Petition for Writ of Certiorari — East First First Street, LLC v. Board of Adjustments (No. 08-1078)

, Supreme Court, U3.

\v | FILED

No 081078 FEB 1 9 2009

Supreme Court of the United States

EAST FIRST STREET, L.L.C. AND M & B RENTALS OF

AMERICA, L.L.C., PETITIONERS

0.

BOARD OF ADJUSTMENTS AND CITY OF THIBODAUX

PETITION FOR A WRIT OF CERTIORARI

TO THE LOUISIANA COURT OF

APPEAL FIRST CIRCUIT

PETITION FOR WRIT OF CERTIORARI

WooDy FALGOUST

Counsel of Record

Woody Falqoust,

A Law Corp.

1050 Casal Bled

Thibodawr, LA 70816

: »

Attorne if for } . hitianrre rs

l

QUESTION PRESENTED

1) Does a residential-only zoning restriction levied

against long-existing commercial buildings “forestall (a)

grave threat to the lives and property of others” to rise to

the level of a “background principle of state law”

sufficient to deny the buildings’ owners’ claims for a

regulatory takings when the restriction has deprived the

owners of “all economically beneficial use" of their

properties?

Lucas v. South Carolina Coastal Council, 505 U.S. 1008,

1029, Note 16 (1992).

Li

TABLE OF CONTENTS

Page

QUESTION Frei cicoweccnarssceecesssccescese i

TABLE OF BU Fite tecscssness'nsecsecsc00000. 11

COPTNTONS Bei aero rseneccivessecesees 0.00000 l

JURISDICTION ..cccccncaseeeeenes Tse oseacirsissareee l

RELEVANT PROVISIONS INVOLVED ..................cc.ccccccesseeeseseess. 2

STATEMENT cicjcccce ee ioecc te scene sses-00.00202.. 3

REASONS FOR GRANTING THE PETITION.......... nasi os 14

CONCLUSION acco cscscnccccess 26

APPENDIX

State Supreme Court Denial of Petition for Review......... la

State Appeala Caeirt Bein eiarciattttetieciecsescccssccsssccceseoes cece 2a

Judgment of the State District Court ...........cccccccc cesses l4a

Re asons for Judgment of the State District Court .......... 16a

State Appeals Court Order Denying Rehearing ............. 28a

itd

TABLE OF AUTHORITIES

Page

CASES

Annison v. Hoover, 517 So.2d 420, 423 (La App | Cir

1987), writ denied 519 So 2d 148 (ha 1988)... eee cee 12

Avenal v. State, 886 So 2d 1085 (La 1995) ww 19, 20

DOT D v. Dietrich, 555 So 2d 1855 Cla 1990)...........ceccsecscocceess 24

Dufau v. Parish of Jefferson, 200 So 2d 335 (La App 4

CF TEED asec cavcecnhis canescens assent Giana ndctcns 11

Esplanade Properties, LLC v. City of Seattle, 307 F

Oe Fe vi ctaceticsunvcicsntscstesduessncn iad eee

Jemison v. City of Kenner, 277 So 2d 728 (La App 4

ARP PIS sonics a nhc ahiseceid wakes abana etc ee e a ae

Lucas v. South Carolina Coastal Council, 505 US

BPE CRAP AMEE etirhn bh eskcsvexssnacts sastcnentiavadlapusGanncsomenss 1, 12, 14

Monte v. Parish of Jefferson, 898 So 2d 506, 511 (La

FES Gr ecisnntcccnccunicpissssceancngneeeacmsetertenys aie 1]

Naquin v. Dept of Transp. and Dev., 604 So 2d 62, 65

(La App 1 Cir), writ denied 608 So 2d 169 (La

21

20

SOME F inssbes suvasbectsaceaetinecs becca cama eae cl ttaiae 24, 25

State v. Constant, 369 So 2d 699, 701 (lua 1979)...... ccc eee ceeeee 2d

Steel v. Cape Corp, 677 A 2d 634 (Md App 1995) ............ 17,18

Tahoe-Sierra Preservation Council, Inc. v. Tahoe

Hea’ COUCH, FRG. GOO Uae. i iisatisersidsnbsentesetnndassintenccss 17

Triste €s Unde rthe Will of Pome rOY WV Town of

Westlake, 357 Soa 2d 1299 (La App 3 Cir 1978) ............ Tae 1]

Willhamson County Regional Planning Comm'n v

Hamilton Bank of Johnson City, 473 US 172. 186

STATUTES

28 U.S.C. § Z2101(c)......

1

OPINIONS BELOW

The appendix includes a writ denial by the

Louisiana Supreme Court entered on November 21,

2008 (Appendix — la), cited at 996 So. 2d 1111 (La 2008),

a rehearing denial by the Louisiana Iirst Circuit Court

of Appeal on August 26, 2008 (28a), the judgment and

opinion (unpublished) by the Louisiana First Circuit

Court of Appeal on June 6, 2008 (2a-13a) and the

judgment and reasons for judgment by the 17" Judicial

District Court, Parish of Lafourche, on January 29, 2007

(14a-27a).

JURISDICTION

The decision of the Louisiana Supreme Court,

the State court of last resort having jurisdiction to

review the decisions of all inferior State courts, denying

the petitioners’ application for leave to obtain further

appellate review of the Appeals Court’s decision, was

decided and filed on November 21, 2008(App. 1).

This petition for writ of certiorari by the

petitioner is filed within ninety (90) days from the date

of the order of the Louisiana Supreme Court denying

the petitioners’ application for leave to obtain further

appellate review of the Appeals Court’s decision. 28

U.S.C. $ 2101(c¢).

2

RELEVANT PROVISIONS INVOLVED

Amendment V

No person shall be held to answer for a capital,

or otherwise infamous crime, unless on a

presentment or indictment of a grand jury,

except in cases arising in the land or naval

forces, or in the militia, when in actual service in

time of war or public danger; nor shall any

person be subject for the same offense to be

twice put in jeopardy of life or limb; nor shall be

compelled in any criminal case to be a witness

against himself, nor be deprived of life, liberty,

or property, without due process of law; nor shall

private property be taken for public use, without

just compensation.

Amendment XIV

Section 1. All persons born or naturalized in the

United States, and subject to the jurisdiction

thereof, are citizens of the United States and of

the state wherein they reside. No state shall

make or enforce any law which shall abridge the

privileges or immunities of citizens of the United

States; nor shall any state deprive any person of

life, liberty, or property, without due process of

law; nor deny to any person within its

jurisdiction the equal protection of the laws

3

STATEMENT

This case involves a review of the Louisiana

Supreme Court’s writ denial in a regulatory takings

vase. Louisiana’s First Circuit Court of Appeal held

that the petitioners’ takings claim was barred because a

residential-only zone placed over existing commercial

buildings was a “background principle” of state law.

The properties at issue are five adjacent small

parcels in Thibodaux, Louisiana. The tracts are located

on a narrow strip sandwiched between Bayou

Lafourche and a section of Louisiana Highway | called

East First Street. In Louisiana law, the land between a

waterway and road is called the “batture.”

