The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
METRO SERVICE GROUP, INC. CIVIL ACTION
VERSUS CASE NO. 21-1136
WASTE CONNECTIONS BAYOU, INC. SECTION: “G”
ORDER AND REASONS
In this litigation, Plaintiff Metro Service Group, Inc., (“Plaintiff”) brings claims against
Defendant Waste Connections Bayou, Inc. (“Defendant”) for breach of contract, wrongful
termination, and unjust enrichment related to a subcontract between the parties for waste removal.1
Defendant brings a counterclaim against Plaintiff to recover attorneys’ fees arising out of these
proceedings.2 Before the Court is Defendant’s “Partial Motion to Dismiss Pursuant to Fed. R. Civ.
Proc. 12(b)(6) for Failure to State a Claim.”3 Considering the motion, the memoranda in support
and in opposition, the record, the parties’ statements at oral argument, and the applicable law, the
Court grants the motion.
I. Background
On May 5, 2021, Plaintiff filed a “Petition for Breach of Contract and for Damages” against
Defendant in the 24th Judicial District Court for the Parish of Jefferson, State of Louisiana.4 On
1 Rec. Doc. 1-2 at 5–6.
2 Rec. Doc. 4.
3 Rec Doc. 17.
4 Rec. Doc. 1-1.
June 10, 2021, Defendant removed the case to this Court based on diversity jurisdiction.5 Plaintiff
alleges that Defendant entered into a “Residential Garbage Collection Contract” (the “Prime
Contract”) on November 5, 2008 with Jefferson Parish for the collection of waste.6 Plaintiff
contends that Defendant then entered into a subcontract agreement (the “Subcontract”) with
Plaintiff on June 17, 2009, under which Plaintiff would pick up and haul waste from designated
“Citizen Drop-off Centers” and deliver them to the landfill designated under the Prime Contract.7
Under the Subcontract, Plaintiff alleges that it was to receive an initial amount of $165.00
for each truckload of waste.8 Plaintiff further alleges that it worked with Defendant to obtain a ten-
year extension of the Prime Contract with Jefferson Parish, and the Prime Contract was ultimately
extended to 2024.9 Plaintiff contends that “[p]er the negotiations between the parties, and based
upon the terms reached with the Parish, the $165.00 base service amount . . . was to increase to
$225.00 per load upon the start of the 10-year contract extension.”10 Furthermore, Plaintiff
contends that it also should have received increases in pay based on changes to the Consumer Price
Index (“CPI”) and/or fuel increases, equal to the CPI and/or fuel increases received by Defendant
under the Prime Contract.11 Plaintiff avers that although Defendant has received increased service
fees each year, they have “failed to remit/pass along to [Plaintiff] any such CPI or fuel increase,”
5 Rec. Doc. 1.
6 Rec. Doc. 1-2 at 2.
7 Id.
8 Id. at 3.
9 Id.
10 Id.
11 Id. at 4.
and instead “continue to remit only the original base amount reflected in the Subcontract.”12
Plaintiff further contends that “[f]ollowing [Plaintiff’s] amicable demands, [Defendant] failed to
follow the required notice provisions set forth in the Subcontract, and improperly terminated” the
Subcontract, causing Plaintiff to suffer additional damages.13
As a result of the alleged breach of contract, Plaintiff claims it has suffered damages in the
amount of approximately $1,364,756.65, with an additional “significant amount” of damages due
to lost profits.14 Accordingly, Plaintiff asserts claims against Defendant for: (1) breach of contract;
(2) wrongful termination; and (3) unjust enrichment.15 Defendant has filed an answer as well as a
counterclaim for recovery of attorneys’ fees arising out of these proceedings.16
On September 28, 2021, Defendant filed the instant motion to dismiss any claims “for
compensation allegedly due and owing to Plaintiff for services rendered prior to May 5, 2018.”17
On October 25, 2021, Plaintiff filed an opposition.18 On October 28, 2021, Defendant filed a
