Veritext Corp. v. Bonin

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

VERITEXT CORP. CIVIL ACTION

VERSUS NO. 16-13903 C/W

17-9877

REFERS TO: 17-9877

PAUL A. BONIN, ET AL. SECTION: “B”(2)

ORDER

Before the Court are, plaintiff Esquire Deposition Solutions’

“Plaintiff Esquire Deposition Solutions’ Motion for Reconsideration

or, Alternatively, to Amend or Alter Judgment” (Rec. Doc. 145);

defendant Louisiana Court Reporters Association’s (“LCRA”)

“Defendant Louisiana Court Reporters Association’s Memorandum in

Opposition to Plaintiff Esquire Deposition Solutions’ Motion for

Reconsideration or, Alternatively, To Amend or Alter Judgment” (Rec.

Doc. 151); and defendant CSR Board’s “Memorandum in Opposition to

Esquire Deposition Solutions, LLC’s Motion for Reconsideration or,

Alternatively, to Amend or Alter Judgment” (Rec. Doc. 155).

For below assigned reasons,

IT IS ORDERED that plaintiff Esquire’s motion for

reconsideration or amendment is DENIED.

Based on extensive filings in this matter, the factual basis

here incorporates the factual findings from the prior dismissal order

at issue. See Rec. Doc. 137 at 2-4. That order involved Esquire’s

Sherman Act and constitutional law vagueness claims against

defendant LCRA, and Esquire’s constitutional law vagueness claims

against defendant Louisiana Board of Examiners of Certified

Shorthand Court Reporters (“CSR Board”).

Esquire contends the allegations in their complaint (Rec. Doc.

1) established that the LCRA sanctioned and promoted a price fixing

conspiracy “separate and apart from its lobbying of the [CSR Board].”

Id. at 1. Esquire further contends that regardless of whether the

allegations were sufficient standing alone, defendant LCRA produced

meeting minutes on September 30, 2019 from defendant LCRA’s annual

board and executive meeting, which purportedly reveal: (1) LCRA

“adopted a policy against contracting”; (2) “solicited insurance

companies and law firms to boycott national court reporting firms”;

and (3) “contacted a national association of court reporters in 2018

to solicit its support against the LCRA’s contracting stance and was

told that such conduct is unlawful.” (Exhibit 3 to Rec. Doc. 145)

Esquire asserts that this court failed to take into

consideration “detail (sic) factual allegations” concerning whether

LCRA member’s actions were undertaken in an individual capacity or

on behalf of the association. It refers to allegations in paragraphs

19 and 20 of their complaint, which identify “key figures (Messrs.

Borello and Gilberti) who are senior officers and directors of the

LCRA.” Id. Plaintiff also contends that evidence recently produced

by LCRA confirms that individuals within LCRA were not acting in

their individual capacities but on behalf of the association.

Esquire further argues that meeting minutes from LCRA’s

Executive Board meeting in 2018 revealed that the President of LCRA

called her counterpart at the National Court Reporters Association

(“NCRA”) “‘to discuss NCRA’s stance on anti-contracting.’” (quoting

Exhibit 4, p. 3, Rec. Doc. 145). In further support of this

contention, it further states that the NCRA president stated that

“Legal Counsel can’t link ethics to stop companies from engaging in

business practices.” Id.

Defendant LCRA and the CSR Board oppose plaintiff’s motion for

reconsideration. (Rec. Docs. 151 & 155).1 Defendants point out that

the court’s prior findings should not be disturbed because: (1) the

court “expressly acknowledged that certain LCRA members served in

senior capacities at the LCRA”; and (2) “the purported ‘newly

discovered evidence’ advanced by Esquire does not change the outcome

of the case and is merely cumulative in nature.” Rec. Doc. 151 at 1.