Recorded history reveals that the .9 mile-long

East First Street batture has never contained a

residence. In the middle of the batture sit the five

properties at issue, which consist of a total of 2.8 acres,

and despite the fact that this immediate section

contains three commercial buildings, the section is

zoned R-1, single-family, residential-only. (Exhibit 7, p

208 and R. 1598 - 1603)

It is undisputed that the R-1 zone has totally

devalued two of the properties, a gas station and an old

florist shop, owned respectively by petitioners East

First Street, LLC and Cornel and Cynthia Martin. An

expert appraiser testified that because of the necessary

demolition costs to convert the commercial buildings

into R-1 homes, the R-l zone has created negative

values for both properties. There is no evidence in the

record to contradict the appraiser's testimony.

(Exhibits L, M & N)

East First Street/LA I’s Commercial Character

The Louisiana Highway 1 batture is consistently

commercial even beyond its Fast First Street section; if

one rides the highway to the east and west of the

section, one will see that are no residences for 4.7 miles

of the batture but there are dozens of commercial

structures. On the batture’s 2.8 acre-strip at issue, all

three of the commercial buildings were either built

prior to any zoning ordinance or when the property was

zoned “C” commercial. (Exhibit A-2) While there was

a zoning change in 1979, converting the properties from

“C” Commercial to R-1, as explained below, the change

was not enforced for more than two decades. (Exhibit

A-6-A, pp 1-2 and R. 63-79)

Property 1 — On the tract’s eastern end at 711

East First Street ts a 49-year-old filling station owned

by petitioner East First Street, LLC. Prior to the

filling station, the property was used as a barroom.

(See Exhibits A, p 9 and, A-4, photos 1-4 and A-6, pp 2-

3)

Property 2 — Just west of and adjacent to the

filling station is a narrow 35-foot wide strip of property

between the filling station and the Bourg, Carmouche,

Gory and Jones Insurance Agency (“Bourg-

Carmouche”). Although zoned R-1, this small lot is not

wide enough to meet the residential building permit lot

width requirement of 75 feet and only has value as a

commercial lot extension. (Exhibit A-6, p 3)

D

Property 3 — The next property to the west, the

present Bourg-Carmouche building, was built in 1970 as

a combination filling station /convenience store and

operated as a Shop-n-BRag, then a Shop Rite. In 1985, a

new tenant converted the convenience store into a

Video Co-Op. After the video store’s successful, multi-

year run, the building went through six different

commercial uses. (Exhibit A-4, photos 4-6 and Exhibit

A-6-A, pp 1-2 and R. 63-79)

Property 4 — Stretching westerly from the

Bourg-Carmouche building to the old Guidroz Florist is

a section of batture land owned by St. Joseph's

Cemetery. (Exhibit A-6, p 4 and See Exhibit A-4,

photos 8-13) Toward the east end of the lot is a wide

culvert/drainage right-of-way (photo 8), and toward the

middle of the lot is another public use, a

pedestnian/bicycle path and _ bridge. (Photo 9)

Evidence at trial indicated that these public right-of-

ways, the tract’s narrow depth and the cemetery’s use

of it as a green buffer would likely prevent any

development of the property. (A-6, pp 4-5 and R. 1195-

1196, 1606)

Property 5 — At the far western border of the

proposed rezoned area at 629 East First Street is the

old Guidroz Florist now owned by petitioners Cornel

and Cynthia Martin. Built in the 1930s, the building

thrived as a florist tor decades, then in the mid-1990s,

converted to other commercial uses without even

recelving zoning variances. As of trial, the building

was empty due to recent denial of zoning variances.

(exhibit A-4, photos 15-19) (Rt. 1406, R. 1410-1415 and

R. 1417)

6

In Search of Variance Relief

In the 1980s and 1990s, the R-1 zone had no

effect on the uses or the values of petitioners’

properties. At 629 East First Street, after the five-

decade run of Guidroz Florist, Cornel Martin was

permitted by the City in 1994-95 to lease his R-1

building to three tenants, a hair salon, a blood bank and

a cake shop, without even applying for a variance. (R.

1411- 1412) During this period at 711 East First Street,

prior owner Ron Delaune made enough profits at his

filling station in the 1990s to support his family and

send his two sons to colleye. At the time, traditional

garage-based filling stations were — still viable

businesses. (Exhibit A, p 8) And next door to 711 East

First Street, the building now known as _ Bourg-

Carmouche made the conversion in 1985 from a

convenience store to a video store, without the

necessity of a variance. (F.xhibit A-6-(A), p 2)

Even at the turn of the millennium, Corne!

Martin had little reason to believe the zoning had an

effect on his property. In 2000 Mr. Martin was first

denied a desired use for the building (his plan was to

open up a snowball stand) but it was not until 2004 that

he realized the sudden arbitrary enforcement of the

zoning ordinance would make it difficult for him to

place a tenant in the building. At that point, all three of

Mr. Martin’s building’s suites had become vacant, a

problem that would have been rectified if the City had

allowed a prospective tenant, a labor company, to

occupy the entire building. (R. 1420)

Meanwhile, over at Bourg-Carinouche, tram 1996

—

‘

through 2002, the city rubber-stamped six variances in

seven years, including approvals for a_= data

management service (8/28/96), ice cream _ parlor

(7/30/97), women’s fitness center (1/7/98), record store

(4/28/99) and clothing store (3/28/01) and finally, an

insurance agency (9/25/02). (Exhibit A-6-A, pp 1-2, R.

63-79 and R. 838)

As to the filling station, in 2005, East First

Street, LLC manager Tony Lafaso investigated how to

obtain the necessary permits to renovate the station’s

garage attachment into a convenience store with

several City officials. Initially, the City’s mayor told

Mr. Lafaso that the company would need to apply for a

variance with the Board of Adjustments. Even though

the property was grandfathered in as a filling station, in

the City’s opinion, this use classification did not include

a convenience store. The City’s building inspector

informed Mr. Lafaso that his company would also need

a variance to make improvements to its building

because the City Zoning Ordinance prevented the

owner of a nonconforming property from spending

more than 10% of the property’s replacement costs on

renovation. Article 1V, § 406. (R. 164)

Mr. Lafaso was also initially told he would need a

variance to sell retail alcohol, which he knew was sold

at every other convemence store in Thibodaux. Retail

alcohol, according to Mr. Lafaso’s market analysis

consultant K. Chris Cox, Ph.D, was a 9 customary

COnNnVEeNnIeCNnCce good necessary to ensure the SUCCeCSS of a

local filling station. (CR. 224, 1517-1518, Exhibit L)

‘a

Before going before the Board of Adjustments,

Mr. Lafaso located the Zoning Ordinance’s definition of

a “filling station” and showed it to the City’s building

inspector. (R. 180-181, 1431) The broad definition

appeared to allow the operation of a convenience store,

and Mr. Lataso testified that after he reviewed the

definition with the building inspector, the inspector led

him to believe that Mr. Lafaso would receive the

necessary permits to renovate the garage into a

convenience store and sell retail aleohol. (R. 1481)

But when the City surprisingly denied the

company’s alcohol permit on June 1, 2005 and the Board

of Adjustments denied the application to renovate the

property and open a convenience store on June 22,

2005, Mr. Lataso realized his true predicament.® (R.

