Court Opinion

ID: 5062511
Source: CourtListenerOpinion
Date Created: 2021-10-01 09:29:09.898221+00
Date Added: 2024-06-11T08:19:28.139213
License: Public Domain

GANT, Justice,
dissenting.
Although the majority opinion contains an excellent discourse on the general law of franchise, it does not answer the sole question raised by this appeal. That question is, “Does the grant of priority of use, a nonexclusive privilege, constitute the award of a franchise which requires the public bidding process mandated by Section 164 of the Kentucky Constitution?” We can quickly dispose of the grant of exclusive use of one small tract of land by ConAgra out of many acres. There is no allegation that this grant in any way interferes with the use of the port facilities nor is there any proof thereof.
Also, to place this action in proper perspective, several things should be pointed out. In answer to interrogatories, movants stated that they knew of not one single instance where the operating agreement interfered with any other person in the use of the Port facilities, nor any manner in which the agreement “inhibited river commerce” in any way. Neither movant alleges that he would have bid on the use of the Port facilities or that he was injured in any way, except as a taxpayer. Thus, unless the “Operating Agreement” itself creates a franchise, none exists. The mere possibility of future interference or inhibition is hardly enough.
Turning to the Operating Agreement entered into between the Port Authority of Lyon County, as it relates to the grain facilities, the use of those facilities is described in Article I, Section 1.1, as a “priority use.” Section 1.2 specifically requires that the grain facilities and operational area shall be operated as a “public grain handling facility in receiving and storage of such products from any person, firm or corporation _” Indeed, ConAgra conceded in oral argument that the facilities were available for public use. The “priority use” provision is also set out in Section 1.2 and requires three-day notice from Con-Agra to the Port if such use is intended, where the three-day notice is possible, and 24-hour notice in all events. No time limit is set for the period that ConAgra will use the facilities, and, as stated herein, there is no proof that such use ever interfered with the public use of the facilities. The primary term of this agreement was two years from January 1, 1981, or final completion of the facilities, which had not been constructed at the time of the agreement, and the agreement contained three additional one-year extensions.
For the grant of this use, ConAgra committed itself to certain use of the facilities, fixed rates per bushel of grain, and a minimum annual rental. Other provisions of the contract are of no consequence to our decision.
By the terms of this agreement setting up a mere priority use and requiring that the facility shall be a public facility, for use by one and all, I cannot conceive that this could be deemed the grant of a franchise, especially in the absence of proof that anyone had ever been excluded from the facility for any period of time whatever. This may constitute a license, but it is not a franchise.
AKER and STEPHENSON, JJ., join in this dissent.