Louisiana Record

Thursday, September 19, 2019

Louisiana high court's eminent-domain decision could affect future government actions, lawyer says

By Karen Kidd | Feb 14, 2018

NEW ORLEANS — A split Louisiana Supreme Court finding St. Bernard Parish's 2010 seizure of a private port along the Mississippi River lawful could encourage aggressive government takings, an attorney in the case and a dissenting justice said.

"We are concerned that this 4-3 ruling could have an effect on future aggressive eminent domain actions by government," Randall A. Smith, founder and managing partner of Smith & Fawer in New Orleans, said in a Louisiana Record email interview.

Smith was lead attorney for Violet Dock Port, which operated the deepwater St. Bernard Port on about a mile of frontage along the Mississippi River until it was taken by the parish port authority, which then leased the port to Violet Dock's rival, Associated Terminals. Violet Dock Port and St. Bernard Parish have been in a legal battle over the taking ever since.

Louisiana Supreme Court Justice John Weimer, one of three justices who dissented in the case.

In its split decision handed down Jan. 30, the high court affirmed an appeals court ruling that St. Bernard Parish port officials properly used the state's eminent-domain laws but reversed the lower court's decision about the amount of compensation. The high court in its 39-page decision wrote that $16 million compensation was too low and that the trial court had made a legal error in determining just compensation that the appeals court failed to correct.

"We therefore remand this matter to the court of appeal solely for the purpose of fixing the amount of just compensation based on the evidence in the record and in accordance with the principles set forth in this opinion," Justice Scott Crichton wrote in the court's majority opinion.

The opinion did not say what amount would be just compensation but Violet Dock Port previously asked for $35 million and a footnote in the opinion refers to a figure of more than $41 million. 

"As for compensation, my experience is that the government often low-balls (to use your words) and we do find it significant that - without dissent - the Louisiana Supreme Court overturned the low compensation award and referenced the $41 million, as opposed to the $16 million," Smith said.  

Crichton, along with Chief Justice Bernette Johnson and Justices James Genovese and Marcus Clark, made up the majority in the court's decision while Justices John Weimer, Greg Guidry and Jefferson Hughes III dissented.

The court's majority opinion flew in the face of the state's constitution, Weimer wrote in his dissent. "With all due respect, I find the majority opinion unfortunately eviscerates the long, significant history the citizens of Louisiana have embodied within the Louisiana Constitution, Article 1 to protect private business from takeover by the government," Weimer wrote.

"[T]he majority opinion thereby subjects business interests across Louisiana to increased risk of government takeovers, which has the effect of thwarting private business from initiating economic development that competes with governmental enterprises," Weimer wrote. "While agreeing that the determination of whether the St. Bernard Port, Harbor & Terminal District expropriated the property and port facilities owned by Violet Dock Port, Inc., LLC for the purpose of operating that port facility or halting competition with the Port is, to an extent, fact-based, I find that legal errors committed by the district court interdicted the fact-finding process, necessitating de novo review."

Crichton argued that the Louisiana Constitution is far more flexible and that it needs to be to provide for market demand. 

"Although the Louisiana Constitution generally restricts the government from expropriating private property, it provides broad exceptions for public port authorities," Crichton wrote in the opinion.

"To Louisiana’s maritime industry, public ports are critical. Due to market demands and increasing global competition, public ports must expand in order to compete."

Meanwhile, Violet Dock is not yet out of options, Smith said. 

"We do have a right to ask for rehearing and will be filing for that in the next few days," Smith said.

"We also have the right to go to the United States Supreme Court if unsuccessful on rehearing," he added.

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Organizations in this Story

Louisiana Supreme Court Smith & Fawer LLC St. Bernard Parish U.S. Supreme Court