1446 and Petition for Damages pp 1-18)

The Rezoning Requests

In June 2005, East First Street, LILC and the

Martins joined forces and filed a Petition for Rezoning

before the defendant Board of Planning & Zoning (“the

Zoning Commission”), requesting that the Zoning

Commission change the zoning of the five tract. strip to

a commercial designation. (R. 1427 and Exhibit A-S, pp

44-54) After the Zoning Commission turned down

petitioners’ rezoning request on July Is, 2OOd,

petitioners filed another rezoning request, presenting

the Zoning Commission with 12 different rezoning

options. The Zoning Commission turned down every

The petitioners’ adrmumistrative and judicial battles are more fully-

explained in the testimonies of Cornel Martin (R. 1411- R 1415 and

R.1419-1421) and Anthony Lafaso (R. 1424-1441

i)

request on August 10, 2005. (R. 1437)

On May 2, 2006, petitioners then took their case

to the Thibodaux City Council, asking the Council to

rezone the strip to C-] or to C-1 with the following

exceptions: 1) no bars and lounges; 2) no on-premises

alechol consumption; 3) no video poker; 4) no mobile

homes; 5) no washaterias; and 6) no billboards. The

City Council denied the request. (See Exhibit A, pp 35-

38, and Exhibit A-1)

The City Council admittedly based their denial

in part on the fact that several cross-highway residents

(seven of whom ultimately intervened in the lawsuit)

were opposed to the rezoning. It should be noted that

all of these residents lived across a double-shouldered

state highway from the proposed rezoned area and

except for one resident (who has since moved), no

resident lived directly across from the zone. Most of

the area opposite the zone is nonresidential, consisting

of a State Farm insurance office, a dentist’s office, a

state-owned assisted living facility and a_ large

cemetery. As the record reflects, the residents never

produced any expert or factual evidence that the

proposed rezoning would cause harm to their property

values or to their quality of life nor did they provide

evidence that the decades of commercial activity on the

batture had ever caused harm of any kind. (Exhibit A-

4, photos 20-27)

After the City Council failed to recognize the

commercial character of the area, the petitioners then

appealed the Council's decision in district court 1)

claiming that the Council's decision was arbitrary and

10

capricious and requested a rezoning; or alternatively, 2)

asking for a regulatory taking and damages.

ACTION TAKEN BY THE LOWER COURTS

Trial commenced on the afternoons of May 22,

2006 and May 23, 2006 and then resumed and concluded

on September 18, 2006. The petitioners presented the

Court with two requests:

l. A C-1 Rezoning or a C-1 Rezoning with

the stated exceptions, plus past lost

income to East First Street, LLC in the

amount of a pro-rated version of $75,511,

depending on the day of the award; or

alternatively,

If no rezoning, the petitioners were

IN

entitled to the following takings damages:

a. To Cornel and Cynthia Martin Loss

of Market Value in the amount of

$141,000;

hy. To East First Street, LLC? Loss of

Market Value in the amount of

$262,000, past lost income in the

amount cf 375,511 and future lost

income in the amount of $1,102,565,

for a grand total of $1,440,076.

The district court rendered judgment on

January 29, 2007, finding that the City Council's actions

were not arbitrary and = capricious, despite also

concluding,

1}

.the court factually finds that’ the

properties in question are destined to

fail...The landowners are no doubt limited in

their ability to maximize the use of their land

and would suffer financial loss to conform their

property to fit the R-Il residential setting.

(emphasis added)

(Appendix 26a)

The district court did not address’ the

petitioners’ takings/damages claim.

After receiving the district court’s opinion,

petitioners filed an appeal with the First Circuit Court

of Appeal, asking for a rezoning or in the alternative, a

taking. In a June 6, 2008 opinion, the First Circuit

denied the rezoning and failed to even address five on-

point Louisiana appellate decisions that found

commercial-to-residential rezonings to be arbitrary and

capricious. See Trustees Under the Will of Pomeroy v.

Town of Westlake, 357 So 2d 1299 (La App 3 Cir 1978

(The court found it arbitrary to fail to rezone a tract of

river batture property from single-family residential to

light industrial.); Jemison ». City of Kenner, 277 So 2d

728 (La App 4 Ctr 1973) (The court reversed the

decision of a City Council's failure to rezone a vacant

tract on a busy highway from. residential to

commercial. ): Dufau uv. Parish of Jefferson, 200 So 2d

335 (La App 4 Cir 1967) (The court reversed a

residential-only zoning change over — existing

commercial structures.); Monte v. Parish of Jefferson,

89S So 2d 506, 511 (La App 5 Cir 2005) (The court

reversed a Parish Council's failure to rezone a home

12

from single-family residential to general office when the

neighboring properties had turned commercial.).

Until the First Circuit’s decision in the instant

case, no Louisiana court had ever allowed a

municipality to change the zoning of a commercial

building to residential-only.

After the First Circuit denied petitioners’

rezoning request, it addressed petitioners’ takings

claim. It noted that under Palazzolo v. Rhode Island,

the petitioners’ claims were not “barred by _ their

acquisition of the subject properties after the

enactment of the zoning regulations.” 533 US 606, 630

(2001). (Appendix 8a) The court did not address but no

one has disputed that the evidence proves the City’s

current K-1 zoning has destroyed petitioners’ property

values. This is true whether one employs the Louisiana

standard, which is “a destruction of a major portion of

the property's value,” Annison v. Hoover, 517 So.2d

420, 423 (La App 1 Cir 1987), writ denied 519 So 2d 148

(La 1988), or the Supreme Court's standard in Lucas v.

South Carolina Coastal Council, 505 US 1008 (1992),

which is the regulation prohibits petitioners of “all

economically beneficial use" of their land. In the instant

case, an appraisal proved that not only do the two

tracts have no value as k-1 properties, but because of

necessary demolition costs to convert the buildings into

R-1 homes, the petitioners have actually sustained six

figure losses. (See Exhibits M & N)

The First Circuit couched it decision to deny

petitioners’ claim for a= regulatory taking on = an

assertion that the residential-only zone over long-

13

established commercial buildings was a “background

principle that is a defense to recovery of damages under

Louisiana’s takings law.” (Appendix 12a)*

The First Circuit denied a rehearing on August

26, 2008 and, on November 21, 2008 the Louisiana

Supreme Court denied writs.

In reading pages Sa-10a of the opinion, the First Circuit confuses

background principles with “ripeness.” As this Court knows,

are totally Separate steps in evaluating a takings elaim, and in the

Instant case, considering the preat pains petitioners went through

In seeking administrative relief, their claims are unquestionably

ripe as “the government entity charged with implementing the

regulations hatd) reached a final OC SLOT regaraing the ; ppiicatl

the regulations to the property at issue.” VV mmson Count

14

REASONS FOR GRANTING THE PETITION

I. The Louisiana Supreme Court, a court of

last resort, has decided an _ important

question of federal law that conflicts with

the United States Supreme Court’s decision

in Lucas v. South Carolina Coastal Council

; and

Il. The Louisiana Supreme Court has decided

an important question of federal law that

conflicts with the federal Ninth Circuit

Court of Appeals, the Maryland court of last

resort and the same Louisiana Supreme

Court.

