Opinion ID: 1805350
Heading Depth: 1
Heading Rank: 5

Heading: The Takings Analysis

Text: The Louisiana Constitution provides: Every person has the right to acquire, own, control, use, enjoy, protect, and dispose of private property. This right is subject to reasonable statutory restrictions and the reasonable exercise of the police power. Property shall not be taken or damaged by the state or its political subdivisions except for public purposes and with just compensation paid to the owner or into court for his benefit. Property shall not be taken or damaged by any private entity authorized by law to expropriate, except for a public and necessary purpose and with just compensation paid to the owner; in such proceedings, whether the purpose is public and necessary shall be a judicial question. In every expropriation, a party has the right to trial by jury to determine compensation, and the owner shall be compensated to the full extent of his loss.... [23] La. Const. art. I, § 4. [24] In Chambers, we recognized that our constitution requires compensation even though the State has not initiated expropriation proceedings in accordance with the statutory scheme set up for that purpose. 595 So.2d at 602. [25] This inverse condemnation action provides a procedural remedy to a property owner seeking compensation for land already taken or damaged against a governmental or private entity having the powers of eminent domain where no expropriation has commenced. Id. Inverse condemnation claims derive from the Takings Clauses contained in both the Fifth Amendment of the U.S. Constitution and Art. I, § 4 of the Louisiana Constitution. The action for inverse condemnation is available in all cases where there has been a taking or damaging of property where just compensation has not been paid, without regard to whether the property is corporeal or incorporeal. Id. (Cites omitted.) The constitutional command of Art. I, § 4 is self-executing, such that the cause of action arises whenever a state commits a taking without justly compensating the victim. Id. Recognizing the abstract nature of the concept of the taking and damaging of legal property rights, the Court in Chambers set forth a three-prong analysis in determining whether a claimant is entitled to eminent domain compensation. Id. at 603. In accordance with this analysis, the court must: (1) determine if a recognized species of property right has been affected; (2) if it is determined that property is involved, decide whether the property has been taken or damaged in a constitutional sense; and (3) determine whether the taking or damaging is for a public purpose under Article I, § 4. Id.; Constance v. State Through Dept. of Transp. and Development Office of Highways , 626 So.2d 1151, 1157 (La.1993) (using C.C. arts. 667 and 668, which impose legal limitations on a landholder's right of ownership, to consider whether property was taken or damaged under Art. I, § 4). Applying this judicially created framework to their claims, the plaintiffs claim a legal property right to their leased oyster beds, the oysters growing on them, and the future profits derived from those oysters. They claim that Caernarvon's changes to the salinity level of the waters covering those beds have damaged the beds' ability to cultivate oysters and, thereby, permanently deprived the harvesters of their rights to profits from oysters that would otherwise grow on those beds. They assert that Caernarvon's diversion of freshwater into the waters covering their oyster beds is in furtherance of the state purpose of preserving coastal wetlands. Because the State's action in furtherance of a public purpose damaged their property rights in the oyster beds and the profits generated by the oysters that grow upon them, they claim the State is required to compensate them for damages to those rights. We find it unnecessary to conduct the full Chambers analysis, which seeks to determine whether a plaintiff is entitled to eminent domain compensation because his private property has been taken or damaged for public use. In this case, the relevant consideration is whether plaintiffs' property was taken for a public purpose, or whether it was damaged for a public purpose. A distinction between a taking and a damaging is necessary because of the existence of two relevant prescription statutes, La. R.S. 13:5111 and La. R.S. 9:5624. Section 5111 of Title 13 is entitled Appropriation of property by state, parish, municipality or agencies thereof; attorney, engineering and appraisal fees; prescription and provides in pertinent part: [A] proceeding brought against the state of Louisiana ... or other political subdivision..., for compensation for the taking of property by the defendant, other than through an expropriation proceeding, ... shall prescribe three years from the date of such taking. Section 5624 of Title 9 provides: When private property is damaged for public purposes any and all actions for such damages are prescribed by the prescription of two years, which shall begin to run after the completion and acceptance of the public works. Thus, although the Louisiana Constitution provides that just compensation shall be paid when property is taken or damaged, La. R.S. 13:5111 provides a three-year prescriptive period for takings and La. R.S. 9:5624 provides a two-year prescriptive period for damage. A.K. Roy, Inc. v. Board of Commissioners for Pontchartrain Levee District, 237 La. 541, 547-48, 111 So.2d 765, 767 (1959) (Prescriptive period of La. R.S. 9:5624 applies only when private property is damaged for public purposes, but not actions for recovery of private property taken for public purposes). The distinction between a taking and a damage claim was made in a case in which a holder of a predial lease invoked property rights pursuant to the 1921 Constitution. [26] Columbia Gulf Transmission Co. v. Hoyt, 252 La. 921, 215 So.2d 114 (1968). In that case, the Court found the lessee's rights under a predial lease fell under the constitutional designation of private property in Art. I, § 2 of the 1921 Constitution and required just compensation to the lessee before the lease rights were damaged, even though Louisiana codal law classified a lessee's rights as personal rights. [27] However, as particularly relevant to this case, the Court distinguished the terms taken and damaged in Art. I, § 2. The Court stated that property is `taken' when the public authority acquires the right of ownership or one of its recognized dismemberments. 