Board of Com'rs of Port of New Orleans v. Splendour Shipping & Enterprises Co., Inc.

• Decision Date: 15 January 1973
• Docket Number: No. 52156,52156
• Citation: 273 So.2d 19
• Court: Louisiana Supreme Court
• Parties: BOARD OF COMMISSIONERS OF the PORT OF NEW ORLEANS, An Agency of the State of Louisiana v. SPLENDOUR SHIPPING & ENTERPRISES COMPANY, INC., et al.

Page 19

273 So.2d 19

BOARD OF COMMISSIONERS OF the PORT OF NEW ORLEANS, An Agency

of the State of Louisiana v. SPLENDOUR SHIPPING & ENTERPRISES COMPANY, INC., et al.

No. 52156.

Supreme Court of Louisiana.

Jan. 15, 1973.

Rehearing Denied Feb. 19, 1973.

Chaffe, McCall, Phillips, Toler & Sarpy, Paul A. Nalty, Leon Sarpy, New Orleans, for plaintiff-applicant.

Deutsch, Kerrigan & Stiles, Cornelius G. Van Dalen, New Orleans, for defendants-respondents.

DIXON, Justice.

Writs were granted in this case to review the claim of the Board of Commissioners of the Port of New Orleans that it is immune from suit for damage resulting from tort.

The issue arose after the Board of Commissioners filed suit against Splendour Shipping & Enterprises Company, Inc. and others for damages to the Florida Avenue bridge, which spans the Inner Harbor Navigation Canal in the Port of New Orleans. Splendour's answer pleaded the contributory negligence of the Board of Commissioners because of its improper design and construction of the bridge and its appurtenances which allegedly constituted a hazard and obstruction to navigation within the channel of the Industrial Canal, which is open to interstate and foreign commerce. Splendour reconvened against the Board of Commissioners for damages to its vessel.

The Board of Commissioners filed a pleading styled 'Exception of No Right of Action,' alleging that it is 'an Agency of the State of Louisiana and was, and is, immune from suit in tort without the consent of the Legislature; that no such consent has been given . . .' Therefore, the Board of Commissioners prayed that the reconventional demand be dismissed. The exception was maintained and there was judgment dismissing the reconventional demand.

The Court of Appeal affirmed, holding that the Board of Commissioners, as an agency of the State of Louisiana, 'enjoys immunity in tort.' Board of Commissioners v. Splendour Shipping & Enterprises Company, Inc. et al., 255 So.2d 869.

Splendour argues that the Board is not the State, and therefore does not enjoy the State's immunity from suit in tort. If the issue were so simple, it would quickly dispose of the case. First, the applicability of the doctrine of sovereign immunity is not determined by the nominal party to the litigation. ¹

Second, in the prior cases in which this court has been obliged to consider the question, we have held that the Board of Commissioners is an agency of the State, and as such, immune from suit in tort.

Sovereign immunity from tort suits has not in the past been confined to the State, itself, but has been enjoyed by its agencies. The Board is a State agency carrying on a public bisiness--the operation of the Port of New Orleans. It is given the complete power to operate and regulate the port, wharves, landings, buildings, to expropriate, to legislate, to maintain a police force. R.S. 34:21--44. Its powers are derived from the legislature and the Constitution. It is not 'the State of Louisiana,' but is part of the State, and it is an agency of the State. Our problem is to determine if the sovereignty of the State clothes the Board with immunity from suit.

The first case squarely holding the Board to be an agency of the State and protected by sovereign immunity from suit in tort was Fouchaux v. Board of Commissioners, La.App., 186 So. 103; 193 La. 182, 190 So. 373. (The earlier cases of Barrett Manufacturing Company v. Board of Commissioners, 133 La. 1022, 63 So. 505; Lamport & Holt, Ltd. v. Board of Commissioners, 137 La. 784, 69 So. 174, stopped short of holding that the sovereign immunity of the State protected the Board). ²

When the Fouchaux case was reviewed in the Supreme Court, sovereign immunity was not mentioned; in fact, the implication to be drawn from the language of the opinion is that the Board may be subject to suit for damages, at least when the damages are suffered by a lessee because of the defective premises under lease from the Board.

However, any doubt created by the Supreme Court opinion in the Fouchaux case was dispelled in Miller v. Board of Commissioners, 199 La. 1071, 7 So.2d 355, which criticized the Supreme Court opinion in Fouchaux and specifically approved the rationale of the Court of Appeal Fouchaux opinion.

Splendour argues that the legislative history of the Board shows that it was intended to have the powers of a corporation to sue and be sued, and, therefore, under Hamilton v. City of Shreveport, 247 La. 784, 174 So.2d 529, the immunity from suit was waived.

