Court Opinion

ID: 3468703
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:35:56.145532+00
Date Added: 2024-06-11T14:08:06.047935
License: Public Domain

The City of New Orleans, availing itself of the provisions of the amendment to Article XIV of the Constitution of Louisiana, Section 31.3, adopted pursuant to Act No. 385 of 1938 and acting through the Public Belt Railroad Commission, entered into a contract on October 22, 1947, with the various railroads servicing New Orleans for the construction, use, and maintenance of a union station, its connecting tracks, crossings, yards, freight terminals, and other appurtenances. *Page 868 
The validity of this contract was challenged by two citizens and taxpayers of the city (one, Mr. Theophile O. Hotard, being the city's Commissioner of Public Property), a number of other citizens and taxpayers, as well as the Police Jury of Jefferson Parish, intervening, adopting substantially the same position taken by the plaintiffs.
The challenges which these parties have levelled at the contract's validity may be divided broadly into an attack on (1) the constitutionality of Act No. 385 of 1938, which authorized the submission of this amendment to the people for ratification, and (2) the legality of the contract itself.
The constitutionality of the amendment is questioned on the ground (1) that it was improperly placed before the voters by the inclusion in a single proposal purporting to be nothing more than an approval of the construction of a Union Passenger Terminal at New Orleans of so many other propositions that should have been submitted separately that the voters were misled as to just what they were authorizing by their ratification; (2) it repeals several sections of the constitution by implication; and (3) it authorizes the city to surrender its right of eminent domain to a non-governmental agency.
The grounds that allegedly vitiate the contract itself are that (1) the Public Belt Railroad Commission's authority to administer the terminal facilities has been divested and transferred and delegated to *Page 869 
a committee composed of 6 representatives of the city and 1 representation for each railroad that may use the facilities (at the present time there are 10 such railroads, but the contract is so worded that these railroads may actually be given additional voting power and the present voting ratio of 6 to 10 in favor of the railroads greatly increased after the station is ready for use), and this committee, with the larger delegation from the railroads, is authorized "to take any action which it may deem necessary" with respect to the supervision and control of the acquisition, construction, maintenance, operation, and use of this terminal, including the right to employ or dismiss any and all employees and to fix wages, the Public Belt Railroad Commission being prohibited from interfering in any way; (2) the city has surrendered its police power to this committee; (3) the city is obligated to appropriate $500,000 annually for the maintenance of the terminal facilities out of its general revenue, in contravention of Section 24 of Article XIV of the constitution; (4) the city has by contract dispensed with the applicability of certain acts of the legislature, in violation of Article III of the constitution that vests the right to enact, amend, and repeal laws in the legislature, and of Article VII, wherein the judiciary is vested with the right to determine the applicability of laws; (5) the retirement of the bonds to be issued for the financing of this project has been agreed upon in a manner that contravenes Section 14 of Article XIV of the *Page 870 
Constitution and of Act No. 46 of the Extra Session of 1921; and (6) the city illegally imposed upon the taxpayers the obligation of defraying 85% of the cost of constructing under and overpasses in connection with street and railroad crossings (leaving a mere 15% to be contributed by the railroads), in violation of the provisions of the city charter requiring that such apportionment be on a basis of 65% to the railroads and 35% to the city, in contravention of the public policy of the state requiring the railroads to bear the larger portion of the expense incidental to crossing facilities (the Louisiana Public Service Commission can compel the railroads to pay the entire cost of constructing and maintaining suitable crossings), and in disregard of the jurisprudence of the Supreme Court to the effect that the division of such costs must bear some reasonable relation to the benefits to be received.
These very serious and extremely important issues (as well as the innumerable ramifications into which they subdivide) were disposed of in a most summary manner in the majority opinion, without any discussion of the singularly fundamental legal principles underlying them or of the applicable constitutional provisions and jurisprudence, exhaustively treated in the numerous briefs of the appellants.