reply.19 The Court heard oral argument on the motion on November 3, 2021.20
12 Id.
13 Id.
14 Id. at 4–5.
15 Id. at 5–6.
16 Rec. Doc. 4.
17 Rec. Doc. 17 at 1.
18 Rec. Doc. 21.
19 Rec. Doc. 25.
20 Rec. Doc. 26.
II. Parties’ Arguments
A. Defendant’s Arguments in Support of the Motion
On September 28, 2021, Defendant filed the instant partial motion to dismiss for failure to
state a claim.21 Defendant makes two alternative arguments that some of Plaintiff’s claims have
prescribed. First, Defendant argues that Plaintiff’s claims are for “compensation for services
rendered,” and thus Louisiana Civil Code article 3494’s (“article 3494”) three-year prescriptive
period applies.22 As a result, Defendant contends that all of Plaintiff’s claims arising prior to May
5, 2018 have prescribed.23 Alternatively, Defendant contends that Plaintiff’s claims fall under
Louisiana Civil Code article 3499’s (“article 3499”) ten-year prescriptive period for breach of
contract claims, and that some of Plaintiff’s claims fall outside of this period.24
Defendant primarily argues that a three-year prescriptive period applies, rendering all of
Plaintiff’s claims for recovery for compensation prior to May 5, 2018 prescribed.25 Defendant
points out that article 3499 provides a prescriptive period of ten years for all “personal action[s]”
“unless otherwise provided by legislation.”26 Nevertheless, Defendant contends that article 3494
is an exception to article 3499 and provides a prescriptive period for actions involving the recovery
of compensation for services rendered.27 Accordingly, Defendant asserts that the three-year
prescriptive period under article 3494 should apply, rather than the ten-year prescriptive period
21 Rec. Doc. 17.
22 Rec. Doc. 17-1 at 8–12.
23 Id.
24 Id. at 12–16.
25 Id. at 8–12.
26 Id. at 9.
27 Id.
under article 3499.28
Defendant contends that the Court should look to the “character of the action” identified in
the Petition to determine the applicable prescriptive period.29 Defendant points out that Plaintiff’s
complaint “explicitly alleges claims to be ‘compensated’ . . . for ‘services’ it ‘rendered’ to
Defendant under the Subcontract.”30 Defendant cites Minor v. Monroe Surgical Hosp., LLC31 for
the proposition that “even if parties enter into a written contract, the shorter prescriptive period of
Article 3494 controls if the contract in question sets forth any of the subspecies of agreements
identified in Article 3494.”32 Because article 3494 includes “action[s] for the recovery of
compensation for services rendered,” and that is “the exact cause of action” Plaintiff alleges,
Defendant contends that the three-year prescriptive period applies.33 Because Plaintiff filed the
Petition on May 5, 2021, Defendant asserts that any claims Plaintiff has asserted for recovery of
compensation for services it rendered to Defendant prior to May 5, 2018 have prescribed.34
Alternatively, Defendant asserts that if the Court finds Plaintiff’s claims to be cognizable
as claims for breach of contract, they are still subject to the ten-year prescriptive period for personal
actions under article 3499.35 Defendant argues that the Petition “essentially alleges” that the
28 Id. at 10.
29 Id. at 9.
30 Id. at 11.
31 Minor v. Monroe Surgical Hosp., LLC, 49,367 (La.App. 2 Cir. 11/19/14); 154 So. 3d 665.
32 Rec. Doc. 17-1 at 11.
33 Id.
34 Id. at 11–12.
35 Id. at 12.
Subcontract entitled Plaintiff to an increase in compensation beginning on January 1, 2010.36
Defendant avers that, if Defendant owed additional amounts due to the CPI increase starting on
January 1, 2010, Defendant would have breached that obligation each time it remitted payment for
the monthly invoices it received from Plaintiff. Therefore, Defendant asserts that “[a]ny such
payment which was exigible prior to [sic] May 5, 2011 (ten years prior to Plaintiff filing suit), is
therefore prescribed.”37
B. Plaintiff’s Opposition to the Motion to Dismiss
In opposition, Plaintiff asserts that Defendant committed two distinct contractual breaches:
(1) the failure to send Plaintiff increases in the CPI and (2) the failure to pay Plaintiff an increased
per load price.38 Plaintiff argues that neither claim has prescribed.
1. Defendant’s Failure to Pay Increases in the CPI
Plaintiff contends that the claim regarding Defendant’s failure to pay increases in the CPI
is a breach of contract claim, rather than a claim for “the recovery of compensation for services
rendered,” and is therefore subject to the ten-year prescriptive period under article 3494.39 Plaintiff
asserts that it is “not claiming that [Defendant] did not compensate them for the services invoiced,”
but rather that Defendant “breached its obligated duty” to inform Plaintiff of the CPI increases
Defendant received and pass them along to Plaintiff.40 Thus, Plaintiff asserts that its claim is one
for breach of contract rather than for recovery of compensation for services rendered and is subject