Act 70 of 1896 created the Board of Commissioners of the Port of New Orleans. Section 2 of that act included this sentence: 'They shall have and enjoy all the rights, powers and immunities incident to corporations.' When the act was amended by Act 36 of 1900 and Act 14 of the Extra Session of 1915, the sentence was retained.

In 1950, the statutory material concerning the Board of Commissioners was included in R.S. 34:1 et seq. R.S. 34:21 enumerated some rights and powers of the Board, but omitted any reference to 'all rights, powers and immunities incident to corporations.' Splendour argues that at least until 1950 the Board had the power to sue and be sued as a corporation in Louisiana, and that the omission of the reference to rights and powers incident to corporations should not have resulted in a change in the substantive law.

This interpretation is plausible, but runs counter to a prior decision of this court. When Act 70 of 1896 became effective, Article 46 of the Louisiana Constitution of 1879 prohibited any local or special law creating corporations. The constitutionality of Act 70 of 1896 was attacked in an injunction suit decided in this court in 1896. The act was upheld; the court noted in the following language that the Board was not given the power to 'plead and be impleaded,' and was not a corporation:

'Generally, a corporation has succession in its corporate name. It may plead and be impleaded. It may hold and convey property. The board here is not invested with all these qualities, essential to the existence of a corporation. The act empowers this board to administer the public wharves of the port, and invests it with certain duties. The matter is, we think, one chiefly of administration. The legislature had the power to pass an act to administer the affairs of the public wharves and levees through agents. Having this power, it had the power to carry the legislative will into execution, through the intervention of a board of commissioners appointed for the purpose, without necessarily creating a corporation, within the inhibitory clause of the constitution. Though the board may possess some of the incidents of a corporation, it is not necessarily a corporation. The provisions of the act can only be regarded as regulations and agencies to be enforced by this board. It is given such authority as may be needful to that end. The members are agents acting together. This board is not a body corporate, with privileges and immunities such as public corporations must have. The most that can be alleged is that the act authorizes the board to perform certain designated acts, which we must assume are in the interest and for the welfare of the state. The general acts and the general modes of creating corporations are not before us for consideration. We are only concerned with an act of public agency, passed for a special purpose. As such, we do not think that it should be adjudged a public corporation.' (Emphasis added). Duffy et al. v. City of New Orleans et al., 49 La.Ann. 114, 21 So. 179 (1896). But see explanation in State v. Kohnke, 109 La. 838, 33 So. 793, 795.

As alternative arguments, Splendour urges that the dock board has waived its immunity by having constructed a bridge within the navigable waters of the United States and that sovereign immunity is unavailable in this case because it would conflict with the uniformity in application of the maritime laws of the United States. This case is presented to us on exceptions to a reconventional demand. We cannot gather from the well pleaded facts that the dock board has waived its immunity by the construction of the bridge here involved.

Splendour's reconventional demand does allege facts which bring the claim against the Board of Commissioners within admiralty and maritime law. 28 U.S.C. § 1333; 46 U.S.C. § 740; Trahan v. Gulf Crews, 260 La. 29, 255 So.2d 63. It alleged that its vessel was damaged in excess of $15,000 resulting from the faulty design and construction of the bridge, rendering it unsafe for ocean-going vessels navigating in interstate and foreign commerce within the channel of the canal in the Port of New Orleans. Splendour argues that the demand of the Board of Commissioners against Splendour, also a demand in admiralty, is subject to defenses not cognizable in Louisiana law, but sanctioned in maritime law, such as comparative negligence, mutual fault, major-minor fault and 'both-to-blame' fault. Splendour contends that dismissing its reconventional demand deprives it of these defenses, available to it under maritime law. For example, if it is found that the accident occurred because of the mutual fault of both parties, the damages must be divided. That is, if the damages to the bridge are proved to be $25,000, as alleged in the petition, and the damages to the ship are proved to be $15,000, as alleged in the reconventional demand, and it is determined that the collision occurred bacause of mutual fault, then Splendour would be required to pay the Board of Commissioners $5,000, a sum equal to one-half of the difference between the damages suffered by the plaintiff and the defendant. Reyonlds v. Vanderbilt (North Star), 106 U.S. 17, 1 S.Ct. 41, 27 L.Ed. 91; 'The Law of Admiralty,' Gilmore and Black, 1957, Chapter 7, p. 408.

We do not agree that sustaining the exception to the reconventional demand effectively deprives Splendour of any defense to the Board of Commissioners' action which...