ARGUMENT

l. The Louisiana courts’ interpretation of

“background princples” conflicts with this

Court’s decision in Lucas.

Lucas v. South Carolina Coastal Council

introduced the defense of “background principles” in a

regulatory takings case. 505 US 1003 (1992). In Lucas,

writer Justice Scalia created a test of when a state law

becomes a background principle. In reviewing his

definition and his tnree factual examples of the

definition’s application, it is clear that the Louisiana

courts herein have contravened Licas.

In Lucas, Justice Scalia described a “background

principle” as:

15

Any limitation sco severe cannot be newly

legislated or decreed (without compensation),

but must inhere in the title itself, in the

restrictions that background principles of the

State's law of property and nuisance already

place upon land ownership. A law or decree with

such an effect must, in other words, do no more

than duplicate the result that could have been

achieved in the courts by adjacent landowners

(or other uniquely affected persons) under the

State's law of private nuisance, or by the State

under its complementary power to abate

nuisances that affect the public generally, or

otherwise.16 Jd at 1029. Footnote 16: The

principal "otherwise" that we have in mind is

litigation absolving the State (or private

parties) of liability for the destruction of

"real and personal property, in cases of

actual necessity, to prevent the spreading of

a fire" or to forestall other grave threats to

the lives and property of others. (emphasis

added)

Lucas at FN 16.

In addition to the example of the “prevent(ing)

of the spreading of a fire,” Justice Scalia then gives two

other instances of the application of background

principles:

On this analysis, the owner of a lake bed, for

example, would not be entitled to compensation

when he is denied the requisite permit to engage

in a landfilling operation that would have the

16

effect of flooding others' land. Nor the corporate

owner of a nuclear generating plant, when it is

directed to remove all improvements from its

land upon discovery that the plant sits astride an

earthquake fault.

Id at 1029.

From these examples and this standard emerges

the thrust of the background principle defense, which is

background principles are principles that 1) “forestall”

“grave threats to the lives and property of others” and

2) are “cases of actual necessity.” The examples given,

“to prevent the spreading of a fire,” to preclude the

“flooding (of) others’ land” and to remove building from

an “earthquake fault,” are obvious preventive measures

of grave threats to life and property and definite cases

of actual necessity.

Applying Lucas’ threat-forestalling principle to

the instant ease, a zoning law that places a house-only

zone over a gas station and denies the owner the ability

to renovate his building and modernize his business is

not an “actual necessity” and does not prevent any

“orave threats.” Instead, the regulation has the

opposite effect of creating the probability that a

building will become vacant and attract vagrants.

(Exhibit A-6-A) Thus, the only grave threat was one to

petitioners’ properties and this threat has been fully

realized, rendering petitioners’ properties worthless.

Louisiana's decision in the instant case conflicts

not only with Lueas’ seminal description of a

background principle but also with the decisions of

17

lower courts across the nation.

II. The Louisiana courts’ interpretation of

“background princples” conflicts with the

decisions of siate and federal appellate courts.

A. Confiict with the jurisprudence’s narrow

interpretation of “background

principles.”

Courts across the country have established that

Lucas provides a narrow interpretation of background

principles. In Preseault v. United States, the Court of

Federal Claims refused to include federal law as a

“background principle,” noting that Lucas limited the

defense to state law. 100 F 3d 1525 (CA Fed 1996).

While the Supreme Court has inferred that some

state zoning regulations could become background

principles, these discussions have been in dicta and in

dissent. See Palazzolo v. Rhode Island, 533 US 606, 627

(2001); and Tahoe-Sierra Preservation Council, Inc. v.

Tahoe Reg'l Council, Inc., 5385 US. 302, C.J. Rehnquist

dissenting. This Court has never confronted whether a

value-confiscating, use-changing zoning provision is a

background principle.

Other than the Louisiana courts herein, the state

courts that have tackled the question have not allowed

a background principles defense to bar a takings claim

when a nonconforming zoning restriction deprives an

owner of “ all economically beneficial use.” Sfeel vw.

Cape Corp, 677 A 2d 634 (Md App 1995) |The

Maryland high court held that failure to rezone

property from OS (Open Space) 1 to R5 (Residential)

18

constituted a regulatory taking]; and City of Sherman

v. Wayne, No. 05-06-00420-CV 2008, Tex App LEXIS

6267 (August 18, 2008) (The Texas Court of Appeals

held a city’s action in limiting the use of former

National Guard buildings to residential-only deprived

the landowner of all economically viable use.)

The City of Sherman case is similar to the

instant one. In 1964 the City of Sherman adopted an

ordinance restricting use of the property at issue to

residential. But until 1999, the Texas National Guard

had operated an armory and vehicle storage unit on the

property. In 2001, James Wayne purchased the

property under the assumption that he could continue

to use the existing buildings for commercial purposes

because the structures had been used for those

purposes for 35 years. After the City denied Mr.

Wayne's permit and rezoning requests, he claimed a

taking. At trial, expert appraisers testified that the

costs of demolishing the buildings would exceed the

worth of the resulting residential lots. The jury found

the market value of the property to be zero with

enforcement of the residential zoning requirement, and

$250,000 without enforcement. The trial considered the

total deprivation in value a taking under Lucas and the

appellate court affirmed. /d.

As in City of Sherman v. Wayne, in the instant

case the costs of demolishing petitioners’ buildings are

greater than their value as residential lots. This is

particularly true for petitioner East First Street, LLC,

who must expend a great sum to unearth and remove

fuel tanks. Like City of Sherman, it is nonsensical in

the case at bar to hold that property that has always

19

been used for commercial purposes must now be limited

to residential use without the property’s owners

receiving just compensation.

While the court in City of Sherman v. Wayne did

not discuss a background principles defense, it is easy

to see why. Logically, it does not make sense to even

ask whether a residential-only restriction over former

National Guard buildings is a background principle

“forestall(ing) (a) grave threat to the lives and property

of others.” Nevertheless, because the Louisiana courts

herein have ruled in this fashion, unlike the First

Circuit Court of Appeal, we will apply and stick to the

letter of the Lucas standard and evaluate how at

least two lower courts have interpreted it.

B. Conflict with the ‘“forestall(ing) (of)

grave threats” standard.

One state high court and one federal appellate

court have directly and consistently applied Lucas’

background principle definition. lLronically, the state

high court is the Louisiana Supreme Court in Avenal v.

State, 886 So 2d 1085 (La 1995).

In Avenal, there is no question of a “grave

threat” being established. Avenal’s facts provide an

example of the utmost danger to Louisiana — the state’s

current subsidence and coastal erosion that makes

Louisiana the world’s fastest disappearing landmass.

