Steve Crooks and Era Lea Crooks v. State of Louisiana, Department of Natural ResourcesSteve Crooks and Era Lea Crooks v. State of Louisiana, Department of Natural Resources
FOR IMMEDIATE NEWS RELEASE
FROM: CLERK OF SUPREME COURT OF LOUISIANA
The Opinions handed down on the 29th day of January, 2020 are as follows:
BY Kirby, J.:
2019-C-00160 STEVE CROOKS AND ERA LEA CROOKS VS. STATE OF LOUISIANA, DEPARTMENT OF NATURAL RESOURCES (Parish of Rapides)
We granted certiorari in this class action to determine whether the plaintiffs’ inverse condemnation claims for compensation against the State of Louisiana have prescribed under
REVERSED IN PART; AFFIRMED IN PART.
Chief Judge Susan M. Chehardy of the Court of Appeal, Fifth Circuit, heard this case as Justice pro tempore, sitting in the vacant seat for District 1 of the Supreme Court. She is now appearing as an ad hoc for Justice William J. Crain. Retired Judge James H. Boddie, Jr., appointed Justice ad hoc, sitting for Justice Marcus R. Clark. Retired Judge Robert Kostelka, appointed as Justice ad hoc, sitting for Justice Genovese, recused.
SUPREME COURT OF LOUISIANA
No. 2019-C-0160
STEVE CROOKS AND ERA LEE CROOKS
VERSUS
STATE OF LOUISIANA, DEPARTMENT OF NATURAL RESOURCES
On Writ of Certiorari to the Court of Appeal, Third Circuit, Parish of Rapides
We granted certiorari in this class action to determine whether the plaintiffs’ inverse condemnation claims for compensation against the State of Louisiana have prescribed under
FACTS AND PROCEDURAL HISTORY
In 1962, the United States began constructing various structures2 in and around the Catahoula Basin pursuant to a congressionally-approved navigation project under the River and Harbor Act of
The project was completed in 1973 and, at that time, the United States Fish and Wildlife Service began managing the water levels in and around the Catahoula Basin. As intended, these water management activities increased water levels in the Catahoula Basin and prolonged the natural annual high-water fluctuations. The U.S. Fish and Wildlife Service continues to manage the water levels in the Catahoula Basin to this day. Also, the State, through the Department of Wildlife and Fisheries, has granted mineral leases in the area known as Catahoula Lake.
On May 4, 2006, plaintiffs Steve Crooks and Era Lea Crooks filed a “Class Action Petition to Fix Boundary, For Damages and For Declaration [sic] Judgment.” The Crookses alleged that they represent a class of landowners in the Catahoula Basin whose property is affected by the increased water levels from the project. Ultimately, the trial court certified the plaintiffs as one class, but subdivided that class into two groups — the “Lake Plaintiffs” and the “Swamp Plaintiffs” — depending on the location of the properties affected.
Specifically, the Lake Plaintiffs are those property owners who sought (1) ownership of the land between the ordinary low and ordinary high water mark of the Little River located within the area known as Catahoula Lake; (2) a declaration that these lands were unlawfully expropriated by the navigation project, which obstructed the natural servitude of drainage; (3) damages for this inverse condemnation; and (4) recovery of the mineral royalty and other payments received by the State from mineral leases granted over the immovable property at issue.
The Swamp Plaintiffs are those persons owning property in the southwestern portion of the Catahoula Basin, designated as “overflow lands.” Much of the land bordering and lying outside Catahoula Lake was approved as swampland and transferred to the State by the federal government under the Swampland Acts of 1849 and 1850. It is not disputed that these lands are below an elevation of 36 feet mean sea level, and that their titles originated from patents issued by the State. Because ownership of these swampland tracts is not disputed, these plaintiffs sought only a declaration of unlawful expropriation and damages for the inverse condemnation.
