Opinion ID: 1711399
Heading Depth: 1
Heading Rank: 3

Heading: Oyster Lease and Renewal: Statutory Scheme

Text: It has been recognized that the statutory laws relative to the leasing of water bottoms for oyster production differ from the provisions which govern ordinary conventional leases addressed in Title IX of Book III of the Civil Code. Vujnovich v. Louisiana Wildlife & Fisheries Comm'n, 376 So.2d 330 (La.App. 4 Cir.1979); see also Inabnet v. Exxon Corp., 93-0681 (La.9/6/94), 642 So.2d 1243 (Kimball, J., dissenting in part). [4] The LDWF is authorized to grant leases on state-owned water bottoms for oyster cultivation, bedding, and harvesting, and matters relating thereto, as provided in Subpart D of Part VII of Chapter 1 of Title 56 of the Louisiana Revised Statutes of 1950. La.R.S. 41:1225. Accordingly, La.R.S. 56:425 provides that the Secretary may only lease this State's water bottoms and natural reefs in the water bottoms of this State to a resident, a firm composed of residents, or a corporation domiciled in Louisiana or organized under this State's laws. The Secretary's right to grant oyster leases is likewise contingent upon a determination that the State owns the water bottoms to be leased, and that the lessee agrees that he will operate under Louisiana laws and pursuant to LDWF's rules and regulations. La.R.S. 56:425(A), (B). All leases made under the provisions of Subpart D begin on the date the lease is signed and continue for a fifteen-year period. La.R.S. 56:428(A). As provided in La.R.S. 56:428(A), the owners of expiring oyster leases have the first right of renewal of their oyster leases, provided the lease is capable of supporting oyster populations. Renewals shall be executed by the secretary, and shall be made subject to both the provisions of this Subpart and to the rules and regulations established by the department. Id. (emphasis added). The secretary has sixty days from the date of expiration of a lease to execute a renewal lease. If a renewal lease is not executed within this sixty-day period, the lease is automatically renewed. In either situation, the fifteen-year period of the renewal lease shall begin on the first day following the expiration date of the prior lease. La.R.S. 56:428(B). In the present case, the Jurisichs contend that the Secretary was powerless to deny renewal of their oyster leases, because it was not shown that the leases were incapable of supporting oyster populations. We agree. When a law is clear and unambiguous and its application does not lead to absurd consequences, the law shall be applied as written and no further interpretation may be made in search of the intent of the Legislature. LA.CIV. CODE art. 9. The words of a law must be given their generally prevailing meaning. LA.CIV. CODE art. 11. The word shall in its usual signification for purposes of statutory construction denotes a mandatory duty. Ray v. South Cent. Bell Tel. Co., 315 So.2d 759 (La.1975). Applying these well established tenets to the present case, it is evident that the word shall as used in La.R.S. 56:428(A) is clear and free from ambiguity, and its application does not lead to absurd consequences. Unless the oyster beds initially leased are incapable of supporting oyster populations, the Secretary has a mandatory duty to renew. Such understanding not only abides with statutory construction, but also conforms with the economic reality that oyster lessees face. [5] In stark contrast to a conventional lessee, oyster lessees must spend years developing the leased acreage before oysters may be harvested and may have to wait a long time to realize the benefit of their labor. Additionally, oyster lessees are restricted under La.R.S. 56:433 as to the size of oysters which may be harvested, are obligated by La.R.S. 56:430 to yearly place at least one-tenth of the leased barren water bottoms into cultivation, are required to stake off and mark the leased water bottoms before harvesting, and must yearly mark seeded areas to prevent trawling. Thus, it is clear that the oyster leases under which oyster lessees function are more than lease instruments; rather as Justice Kimball recognized in her partial dissent in Inabnet, 642 So.2d at 1257, these leases are indeed used by the State of Louisiana to foster and protect the Louisiana oyster industry. It is, then, in that light that we view the mandatory lease renewal provisions which the Legislature provided in La.R.S. 56:428. If an oyster lessee has indeed been a good steward of the leased water bottom, has developed the leased property as required by law, and that property is capable of supporting oyster populations, the lessee has a legislatively granted first right of renewal of the lease which the Secretary is legislatively mandated to recognize. Id. This the Secretary failed to do in the case now before us. To the contrary, rather than recognize the Jurisichs' choice to exercise the first right of renewal which was accorded them, the Secretary thwarted the statutorily created scheme through the imposition of the navigation and oil field activity clause. By this means, the Secretary effectively made lease renewal contingent upon the lessees' acquiescence to this additional clause which was not part of the original lease agreement. This the Secretary was never legislatively authorized to do. The discretion the Secretary has to renew an oyster lease is limited by a determination of the lease's capability of supporting oyster populations. La.R.S. 56:428(A). To allow the navigation and oil field activity clause as a condition of lease renewal would be an impermissible expansion of the Secretary's authority. The Legislature in its wisdom has spoken and specifically provided the law the Secretary must apply in oyster lease renewals. For an expansion of this authority, the Secretary must seek legislative authority and without such a legislative grant we cannot sanction his initiative to expand his authority in lease renewals. In rebuttal, the defendants make three assertions. First, they contend that at the time of lease renewal it is common for lessees, as well as itself, to make changes in the original lease, e.g., most often a lessee might propose to extend the acreage leased. Although no such showing has been made in the present matter, we point out that in such instance a new and different contract comes into being, and the provisions relative to lease renewal are not applicable. See Emporia Holding Co. v. City of New Orleans, 94-1274 (La.App. 4 Cir. 10/27/94), 644 So.2d 1156, writ denied, 94-2766 (La.11/29/94), 646 So.2d 406; National Car Rental Sys., Inc. v. City of New Orleans, 160 So.2d 601 (La.App. 4 Cir.1964). Accordingly, we find that this first argument is easily distinguishable and clearly irrelevant to the facts now before us. Defendants next assert that La. R.S. 56:425(C) allows the Secretary to make such stipulations in the leases ... as he deems necessary and proper. In accordance with that authority, it urges that the doctrine of contemporaneous construction should be applied since it has interpreted this statute to allow the inclusion of new clauses at the time of lease renewal. While a persuasive indication of the true meaning of a statute is the contemporaneous administrative construction given the statute by an agency charged with administering it, an administrative construction cannot be given effect where it is contrary to or inconsistent with legislative intent. Sales Tax Dist. No. 1 of Lafourche Parish v. Express Boat Co., 500 So.2d 364 (La.1987). An administrative construction cannot have weight where it is contrary to or inconsistent with the statute. Traigle v. PPG Indus., Inc., 332 So.2d 777, 782 (La.1976). We disagree with defendants' reliance on contemporaneous administrative construction since we observe no ambiguity in the statutory construction. We also find that although LDWF has now-and-then inserted new clauses at the time of lease renewal, there are instances shown in the record where it has chosen not to make such inclusions. [6] Moreover, we find that defendants' interpretation is contrary to the clear language that the Legislature has provided. As further stated in La.R.S. 56:425(C), the lease stipulations must be consistent with the provisions of [Subpart D]. As such, it is clear that the inclusion of this new lease clause would not be in conformity with the concept of lease renewal that is contemplated in Subpart D. As seen earlier, the inclusion of this new lease clause would create a new contract and would effectively eliminate the oyster lessees's legislatively crafted first right of renewal. The third assertion, defendants' reliance on the public trust doctrine, we will address below as part of our discussion on the basic authority of the LDWF Secretary.