Eula Guidry Ardoin v. Stine Lumber Company

• Court: Louisiana Court of Appeal
• Decided: September 29, 2004
• Docket: CW-0003-1547
• Status: Unknown

Opinion

STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT

04-165 consolidated with 03-1547

EULA GUIDRY ARDOIN, ET AL.

VERSUS

STINE LUMBER COMPANY, INC., ET AL.

**********

APPEAL FROM THE FOURTEENTH JUDICIAL DISTRICT COURT PARISH OF CALCASIEU, NO. 2001-004808 HONORABLE G. MICHAEL CANADAY, DISTRICT JUDGE

ELIZABETH A. PICKETT JUDGE

Court composed of John D. Saunders, Michael G. Sullivan, and Elizabeth A. Pickett, Judges.

REVERSED IN PART; AFFIRMED IN PART.

Jimmy Simien Eulis Simien, Jr. Mark Wayne Simien Simien & Simien 8923 Bluebonnet Blvd., #200 Baton Rouge, LA 70809 (225) 769-8422 Counsel for Plaintiff/Appellee: Jason M. Broussard Jason M. Broussard, on behalf of a Putative Nationwide Class Eula Guidry Ardoin

Thomas M. Bergstedt Bergstedt & Mount 1011 Lake Shore Dr., Ste. 200 Lake Charles, LA 70601 (337) 433-3004 Counsel for Defendant/Appellant: Arch Wood Protection, Inc. Osmose, Inc. Arch Chemicals, Inc. John Stanton Bradford William Boyce Monk Stockwell, Sievert, Viccellio, Clements & Shaddock, LLP P. O. Box 2900 Lake Charles, LA 70602 (337) 436-9491 Counsel for Defendant/Appellant: Lowe's Home Center, Inc. Home Depot U.S.A., Inc.

Luther F. Cole Attorney at Law P. O. Box 4408 Baton Rouge, LA 70821-0000 Counsel for Plaintiff/Appellee: Jason M. Broussard Eula Guidry Ardoin Jason M. Broussard, on behalf of a Putative Nationwide Class

Scott Edward Delacroix Jeffrey Edward Richardson Adams and Reese 4500 One Shell Square New Orleans, LA 70139-0000 (504) 581-3234 Counsel for Defendant/Appellant: Osmose, Inc. Arch Chemicals, Inc. Arch Wood Protection, Inc.

Mark Anthony Delphin Delphin Law Firm 626 Broad St. Lake Charles, LA 70601 (337) 439-3939 Counsel for Plaintiff/Appellee: Eula Guidry Ardoin Jason M. Broussard, on behalf of a Putative Nationwide Class Jason M. Broussard

Richard Charles Stanley Stanley, Flanagan & Reuter 909 Poydras, Ste. 2500 New Orleans, LA 70112 (504) 523-1580 Counsel for Defendant/Appellant: Chemical Specialties, Inc.

Hugh Edward McNeely Attorney at Law 8923 Bluebonnet Blvd, Ste. 200 Baton Rouge, LA 70810 (225) 769-8422 Counsel for Plaintiff/Appellee: Jason M. Broussard Eula Guidry Ardoin Jason M. Broussard, on behalf of a Putative Nationwide Class Jack C. Watson Attorney at Law 692 Lakewood Dr. Lake Charles, LA 70605 (337) 474-3074 Counsel for Plaintiff/Appellee: Jason M. Broussard Jason M. Broussard, on behalf of a Putative Nationwide Class Eula Guidry Ardoin

Bryan Charles Reuter Jennifer Thornton W. Raley Alford, III Stanley, Flanagan & Reuter 909 Poydras, Ste. 2500 New Orleans, LA 70112 (504) 523-1580 Counsel for Defendant/Appellant: Chemical Specialties, Inc.

Robb W. Patryk Nicholas Swerdloff Renee C. Redman Hughes Hubbard & Reed One Battery Park Plaza New York, NY 10004-1482 (212) 837-6000 Counsel for Defendant/Appellant: Chemical Specialties, Inc.

Robert L. Shuftan David A. Kanter Brent R. Austin Attorneys at Law 225 W. Wacker Drive, 30th Fl Chicago, IL 60606-1229 (312) 201-2000 Counsel for Defendant/Appellant: Osmose, Inc. Arch Chemicals, Inc. Arch Wood Protection, Inc.