The central issue presented to the trial court in the claim of the Lake Plaintiffs was the classification of the area known as Catahoula Lake. The Lake Plaintiffs contended that, although referred to as a lake, the area actually constitutes the banks of the Little River, thus conferring on the Lake Plaintiffs ownership of those lands between the ordinary low and the ordinary high water mark. See
The State countered, filing a reconventional demand which sought a declaration recognizing that Catahoula Lake is a lake and the State owns the bed and waters below the ordinary high water mark.
In addition, the State filed a peremptory exception of no right of action asserting that the plaintiffs have no right of action against the State for any inverse condemnation by the federal government because the Act of Assurances is not a stipulation pour autrui, and/or a right of action only inures to those persons owning the land at the time it was taken, and only one of the plaintiffs had ownership when the navigation project was completed in 1973. The State also filed a peremptory exception of prescription, arguing that the plaintiffs’ claims are prescribed under
Following a bench trial, the trial court rendered a judgment in favor of the plaintiffs, declaring that the body of water in the Catahoula Basin in 1812 was a permanent river that seasonally overflowed and covered its banks; the riparian landowners, i.e., the Lake Plaintiffs, are the owners of these river banks; and the State is liable for the inverse condemnation of these lands because of the significant obstruction of the natural servitude of drainage.
Relevant to the issue before us, the trial court denied the State‘s exception of prescription, finding the Cooper case to be on point and controlling. The trial court found that the two-year prescriptive period of
The trial court then determined the prescriptive period applicable to the case is the one-year prescriptive period for damage to immovable property found in
In deciding the peremptory exception of no right of action, the trial court found that the United States is the party that inversely condemned the plaintiffs’ lands. Referring to the language of the “Act of Assurances,” the trial court concluded the State undertook the obligation of acquiring “all lands, easements, and rights of way, including flowage rights in overflow areas” necessary for the project, and agreed to “hold and save the United States free from damages” due to the same. The trial court found this language constituted an indemnification agreement. It further reasoned that the agreement was expressly intended to benefit a specific identifiable class of persons: those landowners whose properties would be adversely affected by the project. Consequently, the trial court found that those landowners are third party beneficiaries of the Act, which constitutes a stipulation pour autrui, which in turn conveys upon the plaintiffs a right of action directly against the State. Again, the trial court relied on Cooper to support its conclusion.
The trial court also rejected the State‘s argument that a right of action for just compensation for a taking inures only to those persons owning a parcel at the time of the taking. The trial court acknowledged that only one plaintiff demonstrated ownership prior to 1973, but found that the subsequent purchaser doctrine established in Eagle Pipe & Supply, Inc. v. Amerada Hess Corp., 2010-2267 (La. 10/25/11), 79 So. 3d 246, does not apply to a subsequent purchaser where, “there is obviously continuing, persistent, and ongoing tortious acts creating a continuing tort,” as in the present case.
The trial court, citing Cooper, found that any interference with the natural servitude of drainage constitutes a taking or damage that entitles a landowner to compensation for inverse condemnation. The court determined that the man-made structures installed in and around the Catahoula Basin altered the natural conditions in the basin and significantly obstructed the natural drainage of the area, flooding lands that would have been dry for longer periods of time. In effecting this change, the trial court found that the United States exceeded its rights as owner of the servient estate, entitling the plaintiffs to damages for the inverse condemnation of their lands. The trial court reasoned “the servient estate owes an absolute duty to the dominant estate to receive waters which naturally flow upon it, and ... the man-made structures violated that duty by flooding both riparian and overflow lands with not only more water, but also for longer periods of time,” entitling the plaintiffs to damages for the inverse condemnation of their lands.
Based on its findings, the trial court awarded expropriation damages of $28,745,438.40 to the Lake Plaintiffs and $9,550,800.00 to the Swamp Plaintiffs, as owners of the overflow lands. The trial court also awarded the Lake Plaintiffs $4,694,309.68 for oil and gas royalties attributable to mineral production from the riparian lands from May 2003 to trial.9
The majority of the court of appeal found no manifest error in the trial court‘s
As to the issue of liberative prescription, the court of appeal, relying on Cooper, found that the United States unlawfully expropriated the plaintiffs’ property because it initiated, constructed, and currently manages and maintains the navigation project and controls the water levels. Noting that prescriptive statutes are strictly construed and
Noting that the court in Cooper found that each interference with the servitudes of drainage constituted a separate, continuous tort, the court of appeal agreed with the trial court that prescription has not run on the plaintiffs’ claims due to the continuing tort doctrine. The court of appeal also found Eagle Pipe inapplicable in the case of a continuing tort because the wrongful conduct and damages have continued during the plaintiffs’ ownership.
