Bayou Bridge Pipeline, LLC v. 38.00 Acres

• Decision Date: 13 May 2021
• Docket Number: No. 2020-C-01017,2020-C-01017
• Court: Louisiana Supreme Court
• Parties: BAYOU BRIDGE PIPELINE, LLC v. 38.00 ACRES, MORE OR LESS, LOCATED IN ST. MARTIN PARISH, et al.

320 So.3d 1054

BAYOU BRIDGE PIPELINE, LLC

v.38.00 ACRES, MORE OR LESS, LOCATED IN ST. MARTIN PARISH, et al.

No. 2020-C-01017

Supreme Court of Louisiana.

May 13, 2021

Rehearing Denied June 29, 2021

GENOVESE, J.

This case involves whether an award of attorney fees and other litigation costs to defendant landowners in an expropriation proceeding may be upheld under current law. For the following reasons, we concur and affirm the court of appeal's award to defendants; however, we find that the basis of the award is vested in the Louisiana Constitution of 1974 rather than statutory law.

The facts in this case arise out of the construction of the Bayou Bridge Pipeline, which carries crude oil from Lake Charles to St. James, Louisiana. As part of the project, Bayou Bridge Pipeline, LLC ("BBP"), sought to acquire servitudes on the property of various landowners. The specific piece of property at the center of this litigation is approximately 38 acres of land ("the property") in St. Martin Parish. Prior to reaching servitude agreements with all individuals with an ownership interest in this particular parcel of land, BBP began pipeline construction. Specifically, in July 2018, BBP entered the property, cleared trees, dug trenches, and undertook other action in furtherance of the project.

Peter Aaslestad, one of the property owners, filed suit against BBP in order to enjoin BBP from further construction. BBP later stipulated that it would remain off the property as of September 10, 2018. However, the pipeline construction was more than 90% complete at that time.

Meanwhile, in late July 2018, after it had begun construction on the property, BBP filed expropriation litigation against hundreds of property owners with whom servitude agreements could not be reached, including Mr. Aaslestad, Katherine Aaslestad, and Theda Larson Wright (hereinafter collectively referred to as "defendants"). In response, defendants filed a reconventional demand against BBP, alleging BPP trespassed on their property and violated due process by proceeding with construction of the pipeline prior to a judgment of expropriation.¹

The matter proceeded to a trial wherein the trial court granted BBP's petition for expropriation, finding the expropriation served a public and necessary purpose. The trial court also granted defendants’ reconventional demand, finding that BBP trespassed on defendants’ property prior to obtaining permission or legal authority. The trial court ultimately awarded each defendant $75.00 for the expropriation and another $75.00 in trespass damages. Finally, the trial court ordered that each party bear its costs and attorney fees. Relying on La. R.S. 19:12, the trial court reasoned as follows:

The Court also notes and finds the provisions of La. R.S. 19:12 are applicable in this case. It states "if the highest amount offered prior to the filing of the expropriation suit is equal to or more than the final award[,] the Court may[,] in its discretion[,] order the defendant to pay all or a portion of the cost of the expropriation proceeding." Id. The Court in this case finds that the defendants were sent proper documentation pursuant to La. R.S. 19:2.1, and the final tender made to the defendants was that of $75. Bayou Bridge has prevailed on its expropriation case pursuant to La. R.S. 19:12. However, the landowners have prevailed on their trespass claim. Therefore, this Court orders that each party will bear its own costs.

Defendants appealed. Pertinent to the issues before this Court, defendants specifically argued that the trial court failed to render judgment on parts of their reconventional demand alleging violations of their property and due process rights. A five-judge panel of the Third Circuit Court of Appeal affirmed in part and reversed in part in a 4-1 decision. In its ruling, the majority declined to address the trespass damage award, finding that it had not been properly raised as an assignment of error.² On the merits, the court of appeal upheld the constitutionality of the expropriation process set forth in La. R.S. 19:2(8), La. R.S. 45:251, and La. Const. art. I, § IV(B)(4).³ In addition, the court of appeal found the Louisiana expropriation statutes do not violate property and due process rights guaranteed in the Louisiana Constitution. The court of appeal also affirmed numerous evidentiary rulings made by the trial court. Finally, the court of appeal determined that BBP violated defendants’ due process rights and awarded $10,000.00 to each defendant for this violation:

