712 So. 2d 959 | La. Ct. App. | 1998
Lead Opinion
The approved land based casino operator, Harrah’s Jazz Company (Harrah’s), filed a petition for bankruptcy, and suspended construction on the casino in New Orleans. While in bankruptcy, the contract between the state and Harrah’s was modified and transferred to Jazz Casino Company, L.L.C. (Jazz Co.). The Jazz Co. was formed under the Plan of Reorganization confirmed by the United States Bankruptcy Court. The Louisiana Gaming Control Board (Board) renegotiated the casino operating contract that had been transferred to the successor Jazz Co. The Board approved the contract on March 20,1998.
A resolution of this dispute lies in the answer to one pivotal issue. That issue is whether the Board
Louisiana Revised Statutes 27:224 D and 27:245 cascade through this issue. These two statutes can reasonably be read, without violation to the principles of logic, to work in tandem. Only sections 224 D and 245 specifically govern operators in bankruptcy. In section 224 D, the legislature reserved the right to authorize the governor
The language in section 245 A is mandatory; the language in section 224 D is permissive. Both sections assign the rights of renegotiation by and to the Board. The only difference is who initiates the process of renegotiation or the decision to “set aside” the casino operating contract. Although, in this instance, the Board has already renegotiated the casino operating contract, section 224 D states that the legislature has the authority, “by Act or Resolution,”, to “set aside” that contract. Thus, if the legislature elects to act before the execution of the contract, section 224 D says that the last word remains with the legislature.
18In so far as the judgment stated that the Board has the authority to renegotiate the contract without the approval of the legislature, the judgment is affirmed. In so far as the judgment denied the legislature a right to participate in the process, as reserved by section 224 D, it is reversed.
The specter of the constitutionality of statutes was raised in the district court. The issue of the constitutionality of section 224 D is reserved for the supreme court.
AFFIRMED IN PART, REVERSED IN PART.
LOTTINGER, C.J., concurs in part and dissents in part and assigns reasons.
KUHN, J., concurs and assigns reasons.
FOIL, J., dissents and assigns reasons.
GONZALES, J., dissents for the reasons set out by FOIL, J.
PARRO, J., concurs and assigns reasons.
FOGG, J., respectfully dissents and assigns reasons.
. Originally instituted as a regulatory agency, the Board was later also vested with supervisory authority over gaming in Louisiana. See La. R.S. 27:15 & 31.
. The governor may act by executive order, subject to legislative approval by vote or mail ballot.
. It is noted that the bankruptcy court has the authority to establish a time frame for the legislature to act or not act, as it so elects.
Concurrence in Part
concurring and dissenting.
To the extent that any other opinion or opinions in this matter affirm the judgment of the trial court, I concur, and to the same extent that any other opinion or opinions reverse the judgment of the trial- court, I dissent. I would affirm the trial court judgment in its entirety.
The essence of the trial court judgment is that the Board can enter into the contract at issue “without the approval of the Louisiana Legislature or the Governor of Louisiana.”
I find no error in the conclusion of the trial court that the contract at issue was a renegotiated contract vis a vis a new contract.
For a full understanding of the issues before this court, a recitation and analysis of the statutes at issue are necessary.
Primarily at issue is the interpretation of La.R.S. 27:245 A and R.S. 27:224 D & E. R.S. 27:224 D & E were enacted into law during the 1st Extraordinary Session of 1996 as part of Act 58. R.S. 27:245 was originally enacted as Act 384 of 1992 as R.S. 4:645, and was 12redesignated as R.S. 27:245 pursuant to Section 3 of Act 7 of the 1st Extraordinary Session of 1996.
La.R.S. 27:245A reads as follows:
A. The board shall have the right to set aside or renegotiate the provisions of any casino operating contract of a casino operator who is voluntarily or involuntarily placed in bankruptcy, receivership, conser-vatorship, or similar status. The corporation may agree in writing to allow the casino operator to be placed in bankruptcy, receivership, conservatorship, or other similar status without setting aside, revoking, or renegotiating the casino operating contract.
La.R.S. 27:224 D & E read as follows:
D. The governor by executive order, subject to legislative approval either by vote or by mail ballot, or the legislature by Act or Resolution may set aside or order that the corporation renegotiate the provisions of the casino operating contract of a casino operator who is voluntarily or involuntarily placed in bankruptcy, receivership, conservatorship, or similar status. Any action so taken shall constitute the revocation or modification of a pure and absolute revocable privilege as provided in R.S. 27:202(C). Neither the state of Louisiana nor any political subdivision thereof shall be liable in damages for such revocation, modification, or order for renegotiation.
