ARIYAN, INCORPORATED, doing business as DISCOUNT CORNER; M. LANGENSTEIN & SONS, INCORPORATED; PRYTANIA LIQUOR STORE, INCORPORATED; WEST PRYTANIA, INCORPORATED, doing business as PRYTANIA MAIL SERVICE/BARBARA WEST; BRITISH ANTIQUES, L.L.C., BENNET POWELL; ARLEN BRUNSON; KRISTINA DUPRE; BRETT DUPRE; GAIL MARIE HATCHER; BETTY PRICE; ET AL., Plaintiffs—Appellants, versus SEWERAGE & WATER BOARD OF NEW ORLEANS; GHASSAN KORBAN, In his Capacity as Executive Director of Sewerage & Water Board of New Orleans, Defendants—Appellees.
No. 21-30335
United States Court of Appeals for the Fifth Circuit
March 21, 2022
Appeal from the United States District Court for the Eastern District of Louisiana, USDC No. 2:21-CV-534
JAMES L. DENNIS, Circuit Judge:
Plaintiffs who succeed in winning a money judgment against a state governmental entity in state court in Louisiana often find themselves in a
Finding themselves in this position, the Plaintiffs in this case, like others before them, have turned to the federal courts to force payment on their state court judgment. They claim that the Defendants’ failure to timely satisfy a state court judgment violates the Takings Clause of the Fifth Amendment. The district court granted the Defendants’ motion to dismiss, applying long-standing precedent that there is no property right to timely payment on a judgment.
We agree and AFFIRM.
I.
In 2013, the United States Army Corps of Engineers and the Sewerage and Water Board of New Orleans (the “SWB“) began construction on a massive flood control project across Uptown New Orleans as part of the Southeast Louisiana Urban Flood Control Program (“SELA“). The Uptown phase involved the construction of underground box culverts that run the length of several major thoroughfares. Plaintiffs are seventy landowners,
As of January 2021, though, the Plaintiffs had not received any payment from the SWB. So, in March 2021 they filed a
The SWB filed a motion to dismiss under
We review dismissal of a case under
Ordinarily a district court‘s denial of a motion to amend a complaint is reviewed for abuse of discretion. Stripling v. Jordan Prod. Co., LLC, 234 F.3d 863, 872 (5th Cir. 2000). However, when denial is based on the futility of amendment, we “apply the same standard of legal sufficiency as applies under
III.
A.
The Plaintiffs’ claim is fairly discrete. They “do not seek to re-litigate the legal or factual issues or compensation awards decided in the state courts.” Rather, their case “concerns an independent Takings Clause violation—the failure to timely pay just compensation once the compensation was determined and awarded.” This nonpayment is,
More than a century ago, the Supreme Court decided the case of a pair of litigants in a similar situation as the Plaintiffs here. In Folsom v. City of New Orleans, 109 U.S. 285 (1883), two relators had obtained state court judgments against the City of New Orleans for property damage caused by riots in 1873. In 1879, a new state constitution limited the taxes New Orleans could levy to just enough to cover the City‘s budget. Id. at 287. The effect was that the relators were prevented from collecting on their judgments. Id. The relators argued that this state constitutional change deprived them of property without due process of law in violation of the Fourteenth Amendment. Id. The Supreme Court rejected the argument, agreeing that the judgments were property, but holding that “the relators cannot be said to be deprived of them so long as they continue an existing liability against the city.” Id. at 289. In dissent, Justice Harlan wrote that an unenforceable judgment is no judgment at all. “Since the value of the judgment, as property, depends necessarily upon the remedies given for its enforcement, the withdrawal of all remedies for its enforcement, and compelling the owner to rely exclusively upon the generosity of the judgment debtor, is, I submit, to deprive the owner of his property.” Id. at 295.
