Reado v. Serpil Properties LLC et al

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
DANIELLE READO 	CIVIL ACTION
VERSUS 	NO. 24-2451
CITY OF NEW ORLEANS AND
SERPIL PROPERTIES, LLC
SECTION “R” (1)
ORDER AND REASONS
Before the Court are defendants’ City of New Orleans (the “City”) and
Serpil Properties (“Serpil”) motions to dismiss for lack of subject-matter
jurisdiction pursuant to Federal Rules of Civil Procedure 12(b)(1) and
12(b)(6).1 Plaintiff Danielle Reado opposes the motions.2 For the following
reasons, the Court grants in part and denies in part defendants’ motions to
dismiss.
I. 	BACKGROUND
This action arises out of the Tax and Adjudication sales of the property
at 4715 Laine Avenue, New Orleans, Louisiana (the “property”).3 	The
property was allegedly adjudicated to the city for failure to pay ad valorem
1 	R. Docs. 25, 27.
2 	R. Docs. 32, 33.
3 	R. Doc. 20 at ¶¶ 1, 9.
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taxes at a tax sale on September 25, 2012 (“Tax Sale”).4 	The tax sale was
recorded in the Orleans Parish Conveyance records on May 23, 2016.5 At the
time of the tax sale, the property was allegedly owned by plaintiff’s mother
Gwendolyn Reado.6 In October 2021, plaintiff allegedly acquired ownership
of the property through a quitclaim deed from her mother.7 Thereafter, the
quitclaim deed was recorded in the Orleans Parish Conveyance records.8 On
January 20, 2023, the city allegedly sold the property to Serpil for $60,757.75
as part of a bundle, the winning bid for which was $121,800.9 The sale of the
property 	(“Adjudication 	Sale”) 	was 	recorded 	in 	the 	Orleans 	Parish
Conveyance records on January 24, 2023.10 At the time of the Adjudication
Sale, the outstanding tax bill for the property was allegedly $27,883.53.11
Plaintiff alleges that neither she nor her mother received notice of the
Tax Sale.12 	Plaintiff further alleges that she did not receive notice of the
Adjudication Sale.13 	Plaintiff additionally alleges on information and belief
4 	Id. at ¶ 10.
5 	Id.
6 	Id. at ¶ 11.
7 	Id. at ¶ 12.
8 	Id.
9 	Id. at ¶¶ 14, 16.
10 	Id. at ¶ 14.
11 	Id. at ¶ 20.
12 	Id. at ¶ 13.
13 	Id. at ¶ 18.
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that, to the extent that she or her mother received notice of the sales, those
notices were legally insufficient.14 	Plaintiff also alleges that she did not
receive any compensation associated with the Adjudication Sale.15
On October 10, 2024, plaintiff filed this suit against the City and
Serpil.16 	In her amended complaint, plaintiff brings multiple claims: (1)
violations 	of due process based on insufficient notice 	of the 	tax and
adjudication sales; (2) violation of the Eighth Amendment’s Excessive Fines
Clause based on the adjudication sale; (3) a takings claim under the Fifth
Amendment based on the adjudication sale; and (4) a request for declaratory
relief under 28 U.S.C. § 2201.17 Plaintiff asks the Court to nullify the Tax and
Adjudication sales.18 	Alternatively, plaintiff seeks just compensation.19
Plaintiff also seeks declaratory judgments as to the constitutionality of
Louisiana Revised Statute § 47:2211, and Louisiana Constitution Art. XII, §
10(c).20
Defendants now bring motions to dismiss plaintiff’s claims. The City
argues that plaintiff lacks claims: (1) to nullify the Tax Sale on due process
14 	Id. at ¶¶ 13, 18.
15 	Id. at ¶ 22.
16 	R. Doc. 1.
17 	R. Doc. 20 at ¶¶ 25-51.
18 	Id. at ¶ 52.
19 	Id.
20 	Id.
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grounds because she lacks standing to sue based on insufficient notice to her
mother and had no independent right to receive notice of the Tax Sale; (2)
under the Eighth Amendment because tax and adjudication sales are
constitutional; (3) under the Fifth Amendment, because the Constitution
does not protect her alleged equity in the context of a tax sale; and (4) to
receive a declaration of the alleged unconstitutionality of either La. R.S.
