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FOR IMMEDIATE NEWS RELEASE NEWS RELEASE #020 FROM: CLERK OF SUPREME COURT OF LOUISIANA

The Opinions handed down on the 16th day of March, 2010, are as follows:

BY CLARK, J.:

2009-CC-1152

PROPERTY INSURANCE ASSOCIATION OF LOUISIANA v. STEVE J. THERIOT, IN HIS OFFICIAL CAPACITY AS LEGISLATIVE AUDITOR FOR THE STATE OF LOUISIANA (Parish of E. Baton Rouge) Kimball, C.J., did not participate in the deliberation of this opinion. For the foregoing reasons, we reverse the rulings of the courts below to the extent that the motion for summary judgment of Steve J. Theriot, in his capacity as the Legislative Auditor for the State of Louisiana, was granted and the motion for summary judgment of Property Insurance Association of Louisiana was denied, and render judgment granting summary judgment in favor of Property Insurance Association of Louisiana. REVERSED AND RENDERED.

3/16/2010 SUPREME COURT OF LOUISIANA No. 09-CC-1152 PROPERTY INSURANCE ASSOCIATION OF LOUISIANA v. STEVE THERIOT, IN HIS OFFICIAL CAPACITY AS THE LEGISLATIVE AUDITOR FOR THE STATE OF LOUISIANA ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, FIRST CIRCUIT, PARISH OF EAST BATON ROUGE Clark, Justice1 We granted this writ application in order to determine whether the courts below erred, first, in denying the motion for summary judgment filed by Property Insurance Association of Louisiana, and, then, in granting the motion for summary judgment filed by the Legislative Auditor for the State of Louisiana and finding that Property Insurance Association of Louisiana is a public entity. For the reasons which follow, we reverse the ruling of the court of appeal, render summary judgment in favor of Property Insurance Association of Louisiana, and find that Property Insurance Association of Louisiana is a private association. FACTS and PROCEDURAL HISTORY Property Insurance Association of Louisiana ("PIAL") is an industry trade group and the primary rating organization for fire insurance in the state. In 2001, PIAL entered into a contract to manage and conduct the business of the Louisiana Auto Insurance Plan ("LAIP"), the state's auto insurer of last resort. Likewise, in 2003, PIAL contracted with Louisiana Citizens Property Insurance Corporation ("Citizens"), the state's property insurer of last resort, for Citizens'
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Kimball, C.J., did not participate in the deliberation of this opinion.

operation and administration. In 2007, Steve Theriot, then the Legislative Auditor for the State of Louisiana ("LLA"), began a compliance audit of Citizens, LAIP, and PIAL for calendar years 2004, 2005, and 2006. In connection with its audit, LLA issued an Information Report dated September 12, 2007. In the Report, LLA delivered its opinion that PIAL was a public entity which was subject to the Ethics Code, Civil Service Laws, Open Meetings Laws, Audit Laws, Public Bid Law, Professional Services Procurement Law, and Procurement Code. On September 28, 2007, PIAL filed a petition for declaratory judgment in the Nineteenth Judicial District Court, naming LLA as defendant. In its petition,
PIAL prayed for a judgment declaring that PIAL is a private association and not a public agency. LLA answered the suit, denying that PIAL was a private association and asking for a judgment declaring PIAL a public entity under the laws of the state. Shortly thereafter, LLA filed a motion for summary judgment, again asking the court to render a judgment declaring that PIAL is a public entity under Louisiana law.

PIAL responded with its own motion for summary judgment, praying that the court declare PIAL a private association. After hearing the competing motions for summary judgment, the trial court denied both motions. Both parties appealed. After denying PIAL's writ, the court of appeal granted LLA's writ, reversed the trial court's denial of LLA's motion for summary judgment, rendered judgment granting LLA's motion for summary judgment, and declared that PIAL is a public entity for all purposes.2 This Court granted writs in order to examine the propriety of that
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Property Ins. Ass. of Louisiana v. Theriot, 2009-0112 (La.App. 1 Cir. 4/3/2009) (unpublished).

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decision.3 DISCUSSION
We apply a de novo standard of review in considering the lower courts' rulings on the parties' summary judgment motions. Suire v. Lafayette City-Parish

Consolidated Government, 2004-1459, p. 11 (La. 4/12/05), 907 So.2d 37, 48. Summary judgment should be granted when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to material fact, and that mover is entitled to judgment as a matter of law. La. Code Civ. P. art. 966(B). A genuine issue exists where reasonable persons, after considering the evidence, could disagree. In determining whether an issue is genuine, a court should not consider the merits, make credibility determinations, evaluate testimony or weigh evidence. A fact is "material" if it is one that would matter at trial on the merits. Any doubt as to a dispute regarding a material issue of fact must be resolved against granting the motion and in favor of trial on the merits. Suire, 907 So.2d at 48. The question raised in both motions for summary judgment is whether PIAL is a public or private entity. As argued by the parties and as discussed by the court of appeal, this Court has specified four factors which determine an entity's public or private character. These factors are (1) whether the entity was created by the legislature, (2) whether its powers were specifically defined by the legislature, (3) whether the property of the entity belongs to the public, and (4) whether the entity's functions are exclusively of a public character and performed solely for the public benefit. State v. Smith, 357 So.2d 505 (La. 1978). In Smith, while not stating explicitly that all four factors must be met in order to find that an entity was public,

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Property Ins. Ass. of Louisiana v. Theriot, 2009-1152 (La. 10/16/09), 19 So.3d 465.