36 Id. at 14.
37 Id.
38 Rec. Doc. 21 at 1.
39 Id. at 8.
40 Id.
to the ten-year prescriptive period.41
Next, Plaintiff contends that the ten-year prescriptive period did not begin to run until
Plaintiff “had sufficient information” to avail itself of its cause of action against Defendant.42
Plaintiff contends that, under the doctrine of contra non valentem, the prescriptive period did not
begin to run until Plaintiff knew or reasonably should have known of its claim against Defendant.43
Plaintiff further contends that it had no duty to inquire about or anticipate CPI increases, and that
instead Defendant had an obligation to inform Plaintiff of the CPI increases.44 Plaintiff argues that
Defendant’s “failure to disclose critical information regarding the CPI increases” was fraudulent,
and “effectually prevented [Plaintiff] from availing itself of its cause of action concerning the CPI
increases.”45
2. Defendant’s Failure to Pay an Increased Price Per Load.
With respect to Defendant’s alleged failure to pay an increased price per load of waste
hauled, Plaintiff contends that there is a disputed question of fact as to the amount of compensation
owed under the contract.46 Plaintiff contends that the new terms discussed were never reduced to
writing after the ten-year extension of Defendant’s contract with Jefferson Parish.47 Plaintiff
asserts that this dispute prevents the Court from evaluating questions of prescription.48 Plaintiff
41 Id.
42 Id. at 9
43 Id.
44 Id. at 11.
45 Id. at 11.
46 Id. at 12.
47 Id.
48 Id. at 15.
contends that “discovery is required to establish the contractual terms between the parties under
the 10-year contract extension, including the price,” and that determining what “prescriptive period
applies without this information would be premature and unfair to [Plaintiff].”49 Accordingly,
Plaintiff argues that the Motion must be denied.50
C. Defendant’s Arguments in Further Support of the Motion
In the reply brief, Defendant first contends that the doctrine of contra non valentum does
not apply because Defendant did not conceal the CPI adjustments it received from Jefferson
Parish.51 Defendant points out that the Prime Contract is incorporated into the Subcontract, and the
terms of the Prime Contract put Plaintiff on notice that “Defendant and Plaintiff were both entitled
to annual CPI adjustments beginning on January 1, 2010.”52 Defendant further contends that had
Plaintiff made a “reasonabl[e] inquiry” into the “documents governing the parties’ relationship and
any collateral agreements that are explicitly adopted . . . Plaintiff would have known prior to
January 1, 2010, that the first price escalation would be determined as of that date.”53 Defendant
further argues that Plaintiff’s attempted application of the contra non valentum doctrine “will
create exceptions that will swallow the law of liberative prescription whole.”54
Defendant further argues that any dispute over the exact price point for the “per load” rate
has no bearing on whether the ten or three-year prescriptive period is applicable to Plaintiff’s
49 Id.
50 Id.
51 Rec. Doc. 22-2 at 2.
52 Id. at 4.
53 Id. at 6.
54 Id.
claims.55 Defendant contends that, even if Plaintiff’s claim is viewed as one for unjust enrichment,
a claim for compensation for services rendered is subject to the three-year prescriptive period
“regardless of how the party characterizes it.”56
Lastly, Defendant contends that Plaintiff has conceded that some of its claims are
prescribed.57 Defendant points out that Plaintiff did not address Defendant’s argument that
Plaintiff’s claims arose on January 1, 2010, and thus even under the ten-year prescriptive period,
Plaintiff’s claims for services rendered prior to May 5, 2011 are prescribed.58 Accordingly,
Defendant urges that even under “the most generous interpretation of the law of prescription,” any
claims for services Plaintiff rendered prior to May 5, 2011 are prescribed.59
III. Legal Standard
Federal Rule of Civil Procedure 12(b)(6) provides that an action may be dismissed “for
failure to state a claim upon which relief can be granted.”60 A motion to dismiss for failure to state
a claim is “viewed with disfavor and is rarely granted.”61 “To survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is
plausible on its face.”62
55 Id. at 7.
56 Id. at 8.
57 Id. at 9.
58 Id.
59 Id.
60 Fed. R. Civ. P. 12(b)(6).
61 Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982).
62 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)) (internal quotation marks omitted).
The “[f]actual allegations must be enough to raise a right to relief above the speculative
level.”63 The complaint need not contain detailed factual allegations, but it must offer more than
mere labels, legal conclusions, or formulaic recitations of the elements of a cause of action.64 That
is, the complaint must offer more than an “unadorned, the defendant-unlawfully-harmed-me
accusation.”65
Although a court must accept all “well-pleaded facts” as true, a court need not accept legal
conclusions as true.66 “[L]egal conclusions can provide the framework of a complaint, [but] they
must be supported by factual allegations.”67 Similarly, “[t]hreadbare recitals of the elements of a
cause of action, supported by mere conclusory statements” will not suffice.68 If the factual
allegations are insufficient to raise a right to relief above the speculative level, or an “insuperable”
bar to relief exists, the claim must be dismissed.”69
A court considering a motion to dismiss “must limit itself to the contents of the pleadings,
including attachments thereto.”70 Attachments to a motion to dismiss are, however, “considered
part of the pleadings” if “they are referred to in the plaintiff’s complaint and are central to her
63 Twombly, 550 U.S. at 555. Put another way, a plaintiff must plead facts that allow the court to draw a
“reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.
