NEW ORLEANS (Louisiana Record) – An attorney for the company that lost its bid to develop the former World Trade Center in New Orleans said the latest filing by defendants in the case is another attempt to avoid trail.
New Orleans residents stand to lose if the Orleans Civil District Court judge grants a defense motion for dismissal in Two Canal Street Investor's case, Charline K. Gipson, an attorney with the New Orleans Davillier Law Group that represents the company, said in an email to the Louisiana Record. Gipson took especial aim at the city and its property development arm, the New Orleans Building Corp. (NOBC).
"The voting, taxpaying citizens of New Orleans stand to be the biggest losers if the city and NOBC are not held accountable for their actions," Gipson said. "The city needs to explain to the people of New Orleans why it passed on an additional $60 million in rent in 2015, and over $2 billion in higher rent over the term of the 99-year lease; delivered a contract to a party who had undisclosed conflicts; and then tried to raise taxes, which could have been avoided if the city had awarded the lease to the highest bidder, as required by the Public Lease Law."
Gipson's comments were in response to a filing in the case on April 29 by attorneys for Carpenter Woodward and other defendants in the case. The filing, a memorandum of law meant to support their motion asking the Orleans Civil District Court judge to dismiss the case, claims there is no right of action.
Much of the memorandum concentrates on Two Canal Street Investors President Stuart "Neil" Fisher.
"TCSI is a shell corporation with no assets, no property, no board meetings or minutes, no bank accounts, and no function other than to act as a hook to keep Stuart Fisher, the alter ego of TCSI, in court," the memorandum says.
The memorandum continues with more allegations about Fisher: "Fisher had no ownership interest in TCSI throughout the bidding process and even when the project was awarded to Intervenors," the memorandum says. "Fisher did not suffer any legally cognizable damage due to TCSI not being selected. Fisher personally has no real or actual interest in this action. Nevertheless, through his purchase of TCSI (for ten dollars, with full knowledge that it already had lost the WTC project), he has been granted access to the court to halt the rightful owners of the lease from doing work that they were awarded.
"In short, Fisher's separate identity from TCSI is a legal fiction. The two are alter egos of each other."
Fisher acquired Two Canal Street Investors with a single goal in mind, the memorandum says.
"Fisher purchased it to be a conduit for a lawsuit that none of the owners of TCSI wanted to pursue," the memorandum said.
For these reasons, Two Canal Street Investors’ lawsuit should be dismissed because there is no right of action. As Fisher and TCSI are alter egos of each other, justice demands that the legal fiction of their separate identities be erased."
Carpenter Woodward's attorneys backed up the memorandum filing with a 4-inch binder of supporting materials, which likely include emails from Two Canal Street Investors officials before any litigation was filed. Those emails praised the city's handling of the bidding process and spoke with approval of the winning bidder's plans for developing the former World Trade Center.
A hearing date for the court to consider the memorandum and motion for dismissal is set for June 1, Greg Beuerman, spokesman for the Carpenter-Woodward litigation team, which works with developer Four Seasons New Orleans, confirmed in an email to the Louisiana Record.
"I cannot speculate on how the court might rule regarding this filing," Beuerman said. "However, we feel strongly that the record supports our position and that Mr. Fisher's self-serving attempts to derail the creation of 2000 permanent and construction jobs and $15 million in annual city and state tax revenues will ultimately be rejected. We have great confidence in our legal position."
Gipson countered that Two Canal Street Investors is a legally established company in the state with all the rights to litigate that any Louisiana company can expect.
"Two Canal Street Investors Inc. is a duly formed and validly existing Louisiana business corporation, which is active and in good standing with the Louisiana Secretary of State," Gipson said. "TCSI absolutely has a right of action, and the pending motion – by parties who offered substantially below market rent to the public – was previously rejected by the court months ago."
The filing, Gipson said, is part of the defendants' strategy to try to circumvent the court and keep the case from coming to trial.
"As with the introduction of the ill-conceived and unconstitutional Senate Bill 447 by these same actors, the motion set to be heard on June 1 is an effort to avoid a trial on the merits, currently scheduled for Oct. 24, 2016, and also to prevent any meaningful examination into the alleged illegal acts under the Public Lease Law," Gipson said.
Gipson added that Two Canal Street Investors expects to file its own motion in the case on May 24, a motion that will claim there is no legal precedent for the dismissal of Two Canal Street Investor's statutorily protected right of action, as an unsuccessful bidder."
Senate Bill 447 would require Two Canal Street Investors, and any future company who brings a similar challenge, to post millions of dollars in bond to maintain the case. That bill passed the Senate in a near unanimous vote last month, about two weeks after its introduction by Conrad Appel (R - District 9). The bill now sits in the House Committee on Civil Law and Procedure. Should the House pass the bill, the governor's signature would be required for it to become law.
Much of the case revolves around Two Canal Street Investor's president, Fisher, a Palm Beach, Florida resident, who is not named as a plaintiff in the case. Fisher is under the court's order to submit to deposition, which he reportedly spent months avoiding. It is not clear if Fisher has complied with the court's order.
Neither Fisher nor his personal legal counsel, Miami attorney Gary E. Davidson, have responded to requests for comment.
Last month, the 4th Circuit Court of Appeal affirmed an earlier ruling by Orleans Civil District Judge Tiffany Chase that denied Two Canal Street Investor's motion for preliminary injunction to stop Four Seasons development from moving forward. The 4th Circuit found the $360 million development proposal, including a Four Season Hotel, accepted by the city last winter, could move forward because the city's selection process was legal and proper.
The case is one of two lawsuits filed by Two Canal Street Investors against the city and various city officials. In March, Two Canal Street Investors filed its second lawsuit in Orleans Civil District Court condemning the selection process by which New Orleans awarded the development to Four Seasons New Orleans. That latest lawsuit also names as defendants members of the real estate consulting team who advised the city in that process.