Louisiana Board of Ethicsethics.la.gov/Pub/Agendas/FullAgendas/200911... · Louisiana Board of Ethics LaSalle Building - First Floor 617 North 3"d Street, Baton Rouge, Louisiana November

Louisiana Board of EthicsLaSalle Building - First Floor

617 North 3"d Street

, Baton Rouge, Louisiana

November 20.20099:00 a.m.

GENERAL

Appearances

G10. Docket No. 09-344Reconsideration of a request for an advisory opinion issued concluding that the

members of the Louisiana Life and Health Insurance Guaranty AssociationBoard of Directors are required to file annual personal financial disclosurestatements.

G11. Docket No. 09-377Appearance in connection with consideration of a request for an advisoryopinion on whether an architecture firm that has entered into contracts with theState of Louisiana through the Office of Facility Planning would be subject tothe Code of Ethics.

Gl2. Docket No. 09-378Appearance in connection with consideration of a request for an advisoryopinion on whether an architecture firm that has entered into contracts with the

State of Louisiana through the Office of Facility Planning would be subject tothe Code of Ethics.

G13. Docket No. 09-935Appearance in connection with consideration of a request for an advisoryopinion as to the propriety of the Office of Coastal Protection and Restoration(OCPR) hiring a person whose spouse works for an engineering firm that has

contracts with the OCPR.

General ItemEthics Board Docket No. BD 2009-344

tu2012009

RE: Reconsideration of a request for an advisory opinion issued concluding that the members of

the Louisiana Life and Health Insurance Guaranty Association Board of Directors are required to

file annual personal financial disclosure statements.

Relevant Statutory Provisions, Advisory Opinions: 1124.2.1, Louisiana Insurance Guaranty

Association v. Commission on Ethics for Public Employees,g5 O02I (La. App. I Cir.5/5195),

656 So.2d 670

Comments:PROCEDURAL BACKGROUND:

At the March 2009 meeting, the Board issued an advisory opinion stating that the members of the

Louisiana Life and Health Insurance Guaranty Association Board of Directors are required to file

annual personal financial disclosure statements are required to file personal financial disclosure

statements pursuant to Section 1124.2.1of the Code.

Counsel for LLHIGA has filed this request for reconsideration based on the following factors:

Counsel for LLHIGA argues that its enabling statute, which was amended as a result of the LIGA

case, is distinguishable from that of LIGA as the amended enabling statute for LLHIGA states

that unless spicifically set forth in its statutes, it shall not be subject to the laws that govern other

departments, units, agencies, instrumentalities, commissions or boards of the state. Further,

Counsel has submitted meeting minutes from the Senate and House from the meeting when this

amendment to the statute was debated. It appears from the meeting minutes that the members of

the legislature understood that the passage of tn. amendment would exempt LLHIGA from the

provisions of the Code of Ethics.

Second, LLHIGA argues that the property of LLHIGA does not belong to the public' In the

LIGA case. the Court noted that certain monies was paid by the association to the state general

fund. LLHIGA does not operate under the same provisions'

Third, LLHIGA argues that its functions are not exclusively of a public character and performed

solely for the public benefit. LLHIGA argues that its provisions protects certain owners or

certificate holders as limited by the LLHIGA Act as well as certain beneficiaries. However,

LLHIGA argues that it does not protect the rights of third-parties.

Finally, LLHIGA argues that since the Duplantis case, which was decided after the LIGA case,

determined that the Cou.t of Appeal does not have the right to review an advisory opinion issued

by the Board, that the decision in the LIGA case, which resulted from the review of an advisoryopinion, that the LIGA decision is null and void.

FACTS:

The Louisiana Life and Health Insurance Guaranty Association ("LLHIGA") was created byLSA-R.S. 22:2085 as a nonprofit entity. LLHIGA is composed of all insurers licensed to sell lifeinsurance, accident and health insurance. and individual annuities in the State of Louisiana. If amember insurer becomes insolvent, then the Association provides protection to the Louisianaresidents who are holders of the insurance policies issued by the insolvent insurer. TheAssociation operated pursuant to a plan of operation approved by the Commissioner of Insuranceand exercises its powers through a board of directors.

The enabling statute states in pertinent part that "[n]otwithstanding any other provision of law tothe contrary, the association is not an may not be deemed a department, unit, agency,instrumentality, commission, or board of the state for any purpose unless specifically set forthherein and shall not be subject to laws governing such departments, units, agencies,instrumentalities, commissions, or boards of the state." The portion of the enabling statutestating "fn]otwithstanding any other provision of law to the contrary" and the portion that states"shall not be subject to laws governing such departments, units, agencies, instrumentalities,commissions, or boards of the state" was added after the issuance of the Court of Appeal, FirstCircuit's, decision in the LIGA case, see below.

LLHIGA does have the authority to expend, disburse or invest $10,000 or more in funds.

LAW:

Section 1124.2.1 of the Code requires financial disclosure for each member and designee of aboard or commission which has the authority to expend, disburse or invest $10,000 or more offunds in a fiscal year.

Section 1I24.2.I of the Code defines the term "boards and commissions"to include "each board,commission or like entity created by the constitution, by law, by a political subdivision [except asprovided in Subparagraph (b)1, or jointly by two or more political subdivisions as a governingauthority of a political subdivision, of the state, or of a local government."

Section 1124.2.1of Code excludes from the term "boards and commissions" any board orcommission or like entity that governs a political subdivision created by a single municipalgoverning authority of a municipality with a population of twenty-five thousand or less, or anysubdistrict of such a political subdivision. " Boards and commissions" also does not include theboard of directors of a private nonprofit corporation that is not specifically created by law.

ANALYSIS:

Counsel for LLHIGA asserts that the language contained in R.S. 22:2085, "the association is not

an may not be deemed a department, unit, agency, instrumentality, commission, or board of thestate for any pu{pose unless specifically set forth herein and shall not be subject to lawsgoverning such departments, units, agencies, instrumentalities, commissions, or boards of thestate," is evident of the Legislature's intent to exclude the members of the board of directors fromthe purview of the Ethics Code's financial disclosure provisions.

The staff initially based its recommendation on the decision in Louisiana Insurance GuarantyAssociation v. Commission on Ethics for Public Employees ,95 OO2I (La. App. I Cir. 5/5/95),656 So.2d 670. The Louisiana Insurance Guaranty Association ("LIGA") was created by R.S.22:2056. LIGA is composed of member insurers as a condition of their authority to transactinsurance in the state of Louisiana. LIGA operates pursuant to a plan of operation approved bythe Commissioner of Insurance and exercises its powers through a board of directors. Theenabling statute also contains the following language: "the association is not and may not bedeemed a department, unit, agency, or instrumentality of the state for any purpose." LIGA isalmost identical ro LLHIGA.

In LIGA v. Commission on Ethics, the First Circuit held that LIGA was a state or public agencywithin the contemplation of the Ethics Code. In its analysis, the First Circuit started with thefactors set forth by the Louisiana Supreme Court in State v. Smith, 357 So.2d 505, 507 (La.1978) to be considered when determining whether an entity is a state agency or public agency orin finding an individual to be a state or public officer: (1) the entity was created by thelegislature; (2) the powers were specifically defined by the legislature; (3) the property of theentity belonged to the public; and (4) the entity's functions were exclusively of a public characterand performed solely for the public benefit.

The First Circuit acknowledged the language contained in the enabling statute, which stated that"the association is not and may not be deemed a department, unit, agency, or instrumentality ofthe state for any purpose." However, the First Circuit stated that if the Legislature intended toexempt LIGA from the Ethics Code it could have in the statute. The Legislature did notspecifically exempt LLHIGA from the Ethics Code either. Moreover, the First Circuit noted thatLIGA was subject to the public records laws and the open meetings law. LLHIGA is also subjectto the public records laws and the open meetings law.

The First Circuit then noted that the powers and duties of LIGA are specifically outlined in R.S.22:2058. LLHIGA's powers and duties are specifically set forth in RS.22:2087. Neither LIGAnor LLHIGA can operate outside of the legislative parameters. Both are subject to the oversightof the Commissioner of Insurance.

The First Circuit also found that the LIGA functions were of a public character exclusively andwere performed solely for the public benefit. Since LLHIGA performs substantially similarfunctions, it is fair to say that the functions of LLHIGA are of a public character exclusively andare performed solely for the public benefit.

The First Circuit was also guided by the analysis in Polk v. Edwards ,626 So.2d 1128, II45-47(La. 1993), in which the Louisiana Supreme Court held that "despite the specific language in the

Casino Act itself stating that the Casino Corporation is not a state agency, except as expresslyprovided in the act, the Casino Corporation is an instrumentality of the state."

Based on the aforementioned considerations, the First Circuit found, despite any language in theenabling statute that LIGA is not a state agency, that LIGA is a state or public agency within thecontemplation of the Ethics Code.

In regards to LLHIGA, the enabling statute of LLHIGA was amended as a result of the LIGAcase. Further, it appears from the minutes of the respective legislative committees that reviewedthe amendment to LLHIGA Act that the members thought such amendment would removeLLHIGA from the purview of the Ethics Codes. (TKM)

Recommendations: Based on the new information submitted, adopt a proposed advisoryopinion stating that the members of LHIGA are not subject to the financial disclosure laws.

Date

$,Mr. Van R. Mayhall, Jr.Breazeale, Sachse & Wilson, L.L.P.Post Office Box 3197Baton Rouge, Louisiana 70821-3197 .v.

Re: Ethics Board D""ilt 'li;Uroa;{!Uft" Ill

Dear Mr. Mayhall:

The Louisiana Board of Ethics, atfor reconsideration of an advisorvthe members of the board of di L&i6ana Eife and Health Insurance GuarantvAssociation ("LLHIGA") were required to file annual personal financial disclosurestatementspursuanttoSection II24.2.I of theCodeof GovernmentalEthics. YoustatedthatLLHIGA was created by LSA-R.S. 22:2085 as a nonprofit entity. LLHIGA is composed ofall insurers licensed to sell life insurance, accident and health insurance, and individualannuities in the State of Louisiana. If a member insurer becomes insolvent. then theAssociation provides protection to the Louisiana residents who are holders of the insurancepolicies issued by the insolvent insurer. The Association operates pursuant to a plan ofoperation approved by the Commissioner of Insurance and exercises its powers through aboard of directors. You also stated that LLHIGA does have the authority to expend, disburseor invest $10,000 or more infun$"*

r ;,y y,,,._r, &". ,

d that ur,". ,rrdr?,e'J"ru%r'd&&t,'u.&", a,r.uit rendered an opinion inLouisiana Insurance Guaranty Associationv. Commission on Ethicsfor Public Employees,95-0021 (La. App. 1 Cir. 5/5/95),656 So.2d 670, finding that the Louisiana InsuranceGuaranty Association was, indeed, subject to the Louisiana Code of Governmental Ethics,which has a similarly worded enapli4g"ffi,tute to LHHIfi,A, that LHHIGA then went to thelegislature to amend LHHIGA's {na$h;rg stq,tl#e.dYou $tated that the enabling statute nowstates in pertinent part that "the asboeia&o% is nfft dh ma$ not be deemed a department, unit,agency, instrumentality, commission, or board of the state for any purpose unless specificallyset forth herein and shall not be subject to laws governing such departments, units, agencies,instrumentalities, commissions, or boards of the state."

The Board concluded. and instru;%Y';;{:&it#UEi;ii. at section rr24.2.rorthe code ofGovernmental Ethics would not r.quir"qtn6 tt"fnU.rc of the board of directors for theLouisiana Life and Health Insurance Guaranty Association to file annual personal financialdisclosure statements. Section 1124.2.1 of the Code requires financial disclosure for each

mber 2-O,7009 meeting, considered your requestssued at it April 2009 Board meeting stating that

Mr. Van R. Mayhall, Jr.DateEthics Board Docket No. 2009-344Page2

member and designee of a board af-rtmrnissiofowffiti ffitn"authority to expend, disburseor invest $10,000 or more of funds it( a fiscal tBae ffi-

Section II24.2.I of the Code defines the term "boards and commissions"to include "eachboard, commission or like entity created by the constitution, by law, by a political subdivision[except as provided in Subparagrqpfu{b)'], or jShtly-b}pere or more political subdivisions as

a governing authority of a politiciid ;.libdfvisiorin of the #u", or of a local government."

Although LLHIGA was created by statute and has the authority to expend, disburse, or invest$10,000 or more in funds in a fiscal year, the enabling statute specifically states thatLLHIGA "shall not be subject departments, units, agencies,instrumentalities, commissions. or ." Further, the Board took intoconsideration the comments and {t the flouse and Senate Committees thatreviewed the bill that was introduced to change LHHIGA's enabling statute to state that it"shall not be subject to laws governing such departments, units, agencies, instrumentalities,commissions, or boards of the state." During the committee meetings, it appears from theminutes that the members of those committees understood that with such change in the law,LHHIGA would not be subject to the provisions of the Code of Ethics. As such, pursuantto the provisions of the enabling statute, the members of the board of directors of LHHIGAare not required to file annual personal financial disclosure statements pursuant to Section1124.2.1of the Code.

This advisory opinion is based tffip,W#:fpcm p.;i$lrrr herein. Changes to the facts as

presented may result in a different a$plfcation of the provisions of the Code of Ethics. TheBoard issues no opinion as to past conduct or as to laws other than the Code of GovernmentalEthics. If you have any questions, please contact me at (800) 842-6630 or (225) 219-5600.

Sincerely,

LOUISIANA BOARD OF ETHICS

Tracy K. MeyerFor the Board

y-q go

9" *3 g\ ;H

@r ffiW-ffiruCreated By: Sylvia Scott on 05/13/2009 at 10:50 AMCategory: Ethics Advisory OpinionsCaption:

Mav 4.2009

Mr. Van R. Mayhall, Jr.Breazeale, Sachse & Wilson, L.L.P.Post Office Box 3197Baton Rouge, Louisiana 7082I-3197

Re: Ethics Board Docket No.ffiWffi-W

Dear Mr. Mayhall:

The Louisiana Board of Ethics, at its ApriI29,2009 meeting, considered your request foran advisory opinion as to whether the members of the board of directors for the LouisianaLife and Health Insurance Guaranty Association ("LLHIGA") are required to file annualpersonal financial disclosure statements pursuant to Section 1124.2.1 of the Code ofGovernmental Ethics. LLHIGA was created by LSA-R.S. 22:2085 as a nonprofit entity.LLHIGA is composed of all insurers licensed to sell life insurance, accident and healthinsurance, and individual annuities in the State of Louisiana. If a member insurerbecomes insolvent, then the Association provides protection to the Louisiana residentswho are holders of the insurance policies issued by the insolvent insurer. The Associationoperates pursuant to a plan of operation approved by the Commissioner of Insurance andexercises its powers through a board of directors. You stated that the enabling statutestates in pertinent part that "the association is not an may not be deemed a department,unit, agency, instrumentality, commission, or board of the state for any purpose unlessspecifically set forth herein and shall not be subject to laws governing such departments,units, agencies, instrumentalities, commissions, or boards of the state." LLHIGA doeshave the authority to expend, disburse or invest $10,000 or more in funds.

The Board concluded, and instructed me to inform you, that Section Il24.2.lof the Codeof Governmental Ethics would require the members of the board of directors for theLouisiana Life and Health Insurance Guaranty Association to file annual personalfinancial disclosure statements. Section 1124.2.1 of the Code requires financialdisclosure for each member and designee of a board or commission which has theauthority to expend, disburse or invest $10,000 or more of funds in a fiscal year.

Section 1124.2.1 of the Code defines the term "boards and commissions"to include "eachboard, commission or like entity created by the constitution, by law, by a politicalsubdivision [except as provided in Subparagraph (b)], or jointly by two or more politicalsubdivisions as a governing authority of a political subdivision, of the state, or of a localgovernment."

Since LLHIGA was created specifically by statute and has the authority to expend,disburse, or invest $10,000 or more in funds in a fiscal year, its members of the board ofdirectors are required to file annual personal financial disclosure statements beginning onMay 15, 2009.

The Board concluded, and instructed me to inform you, that it based its decision on theanalysis by the Court of Appeal, First Circuit in Louisiana Insurance GuarantyAssociation v. Commission on Ethics for Public Employees , 95-0021 (La. App. 1 Cir.515195),656 So.2d 670. The Louisiana Insurance Guaranty Association ("LIGA") is aentity created by statutes substantially similar to those that created LLHIGA. Both LIGAad LLHIGA are composed of member insurers authorized to do and doing business in theState of Louisiana. Both operate pursuant to a plan of operation approved by theCommissioner of Insurance. Both LIGA's and LLHIGA's powers and duties are set bythe legislature in statute. Further, both LIGA's and LLHIGA's functions are of a publiccharacter exclusively and are performed solely for the public benefit. Based on thesefactors, the First Circuit concluded, despite the enabling statute containing languagestating that LIGA was not a state agency, that LIGA was indeed a state or public agencywithin the contemplation of the Ethics Code.

The Board issues no opinion as to laws other than the Code of Governmental Ethics. Ifyou have any questions, please contact me at (800) 842-6630 or (225) 219-5600.

Sincerely,


Tracy K. MeyerFor the Board

BREAZEALE, SACHSE & WILSON, L.L.P. I atto R N EYS Ar LAuu

October 23,2009

VAN R. MAYHALL, JR.vrm@bswllp,com

meoronr: 225-3814009coRroi^G PrcNG: 225-387 4OO0

ru:225-387-5397One American Place. 23rd Floor

Post Office Box 3197Baton Rouge, Louisiana 7082 1-3'l97

www.bswllp,com

Tracy K. MeyerLouisiana Board of EthicsP.O. Box 4368Baton Rouge, LA7082l

RE: Ethics Board Docket No. 2009-344Request for Reconsideration

Dear Tracy:

You will remember that on or about May 4,2009, the Louisiana Board of Ethics issuedan advisory opinion in the captioned matter. On May 5th, 2009, we requested reconsideration ofthat advisory opinion for the reasons stated in the May 5, 2009, letter, a revised copy of whichwe attach hereto and make part hereof. As discussed in our teleconference of yesterday, theLLHIGA Board has considered this matter carefully, and while it wishes for reconsideration ofthe advisory opinion, it does not wish to convert the opinion into the form of a declaratoryopinion pursuant to LSA-R.S. 11:1141.1. Therefore, that request has been deieted from therevised version of our reconsideration request.

As I understand it, we will proceed with the reconsideration of the advisory opinion onthe currently scheduled date of Friday, November 20,2009. Our preference would be to have itheard before the Board later in the agenda since I have some commitments that morning. Youhave indicated that you can accommodate me on this, and I certainly appreciate your everycourtesy in this matter,

I will look back at the May 5th letter in detail and determine if we wish to submitanything further for the consideration of the Board of Ethics. If I am inconect in my statementof our agreements or understandings, kindly let me know as soon as possible.

S AT O N ROUGE NE'd/ORLEANS887581.1

MANDEVILTE

Tracy K. MeyersOctober 23,2009Page2

With kindest regards, I am

VRM:laf

cHsE & WILSON, LLP

Van R. Mayhall, Jr.

8875E1.1

B R EAZ EAL E, SACHSE & WILSON, L.L.P. i

ATTORNEYS AT LAW

May 5,2009www.bswllp.com

Tracy K. MeyerLouisiana Board of EthicsP.O. Box 4368Baton Rouge, LA 70821

RE: Ethics Board Docket No. 2009-344Request for Reconsideration and Request for Declaratory Opinion

Dear Tracy:

On March 19,2009, LLHIGA requested an advisory opinion from the Louisiana Board of Ethics(the "Ethics Board") confirming that LSA-R.S. 42 1124.2.1, requiring certain financialdisclosures by members of certain "boards and commissions" in Louisiana, was not applicable torepresentatives of member insurers serving on the Louisiana Life and Health Insurance GuarantyAssociation ("LLHIGA") Board of Directors (.'LLHIGA Board").

This matter came before the Ethics Board as Ethics Board Docket No. 2009-344 onApril 29,2009, at which time the Ethics Board indicated that its opinion was that the members of theLLHIGA Board are subject to the financial disclosure requirements set forth in La. R.S.42:1124.2.1. The Ethics Board staff has issued a draft advisory opinion ("Advisory Opinion")reflecting this advice on May 4,2009.

At this time, LLHIGA hereby requests reconsideration of the May 4,20Q9, Advisory Opinion,based on four (4) nonexclusive reasons: the 1997 Amendment, the "ownership of assets" issus,the "solely for public benefif issue, and the Duplantis case, al1 as set forth herein below.

VAN R. MAYHALL, JR.Pattner

[email protected]

urerorer: 225-381-8009conmErHoNE: 225-387-4000

ru: 225-387-5397One Americen Place, 23rd Floor

Post Otfice Box 3197Baton Rouge, Louisiana 7082'1.31 97

859991.3MANDEVITTEBATON ROUGE NEWORLEANS

May 5,2009Page2

Tun 1997 AprnNnuBxr

In 1995, the First Circuit Court of Appeal of Louisiana decided the LIGAI case by holding that

the Louisiana Insurance Guaranty Association ("LIGA") was "a state or public agency within the

contemplation of the Ethics Code." I.IGA, at 676. In that case, the First Circuit ignoredlanguage in the LIGA enabling legislation that was, at the time, virtually identical to language inthe LLHIGA Act providing that LLHIGA "is not and may not be deemed a department, unit,agency, instrumentality, commission, or board of the state for any purpose." See Act 1 15 of theI 992 Louisiana Legislature.

In direct response to the LIGA case, the Chair of the House Insurance Committee, James J. (Jim)Donelon, who is now the Commissioner of Insurance, sponsored HB 1812 of the 1997 LouisianaLegislature which was enacted as Act 534 ("Act 534"). Act 534 added express language to theLLHIGA Act with the intent of ensuring that the LIGA decision would not be interpreted todeem LLHIGA a state board, commission or agency for any purpose, Act 534 added thelanguage emphasized below to the provisions of LSA-R.S. 22:2085 C(l):

Notwithstgltdins anv other proUision of law to the contram, the association is not and

may not be deemed a department, unit, agency, instrurnentality, commission, or board ofthe state for any purpose unless $tecifically set forth-herein aryd.lhall not be subiect tolaws governing such deparlmenis, units, s.gengies, instrutwntalities, c.gmmissions. orboards of the state. All debts, claims, obligations, and liabilities of the association,

whenever incurred, shall be the debts, claims, obligations, and liabilities of the

association only and not of the state, its agencies, instrumentalities, officers, oremployees, The state may not budget for or provide general fund appropriations to the

association, and the debts, claims, obligations, and liabilities of the association may notbe considered to be a debt of the state oi a pledge of its credit.2

Thus, it is clear that the Legislature responded to the I*IOA decision by legislative amendment to

the LLHIGA Act to ensure that LLHIGA did not become subject to laws governing boards,

commissions or agencies of the state unless specifically set forth in the LLHIGA Act.

if the plain language of Act 534 is not clear enough, the minutes of the House and Senate

committees considering Act 534 in 1992 are definitive evidence that the Legislature's express

intent was to ensure that the LIGA decision did not affect LLHIGA's non-public status. Forexample, the Committee on House and Governmental Affairs discussed the LIGA case whenconsidering HB 1812 (later adopted as Act 534) as well as the need to confirm that LLHIGA

I Louisiana lnsurance Guaranty Association y. Conamission On Ethics For Public Emo-l-oyees, 656 So.2d 670,950021 (La.App.l Ctr.5l5l95), rehearing denied June 21, 19952 Act 534 also provided: "The association shall be subject to the provisions of Title 24 of the Louisiana Revised

Statutes of 1950 regarding audits by the legislative auditor. The form established by the commissioner pursuant toR.S. 22:2064 for the financial report shall determine the association's accounting method and basis of financial

reporting for all purposes notwithstanding any other provision to the contrary."

859991-3

May 5,2009Page 3

would not be deemed a state agency for any purpose.3 The Executive Director of LLHIGA, Ms.Phyllis Perron, explained to the Committee members the potential serious consequences ifLLHIGA were deemed a state agency. In response, the Committee on House and GovernmentalAffairs reported the bill favorably.

Additionally, the Senate Insurance Committee was also made aware that the I?IGA decision wasthe impetus for the amendment to the LLHIGA Act, and that the purpose of the additionallanguage was to clarify that LLHIGA is not a state agency.a The Senate Insurance Committeealso reported the bill favorably, and it was later enacted into law.

The Ethics Board acted erroneously in failing to follow the law clearly set forth in the LLHIGAAct that LLHIGA is not a public board or commission for any purpose unless contained in theLLHiGA Act, an admonition from the Legislature that was confirmed by the Legislature bymeans of Act 534 after the LIGA case.

OwNnRsgrP oFAssETs

In spite of the clearly expressed intent of the Legislature, by means of the 1997 Amendment, thatthe LIGA case not be applied to LLHIGA, the Ethics Board erroneously used the LIGA case inits analysis relative to the Advisory Opinion. The Advisory Opinion plainly relies on the LIQAcase. However, even for the purposes of argument, neither the Ownership of Assets test nor theSolely For Public Benefit test can be satisfied as applied to LLHIGA.

In the LIGA case, the First Circuit laid out a four part tests that it used to determine that LIGAwas a state agency subject to the Ethics Code. The third prong of that test is whether theproperty of the entity belongs to the public.

In concluding that LIGA assets were public, the LIGA court stated that "any sums acquired byrefund under LSA-R.S. 22:1382 8(6) from the association, which were written off by the insurerand offset against premium taxes, but which are not needed to effectuate the purposes of theLouisiana Insurance Guaranty Act, are required to be paid by LIGA to the Commissioner ofInsurance and deposited with the state treasury for credit to the general fund of the state. LSA-R.S. 22:1382 A(3Xd)." LIGA, at675.

The LIGA Act, LSA-R.5,22:2051 et seq., at the time of the LIGA case, stated as follows:

Any sums acquired by refund, pursuant to RS 22:1382 (2)(f), from the association whichhave theretofore been written off by contributing insurers and offset against premiumtaxes as provided above, and is not then needed for purposes of this Act, shall be paid !g

3 See discussion of HB I 8 12 (Act 534) under ltem III of the Minutes of the Meeting of the Committee on house andGovernmental Affairs, 1997 Regular Session; a copy is attached hereto and made a pad hereof as EKhibit "A".a See discussion of HB l8l2 (Act 534) under ltem III of the Minutes of the Meeting of the Senate InsuranceCommittee on June 11,199'l; a copy is attached hereto and made a part hereof as Exhibit "B".5 This test arises out of State v. Smith, 357 So.2d 505 (1973) which was a criminal case not involving the ethicsIaws.

85999r.3

May 5,2009Page 4

the aqfociation to the commissioner and by him deposited with the state heasury forcredit to the general fund of this state.LSA-R.S. 22:1382 A(3Xd) (emphasis added).

This provision charges LIG.A. with the duty of forwarding those sums offset against premiumtaxes, as provided in the LIGA Act, to the Commissioner of Insurance, who then deposits themwith the State Treasury. This treatment is consistent with the treatment normally afforded publicfunds in the hands of a state agency.

However, the LLHIGA Act provides that;

Any sums which are acquired by refund, from the association by insurers, and whichhave theretofore been offset against premium, franchise and income taxes as provided inR.S. 22:2092(,4.), shall be paid bv the-insurers to this state in such manner as the taxauthorities may require. The association shall notifr the commissioner that such refundshave been made. LSA-R.S. 22:2Q92D (emphasis added).

Thus, the LLHIGA Act requires that if a refund is to be made6, LLHIGA refunds those sumsoffset against taxes to the private member insurance companies, nolto the Commissioner or theState Treasury. This is consistent with the treatment of private funds by a private association ofmembers.

The LLHIGA Act further states that the insurers shall then treat the refunded sums in accordancewith applicable law. However, this imposes no additional burden or requirement on the memberinsurers as they are already bound by state and federal tax law with respect to their private assets.

SolBr,v Fon Purr,tc BENEF'IT

The fourth part of the test set forth in the LIGA case requires that, for an entity to be considereda public agency, "the entity's functions were g.clusive,ly of a public character and performedsolelv for the public benefit " LIGA, at674 (emphasis added).

The LIGA courl noted that one of the purposes of the LIGA Act was to "to provide a mechanismfor the payment of covered claims under cenain insurance policies...". LIGA, at 675, citingLSA-R.S. 22:1376 (now cited as LSA-R.S.22:2052). Clearly, this language, as well as the verynature of the type of insurance for which LIGA provides ooverage, indicates that at least part ofLIGA's purpose includes protection of the public at laree. Thus, third party claimants, includingindividuals and entities with no privity whatsoever to the original insurance contract, may haveprotection under the LIGA Act.

However, the LLHIGA Act specifically names the certain "persons" for whom it is intended toprovide protection: certain owners or certificate holders, as limited by the LLHIGA Act, of

" LLHIGA may also retain the Funds, credit them to the accounts of the member insurer and use them for futureinsolvencies. LSA-R.S. 22:2A88F.

859991.3

May 5,2009Page 5

covered insurance policies, as well as the "beneficiary, assignee or payee" of such owners orcertificate holders.

Third parties have no right to protection by LLHIGA under the LLHIGA Act. Only parties that

ar. ownetr, certificate holders and their beneficiaries, assignees or payees under the covered

insurance policy itself are protected by LLHIGA. This is a private, limited right and, certainly, itcannot be stated that LLHIGA's functions are excl+sivelv of a public character and performed

solelv for the public bene.fit.

Tnn Durunrrs C.lsn

Two issues were presented to the First Circuit Court of Appeal in the LIQA sase: was LIGAsubject to the Ethics Code, and is an application for supervisory writs the appropriate procedural

vehicle for appellate review of an advisory opinion by the Board of Ethics? See LIGA, p' 672.

As noted above, the LIGA court found in the affirmative with respect to the Ethics Code issue.

With respect to the second question, the LIGA case cited LSA-R.S. 42:1142 A, which provides

that any "preliminary, procedural, or intermediate action or ruling by an ethics body is subject to

the supervisory jurisdiction of the appellate court as provided in Article V, Section 10 of the

constitution." LI9A, at 672, citing LSA-R.S. 42:1142 A. Thus, the First Circuit Court held that

"the application for supervisory wdts filed by LIGA is the appropriate procedural vehicle forappellate review of an advisory opinion by the [Ethics] Commission." LIGA, 672 (explanation

added).

However, the Louisiana Supreme Court decided the case of Duplanti-s v. Louisiana Board ofEthics,782 So.2d 582,2000-1750 (La, 3123/01),2000-1956 (La.02123101) several years after

the LIG_A case in 2001. In the Duplantis case, the Louisiana Supreme Court held as follows:

For all these reasons [set forth above], we find the provision of La. R.S. 42:1142(A)which provides that "[a]ny advisory opinion issued to any person or governmental entityby the board ... is subject to the supervisoryjurisdiction ofthe appellate court as provided

by Article V, Section 10 of the Constitution of Louisiana" is unconstitutional as it is

contrary to Article 10, $ 2i of the Louisiana Constitution which provides that

"[d]ecisions of a board shall be appealable,...." An advisory opinion issued by the Board

pilrsuant to La. R.S. 42:1134(E) is not a o'decision" of the Board that is appealable,

Duplantis, at 591 (explanation added).

Thus, the Louisiana Supreme Court in the Duplantis case concludes that "the First Circuit Court

of Appeal has no jurisdiction to review advisory opinions of the [Ethics] Boatd." Duplanti$, at

592to 593 (explanation added).

"Jurisdiction over the subject matter is the legal power and authority of a court to hear and

determine a particular class of actions or proceedings.,.". LSA-C.C.P . Lrt. 2. "Any judgment

rendered by a court that lacks subject matter jurisdiction is nu11." GJnderson v. F.A.. Rishard &Asseciates. Inc. , 977 So.2d 1128, I132-1133,2007-331 (La.App. 3 Cir. 2l27lA8), citing LSA-C.C.P. Arts. 2001, 2002, and Brvp.nt v. Pierson, 583 So.2d 97 (La.App. 3rd Cir., 1991).

85999L3

May 5,2009Page 6

The jurisprudence explicitly states that "a judgment rendered by a court which lacks subject

matter jurisdiction is absolutely null and may be attacked collaterally at any time before any

court bi any person with an interest therein," Robinson v. City of Batpn Rouge, 566 So.2d 415,

421(La.App. lst Cir., 1990).

Therefore, the LIGA case is an absolute nullity that provides no jurisprudential weight with

respect to the iszue of whether LIGA is a public agency, much less as to whether LLHIGA is 4pubti" board or commission.? The Ethics Board, in hearing the LLTFIIGA m9tt91 before them,

erred in basing its Advisory Opinion on the LIGA a case which was decided bY a court

without subject matter jurisdiction and which is an

With kindest regards, I remain

VRM:laf

ute nullity;/

Van R. Mayhall, Jr.

& WILSON. L.L.P.

7 It shoutd be noted that Westlaw's KeyCite citator service does not cite any negative history or "red flags" for the

LIGA case. Our understanding is that KeyCite will show a red flag on a case that has been reversed or overturned in

its udir""t" litigation history, meaning that the hotding has been reversed or overturned in the course of its own

appeal. A red flag may also uppear on an "indirect" case that has been explicitly mentioned as being overhrrned in

an appeltate deciiion.- Becauii a direct appeal in the LIGA case was denied and because Duplanlis does not

explicitly mention the LIGA case, no negative KeyCite symbol is associated with the LIGA opinion. This does not,

however; mean that LIGA remainr good law: the Duplantis case ruled that the procedural basis for subject matter

jurisdiction in LIGA was unconstitutional, making LIGA an absolute nullify.

8s999 t.3

tgluu z/ uu l

u. ROIT CALL

MEMEERS PRESENT:

Representative Charles D. Lancaster, Jr., ChairmanRepresentative Willie Hunter, Vice ChairuranRepreseutative Emile "peppi; Bruneau, Jr.Representative Sherman N. Copelin, lr.

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Reproseirtative Heulette "Clo" iontenotReplesontatlve Kyle M. Green

|enraseltative Billy Montgom€ryItepresentative Benny RousselleReprescntative Steve Scal iseRepresentativc Joseph F. ToomyRepresentativc Mika WalsworthRepresontative Yvonne Wclch .Rop,resentativc Cynthia Wiltard-LewisReprcsontative Diane Winston

StalfMemberr present:

M. Patricia Lowrey-Dufour, Research AnalystDonna Budenski, StaffAftorney -r

Shawn Otsrien, SecretaryMargaret Jackgon, Scrgeent at ArrnsW'ayne llufr, Scrgcant.at ArmsCloyd Benjanin, Committce Clcrk

DISST'SSION

House Bill No' l2l0 increases the penaltics for election offonses. Rcpresentative Lancaster presentedthe bill' rlc erplained that penaltics would ue incrcasea to o rro. qinot more tbaa $ I ,000 and/or notmore than one year in prison, and for rot*qu*i oF"o* ;;; ;;;" than $2,500 *ar* nu" yr"oin prison' Representalive Lancaster p;l"i:; out that the bill ,"oJ, "

message to the srate that thelegislature is serious about stopping rfu rorrn* of election offenses.

COMMITTEE ONHOUSE AT\D GOVDRNMENTAL AIT,AIRS

Mtngtes of Mecdug1997 Regular Sesslon

llttry l,lr lgg

CALLTOOru}ER

Roprescntativc charlcs D' Lancaster' Jr. chaimran of the conimittee on House and GovornmentalAffairs' callcd the meting to orderat 9:li **. io comitcc Room r.. The secretary cailed thc roll

IVTEMBERS ABSENT:

Representative David. Vitter

IIL

-l-

o5/aL/200s FRI 15:24 ITX/RJ. N0 74241 @002

Conqittec. on Houss and Govcnncntel Alfalrs

v{f vLa avvo Lr. eu rM tgJuvd/Qu (

aggressive in the waron d*gt, it is appropdate that the committee wbich addresses ethics standardsto lead by example- Shc notcd drat iti-houtd be made obvious that the legislature wiltnot impose onother state employees that which it does not irnpose on itsclf.

Representative Montgomcry andRepresintative Copelin supported &Lrosolgtion-

Rcpresentativc wclch pmposed e motion to report Housc concurrent Rdsoiution No. 56 favorabty to'which there was no objcotion' Reprcsentahves Bruneau, cop"tio, Grcen, $oot-, Lancaster,Montgomery, Scalise, Toorny, Wetch, Willard-Lcwis, and Win*on votd I l-0 to rr,port Se resolutionfavorably.

Following some discussion on House Bill No. &6letr tnthe meeting Representativc Bruncau movedthat the vote by vrtich_rho commjttee reported House concurrent Resolutioo No. 56 favorably bereconsidered' The motion passed by an 8-0 vote with Represontatiu.s gr.rrr."u: Copulin, Hunter,Lancaster, scalise, Toorny, wcrch, and wilrard-Lewis voting afiimativery.

Represcntative Btuneau moved that an anrcn&nent bo adoptcd wlrich would nullif House ConcurrentResolution No' 56 if House Bill No' 646 which provides for drug *"rting rd";li "r".t"a

offrcialsbecomes law' The motion passed by an 8-0 vote witb Representatives Bnrneau, C,opelin, Hunter,r'ancaster, scaliso, Toomy, weroh" and wilrard-Lewis uoting to adopt the amendment.

Represcntafive Bnrneau proposed a motion that House concurrent Resolution No. 56 be reported withamerr&rrents' The motion passd with Representative" n-n""rr copelin, Hunter, Lancaster, scalisgToomY, Welch, and Willard-Lewis voting yea, and House Cooour*rrt R"*lution No. 56 was reportedwith amcndrnents E-0.

+a @; qf+"r"""tqd* n"rrlol *House Bill No. I8l2 excmpts the Louisiana Life and Health Insurance Guarantec Association(I-ALHIGA)'from p*:i:tolj o{lut". Ms..PhyllisPerron, IALHIGA,451 Florida Blvd., Baron Rouge,Louisinna, presented the bill with authoriz"iioo by Rcpresentativ" Donelou.

Ms' Pcn'on ecplained thatLALHIGA has been in existence since 1991, and the bill restatcs the intentexpressed by the legislature at &at time that LALHIGA is not a $ate rgenay. The need arose when8 court nrled recently 6at t

lGAb tre proporty and casualty insursnce guarantee association, could becortsidercd a state egency, shc explainad, udaiog tt at the potential ofLurt ctrallcngo to lel,HCn,,assessment proa6s is at issug rr'hich would becoms morrc serious if the essociatiJn wcre decmcd astat€ qgmey. Thc bi[ does ndaffcct publio records r public neetings law or cotrhacF regulatim andexamination by tbe Departrrent of Insurancc, she concluded.

In r*pmscto a qrestion byReprcsentetive copclm, Mr. van Mayhau, I-ALIIIGA" p. o. Box 3lg?,Baton R*gu, Louisiano, wlro wss present h support of the bill, explaincd that the court made dreruling in a lgwsuit fit€d by LIGA relative to ansthics administoetion opinion thd. LIGA is a statelgencry' I-ALHIGA which is similar h somo ways, is different in that it puts up moules assessed toits members to cover insuranc€ losses.

-In lelgonsc to a question by Representative Huntcr, Ms. Perron answered that LALIilGA is not ahybrid organization but'rathcr an entity unto itself which has a liaison with the Departnent ofInsurance and which reccives uo state funding or cornpensation to its board members.

