A Louisiana resident is suing the state Bond Commission over the panel’s controversial decision last spring to exclude two large banks from underwriting contracts because of the banks’ corporate gun policies.
The lawsuit challenges the legality of the move — arguing it was arbitrary, politically driven and costly for taxpayers — and seeks an order barring the Bond Commission from doing anything similar in the future.
Pro-gun conservatives railed against Bank of America and Citigroup after the banks added policies for clients in the firearms business following the deadly mass shooting at Marjory Stoneman Douglas High School in Parkland, Florida.
Bank of America decided to stop issuing loans to some gunmakers that produced military-style rifles. Citigroup, meanwhile, required its retail clients to require background checks for firearm purchases, to refuse to sell to anyone under 21 and to quit selling bump stocks and high-capacity magazines, or risk being dropped by the bank.
State Attorney General Jeff Landry denounced that as “fascism at its best” and U.S. Sen. John Kennedy, R-Madisonville, ripped the policies as well.
Landry and state Rep. Blake Miguez, R-Erath, pressed the Bond Commission to block the banks from underwriting more than $600 million in bonds to finance highway projects, including widening Interstate 10 in Baton Rouge and a new interstate link to Louis Armstrong New Orleans International Airport.
Other politicians, including state Senate President John Alario, R-Westwego, and Democratic Gov. John Bel Edwards’ administration, opposed the move, arguing it could disrupt important bond sales and potentially leave the state paying higher fees.
The lawsuit, filed Wednesday in state court in Baton Rouge, argues the move exceeded the Bond Commission’s authority, broke state rules for selecting banks for contracts and cost taxpayers by limiting competition for the work.
Louisiana law prohibits lawsuits from directly challenging already settled Bond Commission decisions, said David LaCerte, the Baton Rouge attorney who filed the lawsuit. Instead, they're seeking a judge's declaration that the action was illegal and an order barring the Bond Commission from making similar moves in the future.
LaCerte, who served as secretary of the Louisiana Department of Veterans Affairs under former Gov. Bobby Jindal, is an attorney with the law firm Sternberg, Naccari & White, which also represents The Advocate in separate matters.
“The Bond Commission put in place an unconstitutional and arbitrary litmus test, and it did so despite concerns from its own members about the costs these actions could bring,” LaCerte said.
"Addressing gun violence is one of the most pressing issues in our state and our country. While people may not always agree on the solutions, when public officials pull political stunts that could cost taxpayers money, there needs to be accountability,” Sandra Brown, a Baton Rouge resident and the named plaintiff in the suit, said in a statement. "The Bond Commission let us down."
State Treasurer John Schroder, who chairs the Bond Commission and pushed to block the banks, declined to comment on the lawsuit through a spokeswoman, saying his office hadn’t yet been served.
The decision to toss out Bank of America and Citigroup’s proposals may have cost taxpayers around $50,000, a review of records by The Advocate found, because the banks sought lower fees on the bonds than other bidders.
Landry, Miguez and other backers of the move contended the policies violated the constitutional rights of Louisianans and claimed the banks had falsely answered questions on their underwriting proposals that asked whether the banks had policies which infringed on state residents’ Second Amendment rights.
But the banks didn’t block individual customers from using credit or debit cards at gun stores or shows, the lawsuit notes, saying the Second Amendment protects against government overreach and not the business decisions of private corporations.
A spokesman for Landry said the Attorney General’s Office hadn’t yet reviewed the lawsuit but “we look forward to vigorously defending the decision of the Louisiana Bond Commission.”
“Attorney General Jeff Landry will not waver in his fight to protect the Second Amendment rights of our State's citizens,” said Jacques Ambers, the spokesman.
The Governor’s Office, which actively opposed the Bond Commission’s move to exclude the banks, again criticized the decision in response to the lawsuit. Christina Stephens, a spokeswoman for the governor, said that there’s “no question that this decision by the State Bond Commission resulted in a higher cost to Louisiana taxpayers.”
Stephens noted that the Bond Commission later reversed itself and awarded work to Bank of America, but said “their posturing came at a cost.”
“The Bond Commission should be protecting the financial condition of the State of Louisiana, not playing politics,” Stephens said.