E. The governor by executive order or the board overseeing the operation of the casino subject to legislative approval either by vote or by mail ballot, or the legislature by Act of Resolution may negotiate a new casino operating contract.
There is no question that prior to the 1st Extraordinary Session of 1996, under R.S. 27:245 A, the board had the authority to set aside or renegotiate the provisions of any casino operating contract of a casino operator who is voluntarily or involuntarily placed in bankruptcy, receivership, conservatorship, or similar status. The terminology “placed in bankruptcy” denotes an event post the execution of the contract, vis a vis before the contract or concurrent therewith. The board did not under any circumstances have the authority to enter into a new contract. There is no mention of gubernatorial or legislative approval for any action by the board to either set aside a contract or renegotiate an existing contract.
During the 1st Extraordinary Session of 1996 the legislature made several changes in the law relating to the issues before this court. By enacting R.S. 27:224 D, the legislature provided authority for the governor subject to legislative approval or the legislature by Act, Resolution or mail ballot to set aside or order the board to renegotiate the provisions of the casino operating contract of a casino operator who is voluntarily or involuntarily placed in ^bankruptcy, receivership, conservatorship, or similar status. Apparently the purpose of this statute was to give to the governor subject to legislative approval or the legislature the authority to either sét aside the operating contract or order the board to renegotiate the contract in the event
But the legislature went a step further and enacted R.S. 27:224 E which allows the governor or the board subject to legislative approval or the legislature to negotiate a new operating contract. Of course this event can only occur after the original contract has been set aside pursuant to R.S. 27:245 A or 27:224 D. Prior to the enactment óf R.S. 27:224 E, the board did not have the authority to negotiate and enter into a new contract. The trial court determined that the contract at issue was not a new contract, but rather a renegotiation of the existing contract. I find no manifest error in this finding.'
Could the governor or the board subject to legislative approval negotiate a new contract? Could the legislature negotiate a new contract? The answer is a resounding YES, but only after the then existing contract has been set aside. But neither the board, nor the governor nor the legislature has moved to set aside the existing contract, thus, none are in a position to negotiate a new contract.
Could the governor subject to' legislative approval or the legislature by Act, Resolution, or mail ballot set aside a contract renegotiated by the board pursuant to R.S. 27:245 A or R.S. 27:224 D because the operator was in bankruptcy or a similar status at the time of the renegotiation? I think not. A fan-reading of the statutes involved leads me to believe that the authority to set aside or to renegotiate an operating contract is-based on the premise as found in R.S. 27:245 A and R.S. 27:224 D that the casino operator is voluntarily or involuntarily placed in bankruptcy, receivership, conservatorship, or similar status. This type of language is no different than similar language found in private leases allowing the lessor to cancel or terminate the lease 1^because the lessee is placed in bankruptcy. Of course, that language cannot be utilized to cancel a contract or lease entered into while the lessee is in bankruptcy. Otherwise, an individual in bankruptcy who enters into a lease with such language is at the mercy of the lessor. This type of language can only refer to an event post the execution or renegotiation of the contract. The fact that R.S. 27:224 D was enacted during the 1st Extraordinary Session of 1996 while the bankruptcy proceedings were ensuing does not change the result. It is the same language used in R.S. 27:245 which was enacted well prior to any bank-ruptey proceedings.'
It is certainly argued that the legislature intended to have the final approval of any operating contract entered into. I do not doubt that that may have been the intention of some legislators, albeit a majority, but that is not what the legislature' enacted. You can’t make a silk purse out of a sow’s ear.
Concurrence Opinion
concurring.
I concur with the reasoning of the majority and assigri additional reasons.
. I write separately to underscore the fact that the actual issue before this court is simply a determination of which branch of our state government is empowered to execute a land-based, casino contract. Both these lawsuits have been instituted by members of the state legislature who seek clarification of the laws that have been enacted. The only role of this court in this case is to interpret the law as written. The court should not endeavor to establish the policy of state government.
The Louisiana Gaming Control Board (“Board”) is the successor to a public corporation owned by the citizens of this state. See R.S. 27:31 & 204. Although it is not technically a state “agency,” it certainly is a legal entity authorized by our legislature to act on behalf of the state in a manner similar to an agency within the executive branch of government. The legislation authorizing the
In my opinion, our only legitimate role in this case, determining which branch of our government is empowered to execute a land-based casino contract, has been answered, which is the appropriate and proper function of the court.
