Red Stick Studio Development, L.L.C. v. State Ex Rel. Department of Economic Development
2011 La. LEXIS 257
| La. | 2011Background
- Louisiana enacted Act 456 in 2005 and amended La.R.S. 47:6007 to create state-certified infrastructure motion picture tax credits totaling 40%.
- Act 456's Section 3(C) introduced a grandfather clause for applications filed on or before August 1, 2007, with a 24-month window to qualify for credits and a minimum spend (20% or $10 million) on film production infrastructure.
- Red Stick Studio Developments filed for an infrastructure project on February 27, 2007; initial certification issued August 27, 2007.
- Red Stick contended paragraph (ii) of the initial letter and the 2007 law required no time limit for expenditures, arguing credits could accrue beyond January 1, 2010 if qualified.
- The parties executed a stipulation: a new initial certification letter (January 14, 2009) cited Section 3(C); if it were later judicially determined that 3(C) had no expenditure deadline, Red Stick would be entitled to credits for expenditures up to a broader period.
- Louisiana trial court ruled for Red Stick, holding the statute clear and that credits could be earned over the life of the project; the court of appeal affirmed the ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Section 3(C) render the 24-month window ambiguous? | Red Stick claims language is unambiguous: 24 months to qualify; minimum spend to trigger credits; credits earned when expenditures occur. | State asserts ambiguity: 'qualify for' could mean actual earning only after expenditures; credits vest within period. | Section 3(C) is ambiguous; legislative history controls. |
| May legislative history inform interpretation of Section 3(C)? | Red Stick relies on legislative history to support life-long 40% credits for grandfathered projects. | Legislative history should be given limited weight; intent not determinative; post-enactment statements are generally inadmissible for meaning. | Legislative history may inform intent; court considers contemporaneous history to discern meaning. |
| What is the correct interpretation of Section 3(C) regarding grandfathered projects? | Grandfathered projects should be eligible for 40% credits for expenditures through the life of the project if minimum spend is met within 24 months. | Grandfathered projects are limited to expenditures incurred by January 1, 2010 to earn 40% credits. | A grandfathered project is entitled to 40% credits only for expenditures incurred by January 1, 2010. |
Key Cases Cited
- M.J. Farms, Ltd. v. Exxon Mobil Corp., 998 So. 2d 16 (La. 2008) (statutory interpretation prioritizes legislative intent)
- East Baton Rouge Parish School Bd. v. Foster, 851 So. 2d 985 (La. 2003) (legislative intent and contemporaneous history may guide interpretation)
- Holly & Smith Architects, Inc. v. St. Helena Congregate Facility, Inc., 943 So. 2d 1037 (La. 2006) (court is final arbiter of meaning of statutes)
- Thibodeaux v. Donnell, 9 So. 3d 120 (La. 2009) (de novo review of statutory interpretation required)