Louisiana Community Development Capital Fund Inc et al v. Grambling Legends Square Taxing District

Filing 34

MEMORANDUM RULING re 31 MOTION for Bill of Costs and Attorney Fees filed by Grambling Legends Square Taxing District. Signed by Judge Robert G James on 10/29/15. (crt,Crawford, A)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
MONROE DIVISION
THE LOUISIANA COMMUNITY
DEVELOPMENT CAPITAL
INVESTMENT FUND, INC. AND FAITH
INVESTMENTS, LLC

CIVIL ACTION NO. 14-2212

VERSUS

JUDGE ROBERT G. JAMES

THE GRAMBLING LEGENDS SQUARE
TAXING DISTRICT

MAG. JUDGE KAREN L. HAYES

RULING
Pending before the Court is a Motion to Tax Costs and for Attorneys’ Fees Pursuant to
Rule 54(d)(1) & (2) of the Federal Rules of Civil Procedure and 28 U.S.C. § 1927 (“Motion for
Fees”) [Doc. No. 31]. For the following the reasons, the motion is GRANTED IN PART and
DENIED IN PART.
I.

FACTUAL AND PROCEDURAL BACKGROUND
On September 30, 2014, Plaintiffs Louisiana Community Development Capital Fund, Inc.

(“CAPFUND”) and Faith Investments, LLC (“Faith”) filed this civil rights action pursuant to 42
U.S.C. § 1983. CAPFUND is an African-American controlled Louisiana corporation operating
as a non-profit organization. Ernest Johnson (“Johnson”), an attorney, is the President of
CAPFUND. Faith is a majority African-American Louisiana limited liability company
comprised of two members: CAPFUND and attorney/developer, Jules B. LeBlanc, III
(“LeBlanc”). Plaintiffs are represented by Johnson and additional counsel, Arthur Ray Thomas
(“Thomas”).
Plaintiffs alleged that Defendant The Grambling Legends Square Taxing District (“the

