Riley v. Wooten

UNITED STATES COURT OF APPEALS
For the Fifth Circuit

No. 91-3916

JAY H. RILEY,,

Plaintiff-Appellant,

versus

ERNEST WOOTEN, Individually and in his
capacity as Sheriff of Plaquemines Parish, Et Al.,

Defendants,

ERNEST WOOTEN, Etc., and
PLAQUEMINES PARISH COUNCIL,

Defendants-Appellees.

Appeals from the United States District Court
for the Eastern District of Louisiana

(August 18, 1993)
Before REYNALDO G. GARZA, HIGGINBOTHAM, and DeMOSS, Circuit Judges.

DeMoss, Circuit Judge:

I. FACTS AND PROCEDURAL HISTORY

On June 18, 1989, Plaquemines Parish Sheriff's deputies and a
representative of the Louisiana Office of Alcohol and Beverage

Control entered Jay Riley's business, the J.U. Lounge, and removed

his state and parish alcohol permits and other permits and licenses

necessary for him to operate, which effectively closed down his

business. In his federal suit, Riley alleges that such actions

were unlawful because the Council and sheriff closed his business

and suspended his licenses without prior notice or an opportunity

for a hearing violating his right to procedural due process.

1
Because of those allegedly unlawful actions, Riley claims that the

Council and Sheriff damaged his business.

On August 24, 1989, Riley filed a petition for damages, writ

of mandamus, and temporary restraining order in Louisiana state

court against Ernest Wooten, in his capacity as Sheriff of

Plaquemines Parish; Luke Petrovich, in his capacity as President of

Plaquemines Parish; Larry Dickenson, in his capacity as

Commissioner of the Office of Alcohol and Beverage Control; and the

State of Louisiana.

The next week, Luke Petrovich filed a petition for revocation

and/or suspension of Riley's liquor permit and occupational license

with the Plaquemines Parish Council (the Council) alleging that

Riley served alcohol to intoxicated persons, operated a disorderly

house, violated Plaquemines Parish building codes, and that

representatives of Riley possessed and sold drugs on the premises.

At a public hearing on September 28, 1989, the Council adopted

Resolution Numbers 89-334 and 89-335, which revoked Riley's

Plaquemines Parish occupational license and liquor permit.

Meanwhile, in the state court suit the defendants filed an

exception of prematurity, which the court granted on September 1,

1989. Riley appealed the trial court's ruling. On appeal, because

the Council had conducted a hearing and revoked Riley's permit and

license, the Louisiana appellate court sustained the dismissal of

Riley's case as moot as far as he was seeking the return of his

license and permit.

On October 16, 1989, Riley filed a motion and order for

devolutive appeal in Louisiana state court challenging the decision

of the Council to revoke his permits. The Louisiana trial court

2
dismissed the suit since Riley had not timely brought it under

Louisiana law, which required an aggrieved party to appeal the

suspension of their permits within 10 days of being notified of the

suspension. See La. R.S. 33:4788.

Not to be deterred, Riley again sued Sheriff Wooten,

Petrovich, and the Council in the United States District Court for

the Eastern District of Louisiana (USDC) asserting that they

violated his right to procedural due process.1 Petrovich filed a

motion for summary judgment based on absolute immunity, which was

unopposed, and the USDC granted the motion. The Council then filed

a motion to dismiss on the ground of res judicata, and on October

8, 1991, the USDC granted the motion. Riley appealed the October

8 dismissal on October 25. Thereafter, on December 2, the USDC

dismissed Sheriff Wooten on the ground of res judicata. Riley

appealed the December 2 dismissal on January 6.

II. DISCUSSION

1. Appellate Jurisdiction

The Council contends when Riley appealed the order dismissing

his claim against it, this Court did not have jurisdiction because

the order was interlocutory and there was no Rule 54(b)2

certification. That is so, because when the USDC dismissed the

Council, it had not adjudicated Riley's claim against Sheriff

Wooten and; therefore, there was not a final judgment. After the

1
We have subject matter jurisdiction of this appeal pursuant to 28 U.S.C. § 1331, which states "[t]he district
courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the
United States."
2
Fed. R. Civ. P. 54(b) states "[w]hen more than one claim for relief is presented in an action, whether as a
claim, counterclaim, cross-claim, or third-party claim, or when multiple parties are involved, the court may direct
the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express
determination that there is no just reason for delay and upon an express direction for the entry of judgment."
3
USDC dismissed Sheriff Wooten, Riley appealed the order as to

Sheriff Wooten, but did not appeal the order relating to the

Council. Therefore, according to the Council, this Court has no

appellate jurisdiction over it.

