Illinois Central Railroad v. Mayeux

UNITED STATES COURT OF APPEALS For the Fifth Circuit No. 01-30880 ILLINOIS CENTRAL RAILROAD COMPANY, Plaintiff-Appellee, VERSUS JAMES E. MAYEUX; ET AL., Defendants, JAMES E. MAYEUX and BARBARA RICHARD MAYEUX, Defendants-Appellants. JAMES E. MAYEUX and BARBARA RICHARD MAYEUX, Plaintiffs-Appellants, VERSUS ILLINOIS CENTRAL RAILROAD COMPANY, Defendant-Appellee. Appeal from the United States District Court For the Middle District of Louisiana August 1, 2002 Before REAVLEY, SMITH, and DENNIS, Circuit Judges. DENNIS, Circuit Judge: Illinois Central Railroad Co. seeks to expropriate a strip of private property for the purpose of building a rail spur to a chemical storage facility on the Mississippi River. Under Louisiana law, a railroad company may expropriate private property only if it establishes a “public and necessary purpose” for the expropriation. The district court granted Illinois Central’s motion for partial summary judgment on that issue, finding that the railroad established a public and necessary purpose as a matter of law. Because we find a genuine factual dispute over whether the expropriation serves a necessary purpose, we reverse and remand for further proceedings. I. Facts and Procedural History Illinois Central is a common carrier railroad that operates a main line through Iberville Parish, Louisiana. In connection with its business, Illinois Central seeks to construct a rail spur from its main line to a chemical storage facility that is owned and operated by a French corporation named LBC PetroUnited, Inc. (“PetroUnited”). The PetroUnited facility is situated on the banks of the Mississippi River in St. Gabriel, Louisiana, approximately one mile west of the Illinois Central main line. The facility serves dozens 2 of chemical producers who store their chemicals at the facility until they can make arrangements to ship them elsewhere. The facility is currently accessible by barge and by truck. Illinois Central claims that making the facility rail-accessible would be advantageous for companies storing chemicals at the facility. The railroad also contends that shipping chemicals via rail is safer and more efficient than transporting them by truck or barge. For the proposed spur to reach the PetroUnited facility, however, it must cross land belonging to the appellants, James and Barbara Mayeux. Despite the railroad’s offers to purchase a servitude over the Mayeuxs’ land, the Mayeuxs have been unwilling to sell. After the Mayeuxs rejected its offers to purchase a servitude over the land, Illinois Central filed a complaint for expropriation in the Middle District of Louisiana. Illinois Central argued that, as a railroad corporation operating in Louisiana, it was entitled to expropriate a servitude over the Mayeuxs’ land because the proposed spur would serve a public and necessary purpose under Louisiana law. On February 8, 2000, Illinois Central filed a motion for partial summary judgment on that issue. After hearing arguments from both sides, the district court granted the railroad’s motion. On June 6, 2001, the case proceeded to a bench trial in which the district court awarded $180,429.00 to the Mayeuxs as “just compensation” for the taking. The Mayeuxs now appeal from the district court’s judgment arguing that there was no 3 right to expropriate because the proposed spur serves neither a public nor a necessary purpose. II. Discussion A. Standard of Review1 We review grants of summary judgment de novo.2 Summary judgment is proper if “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”3 An issue is material if its resolution could affect the outcome of the case.4 In deciding whether a fact issue has been created, we view the facts and the inferences to be drawn 1 The district court applied a more lenient standard of review on the ground that the case was set for a bench trial. Although prior panels of this court have entertained the idea of applying a more lenient standard in nonjury trials, this circuit has not actually adopted such a standard. See, e.g., United States Fid. & Guar. Co. v. Planters Bank & Trust Co., 77 F.3d 863, 866 (5th Cir. 1996); Phillips Oil Co. v. OKC Corp., 812 F.2d 265, 273 n.15 (5th Cir. 1986). Under the suggested more lenient standard, the district judge could grant summary judgment based on inferences drawn from incontrovertibly proven facts, so long as there is no issue of witness credibility. United States Fid. & Guar., 77 F.3d at 866. Because we determine that the Mayeuxs have controverted a material issue of fact, we need not consider whether the more lenient standard is appropriate in this context. 2 Mongrue v. Monsanto Co., 249 F.3d 422 (5th Cir. 2001). 3 Fed. R. Civ. P. 56(c); accord Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). 4 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 4 from them in the light most favorable to the nonmoving party.5 Since this diversity case involves solely questions of Louisiana expropriation law, we must apply the state law in an attempt to rule as the Louisiana Supreme Court would if presented with the same issues.6 B. Public and Necessary Purpose Under Louisiana Revised Statute § 19:2(2), “[a]ny domestic or foreign corporation created for the construction of railroads” may expropriate “needed” private property when the owner of the property and the corporation cannot agree upon a purchase price.7 A second provision, Louisiana Revised Statute § 45:353, allows foreign railroad companies operating in Louisiana to expropriate property needed to construct railroads and rail spurs and for other “railroad purposes.”8 Both of these statutes are, however, subject to the state constitutional protections afforded to owners of private property. Article I, Section 4 of the Louisiana Constitution specifically provides that “[p]roperty shall not be taken or damaged by any private entity authorized by law to 5 Hotard v. State Farm Fire & Cas. Co., 286 F.3d 814, 817 (5th Cir. 2002). 6 Erie R.R. Co. v. Tompkins, 304 U.S. 64, 79-80 (1938); Musser Davis Land Co. v. Union Pac. Res., 201 F.3d 561, 563 (5th Cir. 2000). 7 La. Rev. Stat. Ann. § 19:2(2) (West 1979 & Supp. 2002). 8 La. Rev. Stat. Ann. § 45:353 (West 1982). 5 expropriate, except for a public and necessary purpose and with just compensation to the owner.”9 The Louisiana Constitution also makes clear that, in a given expropriation case, whether “the purpose is public and necessary is a judicial question.”10 1. Public Purpose Whether a particular expropriation will serve a public purpose is a two-pronged inquiry.11 Under the first prong, the expropriating corporation must show that there is a public right to use the expropriated property (i.e., the right of way for the rail spur).12 This prong consists of two subparts.13 Not only must the public have the right to use the spur, but there must also exist a possibility that more than one particular user will have access to the spur.14 Under the second prong, the court considers whether the expropriation will contribute to the general welfare of the 9 La. Const. art. I, § 4 (West 1996) (emphasis added). 