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Skyrunner, LLC v. Louisiana Motor Vehicle Commission

United States District Court, W.D. Louisiana, Shreveport Division

October 31, 2019

SKYRUNNER, LLC
v.
LOUISIANA MOTOR VEHICLE COMMISSION

          HORNSBY, MAGISTRATE JUDGE

          MEMORANDUM RULING

          ELIZABETH ERNY FOOTE, UNITED STATES DISTORT JUDGE

         Now before the Court is a Motion to Dismiss for Lack of Personal Jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) and a Request for Oral Argument filed by Defendant Louisiana Motor Vehicle Commission ("the LMVC"). [Record Document 6]. Plaintiff SkyRunner, LLC ("SkyRunner") has filed an opposition. [Record Document 10]. For the reasons discussed below, the LMVC's motion to dismiss and request for oral argument are DENIED WITHOUT PREJUDICE to refiling. SkyRunner is given leave to amend its complaint by Monday, December 2, 2019.

         I. BACKGROUND

         This case arises out of the LMVC's attempts to regulate SkyRunner. According to its first amended complaint, SkyRunner is a Louisiana Limited Liability Company that manufactures and distributes aircrafts that are certified by the Federal Aviation Administration ("FAA"). Record Document 5, ¶s 2 & 7. SkyRunner makes a product called the MK 3.2, which it describes as an FAA certified special light-sport aircraft. Id. at ¶ 8. SkyRunner states that the MK 3.2 is "designed to become airborne to traverse peaks, rivers, lakes, canyons, trees and cliffs, while being capable of traversing sand, dirt, snow, and asphalt." Id.

         In July of 2018, the LMVC informed SkyRunner that it needed to register with the LMVC and that it needed to obtain a recreational manufacturer and dealer's license. Id. at ¶s 9 & 10. SkyRunner told the LMVC that it is already regulated by the FAA and that being regulated by both entities could result in inconsistency and overlapping regulations. Id. at ¶s 11 & 12. The LMVC responded that it "will regulate the portion of the aircraft that turns into an ATV."[1] Id. at ¶s 12 & 13. On November 29, 2018, the LMVC threatened to impose penalties and/or other sanctions on SkyRunner if SkyRunner did not comply with the LMVC's attempts at regulation. Id. at ¶ 14.

         According to SkyRunner, the LMVC has no constitutional authority to regulate it because the LMVC's legal authority only allows it to regulate motor vehicles and recreational products and not aircrafts such as the MK 3.2. Id. at ¶s 15-21. Specifically, SkyRunner contends that the MK 3.2 does not fall within the legal definition of an ATV set forth in Louisiana Revised Statute § 32:1251. Id. at ¶s 15-18. SkyRunner claims that the FAA is the only entity authorized to regulate aircrafts and that, as a result, the LMVC is federally preempted from attempting to regulate SkyRunner. Id. at ¶ 25.

         SkyRunner seeks a judgment declaring that (1) the FAA is the only entity authorized to regulate SkyRunner and the MK 3.2; (2) Louisiana Revised Statute § 32:1251, et seq., is preempted by federal law; (3) any attempts by the LMVC to regulate SkyRunner and/or the MK 3.2 are preempted or not authorized by existing legislation; and (4) any attempts by the LMVC to impose fines, penalties, and/or other sanctions against SkyRunner are preempted or not authorized by existing legislation. Id. at pp. 8-9. SkyRunner also requests that the LMVC be required to pay all of the costs associated with these proceedings. Id. at 10.

         II. ARGUMENTS OF THE PARTIES

         In response to SkyRunner's complaint, the LMVC filed a motion to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2). Record Document 6. The LMVC claims that this lawsuit is barred by Eleventh Amendment immunity, also known as state sovereign immunity. Record Document 6-1, p. 8. The Eleventh Amendment to the Constitution prohibits federal courts from exercising jurisdiction over a non-consenting state sued by its own citizen or a citizen of any other state. Id. The LMVC claims that it is entitled to this immunity because it is an arm of the State of Louisiana. Id.

         In its opposition, SkyRunner acknowledges that the Eleventh Amendment typically prevents suits against state agencies but argues that it does not apply to this case. Record Document 10, p. 3. SkyRunner asserts that the Federal Aviation Act preempts the LMVC from regulating aircrafts and that a state court should not be allowed to interpret the Act because it is federal statute. Id. at 3-4. Finally, SkyRunner requests that, if the Court determine that the LMVC is entitled to Eleventh Amendment immunity, it be allowed to amend its complaint in accordance with the Ex Parte Young doctrine and name an acting state official with the LMVC as a defendant. Id. at 6.

         In its reply, the LMVC asserts that SkyRunner has failed to show that this Court has personal jurisdiction over it. Record Document 11, pp. 1-2. As such, the LMVC argues that it has an unqualified right to a dismissal of this case. Id. at 1. Finally, the LMVC claims that allowing SkyRunner to amend its complaint in accordance with the Ex Parte Young doctrine would only cure a deficiency of subject matter jurisdiction, not personal jurisdiction. Id.

         III. LAW AND ANALYSIS

         A. Legal Standard

         The LMVC frames its motion as a motion to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2). Record Document 6, p. 1. However, the Fifth Circuit generally regards a dismissal based on state sovereign immunity as a dismissal based on a lack of subject matter jurisdiction. Cantu Servs., Inc. v. Roberie, 535 Fed.Appx. 342, 346 n.3 (5th Cir. 2013). Accordingly, the Court will construe the instant motion as a motion to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1). Motions filed under Rule 12(b)(1) allow a defendant to challenge the subject matter jurisdiction of the court to hear a case. Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001). "A case is properly dismissed for lack of subject matter jurisdiction when the court lacks the statutory or constitutional power to adjudicate the case." Home Builders Ass'n of Miss., Inc. v. City of Madison, Miss., 143 F.3d 1006, 1010 (5th Cir. 1998) (quoting Nowak v. Ironworkers Local 6 Pension Fund, 81 F.3d 1182, 1187 (2d Cir. 1996)). As the party asserting jurisdiction, the plaintiff bears the burden of proving that jurisdiction exists. Ramming, 281 F.3d at 161.

         B. Eleventh Amendment Immunity

         Federal court jurisdiction is limited by the Eleventh Amendment to the Constitution, which bars suits in federal court brought by a citizen against a state, unless the state consents to suit or Congress has abrogated the states' Eleventh Amendment immunity by statute. U.S. Const, amend. XI; Freimanis v. Sea-LandServ., Inc., 654 F.2d 1155, 1157 (5th Cir. Unit A Sept. 1981); Vogt v. Bd. of Comm 'rs of the Orleans Levee Dist., 294 F.3d 684, 688 (5th Cir. 2002). Even when a state is not named as a defendant in a federal lawsuit, "[t]he State's Eleventh Amendment immunity will extend to any state agency or other political entity that is deemed the 'alter ego' or an 'arm' of the State." Vogt, 294 F.3d at 688-89 (citing Regents of the Univ. of California v. Doe, 519 U.S. 425, 429 (1997)). In order to determine whether Eleventh Amendment immunity bars the instant lawsuit, the Court must first determine whether the LMVC is an arm of the state that is entitled to the protections of the Eleventh Amendment.

         C. Arm of ...


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