In a multi-party suit, a court's order is final only if it

meets one of two conditions: (1) it must adjudicate all the claims

of all the parties, or (2) the court must expressly determine there

is no just reason for delay and direct an entry of judgment under

Rule 54(b). Jetco Electronic Industries, Inc., v. Gardiner, 473

F.2d 1228, 1231 (5th Cir. 1973).

To support its contention that we do not have appellate

jurisdiction over it, the Council directs us to the cases of

Kirtland v. J. Ray McDermott & Co., 568 F.2d 1166 (5th Cir. 1978)

and United States v. Taylor, 632 F.2d 530 (5th Cir. 1980). In

Kirtland, the plaintiff sued his employer, McDermott, under the

Jones Act and general maritime law. Kirtland, at 1168. Later he

sued an additional defendant, Columbia Gulf Transmission Company.

Id. The trial court then granted a summary judgment to Columbia

and the plaintiff appealed. Id. One day after the appeal was

docketed, the trial court entered a Rule 54(b) order stating there

was no just reason for delaying an entry of final judgment. Id.

On appeal, this court dismissed the appeal holding that when "more

than one claim for relief is presented in an action, an express

determination pursuant to Rule 54(b) is required as a prerequisite

to an appeal from an order disposing of fewer than all the claims."

Id.

In Taylor, the defendant appealed the trial court's denial of

his motion to join and the dismissal of his counter-claim. Taylor,

4
at 530. After the defendants appealed, the plaintiff dismissed the

case, which ended the litigation. Id. at 531. On appeal, this

court refused to exercise its jurisdiction holding that the

defendant's failure to appeal from the final judgment making the

joinder denial and the counter-claim dismissal a final and

appealable decision deprived the court of jurisdiction. Id. The

court also held the final judgment did not retroactively validate

the premature notice of appeal. Id.

To refute the Council's contention, Riley relies on the Rule

first announced in Jetco Electric Industries, Inc., v. Gardiner,

473 F.2d 1228 (5th Cir. 1973). In Jetco, the plaintiffs

prematurely appealed an order dismissing only one of three

defendants. Id. at 1231. Several months later, the trial court

entered an agreed judgment disposing of the claims against the two

remaining defendants. Id. On appeal, while recognizing that the

appeal met neither the requirements of Rule 54(b) nor a final

judgment, this court nevertheless concluded that it had

jurisdiction to consider the premature appeal. Id. at 1231. The

court stated the "two orders, considered together, terminated this

litigation just as effectively as would have been the case had the

district judge gone through the motions of entering a single order

formally reciting the substance of the earlier two orders." Id.;

See also Alcorn County, Miss. v. U.S. Interstate Supplies Inc., 731

F.2d 1160, 1166 (5th Cir. 1984) (interpreting Jetco) ("[W]e may

consider a premature appeal in those cases where judgment becomes

final prior to disposition of the appeal.").

This court has followed the Jetco rule in many decisions.

See, Levron v. Gulf Intern. Marine, Inc., 854 F.2d 777, 779-80 (5th

5
Cir. 1988); Crowley Maritime Corp., v. Panama Canal Comm., 849 F.2d

951, 953 (5th Cir. 1988); Alcom Electric Exchange, Inc., v.

Burgess, 849 F.2d 964, 966-69 (5th Cir. 1988) (expressly rejecting

Taylor); Sandidge v. Salen Offshore Drilling Co., 764 F.2d 252, 255

(5th Cir. 1985); Tower v. Moss, 625 F.2d 1161, 1164-65 (5th Cir.

1980). More recently, this court reaffirmed the efficacy of the

Jetco Rule in Simmons v. Willcox, 911 F.2d 1077, 1080 (5th Cir.

1990). In Simmons, the trial court granted summary judgment to

four of six defendants, thus leaving two defendants remaining in

the case. Id. at 1080. Without seeking a Rule 54(b)

certification, the plaintiff appealed. Id. After that, the trial

court dismissed the remaining two defendants and the plaintiff

filed a second appeal. This court held that it had appellate

jurisdiction over all of the defendants in that the defect in the

initial appeal was cured by the later dismissal of the remaining

defendants, which ended the litigation before the disposition of

the appeal. Id.

In our view, the Jetco Rule controls the present case and we

should exercise jurisdiction over this appeal. Similar to Jetco

and Simmons, here, the defect in Riley's original appeal was cured

by the trial court's subsequent dismissal of Sheriff Wooten from

the case before we disposed of the appeal. The cases relied upon

by the Council, Kirtland and Taylor, are distinguishable. In

Kirtland, the original premature notice of appeal was not cured by

a later dismissal of the remaining defendant before the court

disposed of the appeal, and in Taylor the litigation was ended by

the plaintiff's voluntary dismissal of the case. To the extent the

opinions in Kirtland and Taylor conflict with the opinion in Jetco,

6
we hold that Jetco controls as this Circuit has applied it more

prevalently and for a longer period.