64 Iqbal, 556 U.S. at 678.
65 Id.
66 Id. at 677–78.
67 Id. at 679.
68 Id. at 678.
69 Carbe v. Lappin, 492 F.3d 325, 328 n.9 (5th Cir. 2007); Moore v. Metro. Human Serv. Dep’t, No. 09-6470,
2010 WL 1462224, at * 2 (E.D. La. Apr. 8, 2010) (Vance, J.) (citing Jones v. Bock, 549 U.S. 199, 215
(2007)).
70 Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000).
claim.”71 “In so attaching, the defendant merely assists the plaintiff in establishing the basis of the
suit, and the court in making the elementary determination of whether a claim has been stated.”72
IV. Analysis
In the instant motion, Defendant urges the Court to dismiss all of Plaintiff’s claims that
arose prior to May 5, 2018, because they have prescribed. The Fifth Circuit has instructed that
a Rule 12(b)(6) motion to dismiss on the basis of prescription should not be granted unless “it
appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which
would entitle him to relief.”73 When presented with a state law claim, “federal courts apply state
statutes of limitations and related state law governing tolling of the limitation period.”74 “[U]nder
Louisiana jurisprudence, prescriptive statutes are to be strictly construed against prescription and
in favor of the obligation sought to be extinguished; of two possible constructions, that which
favors maintaining, as opposed to barring, an action should be adopted.”75 However, “that does
not mean that every prescriptive statute must be interpreted in order to avoid prescription.”76
Furthermore, the party pleading prescription has the burden of proving prescription.77
Nevertheless, if prescription is evident on the face of the pleadings, the burden shifts to the plaintiff
71 Id. at 498–99 (quoting Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir. 1993))
(internal quotation marks omitted).
72 Carter v. Target Corp., 541 F. App’x 413, 416–17 (5th Cir. 2013) (quoting Collins, 224 F.3d at 498–99).
73 Abdul-Alim Amin v. Universal Life Ins. Co. of Memphis, Tenn., 706 F.2d 638, 640 (5th Cir. 1983).
74 Hensgens v. Deere & Co., 869 F.2d 879, 880 (1989).
75 Bustamento v. Tucker, No. 92-C-0523 (La. 10/19/92), 607 So. 2d 532, 537.
76 Turner v. Willis Knighton Medical Center, Nos. 2012-C-0703, 2012-C-0742 (La. 12/4/12), 108 So. 3d 60,
65.
77 Carter v. Haygood, No. 2004-0646 (La. 1/19/05), 892 So.2d 1261, 1267.
to show the action has not prescribed.78
When determining the applicable prescriptive period, Louisiana courts look to “the
character of an action disclosed in the pleadings.”79 Louisiana Civil Code article 3499 provides
that “[u]nless otherwise provided by legislation, a personal action is subject to a liberative
prescription of ten years.”80 Comment (b) of that statute explains that the ten-year prescriptive
period applies to personal actions “in the absence of a legislative provision that either establishes
a shorter or longer period or declares the action to be imprescriptible,” and that “[s]horter
prescriptive periods are established in” articles 3492 through 3498.81 One such shorter prescriptive
period is found in article 3494, which provides:
The following actions are subject to a liberative prescription of three years:
(1) An action for the recovery of compensation for services rendered, including
payment of salaries, wages, commissions, professional fees, fees and emoluments
of public officials, freight, passage, money, lodging, and board;
(2) An action for arrearages of rent and annuities;
(3) An action on money lent;
(4) An action on an open account; and
(5) An action to recover underpayments or overpayments of royalties from the
production of minerals, provided that nothing herein applies to any payments,
rent, or royalties derived from state-owned properties.82
In Starns v. Emmons, the Louisiana Supreme Court explained that the ten-year prescriptive
period of article 3499 does not always apply whenever a contract is involved because “[a]ll of the