John P. MacNaughton Robert P. Alpert 1600 Atlanta Financial Center 3343 Peachtree Road, N.E. Atlanta, GA 30326 (404) 233-7000 Counsel for Defendant/Appellant: Home Depot U.S.A., Inc.

Raymond A. Haas Andrew J. Lewis David W. Longley Attorneys at Law P. O. Box 1700 Tampa, FL 33601 (813) 253-5333 Counsel for Defendant/Appellant: Lowe's Home Center, Inc.

Richard S. Lewis James J. Pizzirusso 1100 New York Ave., N.W. Suite 500, West Tower Washington, DC 20005-3964 (202) 408-4600 Counsel for Plaintiff/Appellee: Eula Guidry Ardoin Jason M. Broussard, on behalf of a Putative Nationwide Class Jason M. Broussard

James M. Papantonio Mark J. Proctor Frederick T. Kuykendall, III James M. Messer Troy A. Rafferty Attorneys at Law P. O. Box 12308 Pensacola, FL 32581 (850) 435-7000 Counsel for Plaintiff/Appellee: Eula Guidry Ardoin Jason M. Broussard Jason M. Broussard, on behalf of a Putative Nationwide Class Pickett, Judge.

FACTS

This matter arises from a Petition for Damages filed by Eula Guidry Ardoin

(the plaintiff) on September 25, 2001, in the Fourteenth Judicial District Court. In

that Petition, the plaintiff claimed that in order to construct a wooden deck and ramp

at her home, she purchased lumber from Stine Lumber Company and Griffith Lumber

Company, Inc. The lumber was treated and/or manufactured with chromate copper

arsenate (CCA) by L.L. Brewton Lumber Company, Inc. with chemicals

manufactured or designed by Osmose, Inc. Plaintiff asserted that the defendants

delivered non-conforming goods and failed to advise or disclose that the lumber she

purchased was treated with CCA. Plaintiff claimed that an unknown quantity of the

CCA chemicals leached into the soil of her backyard and formed residue on the

surface of the deck and ramp. Plaintiff asserted that the soil was a threat to any

person, plants or animals and, thus, the CCA treated wood rendered the products

unsuitable for their intended purpose thereby breaching the implied warranty of

suitability.

On October 25, 2001, Plaintiff’s counsel filed a Motion to Appoint Plaintiffs

as Class Representatives and to Appoint Steering Committee and Liaison Counsel.

On that same day, the plaintiff filed a First Supplemental and Amending Petition for

Damages wherein Jason M. Broussard was added as a plaintiff and the following new

defendants: Home Depot U.S.A., Inc. (Home Depot), Lowe’s Home Centers, Inc.

(Lowe’s), American Wood Preservers Institute (American Wood), Arch Wood

Protection, Inc. (Arch Wood), Arch Chemicals, Inc. (Arch Chemicals), Chemical

Specialties, Inc. (Chemical Specialties), Elder Wood Preserving Company (Elder

Wood), Louisiana-Pacific Corporation (La Pacific), Universal Forest Products (Universal), Koppers Industries, Inc. (Koppers), Wal-Mart Stores, Inc. (Wal-Mart)

and Defendants XYZ 1-1000.

On November 12, 2001, the plaintiffs filed a Motion for Class Certification

seeking to have the matter certified as a class action. On December 6, 2001, the

plaintiffs filed a motion to voluntarily dismiss Wal-Mart without prejudice from the

proceedings and a Second Supplemental and Amending Petition for Damages. Great

Southern Wood Preserving, Inc. (GSWP) was added as a defendant. On December

17, 2001, Universal Forest filed a Notice of Removal asserting that the federal court

had jurisdiction over the matter. The matter was removed to federal district court on

December 18, 2001. On or about March 6, 2002, the matter was remanded back to

the state district court.

Following the remand back to state district court, the parties filed numerous

motions including several declinatory, dilatory and peremptory exceptions filed by

the defendants in this matter.

