Surety Corporation of America v. Cannizzaro et al

Filing 24

ORDER AND REASONS granting 8 Motion to Dismiss Pursuant to F.R.C.P 12 or Alternatively to Abstain. Signed by Judge Ivan L.R. Lemelle. (ijg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
SURETY CORPORATION OF AMERICA

CIVIL ACTION

VERSUS

NO. 14-2041

LEON A. CANNIZZARO, JR., ET AL.

SECTION “B”(5)

ORDER AND REASONS

I.

NATURE OF MOTION AND RELIEF SOUGHT
Before the Court is Defendants’ “Motion to Dismiss Pursuant

to F.R.C.P 12 or Alternatively to [A]bstain” (Rec. Doc. 8),
which seeks dismissal of Plaintiff’s claims on the basis of a
variety of jurisdictional and other defenses. Plaintiff opposes
the motion (Rec. Doc. 15), and Defendants have filed a reply
(Rec. Doc. 18). Following the initial round of briefing, the
Court

ordered

standards
immunity
immunity

for

additional
Monell

doctrine,

municipal

and

allegations.

briefing

issues

liability

procedural

(Rec.

on

Doc.

of

pleading

claims,

absolute

propriety

19).

The

of

parties

qualified
submitted

supplemental briefing in compliance with that order. (Rec. Docs.
20,

23).

For

the

reasons

that

follow,

IT

IS

ORDERED

THAT

Defendants’ Motion (Rec. Doc. 8) is GRANTED, and Plaintiff’s
claims are dismissed with prejudice.
II. FACTS AND PROCEDURAL HISTORY

1

The substance of this action finds itself before the Court
for the second time. Plaintiff, Surety Corporation of America
(“SCA”), is a Florida corporation that serves as the contractual
indemnitor of American Bankers Insurance Company (“ABIC”), an
entity

that

issues

bail

bonds

in

various

jurisdictions,

including Orleans Parish. (Rec. Doc. 1). Made Defendants herein
are

Orleans

Assistant

Parish

District

District

Attorney,

Attorney,

Leon

Graymond

Cannizzaro,

Martin,

and

First

Assistant

District Attorney, Michael Redmann, all in their official and
individual

capacities.

(Rec.

Doc.

1).

Plaintiff

alleges

Defendants improperly sought to execute on null or forged bail
bonds, which resulted in judgments of bond forfeiture, for which
SCA, as indemnitor of ABIC, ultimately suffered the consequences
of the garnishment of ABIC’s accounts. (Rec. Doc. 1).
Plaintiff initially filed suit in this Court on September
16,

2010.

See

Surety

Corporation

of

America

v.

Leon

A.

Cannizzaro, Jr., 2011 WL 1870096, No. 10-3151 (E.D. La. Sep. 16,
2010).

In

the

2010

lawsuit,

Plaintiff

identified

54

bond

forfeiture judgments, totaling in excess of $300,000, exclusive
of interests and costs, which it alleged to be nullities and/or
otherwise clearly defective and obtained in violation of law,
and which had been collected by Defendants through garnishment
of

ABIC’s

Court’s

accounts.
diversity

(Rec.
and

Doc.

1

federal
2

at

6).

question

Invoking
subject

both

the

matter

jurisdiction in that suit, Plaintiff sought: declaration that
each

of

the

underlying

judgments

was

void

and

unenforceable

under Louisiana law; prospective injunctive relief preventing
further attempts to collect on the judgments; declarations that
the garnishments violated Plaintiff’s due process rights under
the federal and Louisiana constitutions; and an award of return
of

the

funds,

together

with

compensatory

damages,

punitive

damages, attorney fees, and legal interest on all sums due.
(Rec. Doc. 1 at 6-7).
Following a motion to dismiss or abstain by Defendants in
the

2010

lawsuit,

the

Court

dismissed

Plaintiff’s

claims

on

Younger abstention grounds. Younger v. Harris, 401 U.S. 37, 91
S.

Ct.

746,

27

L.Ed.2d

669

(1970).