District”), a special taxing district and political subdivision of the State, violated their
constitutional rights under the Fourteenth Amendment. Plaintiffs sought to develop a hotel
project on their property, a portion of which was located in the District using tax incremental
financing. The District denied funding for their project, but Plaintiffs alleged that the District
approved funding for a similar hotel project.
The District moved for dismissal on two occasions. On the first occasion, Magistrate
Judge Karen L. Hayes issued a Report and Recommendation in which she recommended that the
motion be granted in part and denied in part. [Doc. No. 15]. She first found that the Court had
subject matter jurisdiction over Plaintiffs’ claims of constitutional deprivations under 42 U.S.C.
§ 1983. To the extent that the District had moved for dismissal on this basis, she recommended
that the Court deny the motion.
Magistrate Judge Hayes then set forth the test for stating an Equal Protection violation
and considered Plaintiffs’ Complaint. She found that Plaintiffs had failed to make “any factual
allegations to suggest that any purported unequal treatment by the District stemmed from
discriminatory intent or animus.” Id. at p. 12. She explained that Plaintiffs could still advance
their claims under a “‘class of one’ theory which does not require membership in a protected
class or group” if they could prove that the District had “improper motive, animus, or ill will.”
Id. at pp. 12-13. However, Magistrate Judge Hayes found that Plaintiffs’ Complaint also failed
to set forth factual allegations to support this theory. In reaching her conclusions, Magistrate
Judge Hayes very specifically pointed out the requirements for alleging and proving an Equal
Protection claim.
Although Magistrate Judge Hayes found Plaintiffs’ factual allegations to be deficient, she
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recognized that district courts are obliged to grant leave to amend when justice requires and often
do so prior to dismissing a case for such deficiencies. Id. at 13. Accordingly, she recommended
that Plaintiffs be given an opportunity to amend their Complaint “with a proposed pleading that
cures the deficient allegations.” Id. at 16. In the absence of amendment, she recommended that
the Motion to Dismiss be granted, and Plaintiffs’ claims be dismissed for failure to state a claim.
On December 29, 2014, within the time for filing objections to the Report and
Recommendations, Plaintiffs sought to file an amended complaint. On January 2, 2015,
Magistrate Judge Hayes granted leave, and an Amended Complaint was filed. [Doc. No. 20].
In response, on January 22, 2015, the District filed a Motion to Dismiss Pursuant to Rule
12 [Doc. No. 21], contending that Plaintiffs’ claims should be dismissed because the Amended
Complaint also failed to state a claim upon which relief can be granted. The District argued that
Plaintiffs had no (1) “statutory entitlement or constitutional or other right or mandatory
entitlement to public assistance,” (2) “failed to allege any cognizable taking, Due Process, or
Equal Protection Claim,” and (3) failed to allege any “similarly situated properties or projects.”
[Doc. No. 21-1, p. 30]. Thus, the District argued that it could not be “liable for damages for
refusing to violate the law by acting outside its boundaries.” Id.
On February 13, 2015, Plaintiffs filed a memorandum in opposition to the second Motion
to Dismiss [Doc. No. 25]. They argued that their Amended Complaint alleged a Due Process
violation because “their property was taken and placed within the taxing district without their
consent, prior notice or a pre-taking hearing by the Defendant, a political subdivision of the State
of Louisiana.” Id. at p. 1. By doing so, Plaintiffs argued that the District had denied them the
“full use of its property because any revenue derived therefrom is subject to taxation by [the
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District] with no benefit to Plaintiffs.” Id. at p. 2. Plaintiffs argued further that their Amended
Complaint sufficiently alleged a violation of the Equal Protection Clause because the District
“violated their rights as African American owned and controlled companies” and that the District
acted with “deliberate indifference towards the rights of Plaintiffs as African American
businesses.” Id. Plaintiffs additionally challenged the constitutionality of Louisiana Revised
Statute § 33:9036.66 as applied to them.
On March 16, 2015, Magistrate Judge Hayes issued a Report and Recommendation [Doc.
No. 26] in which she recommended that the second Motion to Dismiss be granted and Plaintiffs’
claims be dismissed with prejudice. She first found that Plaintiffs had not sufficiently alleged a
procedural Due Process taking claim when they had not alleged that the property was deprived of
all economically viable use. She further found that the creation of the District and the placing of
the properties in it was the result of a legislative act which in and of itself provides sufficient due
process protection.
Additionally, with regard to their Equal Protection claim, even after amendment,
Plaintiffs still failed to allege any facts to show unequal treatment based on race. Likewise, they
again failed to allege facts to support an Equal Protection claim based on a class of one. Even
after the District filed its second Motion to Dismiss, Plaintiffs failed to allege any facts which
showed that the District’s “stated explanation for its differential treatment of plaintiffs’ proposal
was irrational or arbitrary,” which “seal[ed] the fate of their equal protection claim.” Id. at p. 17.
Plaintiffs filed objections [Doc. No. 27] to the Report and Recommendation, and the
District filed a response [Doc. No. 28] to Plaintiffs’ objections.
After having reviewed the record, including the Report and Recommendation, objections,
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and response, the Court adopted the Report and Recommendation. The Court issued a Ruling
[Doc. No. 29] to address one argument raised by Plaintiffs for the first time in their objections.
In support of a substantive due process claim, Plaintiffs argued that they suffered a taking
without just compensation because hotel occupancy taxes and rents are both civil fruits under
Louisiana law, and the District’s actions deprived them of these fruits. However, the Court
rejected this additional claim. The Court found that
taxes are obligations owed by the potential customers if a hotel were built on the
corner edge of the property (the portion of the property within the District) and if
the District, within its discretion, established an occupancy tax on that property.
Second, rents are civil fruits, but Plaintiff[s] do not allege that they have been
deprived of all economically viable use of the property. Plaintiffs can build
anything they wish on their property within the zoning parameters.
[Doc. No. 29, pp. 1-2]. The Court dismissed Plaintiffs’ claims with prejudice.1
Following the Court’s Judgment, the District filed the instant motion seeking a minimum
of $7,280 in attorneys’ fees to be awarded against Plaintiffs and/or Johnson and/or Thomas.
Plaintiffs oppose the motion. [Doc. No. 33].
The Court is now prepared to rule.
II.

