Hudson v. City of Bossier City

• Decision Date: 17 April 2006
• Docket Number: No. 2005-C-0352.,No. 2005-C-0351.,2005-C-0351.,2005-C-0352.
• Citation: 930 So.2d 881
• Parties: Billy Brooks HUDSON v. CITY OF BOSSIER CITY, et al.
• Court: Louisiana Supreme Court

930 So.2d 881

Billy Brooks HUDSON v. CITY OF BOSSIER CITY, et al.

No. 2005-C-0351.

No. 2005-C-0352.

Supreme Court of Louisiana.

April 17, 2006.

COPYRIGHT MATERIAL OMITTED

Baker, Donelson, Bearman, Caldwell & Berkowitz, Donna D. Fraiche, Aubrey B. Hirsch, Jr., Jennifer B. McNamara, Steven F. Griffith, Jr., New Orleans, Lemle & Kelleher, T. Haller Jackson, III, Joseph L. Shea, Kathryn S. Bloomfield, Robert W. Kyle, Shreveport, Wiener, Weiss & Madison, Susie Morgan, Michael Allyn Stroud, Shreveport, John Schuyler Marvin, District Attorney, James D. Hall, City Attorney, Patrick R. Jackson, Parish Attorney, for applicant.

Hammonds & Sills, Robert L. Hammonds, Jon K. Guice, Karen D. Murphy, Baton Rouge, Cook, Yancey, King & Galloway, Mary D. Bicknell, Edwin L. Blewer, Jr., Glenn L. Langley, Shreveport, Lunn, Irion, Salley, Carlisle & Gardner, Penny N. Nowell, Charles W. Salley, Jeffrey L. Little, Shreveport, Klotz, Simmons & Brainard, David Klotz, Shreveport, Booth, Lockard, Politz, Lesage, Hayter & Odom, Bennett L. Politz, Shreveport, Theodore E. Johnson, Jr., for respondent.

CALOGERO, Chief Justice.

We are called upon in this case to decide the validity of two ten-year casino revenue agreements entered in 1994 by the defendant, City of Bossier City ("Bossier City"), one with each of two other defendants in this lawsuit, companies that operate riverboat casinos within the territorial jurisdiction of Bossier City—namely Louisiana River Gaming Partnership, d/b/a Isle of Capri Casino ("Capri"), and Horseshoe Entertainment ("Horseshoe"). The district court found that the casino revenue agreements were valid, except for one provision, which the district court found was severable. The court of appeal reversed, found the agreements were invalid in their entirety, ordered redistribution of the monies collected under the agreements, and remanded to the district court to determine sums due. We granted the defendants' applications for supervisory writs to determine the validity of the agreements. Following our review of the facts and applicable legal principles, we find that the agreements are valid, except for the severable provision that was invalidated by the district court. Accordingly, we reverse the court of appeal judgment and reinstate the judgment of the district court, finding as we do that the casino revenue agreements are valid.

FACTS AND PROCEDURAL HISTORY

La. Const. art. 12, § 6(b) provides that "[g]ambling shall be defined by and suppressed by the legislature." Pursuant to its exclusive authority to define and suppress gambling in the State of Louisiana, the Louisiana Legislature in 1991 enacted the Louisiana Economic Development and Gaming Control Act, originally found at Chapter 9, Title 4 of the Louisiana Revised Statutes. See 1991 La. Act. 753, § 1.¹ One provision of the Act, La.Rev.Stat. 4:552(A), authorized, but did not require, local governing authorities in jurisdictions where gaming riverboats were berthed to levy an admission fee of $2.50 per person.² La. Rev.Stat. 4:552. La.Rev.Stat. 4:552(B) at that time provided as follows:

B. Other than to levy the admission fee authorized by Subsection A of this Section, no local governing authority may license or regulate the operation of riverboats and the gaming operations conducted thereon.

In 1993, La.Rev.Stat. 4:552(A) was amended to provide the means of allocating monies collected as admission fees by local governing authorities, pursuant to the statute.³ 1993 La. Acts. 405. The amendment required that any funds derived from admission fees levied by Bossier Parish be allocated 80 percent to Bossier City, 5 percent to the Johnny Gray Youth Shelter, and 15 percent to the Bossier Parish School Board to be used solely for the Bossier Educational Excellence Endowment Fund ("BEEF").