Defendants contend that Esquire is unable to make the requisite

showing to alter its judgment under FRCP 59(e). First, defendants

argue that the subject ruling contains no manifest error of fact or

law, as the court took into consideration the positions held by

certain members of LCRA. Id. at 3. Defendants also aver that the

caselaw cited by plaintiff to support their contention that an

association or organization can be held liable for the actions of

1 Defendant CSR Board adopts defendant LCRA’s arguments made in Rec. Doc. 151 as

their own. See Rec. Doc. 155 at 1-2.

its members is misplaced. Id. at 4. Specifically, defendants note

that the cases cited are those in which an organization or

association unilaterally enacted anticompetitive legislation, and in

this case defendant LCRA shows it did not engage in any such

unilateral action. Id.

Esquire’s assertion that defendants failed to produce a

memorandum from their records is incorrect. Defendants show that in

their “Supplemental Discovery Responses dated October 16, 2019”

defendant LCRA produced the memorandum in a PDF file format.

Specifically, defendants state that in the 2013 LCRA annual

meeting minutes, a member of the LCRA (Mr. Borello) “suggested that

the LCRA take the position that it “has been against contracting and

will remain against it.” (citing Rec. Doc. 145-3 at 2). Absent from

the minutes is (1) any indication that a motion was made; (2) a vote

taken; or (3) any action taken, regarding defendant LCRA’s stance on

contracting. Further, defendant notes that the law firm letters that

were then sent out contained: (1) Louisiana Code of Civil Procedure

Article 1434; (2) the statute’s historical background; and (3) the

CSR Board’s interpretation of said statute, and “hardly constitute

‘private enforcement efforts’.” The letters merely informed local

law firms of the existence of the code article in question.

I. LAW AND ANALYSIS

Federal Rule of Civil Procedure 54(b) provides the district

court with “the inherent procedural power to reconsider, rescind, or

modify an interlocutory order for cause seen by it to be sufficient.”

Castrillo v. Am. Home Mortg. Servicing, Inc., No. 09-4369, 2010 WL

1424398, at *3 (E.D. La. Apr. 5, 2010) (citing Melancon v. Texaco,

Inc., 659 F. 2d 551, 553 (5th Cir. 1981). The district court’s

discretion is broad when determining whether a motion for

reconsideration has merit; however, “it is exercised sparingly in

order to forestall the perpetual reexamination of orders and the

resulting burdens and delays.” Id. (citing 18b Charles A. Wright et

al., Fed. Prac. & Proc. § 4478.1 (2d ed.). “The general practice of

courts in the Eastern District of Louisiana has been to evaluate

Rule 54(b) motions to reconsider interlocutory orders under the same

standards that govern Rule 59(e) motions to alter or amend a final

judgment.” Hoffman v. Bailey, No. 13-5153, 2015 WL 9315785, at *7

(E.D. La. Dec. 23, 2015).

A Rule 59(e) motion calls into question the correctness of a

judgment. In re Transtexas Gas Corp., 303 F.3d 571, 581 (5th Cir.

2002). Rule 59(e) serves “the narrow purpose of allowing a party to

correct manifest errors of law or fact or to present newly discovered

evidence.” Basinkeeper v. Bostick, 663 F. App'x 291, 294 (5th Cir.

2016) (quoting Waltman v. Int'l Paper Co., 875 F.2d 468, 473 (5th

Cir. 1989)). Amending a judgment is appropriate under Rule 59(e):

“(1) where there has been an intervening change in the controlling

law; (2) where the movant presents newly discovered evidence that

was previously unavailable; or (3) to correct a manifest error of

law or fact.” Berezowsky v. Rendon Ojeda, 652 F. App'x 249, 251 (5th

Cir. 2016) (quoting Demahy v. Schwarz Pharma, Inc., 702 F.3d 177,

182 (5th Cir. 2012)). Because Rule 59(e) has a “narrow purpose,” the

Fifth Circuit has “observed that [r]econsideration of a judgment

after its entry is an extraordinary remedy that should be used

sparingly.” Id. (quoting Templet v. HydroChem Inc., 367 F.3d 473,

479 (5th Cir. 2004)). Thus, “a motion for reconsideration is not the

proper vehicle for rehashing evidence, legal theories, or arguments

that could have been offered or raised before the entry of judgment.”