47:2211 or Louisiana Constitution, art. XII, § 10(C) for multiple reasons.21
Defendant Serpil adopts the City’s motion.22 Plaintiff opposes the motions.23
The Court considers the parties’ arguments below.
II. 	LEGAL STANDARD
When a 12(b)(1) motion is brought with other Rule 12 motions to
dismiss, the 12(b)(1) motion must be addressed first. Ramming v. United
States, 281 F. 3d 158, 161 (5th Cir. 2001).
A. Federal Rule of Civil Procedure 12(b)(1)
Federal Rule of Civil Procedure 12(b)(1) requires dismissal of an action
if the court lacks jurisdiction over the subject matter of the plaintiff’s claim.
Motions submitted under Rule 12(b)(1) allow a party to challenge the court’s
21 	R. Doc. 25.
22 	R. Doc. 27.
23 	R. Docs. 32, 33.
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subject-matter jurisdiction based upon the allegations on the face of the
complaint. Barrera-Montenegro v. United States, 74 F.3d 657, 659 (5th Cir.
1996). In ruling on a Rule 12(b)(1) motion to dismiss, the court may rely on
“(1) the complaint alone; (2) the complaint supplemented by undisputed
facts evidenced in the record; or (3) the complaint supplemented by the
undisputed facts plus the court’s resolution of disputed facts.” 	Moore v.
Bryant, 853 F.3d 245, 248 (5th Cir. 2017) (quoting Barrera-Montenegro, 74
F.3d at 659). The plaintiff bears the burden of demonstrating that subject-
matter jurisdiction exists. See Spokeo v. Robins, 578 U.S. 330, 338 (2016).
If the court lacks the statutory or constitutional power to adjudicate a
claim, the claim must be dismissed for lack of subject matter jurisdiction.
Home Builders Ass’n of Mississippi, Inc. v. City of Madison, Miss., 143 F.3d
1006, 1010 (5th Cir. 1998). 	A court has federal question jurisdiction when
the plaintiff’s claim arises under the Constitution, laws, or treaties of the
United States. 	28 U.S.C. § 1331. 	A claim arises under federal law when
federal law creates the cause of action. 	Grable & Sons Metal Prods., Inc. v.
Darue Eng’g & Mfg., 545 U.S. 308, 312 (2005). 	The mere presence of a
federal issue “does not automatically confer federal-question jurisdiction.”
Merrell Dow Pharm., Inc. v. Thompson, 478 U.S. 804, 813 (1986); cf.
Grable, 545 U.S. at 314 (a state-law claim can give rise to federal question
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jurisdiction if it “necessarily raise[s] a stated federal issue, actually disputed
and substantial, which a federal forum may entertain without disturbing any
congressionally 	approved 	balance 	of 	federal 	and 	state 	judicial
responsibilities”).
A court’s dismissal of a case for lack of subject-matter jurisdiction is
not a decision on the merits, and the dismissal does not necessarily prevent
the plaintiff from pursuing the claim in another forum. 	See Hitt v. City of
Pasadena, 561 F.2d 606, 608 (5th Cir. 1977).
B. Federal Rule of Civil Procedure 12(b)(6)
When a defendant attacks the complaint because it fails to state a
legally cognizable claim, Rule 12(b)(6) provides the appropriate challenge.
To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead enough
facts to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 547 (2007)). 	A claim is facially plausible “when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.” 	Id. at 678. 	The Court
must accept all well-pleaded facts as true and must draw all reasonable
inferences in favor of the plaintiff. Lormand v. U.S. Unwired, Inc., 565 F.3d
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228, 239, 244 (5th Cir. 2009). But the Court is not bound to accept as true
legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678.
A legally sufficient complaint must establish more than a “sheer
possibility” that the party’s claim is true. See Iqbal, 556 U.S. at 678. It need
not contain “detailed factual allegations,” but it must go beyond “‘labels and
conclusions’ or ‘a formulaic recitation of the elements of a cause of action.’”
See id. (quoting Twombly, 550 U.S. at 555). In other words, “[t]he complaint
(1) on its face (2) must contain enough factual matter (taken as true) (3) to
raise a reasonable hope or expectation (4) that discovery will reveal relevant
evidence of each element of a claim.” 	Lormand, 565 F.3d at 257 (citations
omitted). 	The claim must be dismissed if there are insufficient factual
allegations “to raise a right to relief above the speculative level,” Twombly,
550 U.S. at 555, or if it is apparent from the face of the complaint that there
is an insuperable bar to relief, see Jones v. Bock, 549 U.S. 199, 215 (2007).
