Opinion
No. 2003-C-3521.
October 19, 2004.
ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, FOURTH CIRCUIT, PARISH OF PLAQUEMINES.
CHARLES C. FOTI, JR., Attorney General, BURKE MAYER, ANDREW C. WILSON, ESQ., DAVID L. CARRIGEE, ESQ., JEDD S. MALISH, ESQ., Special Assistants to Attorney General, Counsel for Applicant.
ST MARTIN WILLIAMS, MICHAEL X. ST. MARTIN, ESQ., JOSEPH G. JEVIC, III, ESQ., GAUTHIER, DOWNING, LABARRE, DEAN SULZER, CHARLES S. LABARRE, ESQ., COSSICH, SUMICH PARSIOLA, LTD, PHILIP F. COSSICH, JR., ESQ., McNABB ASSOCIATES, CAROLYN A McNABB, ESQ., Counsel for Respondent.
FREDDIE PITCHER JR., ESQ., THOMAS B. CALVERT, ESQ., Professor OLIVER A. HOUCK, PANZECA D'ANGELO, SALVADORE PANZECA, ESQ., GREGORY G. D'ANGELO, ESQ., OATS HUDSON, WILLIAM M. HUDSON, III, ESQ., CLIFTON O. BINGHAM, JR., ESQ., LAWRENCE E. MARINO, ESQ., LAWRENCE A. DURANTE, ESQ., DEBRA C. EDLREDGE, ESQ., JAMES K. McCAY, II, ESQ., WILLIAM J. DORAN, JR., ESQ., ROLAND DARTEZ, ESQ., SHERRY S. LANDRY, ESQ., City Attorney, DeBORAH M. HENSON, ESQ., Assistant City Attorney, THOMAS A. ROBICHAUX, ESQ., Assistant City Attorney, PAMELA MILLER PERKINS, ESQ., J. MICHAEL LAMERS, ESQ., MICHAEL W. WASCOMB, ESQ., WALTZER ASSOCIATES, JOEL WALTZER, ESQ., ROBERT B. WIYGUL, ESQ., LISKOW LEWIS, GENE LAFITTE, ESQ., S. GENE FENDLER, ESQ., H.S. BARTLETT, ESQ., FREDERICK C. WHITROCK, ESQ., DONALD E. PUCKETT, ESQ., Counsel for Amicus Curiae.
JOHNSON, Justice, concurs in result.
WEIMER, Justice, additionally concurs with reasons.
The conflict in the instant case is between the rights of individuals and governmental actions which serve the public good. The importance of the outcome of this conflict makes the task of balancing these interests all the more arduous. I write to emphasize the importance of the oyster industry and the importance of the state's fight against coastal erosion to the future well-being of this state. Nevertheless, while acknowledging that individual rights must be respected and protected and that government must be allowed to take those actions which prevent calamity, ultimately, as judges, our role is to apply the law to the facts before us.
The oyster industry has been and continues to be vital to Louisiana's economy. As stated in A Brief History of the Louisiana Oyster Industry:
[C]ultivation of oysters has developed over the years into a partnership between the state and private oystermen through the use of both public seed grounds and privately leased state water bottoms.
Learning from experience, the fishermen began moving "seed oysters" from overcrowded reefs to areas where salinity was more favorable, current more steady, and food more plentiful. The oystermen gathered the seed oysters, planted them in a favorable spot, allowed the seed to grow into mature, market-size oysters, and harvested the crop.
. . . .
The leasing of water bottoms began in the 1850s when oystermen leased areas from the parishes. However, when the Louisiana Oyster Commission (predecessor to the Louisiana Department of Wildlife and Fisheries) was formed in 1902, oystermen began leasing water bottoms from the state.
. . . .
The Louisiana oyster industry is one of the most successful oyster fisheries in the country.
Posted by the Louisiana Department of Wildlife and Fisheries, at http://www.wlf.state.la.us/apps/netgear/index.asp?cn =lawlfpid=1084.
Oyster farming has historically been arduous, backbreaking work requiring a special dedication. Oyster farming is fraught with all the difficulties and risks farmers on land face — such as variances in weather conditions and pests — as well as those peculiar to aquaculture. Louisiana has historically leased water bottoms for a nominal value because this property had little intrinsic value. Through hard work and dedication, many oyster fishermen built reefs with materials referred to as cultch over the muddy water bottoms, turning unproductive lands into an area producing bountiful crops of oysters. Conversion of this previously barren property into productive oyster-producing areas has spanned generations.