On September 20, 2002, the state district court ordered that the matter be

governed by Case Management Order Number 1 (CMO1) in order to facilitate the

orderly, efficient, and expeditious disposition of the claims and appointed Kenneth

Michael Wright as provisional Special Master (SM) to assist the court with matters

leading up to the hearing on class certification. The Order listed the duties of the SM

as: (1) to assist the court in resolving discovery disputes, (2) assist the court in

ensuring compliance with the provisions of this CMO1, (3) reporting to the court on

the readiness for the class certification hearing and (4) the SM may perform any

special duties that are expressly ordered by the court or by agreement of the parties

with the written consent of the parties to the SM being involved in that capacity. The

2 Order further stipulated that, after reviewing any matter, the SM would issue a Report

and Recommendation and any party objecting to the Report and Recommendation

could file a written objection within ten (10) days as provided for by La.R.S. 13:4165.

Upon receipt of a written objection, the court would schedule a hearing to review the

Report and Recommendation of the SM.

On November 21, 2002, the district court ordered the parties to deposit a total

of $88,926.84 into the court’s registry by December 20, 2002, for SM fees; assessing

one-half to each party. On November 22, 2002, the district court implemented Case

Management Order Number 2 (CMO2) which superceded CMO1.

On December 21, 2002, the district court granted the plaintiffs’ Motion to

Dismiss Brewton Lumber Co., Inc., Elder Wood Preserving Co., Louisiana-Pacific

Corporation, Universal Forest Products, Great Southern Wood Preserving, Inc.,

Koppers Industries, Inc. and American Wood Preservers Institute as defendants. At

this time the class was not certified.

On December 3, 2002, the plaintiffs filed their Fifth Supplemental and

Amended Petition for Damages wherein Sheral LaVergne was substituted in place of

Eula Guidry Ardoin as a class representative.

On December 5, 2002, the remaining defendants filed a Notice of Removal

with the United States District Court for the Western District of Louisiana seeking to

have the matter removed to federal district court based upon diversity jurisdiction.

The SM and the district court received notice of the removal on that same date. The

plaintiffs filed a Motion to Remand. The federal district court denied the plaintiffs’

motion and the U.S. Court of Appeal for the Fifth Circuit denied the plaintiffs’

3 request to appeal the denial of their motion to remand. See Ardoin v. Stine Lumber,

Co., 02-2502, (W.D. La. //0).

On April 15, 2003, the SM filed an ex parte motion for the payment of his

unbilled and unpaid fees, costs and expenses. On that same date, the district court

signed an Order directing the parties to pay those fees, costs and expenses. On May

14, 2003, the defendants filed a Motion and Incorporated Memorandum in Support

for Final Accounting and Clarification in response to the Orders issued by the district

court on April 15. The motion contends among other things that: (1) the January 8,

2003 disbursement to the SM was incorrect for two reasons; overpayment, and he had

already been paid, (2) the March 12, 2003 disbursement was incorrect, (3) the April

14, 2003 invoice of the SM is incorrect because it itemized work performed by the

SM after the case was removed to federal court on December 5, and (4) although the

district court ordered the parties to deposit $46,828.94 on April 14, only $19,997.21

was needed to satisfy the SM’s invoices. Therefore, the defendants contended that

the amounts ordered by the April 15 Orders exceed the amounts charged by the SM.

On that same date, the district court granted the defendants Motion to Stay the Orders

pending a final accounting and clarification of the fees and costs of the SM.

On May 22, 2003, the SM filed a Motion and Order to Partially Lift Stay. In

that motion, the SM requested that the Stay be lifted as to the undisputed portion in

the amount of $14,080.16. Pursuant to a stipulation of the parties, on June 6, 2003,

the district court granted the SM’s motion as to the undisputed portion, and ordered

the defendants to submit a memorandum to the court within seven days of this order

listing their objection to the remaining claims of the SM’s fees and expenses.

4 On June 13, 2003, the defendants timely filed a Supplemental Memorandum

in Support of Motion for a Final Accounting and Clarification and, on July 1, 2003,

the defendants submitted a Supplemental Memorandum Regarding the June 23, 2003

Statement of the Special Master. In those memoranda, the defendants’ objected to the

SM’s fees because 28 U.S.C. 1446(d) mandates that a “State court shall proceed no

further unless and until the case is remanded.” The defendants argued that the charges

of the SM were improper because the case was removed on December 5, 2003, and

has not been remanded. On July 15, 2003, the plaintiffs filed a memorandum in

support of the SM’s fees. The plaintiffs’ argued that the post-removal activities of

the SM were lawful, reasonable and in accordance with the ministerial duties required

pursuant to CMO2. The plaintiffs’ also asked that the defendants be cast with 100%

of the costs incurred from the SM’s time charges.