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Mlnutes, Comrlttcc oa lloassand Govcrnucntel Alfrirr

9ga 9La &vvq l: ! €u a.Iu vJvv.t/ uv t

Representative copolin proposed a motion to report the bill favorably to which there was no objection.Representatives Brurleaq copelin" Hunter, Lancaster, scalisc, i**y, welch, and willard-L,ewisvoted 8-0 to roprirt House Bill No. I g I 2 favorably-

Ftonse,Rlll No.,'!4I8 hy R ef .,ereTtetf ve MeCr thr m

House BillNo' 2458 atJows ccrtain p€nloru, servingon u*r* ofcomririssioners ofhospital servicedistricts to be cmployed by certain *uti*. Reprei,native Mccailwn rcqucstcd t$at the cornmittee' defer action on tte bill, and theru was no discussion

\eprey.rt{ve co'Pclin nodc a motion to dsfcr action on Houss Biu No. 245g to qfrictr thero.was nogbjT'rtti' Re'presentativec Bluneall copelin, Hurter, r-ancaster, sotirc, t*rny, wcloh, and rviflard-Lewis voted 8-0 for the motion.to defci aetion on the bill.

House Bill No' 646 provides for random dnrg tosting of crected offisiats by tbe Board of Ethics.Reprcsentative Fontenot presentad the bill wi*r assistarice from Mr. cheneyJoscpfu govemocs offico,P. O. Box 94004,Baton Rouge, L,ouisiana.

M.r' jgsenh o<plained tlat !e bill gives the Board of Erhics rhe responsibiliry to dwotop andadminister a progrem 9{ranoom dnr! tasting for elccted "fr"iar. an *"na,ieni requosted byRepresentativo Fontenof he continued,Luru proviae that the electpd offioial is entitle.d to a oopy ofthe test results and is not prohibited from uisciosing the;. A ;;;tfu test r€sult would be tneated asa violation ofthe ethics code, hc said. He exptainoiurat the biit ir airuig,ri"lJil'ili'd*rgi" t"o,,which was struck down by the u.s- $upreme cour! in that it requircs the Board of Ethics witb .assistance from the s"crctary of the Department of H€alth and. Hospitals to develop

" d;;il; 'manncr that will be effective in detecting and detcrring ii[g"l;g use by elccted offioials and toadopt rulcs for thc irnplementation o-fthe-program in a-"orCurrco with the Administrative procodureAct' He stated drat the.Georgil legistation'had required sveryon€ who runs for public office ts submitto a drug test' was totally nondisc?iminating arrd nr" not sf,own to be an effective way of dctectingor dctcrring drug usc, and as such was Len by the court as a purety synibolic geshrre. tleltcnowt$g1dlto possibility t1, n" onty yray to constitutionafiy rcquire elecfrd officiats to subrnitto a test is iftbEre is a reasonable basis for suspecting dnrg *q"*t i"t h";J;idl rr"*. to be theo<tent of the law.

Rcpresontative Lancarter speculated that if the legislaiure possar the joint nrlc rcportcd earlier by thecommitbc to c$ablish a volunary dnrs ffig- ryrjgram for the legislaturc, it might not be mccssaryto also include legislators in HousoB'llt.No- Oae.

-

Rcptcsentatirc copclin sgrcfd thcHqrse Bitl No. 646 should not bs appricsbto t6 the lcgielaturc inligbt ofHorrsa Concurreni Risolution No 56.

Rcprcscntativs Lancastersugg€std withdrcwingthe joint rulo ifHouse Bilt No. 646 passes, statingthat a rule should notbc p"s*]d to teat rusi$t"t"m rc* rr"orrry trr* otlrer elcctad offieials.

Represerrtative Bruncau suggpsted aarending House concurrent Resolution No. 56 30 provide that itwill not go into cffect if Housc Bill No. 646"becomes law. Repreisentativc Lanrcastcr agreed.

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06/0L/200s FRI 16:24 ITXIR.X NO 74241 @004

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iI

I

MII\ruTES OF MEETING

JTJFIE tt. t997

I. CALL TO ORDER

The Senate rnsurance Comnittee onJune ll,l997 at9:40A.M. in Committee RoomA in Baton Rouge, Louisiana. The Chairmsn, Scnator Tarver, callcd thc meeting to order.The roll was called and the following members werc prcsent:

rI. ROLL CALL

Senator Gregory Tarver, ChairuranSenator Ron Bean, Vice-ChairmanSenator Donald CravinsSenator John Guidry

. Senator John HainkelSenator Art Lentini

. Se,lratorRonLandry,Parliamentarian

The following staffwas present

Tom T$er, Senior StaffAttorneyTammy Smittr, Comrnittee Staff AttorneyDiane O'Quin, Commithe Staff Secrctary

The following individuals were pre.sent and/ortestified:

Marsus Carson, La. Health Carc Campaign, Box 2228, Baton Rouge, LA 70821Nicole Robichaux,4155 Ess€lr #5D, Baton Rouge, LA 70809Patrioia Toups, M.D., Baton Rouge, LAK"thy Lynn Coolg l40l Roper Drivc, Scott, LA 70583Deborah Bqioie, 200 Lafayette St., Baton Rougq LADudlcy Stewar{ M.D., 6767 Perkins Rd., Baton Rouge, LA .b

05/0r/2009 FRI 15:24 ITt/pJ. N0 7424I @005

rgl vuo/ uu I

E, L. He,uryDavidDaubc, La. Prprnium Finanoe Assn., 3525 N. CausewayBlvd., #900, Metairie,

LATQOO?AlMiddleton,La.IndependcntFinanceAssn.,3l04ClearyAve., Mctairie, LA700O2

' Julie Betoss, La. Prcmium Financo Assn,, P.O, Box 41337,Baton Rougc, LA 70835John Cox" Central Statcs Ins. of Omahq 701 Main Street, Baton Rouge, LAMichele Calandro, Blue Cross r 5525 Reitz Avenue, Baton Rouge, LA 70809Bob Thomas, Unitcd Compades Life Iru.E. J. Mothe, III, Mothe Life tnsurance Co.Cindy Bishop, La, Socielr of AnesthesiologyPetcrMaunoir, Pan American Life,60l Poydras Strcet, N.O. LA 70130Larry Murray, La. Office ofFinancial lnstitutions, P.O. Box 94095, Baton Rouge, LA

70804Kip Wall, Departnent of Insurance

ftr. LE,GISLATTON I

House Blll No.2509 by Reprecentatlve Donelon provides protectiou ofconsrmersfor insurance sales.

Mr. Donelon presented the bill beforc the committee. He_ statcd that this bill is acompromise between the bsnl6 and the insurance agonts. This wouid rcsolve an issue oreatedby the recent federal court decision that ended years of litigation over the issuc ofbanks inthe insurance bwiness. There is an amendment at the desk that we will have to oppise. Thecompromise vfari tightly drawn and the amendment exempts Hibernia Bank from theprovisions of the bill, he said,

Senator Casey cxplained the ameadment which was offercd by Senator Tanrer. Hestated that many national banks in Louieiafla held insurance liccnses for many years andachrally sold insuranoe and followed thc letter of the law and there has never been anyproblem with regard to cougumers. The purpose of the amendmeat is to recognize the factthat those bsnks that have been in thc insuanoe bwiness and have held insurarce licensesfor many years would be in effeot grandfathered and portions of this Act would not beapplicable to those banks . They still would be reqrdred to obtaiu an insurance license. Thesebanlc are tightly and strictly regulated by the federal govemment with regard to tieingprovisioas and many of the provisions in tlis bill are absolutely um€c€ssary wi& regurd tothose national lanks, hc said.

Mr. Donelou stated that the cornprourigc was convccted betweeu the banking industy'and the insurencc industy and it says ffrat banks will be allowed to scll thinp, likc Hibernia

o6/av200s FRI l5:24 lTL/p8 N0 74241 k0006

wvu(/vut

Malone; Nays: Senator Guidry. The motion canied and House Bllt No. 946 was defcrred.

House BlIl No. 1673 by Representatlve Donelon provides relative to Medicaresuppl emental insrrrance polioies.

Mr. Donelon prcsented the bill before the committce. He statcd that this bill is aHIPPA requirement. There is no cost involved and therc is no opposition.

Upon motion by Senator Hainkel and qdthout objection,Ilouse Blll No. 1673 wasreported favorably,

IA. 9rn' $e&fs:g{ll ilts;'ttl2 by Reptcecffidfve Dmtbflexempts LALHIGA fromprovNlons ot law.

Mr. Donelon stated that this bill clarifies tlrat LALHIGA is not a state agency.

Senator Hainkcl askod how they could be excmpted from the provisions of law?

Mr. Donelon replied that wo are €xempting thcm from the Ethics Codc except foropen meetings and public records and wc addcd in on the House floor, Iegislative audits.

Senator Guidty sttt€d that iu the LIGA case, the court said that LICA was a stateageucy and they uscd a host of criteria to say that LIGA was. Is there a LIGA bill to say tlratLIGA is not? If not will LIGA be subject to the Ethics Code and LALHIGA will not.

Senator Guidry said he was not for taking the.ru out from rurder the Ethics Code. Hemoved to dofer the bill. Senator Bean rnade a zubstitute motion to report the favorably. Tlrefollowingvote occurredonthe substituternotion: Yeas: Senators Bean, Hairkel andlentini;Nays: Senetors Guidry and Malone. The motion oarried and House Blll No. 1812 wasreported favombly.

' Ilause Bln No. 2027 by Representatlve Donslon provides relativa to rcimbursementof uneamedpreirriurns

Mr, Donclon asked that an ame,lrdrnent be adopted which would clarify a previousamendment adopted by tho House. Seuator Hainkel offered the amendment to which therewas no objection and the amendme,lrt was adopted.

There was no opposition to the bill. Upon motion by Sc,lrator Hailkct and withoutobjootion, Houce Blll No. 2A27 wac reportcd wtth emendments.

o5/0t/200s FRI 15:24 [TtrlRI UO Zle+l @ooz

RS 22:2085 (p Page I of 2

$2085. Creation of the associationA. There is hereby created a nonprofit entity to be known as the Louisiana Life and Health

Insurance Guaranty Association whose legal domicile shall be in the parish of East Baton Rouge. Allmember insurers shall be and remain members of the association as a condition of their authority totransact insurance in this state. The association shall perform its function under the plan of operationestablished and approved pursuant to R.S. 22:2089 and shall exercise its powers through a board ofdirectors established by R.S. 22:2086. For purposes of administration and assessment, the associationshall maintain four accounts:

( l) The life insurance account.(2) The annuity account excluding unallocated annuity contracts and defined contribution

government plans qualified under Section 403(b) of the United States Internal Revenue Code (26 U.S.C.Section 403(b)).

(3) The defined contribution plan account, meaning defined contribution plans qualified underSection 403(b) of the united states Internal Revenue code.

(a) The health insurance account.B' The association shall come under the immediate supervision of the commissioner and shall

be subject to the applicable provisions of the insurance laws of this state. The commissioner shall beprovided any records of the association concerning the operations, budget, and management of theassociation upon request.

C'(1) Notwithstanding any other provision of law to the contrary, the association is not and maynot be deemed a department, unit, agency, instrumentality, commission, or board of the state for anypurpose unless specifically set forth herein and shall not be subject to laws governing such departments,units, agencies, instrumentalities, commissions, or boards of the state. Ai debts, claims, oLligations,and liabilities of the association, whenever incurred, shall be the debts, claims, obligations, andliabilities of the association only and not of the state, its agencies, instrumentalities, officers, oremployees. The state may not budget for or provide general fund appropriations to the association, andthe debts, claims, obligations, and liabilities of the association may not Ue considered to be a debt of thestate or a pledge of its credit. The association shall be subject to the provisions of Title 24 of theLouisiana Revised Statutes of 1950 regarding audits by the legislative auditor. The form established bythe commissioner pursuant to R.S. 22:2064 for the financial report shall determine the association,saccounting method and basis of financial reporting for all purposes notwithstanding any other provisionto the contrary.

(2) Notwithstanding the provisions of Paragraph (1) of this Subsection, and except as providedin Paragraph (3) of this Subsection, the association shall be subject to the provisions of R.S.44:l et seq.and R'S' 42:4.1 et seq., and may be considered as if it were a public body for the purposes of thisSection.

(3) The association may hold an executive session pursuant to R.S. 42:6 for discussion of one ormore of the following, and R.S. 44: I et seq. shall not apply to any documents as enumerated in R.S. 44:1(AX2) which relate to one or more of the following:

(a) A request by the association or the commissioner for an examination of a member insurerpursuant to R.S. 22:209L

(b) Reports and recommendations made by the association to the commissioner pursuant to R.S.22:2093 on any matter relevant to the solvency, impairment, liquidation, rehabilitation, or conservationof any member insurer, until such insolvency has been declared or the member insurer has been placedin liquidation, rehabilitation, or conservation.

(c) Matters protected by attorney-client privilege.(d) Matters with respect to claims or claim files, except documents contained in those files

http://www. legis. state. la.us/lss/newWin.asp?doc=509206 4/6/2009

RS 22:2085 G Page 2 of 2

which are otherwise deemed public records.(e) Prospective litigation against the association after formal written demand, prospective

litigation by the association after referral to counsel for review, or pending litigation by or against theassociation.

(0 Any other matters now provided for or as may be provided for by the legislature.(g) Discussion by or documents in the custody or control of any committee or subcommittee of

the association, or any member or agent thereof, or the board of directors or any member or agentthereof, provided such discussion or documents would otherwise be protected from disclosure by any ofthe exceptions provided in this paragraph.

Acts 1991, No' 998, $1, eff. Sept. 30, 1991; Acts 1992, No. l15, g1; Acts 1997,No. 534, gl, eff.July 3, 1997; Redesignated from R.S. 22:1395.5 by Acrs 200g, No.4l5, gl, eff. Jan. l, 2009.

NOTE: Former R.5.22:2085 redesignated as R.5.22:497 by Acts 2008, No.4l5, g1, eff.Jan. 1.2009.

http://www.legis. state.la.us/lss/newWin.asp?doc=509206 4/6/2009

RS 22:2086 Page I of I

$2086. Board of directorsA. The board of directors of the association shall consist of ten member insurers serving terms

as established in the plan of operation. The members of the board shall be selected by member insurerssubject to the approval of the commissioner from the following groups:

(1) One representative of a member which is a domestic commercial insurance company and amember of the Louisiana Insurers' Conference.

(2) Two representatives of member insurers selected from recommendations of the AmericanCouncil of Life Insurance Companies.

(3) One representative of a member insurer selected from recommendations of the HealthInsurance Association of America.

(4) One representative of a member insurer which is a domestic commercial health insurer.(5) One representative of a member insurer which is a member of the Life Insurers' Conference.(6) One representative of a member insurer which is a member of the National Association of

Life Companies.(7) One representative to be approved by the commissioner, who represents a member insurer

which is a domestic nonprofit mutual insurer engaged exclusively in the business of furnishing hospitalservice, medical, or surgical benefits.

(8) Two persons, one appointed by the president of the Senate and one appointed by the speakerof the House of Representatives, both of whom shall be residents of the state of Louisiana.

B. Vacancies on the board shall be filled for the remaining period of the term by a majority voteof the remaining board members, subject to the approval of the commissioner. To select the initialboard of directors and initially organize the association, the commissioner shall give notice to allinsurers of the time and place of the organizational meeting. In determining voting rights at theorganizational meeting, each insurer shall be entitled to one vote in person or by proxy. If the board ofdirectors is not selected within sixty days after notice of the organizational meeting, the commissionermay appoint the initial members.

C. In approving selections or in appointing members to the board, the commissioner shallconsider, among other things, whether all member insurers are fairly represented.

D. Members of the board may be reimbursed from the assets of the association for expensesincurred by them as members of the board of directors. The members of the board shall not otherwisebe compensated by the association for their services.

Acts 1991, No.998, $1, eff. Sept. 30, 1991; Acts 1994,3rd Ex. Sess., No.92, $1; Redesignatedfrom R.S. 22:1395.6 by Acts 2008, No. 415, 91, eff. Jan. 1, 2009.

NOTE: Former R.S. 22:2086 redesignated as R.S. 22:498 by Acts 2008, No. 415, $1, eff.Jan. 1,2009.

http://www.legis.state.la.us/lss/newWin.asp? doc=509207 4/6/2009

RS 22:2081 Page I of4

$2087. Powers and duties of the associationA. If a member insurer is an impaired domestic insurer, the association may, in its discretion,

subject to any conditions imposed by the association, take such actions as do not impair the contractualobligations of the impaired insurer, that are approved by the commissioner:

(1) Guarantee, assume, or reinsure, or cause to be guaranteed, assumed, or reinsured, any or allof the policies or contracts of the impaired insurer.

(2) Provide such monies, pledges, notes, guarantees, or other means as are proper to effectuateR.S. 22:2087(AX1) and assure payment of the contractual obligations of the impaired insurer pendingaction under R.S. 22:2087(A)(l).

(3) Loan money to the impaired insurer.B.(1) If an insurer is an impaired insurer, whether domestic, foreign, or alien, and the insurer is

not paying claims timely, then subject to the preconditions specified in R.S. 22:2087(AX2), theassociation shall, in its discretion, either:

(a) Take any of the actions specified in R.S. 22:2087(1t), subject to the conditions therein.(b) Provide substitute benefits in lieu of the contractual obligations of the impaired insurer

solely for health claims, periodic annuity benefit payments, death benefits, supplemental benefits, andcash withdrawals for policy or contract owners who petition therefor under claims of emergency orhardship in accordance with standards proposed by the association in its plan of operation and approvedby the commissioner.

(2) The association shall be subject to the requirements of R.S. 22:2087(B)(1) only if:(a) The laws of its state of domicile of the impaired insurer provide that until all payments of or

on account of the impaired insurer's contractual obligations by all guaranty associations, along with allexpenses thereof and interest on all such payments and expenses, shall have been repaid to the guarantyassociations or a plan of repayment by the impaired insurer shall have been approved by the guarantyassociations:

(i) The delinquency proceeding shall not be dismissed.(ii) Neither the impaired insurer nor its assets shall be returned to the control of its shareholders

or private management.(iii) It shall not be permitted to solicit or accept new business or have any suspended or revoked

license restored.(bxi) If the impaired insurer is a domestic insurer, it has been placed under an order of

rehabilitation by a court of competent jurisdiction in this state.(ii) If the impaired insurer is a foreign or alien insurer:(aa) It has been prohibited from soliciting or accepting new business in this state;(bb) Its certificate of authority has been suspended or revoked in this state; and(cc) A petition for rehabilitation or liquidation has been filed in a court of competent jurisdiction

in its state of domicile by the commissioner of its state.C. If a member insurer is an insolvent insurer, the association shall, in its discretion, either:(lXa) Guarantee, assume, or reinsure, or cause to be guaranteed, assumed, or reinsured, the

policies or contracts of the insolvent insurer.(b) Assure payment of the contractual obligations of the insolvent insurer.(c) Provide such monies, pledges, guarantees, or other means as are reasonably necessary to

discharge such duties.(2) With respect only to life and health insurance policies, provide benefits and coverages in

accordance with R.S. 22:2081(D\.D. When proceeding under R.S. 22:2087(BXl)(b) or (CX2), the association shall, with respect

to only life and health insurance policies:

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(l) Assure payment of benefits for premiums identical to the premiums and benefits, except forterms of conversion and renewability, that would have been payable under the policies of the insolventinsurer, for claims incurred.

(a) With respect to group policies, not later than the succeeding next renewal date under suchpolicies or contracts or forty-five days, but in no event less than thirty days, after the date on which theassociation becomes obligated with respect to such policies.

(b) With respect to individual policies, not later than the earlier of the succeeding renewal date,if any, under such policies or one year, but in no event less than thirty days, from the date on which theassociation becomes obligated with respect to such policies.

(2) Make reasonable and diligent efforts to provide all known insureds or group policyholderswith respect to group policies thirty days prior notice of the termination of the benefits prouid"d.

(3) With respect to individual policies, make available to each known insured, or owner if otherthan the insured, and with respect to an individual formerly insured under a group policy who is noteligible for replacement group coverage, make available substitute coverage on an individual basis inaccordance with the provisions of R.S. 22:2087(DX4), if the insureds had a right under law or theterminated policy to convert coverage to individual coverage or to continue an individual policy in forceuntil a specified age or for a specified time, during which the insurer shall have no rightlo unilaterallyalter any provision of the policy or undertake alterations only in premium by class.

(4Xa) In providing the substitute coverage required under R.S. 22:1395.7(DX3), the associationmay offer either to reissue the terminated coverage or to issue an alternative policy.

(b) Alternative or reissued policies shall be offered without requiring evidence of insurability,and shall not provide for any waiting period or exclusion that would not have applied under the formerpolicy.

(c) The association may reinsure any alternative or reissued policy.(5)(a) Alternative policies adopted by the association shall be subject to the prior approval of the

commissioner. The association may adopt alternative policies of various types for future issuancewithout regard to any particular impairment or insolvency of an insurer.

(b) Alternative policies shall contain at least the minimum statutory provisions required in thisstate, and shall provide benefits that shall not be unreasonable in relation to the premium charged. Theassociation shall set the premium in accordance with a table of rates which it shall adopt in its plan ofoperation. The premium shall reflect the amount of insurance to be provided and the age and class ofrisk of each insured, but shall not reflect any changes in the health of the insured after the original policywas last underwritten.

(c) Any alternative policy issued by the association shall provide coverage of a type similar tothat of the policy issued by the impaired or insolvent insurer, as detlrmined by the association.

(6) If the association elects to reissue terminated coverage at a premium rate different from thatcharged under the terminated policy, the premium shall be set by the association in accordance with theamount of insurance provided and the age and class of risk, subject to the prior approval of thecommissioner or by a court of competent jurisdiction.

(7) The association's obligations with respect to coverage under any policy of the impaired orinsolvent insurer or under any reissued or alternative policy shall cease on the date such cou"rug" o,policy is replaced by another similar policy by the policyholder, the insured, or the association.

E. When proceeding under R.S. 22:2087(BXl) with respect to any policy or conrract canyingguaranteed minimum interest rates, the association shall assure the payment or credit of a rate of interestconsistent herein.

F. Nonpayment of premiums within thirty-one days after the date required by the terms of anyguaranteed, assumed, alternative, or reissued policy or contract or substitute coverage shall terminate the

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association's obligations under such policy or coverage under this Part with respect to suchpolicy or coverage, except with respect to any claims incurred or any net cash surrender value whichmay be due in accordance with the provisions of this Part.

G. Premiums due for coverage after entry of an order of liquidation of an insolvent insurer shallbelong to and be payable at the direction of the association, and the association shall be liable forunearned premiums due to policy or contract owners arising after the entry of such order.

H. The protection provided by this Part shall not apply if any guaranty protection is provided toresidents of this state by the laws of the domiciliary state or jurisdiction of the impaired or insolventinsurer other than this state.

I. In carrying out its duties under R.S. 22:2087(8) and (C), the association may, subject toapproval by the court:

(1) Impose permanent policy or contract liens in connection with any guarantee, assumption, orreinsurance agreement, if the association finds that the amounts which can be assessed under this Partare less than the amounts needed to assure full and prompt performance of this association's duties underthis Part, or that the economic or financial conditions as they affect member insurers are sufficientlyadverse to render the imposition of such permanent policy or contract liens, to be in the public interest.

(2) Impose temporary restraining orders or liens on payments of cash values and policy loans, orany other right to withdraw funds held in conjunction with policies or contracts, in addition to anycontractual provisions for deferral ofcash or policy loan value.

J. If the association fails to act within a reasonable period as provided in R.S. 22:2087(B) and(C), the commissioner shall have the powers and duties of the association under this Part with respect toimpaired or insolvent insurers.

K. The association may render assistance and advice to the commissioner, upon his request,concerning rehabilitation, payment of claims, continuance of coverage, or the performance of othercontractual obligations of any impaired or insolvent insurer.

L. The association shall have standing to appear before any court in this state with jurisdictionover an impaired or insolvent insurer concerning which the association shall become obligated underthis Part. The standing shall extend to all matters germane to the powers and duties of the association,including but not limited to proposals for reinsuring, modifying, or guaranteeing the policies or contractsof the impaired or insolvent insurer and the determination of the policies or contracts and contractualobligations. The association shall also have the right to appear or intervene before a court in anotherstate with jurisdiction over an impaired or insolvent insurer for which the association shall becomeobligated or with jurisdiction over a third party against whom the association may have rights throughsubrogation of the insurer's policyholders.

M.(1) Any person receiving benefits under this Part shall be deemed to have assigned the rightsunder, and any causes of action relating to, the covered policy or contract to the association to the extentof the benefits received because of this Part, whether the benefits are payments of or on account ofcontractual obligations, continuation of coverage, or provision of substitute or alternative coverages.The association may require an assignment of such rights and cause of action by any payee, policy orcontract owner, beneficiary, insured, or annuitant as a condition precedent to the receipt of any right orbenefits conferred by this Pan upon such person.

(2) The subrogation rights of the association under this Subsection shall have the same priorityagainst the assets of the impaired or insolvent insurer as that possessed by the person entitled to receivebenefits under this Part.

(3) In addition to R.S. 22:2087(MXl) and (2), the association shall have all rights of subrogationand any other equitable or legal remedy which would have been available to the impaired or insolventinsurer or holder of a policy or contract with respect to such policy or contracts.

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N. The association may:(l) Enter into such contracts as are necessary or proper to implement the provisions and

purposes of this Part.(2) Sue or be sued, including taking any legal actions necessary or proper to recover any unpaid

assessments pursuant to R.S. 22:2088 and to settle claims or potential claims against it.(3) Borrow money to effect the purposes of this Part. Any notes or other evidence of

indebtedness of the association not in default shall be leeal investments for domestic insurers and mavbe carried as admitted assets.

(4) Employ or retain such persons as are necessary to handle the financial and legal transactionsof the association, and to perform such other functions as become necessary or proper under this Part.

(5) Take such legal action as may be necessary to avoid payment of improper claims.(6) Exercise, for the purposes of this Part and to the extent approved by the commissioner, the

powers of a domestic life or health insurer, but in no case may the association issue insurance policies orannuity contracts other than those issued to perform its obligations under this Part.

O. The association may join an organization of one or more other state associations of similarpurposes to further the purposes and administer the powers and duties of the association.

Acts 1991, No.998, $1, eff. Sept. 30, 1991; Redesignated from R.S. 22:1395.7 by Acts 2008,No.415, $1, eff. Jan. 1,2009.

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$2089. Plan of operationA.(1) The association shall submit to the commissioner a plan of operation and any amendments

thereto necessary or suitable to assure the fair, reasonable, and equitable administration of theassociation. The plan of operation and any amendments thereto shall become effective either upon thecommissioner's written approval or thirty days after submission if he has not disapproved it.

(2) If the association fails to submit a suitable plan of operation within one hundred twenty daysfollowing September 30, 1991 or if at any time thereafter the association fails to submit suitableamendments to the plan, the commissioner shall, after notice and hearing, adopt and promulgate such

leasonablg rulg5-.aq..Afe..p"e9.e9q"q{y g{.4dyisable to effectuate the provisiorls of thisPart., The ruleq fhallcontinue in force until modified by the commissioner or superseded by a plan submitted by theassociation and approved by the commissioner.

B. All member insurers shall comply with the plan of operation.C. The plan of operation shall, in addition to requirements enumerated elsewhere in this Part:( I ) Establish procedures for handling the assets and liabilities of the association.(2) Establish the amount and method of reimbursing members of the board of directors under

R.S.22:2086.(3) Establish regular places and times for meetings, including telephone conference calls, of the

board of directors.(4) Establish procedures for records to be kept of all financial transactions of the association, its

agents, and the board of directors.(5) Establish the procedures whereby selections for the board of directors shall be made and

submitted to the commissioner.(6) Establish any additional procedures for assessments pursuant to R.S. 22:2088.(7) Contain additional provisions necessary or proper for the execution of the powers and duties

of the association.D. The plan of operation may provide that any or all powers and duties of the association, except

those under R.S. 22:2087(M)(3) are delegated to a corporation, association, or other organization whichperforms or will perform functions similar to those of this association, or its equivalent, in two or morestates. Any corporation, association, or organization which undertakes this function shall be reimbursedfor any payments made on behalf of the association and shall be paid for its performance of any functionof the association. A delegation under this Subsection shall take effect only with the prior approval ofboth the board of directors and the commissioner, and may be made only to a corporation, association,or organization which extends protection not substantially less favorable and effective than that providedby this Part.

Acts 1991, No.998, $1, eff. Sept. 30, 1991; Redesignated from R.S. 22:1395.9 by Acts 2008,No.4l5, $1, eff. Jan. 1,2009.

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'vVestlaw

656 So.2d 670

656 So.2d 670,95 0021 (La.App.(Cite as: 656 So.2d 670,95 0021

H

Court of Appeal of Louisiana,First Circuit.

LOUISIANA INSURANCE GUARANTY ASSO.CIATION

COMMISSION ON ETHICS FOR PUBLIC EM-PLOYEES.

No.95 CW 0021.

May 5, 1995.Rehearing Denied June 2 1, 1 995.

Louisiana Commission on Ethics for public Em-ployees, No. 94-174, issued advisory opinion thatLouisiana Insurance Guaranty Association (LIGA)directors, staff and employees were ..public em-ployees" within meaning of Code of GovemmentalEthics. LIGA applied for supervisory writs. The Su-preme Court granted supervisory writs to reviewopinion. The Court of Appeal, Carter, J., held that:(l) application for supervisory writs was appropri-ate procedural vehicle for appellate review of ad_visory opinion by Commission, and (2) LIGA wasstate or public agency within contemplation of eth_ics code.

Writ recalled and application denied.

West Headnotes

Il Courts 106 C:p207.f

106 Courts

l06VI Courts of Appellate Jurisdictionl06VI(A) Grounds of Jurisdiction in General

106k207 Issuance of prerogative or Re_medial Writs

106k207.1k. In General. Most CitedCases

Application for supervisory writs filed by LouisianaInsurance Guaranty Association (LIGA) was appro-priate procedural vehicle for appellate review ofad-

Page I

visory opinion by Commission on Ethics for public

Employees. LSA-R.S. 42:1142, subd. A.

[2] Officers and Public Employees 283 €>:1110

283 Officers and Public Employees283III Rightsn Powers, Duties, and Liabilities

283k1l0 k. Duties and Performance Thereofin General. Most Cited Cases

(Formerly 360k21)Article of Louisiana Constitution directing Louisi-ana legislature to enact Code of Ethics for ..all of-ficers and employees of the state and its politicalsubdivisions" does not forbid promulgation of codeof ethics that is applicable to persons other thanpublic servants. LSA-Const. Art. 10, g 2l; LSA-R.S. 42: I 101 et seq.

[3] Insurance 217 Q=ll470

217 Insurance

2l7YlI Guaranty Funds or Associations2l7VII(A) In General

217k1470 k. In General. Most Cited Cases(Formerly 217k8)

Louisiana Insurance Guaranty Association (LIGA)is neither person nor corporation; it is sui generistype of association. LSA-R.S. 22:1380.

[4] Insurance 217 *Ull

217 Insurance

2l7VlI Guaranty Funds or AssociationsZI7VII(A) In General


Louisiana Insurance Guaranty Association (LIGA)is private nonprofit, unincorporated legal entity cre-ated by legislature. LSA-R.S. 22:1380.

[5f Insurance 217 *1470

217 Insurance

ZI7VII Guaranty Funds or Associations217VII(A) In General

I Cir.5/5195)(La.App. 1 Cir. 5/5/95))

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Because Louisiana Insurance Guaranty Association(LIGA) is legislative creation, it can operate onlywithin legislative parameters. LSA-R.S. 22: 13g2.

[6] Insurance 217 C:pl480

217 Insurance2l7YIl Guaranty Funds or Associations

2 I 7Vn(B) Adminisrration2l7kl4&0 k. Supervision or Regulation.

Most Cited Cases

(Formerly 217k8)Louisiana Insurance Guaranty Association (LIGA)is state or public agency within contemplation ofethics code, despite language in statute stating thatLIGA is not state agency; LIGA was created by le_gislature, which specifically defined its powers, andis subject to regulation and oversight by Commis_sioner of Insurance and legislative committees oninsurance. LSA-Const. Art. 10, $ 2l; LSA-R.S.22:137 6, 22:1382, 42:l l0l et seq., 42:l 142.*671 Rolfe H. McCollister, Baton Rouge, for relat_or, La. Ins. Guar. Ass'n.

R. Gray Sexton, Maris LeBlanc McCrory, patriciaH. Douglas, Baton Rouge, for respondent, Com'non Ethics for Public Employees.

Before LOTTINGER, C.J., and SHORTESS andCARTER, JJ.

**2 CARTER, Judge.

We granted supervisory writs in this case to reviewan advisory opinion of the Louisiana Commissionon Ethics for Public Employees (Commission).

FACTS

On or about June 23, 1994, the Louisiana InsuranceGuaranfy Association (LIGA) requested an advis-ory opinion from the Commission as to whetherLIGA's board of directors, staff and contract em_

Page2

ployees were "public employees" within the mean-ing of the Code of Govemme*l?l Ethics, posingseveral hypothetical questions.^ "' The Commis-sion considered LIGA's request at its August **3 4,1994, meeting, but took the matter under advise-ment.-Ori'October 21, 1994, the Commission con-cluded that "all members of the LIGA Board and allemployees of LIGA are 'public employees' as

defined by the Code of Ethics." The Commissionalso concluded that "those individuals or businesseswhich have a contractual relationship with LIGAmay also be public employees as defined in theCode of Ethics in certain situations.,' By letter,dated November 4, 1994, the Commission rendereda written opinion, advising LIGA as follows:

FNl. LIGA requested an opinion as to thefollowing questions:

l. (a) Are none, some, or c// of the mem-bers of the Board "public employees',within the meaning of the Code (theBoard is made up of four appointees andfive elected members)?

(b) If "yes" as to some or c/I of; thenwould an employee of a member insurerbe in violation of the Code by serving onthe Board or could such person avoid aconflict by recusing himself/herselfwhen appropriate?

(c) If "yes" as to some or a/l then wouldsomeone in the insurance agency busi-ness in Louisiana be in violation of theCode by serving on the Board or couldsuch person avoid a conflict by recusinghimself/herself when appropriate?

(d) If "yes" as to some or a//, then wouldsomeone in law school who seryes onthe Board be in violation of the Code ifhe/she upon f,rnishing school takes a jobas an attorney with alaw firm represent-ing LIGA?

I Cir.5i5l95)(La.App. 1 Cir. 5/5/95))

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2. (a) Are LIGA's staff members .,public

employees" within the meaning of theCode?

(b) If "yes", then what is meant by the. term "staff'2

3. (a) Are all persons who contract toprovide services to LIGA ..public em-ployees" within the meaning of theCode?

(b) If "yes", are there limitations on thiswith respect to the type of servicesprovided and/or by whom? For example,does this apply to all attomeys, ad-justers, mediators, certified public ac-countants, financial advisors. and all oth-er seryice providers? Where is the linedrawn?

[A]11 of the members of the LIGA Board and ... allof the employees of LIGA are "public employ-ees" as that term is used in Title 42, Chapter 15

of the Louisiana Revised Statutes and [as] that ...

term is defrned at Section l102(18) of the Codeof Governmental Ethics. Accordingly, as such,members of the board and the employees ofLIGA are subject to the provisions of the Code ofGovernmental Ethics.

[A] person serving on the LIGA Board who is ,,inthe insurance agency business" may be in viola-tion of ... Sections I I I lC(2Xd) and I I l2B(2) and(3) as well as Section lll3B ofthe Code, de-pending on the particular facts that might sub-sequently be presented to the Commission in the*672 context ofa specific request for an advisoryopinion.

[A] member of the LIGA Board may be prohibitedby virtue of the application of Sectionllllc(2xd) of the Code from rendering com-pensated services to a "law f,rrm representingLIGA" and depending on the'particular facts thatmight be presented to the Commission.

Page 3

[T]hose persons who are engaged in the perform-ance of a governmental function by virtue of a

contractual relationship with LIGA may be

"public employees" within the meaning of theprovisions of the Code of Governmental Ethicsand, again, depending on the'pdrticular facts thatmight be presented to the Commission for con-sideration.

On January 5, 1995, LIGA frled the instant applica-tion for supervisory writs with this court, assigningthe following errors:

l. The Commission on Ethics for Public Employeeserred in finding that the Officers, Directors, Em-ployees, and Contract Employees of LIGA are

"public employees" for the purposes of the au-thority of the Commission.

2. The Commission on Ethics for Public Employeeserred in finding that the Officers, Directors, Em-ployees, and Contract Employees of LIGA aresubject to the authority of the Commission.

The Commission opposed the application, raisingthe following issues:**4 1. Should appellate review be granted of a

purely advisory opinion rendered on the basisonly ofhypothetical "facts" without any real andadverse issues and absent a real and definable"case or controversy"?

2. May the board members and employees of a le-gislatively created insurance guaranty associationwhich is subject to extensive governmental con-trol and regulation avoid the application of theconstitutionally mandated Ethics Code?

APPELLATE REVIEW OF ADVISORY OPINION

[] The Commission argues that LIGA's applicationfor supervisory writs is premature in that there is nopending case or controversy between the parties.

LSA-R.S. 42:ll42A provides as follows:

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Appeals to the Court of Appeal, First Circuit.Whenever action is taken against any public ser-vant or person by an ethics body or by an agencyhead by order of the commission, or wheneverany public seryant or person is aggrieved by any

'action taken by an ethics body, he may appealtherefrom to the Court of Appeal, First Circuit, ifapplication to the ethics body is made withinthirty days after the decision of the ethics bodybecomes final. Any preliminary, procedurai, orintermediate action or ruling by an ethics body issubject to the supervisory jurisdiction of the ap-pellate court as provided by Article V, Section l0of the constitution. The Court of Appeal, FirstCircuit, shall promulgate rules of procedure to befollowed in taking and lodging such appeals.(emphasis added.)

The law is clear that an advisory opinion renderedby the Commission is a preliminary or intermediateaction or ruling by an ethics body within the mean-ing of LSA-R.S. 42:1142. Midboe v. Commissionon Ethics Jbr Public Employees, 94-227O (La.ll/30/94);646 So.2d 351, 355; In re Amtext, Inc.,625 So.2d 693, 695 (La.App. lst Cir.l993); Boardof Commissioners, Fifth Louisiana Levee District v.Commission on Ethics for Public Employees, 4g4So.2d 845, 849 (La.App. lst Cir.), writ denied,4gTSo.2d 440 (La.1986).

In the instant case, the application for supervisorywrits filed by LIGA is the appropriate proceduralvehicle for appellate review of an advisory opinionby the Commission. See **SCity of Baton Rouge,Parish of East Baton Rouge, Donald Nijoka andRoy Hutchinson v. Commission on Ethics for publicEmployees (La.App. lst Cir. 1995), 655 So.2d 457,and Board of Trustees of the Emptoyees, RetirementSystem of the City of Baton Rouge and parish ofEast Baton Rouge v. Commission on Ethics forPublic Employees (La.App. tsr Cir. 1995), 655So.2d 1355.

,1,673 APPLICABILITY OF CODE OF ETHICS TOLIGA

Page 4

LSA-Const. art. 10, Section 2l provides as follows:

The legislature shall enact a code ofethics for allofficials and employees of the state and its polit-ical subdivisions. The code shall be administeredby one or more boards creat€d bi the legislaturewith qualifications, terms of office, duties, andpowers provided by law. Decisions of a boardshall be appealable, and the legislature shallprovide a method of appeal.