. The argument that the amendment to La.R.S. 27:224(D) & (E) is the later expression of the legislative will incorrectly assumes as its premise that the date of governor approval is the date of expression of legislative will. Clearly, 'in this situation where, in the same extraordinary session, the legislature enacted Acts 1996, 1st Ex. Sess., No. 7 (approved by the governor on May 1, 1996) and No. 58 (approved by the governor on May 9, 1996) based on House Bill Nos. 8 and 9, respectively, both of which were delivered to the governor's office on April 23, 1996, at 2:30 P.M., see Const. Art. 4, § 4(F), the date of the governor's approval cannot determine the date of expression of the will of the legislature.
Dissenting Opinion
dissenting.
I respectfully dissent.
One of the briefs filed in this case urges us to affirm the judgment of the trial court because the welfare and solvency of thousands of Louisiana and other creditors depends on a expeditious affirmation of the decision of the court below. I am certain that every member of this court is sympathetic to those who in good faith became creditors and have not been paid. However, that is not the issue in this case. Nor is this case about whether it is good or bad to have a land based casino in the City of New Orleans. The only issue is whether the legislature must approve the operating contract approved by the Louisiana Gaming Control Board on March 20,1998. The plaintiffs, two state senators, say that the legislature must approve it. The Board and the Governor, through the Attorney General, and the inter-venors say that the Louisiana Gaming Control Board may approve it without the concurrence of the legislature. They have an opinion of the Attorney General to that effect.
12From a practical standpoint, the majority opinion is totally unrealistic. It states that the Louisiana Gaming Control Board has the authority to renegotiate the casino contract. It further states that the legislature may elect to set aside the contract if it acts before the execution of the contract. What if the Board completed renegotiation of a contract at 1:00 P.M. on Monday afternoon, took a break to put it in final form, and then executed it the same day at 3:00 P.M.? It would be impossible for the legislature to call itself into session, come to Baton Rouge and vote all within a two hour period. It would also be impossible for the legislature to conduct a mail ballot within two hours. The majority opinion declares that the legislature has a certain amount of power in these matters. But as a practical matter, under the majority opinion, it has no power at all.
In 1992, the Louisiana Legislature created the Louisiana Economic Development and Gaming Corporation for the express purpose of entering into a casino operating contract with a- private gaming operator. Pursuant thereto, that corporation executed a casino operating contract with Harrah’s Jazz Company, in which Harrah’s obtained the right to operate Louisiana’s only land based casino at the site of the Rivergate Development on Canal Street in New Orleans, Louisiana. Harrah’s commenced construction of the casino, while at. the same time operating a temporary casino in New Orleans. In November of 1995, Harrah’s filed a petition in bankruptcy, closed the temporary casino, and
' When the temporary casino closed, there was no longer a' source of funding for the Louisiana Economic Development and Gaming Corporation. In 1996, the Legislature created the Louisiana Gaming Control Board, which on May 1, 1996, assumed all of the powers, duties and responsibilities of the Louisiana Economic Development and Gaming Corporation (Act 7, First Extraordinary Session of 1996).
13Prior to' 1996, the Louisiana Economic Development and Gaming Corporation had the following authority to renegotiate a casino contract:
A. The board shall have the right to set aside or renegotiate the provisions of any casino operating contract of a casino operator who is voluntarily or involuntarily placed in bankruptcy, receivership, conser-vatorship, or similar status.... (La.R.S. 27:245, enacted in 1992).
It is clear that the above provision applied to the Louisiana Economic Development and Gaming Corporation. It could have set aside or renegotiated the casino contract without approval of the legislature. The above provision was not repealed in 1996 when the Louisiana Gaming Control Board was created. This is what has created the problem in this case.
When the Louisiana Gaming Control Board was created in 1996, the following was enacted:
D. The governor by executive order, subject to legislative approval either by vote or by mail ballot, or the legislature by Act or Resolution may set aside or order that the corporation renegotiate the provisions of the casino operating contract of a casino operator who is voluntarily or involuntarily pláced in bankruptcy, receivership, conservatorship, or similar status. Any action so taken shall constitute the revocation or modification of a pure and absolute revocable privilege as provided in R.S. 27:202(C). Neither the state of Louisiana nor any political subdivision thereof shall be liable in damages for such revocation, modification, or order for renegotiation.
E. The governor by executive order or the board overseeing the operation of the casino, subject to legislative approval either by vote, or by mail ballot, or the legislature by Act or Resolution may negotiate a new casino operating contract.
(La. R.S. 27:224(D) and (E), enacted in 1996).
