Dixie Brewing Company, Inc. v. Department of Veterans Affairs et al

Filing 30

ORDER & REASONS denying as moot 5 Motion to dissolve state-court temporary restraining order & granting in part and denying in part 12 Motion to Remand to State Court. The Department of Veterans Affairs is DISMISSED based on sovereign immunity. Signed by Judge Martin L.C. Feldman on 12/18/2013. (Attachments: # 1 Remand Letter) (caa, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
DIXIE BREWING COMPANY, INC.

CIVIL ACTION

VERSUS

NO. 13-6605

DEPARTMENT OF VETERANS AFFAIRS,
ET AL.

SECTION: “F”

ORDER AND REASONS
Before the Court are the VA's motion to dissolve the temporary
restraining order issued by the state court before removal to this
Court;

Dixie

Brewing

Company's

motion

for

a

preliminary

permanent injunction; and Dixie's motion to remand.

and

For the

reasons that follow, the VA is DISMISSED, its motion is DENIED as
moot, and Dixie's motion to remand is GRANTED in part and DENIED in
part.
Background
This

dispute

arises

out

of

the

contentious

ongoing

construction of the Louisiana State University-Veterans Affairs
Medical Center located in the New Orleans Mid-City neighborhood;
the plan is to replace Charity Hospital and the downtown New
Orleans VA Medical Center.
The construction of the LSU-VA Medical Center has been plagued
with hostility and dispute, in part because of LSU's expropriation
of approximately thirty-five acres of land in Mid-City for the new
medical complex.

The City of New Orleans, LSU, and the VA entered

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into numerous agreements in which LSU agreed to invoke "quick-take"
authority under Louisiana Revised Statute § 19:141 to assist New
Orleans in making land available to the VA for its development of
the medical center:

LSU would expropriate the required land for

both the LSU and VA sections of the complex, and then LSU would
transfer a portion of the land to the VA.

The designated area for

the VA hospital is bordered by Galvez Street, Rocheblave Street,
Canal Street, and Tulane Avenue. The Dixie Brewery Building, which
at one time brewed the local Dixie beer, is located on a parcel at
the corner of Rocheblave Street and Tulane Avenue.1
property

was

not

originally

included

in

LSU's

The Dixie

expropriation

efforts; but in February 2010, the site was added to the land
slated

for

expropriation,

spurring

a

torrent

of

state-court

activity ever since.
On April 29, 2010, LSU filed a petition in state court for
access to the Dixie Brewery Building for the purpose of inspecting
and

evaluating

compensation

the

offer.

property
The

to

petition

make
was

the

obligatory

granted,

and,

just
after

inspection, LSU tendered an offer of compensation to Dixie, which
Dixie rejected.

On February 16, 2011, Dixie filed its first

petition for a declaratory judgment, temporary restraining order,

1

Hurricane Katrina significantly damaged the Dixie Brewery
Building, rendering the property wholly unusable. Notably, Dixie
Brewing has not used the building post-Katrina, and the company
currently brews Dixie beer in Wisconsin.
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and

injunctive

relief

in

state

expropriating the Dixie parcel.

court

to

prevent

LSU

from

The temporary restraining order

was granted and subsequently dissolved on February 25, 2011; LSU's
exception was upheld and the suit was dismissed with prejudice.
Dixie did not seek appellate review. On February 25, 2011, relying
on its quick-take authority, LSU filed a petition for expropriation
of the Dixie parcel in state court, which was granted.

LSU took

possession of the Dixie property the same day, and ultimately
transferred the property to the VA. Months later, however, on June
3, 2011, Dixie filed a motion to dismiss LSU's petition for
expropriation in state court, challenging the constitutionality of
LSU's quick-take authority.

For reasons unknown, the motion has

yet to be ruled on and it appears no hearing date has been set.
Approximately six months later, on January 27, 2012, Dixie
filed another petition for a preliminary and permanent injunction
in state court, requesting that the court prevent LSU from entering
into an agreement to transfer the Dixie property to any third
parties, including the VA, without first offering it for resale
back to Dixie.

