Opinion
Civil Action No. 00-2736.
January 30, 2001
Before this Court is the Plaintiffs' Motion for Reconsideration of this Court's Order of December 7, 2000, Denying the Plaintiffs' Motion for Remand. The matter was heard before this Court on January 17, 2001, with oral argument. The Court, The Court, having heard the arguments of counsel, and having studied the legal memoranda and exhibits submitted by the parties, the record, and the applicable law, is fully advised on the premises and ready to rule.
ORDER AND REASONS
I. Background:
On December 7, 2000, this Court issued an Order in which it denied the Plaintiffs' Motion to Remand the above-captioned matter back to state court. The Plaintiffs filed the present Motion for Reconsideration, claiming that the Court erred in several respects in denying their Motion to Remand. Specifically, the Plaintiffs allege that the Court erred in determining that the jurisdictional amount has been met in this case.
II. The Law on Motions for Reconsideration:
The Federal Rules of Civil Procedure provide that any party may file a motion to alter or amend a judgment within ten business days after its entry. See FED. R. CIV. P. 59. Under Rule 59, a district court enjoys considerable discretion in granting or denying such a motion. Lavespere v. Niagara Mach. Tool Works, Inc., 910 F.2d 167, 173 (5th Cir. 1990);First Commonweatlh Corp. v. Hibernia Nat. Bank of New Orleans, 891 F. Supp. 290 (E.D.La. 1995), amended 896 F. Supp. 634, affirmed 85 F.3d 622. There are certain grounds upon which a Court may grant a Rule 59 motion for reconsideration or to alter or amend the judgment. These grounds include the following: (1) an intervening change in the controlling law has occurred, (2) evidence not previously available becomes available, or (3) it is necessary to correct clear error of law or to prevent manifest injustice. Database America, Inc. v. Bellsouth Advertising Pub. Corp. 825 F. Supp. 1216 (D.N.J. 1993). It is important to note that reconsideration is an "extraordinary remedy which should be used sparingly and should not be used to relitigate old matters, raise new arguments, or present evidence that could have been raised prior to the entry of judgment." Lafargue v. Jefferson Parish, No. 98-3185, 2000 WL 174899, * 1 (E.D.L.A. Feb. 11, 2000).
III. Discussion and Analysis:
In their primary point of error, the Plaintiffs contend that the Court erred is relying on In re Abbot Laboratories rather than H D Tire and Automotive-Hardware, Inc. v. Pitney Bowes Inc. in determining how to allocate attorney fees for purposes of calculating the amount in controversy. Specifically, the Plaintiffs argue that it is legally impossible that any of their claims will exceed the jurisdictional limit of $75,000 because each Plaintiff can only recover the purchase price of the drug. Thus, the Plaintiffs argue that the maximum compensatory damages recoverable by any one Plaintiff is $3,600. However, even if attorney fees are added to that sum for removal purpose, the Plaintiffs argue that those attorney fees cannot be allocated to the named Plaintiffs only. Rather, the Plaintiffs argue that the any attorney fees included in the calculation of the amount in controversy for removal purposes must be spread out among the individual members of the class, not merely among the representative parties.
In support of the argument that attorney fees must be allocated among the entire class rather than just the named class representatives, the Plaintiffs cite H D Tire and Automotive-Hardware, Inc. v. Pitney Bowes Inc., 227 F.3d 326 (5th Cir. 2000), a case in which the Court of Appeals for the Fifth Circuit addressed whether attorney fees could be attributed solely to named plaintiffs to determine the amount in controversy in a class action suit brought under the Connecticut Unfair Trade Practices Act. See H D Tire, 227 F.3d 326, 330 (5th Cir. 2000). The Plaintiffs argue that this Court "either misunderstood or misapplied the reasoning set forth in the H D Tire decision." (Plaintiffs' Supplemental Memorandum in support of its Motion for Reconsideration, Doc. 18, page 1). They specifically contend that H D Tire mandates that the attorney fees in question in this case be attributed to the class as a whole for purposes of determining the amount in controversy. When such is done in the present case, the Plaintiffs argue that the jurisdictional limit is not met.
While the Plaintiffs' position is correct for cases involving the Connecticut Unfair Trade Practices Act, the Fifth Circuit specifically distinguished the situation in H D Tire from that in In re Abbot Laboratories, 51 F.3d 524 (5th Cir. 1995), in which the Fifth Circuit clearly rejected the contention that attorney fees must be distributed among the entire class in cases brought under Louisiana law. See In re Abbot Laboratories, 51 F.3d 524, 526 (5th Cir. 1995). The court in H D Tire specifically cited Abbot for the proposition that in Louisiana when "the statute awards attorneys' fees to the named plaintiffs in a class action, the fees are attributed solely to the class representatives." H D Tire, 227 F.3d at 330. That is exactly what this Court did in its Order of December 7, 2000. While the distinction between the rides in H D Tire and In re Abbot Labs is subtle, in Edwards v. Chrysler Motor Company, Inc., 2000 WL 1532906, at * 3 (E.D.L.A Oct. 13, 2000), Judge Sear explained this distinction in the following manner:
The Fifth Circuit recently held that attorney fees could not be attributed solely to the named plaintiffs to determine jurisdictional amount in controversy in connection with the interpretation of a Connecticut law, but distinguished the case from Abbot on the basis that a Louisiana statute (La. CCP 595) specifically provides that the attorney fees are to be awarded to the "representative party."Edwards, 2000 WL 1532906, at *3, fn. 7 (quoting H D Tire, 2000 WL 1285265 (5th Cir. Sept. 27, 2000)).