The above clearly applies to the Louisiana Gaming Control Board. It is also the latest expression of legislative will. It appears perfectly clear that the intent of the legislature was that any future casino contract 14entered into by the state, regardless- of who represented the state in the negotiations, had to be approved by the Legislature.
The Attorney General also argues that this is not a new contract, but a renegotiation of the old contract. He takes the position that the Louisiana Gaming Control Board can renegotiate the present contract without the approval of the legislature, since this is not a new contract, but the old one renegotiated. That does not appear to be the case. In the present and now final agreement, the parties are different and the terms of the agreement are quite different from the original contract. The present contract certainly appears to be a “new” agreement.
The Attorney General is correct in main-tabling that the constitutional issue of separation of powers is not an issue in this case under the facts established at trial. As in other areas, it is certainly permissible for the legislature to maintain a certain element of control on matters upon which it legislates. There are innumerable instances in which the legislature maintains control over boards which it creates by legislative acts, and over actions of the executive department.
The only issue at present is whether the Louisiana Gaming Control Board has the power to approve the contract without legislative approval. The answer is that it does not.
The judgment of the district court should be reversed and it should be declared that the Louisiana Legislature is the sole authority to finally approve or reject a casino oper
Dissenting Opinion
dissenting.
For the following reasons, I respectfully dissent.
‘ During the First Extraordinary Session of the Louisiana Legislature in 1996, which convened March 24, 1996, the Legislature enacted Act 7 which created the Louisiana Gaming Control Board (“LGCB”), and transferred to that entity certain powers and authority previously held by the Louisiana Economic Development and Gaming Corporation (“LEDGC”). LSA-R.S. 27:31 and 32.
The LEDGC was a corporation, not a state agency. LSA-R.S. 27:204. While LEDGC existed, LSA-R.S. 27:245(A)
A. The board shall have the right to set aside or renegotiate the provisions of any casino operating contract of a casino operator who is voluntarily or involuntarily placed in bankruptcy, receivership, conser-vatorship, or similar status. The corporation may agree in writing to allow the casino operator to be placed in bankruptcy, receivership, conservatorship, or other similar status without setting aside, revoking, or renegotiating the casino operating contract.
|2In 1996, the legislature created the LGCB, which unlike its predecessor is a state agency and a part of the executive branch. LSA-R.S. 27:32. In 1996, it also promulgated LSA-R.S. 27:224(D) and (E) which clearly apply to the LGCB. Those provisions read as follows:
D. The governor by executive order, subject to legislative approval either by vote or by mail ballot, or the legislature by Act or Resolution may set aside or order that the corporation renegotiate the provisions of the casino operating contract of a casino operator who is voluntarily or involuntarily placed in bankruptcy, receivership, or similar status. Any action so taken shall constitute the revocation or modification of a pure and absolute revocable privilege as provided in R.S. 27:202(C). Neither the state of Louisiana nor any political subdivision thereof shall be liable in damages for such revocation, modification, or order for renegotiation.
E. The governor by executive order or the board overseeing the operation of the casino, subject to legislative approval either by vote or by mail ballot, or the legislature by Act or Resolution may negotiate a new casino operating contract.
The conflict between these two provisions is apparent. The 1992 legislation gives the LEDGC, the predecessor of the LGCB, the power to renegotiate the operating contract of an owner placed in bankruptcy without legislative approval. LSA-R.S. 27:245(A). Under the law passed in 1996, three scenarios by which negotiation or renegotiation of a contract can occur are set forth: 1) with legislative approval, the executive branch, through the governor, can renegotiate an operating contract of an owner in bankrupt
|3In summary, the provisions of the. 1992 law initially applied to the LEDGC, an entity that was hot á government agency and its actions under the statute did not require legislative approval. The provisions of the 1996 law apply to both the executive and the legislative branches and require that any future casino contract entered into by the state of Louisiana, regardless of which agency negotiates the contract, must be approved by the legislature. It is implausible to conclude that the language of these two statutes is not in conflict. Clearly, the powers granted'to the executive branch of government under the two laws differ. This conflict is impossible to harmonize and reconcile.
If there is an irreconcilable conflict between two statutes, only one can prevail. LSA-C.C. art. 10; Bunch v. Town of St. Francisville, 446 So.2d 1357 (La.App. 1 Cir. 1984). When an irreconcilable conflict exists between two statutes, the later one prevails, as there is repeal by implication of the earlier one. Department of State Civil Service v. Housing Authority of East Baton Rouge, 95-1959 (La.App. 1 Cir. 5/10/96); 673 So.2d 726, writ denied, 96-1452 (La. 9/29/96); 679 So.2d 434. Considering the irreconcilable conflict between the above two statutes, the later must prevail. Under the prevailing statute, the legislature is required to approve any casino contract prior to its execution.
