Louisiana Record

Wednesday, August 21, 2019

Pacific Legal Foundation argues on behalf of Louisiana businesses

By Angela Underwood | Apr 19, 2017

SACRAMENTO – Pacific Legal Foundation (PLF), the oldest public-interest legal organization of its kind, continues to make a marked difference in defending Americans' Fifth Amendment rights.

Brian T. Hodges, senior and managing attorney at Pacific Legal Foundation, said that is the reason why the 43-year-old foundation filed an amicus brief arguing that business losses may be recoverable when the government exercises its eminent domain authority to take property, including the levee servitude at issue in such cases like South LaFourche Levee District v. Jarreau.

“Though it is rare that business-type damages are awarded as a part of a compensation award, there are circumstances where they can be recovered,” Hodges told the Louisiana Record. “That is why it is good we got the Louisiana Supreme Court to recognize that there are circumstances where business losses can be recoverable, but sadly, to the property owner in this case, the court found reasons not to award such damages.”

He said the fact that the lower appellate court had held that business losses were not recoverable as “some black letter rule,” was why PLF stepped in. 

“We got involved and filed an amicus brief and cited a number of cases where business and economic damages were recovered by property owners,” Hodges said, noting that in Jarreau’s case, the court only awarded $10,000 in compensation for the value of the land and told him to take his business elsewhere.

“In this case, Jarreau ran a dirt excavation business," Hodges said. "His business was inextricably connected to his property where he was excavating the dirt. Sadly, the courts are the ultimate arbitrators of these facts, and they found that because he could get dirt of equal value somewhere else, the government’s appropriation of his property only took generic dirt and not business-specific dirt."

According to Hodges, Louisiana has chosen to limit the amount of compensation payable to owners of property burdened by a levee servitude. 

“An earlier version of the state constitution provided that property owners must be compensated to full extent of their loss,” he said, adding that the state complained that compensation awards became too expensive when the levees were located on lands supporting businesses such as oyster farms. The legislature then amended that language from “the full extent of the loss” to “not to exceed the compensation allowable by the Fifth Amendment.” 

Hodges said it was essential for PLF to step in and argue that the appellate court was wrong because the Fifth Amendment demands that a dispossessed property owner be put in as good a position as he or she would have been if the government had not taken the property. Sometimes, that requires the court to award more than just the raw value of the land and demands recovery of business and other economic damages.

Hodge said the foundations focuses on property rights, free speech and economic liberty. The PLF has had nine landmark U.S. Supreme Court victories.

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Organizations in this Story

Louisiana Supreme Court Pacific Legal Foundation