This article directed the legislature to enact a codeof ethics for all officials and employees of the stateand its political subdivisions and to create one ormore boards to administer the code. Glazer v. Com-mission on Ethicsfor Public Employees,43 I So.2d752,755 (La.1983). Pursuant to this mandate. thelegislature enacted the Code of Ethics for Govem-mental Employees, LSA-R.S. 42:ll0l et seq.

Glazer v. Commission on Ethics for Public Employ-ees, 431 So.2d at 755. Among the multiple policyobjectives of the Code of Ethics are impartiality,faimess, and equality of treatment toward thosedealing with government; assurance that decisionsof public importance will not be influenced byprivate considerations; maintenance of public con-fidence in government (wherein enters the matter ofappearances); and prevention ofuse ofpublic officefor private gain. LSA-R.S. 42:ll0lB; Glazer v.

Commission on Ethics for Public Employees, 431So.2d at 755.

[2] ln Glazer v. Commission on Ethics for PublicEmployees, 43 I So.2d at755-56, the Louisiana Su-preme Court noted that:

[T]he primary objective of the legislation is to pre-vent public officers and employees from becom-ing involved in conflicts ofinterest. A conflict ofinterest is a situation which would require an of-frcial to serve two masters, presenting a potential,rather than an actuality, of wrongdoing. Thewrongdoing does not have to occur in order for aprohibited conflict to exist. A public official mayhave done no wrong in the ordinary sense of theword, but a conflict of interest may put him in

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danger of doing wrong. The Code is aimed atavoiding even this danger. For this purpose, theCode of Ethics for Governmental Employeesidentifies certain **6 types of conflicts of in-terests and prohibits conduct by public officialswhich would bring these conflicts into b-ing. Ad-ditionally, the Code empowers the Commissionon Ethics to determine when a conflict of interestexists and to impose certain sanctions. (citationsomitted).

Moreover, there is no language in the constitutionalprovision which forbids the promulgation of a codeof ethics that is applicable to persons other thanpublic servants. Anzelmo v. Louisiana Commissionon Ethics for Public Employees, 435 So.2d 1082,1084 (La.App. lst Cir.), writ denied, 441 So.2d1220 (La.r983).

At issue in the instant writ application is whetherLIGA or its Board of Directors, staff, and contractemployees are subject to the provisions of the Eth-ics Code. LIGA contends that it is not a govem-mental entity, that it is not engaged in activities thatare governmental functions, and that it is not sub-ject to the direct supervisory control ofany govern-mental employee or publicly elected official. Assuch, LIGA reasons that it, its directors, staff, andemployees are not public employees subject to theEthics Code.

The Ethics Code generally prohibits payments topublic servants from nonpublic sources (LSA-R.S.42:llll), participation in certain transactions in-volving a governmental entity (LSA-R.S. 42:lll2),and assistance to certain persons after terminationof public service (LSA-R.S. 42:ll2l), among otherthings. "Govemmental entity" is defrned in LSA-R.S. 42:l102(12) as "the state or any political sub-division which employs the public employee or em-ployed the former public employee or to which theelected official is elected, as the case may be."LSA-R.S. 42:1102(18) defines a "public employee"as anyone, whether compensated-or not, who is:

(a) An administrative officer or offrcial of a govern-

(&Page 5

mental entity who is not filling an elective office.

(b) Appointed by any elected offrcial when actingin an offrcial capacity, and the appointment is toa post or position wherein the appointee is toserve the *674 **7 'governmental entity or ari. '

agency thereof, either as a member of an agency,or as an employee thereof.

(c) Engaged in the performance of a governmental

function.

(d) Under the supervision or authority ofan electedofficial or another employee of the governmentalentity.

A public employee shall be in such status on dayson which he performs no services as well as days

on which he performs services. The terminationof any particular term of employment of a publicemployee shall take effect on the day the termina-tion is clearly evidenced.

The courts of this state have been confronted withthe question of whether a certain entity was a stateoffice or agency or whether a certain individual wasa state or public officer on numerous occasions. Jeestate v. smilh, 357 So.2d 505, 507 (La.1978). InSmith, the court noted that a consistent theme ranthroughout the cases presented with this question.The following factors were considered in finding an

entity to be a state or public agency or in finding anindividual to be a state or public ofhcer: (l) the en-tity was created by the legislature; (2) the powerswere specifically defined by the legislature; (3) theproperty of the entity belonged to the public; and(4) the entity's functions were exclusively of a pub-lic character and performed solely for the public be-nefrt. State v. Smith,357 So.2d at 507.

1. Created by the legislature.

[3][a] In the instant case, we note that LIGA isneither a person nor a corporation; it is a sui generistype of association. Louisiana Insurance GuarantyAssociation v. Gegenheimer, 93-3021 (La. 4/21/99;

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656 So.2d 670

656 So.2d 670,95 0021 (La.App. I Cir.5/5/95)(Cite as: 656 So.2d 670,95 002r @a.App. I Cir. 5/5/95))

636 So.2d 209, 210. As set forth in LSA-R.S.22:13804, LIGA is a private non-profit, unincor-porated legal entity. Louisiana Insurance GuarantyAsso ciation v. Gegenheimer, 93 -3021 (La. 4l2l /94);636 So.2d at 210; Louisiana Insurance Guaranty

' Aiiaciaiio"ii-'i."*Eiririid, 393 " So.2d 764, i67(La.App. lst Cir.l980). However, the legislaturecreated the Louisiana Insurance Guaranty Associ-ation by enacting LSA-R.S. 22:1380. All insurers,as defined in LSA-R.S. 22:1379, are required, as acondition of their authority to transact insurance inthis state, to become and **E remain members ofLIGA. LSA-R.S. 22:13804. Further, we acknow-ledge that LSA-R.S. 22:13808 expressly providesthat L,I-G-A is not a state instrumentality for any pw-

F t{?pose.- "- See Louisiana Insurance Guaranty Asso-ciation v. Gegenheimer, 93 -3021 (La. 4l2l /9 4); 636So.2d at 210. However, if the legislature had inten-ded to exempt LIGA from the Ethics Code or to en-act special provisions applicable only to LIGA, thelegislature could have expressly set forth such ex-emption in LS$;$.S. 22:1380. However, the legis-lature did not.ttt' Moreover, although LIGA is nottechnically a public body, it is required to haveopen meetings and keep public records. LSA-R.S.22:1380C; Louisiana Insurance Guarangt Associ-ation v. Gegenheimer, 93-3021 (La. 4l2ll94); 636So.2d at 210.

FN2. LSA-R.S. 22:13808 provides as fol-lows:

The association is not and may not bedeemed a department, unit, agency, orinstrumentality of the state for any pur-pose. All debts, claims, obligations, andliabilities of the association, wheneverincurred, shall be the debts, claims, ob-ligations, and liabilities of the associ-ation only and not of the state, its agen-cies, instrumentalities, offrcers, or em-ployees. Association monies may not beconsidered part of the general fund ofthe staie. The stafe miy nbt budget for orprovide general fund appropriations to

Page 6

the association, and the debts, claims,obligations, and liabilities of the associ-ation may not be considered to be a debtofthe state or a pledge ofits credit.

FN3. We noted that, -Since the legislaturehas not seen flt to exempt LIGA from theprovisions of the Ethics Code, it is not ne-

cessary to the resolution of the issuespresented herein to determine whether thelegislature has the constitutional authorityto exempt a govemmental entity or anypublic employees from the provisions ofthe Ethics Code.

2. Powers defined by the legislature.

[5] Additionally, the powenl and duties of the asso-

ciation are specifically outlined in LSA-R.S.22:1382. Because LIGA is a legislative creation, itcan operate only within legislative parameters.Louisiana Insurance Guaranty Association v. Ge-genheimer, 93-3021 (La. 4/21194); 636 So.2d at210. LIGA is not authorizedto act in any mauner*675 inconsistent with the powers expressly gran-ted to the association in LSA-R.S. 22:1382. The le-gislature also required that LIGA submit a plan ofoperation to **9 the Commissioner of Insuranceand the Senate and House committees on insurancefor oversight. LSA-R.S. 22:1383A(l). Any plan ofoperation by LIGA is not effective until approvedin writing by the Commissioner of Insurance, and

the Senate and House committees on insurance mayhold hearings on any plan of operation. LSA-R.S.22:1383A(l). Moreover, LIGA is expressly prohib-ited by statute from implementing any plan of oper-ation rejected by a legislative committee. LSA-R.S.22:1383A(1). If LIGA fails to submit a plan of op-eration, the Commissioner of Insurance is author-ized to adopt and promulgate such reasonable rulesas are necessary or advisable to effectuate the stat-utory provisions, subject to review and approval bythe Senate Committee on Insurance and the House,Committee on Insurance. LSA-R.S. 22:1383A(2).The required plan of operation covers the proced-

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ures for handling assets of the association (LSA-R.S. 22:1383 C(2)); the amount and method of re-imbursing the members of the board of directorsunder LSA-R.S. 22:1381 (LSA-R.S. 22:1383 C(3));procedures by which claims may be filed with theassociation and aiceptable forms of proof ofcovered claims (LSA-R.S. 22:1383 C(4)); placesand times for meetings of the board of directors(LSA-R.S. 22:1383 C(5)); procedures for recordkeeping of all financial transactions of the associ-ation, its agents, and the board of directors (LSA-R.S. 22:1383 C(6)); procedures for members to ap-peal association decisions to the commissioner(LSA-R.S. 22:1383 C(7)); and procedures for theselection of the board of directors for submission tothe commissioner. (LSA-R.S. 22:1383 C(8)). Fur-ther, LSA-R.S. 22:1388 subjects LIGA to examina-tion and regulation by the Commissioner of Insur-ance.

3. Property of entity belongs to the public.

LIGA obtains its funds from member insurers pur-suant to assessments under LSA-R.S.22:13824(3)(a). However, these assessments,

which are evidenced by a certifrcate of contribu-tion, are offset against the member insurer's premi-um tax liability, not to exceed a total offset of100%. LSA-R.5. 22:1382A(3)(c); **10 LouisianaInsurance Guaranty Association v. Gegenheimer,

93 -3021 (La. 4l2l 194) ; 63 6 So.2d at 210. Moreover,any -sums acquired by refund under LSA-R.S.22:13828(6) from the association, which were writ-ten off by the insurer and offset against premiumtaxes, but which are not needed to effectuate thepurposes of the Louisiana Insurance Guaranty Act,are required to be paid by LIGA to the Commis-sioner of Insurance and deposited with the state

treasury for credit to the general fund of the state.LSA-R.S. 22: I 3 82A(3)(d).

!, f n{ity.fr.lctions for public,bcnefit.

Further, LIGA functions solely and exclusively for

PageT

public benefit. See Louisiana Insurance GuarantyAssociation v. Bernard. 393 So.2d at 767. LSA-R.S. 22:1376 sets forth the purpose ofthe associ-

ation as follows:

The purpose of this Part is to provide a mechan-

ism for the payment of covered claims under cer-

tain insurance policies to avoid excessive delay inpayment and to avoid financial loss to claimants

or policyholders because of the insolvency of an

insurer, to assist in the detection and prevention

of insurer insolvencies and to allow the associ-

ation to provide financial assistance to member

insurers under rehabilitation or liquidation, and toprovide an association to assess the cost of such

operations among insurers.

[6] Considering the above, we find that, despite any

language in LSA-R.S. 22:1380 that LIGA is not a

state agency, LIGA is a state or public agency with-in the contemplation of the Ethics Code. LIGA was

created by the legislature, which specificallydefined its powers, and is subject to regulation and

oversight by the Commissioner of Insurance and

the Senate and House committees on insurance.

LIGA's property, which is derived from mandatory

assessments upon all insurers operating in this state,

entitles the member insurers to tax credits, and allremaining funds are transferred into the state gener-

al fund. Moreover, LIGA functions are *676 of apublic character exclusively and are performed

solely for the public benefit. Because LIGA is a

state or public agency within the contemplation ofthe Ethics Code, its board of **11 directors, staff,and contract employees are also subject to the Eth-

ics Code.

In reaching this conclusion, we are guided by the

Louisiana Supreme Court's analysis in Polk v. Ed-

wards, 626 So.2d 1128, ll45-47 (La.1993). InPolk, the court examined the Louisiana EconomicDevelopment and Gaming Corporation (Casino

Corporation). The court held that, despite the specilic language in the Casino Act itself statingthat the Casino Corporation is not a state

agency, except as expressly provided in the act, the

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Casino Corporation is an instrumentality of the

state. The court noted:

After considering its powers and functions, as

well as its interrelationship with the state in many. areas; rye'find.that'the Casino,Corporation is an

instrumentality of the state and is subject to theprovisions of the civil service system. The CasinoCorporation does not enjoy an existence separate

from the state. It does not independently transactits business and hire its personnel. Furthermore,its actions determine the progress of the gaming

industry, which the legislature has designed to as-

sist the $owth of tourism and generate revenueas a benefit to the general welfare. To treat thislegislative entity as a nongovemmental agencyoutside of the civil service system would effect-ively emasculate the constitutional provision,which mandates civil service for "all persons

holding offices and positions of trust or employ-ment in the employ of ... any instrumentality" ofthe state.

Polk v. Edwards, 626 So.2d at 1147. See also Cityof Baton Rouge, Parish of East Baton Rouge, Don-ald Nijoka and Roy Hutchinson v. Commission on

Ethics for Public Employees (La.App, lst Cir.1995); 655 So.2d 457 and Board of Trustees of the

Employees' Retirement Systetn of the City of Baton

Rouge and Parish of East Baton Rouge v. Comrnis-

sion on Ethics for Public Employees (La.App. lstCir. 1995);655 So.2d 1355.

Further, in Louisiana Insurance Guaranty Associ-

ation v. Gegenheimer, 93-3021 (La. 4l2ll94); 636

So.2d at 210, the court was presented with the issue

of whether an amendment to LSA-R.S.E\T/,I

13 4521 ,"'- which exempts state agencies fromprepayment of court **12 costs, was unconstitu-tional. In upholding the constitutionality of the ex-emption for LIGA, the court noted that, althoughLIGA is liable for court costs pursuant to LSA-R.S.22:1382A(l)(b), LIGA is a legislative creation

which operates within legislative parameters. Be-

cause the legislature's plenary power is only limitedby the Louisiana Constitution, the legislature may

Page 8

give LIGA an exemption generally afforded to state

agencies. Louisiana Insurance Guaranty Associ-

ation v. Gegenheimer, 93-3021 (La. 4l2l/94); 636

So.2d at 210.

FN4. LSA-R;S. 13:4!2 I addresses.'the"ex-,

emption of the state and its subdivisions,boards, and commissions from the prepay-

ment of court costs and provides as fol-lows:

A. Except as provided in R.S. l3:5112,R.S. l9:15 and l16, and R.S.48:451.3,

and as hereinafter provided, neither the

state, nor any parish, municipality, nor

other political subdivision, public board,

or commission, nor any officer or em-

ployee of any such governmental entitywhen acting within the scope and author-

ity of such employment or when dischar-

ging his official duties shall be requiredto pay court costs in any judicial pro-

ceeding instituted or prosecuted by or

against the state, or any such parish, mu-nicipality, or other political subdivision,

board, or commission, in any court ofthis state or any municipality of thisstate, including particularly but not ex-

clusively those courts in the parish ofOrleans and the city of New Orleans.

This Section shall also apply to the

Louisiana Insurance Guaranty Associ-ation and the Louisiana Life and HealthInsurance Guaranty Association in anyjudicial proceeding instituted by or

against them. This Section shall also ap-

ply to employees or agents of the state ifthey are named as defendants in a suitarising out of the course and scope oftheir employment or agency. Costs

which are temporarily deferred pursuant

to this Section cannot be shifted to op-

posing parties during the pendency ofsuch defedent. (emphebis'added.)" " '""

DECREE

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656 So.2d 670,95 0021 (La.App. I Cir. 515195)

(Cite as:656 So.2d 670,95 0021 (La.App.1 Cir.5/5/95))

In accordance with the above reasoning, the writpreviously issued herein is hereby recalled, and thewrit application filed by LIGA is denied. The advis-ory opinion of the *677 Commission is correct.Costs in the amount of $202.00 are to assessed"' ' 'afiinif thetbrirnii3si6n'dhd IIGA equally.

WRIT RECALLED AND APPLICATIONDENIED.

La.App. I Cir.,1995.Louisiana Ins. Guar. Ass'n v. Commission on Eth-ics for Public Employees656 So.2d 670,95 0021 (La.App. I Cir. 515195)

END OF DOCUMENT

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2000-1750 (La.3D3/0r)(Cite as: 782 So.2d S82,2000-1956 (La. 3ngrcD)

HSupreme Court of Lou,isiana.

ChriStA DUPLANTIS

LOUISIANA EOIRD OF ETHICS.Breazeale, Sachse, & Wilson, L.L.p.,

Louisiana notura of Btti.r.

Nos. 2000-CC-l 7S0, 2000_CC_t 956.

March 23,2001.

Supervisory jurisdiction was sought to reviewadvisory opinions of the Board of Ethics. The Courtof Appeal granted the writ in one case and denied itin the other. Certiorari was granted. The Supremecourt, victory, J., held that: 1t) statute which states

^ that advisory opinions by the Board of Ethics are

tfl subject to the. supervisory jurisdiction of theappellate court is unconstitutional; (2) the statutewas severable; and (3) district court lacks subjectmatter jurisdiction over a declaratory judgmentacrion seeking a determination of me ethiis dode,sapplication or interpretation.

Vacated in pari and denied in part.

Calogero, C.J., dissented and hled opinion.

Knoll, J., dissented and filed opinion.

West Headnotes

[f] Appeal "nd

Er.o. €="230k2 Most Cited Cases

Statute which states that advisory opinions by theBoard of Ethics are subject to the supervisoryjurisdiction of the appellate court isunconstitutional; advisory opinions of the Board arenot "decisions" within the meaning of constitutionalprovision allowing appeal of the

-Board's decisions.

LSA- Const. Art. 10, g 2l; LSA-R.S. 42:1134.

Page? of22

Page I

subd. E, 42:1142, subd. A.

[2f statutes €='|64Q\361k64(7) Most Cited Cases

Unconstitutional statute which states that advisoryopinions by the Board of Ethics are subject to thesupenrisory jwisdiction of the appellate court wasseverable fiom the other language permittingsupervisory jurisdiction over any preliminary,procedural, or intermediate action or ruling by theBoard or panel. LSA-Const. Afi. 10, $ 2l;LSA-R.S. 42:1142, subd. A.

[3] Statutes e=64(l)361k64(l) Most Cited Cases

The test for severability is whether theunconstitutional portions of the law are sointerrelated and connected with the constitutionalparts that they cannot be separated withoutdestroying the intention manifested by the enactingbody; if the remaining portion is separable from theoffending portion, a court may strike only theoffending portion and leave the remainder intact.

[4] Declaratory Judgment etl24.lI l8Akl24.l Most Cited Cases

The disnict court lacks subject matter jurisdictionover a declaratory judgment action seeking adetermination of the Ethics Code's application orinterpretation. LSA-R.S. 42:t 132.

[5f Declaratory Judgment F- lZ4.lI l8Akl24.l Most Cited Cases

Regardless of whether a case or controversy ispresented, a district court in a declaratory judgmentaction lacks subject matter jurisdiction as an initialmatter to review the interpretation and applicationof provisions of the Ethics Code, absent aconstitutional challenge to a provision of the Code.LSA- R.S. 42:1132.

WestCodenotes ''- " ,.

Held Unconstitutional

\A&stlaru

782 So.2d 582

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o782 So.2d 5822000- I 750 (La. 3 /23 l}t)(Cite as: 782 So.2d 582,2000-1956 (La. 3t}3t0l\\

La. R.S. a2:1142(A)

*583 Jude C. Bursavich, Anthony T. Caruso,Gordon A. Pugh, Andrew T. McMains, Counsel forRespondent (No. 2000-CC- I 956).

Charles J. Fulda, IV, Carolyn A. McNabb, RamonaN. Wallis, Danna E. Schwab, Counsel forRespondent (No. 2000-CC- 1750).

Jennifer G. Magness, Maris L. McCrory, R. GraySexton, Counsel for Applicant.

**l VICTORY, Justice.

We granted writs in these two unrelated cases,consolidated for oral argument, to consider whetherit was proper for the court of appeal to havereviewed advisory opinions issued by the LouisianaBoard of Ethics (the "Board"). After reviewing therecord and the applicable law, we hold that theprovision of La. R.S. 42:1142 which provides that"[a]ny advisory opinion issued to any person orgovernmental entity by the board or panel ... issubject to the supervisory jurisdiction of the Iappellate court ...'t is unconstitutional; therefore,the appellate courts are without jurisdiction toreview such advisory opinions.

FACTS AND PROCEDURAL HISTORYDuplantis v. Board of Ethics

On August 30, 1996, Ctrista Duplantis, through theAssistant Attorney for the Terrebonne ParishConsolidated Govemment, sought an advisoryopinion from the **2 Louisiana Board of Ethics.The substance of that request was as follows:I have been requested by Council member,Christa Duplantis, to obtain an opinion from theBoard of Ethics for Elected Offrcials regardingher potential employment with two localhospitals.Christa Duplantis was elected in 1995 to serve asa Terrebonne Parish Consolidated Governmenrcouncil member for a four ycar term which beganin January 1996. Christa Duplantis is aRegistered Nurse who desires to obtainemployment' with the Terrebonne GeneralMedical Center ('TGMC") or the Leonard

Page3 of22

Page2

Chaben Medical Center ('LCMC"). TGMC isowned and operated by Hospital Service DistrictNo. I of the Parish of Terrebonnc ("hospitaldistrict"). LCMC is a State owned and operatedfacility.

*5E4 Particularly, Duplantis ,wanted the Boardlsopinion as to whether such employment would beprohibited by La. R.S. 42:1113(A). That statuteprovides, in pertinent part:

No public servant ... or member of such a publicservanfs immediate family, or legal entity inwhich hc has a controlling interest shall bid on orenter into any contract, subcontract, or othertransaction that is under the supervision orjurisdiction ofthe agency ofsuch public servant.

La. R.S. a2: I I l3(A).

On October 7, 1996, the Board of Ethics respondedwith Advisory Opinion 96-147 which contained twoprincipal conclusions. First, the Board concludedthat La. R.S. 42:lll3(A) would prohibit Duplantisfrom providing nursing s€rvices to 'Terrebonne

General because it was part of the TenebonneParish Consolidated Government. Secon4 theBoard found that the Code of Ethics would notprohibit Duplantis from seeking employment fromLeonard Chabert because it was an agency of thestale, not an agency of Terrebonne ParishConsolidated Government. On November 12,1996, Duplantis applied for a writ of certiorari fromthe First Circuit Court of Appeal pursuant to La.R.S. 42:l142(A) as it read at that timc. [FNl]

FNl. At tle time Duplantis filed her writapplication, L,a. R.S. 42:l142(A) provided:Whenever action is taken against anypublic servant or person by the board orpanel or by an agency head by order of theboard or panel, or whenever any publicservant or person is aggrieved by anyaction taken by the board or panel, he mayappeal therefrom to the Court of Appeal,First Ciicuit, if application to the board ismade within thi4y days after the decisionof the board becomes frnal. Anypreliminary, procedural, or intermediateaction or ruling by the board or panel issubject to the supervisory jurisdiction ofthe appellate court as provided by ArticleV, Section l0 of the Constitution ofLouisiana. The Court of Appeal, First

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Circuit, shall promulgate rulesprocedure to be followed in takinglodging such appeals.

**3 In 1997, while the case was pending before theFirst Circuit, this court handed down its originalopinion in Transit Management of S.E. La. v.Commission on Ethics for Pub. Emp., 96-1982, p.2(La.l2l2/97),703 So.2d 576, 577 [hereinafter IMSI], which found that an advisory opinion was not a"preliminary, procedural, or intermediate action"within the meaning of La. R.S. 42:1142(A).Consequently, this court reasoned: "There is noconstitutional or legislative authority for judicialreview of an advisory opinion rendered by the[Board of Ethics]." /d. Following that originalopinion in TMSL, the First Circuit dismissedDuplantis's writ on December 30, 1997, SeeDuplantis v. Board of Ethics for Elected Aficials,96-2ar6, p. I (La.App. I Cir. 12130197\ (percuriam) (unpublished opinion).

The original IrVSZ opinion had further reaionedthat a "person who will be ultimately affected by aruling of the [Board of Ethics], if and when acomplaint is filed, can file an action for adeclaratory judgment in the district court todetermine the legal correctness of the [Board's]opinion on conduct or status." TMSL, 96-1982 at 3,703 So.2d at 578. Based on this language, onFebruary 3, 1998, Duplantis filed an action in thedistrict court for a declaratory judgment that, if shewere successful, would hold that the advisoryopinion of the Board of Ethics baning heremployment with Terrebonne General was incorrect.

On April 4, 1998, in response to the rehearingapplication by the Board of Ethics in IMSZ, thisCourt otherwise denied the rehearing but withdrewthe reference in the ?'MSI opinion to the availabilityof declaratory relief for a person in Duplantis's *SES

position, reciting that the statement was dicta. SeeTMSL, 96-1982, p. I **4 (La.4D4198), ?10 So.2d792, 792 (on rehearing). Instead, we stated that:"Issues as to other possible 'remedies' for personsaffected by advisory opinions were not before us,and problems with specific remedies are properlyaddressed when such issues are squarely presented.,'Id. On Jlune 22, 1998, the district court in thismatter sustained an exception of lack of subjectmatter jurisdiction filed by the Board of Ethics and

dismissed Duplantis's case. Sh€ appealed to thecourt ofappeal.

While Duplantis's case was before the court ofappeal, the Legislature, by Acts 1999, No. 252, S l,effective June I l, 1999, amended l-a. R.S.42:lla2(A) to providuthat" ""'' '*''

Whenever action is taken against any publicservant or person by the board or panel or by an

agency head by order of the board or panel, orwhenever any public servant or person is

aggrieved by any action taken by the board orpanel, he may appeal therefrom to the Court ofAppeal, First Circuit if application to the board is

made within &irty days after tle decision of theboard becomes final. Any advisory opinionissued to any person or governmental entity bythe board or panel or any preliminary,procedural, or intermediate action or ruling by theboard or panel is subject to the supervisoryjurisdiction of the appellatc court as provided byArticle V, Section l0 of the Constitution ofLouisiana. The Court of Appeal, First Circuit,shall promulgate rules of procedure to be

followed in taking and lodging such appeals.(Emphasis added.)

La. R.S. 42:1142(A). Following the statute'sbelieving the

law in TMSL,converted Duplantis's appeal to a supervisory writand secured the record from the previous case (the1996 dismissed matter) so that Duplantis could"have her day in court.'r Duplantis v. LouisianaBoard of Ethics, 98-2056, pp. 6-8 (La.App. I Cir.nn8l99) (unpublished opinion). Thereafter, onMay 18, 2000, the First Circuit granted the writwith an order favorable to Duplantis reversing theBoard's opinion. Duplantis v. Louisiana Board oJ

Ethics, 00- 0293 (La.App. I Cir. 5/18/00). Wegranted the writ sought by the **5 Board of Ethics.Duplantis v. Louisiana Board of Ethics, 00-1750(La.9/l 5/00), 7 67 So.Zd 699.

Breazealc, Sachse, & llilson, LLP. v. LouisianaBoard of Ethics

On March 14, 2000, Breazeale, Sachse, & Wilson,L.L.P. ("Breazeale, Sachse") sought an advisoryopinion from the Louisiana Board of Ethics. Thesubstance of that request was as follows:

Breazeale, Sachse, & Wilsori;' L.L.P. ("'BS&W")represents the Louisiana Community and

revision, the court of appeal,Legislature had changed the

ofand

o

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Technical College System ('LCTCS") on anumber of legal matters pusuant to employmentby the Louisiana Attorney General's officc. Werequest an Advisory Opinion as to whetherMurphy J. Foster, III ("Foster") would be inviolation of Section lll3A of the Code of"" GdVernmintal'Ethici'if Foster, as a partribr of BS& W, received any financial benefit in the form ofcompensation that might be derived from BS &Ws representation of LCTCS.

Breazeale, Sachse further acknowledged to theBoard that Foster was a member of the Govemor'simmediate family within the meaning of La. R.S.42:lll3(A) [FN2] and *586 that his ownenhipinterest in the hrm was less than25%o.

FN2. La. R.S. 42:l I l3(A) provides:No public seryant, excluding any legislatorand any appointed member of any board orcommission and any member of agoverning authority of a pdrish with apopulation of ten thousand or less, ormember of such a public seryant,simmediate family, or legal entity in whichhe has a controlling intercst shall bid on orenter into any contract, subcontract, orother transaction that is under thesupervision or jurisdiction of the agency ofsuch public servant.

On April 17, 2000, the Board responded withAdvisory Opinion 2000-216 containing threeprincipal conclusions. First, the Board concludedthat nothing in La. R.S. 42:lll3(A) would prevenrBreazeale, Sachse from "providing legal services toor otherwise representing the interests of LCTCS,provided the provision of such services is bypartners and members of Breazeale, Sachse otherthan Mr. Murphy J. Foster, IIL" Second, the Boardfound that the Code of Ethics would not prohibitFoster from receiving his normal distribution of theprofits from Breazeale, Sachse, *a6 even whensome of those prohts would be derived from thefirm's representation of LCTCS. Finally, the Boardconcluded that La. R.S. 42: I I l3(A) prohibiredFoster Aom personally rendering legal services toLCTCS because such services would constitute aprohibited "tansaction.,,

On May 30, 2000, Breaznale, Sachse applied for a

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Page4

supervisory writ to the First Circuit Court ofAppeal. On June 16, 2000, the First Circuit deniedthe writ reasoning that:

Murphy Foster, III, is an individual and as anindividual he is prohibited by law from enteringinto a transaction with executive -Qranch -agenciesbecause he is an iniireaiate famili membiiof ttreGovemor. It is of no moment &at he may beacting in his capacity as an agent of his law hrmpursuant to a contact between his law firm andthose agencies. He, as an individual, is animmediate family member of the governor andtherefore, cannot perform the work.

Breueale, Sachse, & Wilson, L.L.P. v. LouisianaBoard of Ethicr, 00-1179 (LaApp. I Cir. 6/16/00)(denying the writ). We granted the writ ofBreazeale, Sachse. Breazeale, Sachse, & lVilson,L.L.P. v. Louisiana Bord of Ethics, 00-1956(La,9 / | 5 /00), 7 67 So.2d 699.

DISCUSSION

The Louisiana Board of Ethics is established byTitle 42, Section ll32 of the Louisiana RevisedStatutes and is charged witl enforcing the LouisianaCode of Ethics. See La. R.S. 42:1132. Thepurpos€ of the Code of Ethics is to further thepublic interest by insuring that the law protec8against conflicts of interest on the part ofLouisiana's public officials and state employees byestablishing ethical standards to regulate theconduct of those persons. See La. R.S. 42:ll0l.To this end, the eleven-member Board is given theauthority to investigate and pursue formal chargesthrough either public or private hearings against anindividual or entity for alleged violations of theCode of Ethics. See La. R.S. 42:1134. Uponfinding a violation of **7 the Code, tlie Board hasthe authority to impose various penalties on theresponsible party. See La. R.S. ll5l-57.3. Further,the Board is specifically authorized to renderadvisory opinions regarding interpretations of theCode of Ethics. See La. R.S. 42:1134(E). lt ispursuant to this authority that the Board issued thetwo advisory opinions at issue in these cases.

Before La. R.S. 42:1142(A) was revised in 1999 toadd that "[a]ny advisory opinion issued to anyperson or governmental entity by the board orpanel" is subject to the supervisory jurisdiction ofthe appellatc *587 court, we held n TMSL that"[t]here is no constitutional or legislative authorify

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for judicial review of an advisory opinion renderedby the Commission." 703 So.2d at 577. We heldthat under La. R.S. 42:1142(A'), "an advisoryopinion by the Commission is not a 'preliminary,procedural or intermediate action or ruling., , [FNi]/d. Fu1hb1, we explained thar "[r]he preti.iniry o,procedural actions or ruling referred to in Sectionll42(A) are those rulings which the Commissionmakes after a proceeding before the EthicsCommission has been commenced, such as by filingof a complaint." .fd.

FN3. In TMSL, we retracted a statementwe made earlier in dicta in Midboe v.Commission on Ethics -for publicEmployees, 94-2270 (ta.ll/3t94), 646So.2d 351, that an advisory opinion by theCommission was reviewable bv anappellate court as ,'a preliminary orintermediate action or ruling by an Lthicsbody' and ovemrled the jurisprudenceholding that advisory opinions

- by theCommission are reviewable as preliminaryor intermediate actions or rulings. IM^SL,supra at 578, n. 3.

Shortly thereafter, the legislature revised La. R.S. I

42:1142(A) to give the Fint Circuit Court ofAppeal supervisory jurisdiction over "any advisoryopinion- issued to any person or governmental entityby the. board or panel," as well as "any pretiminary,procedural, or intermediate action or ruling by the

!oar! 9r panel." 1999 La. Acts 252, g t(arnenaing

f-a. R,S, a2:llaz(A)). It is clear that the legislatureintended to change the law set out in fiVSZ anaprovide legislative authority for the First Circuit toreview advisory opinions of the Board of Ethics.Accordingly, the **8 issue presented is whether thelegislature has the authority under our Constitutionto grant that power to our courts.

In r_naking this determination, we are cogrizant ofthe basic rules of statutory construction, specificallythat a statute is presumed constitutional, and theburden of -clearly establishing unconstitutionalityrests upon the party who attacks the statute. in thiicase, the Board of Ethics. State v. tiuschkat,96-2922 (La.3/4/98), 706 So.2d 429, 432; State v.Newton, 328 So.2d ll0, l17.(La.l9?5). Further, astatute must be upheld whenever possible. State v.

Muschkat, supra; State v. Grilfi4 495 So.2d 1306,1308 (La.1986).

tll Article X, Section 2l of the LouisianaConstitution mandates that the legislature enact acode of ethics and create a board to administer thecode, and provides the jurisdictional authority forjudicial review of the Board's actions. An. X, g 2lprovides that "[d]ecisions of a board shall beappealable, and the legislature shalt provide themethod of appeal." Thus, we must determinewhether advisory opinions are "decisions" of theBoard under our Constinrdon.

We held 'n TMSL, before tlre revision of La. R.S.42:1142 to include advisory opinions, rhat '[t]hereis no constitutional or legislative authority forjudicial review of an advisory opinion rendered bythe Commission." The revision of La. R.S. 42:1142does not change that resulq there is still noconstitutional authority for judicial review ofadvisory opinions.

To understand what constitutes "decisions" of theBoard under An. X, $ 21, it is important tounderstand the difference between an advisoryopinion issued pursuant to La. R.S. 42:1134(E) anda finding of a violation by the Board issuedpursuant to the procedures outlined in La. R.S.42:ll4l. An advisory opinion is usually sought byconespondence to the Board by an applicant. Inthe request, the **9 applicant presents a set of factsupon which the Board bases its opinion, which isusually researched and prepared by the Board'sstaff. There is no investigation by *588 the Board,nor is theng an adversary hearing. The applicant isplaced in no different position after be receives theadvisory opinion as he was before the issuancc ofadvice. In fact, the resulting advice might havebeen much diffaent had a full investigation andadversary hearing been held.

By conhast, the procedures for instituting acomplaint with the Board of Ethics are set out in La.R.S. 42:1141. Upon receiving a sworn complaintftom a complainant, or voting to consider a matterwhich the Board believes may be a violation of anyprovision within its jurisdiction, the matter isassigred to a panel of the Board which thenconducts a private investigation to elicit evidence inorder to determine iihither to.rebominenii that theBoard conduct a public hearing or to indicate that

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no violation has occurred. La. R.S. a2:ll4l(B)(l),(C). The "defendant" and the ,,complainant"

aregiven notice of the investigation, and the results ofthe investigation. La. R.S. 42:l14l(CXl), (2).DyTq the investigation or hearing, rhe Board mayadminister oaths and affirmations, subpoenawitnesses, compil -theii-afiendance, take evidence,and require the production of any records. La. R.S.a2:ll4l(E)(2). The defendant has the right to berepresented by counsel, to cross-examine witresses,call witnesses, and present evidence in his ownbehalf. La. R.S. 42:lI4l(EX6). Any witness maybe accompanied and advised by an attomey andmay submit questions to be asked at the hearing.La. R.S. a2:llal@)(8). No disciplinary actio;may be taken unless a majority of the Board or apanel of the Board consisting of more than threemembers, or a unanimous three-member panel, **10has found a violation has occurred. tFN4l lâ.R.S.42:ll4l(EX5). A wide range of penaltieJ maybe imposed by the Board for a violation, such as:(l) administrative enforcement by the publicemployee or former public employee,s agency heador _authority figure under La. R.S. 42:ll5l; (2)recission of any contract of, permig or licenseissued by the governmental entity under La. R.S.42:1152; (3) censure, removal, reduction in puy,demotion or fine of the public employee under-La.R.S. 42:1153; (a) monetary/ fines of no more Oran$10,000 for any illegal paymcnts under La. R.S.42:1154; and, (5) recovery of the amount of anyecongmic advantage gained in violation of any lawwithin the jurisdiaion of the Board and additionalpenalties not to exceed one-half of the amount ofthe economic advantage, plus forfeiture of any giftsor payments made in violation of this Chapter. La.R.S. 42:1155. It is undisputed that decisionsresulting from the above procedures and hndingsunder La. R.S. 42:ll4l are appealable under Art.x, $ 21.

On the other hand, we now hold that advisoryopinions issued purcuant to La. R.S. 42:1134(E)are not decisions under Art. X, $ 21, and thereforeare not reviewable. [FNs] **ll The reasons for ourinterpretation*S89 that advisory opinions are not"decisions" under La. Const. art. X, $ 2! are many.First, this Court has frequently noted'that the grantof judicial power implicitly restricts our courts toreview only matters which are justiciable, i.e.,actual and substantial disputes with adverse parties,not hypothetical, moo! or abstract questions of law.See Cat's Meow v. City of New Orleans, 98-0601(La.l0D0/98), 720 So.2d 1186, ll93; Perschall v.State, 96-1322 (La.7/1197), 697 So.2d 240, 251;Louisiqna Associated Gen. Contractors, Inc. y.

State, 95-2105 (La.3l8/96), 669 So.2d I185, I193.We have defined a "justiciable conFoversy" as "anexisting actual and substantial dispute, asdistinguished from one that is merely hypotheticalor abstract, and a dispute which involves the legalrelations of the parties who have real adverseinterests, and upon which the judgrnent of the courtmay effectively operate through a decree ofconclusive character." Abbon v. Parker, 259 La.279, 249 So.2d 908, 918 (1971). This court hasclearly held that "The Constitution does not vest[Louisiana Courts] with jurisdiction to renderadvisory opinions." Belsome y. SouthernStevedoring Inc., 239 La. 413, I l8 So.2d 458, 461(1960). In ruling that advisory opinions of theBoard of Ethics arc not reviewable. n TMSL weheld:

FN5. The dissent argues that the delegatesto the Constitutional Convention of 1973,in drafting La. Const. Art. X, $ 21,intended for "decisions" to includd purelyadvisory opinions. The dissent bases tlrisargument on the comments of HarmonDrew, the delegate who introduced tlreamendment which added the sentence "Thedecisions of the board shall be appealableand the legislature shall provide themethod of appeal." Before thisamendment, Art. X, $ 2l contained nomention of judicial review. Anotherdelegate was concerned that theamendment could possibly give the priorexisting Louisiana Commission onGovemmental Ethics and Louisidna"'Boardof Ethics for State Elected Officials

FN4. La. R.S. 42:ll4l(A) provides theprocedures whereby the board members siten banc, or in panels of not less than threemernbers. La. R.S. 2:1142(E)(S) providesthat no disciplinary action may be taken bythe board or panel unless a majority of theboard or panel finds that a violation hasoccurred. However, when a panel consists.of only 3 rnembers, the vote must beunanimous.