On a Rule 12(b)(6) motion, the Court must limit its review to the
contents of the pleadings, including attachments. Brand Coupon Network,
L.L.C. v. Catalina Mktg. Corp., 748 F.3d 631, 635 (5th Cir. 2014). The Court
may also consider documents attached to a motion to dismiss or an
opposition to that motion when the documents are referred to in the
pleadings and are central to a plaintiff’s claims. Id. “The district court ‘may
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also consider matters of which [it] may take judicial notice.’” 	Hall v.
Hodgkins, 305 F. App’x 224, 227 (5th Cir. 2008) (citing Lovelace v. Software
Spectrum, Inc., 78 F.3d 1015, 1017-18 (5th Cir. 1996)).
III. 	DISCUSSION
A. 	Constitutionality of Louisiana Revised Statute § 47:2211
and Louisiana Constitution, art. XII, § 10(C)
Defendants argue that plaintiff has no right to a declaration of the
alleged unconstitutionality of either Louisiana Revised Statute § 47:2211, or
Louisiana Constitution, art. XII, § 10(C) because: (1) the Tax Injunction Act
bars Plaintiff’s challenge to La. R.S. 47:2211; (2) plaintiff’s claim as to La. R.S.
47:2211 	is 	moot; 	(3) 	plaintiff 	lacks 	standing 	to 	challenge 	Louisiana
Constitution, art. XII, 10(C); and (4) plaintiff failed to state a plausible claim
to declare Louisiana Constitution, art. XII, § 10(C) unconstitutional. 	The
Court considers each argument in turn.
1. 	The Tax Injunction Act
The Tax Injunction act provides that “[t]he district courts shall not
enjoin, suspend or restrain the assessment, levy, or collection of any tax
under State law where a plain, speedy and efficient remedy may be had in the
courts of such State.” 	28 U.S.C. § 1341. 	The Act is “first and foremost a
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vehicle to limit drastically federal district court jurisdiction to interfere with
so important a local concern as the collection of taxes.” Rosewell v. LaSalle
Nat. Bank, 450 U.S. 503, 522 (1981) (internal citations omitted). 	Federal
courts interpret the statutory text to advance that purpose. ANR Pipeline Co.
v Louisiana Tax Comm’n, 646 F.3d 940, 946 (5th Cir. 2011) (“[T]his
statutory text should be interpreted to advance its purpose of ‘confin[ing]
federal-court intervention in state government.’” (quoting Arkansas v. Farm
Credit Servs. Of Cent. Ark., 520, 821, 826-27 (1997)).
The Fifth Circuit has made clear that the Tax Injunction Act “is not a
narrow statute aimed only at injunctive interference with tax collection, but
is rather a broad restriction on federal jurisdiction in suits that impede state
tax administration. . . .” United Gas Pipe Line Co. v. Whitman, 595 F.2d 323,
326 (5th Cir. 1979); see also Hammonds v. Dallas Cty., 815 F. App’x 787, 787
(5th Cir. 2020) (“[T]he [Tax Injunction Act] is a broad jurisdiction[al]
impediment to federal court interference with the administration of state tax
systems.”) (internal citations omitted). 	The Act “applies with full force to
taxes ‘imposed by municipalities,’” Hammonds, 815 F. App’x at 787 (quoting
Home Builder’s Ass’n v. City of Madison, 143 F.3d 1006, 1010 n.6 (5th Cir.
1998)), and “extends to the broader activities of assessing, levying, and
collecting taxes.” Id. at 787-88.
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Here, plaintiff seeks a declaration of her rights under La. R.S. 47:2211.
She argues that the Tax Injunction Act does not apply because she is not
seeking 	to 	avoid 	paying 	taxes 	but 	seeks 	relief 	from 	the 	allegedly
unconstitutional retention of money collected in excess of the outstanding
tax bill. La. R.S. 47:2211 provides:
Except as otherwise agreed by the holders of the statutory impositions
and governmental liens, all proceeds from the sale of adjudicated
property after deduction of the costs of the sale shall be paid pro rata
to those holders, and any amount in excess of the costs, statutory
impositions, and governmental liens shall be paid to the selling
political subdivision.