This Court agrees with Judge Sear's interpretation of H D Tire and, therefore, finds that it neither misunderstood nor misapplied controlling law in its Order of December 7, 2000. This Court did not err in determining that the statutory attorney fees recoverable by the Plaintiffs must be allocated among only the representative parties for purposes of determining the amount in controversy. In H D Tire, the Fifth Circuit made it a point to distinguish the case before the court from Abbot; accordingly, Abbot is still controlling law in this jurisdiction, and there is nothing in H D Tire that warrants this Court to alter or amend its Order of December 7, 2000. Under Louisiana law, attorney fees must be allocated among only the representative parties for purposes of calculating the amount in controversy.
The Plaintiffs further claim that the Court erred in finding that Article 2545 applied in the present case. The Plaintiffs argue that they are asserting their claims under Article 2531, which does not provide for the award of attorney fees in addition to actual damages. If such is the case, then the amount in controversy could not reach the jurisdictional amount. The Plaintiffs assert that their "carefully crafted petition . . . specifically denied that damages were sought under La. C.C. 2545." (Plaintiffs' Memorandum in support of its Motion for Reconsideration, Doc. 15, page 2). Therefore, the Plaintiffs claim that the Court clearly erred by concluding that Article 2545 applies in the case at hand.
Article 2531 states that "[a] seller who did not know the thing he sold had a defect is only bound to repair, remedy, or correct the defect." La. CC. art. 2531. If the seller is unable to do so, he must return the purchase price to the buyer, with interest, as well as reimburse the buyer any reasonable expenses occasioned by the sale. See id. According to plain language of the statute, Article 2531 applies only to sellers who do not have knowledge of the alleged defect. While the Plaintiffs argue that their claims clearly fall within the bounds of Article 2531, their Petition specifically states that "[t]he Defendants knew of the defect, yet marketed and sold the drug to these individuals failing to declare its known vices." (Plaintiffs' Amending Petition, page 1, paragraph 2). The fact that they expressly allege knowledge on the part of the Defendants clearly precludes their claim from falling under Article 2531.
The Defendant, Warner-Lambert Company ("Warner-Lambert") argues that Article 2545 applies in situations in which a seller is alleged to have knowledge of a defect in a product at the time of sale. (See Defendant's Memorandum in Opposition to Plaintiffs' Motion for Reconsideration, Doc. 19, page 4). Article 2545 states that "[a] seller is deemed to know that the thing he sells has a redhibitory defect when he is a manufacturer of that thing." La. C.C. art. 2545. The Defendant contends that the Plaintiffs claims clearly fall under Article 2545 because they are brought against the manufacturer of the allegedly defective product. Therefore, the Court did not err in finding that Article 2545 applied in the present action.
In looking at what the Plaintiffs call their "carefully crafted petition," the Court specifically finds two paragraphs significant. First, paragraph 37 of the Plaintiffs' Petition states: "As the manufacturer of Rezulin, the defendants are presumed to know of the defects of its product as set forth hereinabove." (Plaintiffs' Petition, page 13, paragraph 37). As stated above, Article 2545 specifically applies to manufacturers of allegedly defective products and those other sellers who had knowledge of the alleged defect complained of in the Petition. In contrast, Article 2531 only applies to sellers who have no knowledge of the alleged product defect. See La. C.C. art. 2531. To put this difference in simplest terms, "[s]ince a manufacturer is presumed to know the vices of the thing he sells, he can never be in good faith [and Article 2531 will not apply] if a defect in fact exists." Associates Fin. Servs. Co., Inc. v. Ryan, 382 So.2d 215, 220 (La.Ct.App. 3d Cir. 1980). In the present case, not only are the Defendant-manufacturers presumed under law to have knowledge of the alleged defect, but the Plaintiffs specifically state as much in their Petition. Accordingly, the Plaintiffs' redhibitory defect claims clearly fall within the bounds of Article 2545, and this Court did not err in finding that Article 2545 governed the above-captioned matter.
The Court notes that in their Petition, the Plaintiffs do not ever specifically cite either Article 2351 or Article 2545 as being the code section under which their claims arise. However, the allegations contained in the Petition clearly show that Article 2545 applies in the present action because those allegations involve knowledge of the defect, deceit, fraud, and other acts of "bad faith" on the part of the Defendants.