There can be no question but that the manner in which this amendment was placed before the voters of the state for ratification was in clear violation of Section *Page 871 
1 of Article XXI of the constitution in the light of the holding of this court in the case of Graham v. Jones, 198 La. 507,3 So.2d 761, 782. In that case the court very aptly pointed out:
"According to Section 1 of article 21 of the Constitution, five elements are indispensable to give validity to a proposed constitutional amendment. They are: The assent of two-thirds of the Legislature, the submission of only one amendment in each proposal, the designation by the Legislature of the date of the election at which the submission shall take place, the publication of the proposed amendment, and a majority of the popular vote. Each of these essentials is as important as the other. In the absence of any one of them, the proposed amendment is without legal effect."
Quoting with approval and at length from the case of Kerby v. Kuhrs, 44 Ariz. 208, 38 P.2d 549, 94 A.L.R. 1502, where the rule is laid down that is to be applied in determining whether one or more constitutional amendments are covered by a proposal, this court in the Graham case held, as set out in the syllabus, that:
"If propositions in proposed amendment to Constitution cover matters necessary to be dealt with in some manner, in order that Constitution, as amended, shall constitute a consistent and workable whole on general topic embraced in part which is amended, and if, logically, propositions should stand or fall as a whole, then but *Page 872 
one amendment is submitted, but, if any proposition, although not directly contradicting others, does not refer to such matters, or if proposition is not such that voter supporting it wouldreasonably be expected to support principle of others, then twoor more amendments are submitted and proposed amendments fallswithin constitutional prohibition against submitting more thanone amendment in the same proposal without affording votersopportunity to vote on each amendment separately." (Italics mine.)
When the constitutional amendment proposed by Act No. 385 of 1938 was submitted to the people for ratification, they were simply informed on the ballot that they were either voting for or against "the proposed amendment to the Louisiana Constitution authorizing a Union Station or Stations at New Orleans,"
whereas, in truth and in fact, under the provisions of this amendment the city was vested with the discretion of locating and establishing these facilities in either New Orleans or in any or all of the adjoining parishes of Jefferson, St. Bernard, Plaquemine, and St. Tammany. In addition, in this single proposal the voters were authorizing the city (1) to lay tracks, construct under and overpasses, acquire switch engines and other railroad equipment, maintain yards and freight terminals, and all necessary appurtenances; (2) to extend the city's power of expropriation into surrounding parishes and there acquire land and property *Page 873 
for the construction of the station itself or of the approaches to the station; (3) to vest in a committee composed largely of private individuals whose first allegiance is not to the city and its people but to the private carrier corporations they represent the right to police these properties not only in the city but also in these adjacent parishes where facilities in connection with the terminal may be located; (4) to lend the money of the taxpayers of New Orleans to railroad corporations to be used by them in defraying the portion of the expense connected with the improvement of these facilities that is to be borne by them; (5) to use the facilities for freight as well as passenger traffic; (6) to exempt railroads from taxation; (7) to float a $15,000,000 bond issue for the purpose of raising the city's share of the cost of constructing the project; (8) to bind the state as well as the city on the obligation of these bonds; and (9) to contribute any amount it might see fit toward the cost of constructing, as well as maintaining, the facilities. (Italics mine.)
The inclusion of these numerous provisions (and their ramifications) in one proposal under the guise of authorizing the city to build a passenger terminal within its limits was, to say the least, most confusing to the voters if, indeed, it can even be conceded they knew of the contents of the provisions of the amendment and their import. It certainly couples in one single proposal numerous propositions that, if *Page 874 
submitted separately, the voters might have desired to vote against. This lumping together compelled the voters to choose the vicious propositions along with the meritorious one of permitting the city to build a terminal station, giving them no opportunity to discriminate between the numerous provisions and express their will as to any they might find undesirable.
