West Jefferson Levee Dist. v. Coast Quality Const. Corp.

• Decision Date: 23 May 1994
• Parties: 93-1718 La
• Court: Louisiana Supreme Court

Page 1258

640 So.2d 1258

93-1718 La. 5/23/94

WEST JEFFERSON LEVEE DISTRICT v. COAST QUALITY CONSTRUCTION CORPORATION.

WEST JEFFERSON LEVEE DISTRICT v. BAYOU DES FAMILLES DEVELOPMENT CORP. v. Betty Jane Perrin, Wife of/and Ronald J. ISAAC.

No. 93-C-1718.

Supreme Court of Louisiana.

May 23, 1994.

Rehearing Denied Aug. 12, 1994.

Opinion Dissenting from Denial of

Rehearing Aug. 12, 1994.

Harry C. Stumpf, Owen J. Bordelon, Jr, Stumpf, Dugas, LeBlanc, Papale & Ripp, for applicant.

David C. Loeb, Lawrence E. Chehardy, Chehardy, Sherman, Ellis, Breslin & Murray; Peter J. Butler, Nancy A. Nungesser, Anne A. Boling, Edward A. Boling, Catherine M. Sheafor, Locke, Purnell, Rain & Harrell, for respondent.

Nancy A. Nungesser, Anne S. Almy, Catherine M. Sheafor, for U.S., amicus curiae.

John A. Dunlap, Frank A. Tessier, for Jefferson Business Council, Harvey Canal Industry Association, Westbank Council Chamber, Chamber-New Orleans, Chamber-River Region, amicus curiae.

[93-1718 La. 1] KIMBALL, Justice. ^*

I. ISSUE

The issue to be decided in this case is the amount of compensation due landowners as a result of the West Jefferson Levee District's expropriation of their property, where, at the time of the expropriation, almost all of the property expropriated was designated as wetlands under the federal Clean Water Act. In this case, the compensation due landowners turns primarily on the fair market value of the property expropriated at the time the District deposited its estimated valuation into the registry of the court in accordance with La.R.S. 38:387. Based on an exhaustive and thorough review of the entire record and on an assessment of the applicable law, we find the lower courts erred in their award of compensation, and we accordingly reverse the lower court judgments and remand the case for a redetermination, consistent with this opinion, of compensation due the landowners.

[93-1718 La. 2] II. FACTS

In 1965, various federal, state, and local entities began to study the feasibility of building a jointly funded levee to protect the West Bank of Jefferson Parish from hurricane flooding.

On August 21, 1972, Bayou Des Familles Development Corporation (BDF) purchased 2182.61 acres on the West Bank in the general area under consideration for construction of the hurricane protection levee. It appears that BDF paid $7,161,200 for the land. ¹ A month prior to the purchase, the United States Army Corps of Engineers (Corps) had issued an announcement that a public meeting would be held to discuss the possibility of federal funding for the hurricane levee project. In the notice, the Corps proposed a levee alignment which would have placed BDF's land on the protected side of the hurricane levee.

Immediately after its purchase of the property, BDF sold 101 acres each to Charalex Lands Inc., which later became Coast Quality Construction Company, to Mr. and Mrs. Ronald J. Isaac, and to Regent Development Corporation. ² It appears these landowners, who were also principals of BDF, each paid BDF $505,000 for their respective purchases. ³ All landowners agreed at that time BDF was to construct improvements on its property which would have benefitted the other landowners' parcels. These improvements were to include a levee which would have protected the land from flooding. While these transactions were taking place, Congress in August of 1972 ordered a study on the feasibility of the creation of a federal park in the vicinity of the landowners' property.

On October 18, 1972, Congress passed the Federal Water Pollution Control Act Amendments (FWPCA). 33 U.S.C. § 1251 et seq. The amendments, renamed the Clean Water Act in 1977, gave the Corps of Engineers the regulatory power to prohibit the discharge of [93-1718 La. 3] pollutants into navigable waters except as authorized by permit, commonly known as the "section 404 permit." Likewise, under the Rivers and Harbors Appropriations Act of 1899 (RHA), 33 U.S.C. § 403, the Corps also has the regulatory power to prohibit any activity affecting any navigable waterway unless authorized by a "section 10" permit issued by the Corps. ⁴

After purchase of the property, BDF hired VTN Corporation to develop a plan for the development of landowners' property into residential subdivisions. VTN's master plan was completed on February 12, 1973. In July of 1973, BDF entered into a contract for the construction of a pumping station and sewage treatment plant. In August of 1973, BDF entered into a contract for the construction of a levee to be located along the Corps' June 1972 recommended alignment such that the landowners' property would be on the protected side of the levee.

