Ernst & Young LLP v. Louisiana Office of Financial Institutions - Res Judicata Exception Reversed
Summary
The Louisiana Court of Appeal, First Circuit granted Ernst & Young LLP's supervisory writ and reversed the trial court's grant of the Louisiana Office of Financial Institutions' exception of res judicata. The appellate court held that a federal court dismissal for lack of subject matter jurisdiction (Eleventh Amendment sovereign immunity) does not constitute a final judgment on the merits and therefore does not bar the state court action. The case was remanded for the trial court to rule on remaining exceptions and Ernst & Young's motion to order disclosures.
What changed
The Louisiana Court of Appeal granted Ernst & Young LLP's supervisory writ and reversed the portion of the trial court's February 20, 2026 judgment that had granted the Louisiana Office of Financial Institutions' peremptory exception of res judicata. The court held that the federal court's dismissal for Eleventh Amendment sovereign immunity—a lack of subject matter jurisdiction—does not constitute a final judgment on the merits under res judicata doctrine. The court also vacated the portion of the judgment denying Ernst & Young's La. R.S. 6:103 Motion to Order Disclosures and remanded for further proceedings.\n\nFor legal professionals and courts, this ruling clarifies that parties may pursue state court remedies even after federal courts dismiss claims on sovereign immunity grounds. Ernst & Young may now proceed with its document disclosure motion in the 19th Judicial District Court.
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April 16, 2026 Get Citation Alerts Download PDF Add Note
Ernst & Young LLP v. Louisiana Office of Financial Institutions
Louisiana Court of Appeal
- Citations: None known
- Docket Number: 2026 CW 0188
Precedential Status: Unknown Status
Combined Opinion
STATE OF LOUISIANA
COURT OF APPEAL, FIRST CIRCUIT
ERNST & YOUNG, LLP NO. 2026 CW 0188
VERSUS
LOUISIANA OFFICE OF APRIL 16, 2026
FINANCIAL INSTITUTIONS
In Re: Ernst & Young, LLP, applying for supervisory writs,
19th Judicial District Court, Parish of East Baton
Rouge, No. 770947,
BEFORE: LANIER, WOLFE, AND HESTER, JJ.
WRIT GRANTED WITH ORDER. The portion of the trial court’s
February 20, 2026 judgment which granted defendant’s, Louisiana
Office of Financial Institutions, Peremptory Exception of Res
Judicata is reversed. Plaintiff, Ernst & Young LLP, filed a motion
titled “La. R.S. 6:103 Motion to Order Disclosures of Documents and
Information” against the Louisiana Office of Financial Institutions,
in the 19th Judicial District Court for the State of Louisiana
seeking to obtain three categories of documents from the Louisiana
Office of Financial Institutions. In opposition to the action in the
19th JDC, the Louisiana Office of Financial Institutions filed
several exceptions, including the exception of res judicata, based
upon a judgment by the United States District Court for the Eastern
District of Louisiana in the matter Fed. Deposit Ins. Corp. v. Ernst
& Young LLP, No. 20-1259, (E.D. La. 9/23/25). However, the federal
court found it lacked jurisdiction over the Louisiana Office of
Financial Institutions due to its Eleventh Amendment sovereign
immunity. When a federal court lacks jurisdiction over the subject
matter of a claim, a dismissal of the claim on those grounds is not
considered to be a final judgment on the merits in a subsequent court
that does have competent jurisdiction. Raj v. Louisiana State
University, 2014-0140 (La. App. ist Cir. 4/24/15), 167 So.3d 1023,
1030; citing Voisin’s Oyster House, Inc. v. Guidry, 799 F.2d 183, 188
(Sth Cir. 1986); also citing Daigle v. Opelousas Health Care, Inc.,
774 F.2d 1344, 1348 (5th Cir. 1985) (explaining that “[a] dismissal
for want of jurisdiction bars access to federal courts and is res
judicata only of the lack of a federal court's power to act”). Thus,
a dismissal on the Eleventh Amendment sovereign immunity grounds,
constitutes a dismissal for lack of subject matter jurisdiction. See
Voisin’s, 799 F.2d at 188. Therefore, the exception of res judicata
filed by the Louisiana Office of Financial Institutions, is denied.
Furthermore, the portion of the trial court’s February 20, 2026,
judgment which denied Ernst & Young’s La. R.S. 6:103 Motion to Order
Disclosures of Documents and Information is vacated. This matter is
remanded to the trial court for a ruling on the Louisiana Office of
Financial Institutions’ remaining exceptions and a ruling on Ernst &
Young’s La. R.S. 6:103 Motion to Order Disclosures of Documents and
Information.
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