The text of this section is clear that it involves only post-tax collection
procedures. The question is thus whether post-tax collection procedures are
part of the “broad activities of assessing, levying, and collecting taxes.”
Hammonds, 815 F. App’x at 787-88. The Court finds that they are not. Other
courts that have addressed the issue presented here have concluded that
claims like those asserted here are not barred by the Tax Injunction Act. See
Freed v. Thomas, 976 F.3d 729, 737 (6th Cir. 2020) (holding that the Tax
Injunction Act did not bar federal jurisdiction when a plaintiff asserted “that
the State took his property—the surplus sale proceeds and excess equity—
after collecting his tax debt without providing just compensation”); Coleman
v. District of Columbia, 70 F. Supp. 3d 58, 66-68 (D.D.C. 2014) (same);
Dorce v. City of New York, 2 F.4th 82, 99 (2d Cir. 2021) (finding the
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reasoning in Freed and Coleman persuasive); cf. Hibbs v. Winn, 542 U.S. 88,
105-06 (2004) (holding that the Tax Injunction act does not bar all claims
relating to state tax administration, but has the more limited scope of barring
claims that disrupt the state’s collection of revenue). 	Accordingly, the Tax
Injunction Act does not bar this Court from hearing plaintiff’s challenge to
La. R.S. 47:2211.
2. Mootness as to La. R.S. 47:2211
Article III of the U.S. Constitution limits federal jurisdiction to cases or
controversies. U.S. Const. art. III, §2. “Mootness is one of the doctrines that
ensures federal courts are only deciding live cases or controversies.” Spell v.
Edwards, 962 F.3d 175, 178-79 (5th Cir. 2020) (citing Campbell-Ewald Co.
v. Gomez, 5777 U.S. 153, 160-61 (2016)). 	“A case becomes moot—and
therefore no longer a ‘Case’ or ‘Controversy’ for purposes of Article III—when
the issues presented are no longer ‘live’ or the parties lack a legally cognizable
interest in the outcome.” Already, LLC v. Nike, Inc., 568 U.S. 85, 91 (2013)
(quoting Murphy v. Hunt, 455 U.S. 478, 481 (1982) (per curium) (internal
quotations omitted)).
A case challenging a statute, then, would “usually become[] moot if the
challenged law has expired or been repealed.” Spell, 962 F.3d at 179 (citing
Veasey v. Abbott, 888 F.3d 792, 799 (5th Cir. 2018) (“Ordinarily, a[n]
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[action] challenging a statute would become moot by the legislature’s
enactment of a superseding law.”). 	“Once the law is off the books, there is
nothing injuring the plaintiff and, consequently, nothing for the court to do.”
Id. (first citing N.Y. State Rifle & Pistol Ass’n, Inc. v. City of New York, 590
U.S. 336, 339 (2020) (holding that a claim for injunctive relief against a law
was moot when the law was amended to give “the precise relief that [the
plaintiffs requested]”); and then citing Amawi v. Paxton, 956 F.3d 816, 819-
21 (5th Cir. 2020) (dismissing an appeal as moot because a statutory
amendment “provided the plaintiffs the very relief their lawsuit sought”)).
Louisiana recently enacted legislation that overhauls its procedures
regarding post-tax collection procedures for adjudication sales. But the new
statutory framework does not become effective until January 1, 2026. Until
then, La. R.S. 47:2211 is still operative. 	Thus, as of the date of this order,
plaintiff’s claims are not moot.
3. Standing to challenge Article XII, § 10(C) of the Louisiana
Constitution
Plaintiff argues that Louisiana Constitution Article XII, § 10(C) is
routinely 	used 	by 	political 	subdivisions 	in 	Louisiana 	to 	avoid 	paying
judgments rendered against it.24 Accordingly, plaintiff seeks to challenge the
24 	R. Doc. 20 at ¶ 51.
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constitutionality of Article XII, § 10(C) of the Louisiana Constitution.