Second, the Court finds paragraph 4a of the Plaintiffs' Amending Petition significant. The Plaintiffs claim that they specifically denied that damages were sought under Article 2545. However, paragraph 4a of the Amending Petition merely states that "Plaintiffs are not seeking attorneys' fees under Louisiana Civil Code article 2545 . . . ." (Plaintiffs' Amending Petition, page 2, paragraph 4a). While the Plaintiffs may have intended to waive all claims arising under Article 2545 by including this paragraph in their Petition, the only thing that this paragraph actually attempts to waive is the right to recover mandatory attorney fees under article 2545. Paragraph 4a does not contain language waiving all claims arising under Article 2545. Furthermore, the Plaintiffs' Petition is filled with allegations of fraud, deceit, and "bad faith" on the part of the Defendants. Such claims clearly arise under Article 2545, not Article 2531. The attempted waiver contained in Paragraph 4a of the Amending Petition is ineffective to waive all claims arising under Article 2545. Accordingly, this Court did not err in concluding that Article 2545 governed the above-captioned matter.
The Plaintiffs additionally argue that this Court erred in finding that the attempted wavier of attorney fees under Article 2545 was invalid. This Court, after careful consideration, determined that the Plaintiffs' attempted waiver of the right to attorney fees under Article 2545 was ineffective because there was no evidence in the record to demonstrate that the representative parties obtained the requisite authority from each putative class member to waive such a right. (Order and Reasons, December 7, 2000, page 9). In addition, the Court found that such a waiver was not in the best interest of the class as a whole. See id. Finally, this Court, citing DeAguilar v. Boeing Co., 47 F.3d 1404, 1410 (5th Cir. 1995), ruled that such a waiver was merely an attempt on the Plaintiffs' part to evade federal jurisdiction.
With respect to the Plaintiffs' arguments set forth above, this Court notes that this case has not yet been certified as a class action lawsuit, nor have the Plaintiffs' attorneys been approved as class counsel in this matter. Both of these considerations support this Court's decision that the representative parties could not waive the statutory right to attorney fees on behalf of the class as a whole. Furthermore, while the Plaintiffs argue that DeAguilar should not apply in this case because DeAguilar did not involve a class action lawsuit, they fail to cite any law or proffer any reason as to why the rationale of the Fifth Circuit in DeAguilar should not apply in the class action context.
Additionally, the Plaintiffs argue that the Court overstepped its bounds by finding that the waiver of attorney fees under Article 2545 was not within the best interest of the class as a whole. Specifically, the Plaintiffs assert that "the issue of what is in the best interest of a person should never be addressed by this court . . . ." (Plaintiffs' Memorandum in Support of Motion for Reconsideration, Doc. 15, page 6). Yet, it is important to note that this Court "has a special role in assuring that the representative plaintiffs fulfill their fiduciary obligation toward members of the putative class." Gassie v. Smith, No. Civ. 97-1786, 1997 WL 466905, *2 (E.D.L.A. Aug. 1, 1997). This duty includes assuring that the actions taken by the representative parties are in the best interest of the class as a whole. Therefore, the Court is unpersuaded by the Plaintiffs' arguments.
The Court points out that in a class action lawsuit in which the representative parties attempted to waive punitive damages on behalf of the class as a whole, the district court involved found the purported waiver to be "wholly specious." Chiartas v. Bavarian Motor Works, AG, 106 F. Supp.2d 872, 874 (S.D.W.Va. 2000). That court further noted that before class counsel can stipulate on behalf of the class as a whole, there must be an Order granting class certification and appointing class counsel. See id. at 874 n. 3.
Finally, the Court notes that with regard to the attempted waiver of attorney fees under Article 2545, the Plaintiffs fail to assert any other new arguments in support of their position. In the Order and Reasons of December 7, 2000, this Court fully considered the relative arguments of the Plaintiffs and the Defendants with regard to the Plaintiffs' attempted waiver contained in their Amending Petition and thoroughly explained its bases for finding that waiver invalid. Consequently, this Court declines to re-litigate the issue at this time.
IV. Conclusion:
In conclusion, for the reasons stated above, this Court finds that none of the Plaintiffs' arguments fall within any of the circumstances set forth above that justify reconsideration. They have failed to show any changes in the factual circumstances or controlling law to support the notion that this Court's Order of December 7, 2000 was erroneous. Furthermore, the Plaintiffs have failed to prove that this Court's prior Order contained a clear error of law warranting reconsideration. Finally, the Plaintiffs failed to show that a failure to reconsider the Order of December 7, 2000, would work an injustice upon the parties. Accordingly,
IT IS ORDERED that the Plaintiffs' Motion for Reconsideration (Doe. 15) be, and the same is hereby DENIED.