78 Id.
79 Starns v. Emmons, No. 88-C-1575 (La. 1/30/89); 538 So. 2d 275, 277.
80 La. Civ. Code art. 3499.
81 Id.
82 La. Civ. Code. Art. 3494 (emphasis added).
actions covered by the provisions of [3494] essentially arise from contractual relationships.”83
Instead, the actions described in article 3494 are “exceptions to the general rule stated in article
3499 that a personal action prescribes in ten years.”84 Thus, where a plaintiff seeks to recover
unpaid compensation for services rendered under a contract, the Louisiana Supreme Court has held
that the three-year prescriptive period of 3494 applies.85
Defendant argues that all of Plaintiff’s claims are seeking compensation for services
rendered, and thus Plaintiff’s claims that arose prior to May 5, 2018 are prescribed by article 3494’s
three-year prescriptive period. Alternatively, if the Court finds instead that article 3499 applies,
Defendant contends that Plaintiff’s claims that arose prior to May 5, 2011 are prescribed by article
3499’s ten-year prescriptive period. Plaintiff, on the other hand, argues that there are two distinct
breaches at issue: (1) the failure to send Plaintiff increases in the CPI and (2) the failure to pay
Plaintiff an increased per load price.86 Plaintiff contends that both of these claims are subject to
the ten-year prescriptive period, and neither claim has prescribed. At oral argument, the parties
agreed that the issues presented in this motion involve a dispute of law, rather than a factual
dispute.
A. CPI Increase Claim
Plaintiff contends that Defendant failed to pay additional money owed under the
Subcontract based on fluctuations in the CPI. The Subcontract between Plaintiff and Defendant
includes the following clause:
83 Starns v. Emmons, No. 88-C-1575 (La. 1/30/89); 538 So. 2d 275, 278.
84 Id.
85 Grabert v. Iberia Parish School Bd., No. 93-2715 (La. 7/5/94); 638 So. 2d 645, 647.
86 Rec. Doc. 21 at 1.
c. CPI & Fuel Increase. Subcontractor will receive equal CPI or fuel increases
received by Contractor under the Contract, if any.87
Defendant contends that the three-year prescriptive period applies because Plaintiff’s action is for
“the recovery of compensation for services rendered” under Article 3494.88 Although Plaintiff
contends that they have not received these increases, Plaintiff’s opposition to the Motion states
that its position is not that Defendant failed to compensate them for services rendered, but rather
that Defendant breached its obligation under this clause.89 Plaintiff’s argument fails for two
reasons.
First, although Plaintiff may characterize its claim as one for breach of a contract, the CPI
provision is part of the compensation that Plaintiff admits it is entitled to receive under the terms
of the contract.90 It follows that Plaintiff’s suit to recover the amount of the CPI increases is an
action to recover compensation for services rendered. In other words, although Defendant has
provided some compensation for the services rendered by Plaintiff, the alleged failure to pay the
CPI increases is an allegation that Defendant has not paid all of the compensation due for the
services Plaintiff rendered under the contract. Thus, Plaintiff’s claim is one for the “recovery of
compensation for services rendered” and is subject to the three-year prescriptive period of article
3494.
Second, the ten-year prescriptive period does not apply to all claims involving breaches of
contract. As discussed, the ten-year prescriptive period for personal actions applies “[u]nless
87 Rec. Doc. 4–2 at 2.
88 Rec. Doc. 17–1 at 11.
89 Rec. Doc. 21 at 8.
90 Id. at 4.
otherwise provided by legislation.”91 In Grabert v. Iberia Parish School Bd., the Supreme Court
of Louisiana explained that the prescriptive period for a suit seeking compensation for services
rendered “is otherwise provided for in article 3494,” which establishes a three-year prescriptive
period.92 In that case, tenured employees who were subject to employment contracts with the Iberia
Parish School Board filed a lawsuit alleging that the Board breached their respective contracts by
paying them less than they were due under the appropriate salary index.93 The plaintiffs argued
that the ten-year prescriptive period applied because of a distinction between an action for breach
of contract and an action for past due wages.94 The Supreme Court of Louisiana rejected that
argument, finding that the action was “plainly for salary or wages past due under the allegedly
appropriate salary index.”95 The Court went on to explain that the claim that wages were less than
what was owed “is not something different because it arises out of a breach of contract. The
contract breached made provisions for the very wages sought.”96 Accordingly, the Court held
applicable the three-year prescriptive period in article 3494, which applies to actions “for the
recovery of compensation for services rendered, including payment of salaries [or] wages.”97
Grabert is directly applicable to the circumstances of this case. As in Grabert, the
“character of the action” here is that Plaintiff alleges it was paid less than what was owed under
the contract. Plaintiff contends that the contract between Plaintiff and Defendant required
91 La. Civ. Code art. 3499.
92 No. 92-2715 (La. 7/5/94) 638 So.2d 645, 657.
93 Id. at 646.
94 Id.
95 Id. at 647.
96 Id.
97 La. Civ. Code. Art. 3494.
Defendant to pay Plaintiff the value of any CPI increases, and that Defendant failed to do so.
