United States of America v. Five Properties, LLC et al

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
UNITED STATES OF AMERICA 	CIVIL ACTION
VERSUS 	NO. 25-1213
FIVE PROPERTIES, LLC ET AL. 	SECTION: “J”(4)
ORDER AND REASONS
Before the Court is an Objection to Order (Rec. Doc. 38) filed by Defendants
Five Properties, LLC and APMT, LLC d/b/a Tonti Management. Defendants object to
the magistrate judge’s Order (Rec. Doc. 36) that allowed Dory Turnipseed to intervene
in this suit. Neither Turnipseed nor the Government have filed a response to
Defendants’ Objection. Having considered the Objection and Order, the record, and
the 	applicable 	law, 	the 	Court 	finds 	that 	Defendants’ 	objection 	should 	be
SUSTAINED.
FACTS AND PROCEDURAL HISTORY
This 	suit 	arises 	out 	of 	a 	lease 	executed between 	Dory 	Turnipseed and
Defendants. (Rec. Doc. 23-1, at 1–4). In May 2018, Turnipseed, a tenant of an
apartment owned by Five Properties, LLC and managed by Tonti Management, filed
a lawsuit in this Court against Defendant Tonti Management. (Rec. Doc. 23-4).
Turnipseed alleged, among other things, that Tonti Management violated the Fair
Housing Act (“FHA”) because it refused to accommodate her mental disability and
allow her to live in the apartment with her emotional support dog. Id. at 2–9. One
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month later, Turnipseed also filed a United States Department of Housing and Urban
Development (“HUD”) complaint. (Rec. Doc. 23-1, at 8).
In July 2018, Tonti Management moved to compel arbitration of the federal
suit. Id. at 6. This Court granted the motion and stayed the lawsuit pending
arbitration. Id. After nearly four years and a court order permitting an additional
thirty days to initiate arbitration, Turnipseed failed to initiate arbitration. Id. Tonti
Management 	subsequently 	moved 	to 	dismiss 	Turnipseed’s 	lawsuit 	for 	lack 	of
prosecution. Id. This Court granted the motion in December 2022 and dismissed
Turnipseed’s suit with prejudice. Id. at 7.
In January 2025, roughly six and a half years after Turnipseed filed her HUD
complaint, HUD completed its investigation and issued a charge of discrimination
and determination of reasonable cause. Id. at 19. The Government then filed this suit,
on behalf of Turnipseed, alleging that Defendants violated the FHA. Id. at 20.
Now Turnipseed is back. She seeks to intervene in this suit and litigate her
FHA claims against both Tonti Management and Five Properties. (Rec. Doc. 18). A
magistrate judge found that Turnipseed could intervene. (Rec. Doc. 36). However,
Defendants object to this finding and argue that res judicata precludes Turnipseed’s
intervention. (Rec. Doc. 38). The Court now considers whether this objection should
be sustained.
LEGAL STANDARD
A magistrate judge's ruling on a nondispositive pretrial motion may be
appealed to the district judge for review pursuant to Rule 72(a) of the Federal Rules
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of Civil Procedure. A magistrate judge is afforded broad discretion in resolving such
motions, and the standard of review is deferential. When a timely objection is raised
to such a ruling, the district judge must review the magistrate's ruling and “modify
or set aside any part of the order that is clearly erroneous or contrary to law.” Fed. R.
Civ. P. 72(a). “A finding is ‘clearly erroneous’ when although there is evidence to
support it, the reviewing court on the entire evidence is left with the definite and firm
conviction that a mistake has been committed.” United States v. U.S. Gypsum Co.,
333 U.S. 364, 395 (1948). A legal conclusion is contrary to law “when the magistrate
fails to apply or misapplies relevant statutes, case law, or rules of procedure.”
Ambrose-Frazier v. Herzing Inc., No. 15-1324, 2016 WL 890406, at *2 (E.D. La. Mar.
9, 2016).
PARTIES’ ARGUMENTS AND DISCUSSION
Res judicata applies when (1) the parties are identical or in privity, (2) a court
of competent jurisdiction rendered the judgment in the prior action, (3) a final
judgment on the merits concluded the prior action, and (4) both actions involved the
same claims or cause of action. Test Masters Educ. Servs., Inc. v. Singh, 428 F.3d 559,
571 (5th Cir. 2005). It is undisputed that elements two and three are met here.
Namely, that a court of competent jurisdiction rendered a final judgment on the
merits that concluded Turnipseed’s original suit. At issue before this Court then is
whether elements one and four are met, namely whether Five Properties and Tonti
Management are in privity and whether the Government’s suit involves the same
claims or cause of action as Turnipseed’s original suit.
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The magistrate found that Turnipseed could intervene in this suit because (1)
Five Properties was not in privity with Tonti Management (Rec. Doc. 36, at 11); and
(2) Turnipseed’s original suit and this suit involved the same claim or cause of action.
