• Goins Aaron, PLC of New Orleans

Trial Court Reversed - Injunction Granted

June 4 2020 | blog

In Orleans Parish School Board vs The City of New Orleans et al the Orleans Parish School Board appealed the decision of the Civil District Court for the Parish of Orleans denying its requests for a preliminary injunction and a mandamus, and the partial granting of an exception of no cause of action filed by the City of New Orleans.   The City of New Orleans answered the appeal seeking a reversal of the trial court’s denial of two exceptions filed by the City should the Court of Appeal reverse the trial court’s judgment denying the preliminary injunction and the mandamus.

In its Petition filed with the Civil District Court, the Orleans Parish School Board alleged that since 2007 the City in its capacity as tax collector has been improperly using ad valorem  taxes collected on the School Board’s behalf to fund statutory obligations of the City to various retirement funds.  The Petition additionally alleged that the City has been unconstitutionally collecting an administrative fee for its collection of the School Board’s ad valorem and sales and use taxes.  The amounts at issue may be as high as $30 million dollars.   In addition to damages the school board's Petition sought preliminary and permanent injunctions barring the City from “withholding and/or diverting the proceeds of dedicated ad valorem taxes as well as dedicated sales and use taxes . . . for a purpose other than the exclusive benefit of the OPSB.”     The Petition additionally sought, in the alternative, a declaratory judgment and a writ of mandamus.

In its June 3, 2020 ruling the Louisiana Fourth Circuit Court of Appeal found that the trial court erred and abused its discretion in denying the School Board’s request for a preliminary injunction.  The Court of Appeal reversed the portion of the trial court’s judgment denying a preliminary injunction, granted a preliminary injunction and went on to find that: a) the collection fees charged by the City are unlawful and b) all proceeds of taxes collected by the City for the School Board are to be paid to the School Board without any deductions or withholdings.  Consistent with its prior ruling in Downtown Development District vs The City of New Orleans, et al  the Court of Appeal affirmed the trial court’s denial of a mandamus.  The Court of Appeal additionally found that the trial court erred in  granting a partial exception of no cause of action and vacated that portion of the trial court’s judgment.   As to the trial court's denial of two exceptions filed by the City the Court of Appeal affirmed.

In speaking to the School Board's entitlement to a preliminary injunction the Court of Appeal aptly observed:

"As we found in Downtown Dev. Dist., the City is wholly without authority to use the OPSB taxes for purposes other than their dedicated purposes.   It follows that the City may not withhold the OPSB tax proceeds to fund the various retirement systems. We, thus, find that the OPSB has made a prima facie showing that it is entitled to a preliminary injunction in this matter and the trial court erred in denying its request for an injunction.   The trial court’s judgment is, therefore, reversed, and the OPSB’s request for preliminary injunctive relief is granted."

The School Board was represented in the trial court and before the Court of Appeal by Aaron & Gianna attorneys Bill Aaron, DeWayne Williams and Anna Rainer.

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