10 Id.; accord Calcasieu & S. Ry. Co. v. Bel, 69 So. 2d 40, 41 (La. 1953). 11 Melvin G. Dakin & Michael R. Klein, Eminent Domain in Louisiana 360 (1970). 12 Id. (citing Bel, 69 So. 2d at 42; Gumbel v. New Orleans Terminal Co., 173 So. 518, 521 (La. 1937); Kansas City, S. & G. Ry. v. Louisiana W.R. Co., 40 So. 627, 629 (La. 1905)). 13 Id. 14 Id. at 361. 6 community.15 There is no question that the public will have the right to use the spur in this case. The fact that PetroUnited will initially “own” the spur16 is inapposite; Louisiana courts have held that the financing and ownership arrangement for a proposed spur has no effect on whether the spur will serve a public purpose.17 Because Illinois Central proposes to connect the spur to its main line, the spur is subject to regulation by the Louisiana Public Service Commission, and Illinois Central must use it to serve the public without discrimination.18 Thus, the first subpart is satisfied. 15 Id. (citing Texas E. Transmission Corp. v. Bowman, 115 So. 2d 797, 798-99 (La. 1959); Bel, 696 So. 2d at 43). 16 At the time of summary judgment, PetroUnited and Illinois Central had come to a tentative financing agreement whereby PetroUnited would front the construction costs and maintain title over the spur for twenty years or until Illinois Central fully reimbursed PetroUnited, whichever came first. 17 See, e.g., Bel, 69 So. 2d at 43 (the fact that the expropriating railroad’s parent company, which was not a railroad company, was financing the construction of the proposed spur had no effect on the public purpose of the spur); see also S. Natural Gas Co. v. Poland, 384 So. 2d 528, 530 (La. Ct. App. 2d Cir. 1980) (“[W]e see no reason to prohibit expropriation of property because the eventual facility which will serve the public will not be solely owned by the expropriator. Where the law itself does not impose such a restriction on the power, we shall not impose the restriction.”). 18 La. Rev. Stat. Ann. § 45:1165 (West 1999); see also Dakin & Klein, supra note 11, at 361 (“[A]ll corporations endowed with the power of expropriation are public service corporations regulated by the Louisiana Public Service Commission and obligated by law to serve the public without discrimination.”). 7 The second subpart concerns whether the spur will actually be available to multiple shippers. The Louisiana Supreme Court has made clear that in the context of railroad expropriation, the number of potential shippers is a key factor in establishing public purpose. In River & Rail Terminals, Inc. v. Louisiana Railway & Navigation Co., the Court held that a rail spur built to serve only one shipper was not built for a public purpose.19 The railroad company in River & Rail had built a rail spur exclusively to serve the New Orleans Refining Company in the shipment of its own products.20 Because the spur benefitted no shipper other than the one refining company, the court held that it did not serve a “public purpose.”21 The holding focused on the fact that the spur exclusively served one private shipper: The evidence clearly shows that the spur track of defendant company serves no other enterprise but the New Orleans Refining Company, and that it was constructed solely for the purpose of enabling defendant company to handle tank cars shipped out by the refinery. There is nothing in the record to show that the public has ever used the spur track of defendant company, or that defendant company's spur track will accommodate a number of plants on the river front, and will be open to all other business enterprises, present and future, in the same vicinity.22 Although one shipper is not enough, the proposed rail spur 19 130 So. 337, 340 (La. 1930). 20 Id. at 339-40. 21 Id. at 340. 22 Id. 8 does not have to serve a large number of shippers to serve a public purpose. In Kansas City, S. & G. Railway Co. v. Louisiana Western Railroad Co., public purpose was established by showing that a spur would reach nine private industrial plants.23 In Gumbel v. New Orleans Terminal Co., a railroad company established a public purpose by showing that the rail spur would be open to the public and that it could potentially serve three private companies already operating in the area along the spur.24 In Calcasieu & Southern Railway Co. v. Bel, the court held that public purpose was satisfied when a gravel company built a spur primarily to ship gravel from its own gravel pit.25 The court found a public purpose because some of the land along the seven-mile rail spur belonged to lumber companies that might use the spur to ship lumber.26 The general public utility of a proposed rail spur also figures into the public purpose analysis. The Bel decision 23 40 So. 627, 629 (La. 1905). 24 173 So. 518, 521 (La. 1937) (“It is clear that the spur tracks involved here serve a public and not a mere private purpose. The uncontradicted testimony in the record shows that the tracks are not restricted to the use of any single industrial plant, but, on the contrary, are available to any industrial plant which may locate on any of the now vacant sites in the area; that there are presently operating in the area three industrial plants which are served by the tracks, which, in the past, also served a number of other plants formerly located in this industrial area.”), overruled in part by, Lake, Inc. v. La. Power & Light Co., 330 So. 2d 914, 918 (La. 1976). 25 69 So. 2d 40, 41 (La. 1953). 26 Id. at 42-43. 9 demonstrates that after River & Rail, the Louisiana Supreme Court adopted a broader view of public purpose that encompasses the general public utility of a proposed expropriation. In determining that the gravel company’s rail spur served a public purpose, the Bel court considered the economic benefits that the spur would bestow upon the general public: It was shown that . . . the construction of the road will be a public advantage and will tend to enlarge the resources, increase the industrial energies, and promote the productive powers of a considerable number of the inhabitants or businesses of a section of the state, and manifestly will contribute to the general welfare and prosperity of the community in which it is located.27 The court then referred with approval to a section of Nichols on Eminent Domain discussing the nationwide trend of interpreting public purpose broadly to mean public utility.28 In the next paragraph, the court cited River & Rail, but stated that it is “not 27 Id. at 43; accord City of New Orleans v. New Orleans Land Co., 136 So. 91, 92-93 (La. 1931) (citing Corpus Juris for the following: “The character of the use, and not its extent, determines the question of public use. It is not essential that the use or benefit extend to the whole public or any considerable portion thereof, nor that each and every individual member of the community have the same degree of interest therein.”). 