Veritext Corp. v. Bonin

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

VERITEXT CORP., ET AL. CIVIL ACTION

VERSUS NO. 16-13903

C/W 17-9877

REF: ALL CASES

PAUL A. BONIN, ET AL. SECTION “B”(2)

ORDER AND REASONS

Before the Court are defendants’ Motion for Reconsideration

of this Court’s Order and Reasons [Rec. Docs. 237, 238] (Rec.

Doc. 240), plaintiffs’ Response in Opposition (Rec. Doc. 242),

and defendants’ Reply in Further Support of Motion for

Reconsideration (Rec. Doc. 246).

For the reasons discussed below,

IT IS ORDERED that defendants’ Motion for Reconsideration

(Rec. Doc. 240) is DENIED.

I. FACTS AND PROCEDURAL HISTORY

On February 25, 2019, this Court consolidated plaintiff

Esquire Deposition Solutions, LLC (“Esquire”) and plaintiff

Veritext Corporation’s actions against defendants John J. Lee,

Jr.,1 Vincent P. Borrello, Jr., Milton Donegan, Jr., Suzette Magee,

Kimya M. Holmes, John H. Anderssen, May F. Dunn, Elizabeth C.

Methvin, and Laura Putnam. See Rec. Doc. 91. Veritext and Esquire

1 On January 11, 2019, the Court granted plaintiffs’ motion to substitute John

J. Lee, Jr., in his official capacity as a member of the Louisiana Board of

Examiners of Certified Shorthand Reporters, for Paul A. Bonin. Rec. Doc. 89.

are both Delaware corporations providing court-reporting services

to clients across the United States, including in Louisiana. Rec.

Docs. 1 at 5, 117 at 5. Both companies also utilize court reporting

services in Louisiana. Id. Plaintiffs provide negotiated rates and

discounts for court reporting services to frequent customers who

agree to utilize plaintiffs’ services for all or some of their

court reporting needs. Rec. Doc. 117 at 8.

Defendants are current and former members of the Louisiana

Board of Examiners of Certified Shorthand Reporters (“Board”),

which is a regulatory body created “for the purpose of encouraging

proficiency in the practice of shorthand reporting as a profession,

promoting efficiency in court and general reporting, and . . .

establishing a standard of competency for those persons engaged in

it.” LA. STAT. ANN. § 37:2551(A) (2021). The Board is authorized to

enforce Louisiana Code of Civil Procedure Article 1434, the

provision under scrutiny in this matter, which prohibits

a person who has a contractual relationship with a party

litigant to provide shorthand reporting or other court

reporting services . . . [or] a person employed part or

full time under contract or otherwise by a person who

has a contractual relationship with a party litigant to

provide shorthand reporting or other court reporting

services.

LA. CODE CIV. PROC. ANN. art. 1434(A)(2) (2021); see also Rec. Doc.

117 at 6, 17.

In 2012, the Board began enforcing Article 1434 against all

court reporters who entered into volume-based discount contracts

with party litigants. Id. at 13. Plaintiffs consequently brought

Constitutional claims under the dormant Commerce Clause and the

Fourteenth Amendment, as well as a claim under Section 1 of the

Sherman Act, 15 U.S.C. § 1. Rec. Docs. 1, 4. The Court dismissed

plaintiffs’ constitutional challenges, and subsequently dismissed

the Sherman Act claim on reconsideration. Veritext Corp. v. Bonin,

259 F. Supp. 3d 484 (E.D. La. 2017), on reconsideration, 2017 WL

3279464 (E.D. La. Aug. 2, 2017). On appeal, the Fifth Circuit

confirmed the dismissal of Veritext’s Constitutional claims but

reversed the dismissal of its Sherman Act claim because it found

that “Veritext pled facts sufficient to support a finding that the

Board’s conduct does indeed restrain trade.” Veritext Corp. v.

Bonin, 901 F.3d 287, 292 (5th Cir. 2018). Additionally, the Court

held that the Board members were not entitled to Parker immunity

because the active supervision requirement of that doctrine was

“not met.” Id.; see also Parker v. Brown, 317 U.S. 341, 351 (1943).

Plaintiffs then filed a motion for partial summary judgment

on the affirmative defenses of unclean hands, in pari delicto,

indemnification, contribution, and allocation of fault. Rec.