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we did so by implication.4 Today, we hold that all four factors must be present in order for a court to determine that an entity is public. Accordingly, we address each factor. Was PIAL created by the legislature? PIAL contends that the organization's predecessor was chartered in 1888 by private fire insurance companies as a private association, and that the legislature on several occasions has only authorized its existence. LLA, however, argues that the legislature created PIAL's predecessor in Act 302 of 1926, which mandated that the fire insurance companies organize a fire prevention bureau, and, in the same act, dissolved any previously organized bureaus. A review of the history of Louisiana's fire prevention bureaus shows that in 1888, fire insurance companies in the state formed by charter the Property Holders Mutual Aid Fire Indemnity Society, which PIAL claims as its predecessor. The legislature, in Act 110 of 1900, implicitly recognized the association's existence, and made it unlawful for fire insurance companies, associations, or partnerships to organize for the purpose of governing, controlling, or influencing insurance rates. In 1902, Act 183 made it lawful for fire insurance companies to organize a Fire Prevention Bureau to make inspections as to physical care and condition of risks, to define the safest methods of construction, and to supervise the installation of devices involving fire hazards, all in order to reduce the chance of fire. Act 189 of 1904 again authorized fire insurance companies to organize a Fire Prevention Bureau to make inspections as to physical care and condition of risks, to

The Court, after first laying out the factors to be considered, analyzed only one-whether the entity had been created by the legislature. After determining that it had not been so created, the court found that the entity was not a public agency. This implication is bolstered by the fact that all post-Smith opinions which have examined the Smith factors either found the entity to be private after examining only one factor or required all four to be present in finding that the entity was public. See Bankston v. Board of Ethics for Elected Officials , 98-0189 (La. 6/22/98), 715 So.2d 1181 (community action program not public entity because not created by legislature); State v. Duque , 42,074 (La.App. 2 Cir. 1/18/07), 946 So.2d 760 (community action agency not public entity because not created by legislature); Louisiana Ins. Guaranty Assn. v. Comm. on Ethics for Public Employees , 95-0021 (La.App. 1 Cir. 5/5/95), 656 So.2d 670 (public entity because all four factors present).

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define the safest methods of construction, to supervise the installation of devices involving fire hazards, and to collect statistical information in order to reduce the chance of fire. In 1912, the legislature, through Act 224, again declared that it was unlawful for fire insurance companies, associations, or partnerships to organize for the purpose of governing, controlling, or influencing insurance rates. The legislature "created" the Insurance Commission by means of Act 302 of 1926. The act also ordered fire insurance companies to "organize" the Louisiana Rating and Fire Prevention Bureau under the supervision of the Insurance Commission. As contemplated by the Act, the Rating and Fire Prevention Bureau was to be organized by the fire insurance companies, to make rates with the approval of the Insurance Commission, to make inspections as to physical care and condition of risks, to define the safest methods of construction, and to supervise the installation of devices involving fire hazards, all in order to reduce the chance of fire. Act 302 also dissolved the fire prevention bureau organized under Act 189 of 1904 and authorized the Insurance Commission to audit the new Bureau's books. In Act 125 of 1958, the legislature amended and re-enacted the first and second chapters of the Insurance Code. The Act continued the Louisiana Rating and Fire Prevention Bureau, which was to inspect every risk specifically rated by schedule and make written surveys of such risks, to define the safest methods of construction, to supervise the installation of devices involving fire hazards in order to reduce the chance of fire, and to make rates with approval of the Insurance Commission. The Act also allowed for corporations, unincorporated associations, partnerships and individuals to apply to the Insurance Commission for licensing as "other rating organizations." The Act continued to authorize the audit of the Louisiana Rating and Fire Prevention Bureau by the Insurance Commission. Act 311 of 1975 changed the name of the Louisiana Rating and Fire Prevention

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Bureau to the Property Insurance Association of Louisiana. In 1999, Act 885 transferred the Board of Directors of PIAL to the Department of Insurance. Finally, in 2007, Act 420 authorized LLA to audit PIAL, and Act 459 changed the makeup of PIAL's Board of Directors. That the legislature has concerned itself with fire prevention, fire safety, and fire insurance rate making is clear

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