Although Plaintiff claims that the action is for a breach of contract rather than recovery of
compensation for services rendered, as in Grabert, the contract that Defendant allegedly breached
“made provisions for the very [CPI increases] sought.”98 Thus, Plaintiff’s claim regarding the CPI
increases is a claim for “recovery of compensation for services rendered,” and is subject to 3494’s
three-year prescriptive period.
Indeed, at oral argument, Plaintiff conceded that the subcontract was a service contract.
Plaintiff further conceded that, at least with respect to the base price per load, its claim was for
services rendered. However, for reasons explained more fully below, both the claim regarding the
CPI increase and the claim regarding the base price are claims seeking “compensation for services
rendered.”99 Accordingly, the three-year prescriptive period applies.
Having found that Plaintiff’s claim regarding the CPI increase is subject to the three-year
prescriptive period, the Court must determine when that period began to run against Plaintiff.
Because the state court petition was filed on May 5, 2021, Defendant asserts that Plaintiff’s claims
for compensation for services rendered to Defendant prior to May 5, 2018 have prescribed.100
Plaintiff, however, contends that under the doctrine of contra non valentem, the period did not
begin to run until Plaintiff knew or should have known of the cause of action against Defendant.101
Plaintiff suggested that it did not know, and could not have known, that it had a cause of action
against Defendant until Defendant terminated the contract and Plaintiff discovered, by submitting
98 See Grabert, 638 So. 2d at 657.
99 La. Civ. Code. 3494.
100 Rec. Doc 17–1 at 11–12.
101 Rec Doc 21 at 9.
a public records request, that Defendant received CPI increases from Jefferson Parish but failed to
pass those increases along to Plaintiff.102
Under the doctrine of contra non valentem, the applicable prescriptive period may be
interrupted where one of four factual circumstances are present:
(1) where there was some legal cause which prevented the courts or their officers from
taking cognizance of or acting on the plaintiff’s action;
(2) where there was some condition coupled with the contract or connected with the
proceedings which prevented the creditor from suing or acting;
(3) where the [defendant] himself has done some act effectually to prevent the
[Plaintiff] from availing himself of his cause of action; or
(4) Where the cause of action is neither known nor reasonably knowable by the plaintiff
even though plaintiff’s ignorance is not induced by the defendant.103
Plaintiff argues that the third category applies because Defendant’s failure to disclose the fact that
it was receiving CPI increases from Jefferson Parish was fraudulent, and “effectually prevented
[Plaintiff] from availing itself of its cause of action concerning the CPI increases.”104 The
Louisiana Supreme Court has stated that the third category is implicated only when “(1) the
defendant engages in conduct which rises to the level of concealment, misrepresentation, fraud or
ill practice; (2) the defendant’s actions effectually prevented the plaintiff from pursuing a cause of
action; and (3) the plaintiff must have been reasonable in his or her inaction.”105 In other words,
the doctrine “will not exempt a plaintiff’s claim from running if his ignorance is attributable to his
own willfulness, neglect, or unreasonableness.”106
102 Rec. Doc. 21. at 11.
103 Renfroe v. State ex. Rel. Dept. of Transp. and Dev., 2001-1646 (La. 2/26/02); 809 So. 2d 947, 953.
104 Rec. Doc. 21 at 11.
105 Marin v. Exxon Mobil Corp., 09-2368, p. 23 (La. 10/19/10); 48 So. 3d 234, 252 (internal citations omitted).
106 Able v. City of New Orleans, 14-0186, p. 10–12 (La. App. 4 Cir. 9/17/14); 150 So. 3d 361, 368 (quoting
Dominion Exploration & Prod., Inc. v. Waters, 07-0386, p. 14 (La. App. 4 Cir. 11/14/07); 972 So. 2d 350,
360)
Even assuming that Defendant’s failure to disclose the CPI increases rises to the level of
concealment, misrepresentation, fraud, or ill practice, Plaintiff cannot meet the other two
requirements necessary to invoke the third category of contra non valentem.