Docs. 229, 231, 234. The Court granted summary judgment for the

affirmative defenses of unclean hands and allocation of fault

and dismissed as moot the affirmative defenses of in pari

delicto, indemnification, and contribution. Rec. Docs. 237, 238.

Defendants next filed this instant motion for reconsideration of

plaintiffs’ motion for summary judgment. Rec. Docs. 240, 242,

246.2

II. LAW AND ANALYSIS

A. Motion for Reconsideration Standard

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) (quoting

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 & Arthur Miller, Federal Practice and Procedure

§ 4478.1 (2d ed. 2002)). “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).

2 Shortly after their motion for reconsideration, defendants filed a motion to

dismiss for lack of subject matter jurisdiction. Rec. Docs. 247, 250, 253.

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.” Atchafalaya 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. 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.” 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. “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., No. 13-4992, 2014 WL 5324987, at *1 (E.D.

La. Oct. 17, 2014).

B. The Court’s Ruling on the Clean Hands Doctrine

Defendants argue that reconsideration of this Court’s ruling

on plaintiffs’ motion for partial summary judgment (Rec. Docs.

237, 238) “is warranted to correct manifest error of law.” Rec.

Doc. 246 at 2. Defendants, however, fail to demonstrate any

manifest error. In its Reasons at record document 238, this Court

states:

[C]ase law analyzing the Clean Hands Doctrine in

antitrust cases, supra, scrutinized plaintiffs that also

violated antitrust laws—not state statutes as the

defendants allege in the current matter. Reason dictates

that if this court finds that the statute in question

violates the Sherman Act, the plaintiffs would not be

coming to court with “unclean hands” for any violations

of that statute. Therefore, defendants may not assert

the Clean Hands Doctrine to bar plaintiffs from seeking

injunctive relief or to limit the quantum of damages.

Rec. Doc. 238 at 13. Defendants contend that in this excerpt, the

Court incorrectly suggests Article 1434, the Louisiana statute at

issue in this case, can violate the Sherman Act. Rec. Doc. 240-1

at 3-4. According to defendants, this Court cannot find Article

1434 violates the Sherman Act and plaintiffs do not even assert

this violation. Id. Defendants claims, nevertheless, are

unavailing. In making this argument, defendants, merely seek to

relitigate issues already decided by this Court and by the Fifth

Circuit.

First, it is clear from this Court’s Reasons at record

document 238, that when the Court says “if this court finds that

the statute in question violates the Sherman Act,” the Court refers

to plaintiffs’ allegation that the Board members’ enforcement of

Article 1434 violates the Sherman Act. See Rec. Doc. 117 at 21-

22. Thus, the Court does not suggest “plaintiffs have . . .

requested that this Court find . . . article 1434 violates the

Sherman Act,” the court merely refers to plaintiffs’ asserted

claim. Rec. Doc. 240-1 at 1; see also Rec. Doc. 117 at 21-22.

Second, even if the Court misstated plaintiffs’ allegation,

this sentence fragment is not central to the Court’s ruling on

whether defendants may assert the Clean Hands Doctrine as an

affirmative defense. The Court clearly states that “case law

analyzing the Clean Hands Doctrine in antitrust cases, supra,

scrutinized plaintiffs that also violated antitrust laws—not state

statutes.” Rec. Doc. 238 at 13. Here, defendants allege plaintiffs

violated Article 1434, not antitrust laws. Consequently,

defendants may not assert the Clean Hands Doctrine because case

law dictates as so, not because the Court has made any mistake.

See Rec. Doc. 238 at 12-13. There is no manifest error of law here.

Instead, defendants’ true objective appears to be recasting

a previously decided issue as an error of law in need of

reconsideration. Throughout defendants’ briefing, they repeatedly

state Article 1434 is exempt from the Sherman Act as a matter of

law. See Rec. Docs. 240 at 2, 240-1 at 1, 4, 246 at 3-4. Defendants’

reasoning, however, mainly rests on cherry picked quotations from

case law. See, e.g., Rec. Doc. 240-1 at 4. Even just a cursory

look at defendants’ citations shows that when defendants claim

“state legislation . . . ipso facto is exempt from operation of

the antitrust laws,” they draw from the doctrine of state action

or Parker immunity. But the Fifth Circuit already ruled that the

Board is not privy to Parker immunity and that plaintiffs “pled

facts sufficient to support a finding that the Board’s conduct

does indeed restrain trade.” Veritext Corp. v. Bonin, 901 F.3d

287, 292 (5th Cir. 2018). The Court will not allow defendants to

continue to dress the same argument up in different clothes. See

Rec. Doc. 235 at 10, 12-13. A motion for reconsideration is not

the proper vehicle for “a mere disagreement with a prior order.”