Id. (quoting Templet, 367 F.3d at 479). “When there exists no

independent reason for reconsideration other than mere disagreement

with a prior order, reconsideration is a waste of judicial time and

resources and should not be granted.” Ferraro v. Liberty Mut. Ins.

Co., Case No. 13-4992, 2014 U.S. Dist. LEXIS 148294 at*2-3 (E.D. La.

Oct. 17, 2014).

Reconsideration of the prior dismissal order is not proper.

Plaintiff Esquire contends the order erred by not taking into

consideration factual allegations which plaintiff purports

distinguish their case from one that seeks to hold an association

liable for member conduct that takes place independently of the

association. See Rec. Doc. 145-1. In support of this contention,

plaintiff reiterates that the particular members complained of are

“not ordinary association members” but rather “members of the board

of directors and senior officers.” Rec. Doc. 145-1 at 4. However,

the ruling at issue did take note of roles that individual members

played within their association. For instance, the ruling observed

that Peter Gilberti was a “member of the LCRA Board and the

association’s current Treasurer and Registered Agent.” Rec. Doc. 137

at 10.

Esquire further contends that the “key figures” were active

market participants and that they engaged in anticompetitive conduct

separate and apart from their lobbying of the CSR Board. Rec. Doc.

145-1 at 5. Plaintiff also contends that the ruling ignored “a public

admission of price fixing by Peter Gilberti, a spokesperson, officer,

director, and registered agent for LCRA.”2 Id. (Citing Rec. Doc. 1

at ¶ 52). However, after reviewing plaintiffs’ cited materials, it

is evident that Mr. Gilberti did not make that statement at the CSR

Board meeting.

Esquire also cites us to paragraph 52 of its complaint, which

in turn cites to “Ex. 1 at 201:19-202:2.” See Rec. Docs. 145-1 at 5;

1 at ¶ 52. “Ex. 1” is a transcript of a CSR Board meeting that took

place on January 20, 2012. See Rec. Doc. 1-1. The statement

plaintiffs attribute to Mr. Gilberti is actually located in the

transcript of a separate CSR Board Meeting, which took place on April

29, 2013. See Rec. Doc. 1-3, Exhibit 3 to Complaint, 201:19-202:2.

2 Esquire quotes Peter Gilberti as stating: “our reporters [referring to LCRA]

are upset that we had to give up a lot of this work, and they’re not engaging in

contracting anymore, but we know that a lot of reporters are, so who is policing

this.”

In the CSR Board’s April 29, 2013 meeting, Mr. Gilberti did not use

the quoted language that plaintiffs attributed to him in plaintiffs’

Motion for Reconsideration (Rec. Doc. 145-1). In fact, the quoted

statement was given by a “Ms. Landrieu”. Rec. Doc. 1-5 at 201:2. It

is not alleged in the complaint whether “Ms. Landrieu” is: (1) a

member of the LCRA; (2) a past or current director or officer of the

LCRA; or (3) affiliated with in any way with the LCRA. See Rec. Doc.

1. In fact, the complaint does not mention a Ms. Landrieu. Id.

Therefore, the incorrect attribution here to “Peter Gilberti”, is

devoid of meaning or impact on the subject ruling. The record has no

reference on who “Ms. Landrieu” is or in what capacity she allegedly

spoke. In sum, the prior ruling did not disregard the noted factual

allegations pertaining to LCRA’s conduct, as incorrectly alleged by

Esquire.

Esquire further alleges that “evidence only recently produced”

by defendant LCRA confirms that the LCRA adopted a policy against

contracting, engaged in “private enforcement activities” to

discourage insurance companies and law firms from engaging with

national court reporting firms, and that the LCRA previously

contacted the NCRA to solicit its support against contracting. Rec.

Doc. 145-1 (citing Rec. Doc. 145-1, Exhibits 1-4). Esquire argues

Noerr-Pennington immunity is not applicable because newly produced

LCRA meeting minutes establish that LCRA had established its own

anti-contracting policy, separate and apart from LCRA’s lobbying

efforts to the CSR Board. Id. at 6.

