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Veritext Corp. v. Bonin

United States District Court, E.D. Louisiana

September 26, 2019

VERITEXT CORP.
v.
PAUL A. BONIN, ET AL.

         SECTION: “B” (2)

          ORDER & REASONS

         I. NATURE OF MOTION AND RELIEF SOUGHT

         Before the Court are: (1) defendant Louisiana Board of Examiners of Certified Shorthand Reporters’[1] (“CSR Board”) “Motion to Dismiss Complaint Under Federal Rule of Civil Procedure 12(b)(6)” (Rec. Doc. 92); (2) defendant Louisiana Court Reporter’s Association’s (“LCRA”) “Motion to Dismiss Complaint Under Federal Rule of Civil Procedure 12(b)(6)” (Rec. Doc. 93); (3) defendant CSR Board’s “Supplemental Memorandum in Support of Motion to Dismiss Complaint Under Federal Rule of Civil Procedure 12(b)(6)” (Rec. Doc. 94); (4) defendant LCRA’s “Supplemental Memorandum in Support of Motion to Dismiss Complaint Under Federal Rule of Civil Procedure 12(b)(6)” (Rec. Doc. 95)[2]; (5) plaintiff Esquire Deposition Solutions, LLC’s (“Esquire”) “Plaintiff Esquire Deposition Solution’s Memorandum in Opposition to Motion to Dismiss Complaint” (Rec. Doc. 96); (6) defendant CSR Board’s “Memorandum in Reply to Plaintiff Esquire Deposition Solutions’ Opposition to Motion to Dismiss Complaint” (Rec. Doc. 103); and (7) defendant LCRA’s “Reply Memorandum in Support of Motion to Dismiss Complaint Under Federal Rule of Civil Procedure 12(b) (6)” (Rec. Doc. 105).

         For the reasons discussed below, IT IS ORDERED that the motions to dismiss (Rec. Doc. 92 & Rec. Doc. 93) are GRANTED, dismissing plaintiff Esquire’s constitutional vagueness claims against defendants LCRA and the CSR Board, and dismissing plaintff’s Sherman Antitrust Act claims against defendant LCRA.

         II. FACTS AND PROCEDURAL HISTORY History of Consolidated Cases

         The case at issue, No. 17-9877, has been consolidated with No. 16-13903, with the latter being the master case. See Rec. Doc. 75 in 17-9877. Therefore, a short background and procedural history of each case is warranted to put this motion in perspective.

         On September 29, 2017, plaintiff Esquire Deposition Solutions, LLC (“Esquire”) filed its complaint alleging that Louisiana Code of Civil Procedure Article 1434 (“Article 1434”) was unconstitutionally vague, in violation of the Due Process Clause, the Equal Protection Clause and the Dormant Commerce Clause, and that defendants Louisiana Court Reporter’s Association (“LCRA”) and the Louisiana Board of Examiners of Certified Shorthand Reporter’s (“CSR Board”) actions violated the Sherman Antitrust Act (“Sherman Act”). See Rec. Doc. 1; see also 15 U.S.C. § 1. Prior to Esquire’s complaint, plaintiff Veritext Corporation filed a complaint against the CSR Board, alleging all claims included above, except for the constitutional vagueness claim.[3]See Rec. Doc. 4, 16-13903.

         In Veritext v. Bonin, this Court granted defendant CSR Board’s a motion to dismiss for failure to state a claim as to all claims alleged by plaintiff Veritext. See Rec. Doc. 22; Rec. Doc. 44. That order dismissed the constitutional claims, but the Sherman Act claim was upheld and not dismissed. See Rec. Doc. 44 at 11. After a subsequent motion for reconsideration filed by defendants CSR Board, this Court dismissed plaintiff Veritext’s Sherman Act Claim stating, “despite the Plaintiff’s adequately alleged facts, the actors in the complaint do not fall under the purview of the Sherman Act” because the actions were taken by state officers/agents and subject to Parker immunity. See Rec. Doc. 48; Rec. Doc. 73. That judgment was appealed to the United States Fifth Circuit Court of Appeals, who affirmed this Court’s judgment regarding the constitutional claims and remanded the case regarding the Sherman Act Claim. See Veritext Corp. v. Bonin, 901 F.3d 287 (5th Cir. 2018).

