Hudson v. City of Bossier City, 39,182-CA.

• Court: Supreme Court of Louisiana
• Writing for the Court: Brown
• Citation: 892 So.2d 143
• Parties: Billy Brooks HUDSON, et al., Plaintiffs-Appellants v. CITY OF BOSSIER CITY, et al., Defendants-Appellees.
• Docket Number: No. 39,182-CA.,39,182-CA.
• Decision Date: 06 January 2005

892 So.2d 143 Billy Brooks HUDSON, et al., Plaintiffs-Appellants
v.
CITY OF BOSSIER CITY, et al., Defendants-Appellees. No. 39,182-CA. Court of Appeal of Louisiana, Second Circuit. January 6, 2005.

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Jeffrey Lee Little, Shreveport, Counsel for Plaintiffs-Appellants.

Hammonds & Sills, by Robert L. Hammonds, Baton Rouge, Counsel for Defendant-Appellee, Bossier Parish School Board.

Lunn, Irion, Johnson, Salley & Carlisle, by Charles W. Salley, Penny Nowell, Shreveport, Counsel for Defendant-Appellee, Louisiana Riverboat Gaming Partnership d/b/a Isle of Capri Casino.

Cook, Yancey, King & Galloway, by Edwin L. Blewer, Jr., Shreveport, Counsel for Defendant-Appellee, Bossier Parish Sheriff's Office.

Hargrove, Smelley & Strickland, by Glenn L. Langley, Shreveport, Counsel for Defendant-Appellee, Bossier Parish Sheriff's Office.

Klotz, Simmons & Brainard, by David Klotz, Shreveport, Counsel for Defendant-Appellee, Greater Bossier Economic Development Foundation.

Theodore E. Johnson, Jr., Counsel for Defendant-Appellee, Johnny Gray Jones Youth Shelter.

Cook, Yancy, King & Galloway, by Mary D. Bicknell, Shreveport, Counsel for Defendant-Appellee, Horseshoe Entertainment.

James D. Hall, City Attorney, Counsel for Defendant-Appellee, City of Bossier City.

J. Schuyler Marvin, Bossier Parish District Attorney, Pugh, Pugh & Pugh, by Robert G. Pugh, Patrick Jackson, Shreveport, Counsel for Defendant-Appellee, Bossier Parish Police Jury.

Before BROWN, WILLIAMS, and PEATROSS, JJ.

BROWN, C.J.

In 1991, the Louisiana Legislature authorized the local governing authorities where riverboats were berthed to levy an admission fee of up to $2.50 for each boarder.¹ In 1993, this legislation was amended to specifically direct how the proceeds collected would be distributed.² The parties designated to receive these tax funds from the two Bossier boats were: 80% to the City of Bossier City; 15% to the Bossier Parish School Board for its Bossier Education Excellence Fund (BEEF), and 5% to the Johnny Gray Jones Youth Shelter, which is operated by the Bossier Parish Police Jury. In 1995, this legislation was again amended to add another $.50 to the boarding fee, with this additional amount to go to the Bossier Parish Police Jury for widening Airline Drive and thereafter to be placed in its road fund.³

In 1994, disregarding the legislature's specific authorization, Bossier City entered into contracts with the two gambling boats, Riverboat Gaming Partnership d/b/a Isle of Capri Casino-Bossier City ("Isle of Capri") and Horseshoe Entertainment ("Horseshoe").⁴ These contracts set an annual fee for each boat that gave the City 3.2% of gross receipts (or a minimum of $2.5 million), $350,000 to the Police Jury

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(of which $50,000 would go to the Youth Shelter), $300,000 to the School Board, $200,000 to the Sheriff of Bossier Parish and $150,000 to the Greater Bossier Economic Foundation.⁵ The record reflects that 3.2% of gross revenues have always been greater than the $2.5 million minimum payable to Bossier City and that the Boats' revenues have consistently increased. Thus, while the School Board, Police Jury, and Shelter have received the same money each year, the City's revenues have continually grown. See Horseshoe Entertainment v. Bossier Parish Police Jury, 30,502 (La.App.2d Cir.06/26/98), 714 So.2d 920, writ denied, 98-1941 (La.11/06/98), 728 So.2d 392.

Plaintiffs, a group of concerned citizens from Bossier Parish⁶, challenged the revenue contracts entered into between "Isle of Capri", "Horseshoe" and Bossier City. Also made defendants were the other parties to the contracts, the Bossier Parish Sheriff's Office, the Bossier Parish Police Jury, the Bossier Parish School Board, the Greater Bossier Economic Development Foundation, and Johnny Gray Jones Youth Shelter.

After a bench trial, it was ruled that the provision in the contracts that attempted to restrict Bossier City's authority to assess a boarding fee or any other tax authorized by the legislature was unenforceable as being against public policy; however, the trial court recognized the severability of that provision. The trial court further found that the enactment in 2003 of an amendment to La. R.S. 27:93 retroactively ratified the method of collection and distribution detailed in the contracts. Accordingly, the trial court refused to redistribute the proceeds actually collected to the parties designated by the legislature to receive those funds. From this ruling, plaintiffs have appealed. We reverse, render, and remand.

Discussion

Validity of Casino Revenue Contracts

In its written opinion, the trial court recognized that "[A] strong argument can be made that unless the legislature approves or ratifies the practice, a government entity can do nothing other than collect and distribute revenue as spelled out by statute and is not free to negotiate and contract inconsistent therewith." Clearly, in this case, defendants negotiated and contracted inconsistent with the method of collection and distribution spelled out by the statute. The contracts imposed a tax not authorized and a distribution of those funds contrary to what was designated.

La. Const. art. VII, § 1(A) states, "[E]xcept as otherwise provided by this constitution, the power of taxation shall be vested in the legislature, shall never be surrendered, suspended, or contracted away, and shall be exercised for public purposes only." This court previously reviewed the contracts at issue in Horseshoe Entertainment v. Bossier Parish Police Jury, supra at 924, and observed:

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A municipality or police jury is a subordinate political subdivision of the state and as such possesses only those powers delegated to it by the state and its constitution. Rollins Environmental Services of Louisiana, Inc. v. Iberville Parish Police Jury, 371 So.2d 1127 (La.1979); Bradford v. City of Shreveport, 305 So.2d 487 (La.1974). The state has the ultimate power to license and regulate gaming facilities. Polk v. Edwards, supra, 626 So.2d 1128 (La.1993). Therefore, it correlates that any political subdivision of the state has only such powers as are expressly delegated to it by the state through statutory enactments. See Johnston v. Morehouse Parish Police Jury, 424 So.2d 1053 (La.App. 2d Cir.1982).

The delegation of the...