Case Name: Albert J. AVENAL, Jr., et al. v. STATE of Louisiana, DEPARTMENT OF NATURAL RESOURCES
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 2003-10-15
Citations: 858 So. 2d 697
Docket Number: No. 2001-CA-0843
Parties: Albert J. AVENAL, Jr., et al. v. STATE of Louisiana, DEPARTMENT OF NATURAL RESOURCES.
Judges: (Court composed of Chief Judge WILLIAM H. BYRNES III, Judge JOAN BERNARD ARMSTRONG, Judge PATRICIA RIVET MURRAY, Judge TERRI F. LOVE and Judge MAX N. TOBIAS Jr.).
Reporter: Southern Reporter, Second Series
Volume: 858
Pages: 697–743

Head Matter:
Albert J. AVENAL, Jr., et al. v. STATE of Louisiana, DEPARTMENT OF NATURAL RESOURCES.
No. 2001-CA-0843.
Court of Appeal of Louisiana, Fourth Circuit.
Oct. 15, 2003.
Rehearing Denied Nov. 21, 2003.
Philip F. Cossich, Jr., Cossich Martin Sumich & Parsiola, Belle Chasse, LA, Les Martin, New Orleans, LA, Michaél X. St. Martin, Timothy C. Ellender, Jr., St. Martin & Williams, Houma, LA, Wendell H. Gauthier, Seott Labarre, Gauthier, Downing, Labarre, Beiser & Dean, Metairie, LA, Carolyn McNabb, Carolyn McNabb & Associates, Houma, LA, for Plaintiffs/Appellants.
Richard P. Ieyoub, Attorney General, Andrew C. Wilson, Donna M. Young, David L. Carrigee, Jedd S. Malish, Special Assistant Attorneys General, Burke & Mayer, New Orleans, LA, for Defendant/Appellant.
(Court composed of Chief Judge WILLIAM H. BYRNES III, Judge JOAN BERNARD ARMSTRONG, Judge PATRICIA RIVET MURRAY, Judge TERRI F. LOVE and Judge MAX N. TOBIAS Jr.).

Opinion:
| JOAN BERNARD ARMSTRONG,
Judge.
This is a class action by oyster fishermen who contend that their leases were taken, in a constitutional sense, by the State of Louisiana Department of Natural Resources. Following a jury trial, the trial court rendered judgment in favor of the plaintiffs. The State appeals. For the reasons given below, we will modify the quantum of damages awarded as to one of the plaintiffs but otherwise affirm.
The alleged taking occurred as a result of the operation of the Caernarvon Freshwater Diversion Structure (the "CFDS") as a coastal restoration measure. The ecology of the areas where the plaintiffs' oyster leases were located was altered as a result of the freshwater diversion so as to make those areas no longer suitable for oyster production.
Historically, the Breton Sound Basin, where the plaintiffs' oyster leases were located, contains a mixing of freshwater from the Mississippi River and other freshwater sources with saltwater from the Gulf of Mexico. As a result, much of |gthe area had water of intermediate salinity. In particular, much of the area had an intermediate salinity level that is suitable for oysters. Stated in a simplified manner: The area closest to land, and thus closest to the sources of freshwater, had the lowest salinity and was not sufficiently saline for oysters. The area farthest from land, and thus closest to the Gulf of Mexico, had the highest salinity and was too saline for oysters. In between those two areas was the area of intermediate salinity that was suitable for oysters. Over time, the construction of flood-control levees on the Mississippi River reduced the flow of freshwater into Breton Sound. That reduction of freshwater flow, along with other man-made and natural changes, caused the area of intermediate salinity, suitable for oysters, to move landward. The area of higher salinity, which was not suitable for oysters, also moved landward. The reduction of the flow of freshwater and the landward movement of the area of higher salinity caused coastal erosion and loss of coastal wetlands.
The State, with assistance from the federal government, has undertaken a program of coastal restoration. With respect to Breton Sound, the coastal restoration effort requires the diversion of additional freshwater from the Mississippi River to Breton Sound. This diversion is done by means of the CFDS. This increased flow of freshwater moved the intermediate salinity area, which is suitable of oysters, outward away from the land. Areas closer to the land, which had previously had intermediate salinity, and which had been suitable for oysters, became areas of lower salinity which were no longer suitable for oysters. The area |3of higher salinity, which is not suitable for oysters, was moved farther from land. In sum, as a result of CFDS, some areas which had previously not been suitable for oysters became suitable for oysters and some areas which had been suitable for oysters were no longer suitable for oysters. The plaintiffs' oyster leases were in areas which were no longer suitable for oysters.
