Here's a new cert petition, filed yesterday in a case we've been following out of Louisiana that asks the Supreme Court to revisit the Public Use Clause questions left open by Kelo v. City of New London, 545 U.S. 469 (2005).
In Violet Dock Port, LLC v. St. Bernard Port, Harbor, & Terminal District, 239 So.3d 243 (La. 2018), the Louisiana Supreme Court upheld the taking of a private port facility on the Mississippi River to give it, turnkey, another private operator. The Port took the entire VDP facility, made no change in how the property was used, and eventually turned over operation of the facility to a "hand-picked" and previously identified private operator. The court rejected the owner's argument that the real purpose was to take over VDP's valuable Navy contracts and to halt competition. Not so, held the court, the record suggested the real reason for the taking was because the Port was at capacity and "sought to expand its cargo operations."
The Questions Presented sum up the key facts:
The St. Bernard Port, Harbor, & Terminal District used its eminent domain power to seize Petitioner’s fully-functioning and profitable private port facility to lease it to another private port operator, to operate in a similar manner, even taking over Petitioner’s customers in the process. The taking was not part of a comprehensive redevelopment plan, nor was Petitioner’s property blighted or causing any harm. The intended private recipient of the property was intimately involved in all aspects of the taking from its earliest planning stages, to the local government’s applications for state funding, to taking over operations on the property post-taking.We authored an amicus brief in the Louisiana Supreme Court which focused on the just compensation issues. Although the Louisiana court held that the Port could take VDP's property, it agreed with the owner that it was undercompensated. The owner argued that because its property is unique, the lower courts' sole reliance on fair market value as the only applicable valuation standard was wrong, and that evidence of replacement cost should have been admitted.
The Louisiana Supreme Court, relying on Kelo v. City of New London, 545 U.S. 469 (2005), upheld the taking because “this expropriation satisfies the broad definition of public purpose under federal law.” The questions presented are:1. Did the Louisiana Supreme Court err when it held that the Fifth Amendment’s “public use” requirement is a question of fact to be resolved in the trial court, subject only to a manifest error review on appeal?
2. Do the Fifth and Fourteenth Amendments prohibit government from taking a fully-functioning private facility with the intent to lease it to another private entity to operate, with the revenues earned from those operations to be shared by both the local government entity and its favored private actor?
But the owner doesn't really want to be compensated, it wants to keep its facility.
The petition focuses on the lower court split in the wake of Kelo on how to evaluate a Public Use Clause challenge where the condemnor's record says it is taking property for a public use or purpose, but the property owner claims the actual reason is to benefit a private party, highlighting a case we ran up the chain a few years ago, County of Hawaii v. C & J Coupe Family Ltd. P'ship, 189 P.3d 615 (Haw. 2008) (has it really been 10 years?). In Coupe, the Hawaii Supreme Court held that the reviewing court doesn't have to take the condemnor's statements at face value, but has an obligation to look behind the curtain.
We think this issue is teed up for another Supreme Court look, and this case is a good vehicle. In the 13 years since Kelo, despite a number of petitions asking for clarity on the "pretext" issue (including ours, in a later phase of the Coupe litigation), the Court has not granted review, and as a result, the lower courts are all over the map on whether there is any substance to the Court's assertion that some cases won't pass Public Use Clause muster.
We will be filing an amicus brief in support of the Petitioner, urging the Court to take the case. So stay tuned, there will be more. Follow along on the Court's docket here.