Plaintiff contends that Defendant was required under the contract to “send CPI increases
to [Plaintiff] to the same extent [Defendant] received such payments from Jefferson Parish for the
work [Plaintiff] performed, ‘if any’ such payments were made.”107 Plaintiff contends that it was
under no obligation to “inquire or anticipate CPI increases,” and thus Defendant’s failure to
disclose the payments received based on the CPI increases “effectually prevented [Plaintiff] from
availing itself of its cause of action” against Defendant.108 Plaintiff suggests that it could not have
known of the cause of action until Defendant terminated the contract and Plaintiff discovered, by
submitting a public records request, that Defendant received CPI increases from Jefferson Parish
but failed to pass those increases along to Plaintiff.109
The Court finds this argument unavailing. At oral argument, Plaintiff conceded that the
Subcontract explicitly incorporates the terms of the Prime Contract.110 The terms of the Prime
Contract gave Plaintiff the notice necessary to avail itself of the cause of action. The Prime
Contract provides as follows:
The service fees, with the exception of the fuel component, which is stipulated to
be $2.04, payable to IESI shall be adjusted upward or downward to reflect changes
in the cost of doing business, as measured by fluctuation in the CPI using the then
107 Rec. Doc. 21 at 2.
108 Id. at 11.
109 Id.
110 Rec. Doc. 4–2. The first paragraph of the Subcontract states:
WHEREAS, Contractor has entered into a Residential Garbage Collection
Contract with Jefferson Parish, Louisiana (the “Parish”) on or about November 4,
2008 (the “Contract”), which, along with all of its referenced documents, is
annexed hereto and made part and parcel of this Agreement . . .
most recently published All Urban Consumers All Item Index (CPI-U) U.S. City
Average published by the U.S. Department of Labor, Bureau of Labor Statistics on
January 1, 2010, and then annually thereafter. For each adjustment, the service
fees of IESI shall be increased or decreased by a percentage amount equal to the
net percentage change in the CPI-U or five (5) percent per annum, whichever is
less. The net percentage change shall be the difference between the most recent
CPI-U published for July 1, 2009 and that for January 1, 2010. Subsequent years of
the Contract shall be adjusted annually based upon the net percentage change for
the preceding year.111
Under the express terms of the Prime Contract, as both parties acknowledged at oral argument, the
fees that Defendant was to receive from Jefferson Parish would be adjusted, up or down, based on
fluctuations in the CPI. Under the express terms of the Subcontract, as the parties also
acknowledged at oral argument, Plaintiff was to receive “equal CPI or fuel increases received by
[Defendant] under the [Prime Contract], if any.”112 Thus, the parties contemplated that the amount
that Plaintiff was to receive from Defendant could fluctuate yearly based on an upward adjustment
in the CPI, as measured by a public report released by the Department of Labor. The terms of the
Prime Contract put Plaintiff on notice that the amount of fees Defendant would receive from
Jefferson Parish would be adjusted each year on January 1. Because the fluctuations in the CPI
were available to Plaintiff, and the terms of the Prime Contract make clear that the fees “shall” be
adjusted each year, Plaintiff was on notice that each January, it may have been entitled to an
increased amount of fees if the CPI changes called for an upward adjustment. Despite not receiving
any increased payment from Defendant each year, Plaintiff took no action to determine whether it
was entitled to an increase. The fact that Defendant did not disclose the upward adjustment to
Plaintiff, therefore, did not “effectually [] prevent the [Plaintiff] from availing [itself] of [its] cause
111 Rec. Doc. 4–1.
112 Rec. Doc. 4–2 at 2.
of action.”113
Plaintiff cites American Cyanamid Co. v. Electrical Industries, Inc. for the proposition that
the conduct that gives rise to the cause of action cannot also be the basis for prescription.114 But
Plaintiff reads American Cyanamid too broadly. In that case, a contractor who did repair work for
American Cyanamid entered into an agreement with a subcontractor, whereby the contractor would
bill American Cyanamid an extra sum for “services” of the subcontractor.115 Although the
contractor’s invoice to American Cyanamid included the amount that would be paid to the
subcontractor, the invoice did not reflect that any payment would be made to the subcontractor.116
Because the invoices did not reflect payments to the subcontractor, and the contractor never
revealed this agreement to American Cyanamid, American Cyanamid “was kept unaware of the
payments . . . as a result of concealment,” and thus was able to invoke the doctrine of contra non
valentem.117
The Fifth Circuit noted that “[i]t would indeed be contrary to reason to hold that the
selfsame fraud which rendered [the defendant] liable to the plaintiff could subsequently operate to
allow [the defendant] to successfully interpose a plea of prescription.”118 However, the Fifth
Circuit did so based on the premise that American Cyanamid was not “aware of any fact or
113 Renfroe, 809 So. 2d at 953. See also Able v. City of New Orleans, 14-0186, p. 10–12 (La. App. 4 Cir.
9/17/14); 150 So. 3d 361, 369 (finding that the third category of contra non valentem did not apply where the
defendant’s conduct “provided sufficient information to excite attention and prompt further inquiry” that
would have revealed the existence of a cause of action.).