28 Bel, 69 So. 2d at 43. Although the court did not indicate which edition of Nichols it was citing, the current edition of that treatise contains statements to the same effect. See 2A Julius L. Sackman, Nichols on Eminent Domain, § 7.02[5] (rev. 3d ed. 2001) (“Many courts have recognized the inadequacy of the narrow ‘use by the general public’ rule and have opted to follow the liberal construction of ‘public use.’”); see also City of Shreveport v. Chanse Gas Corp., 794 So. 2d 962, 972-74 (La. Ct. App. 2d Cir. 2001) (acknowledging and adopting the federal trend in “public purpose” jurisprudence). 10 pertinent to, or determinative of, the issue in the instant case.”29 Having determined that the gravel company’s rail spur was available to other shippers and that it would generally benefit the public, the court simply dismissed River & Rail as irrelevant to its analysis.30 Although PetroUnited is presently the only company with property adjacent to the proposed spur line, multiple shippers will have access to the spur. Consequently, this case is 29 Bel, 69 So. 2d at 43. 30 Id. The more recent Louisiana appellate court cases define “public purpose” solely in terms of public benefit. See, e.g., Town of Vidalia v. Unopened Succession of Ruffin, 663 So. 2d 315, 319 (La. Ct. App. 3d Cir. 1995) (“[A]ny allocation to a use resulting in advantages to the public at large will suffice to constitute a public purpose.”); Dixie Pipeline Co. v. Berry, 227 So. 2d 1, 7 (La. Ct. App. 3d Cir. 1969) (finding a public purpose where a proposed pipeline would connect a privately owned plant with the proposed expropriator’s pipeline because “the effect of the pipeline will be to transport large quantities of propane gas from the plant to a large market in several states”), writ ref’d, 229 So. 2d 731 (La. 1970) (“On the facts found by the Court of Appeal the result is correct.”); Texas Pipe Line Co. v. Stein, 190 So. 2d 244, 252 (La. Ct. App. 4th Cir. 1966), rev’d on other grounds as moot, 202 So. 2d 266 (La. 1967) (“The public purpose is no less served because the pipeline initially will deliver to only one consumer. If this were reason to reject its qualification as a public utility carrier, it would be very difficult, if not impossible, for any new common carrier pipeline for delivery of crude oil to a refinery to qualify, for we may fairly assume they are initially connected to only one refinery. It is not the number of persons who initially contract for use of the line, nor the number who might actually use it at any given time, which determines its public character, but rather the extent of the right to its use by the public.”); see also Town of Vidalia, 663 So. 2d at 319 (“Despite this restrictive language [in River & Rail], the Louisiana jurisprudence has not defined ‘public purpose’ so narrowly.”). We do not speculate, however, on whether the Louisiana Supreme Court would follow River & Rail today. 11 distinguishable from River & Rail. PetroUnited is in the chemical storage and distribution business; it does not merely manufacture and ship its own products. Rather, various companies deliver their products to the facility for storage until they make arrangements to ship them elsewhere. The arrangement is one of bailment; at all times, PetroUnited’s customers retain ownership of the products stored at the facility. Thus, PetroUnited’s customers decide when, where, and how to ship their products from the facility. The summary judgment evidence indicates that from 1995 to 1999, PetroUnited’s Sunshine facility stored chemicals for thirty- three different companies. The evidence also shows that, on several occasions, various chemical companies asked Illinois Central to build a spur to the PetroUnited facility so that they could ship their chemicals via rail from that location. Thus, unlike the spur in River & Rail, there is uncontroverted evidence that the rail spur in this case could serve numerous shipping companies and benefit the general public. Since PetroUnited produces nothing, the only way that its facility generates a profit is by storing and facilitating the distribution and shipment of other companies’ products.31 31 It is also relevant to note that River & Rail was a trespass suit, not a traditional expropriation suit. The plaintiff in River & Rail sought to enjoin the defendant railroad company from operating a rail spur on the plaintiff’s land without the plaintiff’s permission or a court order. River & Rail, 130 So. at 337-38. That is, the railroad tortiously, and perhaps criminally, trespassed on the plaintiff’s property to build and operate a rail line. The railroad company raised expropriation as a defense to 12 Contrary to the dissent, our public purpose analysis does not conflict with the holding in River & Rail. We do not hold that a public purpose is established merely because the public will have a theoretical right to use the spur; the expropriator must also show that a sufficient number of shippers will have actual access to the spur. There was no public purpose in River & Rail because at the time of the lawsuit, only one shipper had access or occasion to use the spur.32 In the present case, dozens of shippers will have access to the spur. Furthermore, there is no basis for the dissent’s claim that the general public must have access to the terminal served by the rail spur. Neither Kansas City, Gumbel, nor Bel involved public terminals. In each of these cases, public purpose was established by showing that the spur was open to the public and that several companies would actually have occasion to use it.33 There is no the trespass suit after it had already been operating the rail spur for some time. Id. Although this fact does not overtly figure into the court’s public purpose analysis, it provides relevant background from which to evaluate the case. Had the court simply required the railroad to compensate the landowners for the land that it had tortiously occupied, there would be no incentive for it (or others similarly situated) to negotiate with landowners or to bring expropriation suits before forcefully seizing land. Not only would that conclusion be inequitable under the facts of River & Rail, but it would undermine eminent domain law and breed bad public policy. 32 Id. at 340. 33 Kansas City, S. & G. Ry. Co. v. La. W. R.R. Co., 40 So. 627, 629 (La. 1905) (holding that a public purpose was established where “the proposed spur track of plaintiff company will reach nine industrial plants . . . and will be open to public use”) (emphasis 13 indication in any of these cases that the public would have a right to use the private terminals that abutted the proposed spurs. Nor is there any indication that River & Rail requires that the rail terminal be open to the public.34 The holding of River & Rail is simple: a spur built to serve one private shipper does not serve a public purpose. Neither it, nor the cases that it relied upon, require the spur to serve a public terminal.35 added); Gumbel v. New Orleans Terminal Co., 173 So. 518, 521 (La. 1937) (“It is clear that the spur tracks involved here serve a public and not a mere private purpose. The uncontradicted testimony in the record shows that the tracks are not restricted to the use of any single industrial plant, but, on the contrary, are available to any industrial plant which may locate on any of the now vacant sites in the area; that there are presently operating in the area three industrial plants which are served by the tracks . . . .”) (emphasis added); Bel, 69 So. 2d at 42-43. 