds of the operations of the Board in the context of the due process requirements of the ...

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