LAW AND ANALYSIS
A.

Costs

The District’s motion was styled a request for costs and attorney’s fees, and the District
cites Federal Rule of Civil Procedure 54(d)(1) which provides for an award of costs permitted by

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In their opposition memorandum to the instant motion, Plaintiffs state that the Court has
not ruled on “whether Plaintiffs, as owners of property within the taxing district, could legally
submit an application [for funding by the District.]” [Doc. No. 33, p. 4]. The Court finds that
such an analysis is unnecessary given its other conclusions, but, regardless, the time for appeal
has passed.
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28 U.S.C. § 1920. However, the District’s arguments and evidence are limited to establishing its
right to recovery of attorneys’ fees. Thus, to the extent that the District moves for costs, there is
no evidence to support such a request under Rule 54(d)(1), and the motion is DENIED.2
B.

Consideration of Attorneys’ Fees under 42 U.S.C. § 1988 and 28 U.S.C. §
1927

The Court now turns to consideration of the District’s motion for attorneys’ fees under 42
U.S.C. § 1988 and 28 U.S.C. § 1927.
Under 42 U.S.C. § 1988, a district court may, in its discretion, award attorneys’ fees to a
prevailing party in a § 1983 suit. Although prevailing plaintiffs are usually entitled to such fees,
prevailing defendants are entitled to fees “only when a plaintiff’s underlying claim is frivolous,
unreasonable, or groundless.” Walker v. City of Bogalusa, 168 F.3d 237, 239 (5th Cir. 1999);
see also Merced v. Kasson, 577 F.3d 578, 595 (5th Cir. 2009). The Fifth Circuit has identified
three factors for a district court to consider in determining whether to award attorneys’ fees to a
prevailing defendant: (1) whether the plaintiff established a prima facie case, (2) whether the
defendant offered to settle, and (3) whether the court held a full trial. Myers v. City of West
Monroe, 211 F.3d 289, 292 (5th Cir. 2000) (citation omitted).
The limitations on an award of attorneys’ fees to a prevailing defendant are an attempt to
prevent any chilling effect on the enforcement of civil rights. See Vaughner v. Pulito, 804 F.2d
873, 878 (5th Cir.1986). When fees are awarded to a prevailing plaintiff, the award is against a
violator of the law and in favor of the individual chosen by Congress to vindicate an important
policy; these considerations are not at play when fees are awarded to a prevailing defendant. See
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Attached to the motion is an affidavit from the District’s attorney, which is
styled an “Affidavit of Costs,” but, again, discusses the attorneys’ fees incurred, not costs.
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Christiansburg Garment Co. v. E.E.O.C., 434 U.S. 412, 419 (1978); Hughes v. Rowe, 449 U.S.
5, 14 (1980). The Court “must ‘resist the understandable temptation to engage in post hoc
reasoning by concluding that, because a plaintiff did not ultimately prevail, his action must have
been unreasonable or without foundation.’” Offord v. Parker, 456 Fed. App’x. 472, 474 (5th Cir.
2012) (quoting Christiansburg Garment Co., 434 U.S. at 421). Instead, the Court “must ask
whether ‘the case is so lacking in arguable merit as to be groundless or without foundation rather
than whether the claim was ultimately successful.’” Id. (quoting Stover v. Hattiesburg Pub. Sch.
Dist., 549 F.3d 989, 997 (5th Cir. 2008)).
Similarly, under 28 U.S.C. § 1927, “[a]ny attorney . . . who so multiplies the proceedings
in any case unreasonably and vexatiously may be required by the court to satisfy personally the
excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct.” As
such, “[a]n award of attorney’s fees under § 1927 requires evidence of bad faith, improper
motive, or reckless disregard of the duty owed to the court.” Lawyers Title Ins. Corp. v.
Doubletree Partners, L.P., 739 F.3d 848, 871 (5th Cir. 2014). A mere “lack of merit” is not
sufficient to justify an award of attorneys’ fees under § 1927. Ayala v. Enerco Group, Inc., 569
Fed. App’x. 241, 251 (5th Cir. 2014). Instead, the Court should impose § 1927 sanctions only
where counsel has exhibited “a serious and standard disregard for the orderly process of justice,
lest the legitimate zeal of an attorney in representing [a] client [be] dampened.” Lawyers Title
Ins., 739 F.3d at 872; Avayla, 569 Fed. App’x at 251 (quoting same).
In this case, Plaintiffs were given multiple chances to establish that they had a case
sufficient to survive a Rule 12(b) challenge. The District’s first motion to dismiss was not
successful, but only because the Court allowed Plaintiffs an opportunity to amend their
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Complaint to address the deficiencies identified in Magistrate Judge Hayes’ Report and
Recommendation. The Court cannot say that Plaintiffs’ initial filing was entirely frivolous or
groundless. However, after Magistrate Judge Hayes issued her first Report and Recommendation,
Plaintiffs were well aware of the standard they were required to meet in order for their Equal
Protection claim to survive review under Rule 12(b)(6).
In their Amended Complaint and in briefing, Plaintiffs espoused a number of theories,
but, even after amendment and after Magistrate Judge Hayes instructed them on the law,
Plaintiffs still failed to allege any facts to show unequal treatment based on race. Likewise, they
again failed to allege facts to support an Equal Protection claim based on a class of one. Both
Magistrate Judge Hayes and this Court found their remaining theories of recovery groundless as
well. Applying the three factors identified by the Fifth Circuit for consideration of an award of
attorneys’ fees under § 1988, Plaintiffs failed to survive even a Rule 12(b)(6) challenge, much
less state a prima facie case, and, obviously, the case did not reach trial. Although the District
did not make a settlement offer, it did not do so because they believed that the claims lacked
merit.3
In any § 1983 case, the Court is cautious about awarding attorneys’ fees to a prevailing
defendant lest such an award have a chilling effect on civil rights action. However, under the
particular circumstances in this case, the Court finds that an award of attorneys’ fees is
appropriate under § 1988. Plaintiffs are not unsophisticated pro se litigants; these two entities

