Mongrue v. Monsanto Company, 00-30052

• Decision Date: 07 May 2001
• Docket Number: No. 00-30052,00-30052
• Citation: 249 F.3d 422
• Parties: (5th Cir. 2001) ROLAND J. MONGRUE; CLYDE A. GISCLAIR; and SYLVIA GISCLAIR, Plaintiffs-Appellants, v. MONSANTO COMPANY, Defendant-Appellee
• Court: U.S. Court of Appeals — Fifth Circuit

Page 422

249 F.3d 422 (5th Cir. 2001)

ROLAND J. MONGRUE; CLYDE A. GISCLAIR; and SYLVIA GISCLAIR, Plaintiffs-Appellants, v. MONSANTO COMPANY, Defendant-Appellee.

No. 00-30052

UNITED STATES COURT OF APPEALS, FIFTH CIRCUIT

May 7, 2001

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Appeal from the United States District Court Eastern District of Louisiana

Before JOLLY and DAVIS, Circuit Judges, and RESTANI, Judge.^*

JANE A. RESTANI, Judge:

The issue before the court is whether remand is necessary for the district court to consider a takings claim against a private entity under the federal Constitution rather than the Louisiana Constitution. Roland J. Mongrue, Clyde A. Gisclair and Sylvia Gisclair (collectively, "Appellants") originally brought an action in Louisiana state court against Monsanto Company ("Monsanto"). The Appellants had alleged, inter alia, that wastewater injected underground by Monsanto pursuant to a permit issued by the Louisiana Commissioner of Conservation had migrated into their subsurface property, thereby constituting a taking without just compensation. Following removal on diversity grounds, the district court on October 21, 1999, entered an order granting in part Monsanto's motion for summary judgment. In the order, the district court ruled, inter alia, that the Appellants could not establish a claim of unconstitutional taking because Monsanto was not a "private entity authorized by law to expropriate" for a "public and necessary purpose," as required under the Louisiana Constitution. On October 26, 1999, the district court granted the Appellants' motion for leave to dismiss with prejudice to their remaining claim of trespass, thereby rendering the summary judgment order final and appealable.¹ The Appellants subsequently moved for a new trial on the basis that they had claimed takings under both the Louisiana and United States Constitutions. The district court denied this motion. Appellants appeal from both the summary judgment order and the denial of their motion for a new trial. We affirm.

FACTS

The Appellants and Monsanto own adjacent parcels of real property in Luling, St. Charles Parish, Louisiana. On its property, Monsanto operates a plant facility that manufactures products such as herbicides, acetaminophen and water treatment chemicals. Beginning in 1972, Monsanto disposed of chemical wastewater produced in the manufacture of these products by injecting it through underground wells ("disposal wells") that extend from 2500 to 7000 feet below the surface.² Monsanto injects the wastewater through the disposal wells into sand layers isolated by impermeable layers of rock, which prevented vertical migration of the wastewater.

The Office of Conservation of the State of Louisiana, under authority delegated by the Louisiana legislature, had issued permits allowing disposal by such means, subject to monitoring and regulation. See La. Rev. Stat. Ann. § 30:4.1. The permits are granted only after an application process that includes public hearings.

In August of 1998, Appellants filed in state District Court for the Parish of St. Charles, Louisiana, a suit claiming that Monsanto's injection into Disposal Wells #1 and #2 caused a migration of wastewater into the sand strata approximately 2600 feet beneath their properties. No government entity was named in the suit. Appellants claimed that the subsurface migration (1) resulted in Monsanto's unjust enrichment, (2) constituted an unlawful trespass, and (3) constituted a violation of constitutional provisions prohibiting takings for public purpose without just compensation. Rather than seek an injunction,³ Appellants demanded compensation from Monsanto based on the rental value of their property. Appellants did not challenge the legal authority of the Commissioner in granting the permit, nor the regulatory scheme under which the permit was granted.

On August 25, 1998, Monsanto removed the case to federal district court based on diversity of citizenship pursuant to 28 U.S.C. § 1332.⁴ On January 5, 1999, Monsanto filed a motion for judgment on the pleadings, which the court denied on April 9, 1999. In October of 1999, Monsanto filed a motion for summary judgment on all three of Appellants' claims. On October 21, 1999, the district court granted summary judgment as to the unjust enrichment and the takings causes of action because the court found that Monsanto was not a "private entity authorized by law to expropriate" as required by the Louisiana Constitution, Art. I, sec 4. Finding several genuine issues of material fact, the court denied summary judgment with respect to the trespass claim. On October 26, 1999, the court granted Appellants' motion to dismiss the trespass claim with prejudice, thereby enabling Appellants to appeal the partial summary judgment as the final judgment of the case.