Defendants argue that the Amended Complaint lacks well-pleaded facts that,
if proved, would establish any controversy between plaintiff and the City
regarding this provision.25 	Section 10(C) of Article XII of the Louisiana
Constitution states:
Limitations; Procedure; Judgments. 	Notwithstanding Paragraph (A)
or (B) or any other provision of this constitution, the legislature by law
may limit or provide for the extent of liability of the state, a state
agency, 	or 	a 	political 	subdivision 	in 	all 	cases, 	including 	the
circumstances giving rise to liability and the kinds and amounts of
recoverable damages. It shall provide a procedure for suits against the
state, a state agency, or a political subdivision and provide for the effect
of a judgment, but no public property or public funds shall be subject
to 	seizure. 	The 	legislature 	may 	provide 	that 	such 	limitations,
procedures, and effects of judgments shall be applicable to existing as
well as future claims. No judgment against the state, a state agency,
or a political subdivision shall be exigible, payable, or paid except
from funds appropriated therefor by the legislature or by the political
subdivision against which the judgment is rendered.
(emphasis added).
Article 	III 	standing 	is 	an 	element 	of 	the 	court’s 	subject-matter
jurisdiction. See Acheson Hotels, LLC v. Laufer, 601 U.S. 1, 4 (2023). “The
party invoking federal jurisdiction bears the burden of establishing these
elements.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992). To establish
Article III standing, a plaintiff must establish: “(1) an ‘injury in fact,’ (2) a
25 	R. Doc. 25-1 at 21.
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sufficient ‘causal connection between the injury and the conduct complained
of,’ and (3) a ‘likeli[hood]’ that the injury ‘will be redressed by a favorable
decision.” 	Susan B. Anthony List v. Driehaus, 573 U.S. 149, 157-58 (2014)
(quoting Lujan, 504 U.S. at 560). “To establish injury in fact, a plaintiff must
show that he or she suffered ‘an invasion of a legally protected interest’ that
is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or
hypothetical.’” 	Spokeo, Inc. v. Robins, 578 U.S. 330, 339 (2016) (quoting
Lujan, 573 U.S. at 560). 	“Although ‘imminence’ is concededly a somewhat
elastic concept, it cannot be stretched beyond its purpose, with is to ensure
that the alleged injury is not too speculative for Article III purposes—that the
injury is certainly impending.” 	Lujan, 504 U.S. at 564, n.2. “Allegations of
possible future injury do not satisfy the requirements of Art. III.” Whitmore
v. Arkansas, 495 U.S. 149, 158 (1990).
Here, plaintiff’s alleged injury is a possible future one. 	This claim of
injury requires the following chain of events. First, plaintiff must succeed on
her Fifth Amendment claim and be awarded just compensation. Second, the
City of New Orleans would have to invoke § 10(C) to avoid paying that
judgment. The Court finds that such an injury is not “certainly impending”
as required to satisfy the requirements of Article III standing. See id.
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Accordingly, 	the 	Court 	dismisses 	without 	prejudice 	plaintiff’s
challenge to Article XII, § 10(C) of the Louisiana Constitution.
4. 	Failure to state a claim regarding Article XII, § 10(C) of the
Louisiana Constitution
Because 	the 	Court 	dismisses 	plaintiff’s 	claim 	regarding 	the
constitutionality of Louisiana Constitution Article XII, § 10(C) on standing
grounds, it does not reach this argument.
B. 	Nullity of the Tax Sale
Plaintiff seeks to have the Tax and Adjudication Sales set aside as
absolute nullities or as redemption nullities. Defendants challenge plaintiff’s
standing to nullify the Tax Sale. The Court considers the various arguments
regarding nullity below.
La. R.S. 47:2121, 	et seq., governs the payment and collection of
property taxes, tax sales, and redemptions. Under the 2008 reforms, at a tax
sale, “tax sale title” is sold as a certificate redeemable by tax debtors for three
years from the date of the recordation of the tax sale certificate. 	La. R.S.
47:2156; La. Const. art. VII, § 25(B). 	A tax sale certificate converts to
ownership of the tax sale properly only when the redemption period has
expired, and the interested parties are duly notified of the tax sale. La. R.S.
47:2121(B). Per the statute, a party is “duly notified” when
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an effort meeting the requirements of due process of law has been
made to identify and to provide that person with a notice that meets
the requirements of R.S. 47:2156, 2157, 2206, 2236, or 2275, or with
service of a petition and citation in accordance with R.S. 47:2266,
regardless of any of the following:
(a) Whether the effort resulted in actual notice to the person.
(b) Whether the one who made the effort was a public official or
a private party.
(c) When, after the tax sale, the effort was made.
La. R.S. 47:2122(4).