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powers they did not possess, that is, thepower to impose sanctions. Drew'scomment was that "any action taken by theBoard of Ethics that would be critical of aperson should be subject to review,' andthe dissent interprets his comment :rsindicative of his understanding that ',allactions of the Board should be subject toreview, whether adjudicatory or advisory."As the dissent points out, in adopting Mr.

Drew's amendment, the delegates to theconvention were addressing the concernthat, without a specific grant of authorityfor judicial review in the proposed articli,the Legislanrre would be unable to providea method of appeal for decisions of theseboards. At that time, although the boardsdid nor have the power to imposesanctions, they did have the power toinvestigate alleged misconduct, conducthearings on the alleged violations, andissue determinations of whether a violationof the Code of Ethics had occurred. .SeeLa. R.S. 42;lll9, ll2l and ll44 (vacaredby t97g La. Acts 443, $ 1). Thesedeterminations were decisions that weremeant to be appealable under Art. X, $ 21,just as they were under the Constitution ofl92l and the former statutory provisions.There is no indication that fte delegatesintended that purely advisory opinions,

- which the two boards were also authorizedto issue under La. R.S. 42:llt9(D)(9) anda2:llffi(E)(7), would also be appeatableunder Arl X, g 2l .

Petition for Declaratory Judgment andInjunction in the district court seeking arrorder declaring a provision of the Code ofEthics and an unfavorable advisoryopinion issued by the Ethics Boardunconstitutional. The Board argued thatthe district court 'did-h'oi hivC subjectmatter jurisdiction to rule on Midboe'spetition under La. R.S. 42:1142. In rulingon this initial jurisdictional question, thisCourt held:Had Midboe's petition sought adetermination of the ethics code'sapplication or interpretation, theconstitutional and statutory schemeoutlined above tl.a. R.S. 42:ll42lprovides for an initial determinationutilizing the Commission's expertise andreview by the court of appeal. However,Midboe's petition clearly sought adetermination of the constitutionality ofthe statutory provisions of the ethics code.

The determination whetlrer a statute isunconstitutional is a purely judicialfunction. The judicial power of the stateis constitutionally vested in the courts. La.Const. Art. 5, $ l. The Commission is nota coufi but is an administrative agency inthe executive branch of state govenrment.An administrative agcncy does not havethe authority to determine theconstitutionality of statutes. Thus, thedistrict court, and not the Commission, hadjurisdiction to rule on the constitutionalityof sta$tes.646 So.2d at 354. After finding that theCourt had jurisdiction because Midboeraised a constitutional challenge, ttris Courtwent on to find that Midboe's challengepresented a justiciable controversy tll;follows:Midboe, as a former state agency headwithin two yean following termination ofhis public service, is faced with animmediate and genuine siruation, theapplicability of ethics code's rules to hispresent attomey employmentopportunlties. Midboe has a real interestin obtaining a declaratory judgment toclariff his employment options. If heproceeded without such a declaration, hemight subject himself and his futurc

until there is some proceeding beforeCommission which could result in

thethe

Commission's imposing a penalty, there is nopreliminary or procedural action or ruling by theCommission that is appropriate for -juiicialreview, either by appeal or by supervisory writs.tndeed, there is no justiciable controversy for thecourts to decide.

TMSL, supra at 578. Our interpretation today,-.d ]n TMSL, comports with our long-standingprinciple that our courts are without jurisdiction toissue or review **12 advisory opinions and mayonly review matters that are justiciable. [FN6]

oFN6. In Midboe, supra, dn attorney filed a


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employer to the Commission'sadministrative sanctions. ThcCommission has a statutorily mandatedduty to administer and enforce the ethicscode. Thus, there is a genuine controversybetween the panies. "To require privateindividuals to"do business undlr the acr attheir peril in order to acquire standing is todefeat a major purpose of the decliatoryjudgment act."Id. (Cites omiued.) To the extent thatMidboe held that a justiciable controversyis. always presented by a challenge to -advisory opinion, that holdine wasoverruled by six justices of this- Court.including the Chief Justice, in IMSI andwe reaffirm that result todav.

*590 Secondly, in seeking an advisory opinion, theapplicant is not adverse to the Soar4 nor is theBoard adverse to the Board. La. R.S. a2:ll3a@)authorizes the Board to issue advisory opinions andprovides that "[t]he Board may rendir advisoryo_pinions with respect to the. provisions of thisChapter and -any other law within its jurisdictiong! rul9s and regulations issued by the Loard.', La.R.S. 42:1134(E). An advisory opinion is simptyadvice as to the status or conduct-ofthat person orsome other person under the Code of Ethics. ',lt isnot a ruling or action by the Commission that willaffect the person whose conduct or status isquestioned, and it cannot be **13 enforced bv anvperson." TMSL, supra at 577; see 2 Kenneth i.Davis & Richard J. pierce, Jr., Administrative Laut $15.15 (1994). The Board is a disinterested partym-er9ly giving advice to a parry who has sougirt itsadvice pursuant. to the Board,s authoriw -*a",a2:ll3a@). [FNZ] This is in stark contr; to theposture. of, the parties upon the filing of a sworncomplaint by a "complainant', against; ,defendant,,

or the consideration of a mattei that the Board hasreason to believe may be a violation, and in which apriyu!: investigation is undertaken, a public hearingis held at whicb parties are representid by counsel,parties testiry under oath and present eviience andcross-examine wiuresses, and then the Board votesas to whether a violation has occurred and, if so,lmposes a -penalty on the former or presenlgovemmental employee.

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oFN7. Advisory opinions of the Board aresimilar in this respect to opinions issued bythe Aftorney General pursuant to La R.S.49:.251, which are likewise not reviewableby a court.

Third, the review of an advisory opinion woulddepend solely on facts as represented by therequesting party, not on sworn testimony presentedby opposing parties, without any investigation bythe Board or adversarial hearing. Consequently,there is no record of the proceedings below- for anappellate court to review as there was no hearing,no evidence, and no testimony.

Fourth, we find that the purpose of the thirdsentence of La. Const. art. X, $ 2l was to allow adirect appeal to the court of appeal of a decision bythe Board on the merits of the charged violation.ln the absence of this provision, jurisdiction for*591 judicial review would be vested in the districtcourt. [FN8]

FN8. This constitutional provision issimilar ro the additionil appellatejurisdiction provided to the courts ofappeal by La. Const. art. X, g l2(A),which authorizes a direct appeal to thecourt of appeal for a "frnal decision" of theState Civil Service Commission.

For all these reasons, we find the provision of La.R:S, a2:ll42(A) which provides that ,,[a]ny

advisory opinion issued to any person orgovernmental entity by **14 the board ... is sutjectto the supervisory jurisdiction of the appeltate courtas provided by Article V, Section l0 of theConstitution of Louisiana" is unconstitutional as itis confary to Article 10, $ 2l of the LouisianaConstitution which provides that ,,[d]ecisions of aboard shall be appealable,...." Alt advisory opinionissued by the Board pusuant ro La. R.S. 42:l i34(E)is not a "decision" ofthe Board that is appealable.

[2][3] However, we find that this provision, whichwas added by the legislarure by Acts 1999, No. 252,$ I is severable from the remainder of La. R.S.42:1142. The test. for severability is whether theunconstitutional portions of the law are "so


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interrelated and connected with the constitutionalparts S"t they cannot be separated withoutdestroying the intention manifested'i by the enactingb9ly. Radiophofone, Inc. v. City of-New Orleai,616 So.2d 1243, t249 (La.1993) (citing'.Srale v.Azar, 539 So.2d t222 (La.l9S9)). If the remainingportion is separable from the offending portion; thiiCourt may strike only the offending portion andleave the remainder intact. Id. The- legislatureadded the offending portion of the statite, i.e."[a]ny advisory opinion issued to any person orgovernmental entity by the board or panel or" to thesecond sentence of La R.S. a2)la2(A) in 1999.Prior to that time, the statute constitutionallyprovided that "Any preliminary, procedural, o,intermediate action or ruling by the board or panelis subject ro the supervisory jurisdiction oi theappellate court as provided by Article V, Section l0of the Constitution of Louisiana." This provisionremains intact and enforceable and is unafiected bvtbe severance of the offending portion of the statute.

[4] Finally, in Duplantis, we must address thc issueof whether the district court has subject matterjurisdiction over a declaratory judgment actionseeking a determination of the application orinterpretation of the Ethics Code. In Diptantis, **lSfollowing the First Circuit,s dismissai of her witapplication seeking review of the advisory opinionissued by the Board in Duplantis v. Board of b,thics,96-2416 (La.App. I Cir. 12t30/97), Duplantis filedan action in the district court seeking a declararoryjudgment that rhe advisory opinion issued by theBoard of Ethics was incorrect. This declaratoryiudgment action was dismissed by the district courtfor lack of subject matter jurisdiction, and Duplantisappealed to the court of appeal. While the lppealwas pending, the legislature..amended La.'R.S.42:11a2(A) to provide that advisory opinions weresubject to the supervisory jurisdiction of theappellate court. In ruling on this appeal, the FirstCircuit converted the appeal to a zupervisory writand ordered the supplementation of the recori withthe record in Duplantis v. Board of Ethics, 96-2416.In so doing, the court noted:

Even if this court were to apply the amendmentsto La. R.S. 42:ll42A retroacively, we would beprecluded from rendering an opinion on themerits for the reason t}at the record before usdoes not contain a copy of the advisory opinion

.. ,or,.. otbe.r. ,. relevant evidence ....of the partiesintroduced before the Ethics *592 Board at its

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hearing. This evidence was presented to thiscourt in Christa Duplantis v. Board of Ethics forElected Oficials, 96CE2416 (La.App. I Cir.12130/97). As we noted previously, rhis matterwas assigred to a five-member panel of this courtand was subsequently dismissed in response tothe Louisiana Supreme Court'S itilifighlfi?t iin' "' *'"-*"We know of no internal procedural devicewhereby, as memben of the instant panel, we candirect that the previous five-member panelreinstate and decide Ms. Duplantis, previous writapplication.

Duplantis y. Board of Ethics, 98-2056, p. 6(La.l2D8/99), 761 So.2d 807. Under itssupervisory jurisdiction over cases within its circuitunder [,a. Const. Art. V, $ 10, the First Circuitconverted the appeal of the dismissal of thedeclaratory judgment action to a supervisory writand ordered the record supplemented with therecord in 96-2416. Id. at 7-8, 761 So.2d 807. Nopary filed a writ application to this Court based onthis ruling, Subsequently, the First Circuit grantedthe writ and reversed the advisory opinion **16issued by the Board of Ethics. Duplantis v. Boardof Ethics, 00{293 (La.App.5/t8/00). The opinionwe are issuing today vacates this decision based onour finding that the appellate court lacks

, .iurisdiction to review advisory opinions of theBoard.

[5] However, because of the unusual procedureused by the First Circuit in converting Duplantis'sappeal of the dismissal of her declaratory judgmentaction into a supervisory writ, the status ofDuplantis's declaratory judgment action is unclear,but will inevitably present itself again. Therefore,we address the issue of whether a declaratoryjudgment action is available to review the advisoiy '

.

opinions of the Board. tFNgl Based on our priorholdings n Jones v. Board of Ethics for ElectedOfiicials, 96-2005 (La.519197), 694 So.2d t7t,modified on rehearing,696 So.2d 5a9 (La6/20/97)and Midboe, supra, regwdless of whetler a case orconFoversy is presented, a district court lackssubject matter jurisdiction as an initial matter toreview the interpretation and application ofprovisions of the Ethics Code, absent aconstitutional challenge to a provision of the EthicsCode. "The grant of Cxclusivi jurisdiction of certainsubject matter to lthe Board] results in thesubtraction of those matters fiom" the district.uourt'sjurisdiction." Jones, supra, 694 So.2d at 172.


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Thus, the district court lacks subject matterjurisdiction over a declaratory judgirent actionseeking a determination of thj nltnics Code,sapplication or interpretation.

grounds. The writ should have been deniedbecause the First Circuit lacked jurisdiction toreview advisory opinions of the Board.

Duplantis v. Louisiana Board of Ethics,00-1750-VACATED;

Breazeale, Saclse, &AFFIRMED.

lVilson, 00-1955-

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FN9;'As discussed, infrd, on pages jg4_g5,we stated in our original IMSI opinionthat a "person who will be ultimatelv{l.rt.-d by a ruling of rhe [Board otEthicsl, if and when a complaint is filed,can file an action for a declaratorvjudgment in the district court to determinlthe legal correcbless of the [Board,s]opinion on conduct or status." IMSZ,supra, 703 So.2d at 579. On rehearing,we withdrew that statement" statine thit"[i]ssues as to other possible 'remediEs' forpersons affected by advisory opinions werenot before us, and problems with specificremedies are properly addressed whensuch issues are squarely presented.,,TMSL, supra, Tl0 So.2d at 792 (onrehearing).

CONCLUSIONAn-advisory opinion issued by the Board pursuattto La. R.S. a2:1134(E) is not a ,'decisioni' of theBoard under La. Const. art. X, $ 21. Consequently,the provision **17 of La. R.S. 42:1142(.4) whiihprovides that "[a]ny advisory opinion issued to anyperson or governrnental entity by the board orpanel" is subject to the supervisory jurisdiction ofthe appellate coufi is in derogation ofla. Const. an.X, S 2l and is unconstitutional. Thus, we find thatthe First Circuit Court of Appeal has no jurisdictionto review advisory opinions of the *593 Board.Further, we find that a disfict court lacks subjectmatter jwisdiction over a declaratory iudsmenraction seeking a determination of the gtniis dode'sapplication or interpretation.

DECREE

For the reasons stated above, in Duplantis v.Lôuisfna Board.of Ethics, we vacate thj ruling ofthe First Circuit in 00-0293 (La.App. I tb.5/18/00) which reversed the Board;s advisorvopinion. ln Breazeale, Sachse, & Ililson, L.L.p. ;.

.L.o u is i ana. B o I r d of .Eth i c+. wp..affrm . the iudsmentof the First Circuit denying the writ, but on difTerent

LEMMONS, J., concurs and will assign reasons byKIMBALL,J.

CALOGERO, C.J., dissents and assigrs reasons.

KNOLL, J., dissents and assigns r&Nons.

"*l CALOGERO, Chief Justice, dissenting.

Today, the majority holds that (l) La.Rev.Stat. g

a2:lMZ(A) is unconstitutional insofar as it grantsthe First Circuit Court of Appeat jurisdiction to

, review advisory opinions issued by the Board ofEthics and (2) the district court does not havesubject matter jurisdiction over an action seekingdeclaratory relief regarding the propriety of anadvisory opinion issued by the Board of Ethics. Ircspcctfully disagree with both of these conclusionsand, therefore, dissent.

The first issue raised in each of these cases, and theprinciple issue that promptcd us to grant this writ, iswhether the Fint Circuit Court of Appeal hasjurisdiction to review advisory opinions of theLouisiana Board of Ethics. The majority frnds thatthe Legislature is without the authority to grant theFirst Circuit this jurisdiction and, in doing so,declares that portion of g 42:l 142(A) grantinglt thepower to hear such cases unconstitutional.

ln **2Transit Management of S.E. La. v.Commission on Ethics for pub. Emp., 96- 19g2, p.2 (La.l2l2l97), 703 So.2d 576, 577 [hereinaftirTMSLI, we addressed the question of whether anadvisory opinion was a "preliminary, procedural, orintermediate action or ruling by .ari,ethics'btrdy".,-within the meaning of g 42:l |AZ(A) as it read at tire

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reflects the fact thatwell-settled rule that

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we followed theour courts will

dispose of a case on statutory groundsbefore addressing a constitutional issue.See, e.g., Blanchard v. State,96, 0053, p.2 (-a.52ll96\, 673 So.2d 1000, 1002;Matherne i. 'Gray" Ins.'Cb., 9s-og1s, it- 3^ -(La.10/16195), 661 So.2d 432, 434.Contrary to the majority's statement, nopart of the TMSL decision could be fairlyread to conclude that the word "Decisions',in Article X, Section 2l of the Constitutiondoes not include advisory opinions--thequestion presented in this case.

**3 It is elementary that the Legislature possesses aplenary power to enact any legislation notprohibited by our state constitution. Board oJComm'rs of Orleans Levee Dist. v. Department oJNatural Resowces, 496 So.2d 281, 286 (La.1986)(on rehearing). As such, laws enacted by thcLegislature are entitled to a presumption ofconstitutionality from our courts. See State v,Griffin, 495 So.2d 1306, 1308 (La.1986); City oJLake Charles v. Henning" 414 So.2d 331, 333(La.1982). Accordingly, the parry attacking astatute's constitutionality, the Board of Ethics in thiscase, has the burden of proving its constitutionalflaw and any doubt must be resolved in favor ofconstitutionality. See City of Lake Charles y.

Chaney,468 So.2d ll9l, tt92 (La.1985); State v.Gisclair, 363 So.2d 696, 698 (La.1978). Finally,as $ 42:1142(A) explicitly confers jurisdiction onthe First Circuit Court of Appeal to review advisoryopinions of the Board of Ethics, "it is not enough[for the Board] to show that the constitutionaliry [of$ 42:1142(.4)l is'fairly debatable, but, rarher, itmust be shown clearly and cornincingly that it wasthe constitutional aim to deny the Legislature thepower to enact the statute." Board of Directars ojLouisiana Recwery Dist. v. Tacpryers, propertyOwners, & Citbens of the State of Louisiana, 529So.2d 384, 388 (La.1988) (emphasis added);accord Ancor v. Belden Concrete Products, Inc.,260 La. 372, 379,256 So.2d tZ2, t?s (1971). lnmy view, the Board has failed to meet this hiehburden in this case.

Title 42, section I142(A) of the Louisiana RevisedStahrtes specifically gradts 'the" Fiist" Circhitauthority to review the advisory opinions of the


782 So.2d 5822000- I 750 (La. 3 /23 / 0 t)(Cite as: 782 So.2d S82,2000-1956 (La. 3tZ3t0t))

time. As we determined n TMSL, unchanged byour clarification on rehearing, the holdin g o{ fUStwas that an advisory opinion was not a pieliminary,procedural, or intermediate action by the Board ofEthics. See TMSL, 96-1982, p. I (La.4f24/98), 7101o.29 7,92, 792 (on rehearing). Therefori, wefound that there was- no statutory authoriw forreview of advisory opinions. Shortly thereafter, theLegislature revised g 42;1142(A) to give the FirstCircuit Court of Appcal supervisory jurisdictionover "any advisory opinion issued to any person orgovernmental entity by the [Board of Ethicsl" aswell as "any preliminary, procedural, orintermediate action or ruling by thl [noard]i, See

\29?-L.:: Acts 252, g I (amending ta.Rev.-Stal gaZ:lla2(A)). It is clear that the Legislatureintended to change the TMSL result and clearlvprovide legislative authority for the Fint Circuii.and ultirnately this court, because of our supervisoryjurisdiction over the courts of appeal, to reviewadvisory opinions of the Boaii of Ethics.Therefore, the first issue before this court. as themajority points ou! is whether or not theLegislature has the authority under *594 our 1974constitution to grant that power to our courts. InIMSL this question was neither posed nor resolved.tFNrl

FNl. The majoriry opinion srates: ',Weheld in TMSL, before the revision of La.R.S.42:1142 to include advisory opinions,that '[t]here is no constitutional oilegislative authority for judicial review ofT advisory opinion rendered by theCommission.' " See anle at p. 5g?. ThisstaJement by- the majority is, quite simply,taken out of context. I\e TMSL trotdinghad nothing whatsoever to do with thiinterpretation of the word ,'Decisions"

inArticle X, Section 2l of the LouisianaConstitution; in fact, the constitution is notreferenced at any point in either theoriginal or rehearing opinions. As we

:lgt!"a on rehearing, the actual holding ofTMSL was simply that an advisory opinionwas not a "preliminary, procedural orintermediate action or ruling,, ascontemplated by La.Rev.Stat. g 42:1142(A)as it read at t}le time. See TMSL, g6'lggi

al .1, 710 So.2d at.793 (on rehearing).Further, a read of our IMSZ decision

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jurisdiction of the courts of appeal overactions of the Public Service Commissionby providing for appeal directly fiom thedistrict court to the supreme court).

Article X, Section 2t of the Louiiiana'Constituti;ncreates the Board of Ethics and provides that: "Decisiow of [the Board] shall be appealable, andthe legislature shall provide the method of appeal.,,La. Const. art. X, S 2l (emphasis added). [FN3] **sTherefore, the issue here is the intent and meaningof the word "decisions" (of the Board). Did theconstitutional delegates, and correspondingly thepeople in adopting the constitution, mean to limitappealable decisions to adjudications following afull adversarial hearing-to justiciable controversiesbetween adversaries-or was the word ,'decisions',

intended to include othcr decisions or maftcn likelyto be within the province of an ethics board that theLegislature, as authorized by the constitution, mightchoose to create? Based upon both theconstitutional and statutory provisions regarding aCode of Ethics prevailing in lg73 before theadoption of the 1974 Constitution as well as thedebates of the delegates at the 1973 ConstitutionalConvention, I would furd that this provision wasintended to do the latter.

FN3. Article X, Section 2l provides in itsentirety as follows:The legislature shall enact a code of ethicsfor all officials and employees of the stateand its political subdivisions. The codeshall be administered by one or moreboards created by the legislature withqualifications, terms of offrce, duties, andpowers provided by law. Decisions of aboard shall be appealable, and thelegislaturc shall provide thc method ofappeal.La. Const. art. X, $ 21.

Prior to 1964, Louisiana did not have a Code ofEthics covering state officials or employees. ln1964, a constitutional amendment was proposed tothe voters to add what came to be Article XIX,Section 27 of the Louisiana Constitution of l9}l.See La. Const. of l92l; art."Xx;' g 27'(1964)."Upon ratification of that constitutional amendment


(,,

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Board; therefore, the constitutional boundaries toth:

.F.ry Circuit's jurisdiction are integral to analysisof this issue. Article V, Secrion l0 oithe LouisianaConstirution grants jurisdiction to the courts ofappeal over three types of cases: civil cases, familyand juvenile matters, **4 and criminal cases triabGby a jury (other ihbn cirpi&rl cases imposihg asentence of death)-"except as otherwise

-provided

by this constitution." This latter phrase' "is thegthority of the legislanrre to giant additionaljurisdiction to the courts of appeal; as directed byother portions of the constitution. See LeeHargrave, The Judiciary Article of the LouisianaCowtitution of 1974, 37 La. L. Rev. 767, g}s(1977). One such example is Article X, Sectionl2(A) of the constitution which provides that "thefinal decision of *595 the fstare Civil ServiceCommissionl shall be subject to review on anyquestion of law or fact upon appeat to the court ofappeal wherein the commission is located.', La.Const. art. X, g l2(A). [FN2] Thus, in order forthe Legislatwe's expansion of the First Circuit'sjurisdiction to cover the review of advisory opinionsfrom the Board of Ethics to be constiiutionat, aseparate constitutional provision must allow for it.Article X, Section 2l of the Louisiana Constitutionisjust such a provision.

FN2. Similarly, decisions of the Citv CivilService Commission "shall be subject toreview on any question of law or fait uponappeal to the court of appeal wherein thecommission is located....', La. Const. art.

I $ l2(B). Additionally, Articte X,Section 50 provides that ,'tbe decision ofthe lstate Police Commission] shall be

lubject to review on any question of law ortact upon appeal to the court of appealwherein the commission is located.'i

-La.

Const. art. X, $ 50; cf La. Const. art. I[,! 6 (granting the supreme courtjurisdiction to reapportion therepresentative districts if the legislaturefails to do so as required Uy theconstitution).Further, just as the Legislature can add tothe jurisdiction of the courts of appealwhen authorized by the constitution, ii-canwithdraw that jurisdiction as well when soauthorized. .See La, Const art. IV, $ 2l(E)

(permitting the legislature to withdraw

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in November of 1964, the Legislature enacted thefirst Code of Ethics. See 1964 La. Acts I l0(enacting La.Rev.Stat. gg ll0l4g). This new andcomprehensive code was to be administered by rwoseparate administative bodies with somiwhatdifferent duties: the Louisiana Commission onGovernmental Ethics and the Louisiana Board ofEthics for State Elected Officials, See rd

The Louisiana Commission on GovemmentalEthics ("Commission on Ethics") *596 hadjurisdiction to

- investigate alleged misconduct by

any state employees other than elected officiali.See La. Const. of lg?l, art. XIX, $ 22;La.Rev.Stat. g 42:llt9 (vacated by t919 La. ects443, $ l). Importantly, the Commission on Ethicsdid not **6 have the power to impose sanctions onany state employees. See La.Rev.Stat. $ 42:ll2l(vacated). Instead, the Commission on Ethics waspermitted to hold hearings on charges and thenreport the findings to the head of the'employee,sdeparfrnent upon finding a violation; thatdepartment head would then have the authority toimpose sanctions. See id. The constitution andthe revised statutes were specific in granting a rightof_ appeal to an ernployee only after ai actionadverse to him was taken by the dipartment head,whether prompted by the Commission's findings oran independent investigation by the departmenthead. See La. Consr. of 192t, art. XIX, $

jZ(:XC);La.Rev.Stat. g a2:l l2l(E) (vacated). Consequenity,Louisiana courts lacked the authority to reviiw anyadvisory decisions (such as opinions) of theCommission until after discipline had been imposedon the employee. See Louisiana Commission onGovernmental Ethics v. Leake, 26,4 So.2d 675,677'7.8.(La.App. lst Cir.l972) (declining to reviewan advisory opinion from the Commission because"it is apparent from the legislative enacunent thatappeals lie only from a decision in whichdisciplinary action is taken against any employeesand only after the decision becomes final').

The second agency in place in 1923, the LouisianaBoard of Ethics for State Elected Officials("Elected Official's Board of Ethics"), as the namesuggests, had jurisdiction ,,to investigate allallegations of violations of the coae ofgovemmental ethics enacted by the legislature withrespect to all elected state offrcials, including.memhe_rs of -the-legislature.'i La. Const. of l92l-,art. XIX, $ 27(4XB). The Elected Official,s Board

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of Ethics also had no power to impose penalties;instead, upon finding a violation of the ethics code,the Elected Official's Board of Ethics wouldforward a copy of the findings to a district attorneyfor possible prosecution. See La.Rev.Stat. $a2:ll4a(E\(6) (vacated;. Thus, the role of theElected Official's Boerat'"r,*7''iif Ethidd wif fri"badvisory-it would investigate claims, hold hearings,and refer matters to a local distict attorney. Nofinding by the Elected Offrcial's Board of Ethics,standing alone, would have punitive consequencesother than, possibly, adverse publicity.

Despite the fact that the Elected Officiat's Board ofEthics was a purely advisory body, constitutionalauthority existed for appellate review of its frndings.Specifically, the Louisiana Consdrution of 1921,as amended in 1964, provided that:

The decision of the Board shall be subiect toappeal which shall be ganted to the Ciurt ofAppeals, First Circuig if application to the Boardis made within 30 days after the Board's decisionbecome [sic] final.

La. Const. of 1921, art. XIX, g 27(4XC). [FN4]Thus, even though the Board of Ethics served apurely advisory rote, its "decision" was appealableand 'no authority, jurisprudential or otherwise,existed to refute *597 that conclusion. Theimportance of this was mdde evident by the floordebates at the 1973 Constitutional Convention.

FN4. lt is also important to note that theLouisiana Constitution of lg2l, asamended, characterized the ElectedOfficial's Board of Ethics,s advisory actionas a "dccision." La. Const. of 1921, art.XIX, $ 27(4XC). Further, the languagegranting appeal of the Board's "decisions"in the former constitution is strikinglysimilar to the language in the presentconstitution. Compare La. Const. of1921, art. XIX, $ 27(4)(C) ("The decisionof the Board shall be subject to appeal....',)with La. Const. art. X, $ 2l ("Decisions ofa board shall be appealable....").

Throughout the debates at the Convention, it isclear from the discussion of the Delegates that theintent of this new','constitutional -afiicle* was.primarily to shorten, and in the process simpliS, the

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Drew was later questioned about the exactapplication of this new provision regarding"decisions" being appealable and the folowingdiscussion took place:

Mn Jenkiw: Harmon, isn't it true that the Boardsof Ethics right now primarily are advisory in theirdature. They can'-'denCni{ ' thiiy - can' criiiciz;:publicize, but they can,t actually do anything toanyone, can they?Mr. Drew: As I appreciate it, that,s correct.Mr. Jenkins: Well, wouldn.t your amendment aswitten change that concept becausc when yousay that ttre decisions of the board will beappealable, aren't you saying in effect that theyare going to be able to do something to someone,or at least that the legislature could allow them todo something to someone and tha! thus, you aregoing to need a means for appealing thosedecisions; such as removal from office. iuch asfines, suspansions from offices, things like that?**9' Mr. Drel4,.. Not necessarily, Woody, becauseI think any action taken by the Board of Ethicsthat would be critical of a person should besubject to reviav.

Oficial Transcript, supra, at 4O4l (emphasisadded). Shortly after this exchange, theamendmenr adding the language *5rg that

, "decisions of the board shall be appealabte....,, wasadopted and, on January lO, 1974, the Article wasratified by the Convention.

It appearr from the above debates that the intent ofthe sentence "Decisions of the board shall beappealable" was to allow the Legislature to providefor appeal of any action of the Board that is adverseto the interes8 of a person (Delegate Drew,s wordswere "critical of a person',).

Prior to the Louisiana Constitution of 1974, the twoEthics Boards were primarily advisory. TheLouisiana Commission on Govemmcntal Ethicscould only effect sanctions through departnentheads and &e Elected Official,s Board of Enicscould only refer its findings or opinion to a localdisnict attomey. The agencies had no authority tosanctio:r or penalize anyone for anything;neveftheless, the actions of these two agencies wereappealable. See La. Const. of 1921, art. XIX, $$27(3XC) & Z7(4)(C). At the l9Z3 Constitution,alConvention, Delegate. Jenkins questioned DelegateDrew as to whether these.agencies w€re advisory innature and Drew responded that they were. Jenkins

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former lengthy provision. tFN5l Ir is also evidenrthat the Convention intendid to grant theLegislature considerable discretion in its-abiliry rocreate the Board of Ethics, administer the CoOe ofEthics, and provide the procedural mechanisms forits enforcement. Importantly, when the Code ofEthics provision în. **8 the Louisiana Constitutionof 1974 was initially proposed, the generalprovision leaving extensive authority t" theLegislature contained no mention of judicial review.During the floor debate at the ConstitutionalConvention, the D€legates were concemed thatwithout a specific grant of authority for judicialreview in the proposed article, the Leeislanrewould be unable to "give the appellate- courtsjurisdiction of an appeal from a purelyadministrative body without some constitutionalprovision. for.thl appeal." fficial Transuipt of theConstitutional Contention State. of Louisiina i gZS,

18th +y, -p. 15 (Sept. 15, l97j), reprinted in 7Records of the Louisiana Constitutional Conventionof 1973: Coroention Transuipts, p. 1276 (La.Const. Conv. Records Comm.l977) [hereinafterOlficial TranscriptJ. Consequentty, DelegateHarmon Drew introduced an- a.inament thatre-yrote the language of the proposed Article andadded the following sentence: "The decisions of theboard. shall be appealable and the legislature shallprovide the method of appeal.', Ofiiciat Transcript,supr?,. at 38. In explaining the purpose of tirisprovision, Drew stated that it ',wili give a right ofappeal to effecr to protect ihe indiiiOuataffected," Id. at39 (ellipsis in original).

FN5. Article XIX, Section Z7 of rheLouisiana Constitution of l92l consistedof four subsections, nine subsubsections.and threc subsubsubsections whereasArticle X, Section 2l of the LouisianaConstitution of 1974 consists of a total ofthree sentences. It is well established thatone of the goals of the 1973 ConstitutionalConvention was to produce a shorter andsimpler constitution for the state. See

$ark T. Carleton, Fundametxal SpecialInterests: The Corutitution of 1974,' in InSearch of Fundamental Law: Louisiana,sCorctitutions, 1812-1974 l4l (Wanen M.Billings & Edward F. Haas eds.l993).

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then expressed concem that an amendmentmandating that "decisions shall be appealable"would effectively force the Legislanre to grant theBoard authority to render "decisions,,--somethingthat Jenkins understood to only include finaladjudicatory actions such as removal, suspensions,or fines' Drew disagrecd and clarified that theintent of the amendment was not to mandate such agrant of authority by the Legislature because, heperceived, a// actions of the Board should besubject to review, whether adjudicatory or advisory.The impon of Drew's statement is that, under theconstitution, the Legislature would have **10 theability to create a Board of Ethics both roadminister the Code of Ethics and impose sanctionsor critically affect a penon's interests by somethingless than sanctions (as for instance, advisoryopinions), but that in all events, appeal to the Courtof Appeal would be permined. [FN6]

FN6. The majority takes the position thatDrew's cornments regarding appealabilityare only in reference to the investigatoryand regulatory actions of the Board. Seeante at p. 588, n. 4. However, nothing inthe discussion between Delegates Jenkinsand Drew indicates that they were onlyconcerned with these powers of the Board.

Again, the Legislature's enacunent is entitled to apresumption of constitutionality and the Boardbears the burden to prove "clearly and convincinglythat il was the constitutional aim to denv theLegislature the power to enact', Title 42, SectionI142(A) of the Revised Statutes. Board oJDirectors of Louisiana Recovery Disr. v. Tu.payers,Property Owners, & Citizens of the State oJLouisiana, 529 So.2d 384, 388 (La.l9SS). ln myopinion, the Board falls well short of meeting thisburden. To the contrary, a review of thisLegislative history reveals that the intent of theframers of the constitution was to permit 0reLegislature to provide judicial review of any actiontaken by the Board of Ethics that would adverselyaffect any person's interests. Thus, I would findthat the grant of judicial review over advisoryopinions by the Board of Ethics in La.Rev.Stat. g

42:1142(A) is not prohibited by the LouisianaConstitution.

The majority cites fow reasons why advisoryopinions cannot be reviewed pursuant to $42:1142(A): (l) courts can only review justiciablecontrovenies, (2) there is an absence of adverseparties, (3) there is no fully developed record withswom testimony, and (4) the only purpose of thethird sentence'.of irticle' X, 'section'''?t-of theLouisiana Constitution was to allow direct review ofthe Board's actions at the *599 court of appeallevel. See ante at pp. 588-91. None of thesereasons are persualiive.

**11 First" the majority reasons that our courts arelimited to the review of justiciable controversiesand that the present cases do not so qualif,, Indoing so, the majority ovemrles a portion ofMidboe v. Commission on Ethics for Public Emp.,94-2270 Q.a.ll/30/9$. 646 So.2d 351. ln Midboe,an attorney licensed in Louisiana requested anadvisory opinion from the Commission on Ethicsregarding post-employment restrictions on thepractice of law contained within the Code of Ethics.Following an adverse advisory opinion by theCommission, Midboe filed a Petition forDeclaratory Relief seeking an order declaring theCode of Ethics unconstitutional as it applied to theregulation and praetice of law. This court held that a

. sufficient justiciable controversy existed between' Midboe and the Commission on Ethics to permitreview by the court. See Midboe, 94-2270 at pp.4-5, g6 So.2d at 351. Specifically, the courtreasoned that:

Midboe, as a former state agency head within twoyears following termination of his public service,is faced with an immediate and genuine situation,the applicability of ethics code's nrles to hispresent attomey employment opportunities.Midboe has a real interest in obtaining adeclaratory judgment to clariS his employmentoptions. "lf he proceeded without such adeclaration, he might subject himself and hisfuture employer to the [Board's] adminisrativesanctions. The [Board] has a statutorilymandated duty to administer and enforce theethics code. Thus, there is a genuine controversybetween the parties.

Midboe, 94-2270 at pp. 9-10, 646 So.2d at 356(citations omitted). The six justices reaching thisconclusion in Midboe were corr€ct.

Under . the declaratory judgrnent .articles of theCode of Civil Frocedure, a court has the jurisdiction

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to declare rights, status, and other legal relationswhetler or not the person seeks othei retief. ,SeeLa.Code Civ. Pro. art. 1871. Furttrer, the purposeof the articles is to settle and afford reliif iomuncertainty and insecurity with respect to thoserights, status and other legal relations; thus, theatticles'*should ".be-.,liberally'-constfued' and. . .

administered to permit a court to act. ,See La.CodeCiv. Pro. art. 1881. *'rl2 uA person is entitled torelief by declaratory judgment when his rights areuncertain or disputed in an immediate and genuinesituation and the declaratory judgment will removethe uncertainty or terrninate the dispute." LouisianaAssociated Gen. Contrs. v. State, 95-2105, p. 15(La.3/8/96), 669 So.2d 1185, llgl (quoting /n reP.V.W., 424 So.2d 1015, 1020-21 (La.t9S2)).

An individual seeking an advisory opinion from theBoard of Ethics is not seeking an opinion regardingsome future, abstact, or hypotheticat situation. Tothe contrar;r, that individual is only prompted torequest an advisory opinion in the face of animpending business transaction or employmentoppomrnity. ln fact, ttre Board will only csnsider arequest for an advisory opinion from a person orentity "with a demonsfable objective interest in theBoard's interpretation, construction, and applicationof any law within the Board's jurisdiction.,' SeeRules for the Louisiana Board of Ethics gg l0l & t

601, available a,http ://www.ethics. state. la.us/generaVrules.htrn.

When confronted with an advisory opinion fromthe Board adverse to his interests, the individuat hastwo options: (l) forego the employmentopportunity, as Duplantis did in this case; or (2)ignore *600 the advisory opinion and all but assuredisciplinary action by the Board, see, e.g., Hiil v.Commission on Ethics for pub. nnp., 4+Z So.Zd592 (La.App. lst Cir.l983). The exact purpose ofthe Code of Ethics is to protect against conflicts ofinterest "without creating unn€cessary barriers topublic service," La.Rev.Stat. $ 42:ll0l. Refusingto allow an individual to ascertain the correcbess ofthe Board's advice puts that person in the precariousposition of honoring an opinion that he believes istruly incorrect (and thus, forego a businessopportunity or public service IFNZI) or violate theopinion, r!1k frles of up to **13 $10,000, and hopeto be vindicated from the sanction on appeal. [FNg]As fonner.- Justice Tate . so eloquently stated: .Torequire private individuals to do business under the

act at their peril in order to acquire standing is todefeat a major purpose of the declaratory judgmentact." Louiiiana Independent Auto Dealers Assoc.v. State, 295 So.2d 796, 801 (La.1974), quoted in,Midboe, 94-2270 at p. 10, 646 So.2d at 356. Thus,I would conclude, as did six justices in Midboe, thatthe rendering of an"'ldifSory' optuiibn bi-the'B'ddidof Ethics adverse to the requesting party's interestcreates a sufficiently justiciable contoversy topermit our courts to grant declaratory relief whenappropriate. Assuming for the moment that Midboewas urong when it concluded that a justiciablecontroversy exists in this situation and that it shouldbe ovemrlpd in that respect the First Circuit shouldstill retain jurisdiction over these cases despite thelack of a justiciable controversy in the face of anexpress constitutional directive to do so.