114 Rec. Doc. 21 at 11–12.
115 American Cyanamid Co. v. Electrical Industries, Inc., 630 F.2d 1123, 1125–26 (5th Cir. 1980).
116 Id.
117 Id. at 1128.
118 Id.
circumstance sufficient to alert a reasonably prudent businessman to the possibility that a fraud
was being perpetrated.”119
As explained above, Plaintiff was aware that the Prime Contract called for yearly
adjustments in fees based on the CPI. Plaintiff cannot now rely on its failure to inquire about the
CPI increases in order to invoke the contra non valentem doctrine. As the American Cyanamid
Court explained, the doctrine “will be of no avail to a plaintiff whose delay in filing suit has
resulted from [its] own willfulness or neglect.”120 Accordingly, the Court finds that the doctrine of
contra non valentem is not applicable. As a result, the Court finds that all of Plaintiff’s claims to
recover the amount of the CPI increases that accrued prior to May 5, 2018 are prescribed.
B. Base Price Per Load Claim
Finally, the Court must determine which prescriptive period applies to Plaintiff’s claim that
Defendant failed to pay Plaintiff an increased base price per load under the contract. Defendant
does not distinguish between the alleged breach for failure to pay increases based on the CPI index
and the alleged failure to pay an increased base price, and thus contends that the three-year
prescriptive period applies to this claim as well.121 Plaintiff, on the other hand, contends that the
“new terms discussed between the parties were never reduced to writing following receipt of the
10-year extension to [Defendant’s] contract with Jefferson Parish,” and that Plaintiff nevertheless
“continued to perform as [Defendant’s] subcontractor after the acquisition of the 10-year contract
extension.”122 Plaintiff contends that because “there was never an agreement concerning the
119 Id.
120 Id.
121 Rec. Doc. 22–2 at 7–8.
122 Rec. Doc. 21 at 12.
amount of compensation to be received,” “the court in the context of contractual interpretation
must supply the missing price.”123 Plaintiff further argues that determining what prescriptive
period applies without the Court determining the price term “would be premature and unfair to
[Plaintiff].”124
Plaintiff does not explain why the exact price term is relevant to whether the three-year or
the ten-year prescriptive period applies. As the Court has explained, when determining the
applicable prescriptive period, Louisiana courts look to “the character of an action disclosed in the
pleadings.”125 Whether the parties ultimately agreed to an increased base price of $225.00 per load
as alleged in the Petition, or some other price, the “character” of Plaintiff’s claim is that Defendant
has paid Plaintiff less money than what was owed for the work Plaintiff performed after the start
of the ten-year extension of the Prime Contract. Accordingly, this claim is one for “the recovery
of compensation for services rendered” subject to the three year-prescriptive period under article
3494, for the same reasons articulated above. In fact, as discussed above, Plaintiff conceded at oral
argument that its claim regarding the base price was one seeking compensation for services
rendered.
Although there may well be a dispute of fact as to the terms of the parties’ agreement
following the ten-year extension of the Prime Contract with Jefferson Parish, that dispute is not
relevant to this Court’s determination that some of Plaintiff’s claims have prescribed. At a later
stage in these proceedings, this Court may have to determine the price per load hauled that the
parties agreed to upon the extension of the Prime Contract. However, because Plaintiff’s claim is
123 Id. at 13.
124 Id. at 15.
125 Starns v. Emmons, No. 88-C-1575 (La. 1/30/89) 538 So. 2d 275, 277.
that Defendant has not paid the amount owed to Plaintiff for work performed after the start of the
ten-year extension of the Prime Contract, the claim is subject to the three-year prescriptive period
of article 3494. Accordingly, the Court finds that Plaintiff’s claims for compensation regarding the
base price accruing prior to May 5, 2018 are prescribed.
For the foregoing reasons,
IT IS HEREBY ORDERED that Defendant’s “Partial Motion to Dismiss Pursuant to Fed.
R. Civ. Proc. 12(b)(6) for Failure to State a Claim”!?° is GRANTED. All of Plaintiff’s claims
accruing prior to May 5, 2018 are prescribed.
NEW ORLEANS, LOUISIANA, this _!8th_ day of November, 2021.
NANNETTE JOLIVETTE BROWN
CHIEF JUDGE
UNITED STATES DISTRICT COURT
126 Rec Doc. 17.
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