In

dismissing

lawsuit, the Court held:
In the case at bar, SCA seeks a
declaration that the underlying state bond
forfeiture
judgments
are
nullities
and
challenges
the
enforcement
of
these
judgments as well as the constitutionality
of Louisiana’s bond forfeiture scheme. As
set forth above, Louisiana not only has an
important interest in the enforcement of its
orders and judgments, but also in the
administration of its system regarding bond
forfeiture. See also International Fidelity
Ins. Co. v. City of New York, 263 F.Supp.2d
619, 633 (E.D.N.Y. 2003)(stating that a
challenge to the constitutionality of New
York’s bond forfeiture scheme appears to
implicate an important state interest).
Moreover, as actions for nullity of a
portion
of
these
judgments
and
for
injunctive relief against enforcement of
3

the

2010

some
of
these
judgments
are
currently
pending in Louisiana state court, not only
should Louisiana have the opportunity to
interpret its own regulations and review its
own judgments, but SCA also has an avenue
open and an adequate opportunity for review
of its constitutional claims in the state
proceedings. Accordingly, we conclude that
the principles of Younger similarly warrant
abstention in this case, and Defendants’
motions . . . are hereby GRANTED.
Surety Corp. of America v. Cannizzaro, 2011 WL 1870096, No. 103151 (E.D. La. May 13, 2011)(Rec. Doc. 22 at 10-11).
Following this Court’s dismissal, Plaintiff returned to the
Louisiana state courts for redress. While the pleadings in the
instant

matter

make

it

difficult

to

ascertain

the

precise

posture of the state court matters, it appears that at one point
in time, actions to annul various of the challenged forfeiture
judgments

were

pending

simultaneously

in

divisions

of

the

Orleans Parish Criminal and Civil District Courts. (See Rec.
Doc. 1 at 8). On July 2, 2012, the Civil District Court action
was dismissed for lack of subject matter jurisdiction. Id. That
ruling was affirmed on appeal to the Louisiana Fourth Circuit
Court

of

Appeal,

and

the

Supreme

Court

of

Louisiana

denied

writs. (Rec. Doc. 1 at 8). On July 19, 2012, one of the nullity
actions pending in Criminal District Court was dismissed sua
sponte,

also

on

the

basis

of

a

lack

of

subject

matter

jurisdiction. (Rec. Doc. 1 at 8). There is no indication that
any appeal was taken from that ruling.
4

Relying on the foregoing refusals by state courts to hear
Plaintiff’s claims, it has returned to this Court arguing that
it has been relegated to some Kafakaesque dimension wherein no
court

entertains

actions

in

subject

Orleans

matter

Parish,

jurisdiction

and

that

it

over

has

been

nullity
entirely

deprived of a forum for its claims. Plaintiff makes this claim
in spite of the fact that the record indicates it never took the
opportunity

to

advance

its

constitutional

claims

before

the

state courts and further that it failed to appeal the adverse
Criminal

District

Court

ruling.

This

latter

failure

is

perplexing for many reasons, not least of which is the direct
guidance of the Louisiana Fourth Circuit Court of Appeal, in the
context of the appeal of the Civil District Court judgment,
that: “[Plaintiff’s] remedy was to seek relief . . . in Criminal
District Court, and in the instance of an adverse judgment, to
apply for relief with this court.” State ex rel. Cannizzaro v.
Am.

Bankers

Ins.

Co.,

12-1455,

pp.

11-12

(La.

App.

4

Cir.

7/10/13); 120 So. 3d 853, 861 (emphasis added). In any event,
Plaintiff has returned to federal court, arguing that the state
court

rulings

indicate

that

it

did

not

have

an

adequate

opportunity to raise its constitutional claims and further that
this

Court

nullity

should

actions.

entertain
As

best

jurisdiction

the

Court

is

over

the

underlying

able

to

ascertain,

Plaintiff seeks the following relief: (1) declarations that the
5

challenged judgments of forfeiture are void under state law, (2)
declarations

that

certain

articles

of

the

Louisiana

Code

of

Criminal Procedure are unconstitutional, (3) declarations that
the

state

jurisdiction

courts’
over

refusals

Plaintiff’s

to
claims

exercise

subject

amounted

to

due

matter
process

violations, (4) determination that actions taken by the named
Defendants

in

their

individual

capacities

in

executing

the

forfeiture judgments violated Plaintiff’s procedural due process
rights, and (5) determination the Defendants’ actions in their
official capacities also amounted to due process violations.
III. CONTENTIONS OF MOVANTS
Defendants move for dismissal of Plaintiff’s claims on
eight grounds:
(1)