FN7. For example, n City of Baton Rougev. Commission on Ethics for Pub. Emp.,94-2480 (La.App. I Cir. 5/5195), 655So.2d 457, znd Board of Trustees of theEmp. Retirement Sys. v. Commission onEthics for Pub. Emp., 95-0062 (La.App. ICu. 515/95),655 So.2d 1355, memben ofa Board of Trustees resigned from theirpositions because of an advisory opinionby the Board concluding that a violation ofthe Code of Ethics would occur absentsuch action.

FN8. Justice Knoll cited this argument inher dissent from TMSL:An advisory opinion may have expensivecompliance requirements for both publicand private persons. The opinion mayhave a "chilling effect" on the actions ofaffected individuals, justifiably concemedabout an impending formal action againstthem if they challenge the Commission'sopinion by their conduct. Rather thanplace the expense and burden ofhumiliation of an ethics investigation onthe individual, it is better to encourage thechallenge of advisory opinions in thecouns.TMSL, 96-1982, p. 2 (La.l2l2l97), 703So.2d 576, 578 79 (Knoll, J., dissenting).

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The Louisiana Constitution vests the judicial powerof the State in the supreme court,

-the courts of

appeal, the district courts, and other courtsestablished by the constitution. See La Consl art.V, $ l. It is tnre that this court has frequently notedthat the grant of judicial power implih.r/y iesnicts' our courts' to' teview only 'maners .which

afejusticiable, i.e., actual and substantial disputes withadverse parties, not **14 hypothetical, mooq orab-stract questions of law. See Cat,s Meou, v. Cityof New Arkans, 98-0601, p. 8 (fa.t0/20/gg), 7i0S9.2d 1186, ll93; Perschall v. State, 9G03i2, p.15 (La.7/1/97), 697 So.2d 240, 251; LouisianaAssociated Gen. Contractors, Inc. y. Stale,

?5-2195, p. 9 (t-a.3/s/96), 669 So.2d 1185, ll93;St. Charles Parish Sch. Bd v. GAF Corp., 512So.2d I 165, I l7l (La. 1987) (on reGaring);Stoddard v. City of New Orleans, 246 La. 417, 413,165 lo.Z{ 9, ll (t964), Consequently, as ageneral rule, the constitution prohibits the courts

lom_rwiewing or rendering advisory opinions.See Cat's Meow, 98-0601 at 8, 720 So.-2d at ttg:;Jordan v. Louisiana Gaming Conrrol Bd, gg-llZl,,p. l8 (La.5/15/98), 7tZ So.2d 74, 85; *601American llaste & Pollution Control Co. v. Sr.Martin Parish Police Jury, 627 So.Zd l5g, 162(La.1993); Church Point llholesale Barcrage Co.v. Taruer, 614 So.2d 697, 702 (La.1993); Belsomev. Southern Staedoring, Inc., 239 La,. 413, 421, I

ll8 So.2d 458,461 (1960). However, just as theconstitution can generally require justiciablecontroversies, through the implicit rule found in theabove cited cases, there is no reason that it cannotprovide exceptions to it in situations such as the onefound in article X, section 2l of the Louisianaconstitution which provides the Legislature broadauthority to grant the courts of appeal review ofdecisions of the Board of Eltrics.

Second, the majority furds that while Duplantis andBreazeale, Sachse are ,,interested" parties in thislitigation, the Board is an uninterested partyindifferent to the ultimate resolution by this court.As such, the majority concludes that the issues oflaw cannot be fully debated so as to provide for aresolution of a true controversy. I would agreethat under the present statutory scheme, the Boardis an uninterested party and further agree that it isstrongly advisable for our courts to resolve conflictsonly between "interested" parties. There is nodoubt that. this. is a valid concern and **15 ourcourts should seek to avoid this problem through

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Page l7

the use of implicit rules such as justiciabilitywhenever possible. Despite our concerns,however, thc explicit directive by the Legislature,authorized by the constitution, should supercedethese concerns. The constitution is specific inproviding that "the legislarure shall provide themethod of appeal" <if tfie

"Boiid,s' deLisions. La.

Const. art. X, $ 21. This is a broad grant ofauthority by the constitution and, under it, themajority should not second guess the Legislature'sstatutory scheme.

Thir4 the majority finds that the review of anadvisory opinion' would necessarily depend solelyon facts as represented by the requesting party, notsworn testimony flushed out after a full hearing orffial on the merits. A review of the records in thesecases supports those contentions in that there is nosworn testimony of any kind speaking to the factsproviding the basis for these advisory opinions.Unfortunately, however, when the legislatureimplements its power under the constitution bydirecting our courts to review a specific matter, welack the authority to find that such a mandate isinadvisable for lack of a record; instead I wouldfind that in light of the constitution,s grant ofauthority to the Legislature in this case, this courtshould be bound to perform this review as the casescome before us. [FN9]

FN9. Of course, while the problem createdby a lack of a record in these cases couldbe addressed by the Legislature in the formof a statutory provision or by this court inthe form of procedural rules, the Boardcould also take action to cure this problem.Under La.Rev.Srat. g 42:t134, the Board

has the authority to adopt rules andregulations for the carrying out of theduties and powers of the Board. In fact,under the authority granted by thisprovision, the Board has outlined severalprocedural requirements that must b€satisfied before the Board will issue anadvisory opinion.

^See Rules for the Boardof Ethics $$ 601-10, available athttp://www. ethics.state.la.uVgeneraVrules.htm. Under that sameauthority, the Board would surely bepermitted to- circumscribe'additioral"procedural rules to tighten the parameters

Copr. @ West 2004 No Claim to Orig. U.S. Govt. Wor&s

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therefore, I will address Midboe directlv. Aspreviously mentioned, Midboe filed suit in n.district court seeking a declaratory judgmentdeclaring portions of the Code of Ethicsunconstitutional. The Midboe court did concludethat a p€rson seeking a determination of theapplication or interpi6ihtiori of'thb Cbde of Efhidswas limited to bringing such a claim to the FirstCircuit due to the statutory and constitutionalscheme in place at the time; however, the courfsreasoning on this **17 point has since beenovemrled. Specifically, the Midboe courtreasoned:

"[An] advisory opinion by the Commission is apreliminary or intermediate action or ruling by anethics body within the meaning of La. R.S.42:1142;' The Commission argues that, despitetitling the petition as on€ for declaratoryjudgment" the real issue was review of theCommission's advisory opinion.Had Midboe's petition sought a determination oJthe ethics code's application or interpretation,the constitutional and statutory scheme outlinedabove provides for an initial determinationutilizing the Commission's upertise and rqiewby the court of appeal. However, Midboe'spetition clearly sought a determination of theconstitutionality of the statutory provisions of theethics code. The determination whether a statuteis unconstitutional is a purely judicial function.The judicial power of the state is constitutionallyvested in the courts. The Commission is not acourt but is an adminisfative ag€ncy in theexecutive branch of state govemment. Anadminisfative agency does not have the authorityto determine the constitutionality of statutes.Thus, the district coun, and not the Commission,had jurisdiction to rule on the constitutionality ofthe statutes.

Midboe, 94-2270 at 6-7, 646 So.2d at 355(emphasis added) (citations omitted). Thus, thecourt concluded, in what could only b€characterized as dicta, that the district court did nothave subject matter jurisdiaion over claimsregarding the interpretation or application of theCode of Ethics. As made evident in the abovequoted p:Nsage, however, the court's reasoning *603focused on the fact that the claimant would have anavenue of relief through the Fint Circuit Court ofAppeal. Since Midboe first reached thisconclusion, the reasoning suppoftillg'itg'cdnclusioiihas been ovemrled. ln TMSL, we found that an


782 So.2d 5822000- I 750 (La. 3 t23 /0t)(Cite as: 782 So.2d 582,2000-1956 (La. 3l23t1t))

under which it issues advisory opinions.

Finally, -the majority finds that the only purpose of

the third paragaph of Article X, section 2l was topermit review of the imposition of sanctions by theBoard of Ethics directly with the First Circuit. Forthe reasons more fully articulated **16 above, Imust disagree. As the delegate who authored thesentence stated, the purpose of that sentence was tomake "any action taken by the Board of Ethics thatwguld be critical of a person ... subject to review."*602 Therefore, the majority ignoris the intent ofthis provision altogether. tFNl0l

o

FNl0. My opinion on this issue is drivensolely by the fact that there is a specificconstitutional authority for the review ofadvisory opinions of the Board of Ethicsonly. I fully agree with the long- standinggeneral rule against the review of advisorvopinions. It is only in this situation, wherea specific constitutional provision erantsthe Legislature this power, would I- findthat we have the power to undertake such areview.

This fust holding by the majority disposes of theBreueale, Saches matter as that case was broughtdirectly ro the First Circuit following the renditionof the advisory opinion by the goard of Ethics.'t-he. DuplantlJ case, however, originated as adeclaratory judgment action in the

-distict coun

and, consequently, the second issue presented forthe court's review is whether the disuict court hassubject matter jurisdiction over this claim. Themajonty finds that "a district court lacks subjectmaner jurisdiction to review the interpretation andapplication of provisions of the Ethics Code, absenta constitutional challenge to a provision of theEthics .Code." Ante p. 591. I; reaching thisconclusion, $g majorrty relies on Jones v. Biard ofllh.ics _foy .Elected Oficiats, 96-2005 (La.5t9/9?j,

994 -.!1,?{. 17l, r72, modilied on rehearins(La.6/20197),696 So.2d 549, and Midboe, g4-2ZiO(La.ll/30/94), 646 So.2d 351, 35S. The majority,sreliance on these two decisions is misplaced.

The . Jones. decision was based solely on theanalysis performed by this court n Midboe:

O;

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.- 'tII'",.,

782 So.2d 5822000- I 750 (La. 3 t23 t}r)(Cite as: 7&2 So.2d 582,20fr)-1956 (La. 3n3rcD)

individual seeking a review of an advisory opinionconceming the interpretation or application of theCode of Ethics could nol seek relief through theFirst Circuit under the statutory scheme in place atthe time and, today, the majority affirms this ruling.Therefo-re, the reasoning which initially supportedMidboe's conciuSirin that the district court did nothave subject mafter jurisdiction over this type ofclaim is no longer good law and the majority'sreliance on it is misplaced.

**18 The majority's opinion today oir., thefollowing simplc problcm: Duplantis has a right todeclaratory relief under the Louisiana Code of CivilProcedure because of the adverse advisory opinionissued by the Board of Ethics; however, there is nocourt in the state with the power to grant it. Such aconclusion seans illogical. The better view wouldbe that the district court has jurisdiction over theclaim pursuant to its general jurisdiction over allcivil matters. See La. Const. art. V, g 16(A).Thcrefore, in -y opinion, Duplantis should bepermined to pursue her declaratory action in thedisnict court,

ln sum, I must disagree with both of the majority'sconclusions today. Fint, any valid, independentreiuions cited by the majority for disfavoring thereview of advisory opinions by the Board of Ethicsare superceded by the directive from theconstitution to make such a review available whereauthorized by the Legislature. [FNll] Second, thedisrict court possesses the subject matterjurisdiction to hear a claim for **19 declaratoryrelief seeking a ruling on the accuracy of anadvisory opinion from the Board of Ethics.

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Page 19

FNll. Notably, this state would not bealone in granting its courts the ability toact on matters not othenvise justiciable.As the United States Supreme Court soappropriately noted, the issue of whetheror not a state coufi may render an advisoryopinion is purely a matter of state law.See Nary York State Club Assoc. v. NewYorh 487 U.S. l, 8 n. 2, 108 S.Ct. 2225,l0l L.Ed.zd I (1988). ln fact, a survey ofthe constitutions and jurisprudence of oursister states reveals that twelve states

"- - -permit-. their courts to render advisoryopinions in certain situations.

Typically, the authority for such action bythe courts is found directly within theconstitution itself. See Colo. Const. art.VI, $ 3; Fla. Const. art. IV, g I & art. V, g

3; Mass. Const., pt. 2, chap. III, art. II;Me. Const. art. VI, $ 3; Mich. Const. art.III, $ 8; N.H. Const., pt. 2, art. 74; R.l.Const. art. X, $ 23; S.D. Const. art. V, $ 5.In three states, however, the authority forsuch review is found within the statutes.See Ala.Code $ l2-2-10; Del.Code tit. 10, $l4l & tit. 29, $ 2102; Okla. Stat. tit. 22, $

1003. In these states, however, limits onthe power of the courts to act under suchauthority exists because of theconstitutional concems. See, e.g.,Opinions .of Justices, 209 Ala. 593, 96 So.487, 488-89 (1923) (permining theissuance of advisory opinions with severallimiting conditions); Opinion of Justices,413 A.zd, 1245, 1247 (Del.l980) (limitinesuch opinions to strictly constitutionalquestions); Okla. Stat. tit. 22, $ 1003(allowing for the Govemor to request anadvisory opinion only on the sufiiciency ofthe proceedings in a capital case). Finally,North Carolina's Supreme Court will issueadvisory opinions in limited situationssolely within their own discretion when thecourt finds the issue presented significantenough to warrant such action. SeeWaddell v. Berry, 3l N.C. (9 Ired.) App.(lEa8); see also Margaret M. Bledsoe,Comment The Advisory Opinion in NorthCarolina: 1947 to 1991, 70 N.C.L.Rev.r853 (1992).For a more detailed discussion of the useof advisory opinions in other states andcounties, as well as a discussion of ttreprocedures utilized by courts in tailoringtheir treafinent of those opinions, seePascal F. Calogero, Jr., AdvisoryOpinions: A llise Change for Louisianaand hs Judiciary?, 38 Loy. L.Rev. 329(reez).

For the foregoing reasons, I respectfully dissent.

*604**1 KNOLL,-Justice, dissenting: " .


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782 So.2d 5822000- 1 750 (t;.. 3 /23 l0l)(Cite as: 782 So.2d S82,2000-1956 (La.3t23t0t\)

The issue in these consolidated cases is whether anadvisory opinion is a decision within the context ofArticle X Section 2l of the Louisiana Constitution.The majority contrasts an advisory opinion with afull.blown investigation of a formal iomplaint andholds an advisory opinion is not a decision underLa.. Const.--art. X $ 21. In his extensive dissengChief Justice Calogero delves into the legislativeintent behind "decisions" by examining the debatesof the delegates at the lg73 ConstitutionalConvention and frnds an advisory opinion is adecision. I

. agree with Chief Justice Calogero,sexcellent dissent; however, I believe the lvord"decisions" encompasses advisory opinions underLa. Const. art. X, $ 2l for additional reasons anddissent separately to explain my view.

"The words of a law must be given their generalp-revailing meaning." La. Civ.Code ann. art. t.t.Words must be read in context and must beconstme^d "according to the common and approvedusage of the language." La.Rev.Stat. nnn.

'S't::.The majority-fails to apply the general privailingmeaning of the **2 word "decisions." A decisionis "[a] determination arrived at after considerationof facts, and, in legalratlrer than technical

action between parties. One which settles rights ofparties respecting the subject-matter of the suit andwhich concludes them until it is reversed or seraside." BLACKS LAW DICTTONARY 629 (6thed. 1990). A "final decision" is one thatcontemplates an adversarial process between tw,opaities, not a "deiisibn.ii ffre riraften of theconstihrtion purposefully used the word "decisions"as opposed to "frnal decisions." Compare l-a,.Const. art. X, $ 12 (using both "decisionn and "finaldecision" in the context of removal and disciplinarycases before the State Civil Service Commission)withla. Const. art. X $ 20 (using only "decisions").

**3 The Administrative Procedure Act ("APA")provides a definition of a decision in that context as"the whole or any part of a final disposition ... ofany agency, in any matter other than rulemaking,required by constitution or statute to be determinedon the record after an opportunity for an agencyhearing...." La.Rcv.Stat. Ann. g 49:951(3). Thisnarrow defrnition of decision is appropriate to theAPA; however, it is not tailored to fit the specialneeds of govemmental ethics where a broaderdefinition of decision is required.

*605 The Board's ethics opinions are calledadvisory opinions; however, this does not meanthat the opinions are merely advice and notdecisions. Rattrer, if we disregard the form whichthese decisions take and cxamine the ,'substantial

operation" of the opinion, see United States v.Thompson, 251 U.S. 407, 412, 40 S.Ct. Ztg, 64L.Ed. 333 (1920) (holding that the quesrion ofwhether a quashing of an indictnent was a ,'

'decision or judgment sustaining a special plea inbar, when the defendant has not been put injeopardy' " is a question "to be determined not byform but by substance."), w€ see that an advisoryopinion impacts people in a concrete and significantmanner. We should adopt this view in whichsubstance triumphs over form.

I stated in my dissen t in Transit Management oJSoutheast Louisiana, Inc. v, Commission on Ethicsfor Public Employees, No. 96-1982 p.2 (La.t997),703 So.2d 576, 578-79, that a{visory opinions inthe context of govemmcnt ethics can aggrievepeople. An advisory opinion Gan have costlycompliance requirements and can have a "chillingeffect" on the actions of people- affected 'by"tliOopinion who are concemed that a request for an

context, law. A popularor legal word; a

comprehensive term having no faed, legal meaning.It may be employed as referring to ministerial acrsas well as to those that are judicial or of a judicialcharacter." Blacks Law Dictionary 407 (6t ea.1990) (emphasis added).

It is not a casual matter to request an advisoryopinion. There is a formal procedure with whichthe affected person must comply. To receive anadvisory opinion from the Louisiana Board ofEthics, a1 affelgd person must request an advisoryopinion in writing. RULES FOR TI{E BOARDOF ETHICS, Chapter 6 S 601. The request must,inter alia, disclose the requesting person's interestin the question presented, state the govcrnmentalagency and/or the individual involved, and statesufficient facts to enable the Board to respond. .Id,Under this procedure, the Board considlrs factspresented by a person affected by the opinion andmakes a determination. Although the majoritycorrectly stated that the facts are not developed inan adversarial context, the majority fails to corrnasta "decisionl' with a "final decision." A ',fmal.decision" is .ii[o]ne which leaves nothing oDen tofurther dispute and which sets at rest [af cause of


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o782 So.2d 5822000-I750 A.a. 3/23/01 )(cite as: 782 So.2d 58i, 2000_195 6 (Le.snyoD)

advisory . opinion may result in a full blown

Investlgation and formal charges.

Because ethical considerations are not alwaysclear, the Board issues **4 advisory opinions tohelp people make ethical decisions. ivt

"t happ"n,

when a petitioner disagrees with the nolra,sadvisory opinion on an unclear and close issue?The majority forces petitioners to challenee theBoard's opinions with conduct and face the ieril offorla-l .charges €ven ftough the propriety'of theunderlying ethical issue is close and unclear. Thisapproach to govemmental ethics suggests that onemay be better off not asking for an

"&irory opinion

and taking his or her chanies that the .oniu"l th"ythink has unclear ethical considerations will gounnoticed rather than draw attention to the conductby petitioning for an advisory opinion. Thisapproach is illogical and unconscionable. Onewould be better off not even asking for an advisoryopinion under these circumstances. Thesubstantive effect of advisory opinionsdemonstrates that advisory opinions frbm ttre Soaraare mor€ akin to judgments than to advice.

SiT.p.tV .rlu,"4 the majority,s nrirrow interpretationof "decisions," in essence, means only "viilations',are appealable. If La. Const. art. X, g Zt meantonly "violations" are the decisions of thi Board that I

qe appealablc, the word ,'violations,' would havebeen used rather than the more encompassing term,"decisions." It is an inherent function bf the-goardf Sive advisory opinions upon proper request.These advisory opinions, which' concretely andsignificantly impact an affected person,s life and arepart of the decision making authority of the Board,are encompassed in the broad term "decisions,', butare left unchecked by judicial review under themajority's narrow interpretation.,,Decisions" mustbe read in the context of the function of the Boardof Ethics. The majority reads it too narowty byrestricting it to formal complaints and thirebydiminishes the valuable and necessary serviciprovided by the Board to those who seik its **5counsel. Thus, I find that "decisions,' includesadvisory opinions in the context of La. Const. an.X, $ 21. Any other reading conflicts with thegeneral prevailing definition of ',decisions' and withthe ptactical consequences involved when a publicofficial r: f".** ro dispute an advisory opinfon by:!ufl,:ngTg it through conduct. For these i"usonr, irespectfirlly dissent.'"

G

782 So.2d 582, 2000-17502000-1956 (La.3D3t0t)

ENDOFDOCI.JMENT

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(La. 3n3/01),


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General Item

Ethics Board Docket No. BD 2009-37711t20t2009

RE: Appearance in connection with consideration of a request for an advisory opinion onwhether an architecture firm that has entered into contracts with the State of Louisiana throughthe Office of Facility Planning would be subject to the Code of Ethics.

Relevant Statutory Provisions, Advisory Opinions: I102, I I l3

Comments:

FACTS: The Division of Administration, Office of Facility Planning and Control (FPC) requests

an advisory opinion on whether or not Washer Hill Lipscomb Cabaniss Architecture ( WasherHill) an architecture firm that has entered into a contract with FP&C to be the designer on theNew Clinical Research Fcility, LSU Pennigton Biomedical Research Center (PenningtonProject). As designer, Washer Hill is the representative of the owner and has the authority to act

on behalf of the Owner during the construction phase of this project. As designer of record,Washer Hill's duties include, conducting site visits to evaluate the progress and the quality of theContractor's work, conducting regular progress meetings, preparing and distributing minutes, andsubmitting monthly status reports with each pay request, verifuing that the Contractor'sApplication for Payments reflects the status of work and the stored material, and recommendingand preparing change orders to the contract. Michael Hill is a principal in Washer Hill. TTMsubmitted a bid for roof repair work on the Pennington Project. TTM was once owned byMichael Hill but was sold to the sons of Michael Hill. TTM withdrew their bid submission;however, the FP&C requests that the Board still render the opinion since TTM is requesting theretum of its bid bond and the Board's opinion is necessary to decide that issue.

ISSUE #l: Is the request for an opinion moot since TTM withdrew their bid submission. IS FPCentitled to an opinion on this scenario in order to determine if TTM should receive a refund ofthe bid bond. Is FPC an "affected person" under the Code.

ANALYSIS: FPC states that it still desires an opinion be rendered regarding TTM since a

determination that TTM could not bid on the project uner the Code would provide guidance toFPC in making a decision as to pursuing the bid bond. Futher, FP&C argues that an advisoryopinion on the issue would be consistent with the primary objective of the Code by delineatingsituations that present too great a danger of a conflict of interest occurring. The FP&C may be

faced with the same type of situation again and it requires the guidance of the Board as to how tohandle these situations. Further, rendering the opinion will allow the Board to clarify its positionon who is a public servant under the Code. Section 601 of the Rules for the Board of Ethicsprovides that the Board will only render advisory opinions to "affected persons." "Affectedperson" is defined in the Board's Rules as "any person or governmental agency, or the authorizedrepresentative of such person or agency with a demonstrable and objective interest in the Board's

interpretation, construction, and application of any law within the Board's jurisdiction." The staff

recommends that the Board decline to issue the advisory opinion since the withdrawal of the bid

renders this issue moot.

ISSUE #2:Michael Hill is a principal in Washer Hill. His sons own TTM roofing. Is there a

conflict of interest if TTM is awarded a contract on the Pennington Project when Washer Hill isthe design architect. Section I I 13 of the Code prohibits a public servant, or member of such

public servant's immediate family, or legal entity in which he has a.g.otr,tro,.lling.in1qr9$fp$"" ". ".bidding on or entering into any contract, subcontract or other transaction that is under the

supervision or jurisdiction of the agency of such public servant. "Controlling interest"is an

interest in a company either held individually or collectively by a member of his immediate

family member that exceeds2lYo. TTM Construction is wholly owned by Terence and Travis

Hill. Each has a 50% ownership interest.

ANALYSIS: Since TTM Construction is a legal entity in which Michael Hill's immediate familyown a controlling interest, it would be prohibited from bidding on or entering into a contract

under the supervision and jurisdiction of Washer Hill. (AMA)

Recommendations: Decline to render the advisory opinion since the issue is moot now that the

bid has been withdrawn.

()

D, ,l

Bonrv Jtxoet"(;()vE$i()R

(Q

a&q.yq

State of T.suigian.rDivision of Administration

OFFICE OF GENERAL COUNSEL" ' March 25;2009

Louisiana Ethics Administration ProgramP.O. Box 4368Baton Rouge, Louisiana 70821

Rc: Requcst for Advisory Opinion on Projcct entitled Hurricenc GustrvRelatcd Repein, Pennington Biomedicrl Rcseerch Ctn, Gl9-609-09-

ORM, Pan I

To: Members of Louisiana Ethics Administration Program

The Division of Administration, Oflice of Facility Planning and Control (FP&C),requests an advisory opinion on the following matter that has recently come to our anention.Because this matter involves roof repair as a result of Hunicane Gustav, time is of the ess€nce,and if there is anything that can be done to expedite this matter, it would be appreciated.

Wesh?r Hill Lioscomb Cebrniss ArchitGctura LLC

According to the records of the Louisiana Secretary of Statg one of the principalmembcrs of Washer Hill Lipscomb Cabaniss Architecturc, LLC (WHLC) is Michael W. Hill.On Novembet 17,200t, WHLC entered into a contract with FP&C to be the designer on theabove-entitled project.

According to the Louisiana Capital lmprovernent Projects Procedural Manual for Designand Construction - 2006 Edition, as the desigter, WHLC is the reprcsentative of the Owner andhas the "authorily to act on behalf of the Owner" during the Construction Phase of this project.As the designcr of record, WHLC's duties irrclude, but arc not limited, to:

ANcELE D,rvls( _( )tlriltsst()NF:R ()F,\DNilNISTMTI()N

Conducting site visits to evaluate prcgress and quality of the contractor's work.As such, the designer "shall endeavor to guard the Owner against defects anddeficiencies in the Work of the contractors";rConducting rcgular progrcss rneetings, prcparing and distributing minutes, andsubmitting monthly status reports with each pay request;Verifying that thc Contractor's Application for Payments rcflects the status ofwork and the stored material. This verification rcquires that the designer assert

' Louisiana Capital lmprovement Projccts hocedural Manual for Design and Construction - 2006 Edifion.-p; l3

Othce of General Counsel . Post ()flice Box 94095 . Baton Rouge, Louisiana 70804-9095Claiborne Building ' l20l N. 3rd Strect . Suite 7-2ll . Baton Rouge, Louisiana 70802

(225) 342-7154 . Fax (225) 219-1572,\n Equal ()pportuniry Emplover

),

(D

Lou isiana Ethics Admi nisnatio9rogramMdrch 25. 2009Pagc 2 of 3

that the work and stored materials, to the best of his knowledge, are coriplete,acceptable and in accordance with the contract documens; and

d. Recommending and preparing change orders to thc contracl

TTM 9onstruction Comopv. l,LC (TTM!

On February 26, 2009, bids were opened on thc Hunicane Gustav Related RepainProject. Thc apparent low bidder was TTM Constnrction Company, LLC (TTM).

According to the records of thc Louisiana Secretary of State, prior to Junc 3, 200E,Michael W. Hill, Travis C. Hill and Terrence W. Hitt were membcn of fiM. On June 3, 2008,Michael W. Hill tendered his 5l7o membership in fiM to Travis and Tenerrce Hill. At pr€sent,the sole members of TTM, according to thc Secretary of State, are Travis and Terrence Hill.Travis and Tenence Hill (TTM) are the sons of Michael W. Hill (WHLO.

On March 24,2009, a letter was sent to TTM and WHLC rcquesting that they extend thcdeadlinc for awarding the contract to it by thifiy (30) days while we seek an opinion from theEthics Administration.

Issucs in which thc Ofllcc of Frcilitv Phnnins snd Control Reouclts en Ooinion

We request an advisory opinion from the Louisiana Ethics Administration as to thefollowing:

(l) Under Louisiana Revised Statutc 42:1102, a "public sewant'is defined as a "publicemployee" or an "elected oflicial", and a "public employce is defined as "anyone,whether compensated or not, who is...(c) Engaged in the performance of a governmentalfunction." Previous crasc law and advisory opinions have indicated that this definitionapplies to contractors.2 Based upon the dutiei of the architect as defined abovg wouldWasher Hill Lipscomb Cabaniss Architecture, LLC, be considercd a public servant underthe Code of Governmental Ethics?

(2\ Under Louisiana Revised Statute 42:ltl3, no public servantor member of such apublic sewant's immediate family "shall bid on or enter into a contract ... that is underthe supervision or jurisdiction of the agency of such public senant". An immediatefamily member, under thc Starc Ethics Code, includes children of public servants. Basedupon the facts described abovg can TTM Construction Company, LtC bid on or contractwith Facility Planning and Control when Washer Hill Lipscomb Cabaniss Architecture,LLC is the designer of record?

(3) Under Louisiana Revised Statute 42:lll2, no public servant shall participate in atransaction involving the governmental entity in which any of his "immediate family

' See Co;nnission oa Elhlcs v. IT Corp.,423 So.2d 695 (b. App. I Cir. | 9t2), /n rc T, Batet Smtth &, Son, Ina,Etlrics Board'Docket No; 2004.336

(9

o

()

Loui.siana Ethics Administrat,"fl"*tMarch 25. 2009Page 3 of3

memhrs" has a substantial economic interest. Based upon thc information above, can

Washer Hill Lipscomb Cabaniss Architecrure, LLC, provide design seryices to Facility

Planning & Control when TTM Construction Company, LLC is the lowest responsive

bidder?

If you need any further information on thesc issues, please contact me.

Sincerely,

./' r flUo* (f^/rc;

Pamela Miller PerkinsGeneral Counsel

PMP/JB/eb

c: Waslrer Hill Lipscomb Cabaniss Architecture, LLCTTM Construction CompanY, L.L.C.

co

Bonay JrNorl(;( )vEnN()R ANGELE Devrs

(-( )NlllllSSl()Nt:R ( )F ,\DMfNISTRiTI()N

State of T-auigianaDivision of Adminisrration

OFFICE OF GENERAL COUNSEL

Ap4129,2009

VIA HAND DELIVERYLouisiana Ethics Administration programP.O. Box 4368Baton Rouge, LA 70821

RE: New Clinical Research Facility, LSU pennington Biomedical Research Cenrer,Project No. l9-609-065-01; andHurricane Gustav Related Repairs, Pennington Biomedical Research Center,Gl9-609-09-ORM, part I

To Whom lt May Concern:

This letter is in response to the recent letters regarding to the above- referenced mattri\submitted to this Board by Milton womack,,Irc., washir Hitit-ips"orb cabaniss Architecrure,LLC (WHLC) and Michael Hill' AIA Louisiana - Th€ Louisiana Archirects Associarion (AIA),and the Louisiana Association of General Contractor: (AGC).

Prior to discussing the issues presented, the Division of Administration, office of FacilityPlanning and control (FP&c) would like to make clear that it has no ilt-will towards any ofthese entities' FP&c's main objective in this requesr is the same as that of the Ethics Board. It isto ensurc *impartiality' trT.T and. equality of tieatment toward those dealing with gou.rn-"n,;assurance that decisions of public importarrce will not be influenced by private considerations;maintenance of public confiderce in govemment (wherein enters the matter of appearances); andprcvention of use of public oflice forlrivate gain.;,|

I. Current Status of Ethics Requcst

on March 25, 2a09, on behalf of FP&c, the undersigred wrote two separate letters tothis Board requesting an opinion on rhe following projects:

(A)New clinical Research Facility, LSU pennington Biomedical Researchcenter, Projecr No. r9-609-0os-ot lctinical Reseirch raciriiiprojecr); and

' La' R'S' 42: I f 0 | (B). Glazer v. Com'n on Ethics for Public Employees,43 I so.2d 752,755-56 (La. t9g3).

of6ce of General Counsel ' Post ofhce Box 94095 . Baron Rouge, l.r>uisiana 70g04-9095ClaiborneBuilding' l20l N.-irdStreet'SuiteT-211 . BatonRt>uge,Louisiana 7()g02(225) 342-7154 . Fax (2ZS) 219_7572

An Equal ()pportururv Emplover

(9

Lou isiana Ethics Adm in ir,flon procramApril29,2009Pagc 2 of l5

(B) Hunicane Gustav Related Repairs, Pennington Biomedical Research Ctr.,c | 9-609-09-ORM, pad | (Roof Repair project).

A. Roof Repair projcct

- Ahhough FP&C has not withdrawn is request for an advisory opinion regarding the Roof!'epair Project' no one has addressed the issue. Perhaps, it is because the rei-ponAiig entitiesbelieve there is no justiciable controvetsy.Fp&c,however, respecrfully disagrees.

After receiving notice that FP&C requested an Ethics Advisory opinion from this Board9n tle two projects, on April 6,2W9, TTiltrConstrucrion, L.L.C. (TTU;rhc tow bidder on rhcRoof Repair Project, withdrew its bid. The wirhdrawal of the bid did not moot rhc issue for anumber of reasons.

First' in its withdrawal. TTM requested that its bid bond be retumed. Fp&C stiil desiresan advisory opinion from thc Board on this particular situation. A determination rhat TTM couldnot.bid on this project under the Ethics Code will provide guidancc to Fp&C in making adecision as to pursuing the bid bond.

Second,^FP&C's request is for an advisory opinion, not a request for charges to bc teviedagainst a party.2 An advisory opinion ir not

" decision on

" formJ.i-g"i-iiri-a nin-uinaing

interpretation of the law. An adylsow opinion on rhis issue would be coniistent wirh thc primaryobjective of the Ethics Codc, which is 'io pre"errt not only the actuality of conflicts of inrercst,but also to prevent thc occurrence of those situations &at tend to create a perception of conflictof interest- It does this by dclineating situations that present tq, great a dangerof a conflict ofinterest occurring-'{ when onc .on-ridor the number of architecs and contmctors that do.business with FP&c, the danger of this samc typc of sitnation occuning again is quite reat.FP&C sceks guidance from the Ethics Board should it encounter a similar siruation in the future,

Third' when one considers the difference between FP&C and rhe intercsted parties'interpretation of the Ethics Code and the differcnce in various opinions by the Board and thecourts as to thc provisions questioned, the cunrnt definition of "public employee" and"governmental fi.nction" obviously need further clarification. Thc facts invotving thi ctinicatResearch Facility Project are diffeient from the facts involved in rn Rc Taylor pln i- For thatmatter, thc facts involved in the Clinical Research Facility Project are different from the factsinvolved in the Roof Repair Project. As this Board noted

-in In' Rc Taylor portcr rcgarding the

very issue presented in our request, "it is necessary that such a determination be made oh a Gase-oy-case Dasts".-

: La. R.s. 42: | | 34'.ln Rc Toylor poaet, Opinion No. 200g- | | 50. oasc 6',ln Re Beychot. 495 So.2d 1278, l28t (La.t98b)-' In Rc Toylot Porten Opinton No. 200g- l 1 50. page ?

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May I l, 2009

WA HAI{D DELIVERY

Louisiana Ethics Administration prograrn617 North Third StreetLaSalle Building, l0,h FloorBaton Rouge, Louisiana 70802

itl'irt t'

oNE uxrlD pu?t" su[E too . 4o4t Essrx qxt . larcts roocE, lourshM 7oto9 . rxorr: {ur) gr.rrro

Response to Correspondence from the Division ofAdministration and the OfficeFacility Planning and_-cortrol regarding Request for Advisory opinion onProject entitled New clinical Research Facility, LSU pennington BiomedicalResearch Center, Project No. 19-609-065{1, part 01.

To: Members of the ls'i5iana Ethics Administration program:

Please accept these comments on behalf of Washer Hill Lipscomb Cabaniss Architecture,LLC (WHLC) and Michael Hill in response to the April 29,2009 coispondence from the Divisionof Administration(DoA/office- of Facility Planning and dontrol (Fpi). As you are aware, one ofWHLC's principals is Michael Hill, and Terry Hill, the President of Wo,nu"[, is his brother.

' Roof Repair proiect

DoA/FPc takes the position it will not withdraw its request for an advisory opinionregarding the roof repair project even though the contractor, TTM Construction, LLC, has withdrawnits bid' DoA/FPc suggests to the Board that the basis for its insistence is that it wishes to haveassistance in making a deqi5isn whether to pursue TTM's bid bond. This can only be characterizedas punitive. There is nothing pending which requires an advisory opinion. The Board should declineDOA/FPC's request.

Pursuant to wHLC's ."ope of re*ices and the applicable "ase

ta. and statutes.wHLC is not engaged in the oerformance ol a eovernmental funciio,rl

Central to the questions before the Board of Ethics is whether WHLC, a private entity that.contracted with the Division of Administration pursuant to a joint venture to periorm architectural

Re:

. r{: (utr 9:t'rot . rrxrrt: tw.loxcur.€or

()

Louisiana Ethics Administration prosramMay 8,2009Page 2

services for one of its many projects, is a government employee engaged in the performance of agovemmental function under La. R.S 42: I 102 ( I 8). For the r"uroni zubmitted to.youbefore.andfor reasons more fully stated herein, the Board of Ethics' answer to this question should be no.

In the case of Commission on Ethics Jbr Public Employees v. IT Corporation,t the corrtdetermined tT Corporation was a state employee engaged in the performancl of a state functionpursuant to state law. Act 334 of 1978 provided, "it is in the public interest and within the policepowers of the state to establish a framework for the regulation, monitoring, and control of thegenerators, transportation, slerase and disoosal of such hazardous waste..." (emphasis added) tThad the duty of securing feasible sites for the storage and disposal ofhazardous wasre. Accordingly,IT was charged with one part of the framework in establishing where the storage and disposai ofhazardous waste would be located. tn finding IT was a state employee, the.ourt aia not use anexpansive interpretation of being engaged in the performance of a state function, as is necessary rofind WHLC is engaged in the performance of a governmental function.

The same was true with the case of/n Re: George Dyer and Fire Apparatus Specialisrs, Inc.lThe volunteer firc department contracted to be the sole provider of fire piotection ior the district;accordingly, the volunteer firc department, of which George Dyer was the fire chief, was engagedin the performance of a govenunent function. (emphasis added) An expansive interpretation wasagain not needed to find that the sole fire fighters for the disnict were engaged in theperfornanceof a governmental function. No government employees provided these services. tn the instantmatter' however' WHLC has architectural duties apart from the role of the DOA/FPC. It is not as

tough the work performed by the architects of WHLC is the same a:i or takes the place of thefunction of the DOA/FPC. Accordingly, the Board should not find WHLC is engaged in theperformance of the govemmental function assigned to the DOA/FPC. To find WHiCis a stateemployee requires an expansive interpretation of being engaged in the performance of agoverrunental function, which the Ethics Board has previously found to be inappropriate.

The DOA/FPC relies on In Re: Kean Mitter 2009-169 to suggest that WHLC is a stateemployee. While the case suggests that Kean Miller is a state employee, this case does not furtherthe argument that WHLC is a state employee. There are many points of distinction which suggestWHLC is not a state employee.