The catastrophic land loss has shredded the state’s

defenses in recent hurricanes like Katrina, Rita, Gustav

and fke. Because of the state’s coastal erosion,

Louisiana has had to construct saltwater-abating and

20

sediment-building water diversion projects like the one

in Avenal. The problem with these projects is that the

influx of freshwater into the oyster-rich marshlands

often alters the salinity in the oyster beds and damages

oyster crops. In Avenal, oyster fishermen holding

leases in a coastal area brought a claim for a regulatory

takings against the state for enacting a water diversion

project that they claimed damaged or destroyed their

oyster beds. Jd at 1091-1092.

The Louisiana Supreme Court ultimately held

that the oystermen’s takings claims were barred due to

background principles. The court wrote that the

diversion project was a background principle because

“the freshening of these waters in order to prevent

further coastal erosion and save Louisiana's coast is a

matter of ‘actual necessity’ as it will ‘forestall (a) grave

threat to the lives and property of others.’” Jd at 1108,

quoting Lucas, Note 16, 505 U.S. at 1029.

With Avenal providing clear guidance and a

consistent interpretation of Lucas, petitioners are

admittedly shocked that an appellate court from

Louisiana would totally misinterpret the concept of

background principles and ignore what this Court’s

majority so clearly spelied out in Lucas. Again, while

coastal erosion is the gravest of threats to Louisiana,

maintaining a bedroom-only zone over underground

fuel tanks on petitioner's property does not abort any

threats to the state burt only creates one to petitioner

and to the nearby public for the environmental hazards

those tanks present ;

21

Avenal’s application of “background principles”

is also consistent with the federal Ninth Circuit in

Esplanade Properties, LLC v. City of Seattle, 8307 F' 3d

978 (9 Cir 2002). In E’splanade Properties, a developer

attempted to construct single-family residential homes

over state-protected tidelands. The Ninth Circuit

restated Lucas’ definition of background principles

being “cases of actual necessity, to prevent the

spreading of a fire cr to forestall other grave threats to

the lives and property of others.” /d at 987. The threat

in Hsplanade Properties was to the ecology and

character of the shoreline and to the navigability of

Elliot Bay, which were protected by numerous

regulations. The Ninth Circuit’s conclusion inferred

why these regulations were — takings-barring

background principles:

Esplanade's proposal to construct concrete

pilings, driveways and houses in the navigable

tidelands of Elliot Bay, an area regularly used by

the publie for various recreational and other

activities, Was inconsistent with the public trust

——~-.~ that the State of Washington is obligated to

protect.

ld,

In apply in” Lsplanad Prope rties to the instant

case, regulations protecting the navigability of a bay

and the character of tidelands are not even remotely

comparable to a law placing a residential-only zone over

existing commercial buildings. While in) Bsplarads

Properties the regulations are preserving what already

eXists, In the instant case the regulation is destroying

99

what has been in place for decades.

Unlike Esplanade Properties and Avenal, in the

instant case, the Louisiana courts herein never

mentioned the Lucas background principle standard.

The First Circuit Court of Appeal claims that there

was a takings-barring background principle because the

“zoning at issue has been in place since 1979.”

(Appendix lla) In making this statement, the First

Circuit omits the fact that the zoning ordinance was

totally ignored for 21 years and was only arbitrarily

enforced after the year 2000. The First Circuit also

failed to note that the R-1 zone has never produced a

conforming change in use. What was commercial since

the dawn of recorded time — dating back to the mid-

19th century days when former Chief Justice Edward

Douglass White spent his boyhood six miles to the

north along the same highway and bayou — was, is and

probably always will be commercial in fact. Yet

somehow the First Circuit of Appeal called this

nonconforming zone that expects a person to live in a

yas station to be a “background principle.”

Moreover, the statement about the zoning

existing “since 1979" contravenes Palazzolo, which

makes it irrelevant how long the challenged regulation

has been in place. In Palazzo/lo, this Court made it

clear that a state could not “put an expiration date on

the Takings Clause,” and that “future generations, too,

have a right to challenge

the use and value of land.” Palazzolo v. Rhode Island,

32 TS at 627. The First Cireuit’s claim that “nothing

unreasonable limitations on

?

in the record sugvests that the zoning is somehow

invalid’ as not only illogical and incorrect under the

9)

23

above-cited Louisiana rezoning cases of Pomeroy,

Dufau, Jemison and Monte but is also irrelevant in a

background principle analysis. (12a) Again under

Lucas, the crucial inquiry is not whether the ordinance

is “valid” but whether it is an “actual necessity,”

“forestall(ing) grave threat(s) to the lives and property

of others.”

Lastly, the First Circuit’s contention that a

zoning regulation is a background principle because

zoning “flows” from the state’s “police power” fails to

mention that every state regulation originates from its

police power. (lla) If “police power” was the standard

for background principles, Lhen every claim for a taking

would be barred, and there would be no constitutional

check on the state’s power to take private property.

The Court has an opportunity herein not only to

reverse an incorrect decision, but to set the record

straight. The Court can establish once and for all that

the lower courts must follow Lucas’ forestalling grave

threats standard. As it stands now, a_ precedent

allowing municipalities to rezone existing commercial

buildings to residential-only without just compensation

will place even the most absurd rezoning decisions

beyond judicial review. As this Court said in Palazzolo,

“Were we to accept the State's rule, the postenactment

transfer of title would absolve the State of its obligation

to defend any action restricting land use, no matter how

extreme or unreasonable.” /d. It is unreasonable and

unconstitutional to leave the final fate of private

property in the hands of local politicians. Our

Constitution is above politics and was designed to

protect the rights of private citizens against the self

24

interest of politicos. Before a city councilman decides to

appease his constituents with a nonconforming zoning

decision that devalues a building and effectively

renders it abandoned, the councilman must understand

that his constituents could end up paying for the

property with their tax dollars.

Lucas establishes that a municipality’s scream of

“background principle” is not an automatic out but a

rare exception to a takings claim. In the instant case,

there are no threats of fire, flood, earthquake, land loss

or decrease in navigability. Consequently, there are no

background principles to stop this taking. Under Lucas

and in harmony with Avenal, Esplanade Properties and

City of Sherman, this Court should reverse the

Louisiana courts and hold that the City of Thibodaux

has taken petitioners’ properties.

C. Petitioners are entitled to full

compensation under the Constitutions,

including future lost income.

The Louisiana courts have interpreted the

language of the Fifth Amendment of the US

Constitution and of Article 1, Section 4 of the Louisiana

Constitution to compensate the party damaged by the

taking “to the full extent of his loss.” Compensation

includes costs of relocation, inconvenience and loss of

profits. Naquin v. Dept of Transp. and Dev., 604 So 2d

62,65 (La App 1 Cir), writ denied 608 So 2d 169 (La

1992), citing State, DOTD v. Dietrich, 555 So 2d 1355

(La 1990). Compensation for such losses is based on the

principle from State ». Constant that an owner must be

placed in as good a position pecuniarily as he would

25

have been had his property not been taken. State v.

Constant, 369 So 2d 699, 701 (La 1979).

Louisiana has extended the award of business

losses to include not only present losses, but also

estimated future business losses. Naguin, 604 So 2d at

65. The determination of what amount will compensate

a landowner to the full extent of his loss is based on the

facts of each case and in accord with the uniqueness of

the thing taken. /d at 65-66. Accordingly, when an

expert’s well-reasoned testimony supports an award of

damages and is accepted by the trier of fact, the

property owner should prevail. /d at 66, cating DOTD

v. Dietrich, supra.