See Footnote 10 of majority opinion.
In addition to the leased acreage, market oysters from Louisiana's public seed grounds account for approximately one third of the annual harvest. Assane Diagne and Walter R. Keithly, Jr., The Demand for Relaying by the Louisiana Oyster Industry (2000), at http://oregonstate.edu/dept/IIFET/2000/abstracts/keithly.html.
Estimates indicate state oyster production creates about 10,000 jobs and generates $266 million a year in Louisiana. During 2000, Louisiana produced approximately 10.22 million pounds of the 16.6 million pounds of oyster meat produced nationally — representing approximately 63 percent of the total United States oyster production. It is believed that Louisiana now produces over 70 percent of the total United States harvest. Agriculture Marketing Resource Center at http://www.agmrc.org/aquaculture/oystermain.html. In sum, the oyster industry is a valuable economic asset of Louisiana. Oysters are a rich part of Louisiana's history, heritage, culture, cuisine, and folklore. Louisiana oysters are prized by chefs world-wide as a delicacy.
However, many historically productive areas are likely to be of little value in terms of their ability to produce significant quantities of oysters due to wetlands erosion and subsidence. The Demand for Relaying by the Louisiana Oyster Industry by Assane Diagne and Walter R. Keithly, Jr., supra. Thus, freshwater diversion, which is an integral part of coastal restoration, is important to the viability of the oyster industry as a whole. A unique feature of this case is that although there may be loss by individuals on private leases caused by the freshwater diversion, losses may be offset by oyster production on public grounds, which the evidence established increased dramatically. Oyster productivity from the public seed grounds increased by 300 percent, a fact acknowledged by plaintiffs in brief.
The plight of Louisiana's coast and its wetlands warrants national concern.
Many factors, some natural, some due to human intervention, are converging to result in the loss of Louisiana's wetlands and the concomitant alteration of its coast. Louisiana, because of its many bays and sounds, has the longest coastline (15,000 miles) of any state and 41 percent of the nation's wetlands. Louisiana Department of Economic Development available at http://www.crt.state.la.us/crt/profiles/industry.htm. The losses are alarming and devastating.
The rate of coastal land loss in Louisiana has reached catastrophic proportions. Within the last 50 years, land loss rates have exceeded 40 square miles per year, and in the 1990's the rate has been estimated to be between 25 and 35 square miles each year. This loss represents 80% of the coastal wetland loss in the entire continental United States.
The reasons for wetland loss are complex and vary across the state. Since the scale of the problem was recognized and quantified in the 1970's, much has been learned about the factors that cause marshes to change to open water and that result in barrier island fragmentation and submergence. The effects of natural processes like subsidence and storms have combined with human actions at large and small scales to produce a system on the verge of collapse.
System collapse threatens the continued productivity of Louisiana's bountiful coastal ecosystems, the economic viability of its industries, and the safety of its residents. If recent loss rates continue into the future, even taking into account current restoration efforts, then by 2050 coastal Louisiana will lose more than 630,000 additional acres of coastal marshes, swamps, and islands. The loss could be greater, especially if worst-case scenario projections of sea-level rise are realized, but in some places there is nothing left to lose.
Along with the loss of acreage goes the loss of the various functions and values associated with the wetlands: commercial harvests of fisheries, furbearers, and alligators; recreational fishing and hunting, and ecotourism; habitats for threatened and endangered species; water quality improvement; navigation corridors and port facilities; flood control, including buffering hurricane storm surges; and the intangible value of land settled centuries ago and passed down through generations. The public use value of this loss is estimated to be in excess of $37 billion by 2050, but the losses associated with cultures and heritage are immeasurable. (Emphasis supplied.)
Louisiana Coastal Wetlands Conservation and Restoration Task Force and the Wetlands Conservation and Restoration Authority. 1998. Coast 2050: Toward a sustainable Coastal Louisiana. Louisiana Department of Natural Resources. Baton Rouge, La., Chapter 1, page 1. (In 1998, the State of Louisiana and its Federal partners approved a coastal restoration plan entitled Coast 2050: Toward a Sustainable Coastal Louisiana. That document presented strategies jointly developed by federal, state, and local interests to address Louisiana's massive coastal land loss problem.)