I Commission on Erhics for Public Employees v. IT Corporotion, 423 So.2d 595 (La. App. I Cir. 1982.)

t ln Rr, George Dyer and Fire Apparatus Specialist, lnc. 95 2297 (La. App l. Cir. 6/28196),677 so.2dI 075.

3 In R"t Kean Miller20Og-169

)

iJ 1)


The rationale of the Board finding Kean Miller is a state employee is outlined in opinion2009'"154-: 'Kean-Nfiller.was.found to be apublic ernployee.pursu:rnt to La. R:S:.42;g02{s"(O- fiii,.and iv). Kean Miller was hired to l.) attend meetings of the oCD State Appeal panelsapproximately three times a week, 2.) provide tegal couns-l to the Louisiana OCD State AppealsPanels as requested with regard to disposition ofappeals before panels; 3.) draft proposed decisionletters incorporating the decision of the Appeals Pinels; and 4.) iepresent oCo in titigation arisingout ofthe decision of the Appeal Panels. Following Hurricane Katrin4 the OCD had alproximately5,000 appeals to be heard and four staffmembers to make recommendations to ttte pL"t. r"unMiller provided most of its services in the office of the oCD, including clericaVparalegal services.Kean Miller's staff also performed the same functions as the Road Home program stafr under thehead of oCD and the head of the Road Home Program. The contract was entered into due to thevolume of appeals.

WHLC did not contract with the state to address the volume of the DOA/FpC's work or toperform the same function of the DOAiFPC. WHLC as a joint venturer was hired to performprofessional architectural services pursuant to contract with the Division of Administration for aCapital outlay Project. The role of WHLC in performing architecrural services is distinct, separareand apart from the administrative role ofthe DOA/FPC. kean Miller's employees were performingthe same functions as the agency stalf due to the volume of appeals in the same oflice as the OCDand under the head of OCD and the head of the Road Home rrograrn. WHLC does not perform itsservices in the offtces of the DOA/FPC, and the architects of WtttC are supervised by and subjectto the authority of WHLC. To find that the DOA/FPC has supervision or authority over theemployees of privately owned companies who contract with the siate for Capital Outlay projectswould lend to an absurd result. Where would the line of state employees end? The OOefppCfunctions as the owner of the project through a contract for services.- A finding that Kean Miller isengaged in the performance of a governmental function based on these pertiient points does notfurther the argument that wHLc is a state employee pursuant to La R.S. a:l fi2 t ti 1ay liii and iv).

The question is whether WHLC is "engaged in the perfiormance of governmental function"in providing architecture services to the DOA/FPC for itre Ctini.A Reiearch Facility at LSUPennington Biomedical Research center pursuant to state law. The answer is no.

La. R.S' 39:l creates the Division of Administration as a division of the Office of theGovernor. La- R.S. 39: I 2l says the Division of Administration is to "exercise supervision over theexpenditure of funds and the constmction projects." La. R.S. 39:l2l(4) specifically provides, ..the

DivisionofAdministration shall "[s]upervise construction, approve estimates, and selectandemployengineers' architects. and other personnel necessary in connection with the administration ofcontracts for projects."

' Opinion No. 2009-154

(,, J ()


Pursuant to La R'S. 39:124, "facility planning and control section shall make periodic" insReatlons, at-au*stages.of .construction of any-.f,acility constructed -pursuant to this part .atid-she1rmake detailed reports which shatt be made.ivailabli to the tegislature and to ttre pultic. suchinspections shall include but not be limited to the close techiical on-site examination of thematerials, stnrcture, and equipment and surveillance of the workmanship and methods used to insurereasonably that the project is accomplished in compliance with information given;fi; contractdocuments and good construction practices."

La' R'S' 39:125 also provides the "facility planning and control section shall be responsiblefor directing final pavment for work done on "*t p-1r"t.-go*"u.iiril;;ffi;;;, of anyproject it shall be found that P? plans, specifications, iont u"t, or change orders for the project shallnot have been fully complied with' tire facility planning and control section shall, until suchcompliance shall have been effected or adjustments satisfactory to it shau have been made, refuseto direct such payment. Upon completion olthe project the facilityplanning and control section shallrelease it to the agency. The facility planning and control section sirall be responsible for making aninspection of the project prior to, the expirati-on of the guarant." p"rioo to observe any defects whichmay appe:u within one ye,r after completion of the contract. The facility plannin! and controlseclion shall give prompt written notice io the contractor ofdefects which ale due to faulty materialsand workmanship."

Section 7 ofthe Louisianacapital Improvements Projects procedure Manual forDesignandconstruction (Procedure Manual) ouilines the role ofthe architect.t The array of services shows the

t The role of the architect.involves designing the project within the applicable legal requirements and costconstraints and advising the owner if this cannot u" aon.. _

irr" aesigner is ctraifed with providing thc necessarygeotechical reports and surveys' and finalizing the time schedule. Tihe designeiis to submit a statement of probablecosts' and a report based on the applicable codes for state owned buitdings. The designer is raponsiute ioittrecoordination of all documents and disciplines. The designer distributes instruction documents and is required tocomply with all provisions of Public Bid Law. The desilner evaluates prior approval ,.qu".t tt*

ri1urii,"'ti"n "rmater.ials, products and equipment required by the applicable statutes and owner procedures. The designer issues theagenda and modifies construction documents. The iisigner participates in a pre-bid conference in accordance withthe contract documents. The designer provides a form to rhEownei to tabulaie the bids. The designer analyzes thebids and makes a recommendation to the owner iui to whether ro award the bid to the low bid contiactor o, io ,q".tall bids' The architect administers the construction documents and submits to the owner a cost data form for theowner's evaluation. The architect makes recommendations for the owner's approval in regard to testing. The

architect advises and consults with the owner and communicates the ownen instructions to the contractor. Thedesigner can act on behalfof the owner as provided for the manual. The designer conducts a pre-constructionconference,' The designer and consultants must visit the site for inspections. lhe designer is to guard the owneragainst defects and deficiencies. RgRorts are required from the designerand consultants to the olwner upon eachvisit' The designer agrees to qualifications,.*piri.n"" and training ofhis representatives in making decisions andinterpreting construction documents. The designer is to confirm iriwriting ail suctr decisions to the owner. Thedesigner is also charged with replqci4g any representative the owner deteinines does not meet the qualifications. Thedesigner issues certificates for payment upon determining the guality and progress ofthe contractor,s work. Thedesigner instructs the contractor to conduct monthly meetings in regard to project scheduling. The designer is to

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Louisiana Ethics Administration Program

May 8,2009Page 5

design professional functions in the role of an architect, which supports the supervisory

F;'$tt#i"l n i.nion',of.ihe'DOilFPC:.The cehiteet certainly assists'the'D'OA/FPC,,b.st.!hgIt is misleading to suggest otherwise. The

legislature and the poUti" arising fromthese projects, essentially, its own administration to perform

selarate, independint and apart from the work of the architect. While the DOA/FPC may rely on

the information supplied by the architect in performing its tasks, to find that anyone whose work is

relied upon by the-govemment agency in performing its d,rtiet is engaged in the performance of a

governmentaifunctlon is overly broad. The Board of Ethics cannot find WHLC is a state employee

without i nterpretin g 42: I L 02 ( I SXaXiiD expansively.

DOA/FPC has its own supervisory rgle, its own inspections to perform, its own budgetary concems

to address. its own report; to write, its own contracfadministration to perform, its own duties to the

This Board has said quite correctly and is worth again quoting here:

"The Board takes cognisance ofthe untold hundreds, ifnot thousands, ofcontracts

between private entities and governmental agencies. The object of these contracts

varies griatly. Some provide professional services (legal, accounting, architecture'

landscipe architecture, medical, engineering' etc.); some provide construction'

renovation or repairs of b*itdings, ioads, equipment' etc'; some provide social

services, employment and management guidelines, insurance advice and policies'

some provide products including consumables; the list is virtually endless' To hold

that each of those private entities and their employees are public employees appears

beyond the intent of the legislature in adopting Sec.l102(l8Xa)._lf the legislature

intended that result, it would simply have provided in Section I 102( I 8Xa) that "any

submit to th€ owner, user agency and contractor a monthly status report- The form of the report is supplied to the

designer. The Designer's S-tatement for Professional services and tlre Contractor's Certificate for payment shall be

supplied to th€ owner. The designer is the impartial.iuagt i"i*""n the ownet and contractor for the requirements of

the contract documents. The designer can reject all wor-k that is not in compliance with the contract documents' The

designer reviews shop drawingp, samples and submissions of the contractor only for conformance of the design

concept. The designer is to respond to requests for information from the contractor. only with the authorization of

the owner shall the designer pr.p*" change orders' The designer conducts.an inspection with the owner' usier

agency and the contractor to determine ifthe contractor'r r"ort' is in general accordance with the contract documents'

When the owner desires to accept the work on full or substantial comlhtion' the desigrer shall recommend such

acceptance in writing, excepting the retained percentage' liquidated damagesor the value ofthe punch list items'

Upon ,...ipt otttre iiear lien cirtificate, the designer-makei the final inspection' The desigrcr issues guarantees'

bperation and maintenance manuals, keys and oth-er closing documents for the owner' After acceptance by the owner'

the.designer prepares a final report containing information-requested by the owner and two sets of as built dnwings'

The designer reviews and approves the punch list. The designer follows up on items to be coirediedtiuriirg the' ' ' '

warranty period.

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May 8,2009Page 6

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person who provides a service or product under contract to a governmental agency

iiiii,i'enirid'to'be-dpublic"einployee;''''''r'' " : : : r1'i:

A finding that WHLC is a state employee has far reaching ramifications, lach private

architect who contracts from here on with the obnyppC for Capital Improvement Projec_ts will be

subject to the same strict confines of the ethics code applicable to state employees. The Ptocedure

Manuel outlines the roles for all architects working on these projects, and the revised statutes

applicable to the DOA/FPC apply ineach instance as well. Accordingly, a findingthat the archit€ct

is engageO in the performance of a govemmental function in this instance would mean the same

,esulifor each architect engaged in services under any Capital Outlay Project'

Womack's bid is in thc best interest of the tax payer

DOA/FPC claims the tax payer is at a great disservice when contractors bid on projects

designed by immediarc i".ifv r"rntrot. ttre Oba,lfpC conveniently excluded from its analysis

tnat-ttyougl the vetting pro""., of the public bid, Womack's bid was nearly $400'000less than the

next high;st bid. If WRLC is found tobe a public employee and in turn Womack is precluded from

proceeiing with the project, an extra $400,d00 will be necessary to complete this project' We again

caution against an expinsive interpretation of U/HLC being engaged in the performance of the

governmental firnction tbr practical reasons such as this'

At the time WHLC became the architect, there were no ethical concerns to address regardless

of whether WHLC is found to be a state employee or not. WHLC as the architect designed the plans'

prepared the specifications to be bid, etc. it *ut not until after Womack bid the job and the

DOA/FPC awardedthecontractto WomackthattheDOA/FPC claimedtherewas anethical conflict'

The DOA/FPC did not raise its ethical concerns until the job was approximately one year from

completion. It would be a great disservice to the taxpayers of this state to nullify the contact of the

architect and/or the contract of the contractor. Given most of the work has been completed' the

parties request that neither contract be nullified' as no ethical impropriety grounded in fact has been

found.

The DOA/X'CP's assertions of ethical concerns

arisins from thc;ork of WI{LC and Womack are unfounded'

The DOA/FPC contends the primary objective of the ethics code is "to prevent not only the

ln Re: Tqlor Porter 20o8'1150

April 29, 2009 conespondence from the DOA/FPC to the Board of Ethics page 6'


May 8,2009Page 7

actuality ofconflicts ofinterest, but also to prevent the occurrence ofthose situations that tend to

ireate a perception bf -a conflict of interest."! ' In finding a conflict 'of interest under these

circumstances and based on the assertions of the DOA/FPC, one would need to presume first of all,

these actions are possible and secondly, WHLC is prepared to igrore the provisions of the Louisiana

State Board of Architectural Examiners, cheat, lie and steal in order to further its inter€sts and those

of Womack. This is an extreme charge in order to find an ethical conflict' especially since any

design professional would face legal and professional ramifications for the actions suggestd by the

DOAiFPC. The DOA/FpC's arguments for ethical conflict also ignore the fact that the architecture

services were provided subject to a joint venfire with Post Architects.

A. Closing SPecifications

DOA/FPC contends that the designer could easily manipulate it's design to favor the

contractor by including a closing specification.' The DOA/FPC is aware this type of manipulation

did not occur. Section 7.1 .4 of the Procedure Manual specifically addresses closing specifications'

Generally, state law prohibits closing specifications with few exceptions. Section 7. 1 .a ( I Xb) of the

proceduie Manual provides, "Any r-ason for closing specifications as provided for by law shall be

brought to the atteniion ofthe owner in writing forrcview." Accorrdingly, any closing specification

included in the plans would not be a secret. Further, for this specific project, the construction

documents were developed with a closing specification, not at the insistence of the architect, but at

the request of the user ui"o"y. The closing specification requested by the user agency involved the

flrre alarm and mechani-cal systenn, and thii closing specification was approved by FPC when

Womack bid the project. The DOAJFPC knows closing specilications are generally prohibited. The

DOA/FpC also knows that if a closing specification is included in the plans, the owner will be aware

of the specification and the specificaiion will be subject to approval. Suggesting an ethical conflict

based on closing specifications which are known by th" o*"t und subject to approval is misleading'

B" Price lncreases and Change Orders

The DOA/Fpc contends an architect could approve cost increases and approve change orders

to increase the contract price as a benefit to the contractor.r0 An architect cannot unilaterally approve

cost increases or chanie orders in favor of family members and to suggest that one can is again

misleading, especially-when dealing with charges of ethical impropriety' Section 7- l-6' 15 of the

procedure Manual nriner provides, 'only witlithe authorization of the owner. shall the Designer

() O

s April 29, 2009 conespondence from the DOA/FPC to the Board of Ethics page 2'

e April 29, 2009 correspondence from the DOA7FPC to the Board of Ethics page 6'

r0 April 29, 2009 correspondence from the DOA/FPC to the Board of Ethics page 6.

(') ()

Louisiana Ethics Administration ProgramMay 8,2009Page 8

prepare Change Orders. The designer shall obtain from the Contractor his estimate of cost and timechangesin,accordanee.withthecontractdocumentsforthe€hangeorder,revierrrand.appcove'saIE9''.'',]'.].;'.and submit it to the Owner for approval before any changes are made in the Contract." There is nobasis for the claims of the DOA/FPC in regard to ethical concerns over price increases and changeorders. (Emphasis added)

C. Ignoring Delays Caused by the Contractor

The DOA/FPC argues that an ethical conflict may arise ifthe architect ignores delays causedby the contractor resulting in delays of occupancy and loss of the owner's right to contractuallystipulated damages.rr This argument ignores the fact that any weekly or monthly reportsr2 from thearchitect are submitted to the owner for review, ignores the premise that the DOA is charged withperformingitsowninspectionspursuantto LaR.S.39:l2l(4)andignoresthefactthatthefacitityplanning and control section is to make periodic inspections at all stages of constnrction and is tomake detailed reports available to the legislature and to the public pursuant to La. R.S. 39:124. TheDOA/FPC seems to argue the WHLC has free reign. but there is owner oversight as to the status ofthe project on a strict and routine basis. Further, WHLC is providing its seryices subject to a jointventure with Post Architects. It is impractical to argue that long delays caused by the contractorwould be ignored by the architect.

Further, the designer is to be the "impartial judge of the performance there under by both theOwner and Contractor,"rr and the desigrer shall "endeavor to guard the owner against defects anddeficiencies in the work of the contractor."r4 Accordingly, both WHLC and Post Architects can besued for breach of contract and for professional negligence if the architects participate in the schemealleged by the DOA/FPC. One who assens an ethical conflict is present or potentially pr€sent mustpresume WHLC is engaged in professional negligence and is breaching its contract to the owner.The Board should not presume professionals are engaged in schemes of professional negligence andbreaches g{gor,rfract. No reasonable person would engage in these actions.

I I April 29, 2OO9 correspondence from the DOA/FPC to the Board of Ethics page 6.

l2 Section 7.1.6.6 and 7.1.6.10 of the Louisiana Capital lmprovements Projects Procedure Manual forDesign and Construction

l3 Section ?. I .6. I I of the Louisiana Capital lmprovements Projects Procedurc Manual for Design and

Construction

la Section 7. 1.6.6 of the Louisiana Capital Improvemens Projects Procedure Manual for Design andConstruction

o

Louisiana Ethics Administration ProgramMay E,2009Page 9

D. Information Conveyed only to the Fevored Contractor

DOA/FPC contends that an architect could convey information to a preferred contractor that

would not be known by any other contractor bidding the job, which would allow for an unfair,competitive advantage in securing the bid.t5 There are factual constraints to this argument, and

again, no reasonable professional would engage in this activity.

Section 7.1.5 of the Procedure Manual establishes, "Upon receipt of written approval fromthe User Agency and other State regulatory agencies, receipt of corected and completed

Constmction Documents, and approval of the Latest Statement of Probable Construction Costs, the

Owner may advertise the project for bids and shall be assisted by the Designer in obtaining bids."Section 7.1.5.6 also establishes that"the architect provides the Ownerwitha form to assist the ownerin tabulating the bids." Accordingly, the process for tabulating the bids is the same as to allsubmissions and based on the documents previously approved. It is unclear how secretive

information could give one contractor an advantage over another if all of the contractors' bids are

based on the same plans and specifications approved by the owner, user agency and state regulatory

agencies, and ifthe criteria contained in the plans and specifications is used to evaluate the bids.

Any vagueness in the plans and specifications may be called into question by any of the

contractors. Accordingly, this is simply another roadblock to any anempts by an architect tounethically favor a contractor.

The argument of the DOA/FPC also suggests that the owner would be completely unaware

if the criteria upon which the bids were evaluated favored a particular contractor. We suggest thiswould be clear if an architect was brazen enough to do this.

It should be noted Womack presented a bid that was $400,000 lower than any of the other

contractors. This speaks to the integrityand professional reputations of WHLC and Womack in that

the bid was not challenged by any of the-other contraciors. The potential challenge of other

contractors in regard to a bid submission is a deterrent to any desigr professional from favoring one

contractor over another.

It should not be presumed that professionals are engaged in these sorts of activities- There

are strong deterrents to these practices as provided by the Louisiana State Board ofArchitecturalExaminers and the laws of this state.

15 April 29,2OOg correspondence from the DOA/FPC to the Board of Ethics page 6.

o

Louisiana Eth ics Admin istration ProgramMay t,2009Page l0

E. Ignonng Defective or Substandard Constmction

The argument by the DOA/FPC ttrat an architect might just ignore defective or substandardconstruction is completely unreasonable.16 No architect wants problems with the constructionof his proiect. The architect is charged with protecting the owner from defects and deficiencies.rTlgnoring defective and zubstandard construction, no matter who the contractor is, would likelysubject the architect to professional negligence and breach of contract claims resulting in damages,repair costs, emotional distress damages, etc. When there are legal and professional ramificationsof this nature, it should not be presumed that these actions would occur. Especially in the case ofa joint venture, it is not only WHLC that would be exposed to legal action, but also Post Architects.

The DOA/FPC's argumentsuggests it has no control overtheproject, but the DOA/FPC hastotal control. In fact. it has final acceptance. Pursuant to 7.1.6.15 of the Procedure Manual. R.S.38:2241.1 gives the owner discretion to make acceptance on either full completion or substantialcompletion. The designer conducts an inspection with the Owneq User Agency, and Contractor todetermine if the work is in general accordance with the contract d<rcuments. Accordingly, the agencyconducts its own independent evaluation as to the construction.

Pursuant to La. R.S. 39: l2S,"facility planning and control section shall be responsible fordirecting final payment for work done on each project. However, if upon final inspection of anyproject it shall be found that the plans, specifications, contract, or change orders for the project shallnot have been fully complied with, the facility planning and control section shall, until suchcompliance shall have been effected or adjustments satisfactory to it shall have been made, refuseto direct such payment. Upon completion of the project the facility planning and control section shallrelease it to the agency.' There are so many reasons an architect would not ignore substandardconstruction regardless of who the contractor is that this argument is unfounded.

Lack of Capacity for Decision Making

Crucial to finding no ethical conflict in In Re: Kean Millertc was that Kean Miller was northe decision maker.re The OCD was to be the decision maker as to the outcome of the appeals andthe decision as to what title company to use was made by IFC and the Road Home Applicant. As

r6 April 29,2OOg correspondence from the DOA/FPC to the Board of Ethics page 6

r7 Section 7. | .6.5 of the Louisiana Capital lmprovements Projects Procedure Manual for Design and

Construction

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tB ln Re: Kean Miller 2009-169

t)

Louisiana Ethics Administration prosramMay 8.2009Page I l

outlined in the Procedure Manual, the owner maintains approval over the plans and specifications,any change orders are subject the owner's approval, inspecttions are made fy not.intyi;t";iidbut by the govemment agencies as well, payments are made subject to the approval ofthe owner, andfinal acceptance of the project is subjeci to the approval of thelwner. The owner, not the architect,makes the final decision on aspects crucial to thi projec! the same aspects the DoA/FpC seems tosuggest lend to an ethical conflict.

Conclusion

wHLc should not be deemed a public employee. The DoA/FPc has set forth scenarios forethical conflict that are neither factually, legally oi etirically plausible. one would need to presumearchitects have complete.control over the plans and acceptance of these state owned projects to assertan ethical conflict' Further, one would have to presume architects who have

"*""il.nt reputationsil.lh"tt fields would partake in unprofessional actions which would subject them to professional

ridicule and hardship as well as lawsuits in order to further an already independently successfulcontractor. These are not presumptions that should be made to find real ethical conflict exists.

Very truly yours.

LONG FIRM, L.L.P.

MAP: srccc: Mike Hill

MICHAEL A. PATTERSONSEBASTIAN R. CABALLERO

General ltem

Ethics Board Docket No. BD 2009-3781u2012009

RE: Appearance in connection with consideration of a request for an advisory opinion on

whether an architecture firm that has entered into contracts with the State of Louisiana through

the Office of Facility Planning would be subject to the Code of Ethics.

Relevant Statutory Provisions, Advisory Opinions: II02, ll13

Comments:

FACTS: The Division of Administration, Office of Facility Planning and Control (FPC), requests

an advisory opinion on whether Washer Hill Lipscomb Cabaniss Architecture ( Washer Hill) an

architecture firm that has entered into a contract with FPC to be the designer on the New ClinicalResearch Facility, LSU Pennigton Biomedical Research Center (Pennington Project) is a public

servant. In December 2007,the State of Louisiana, through the Division of Administration,entered into a contract with Washer Hill - Post Architects - A Joint Venture for design services inconnection with the Pennington Project. As designer, Washer Hill is the representative of the

owner and has the authority to act on behalf of the Owner during the construction phase of thisproject. Washer Hill's duties include, conducting site visits to evaluate the progress and the

quality of the Contractor's work, conducting regular progress meetings, preparing and distributing

minutes, and submitting monthly status reports with each pay request, verifuing that the

Contractor's Application for Payments reflects the status of work and the stored material, and

recommending and preparing change orders to the contract. Michael Hill is a principal in Washer

Hill. Terry Hill, the brother of Michael Hill, is the President of and partial owner of Milton J.

Womack, Inc. Is there a conflict of interest if Milton J. Womack, Inc. is awarded a contract on

the Pennington Project when Washer Hill is the design architect.

The Board concluded at the October 28,2009 meeting that Washer Hill is a public employee and

is therefore subject to the provisions of the Code of Governmental Ethics.

The remaining issue is whether Milton J. Womack, Inc. may be awarded a contract on the

Pennington Project when Washer Hill is the design architect.

Michael Hill is a principal in Washer Hill. Terry Hill, the brother of Michael Hill, is the President

of and partial owner of Milton J. Womack, Inc. Section 1113 of the Code prohibits a publicservant, or member of such public servants immediate family, or legal entity in which he has a

controlling interest from bidding on or entering into any contract, subcontract or other transaction

that is under the supervision or jurisdiction of the agency of such public servant. "Controllinginterest"is an interest in a company either held individually or collectively by a member of his

immediate family member that exceeds21Yo. Section lll2B provides no public servant shall

participate in a transaction involving the governmental entity in which to his actual knowledge,

any member of his immediate family has a substantial economic interest.

Terry Hill is President of Milton J. Womack, Inc. and has submitted affidavits stating that he

does not have a controlling interest in Milton J. Womack, Inc. and that he is the sole member ofhis immediate family owning any common stock in Milton J. Womack, Inc. At no time has Terry

Hill owned more than 23.6843% common stock in Milton J. Womack, Inc. The contract to

Milton Womack has already been awarded therefore the prohibited transaction, if any, is past

conduct. The Board does not issue advisory opinions regarding past conduct.

Michael Hill is Vice President of Washer Hill and is a21.5% shareholder. No other member ofMichael Hill's family has any ownership interest in Washer Hill. Michael Hill oversees the

production of all the contract documents and construction administration of all projects forWasher Hill. On the Pennington project, he oversees Jason Bethany who handles the day to day

construction administration of the project and attends all jobsite meetings with Mr. Bethany.

Section lll2B provides no public servant shall participate in a transaction involving the

governmental entity in which to his actual knowledge, any member of his immediate family has a

substantial economic interest. (AMA)

Recommendations: Adopt proposed advisory opinion.

Bossy JrNo.u(;( )vERti()R

ANcrr,e Devrs(-( )illrllSSI()Nt:R ( )F .\DMlNlSTMTt()N

State of lLouigianaDivision of Administration

OFFICE OF GENERAL COUNSEL

VIA HAND DELIVERYLouisiana Ethics Administration programP.O. Box 4368Baton Rouge, LA 70821

RE: New Clinical Research Facility, LSU Pennington Biomedical Research Cenrer,Project No. l9-609-065-01 ; andHurricane Custav Related Repairs, Pennington Biomedical Research Cenrer,Gl9-609-09-ORM, part I

To Whom It May Concern:

This letter is in response to the recent letters regarding to the above- referenced 11lsttci.submitted to this Board by Mitton womack, Inc., wash-er Hililipscomb Cabaniss Architecture,LLC (WHLC) and Michael Hill, AIA Louisiana - The Louisiana Rrchitecrs Ass(rciarion (AIA),and the Louisiana Association of General Contractors (AGC).

Prior to discussing the issues presented, the Division of Administration, Office of FacilityPlanning and Control (FP&c) would like to make clear that it has no ill-will towards any ofthese entities. FP&C's main objective in this rcquest is the same as that of the Ethics Board. It isto ensure "impartiality' ffT.T and- equality of tieatment toward those deating with govemment;assurance that decisions of public importance wilt not be influenced by priite coisiderations;maintenance of public co-nfidence in govemment (wherein enterc the raiti, of appearances); andprcvention of use of public oflice for private gain.;'l

I. Current Status of Ethics Request

on March 25, 2009, on behalf of FP&C, the undersigned wrote two separate tetters tothis Board requesting an opinion on the following projecrs:

(A)New clinicat Research Facility, LSU pennington Biomedical Researchcenter, Project No. l9-609-06s-01 (ctinical Reseirch Facitity project); and

'La' R'S'a2:f t0f (B). Glazerv.Com',nonErhicsforPublicEnployees,43 lSo.2d 752,755-56(La. I9g3).'

Office of General Counsel ' Post Of6ce Box 94095 . Baron Rouge, kruisiana 70g04-9095ClaiborneBuilding' l20l N'-lrdStreet'SuiteT-2ll . Batonil,.rug.,Louisiana 70802

(225) 342-715.1 . Fax (225) 2t9-7572An Equd Opporruniq, Emplover

April29, 2009

rTLou isiana Ethics Adm in isrhton programApril29,2fi)9Page 2 of l5

(B) Hunicane Gustav Related Repairs, Penninglon Biomedical Research Ctr.,Cl9-609-09-ORM, part I (Roof Repair project).

A. Roof Repair Project

Although FP&C has not withdrawn its request for an advisory opinion regarding the RoofRepair Project, no one has addressed the issue.- Perhaps, it is beciust the'rcsponding entitiesbelieve there is no justiciable controversy. Fp&c, however, respectfully disagrees.

After receiving notice that FP&C requested an Ethics Advisory Opinion from this Boardon the two projects, on April 6,2OOg, TTM Construction, L.L.C. (TTM); the low bidder on rheRoof Repair Project, withdrew its bid. The withdrawat of the bid did not moot the issue for anumber of reasons.

First, in its withdrawal, TTM requested that its bid bond be retumed. FP&C still desiresan advisory opinion from the Board on this particular situation. A determination that TTM couldnot.bid on this project under the Ethics Code wilt provide guidance to FP&C in making adecision as to pursuing the bid bond.

Second'^FP&C's request is for an advisory opinion, not a request for charges to be leviedagainst a puq.2 An advisory opinion is not a decision on

" rot "i.t-g".' liiiiion-uinaing

interpretation of the law. An advisory opinion on this issue would be consistent with the primaryobjective of the Ethics Code, which is '1o prevent not only the actuality of conflicts of interesi,but also to prevent thc occurrence ofthose situations that iend to creatj a perception ofconflictof interest- It does this by delineating situations that present too great a dangeiof a conllict ofinterest occurring.'d When one .otnid"o the number of archirccs and contractors that do.business with FP&C, the danger of this same type of situation occurring again is quite real.FP&C seeks guidance from the Ethics Board stroum it encounter a similar rit,raiion in the furure.

Third, when one considers the difference between FP&C and the interested parties'interpretation of the Ethics Code and the difference in various opinions by the Board and thecourts as to th€ provisions questioned, the current definition of "public employee" and"governmental frnction" obviously need further ctarification. Thc facts involving the CtinicAResearch Facility Project are different from the facts involvedin In Re Taylor pirter- For thatmatter' the facts involved in the Clinical Research Facitity Project are different from the factsinvofved in the Roof Repair Project. As this Board noted

-in In- Re Taylor Porter regarding the

very issue presentd in our request, "it is necessary that such a determination be madJo[ a cose-by-case basis".'

'La. R.S. 42:1134',\ R-c \ailor Poner,epinion No. 200g-l 150, page 6',ln Re Beycholt, 495 So.2d t278, t2il (La. t98b)-' ln Re Toylot Pgrtea Opinion No.,200g-1150, page ?

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B. Clinicrl Reserrch project

Since the original rcquest, Fp&C has received tetters fro4. rh9 a_bo.y.9._-;grpgd.entitips.jn"'"'response-t++he"cl'inical Research Facilitv'Pibi'ccr. r" ,rrrii';".r*pondencg they have focr:sedalmost excfusiverv on rhe eo.,J;. ;;;;1 opinion of In Re- ioyrot porter. They argue thatdesigners who contract with Fp&c -;;; piuti" ,.**,r, Ljin" p.j""t architect,s rore is to"indirectly support" FP&c's p.tf;;;; of irs mandated governmental function. To hordotherwise' the responden" .r"it,-*ourJ-L - "expansive intirpretation,, of the Ethics code.we respecrfutty disagree t"itr, trr"r" *fuients fo, th; ,.,,o;;;;" furty discussed berow.II. Curreat Delinition of .Governmental

Funetion,

A. In Re Taylor porter,Opinion No 200&llS0

In Rc Taylor Potter,this Board noted that the Ethics code did not provide a definition of"governmental function" as i1 *3:*- r: i *ry or enrity being crassified as ..public servanr,'.6

T"l"f*j|": ffifll.Tfl ,:i iltl= iiw oiction"'), i" ;#;ine thg ;.dil';iih",..,"

"O *o_:-"T."ngf aS.engfls conduct rhat is expressly or impliedtymandated or authorized by constitution, statuie-or other law andthat is carried our for rhe benefit of rh;-fn;;ffuili".,,The Board then examined First circuit precedent regarding the meaning of the term"governmenal function'' The r;i";l-; in tfris *r^ o ii^^*rio, on Erhics for publicEmployces u IT corporation.' l;-ii iltprotion,

" prin"t"-.ompany (IT corporation) wasawarded a contract by the.Departt"ttt oiNhura neso'Ll, ri .ona*t a feasibility study for aregional hazardous

lste disnii1r.r"1iv. utogr th.r" d;;,i" .oun found IT corporation wasa state employee for purposei of the Ethics code becau;;it;;;engaged in the performance ofa state filnction"' In making ttris aetermi-iation, the court lookJto the statutory raw to determinewhether the work tt -*qtn IT C;tp";t;oo .ont ""iJ *as a"signea to the Department ofNatunal Resources bv state law as on"iii,r "governmenat runctions,,. citing Act 334 of lg7g,

$:rnnfr|}i,1ru"ru'J::e 1rd"iirii,, ouo, was in ract a statutory responsibirity or the

In contrast' Taylor Porter's contract with LSU was limited to providing legal services tothe university in order-lg assi^st it in negotiatr.".": :t gfi;; o_f $e Lake (another TayrorPorter client) in the creation oru t *-r,ing'ilospital. This B;;il;;ed rhat rhe particular function

u La. R.s. a2: I to2(l 8)' {23 So2d 695 (La. App. I Cir l9E2)'td.

!ouj:,-T" !,r,jcs nom in istffin programApril29,2009Page 4 of l5

assigned by law to LSU is to provide "sewices for students studying to become physicians andthe provision of health "ate

for the benefit of the public," and that the ..legal services to beprovided by Taylor Porter.will not provide a mediial education or health care to the public;instead its legal services will indirecity support the LSU's performance of its legally mandatedgovernmental function."Y

@

o

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B' In Re Keon Miiler,opinion 2wr-l69and opinion 2txl9-r54

Since 'ln Re Taylor Porter,this Boad has again had the opportunity to examine the issueof whether a private law firm was performing a ..governmentar function,,. In this il;:::however' the Board found that the law firm was perfoiming a "governmental function,'and thuswas a public employee.l' In rhe In Re Kean riitter opin?onrrr, ii;i."i,;;;il- M1rer,Hawthorne' D'Armond, Mccowan & Jarman, L.L.P. (Kean Miller) requested an opinion as towhether it was a public employee if it entered into an ugr""r"ni with the oflice of 'commgnity

Development (ocD) to-providt legal and administrativJassistance in the appeal process for theLouisiana Road Home program.

oCD's governmental function is to provide financial assistance to citizens displaced byHurricane Kanina' Kean Miller's contractuai obligations ,o ocp were: (l) to attend meetings ofthe oCD thrce times per week; (2) provide legal-counsel to rhe oCD appeals panels; (3) draftproposed decision leners and (4) represent ttre 6co in ritiguti* arising out of the decisions.

The question arose because Kean Miltcr had a business relationship with First AmericanTitle. compilY, a subcontractor of the Road Home *d;. First American,s contractualrelationship with OCD involved obtaining applicant backgro-und information, performing supportfunctions for eligibility determinationi -

determining -pr"-rtor.

values, appraising homes,searching titles, disbursing fundq and performing closi-nj seruices. lt was notiire title-companyfor the Rg"d-HoTg program. The relaiionship between Kean Milter and First American did notinvolve the Road Home progmm or residentiat real estate transactions. Kean Milter attorneysserved as.licensed agents for Fint American and sold titte insurance policies in connection withcommercial real estate.

on April l, 2009, this Board issued an opinion pertaining ro wherher Kean Miller canprovide services to ocD and at the same time continue representation of First American.r2 TheBoard held that Kean Milter's agency as ii pertained to its contractual service with ocD wasdefined .by qe scope of..th"- t"otk ii frouia"a under its .oio.r,. And because the servicesprovided under Kean Miller's contraci with ocD and its .onto.t with First American areseparate and distinct and do not overlap, the Board found there was no violation of the EthicsCode. In its finding, the Board stated:

o,ol2&e.To1l9t portcr, Oplnion No. 200t-l 150, page 4'" Opinion No. 2009-154" 2009- I 69 and 2fi)9" I 54'' Opinion No.2fi)9-t69

(G

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April29,2009Page 5 of l5

"Kean Miller's role with the Road Home Program will not be as a decision-maker' The ocD will be the decision-maker .i,o it. outcome of the appeals.Further' the decision as to which.titre company io.iproy, regarding potentialresidentiat properrv under the Road Home il;;;; *iii u" made by ICF and.the.Road Home applicant. In the event th1 an upfrJ."rir-for work to be completed

Y,t$:f,!"mpany, this decision is to be d"d;i""d by ir," n""a H;;ilfi;*,

Absent from this decision, but implied wirhiru is the determinarion of whether KeanMiller is a public employee. lt is o,r unaekanding thaithe J..irion that Kean Miller is a publicemployee was requested and rendered, but has y.ito u. p"iririi"o. It is our understanding thatthis Board' in opinion No. 2009-l5e iouna trc Kean wrtu ii,t were inapplicable to rhose inIn Re Toylot Porler' It atso found that- the Kean Miler a.L *"r" morc analogous to thesituation in IT corporotJoa because ttre-s"rices b"i"g ;;f;;J uy ron Miller woula directlybenefit and be delivercd to the public

III. Various Issues Rrised by the Other parties

A' wHLc is contrectually obligeted to Perform Fp&c,s statutority MendatedGovernmentel Functioni

Based upon the definition of "governmental functions', and holdings referred to above,the pivotal questions to be determin"i-"tgt (l) ;ha;;-iL i"rti""lar duties thar a privatecontractor agre6 to perform when entering into a contract wifh Fp&C; (2) what are thegovernrnental functions assigned by raw 19.

rngc fo. th";;[c,s benefit, and (3) are thecontractual services provided by washer Hill and orh"; d;dllcrri ""o

directly related to rhe

:;]f$ffi:1,:turctions assigned to FP&c or are thev services that onty indirectty support the

f,:t:j:::,1"_a:1T'f.0":o*strares, rhe p_urpose of the design professional is much morel?ilJ'fl:il,*,*lT#,'""i:l*:-:r*;;,il;ff;ffi :ffi ffi;:ilT&T:[?,']"';:l,E:ffi

,i*,1""'i,*9":n::y:lg;;"]iltffi ;"'#,ilH",],ff :Tfi'ffi [ilx,?,:of capital outlay Funds;ll,up"*ir-i-no ;;-""" vr' v^lrlri)rlrts' rul'Efvrsron over tne expen4turc

necessarv for rhe ernrini*eri^- ^c^^r^___:T.,ioni approving-estimates; selecring ienonnel

ffiiJ:y"[::"',!"""::1'-':"1]-:1',:i",*" "; ;ffifir;;h#il'il;'ilr'JiJiJ.iiilTii

l:,"T,::, : ", ",li r*tyT:ll g Tt ;; .;; Hh ;., fi ii.jl:#ffirT;ffif

.::"#ldocuments have LLn ury compril ;;,h ur'r"il.,i,1J;: ffiIl'Tff#"fiX1n,:lm||

' ld at pagc 2'' See Anached Exhibir A'' La. R.S. 39: l2 |

'o La. R.s. 39: t2 l(4)" La. R.S. 39:124

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'r La. R.s. 39: l2i'o see p 4 of AGC tetter citing govcil u. Dcpottmcm.of.Hlghtlrs,203 La. 760, r4so.2d 627 (La. 1943);flaushron Etcvo'or Divhyln s1orr, ot'iti ii)a;u6nt^,tda utai'or tr-a. rszs);ft?i:ffi[j[X[." page 7' states that theiincrence between the uritton womack bid and the second towesr

no1?;tiltf*:,i,1ln B' March 2'200s'Lener from Simon, pengine, Smith & Redfearn on behatf.of crown

making a final inspection gf-the project during.the"waranty period; and giving prompt writtennotice to the contractor of defectrin ,rorfr*rf,ip.,r --'J F'

Design professionals ane morc susceptibte to being involved in a conflict of interestbecause of the govemmental functions they ar-e contracting to perform,,.particularly-when.theconflictrelates'To family mernbers wtrose work they ur".itr".tually obligated to review andsupervise' while we are not accusing any,of the p"ii.r "r*;';ng doing in this maner, rheseconflicts ar€ not remote or inconseqrientiuf. fn"y'*. r.+ anj,f," possibilities for favoritism andcomrption are infinire.

