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Bayou Canard, Inc. v. State

Court of Appeals of Louisiana, First Circuit

May 14, 2018

BAYOU CANARD, INC.
v.
STATE OF LOUISIANA THROUGH THE COASTAL PROTECTION AND RESTORATION AUTHORITY

          APPEALED FROM THE NINETEENTH JUDICIAL DISTRICT COURT IN AND FOR THE PARISH OF EAST BATON ROUGE STATE OF LOUISIANA DOCKET NUMBER 643420 HONORABLE JANICE G. CLARK, JUDGE

          George Pivach, II Corey E. Dunbar Belle Chasse, Louisiana Attorneys for Plaintiff/Appellee Bayou Canard, Inc.

          Jeff Landry Attorney General Richard L. Traina Assistant Attorney General Baton Rouge, Louisiana Attorneys for Defendant/Appellant State of Louisiana, through the Coastal Protection and Restoration Authority.

          BEFORE: WHIPPLE, C.J., McDONALD, AND CHUTZ, JJ.

          Mcdonald, J.

         In this case the State of Louisiana, through the Coastal Protection and Restoration Authority (CPRA), appeals a judgment against it and in favor of Bayou Canard Inc., a leaseholder of State water bottoms for oyster bedding purposes. The judgment declared that (1) the harvest efficiency ratio procedure, as defined by La. R.S. 49:951(6), was not properly adopted or promulgated pursuant to La. R.S. 49:953; (2) the harvest efficiency ratio was invalid and/or inapplicable as the harvest efficiency ratio procedure exceeds the statutory authority of the State through CPRA, and was adopted without substantial compliance with rulemaking procedures; and (3) CPRA exceeded its statutory authority by applying the harvest efficiency ratio procedure to the acquisition of Bayou Canard's marketable oysters under the Oyster Lease Acquisition and Compensation Program (OLACP). The judgment awarded Bayou Canard reasonable litigation expenses in the amount of $7, 500.00, including costs, expenses, and attorney fees, pursuant to La. R.S. 49:965.1(D)(1). After a de novo review, we reverse.

         FACTS AND PROCEDURAL HISTORY

         Bayou Canard was a leaseholder of State water bottoms for oyster bedding purposes. Lease number 28549-01, dated December 20, 2000, covered 101 acres; lease number 32465-07, dated December 21, 2006, covered 30 acres; and lease number 34777-11, dated December 16, 2010, covered 733 acres. In 2015, CPRA determined that a portion of the water bottoms covered by each lease was located within the direct impact area of a coastal restoration project known as the Shell Island West Restoration Project. By three letters dated August 31, 2015, CPRA notified Bayou Canard that it was acquiring a portion of each lease and that Bayou Canard would be compensated for the acquisitions in accordance with OLACP, La. R.S. 56:432.1 and former La. Admin. Code, Title 43, Part I, §§850-869. The acquisitions were effective September 18, 2015. CPRA paid Bayou Canard a total of $174, 205.31 to acquire approximately 10.15 percent of the total acreage of the leases.

         Bayou Canard filed a petition for injunctive relief and declaratory judgment on October 29, 2015, naming as defendant the State, through CPRA. Bayou Canard maintained that the compensation paid by CPRA for the value of its marketable oysters was based on a harvest efficiency ratio, which resulted in a reduction of compensation. Bayou Canard further maintained that CPRA had generally and uniformly applied the harvest efficiency ratio procedure to every acquisition under OLACP since the inception of the OLACP program, and that, as a State agency engaged in rulemaking, CPRA was required to adopt its rules and regulations in compliance with the Administrative Procedure Act (APA), La. R.S. 49:214.6.2 and La. R.S. 49:951-953. Bayou Canard asserted that CPRA did not follow the mandatory rulemaking procedure of the APA in adopting the harvest efficiency ratio procedure; thus, it was not a properly adopted rule or regulation of the CPRA. Further, Bayou Canard asserted that CPRA unlawfully reduced its compensation by defining the number of marketable oysters as both seed and market-size oysters as defined by the Louisiana Department of Wildlife and Fisheries (LAC 43;I(B)(855), although the definition of marketable oysters had no reference to the harvest efficiency ratio procedure.