Tax debtors have a constitutional right to redeem property sold at a tax
sale within the redemptive period. 	La. Const. art. VII, § 25(B). 	If the
redemptive period has expired, a tax sale party may still bring an action to
annul the tax sale based on “payment nullity, redemption nullity, or a nullity
under R.S. 47:21612.” 	La. R.S. 47:2286. 	These three nullities are relative,
which, unlike absolute nullities, can be cured. 	See Adair Asset Mgmt., LLC
v. Turney, 195 So. 3d 501, 512-13 (La. Ct. App. 2 Cir. 2016). 	A payment
nullity claim “can be cured by acquisitive prescription.” 	La. R.S. 47:2286
cmt. 	A redemption nullity claim “can be cured by the giving of notice and
the passage of time.” 	Id. 	And a claim of nullity under R.S. 47:21612 can be
“cured by a sale to a good faith purchaser.” Id.
Defendants argue that plaintiff cannot bring a claim that the Tax Sale
is an absolute nullity. 	This is correct. 	The applicable statutory scheme is
clear that there are only three nullities, all of which are relative: redemption
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nullities, La. R.S. 47:2122; payment nullities, La. R.S. 47:2122; or sales to a
prohibited buyer, La. R.S. 47:2162. See Adair Asset Mgmt., 195 So.3d at 513.
As the Louisiana Court of Appeal in Adair Asset Mgmt. held, this statutory
scheme 	aimed to remove 	the 	previous 	uncertainty 	resulting 	from the
“possibility that a tax sale could be invalidated at any time as an absolute
nullity.” 	Id. at 512-13. 	That court further found that the statutory scheme
sought to “reconcile[] the requirements of due process under Mennonite,26
with a system that both provides a fair process for the redemption of tax sale
properties and encourages the return to commerce of such properties subject
to tax sale.” Id.
The Court next considers whether plaintiff can challenge the Tax Sale
as a relative nullity. Defendants argue that plaintiff was not a party to whom
notice was Constitutionally or statutorily required. Plaintiff argues that the
alleged defect in sale–the alleged lack of notice to her mother–follows the
property and passes to subsequent owners.
In Mooring Tax Asset Grp., LLC v. James, the Louisiana Supreme
Court found that the current record owner of a property “properly sought to
annul the tax sale even though he was not the tax debtor or property owner
at the time of the sale.” 156 So. 3d 1143, 1151 (La. 2014). Defendants argue
26 	Mennonite Bd. of Missions v. Adams, 462 U.S. 791 (1983).
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that Mooring is distinguishable because Mooring acquired the property at
issue via cash sale, whereas plaintiff acquired the property at issue here via
quitclaim. For the reasons that follow, the Court finds this distinction inapt.
As all parties agree, on or around October 1, 2021, plaintiff’s mother
executed a quitclaim deed, transferring any rights or interests she had in the
property at the time to plaintiff. 	A quitclaim deed “is an instrument that
purports to convey nothing more than the interest or estate of the grantor, if
any he has, at the time of the conveyance, rather than the property itself.”
La. Civ. Code art. 2502 Revision Comment (c); see also Franklin v. Camterra
Resources Partners, Inc., 123 So. 3d 184, 187 (La. App. 2d Cir. 2013). Thus,
the quitclaim deed conveyed to plaintiff only the rights or interests that
plaintiff’s mother had, if any, to the property at issue on that date.
At that time, a tax sale of the property in question had already taken
place. As defendants argue, plaintiff obtained only her mother’s post-tax sale
interest in the property. However, based on the tax sale law in effect in 2012,
plaintiff’s mother continued to have an interest in the property following the
sale. See Cent. Props. v. Fairway Gardenhomes, LLC, 225 So. 3d 441, 448-
49 (La. 2017). Indeed, “[u]nder the tax sale law as amended in 2008, the tax
collector no longer auctions the real estate itself; instead, the tax collector
auctions a tax sale title to the property . . . which neither transfers nor
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terminates the property interest of any person in the property.” 	Id. (first
citing La. Rev. Stat. 47:2121(B) (“No tax sale shall transfer or terminate the
property interest of any person in tax sale property or adjudicated property
until that person has been duly notified and . . . the redemptive period . . .
[has] terminated.”); and then citing La. Rev. Stat. 47:2121(C) (“A tax sale title
confers on the tax sale purchaser . . . only tax sale title. . . .”)). Thus, plaintiff’s
mother continued to hold her interest in the property until she was “duly
notified” and “the redemptive period . . . terminated.” 	La. Rev. Stat.