As the AGC's April 23, 2009, letter to the Board pointd out, ,.the public Bid Law wasenacted in the interest o.f rhe taxpaying citizens "*-t"".{; il;;"tp"* their protection againstcontracts of public officials

"ntetea-inti becaue of favoritism and possibly involving exorbitantand extortionate prices"^'t In. til(payers-are at a disservice when contractors bid on projectsdesigned by immediare family t",nu"o. ror..*"rpre, i1" atrs"* could easily manipulate itsdesign to favor the related .ont

""to, by;.to.ing

" ,p."in""tion;', i.e., writing a specification sothat only the family member can p"tr"il. rr,. i-iiui"ti"i"""r. be so cleverly disguised thatno one would even notice' The dlsigner could also allow the contractor/family member to bidsignificantly lower than the other bid;;; irat-might not be privy to rhe same information that isknown only to the design professionJ3d r1.r".t, the present isiues are the result of the second

ffi?ti't*r in the RoorRepair nojict ;1rl;il;;;;;;"'*rationship u"t,r".oin r ,,0

Moreover' after the conbact is awarded, the architect could approve cost increases tofavor his family members. He coula ignore defective or ruurirrJ"ru construction or construction:!1i: n:l il compliance with the prilr *ta specifications iil;" designed so as not ro causeharm to his family members. The architect Ldd approve change orden and increase the contractprice so as to benefit the related

"ont u.r*.ue courd ignorJaetay, caused by the contractorresulting in delay in occupancy of the building ana Ioss"Jirr"i*n"r, right ro conrracruallystipulated liquidated damages. H"

"ourJ a-i*gard punch-rist items rhal are not in compliancewith the plans and specifiationt tr,uit"'a.rign"a'. ena tr,"-Jerign", could fail to hold thecontractor accountabre for warranty items prior 6 tr,.ir.*pir"iilr,

The architect's function on these two prcjects is more than to provide..indirect suppofi,,to FP&c. FP&c has ro..rery !*yilv upon arihitects such * wnrc to perform Fp&c,sstatutorily rnandated functioni. And if the'architects *"r" ,o L aerelict in these duties or show

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Louisiana Erhics Administra0 programApril 29,2009PageTofl5

favoritism to the contractor at the expense of FP&C, then the til(payen of this stare suffer.22

C. Thc Governmental Function of FP&C tr Not Solely to Opcrate a FecilityManagement Program and the Conlractual Duty of thc Architect Ir Not Soleg tL' Perform Design Senices

. In its April23, 2009, letter, the AIA states that the governmental function of FP&C is toprovide "facility management sewices". While facility management is one governmentalfunction of FP&C, the AIA is inconect in insinuating that this is iti only funcrion. io imply suchis to ignore the provisions found within Title 39 tnal pertqin to adminisering thc capital buttayprogram and the construction and repair of state buildings.23

The AIA letter also states that "during the construction phasc, when a project architectfunctions al a represenPtiu: of the building owner, he does so functioning as a'p..i.", architectand doesnnot supplant the administration, management and supervision functionj of the buildingovmet."" This statement is misleading.

As shown in - the attached chart,25 the Desicn Manual bestows upon the architect

numerous administrative, manag€ment and supervisory powers over the conitruction phase ofthe project. Moreover, every contract between FP&C and the general contractor incorporarestherein thc AIA document entitled General Conditions of thc ionract for Constnrction. AIADqcument A20l-1997.'u In this document-$e

"ontractor acfnq ttrat ttri

architect provides contract administation;2? that communications between the trro will befandfed lhrough the architect when they pertain to the Contract documents;2! tiat the architecthas.the right to reject work that does noi cbnform to the contract documentsfe that the Architectwill prepare the Changeôrders and Construction Change Dircctives and may authorize minorchanges in the work;ro that the architect will inteipret and decide mitrc.s concemingperformance under, and rcquirements of the Contract Documents.3l To state t"i Fpac has notgiven the architect administrative authority under a contract is to completely disregard Fp&C'scontnrct with both the architect and the general contmctor.

x.ln re.Ark-La'Tcx-Antique. an_d classic vchicles, tnc., App. I cir.2006, g43 So.2d 1 169, 2005-1931 (La.App. Icir' 9/ I 5/06). writ denied 94t so.2d | 5 | , 2006-2j09 g-a.'ittztotl. (Among th- muhiptc poticy objeciives of theCodc of Govemmental Ethics are. impartiality, fairness, and equality of treatmcnt toward thosc dcaling withSovemmentr itssurancc that dccisions of public importancc will not-bc influenccd by private consideritions,maintenanc€ of public confidence in government, and preventiolr of use of public oidcc for privatc gain.)''' Scc anached Exhibit A and Anachcd Exhibit i Louisiana capiral lmprovement projccts procedure Manual forDesign and Constnrction (Design Manual)" AGc. likewise arcues in its lcttcr that fic function of rhe designer is not to supcrvise and oversee the work.:5 sce anached gxnl-uit I26

See anachcd Exhibit D. cencral condirions of the contract forconstmdion^ AIA Documcnt A20t-t99?" A20 l - 199?. Secrion 4.2tt A20 | - | 997, Secrion 4.2.4t" A20l- | 997, Secrion 4.2.6to A20l - 1997, Scction 4.2.tt' A20t- | 992, Sediqn_ 4.2. | |

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April29, 2009Page8ofl5

Additionally, AIA's letter implies that FP&C retains the ultimate authority as owner andtherefore, the architect is not truly performing administrative, managerial or supervisoryfunctions. Ultimate authority, however, does not negate the fact that architects arc stillperforming a "govemrnental function". In fact, in In Rc Kean Miilel2,one of the determinativefactors in deciding that Kean Miller could perform conttactual legal services for OCD and stillrepresent FirS American was the fact that Kean Miller was not the decision maker. Likewise, inIT Corp u Commission on Ethidt,lT Corporation was employed to perform a feasibilitystudy, nevertheless, DNR retained the right to proceed with the results of that study. Even a

traditional state employee may not posscss ultimate decision making authority, but that does notexempt a state employee from the Ethics Code.

D. Thcrc is No Blenket Excmption from the Stetc Ethicr Codc For Architects endEngincers

l. In Rc Taylor Poflcr Held Decisions as to thc Clrssificrtion of PrivetcCompenies gs Public Scrents ls To Be Mrdc on e Crsc by Case Besis

Milton Womack and WHLC's letters suggest that this Board in In Rc Taylor Poacrexempted private architecs from the Ethics Codc. They quote, out of context, the Board's takingnotice that therc are thousands of contracts between private entities and govemment agencies,including pmfessional services contnrcts with architects and engineers. They also quote theBoard's comment that'1o hold that each of those private entities and their employees-are publicemployees appears beyond the intent of the Legislature in adopting Sec. I102(18Xa).- "

Left out of their argument, however, is the final conclusion reached by this Board. In itsconclusion, this Board made clear that it was not crcating a blanket ex€mption for professionalservices. It stated: "'lt is necessary that such a detetmination be made on a case-by-case basis'Likewise, our decision is premised on the facts found herein."" Lastly, if the Board werecreating a blanket exemption, then the decision in In Rc Kcan Miller would have had differentresults because private attomeys would already be exempt under In Rc Taylor Portcr.

2. In Rc Taylor Portcr Did Not Hold Privetc Profcssionels Subjoct to SeprreteLicensing Rcquirements rrc Not Subjcct to thc Strtc Ethics Code

In its corespondence to this Board, the AIA claims that architects are licensed andgovemed by the Louisiana State Board of Architectural Examiners. Therefore, it claims thatapplication of the Ethics Code to architects is unnecessary because any potential conflict of

': Opinion No.2t)o9-169'' 464 So.2d 2t4tt Opinion No.200&l 150, p.4'' ld at pagc 7

Louisiana Ethics Adm in i*.Rn programApril29,2009Page9ofl5

interest or impartiality is resolved under LSBAE Rules of Conduct. It quotes the following fromIn Re Taylor Porter, to support its argument:

In the instant case, neither a conflict of interest nor improper private gain wouldbe inhercnt in Taylor Porter's rendering tegal servicet'to Lsu. As noted above,the potentialarofessional'conflict of iniercsr will be rcscrlved under the Rild 6f'Professional Conduct for attomevs.J6

Again' the reference to the Taytor Porter decision is taken out of context. In the TaylorPorter decision, the Board was obviously refening to that specific set of facts, i.e., an attomeyrepresenting two clients on the same tr:rnsaction. If rhe Board would have meant all attomeys areexempt from the State E-thics laws simply because there is a comparable Rule of professionalConduct, then the In Re Kean Mitlerdeiiiion would have had diffeient results.

Furthermore, this argument ignores prior court dgJisions on this topic. In the matter ofMidboc u Commissiol on Ethicsfor Publii Eraployees,rz the plainriffsued the Commission onEthics for Public Employees for a declaratory juigmcnt as ro rhe constitution"iity "iii" Ethicscode prohibiting him from pursuing,gmployment opportunities ru an attomey aftei his service asthq former Secretary of DEQ ended.rt HL ciaimed thit the Ethics Code infringed on the Supreme9oy't exclusive power to regulate the practiceof law. The Suprcme Court, ii nnaing the EthicsCode to be Constitutional, stated the Ethics Code mercly supplemented the Rules of professionalConduct for Attorneyt, Td it did not infringe upon the supr.r" Court's powen. In its decision,the Supreme Court stated:

However, attomeys are subject to laws orher than thc Rules ofProfessional condrrct, and sometimes rhosc laws relate to theiractions as attomeys. A person who receives a license to practicelaw and adhercs to the Rules of professional Conduct is notinsulated from other regulations and conditions under which thelicense may be u*d. Mire.540 So.2d at 955; see also Desalvo v.

Irgte.624 So.2d 897, 902 (La-t993), cert. denied, 510 U.S. I I t Z,r t4 s.ct. 1067, t27 L.Ed.2d 386 (1994).

t frto-n possessing a law license is not exempr from the duties ofcitizenship or ordinary state laws. Mire, 540 So.2d ar 954. Forexample, a lawyer's business is affected and limited by local

lo.ning ordinances, yet these regulations do not impede or frustratethis Court's- authority over thi practice of law. A lawyer whoconverts-and commingles his clients'money may have violated thiscourt's disciplinary rules but is also subject to the state criminal

t6 Opinion No.200t-t 150" 646 So.2d 35t (La. t994)" This case was abrogated by the Supreme Court for reasons not applicabte to thc issue at hand.

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Louisiana Ethics AdminirrRn programApril29,2009Page l0 of l5

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theft laws. similarry, an attorney who is a pubric ofliciar oremployee is subject to the Rules of Professional Conduct, as weltas the ethics code rules which apply to ail pubtic servants, as longas the ethics code provisions do not impedeor fnrstrate this Courti

. lr.lhoti,y 19.l"gul."!: the practice of taw.3e

- To s,ay one profession is exempt from the Ethics Code because it is also bound by aprofessional code would be a very expansive interprctation of the Ethics Code and would resultin some very abzurd *:Yry. For example, a licensed attorney would be free to ignore therequirements of Section I I12, and I I 13 as well, claiming the issue is addressed in the Rules ofProfessional Conduct.

To conclude,.the Ethics Code's prohibitions do not prevent architects from practicingtheir trade nor does the Ethics Code conilict with Rules of Professionat Conduct for Architects.However, when a peNon contracts with the Statc of Louisiana to perform govenrmentalfunctions, hc is required to also abide by the Ethics code re!:, 've

to that piolect.

3' Enforcement of thc Ethics Codc Doer Not Rcsult in Provisions of the publicBid Lew Becoming Meeninglesr or Absurd

Milton Womack and the ACC claim that the enactment of La R.S. 38:2212.7 last yeardemonstrates the legislative intent not to include in the Ethics Code definition of public servantsprivate architects, designers or other consultants who perform services on public works project.As shown below, the opposite is true. We respectfully disagrce.

La R.S. 38:2212.7 states:

Any person - contracting with an agency for the purposes of

developing bidding documents, requests foi proposars, or any othertype of soricitation rerated to a specific p*rcurement shail beprohibited from bidding proposing, or otherwise competing foraward of that prccurement. Such persons sharr rinttrer ueprohibited from participating as subcontractors related to the awardof that procurement.

This statute is found within the Public Bid Law, and it goes without saying that Title 39and Title 42 pertain to two separate and distinct areas of the iaw. As pointed our in Midboe,supr4 one statute is not to be read to the exclusivity of the other nor is it meant to supplant theother' Thes" llo separate areas of law have two distinct purposes, and while both affectarchitects' each law affects them in a different manner.to unde'r ta R.s. 3g:2212.7, an architect

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April29,2009Pagellof15

who bids on a public works prqiect that he designs would be in violation of the Public Bid Law.The ramifications for violating the Public Bid Law are quite different from the penalties rhat maybe imposed by the Board of Ethics. To say that there is no need for one provision under thePublic Bid Law because there is an applicable provision under the Ethics Code would be asnonsensical as stating.that therc is no need for a criniinal penalty for misapplication for paymentsof construction fundsar since.-there is a remedy available io pu6ue a claim for payr"oi oi n ndiunder the Public Works Act.a2

4. Thc Ethic Codc Should bc Reed So ar to Employ I "Fair and Jugt" Reading ofEech Provision and not in l Menner to Mekc Onc Section Meeningless or MereSurplusegc

This Board has made clear it will not adopt a standard of construction that does notemploy a "fair and just" reading of each provision. Nevertheless, some of the argumentspresented by some of the responding entities rcquest that the Board employ a stretched view ofttre Ethics Code. If so employed, the interpretation would lead to conflicts within the Code itselfand also expand the code in directions the legislaturc clearly never intended.

- For example, the AGC sugg€st that if a private architect is deemed a public employee,then the Board would have to interpret La. R.S. 42:ll2l to mean that a privite architect firmcannot contract with FP&C for two years after the project is completed. Such an interpretationobviously would not be rational, and it certainly would not be a 'ifair and just" reading of thisprovision. Additionally, this hypothetical situation disregards the vast precedent to the contrary,incfuding the recent decision of this Board in In Rc Kcan Mitterthat states the scope of a privaiefirm's agency is limited to its contract with the public entity.al

Milton Womack and AGC also urge this Board to read the recent amendment of La. R.S.42:lll3 (D[l)(a{i), to "specifically allow family members of [certain public officials] to beawarded a public contract by competitive bidding so long as the immediate family member is nota spouse". The subparagraph does not state this and to rcad such into it would b€ an "expansiveinterpretation of the ethics code". Reading the provision in the manner they suggest would resultin a conflict between Pafi A and Part D of La R.S. 42:l I 13. And as pointed out Uy AGC, 'Nolaw sttould be considered meaningless or mere surplusage.'# The legislative inteni in enactingSection A was to prevent public servants and their immediate family members from contractingWithin their aeenc],. and the legislative intent in enrcting Section D was to prcvent heads ofdepartments or high ranking public oflicials and their ipouses from contracting with otheragencies in state govemment.

" La. R.s. t4:202'2 La. R.s. 38:2241

" Opinion 2009-169on AGC conespondence, p:6

t-ouiri"n" Ethics Admin,ufin Programo

April29,20o9Page 12 of l5

Also, Milton Womack suggests this Board has held in the past that when a contract ispublicly bid by a class of companies and.does not involve services or products that only one

bidder can provide, therc is "no substantial economic interest" and thus no violation of SectionI I 12. Such an interpretation of the law and this Board's prccedent is neither "fair" nor "just". Asstated above, when an architect is allowed to participate in tramactions involving his immediatefamily members, the entire process, not just the award of the contracq-'is'tainted:-Potential--"violations of the Ethics Code can occur both beforc and after the actual bid. There is thepossibility of pre-bid collusiolt as well as questions of favoritism both during and afterconstruction. The advisory opinion cited by Milton Womach Opinion No. 2009-155, certainlydid not address these issues nor does it address the host of other issues involved if this Boardwere to state that public bidding makes the Ethics Code inapplicable.

Lastly, AGC's argument that because this matter is publicly bi4 the architect has no wayof knowing who will be the lowest bidder should not be considered for the same reilsons. Thereis still a possibility of bid collusion and post-bid misconduct. Further, each contractor bidding ona job must be familiar with the plans and specifications. Under Section I I13, the contractorshould not bid on the project when he knows his father or brother is the designer.

E. The Architect is !!9I Per{orming thc Scrvicel for Uscr Agencier; lt is PerformingSenicer for FP&C

In Milton Womack's letter, it states that thc purpose of the architect in this maner is to"design a facility to house suites for exercisc, testing speciat procedures, metabolic chambers,metabolic cart studies and space for faculty and support personnel in order to support PenningtonBiomedical Research Center's research ard clinical missions. Pennington's mission is not toconstruct facilities".

This statement misses a cnrcial point. The design contmct is between FP&C and thedesigner. The purpose of the contract is to fill a vital role that FP&C is statutorily obligated toperform for the user agency. While FP&C employs architects and engineers on staff that coulddo the work, drrc to limited resources and in an effort to employ the most eflicient, cost-effectivemeans possible, FP&C contracts this work out to private desigr firms (architects and engineers).This not only achieves a savings for the State, it insurcs that desigrrers with'specialties in certainareas such as laboratory design or roofing can be employed. FP&C is not statutorily obligated tocontract with oilside architects, but the inordinate volume of work makes it cost-prohibitive andextremely burdensome to add hundreds of architects and engineers to the State's payroll.

IV. Ownership of thc Construction Comprnics

In addition to responding to our request, Milton Womack and thc AGC also argue thatMilton Womack is not in violation of La R.S.42:lll3 because Terry Hill, the prcsident ofMilton Womack, does not have a controlling interest in the company.

April29, 2009Pagc l3 of l5

The ownership of TTM Construction Company was not addressed among the parties'

According to the records of thc Louisiana Secretary ofstate, prior to June 3, 2008, Michael W'

Hill (a riember of WHLC), Travis C. Hill, and Terrence W. Hill were members of fiMConstnrction. On June 3,

-2008, Michael W. Hill tendered his 5l% membership in fiM to

Travis and Tenence Hill. Travis and Terrence Hill (TTM) are the sons of Michael W' Hill

{WFg-€): rFtrerc,is'nothing,that contests that Travis and TenenceHill havc.a conUolllngintqte$I'*"

in TTM'and that they are the sons of the architect, Michael W. Hill of WHLC. Under the Ethics

Code, they arc prohiLited from bidding on the Roof Repair Project. at

A. Controlling Intercst in Milton Womeck

As to the ownenhip of Milton Womack, Inc., the AGC and Milton Womack do not

contest that Michael W. Hill of WHLC and Terry Hill of Milton Womack are brothers'

Nevertheless, they argue that La. R.S. 42:l I 13 does not apply to Milton Womack because Terry

Hill, the president of Milton Womack, does not have a controlling interest

Louisiana Revised Statute a2:l I l3(A) provides:

A. (l) No public scrvant, excluding any legislator and any appointcd

membcrofanyba'dorcommissionardanymembcrofagoverningauthority of i parish with a population of ten thousand or lcss, or

membei of sucir a public scrvant's immcdiate family, or legal entity

in which he has a controlting interest shall bid on or enler into any

contract, subcontract, or othcr transaction that is under the

supervision orjurisdiction ofthe agency ofsuch public servant.

A "controlling interest" is a defined term in the Ethics Code. It means "any ownership in

any legal entity or Uenificial interest in a trusl held by or on behalf of an individual or a member of his

immediate family, either individually or collectively, which exceeds twenty-five percent of that legal

"iiitr:J. ffti ibC and Milton *omack argue-and submit an affrdavit by Mark Callegos' the

Secretary/Trcasurer of Milton Womaclq climing that Terry Hilt owns only 23o/o of Milton

Womacl's common stock" and therefore, Section t I 13 is not applicable to it.

' ' " This argument misinterprets the statute. Under this statute, the following persons are

prohibited nom UiaOing or entering "into a contract, subcontract or other transaction that is under

ihe supervision or jurisdiction of the agency of such public serYant".

(l) A public sewant(2) A member of the public servant's immediate family(3) A legal entity in which the oublic senant has a controlling interest

nt Ethics Board Opinion No.2002-149'o La. R.s- 42: l lo2 (8)

April29, 2009Page 14 of I 5

The public seryant involved herein is Michael Hill and/or WHLC. No one has stated that

Michael Hill does not own a controlling interest in WHLC. To the extent that Milton Womack

and AGC are claiming that Terry Hill does not have a "controlling interest" in Milton Womack

as defined by the Ethi-cs Code, the issue is irrelevant. The only issue is can Terry Hill' a member

,,., .-"9f 9: py_qli: *,:it s irnmedile tuil{,uif o11tet into contracts with FP.lc,

Terry Hill is the president of Milton Womack, tnc. He holds the contractor's licenses

that were used to bid on this projecl. Terry Hill printed his name and signed the bid form for the

Clinical Research Facility Pr;j;t.{7 Terry Hill'i name is also listed as the authorized officer ofMilton Womack on the bid form.{t Milton Womack's attached corporate resolution authorizes

and empowers Terry Hill to execute any and all contracts of whatever kind on behalf of the

corporati;;J;iil'dii;G; the contract between Milton Womack and FP&C as president. s0

At the time of filing the request, the exact amount of stock owned by Terry Hill in t"titl9T

Womack was not known to FP&C. To this date, FP&C does not know exactly whether the 23Vo

is a substantial number of the total stocks or not. It is unknown whether the 73o/o represents the

majority of Milton Womack stocks held by any one individual or whether there are people who

hold more of a controtling interest than Tlrry-Hill. Likewise, it is unknown whether any other

immediate family members own any portion of stock in Milton Womack. ''

FP&C is not in a position to investigate such matters. However, even if it is found that

Terry Hill's ownership interest results in Siction ll13 found inapplicable to Milton Womack,

the remaining issue involving the Ctinical Research Facility Project also needs to be decided

because if Terry Hill's interest is not a "controlling interest", it may be deemed a *substantial

interest" under ihe Ethics Code. Under Section I I It the public servant, WHLC/Michael Hill, is

not allowed to participate in transactions in which any member of his immediate family has a

"substantial economiC interest." A substantial economic interest is "an economic interest which

is of greater benefit to the public servant or other person than a general class or group ofpetsoni."t2

It See Anached Ex. E, Bid Form by Milton Womack

tu tdno ldro

See Anached Ex. F, Contract betwcen FP&C and Milton Womackt' opinion No. 2$8-913t'La. R.s.42:il02 (2t)

touisi"na Ethics Admini.rr* programApril29,2009Pagc l5ofl5

If you have any questiorui or desire anything further from the Division of Administrationin regards to this matter, please do not hesitate to contact our office.

Division of AdministrationOffice of General Counsell20l N. Third Street, Suite 7-21IBaton Rouge, LA70802

JB/eb

Enclosures

c: Russel W. WrayJames L. EllisHerman J. Gesser IIIMichacl A. PattersonJerry JonesJohn Davis

/

Sincerely, .4'a

,. P amela Mi lkr-Perkins..,' Jason Bonaventure

(3IJ. (t C. Krir Kirlpatricl"l

Mich&l A Prnmn"DJ*ph E. tubanAlbcn D.l. Chryr

D.vid L cEnttC. Srokcr Mcconmll, ,r. "l. Vadcll Clarl

Juic Hqrrt \Yrtb

Adriin G. N.dau

facqw A. Pucho

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April2l.2009

VIA HAND DELIVERY

Louisiana Ethics Administration program617 Norrh Third StreetLaSalle Building l0,h FloorBaton Rouge, Louisiana 70802

Re: Request for Advisory Opinion on Project entitled New Clinical ResearchFacility, LSU Pennington Biomedical Research Center, project No. l9-609-065-01, part 0l

To: Members of Louisiana Ethics Administration program:

Please accept these comments on behalf of Washer Hill Lipscomb Cabaniss Architecture,LLC and Michael Hill, a principal of the firm, in response to the request for an advisory opinion byGeneral Counsel for the Division of Administration concerning this project.

BACKGROUND

Penniugton Foundation made a decision in the late 1990s to expand the research facilities atthe Pennington Biomedical Research Center.

At that time' the expansion was to be privately funded. The Basic Science Building wasprivately bid in 2000 and was built.

The combined price of the Basic Science and Clinical Research projects exceeded the fundsPennington Foundation had available for consrruction, At that.iuncture. the Clinical ResearchBttilding was placed o{r9ld. Subsequently. Pennington Foundation approached the State to obtainpublic funding for the Clinical Research Building.

Itt December. 2007' the State of Louisiana, through the Divisiou ofAdrninistration, entereditrto a contract rvith washer Hill Lipscomb Architecture - post-Architects - A Joint Venture for thedesign services in connection with the Clinical Research Facility to be located at penninston.

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April21.2009Page 2

Subsequently, the project was placed for competitive bids in 2008. There were thirteen ( l3)bids received on the prqect and Milton Womack, Inc. was the successful low bidder on the project(approximately $400,000.00 lower than the second bid). The State of Louisiana entered into acontiact for the construction of the Clinical Research Facility with Milton Womack, Inc.

One of the principals of Washer Hill Lipscomb Cabaniss Architecture, LLC is Michael Hill.HisbrotherisoneoftheofficersofMiltonWomack,Inc. Mr.Hill'sbrotherownsaminontyinterestin Milton Womack, Inc. Michael Hill has no ownership interest whatsoever in Milton Womack, lnc.

It should be noted that the request for advisory opinion only refers to Washer Hill LipscombCabaniss Architecture, LLC when in fact a review of the design contract with the Division ofAdrninistration shows that the desigrer of record is a joint venture between Washer Hill LipscombArchitecture and Post-Architects.

General Counsel for the Division of Administration has asked whether Washer HillLipscornb Cabaniss Architecture, LLC should be considered a public servant pursuant to the Codeof Govemmental Ethics. For the reasons discussed below, the answer to this question should be no.Washer Hill Lipscomb Cabaniss Architecture, LLC should not be considered a public servant.

DISCUSSION

The Clinical Research Facility is a building under construction on the existing Penningtoncampus. "The new facility will house suites for exercise testing, special procedures, two metabolicchambers, a metabolic cart studies and space for facility and support personnel."l

Washer Hill Lipscomb Cabaniss Architecture, LLC is a private architectural firm, not agovernmental entity.

The cluestion posed by counsel for the Division of Administration is whether the workperformed by Washer Hill Lipscomb Cabaniss Architecture, LLC cause it to be considered a publicernployee pursuantto La. R.S. $ 42:1102(18)(a)(iii). The Board hasveryrecentlystated in In Re:Ttq'lsv Poner.:008-1150 that "[a] fair reading of Section t8(a) shows that (iii) and (iv) aboverepresent exceptions to generally accepted meaning of employee. Thus. those exceptions should notbe given an expansive interpretation."

rPrelinlnary Progranr New Clinic Research Facility, Pennington Bionredical Research Center, Project No.I 9-(r09-06S-01

3

'9(3

April2l,2009Page 3

Tlre question here is the same as in /z Re: Tavlor Porter: whether Washer Hill LipscombC'abaniss Architecture, LLC would be "engaged in the performance of governmental tirnction," inproviding architecture services to the Division of Adrninistration and. therefore. in violation ofSection 'l ll l(2Xd) (payment from nonpublic sources as compensation) and Section'11'l28(2)(participation in certain transactions involving the public employees governmental entity).

. The Code of Governmental Ethics provides no definition of governmental function. La. R.S.

i9: I creates the Division of Administration as a division of the Office of the Govemor. La. R.S.

39:l2l saystheDivisionofAdministrationis to"exercisesupewisionovertheexpenditureoffundsand the construction projects." La. R.S. 39:l2l(4) specifically provides, "tl're Division ofAdministration shall "[s]upervise construction, approve estimates, and select and employ engineers,

architects. and other personnel necessary in connection with the administration of contracts forprojects." ( Emphasis added.)

Here, as in In Re: Taylor Porter, Washer Hill Lipscomb Architecture - Post-Architects - A.loint Venture is indirectly supporting the Division of Administration's performance of its legallyrnandated govemmental function in administering contracts for projects. To find that a privatearchitectural firm involved in one of the numerous projects overseen by the Division ofAdministration is engaging in the performance of a govemmental function is an expansive view ofa private entity being engaged in the performance of a govemmental function.

This Board has said quite correctly and is worth quoting here:

"The Board takes cognisance ofthe untotd hundreds, ifnot thousands, ofcontractsbetween private entities and governmental agencies. The object of these contractsvaries greatly. Some provide professional services (legal, accounting, architecture,landscape architecture, medical, engineering, etc.); some provide construction.renovation or repairs of buildings, roads, equipment, etc.; some provide socialservices, ernployment and management guidelines, insurance advice and policies.some provide products including consumables; the list is virtually endless. To holdthat each of those private entities and their employees are public employees appearsbeyond the intent of the legislature in adopting Sec. I 102( I 8Xa). If the legislatureintended that result, it would simply have provided in Section I 102( l8Xa) that "anyperson who provides a senice or produgt under contract to a govemmental agencyis deemed to be a public employee." In Re: Taylor Porter.

As furthernoted by this Board the Preamble to the Code annonnces a policy against "creatingurlnecessary barriers to public service." Such a result would inevitably follow were an architecturalFtlm such as Washer Hill Lipscomb Cabaniss Architecture, LLC to be deemed a public servant

()

,{pril2l,2(n9Page 4

because of its design services in assisting the Division of Administration in performing its statutorilymandated duties.

Verytntl

W FIRM. L.L.P.

ATTERSON

MAP:krccc: Mike Hill

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VIA HAND DELIVERY

Louisiana Ethics Administration program617 North Third SreetLaSalle Building, l0,h FloorBaton Rouge, Louisiana 70802

C, Krir KirlpeticloMichecl,|. PanmnoH

forcph E. fubcn

'Allbcrr DdeChrytDavid L Cucrrt?

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Response to Correspond€nce from the Division ofAdministration and the OfficeFacility Planning and_control regarding Request for Advisory opinion onProject entitled New clinical Research Facility, LSU pennington BiomedicalResearch Center, Project No. 19-609-065-01, part 01.

To: Members of the Louisiana Ethics Administration program:

Please accept these comments on behalf of Washer Hill Lipscomb Cabaniss Architecture,LLC (wHLc) and Michael Hill in response to the April 29,2009 coiespondence from the Divisiono-f,Administration(DoA)/office of Facility Planning and ilontrol (Fpi). As you are aware, one ofWHLC's principals is Michael Hill, and Terry Hill, the President of wornu"[, is his brother.

' Roof Repair pro&lct

DoA/FPc takes the position it will not withdraw its request for an advisory opinionregardingtheroofrepairprojecteven thoughthecontractor, TTM Construction, LLC, has withdrawnits bid- DOA/FPC suggests to the Board that the basis for its insistence is that it wishes to haveassistance in making a decision whether to pursue TTM's bid bond. This can only be characterizedas punitive. There is nothing pending which requires an advisory opinion. The Board should declineDOA/FPC's request.

Pursuant to WHLC'S scope of selvices and the applicabte case law and statutes.wHLC ir oot

"os"gd io the o".foro'"n." of

" nor"ro-"ot"l fuo"tion.

Central to the questions before the Board of Ethics is whether WHLC, a private entity thatcontracted with the Division of Administration pursuant to ajoint venture to peribrm architectural

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Louisiana Ethics Administration ProsramMay 8,2009Page2

services for one of its many projects, is a government employee engaged in the performance of agovemmental function under La. R.S 42: I 102 ( l8). For the reasons submitted to yor*tefore and..-"* -.for reasons more fully stated herein, the Board of Ethics' answer to this question should be no.

In the case of Commission on Ethics for Public Employees v. IT Corporation,t the courtdetermined IT Corporation was a state employee engaged in the performance of a state functionpursuant to state law Act 334 of 1978 provided, "it is in the public interest and within the policepowers of the state to establish a framework for the regulation, monitoring, and control of thegenerators, transportation, storaee and disoosal of such hazardous waste..." (emphasis added) IThad the duty of securing feasible sites for the storage and disposal of hazardous waste. Accordingly,IT was charged with one part of the framework in establishing where the storage and disposal ofhazardous waste would be located. In finding IT was a state employee, the court did not use anexpansive interpretation of being engaged in the performance of a state function, as is necessary tofind WHLC is engaged in the performance of a govemmental function.

The same was true withthecase of In Re: George Dyer and Fire Apparatus Specialists, Inc.lThe volunteer fire department contracted to be the sole provider of fire protection for the district;accordingly, the volunteer fire department, of which George Dyer was the fire chief, was engagedin the performance of a govemment function. (emphasis added) An expansive interpretation wasagain not needed to find that the sole fire fighters for the distict were engaged in the performanceof a governmental function. No government employees provided these services. In the instantmatter, however, WHLC has architectural duties apart from the role of the DOA/FPC. It is not asthough the work performed by the architects of WHLC is the same as or takes the place of thefunction of the DOA/FPC. Accordingly, the Board should not find WHLC is engaged in theperformance of the governmental function assigned to the DOAIFPC. To find WHLC is a stateemployee requires an expansive interpretation of being engaged in the performance of agovemmental function, which the Ethics Board has previously found to be inappropriate.

The DOA/FPC relies on In Re: Kean Milter 2009-rc93 to suggest that WHLC is a stateemployee. While the case suggests that Kean Miller is a state employee, this case does not furtherthe argument that WHLC is a state employee. There are many points of distinction which suggestWHLC is not a state employee.

Commission on Ethics for Public Employees v. IT Corporation, 423 So.2d 695 (La. App. I Cir. 1982.)

In Re: George Dyer and Fire Apparatus specialist, Inc. 95 2297 (La. App l. cir. 6128196), 677 so.2d| 075.

In Re: Kean Miller2009-169

ip

i)


The rationale of the Board finding Kean Miller is a state employee is outlined in opinion.?QA9-.!5J'l .Ke.anMil!.er was foundto.be apublic employeepursuantro.La. R,S. 42:1102 ls (a) (iiiand iv). Kean Miller was hired to l.) attend meetings of the OCD State Appeal panelsapproximately three times a week, 2.) provide legal counsil to the Louisiana OCD State AppealsPanels as requested wjth regard to disposition of appeals before panels; 3.) draft proposed decisionletters incorporating the decision of the Appeals Panels; and 4.) iepresent OCO in tiiigation arisingout ofthe decision ofthe Appeal Panels. Following Hurricane Katrin4 the OCD had afproximately5,000 appeals to be heard and four staffmembers to make recommendations to the panel. KeanMiller provided most of its services in the office of the oCD, including clericaVparalegal services.Kean Miller's staff also performed the same functions as the Road Home program stah under thehead of OCD and the head of the Road Home Program. The contract was entered into due to thevolume of appeals.

WHLC did not contract with the state to address the volume of the DOA/FpC,s work or toperform the same function of the DOA/FPC. WHLC as a joint venturer was hired to performprofessional architectural services pursuant to contract with the Division of Administration for aCapital Outlay Project. The role of WHLC in performing architectural services is distinct, separareand apart from the administrative role ofthe DOA/FPC. Kean Miller's employees were performingthe same functions as the agency staff due to the volume of appeals in the same office as the OCDand under the head of OCD and the head of the Road Home fiogram. WHLC does not perform itsservices in the offrces of the DOA/FPC, and the architects of WftfC are supervised by and subjectto the authority of WHLC. To find that the DOA/FPC has supervision or authority over theemployees of privately owned companies who contract with the siate for Capital Outlay projectswould lend to an absurd result. Where would the line of state employees

"nOt ttt" OOa,rfpC

functions as the owner of the project through a contract for services.- A finding that Kean Miller isengaged in the performance of a governmental function based on these pertinent points does notfurther the argument that wHLc is a state employee pursuant to La. R.S. +z:t loZ t g- (a) (iii and iv).

The question is whether WHLC is "engaged in the p"erformance of governmental function"in providing architecture services to the DOA/FPC for the Clinical Reiearch Facility at LSUPennington Biomedical Research center pursuant to state law. The answer is no.

La. R.S. 39:1 creates the Division of Administration as a division of the Office of theGovemor. La. R.S. 39:l2l says the Division of Administration is to "exercise supervision over theexpenditure of funds and the construction projects." La. R.S. 39:l2l@) specifically provides, "theDivision ofAdministration shall "[s]upervise construction, approve estimates, and select and employengineers, architects. and other personnel necessary in connection with the administration ofcontracts for proj ects."

* Opinion No. 2009-t 54

(3 (3

Louisiana Ethics Administration programMay 8,2009Page 4

Pursuant to La. R.s. 39:124, "facility planning and control section shall make periodic,ing-ye.-91!ons 4,aU*qtag-sf. of copstruction of any facility eonstructed pu,rsuant to this part and .shallmake detailed reports which shall be made available to the legislature and to the public. suchinspections shall include but not be limited to the close techiical on-site examination of thematerials, structure' and equipment and surveillance of the workmanship and methods used to insurereasonably that the project is accomplished in compliance with information given uyirr" contractdocuments and good construction practices."

La' R'S' 39 125 also provides the "facility planning and control section shall be responsiblefor directing final payment for work done on each project. Ho*"u"r, ir6;;;;r*;" of anyproject it shall be found that the plans, specifications, contract, or change orders for the project shallnot have been fully complied with, tire facility planning and control section shall, until suchcompliance shall have been effected or adjustments satisra-ctory to it shall have been made, refuseto directsuchpayment. uponcompletionoftheprojectthe facilityplanning and control section shallrelease it to the agency. The facility planning and control section sirall be responsible for making aninspection of the project prior to thelxpirati-on of the guarantee perioo to observe any defects whichmay appqr within one year after completion of the contract. th. a"itity planning and controlsection shall give prompt written notice to the contractor of defects which are a-ue to faitty materialsand workmanship."

Section 7 of the Louisiana capital Improvements Projects Procedure Manual for Design andConstruction (Procedure Manual) outlines thl role ofthe architect.5 The array of services shows the

5 The role of the architect.involves designing the project within the applicable legal reguirements and costconstraints.and advising the owner ifthis cannot ue oon". ilre designer is chargea with providing the necessarygeotechical reports and surveys' and finalizing the time schedule. itre aesigneiis to submit "

rtj.rn"nt orprobablecosts, and a report based on the applicable codes for state owned buildings. The designer is responsible foi thecoordination of all documents and disciplines. The designer distributes Jonstruction documents and is required tocomply with all provisions of Public Bid Law. The designer evaluates prior approval requests for substitution ofmater.ials' products and equipment required by the applicible statutes una o*n". proceduies. The designer issues theagenda and modifies construction documents. The designer participates in a pre-bid conference in accordance withthe contract documents- The designer provides a form to the ownei to tabulate the bids. The designer analyzes thebids and makes a recommendation to the owner as to whether to award the bid to the low bid contractor or io relectall bids' The architect administers the construction documents and submits to the owner a cost data form for theowner's evaluation. The architect makes recommendations for the owner's approval in regard to testing. Thearchitect advises and consults with the owner and communicates the owners instructions to the contractor. Thedesigner can act on behalfof the owner ari provided for the manual. The designer conducts a pre-constructionconference. The designerand consultants must visit the site for inspections.