That the Court lacks subject matter jurisdiction over
Plaintiff’s claims because they require the Court to
engage in substantive review of final state court
judgments, as prohibited under the Rooker-Feldman
doctrine;

(2)

That, if the Court has subject matter jurisdiction, it
should abstain for the same reasons as in the 2010
lawsuit under the principles of Younger;

(3)

That Plaintiff’s claims are barred under applicable
state
prescription,
abandonment,
estoppel,
and
peremption grounds;

(4)

That the rights SCA seeks to vindicate here belong
properly to ABIC and are not assignable (i.e., that
SCA lacks standing);

6

(5)

That Defendants are entitled to absolute prosecutorial
immunity for actions taken in their individual
capacities;

(6)

That Defendants are entitled to qualified immunity for
actions taken in their individual capacities;

(7)

That the constitutionality of La Code Crim.
arts. 334, 349.5 is not properly in issue; and,

(8)

That Plaintiff has failed to join parties deemed
necessary under Fed. R. Civ. P. 19, such that the
Court may not properly accord the requested relief.

Proc.

IV. CONTENTIONS OF OPPONENTS
Plaintiff responds to each of the above claims as follows:
(1)

Because no state court reached the merits of its
nullity actions, its claims before this Court do not
require de facto appellate review of state court
judgments, such that they may be adjudicated by this
Court despite Rooker-Feldman;

(2)

Younger abstention is not warranted in this case where
there
is
no
longer
a
pending
parallel
state
proceeding;

(3)

Applicable prescriptive and other delays cannot begin
to run until there has been a substantive ruling that
the challenged underlying judgments are void, and, in
any event, equitable tolling ought to apply for the
period during which Plaintiff unsuccessfully attempted
to litigate its claims in state court;

(4)

SCA has standing to bring its claims both because they
were assignable and, in fact, assigned by ABIC, and
because the standing elements of injury, causation,
and redressability are satisfied due to SCA’s status
as contractual indemnitor of ABIC (regardless of the
effect of any assignment agreement);

(5)

Defendants were acting in administrative, rather than
advocative, capacities in obtaining and executing the
bond forfeiture judgments, such that they are not
cloaked with absolute prosecutorial immunity for their
actions;
7

(6)

Defendants
knowingly
enforced
void
forfeiture
judgments, in violation of Plaintiff’s due process
rights, such that they are not entitled to qualified
immunity;

(7)

SCA
had
no
adequate
opportunity
to
raise
its
constitutional challenges in state court as a result
of the adverse rulings on subject matter jurisdiction;

(8)

Because the Louisiana statutes relating to bond
forfeiture provide that the funds recovered ultimately
redound to the District Attorney’s office, the State
need not be named as a party, and further because SCA
received assignment of ABIC’s rights, there is no need
for ABIC to be joined as a party.1

V. DISCUSSION
Because

the

Court

decides

this

motion

on

grounds

of

abstention, discussion will be limited to that issue, rather
than addressing each of the grounds enumerated in the parties’
sprawling pleadings.
A. Younger Abstention
As

noted

above,

this

Court

previously

abstained

from

deciding Plaintiff’s various state and federal claims under the
Younger

doctrine in the 2010 lawsuit.2

warranted

when:

(1)

the

dispute

Younger

involves

an

abstention is
“ongoing

state

judicial proceeding,” (2) an important state interest in the
subject matter of the proceeding is implicated, and (3) the
1

Plaintiffs alternatively contend that if any absent party is deemed
necessary, they should be permitted leave to amend their complaint so as to
properly name any such defendants.