In April 1994, Bossier City entered into the two casino revenue agreements with Capri and Horseshoe that are the subject of this litigation. The preambles to the two agreements, which are virtually identical except for the name of the casino involved, stated as follows:

WHEREAS, the Louisiana Legislature has authorized the City of Bossier City to levy a boarding fee of $2.50 per passenger; and

WHEREAS, the Louisiana Legislature has further provided that fifty cents ($.50) of the $2.50 boarding fee shall be distributed among certain designated entities in Bossier Parish; and

WHEREAS, the Louisiana legislature will continue to receive requests for funding from gaming revenues in the future unless all of the major governmental entities and agencies in Bossier Parish agree on a distribution of gaming revenues; and

WHEREAS, it is in the best interest of [the casino], the City of Bossier City, Bossier Parish Police Jury, Bossier Parish School Board, Bossier Parish Sheriff, the Bossier Parish Police Jury on behalf of the Johnny Gray Jones Youth Shelter and the Greater Bossier Economic Development Foundation to reach an agreement regarding the distribution of gaming revenues, in lieu of levying a boarding fee, so that gaming revenues may be distributed and budgeted without further legislative intervention; and

WHEREAS, all governmental entities and agencies which are beneficiaries of gaming revenues will execute appropriate resolutions in conjunction with this agreement requesting the Louisiana Legislature to exempt Bossier City, Bossier Parish, from any future modifications to riverboat gaming legislation regarding the assessment or distribution of fees; and

WHEREAS, all governmental entities and agencies agree to accept the distributions of riverboat gaming revenue set forth herein in lieu of any future legislative modifications which may be proposed regarding distributions of riverboat gaming revenue.

(Emphasis added.)

The two agreements then set forth a "Distribution of Gaming Revenues," which provided that Bossier City would receive $2.5 million per year or 3.2 percent of the gross gaming receipts, whichever was greater. The agreements further provided that the casinos would pay Bossier City an additional $1 million per year "on behalf of the other governing authorities." The City was required under the agreements to distribute the $1 million as follows: (1) $300,000 to the Bossier Parish School Board; (2) $300,000 to the Bossier Parish Police Jury; (3) $200,000 to the Bossier Parish Sheriff's Department; (4) $150,000 to the Greater Bossier Economic Development Foundation ("GBEDF");⁴ and (5) $50,000 to the Bossier Parish Police Jury, on behalf of the Johnny Gray Jones Youth Shelter. The casinos were required by the agreements to remit the additional $1 million on a pro-rated monthly basis over a twelve-month period.

Section 1.5 of the agreements further stated as follows:

Under the Agreement herein, the payments made under this Agreement are acknowledged to be in total fulfillment of [the casino's] obligation under [La.Rev. Stat. 4:552], particularly to the Johnny Gray Jones Youth Center and the Parish of Bossier to the Bossier Parish School Board, with distribution by the CITY, also the Bossier Parish Police Jury, Sheriff of Bossier Parish, Bossier Parish School Board General Fund, and the Bossier Economic Development Foundation.

This provision is commonly called a "no-levy" clause.

Finally, section 13 of the agreements provided as follows:

If any provision of this Agreement is held to be invalid, illegal, or unenforceable, that shall not affect or impair, in any way, the validity, legality, or enforceability of the remainder of this Agreement.

By 1995 La. Act. 743, La.Rev.Stat. 4:552⁵ was further amended to increase the admission fee per person that Bossier parish was authorized to levy from $2.50 to $3. La.Rev.Stat. 4:552(B)(2)(I) was also added to require that, in the event Bossier Parish chose to levy the additional 50 cents admission fee, the funds derived from that fee "be used in their entirety" for the parish road fund, first to make Airline Drive from 1-220 to the Linton Road Cutoff into a four-lane highway, following which the fees would be used "for general use in the parish road fund."

In 1996, the Louisiana Legislature by 1996 La. Act 7 enacted section 3 of Title 27 to the Louisiana Revised Statutes of 1950, comprised of Chapter 1, Rev. Stats. 27:1 to 27:3, Chapter 2, Rev. Stats. 27:11 to 27:26, and Chapter 3, Rev. Stats. 27:31 and 27:32. As part of that Act, Title 4 of the Louisiana Revised Statutes of 1950, the Louisiana Riverboat Economic Development and Gaming Control Act, was redesignated Chapter 4 of Title 27, consisting of La. Rev. Stats. 27:41 to 27:113. Pertinent to the controversy herein, La.Rev.Stat. 4:552, which authorized local government authorities to levy the admission fee, was redesignated as La.Rev.Stat. 27:93.

Effective January 1, 1997, Horseshoe reached a separate agreement with the Bossier Parish Police Jury to pay monies directly to that local governmental authority. As a result, the agreement between Bossier City and Horseshoe was amended primarily for the purpose of removing the Bossier Parish Police Jury from the distribution of monies being paid by Horseshoe to Bossier City on behalf of the other governmental entities. However, another result of the amendment was that the agreement between Bossier City and Horseshoe was extended until ten years from the date of execution of the amendment, or until January 1, 2007.

The final pertinent amendment to the statute authorizing local governing authorities to levy an admission fee on riverboats was made by 2003 La. Acts 1222, which reenacted and amended La.Rev.Stat. 27:93,⁶ inter alia, "to provide for the allocation of funds derived from riverboat admission fees on certain riverboats in Bossier Parish." Following the 2003 amendments, Bossier City was, for the first time, required (as opposed to simply authorized) to levy an admission fee equal to 4.5 percent of the monthly net gaming proceeds from each riverboat. Bossier City was further required by the amended statute to...