Judge Amy dissented. With respect to the issue at hand, he found the plaintiffs’ claims are barred by
We granted the State of Louisiana Department of Natural Resources’ writ application and ordered briefing and argument limited to the issue of whether “[t]he lower courts erred in failing to find that the [p]laintiffs’ inverse condemnation claims have prescribed under either or both
After we granted the writ, but prior to oral argument, pursuant to
LAW AND DISCUSSION
The Louisiana Constitution provides:
Every person has the right to acquire, own, control, use, enjoy, protect, and dispose of private property. This right is subject to reasonable statutory restrictions and the reasonable exercise of the police power.
Property shall not be taken or damaged by the State or its political subdivisions except for public purposes and with just compensation paid to the owner or into court for his benefit. Property shall not be taken or damaged by any private entity authorized by law to expropriate, except for a public and necessary purpose and with just compensation paid to the owner; in such proceedings, whether the purpose is public and necessary shall be a judicial question. ...
Having reviewed the evidence in the record, we find no manifest error with regard to the following factual findings by the trial court: the body of water in the Catahoula Basin in 1812 was a permanent river that seasonally overflowed and covered its banks; the riparian landowners, i.e., the Lake Plaintiffs, own of the land between the ordinary low and ordinary high water mark of the river‘s bank; and the man-made structures installed in and around the Catahoula Basin caused significant flooding of both the riparian and overflow lands, which obstructed the natural servitude of drainage of the area.
We turn now to consider whether or not the plaintiffs’ inverse condemnation claims have prescribed. The plaintiffs seek compensation for the increased
Section 5111 of Title 13 is entitled “Appropriation of property by the state, parish, municipality or agencies thereof; attorney, engineering and appraisal fees; prescription” and provides, in pertinent part: “Actions for compensation for property taken by the state, a parish, municipality, or other political subdivision or any one of their respective agencies shall prescribe three years from the date of such taking.”
In this case, the lower courts determined the plaintiffs’ inverse condemnation claims for compensation are not barred by liberative prescription, including
[I]f the operating cause of injury is tortious and continually gives rise to successive damages, prescription begins to run from the cessation of the particular wrongful conduct causing the damage. “A continuing tort is occasioned by unlawful acts, not the continuation of the ill effects of an original, wrongful act.”
In this matter, because each instance of damage (each interference with the servitudes of drainage) constitutes a tort under Article 667 and given Plaintiffs’
belief that, both, the damage and interference are continuous, Plaintiffs assert that each of these torts qualifies as a continuing tort. We agree. ....
[P]rescription will not run in this case until the flooding of Plaintiffs’ lands is abated. Therefore, we find, through application of the continuing tort theory, that prescription has not, yet, begun to run on their claims for compensation.
