Public Power, Private Gain: Louisiana

Overview

 

Louisiana has been relatively modest in its use of eminent domain for private parties. The main source of private condemnations in the past five years has been a hotel/convention center project in Shreveport, which generated five condemnations. St. Gabriel also condemned property for a private railroad spur. Courts upheld the Shreveport condemnations and the case in St. Gabriel. In the next several years, local officials may continue to use restraint in condemning property, or they may be emboldened by these judicial decisions and decide to push the envelope.Private Use Condemnations

 

Shreveport

City leaders in Shreveport have been trying for years to build a new convention center, a centerpiece of which would be a large, privately owned hotel. In 1999, Shreveport voters backed a bond referendum to raise the $85 million needed for the project. The City then began studying various locations for the new convention center, eventually settling on a three-block strip along Caddo Street near the riverfront. The selected area included land owned by Chanse Gas Corp., which operated a warehouse and office building there, along with an adjacent parking lot. After fruitless negotiations between the City and Chanse Gas, the City condemned the property on January 11, 2000. Chanse Gas challenged the taking, arguing that the City’s convention center project would not serve a public purpose, but instead would subsidize the construction of a new hotel to compete with the existing hotels in the area. Chanse Gas also argued that the convention center would drain the City’s coffers to benefit private developers, thus jeopardizing other worthy public projects. The trial court disagreed, and upheld the taking.270 The Louisiana Court of Appeals affirmed the ruling in August 2001, stating that the project was justified by the “economic development” the new convention center/hotel would bring to downtown Shreveport.271 The Louisiana Supreme Court declined to review the case.272

 

Shreveport

As part of the same hotel/convention center development, the City and its design consultants determined that the best location for a 1,200-car parking garage was on a site adjacent to the planned hotel. The garage would be owned and operated by the City, but would serve both patrons of the convention center and hotel guests. The desired site comprised three parcels of land, all of which were owned by the Shreve Town Company. A City appraiser valued the land at $870,000, but Shreve Town rejected the City’s offer to buy the parcels at that price. The City refused to consider Shreve Town’s offer to jointly operate the garage. In February 2000, the City Council voted unanimously to condemn the properties, stating that public necessity dictated that they be controlled by the City. The company challenged the condemnation in federal court. The trial court held that rather than being a mere amenity to the new convention center, the new parking facility was necessary to its success, and therefore the taking served a public purpose. The U.S. Court of Appeals for the Fifth Circuit affirmed, holding that the condemnation did not violate the Louisiana Constitution.273

 

St. Gabriel

Illinois Central Railroad Co. sought to expropriate a strip of property owned by James and Barbara Mayeux for a proposed railroad spur leading to an LBC PetroUnited chemical storage facility on the Mississippi River. Illinois Central tried to negotiate with the Mayeuxs for an easement over their land, but the family was unwilling to sell. So the railroad filed a complaint for expropriation of the Mayeux land in Louisiana federal court, claiming that the proposed rail spur would serve a public and necessary purpose. After hearing arguments from both sides, the trial court granted the railroad a summary judgment on the issue.274 The Mayeuxs appealed that decision, and in August 2002 the U.S. Court of Appeals for the Fifth Circuit reversed,275 holding that regardless of Louisiana’s statute allowing railroads to condemn “needed” private property, the taking must satisfy the U.S. Constitution’s public use necessity requirement. The trial court stated that necessity is satisfied simply by declaring that the taking is for “railroad purposes.” However, the Fifth Circuit held that a court must consider “whether there is an actual public demand for the expropriation.”276 Because the Mayeuxs showed that a genuine dispute existed on the issue of necessity, the Fifth Circuit remanded the case to the district court.277 However, the appeals court agreed that taking property for a railroad spur that would serve one company could be a public use.

 

*These numbers were compiled from news sources. Many cases go unreported, and news reports often do not specify the number of properties against which condemnations were filed or threatened.

270 See City of Shreveport v. Chanse Gas Corp., No. 00-0315 (Caddo Parish, La. June 16, 2000).

271 See City of Shreveport v. Chanse Gas Corp., 794 So. 2d. 972 (La. App. 2001).

272 See City of Shreveport v. Chanse Gas Corp., 805 So. 2d. 209 (La. 2002).

273 See City of Shreveport v. Shreve Town Corp., No. 00-0315 (W.D. La. Nov. 27, 2000), aff’d, 314 F.3d 229 (5th Cir. 2002).

274 See Illinois Central Railroad Co. v. Mayeux, 178 F. Supp. 2d 663 (2000).

275 See Illinois Central Railroad Co. v. Mayeux, 301 F.3d 359, 361 (2002).

276 Id. at 368.

277 Id. at 369.