To illustrate, I do not believe and I cannot assume that the people of New Orleans would have voted for this proposition if they had known or understood it was well within the discretion being vested in the New Orleans Commission Council to have the terminal constructed in the Parish of Jefferson, or that the people of Jefferson Parish would have voted for the proposal if they had understood that their property might be expropriated without the consent of their Police Jury, in contravention of the present policy of this state in such matters, and resulting in the removal from the parish's power to tax of the expropriated property, thus shifting the tax burden upon the remaining property by increasing it proportionately. Further, it is impossible for me to conceive of the voters of the state approving the building of this terminal in New Orleans if they knew or understood the obligations being incurred thereunder were to be backed by the full faith and credit of the entire state; nor can I, by any stretch of the imagination, allow myself to believe the people of the city and the state generally would *Page 875 
have voted for this amendment had they known or understood they were thereby authorizing the city (as will hereafter be more clearly demonstrated) to completely surrender its police power and to bargain away its governmental functions to private individuals who are not even residents of the state.
As a matter of fact, the majority opinion recognizes the fact that numerous of these proposals might not have met with the approval of the majority of the voters and that in order to secure their passage it was necessary to lump them together in a single proposition that could not help but meet with public approval, for in the opinion it is said: "The provisions of the amendment are so interrelated that it would not have been feasible to submit each one of them to the voters as a separate and independent amendment to the Constitution. If they had beenso submitted, and if the voters had voted for some of thepropositions and against others, the purpose of the amendmentmight have been defeated." (Italics mine.)
I am of the further opinion that this amendment is unconstitutional because Section 31.3 of Article XIV amends other articles and sections of the constitution by implication, thereby doing indirectly what it has been specifically declared cannot be done directly in the case of Graham v. Jones, supra.
It is to be noted that Section 12 of Article IV of the constitution declares that "The *Page 876 funds, credit, property or things of value of the State, or ofany political corporation thereof, shall not be loaned, pledged
or granted to or for any person or persons, associations orcorporations, public or private * * *." Nevertheless, without referring to this constitutional provision, the city is authorized in Section 31.3 of Article XIV to pledge not only the credit of the city on the bonded obligation to be floated by it for the construction of a terminal that is to be turned over to a committee dominated by private corporations and that is to be used exclusively by private transportation corporations, but the credit of the state as well. The city is further authorized to lend the money collected from its taxpayers to these railroads, to be used by them in defraying their share of the cost, in further contravention of this specific constitutional prohibition. (Italics mine.)
Further, this amendment violates Section 26 of Article XIV of the constitution, wherein the exclusive control, operation, management, and development of the Public Belt Railroad is vested in the Public Belt Railroad Commission, which must always be kept separate and distinct from any railroad, and which no railroad can be given the right or privilege of controlling, for although we find in subsection (A) of the amendment that this passenger terminal "and all property and rights of use or possession of property acquired, constructed or dedicated pursuant to Section 31.3 hereof, shall be under the control and management *Page 877 
of the Public Belt Railroad Commission," and in subsection (H) that "Nothing herein contained shall be deemed to repeal, limit, modify or affect any police power or other power of the City of New Orleans, through its Commission Council, or the Public Belt Railroad Commission, or otherwise," in subsection (A) which gives the Public Belt Railroad Commission control of these facilities, this commission is permitted, by contract, or the Commission Council by resolution, to delegate to a committee composed of representatives of any and all interested parties, "including * * * representatives of any railroad company or railroad companies," the power of "supervising or controlling the acquisition, construction, maintenance and operation of said passenger station or stations, the approaches thereto and appurtenances thereof, and any tracts or other property * * *." As actually constituted under the present contract, this committee consists of 6 representatives of the city and its taxpayers and 10 representatives of the railroads, thus giving the railroads the edge in all controversial decisions from the sheer weight of their larger number (which voting power can be greatly increased in favor of the railroads) and clearly demonstrating that the city has no possible hope of ever putting across any policy or program with respect to these facilities that is found to be inimicable to the interests of these private corporations who will use them exclusively, for the city is irrevocably bound not to change *Page 878 
the committee as it is constituted in the contract. In addition to all of this, in Section 5 of the contract the city has agreed that the members of the committee may be represented and vote by proxy, making it entirely possible that this committee will eventually be controlled by persons who have never been, never expect to be, and never intend to be residents of either New Orleans or Louisiana; consequently, having no interest in the welfare of our citizens but only in the private corporations whom they serve.
