Nissan of Slidell, LLC v. Nissan North America, Inc.

Filing 11

ORDER re dft's 7 Motion to Dismiss for Lack of Jurisdiction and for failure to state a claim upon which relief may be granted; for the reasons stated therein, dft's motion to dismiss is GRANTED in part and denied in part; pla's claims for damages and declaratory relief under the LMVA are DISMISSED. Signed by Chief Judge Sarah S. Vance on 11/3/08. (rll, )

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA NISSAN OF SLIDELL, L.L.C. VERSUS NISSAN NORTH AMERICA, INC. CIVIL ACTION NO: 08-1206 SECTION: R(2)

ORDER AND REASONS Before the Court is defendant Nissan North America's 12(b)(1) and (6) motion to dismiss for lack of subject matter jurisdiction and for failure to state a claim upon which relief may be granted. For the reasons stated below, the motion is

GRANTED in part and DENIED in part. I. Background Plaintiff Nissan of Slidell ("Nissan Slidell") sells cars and trucks manufactured by defendant Nissan North America ("Nissan NA") in Louisiana and Mississippi. Nissan Slidell

specifically markets their vehicles and services in St. Tammany Parish and in the area of Mississippi surrounding Picayune. This

is Nissan Slidell's Primary Market Area ("PMA") - "a geographic area which is based upon demographic, competitive, and market factors and is established so that the dealer can effectively invest in and market the dealership's sales and service functions." (R. Doc. 1 at 3.)

According to plaintiff, Nissan Slidell entered into an agreement with Nissan NA that granted Nissan Slidell the exclusive right to sell Nissan cars and trucks within the PMA, and that agreement has been renewed annually since 2001. In

addition, Nissan NA allegedly assured Nissan Slidell that no other Nissan dealerships would be approved to operate in the PMA on numerous occasions. Allegedly relying on these promises and

their exclusive agreement, Nissan Slidell invested in new facilities, Hurricane repairs and advertising within the PMA. In January 2008, Nissan NA gave required notice under La. Rev. Stat. § 32:1254(C)(12) to the Louisiana Motor Vehicles Commission that it was considering approval of a new dealer to be located in Picayune, which is within Nissan Slidell's PMA. Nissan NA later withdrew this notice, but then conditionally approved the new dealer. According to plaintiff's allegations,

final approval is imminent. Nissan Slidell has brought this suit against Nissan NA

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seeking damages and a permanent injunction1 for violation of the Louisiana Motor Vehicles Act, detrimental reliance and misrepresentation. Nissan Slidell also requests a declaratory

judgment that Nissan NA is in violation of the Louisiana Motor Vehicles Act, and that Nissan Slidell has the exclusive right to market to its PMA. Nissan NA has moved to dismiss for lack of

subject matter jurisdiction and for failure to state a claim. II. Legal Standards Rule 12(b)(1) requires dismissal if the court lacks jurisdiction over the subject matter of the plaintiff's complaint. Motions submitted under Rule 12(b)(1) allow a party

to challenge the Court's subject matter jurisdiction based upon allegations on the face of the complaint. Lopez v. City of In ruling

Dallas, Tex, 2006 WL 1450520, at *2 (N.D. Tex. 2006).

on a Rule 12(b)(1) motion to dismiss, the Court may rely on (1) the complaint alone, presuming the allegations to be true, (2) the complaint supplemented by undisputed facts, or (3) the complaint supplemented by undisputed facts and by the court's resolution of disputed facts.
1

Id.; See also Barrera-Montenegro

Plaintiff's complaint contains a "Request for Permanent Injunction." Plaintiff's brief, however, repeatedly refers to its "claim for permanent injunction." An injunction is a form of relief and not a cause of action, and the Court interprets plaintiff's pleadings as requesting injunctive relief as an additional form of recovery under its other causes of action. 3

v. United States, 74 F.3d 657, 659 (5th Cir. 1996).

Furthermore,

the plaintiff bears the burden of demonstrating that subject matter jurisdiction exists. 521, 523 (5th Cir. 1981). See Paterson v. Weinberger, 644 F.2d

When examining a factual challenge to

subject matter jurisdiction that does not implicated the merits of plaintiff's cause of action, the district court has substantial authority to "weigh the evidence and satisfy itself as to the existence of its power to hear the case." Garcia v.