The CFDS is a success, and has halted coastal erosion and fostered coastal restoration. However, one of the costs of these laudable achievements is that the plaintiffs' oyster leases are no longer productive to a commercially feasible extent. Variations in the flow of freshwater through CFDS, particularly reductions of the flow of freshwater, can sometimes allow temporary, sporadic production of oysters on the plaintiffs' leases. However, assuming that CFDS will be used as intended, and there is no reason to doubt that it will be, and assuming that CFDS produces the results planned, and in fact it is doing so, the plaintiffs' oyster leases can no longer be used for commercial oyster production.
The first issue raised on appeal by the State is the quantum of damages. The water bottoms are owned by the State and leased to the plaintiffs. The plaintiffs presented damages evidence, which was accepted by the trial court, based upon the cost that would be required to "restore" (or, more accurately, recreate in another location) suitable conditions of the water bottoms of the plaintiffs' oyster leases. [ 4More specifically, oyster leases, to be productive, must have water bottoms covered with "cultch", which is hard material such as crushed shells, gravel, etc. laid down over the mud or sand of the water bottom. The trial court awarded damages using a formula (referred to as the "cultch currency matrix") as to the cost (installed) of cultch on a per acre basis which cost it multiplied by the number of acres covered by the plaintiffs' oyster leases. In particular, the trial court awarded damages of $21,345 per acre.
The cultch currency matrix was developed by the State, Department of Natural Resources ("DNR"), in cooperation with various private groups (oyster fishermen, the oil & gas industry, environmental organizations, etc.), state and federal agencies (Department of Wildlife and Fisheries, Army Corps of Engineers, etc.) and biologists and other scientists with interests in coastal areas containing oyster leases. The State, DNR brought representatives of all of these various interests together at an Oyster Lease Valuation Matrix Workshop in March, 1995. The list of attendees at the Workshop includes a number of the expert witnesses who testified for each side below as well as the State's trial counsel below. Thus, the State was well-represented at the Workshop from a scientific, technical and even legal standpoint.
The minutes of the Workshop reflect that numerous issues and proposals were discussed covering scientific/technical, economic/financial and other topics. There were some issues and proposals as to which the various interests represented at the Workshop were unable to agree. However, consensus developed on | ¡sufficient issues and proposals that the Workshop was able to produce the cultch currency matrix as a consensus means of valuing damages to oyster leases. The State, DNR, adopted the matrix with minor modifications.
The matrix uses the cost of cultch (installed) as the "currency" for valuing oyster leases. The layer of cultch placed on the water bottom is necessary for the growth of oysters. The cultch currency matrix looks to the cost of the cultch (installed) on a per-acre basis as the measure of value of the oyster lease. Thus, in the present case, the cultch currency matrix measures the value of the plaintiffs' leases by the cost of replacing them at another location by the placement of the necessary cultch. (Interestingly, in another coastal area affected by the State's coastal restoration efforts, Davis Pond, the State has compensated or will compensate oyster lessees based upon the cost of installed cultch which, as stated above, is the determinative factor in the cultch currency matrix.)
The State's principal objection to the use of the cultch currency matrix is that the matrix measures replacement value, rather than market value, and that the plaintiffs should be compensated based upon market value of their oyster leases as of the date they were taken by the State. After most careful consideration of the State's arguments and citations to legal authorities, we disagree with the State's contention for two general reasons.
First, the Louisiana Constitution, at Article I, Section 4, mandates that when private property is taken for public purposes, the private property owner "has the right to a trial by jury to determine compensation, and the owner shall be | (¡compensated to the full extent of his loss." (emphasis added). Under this provision of the Louisiana Constitution, an owner of property taken by the State has rights to compensation which go beyond the rights to compensation provided by the Constitution of the United States and by other state constitutions. State v.1971 Green GMC Van, 354 So.2d 479 (La.1977); State v. Spooner, 520 So.2d 336 (La.1988); Jenkins, The Declaration of Rights, 21 Loy. L.Rev. 9 (1975). Thus, we believe that the Louisiana constitutional imperative of "full" compensation favors replacement cost, when that is greater than market value, as the measure of compensation to be applied. We note that, on some occasions when private property used for business purposes has been taken by the State, the Supreme Court has held that replacement cost, rather than market value, should be used as the measure of compensation to the private property owner. See State, Through Dept. of Highways v. Constant, 369 So.2d 699 (La.1979); State, Dept. of Transp. and Development v. Dietrich, 555 So.2d 1355 (La.1990).