47:2121(B). 	Plaintiff alleges that her mother was never notified of the tax
sale. 	Taking this as true, in 2021, when plaintiff’s mother transferred the
property to plaintiff via the quitclaim deed, plaintiff’s mother still held
interest in the property to transfer to plaintiff, and the City held only tax sale
title. Accordingly, the Court finds that, even though plaintiff was not the tax
debtor or property owner at the time of the sale, as the current interest-
holder in the property, she has standing bring the due process claim. 	See
Mooring, 156 So.3d at 1151.
Defendants argue that even if plaintiff’s mother’s right to receive notice
of the Tax Sale was transferred, the Louisiana public records doctrine bars
plaintiff’s claim. They argue that plaintiff had constructive notice of the Tax
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Sale at or before obtaining the property via quitclaim deed. Plaintiff argues
that constructive notice is insufficient.
It is true that the corollary to the public records doctrine27 is that all
persons are held to have constructive notice of the existence and contents of
recorded instruments affecting real estate. See Judice-Henry-May Agency,
Inc. v. Franklin, 376 So.2d 991 (La. Ct. App. 1st Cir. 1979). But it is also true
that 	constructive 	notice 	is 	generally 	insufficient 	to 	meet 	the 	notice
requirements for terminating a property interest. Under La. R.S. 47:2122,
“[d]uly notified” means, with respect to a particular person, that
an effort meeting the requirements of due process of law has
been made to identify and to provide that person with a notice
that meets the requirements of R.S. 47:2156, 2157, 2206, 2236,
or 2275, or with service of a petition and citation in accordance
with R.S. 47:2266 . . . .
(emphasis added). Due process requires “actual notice of the pending
tax sale by the tax collector’s mailing of the notice of delinquency to each
owner of record . . . if the name and address of the owner are reasonably
ascertainable.” 2 La. Prac. Real Est. Requirement of notice and due process
§ 17:12 (2d ed.) (citing Allied Tax Fund, LLC v. Chin Hong Bow & Co., Inc.,
155 So. 3d 524 (La. Ct. App. 4th Cir. 2013)).
27 	The public records doctrine itself generally requires that interests in
real estate must be recorded to affect third parties. La. Civ. Code art.
3338.
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However, plaintiff was not an “owner of record” at the time of the tax
sale, her mother was. 	The crux of the dispute is whether this distinction
matters. At issue is whether constructive notice is sufficient to terminate a
successor in interest’s property interest. Defendants have cited no support
for such a proposition. Without clear Louisiana precedent, the Court will not
announce a bright-line rule that recordation of a tax sale suffices as notice of
that sale to successors in interest. 	Accordingly, at this juncture, the Court
finds that the public records doctrine does not preclude plaintiff’s claims.
Finally, plaintiff alleges in the alternative that if she or her mother were
sent notices, those notices were insufficient. Plaintiff has not pled any facts
regarding how the notices, which she avers they never received, were
insufficient. Plaintiff has not plausibly alleged insufficient notice.
Accordingly, the Court finds that plaintiff has standing to bring her
claim to nullify the tax sale as a redemption nullity based on lack of notice,
but not based on insufficient notice. 	The Court dismisses plaintiff’s claim
that the tax sale is an absolute nullity for failure to state a claim upon which
relief can be granted.
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C. 	Takings Claim
Plaintiff argues that if this Court finds the sales are not nullities, she is
entitled to receive just compensation.28 	Plaintiff basis her argument in the
Takings Clause of the Fifth Amendment to the United States Constitution.29
Defendants argue that plaintiff has no plausible claim to recover the “equity”
she allegedly had in the property less the tax debts.30
The Takings Clause of the Fifth Amendment, applicable to the States
through the Fourteenth Amendment provides that “private property [shall
not] be taken for public use without just compensation.” U.S. Const., amend
V. The Supreme Court recently addressed the issue of whether retention of
a surplus from a tax sale constitutes a taking, unanimously holding “that a
taxpayer is entitled to the surplus in excess of the debt owed.” 	Tyler v.
Hennepin Cnty., MN, 598 U.S. 631, 642 (2023). In Tyler, Hennepin County,
Minnesota, sold a delinquent taxpayer’s house for $40,000 to satisfy a
$15,000 tax bill and retained the remaining $25,000. 	Id. at 635. 	The
Supreme Court held that Tyler “stated a claim under the Takings Clause and
is entitled to just compensation.” Id. at 639.