Aside from the flagrant manner in which these provisions of our basic law have been flaunted in the adoption of this amendment, I find from a study and analysis of the contract itself that its stipulations not only violate specific mandates of the very amendment that authorizes it but completely ignore, contract away, or otherwise violate several other parts of the constitution and various acts of the legislature.
As pointed out above, in subsection (H) of the amendment, it is provided that "Nothing herein contained shall be deemed to repeal, limit, modify or affect any police power or other power of the City of New Orleans, through its Commission Council, or the Public Belt Railroad Commission, or otherwise," yet we find the city in this contract (1) surrendering to a non-governmental agency that is not responsible to the public its police power that "Neither Legislature nor people may bargain away * * * by contract or otherwise" (State *Page 879 
ex rel. Porterie v. Walmsley, 183 La. 139, 162 So. 826. See also, Shreveport Traction Co. v. City of Shreveport, 122 La. 1, 47 So. 40, 129 Am.St.Rep. 345; State v. City of New Orleans,151 La. 24, 91 So. 533); (2) vesting in this non-governmental committee authority to expropriate property deemed necessary for the rights-of-way for the approaches to this terminal or of the terminal itself not only in New Orleans but also in adjacent parishes, a function that is truly a sacred governmental prerogative since "The right or power of eminent domain * * * is an inherent and essential power of sovereignty, and inheres in every independent state, and it is inalienable and cannot be surrendered" (Black, Constitutional Law, Section 180, page 455); (3) granting this committee the right to expropriate and remove from taxation not only the property that is to be used in constructing the new terminal, but also the property upon which the railroad facilities now in the city are constructed and upon which the railroads are paying taxes, thus permitting the railroads, in effect, to exempt themselves from taxation; and (4), finally, throwing to the winds its inherent power of removal that is so inseparably a part of the power of appointment when the tenure of an office is not prescribed by law, for the city has not retained to itself the right to change either the membership of this committee or its voting rights. And in delegating these very vital functions of government to a non-governmental committee dominated by private corporations, *Page 880 
the city has not retained a single vestige of supervision or control over its actions and this committee, in whatever it does, is neither answerable to the government nor to the people.
In addition to all of this, it is provided in Section 85 of the contract that in so far as the acquisition, construction, maintenance, and operation of this terminal is concerned, Act No. 271 of 1908 (requiring that mechanics employed on all state or public buildings and work shall be citizens of Louisiana), and its amending act, No. 144 of 1934; Sections 58 and 60 of Act No. 159 of 1912, (providing that contracts of more than $200 shall be executed in the name of the city and that all contracts of more than $500 involving either work or material on public buildings or property shall be given to the lowest bidder) and the later act, No. 127 of 1940; shall not be applicable or controlling and shall be considered as abrogated. In this same Section 85 Act No. 171 of 1940, setting up Civil Service in cities of more than 100,000, is suspended in so far as these public facilities are concerned, with the result that in view of the fact the committee has exclusive right to hire, fire, and fix wages for the employees in the terminal, none of these employees can receive the benefit of civil service and it is entirely possible these employees will be sent into this state from other sections of the country by these railroads. The city has thus contracted away what is the legislature's exclusive constitutional *Page 881 
province of passing, amending, and repealing acts (Article III), as well as the authority vested in the courts under Article VII of the constitution of interpreting the laws of the state and determining their applicability. By this stipulation of the contract the city and these railroads have also abrogated the provisions of Article 11 of the Revised Civil Code providing that "Individuals can not by their conventions, derogate from the force of laws made for the preservation of public order or good morals," and of Article 12, which provides that "Whatever is done in contravention of a prohibitory law is void, although the nullity be not formally directed."
The result of this action is that although this terminal station is to be a public building, constructed with public funds, it is to be run by private corporations, and the employees who are to maintain and construct it are not public employees and are not given the advantages and privileges that are accorded public employees.