34 See River & Rail, 130 So. at 340 (stating that “[t]here is nothing in the record to show that the public has ever used the spur track of defendant company, or that defendant company’s spur track will accommodate a number of plants on the river front”) (emphasis added). 35 The court summarized its holding in River & Rail as follows: “Our conclusion is that the construction by the defendant company of the spur track from its main line was for the purpose of serving an individual enterprise only and not for a public purpose.” Id. The cases that River & Rail relied on for its statement that “there must be a general public right to a definite use of the property, as distinguished from a use by a private individual or corporation” merely state that a spur built to serve one private shipper does not serve a public purpose. See Kansas City, 40 So. at 629 (acknowledging that there is no public purpose where the proposed spur would serve “a private station for an individual shipper”); Atlanta, S. M. & L. R. Co. v. Bradley, 81 S.E. 1104, 1105 (Ga. 1914) (holding that a spur serving only one shipper did not satisfy a public purpose); Pittsburg, W. & K. R. Co. v. Benwood Iron-Works, 8 S.E. 453, 455, 467 (W. Va. 1888) (holding that a public purpose was not established where the proposed spur would serve one steel factory). None of these cases hold that a proposed spur must serve a public terminal for it to serve a public purpose. 14 In Gumbel, for instance, public purpose was established because there were three private companies operating along the track that could use it for shipping products.36 It would be nonsensical to conclude that a public purpose exists when a spur serves three private companies operating from three private terminals, but that a public purpose does not exist when a spur serves dozens of companies shipping products from one terminal. Thus, the public purpose requirement is satisfied in this case. The undisputed evidence shows that the spur will be open to the public and that the dozens of companies who use the St. Gabriel facility will have access to the spur as a means of shipping their products through the region. Summary judgment was therefore proper on the issue of public purpose. 2. Necessary Purpose There are at least two components to the necessary purpose inquiry under Louisiana law. First, the private expropriator must show that there is a public necessity for the expropriation; i.e., that there is a public demand for the expropriation.37 Second, the 36 Gumbel, 173 So. at 521. 37 City of Westwego v. Marrero Land & Improvment Ass’n, 59 So. 2d 885, 886 (La. 1952); Claiborne Elec. Coop., Inc. v. Garrett, 357 So. 2d 1251, 1255 (La. Ct. App. 2d Cir. 1978); S.W. Elec. Power Co. v. Conger, 254 So. 2d 98, 99 (La. Ct. App. 2d Cir. 1971); Dixie Pipeline Co. v. Barry, 227 So. 2d 1, 7 (La. Ct. App. 3d Cir. 1969); see also Dakin & Klein, supra note 11, at 363. Academically, the public demand inquiry might fall under the heading of “public purpose” rather than “necessary purpose,” but in 15 expropriator must show that the expropriation is expedient; i.e., “[t]he amount of land and the nature of the acreage taken must be reasonably necessary for the purpose of the expropriation . . . .”38 The district court erred in its necessary purpose analysis because it focused only on the expediency aspect of the inquiry. The court stated that the necessary purpose requirement is satisfied if the taking is for “railroad purposes,”39 and emphasized that the expropriator need not “show actual, immediate, and impending necessity for the expropriation.”40 Since the Mayeuxs did not allege that Illinois Central was attempting to expropriate more property than was needed for the proposed spur, the court found that summary judgment was proper. Before reaching the expediency issue, however, the court should have considered whether there was a public necessity for the spur. A key aspect of the public necessity inquiry under Louisiana expropriation law is whether there is an actual public demand for deference to the weight of Louisiana decisions, which discuss the issue in terms of “necessity” and “public necessity,” we have characterized it as an issue of necessary purpose. 38 Coleman v. Chevron Pipe Line Co., 673 So. 2d 291, 296 (La. Ct. App. 4th Cir. 1996) (quoting City of New Orleans v. Moeglich, 126 So. 675, 677 (La. 1930)); accord Calcasieu-Cameron Hosp. Serv. Dist. v. Fontenot, 628 So. 2d 75, 78 (La. Ct. App. 3d Cir. 1993); see also Dakin & Klein, supra note 11, at 363 (characterizing the quantity and the location of the taking as “expediency issues”). 39 Mo. Pac. R.R. Co. v. Nicholson, 460 So. 2d 615, 620-21 (La. Ct. App. 1st Cir. 1984). 40 Coleman, 673 So. 2d at 297 (quoting Moeglich, 126 So. at 677); accord Fontenot, 628 So. 2d at 78. 16 the expropriation.41 The court should have examined this issue and found a genuine issue of fact regarding the public demand for the proposed spur. Illinois Central presented evidence of public demand for the spur by showing that certain chemical companies had directly petitioned the railroad to build a spur to this location. The Mayeuxs, however, presented expert testimony from a transportation and logistics specialist stating that there is no public demand for the proposed spur because it will be unattractive to companies in the business of shipping bulk chemicals. The Mayeuxs’ expert opined that the proposed spur will rarely, if ever, be used to ship chemicals from the Mississippi Valley. Despite its relevance to the public demand or public necessity inquiry, the district court’s summary judgment opinion makes no mention of this expert testimony. Because the Mayeuxs have shown that there is a genuine dispute as to whether there is a public demand or public necessity for the spur, summary judgment on this material issue of fact was unwarranted. On remand, the district court must determine whether there is a sufficient public demand for the proposed spur to 41 City of Westwego, 59 So. 2d at 886 (considering evidence of the public demand for the expropriation before reviewing propriety of the proposed location); Claiborne Elec. Coop., 357 So. 2d at 1255 (evaluating the demand for the expropriation as part of the necessary purpose inquiry); Conger, 254 So. 2d at 99 (evaluating the public necessity (i.e., public demand) before discussing expediency issues); Dixie Pipeline, 227 So. 2d at 7; see also Dakin & Klein, supra note 11, at 363-65 (explaining that an expropriation must be necessary for a public benefit). 17 satisfy the necessary purpose requirement under Louisiana law. III. Conclusion Because there is a genuine factual dispute over whether there is a public necessity for the proposed spur, and summary judgment on the necessary purpose issue was improper, we therefore reverse the district court’s judgment and remand the case for trial or other proceedings. REVERSED and REMANDED for further proceedings. 