In the instant case, the well-reasoned testimony

of experts Martin Glynn and K. Chris Cox, Ph.D

supports an award of damages to both petitioners. In

regard to 629 East First Street, if the R-1 zone stayed

in place, Mr. Glynn testified that Cornel and Cynthia

Martin have sustained a loss of their property’s market

value in the amount of $141,000. (R.1682 and Exhibit

M)

As to 711 East First Street, if the R-1 zone

stayed in place, Mr. Glynn testified that East First

Street, LLC has sustained a loss of its property’s

market value in the amount of $262,000. (R. 1631-16382

and Exhibit N) But under Naquin, East First Street,

LEC is also entitled to past and future business lost

income, Which Dr. Cox valued at $75,511 and $1,102,565

respectively. (R. 1570, and Exhibit I.) Thus when

added to Mr. Glynn's total, because the R1 zone has

staved in effect, to justly compensate East First Street,

26

LLC “to the full extent of its loss” under the state and

federal constitutions, the City of Thibodaux must pay

$1,440,076 in damages.

CONCLUSION

For the foregoing reasons, this petition for writ

of certiorari should be granted.

Respectfully submitted,

Woody Falgoust

Counsel of Record

Woody Falgoust, A Law Corporation

1050 Canal Blvd

Thibodaux, LA 70816

Tel: (985) 447-6665

la

(any footnotes trail end of each document)

NO. 2008-C-2261

SUPREME COURT OF LOUISIANA

EAST FIRST STREET, L.L.C. AND M & B

RENTALS OF AMERICA, L.L.C.

VS.

BOARD OF ADJUSTMENTS AND CITY OF

THIBODAUX

November 21, 2008, Decided

NOTICE: DECISION WITHOUT PUBLISHED

OPINION

JUDGES: Chet D. Traylor, Pascal F. Calogero, Jr.,

Catherine D. Kimball, Bernette J. Johnson, Jeffrey

P. Victory, Jeannette Theriot Knoll, John L.

Weimer.

OPINION

Denied.

2a

2007 CA 0664

COURT OF APPEAL OF LOUISIANA, FIRST

CIRCUIT

EAST FIRST STREET, L.L.C. AND M & B

RENTALS OF AMERICA, L.L.C.

VERSUS

BOARD OF ADJUSTMENTS AND CITY OF

THIBODAUX

June 6, 2008, Judgment rendered

NOTICE: NOT DESIGNATED FOR

PUBLICATION.

PLEASE CONSULT THE LOUISIANA RULES OF

APPELLATE PROCEDURE FOR CITATION OF

UNPUBLISHED OPINIONS.

On Appeal from the 17th Judicial District Court Parish

of Lafourche, State of Louisiana. Civil Number 101760,

Division "C". The Honorable Walter I. Lanier, ITI,

Judge Presiding.

JUDGES: BEFORE: CARTER, C.J., KUHN, AND

DOW NING, -J.

OPINION

DOWNING, J.

3a

M & B Rentals of America, LLC, East First Street,

LLC, and Cornel and Cynthia Graham Martin ("the

Applicants") appeal a judgment denying their petition

for writ of mandamus and damages, effectively denying

their requests to rezone five contiguous tracts of

batture, approximately 2.8 acres, lying between East

First Street and Bayou Lafourche in Thibodaux,

Louisiana. The Thibodaux Planning and Zoning Board

did not recommend the rezoning, and the Thibodaux

City Council ("City Council") denied the rezoning

requests. The district court affirmed the decisions of

the City Council. For the following reasons, we affirm

the judgment of the district court.

PERTINENT FACTS AND PROCEDURAL

HISTORY

The Applicants sought to rezone certain property from

R-1, residential only, to C-l, commercial, or C-1 with

restrictions. The property had been rezoned R-l,

residential only, in 1979. Prior to that, the property was

zoned commercial. After the 1979 rezoning, the

property was allowed to continue as commercial

property because the zoning ordinance's "grandfather

clause" allowed the property to continue its non-

conforming uses. The five tracts bore two addresses,

711 East First Street and 629 East First Street. 711

East First Street was allowed to operate as a

traditional filling station. 629 East First Street was

allowed to continue in various commercial activities.

After the Planning and Zoning Board failed to

recommend the Applicants' rezoning, and after the City

Council voted to deny the rezoning requests, the

applicants filed a petition for writ ot certiorari, for writ

4a

of mandamus, and for damages in the district court.’

After a trial over three days, the district court denied

the petition for mandamus and for damages at the

Applicants’ cost.

The Applicants now appeal, raising two assignments of

error:

1. The district court erred in finding that the City

Council was not arbitrary and capricious in refusing to

rezone a residential-only zone over long-established

commercial buildings to an appropriate commercial

designation; and

2. The district court failed to even address [the

Applicants'}| claim that the City of Thibodaux's

arbitrary enforcement of its zoning regulations

constitutes a "taking" of {the Applicants'] property.

DISCUSSION

Denial of Rezoning Application

In their first assignment of error, the Applicants assert

that the district court erred in failing to find that the

City Council acted arbitrarily and capriciously in

refusing to rezone the subject property as requested.

We disagree.

A challenge to a zoning decision is a de novo action in

which the issue is whether the result of the legislation,

or lack thereof, is arbitrary and capricious. See King v.

Caddo Parish Com'n, 97-1873, p. 15 (La. 10/20/98), 719

So.2d 410, 419. The Applicants have the burden of

establishing by a preponderance of the evidence that

5a

the rezoning decision has no substantial relationship to

public health, safety, morals or general welfare of the

municipality. /d., 97-1873 at p. 16, 719 So.2d at 419.

Quoting Four States Realty Co., Inc. v. City of Baton

Rouge, 309 So.2d 659, 664 (La. 1974), the King court

explained the terms “arbitrary and capricious" as

follows:

The terms ‘arbitrary and capricious action’ when used

in a manner like the instant one, must mean willful and

unreasoning action, absent consideration and _ in

disregard of the facts and circumstances of the case. On

the other hand, when there is room for two opinions,

action is not arbitrary or capricious when exercised

honestly and upon due consideration, even though it

may be believed that an erroneous conclusion has been

reached.

King, 97-1873 at p. 14, 719 So.2d at 418. A court of

appeal does not consider whether the district court

manifestly erred in its findings, but whether the zoning

decision was arbitrary, capricious, or confected with

any calculated or prejudicial lack of discretion. /d., 97-

1873 at pp. 14-15, 719 So.2d at 418. Even where no

competent evidence to support a zoning decision

supports a governing body's decision, the resulting

legislation, or lack thereof, will be upheld if the result 1s

supported by evidence adduced at trial. See Palermo

Land Co., Inc. v. Planning Com'n of Calasieu Parish,

61 So.2d 482, 491-92 (Ta. 1990).

Based on the record before us, we conclude that the

district court did not err in concluding that the

Applicants failed to prove by a preponderance of

evidence that the City Council acted arbitrarily and

ba

capriciously, that is, in a willful and unreasoning

manner without consideration of or in disregard for the

facts and circumstances of the case. Five members of

the City Council and the chairman of the Planning and

Zoning Board testified as to their reasons for voting

against the rezoning. These reasons included, among

others, the character of the surrounding area, the good

of the neighborhood and the city, compliance with the

zoning master plan, spot zoning, the potential for more-

conforming, rather than less-conforming, commercial

uses, respect for the work of the Planning and Zoning

Board, the prececent for other rezoning requests in

changing residential property to commercial property,

maintaining the integrity of commercial and residential

zones, giving special treatment to the two tracts at

issue, other permitted uses on the batture, and the

appropriateness of the zoning. They also considered the

Applicants’ testimony that the sale of alcohol was

anticipated.