28 	R. Doc. 20 at ¶¶ 37-44.
29 	Id.
30 	R. Doc. 25-1 at 15-16.
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Plaintiff’s claims are akin to the claims in Tyler. The Court finds that
plaintiff has adequately pled a violation of her Fifth Amendment rights.
However, in her complaint plaintiff seeks not just the retention of the
difference between the sale price and the tax debt.31 Plaintiff argues that she
is entitled to compensation based on her alleged “equity” or the “fair market
value” of the property.32 The Court finds plaintiff’s claim that she’s owed the
difference between the fair market value of the property and the outstanding
tax bill unsupportable.
The Supreme Court has not held that a plaintiff whose property is sold
for failure to pay taxes is entitled to recoup the fair market value of that
property and, the Sixth Circuit, addressing this very issue post-Tyler,
rejected plaintiff’s position. 	Freed v. Thomas, 81 F.4th 655, 658 (6th Cir.
2023). 	In Freed, the Sixth Circuit stated that “[n]either this Court nor the
Supreme Court has ever held that a plaintiff whose property is foreclosed and
sold at a public auction for failure to pay taxes is entitled to recoup the fair
market value of the property.” 	Id. 	In rejecting the proposition that fair
market 	value 	is 	reasonable, 	the 	Sixth 	Circuit 	further 	explained 	that
“awarding the fair market value of a property instead of the price obtained at
31 	R. Doc. 20 at ¶¶ 37-44.
32 	Id.
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a public tax foreclosure sale ‘would run contrary to the general principle that
just compensation is measured by the value of the property taken’ and would
‘not only . . . [take] money away from the public’ but would also allow
plaintiffs to ‘benefit from their tax delinquency.’” Id. at 659 (quoting Rafaeli,
LLC v. Oakland Cnty., 952 N.W.2d 434, 465-66 (2020)). 	The Court finds
that awarding the fair market value “would run contrary to the general
principle that just compensation is measured by the value of the property
taken.” Rafaeli, 952 N.W.2d at 465.
Accordingly, plaintiff has adequately pled a claim for relief based on
the actual sale price but not the fair market value or “equity” in the property.
The Court dismisses plaintiff’s claim for compensation based on the fair
market value of the property for failure to state a claim.
D. 	Excessive Fines Claim
Plaintiff brings an excessive fines claim. 	This claim substantially
overlaps with her Fifth Amendment claim, and the relief sought is the same.
The Court is to avoid reaching constitutional issues when a case can be
resolved on other bases. See St. Joseph Abbey v. Castille, 700 F.3d 154, 165
(5th Cir. 2012); County Court of Ulster County v. Allen, 442 U.S. 140, 154
(1979) (federal courts “have a duty to decide constitutional questions when
necessary” but also “have an equally strong duty to avoid constitutional
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issues that need not be resolved in order to determine the rights of the
parties”). The Supreme Court has already spoken on the application of the
takings clause to the retention of excess profits from a tax sale, but a majority
has not yet spoken on the same with regards to excessive fines claims.
Because a finding that defendant’s actions constitute a taking or an excessive
fine entitle plaintiff to the same relief, the Court avoids reaching the issue of
whether 	defendant’s 	actions 	constitute 	a 	violation 	of 	the 	Eighth
Amendment’s 	prohibition 	on 	excessive 	fines. 	Accordingly, 	the 	Court
dismisses plaintiff’s excessive fines claim without prejudice.
IV. 	CONCLUSION
For the foregoing reasons, the Court GRANTS IN PART and DENIES
IN PART defendants’ motions to dismiss as set forth above.
The Court DISMISSES plaintiff’s challenge to Article XII, § 10(C) of the
Louisiana Constitution WITHOUT PREJUDICE.
The Court DISMISSES plaintiff’s claim that the tax sale is an absolute
nullity WITH PREJUDICE.
The Court DISMISSES plaintiff’s claim for compensation based on the
fair market value of the property WITH PREJUDICE.
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The Court DISMISSES plaintiff’s excessive fines claim WITHOUT
PREJUDICE.
The Court DENIES defendants’ motions as to the remaining claims.
New Orleans, Louisiana, this 21st day of November, 2025.
_____________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE
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