On October 17, 2003, the district court issued a Per Curiam and Judgment

regarding the charges of the SM. In that judgment, the district court ruled that, “a

state court retains the power to assess and collect costs after removal, and for such

other ministerial tasks which do not go to the merits of a case that has been removed.”

The district court further ruled that, pursuant to 28 U.S.C. Section 1450, the SM’s

appointment remains in effect since there has been no order in the federal district

court terminating his appointment. The district court ordered the parties to pay the

disputed funds in the amount of $15,831.64 into the registry of the court, and taxed

the sum as costs of the court. The district court assessed the plaintiffs with twenty-

five percent and the defendants with seventy-five percent of the total court costs

including the costs of the SM.

It is from this judgment that the defendants appeal.

5 ASSIGNMENTS OF ERROR

The defendants set forth the following assignments of errors on appeal:

A. The district court erred by ordering the Special Master to monitor the federal-court proceedings after this case had been removed and by assessing the parties with the costs of those unlawful post-removal activities.

B. The district court’s retroactive re-assessment of costs is an absolute nullity.

C. Alternatively, the district court’s retroactive re-assessment of costs was erroneous because no party had filed a motion requesting such relief, the court did not conduct a hearing on the issue, and the court did not give a factual basis for the re-assessment.

DISCUSSION

In their first assignment of error, the appellants argue that the district court

erred by ordering the Special Master to monitor the federal court proceedings after

this case had been removed and in assessing the parties with the costs of those

unlawful post-removal activities. The appellants contend that the federal removal

statute, 28 U.S.C. § 1446(d), supports their argument. That statute provides as

follows:

Promptly after the filing of such notice of removal of a civil action the defendant or defendants shall give written notice thereof to all adverse parties and shall file a copy of the notice with the clerk of such State court, which shall effect the removal and the State court shall proceed no further unless and until the case is remanded.

In its per curiam, the district court noted:

The United States Sixth Circuit Court of Appeals in Lawrence v. Chancery Court of Tennessee, 188 F.3d 687 (6th Cir.1999) determined that the intention of Congress when it drafted 28 U.S.C. § 1446(d) would paralyze a state court from taking ministerial steps that do not affect the adjudication of the parties’ dispute. The Sixth Circuit concluded that the state court would not be able to recoup pre-removal costs outside of billing a party directly, because the collection of state court costs are outside the federal court’s power. Thus, a state court retains the power to assess and collect costs after removal, and for such

6 other ministerial for ministerial (sic) tasks which do not go to the merits of a case that has been removed. The Court finds this case persuasive and applicable herein.

In addition, all orders of the state court remain in full force and effect until dissolved or modified by the Federal District Court. 28 U.S.C. § 1450, third paragraph. Such orders remain binding on the parties. The Special Master’s appointment remains in effect since there has been no order in the Federal District Court terminating his appointment. Thus, State Court has the discretionary authority to award appropriate fees and expenses for ministerial tasks performed for this court.

This court has analyzed and reviewed the briefs of all parties and the post removal billings of the Special Master and finds that the fees charged and expenses and costs incurred were for ministerial duties and finds that this Court has the authority to assess such fees (sic) expenses and changes (sic) as court costs and does so. The post removal activity was a result of the Court’s request to the Special Master to monitor the proceedings, since this matter had been removed and remanded previously and anticipated return to State Court since the Federal System has seen fir (sic) to sustain the removal ....

Upon reviewing the Lawrence case, we find that assessing and collecting court

costs does not constitute “proceeding further” under 28 U.S.C. § 1446(d) because that

is considered a ministerial act that does not affect the merits of the dispute between

the parties. In the instant case, however, the issue is not whether the district court had

the authority to assess and collect costs but whether the tasks that the district court

ordered the SM to perform on its behalf, after the removal, constitute ministerial acts

such that the costs, and expenses assessed were proper.

The defendants argue that the district court’s reading of Lawrence was

fundamentally incorrect because Lawrence held only that 28 U.S.C. § 1446(d) does

not prohibit a state court from assessing costs that accrued pre-removal. The

defendants note that none of the costs at issue in the Lawrence case were incurred

after the state court had been divested of subject matter jurisdiction. In contrast, in

the instant case, the district court authorized the SM to monitor the federal

7 proceedings and then assessed costs for the SM’s post-removal activities. Defendants

argue that such activities are certainly not the type of “ministerial steps” that the

Lawrence court had in mind. We agree.