Id. at 14.
Defendants disagree. They argue that Five Properties is in privity with Tonti
Management based on a vicarious relationship, and that this suit involves the same
claim or cause of action. (Rec. Doc. 38). The Court will address each of these issues in
turn.
I. 	Privity
A non-party is in privity with another party if the non-party’s interests are
adequately represented by that party’s interest in the original suit. Meza v. Gen.
Battery Corp., 908 F.2d 1262, 1267 (5th Cir. 1990). While the 	acknowledged that a
vicarious 	relationship 	could 	establish 	privity 	(Rec. 	Doc. 	36, 	at 	10), 	she 	was
unconvinced that there was a proven vicarious relationship between the Defendants.
Id. at 11.
However, the Court finds that Defendants have a vicarious relationship
sufficient to establish privity. Five Properties owns Sunlake Apartments. As owner,
Five Properties hired Tonti Management to manage Sunlake Apartments. Thus,
there 	is 	a 	principal/agent 	relationship 	between 	Five 	Properties 	and 	Tonti
Management. Under the FHA, Five Properties as the owner and principle, can be
vicariously liable for any discriminatory acts of its agent, Tonti Management. Meyer
v. Holley, 537 U.S. 280, 285 (2003). Turnipseed admits to this vicarious relationship
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in her proposed intervenor complaint. (Rec. Doc. 18-2, at 2). She says “[a]t all relevant
times, Tonti acted as an agent of Five Properties. Because the actions set forth below
occurred within the scope of this agency relationship, Five Properties is vicariously
liable for the conduct of Tonti.” Id. The Government’s complaint states the exact same
thing. (Rec. Doc. 1, at 3). Therefore, the Court finds a clear vicarious relationship
between Five Properties and Tonti Management.
Further, the Court notes that nearly all of the alleged discriminatory conduct
in this case occurred by Tonti Management. The only thing that Five Properties
allegedly did, besides hire Tonti Management, is it jointly filed the eviction petition
with Tonti Management to evict Turnipseed. Id. at 9. The Court does not find that
this action alone is sufficient to defeat privity in this case, as Five Properties can only
be found liable if Tonti Management is found liable. See Lubrizol Corp. v. Exxon
Corp., 871 F.2d 1279, 1289 (5th Cir. 1989) (holding that claim preclusion is justified
when vicarious liability formed “the only asserted basis for the [principal]’s liability”
in the dispute). Accordingly, the Court finds Five Properties to be in privity with Tonti
Management and that the magistrate’s finding to the contrary was clearly erroneous.
II. 	Same Claim or Cause of Action
In deciding whether the Government’s suit and Turnipseed’s suit are based on
the same claim or cause of action, the Court must apply a transactional test. Test
Masters, 428 F.3d at 571. “Under the transactional test, a prior judgment’s preclusive
effect extends to all rights of the plaintiff with respect to all or any part of the
transaction, or series or connected transactions, out of which the original action
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arose.” Id. In other words, the Court must determine “whether the two actions were
based on the ‘same nucleus of operative facts.’” Eubanks v. F.D.I.C., 977 F.2d 166,
171 (5th Cir. 1992) (quoting Howe v. Vaughan, 913 F.2d 1138, 1144–45 (5th Cir.
1990)).
In her Order, the magistrate found that the suit was not based on the same
nucleus of operative facts because the Government’s suit “seeks to vindicate public
interests beyond what Turnipseed sought in her original suit.” (Rec. Doc. 36, at 14).
Defendants argue that the magistrate misapplied the test, and the Court
agrees. As the Fifth Circuit explains, when applying this test, “the critical issue is not
the relief requested or the theory asserted but whether plaintiff bases the two actions
on the same nucleus of operative facts. In re Howe, 913 F.2d 1138, 1144 (5th Cir.
1990). The standard aims to “bar all claims that were or could have been advanced in
support of the cause of action on occasion of its former adjudication.” Id.
After reviewing Turnipseed’s original complaint, the Government’s complaint,
and Turnipseed’s intervenor complaint, the Court finds that all three complaints
stem from the same alleged mistreatment of Turnipseed by Tonti Management. The
Government’s suit, therefore, arises out of the same nucleus of operative facts as
Turnipseed’s original suit. Thus, both suits are based on the same claim or cause of
action, and the magistrate’s finding was contrary to law. All elements of res judicata
are met. Accordingly, the Court cannot allow Turnipseed’s intervention to stand.
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CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that Defendants’ Objection (Rec. Doc. 38) is
SUSTAINED.
IT IS FURTHER ORDERED that the magistrate’s January 9, 2021 Order
(Rec. Doc. 36) is REVERSED.
IT IS FURTHER ORDERED that Dory Turnipseed’s Motion to Intervene
(Rec. Doc. 18) is DENIED.
New Orleans, Louisiana, this 16th day of March, 2026.
____________________________________
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE
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