We also note that the Louisiana Constitution, as quoted above, specifically guarantees the right to trial by jury to determine compensation for the taking of private property for public purposes, and this makes us all the more cautious about upsetting the jury's determination of the amount of compensation in this case. The State presented evidence as to the market value of the plaintiffs' oyster leases, including most particularly the expert testimony of economist Walter Keithly, but 17the jury was obviously unpersuaded by the State's evidence as to value. It is well-established in takings cases both that the jury as the trier of fact is afforded much discretion and that the jury's factual determinations (including its evaluation of expert testimony) may be disturbed on appeal only if they are clearly wrong-manifestly erroneous. See, e.g., State Through Dept. of Transp. and Development v. Estate of Davis, 572 So.2d 39 (La.1990); State, Dept. of Transp. and Development v. Pipes, 489 So.2d 293 (La.App. 4th Cir.), writ denied, 492 So.2d 1219 (La.1986). Based upon the constitutional protection of the jury's determination, as well as the just-cited case-law, we cannot say that the jury clearly erred in selecting the replacement cost as the measure of compensation in this case.
Our second general reason for disagreeing with the State's contention that market value should be used to determine compensation, rather than the replacement value of the plaintiffs' leases as determined by use of the cultch currency matrix, lies in policy considerations of consistency of treatment in the determination of compensation for the taking of oyster leases. The State sponsored the creation of the cultch currency matrix as a means of determining the amount of compensation for the effective loss of oyster leases by man-made impacts. The State, DNR adopted the cultch currency matrix for use by the quasi-governmental Oyster Lease Damage Evaluation Board and that body makes determinations of compensation to oyster fisherman using the matrix. The State, DNR was the lead author of the cultch currency matrix. We note that the State has applied the cultch currency matrix in other situations. Therefore, we believe that the cultch currency | ^matrix appears to be the best means available to best achieve consistent compensation for the taking of oyster leases. Accordingly, we find that it was appropriate and consistent to apply the cultch currency matrix in the present case.
The State's next argument on appeal is that the plaintiffs did not prove that CFDS was the proximate cause of oyster mortality on the plaintiffs' oyster leases. In particular, the State argues that there are multiple sources of freshwater in Breton Sound and that these sources of freshwater also killed oysters. Also, the State argues that, even after CFDS came on line, there have been oysters produced in Breton Sound.
However, the testimony of the various expert witnesses (both the plaintiffs expert witnesses and the State's own expert witnesses), as well as the plaintiffs' own testimony as to their actual historical experience with oyster leases in Breton Sound, shows that the permanent loss of oyster productivity is attributable to CFDS. Although oyster mortality can be caused by a "freshet," a sudden large infusion of freshwater caused by heavy rains, the oyster mortality so caused is transitory and fol lowed by renewed oyster growth. Also, although the evidence shows that there was some oyster production in Breton Sound after CFDS came on line, it appears that this was sporadic oyster growth that occurred when the flow of freshwater through CFDS was temporarily reduced. However, this sporadic oyster |9growth was not sufficient to make the plaintiffs' oyster leases commercially viable. Moreover, it is apparent that, when CFDS is used at its planned capacity, and there is no reason to doubt that it will be, as opposed to the curtailed flow which allowed sporadic oyster production, the plaintiffs' oyster leases are rendered unsuitable for oysters.
Lastly on this "proximate cause" point, the State argues that the plaintiffs have not proven with specificity the amount of production from their leases prior to CFDS coming on line. However, so long as the plaintiffs proved generally that their leases were productive before CFDS came on line, and that they were not productive after CFDS came on line, and that CFDS caused the loss of oyster productivity, proximate cause has been proven.
The State next argues that the plaintiff class was improperly certified. However, this court's prior upholding of the class certification became final when the Supreme Court denied the State's writ application in Avenal v. State, Dept. of Natural Resources, 97-2747 (La.1/16/98), 706 So.2d 979. Thus, we cannot address this issue further.
The State's next argument on appeal is that the trial court erred by excluding from evidence certain proposed expert testimony for the State which was based upon the use of side scan sonar. The Louisiana Supreme Court, in State v. Foret, 628 So.2d 1116 (La.1993), adopted the United States Supreme Court's decision in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), as to the admissibility of scientific expert testimony. The trial court must apply a multifactor test to make a preliminary determination of the reliability of the proposed expert testimony. If the trial court determines that the proposed expert | intestimony lacks the requisite indicia of reliability, then the expert testimony is to be excluded. An evidentia-ry hearing, out of the presence of the jury, can be useful to the trial court's determination and that procedure was utilized in the present case. The two State proposed expert witnesses both testified as to their side scan sonar technique as applied to the plaintiffs' oyster leases.
