A Louisiana judge has ruled that the lawsuit filed against the State Bond Commission challenging its pro-gun sales underwriting policies can proceed.
Judge Trudy White made the decision Thursday from the bench during the first hearing on the lawsuit filed by Louisiana resident Sandra Brown in the 19th Judicial District Court in Baton Rouge on June 18.
Brown is seeking an injunction barring the Bond Commission from excluding underwriters from working on bond issues for reasons unrelated their qualifications, as well as a determination that the commission acted unlawfully when it prohibited Citi and Bank of America Merrill Lynch from participating in the underwriting pool for the issuance of the state’s first grant anticipation revenue vehicle bonds last year.
Citi and BAML were barred from working on the state’s Garvee deals because bond commissioners disliked firearms policies the firms enacted after the February 2018 gun massacre of 14 students and three adults at Marjory Stoneman Douglas High School in Parkland, Florida.
BAML said it would stop lending to companies that make assault-style guns for non-military purposes. Citi’s policy asked new retail sector clients to adhere to “best practices” policies for firearms sales, including a minimum age of 21 for gun buyers and not selling bump stocks or high-capacity magazines.
Angelique Freel, civil director for the Louisiana Department of Justice headed by Attorney General Jeff Landry, said the judge’s decision to move forward with the lawsuit was not based on the merits of the case, but on legal exceptions Landry’s office had cited in arguing that the case should be thrown out.
“We will seek appropriate review of the judge's ruling on these procedural matters,” Freel said in a statement Friday, when asked if the state would appeal White’s decision allowing the case to proceed.
“Attorney General Jeff Landry will continue to do all he legally can to protect the Second Amendment rights of our state's citizens,” said Freel, who added that Landry “looks forward to defending the Bond Commission's decision in court at the appropriate time.”
In response to the lawsuit Aug. 8, attorneys for Landry cited a series of “peremptory exceptions” about why Brown’s complaint didn’t meet legal standards to move forward, including the fact that it failed to state a cause of action about why the petition didn’t demonstrate that the Bond Commission committed a direct violation of a prohibitory law.
The state gave five more reasons why the litigation should not go forward, including that Brown failed to object within 30 days of the publication of a notice that the commission intended to issue the Garvee bonds. The Dec. 18, 2018, notice said objections to the bonds or the proceedings that authorized them must be filed within 30 days or the debt would be presumed to be legal and “no court shall have the authority to inquire into such matters.”
Brown’s attorney, David LaCerte with Sternberg, Naccari & White LLC, previously said that the 30-day notice doesn’t apply to his client’s case because a prospective declaration is being sought from the court, and the bonds themselves aren’t being challenged.
“I expect the Bond Commission to request a writ on the matter to the court of appeal,” he told The Bond Buyer Friday. “We will quickly push for discovery and move the matter forward.”
LaCerte also said that the court on Thursday recognized that “the Bond Commission’s actions weren’t just misguided, they were obviously unlawful.”
“Everyone is entitled to their own political views, but scoring political points shouldn’t needlessly cost our state money,” said LaCerte. “Our client is ensuring there is accountability when public officials don’t live up their obligations to taxpayers.”
LaCerte said developing the suit against the Bond Commission involved extensive public records requests, and that he hadn’t determined if barring the two banks from the bidding process cost the state any money.
Both the state treasurer’s office and the Division of Administration were asked previously if banning the two banks from working on the Garvee deals cost the state more money, but neither provided a response.
According to The Advocate newspaper, a review of state records showed that tossing out proposals by Citi and BAML “