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Plaintiffs did make a settlement offer to the District, but it is only a defendant’s offer of
settlement that is one of the three factors the Fifth Circuit instructs the Court to consider.
Regardless, in this case, it is Plaintiffs’ failure to make out a prima facie case that has the most
bearing on the Court’s conclusion.
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act through Johnson, an attorney and President of Plaintiff CAPFUND, and LeBlanc, an
attorney/real estate developer and member of Faith. As counsel for Plaintiffs, Johnson
presumably participated, along with co-counsel, Thomas, in the drafting of its pleadings.
Further, the District’s request for attorneys’ fees comes only after Plaintiffs were given an
opportunity to amend their Complaint. Plaintiffs thus had a second opportunity to make factual
allegations sufficient to comply with the requirements of the law specifically identified by
Magistrate Judge Hayes. If after further review they determined they could not make such
allegations, Plaintiffs also had the opportunity to let Magistrate Judge Hayes’ Report and
Recommendation stand without action, and the Court would have dismissed their case. It is
Plaintiffs’ persistent pursuit of a groundless lawsuit under these particular circumstances that
supports the award. Therefore, the District’s motion for attorneys’ fees under § 1988 against
Plaintiffs is GRANTED. However, to avoid a chilling effect on civil rights litigation, the Court
will limit the award to the time period of the filing of the Amended Complaint forward.
Further, the Court, in its discretion, finds that the award should be entered against the
entity Plaintiffs only, not against Johnson and/or Thomas individually. Although Johnson is
counsel of record, both he and LeBlanc are attorneys and businessmen, and both are principals of
Plaintiffs. The Court is not convinced that Johnson somehow trod on the rights of LeBlanc or the
entities themselves, rendering himself individually liable. Thomas apparently acted as counsel
only, and the Court finds no basis to penalize him individually. Therefore, the Court finds that
Plaintiffs, not their counsel, bear ultimate responsibility for the continued pursuit of this lawsuit.
Finally, given the Court’s award of attorneys’ fees under § 1988, the Court need not reach

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consideration of the appropriateness of an award under § 1927.4
C.