The trial court's decision as to whether to admit or exclude from evidence the proposed expert testimony is reviewed on appeal using an abuse of discretion standard of review. Collins v. State, ex rel. Louisiana Health Care Authority, 99-2307 (La.App. 4 Cir. 7/12/00), 774 So.2d 167, writ denied, 2000-2633 (La.11/17/00), 775 So.2d 439; Mitchell v. Uniroyal Goodrich Tire Co., 95-0403 (La.App. 4 Cir. 12/28/95), 666 So.2d 727, unit denied, 96-0260 (La.3/15/96), 669 So.2d 421. The testimony at the Foret/Daubert hearing showed that, while the use of side scan sonar itself is well-established, the application of that technology to the determination of what portion of any oyster lease water bottom is covered by cultch is still very much a work-in-progress. Indeed, the State's experts were experimenting with the technique in the course of their work for the present case. The specific type of study undertaken in the present case has been done seldom, if ever, before. The specific technique employed has not been the subject of peer-reviewed publication. There is no generally-recognized rate of error with the technique employed in the present case. This is not to say that the State proffered "junk science", or that the State's experts were anything other than reputable scientists, but it is clear that the technique employed here is not mature scientifically. There was also evidence from "ground-truth", i.e., actually feeling the water bottoms with poles, that was at variance with the side scan sonar data. InUnder the circumstances, we cannot say that the trial court abused its discretion in excluding the side scan sonar evidence.
The State's next argument on appeal is that the trial court erred by not granting three of the State's challenges for cause to prospective jurors, thus causing the State to use three of its six peremptory challenges to exclude those three jurors. Even if the trial court erred as to those three challenges for cause (and we make no finding that the trial court did so err), we do not believe that such would be grounds for reversal. The trial court granted eight of the State's thirteen challenges for cause as to prospective jurors. A reason for allowing the parties peremptory challenges is that reasonable minds can differ as to whether a particular prospective juror should be excluded for cause and to mitigate any harm that might otherwise be caused by a trial court's erroneously failing to strike for cause a prospective juror. The fact that, after striking eight jurors for cause at the State's instance, the trial court failed to strike three others, so that the State had to use three of its six peremptory challenges, does not appear to us to be likely to have caused any substantial prejudice to the State. In any case, the trial court has discretion to manage the selection of the jury, e.g., Carter v. Baham, 95-2126 (La.App. 4 Cir. 10/9/96), 683 So.2d 299, and a review of the record of the jury selection as a whole does not reveal an abuse of discretion.
The State's next argument on appeal is that some of the plaintiffs' claims are prescribed under La. R.S. 9:5624 because that statute provides a two-year prescriptive period for claims for "damage" to private property for public purposes and the plaintiffs did not file suit until two and a half years after CFDS came on line. However, the statute relied upon by the State has no application to the present case. Specifically, La. R.S. 9:5624 applies only to cases in which private property |1?has been "damaged" but not taken by the State. Greater Baton Rouge Airport Dist. v. Hays, 339 So.2d 431 (La. App. 1st Cir.1976). See also A.K. Roy, Inc. v. Board of Com'rs for Pontchartrain Levee Dist., 237 La. 541, 111 So.2d 765 (1959); Powell v. Department of Highways, 383 So.2d 425 (La.App. 4th Cir.1980); Schneider v. Jefferson Parish, 216 So.2d 604 (La.App. 4th Cir.1969). Nor is there any doubt that this is a "takings" case under La. R.S. 13:5111 which has a three-year prescriptive period. In fact, two prior published decisions of this court have held that this is a takings case. See Avenal v. State, 99-0127 (La.App. 4 Cir. 03/3/99), 757 So.2d 1; Avenal v. State, Dept. of Natural Resources, 95-0836 (La.App. 4 Cir. 11/30/95), 668 So.2d 1150. Factually, the key point as to why this is a "takings" case is that the plaintiffs' oyster leases have, under the normal full-flow operation of CFDS necessary to achieve its purposes, been rendered commercially non-viable as oyster leases and, because CFDS will be operated at its normal full flow on a permanent basis, the loss of commercial viability of the plaintiffs' oyster leases is permanent. When property has been rendered permanently non-usable for its only purpose, that is a taking. The facts that the State did not physically enter onto the plaintiffs' oyster leases, and that the CFDS was not constructed on the plaintiffs' oyster leases, are of no moment. Nor is it of any significance that the plaintiffs continue to have the legal right to use the leased premises for oyster production. What is dispositive is that the State rendered the plaintiffs' oyster leases permanently useless for commercial oyster production.
