Lagc v. La Dept. of Agr. and Forestry

• Decision Date: 22 February 2006
• Docket Number: No. 2005-C-0131.,2005-C-0131.
• Citation: 924 So.2d 90
• Parties: LOUISIANA ASSOCIATED GENERAL CONTRACTORS, INC., v. LOUISIANA DEPARTMENT OF AGRICULTURE AND FORESTRY, Louisiana Agricultural Finance Authority, and Bob Odom, Commissioner.
• Court: Louisiana Supreme Court

924 So.2d 90

LOUISIANA ASSOCIATED GENERAL CONTRACTORS, INC., v. LOUISIANA DEPARTMENT OF AGRICULTURE AND FORESTRY, Louisiana Agricultural Finance Authority, and Bob Odom, Commissioner.

No. 2005-C-0131.

Supreme Court of Louisiana.

February 22, 2006.

Rehearing Denied April 17, 2006.

Wray & Pierce, W.P. Wray, Jr., Russel W. Wray, Christopher P. Pierce, Baton Rouge, Harry T. Lemmon, Melvin A. Shortess, for applicant.

Gelpi & Associates, Dan B. Zimmerman, C. James Gelpi, David S. McFadden, New Orleans, for respondent.

VICTORY, J.

We granted this writ application to determine whether the Louisiana Agricultural Finance Authority ("LAFA") is exempt from the requirements of La R.S. 38:2211, et seq. (the "Public Bid Law"), and if so, whether by undertaking the public works at issue, LAFA is unlawfully undertaking works on behalf of the Louisiana Department of Agriculture and Forestry (the "Department") and Bob Odom (the "Commissioner"), using LAFA's exemption from the Public Bid Law. After reviewing the record and the applicable law, we affirm the judgments of the lower courts and hold that LAFA is expressly exempt from the requirements of the Public Bid Law and that the public works projects undertaken by LAFA fit within LAFA's stated statutory purpose.

FACTS AND PROCEDURAL HISTORY

On November 22, 1999, Louisiana Associated General Contractors, Inc. ("LAGC"), filed a petition for declaratory judgment and permanent injunction, alleging that the defendants were required to comply with the Public Bid Law and that certain construction projects were undertaken by defendants in violation of that law.¹ The defendants filed a reconventional demand for declaratory judgment that LAFA as owner of property is authorized to carry out public works on its property, to do so utilizing public employees, equipment and materials, and to do so employing a bidding procedure different from that contained in the Public Bid Law, and that no further conduct is required of LAFA or the Department beyond that presently employed to exercise LAFA's legislative authority; or if any further conduct is required of LAFA or the Department to lawfully exercise its legislative authority, a declaration of what that conduct is. The parties submitted the matter on stipulated facts and exhibits, which are summarized in the following paragraphs.

LAGC is a state-wide association of construction contractors which exists, inter alia, for the purposes of fostering, promoting, and protecting the common interests of its member contractors and competitive bidding under the Public Bid Law. The Commissioner exercises all functions of the state relating to the promotion, protection, and advancement of agriculture. La. Const. art. 4, § 10. LAFA was created by the legislature in 1983 and is a state agency whose members are appointed by the governor, which was placed into the Department and is administered by the Commissioner.

In 1980, the Department was housed in various facilities around the state outside of Baton Rouge and in fourteen different locations in Baton Rouge, almost all of which were rented facilities. In the mid-1980s, the State experienced, and the governor declared, a fiscal emergency. In response, defendants commenced an "Office Consolidation Project," with the goal of consolidating the Department's various offices and facilities notwithstanding the limited funds available. Since the 1980s, public works have been carried out in a manner which has given rise to this legal controversy, specifically, whether one or more of the defendants can initiate and carry out public works in a manner and utilizing a bidding procedure that is different from the manner and bidding procedure contained in the Public Bid Law.

Specifically, the relevant public works are carried out utilizing equipment and materials acquired by LAFA and with LAFA utilizing a bidding procedure to acquire the equipment and materials that is different from the bidding procedure contained in the Public Bid Law. The relevant public works are carried out (a) utilizing mostly workers employed by the State and appointed, removed, assigned, and promoted by the Commissioner: (b) utilizing to a lesser extent, independent contractors engaged by LAFA utilizing a bidding procedure that is different from that bidding procedure found in the Public Bid Law; and (c) without utilizing general contractors except on occasions to supervise, superintend, and oversee the construction. The workers carrying out the relevant public works who are employed by the State are paid by the State's uniform payroll system, regularly engaged on a full-time basis by the Department and temporarily assigned or cross-utilized by the Commissioner to LAFA to work on a part-time basis on the relevant public works. The relevant public works exceed $100,000.00 and are funded through public bond issues, by legislative appropriation, through use of the Boll Weevil Eradication Fund, or through the use of feed, fertilizer, and pesticide funds.