18 JERRY E. SMITH, Circuit Judge, dissenting. shall not be taken or damaged by the state or its political subdivisions except I respectfully disagree with the panel for public purposes and with just majority, because the taking of the Mayeuxs’ compensation paid to the owner or into property was not for a public purpose. court for his benefit. Property shall not Although, in my view, it is not necessary to be taken or damaged by any private reach the issue of necessitySSbecause the case entity authorized by law to expropriate, can be resolved on the public purpose criterion except for a public and necessary aloneSSI express some reservations regarding purpose and with just compensation the majority’s approach to that issue as well. paid to the owner; in such proceedings, whether the purpose is public and I. necessary shall be a judicial question. Article I, § 4 of the Louisiana Constitution of 1974 provides extensive protection for LA. CONST. art. I, § 4 (emphasis added). “Ar- property rights: ticle I, section four of our Constitution was intended to give far-reaching new protection Every person has the right to the right of our citizens to own and control acquire, own control, use, enjoy, private property. . . . Its language goes protect, and dispose of private property. beyond other state constitutions, including our This right is subject to reasonable 1921 Constitution, and the federal statutory restrictions and the reasonable Constitution in limiting the power of exercise of the police power. Property government to regulate private property.” State v. 1971 Green GMC Van, 354 So. 2d & Rail Terminals, Inc. v. La. Ry. & Nav. Co., 479, 486 (La. 1977) (quotation omitted). 130 So. 337, 340 (La. 1930),42 which “‘[N]o other state constitution places such held that “construction . . . extensive limitations on the power and of [a] spur track . . . for the authority of government to regulate or ex- 42 Although River & Rail was decided under the 1921 propriate private property.’” State v. Spooner, Louisiana Constitution rather than the 1974 Constitution, the 520 So. 2d 336, 362 (La. 1988) (quoting two documents are alike in for- bidding condemnations for non- Louis Jenkins, The Declaration of Rights, 21 public purposes. In view of the strong solicitude for LOY. L. REV. 9, 19 (1975)). “[T]he rule is the property rights shown by the 1974 framers, it is safe to assume that the public purpose protection of property rights and the exception test under the 1974 Constitution isSSat the very is regulation of those rights, the burden of leastSSno less stringent than that under its predecessor. proof must shift from the owner to the See W. Lee Hargrave, The Declaration of Rights of the regulator.” Id. at 366-67 (Dennis, J., Louisiana Constitution of 1974, 35 LA. L. REV. 1, 16-17 (1974) concurring). The Mayeuxs’ claims must be (demonstrating that “the deliberate aim [of art. I, § 4 viewed in light of these general principles. of the 1974 Constitution] was to make expropriation more difficult”); Jenkins, supra, 21 LOY. L. REV. at 10 (noting that “[t]he new Louisiana A. Constitution is the first state or national constitution to be The condemnation of the Mayeuxs’ influenced by modern libertarian writers” and that property violates the public purpose it reflects a “passion for strong limitations on the power of government and for both requirement of the Louisiana Constitution. economic and social freedom”). Jenkins was a delegate to the Properly understood, the present case is Louisiana Constitutional Convention and co-author of the controlled by the factually similar case of River Declaration of Rights of which art. I, § 4 is a part. 20 purpose of serving an permission to use its individual enterprise only” is facilities are allowed to use not “a public purpose.” the terminal that the proposed Illinois Central spur would To show a public purpose, serve. there must be a “general public right to a definite use of the The factual similarities property, as distinguished from between River & Rail and the a use by a private individual instant case are striking: or corporation which may prove beneficial or profitable to The evidence clearly some portion of the public.” shows that the spur track Id. Like the proposed spur of defendant company serves track to the PetroUnited no other enterprise but the facility, the spur line in New Orleans Refining River & Rail would have served Company, and that it was the facility of a single constructed solely for the “private enterprise whose purpose of enabling premises the public has no defendant company to handle right to enter, but is tank cars shipped out by prohibited from so doing.” Id. the refinery. at 339. Only those firms that have signed contracts with There is nothing in the PetroUnited and obtained its record to show that the 21 public has ever used a private individual or the spur track of corporation which may prove defendant company, or beneficial or profitable to that defendant some portion of the public company’s spur track . . . . will accommodate a num- ber of plants on the Our conclusion is that river front, and will the construction by be open to all other defendant company of the business enterprises, spur track from its main present and future, in line was for the purpose of the same vicinity. The serving an individual evidence fails to enterprise only and not for establish, in our a public purpose. opinion, that the en- tire public has the Id. at 340. right to use the spur track . . . . River & Rail has not been overruled and remains good law, It is well settled that at least with respect to other there must be a general factually similar cases. The public right to a definite Louisiana First Circuit Court use of the property, as of Appeal, in fact, has adopted distinguished from a use by the River & Rail standard as 22 its general rule for public will actually be available to purpose claims.43 multiple shippers.” Id.; Majority op. at 8. This B. approach fails for three The majority claims that to reasons. meet the requirement of “a general public right to a de- 1. finite use of the property” First and most importantly, spelled out in River & Rail, under the majority’s Illinois Central need only show interpretation, River & Rail that “the public [will] have a itself would have had to be right to use the spur” decided the other way. The itselfSSeven if it has no right defendant railroad in River & to use the PetroUnited Rail was a common carrier, and terminalSSand that “the spur the general public undeniably had a “right to a definite use” 43 See Terrebonne Parish of its rail spurs, including Police Jury v. Kelly, 472 So. 2d 229, 232 (La. App. 1st that which connected its main Cir.) (holding that “to show a public purpose there must be a line to the New Orleans ‘general public right to a definite use of the property, Refinery Company property. as distinguished from a use by a private individual or River & Rail, 130 So. at 339. corporation which may prove beneficial or profitable to The River & Rail court took some portion of the public’”) (quoting River & Rail, 130 So. great pains to distinguish at 340), writ granted in part on other grounds, 476 So. 2d between the “general 340 (La. 1985). 