Eloquently stated is the following:
Over a million acres have disappeared since the 1930s and, at the present loss rate of 24 square miles a year, an additional 500 square miles of coastal land will wash away by 2050. Gone forever will be precious nursery habitat for fish and shellfish; nesting and feeding grounds for migratory waterfowl and wildlife; storm surge protection for vulnerable coastal communities, ports, and roads; and land that buffers oil and gas pipelines, production platforms, and shore-based processing facilities against storm and wave damage.
Louisiana's coastal marshes are the cradle of nearly one-third of the total commercial fish and shellfish harvest in the lower 48 states. Seventeen percent of the nation's oil and twenty-five percent of its natural gas are mined in the state's offshore waters. Louisiana's four major ports handle more than 21 percent of U.S. foreign waterborne trade. Calling Louisiana's coastal marshes "a national treasure" is no exaggeration. (Emphasis supplied.)
Postings of Rhea Gary and C.C. Lockwood, http://www.marshmission.com/problem.cfm (2003).
Freshwater diversion became particularly important for the oyster industry after 1927 when the Mississippi River levee system was enhanced for navigation and flood prevention purposes. However, the construction of additional and larger levees prevented river water from reaching adjacent estuaries and the oyster beds located therein on both sides of the Mississippi River. Consequently, these areas continued to become more saline; the salinity killed the plant life that held the soil together. This, in turn, accelerated erosion, which was no longer being offset by the replenishing of land by suspended sediment from the river. As the land eroded, the saltwater intrusion from the Gulf of Mexico continued farther inland In response, the oyster fishermen relocated their oyster beds farther inland away from encroaching saltwater predators and disease, but closer to the sources of manmade pollution.
Avenal v. State, Department of Natural Resources, 01-0843, pp. 2-3, (La.App. 4 Cir. 10/15/03), 858 So.2d 697, 710 (dissent by Judge Tobias).
I agree with the majority's detailed analysis of the plaintiffs' contracts that contain hold-harmless clauses. I also agree with the majority's discussion of prescription which applies to the remaining leases. A threshold consideration regarding prescription is a comparison of the property rights guarantee of the United States Constitution with the property rights guarantee of the Louisiana Constitution. The Fifth Amendment of the United States Constitution states in pertinent part: "No person shall be . . . deprived of . . . property, without due process of law; nor shall private property be taken for public use, without just compensation." (Emphasis supplied.) Article 1, Section 4 of the Louisiana Constitution of 1974 states in pertinent part: "Property shall not be taken or damaged by the state or its political subdivisions except for public purposes and with just compensation." (Emphasis supplied.)
Generally, the language of the Fifth Amendment has been given a broad meaning, which results in a "taking" in the constitutional sense not only when there is a substitution of ownership but also when there is deprivation of ownership, including damage to, depreciation in value of, and destruction of property. 29A CJS Eminent Domain § 82 at 230 (1992). Likewise, in Louisiana, taking and damage claims are treated the same for most purposes, and it is seldom necessary to delineate between taking and damaging. See State, Department of Transportation and Development v. Chambers Investment Company, Inc., 595 So.2d 598, 603 (La. 1992); Constance v. State, Department of Transportation and Development, Office of Highways, 626 So.2d 1151, 1156-1157 (La. 1993). However, in cases where the differences between the two discrete rights specified in the Louisiana Constitution — proscription of the state's taking personal property without just compensation and proscription of the state's damaging personal property without just compensation — form the dispositive issue, we must give effect to the language of the Louisiana Constitution.
The term "taken" as used in the Fifth Amendment has been interpreted broadly to include some, but not all, damages to private property. When federal or state government limits the owner's use of private property, without itself occupying or otherwise using the property for government purposes, the classic analytical tool used by the federal courts for assessing whether a taking has occurred is the three-part test enunciated in Penn Central Transportation Co. v. New York City, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978). Avenal v. United States, 100 F.3d 933, 937 (Fed. Cir. 1996). The courts consider: "the character of the governmental action, the economic impact on the claimant and, particularly, the extent to which the governmental action has interfered with distinct investment-backed expectations." Id. Finding that these plaintiff oyster farmers did not have distinct investment-backed expectations, the federal appellate court rejected the argument that the Caernarvon Freshwater Diversion Structure (Caernarvon) resulted in a "taking" pursuant to the Fifth Amendment. Thus, the plaintiffs' claims were not compensable under the federal constitutional guarantee despite the broad interpretation accorded the word "taking" in the federal jurisprudence.