I think, too, that the provisions of this contract further violate the policy of this state as enunciated in Section 14 of Article XIV of the Constitution and in Act No. 46 of the Extra Session of the Legislature for the year 1921 that all bonds issued in the state shall become due and payable in annual
installments beginning not more than three years after the date of their issuance, and that the amounts to be paid annually toward their retirement is to be fixed in such a manner that when the annual *Page 882 
interest is added to the principal amount to be paid the total amount retired each year will be as nearly equal as practicable, for in Section 7-A of the contract it is provided that the $15,000,000 bond issue is to mature from January 1, 1953 (more than three years after their issuance in 1948) through January 1, 1989, but that no bonds shall mature from 1989 until 1998, with the result that for this period of ten years, and until the $100,000 bonds mature in 1998, no bonds will be retired. Inasmuch as the rental the railroads are supposed to pay for the use of these terminal facilities that the city is to build and maintain at the cost of the taxpayers up until the last maturity is an amount equal to the principal and interest on the bonds, and the rental to be paid after the last maturity date is an amount equal to the ad valorem taxes on these facilities if they were not tax exempt, it is obvious this arbitrary extension of the last maturity date was incorporated in the contract for the ostensible purpose of allowing the railroads to rent these facilities during this ten year period for the nominal amount of interest payments due on $100,000 bonds. This provision likewise has the further effect of granting a tax exempt status to the carriers for an additional 9 years.
Finally, in Section 24 of Article XIV of the constitution, it is provided that the city "shall not * * * pledge its credit or anticipate the collection of any of its taxes * * * nor shall said City make any contract *Page 883 
or incur any debt or obligation for any purpose whatsoeverunless sufficient funds not otherwise appropriated to pay anddischarge same are actually in the treasury of said City at thetime of making the contract or incurring the debt or obligationand are specifically set aside and dedicated to said purpose * **." In Section 7 of Article 2 of the contract, the city has absolutely and irrevocably bound itself for a period of 100 years (50 years under the contract with the railroads, the latter being given the option of renewing the rental thereof for an additional 50 years although no such option is given the city), to appropriate from the general funds of the city $500,000 annually, all in addition to the money raised by the bond issue, and this amount is "to be dedicated and solely and exclusively used, to the extent necessary, for the same purpose for which the proceeds of the bonds referred to in this paragraph are to be segregated (i. e., for the purpose of carrying out and paying the city's portion of the cost of the elimination of grade crossings under the agreement), * * *as well as for the payment of the cost of the other obligationsand undertakings assumed by the City in this agreement." This is unquestionably in direct contravention of the constitutional prohibition above quoted, as well as in contravention of the provisions of Section 31.3 of Article XIV of the constitution authorizing the contract itself. (Italics mine.) *Page 884 
In an amendment that purported to authorize the City of New Orleans to issue bonds to cover its portion of the cost of a terminal consolidation and grade separation program, it is impossible to assume the people intended (and they should not have been compelled) to authorize the city to set up a plan whereby it would finance the obligation of the carriers in the same project, infringe on the rights of adjacent parishes, embark upon a vast tax exemption scheme for the benefit of the carriers, forever surrender their right of eminent domain with regard to railroad properties not made a part of the terminal program as well as those that are made a part of it. The position I take is that it was unconstitutional to force the voters to grant these vital prerogatives to the city (all of which are in derogation of positive law) to the city under the guise of approving the establishment of a union terminal station in New Orleans.
It is also my belief that the contract itself is not only unconstitutional and invalid for the many reasons above pointed out, but for the further reason that it was entered into with no regard to the general financial picture of the city government. Under its provisions as they now stand, the entire tax structure of the city will, in all probability, be damaged, so crippling and hamstringing the city from a financial standpoint that it will be impossible for any additional public improvements to be undertaken in New Orleans for the next *Page 885 
hundred years. It will also render the $15,000,000 bond issue of such uncertain value as to make it difficult if not impossible to dispose of the bonds, as well as necessitate the imposition of additional taxes.
The ramifications of this contract are such that the city has practically agreed to bankrupt itself for generations to come for the sole purpose of establishing a union terminal in New Orleans that will facilitate and further the business of private corporations. Such a course not only is not authorized by the adoption of Section 31.3 of Article XIV of the constitution, but the action the city has taken under this authorization constitutes a gross abuse of the discretion that was vested in it of consolidating the carrier lines feeding the city "in any manner it may determine."
For these reasons, I dissent.