On November 5, 1999, Appellants filed a motion for new trial on the issue of unconstitutional takings. Appellants argued that the court should have analyzed their takings claim under the Fifth Amendment of the United States Constitution. On December 20, 1999, the district court entered an order denying the motion for new trial on the grounds that (1) the motion was untimely,⁵ and (2) Appellants were attempting "to relitigate the issue of unconstitutional takings with the new argument that their claim arises under the Fifth Amendment of the United States Constitution." On January 5, 2000, however, the district court vacated the section of its December 20 order that related to timeliness, but reiterated its denial of the Appellants' motion for a new trial on the second ground stated therein. On January 13, 2000, Appellants filed a notice of appeal to challenge the district court's grant of summary judgment and the denial of its motion for a new trial.

DISCUSSION

I. Denial of Appellants' Motion for a New Trial

"[W]hen the district court's ruling is predicated on its view of a question of law, it is subject to de novo review." Munn v. Algee, 924 F.2d 568, 575 (5th Cir.) (denial of motion for new trial reviewed de novo where partial summary judgment had been decided on availability of damages a question of law) (citing Dixon v. International Harvester Co., 754 F.2d 573, 586 (5th Cir.1985)), cert. denied, 502 U.S. 900 (1991).

The order denying a new trial was predicated on the conclusion that Appellants had failed to show a mistake of law in the court's summary judgment analysis or in its application of Louisiana law. The district court found that the Appellants effectively were seeking to relitigate their takings claim under the United States Constitution. See Simon v. United States, 891 F.2d 1154, 1159 (5th Cir. 1990) (Rule 59 motion may not be used to relitigate old matters or raise new arguments). The district court reasoned that because Appellants had "treated their unconstitutional takings claim throughout the litigation as a claim arising under the Louisiana Constitution and not the United States Constitution," summary judgment was properly decided under the former.

The district court's ruling was correctly and properly decided under the Louisiana Constitution based on the Appellants' presentation of the issues. A party has presented an issue in the trial court if that party has raised it in either the pleadings or the pretrial order, or if the parties have tried the issue by consent under Federal Rule of Civil Procedure 15(b).⁶ Portis v. First Nat'l Bank, 34 F.3d 325, 331 (5th Cir. 1994) (citing Myrick v. City of Dallas, 810 F.2d 1382, 1386 (5th Cir.1987)). An issue must be presented so as to put the opposing party and the court on notice that it is being raised. Id. (citing Simon, 891 F.2d at 1158).

Neither the district court nor Monsanto could have been on notice from the Appellants' pleadings that remedies were sought under the federal Constitution. The case had been removed from state court on grounds of diversity rather than federal question jurisdiction. The district court therefore applied the substantive law of the state in which it was sitting, Louisiana. See Erie Ry. Co. v. Tompkins, 304 U.S. 64 (1938). In point six of its petition before the state court, Appellants had referred only to the language of the Louisiana Constitution in informing the court of its basis for their takings claim:

Monsanto's actions in unilaterally appropriating the property of Mr. Mongrue and the Gisclairs amounts to an unconstitutional taking of their property without payment of just compensation. See Article 1 Section 4 of the Louisiana Constitution, which states that "[p]roperty 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 owners . . ." Monsanto should be answerable in damages for just compensation for the property expropriated by Monsanto.

R1-288. In the absence of any reference to the Takings Clause of the Fifth Amendment to the United States Constitution, neither the district court nor Monsanto could have reasonably been on notice that Appellants' petition included a federal claim.⁷ Had Appellants intended to bring a takings claim under the federal Constitution, they had the chance to amend their petition once it became obvious that Monsanto understood that the takings claim continued to be based on the Louisiana Constitution. In its motion for judgment on the pleadings, Monsanto stated: "The plaintiffs also assert that Monsanto's use of injection wells constitutes a taking by a private citizen in violation of Article I Section 4 of the Louisiana Constitution." R1-250. In their response, Appellants failed to clarify that, as they now allege, their claim was actually brought under both the Constitutions of the United States and of Louisiana. Rather, Appellants asserted that they met the "elements of expropriation" by again citing only the Louisiana Constitution. R1-217. Similarly, Appellants failed to invoke...