215 So.2d at 120. Property is considered `damaged' when the action of the public authority results in the diminution of the value of the property. Id. In Hoyt, this Court stated that beginning in 1880, in the case of In Re Morgan R.R. & S.S. Co., 32 La. Ann. 371, and continuing, courts have awarded lessees compensation for leases in land expropriations, because when land subject to a lease is taken for public use, the lease terminates. This Court noted that lease rights, however, may be damaged other than by termination of the lease. If the land taking is partial only, such as in the acquisition of a servitude for passage, the taking may damage lease rights, although the lease has not been destroyed. We have no trouble classifying this case as a damage case under Art. I, § 4 rather than a takings case, for numerous reasons. It is undisputed that the state owned and continues to own the water bottoms. La. R.S. 9:1101. The state owns the waters. Id. The state owns the oysters. La. R.S. 56:3. Thus, the State could not take its own property. As Judge Tobias aptly noted in dissent, [t]he State cannot appropriate or inversely condemn that which it already owns. Avenal, 01-0843, 858 So.2d at 740 (Tobias, dissenting). Further, the oyster fishermen's right of exclusive use of the water bottoms was not taken as, in spite of Caernarvon, no other private party can use these bottoms to fish for oysters. In addition, their exclusive right to oysters and cultch thereon was not taken as no other private party can enter that lease and extract oysters or cultch. The changes in salinity of the water resulting from Caernarvon affected neither of these rights. As one court commented, [t]he plaintiffs retained the use of their leaseholds, it was not the plaintiffs who were ousted by [Caernarvon], but the oysters. Palm Beach Isles Associates v. U.S., 231 F.3d 1354, 1360 (Fed.Cir.2000) (explaining their holding in Avenal, supra, 100 F.3d 933). Plaintiffs claim, however, that what was taken was their right to profitably harvest oysters from these waters because the salinity levels will prohibit this if Caernarvon is run at its full capacity as expected. Indeed, the court of appeal agreed and found that Caernarvon constituted a taking because it rendered the plaintiffs' oyster leases permanently useless for commercial oyster production. Avenal, supra, 858 So.2d at 706. However, this somehow assumes that the State intended to guarantee each lessee a commercially viable oyster lease. La. R.S. 56:423 never mentions nor suggests that lessees are entitled to profits. Further, the oyster statutes do not guarantee the oyster lessees with a vested right to an optimal salinity regime in the State's own waters, nor that the state maintain a certain salinity regime favorable for oyster cultivation. As one commentator has stated, [o]ne can hardly imagine why the state would charge only two dollars per acre if indeed the purchase of a lease automatically conferred a right to $21,000 or more per acre in expected profits upon all oyster lessees who attempt to harvest oysters on leased lands. Robert L. Rogers, III, Turning River Water into Gold: Why Oyster Harvesters should not be Permitted to Cash In On Changes in Salinity Caused by the Caernarvon Water Diversion Project, 22 Va. Envtr. L.J. 53, 72 (2003) (case note); see also Louisiana Seafood Management Council v. Louisiana Wildlife and Fisheries Com'n., 97-1367 (La.5/19/98), 715 So.2d 387, 392-92 (citing Andrus v. Allard, 444 U.S. 51, 66, 100 S.Ct. 318, 327, 62 L.Ed.2d 210 (1979) (loss of future profits-unaccompanied by any physical property restriction-provides a slender reed upon which to rest a taking claim ... [T]he interest in anticipated gains has traditionally been viewed as less-compelling than other property-related interests.)) Further, the court of appeal's holding that Caernarvon rendered the plaintiffs' oyster leases permanently useless for commercial oyster production fails to take into account that, as to those 12 leases which did not contain indemnity clauses, they all expired between 2000 and 2005, at which time the they would either be renewed with the post-1995 hold harmless clause, or not renewed at all upon a finding by the State that the leases were incapable of supporting oyster population. At most, these plaintiffs with pre-1989 leases possibly had a claim for property damage up until the time these leases expired. In addition, in this case, the class representatives testified that they continued to exercise their right to claim damages from oil and gas interests for drilling, surveying, dredging, and other exploration activities conducted on their leases following the diversion, even though the leases were unproductive for oysters. Several of the oyster lessees also filed claims with the federal government for the damages to their oyster leases as a result of Hurricane Andrew. Evidence was also presented at trial that some of the leases were still producing oysters. Thus, Caernarvon did not deprive the plaintiffs of all economically beneficial use of their property. However, it may have damaged their property rights in their oyster beds and the profits generated by the oysters that grow upon them. For the above reasons, the rights under the remaining 12 leases may have been damaged under Art. I, § 4, but they have not been taken. [28] Therefore, the prescriptive period of La. R.S. 9:5624 applies to these claims.