State ex rel. Guste v. Fedders Corp.

539 F. Supp. 582, 1982 U.S. Dist. LEXIS 12555
CourtDistrict Court, M.D. Louisiana
DecidedMay 24, 1982
DocketCiv. A. No. 81-630-B
StatusPublished
Cited by2 cases

This text of 539 F. Supp. 582 (State ex rel. Guste v. Fedders Corp.) is published on Counsel Stack Legal Research, covering District Court, M.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Guste v. Fedders Corp., 539 F. Supp. 582, 1982 U.S. Dist. LEXIS 12555 (M.D. La. 1982).

Opinion

POLOZOLA, District Judge.

This matter is before the Court upon its reconsideration of the motion of the plaintiffs to remand this action back to the Nineteenth Judicial District for the Parish of East Baton Rouge pursuant to 28 U.S.C. § 1447(c). The Court previously denied this motion. State v. Fedders Corp., 524 F.Supp. 552 (M.D.La.1981).

This action was instituted by William J. Guste, Jr., in the name and on the behalf of the State of Louisiana and on behalf of Charles W. Tapp, Assistant Secretary of the Department of Urban and Community Affairs (DUCA). The plaintiffs seek to enjoin the defendants from alleged unfair and deceptive trade practices under the Unfair Trade Practices and Consumer Protection Act, La.R.S. 51:1401 — 1418. In addition to the injunctive relief sought under § 1407 of the Act, the plaintiffs seek additional relief in the form of restitution and other remedies on behalf of Louisiana consumers aggrieved by the above practices. La.R.S. 51:1408.

In its earlier ruling on the plaintiffs’ motion, the Court found that the State of Louisiana was not a real party in interest to this lawsuit and that DUCA is an entity of sufficient autonomy that it is a citizen of Louisiana for diversity jurisdiction purposes. The plaintiffs now reurge their contention that the State, which is not a “citizen” under 28 U.S.C. § 1332, is a real party in interest to this suit so that diversity does not exist. In the alternative, they argue that the case does not involve the requisite $10,000 amount in controversy. Both of these contentions are without merit.

For the reasons previously stated in its earlier opinion, the Court again holds that diversity jurisdiction is present. Also, the Court finds that the claim in controversy exceeds the sum of $10,000. The plaintiffs consistently maintain that this is not a class action, but an injunctive proceeding to insure compliance with Louisiana law with additional remedies requested for prior violations. Thus stated, this premise is correct. However, the plaintiffs are incorrect in their contention that if the State is not considered to be the real party in interest to this litigation the suit must be treated as a class action wherein each consumer who might receive relief under the Court’s judgment must have a $10,000 claim against the defendants.

Individual Louisiana consumers have not been joined as litigants in this matter. They are not being represented in the form of a class action. Certain language in the Court’s original opinion which might be construed to the contrary merely points out [584]*584that the relief requested would not benefit the State Treasury. This is in line with the Court’s findings that DUCA is a corporate body distinguishable from the State for purposes of 28 U.S.C. § 1332.

DUCA has brought this action to enforce the Unfair Trade Practices and Consumer Protection Act (UTPCPA) in the same way that the railroad commissioners sought to enforce their regulations in Missouri, K. & T. R. Co. v. Hickman, 183 U.S. 53, 22 S.Ct. 18, 46 L.Ed. 78 (1901). This is not a class action for damages, although Louisiana consumers rather than the State Treasury may receive monetary restitution under La.R.S. 51:§ 1408. In fact, § 1409(A) specifically forbids class actions,1 although § 1408 retains some of the benefits of a class action for the consumer without his being considered a party litigant.2 The pecuniary relief prayed for in this case serves as much as an enforcement mechanism as it does a device for compensating victims.3 The defendants have responded to the plaintiffs’ argument on jurisdictional amount by contending that the amount should be determined according to what it would cost them to comply with a judgment against them. Federal courts have taken various positions on how the amount in controversy should be ascertained. Some have stated that jurisdiction exists only if the value of the judgment to the plaintiff exceeds the required amount.4 Others have held, as the defendants contend herein, that the pecuniary effect produced by a judgment to either plaintiff or defendant may suffice. A few have ruled that the question must be viewed from the perspective of the party seeking to invoke federal jurisdiction.5 It is generally considered that this issue has not been conclusively decided by the Supreme Court. C. Wright, Federal Courts, 3d Ed. (1976) at 134-135.

The test proposed by the defendants, i.e., that the pecuniary effect on either party may be considered for the amount in controversy, has been adopted in a number of jurisdictions. E.g. Commonwealth of Massachusetts v. United States Veterans Administration, 541 F.2d 119 (1 Cir. 1976); Government Employees Insurance Co. v. Lally, 327 F.2d 568 (4 Cir. 1964); McCarty v. Amoco Pipeline Co., 595 F.2d 389 (7 Cir. 1979); Oklahoma Retail Grocers v. Wal-Mart Stores, 605 F.2d 1155 (10 Cir. 1979); Committee for G. I. Rights v. Callaway, 518 F.2d 466 (D.C.Cir.1975). Professor Wright states that this is “the most desireable” view. Wright, supra, at 135. Additionally, it is supported by the decisions of the United States Supreme Court in Smith v. Adams, 130 U.S. 167, 9 S.Ct. 566, 32 L.Ed. 895, (1889) and Illinois v. City Milwaukee, 406 U.S. 91, 98, 92 S.Ct. 1385, 1390, 31 L.Ed.2d 712 (1972). In the former case the Supreme Court stated “It is conceded that the pecuniary value of the matter in dispute may be determined, not only by the money judgment prayed, where such is the case, but in some cases by the increased or diminished value of the property directly affected by the relief prayed, or by the pecuniary result to one of the parties immediately from the judgment.” 130 U.S. at 175, 9 S.Ct. at 569, 32 L.Ed. at 898. In the latter case the

Court in finding jurisdiction to be present was ambiguous as to the test it applied. [585]*585However, the authorities upon which it relied have led some commentators to conclude that the Court adopted the “either party” test. Wright, supra, at 135 n.12; 14 Wright, Miller & Cooper, Federal Practice and Procedure, § 3703 pp. 410-11 (1976).

The Fifth Circuit Court of Appeals has on at least one occasion rejected the “either party” test in favor of the “plaintiff’s viewpoint” theory. Alfonso v. Hillsborough County Aviation Authority,

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539 F. Supp. 582, 1982 U.S. Dist. LEXIS 12555, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-guste-v-fedders-corp-lamd-1982.