This determination raises the issue of the constitutionality of the statutes in light of La. Const, art. 2, § 2, which provides as follows: “Except as otherwise provided by this constitution, no one of these branches [legislative, executive, or judicial], nor any person holding office'in one of them, shall exercise power belonging to either of the others.” |4This issue was discussed in the trial court, but not addressed in the trial court’s judgment.
An elementary principle of statutory construction in constitutional law holds that all statutory enactments are presumed to be constitutional. Interstate Oil Pipe Line Co. v. Guilbeau, 217 La. 160, 46 So.2d 113 (1950); State on behalf of J.A.V., 558 So.2d 214 (La: 1990). Unless the fundamental rights or privileges and immunities of ’a person are involved, a strong presumption exists that the legislature, in adopting legislation has acted within its constitutional authority. This presumption is especially forceful in the case of statutes enacted to promote a public purpose. Board of Directors of Louisiana Recovery Dist. v. All Taxpayers, Property Owners, etc., 529 So.2d -384 (La.1988). In order to hold legislation invalid under the constitution, it is necessary to rely on some particular constitutional provision that limits the power of the legislature. In re American Waste & Pollution Control Co., 588 So.2d 367 .(La.1991).
Conversely, the Louisiana Legislature has all powers which have not been denied it by the state constitution. In re American Waste & Pollution Control Co., 588 So.2d 367 (La.1991); Swift v. State, 342 So.2d 191 (La. 1977). The provisions of the Louisiana Con-' stitution serve as limitations on the otherwise plenary power exercised by the legislature, which may enact any legislation not prohibited by the Constitution. State Bond Com’n of the State of Louisiana v. All Taxpayers, Property Owners & Citizens, 525 So.2d 521 (La.1988).
The constitution contains no limitations on the legislature with respect to the enactment of gambling legislation other than that contained in La. Const, art. 12, § 6(B), which provides that “[gambling shall be defined by and suppressed by the legislature.” That provision was explored in the ease of Polk v. Edwards, 626 So.2d 1128 (La.1993) and is not concerned with the issues raised herein.
Perhaps review of the issues raised in this ease will afford our supreme court an opportunity to revisit its opinion in Polk v. Edwards, wherein it validated the Louisiana Legislature’s exercise of its authority to “define” gambling under La. Const, art. 12, § 6 by exempting from that definition certain forms of “gaming.” Rather than enacting a constitutional amendment which permitted gambling activity in Louisiana, the legislature chose to define gambling as “the intentional conducting, or directly assisting in the conducting, as a business, of any game, contest, lottery, or contrivance whereby a person risks the loss of anything of value in order to realize a profit.” LSA-R.S. 14:90 A(l)(a). This definition specifically excluded gaming activities or operations on board a commercial cruiseship, upon a riverboat, and at the official gaming establishment and enabled the legislature to enact the Casino, Cruise-ship Gaming, Riverboat Gaming, and Video Poker Acts.
. LSA-R.S. 4:246 was redesignated as LSA-R.S. 27:245 in 1996, pursuant to § 3 of Acts 1996, 1st Ex.Sess., No. 7.
. When the oral reasons or minute entry conflicts with the written judgment, the latter governs. The trial judge may, within his authority, render judgment which differs substantially from his oral statements. Such oral reasoning forms no part of the judgment. It is the formal, signed judgment which governs the controversy. Sanders v. Pilley, 96-0196 (La.App. 1 Cir. 11/8/96); 684 So.2d 460, writ denied, 97-0352 (La. 3/21/97); 691 So.2d 90.
Concurrence Opinion
concurring.
I concur in the result achieved in the majority opinion because it is my belief that LSA-R.S. 27:245 was not implicitly repealed, and therefore the Board had the authority to renegotiate the provisions of the existing casino operating contract. However, it is also my belief that LSA-R.S. 27:224(D) authorizes the governor or the legislature to set aside only the “existing” casino operating contract and not a “renegotiated” contract perfected by the Board pursuant to the authority of LSA-R.S. 27:245. Accordingly, if the existing contract were set aside by the governor or the legislature under the authority of LSA-R.S. 27:224(D) prior to the execution of the renegotiated contract by the Board, then it is my belief that the stage would be set for the negotiation of a “new” contract pursuant to the authority of LSA-R.S. 27:224(E).
