Opinion ID: 1707932
Heading Depth: 1
Heading Rank: 5

Heading: State Action Determination under the Louisiana Constitution

Text: We proceed to determine, under the Louisiana Constitution, whether a creditor's utilization of the Self-Service Storage Facility Act for a private seizure and sale of the debtor's property, without a hearing or judicial supervision, constitutes state action that implicates due process guarantees. Plaintiffs invitation to follow New York and California in rejecting, under the state constitution, a creditor's use of state-authorized private seizure and sale of the debtor's property is attractive, particularly in view of Louisiana's history under civilian principles of the abhorrence of self-help by creditors. [8] One of the primary factors in determining the existence of state action, when the asserted involvement is a legislative act, is whether the act codified or extended previous rights. This inquiry necessarily involves a review of historical antecedents, including Louisiana's traditional civilian principles. Nevertheless, some twenty years have passed since the Flagg Brothers decision and the New York and California state constitution decisions were rendered. We cannot ignore historical events in Louisiana during those twenty years, in which the trend of the Legislature (which sets public policy in the state) has been to follow national commercial practices and to permit private enforcement of possessory liens in several specific situations. Around the time of the Flagg Brothers decision in 1978, Louisiana steadfastly resisted self-help in creditor-debtor relationships. Louisiana had also resisted wholesale adoption of the Uniform Commercial Code (U.C.C.), which was in use in most other jurisdictions. The Legislature, apparently in order to bring Louisiana in line with national use of uniform commercial practices, began adopting selected sections of the Uniform Commercial Code, although modified in several respects. In 1988, the Legislature adopted Section 9 of the U.C.C., pertaining to secured transactions. [9] This gradual yielding to the national trend included adoption of several procedures for private enforcement of possessory liens. [10] In addition to the U.C.C. provisions, the Legislature has adopted special provisions for warehouseman's liens (similar to those in Flagg Brothers ). See La.Rev.Stat. 10:7-210. In 1981, the Legislature added possessory lien protection for owners of self-service storage facilities and provided for private enforcement of these possessory liens. From this review, we conclude that the Self-Service Storage Act was not an extension of previously existing rights of possessory lienholders that might constitute state action. Rather, the Act was the removal of state involvement through judicial oversight. A legislative decision to remove state involvement from enforcement of possessory liens that were legislatively created at the same time does not necessarily constitute state action that implicates procedural due process guarantees. In summary, an owner-lessor who proceeds under the private enforcement provisions of the Self-Service Storage Facility Act is a private actor who is not acting under color of state law. While the owner-lessor is acting under a government rule, it is not a rule that fostered discrimination, as in Reitman, or a rule that infringed upon freedom of speech, as in New York Times v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964); it is simply a rule that removed state involvement from certain commercial transactions. Moreover, the state neither encouraged nor benefitted from the private action authorized in the Act. The owner-lessor is simply engaging in a private procedure that is no longer prohibited, but rather is authorized by statute while not being compelled by statute. [11] Moreover, while the enforcement of possessory liens traditionally has been performed by the sheriff in Louisiana, the enforcement is not exclusively reserved to the sheriff, especially since the enactment of U.C.C. provisions and more especially when enforcement procedures are considered on a nationwide basis because of Louisiana's subscribing to nationally uniform commercial laws. Significantly, the Act requires notice by delivery or certified mail to the defaulting debtor that the owner-lessor has taken possession of the property subject to the lien created by the Act. The debtor is then given a reasonable period after notice to seek judicial protection if the debt is not in default or if there are other defects in the owner-lessor's claim. Moreover, the Act presents no obstacle to the debtor's recovery of damages caused by wrongful seizure and sale. Generally, the validity and default status of the debt are not disputed, and the value of the lien usually is insufficient to justify expensive litigation. [12] We therefore conclude that the Act, with its fair notice requirement and other safeguards, presents no fundamental unfairness in the creditor-debtor relationship to which the possessory lien applies. This does not necessarily mean that private self-help can be utilized in every creditor-debtor relationship, even if authorized by statute. Such matters are to be decided on a case-by-case basis. However, the Act presently under consideration, particularly in the context of the facts of this particular case, does not warrant judicial intervention. Finally, while this court has on occasion interpreted other provisions of the Louisiana Constitution to provide greater protection for citizens of this state than is provided under the United States Constitution, this court has never interpreted the Due Process Clause of the Louisiana Constitution beyond the federal constitutional decisions of the United States Supreme Court. Fields v. State of Louisiana Through Dep't of Public Safety and Corrections, 98-0611 p. 6 (La.7/8/98), 714 So.2d 1244, 1250. If this court were to follow the views expressed by the New York and California courts shortly after the Flagg Brothers decision, such a ruling by this court, applicable only in this state, would adversely affect the uniformity of commercial laws pertaining to possessory liens as they exist in most other jurisdictions. See Sharrock v. Dell Buick-Cadillac, Inc., 45 N.Y.2d 152, 408 N.Y.S.2d 39, 379 N.E.2d 1169, 1183 (1978)(Jasen, J., dissenting). Accordingly, the judgment of the district court declaring La.Rev.Stat. 9:4756-4760 unconstitutional is reversed.