LAW INDUSTRIES, LLC VS. STATE
Annotate this CaseIn a dispute arising from a contract for refurbishing an elementary school, the Supreme Court of Louisiana ruled that no unfair trade practices claim could be stated against the State of Louisiana, Department of Education, Recovery School District (the “State”). The plaintiff, Advanced Environmental Consulting, Inc. (“AEC”), had subcontracted to perform asbestos abatement services for Law Industries, LLC, the general contractor. When the State terminated the contract due to unsatisfactory asbestos remediation progress, AEC amended its answer to Law Industries' breach of contract suit to include a claim of unfair trade practices under the Louisiana Unfair Trade Practices and Consumer Protection Act (“LUTPA”). The State had objected to this claim, arguing that AEC had no cause of action and that the claim was perempted (time-barred). The Supreme Court of Louisiana held that AEC had failed to state a valid LUTPA cause of action against the State. It concluded that the State's actions were in furtherance of its governmental function of providing safe educational facilities for schoolchildren. The State, in this case, was a consumer of construction services, not a participant in "trade or commerce" as defined in the LUTPA, and was therefore not subject to a LUTPA claim. The court remanded the case to the district court for further proceedings consistent with its ruling.
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