23 public[’s] right to a definite spur “may prove beneficial or use of the property” and mere profitable to some portion of benefits to “some portion of the public”SSthe standard of the public” that arise from proof rejected by River & “use by a private individual or RailSSbut it is not enough to corporation.” Id. at 340. The show that there is “a general former, not the latter, is the public right to a definite use criterion for public use. of the property.” River & Rail, 130 So. at 340. This language in River & Rail contradicts the majority’s 2. suggestion that a spur line Second, the majority’s connecting solely to a interpretation fails because privately owned terminal to the cases that River & Rail which the public lacks a right cites in explication of the of access meets the test so requirement “general public long as the public has a right right to a definite use of the of access to the spur line property” cut the other way. (though not the terminal) and Id. at 340. In the passage at “the spur will actually be issue, the River & Rail court available to multiple cited three decisions: shippers.” Majority op. at 8. Pittsburg, Wheeling & Ky. R.R. Such availability might show v. Benwood Iron-Works, 8 S.E. that the construction of the 453 (W. Va. 1888); Atlanta, 24 Stone Mountain & Lithonia R.R. condemnation was private gain.” v. Bradley, 81 S.E. 1104 (Ga. Id. at 467. Access to the 1914); and Kansas City, terminal, not to the rail spur, Shreveport & Gulf Ry. v. La. was the determining factor. W.R.R., 40 So. 627 (La. 1905). The first two of these cases Similarly, in Atlanta, 81 directly contradict the S.E. at 1105, the court majority’s claims, and the invalidated a condemnation third does not address the undertaken “for the purpose of question at hand. constructing a spur track from its main line merely to afford In Pittsburg, the court held transportation facilities for that a proposed condemnation to the owners of an individual build a rail spur failed the enterprise.” Here too, the public purpose test because it railroad was a common carrier, connected only to a single and the general public had a steel works owned by a private right of access to all its rail firm. 8 S.E. at 466-67. The lines, including the spur in court concluded that the fact question. Once again, the that “the public will have a determining factor is the right to use” the rail spur status of the enterprise to itself “amounts to nothing in which the spur line connected, the face of the fact that the not the status of the spur line only incentive to ask for the 25 itself.44 therefore cannot prevent the use of the eminent domain power 3. to construct a line that is The third flaw in the useless to the general public majority’s approach is that it but of benefit to politically undermines the fundamental influential private parties. objective of the public purpose For this reason, the majority requirement: to ensure that runs afoul of the public condemnations serve the public purpose requirement’s as a whole and not merely fundamental objective of narrow private interests. The preventing the abuse of the “right” to use a rail spur that eminent domain power “for the connects to only one terminal purpose of serving an is utterly worthless to the individual enterprise only.” general public if it does not River & Rail, 130 So. at 340. also have a right to use the terminal itself. Such was the The majority’s additional situation in both River & Rail requirement that “the spur will and the present case. actually be available to The public’s theoretical multiple shippers” does not vi- right to use the spur line tiate the danger of abuse of the eminent domain power. Majority op. at 8. Any 44 Kansas City, the third case cited by the River & Rail expropriation that benefits an court, does not shed light on the point at issue. 26 individual private business is River & Rail, but even those also likely to benefit its courts have reaffirmed its ap- customers, in this case the plicability to directly anal- shippers that contract to store ogous factual circumstances.45 goods at the PetroUnited ter- 45 minal. The majority’s approach The district court claims that later decisions have not requires only that the business “followed [the] restrictive line” of River & Rail, but the in question can show that “the court cites only three deci- sionsSSall from the Louisiana spur will . . . be available to Third CircuitSSin support. Ill. Cent., 178 F. Supp. 2d at multiple shippers;” it need not 668 (citing Dixie Pipeline Co. v. Barry, 227 So. 2d 1 (La. even show that the shippers App. 3d Cir. 1969), writ denied, 229 So. 2d 731 (La. will actually take advantage of 1970)); La. Res. Co. v. Greene, 406 So. 2d 1360 (La. App. 3d this “availability.” Id. Cir. 1981), writ denied, 412 So. 2d 84 (La. 1982); Town of Such a weak restriction does Vidalia v. Ruffin, 663 So. 2d 315, 319 (La. App. 3d Cir. little, if anything, to prevent 1995). One of the courts cited, however, took care to the use of the eminent domain point out that River & Rail “reached the correct conclusion power for the benefit of narrow under the particular facts before it,” because the private interests. proposed spur track in that case would link only to a “‘private enterprise whose premises the public has no C. right to enter, but is prohibited from so doing.’” Id. Several of Louisiana’s lower at 319 n.2 (quoting River & courts, cited by the district Rail, 130 So. at 339) (emphasis added by Ruffin). Thus, it court and the majority, have seems likely that the Ruffin court would not have upheld the sought to narrow the scope of expropriation in the present case. 27 Some other Louisiana lower however, addressed factual courts have adopted broader circumstances very different standards for public purpose from those of the present case determinations, holding that a n d a r e e a s i l y almost any expropriation that distinguishable.47 In any promotes economic development event, we are not bound by or increases consumer access to these later lower court the products of industry passes decisions, because in diversity the test.46 These decisions, cases we are required “to apply the law as interpreted by the state’s highest One of the other cited opinions similarly noted that court.” FDIC v. Abraham, 137 F.3d 264, 268 River & Rail was correctly decided, because a rail spur (5th Cir. 1998) (emphasis added) (quotations “to the site of a private industrial plant [is not a public purpose] because the omitted). public had no right of access to this facility.” La. Res., 406 So.2d at 1364. The third case distinguished River & Rail The majority claims that its holding is sup- on the ground that the facility in questionSSa pipelineSSwas a ported by several Louisiana Supreme Court common carrier facility open to all customers that met generally applicable rules. Dixie Pipeline, 227 So. 2d at Res., 406 So. 2d at 1364 6. This distinction does not (holding that a pipeline that apply to the PetroUnited provided gas only for selected terminal. private industries “serves a public purpose merely by 46 See City of Shreveport v. placing more gas in the stream Chanse Gas Corp., 794 So. 2d of commerce”). 