The Applicants argue that the proposed rezoning did

not meet the legal definition of spot zoning. Even if

true, we cannot say it is improper for the City Council

to consider how two owners' applications for rezoning

would be singled out for different treatment. The

Applicants further argue that the R-1l zone is

unreasonable and that the Chairman of the Planning

and Zoning Board's reasons for denying the rezoning

bore no reasonable relation to health, safety or welfare.

Thev argue that the City Council based its decision on

residents’ baseless speculation. They further argue that

a rezoning is the only way to satisfy the fundamental

tenets of zoning law.

Ta

We recognize that the City Council may have

considered some matters that were inappropriate. But,

as explained above, our inquiry is not whether the

district court erred, but whether the City Council's

decisions were arbitrary, capricious, or confected with

any calculated or prejudicial lack of discretion. King, 97-

1873 at pp. 14-15, 719 So.2d at 418.

Our review of the record shows that the City Council

acted in good faith in considering the rezoning of the

subject property. It is apparent that people could

reasonably differ on whether the subject property

should be rezoned. Accordingly, we conclude that the

district court did not err in concluding that the

Applicants failed to show by a preponderance of the

evidence that City Council's actions were arbitrary and

capricious. The district court did not err in concluding

that the Applicants failed to prove by a preponderance

of the evidence that the denial of their rezoning request

bore no substantial relationship to the public health,

safety, morals or general welfare.

The Apphcants’ first assignment of error is without

merit.

Damages for Taking

The Applicants argue that they are entitled to damages

because the City has destroyed the value of their land,

resulting in a constructive taking, since the district

court found that "the properties in question [were]

destined to fail" and that the Applicants “Would suffer

financial loss to conform their property to fit the R-1

setting.” Nonetheless, on the record before us, we

disagree that the Applicants are entitled to damages.

Sa

The Applicants point to Palazzolo v. Rhode Island, 533

U.S. 606, 632, 121 S.Ct. 2448, 2465, 150 L.Eed.2d 592

(2001), where the Supreme Court held that a state

supreme court erred in ruling that "acquisition of title

after the effective date of the regulations barred [a]

tukings [claim].". And pursuant to Paluzzolo, we

conclude that the district court erred to the extent it

found that the Applicants created for themselves the

hardship caused by the zoning restriction.

The Palazzolo court explained that the central question

in resolving the issue of whether a takings claim is ripe

for decision "is whether petitioner obtained a final

decision from the Council determining the permitted

use for the land.” Jd., 533 U.S. at 618, 121 S.Ct. at 2458.

The court futher explained:

(There exists an] important principle that a landowner

may not establish a taking before a land-use authority

has the opportunity, using its own reasonable

procedures, to decide and explain the reach of a

challenged regulation. Under our ripeness rules a

takings claim based on a law or regulation which is

alleged to go too far in burdening property depends

upon the landowner's first having followed reasonable

and necessary steps to allow regulatory agencies to

exercise their full discretion in — considering

development plans for the property, including the

opportunity to grant any variances or waivers allowed

by law. As a general rule, until these ordinary

processes have been followed the extent of the

restriction on property is not known and a regulatory

taking has not yet been established. Government

authorities, of course, may not burden property by

Ya

imposition of repetitive or unfair land-use procedures in

order to avoid a final decision. (Citations omitted.)

Id., 5383 U.S. at 620-21, 121 S.Ct. at 2459. The court

stated that "[a] challenge to the application of land-use

regulation .... does not mature until ripeness

requirements have been satisfied." /d., 583 U.S. at 628,

121 S.Ct. at 2463. We note that neither the district

court nor the City Council address the ripeness issue,

probably due to their erroneous belief, as discussed

above, that the Applicants' takings claims were barred

by their acquisition of the subject properties after

enactment of the zoning regulations.

Even so, we note differences between federal and state

takings that might affect when a claim ripens. In

Avenal uv. State, 03-3521 (La. 10/19/04), 886 So.2d 1085,

cert. denied, 544 U.S. 1049, 125 S. Ct. 2305, 161 L. Ed.

2d 1090 (1995),* the Loulsiana supreme court discussed

the concept of taking under Louisiana Const. Art. 1, § 4.

This provision provides in pertinent part as follows:

(A) 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.

(B)(1) Property shall not be taken or damaged by the

stute or its political subdivistons except for public

purposes and with just compensation paid to the owner

or into court for his benefit. Except as specifically

authorized by Article VI, Section 21 of this Constitution

property shall not be taken or damaged by the state or

its political subdivisions: (a) for predominant use by any

l0a

private person or entity; or (b) for transfer of

ownership to any private person or entity. (Emphasis

added.)

As Justice Weimer explained in his concurring opinion

in Avenal, 04-2185, concurring opinion p. 7, 886 So.2d at

1113, "La. Const. art. I, § 4, using both words, ‘taken’

and ‘damaged,’ encompasses damage claims that would

not necessarily qualify as a taking under the Fifth

Amendment. Under Louisiana law, a damage claim is

compensable although it is not a taking." Justice

Weimer further explained:

In sum, because the Louisiana Constitution provides

for compensation for property "taken" or "damaged,"

What is considered "taken" is a narrower concept in

Louisiana when contrasted with federal law. Under

federal law, interpretation of the term "taken" is

broader. Under Louisiana law, the right to

compensation is broad, but the interpretation of "taken"

is narrower than in the federal sense.

Id.

Nonetheless, in Lucas wv. South Carolina Coastal

Council, 505 U.S. 1008, 1029, 112 S.Ct. 2886, 2900, 120

L.Ed.2d 798 (1992), the Supreme Court observed that a

landowner's ability to recover for governmental

economic deprivation is not absolute. The court

explained, “We believe similar treatment must be

accorded confiscatory regulations, 7.e., regulations that

prohibit all economieally beneficial use of land Any

limitation so severe cannot be newly levislated or

decreed (without compensation), but must inhere in the

title itself mim the restrictions that background

lla

principles of the State's law of property and nuisance

already place upon land ownership." In Palazzolo, 533

USS. at 627, 121 S.Ct. at 2462, the Supreme Court stated

that “[t}he right to improve property, of course, is

subject to the reasonable exercise of state authority,

including the enforcement of valid zoning and land-use

restrictions.” Further, there is widespread agreement

among the members of the Supreme Court that "some

ralid zoning and land use regulations are background

principles that bar any takings claim." Blum and

Ritchie, Lucas's Unlikely Legacy: The Rise of

Background Principles as Categorical Takings

Defenses, 29 Harv. Envtl. L. Rev. 321, 356 (2005).