As co-owners, Defendants’ due process rights were individually viable and as against BBP, a third-party, each were entitled to be recognized regardless of their co-ownership interest or residence. In accord , Kenneth M. Murchison, Local Government Law, 53 La.L.Rev. 823, 850 (1993) (footnotes omitted) (stating "the right to exclude others has been recognized as an essential attribute of the ownership of immovable property. When the government physically invades (or authorizes third parties to invade) real estate, a taking occurs even if the financial impact is minimal."). Thus, regardless of BBP's assertions of limitation, each Defendant was entitled to assert their constitutionally guaranteed due process rights against BBP's expropriation action and contest BBP's right to such an expropriation. As such, the due process rights established and specifically recognized in La.Const. art. 1, § 4 existed to protect Defendants’ property ownership rights, and BBP willfully, wantonly, and recklessly violated those rights.

In the present case, the trial court's failure to award damages for BBP's violation of Defendants’ due process rights, a claim separate and apart from their award for trespass damages, constituted legal error. When the trial court errs as a matter of law in its assessment of damages rather than abuses its "much discretion," an appellate court, if it can, must assess res nova the amount of damages appropriate under the circumstances. Mart v. Hill , 505 So.2d 1120, 1128 (La.1987).

Bayou Bridge Pipeline, LLC v. 38.00 Acres , 19-565, pp. 35–36 (La. App. 3 Cir. 7/15/20), 304 So.3d 529, 550-51 (footnote omitted). Ultimately, the court of appeal found that although defendants could not challenge the amount of the trespass award, they were entitled to damages for due process violations:

After reviewing the record, we find the Defendants proved they are entitled to damages for BBP's violation of the due process rights particularized in this state's constitution. To decide otherwise would give entities such as BBP the unrestrained ability to decide whether another citizen's property rights can be restricted and makes a mockery of this state's carefully crafted laws of expropriation. Therefore, we award these Defendants each $10,000.00 for BBP's violation of their due process rights.

Id ., at p. 39, 304 So.3d at 552. Finally, the court of appeal found defendants are entitled to attorney fees and other litigation costs pursuant to La. R.S. 13:5111, but remanded the matter for a hearing to determine the reasonable amounts of each:

In addition, the Defendants have prayed for an award of reasonable attorney fees and expert witness fees. At the time BBP violated the Defendants’ due process rights[,] it acted as a private entity qualified as an agent of the government for purposes of La.R.S. 13:5111. See Mongrue v. Monsanto Co. , 249 F.3d 422 (5th Cir. 2001). As such, when it commenced pipeline construction on Defendants’ property prior to the initiation of expropriation proceedings, it became liable to compensate Defendants for reasonable attorney fees and expert witness costs pursuant to the provisions of La.R.S. 13:5111. Because the record is incomplete with regard to these elements of costs, we remand this matter to the trial court for a hearing to determine those elements of cost.⁴

Id ., at p. 40, 304 So.3d at 552–53. BBP thereafter sought writs in this Court, arguing that the court of appeal erred in awarding defendants attorney fees and expert witness costs pursuant to La. R.S. 13:5111, because BBP is not "the State of Louisiana, a parish, or municipality or other political subdivision or an agency of any of them." Alternatively, BBP averred that the present action does not involve a proceeding "for compensation for the taking of property by the defendant [in reconvention], other than through an expropriation proceeding[.]"

Louisiana Revised Statutes 13:5111(A) provides, in relevant part, as follows:

[a] court of Louisiana rendering judgment for the plaintiff, in a proceeding brought against the state of Louisiana, a parish, or municipality or other political subdivision or an agency of any of them, for compensation for the taking of property by the defendant, other than through an expropriation proceeding, shall determine and award to the plaintiff, as part of the costs of court, such sum as will, in the opinion of the court, compensate for reasonable attorney fees actually incurred because of such proceeding.

By its plain language, La. R.S. 13:5111 does not allow for an award of attorney fees in this case, as it involves expropriation by a private entity. Specifically, we find that BBP is not an "agency" of the state.⁵ Therefore, each party's arguments regarding whether or not this statute applies will not be addressed. Instead, we find that the Louisiana Constitution of 1974 does provide the legal authority and basis to uphold the award of attorney fees and litigation costs.

The Louisiana Constitution of 1974 requires that landowners be compensated "to the full extent" of their loss, which "shall include, but not be limited to, the appraised value of the property and all costs of relocation, inconvenience, and any other damages actually incurred by the owner because of the expropriation." La. Const. Art. I, § IV(B)(5).This article applies to both public and private entities and was amended in the Constitution of 1974 in order to encompass costs of...