Phase One of the Office Consolidation Project involved the consolidation of the Department's various rented offices in Baton Rouge into essentially one facility owned by the State. Upon completion of Phase One, LAFA leased the building to the Department, which relocated its personnel from the various rented offices across Baton Rouge into the new central headquarters building. Extra space in the building, intended for future growth of the Department, is currently rented by LAFA to other state agencies. In 1998, Defendants commenced Phase Two of the Office Consolidation Project, which involved consolidation of the Department's mostly leased offices in those areas of the State outside of Baton Rouge into facilities owned by the State through LAFA, and also involved the acquisition of new space needed to house Louisiana's boll weevil eradication program. Again, with the unanimous approval of the State Bond Commission, LAFA issued bonds, acquired immovable property in various locations across the State and constructed office facilities and other public works, which LAFA then leased to the Department for the Department's use in performing its statutory duties and functions.

Most of the relevant public works, such as those described above, are carried out on immovable property that is owned by LAFA. Some of the relevant public works are carried out on immovable property that is leased by LAFA. For example, airplane hangers were erected at airports and are used to house and repair portions of the Department's fleet of forest fire detection aircraft. Some of the relevant public works are carried out on immovable property that is owned by public entities other than LAFA. For example, a farmers market and an equestrian center were built for and in the City of Monroe pursuant to a "cooperative endeavor agreement" between LAFA and the City of Monroe in exchange for 250 acres of land within the city limits to house the Department's district offices and facilities.

Most of the relevant public works are used to house personnel of and/or to facilitate the functions of the Department.² Some of the relevant public works are used to house personnel of and/or to facilitate functions of other public entities.³ Some of the relevant public works are used to facilitate the function of private entities.⁴

After considering the above stipulated facts and exhibits, the trial court issued the following judgment:

1. The law authorizing the Louisiana Agricultural Finance Authority to carry out public works with or without public bidding, more particularly, R.S. 3:266(14), is clear and unambiguous.

2. The law authorizing the Louisiana Agricultural Finance Authority to carry out public works, including R.S. 3:266(14), R.S. 3:266(21) and other statutes, created an express exception for the Louisiana Agricultural Finance Authority from the provisions of R.S. 38:2211, et seq.

3. The law authorizing the Louisiana Agricultural Finance Authority to utilize public employees to carry out public works, including R.S. 3:266(21), permits the Louisiana Agricultural Finance Authority to utilize employees of agencies other than the Louisiana Agricultural Finance Authority, including the Louisiana Department of Agriculture and Forestry.

4. The Louisiana Agricultural Finance Authority is designed and is authorized to operate in concert and cooperation with the Louisiana Department of Agriculture and Forestry and with the Commissioner of Agriculture.

5. The relevant public works projects are being or have been constructed to house personnel and/or to facilitate the functions of the Louisiana Department of Agriculture and Forestry, and of other public or private entities, by promoting, protecting, assisting and advancing agriculture.

6. Promoting, protecting, assisting and advancing agriculture are purposes for which the Louisiana Agricultural Finance Authority was established.

7. The relevant public works that are being or have been carried out by the Louisiana Agricultural Finance Authority and the Louisiana Department of Agriculture and Forestry are fully authorized by statutory and constitutional authority, and the Louisiana Agricultural Finance Authority is authorized to carry out public works on its property, to do so utilizing public employees, equipment and materials, and to do so without employing the bidding procedure contained in R.S. 38:2211 et seq. or by employing a bidding procedure that is different from the bidding procedure contained in R.S. 38:2211 et seq., and no further acts or omissions are required of Defendants beyond those historically employed in order for the Louisiana Agricultural Finance Authority to exercise its legislative authority to carry out public works.

The court of appeal affirmed. Louisiana Associated General Contractors, Inc. v. Louisiana Dept. of Agriculture and Forestry, 03-2501 (La.App. 1 Cir. 12/17/04), 897 So.2d 699. We granted LAGC's writ application to determine the res novo legal...