See discussion of Penn Central and of plaintiffs' claim under the Fifth Amendment of the United States Constitution at Footnote 28 of the majority opinion.
Regarding any claims of the plaintiffs asserted pursuant to the U.S. Const. amend. V, I believe these claims are properly denied based on the rationale of the federal court in Avenal, 100 F.3d 933.
In contrast, La. Const. art. I, § 4, using both words, "taken" and "damaged," encompasses damage claims that would not necessarily qualify as a taking under the Fifth Amendment. Under Louisiana law, a damage claim is compensable although it is not a taking. Although "damages" sustained as a result of public projects are potentially compensable under the Louisiana Constitution, not all claims that are compensable under federal law (because they are deemed to be "takings") are "takings" under Louisiana law.
In sum, because the Louisiana Constitution provides for compensation for property "taken" or "damaged," what is considered "taken" is a narrower concept in Louisiana when contrasted with federal law. Under federal law, interpretation of the term "taken" is broader. Under Louisiana law, the right to compensation is broad, but the interpretation of "taken" is narrower than in the federal sense. It would be incongruous for the identical governmental act for public purposes, the Caernarvon project, to meet the narrower interpretation of "taken" called for by the Louisiana Constitution but not to meet the broader interpretation of "taken" for Fifth Amendment purposes. See, Avenal, 100 F.3d 933. The fourth circuit's decision that the Caernarvon project was a taking pursuant to the Louisiana Constitution was erroneous. Avenal, 01-0843 at 11-12, 858 So.2d at 705-706.
Thus, although the Louisiana Constitution provides that just compensation shall be paid when property is taken or damaged, LSA-R.S. 13:5111 provides a three-year prescriptive period for takings and LSA-R.S. 9:5624 provides a two-year prescriptive period for damage. A.K. Roy, Inc. v. Board of Commissioners for Pontchartrain Levee District, 237 La. 541, 547-548, 111 So.2d 765, 767 (1959) (Prescriptive period of LSA-R.S. 9:5624 applies only when private property is damaged, but not to actions for recovery of private property taken for public purposes.).
Louisiana jurisprudence has applied the two prescriptive periods on a case by case basis, usually with the issue being whether one of these two prescriptive periods for eminent domain cases was applicable instead of some other prescriptive period, such as the one-year limitation for asserting tort claims. The two-year prescriptive period of LSA-R.S. 9:5624 has been applied in various factual situations. See, Lyman v. Town of Sunset, 500 So.2d 390 (La. 1987) (Land developer's suit against town, alleging town's operation of landfill diminished property value and marketability of subdivision development, was subject to two-year prescriptive period.); see also appellate court cases cited therein, Florsheim v. Department of Highways, 201 So.2d 155 (La.App. 2 Cir. 1967) (Claim for compensation by owner of buildings located adjacent to interstate highway right-of-way and structurally damaged by vibrations associated with construction of the highway was brought within the two-year limitation.); Nuckolls v. Louisiana State Highway Department, 337 So.2d 313 (La.App. 2 Cir. 1976) (Claim of landowner whose property was adjacent to public highway construction site who sued for flooding caused by unauthorized alteration of natural drainage was not timely when filed more than two years from date of the first flooding.); Carbo v. Hart, 459 So.2d 1228 (La.App. 1 Cir. 1984), writ denied, 462 So.2d 654 (1985) (Action against city for damages arising from flooding of plaintiffs' property which was immediately adjacent to city limits allegedly caused by work on a man-made drainage canal was time barred by two-year prescriptive period.); Broussard v. Booth, 446 So.2d 974 (La.App. 3 Cir.), writ denied, 449 So.2d 1357 (1984) (Plaintiff's claim against police jury for flooding of his property after a drainage construction project was time-barred because filed more than two years after plaintiff became aware of the flooding; police jury's action resulted in damages to plaintiff's property and not a taking of the property when police jury had not expropriated, taken possession of the property, nor constructed any facility upon, under or over his property.)
