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Judge dismisses WTC development lawsuit; attorney says 'case is far from over'

By Karen Kidd | Jul 15, 2016

WTC tower | Shutterstock

NEW ORLEANS – Development of New Orleans' former World Trade Center, stalled for a year by litigation over how the city awarded the bid in the project, may soon move ahead following a judge's dismissal of a lawsuit in the case.

Orleans Civil District Court Judge Tiffany Chase on July 13 dismissed Three Canal Street Investor's case against New Orleans Building Corp. Chase also canceled the notice of pendency that had been blocking redevelopment of the former World Trade Center Building into a $360 million modern facility that includes a Four Seasons hotel.

"The Four Seasons development team is pleased by the court's dismissal of this baseless litigation," Greg Beuerman, spokesman for the Four Seasons development team, said in an email to the Louisiana Record.

Beuerman also mentioned Two Canal Street Investors owner and Palm Beach, Florida businessman Stuart C. "Neil" Fisher.

"As we have stated all along, Mr. Fisher's TCSI is a shell corporation with no assets," Beuerman said. "We look forward to bringing the Four Seasons Hotel to New Orleans along with much-needed jobs and new economic opportunity for the region."

Two Canal Street Investors was a losing bidder on the city's effort to redevelop the 33-story former office building on the riverfront.

Chase's judgment handing down the dismissal contains no explanation of how the judge reached her decision. However, spokespersons for both sides confirmed the dismissal was sparked by Two Canal Street Investors' failure to post $750,000 in security to maintain the lawsuit.

Chase erred in her judgment and the amount required was excessive, Charline K. Gipson, an attorney with the New Orleans Davillier Law Group, said during a Louisiana Record email interview. Chase signed the dismissal without hearing from Two Canal Street Investors, Gipson said.

"The motion was furthermore submitted unilaterally by the city, NOBC and Carpenter Woodward, and is based on a plain legal error that TCSI intends to appeal to the highest level," Gipson said. "The defendants' failed attempt to change the law to require a multimillion dollar bond for plaintiffs to access the courts has apparently been converted to an unprecedented interpretation of a longstanding statute regarding security for court filing fees."

The amount Two Canal Street Investors had until July 8 to post was not required by a new law signed by Gov. John Bel Edwards last month, a law that is supposed to prevent this type of litigation, but an earlier version of that legislation would have require much more be posted.

"Any experienced legal practitioner knows that security for court costs refers to expenses associated with the services of the clerk of court, and not an illusory, inflated bond in the amount of $750,000 that bears no rational connection to the actual court fees contemplated by the cited statute," Gipson said.

These fees do not apply to defendants in the case, Gipson said.

"Even more curious about the exorbitant security amount that was set in this case is the fact that the city and NOBC do not even incur court filing fees," she said. "This continues an unfortunate trend of questionable efforts to avoid a trial on the merits on alleged violations of the public lease law to the detriment of New Orleanians and the benefit of powerful private parties.”

Two Canal Street Investors did file an opposition to defendants' motion to dismiss, a copy of which Gipson provided to the Louisiana Record.

"Louisiana does not have a 'Loser Pays' system," Two Canal Street Investor's opposition says. "Efforts to create a Loser Pays system have failed for decades. To apply the clear statutes at issue in the manner is to crush the access of all but the wealthy to the legal system."

However, Gipson said the opposition seems to have had little bearing on Chase's decision.

"It appears the judge may not have reviewed TCSI's brief prior to the execution of the dismissal order," Gipson said.

Gipson did not respond to a direct question about whether Two Canal Street Investors will appeal the case. However, she did say: "This case is far from over."

Two Canal Street Investors would have less than two weeks to appeal Chase’s decision.

Any appeal in the case could be tripped up by the new law, which includes very tight time tables for courts to hand down decisions in this type of litigation. Two Canal Street Investors attorneys have said those time tables appear to be unconstitutional, which may suggest the case, on appeal, could bring constitutional challenges that could potentially land it in the state Supreme Court.

The older of Two Canal Street Investors' two lawsuits challenging the bidding process to redevelop the former World Trade Center property had been scheduled to go to trial Oct. 24. Development of New Orleans' 33-story former World Trade Center, located on the riverfront, was leased last year to the development team led by Carpenter & Co. of Massachusetts and Woodward Interests of New Orleans.

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