The State next argues that one of the class representative plaintiffs, Fox Oyster Company, was improperly awarded damages for leases which it managed but did not own. However, this is a class action, and Fox Oyster Company is one of the five class representatives. While all of the damages awarded must go to the |13actual owners of the oyster leases, that does not prevent Fox Oyster Company (which, in fact, does itself own many leases in the affected area) from serving as a class representative. The trial court can insure that damages are paid only to actual oyster lease owners.
The State also argues that the jury erred in its determination of the number of acres of oyster leases owned by each of the class representatives. The parties disputed these facts and presented evidence as to them. We do not believe that the jury was clearly wrong/manifestly erroneous in this regard. Therefore, we may not disturb the jury's determination. See West Jefferson Levee Dist. v. Coast Quality Const. Corp., 98-1718 (La.5/23/94), 640 So.2d 1258; LeJeune v. Union Pacific R.R., 97-1843 (La.4/14/98), 712 So.2d 491; Lewis v. State, Through Dept. of Trans. Development, 94-2370 (La.4/21/95), 654 So.2d 311.
Lastly, the State argues that it is relieved of liability because the State inserted into the plaintiffs' oyster leases, when those leases were renewed, certain "indemnity clauses". The Supreme Court held in Jurisich v. Jenkins, 99-0076 (La.10/19/99), 749 So.2d 597, that such unilateral insertion by the State of onerous clauses in oyster leases is legally invalid. The State argues that the legislature amended the oyster lease statutes to allow the State to unilaterally insert onerous clauses upon the renewal of oyster leases. See 2000 La. Acts No. 107. However, without deciding whether that statute permits the indemnity clauses at issue, we note that the statutory amendment applies only to oyster leases renewed or extended after July 1, 1995. Id. The list of oyster leases offered by the State does not. include leases dated after July 1, 1995. Therefore, the statutory amendment does not apply and, under the Supreme Court's Jurisich, decision the indemnity clauses at issue are invalid.
| uFor the foregoing reasons, the judgment the trial court is modified as to plaintiff Avenal and is otherwise affirmed.
AFFIRMED AS MODIFIED.
BYRNES, C.J., concurs in the reasons assigned by MURRAY, J.
LOVE, J., respectfully concurs in part and dissents in part.
TOBIAS, J., dissents and assigns reasons.
. The general background of the CFDS and the effect of its operation upon the plaintiffs' oyster leases is discussed in detail in Avenal v. United States, 100 F.3d 933 (1996).
. The plaintiffs also contend, and presented evidence, that some oyster leases became unsuitable for oysters because of the creation of marsh (which is a puipose of CFDS) and the deposit of sediment. The plaintiffs also contend, and presented evidence, that CFDS led to closures of oyster leases due to fecal coli-form. Fecal coliform lives longer in fresher water. Also, increases in animal life in newly-created marshland cause increases in fecal coliform. Additionally, the plaintiffs contend, and presented evidence, that the increased freshwater flow of CFDS caused the growth of eurasian milfoil, an aquatic plant, which made their oyster leases inaccessible by boat.
. The State cites Inabnet v. Exxon Corp., 93-0681 (La.9/6/94), 642 So.2d 1243. However, Inabnet was a tort case between private parties rather than a public takings case implicating Article I, Section 4 of the Louisiana Constitution. In some cases, the compensation constitutionally required in a takings case is greater than would be the damages awarded in a tort case with the same facts. See Packard's Western Store, Inc. v. State, Dept. of Transp. and Development, 618 So.2d 1166 (La.App. 2 Cir. 5/5/93), writ denied, 629 So.2d 345 (La. 1993).
. The jury awarded one of the class representative plaintiffs, Albert J. Avenal, only $1,000 per acre of oyster leases taken. Perhaps the jury treated Mr. Avenal differently because he acquired some (but by no means all) of his leases just as the present action was being filed. However, there is no evidence that Mr. Avenal, a well-established oyster fisherman, who had entered into prior such oyster lease transactions, was in any way in bad faith. Thus, there was no proper basis for Mr. Ave-nal to be treated any differently than the other plaintiffs. Consequently, we will modify the judgment so that Mr. Avenal receives the same compensation per acre as the other plaintiffs.