         All parties agree that the decision of the Fifth Circuit is final and binding on these consolidated actions. See Rec Doc. 96 at 2. Thus, the only remaining claim to be addressed in defendant CSR Board’s motion for failure to state a claim is the claim that Article 1434 is unconstitutionally vague, which was not addressed in the Veritext opinion. See Rec. Doc. 94. Likewise, the only claims to be addressed in defendant LCRA’s motion to dismiss for failure to state a claim are for the constitutional vagueness of Article 1434 and for the LCRA’s alleged violations of the Sherman Act, which were not specifically addressed as to defendant LCRA by the Fifth Circuit in Veritext. LCRA was not a party in that appellate action. See Rec. Doc. 95; see also Veritext Corp., 901 F.3d 287.

         The subject motions to dismiss under Federal Rule of Civil Procedure 12(b)(6) relate only to plaintiff Esquire Deposition Solutions, LLC. (“Esquire”).

         History of Instant Proceedings

         Plaintiff Esquire is a Delaware Corporation with its principal place of business in Atlanta, Georgia. Rec. Doc. 1 ¶ 11. Esquire provides court-reporting services to several states across the nation, including Louisiana, “in depositions, arbitrations, and other proceedings . . .” Id. In the instant suit, plaintiff challenges the constitutionality a state statute, Article 1434, which prohibits court reporters from entering into contracts with party litigants, among other restrictions.[4]

         Defendant CSR Board[5] is a “regulatory body” created to maintain and police the shorthand reporting profession as well as establish a standard of competency for those persons engaged in the profession. See Rec. Doc. 1 at ¶ 13. The CSR Board is composed of “active market participants” as six of the nine members of the board are practicing court reporters. Id. at ¶ 15.

         Defendant LCRA is a private organization created in 1955 to “educate[], protect[], and promote[] the court reporting profession in Louisiana. LCRA has ‘approximately ninety-three (93) dues-paying members, ” with annual membership dues set at $76. Rec. Doc. 1 at ¶ 18; see also Rec. Doc. 95 at 2. Vincent Borello, and Messrs. Donnegan, Andressen, Dunn, Magee, and Methvin were allegedly members of LCRA while simultaneously holding positions on the CSR Board. See Rec. Doc. 1 at ¶ 19.

         Plaintiff alleges Article 1434 prohibits court reporters from “offering volume-based price discounts to customers and [the legislation was] motivated by the ‘sweet deals [that] were being made to big insurance and defense firms.’” Id. at ¶ 1 (citing CSR Board Meeting Transcript, January 20, 2012 at 148:14-149:9). Further, while Article 1434 makes no mention of volume based price discounts, “‘sweet deals’”, nor contains any language evidencing any legislative intent to displace competition amongst court reporters, defendants LCRA and CSR Board allegedly agreed that LCRA members “would not engage in volume-based price discounting, that [The CSR Board members] would exercise their voting control on the board to effect and police their conspiracy, and that the LCRA, the [CSR Board] and its members would use the meetings of the [CSR Board] as cover for discussing ways to suppress price competition among court reporters.” Id. at ¶ 3. Said differently, plaintiff alleges that defendants LCRA and the CSR Board conspired together to restrict trade by disallowing volume-based discounts to court reporting firms, in violation of the Sherman Antitrust Act. See Rec. Doc. 1; see also 15 U.S.C. § 1.

         III. LAW AND ANALYSIS

         A. Motion to Dismiss Standard

         Rule 12(b)(6) of the Federal Rules of Civil Procedure allows a party to move for dismissal of a complaint for failure to state a claim upon which relief can be granted. To survive a motion to dismiss under Rule 12(b)(6), a plaintiff’s complaint “must contain ‘enough facts to state a claim to relief that is plausible on its face.’” Varela v. Gonzalez, 773 F.3d 704, 707 (5th Cir. 2014) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In other words, a plaintiff’s “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. “A claim has facial plausibility when the plaintiff pleads factual content that ...


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