In National Society of Professional Engineers v. United States

(“NSPE”), 435 U.S. 679 (1978), the United States brought a civil

action against the National Society of Professional Engineers’ (“The

Society”) to “nullify” the Society’s Code of Ethics, which prohibited

competitive bidding by its members. NSPE, 421 U.S. at 681. The issue

in the NSPE was “whether the [ethical] canon [was] justified under

the Sherman Act . . ., because it was adopted by members of a learned

profession for the purpose of minimizing the risk that competition

would produce inferior engineering work endangering the public

safety.” Id. The Supreme Court affirmed the Appellate Court’s

judgment that held the Society was “prohibit[ed] . . . from adopting

any official opinion, policy statement, or guideline stating or

implying that competitive bidding is unethical.” NSPE, 421 U.S. at

696-97.

In Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975), the

issue was “whether a minimum-fee schedule for lawyers published by

the Fairfax County Bar Association and enforced by the Virginia State

Bar violate[d] § 1 of the Sherman Act . . . ” Goldfarb, 421 U.S. at

775. The United States Supreme Court held that neither the County

nor the State Bar were exempt from the requirements imposed by the

Sherman Act. Id. at 791-792. The Court noted that while the State

Bar did not officially take any formal disciplinary action against

those who violated the restrictive fee schedule, or create said

schedule, it “published reports condoning fee schedules, and . . .

issued two ethical opinions indicating that fee schedules cannot be

ignored.” Id. at 776-777.

In Silver v. N.Y. Stock Exchange, 373 U.S. 341 (1963), the

United States Supreme Court held that a rule adopted by the New York

Stock Exchange was violative of the Sherman Antitrust Act. Silver,

373 U.S. at 364 (“Our decision today recognizes that the action there

taken by the Exchange would clearly be in violation of the Sherman

Act . . .”).

While Esquire correctly shows that the associations in the above

cited cases were liable for the actions of their members, it fails

to recognize a key difference in the issue at present: LCRA did not

create the complained of statute that resulted in the alleged

restriction on trade or competition, the Louisiana Legislature

enacted Louisiana Code of Civil Procedure Article 1434.

In NSPE, Goldfarb, and Silver the associations that were held

liable enacted a code of ethics, a fee schedule, and a rule,

respectively. See NSPE, 421 U.S. at 697 (Association’s Ethical cannon

“was adopted by members of learned profession for the purpose of

minimizing the risk that competition would produce inferior

engineering work endangering public safety.”)(emphasis added); see

also Goldfarb, 421 U.S. at 775 (“We granted certiorari to decide

whether a minimum fee schedule for lawyers published by the Fairfax

County Bar Association and enforced by the Virginia State Bar

violates [the Sherman Act].”)(emphasis added); see also Silver, 373

U.S. at 364 (“Our decision today recognizes that the action there

taken by the Exchange would clearly be in violation of the Sherman

Act . . .”)(emphasis added)3. Unlike the associations in the above

cited cases, the LCRA did not unilaterally enact allegedly

anticompetitive Article 1434, and it is vague as to whether any

action to adopt the anticompetitive stance of Article 1434 was taken.

Defendant LCRA did issue a memorandum to law firms, stating

that defendant CSR Board had advised defendant LCRA that “if [LCRA

Court Reporters] should do work for a ‘national’ firm, they might be

in violation of La. C.C.P. Art. 1434, for violating the employee

prohibition.” Rec. Doc. 145-5 at 2. The Memorandum further states,

3 Plaintiff further cites N.C. Bd. Of Dental Examiners v. FTC, 717 F.3d 359 (4th

Cir. 2013) for the proposition that the LCRA’s activities constituted prohibited

conduct in restraint of competition. In North Carolina Board of Dental

Examiners, the Board of Dental Examiners (“the Board”), which is a state agency,

sent cease and desist letters to non-dentists who were offering teeth whitening

services to customers. Id. at 365. These letters were sent pursuant to a North

Carolina Statute that forbade non-licensed dentists from practicing dentistry in

the state. See id. at 364-65. The cease and desist letters were issued to at

least 27 non-dentists on official Board of Dental Examiners letterhead and

requested that the targets of such letters “cease and desist ‘all activity

constituting the practice of dentistry.’” Id. at 365. The Board also, “‘on

several occasions, . . . discussed teeth whitening services provided by non-

dentists and then voted to take action to restrict these services.’” Id. at 373

(quoting Final Order, 2011 WL 6229615, at *23)(emphasis added).