Id., pp. 5-6, 870 So. 2d at 322-23 (footnotes omitted). The court further reasoned that
The facts in Cooper are, in all material respects, identical to the facts in the present case. Nonetheless, we agree with dissenting Judge Amy that the majority in Cooper erred by applying tort doctrine to an appropriation claim. In doing so, the Cooper majority ignored the court‘s own longstanding precedent that “[t]he taking of property, by flooding or otherwise, without proper exercise of eminent domain, is not a tort but is considered an appropriation.” Hawthorne, 540 So. 2d at 1262 (emphasis added) (citing Bernard v. State, Dep‘t of Pub. Works, 127 So. 2d 774 (La. App. 3 Cir. 1961); Boothe v. Dep‘t of Pub. Works, 370 So. 2d 1282 (La. App. 3 Cir.), writ denied, 374 So. 2d 661 (La. 1979)). Judge Amy pointed out that in both Hawthorne, 540 So. 2d 1261, and in Cooper v. La. Dep‘t of Pub. Works, 540 So. 2d 1265 (La. App. 3 Cir. 1989)13, the claims for compensation, which the court concluded had prescribed under
Furthermore, we agree with Judge Amy that the majority in Cooper erred in determining the United States, and not the State, appropriated the plaintiffs’ property. In Succession of Rovira v. Board of Commissioners of Port of New Orleans, 418 So. 2d 1382 (La. App. 4 Cir.), writ denied, 423 So. 2d 1147 (La. 1982), the State agreed to furnish, free of cost to the United States, all lands, easements, rights-of-way, and spoil disposal areas for the construction of the Mississippi River Gulf Outlet (MRGO) and delegated this task to a local entity, the Dock Board. A portion of the plaintiffs’ private property was occupied and used for the channel of the MRGO, but there had been neither expropriation proceedings nor compensation paid to the plaintiffs. Id. The plaintiffs sued the Dock Board, and, in concluding that the United States was not an indispensable party, the fourth circuit found that, based on the documents ordering and authorizing the Dock Board to acquire the rights-of-way, the Dock Board was the public body that was the “taker” of the land used in construction. Id. The court noted that the plaintiffs’ claims were for compensation for their lands taken and the dispute was between the plaintiffs and the Dock Board as “taker“. The court found it mattered not that the United States, as recipient of the lands taken, constructed the waterway and continued to operate it, because the Dock Board, not the United States, was the entity which had to respond to the claims asserted by the plaintiffs. The court also emphasized that the plaintiffs’ claims were not for property damage occasioned by construction, but for compensation for the “taking” of the property. Id. at 1386-87.
As mentioned above, the plaintiffs here seek compensation for the taking of their property. Given that the dispute is between the plaintiffs and the State as the “taker” of the land used for the project, we conclude that the plaintiffs’ claims for compensation are governed by the prescriptive period in
Pursuant to
Having found that the plaintiffs’ inverse condemnation claims against the State for compensation have prescribed, we express no opinion as to the applicability of
Next, we address the State‘s peremptory exception of no cause of action objecting to the plaintiffs’ claim for the mineral royalties. The peremptory exception of no cause of action is premised on the following syllogism: 1) the Lake Plaintiffs’ claim to the royalties is an action for unjust enrichment; 2) the action for unjust enrichment is only available where the law provides no other remedy, see
As used in the context of a peremptory exception, a “cause of action” refers to the operative facts which give rise to the plaintiff‘s right to judicially
Generally, under
Applying the aforementioned legal precepts, we find no merit to the State‘s argument that the plaintiffs’ claim for reimbursement of the mineral royalties is merely one of unjust enrichment whose remedy is against the unit operators only, and its reliance on Taylor, supra, is misplaced. In Taylor, owners of unleased mineral interests sued the purchaser of production from their unit to recover their share of the proceeds of the sale. This Court framed the issue before it as follows: “whether a party claiming rights as an unleased mineral interest owner in a pooled drilling unit ...has a right and/or cause of action against a purchaser of unit production to recover the value of his share.” Taylor, 562 So. 2d at 889. In resolving the issue, the Court held:
As owners of an unleased interest who have not made arrangements to separately dispose of their share of production, the [plaintiffs‘] right to take possession of their share of production is limited by the unit operator‘s right to sell their share. Upon sale by the unit operator, an unleased interest owner‘s right to recovery is limited to recovery of a pro rata share of the proceeds of
the sale from the operator. The [plaintiffs] have no action to recover their share of production or the value of their share of production from Ashland, the purchaser, on the basis of articles 2301 and 2312 because of the provisions of LSA-R.S. 30:10(A)(3).
Taylor is distinguishable from the case at hand, as the defendant in Taylor was the purchaser of production, not the royalty recipient. That being the case, the Court in Taylor concluded that the purchaser could not be made to pay twice; rather the recipient of the proceeds (the operator) was responsible for the reimbursement.