-The designer isio guard the owner

against defects and deficiencies. RgRons are required from the designer and consultanis to the o-wner upon eachvisit' The designer agrees,to qualifications, experience and training-ofhis representatives in making decisions andinterpreting construction documents. The designer is to confirm in lvriting ail such decisions to the owner. Thedesigner is also charged with replacing any repiesentative the owner deteinines does nor meet the qualifications. Thedesigner issues certificates for payment upon determining the quality and progress ofthe contractor,s work. Thedesigner instructs the contractor to conduct monthly meetings in regard to project scheduling. The designer is to

(' (p


May 8,2009Page 5

design professional functions in the role of an architect, which supports the supervisory

god--e"tat-frmction-of.the DOA/FPC, The.architEct.certainly.assists lhe."D-.9-.&.-nB9-,.-b,.t4S,.. .,.irchitect does not perform the function of the DoA/FPC. It is misleading to suggest otherwise' The

DOA/FPC has its o*tt *p"*isory role, its own inspections to perform, its own budgetary concerns

to address. its own reports to write, its own contractadministration to perform, i-ts o1n duties to the

legislature and the puUti. arising from these projects, essentially, its own administration to perform

selparate, independint and apaJfrom the work of the architect. While the DOA/FPC may rely on

the information supplied by the architect in performing its tasks, to find that anyone whose work is

relied upon by the government agency in performing its duties is engaged in the performance of a

governrnentaifurr"tiol is overly iroui. fn" Board oiEthi"s "unoot

find WHLC is a state employee

without i nterpretin g 42: | | 02 ( I SXaXiii) expansively'

This Board has said quite correctly and is worth again quoting here:

"The Board takes cognisance ofthe untold hundreds, ifnot thousands, ofcontracts

between private entities and governmental agencies. The object of these contracts

varies griatly. Some provide professional services (legal, accounting, architecture'

landscipe architecturl, medical, engineering, etc'); some provide construction'

renovation or repairs of buildings, roads, equipment, etc'; some provide social

services, employment and management guidelines, insurance advice and policies'

some provide products including conrrr1nubl"t; the list is virtually endless. To hold

that each of those private entities and their employees are public employees appears

beyond the intent;f the legislature in adopting Sec.l 102(.1 8)(a). _If the legislature

intended that result, it wouii simply have frovided in Section I 102( I 8Xa) that "any

submit to the owner, user agency and contractor a monthly status report- The form of the report is supplied to the

designer. The Designer,s S-tatement for Professional Services and tlle Contractor's certificate for payment shall be

supplied to the owner. The designer is the impartialjudge between the owner and contractor for the requirements of

the contract documents. The designer can reject all wori. that is not in compliance with the contra€t documents' The

designer reviews shop drawings, samples and submissions of the contractoi only for conformance of the design

concept. The designer is to respond to requests. for information from the contractor' Only with the authorization of

rhe owner shall the designer pr.p*" change orders. The designer conducts.an inspection Yjtl,tht o*^l-t:: l:tt

agency and the contractor to det-ermine if the contracto,', *oi. is in general accordance with the contract documents'

Wtren the owner desires to accept the work on nrU or iu*tantial com-pletion' the designer shall recommend such

acceptance in writing, excepting the retained percentag€, liquidated qa.'mages.or the value of the punch list items'

Upon receipt ofthe clear tien cirtificate, the designerirakes the final inspection. The desigrer issues guarantees'

operation and maintenance manuals, keys and ottier clOsing documents for the owner' After acceptance by the owner'

the designer prepares a frnal report containing informatiorirequested by the owner and two sets of as built drawings'

The designer reviews and approves the punch list. The designlr follows up on items to be corrected iluiin$thb - "''

warranty period.

(& (9


May 8,2009Page 6

person who provides a service or product under contract to a goverrxnental agency

iS de€mcd to be a public employee.'t

A finding that WHLC is a state employee has far reaching ramifications. Each private

architect who contracts from here on with the Oba,lfpC for Capital Improvement fryjqs will be

subject to the same strict confines of the ethics code applicable to state employees' The P-rocedure

Manuel outlines the roles for all architects working on these projects, and the revised statutes

applicabte to the DOA/FPC apply in each instance as well. Accordingly, a hndingthat the architect

is lngaged in the performance of a govemmental function in this instance would mean the same

r"sulifor each architect engaged in services under any Capital Outlay Project'

Womack's bid is in the best interest of the tax payer

DOA/FPC claims the tax payer is at a great disservice when contractors bid on projects

designed by immediate iun,if' r".ierst. The dOe,lfpC conveniently excluded from its analysis

that"throug'h the vetting pro""r, of the public bid, womack's bid was nearly $400,000 less than the

next highest bid. If WHLC is found tobe a public employee and in turn Womack is precluded from

proceeding with the project, an extra $40O,dOO witt be necessary to complete this project' We again

caution against an expansive interpretation of WHLC being engaged in the performance of the

governmental function for practical reuuions such as this'

At the time WHLC became the architect, there were no ethical concerns to address regardless

of whether WHLC is found to be a state employee or not. WHLC as the architect designed the plans,

prepared the specifications to be bid, etc. it *ut not until after Womack bid the job and the

DOA/FPC awardedthecontractto womackthattheDoA/FPC claimedthere was anethical conflict'

The DOA/FPC did not raise its ethical concerns until the job was approximately one year from

completion. It would be a great disservice to the taxpayers olthis state to nullify the contract of the

architect and/or the contract of the contractor. Given most of the work has been completed' the

parties request that neither contract be nullified, as no ethical impropriety grounded in fact has been

found.

The DOA/T'CP's assertions of ethical concerns

"ri.inu fro* th" *o.k of IVHLC nod Wo*"tk

""u unfouttdud'

The DOA/FPC contends the primary objective of the ethics code is "to prevent not only the

In Re: Tqvlor.Porler 2008'l 150

April 29,2009 conespondence from the DOA/FPC to the Board ofEthics page 6'


May 8,2009Page 7

actuality ofconflicts ofinterest, but also to prevent the occurrence ofthose situations that tend to

create a perception of 'a conflict of,interest."s In finding a conflict of interest under- these

circumstances and based on the assertions of the DOA/FPC, one would need to presume first of all,

these actions are possible and secondly, wHLC is prepared to igtore the provisions of the Louisiana

State Board of Architectural Examiners, cheat, lie and steal in order to further its interests and those

of Womack. This is an extreme charge in order to find an ethical conflict, especially since any

design professional would face legal and professional ramifications for the actions suggested by the

DOA/FpC. The DOA/FPC's argrinents for ethical conflict also ignore the fact that the architecture

services were provided subject to a joint ventuxe with Post Architects.

A. Closing SPecilications

DOA/FPC contends that the designer could easily manipulate iti design to favor the

contractor by including a closing specification.o The DOA/FPC is aware this type of manipulation

did not occur. Section 7.1.4 of the procedure Manual specifically addresses closing specifications.

Generally, srate law prohibits closing specifications with few exceptions. Section 7.1.4 (lXb) ofthe

Procedure Manual provides, "Any riason for closing specifications as provided for by law shall be

brought to the attention of the owner in writing for.wil*." Accordingly, any closing specification

included in the plans would not be a secret.- Further, for this specific project' the construction

documents were developed with a closing specification" not at the insistence of the architect, but at

the request ofthe user ui"n"y. The closing specification requested by the user agency involved the

fire alarm and mechanical system, and this closing specification was approved by FPC when

Womack bid the project. The DOA/FPC knows closing ipecifications are generally prohibited' The

DOA/FpC also knows that if a closing specification is included in the plans, the owner will be aware

of the specification and the specification will be subjectto approval' Suggesting an ethical conflict

based on closing specifications which are known by tit" o*t "t

*a subject to approval is misleading'

B. Price Increases and Change Orders

The DoA/Fpc contends an architect could approve cost increases and approve change orders

to increase the contract price as a benefit to the contraitor.ro An architect cannot unilaterally approve

cost increases or chanie orders in favor of family members and to suggest that one can is again

misleading, especially when dealing with charges of ethical impropriety' Section 7- l-6' 15 of the

procedure Manual t iner provides, 'Onl:r wittlthe authorization of the Owner' shall the Designer

($

s April 29,2OOg correspondence from the DOA/FPC to the Board of Ethics page 2'

e April 2g,20}g correspondence from the DOA/FPC to the Board of Ethics page 6'

lo April 29, 2009 correspondence from the DOA/FPC to the Board of Ethics page 6'

(g (p

Louisiana Ethics Administration ProsramMay 8,2009Page 8

prepare Change Orders. The designer shall obtain from the Contractor his estimate of cost and timechanges.inaccordanee .with the contractdocuments for the Change Order, review and.approvesiunsand submit it to the Owner for approval before any changes are made in the Contract." There is nobasis for the claims of the DOA/FPC in regard to ethical concerns over price increases and changeorders. (Emphasis added)

C. Ignoring Delays Caused by the Contractor

The DOA/FPC argues that an ethical conflict may arise ifthe architect ignores delays causedby the contractor resulting in delays of occupancy and loss of the owner's right to contractuallystipulated damages.rr This argument ignores the fact that any weekly or monthly reportsr2 from thearchitect are submitted to the owner for review, ignores the premise that the DOA is charged withperforming its own inspections pursuant to La R.S. 39: l2l (4) and ignores the fact that the facilityplanning and control section is to make periodic inspections at all stages of construction and is tomake detailed reports available to the legislature and to the public pursuant to La. R.S. 39:124. TheDOA/FPC seems to argue the WHLC has free reign. but there is owner oversight as to the status ofthe project on a strict and routine basis. Further, WHLC is providing its services subject to a jointventure with Post Architects. It is impractical to argue that long delays caused by the contractorwould be ignored by the architect.

Further, the designer is to be the "impartial judge ofthe performance there under by both theOwner and Contractor,"r3 and the designer shall "endeavor to guard the owner against defects anddeficiencies in the work of the contractor."r4 Accordingly, both WHLC and Post Architects can besued for breach ofcontract and for professional negligence ifthe architects participate in the schemealleged by the DOA/FPC. One who asserts an ethical conflict is present or potentially present mustpresume WHLC is engaged in professional negligence and is breaching its contract to the owner.The Board should not presume professionals are engaged in schemes of professional negligence andbreaches of contract. No reasonable person would engage in these actions.

rr April 29,20Oq correspondence from the DOA/FPC to the Board ofEthics page 6.

l2 Section 7.1.6.6 and 7.1.6.10 of the Louisiana Capital lmprovements Projects Procedure Manual forDesign and Construction

13 Section 7. I .6. I I of the Louisiana Capital tmprovements Projects Procedure Manual for Design andConstruction

la Section 7. L6.6 of the Louisiana Capital lmprovements Projects Procedure Manual for Design andConstruction

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May 8,2009Page 9

D. Information Conveyed only to the Favored Contractor

DOA/FPC contends that an architect could convey information to a preferred contractor that

would not be known by any other contractor bidding the job, which would allow for an unfair,

comp€titive advantage in securing the bid.r5 There are factual constraints to this argument, and

again, no reasonable professional would engage in this activity.

Section 7.1.5 of the Procedure Manual establishes, "Upon receipt of written approval from

the User Agency and other State regulatory agencies, receipt of corrected and completed

Construction Documents, and approval ofthe Latest Statement of Probable Construction Costs, the

Owner may advertise the projecifor bids and shall be assisted by the Designer in obtaining bids."

Section 7. 1 .5.6 also establishes that "the architect provides the Owner with a form to assist the owner

in tabulating the bids." Accordingly, the process for tabulating the bids is the same as to all

submissions and based on the documents prwiously approved. It is unclear how secretive

information could give one contractor an advantage over another if all of the contractors' bids are

based on the same plans and specifications approved by the owner, user agency and state regulatory

agencies, and ifthi criteria contained in the plans and specifications is used to evaluate the bids.

Any vagueness in the plans and specifications may be called into question by any of the

contractors. Accordingly, this is simply another roadblock to any attempts by an architect to

unethically favor a contractor.

The argument of the DOA/FPC also suggests that the owner would be completely unaware

if the criteria upon which the bids were evaluated favored a particular contractor. We suggest this

would be clear if an architect was brazen enough to do this.

It should be noted Womack presented a bid that was $400,000 lower than any of the other

contractors. This speaks to the integrity and professional reputations ofWHLC and Womack in that

the bid was not challenged by any of the-other contractors. The potential challenge of other

contractors in regard to u Uid submission is a deterrent to any design professional from favoring one

contractor over another.

It should not be presumed that professionals are engaged in these sorts of activities' There

are strong deterrents to ih"." practicesas provided by the Louisiana State Board of Architectural

Examiners and the laws of this state.

l5 Aprif Zg,2OOg correspondence from the DOA/FPC to the Board of Ethics page 6.

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Louisiana Eth ics Admin istration ProgramMay 8,2009Page l0

E. Ignoring Defective or Substandard Construction

The argument by the DOA/FPC that an architect might just ignore defective or substandardconstruction is completely unreasonable.16 No architect wants problems with the constructionof his proiect. The architect is charged with protecting the owner from defects and deficiencies.rTlgnoring defective and substandard construction, no matter who the contractor is, would likelysubject the architect to professional negligence and breach of contract claims resulting in damages,repair costs, emotional distress damages, etc. When there are legal and professional ramificationsof this nature, it should not be presumed that these actions would occur. Especially in the case ofa joint venture, it is not only WHLC that would be exposed to legal action, but also Post Architects.

The DOA/FPC's argument suggests it has no controloverthe project, but the DOA/FPC hastotal control. In fact. it has final acceptance. Pursuant to 7.1.6.15 of the Procedure Manual, R.S.38:2241.1, gives the owner discretion to make acceptance on either full completion or substantialcompletion. The designer conducts an inspection with the Owner, User Agency, and Contractor todetermine if the work is in general accordance with the contract documents. Accordingly, the agencyconducts its own independent evaluation as to the construction.

Pursuant to La. R.S. 39:l2S,"facility planning and control section shall be responsible fordirecting final payment for work done on each project. However, if upon final inspection of anyproject it shall be found that the plans, specifications, contract, or change orders for the project shallnot have been fully complied with, the facility planning and control section shall, until suchcompliance shall have been effected or adjustments satisfactory to it shall have been made, refuseto direct such payment. Upon completion of the project the facility planning and control section shallrelease it to the agency.' There are so many reasons an architect would not ignore substandardconstruction regardless of who the contractor is that this argument is unfounded.

Lack of Capacity for Decision Making

Crucial to finding no ethical conflict in In Re: Kean Miller'E was that Kean Miller was notthe decision maker.re The OCD was to be the decision maker as to the outcome of the appeals and

the decision as to what title company to use was made by IFC and the Road Home Applicant. As

16 April 29,2OOg correspondence from the DOA/FPC to the Board of Ethics page 6

l7 Section ?. 1.6.6 of the Louisiana Capital lmprovements Projects Procedure Manual for Design andConstruction

18 l, Re: Kean Miller 2009-169

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Louisiana Ethics Administration programMay 8,2009Page I I

outlined in the Procedure Manual, the owner maintains approval over the plans and specifications,any change orders are subject the owner's approval, inspections are made 6y iiot.ltity-ttid aiihit€iti-'-"'but by the govemment agencies as well, payments are made subject to the approval ofthe owner, andfinal acceptance of the project is subject to the approval of the owner. The owner, nol the architect,makes the final decision on aspects crucial to the projec! the same aspects the DOA/FpC seems tosuggest lend to an ethical conflict.

Conclusion

WHLC should not be deemed a public employee. The DOA/FPC has set forth scenarios forethical conflict that are neither factually, legally or ethically plausible. One would need to presumearchitects have complete-control over the plans and acceptance of these state owned projects to assertan ethical conflict. Further, one would have to presume architects who have

"*."il"nt reputations

in their fields would partake in unprofessional actions which would subject them to professionalridicule and hardship as well as lawsuits in order to further an already independently successfulcontractor- These are not presumptions that should be made to find real ethiCal conflict exists.

Very truly yours.

SEBASTIAN R. CABALLERO

MAP: srccc: Mike Hill

(3 \ a

Alesia Ardoin

From:Sent:To:Subject:

Michael Patterson [[email protected]]Monday, May 11, 2009 10:46 AMAlesia ArdoinRequest for info on WHLC ownership

@MICIIAELA. PATIERSON

[email protected]

Ms Ardoin,Per. your .request, here. i+the.inforr+ation, on WHLe,

Russell Washer- President 42.5% shareholderMike Hilf VP 2t.5% shareholderRick Lipscomb Secfireas. 21.5% shareholderRex Cabaniss 15% shareholder

Mr' Hill oversees the production of all the contract documents and construction administration of all projects for thefirm.

On the Pennington project, he oversees Jason Bethany who handles the day to day construction administration of theproject. Mr. Hill attends alljobsite meeting with Mr. Bethany.

ear|lil[ rrf ntt

Phone: 225-922-51 10

General Item

Ethics Board Docket No. BD 2009-935tu2012009

RE: Appearance in connection with consideration of a request for an advisory opinion as to thepropriety of the Office of Coastal Protection and Restoration (OCPR) hiring a person whosespouse works for an engineering firm that has contracts with the OCPR.

Relevant Statutory Provisions, Advisory Opinions: 1111C(2)(d), 1113A

Comments: The Office of Coastal Protection and Restoration (OCPR) is a newly-formed entitythat was created by combining parts of the LA Dept. of Natural Resources (DNR) and the LADept. of Transportation and Development (DOTD). Brown and Caldwell currently performscoastal planning and project management consulting work for OCPR under an existing DNRcontract. While the contract is with DNR, it is managed by OCPR; the work is also performed forOCPR. Laura Belden is a regular-salaried, mid-level employee of Brown and Caldwell. LauraBelden works full time as a project manager on the Coastal Impact Assistance Program. ChrisWilliams, the head of project management at OCPR, directs the implementation of this work.OCPR would like to hire Laura Belden's husband, Cory Belden, as a project manager. ChrisWilliams would be Cory Belden's direct supervisor. If Cory Belden were hired by OCPR, he

would not participate in any selection process for any projects in which Brown and Caldwellwould be involved, nor would he manage, supervise or approve any of Brown and Caldwell'swork.

Section 1111C(2Xd) of the Code prohibits a public servant from accepting anything of economicvalue from a person who has or is seeking to have a business or financial relationship with thepublic seryant's agency. Ethics Board Docket No. 82-02D creates an exception to Section1111C(2)(d) of the Code when the following factors are met: (1) the employee must be a

salaried or wage-earning employee; (2) the employee's salary must remain substantiallyunaffected by the contractual relationship; (3) the public servant must own less than a"controlling interest" in the company; and (a) the public servant must be neither an officer,director, trustee, nor partner in the company. In BD 2007-420 the Board concluded that Pam

Hazlettwas able to continue her employment with Providence Engineering, a company withcontracts with LDEQ, while her husband, Jim Hazlett was employed with LDEQ. The Boardconcluded that Ms. Hazlett may continue to work for Providence since she meets therequirements set forth in BD No. 82-02D; (2) since Ms. Hazlett does not have a substantialeconomic interest in Providence or the project between Providence and DEQ, Mr. Hazlett is notprohibited from participating in transactions involving the project; and (3) since the individualwork performed by Ms. Hazlett on behalf of Providence on the project will not be subject toreview or approval or disapproval by Mr. Hazlett or his department, Ms. Hazlett is not prohibitedfrom working on this project for Providence. It appears that Cory Belden would meet therequirements of 82-02D.

However, there appears to be a violation of Section I I 13,A. of the Code. Section 1 1 13,{ prohibitspublic servants and members of their immediate family from bidding on or entering into a

contract, subcontract or other transaction under the supervision or jurisdiction of the publicseryant's agency. In BD 2007-420 Ms. Hazlett's work for Providence was not subject to review,approval or disapproval by Mr. Hazlett or his department. Here, Laura Belden's work, performingprogram management duties for the Coastal Impact Assistance Program is under the supervision

of Chris Williams, an employee of OCPR and Cory Belden's supervisor. (AMA)

Recommendations: Adopt the proposed advisory opinion concluding that Mr. Belden'semployment is prohibited under Section 1113A of the Code.

DATE

Shelton Dennis BluntPhelps Dunbar, LLpP.O. Box 4412BatonRouge, LA70gl2

Re: Ethics Board Docket No.2009-935

Dear Mr. Blunt:

'Y

ff I'J,1;Jl:"::i::'::'1"?:trT:g;'*,ffi ;;;-;;;:

The Louisiana Board of Ethics, at its octob er 27-2g,zooq need;*oadvisory opinion as to whether the office of coastai rrorrrriJ"iffiCory Belden, when his wife Laura Belden is employeaUfBroyU:aunicontractual relationship with ocpR. you stated gro*r,

"nd..iltreplanning and project management consurting work and thai;hilgffi;of Natural Resources, the work is managed by OCpR *dt#;ffi;;..1

OCPR.

Brown and

ImpactAssistanceProgram(CIAP).Laura.Beld*p'!!;#'ru;;t** jilot""*'jjas the project manager

-on cnp p-;".tr. o-CrC-6;by..r,,.cli{j} wiliams, directs theimplementation of the work on the crAP p1oj1t cdie'Ei worrrdrgoik as a project manager forOCPR and Chris WilliaSs, the head ofprolect manag@erigwôuld,6e his direct srrncnricnr /-^*.

implement"i." "iil" i""r-; ;lJt tr"ects''

ocP& eg'plove€r' !ocPR and chris \tr;illio-o lr'^ L^^-r ^'llttttttttttttt{oJ":t

coryBe4:nw'ouldiOCPR and Chris Williams, the head ot.r:.Belden wor r ld nnr norli ni *^+^ :- --- - - ^, - lP+ttt managemenf;

3:f,r,:i#*:::*:*T###'#lT"TffJf,ffi lI#,1ff fi:ffi :Hffi U',Jfiwould be involved, nor wourd he.*"e",--Jupi*;;;;;;;i# & ffi#ffi"#iff:r::,*:r?:Generally' sectiop:l.l ll c(2xd) of the code prol.ribits a public servant or his spouse from providingcompensated'sefvibes to aperson who has "lo"t .touiiirinr* o, financia?lationship with his4$erc['Hbweveq'.9tt: it T exception to sectio,n rrirc(zxa) contained in go gz-'2Dthat isapplioablbifthefollowing criteri" irr 1.t; iilil;rovi" i. a salaried/wage-earning employee,2);his'salarywill not be adctedbvthe rerationship t"tw."r, trre employer ana his agency, 3) he doesnot ownracontnolling interest in the company, ,na +1 he is not an officlr, director, trustee orpartnerof the company''r'a'ra Belden is a salariea-emproi"e;l;r, wages would not be affected by thecontractual'relationship between Brown and caldwell and ocpR; ,1. ao., noi o*, a controllingownership interestin Brown and caldwell and that she does not serve as an officer, director, trusteeor partner of the company. Becbuse the four elementr orgo gz-02D*, ,"tirfi.d, Laura Beldenwould be permitted under section I I l lc(2xd) of the C;. to be compensated for services sheperforms for Brown and caldwell while co.y*ra"" i,

"*proyrd with ocpR.

However' the Board concluded and instructedme to inform you that Laura Belden is prolibitgd fro,mperforming services for ocPR on behalf of Brown andtaldwell. seilion 1ll3A of the codeprohibits a public servant or member of his immediate ramiiy from biddint;r;; entering into anycontract' subcontract or other transaction which is unoerirr" .upr-irion orjirisdiction ofhis agency.since the individual workperformedbylauraBeldenonuetrarorBrownand caldwell onthe cIAp

Ethics Board Docket No. 2009_935Page 2 of2DATE

project will be subj;c1 to review or approval or disapproval by corey Belden,s department, LauraBelden is prohibited from working o" ttrir project ror^gro*n and caldwell if coryBelden is hiredbyOCPR. J------

This advisory opinion is b.ased solely on the facts as set fort[herein

ii';:*"::?1;::::::"l'jl"11'tapprication:r*:0.*i-ions;sri,lCoiffifflfil'"y::.:::-'::::"",_i:li,lLllu*orly:_:,191ti"tr,LC&J6iApiH##;r,rhave any questions, please contact me at (225) 219-5600* 6;-Qj

Sincerely,LOUISIANA BOARD OF ETHICS

Alesia M. ArdoinFor the Board

:"

:.,5'

facts as

The Board

i:r

VIA HAND DELIVERY

Mr. Frank SimoneauxChairmanLouisiana Board of Ethics6l 7 Norrh 'Ihird

StreetLaSalle Building, Suite l0_36Baton Rouge, LA 70902

Re: Request for Ethics Advisory Opinion

Dear Mr. Simoneaux:

I serve as counsel for Brown and caldwell. Lucila cobb, vice-president of Brown andcaldwell' has asked T"- to request an. advisory opinion from the Louisiana Board of Ethicsconcerning Brown and caldwell's continu"d .ontructual relationship with the office of coastal5::::il:Tr:,:1.*"t"ration

("ocPR")' rhe facts f..tin.nt to tr,i, i"*o are more ruly

Brown and caldwell is an employee-owned private.company with approximately 1.500employees and over 40 offices. Laura'Beiden is a ,.futurlauried, mld-level Jmproyee of Brownil.1::lt;Yill;.??:r"n,no

contract signature authority and is neither an officer nor controlring

ocPR is a newly formed entity that was created by combining parts of the LouisianaDepartment of Natural Resources 1"DNR"; and the t-ouiriunu Department of Transportation andDevelopment ("DorD")' ocPR has approximately 150 employees and manages over 200coastal restoration and protection projects. currently, att employees of ocpR are either DorDor DNR employees' but soon tn.y ,ttay all become'ocpR .rpioy..r. I-aura,s husband, coryBelden' is a registered Profbssional Engineer with the state of Louisiana. cory would like toaccept a position of employment with olpn ur u pro1..in.,unug"r. He would likely be hired as aDorD employee. but he may eventually becom" un bcpR employee. chris williams, the headof Project Management at ocPR, *ould be cory's di*;i supervisor. others within ocpR,sorganization' such as someone from Engineering, .""rJ "i* become cory,s supervisor.

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hrpclo, ivl5

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25932-0001

Nov Orlcrns, LA

Brron Rouqc. LA

Houston. TX

London, Enqhnd

SHELTO\ DE\\-tS BLU\-Tt,.rrnir

lir .n t(.)rtr \rr-r;i.t-i. j:i\ rr2ir

L.lrr n r.1(c ph.,lps.corrr

f-\\-,Purlps Dr-rxBAR..o

COUNSELORS AT LAW

City Plaza. 4oo Convention Srreet . SuireBaton Rouge, Louisiana Togoz-Sfig

p O. Box 4412Baton Rouge, Louisiana 7Og2t_++tZ

(225) )46_0285Fax (zzS) )8r_9r97

www.phelpsdunbar.com

September lS,2009

(} dooq-qss

III IOO

t)t) 2180151.,1

Mr. Frank SimoneauxScptenrber 15,2009Page 2

()

Brown and Caldwell currently performs coastal planning and project managementconsulting work for OCPR under an existing DNR contract ("the Contract") as a sub-consultantto CSRS. While the Contract is with the DNR, it is managed by OCPR; the work is alsoperfbrmed for OCPR. Chris Williams oversees the Contract. Laura currently works full timeunder the Contract as a project manager, though she has worked for a variety of clients in thepast and may work for other clients in the future.

Currently, there are two components to the Contract:

i. Coastal Impact Assistance Program (CIAP) Program Management: Lauraworks full time on this component, performing program managementduties for the clAP program and serving as a project manager on clApprojects. chris williams directs the implementation of this work.

ii. Annual Plan Development: Laura does not currently work on thiscomponent. Kirk Rhinehart, the head of planning, directs theimplementation of this work.

Chris Williams is fully aware of the relationship between Cory and Laura. If Cory werehired by OCPR, his work would be wholly unrelated to Brown and Caldwell's work for OCpR.Cory would not participate in any selection process for any projects in which Brown andCaldwell would be involved, nor would he manage, supervise, or approve any of Brown andCaldwell's work.

Brown and Caldwell may pursue and be selected for additional work with OCPR and/orDNR and/or DOTD in the future, either as a prime consultant or a sub-consultant. Moreover,Brown and Caldwell may receive additional task orders under existing contracts as a sub-consultant to CSRS, Chester Engineering or BEM.I

Prior to Cory accepting employment with OCPR, Brown and Caldwell requests theBoard's opinion as to whether Cory's employment with OCPR, while Laura works for Brownand Caldwell, poses any violations of the Louisiana Code of Governmental Ethics (the ,.EthicsCode"). Specifically, BC requests the Board's opinion as to the following questions:

i. Does the Ethics Code prohibit Cory from working for OCPR while Laurais employed by Brown and caldwell and performing work for ocpRpursuant to a contract between OCPR and Brown and Caldwell (as a sub-consultant to csRS)? lf certain criteria must be met in order for cory'semployment to be deemed acceptable, what are those criteria?

l]rown and Caldwell has two additional Engineering contracts as l) sub-consultant to CSRS and 2) separately assub-consultant to Chester Engineering to perform Coastal Engineering work for OCpR. Each prime consultantholds their respective contract with DNR. Chris Knotts is the head of Engineering at OCPR and oversees thesecontracts. Brown and Caldwell cunently does not perform any work under these contracts. Brown andCaldwell also has an additional contract as subconsultant to BEM to perform Environmental Services forCoastal Restoration projects for OCPR. BEM holds this contract with DNR. Jamie Favorite in ptanning atOC'PR oversees this contract. Brown and Caldwell currently does not perform any work under this contract.

1,D.2180t51.4

Mr. Irrank SimoneauxScpten:ber 15.2009Pase 3

SDB:lmwjlgcc: Ms. Lucila S. Cobb

Mr. Robert D. Goodson

Very truly yours,

PHELPS DLINBAR T,LP

{}

ii' Does the Ethics Code prohibit tsrown and caldwell fiom submittingproposars and/or obtaining new work through ocpR, DNR, or DOTD,either directry or as a subcJntract"; f'C;ry accepts a job with ocpR?iii' Assuming that, under the.present facts, an ethics violation would not occurif cory. accepted a job wiih ocpR, ;;;l;" ethics vioration occur in theevent that cory were promoted to a manageriar position *.irrin .acpnand/or t-1utl *ttt prototed within Brown and caldwell? If certaincriteria must be met in order fb; ih.r; promotions to be deemedacceptable, what are those criteria?

If I can provide you with any additional information, please do not hesitate to conract me.With kindest regards, I remain

PD.2 l80t5t4

@F w-*Created By: Wendy Ingram on0612812007 at 12:53 PMCategory: Ethics Advisory OpinionsCaption: An advisory opinion that the Code of Governmental Ethics does not prohibit the wife of an employee of

the Department of Environmental Quality from continuing her employment with Providence Engineeringwhich is seeking to transact business with the DEQ. Further, since the wife does not have a substantialeconomic interest in Providence Engineering or the proposed project between Providence Engineeringand DEQ, the husband is not prohibited from participating in transactions involving the project.

Iune 7,2007

Mr. Rich Major, P.E.Senior Managing PartnerProvidence Engineering1201 Main StreetBaton Rouge, Louisiana 70802

Re: Ethics Board Docket No. KM

Dear Mr. Major:

By correspondence of May 16, 2007, you requested an emergency opinion from the LouisianaBoard of Ethics concerning whether Providence Engineering may enter into a contract with theState of Louisiana, Division of Administration, Office of State Purchasing, for an ambient airquality monitoring project for the Louisiana Department of Environmental Quality(LDEQ) whenthe wife, Pam Hazlett, of an employee of LDEQ, Jim Hazlett, works for Providence Engineering.You stated that Ms. Hazlett is an environmental scientist who has been employed by Providencefor slightly over two yoars. Ms. Hazlett is a salaried employee (non-commission), has nocontrolling interest in Providence, and she is not an officer, director, trustee or partner inProvidence. You stated that Ms. Hazlett provides technical assistance to air-related projectswhich encompass instrument method development, troubleshooting, training, routine operationsof monitors and data review" You stated that Ms. Hazlett's particular duties as to the LDEQproject include coordination of arrival of equipment and supplies from vendors, assistance withgas chromotograph instrument set up and calibration per instrument manuals, routine check ofinstruments per procedures established by this project, remote access of instruments to checkinstrument settings and adjust instruments per manuals, review of gas chromatograph results andtransfer of data into a database and assistance with instrument troubleshooting. You stated thatMs. Hazlett's individual actions performed on this project are not reviewed by LDEQ. Youstated that Ms. Hazlett's husband is currently employed by LDEQ and serves in a technicaladvisor role for LDEQ. Mr. Hazlett will be using the data generated by this project together withother air monitoring data to make assessments of the ambient air quality for Baton Rouge and thesurrounding areas to determine if the air quality at the monitoring stations complies with stateand federal ambient air quality standards. Mr. Hazlett will prepare reports detailing theassessment of the air quality, make determinations of the likely causes or sources of the air

quality problems and provide guidance as to any corrective measures taken at the direction of hissupervisors. Mr. Hazlett will not be approving or disapproving the work generated byProvidence.

Rule 605 of the Rules of the Board of Ethics allows the Ethics Administrator to issue anemergency opinion when an opinion must be rendered prior to the next regularly scheduledmeeting of the Board. Pursuant to Rule 605 of the Board, and after consultation with theChairman, this emergency opinion is therefore rendered. The opinion may be relied on until suchtime as the full Board adopts a contrary qualified opinion at its June L4,2007 meeting.

Section 111lC(2Xd) of the Code of Governmental Ethics prohibits a public servant, his spouse,and a legal entity in which either owns more than 25o/o or exercises control, from renderingcompensated services to a person that has or is seeking a business, frnancial or contractualrelationship with his agency. There is an exception to Section I l l lC(2Xd). of the Code which iscontained in Ethics Board Docket No. 82-02D. The criteria required to meet 82-02D are: (1) theemployee must be a salaried or wage-eaming employee; (2) the employee's salary must remainsubstantially unaffected by the contractual relationship; (3) the public servant must own less thana "controlling interest" in the company; and (a) the public servant must be neither an officer,director, trustee, nor partner in the company. Since Ms. Hazlett is a salaried employee, her salarywill not be affected by the contract with LDEQ, she does not own a controlling interest inProvidence and she is neither an officer, director, trustee, nor partner in Providence, Ms. Hazlett's continued emplolmrent with Providence is not prohibited while Providence is seeking orobtains a contract with LDEQ at a time when her husband is employed by LDEQ.

Section 1l l2B(l) of the Code prohibits a public employee from participating in transactions inwhich a member of his immediate family has a substantial economic interest. Since Ms. Hazlettdoes not have a substantial economic interest in Providence or the project between Providenceand LDEQ, Mr. Hazlett is not prohibited from participating in transactions involving the projectas described above.

Section 1ll3A of the Code prohibits a public servant or member of his immediate family frombidding on or entering into any contract, subcontract or other transaction which is under thesupervision or jurisdiction of his agency. Since the individual work performed by Ms. Hazlett onbehalf of Providence on the project will not be subject to review or approval or disapproval byMr. Hazlett or his department, Ms. Hazlett is not prohibited from working on this project forProvidence.

This opinion addresses the specific question raised and does not express an opinion as to lawsother than the Louisiana Code of Governmental Ethics. If you have any further questions, pleasecall me at (800) 842-6630 or (225) 763-8777.

Sincerely,

LOUISIAIIA BOARD OF ETHICS

@e w-wCreated By: Diane Simon on 05/09/2000 at 11:36 AMCategory: Ethics Advisory OpinionsCaption:

April 17,2000

Mr. Gordon A. PughBreazeale, Sachse & Wilson, L.L.P.Post Office Box 3197Baton Rouge, LA 7 0821-3197

RE: Ethics Board Docket No. #-IM

Dear Mr. Pugh:

The Louisiana Board of Ethics, during the course of its April 14, 2000 meeting,considered the March 14,2000 request for an advisory opinion from Breazeale, Sachse &Wilson, L.L.P. ("BS&W"). The central issue presented by the request concerns thepropriety of BS&W providing compensated legal services to the Louisiana Communityand Technical College System ("LCTCS") in view of the consideration that theGovernor's son, Murphy J. Foster, III, is a member and partner of BS&W, with anownership interest of less than25Yo.

The operational provision of the Code is Section 11134 (LSA-R.S.42:1113A) whichprovides as follows:

No public servant . . or member of such a public seryant's immediate family, or legalentity in which he has a controlling interest shall bid on or enter into any contract,subcontract, or other transaction that is under the supervision or jurisdiction of the agencyof such public servant.

"Immediate family'' as used in the cited section of the Code is defined in Section1102(13) to provide as follows:

"Immediate family" as the term relates to a public servant means his children, the spouses

of his children, his brothers and their spouses, his sisters and their spouses, his parents,

his spouse, and the parents of his spouse.

"Agency" as used in the cited section of the Code and as applied to the Governor isdefined at Section 1102(2)(a)(ii) as follows:

For the governor and lieutenant governor, it shall mean the executive branch of stategovernment.

LCTCS is an agency in the "executive branch of state government" and, as acknowledgedin the opinion request, transactions with the LCTCS are therefore "under the supervision[and] jurisdiction of the agency" of the Governor.

"Transaction" as used in the cited section of the Code is defined in part at Sectionll02(23) of the Code as follows:

o'Transaction involving the governmental entity" means any proceeding. . . submission .

. . contract, claim, case or other such particular matter which the public servant . . . inquestion knows or should know:

(a) Is, or will be, the subject of action by the governmental entity.

(b) Is one to which the governmental entity is or will be a party.

(c) Is one in which the governmental entity has a direct interest. A transactioninvolving the agency of a governmental entity shall have the samemeaning with respect to the agency.

Based on the information provided to the Board in the corespondence from BS&W ofMarch 14,2000, it is the opinion of the Board that BS&W is not prohibited by virtue ofthe application of Section 1113 of the Code from providing legal services to or otherwiserepresenting the interests of LCTCS, provided the provision of such services is bypartners and members of BS&W other than Mr. Murphy J. Foster, III. The Boardreaches this determination on the basis of the consideration that Mr. Foster does not own"a controlling interest" in BS&W and will not otherwise be "enterfing] into a transaction"with LCTCS.

It is further the opinion of the Board that the operational provisions of the Code do notprohibit Mr. Foster from participation in the distribution by BS&W of fees earned fromthe provision by BS&W of legal services to LCTCS. In the opinion of the participatingmembers of the Board, the distribution by BS&W to Mr. Foster of a portion of the feesearned from representation by BS&W of LCTCS does not cause Mr. Foster to enter into a"transaction" that is under the supervision or jurisdiction of an executive branch agency.

Finally, it is the opinion of the Board that Murphy J. Foster, III is prohibited from directlyrendering legal services to LCTCS. The provision of legal advice and counsel to anexecutive branch agency, enrolling as counsel, making appearances and advancingarguments on behalf of the LCTCS in administrative and judicial proceedings represents a"transaction" between LCTCS and Murphy Fosteq III individually, even though the"contract" may be between LCTCS and BS&W.

Please remember that this advisory opinion is restricted to the facts and particular mattersubmitted in your request of March 14,2000.

Yours troly,


Robert L. Roland, ChairmanFor the Board

RLR:RGS:dds