LSU filed exceptions of no cause and no right of

action, and Dixie's state-court petition was denied on February 7,
2012.

Dixie gave LSU notice of its intent to apply for a

supervisory writ, but failed to do so.

On October 12, 2012, Dixie

again filed a petition for a preliminary and permanent injunction
in state court to prevent LSU from entering into an agreement to

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transfer the Dixie property to any third parties, including the VA,
without first offering it for resale back to Dixie.

LSU filed its

exception of res judicata, and, again, Dixie's petition was denied
with prejudice on November 16, 2012.2
On March 12, 2013, Dixie sued the VA, Clark Construction
Group, LLC, and McCarthy Building Companies, Inc. in this Court,3
invoking

federal

question

and

diversity

of

citizenship

jurisdiction, and once again seeking a temporary restraining order
and a preliminary and permanent injunction.

The Court denied

Dixie's request for a temporary retraining order, finding that
Dixie failed to fulfill the requirements under Rule 65 of the
Federal Rules of Civil Procedure.
21,

2013,

alleging

that

LSU moved to intervene on March

Dixie's

complaint

is

"inextricably

interwoven" with LSU's expropriation and subsequent transfer of the
Dixie property, and Magistrate Judge Sally Shushan granted the
motion, allowing LSU to intervene.

The Court then considered

Dixie's motion for a preliminary and permanent injunction, and
denied the motion and dismissed the case for lack of jurisdiction.4
Specifically, the Court found that it had neither federal question

2

Dixie appealed to the Louisiana Fourth Circuit, which
affirmed the district court's order on December 4, 2013.
3

The VA had contracted with Clark and McCarthy for the
demolition of the Dixie property.
4

Dixie Brewing Co. v. U.S. Dep't of Veterans Affairs, No.
13-461, 2013 WL 2557108, at *2 (E.D. La. June 10, 2013).
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nor diversity jurisdiction over the case, and that the VA was
entitled to sovereign immunity.
On December 6, 2013, upon learning that certain demolition
activities were scheduled for December 9, 2013, Dixie filed still
another

petition

for

a

temporary

restraining

order

and

a

preliminary and permanent injunction in state court to prevent any
action toward the demolition of the Dixie Brewery Building pending
final judgment in the expropriation action.
defendants

the

Department

of

Veterans

Dixie named as

Affairs;

the

Board

of

Supervisors for Louisiana State University and Agricultural and
Mechanical

College;

McCarthy

Building

Companies,

Inc.;

Cycle

Construction Co., LLC; Concrete Busters of Louisiana, Inc.; and the
Clark Construction Group, LLC.5

On December 9, 2013, the VA

removed the suit to this Court; however, minutes before the VA
filed its notice of removal, the state court granted a temporary
restraining

order

pending

a

hearing

on

the

request

for

a

preliminary injunction.6
Now before this Court are the VA's motion to dissolve the
temporary restraining order issued by the state court before
removal; Dixie's motion for a preliminary and permanent injunction

5

Dixie now alleges that the VA has contracted with
McCarthy, Cycle, Concrete Busters, and Clark for the demolition
of the Dixie property.
6

The state court scheduled a hearing for December 18, 2013.
The TRO is set to expire on December 19, 2013.
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to prevent the demolition of the old Dixie Brewery Building; and
Dixie's motion to remand.
I.
A.
The VA contends that this Court has the authority to
dissolve the temporary restraining order issued by the state court
before removal.

Under 28 U.S.C. § 1450, upon removal, "[a]ll

injunctions, orders, and other proceedings, had in [a state court]
action prior to its removal shall remain in full force and effect
until dissolved or modified by the district court."

Under Fed. R.

Civ. P. 65(b)(4), the party against whom a temporary restraining
order is issued may move to dissolve or modify the order, and the
court must then promptly hear and decide the motion. The motion to
dissolve is treated like a motion for reconsideration, and should
be granted where the temporary restraining order was improperly
issued.

See id.