2

Plaintiff initially appealed that dismissal to the United States Court of
Appeals for the Fifth Circuit, but that appeal was dismissed on Plaintiff’s
own motion. Surety Corp. of America v. Cannizzaro, No. 11-30533 (5th Cir. May
2, 2012).
8

state

proceedings

afford

an

adequate

opportunity

to

raise

constitutional challenges. Texas Ass’n of Business v. Earle, 388
F.3d 515, 519 (5th Cir. 2004)(citing Wightman v. Tex. Supreme
Ct., 84 F.3d 188, 189 (5th Cir. 1996)). For reasons stated in
this Court’s opinion in the 2010 lawsuit, it is apparent that
Plaintiff’s claims implicate important interests of the State of
Louisiana in the finality of the judgments of its courts and
interpretation of the procedures and policies undergirding its
post-judgment

enforcement

scheme.

There

has

also

been

no

suggestion that Louisiana state courts do not have jurisdiction
to

consider

the

constitutional

questions

raised

by

Plaintiff

here. See, e.g., Moore v. Sims, 442 U.S. 415, 430-31, 99 S.Ct.
2371,

60

afford

L.Ed.

adequate

2d

994

(1979)(state

opportunity

to

proceedings

raise

presumed

constitutional

to

claims,

absent specific showing of procedural barrier erected by state
law.)3
As

noted

above,

Plaintiff

disputes

the

propriety

of

abstention under Younger, alleging both that it has not been
afforded

an

adequate

opportunity

to

raise

its

constitutional

claims in the state proceedings and further that no parallel

3

It should be noted that the state courts’ denial of subject matter
jurisdiction does not amount to the type of barrier preventing review of the
constitutional claims contemplated by Moore, supra. This is because Plaintiff
failed to present its constitutional claims in the state proceedings and, had
it presented such claims, would have been required to exhaust its state
appeals on those issues before seeking federal redress.

9

state

proceedings

are

currently

pending.

Nevertheless,

the

pleadings in the instant matter reveal that Plaintiff failed to
amend

its

complaint

in

the

state

proceedings

to

assert

the

constitutional challenges this Court directed it to pursue in
state

court.

This

is

insufficient

to

short-circuit

the

application of Younger. See DeSpain v. Johnson, 731 F.2d 1171,
1180 (5th Cir. 1984)(“All that is required ‘in order for Younger
and Huffman to apply . . . [is] an opportunity to fairly pursue
[the] constitutional claims in the ongoing state proceeding . .
., [the] failure to avail [oneself] of such opportunity does not
mean that the state proceedings [are] inadequate.’”(alterations
in original)). Thus, it is clear that the latter two elements of
Younger are satisfied.4 The only question remaining therefore is
whether, as Plaintiff argues, there is a lack of “ongoing state
proceedings” for purposes of the first Younger element.
As noted above, Plaintiff committed the apparent procedural
blunder
District
subject
state

of

failing

Court
matter

appellate

to

judgment

appeal

dismissing

jurisdiction,
court.

the

It

as

Orleans
its

claims

previously

further,

Parish
for

instructed

erroneously,

Criminal
lack
by

attempts

of
the
to

color such judgment as binding on other courts in Louisiana in
arguing that the rulings of both Civil and Criminal District

4

These are: (1) the implication of important state interests and (2) an
adequate opportunity to raise the federal constitutional challenges in state
proceedings.
10

courts operate such that no Louisiana court has subject matter
jurisdiction

over

nullity

challenges

to

bond

forfeiture

judgments in Orleans Parish. Contrary to Plaintiff’s arguments,
the Supreme Court has held:
[A]
party
may
not
procure
federal
intervention
by
terminating
the
state
judicial process prematurely—foregoing the
state appeal to attack the trial court’s
judgment in federal court. “[A] necessary
concomitant of Younger is that a party
[wishing to contest in federal court the
judgment of a state judicial tribunal] must
exhaust his state appellate remedies before
seeking relief in the District Court.”
Huffman v. Pursue, Ltd., supra, 420 U.S., at
609, 95 S.Ct., at 1210.
New Orleans Pub. Serv., Inc. v. Council of City of New Orleans,
491 U.S. 350, 368-69, 109 S.Ct. 2506, 2518-19, 105 L.Ed.2d 298
(1989). Plaintiff’s dual failures to assert its constitutional
claims in the state forum and to avail itself of the state
appellate

process

will

not

suffice

to

warrant

federal

intervention here. Accordingly, the Court abstains from deciding
Plaintiff’s

claims

for

the

reasons

asserted

in

the

order

dismissing the 2010 lawsuit.
B. Pullman Abstention
To

the

judgments,

extent
not

part

Plaintiff
of

the

challenges
2010

new

lawsuit,

bond
and

forfeiture
now

raises

additional constitutional challenges arising out of the actions
of the state courts, there are grounds to decline these claims