The Folsom majority‘s notion of a judgment as an “existing liability,” conceptually distinct from its recovery, has only been reinforced in the intervening years. In Minton v. St. Bernard Parish School Board, this Court,
Again, in Freeman Decorating Company v. Encuentro Las Americas Trade Corporation, our Court held that there was no Takings Clause violation where the City of New Orleans failed to make timely payment on a state court judgment because there had been no taking of any property. “[T]he only property right [the plaintiff] has is the recognition of City‘s [sic] continuing debt.” 352 F. App‘x 921, 924 (5th Cir. 2009); see also Guilbeau v. Par. of St. Landry, 341 F. App‘x 974 (5th Cir. 2009); cf. Evans v. City of Chicago, 689 F.2d 1286, 1297 n.13 (7th Cir. 1982) (distinguishing Folsom because Illinois Constitution created property right to immediate payment on a judgment). In short, “[a] party cannot be said to be deprived of his property in a judgment because at the time he is unable to collect it.” Folsom, 109 U.S. at 289. Thus, Plaintiffs’ claim that their property has been taken by the SWB‘s failure to timely pay must fail under Folsom.
The Plaintiffs try to get around this precedent in two ways. First, they argue that Folsom and its progeny are distinguishable because the underlying judgments in those cases sounded in state tort and contract law, while the Plaintiffs’ judgments are based on violations of a federal constitutional right. But Plaintiffs’ underlying state court cases were not based on any asserted federal right. As the SWB pointed out in briefing, and as the record shows, Plaintiffs’ state court judgments were for violations of Louisiana law, not for violations of the Fifth Amendment Takings Clause as the Plaintiffs have asserted to this Court. But even if the underlying judgments were based on
Vogt v. Board of Commissioners of Orleans Levee District, 294 F.3d 684 (5th Cir. 2002), and Lafaye v. City of New Orleans, No. 2:20-CV-41, 2021 WL 886118 (E.D. La. Mar. 9, 2021), also do not aid the Plaintiffs in escaping Folsom‘s holding. In Vogt, the Court stated in dicta that the governmental defendant‘s refusal to satisfy a judgment could constitute a taking. 294 F.3d at 697. But the judgment in that case was, in part, a declaratory judgment by the state courts that mineral royalties in the government defendant‘s possession were the property of the plaintiff. Id. at 688. The government‘s refusal to “pay over the retained royalties constitutes a taking because the governmental entity is withholding private property from its owners.” Id. at 697. This situation, where the judgment debtor is in possession of property determined to belong to the creditor, is different from a judgment wherein the debtor owes compensation to the creditor. Lafaye turns on the exact same distinction. As the district court wrote in that case, “[b]oth Vogt and this case involve the government‘s refusal to return private property to its rightful owner.” Lafaye, 2021 WL 886118, at *9. Plaintiffs’ judgments here are for
Plaintiffs’ second argument is that two Supreme Court cases—Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985) and Knick v. Township of Scott, Pennsylvania, 139 S. Ct. 2162 (2019)—provide a federal forum for their claim. Plaintiffs misunderstand those cases. They are right that Knick and Williamson County discuss when a plaintiff may file a Takings Clause claim in federal court, but the cases say nothing about whether failure to timely pay a state court judgment constitutes a taking or any other deprivation of a federal right actionable under
B.
Plaintiffs invoked federal question jurisdiction, relying on their Fifth Amendment claim, to bring this suit. With that claim dismissed, the district court declined to exercise jurisdiction over Plaintiffs’ separate claim for a declaration of the parties’ rights and duties under the Damages SOP. The Declaratory Judgment Act “does not of itself confer jurisdiction on the federal courts.” Jolly v. United States, 488 F.2d 35, 36 (5th Cir. 1974). Without an underlying federal claim, or any other basis for jurisdiction
As a final matter, the district court also properly declined to grant leave to Plaintiffs to amend their complaint. Though
IV.
Like the district court, we understand the Plaintiffs’ frustration. They have succeeded in winning a money judgment. Without any judicial means to recover, they are compelled “to rely exclusively upon the generosity of the judgment debtor.” Folsom, 109 U.S. at 295 (Harlan, J., dissenting). But the Plaintiffs’ case before the district court turned entirely on a purported property interest not recognized in Fifth Amendment jurisprudence. They therefore failed to state a claim for relief, and the district court properly dismissed their case.
We AFFIRM the district court‘s judgment.