Lodestar Analysis

Having determined that attorneys’ fees should be awarded, the Court now turns to the
determination of a reasonable fee. The Court begins with a lodestar analysis. See Perdue v.
Kenny A. ex rel. Winn, 559 U.S. 542, 551 (2010). The lodestar amount is an objective
determined by multiplying the reasonable number of hours expended by counsel on the case by a
reasonable hourly rate based on the prevailing market rates in the relevant community. See
Thompson v. Connick, 553 F.3d 836, 867 (5th Cir. 2008); Perdue, 559 U.S. at 551. In calculating
the number of compensable hours, courts consider whether the total number of hours claimed is
reasonable based on the nature and extent of the legal services rendered. Hensley v. Eckerhart,
461 U.S. 424, 433-34 (1983). Excessive or duplicative time is not compensable. Watkins v.
Fordice, 7 F.3d 453, 457 (5th Cir.1993).
The “lodestar method yields a fee that is presumptively sufficient,” 559 U.S. at 552, but
the fee may be enhanced “where the method used in determining the hourly rate . . . does not
adequately measure the attorney’s true market value”; where “the attorney’s performance
includes an extraordinary outlay of expenses and the litigation is exceptionally protracted”;
where there are “extraordinary circumstances in which an attorney’s performance involves
exceptional delay in the payment of fees”; or in the “rare and exceptional” cases where “superior
attorney performance is not adequately taken into account,” and “the lodestar fee would not have
been adequate to attract competent counsel.” Id. at 554-56 (citations and internal quotation marks
omitted).
4

The Court would note, however, that the considerations are similar, if not identical.
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In this case, counsel for the District, Pamela Breedlove (“Breedlove”), provided an
affidavit in which she avers that the billing rate of $175 per hour is less than that she charges her
other clients. She further avers that she has been in practice since 1992, and this billing rate is
below the current market rate for her services. Plaintiffs do not challenge her averments by
affidavit or otherwise.
Based on Breedlove’s averments and the Court’s own knowledge of prevailing market
rates in the Monroe area, the Court finds that the requested billing rate is reasonable and below
that charged by a practitioner of similar experience.
The Court now turns to a review of Breedlove’s hourly time records, which are supported
by her affidavit.5 The records reflect 15.3 hours expended from the time Plaintiffs provided
counsel with a copy of their Amended Complaint in December 2014, until the dismissal of this
lawsuit. The Court finds that the hours expended are not excessive, and the time records do not
reflect duplicative entries. Further, the District seeks compensation at the same hourly rate for
the time spent in preparing the instant motion in the total amount of $700. The Court finds that
this time is also compensable. Calculating the lodestar under the principles outlined above, 15.3
hours multiplied by $175 per hour yields a fee of $2,677.50. With the additional amount of
$700, the total fee award is $3,377.50. The Court finds that no further adjustment to the lodestar
is required because the applicable factors have already been taken into consideration.
III.

CONCLUSION
For the foregoing reasons, the District’s Motion for Fees [Doc. No. 31] is GRANTED IN

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Plaintiffs do not challenge the reasonableness of the hours expended either, only the
appropriateness of an award of attorneys’ fees at all.
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PART and DENIED IN PART. To the extent that the District moved for costs other than
attorneys’ fees, the motion is DENIED for lack of evidence. To the extent that the District
moved for attorneys’ fees, the motion is GRANTED IN PART and DENIED IN PART. The
Court finds that a judgment of attorneys’ fees in the amount of $3,377.50 shall be awarded in
favor of the District and against Plaintiffs for the reasons set forth above. A judgment of
attorneys’ fees shall not be awarded against Plaintiffs’ counsel individually.
MONROE, LOUISIANA, this 28th day of October, 2015.

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