In this case, a review of the petition, and of the evidence adduced without objection, reveals that the operative facts which give rise to this litigation are that the State granted mineral leases on plaintiffs’ lands, and received mineral royalties from those leases. Accepting these facts as true, the plaintiffs have asserted a cause of action against the State for mineral royalties pursuant to
Products derived from a thing as a result of diminution of its substance belong to the owner of that thing. When they are reclaimed by the owner, a possessor in good faith has the right to reimbursement of his expenses. A possessor in bad faith does not have this right.
In Lamson Petroleum Company v. Hallwood Petroleum, Inc., 99-1444 (La. App. 3 Cir. 5/24/00), 770 So. 2d 786, the court of appeal was presented with competing claims to ownership of mineral leases covering a disputed piece of property. The plaintiff, Lamson, held a mineral lease over a particular parcel of land. Hallwood Petroleum also held a lease of the same property, obtained from different property owners. The dispute boiled down to which lessors were the proper owners of the tract. The issue of ownership was decided in favor of Lamson, which then sought the proceeds of production from the Hallwood lease. In addressing the issue of Lamson‘s entitlement to the proceeds of production from the lease, the court of appeal noted that Lamson had been appointed agent for its lessors in pursuing the return of royalties improperly paid, and as a result had a cause of action under
While
La. R.S. 30:10 does provide a remedy for unleased property owners to recover their share of the proceeds of a well from the operator of that well, we find no authority for the proposition that it provides the exclusive remedy for unleased land owners. In Bonnett v. Mize, 556 So. 2d 228 (La. App. 2 Cir. 1990), writ denied, 559 So. 2d 1360 (La. 1990), the court considered a case where a good faith possessor of immovable property received money from a mineral lease of that property. The court found that because the conveyance of the property to the good faith possessors was invalid, the owner was entitled to a money judgment against the good faith possessor for mineral lease rental payments and royalties received. While we agree that the Appellants have not been alleged to be the operator of the well, we find no error in the trial judge‘s decision to grant judgment against the Appellants as good faith possessors of the property at issue and in favor of Lamson, standing in the shoes of the owners.
Lamson, 99-1444 at 17-18, 770 So. 2d at 798. We find the holdings in Lamson and Bonnett reinforce our conclusion that the plaintiffs have a cause of action for mineral royalties under
Therefore, the peremptory exception of no cause of action filed by the State is overruled.
DECREE
For the reasons expressed herein, the court of appeal judgment is reversed, in part, insofar as it upheld the award of $28,745,438.40, and the interest thereon, to the Lake Plaintiffs, and the award of $9,550,800.00, and the interest thereon, to the Swamp Plaintiffs, the owners of the overflow lands, for compensation for the inverse condemnation of their lands by the State. In all other respects, the judgment is affirmed.
REVERSED IN PART; AFFIRMED IN PART.
Notes
The banks of navigable rivers or streams are private things that are subject to public use.
The bank of a navigable river or stream is the land lying between the ordinary low and the ordinary high stage of the water.
Public things that belong to the state are such as running waters, the waters and bottoms of natural navigable water bodies, the territorial sea, and the seashore.
Actions for compensation for property taken by the state, a parish, municipality, or other political subdivision or any one of their respective agencies shall prescribe three years from the date of such taking.
When private property is damaged for public purposes any and all actions for such damages are prescribed by the prescription of two years, which shall begin to run when the damages are sustained.
When damage is caused to immovable property, the one year prescription commences to run from the day the owner of the immovable acquired, or should have acquired, knowledge of the damage.
Natural drainage
An estate situated below is bound to receive the surface waters that flow naturally from an estate situated above unless an act of man has created flow.
If there is included in any unit created by the commissioner of conservation one or more unleased interests for which the party or parties entitled to market production therefrom have not made arrangements to separately dispose of the share of such production attributable to such tract, and the unit operator proceeds with the sale of unit production, then the unit operator shall pay to such party or parties such tract‘s pro rata share of the proceeds of the sale of production within one hundred eighty days of such sale.