The Fourth Circuit held that these actions, coupled with the Board’s

“‘consistent practice of discouraging non-dentist teeth whitening services’

through their cease and desist letters and other efforts,” constituted

prohibited conduct under the Sherman Act. Id. Notably, although there were

discussions amongst members of the LCRA at meetings concerning anti-contracting,

and a memorandum was issued, there is no evidence that a vote was taken to

engage in concerted activities, and upon review, the memorandum does not rise to

the level of a cease and desist letter expressly forbidding law firms from

contracting with national court reporting firms.

“as a professional association, we are respectfully requesting your

cooperation in these most important endeavors, by informing your

insurance company clients that Louisiana Court Reporters are

prohibited from engaging in such practices, as stated above, and

will face disciplinary action resulting in the suspension and/or

revocation of their license.” Rec. Doc. 145-5 at 2-3. This memorandum

does not rise to the level of either formally adopting a code of

ethics or rule by the association, as in NESP and Silver, nor does

it rise to the level of publishing ethical opinions and creating

reports condoning the anti-competitive activity, as in Goldfarb.

This undated memorandum, which was allegedly sent to law firms,

merely quotes the Louisiana legislature’s code article, states a

brief history of said article, and gives LCRA’s interpretation of

the article.

Esquire’s reliance on LCRA’s meeting minutes is also misplaced.

LCRA’s minutes seem to show discussion of anti-contracting were

present; however, discussions alone do not rise to the level of a

formal adoption of an anti-contracting policy. In the Meeting Minutes

dated January 28, 2013, it states “[Defendant] Vincent Borrello

suggested that the LCRA take a position on the contracting issue;

LCRA has been against contracting and will remain against it.” Rec.

Doc. 145-3 at 2. Once again, an individual member, albeit an

immediate past president, made a suggestion about LCRA taking a

stance on contracting. See Rec. Doc. 145-3 at 2. The minutes detail

no motion or vote by the members of the association board. See id.

Further, the sentence immediately following states, “Discussion

ensued regarding that issue and that in 2013 the CSR Board would

start to enforce new rules against contracting.” Id. This is not a

formal adoption by the LCRA against contracting and appears to be a

discussion of what actions the CSR Board, the state regulatory board

for court reporters in Louisiana, were taking concerning enforcement

of a provision of Louisiana law. There is no evidence of a formal

adoption of an anti-contracting stance by the LCRA in this case, and

what evidence there is4, is protected by the Noerr-Pennington

Immunity Doctrine, as noted in this Court’s previous Order and

Reasons (Rec. Doc. 137).

Finally, the 2018 meeting minutes attached to Esquire’s motion

also fail to establish that defendant LCRA had formally adopted an

anti-contracting policy. The Minutes state: “Ms. Kazik had a

telephone conference on April 3, at 1:00 pm with Marcia Ferranto the

CEO of NCRA to discuss NCRA’s stance on anti-contracting . . . Legal

Counsel cannot link ethics to stop companies from engaging in

business practices.” Rec. Doc. 145-6. Once again, this fails to rise

to the level of showing that the LCRA has formally adopted an anti-

contracting policy. What it does show is that there was a discussion

between the president of the LCRA, Eve Kazik, and the president of

4 Statements made by LCRA members at CSR Board meetings.

the NCRA, Marcia Ferranto, about “the NCRA’s stance on anti-

contracting.” Id. (emphasis added). No mention is made in the meeting

minutes of the LCRA’s collective stance on anti-contracting nor of

a vote taken to adopt an anti-contracting stance on the part of the

LCRA. Id.

New Orleans, Louisiana this 9th Day of December 2019

___________________________________

SENIOR UNITED STATES DISTRICT JUDGE