Federal court dismisses contracting company's unfair taxation lawsuit against Jefferson Parish

By Daniel Kobialka | Apr 15, 2016

NEW ORLEANS — A federal court has denied a contracting company's lawsuit against Jefferson Parish that alleges unfair taxation.

The court cited jurisdiction concerns in its dismissal of a lawsuit filed by Hollywood Door Company of Metairie against Newell Norman, sheriff and ex officio tax collector for Jefferson Parish; and Jefferson Parish.

John Dryden, vice president of Hollywood Doors, said the lawsuit was moved from state court to federal court, which dismissed the case because it involves a state tax matter.

"It's very problematic, and the litigation is ongoing," he told the Louisiana Record. "We're looking for a fair shake anywhere in the state of Louisiana. And if we lose this case, we may owe taxes twice to every other parish except Jefferson Parish."

To date, Dryden said Hollywood Door has encountered more than $60,000 in legal fees.

"This could put me out of business just paying legal fees," he noted. "Now, all of the other parishes are holding out for their share."

Dryden said Jefferson Parish views Hollywood Doors as a retail company and is trying to tax the business accordingly.

"Even though we have some retail aspects to our business, we're not a traditional retailer," he said. "We perform door installations in a variety of areas."

Hollywood Door's lawyer, Sidney L. Shushan of Jonathan Marks Shushan in New Orleans, said he and his client are going to review the court records and determine the best course of action moving forward.

"We have a couple of options: We can appeal in federal court or go back to state court," he told the Louisiana Record. "It's a procedural choice."

State courts are permitted to hear all cases except for those involving federal laws, including antitrust, bankruptcy, criminal, copyright and some maritime cases.

Comparatively, federal court jurisdiction is limited to the types of cases listed in the U.S. Constitution and provided by Congress. These cases may involve violations of the Constitution or federal laws, lawsuits between citizens in different states where the total claims exceed $75,000, and various bankruptcy, copyright, patent and maritime law situations.

Hollywood Door Company filed the lawsuit Oct. 7, 2015 in U.S. District Court for the Eastern District of Louisiana.

According to the complaint, Hollywood Door claims Norman decided to levy tax after many years of adhering to a previous ruling.

Hollywood Door, which buys doors out of state and installs them at locations across southeast Louisiana, won a case in 1985 over the sheriff who had ordered it to pay sales tax on doors, regardless of where they were installed. 

In 2010, the sheriff assessed Hollywood Door with fines for failure to pay a sales tax rather than a use tax.

The plaintiff said it paid the tax under protest Oct. 10, 2010.

Hollywood Door has requested the removal of these tax requirements, a refund of $65,679.32, for the taxes paid under protest in 2010, along with litigation costs and any other relief deemed appropriate by the court.

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Hollywood Doors State of Louisiana U.S. District Court for the Eastern District of Louisiana

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