United States District Court, S.D. Mississippi, Southern Division
INDUSTRIAL & CRANE SERVICES, INC. PLAINTIFF/COUNTER-DEFENDANT
GEDA USA ELEVATOR AND MATERIAL LIFT COMPANY, LLC and JOHN DOES 1-10 DEFENDANT/COUNTER-CLAIMANT
MEMORANDUM OPINION AND ORDER DENYING DEFENDANT'S
MOTION TO DISMISS FOR LACK OF SUBJECT MATTER
THE COURT is the  Motion to Dismiss for Lack of Subject
Matter Jurisdiction filed by Defendant/Counter-Claimant GEDA
USA Elevator and Material Lift Company, LLC
(“GEDA”). In the Motion, GEDA argues that the
contracts at issue in this lawsuit are subject to the
Louisiana Public Works Act (“LPWA” or “the
Act”), La. R.S. § 38:2241, et seq.,
because the contracts involved public entities in the State
of Louisiana, and therefore this dispute must instead be
brought as a concursus proceeding in Louisiana state or
federal court. Plaintiff/Counter-Defendant Industrial &
Crane Services, Inc. (“ICS”) disagrees, at least
insofar as its own claims are concerned. The Motion is fully
briefed. Having considered the submissions of the parties,
the record, and relevant law, the Court finds that GEDA's
Motion to Dismiss should be denied at this time.
ICS is in the business of erecting, maintaining, and
refurbishing industrial cranes. GEDA is a manufacturer and
supplier of industrial and construction elevators and
material lifts. In 2017, ICS won bids for two
elevator-replacement projects in Louisiana - one at the Port
of New Orleans and the other at the Port of Lake Charles. ICS
acquired surety bonds for the projects as required by the
LWPA. La. R.S. § 38:2241(A)(2). In forming its winning
bids bids, ICS accepted quotes for services from GEDA. These
quotes formed the basis for the subcontractor agreements
allegedly breached in this case. Although both elevator
projects were completed to the satisfaction of the port
entities, neither ICS nor GEDA is satisfied with the
other's performance under their subcontractor agreements.
ICS claims it was forced to pay for modifications to the port
facilities that proved to be necessary for the proper
installation of the elevators, despite conclusions to the
contrary in GEDA's quotes, and has accordingly withheld
payments to GEDA. GEDA says it performed in full under the
subcontractor agreements and is due the wrongly withheld
payments from ICS.
case was removed from the Circuit Court of Jackson County,
Mississippi on March 29, 2019. On October 10, 2019, GEDA
filed the instant Motion to Dismiss for Lack of Subject
Matter Jurisdiction, which asserts that, because
“[b]oth contracts were with public entities in the
State of Louisiana, ” the LPWA mandates the
parties' claims be tried in a concursus proceeding
brought in the Louisiana state or federal courts local to the
Port of New Orleans and the Port of Lake Charles,
respectively. (Mem. Supp. Mot. Dismiss 2-4, ECF No. 28.) ICS
responds that the subcontract agreements between itself and
GEDA are not public contracts and therefore not subject to
the jurisdictional limitations imposed by the LPWA.
motion to dismiss pursuant to Rule 12(b)(1) should be granted
“when the court lacks the statutory or constitutional
power to adjudicate the case.” Hooks v. Landmark
Indus., Inc., 797 F.3d 309, 312 (5th Cir. 2015) (quoting
Home Builders Ass'n of Miss., Inc. v. City of
Madison, Miss., 143 F.3d 1006, 1010 (5th Cir. 1998)).
“When ruling on the motion, the district court may rely
on the complaint, undisputed facts in the record, and the
court's resolution of disputed facts.” Morris
v. Thompson, 852 F.3d 416, 419 (5th Cir. 2017) (citing
Ramming v. United States, 281 F.3d 158, 161 (5th
Cir. 2001)). The burden of proof rests on the party asserting
the existence of jurisdiction. Id. (citing
Ramming, 284 F.3d at 161).
ICS nor GEDA disputes the existence of diversity jurisdiction
under 28 U.S.C. § 1332. ICS is a citizen of Mississippi,
no member of GEDA is a citizen of Mississippi, and ICS seeks
damages in excess of $280, 000. (See Not. Removal
1-2, ECF No. 1.) In fact, both parties invoke § 1332 as
this Court's basis for hearing the their claims and
counterclaims. (See id.; Answer & Countercl.
4-5, ECF No. 2.)
“[t]here are many cases where right and remedy are so
united that the right cannot be enforced except in the manner
and before the tribunal designated by the act” that
created the right or remedy. Tennessee Coal, Iron &
R. Co. v. George, 233 U.S. 354, 359 (1914). The LPWA
a special, speedy, and summary remedy to enable the
authorities letting the work, or, on their default, any
creditor of the contractor, to bring all parties concerned
and having an interest together before one court and in one
proceeding, to the end that their respective rights as
between themselves and against the contractor and his surety
might be recognized and adjusted.
Seal v. Gano, 107 So. 473, 475 (La. 1926).
Accordingly, the Act mandates that unpaid claims on
statutorily-bonded, public contracts “shall be tried in
concursus” in “the proper court of the parish
where the work was done.” La. R.S. § 38:2243.
Relying on the Louisiana Supreme Court's decision in
Seal v. Gano, two federal district courts outside
Louisiana have interpreted this requirement to be a
jurisdictional limitation on the ability of other courts to
hear suits by one or more claimants against the contractor
and surety. See Rockport Contracting, LLC v. Chain
Elec. Co., No. CIV.A. H-11-1853, 2012 WL 112601 (S.D.
Tex. Jan. 11, 2012); Pipe Sys., Inc. v. Am. Mfrs. Mut.
Ins. Co., 609 F.Supp. 571 (E.D. Mo. 1985). The question
before the Court is thus whether the claims and counterclaims
in this case are of the type restricted by the LPWA to a
particular Louisiana court.
initial matter, the Court assumes for the moment that,
because GEDA has already initiated concursus proceedings in
Calcasieu and Orleans Parishes, GEDA has satisfied the
statutory perquisites for making a claim in a LPWA concursus
proceeding. See Apex Bldg. Techs. Grp., Inc. v. Catco
Gen. Contractors, L.L.C., 15-729 (La.App. 5
Cir. 3/30/16), 189 So.3d 1209, 1213 (citing La. R.S.
§§ 38:2242(B), 38:2247). Neither party has directly
addressed this issue. If GEDA has, in fact, failed to timely
provide notice of and record its claim and initiate concursus
proceedings, it has failed to preserve its statutory claim
under La. R.S. § 38:2243. See id.
LPWA concursus proceeding protects “the right of all
creditors to share ratably and in proportion to the amount of
their claims in the common fund, the obligation of the surety
on the contractor's bond.” Seal, 107 So.
It is a special remedy afforded a certain class of creditors
for the concurrent enforcement of their claims and to
regulate their rights as between themselves and against a
contractor doing public work, and the surety on his bond. It
is a statutory concursus authorized to be instituted under
certain conditions by the public authorities letting the
contract for the public work, or by any person having a
properly recorded claim against the contractor who performed
the work or caused the same to be done, in the event the
authorities failed or neglected to exercise the right.
The bond furnished by the contractor for the benefit of the
authorities having the work done and for the benefit of
claimants against the contractor represents the fund upon and
against which the rights of the creditors of ...