962, 973 (La. App. 2d Cir. 2001) (finding that “economic 47 For example, the Louisiana development is a public pur- Resources and Chanse Gas courts pose”), writ denied, 805 So. 2d considered expropriations for 209 (La.), and writ denied, 805 the purpose of building So. 2d 209 (La. 2002); La. pipelines for public utilities. 28 decisions. The cases the majority cites, There is no indication that the Kansas City however, do not advance the conclusion that court would have upheld a condemnation of a spur line that connects to only one privately the latter type. To the contrary, that court fa- owned terminal can pass the public purpose vorably cited an Arkansas decision that “held test. To the contrary, all of these decisions up- that a railway cannot exercise the right of em- held expropriation at issue in large part be- inent domain to establish a private station for cause the spur line in question connected to an individual shipper.” Id. (citing St. Louis, more than one terminal. Iron Mountain & S. Ry. v. Petty, 21 S.W. 884 (Ark. 1893)).48 Kansas City, the first case on which the 48 The reasoning of the majority relies, is readily distinguishable and Arkansas Supreme Court strongly supports my position: was in any event decided twenty-five years A railway cannot exercise before River & Rail. The Kansas City court, the right of eminent domain to establish a private shipping station for an 40 So. at 629, upheld a condemnation for the individual shipper. If the station is for the exclusive purpose of building a “spur track . . . [that] use of a single individual, or a collection of will reach nine industrial plants already in individuals less than the public, that stamps it as a existence.” Undeniably, a track that services private use, and private property cannot be taken for the facilities of nine different firms is more private use. The fact that the railway’s business would likely to serve a true public purpose than is be increased by the additional private facilities is not enough to one that connects to just one facility owned by make the use public . . . . To be public, the user must a single enterprise. concern the public. If it is an aid in facilitating the business for which the public agency is authorized 29 Gumbel v. New Orleans tracks, which, in the past, Terminal Co., 173 So. 518 (La. also served a number of other 1937), and Calcasieu & S. Ry. plants formerly located in this v. Bel, 69 So. 2d 40 (La. industrial area.” Id. at 1953), the two other cases 521.49 In the present case, relied on by the majority, are 49 Citing Gumbel, the also distinguishable. Gumbel majority opines that “[i]t would be nonsensical to upheld the use of eminent conclude that a public purpose exists when a spur serves three domain to operate a spur track private companies operating from separate terminals, but because “the tracks are not that a public purpose does not exist when a spur serves dozens restricted to the use of any of companies shipping products from one terminal.” Majority single industrial plant, but, op. at 15. Such a conclusion, though, is in fact perfectly on the contrary, are available reasonable. However many companies ship products to the to any industrial plant which one terminal, it is still the case that access to the may locate on any of the now terminal is controlled by a single private owner, and only vacant sites in the area; . . . such parties as serve its interests will be allowed to there are presently operating use it. There is therefore no assurance that the spur line in the area three industrial will be used for a public purpose beneficial to the plants which are served by the public as a whole. By contrast, in the case with three terminals, access to to exercise the power to stations on the spur line is no condemn, or if the public longer controlled by a single may enjoy the use of it, party, and there is at least not by permission, but of somewhat greater assurance that right, its character is the public interest will be public. served. St. Louis, 21 S.W. at 885 Furthermore, contrary to the (emphasis added). majority’s suggestion, Gumbel 30 the proposed spur line connects proposed spur would connect only to a single enterprise, not only to a single private and there are no other enter- facility but also to properties prises to which it can connect, owned by “lumber corporations, even potentially. The Gumbel owners of large tracts of land court specifically situated in the vicinity of the distinguished River & Rail on proposed rail line.” the ground that “the spur track Calcasieu, 69 So. 2d at 42. involved there, differently The court stressed that “upon from the spur track involved completion of the railroad here, was constructed solely under construction, its for the purpose of serving a facilities would serve the pub- single industry.” Id. lic generally and any industries located near its In Calcasieu, likewise, the tracks.” Id. court upheld a condemnation for a spur line because the rail- Louisiana precedent may not road had established that the definitively answer the question of how many privately does not hold that a connection owned terminals a proposed spur to three terminals is by itself sufficient to meet the River & line has to connect to before Rail standard. Rather, it holds that this was sufficient it can be considered a public in an area in which there also were empty lots that purpose. River & Rail does, previously had contained numerous other industrial however, plainly state that one plants and might do so again. Gumbel, 173 So. at 521. 31 is not enough. the issue does have to be resolved, I agree with the There is, therefore, every majority’s conclusion that a reason to believe that River & remand is necessary. I write Rail is the Louisiana precedent separately, however, to point most applicable to the present out some critical flaws and case. We need not decide to omissions in the majority’s what it extent it also may reasoning. apply in situations that are materially different. For this A. reason, I would reverse the The most important district court’s decision on shortcoming of the majority the ground that the proposed opinion is its failure to give expropriation is not for a proper consideration to the public purpose. fact that the Louisiana Constitution of 1974 imposes a II. new and more strict necessity Because I conclude that the requirement on takings by pri- proposed condemnation of the vate entities. Under the 1921 Mayeuxs’ property runs afoul of Constitution, authorized the public purpose requirement, private expropriators were I do not consider it essential required only to prove that the for this court to address the expropriation was for a public necessity issue. Assuming that purpose. The 1974 Constitution 32 imposes the additional require- persuasive: It is difficult ment that takings by private to believe that the 1974 entities must be for a “public framers would