Ferraro, 2014 WL 5324987, at *1.

Defendants next argument is also unconvincing. In the Reasons

at record document 238, this Court states:

Defendants accuse plaintiffs of not citing a single case

where private parties . . . sought to enjoin an arm of

the state . . . implicat[ing] significant policy

considerations,” and plaintiffs’ unclean hands render

summary judgment inappropriate. Id. at 8. Likewise,

defendants fail to cite a single case or address any

public policy considerations.

Rec. Doc. 238 at 9. Defendants claim the Court errs in this

excerpt’s second sentence. See Rec. Doc. 240-1 at 6. Defendants

assert that “[t]he public policy considerations underlying Article

1434 have already been recognized as legitimate state interests by

this Court and the Fifth Circuit,” and thus, defendants did not

fail to address public policy considerations. Id. at 7. While

courts have recognized the public policy considerations underlying

Article 1434, the Court still finds no manifest error of law in

its previous statement. See Rec. Doc. 238 at 9.

In defendants’ opposition to plaintiffs’ motion for partial

summary judgment, they state:

It is important to note that Plaintiffs have not cited

a single case where private parties (like Plaintiffs)

sought to enjoin an arm of the state (like the Board)

from enforcing a constitutional state statute (like

Article 1434). The circumstances presented here –

seeking to enjoin state actors from enforcing a

constitutional state law – implicate significant public

policy considerations that Plaintiffs fail to address.

Rec. Doc. 231 at 8. Notably, there is no citation after this

excerpt, as this Court’s prior Reasons asserts, and defendants do

not delve into any public policy considerations. See Rec. Doc. 238

at 9. It is irrelevant whether the Court has previously

acknowledged that Article 1434 promotes legitimate state

interests. Defendants did not describe any public policy

considerations here, and thus, this Court did not err in stating

that “defendants fail to cite a single case or address any public

policy considerations.” See Rec. Doc. 238 at 9.

C. Request for Clarification

In their motion for reconsideration, defendants also seek

clarification as to whether they may “present evidence and argument

at trial regarding violations of Article 1434 if such evidence and

argument relate to causation, damages, or the merits of Plaintiffs’

case.” Rec. Doc. 240-1 at 8. Plaintiffs’ motion for partial summary

judgment sought, in part, to bar defendants from asserting a Clean

Hands Doctrine defense to plaintiffs’ damages and injunctive

relief claims. In the Court’s Order at record document 238, this

Court ruled “defendants may not assert the Clean Hands Doctrine to

bar plaintiffs from seeking injunctive relief or to limit the

quantum of damages.” Rec. Doc. 238 at 13.

Accordingly, whether defendants may present evidence and

argument at trial regarding violations of Article 1434 was not a

question before this Court in plaintiffs’ motion for partial

summary judgment. Rec. Doc. 229-4 at 5. See Perma Life Mufflers v.

Int’l Parts Corp., 392 U.S. 134, 140 (1968) (distinguishing between

permitting evidence of plaintiff’s potential wrongdoing for the

purpose of computing damages and allowing a party to assert an

equitable defense); Kiefer-Stewart Co. v. Joseph E. Seagram & Sons,

Inc., 340 U.S. 211, 214 (1951) (finding that petitioners can “be

held responsible” for any potential wrongdoing, but petitioner’s

potential illegal conduct does not permit respondents an absolute

defense); Pearl Brewing Co. v. Jos. Schlitz Brewing Co., 415 F.

Supp. 1122, 1131 (S.D. Tex. 1976) (distinguishing between

defendant’s ability to claim an absolute defense and defendant’s

ability to introduce evidence of plaintiff’s alleged illegal

conduct). The Court ruled that defendants cannot use the Clean

Hands Doctrine as an absolute defense, but did not address whether

defendants will separately be permitted to present evidence

relating to plaintiffs’ alleged violations of Article 1434. As the

latter question was not before the Court in plaintiffs’ motion for

partial summary judgment, it need not be answered now in this

instant motion for reconsideration.

New Orleans, Louisiana this 21st day of October, 2021

___________________________________

SENIOR UNITED STATES DISTRICT JUDGE