Copenhaver, Bell & Assocs., 104 F.3d 1256, 1261 (11th Cir. 1997). See also Clark v. Tarrant County, 798 F.2d 736, 741 (5th Cir. 1986). Accordingly, the Court may consider matters outside the See Garcia, 104

pleadings, such as testimony and affidavits. F.3d at 1261.

A Court's dismissal of a case for lack of subject

matter jurisdiction is not a decision on the merits, and the dismissal does not prevent the plaintiff from pursuing the claim in another forum. See Hitt, 561 F.2d at 608.

In considering a motion to dismiss under Rule 12(b)(6), a court must accept all well-pleaded facts as true and must draw all reasonable inferences in favor of the plaintiff. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). Baker v.

To survive a Rule

12(b)(6) motion to dismiss, the plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, --- U.S. ----, 127 S. Ct. 1955, 4

1974 (2007); In re Katrina Canal Breaches Litigation, 495 F.3d 191, 205 (5th Cir. 2007) (recognizing a change in the standard of review). "Factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all allegations in the complaint are true (even if doubtful in fact)." Twombly, 127 S.Ct. at 1965 (quotation marks, citations,

and footnote omitted). III. Analysis Defendant seeks dismissal on the grounds that the LMVA does not create a private right of action, and because Nissan Slidell did not exhaust administrative remedies under the LMVA before filing suit. i. No Private Right

In Crescent City M Dealership, LLC v. Mazda Motor of America, Inc., No. 00-1620, 2000 WL 1372965, at *2-3 (E.D.La 9/22/2000), aff'd 275 F.3d 43 (5th Cir. 2001), this Court held that the Louisiana Motor Vehicles Act does not confer a private right of action to dealers or other private persons or entities. The Court found the LMVA analogous to similarly comprehensive Louisiana legislation that did not explicitly provide for a private right of action, and under which Louisiana courts had declined to imply such a right. Id. The Court contrasted the

LMVA with the Louisiana Unfair Trade Practices and Consumer 5

Protection Law, in which the Louisiana legislature explicitly provided for a right of action, as well as for an administrative body. Id. The Court concluded that the Louisiana legislature Id.

knew how to create a private right and did not.

In Crescent City, the plaintiff argued that Louisiana courts had allowed private actions under the LMVA, so the LMVA must create one; an argument Nissan NA echoes here. But the cases to

which Nissan NA directs the Court, both of which pre-date Crescent, do not convince the Court to revisit its decision. The

Court explicitly considered Aetna Cas. & Surety Co. v. LivelyCulpepper Chevrolet Oldsmobile, Inc., 609 So.2d 1055 (La. Ct. App. 1992) in its Crescent City opinion, and Everything on Wheels Subaru, Inc. v. Subaru South, 593 So.2d 1269 (La. Ct. App. 1991) is of no precedential value because the court did not address the issue of whether plaintiff had standing to sue under the LMVA. Plaintiff also argues that Crescent City is distinguishable because, here, plaintiff seeks a declaratory judgment of its rights under the LMVA, whereas the plaintiff in Crescent City sought only damages. But the form of relief plaintiff seeks on The Fifth

its non-existent cause of action is irrelevant.

Circuit has stated that while the Declaratory Judgment Act provides a remedy for litigants, the Act "does not provide an additional cause of action with respect to the underlying claim." 6

See Okpalobi v. Foster, 244 F.3d 405, 423 fn. 31. (citing Earnest v. Lowentritt, 690 F.2d 1198, 1203 (5th Cir. 1982)); See also Buck v. American Airlines, Inc., 476 F.3d 29, 33 n.3 (1st Cir. 2007). Because plaintiff has no private cause of action under

the LMVA, it has failed to state a claim for declaratory judgment as well. ii. Administrative Exhaustion

Defendant argues that this Court does not have jurisdiction to hear plaintiff's remaining state law claims, because plaintiffs have not exhausted administrative remedies available under the LMVA. The doctrine of administrative exhaustion is a

judicially created rule that precludes judicial relief until the prescribed administrative relief has been exhausted. See Reitner

v. Cooper, 507 U.S. 258, 269 (1993); McKart v. United States, 395 U.S. 185, 193 (1969). While the rule is subject to exceptions

and may be waived, the predicate for its application is a "claim [that] is cognizable in the first instance by an administrative agency alone." United States v. Western Pac. R.R. Co., 352 U.S.

