Two Important Recent Cases Change the Legal Landscape for Public Works Mandamus Claims.
Authors: Christopher K. LeMieux, Antonio Torres and Olivia Maynard
1. First Circuit Court Calls into Question Prior Mandamus Cases in Louisiana Public Contracts: LA Contracting Enterprise, LLC v. South Lafourche Levee District
In this case, LA Contracting was awarded a public works contract in which a dispute arose regarding amounts owed to it. Thus, LA Contracting filed a mandamus under La. R.S. 38:2191, seeking payment of amounts due to be heard within 10 days. The trial court ultimately denied mandamus relief. However, the most concerning part of the ruling for contractors comes in the last paragraph, wherein the court seems to be backing off of two prior cases, Law Industries, and Coast 2 Coast Construction, which held that if a contractor files a mandamus proceeding, the trial court must determine the amounts due under the contract, including any offsets alleged by the Owner in the mandamus.
Conversely, in the recent LA Contracting case the court seems to be saying that if the claims and defenses get too technical, the court does not have to determine the amounts owed in the mandamus:
[t]he engagement of experts and the exchange of reports is particularly challenging within the context of a summary proceeding. To demand that the trial court resolve all of the disputes presented within an abbreviated timeframe would do a disservice to the litigants. As noted by Judge Welch in his dissenting opinion in Law Industries, such an approach “merges the ordinary proceeding with the highly restricted mandamus summary proceeding and thwarts the legislative intent of La. R.S. 38:2191 for public entities to promptly pay monies owed under public contracts.”
The problem with LA Contracting is that if this view holds, it will weaken the mandamus option for contractors to get paid quickly, as they will have to file an ordinary proceeding and likely wait for over a year to reach conclusion.
2. Can Contractors File Separate Lawsuits for Statutory Interest? Wallace C. Drennan, Inc. v. Kerner:
Recently, in Drennan v. Kerner, the Louisiana Fifth Circuit Court of Appeal reviewed whether a contractor must claim statutory interest under the Public Works Act in the same mandamus action or file a separate lawsuit.
In May 2020, Drennan filed a Petition for Writ of Mandamus (“Mandamus I”), demanding payment for these outstanding amounts, plus statutory interest and attorney fees. After an interim settlement, the court dismissed the case but allowed Drennan to pursue further claims.
Later, in December 2020, Drennan filed Mandamus II, seeking newly approved funds for the same pay applications. However, Lafitte withheld the funds due to liquidated damages. Unlike Mandamus I, this petition did not include statutory interest claims. The court ruled in Drennan’s favor, ordering Lafitte to pay $137,000 plus judicial interest and attorney fees but did not address statutory interest.
Drennan then filed a separate lawsuit for statutory interest on multiple pay applications. Lafitte argued that the Mandamus II ruling barred further claims (res judicata). The trial court agreed, dismissing Drennan’s case. Drennan appealed.
Surprisingly, the court ruled that La. R.S. 38:2191(D) did not require or allow Drennan to include statutory interest claims in its mandamus actions. It also found that the exceptional circumstances exception to res judicata applied, meaning Drennan was not barred from pursuing statutory interest in an ordinary proceeding.
The takeway in Drennan is that even if you fail to bring interest claims in mandamus, such claims may still be asserted later in an ordinary proceeding. Moreover, the court allowed multiple mandamuses to proceed on the same pay applications.