11

under the Pullman doctrine. Railroad Comm’n of Texas v. Pullman
Co., 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971 (1941).5 Pullman
abstention is appropriate when: (1) a federal court is presented
with an ambiguous or uncertain provision of state law, and (2)
state court interpretation of the state law issue may avoid the
federal constitutional question. See, e.g., Nissan Motor Corp.
in U.S.A. v. Harding, 739 F.2d 1005, 1008 (5th Cir. 1984). To be
sure, abstention is the exception, not the rule, and federal
courts “should exercise their jurisdiction if the state law in
question is clear.” Id. The Court believes, however, that the
conflicting
plainly

jurisdictional

reveal

forfeiture

that

scheme,

rulings

ambiguities
which

of
exist

the

ambiguities

in
ought

Louisiana

courts

Louisiana’s
properly

bond
to

be

resolved by the Louisiana courts. There is no question but that
rulings on these issues could obviate the need to resolve the
federal

constitutional

claims

advanced

by

Plaintiff

in

the

instant matter. Those claims allege both that Louisiana’s bond
5

Beyond the Pullman doctrine, the Court notes without deciding, that to the
extent Plaintiff’s challenges implicate the validity of underlying state
court
judgments
(i.e.,
the
dismissals
for
lack
of
subject
matter
jurisdiction), there are jurisdictional concerns implicated by the RookerFeldman doctrine, as recently expounded by the Supreme Court in Exxon Mobil
Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 125 S.Ct. 1517, 161 L.Ed.2d
454 (2005). Additionally, issues exist as to whether a procedural bar exists
under a mandatory/non-waiveable venue provision of Louisiana law related to
nullity actions, to the extent such provision may be binding on a federal
court sitting in diversity under the Erie doctrine and related authority. See
La. Code Civ. Proc. arts. 44, 2006; 1 La. Civ. L. Treatise, Civil Procedure §
3:2 (2d ed.)(“The action for nullity of judgment . .
. must be brought in
the trial court which rendered the judgment.”). Because abstention is
warranted for the grounds discussed above, however, the Court need not
conclusively rule on these issues.

12

forfeiture statutes and the Louisiana courts’ applications of
those

statutes

injuries.6

have

Accordingly,

caused

it

abstention

constitutionally
is

further

cognizable

warranted

under

Pullman.
V. CONCLUSION
In

light

of

the

foregoing,

Plaintiff’s

recourse

is

to

assert its claims (all of them) in the courts of the State of
Louisiana. It must exhaust its remedies there, after which point
recourse may be had to a federal district court, if appropriate,
or the United States Supreme Court, where the relief requested
requires review of the merits of an underlying state judgment.
The Court takes no position as to whether Plaintiff’s prior
procedural

missteps

have

now

permanently

deprived

it

of

the

opportunity to bring certain of the claims advanced in the 2010
lawsuit, or whether it will be capable of pursuing new claims in
the state courts. The appropriate action was explained by the
Louisiana Fourth Circuit Court of Appeal, and Plaintiff should
have heeded that court’s admonition.
For the foregoing reasons, IT IS ORDERED THAT Defendants’
Motion to Dismiss (Rec. Doc. 8) is

6

GRANTED, and Plaintiff’s

It must further be noted that, to the extent Plaintiff raises as-applied
challenges to the statutes, the Court believes these claims would be barred
under the Rooker-Feldman doctrine. Plaintiff would have been required to take
direct appeal (and exhaust state appellate remedies) from adverse rulings and
then seek review from the United States Supreme Court in the event of further
adverse rulings.
13

claims

in

the

above-captioned

matter

are

DISMISSED

WITH

PREJUDICE.
New Orleans, Louisiana, this 22nd day of May, 2015.

____________________________
UNITED STATES DISTRICT JUDGE

14