The intent of 28 U.S.C.A. § 1446 is to prevent state and federal courts from

sharing jurisdiction over a case and thus avoid jurisdictional conflicts. Therefore,

Louisiana courts are divested of jurisdiction once the requirements of the federal

removal statute have been met. Kaplan v. Missouri Pacific Railroad Company, 447

So.2d 489 (La.App. 3 Cir.), writ. denied, 449 So.2d 1345 (La.1984). As a general

rule, any action taken by a court without proper subject-matter jurisdiction is an

absolute nullity. Bryant v. Pierson, 583 So.2d 97 (La.App. 3 Cir.1991); La.Code

Civ.P. art. 2002.

We agree that the SM’s appointment was still in effect because the federal

district court had not terminated his appointment. The facts in the record, however,

clearly show that the SM duties, pursuant to CMO1 and CMO2, were limited to

assisting the district court with matters leading up to the hearing on class certification.

This specifically entailed assisting the district court in resolving discovery disputes,

ensuring that the parties complied with CMO1, and reporting to the district court on

the readiness for the class certification hearing. In addition, CMO1 provided that the

SM could perform any special duties that were expressly ordered by the court or by

agreement of the parties with the written consent of the parties to the SM being

involved in that capacity.

The monitoring of federal proceedings is not a duty provided for in CMO1 and,

although the district court expressly ordered the SM to perform this task, the record

8 does not reflect that the parties gave written consent to the SM being involved in that

capacity.

We will discuss the defendants’ second and third assignments of error together,

as they are interrelated. The defendants argue that the district court’s retroactive re-

assessment of costs is an absolute nullity. Alternatively, the defendants assert that the

district court’s retroactive re-assessment of costs was erroneous because no party had

filed a motion requesting such relief, the court did not conduct a hearing on the issue,

and the court did not give a factual basis for the re-assessment.

Over the course of, and in connection with the pre-certification, the district

court ordered the parties to deposit $143,345.84 into the court’s registry, of which,

$138,233.93 was distributed to the SM. Each time the district court disbursed

monies to the SM it taxed the matter as costs of the court and assessed one-half to the

plaintiffs and one-half to the defendants. The district court reserved the right to

revise future assessments

Defendants contend that no party filed a motion requesting reassessment of

costs in this matter. We note, however, that the defendants requested a final

reconciliation of the amounts contributed by each to the SM’s costs in their Motion

for Final Accounting and Clarification. In response, the plaintiffs, in their

memorandum filed on July 15, 2003, asked that the defendants be cast with 100% of

costs incurred from the SM’s time charges. The matter was submitted on briefs by

agreement of the SM and the defendants.

In its per curiam, the district court stated that:

Its Case Management Order established an initial allocation of 50% to the Defendants subject to review of the court at a later date for reallocation if the facts warranted.

9 ....

In its previous orders the allocating costs of one-half to plaintiffs and one-half to defendants this Court reserved the right to revise the allocations. This Court has analyzed the cooperation of both the defendants and the plaintiffs, the discovery facilitation by the parties and other factors and has determined that the previous assessment of court costs should be revised to reflect more reasonable and accurate assessment of each parties responsibility for court costs. After carefully evaluating the amount of time and effort that was required by the Court on behalf of the plaintiffs and the defendants this court finds that the Special Master costs assessed as court costs and all other Court costs should be reassessed. (This assessment was reserved by the Court as per transcripts of numerous hearings in preparation of the ultimate certification determination.)

The district court then went on to order the parties to pay into the registry of

the court the disputed funds, assessing each party a one-half share. In its judgment,

the district court assessed the plaintiffs with 25% and the defendants with 75% of the

total court costs including the costs of the SM.

We find no error in the reassessment of the costs by the trial court. The

assessment of costs was subject to review by the court, and although there was no

formal hearing, the matter was submitted on briefs by agreement of the parties. The

court did recite its considerations in assessing the costs and we find no error in its

reasoning. This assignment of error is without merit.

DECREE

The judgment of the trial court assessing the parties with costs in the amount

of $15,831.64 for activities performed by the SM subsequent to the filing of the

Notice of Removal is reversed. The judgment of the trial court is affirmed in all other

respects. Costs of this appeal are to be divided equally between the parties.

REVERSED IN PART; AFFIRMED IN PART