Under Fed. R. Civ. P. 65(b)(1), a temporary

restraining order is properly issued, without notice to the adverse
party, only where:
(A) specific facts in an affidavit or a verified
complaint clearly show that immediate and irreparable
injury, loss, or damage will result to the movant before
the adverse party can be heard in opposition; and
(B) the movant's attorney certifies in writing any
efforts made to give notice and the reasons why it should
not be required.
B.
Dixie contends that this Court should issue a preliminary and
permanent injunction preventing demolition of the former Dixie
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Brewery Building pending final resolution of the expropriation
action in state court.

It is well settled that a “preliminary

injunction is an extraordinary remedy that should not be granted
unless the party seeking it has clearly carried the burden of
persuasion.”

Bluefield Water Ass’n v. City of Starkville, Miss.,

577 F.3d 250, 253 (5th Cir. 2009) (quoting Lake Charles Diesel,
Inc. v. Gen. Motors Corp., 328 F.3d 192, 196 (5th Cir. 2003)); see
also Mazurek v. Armstrong, 520 U.S. 968, 972 (1997) (noting that
preliminary injunctions are “extraordinary and drastic” forms of
judicial

relief

that

should

not

be

granted

absent

“a

clear

showing”); PCI Transp., Inc. v. Fort Worth & W. R.R. Co., 418 F.3d
535, 545 (5th Cir. 2005). The Court can issue an injunction only if
the movant shows:
(1)

a substantial
merits;

likelihood

(2)

a substantial threat of irreparable injury if the
injunction is not granted;

(3)

the threatened injury outweighs any harm that will
result to the non-movant if the injunction is
granted; and

(4)

the injunction
interest.

will

not

of

prevailing

disserve

the

on

the

public

Ridgely v. Fed. Emergency Mgmt. Agency, 512 F.3d 727, 734 (5th Cir.
2008).
“Speculative injury is not sufficient [to make a clear showing
of irreparable harm]; there must be more than an unfounded fear on
the part of the applicant.” Holland Am. Ins. Co. v. Succession of
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Roy, 777 F.2d 992, 997 (5th Cir. 1985); see Wis. Gas Co. v. Fed.
Energy Regulatory Comm'n, 758 F.2d 669, 674 (D.C. Cir. 1985)
(“[Irreparable] injury must be both certain and great; it must be
actual

and

not

theoretical.”).

Where

the

injury

is

merely

“financial” and “monetary compensation will make [the plaintiff]
whole if [the plaintiff] prevails on the merits,” there is no
irreparable injury.

Bluefield, 577 F.3d at 253.

But when the

nature of economic “rights makes ‘establishment of the dollar value
of the loss . . . especially difficult or speculative,’” a finding
of irreparable harm is appropriate. Allied Mktg. Grp., Inc. v. CDL
Mktg., Inc., 878 F.2d 806, 810 n.1 (5th Cir. 1989) (quoting Miss.
Power & Light Co. v. United Gas Pipe Line Co., 760 F.2d 618, 630
n.12 (5th Cir. 1985)).
C.
Dixie also contends that removal was improper and the case
should be remanded.

A defendant may generally remove a civil

action filed in state court if the federal district court has
original jurisdiction over the case—that is, if the plaintiff could
have brought the action in the federal district court from the
outset.

See 28 U.S.C. § 1441(a).

However, a federal officer or

agency sued in state court can remove the action even though the
federal district court would not have otherwise had subject matter
jurisdiction.

28 U.S.C. § 1442(a)(1).

Although the plaintiff

challenges removal, the defendant carries the burden of showing the

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propriety of the court's jurisdiction.

See Jernigan v. Ashland

Oil, Inc., 989 F.2d 812, 815 (5th Cir. 1993).

If at any time before

final judgment the court concludes that removal was improper, the
case must be remanded.

28 U.S.C. § 1447(c).
II.

The Court need not address the merits of the VA's motion to
dissolve,

or

Dixie's

motion

for

a

preliminary

and

permanent

injunction, because the VA must be dismissed as a party based on
sovereign immunity and Dixie's claims against the other defendants
should be remanded.
A.
The VA contends that it must be dismissed from this action
based on sovereign immunity. The Court agrees. "The basic rule of
federal sovereign immunity is that the United States cannot be sued
at all without the consent of Congress."7
461 U.S. 273, 287 (1983).