2. Res Judicata

We must first decide whether the state or federal rules of

claim preclusion apply. In University of Tennessee v. Elliott, 478

U.S. 788, 799 (1986), the Supreme Court held that federal courts

apply state rules of issue preclusion after a state administrative

adjudication. Since this case involves the preclusive effect to

give the Council's administrative adjudication, Louisiana's res

judicata law governs this appeal.

Both parties agree that under Louisiana law once the time to

appeal an administrative ruling has run, the ruling becomes final

and has res judicata effect. See, Robinson v. City of Baton Rouge,

566 So. 2d 415 (La. App. 1st Cir. 1990); La. R.S. 33:4788.3 What

the parties disagree on is the scope of the preclusive effect to be

given to Riley's failure to appeal timely the Council's ruling.

Louisiana Revised Statute Annotated 13:4231 determines the scope of

the preclusive effect of a prior suit. For a former judgment to

bar a subsequent suit on the ground of res judicata, the statute

required that:

[t]he thing demanded must be the same; the demand must be
founded on the same cause of action; the demand must be

3
La. R.S. 33:4788 states:

[t]he holder of the permit who is aggrieved by a decision of the governing body of the
municipallity or parish or a municipal alcoholic beverage control board to suspend or revoke
his permit, may within ten days of the notification of the decision take a devolutive appeal to
the district court having jurisdiction of his place of business and on such appeal the trial shall
be do novo . . . .

La. R.S. 33:4788.
7
 between the same parties, and formed by them against each
other in the same quality.4

La. R.S. 13:4231.

Riley contends that the state suit challenging the Council's

ruling does not preclude him on the ground of res judicata from

bringing the present suit, because neither the state suit nor the

Council hearing addressed the same relief or the same cause of

action, the propriety of and damages flowing from the initial

closing of his business on June 18, which he now pursues in the

present suit. To support his contention that the present action is

not barred by res judicata, Riley relies on the Fifth Circuit case

of Frazier v. King, 873 F.2d 820, 824 (5th Cir.), cert. denied, 493

U.S. 977 (1989).5

In Frazier,6 the plaintiff, after obtaining a favorable ruling

in a Louisiana Civil Service Commission (LCSC) hearing, sued in

federal court for damages alleging that her employer violated her

constitutional rights under the First and Fourteenth amendments and

committed several state law torts. In response, the defendants

answered, and the trial court agreed, that the LCSC adjudication

4
Sheriff Wooten points out the Louisiana Legislature has recently amended La. R.S. 13:4231, so that it now
adopts the broader common law theory of res judicata which is based on a transactional or occurrence test. The
comments to the recent amendments to the legislation succinctly state "R.S. 13:4231 makes a substantial change
in the law. Under the present law a second action would be barred by the defense of res judicata only when the
plaintiff seeks the same relief based on the same cause or grounds. This interpretation of res judicata is too
narrow to fully implement the purpose of res judicata which is to foster judicial efficiency and also to protect the
defendant from multiple lawsuits. . . ." Under the new La. R.S. 13:4231, Wooten contends Riley's federal suit
would be barred. What Wooten omits is that the comments to the Act specifically state that "the preclusive effect
and authority of a judgment rendered in an action filed before the effective date of this Act, shall be determined
by the law in effect prior to January 1, 1991."
5
See also Cantrelle Fence & Supply Co., Inc. v. Allstate Ins. Co., 515 So.2d 1074 (La. 1987), which
recognizes that the common law rule allowing preclusive effect to be given to all matters that might have been
pled or raised is inapplicable in Louisiana.
6
In Frazier, the court did not decide whether state or federal rules of claim preclusion apply after a state
agency, rather than a state administrative, adjudication. Under either the federal or state rule of claim preclusion,
the court held that the plaintiff's federal claims were not barred.
8
barred the federal claims on the ground of res judicata. On

appeal, this Court reversed, holding that the "thing" demanded by

the plaintiff in the agency hearing, reinstatement with back pay,

differed from the relief she sought in federal court, money damages

and attorney's fees, and; indeed, could not have been granted in

the agency hearing. In the present case, Riley argues the

administrative hearing conducted by the Council did not decide the

propriety of or the damages resulting from the initial closing of

his business, and, therefore, did not adjudicate his rights

regarding the initial June 18 closing. Riley contends, just as in

Frazier, neither the "thing" demanded by him nor the present cause

of action was adjudicated by the Council or the state court, and

consequently Louisiana's law of res judicata does not bar the

present suit.