have added the and necessary purpose.” LA. “necessary” provision if they CONST. art. I § 4 (emphasis had not intended to raise the added). applicable standard and to create a higher standard than The only published opinion that applied to public explicitly to have considered agencies. the impact of the 1974 Consti- tution on the necessity Evidence gathered by academic standard is Judge Watson’s commentators confirms Judge concurring opinion in La. Re- Watson’s view.51 Louis Jenkins sources, in which he concluded points out that “[t]he that art. I, § 4 of the 1974 convention debated at length Constitution “was adopted after the desirability of providing great controversy and was that property could not be intended to make expropriation taken except for a ‘public and by private entities more necessary’ purpose” and difficult.” Id. at 521 deliberately chose to adopt (Watson, J., concurring).50 51 See Hargrave, supra, 35 Judge Watson’s reasoning is LA. L. REV.at 16-17 (demonstrating that “the deliberate aim [of art. I, § 4] 50 The majority opinion in was to make expropriation more Stream did not address the difficult”); Jenkins, supra, 21 issue raised by Judge Watson. LOY. L. REV.at 21-22 (same). 33 this wording to set a “con- demanded of government siderably more onerous” agencies, the term “necessary” standard for takings by private in Art. I, § 4SSwhich applies entities. Jenkins, supra, 21 to private but not governmental LOY. L. REV. at 21-22 (emphasis takingsSSwould be rendered added). superfluous, because it would not create a higher standard The Louisiana Supreme Court for the former. In sum, the has refused to accept Louisiana Constitution of 1974 interpretations of the state supports a standard of nec- Constitution that render essity for takings by private particular provisions entities that is much more “superfluous.”52 If the rigorous than that currently standard for necessity required required of government agencies of private expropriators is not or that required of private held to be higher than that expropriators before 1974. 52 Manuel v. State, 692 B. So. 2d 320, 324 (La. 1996); see also City of Baton Rouge v. If we accept, as we must, the Ross, 654 So. 2d 1311, 1328 (La. 1995) (Calogero, C.J., conclusion that the 1974 concurring) (arguing that a provision of the 1974 Constitution requires private Constitution that contained wording deliberately changed expropriators to meet a from that of the 1921 Constitution must not be standard of necessity that goes interpreted in the same way as the latter, because otherwise beyond the requirements imposed the new wording would be superfluous). 34 on public agencies, Illinois it still must prove that the Central’s position becomes even expropriation of some location more precarious than the major- is necessary to achieve its indicates. A sound approach to public purposes. If the public the necessity standard should purpose can be achieved by at the very least require that voluntary means, it cannot the public purpose the taking possibly be “necessary” to is intended to achieve cannot achieve it by means of coercive be accomplished with comparable expropriation.54 efficacy without expropriation. This requirement is consonant This line of reasoning is with the current caselaw’s supported by Coleman, one of insistence that proof of the cases relied on by the necessity must include proof of majority. Coleman held that the necessity of the purpose “[o]nce public necessity is though not of the necessity of established, the extent and 53 the specific location. Even location for the property to be if the expropriator need not prove that the condemnation of 54 The most relevant any specific site is required, dictionary definition of necessary is a thing “that cannot be done without” or is “absolutely required.” WEBSTER’S THIRD NEW INTERNATIONAL 53 Coleman v. Chevron Pipe D ICTIONARY 1151 (1986). Line Co., 673 So. 2d 291, 296 Certainly, there can be no (La. App. 4th Cir. 1996); Clai- “absolute requirement” for borne Elec. Coop. v. Garrett, expropriation if noncoercive 357 So. 2d 1251, 1255 (La. App. alternatives are readily 2d Cir. 1978). available. 35 expropriated are within the the particular property at sound discretion of the issue. Majority op. at 17. expropriation authority.” Here, the majority’s failure to Coleman, 673 So. 2d at 296 acknowledge the importance of (emphasis added). This the 1974 Constitution comes demonstrates that proof of home to roost. All but one of “public necessity” is separate the cases that the majority from proof of the need for any cites to support its position particular site. The that the existence of a expropriator first must “public demand” is sufficient establish that expropriation is to justify an expropriation necessary at all. once “expediency” is established either predate the The requirement that 1974 Constitution or concern expropriators prove that the expropriation by public public purpose at issue cannot agenciesSSwhich are not bound be achieved without by the necessity requirement of expropriation is stronger than art. 1, § 4SSor both.55 These the majority’s stated 55 See Majority op. at 17 n.41 requirement that the (citing City of Westwego v. expropriator merely prove the Marrero Land & Improvement Ass’n, 59 So. 2d 885, 886 (La. existence of a “public demand 1952) (both addressing a public expropriation and predating the for the expropriation” and the 1974 Constitution); Southwestern Elec. Power Co. v. “expediency” of expropriating Conger, 254 So. 2d 98, 99 (La. App. 2d Cir. 1971) (predating 1974 Constitution); and Dixie 36 cases are irrelevant to the “public demand” obviates the task of interpreting art. 1, § need to prove that 4. expropriation of some property is necessary.56 Claiborne Electric Power, the sole post-1974 decision cited The majority’s approach might by the majority to support its even allow the necessity position on this point, does standard to be satisfied in not in fact do so. The cases where some segment of Claiborne court held merely “the public”SSin this case, a that the existence of a demand segment as small as a few for the public purpose served shippers SSsupports by the expropriation refuted expropriation despite the fact the property owners’ claim that that the public purpose in the power company was required question could just as ef- to prove the need to fectively be achieved by expropriate “the specific noncoercive means. The degree location of the servitude.” of danger posed by the majority Claiborne, 357 So. 2d at 1255 position remains uncertain, (emphasis added). Claiborne 56 Indeed, the Claiborne court did not even come close to was careful to emphasize that the defendants were arguing holding that the existence of a that “the expropriating authority [must] prove [that] the particular route chosen [by the expropriator] was Pipeline, 227 So. 2d at 7 necessary.” Claiborne, 357 So. (same)). 2d at 1255. 37 however, because the majority fails to indicate how high a level of “public demand” needs to be demonstrated before its standard is met. For the reasons indicated, I respectfully dissent. 38