U.S. 59, 63 (1956). See also McKart, 395 U.S. at 193-94; Daily Advertiser v. Trans-La, 612 So.2d 7, 27 (La. 1993). In Penny v.

Southwestern Bell Telephone Co., 906 F.2d 183, 185-86 (5th Cir. 1990), the Fifth Circuit held that a plaintiff was not required to exhaust administrative procedures under the Texas Public 7

Utility Regulatory Act (PURA) before suing a telephone company on state law claims not arising under the PURA. The court did not

require exhaustion even though the Texas Public Utility Commission had "exclusive jurisdiction over the business and property of telecommunications utilities in the state," subject to certain limitations not relied on by the court. Id. The

court found that plaintiff's claims for deceptive trade practices, misrepresentation and retaliation were created by state law independent of the regulatory act, and so the administrative exhaustion doctrine did not prevent a court with otherwise proper jurisdiction from hearing the claims. Id. In

addition, the Court held that the administrative procedure was not the exclusive remedy for disputes between customers and public utilities, because the Public Utility Commission could not provide the damages remedy plaintiff sought. Id.

Nissan Slidell's remaining claims are for detrimental reliance and misrepresentation. Although defendant argues that

these claims "are simply a repackaging of the Vehicles Act claim," (R. Doc. 7-2 at 8), it is apparent that plaintiff's claims are viable theories of recovery, under Louisiana law, separate and apart from the LMVA. See, e.g., La. Civ. Code arts. 1967, 2315; Suire v. Lafayette City-Parish Consol. Government, 907 So.2d 37 (La. 2005)(detrimental reliance); Sportsman Store of 8

Lake Charles, Inc. v. Sonitrol Security Systems of Calcasieu, Inc., 748 So.2d 417 (La. 1999)(intentional and negligent misrepresentation). In addition, the remedies Nissan Slidell

seek include damages, which the Louisiana Motor Vehicles Commissions cannot provide. See La. Rev. Stat. § 32:1256.

Defendant acknowledges that other sections of this Court have held that the LMVA does not provide the exclusive remedy for disputes between car manufacturers and dealers under Louisiana law. See Volvo Trucks North America, Inc. v. Crescent Ford Truck

Sales, Inc., No. 02-3398, 2003 WL 1936356 (E.D.La. 4/22/03); American Honda Motor Co., Inc. v. Premier Quality Imports, LLC, No. 04-1205, 2005 WL 2036685 (E.D.La 8/10/2005)(abstaining on grounds not argued here). But defendant argues that this case is

distinguishable because Nissan Slidell has not asked for monetary damages, and cannot show monetary damage because Nissan NA has yet to approve the new dealership within plaintiff's PMA. Contrary to defendant's assertion, however, plaintiff's prayer for relief includes "such damages as will be shown at trial."2 Defendant also quotes at length from the Court's opinion in

Defendant appears to challenge the ripeness of plaintiff's claim with this statement, but defendant has not made a justiciability challenge other than to argue that plaintiff has not exhausted administrative remedies, and as explained above administrative exhaustion is not implicated here. 9

2

Crescent City to support its argument that exhaustion is required, but in Crescent City, this Court analyzed separately plaintiff's breach of contract claim, and did not indicate that a plaintiff could not bring an otherwise valid state-law claim, though the LMVA failed to provide a private cause of action. Crescent City, 2000 WL 1372965, at *2-3. Plaintiff has properly invoked this Court's jurisdiction under 28 U.S.C. § 1332 for its remaining claims under Louisiana law. These claims are not claims under the LMVA, and plaintiff Accordingly, the See

seeks a damages remedy the LMVC cannot provide.

Court rejects defendant's invitation to abstain under the administrative exhaustion doctrine. IV. Conclusion For the reasons stated above defendant's motion to dismiss is GRANTED in part and plaintiff's claims for damages and declaratory relief under the LMVA are DISMISSED.

New Orleans, Louisiana, this ___ day of November, 2008 3rd

_________________________________ SARAH S. VANCE UNITED STATES DISTRICT JUDGE

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