The Council contends that Riley's argument that its

administrative hearing did not have as its focus the initial

closing of his business, and, therefore, did not adjudicate his

procedural due process rights regarding the initial closing misses

the point. According to the Council, whether its administrative

hearing addressed the initial closing of his business is not

essential to the core of its res judicata argument. Rather, the

Council contends that its administrative ruling revoking Riley's

permits is final and acts as res judicata on the issue of the

revocation of the permits in that Riley failed to appeal timely its

ruling. Therefore, the Council contends the issue of the

revocation of the permits is final, and consequently any claim for

damages by Riley resulting from the revocation of those permits is

barred, even his claim for damages resulting from the initial

9
closing of his business. If Louisiana did not take such a narrow

view of res judicata, the Council's argument might carry the day.

The Council contends that Myers v. City of Lafayette, 537 So.

2d 1269, 1275 (La. App. 3rd Cir. 1989) supports its argument that

because Riley failed to appeal the administrative ruling, he has no

claim for damages resulting from the closing of his business in any

regard. In Myers, the court held that the plaintiff's failure to

appeal timely the Louisiana Office of Alcoholic Beverage Control's

denial of her alcohol beverage permits to the court as the statute

required, made the decision of the state and the city not to issue

the permits final and binding on all of the parties. Further, the

court stated "[s]ince plaintiff had no legal right to compel the

issuance of permits or to even now challenge the non-issuance of

the permits she has no cause of action for damages resulting from

the non-issuance of the permits." Id. at 1275. In sum, the

Council contends Riley's failure to appeal timely its

administrative ruling revoking his permits bars him from now

bringing a procedural due process claim for the initial closing of

his business.

The Council's argument relying on Myers is unpersuasive,

however, because Myers involved neither the revocation of an issued

permit nor the closing of an ongoing business, but the denial of an

application for a permit. In Myers, therefore the issue of the

propriety of the closing of the plaintiff's business, initial or

otherwise, was not before the court. Consequently, we conclude

that the holding in Myers does not foreclose Riley from bringing

his procedural due process claim in the present case. Moreover,

our conclusion is buttressed by the Louisiana Supreme Court case of

10
Paillot v. Wooton, 559 So.2d 758 (La. 1990), in which the court

struck down the Council ordinances7 in issue on this appeal.

In Paillot, the plaintiff, Paillot, sued seeking damages and

an order enjoining the Council from suspending her permits on the

ground of due process, after the sheriff and the Council shut down

her bar without prior notice or a hearing. The Louisiana trial

court issued a preliminary injunction ordering the Council to

return all of Paillot's permits, pending a hearing. After the

court issued the injunction, the Council conducted a hearing and

suspended Paillot's permits. On appeal, the Louisiana Supreme

Court held the Plaquemine's ordinances allowing the revocation of

Paillot's permits and the closing of her business without prior

notice and a hearing violated her right to procedural due process.

In so holding, the court rejected the Council's argument that the

administrative hearing after the initial closing cured the

illegality of the initial closing. In rejecting that argument, the

court stated:

[b]ecause in this case the license and permits were again
suspended when a hearing was finally held by the council
almost a month after the initial government action, there
is reason to believe plaintiff may have committed
violations which justified suspension of the permits.
However `to one who protests against the taking of his

7
Plaquemines Parish Ordinance 4-14 provided:

[i]f any disturbance of the peace, public nuisance or other violation of state law or this chapter is committed on
said premises [businesses licensed to sell alcoholic beverages], the president of the council with the approval of
the commissioner of finance or the sheriff, is hereby authorized to suspend or revoke said permit [to sell liquor
or beer] . . . In case of such suspension or revocation, permittee may appeal to the council for a hearing, to
remove or recall the suspension or revocation, pending which hearing no liquor or beer shall be sold by permittee
....

Plaquemines Parish Ordinance 14-26 provided:

if any violation of Louisiana law or parish ordinance is committed on said [licensed] premise, the council, through
its president, with recommendations from the director of administration or the sheriff, may suspend or revoke the
occupational license to continue to conduct such business . . . .
11
 property without due process of law, it is no answer to
say that in his particular case due process of law would
have led to the same result because he had no adequate
defense on the merits.'

Id. at 762 (quoting Wilson v. City of New Orleans, 479 So.2d 891,

894 (La. 1985)).

We are obligated to follow the Louisiana courts'

interpretation of its law regarding res judicata. In our view, the

Louisiana Supreme Court would not bar Riley from suing the Council

or Sheriff Wooten on the ground of res judicata for the initial

closing of his business although the Council held a later

administrative hearing, which Riley lost.

In sum, the Council hearing did not address the propriety of

the initial closing of Riley's business or whether Riley suffered

any damages because of the closing. That fact, coupled with

Louisiana's narrow view of res judicata supports our holding that

the USDC erred in granting summary judgment to the Council and

Sheriff Wooten.

III. CONCLUSION

For the foregoing reasons, the judgment of the district court

is REVERSED and the case is REMANDED.

12