         Bayou Canard requested temporary and permanent injunctions enjoining CPRA from enforcing and applying the harvest efficiency ratio procedure; asked that the court issue a preliminary injunction requiring any and all other such acts as the court deemed appropriate for injunctive relief; asked that the court's order remain in full force and effect until such time as the trial court specifically ordered otherwise; requested an expedited trial on the merits and a permanent injunction; and any other equitable and general relief. Bayou Canard maintained that it need not demonstrate irreparable injury to obtain injunctive relief, as CPRA's actions were illegal.

         Bayou Canard also requested a judgment declaring that: (1) the harvest efficiency ratio procedure is a rule as defined by La. R.S. 49:951(6) of the APA; (2) the harvest efficiency ratio procedure was not properly adopted or promulgated pursuant to La. R.S. 49:953 of the APA; (3) the harvest efficiency ratio procedure is invalid and inapplicable as it exceeds the statutory authority of CPRA and was adopted without substantial compliance with required rulemaking procedures; and (4) CPRA exceeded its statutory authority by applying the invalid and/or inapplicable harvest efficiency ratio procedure to the acquisition of Bayou Canard's marketable oysters under OLACP. Bayou Canard maintained that it was not required to exhaust any administrative remedies prior to seeking declaratory relief as the harvest efficiency ratio procedure is a rule as defined by La. R.S. 49:951(6) of the APA and was not properly adopted or promulgated in accordance therewith. Bayou Canard also requested an award of reasonable litigation expenses, including costs, expenses, and attorney fees, pursuant to La. R.S. 49;965.1(D)(1).

         At a hearing on November 9, 2015, the trial court orally granted the preliminary injunction. Bayou Canard thereafter filed a motion for summary judgment on December 22, 2015, as to the declaratory relief it sought and an award of reasonable litigation expenses pursuant to La. R.S. 49;965.l(D)(1). The motion was heard on February 29, 2016, and denied. Judgment was signed on March 15, 2016. Bayou Canard filed an application for supervisory writs with this court, which was denied. Bayou Canard, Inc. v. State of Louisiana through the Coastal Protection and Restoration Authority, 2016-0404 (La.App. 1 Cir. 6/27/16) (unpublished writ action). Bayou Canard filed an application for supervisory and/or remedial writs with the Louisiana Supreme Court, which was also denied. Bayou Canard, Inc. v. State of Louisiana through the Coastal Protection and Restoration Authority, 2016-1415 (La. 11/15/16), 209 So.3d 786.

         CPRA filed a motion for summary judgment on July 21, 2016, which was heard on September 12, 2016. The trial court did not rule on the motion. Bayou Canard filed a second motion for summary judgment on December 16, 2016 seeking the declaratory judgment asked for in its petition and $7, 500.00 in litigation expenses.

         On March 27, 2017, the trial court heard both CPRA's motion for summary judgment and Bayou Canard's second motion for summary judgment. The trial court granted Bayou Canard's motion for summary judgment and denied CPRA's motion for summary judgment. The trial court signed a judgment denying CPRA's motion for summary judgment on April 28, 2017. The trial court signed a judgment granting Bayou Canard's motion for summary judgment and awarding Bayou Canard $7, 500.00 in reasonable litigation expenses on May 2, 2017. CPRA appealed both judgments.

         CPRA makes the following assignments of error:

1. The Trial Court erred by allowing this matter to proceed before [Bayou Canard] exhausted its administrative remedies.
2. The Trial Court erred by granting [Bayou Canard's] motion for summary judgment because the [harvest efficiency ratio procedure] is not a rule under La. R.S. 49:951(6) and because genuine issues of material fact existed as to the relationship between [Bayou Canard] and the Louisiana Oyster Task Force and whether [Bayou Canard] was bound by that task force's recommendations.
3. The Trial Court erred by denying the State's motion for summary judgment because the terms of [Bayou Canard's] oyster leases barred [Bayou Canard] from bringing this lawsuit.
4. If granting [Bayou Canard's] motion for summary judgment was proper, the Trial Court erred in awarding [Bayou Canard] attorney fees pursuant to La. R.S. 49:965.1.

         THE ...


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