Beaird-Poulan, Inc. v. DEPARTMENT OF HYS., STATE OF LA.

• Decision Date: 21 August 1974
• Docket Number: No. 73-3453.,73-3453.
• Citation: 497 F.2d 54
• Parties: BEAIRD-POULAN, INC., Plaintiff-Appellant, v. DEPARTMENT OF HIGHWAYS, STATE OF LOUISIANA, Claude S. Brinegar, and Secretary of Transportation, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

497 F.2d 54 (1974)

BEAIRD-POULAN, INC., Plaintiff-Appellant, v. DEPARTMENT OF HIGHWAYS, STATE OF LOUISIANA, Claude S. Brinegar, and Secretary of Transportation, Defendants-Appellees.

No. 73-3453.

United States Court of Appeals, Fifth Circuit.

July 5, 1974.

Rehearing Denied August 21, 1974.

Thomas J. Wyatt, Cecil E. Ramey, Jr., Shreveport, La., for plaintiff-appellant.

Donald E. Walter, U. S. Atty., Robert H. Shemwell, Asst. U. S. Atty., Shreveport, La., William W. Irwin, Jr., D. Ross Banister, Jessee S. Moore, Jr., Baton Rouge, La., Wallace H. Johnson, Dept. of Jus., Edmund B. Clark, George R. Hyde, John J. Zimmerman, Attys., Washington, D. C., for defendants-appellees.

Before TUTTLE, COLEMAN and AINSWORTH, Circuit Judges.

COLEMAN, Circuit Judge:

Section 221 of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (Relocation Act), 84 Stat. 1894, 42 U.S.C., § 4601 note, provides:

"(a) Except as provided in subsections (b) and (c) of this section, this Act and the amendments made by this Act shall take effect on the date of its enactment.

"(b) Until July 1, 1972, sections 210 and 305 shall be applicable to a State only to the extent that such State is able under its laws to comply with such sections. After July 1, 1972, such sections shall be completely applicable to all States.

"(c) The repeals made by paragraphs (4), (5), (6), (8), (9), (10), (11) and (12) of section 220(a) of this title and section 306 of title III shall not apply to any State so long as sections 210 and 305 are not applicable in such State."

This statute became generally effective on January 2, 1971. States which, because of their laws, could not comply as of that date were given until July 1, 1972 to come into compliance. The legislative history shows that the latter provision 42 U.S.C., § 4601(b) was, in fact, made for the benefit of the State of Louisiana because Congress believed although erroneously, as will be seen later that the laws of Louisiana rendered that State unable, at the time, to comply, see Conference Report, No. 91-1780, U.S.News, 91st Cong., 2d Sess., pp. 5465, 5466 (1970).¹

The Relocation Act specifically stated its purpose:

"The purpose of this title is to establish a uniform policy for the fair and equitable treatment of persons displaced as a result of Federal and federally assisted programs in order that such persons shall not suffer disproportionate injuries as a result of programs designed for the benefit of the public as a whole." (Relocation Act, § 201).

Article IV, § 12 of the Louisiana Constitution of 1921, at times pertinent to this litigation, provided as follows:

"The funds, credit, property or things of value of the State, or of any political corporation thereof, shall not be loaned, pledged or granted to or for any person or persons, associations or corporations, public or private; nor shall the State, not any political corporation, purchase or subscribe to the capital stock or stock of any corporation or association whatever, or for any private enterprise. Nor shall the State, nor any political corporation thereof, assume the liabilities of any political, municipal, parochial, private or other corporation or association whatsoever, except as otherwise provided in this Constitution; nor shall the State undertake to carry on the business of any such corporation or association, or become a part owner therein; provided, the State, through the Legislature, shall have power to grant the necessary rights of way through its public lands for the construction of any railroad, or flood control or navigation canal; and provided, police juries and municipal corporations may, in providing for destitute persons, utilize any charitable institutions within their corporate limits for the care, maintenance and asylum of such persons; and all appropriations made to such institutions for the purpose aforesaid, shall be accounted for by them in the manner required of officials entrusted with public funds. . ."

This, in general, states the legal back-ground for the litigation, here under review.

In April and May, 1971, in connection with the construction of an interstate highway at Shreveport, Louisiana, Beaird-Poulan, Inc., the plaintiff-appellant, in response to expropriation (condemnation) proceedings brought by Louisiana, was required to move machines, equipment, office supplies, and other items from its manufacturing plant and offices to a new location. The cost of the move is alleged to have been $217,082.46. The Louisiana Department of Highways refused to pay said expenses or to process any administrative claim therefore in compliance with the Relocation Act. The Secretary of the United States Department of Transportation declined to amend grants, contracts, and agreements with the Louisiana Department of Highways to include the cost of relocation expenses.

Beaird-Poulan filed suit against the Department of Highways for the recovery of its cost and for injunctive relief requiring the Secretary of Transportation to enforce the Relocation Act as to it and others similarly situated.

The Department of Highways answered that the complaint failed to state a claim upon which relief might be granted and further answered that because of the constitutional prohibition appearing in Article IV, § 12, it could not comply with the Act.

The United States, on behalf of the Secretary of Transportation, moved to dismiss for lack of jurisdiction and because the complaint failed to state a claim upon which relief could be granted.

The District Court dismissed the complaint.

This was done in reliance upon the provisions of the Louisiana constitutional provision and the decision of the Louisiana Supreme Court in Department of Highways v. Southwestern Electric Power Company, 243 La. 564, 145 So.2d 312 (1962). It was further pointed out that Louisiana, under the law then existing, was not required (emphasis ours) to pay compensation for relocation costs incurred in expropriation cases, citing Gray v. Department of Highways, 250 La. 1045, 202 So.2d 24 (1967) ; Louisiana Highway Commission v. DeBouchel, 174 La. 968, 142 So. 142 (1932) ; Rapides Parish School v. Nassif, 232 La. 218, 94 So.2d 40 (1957) ; Department of Highways v. Levy, 242 La. 259, 136 So.2d 35 (1962), and Housing Authority of Shreveport v. Green, 200 La. 463, 8 So.2d 295 (1942).

The District Court concluded that any payment of relocation costs by the State of Louisiana would constitute a gratuity and that such a donation was prohibited by its Constitution, Article IV, § 12. Further, since the Louisiana law prevented the Department of Highways from complying with the Relocation Act, the Secretary of Transportation should likewise be dismissed.

It is beyond doubt that in the existing state of the law Louisiana was not required to pay relocation costs. As we view the issue, however, this did not necessarily mean that, in the words of the federal relocation statute, it was unable to do so.

We do not read Department of Highways v. Southwestern Electric Power Company, supra, as shedding any precedential light on this litigation. In that case, the Power Company refused to move its lines and poles from city streets which were to be converted into the interstate highway system unless it was paid for the cost of the relocation. The Louisiana Supreme Court denied removal expense relief on the ground that removal was required by the franchises which had granted the use of the streets in the first place, for, indeed, under Louisiana law a corporation may not acquire any proprietary interest in a street.

This case was decided in 1962, eight years before the enactment of the federal relocation act. The Federal Highway Act of 1956, as then written, did authorize the payment of relocation costs to public utilities. Of this, the Louisiana...