In the instant case, suit was filed on March 29, 1994, which was more than two years after the completion, acceptance, and initial operation of the Caernarvon project. Suit was filed less than three years from the date the plaintiffs contend a "taking" occurred, when the oyster beds were "rendered permanently non-usable" for the commercial production of oysters. See, Avenal v. State, Department of Natural Resources, 01-0843, p. 12 (La.App. 4 Cir. 10/15/03), 858 So.2d 697, 705 ("When property has been rendered permanently non-usable for its only purpose, that is a taking.") Thus, the plaintiffs argue to this court that the court of appeal was correct in rejecting the state's plea of prescription, and the state argues that the court of appeal confused taking and damage claims.
In Columbia Gulf Transmission Company v. Hoyt, 252 La. 921, 215 So.2d 114 (1968), this court held that a predial lease is property within the meaning of the Louisiana Constitution, requiring just compensation to the lessee before the lease rights were damaged. Hoyt, 252 La. at 937-938, 215 So.2d at 120-121. Similarly, in Avenal, 100 F.3d at 936, the federal appellate court acknowledged that the plaintiffs owned valuable property rights in their leases of the water bottoms and remarked that the question was not whether plaintiffs had a constitutionally protected property interest, but whether that property interest was taken by the government.
As recognized by the majority in Hoyt, the Louisiana Supreme Court distinguished between what is considered "taken" as opposed to what is considered "damaged." "[P]roperty is 'taken' when the public authority acquires the right of ownership or one of its recognized dismemberments. Property is considered 'damaged' when the action of the public authority results in the diminution of the value of the property." (Citations omitted.) Hoyt, 252 La. at 935, 215 So.2d at 120. Because the state did not acquire any right of ownership, there was no taking from a Louisiana constitutional standpoint. Id. In the instant case, testimony at trial established many of the leases at issue were non-productive because they fell within the seasonal closure line; however, the leaseholders chose to retain the leases because they derive revenue from oil and gas interests that continue to conduct surveys, seismic activities, oil exploration, and lay pipelines on the leaseholds. Avenal, 01-0843 at 54, 858 So.2d at 738-739 (dissent). Other testimony indicated there was some oyster production subsequent to Caernarvon's going on line.
Hoyt was decided before the adoption of the Louisiana Constitution of 1974. Both the Constitution of 1921 and the Constitution of 1974 provided that property shall not be taken or damaged except for public purposes. Although Article I, section 2 of the 1921 Constitution provided that "just and adequate compensation" was to be paid, while Article I, section 4 of the 1974 Constitution provides that a party whose property is expropriated "shall be compensated to the full extent of his loss[,]" the "taken or damaged" language remained unchanged.
Lastly, as the majority notes, the state owns the water, water bottoms, and oysters. The state cannot take from someone that which it owns. Further, the oyster farmers still possess the leasehold interests. Thus, rather than taking, the state damaged one aspect of plaintiffs' leasehold interest; therefore, LSA-R.S. 13:5111 which applies to a taking is inapplicable to plaintiffs' claims.
Although I conclude there was no taking, for the sake of analysis, I will assume there were damages. However, a forceful argument can be made to the effect that if the state exercises its police power to avoid a public calamity or in cases of imminent peril to the general welfare, there is no compensable taking or damage. See, 29A CJS Eminent Domain § 8-10, p. 104-109. Here, the project was commenced, in part, because of the requests of the oyster industry. The area affected had not supported oysters historically until the construction of the levee system artificially altered salinity levels. The fresh water intrusion project, which had been publically discussed and planned for decades before its ultimate construction, benefitted the entire oyster industry because the public seed grounds blossomed, thus, limiting any potential losses suffered by plaintiffs. Further, relocation of the leaseholds was offered and plaintiffs declined. The salinity level to which the plaintiffs claim entitlement was an artificial level, resulting from salt water intrusion due partially to levee construction. It is this salinity level which, in part, is adversely impacting the coast. "The destruction of property to avert impending peril or disaster . . . is an exercise of the police power, and not a taking under the power of eminent domain." 29A CJS § 9, pp. 108-109. See also, footnote 3, supra. The majority's discussion concerning the public trust doctrine is consistent with the state's police power and the following constitutional provision, which prefaces the portions of La. Const. art. I, § 4 invoked by plaintiffs in their claim for compensation: "Every person has the right to acquire, own, control, use, enjoy, protect, and dispose of private property. This right is subject to reasonable statutory restrictions and the reasonable exercise of the police power." (Emphasis supplied.)
Having written to emphasize the significance of the divergent interests raised in this matter, I respectfully concur.