Legal Memorandum: "No Right of Action" Exception in LA

Issue: In what instances is the ‘no right of action’ exception acceptable in a claim for judicial dissolution of an LLC in Louisiana?

“The objection of no right of action tests whether the plaintiff has a ‘real and actual interest’ in the suit.  Stated another way, an exception of no right of action determines ‘whether the plaintiff belongs to the particular class to which the law grants a remedy for the particular harm alleged.'”  Lindsay, Marcel, Harris & Pugh v Harris, 752 So. 2d 335, 337 (La. App. 1 Cir. 2000) (citations omitted).    

A claim for judicial dissolution of the LLC is expressly made available to members—not the company itself—by La. R.S. 12:1335.  This statute provides that “on application by or for a member, any court of competent jurisdiction may decree dissolution of a limited liability company” under the circumstances stated therein. 

The straightforward, plain language construction that a “member” may have a cause of action for judicial dissolution under La. R.S. 12:1335 is confirmed by case authority.  See In re Cat Island Club, LLC, 94 So. 3d 75, 79 (La. App. 3 Cir. 2012) (dissolution claim brought by member under La. R.S. 12:1335 allowed); Lindsay, Marcel, Harris & Pugh v Harris, 752 So. 2d at 337 (“Judicial dissolution may be sought by or for a member of a limited liability company.” (emphasis in original)). 

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