On January 15, 1974, the Corps of Engineers issued a cease and desist order to BDF prohibiting further development of, dredging, and filling on their land without the § 404 and § 10 permits necessary under the FWPCA and the RHA. ⁵ At the time of the issuance of the cease and desist order, the levee was approximately 75% to 90% complete. On March 8, 1974, the Corps ordered BDF to submit an after-the-fact permit application for the work already done and for the work necessary to complete the development of the land. The Jefferson Parish Council passed a resolution urging the Corps to grant BDF's permit application.

In April of 1975, BDF submitted an Environmental Impact Statement and an after-the-fact application for § 404 and § 10 permits for construction of its levee and development of its property. The permits would have allowed BDF to complete construction of the levee it had been building which would have enclosed and protected the landowners' land from flooding, thereby allowing it to be developed. ⁶ The application was complete and ready to be processed by the Corps by December of 1975. ⁷

[93-1718 La. 4] During the pendency of BDF's application for a permit to build its own levee necessary to protect its property from hurricanes, and prior to the Corps' action thereon, several events took place concerning the West Bank hurricane levee project and the proposed federal park. On May 16, 1978, the Jefferson Parish Coastal Zone Advisory Committee advised the Parish Council that the West Bank hurricane levee, once built, would form the growth conservation line for development of the parish. On May 17, 1978, the Corps of Engineers made a presentation to the Jefferson Parish Council regarding the various alignments under consideration for the construction of the West Bank hurricane protection levee. One of these alignments followed the levee alignment for which BDF was seeking a permit to build its own levee.

On November 10, 1978, Congress authorized the creation of Jean Lafitte National Park. 16 U.S.C. § 230, et seq. Section 230 states the park shall include:

(1) the area of approximately twenty thousand acres generally depicted on the map entitled "Barataria Marsh Unit--Jean Lafitte National Historical Park and Preserve" numbered 90,000B and dated April 1978, which shall be on file and available for public inspection in the office of the National Park Service, Department of the Interior. ⁸

The 20,000 acres were divided into an 8,600 acre "core area" and an 11,400 acre "park protection zone." The boundaries of these areas were established in the enabling legislation and could only be revised by the Secretary of the Department of the Interior with the consent of Jefferson Parish. 16 U.S.C. §§ 230, 230a(a), 230a(b), 230a(f). ⁹

The Secretary of the Department of the Interior is authorized to acquire the acreage in [93-1718 La. 5] the core area. 16 U.S.C. § 230a(a). With regard to the park protection zone, the uses of land in the zone are to be regulated by local authorities pursuant to guidelines developed by the Secretary of the Interior in consultation with the local authorities. These regulations must serve to preserve certain values in the core area. ¹⁰ 16 U.S.C § 230a(b) and (c). While the Secretary can acquire property in the core area in all cases, he can only acquire property in the park protection zone where the protective regulations were either not passed by or enforced by the local authorities and where such acquisition is necessary to protect (1) the fresh water drainage from the park protection zone into the core area, or (2) the vegetative cover in, the integrity of ecological and biological systems in, or the water and air quality of the core area. 16 U.S.C. § 230a(c) and (e).

The landowners herein introduced into evidence a copy of the park boundary map (# 90,000B) referred to in 16 U.S.C. § 230. Superimposed upon the park protection zone as depicted in the map is the landowners' appraiser's sketch of landowners' property involved in the dispute herein. The vast majority of landowners' property is located within the boundaries of the park protection zone.

On September 21, 1979, the Corps finally acted on and denied BDF's application for an after-the-fact permit to construct a levee to protect its property. On November 2, 1979, BDF sued the Corps, the Department of the Interior, and the United States of America in federal district court, seeking to enjoin the Corps' denial of its permit application, to enjoin the Corps from recommending for its own hurricane protection levee an alignment other than one following BDF's alignment, to enjoin the Department of the Interior from issuing regulations restricting land use in the park protection zone, and to enjoin the Department of the Interior from including a portion of BDF's property in the core area without being required to purchase it. The federal district court held: (1) the Corps had jurisdiction over the navigable waters and wetlands on BDF's property; (2) BDF's failure to obtain permits for construction of the levee and canal system constituted a violation of federal law; (3) the denial of the BDF permit application was not arbitrary or capricious; (4) the six month deadline on developing guidelines for the park [93-1718 La. 6] protection zone is...