Block v. North Dakota,

The Fifth Circuit mandates that "a

waiver of sovereign immunity must be specific and explicit and
cannot

be

implied

by

construction

of

an

ambiguous

statute."

Petterway v. Veterans Admin. Hosp., Hous., Tex., 495 F.2d 1223,
1225 n.3 (5th Cir. 1974). Dixie fails to identify any statute that
waives the VA's sovereign immunity in this case.

Dixie is simply

wrong in its contention that the Federal Torts Claims Act, 28
7

It is not disputed that the VA is an agency of the United
States and is entitled to sovereign immunity unless its immunity
from suit has somehow been waived as a matter or law.
-9-

U.S.C. § 1346(b)(1), waives the VA's sovereign immunity in this
case; § 1346(b)(1) authorizes certain claims against the United
States itself, not federal agencies like the VA.

Galvin v.

Occupational Safety & Health Admin., 860 F.2d 181, 183 (5th Cir.
1988)("It is beyond dispute that the United States, and not the
responsible agency or employee, is the proper party defendant in a
Federal Tort Claims Act suit. . . . Thus, an FTCA claim against a
federal agency or employee as opposed to the United States itself
must be dismissed for want of jurisdiction.").8
B.
Dixie seeks remand, contending that removal was improper and
that this Court lacks subject matter jurisdiction. In fact, the VA
properly removed this lawsuit pursuant to 28 U.S.C. § 1442(a)(1).
Section 1442 governs removal of suits against federal officers or
agencies.

It provides:

(a) A civil action or criminal prosecution commenced in
a State court against any of the following may be removed
by them to the district court of the United States for
the district and division embracing the place wherein it
is pending:
(1) The United States or any agency thereof or any
officer (or any person acting under that officer) of the
United States or of any agency thereof, sued in an
official or individual capacity for any act under color
of such office or on account of any right, title or
authority claimed under any Act of Congress for the
apprehension or punishment of criminals or the collection
of the revenue.
8

Moreover, the FTCA by its terms applies to suits for
money damages, not requests for injunctive relief. 28 U.S.C. §
1346(b)(1).
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Id.

Notably, § 1442 allows removal of the entire case, not just

the claims against the federal officer or agency.

IMFC Prof'l

Servs. of Fl., Inc. v. Latin Am. Home Health, Inc., 676 F.2d 152,
158 (5th Cir. 1982).
Although removal was plainly proper, it does not, however,
follow that remand is inappropriate.

28 U.S.C. § 1447(c) allows

remand based on events occurring after removal. See IMCF, 676 F.2d
at 160.

Where a suit against a federal agency is properly removed

but the agency is then dismissed, "§ 1442(a)(1), through its
creation of an ancillary jurisdiction, confers discretion on the
district court to decline to exercise continued jurisdiction." Id.
at

156.

Although

a

court

is

not

automatically

divested

of

jurisdiction over the remaining state-law claims, it may in its
discretion

decline

to

instead, order remand.

exercise
Id.

continued

jurisdiction,

and,

Accordingly, the VA's dismissal from

this case leaves the Court with the discretion to remand the
remaining claims against the other defendants.
The Court finds that remand is appropriate.
local one only.

A heated one, but a local one.

This story is a
Dixie's request

for injunctive relief is anchored to its contention that LSU's
expropriation and transfer of the old Dixie Brewery Building
violates the Louisiana Constitution.

The merits of this case must

be resolved in state court, where the expropriation action remains

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pending, and where the tortuous history of this dispute has resided
for years.9
Accordingly, Dixie's motion to remand is GRANTED as to the
claims against the nonfederal defendants, and DENIED as moot as to
the claims against the VA, which are DISMISSED based on the VA's
sovereign immunity.

The VA's motion to dissolve the temporary

restraining order is DENIED as moot.

Dixie's claims against the

remaining defendants are hereby remanded to the Civil District
Court for the Parish of Orleans.

New Orleans, Louisiana, December 18, 2013
__________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE

9

Apart from § 1442(a)(1), the abstention doctrine also
provides grounds for remand. See IMFC, 676 F.2d at 160.
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