The Louisiana supreme court has expressed views in

accordance with this view. In Avenal, 03-3521 at p. 32

n.28, 886 So.2d at 1107 n.28, the court, citing Lueas,

noted, "if [the coastal diversion project] did entirely

deprive [the leaseholders] of all economically beneficial

and productive use of their property rights, the

plaintiffs are still not entitled to compensation as |the

coastal diversion project] was a valid exercise of the

state's police power under federal law." It further

explained, “compensation is not owed if the state action

is in accordance with a ‘background principle’ of the

state's property law that already prohibit the

landowner from the use he claims was taken, or is

undertaken in the exercise of the state's police power."

Id.

(Zjoning is a legislative function, the authority for

which flows from the police power of governmental

bodies.” Avng, 97 1878 at p. 14, 719 So.2d at 418. Here,

the zoning at tssue has been in place since 1979.

]2a

Nothing in the record suggests that the zoning is

somehow invalid or that it was done for a malicious or

improper purpose. As such, it is a background principle

that is a defense to recovery of damages under

Louisiana's takings law.

We therefore find no merit in the Applicants’ second

assignment of error.

DECREE

We affirm the judgment of the district court. Costs of

this appeal are assessed against M & B Rentals of

America, LLC, Fast First Street, LLC, and Cornel and

Cynthia Graham Martin.

AFFIRMED

Footnotes

IIn a related matter, this court has previously

considered East First Street, LLC's appeal of the

denial of its request for variances. See Hast First Street,

L.L.C. v. Board of Adjustments, 06-0067 (La. App. 1 Cir.

2/9/07) Canpublished), 949 So.2d 675 (table), writ denied,

O7-1047 (La. 8/31/07), 962 So.2d 440

2The Applicants argue that the district court did not

rule on their claim tor damages arising from a taking.

However, the judgment plainly denies their petition for

damages.

3S8ee also, Costonis. Avenal v. State: A Road Map for

Takings and Damagings Claims under the Louisiana

loa

and Federal Constitutions, 52 La. B.J. 358 (Feb./Mar.

2005).

l4a

NUMBER 101760

IIVISION "C"

PARISH OF LAFOURCHE

17TH JUDICJAL DISTRICT COURT

EAST FIRST STREET, L.L.C., ET AL

VERSUS

BOARD OF ADJUSTMENTS, ET AL

JUDGMENT

This matter came before the Court on March 17, 2996,

May 22 and 23, 2006 and concluded on September 18,

2006.

PRESENT:

WOODY FALGOUST, attorney for plaintiffs, EAST

FIRST STREET, L.L.C. AND M & B RENTALS OF

AMERICA, L.L.C.

RUSTY SAVOIE, attomey for Intervenors, CORNEL

AND CYNTHIA GRAHAM MARTIN

CLAYTON E. LOVELL, attorney for defendants,

CITY OF THIBODAUX CITY COUNCIL AND

BOARD OF ADJUSTMENTS OF THE CITY OF

THIBODAUX.

DAVID ARDOIN, attorney for Intervenors, GUY

AND CATHERINE DIEBOLD, DAVID AND

FRANNIE MIDDLETON, CHESTER AND ANNE

BOUDREAUX AMD MARY DUPANTIS

15a

After hearing the argument of the parties and

considering the memoranda filed in this matter:

IT IS ORDERED, ADJUDGED AND DECREED

that plaintiffs’ Petition for Writ of Mandamus and

Damages is hereby denied at plaintiffs’ cost.

Thibodaux, Louisiana, this 29" day, of January, 2007.

16a

NUMBER 101760

DIVISION "“C"

PARISH OF LAFOURCHE

17TH JUDICIAL DISTRICT COURT

EAST FIRST STREET, L.L.C., ET AL

VERSUS

BOARD OF ADJUSTMENTS, ET AL

REASONS FOR JUDGMENT

East First Street, LL.C.and M & B Rentals of America,

LL.C. filed a Petihon for Writ of Certorarl, for Writ of

Mandamus and for Damages against defendant, the

City of Thibodaux, City Council of Thibodaux and the

Board of Adjustments for the City of Thibodaux.

Cornel and Cynthia Martin intervened as additional

plaintiffs to have the City of Thibodaux re-zone their

property at 629 East First Street as well. Guy and

Cathy Diebold David and Francis Middleton Chester

and Anne intervened as additional defendant opposing

the re-zoning.

This case involves tracts of immovable property located

at municipal address 711 East First Street and 629

East First Street, Thibodaux, Louisiana (hereafter "the

property"). The property at 711 East First Street was

purchased by plaintiff M & B Rentals of America L.L.C.

n May 17, 2005 subsequently sold to its wholly-owned

subsidiary East First Street, L.L.C. The principal

owner of M & n Rentals of America L.L.C. Bernie and

Tony Lafasco, caused plaintiffs m= purchase the

property as aeceptance of payment of debt owed to

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them by the previous owners of the property, the

Delaunes.

The property at 711 East First Street consists of a

traditional garage-attached filling station originally

built in 1960 by Texaco, Inc., and operated at Ron's

Texaco since 1981. In 1969, the area including the

property was zoned "C", commercial but in 1979 it was

re-zoned R- 1, residential only. The zoning ordinance's

grandfather clause allows the property's continued

nonconfornning use as a "filling station".

After purchasing the property, plaintiffs (East First

Street, L.L.C.) Applied for a variance from the Board of

Adjustments (herein after "the Board") in order to

convert the property to a modern convenience store.

Plaintiffs specifically asked for a variance to allow them

to spend the money necessary to remodel the property

and a permit to sell retail alcoholic beverages (the city

lead previously denied the alcohol permit because of the

zoning issues.)

The Board met on June 22, 2005 and denied plaintiffs

request taking into consideration opposition to the

project from the members of the neighborhood adjacent

to the property. Plaintiffs then filed this action asking

this Court to review the decision of the Board and issue

writs of mandamus ordering the Board to authorize the

plaintiffs to remodel the property and ordering the City

of Thibodaux to issue plaintiffs a permit to sell retail

alcoholic beverayes.

On August 12, 2005 Cornel and Cynthia Graham Martin

owners of 629 Fast First Street, intervened in these

proceeding claiming defendants also denied their

18a

Petition for Rezoning which was in conjunction with

plaintiffs.

On September 14, 2005, Guy Diebold, Cathrine Diebold,

David Middleton, Francine Middleton, Chester

Boudreaux, Aline Boudreaux, and Mary Duplantis

intervened in this action on the side of defendants.

These interveners are owners of property adjacent to

or located within a close proximity to the property.

This matter was heard by this Court oil March 17, 2006,

May 22 and 23, 2006 and concluded oil September 18,

2006.

At trial the Court heard testimony from Cornel! Martin,

owner of 629 East First Street, Tony Lafaso, owner of

711 East First Street, Dr. Christopher Cox, Nicholls

State Professor, who was qualified as an expert in

Market Analysis, Martin Glynn, who was qualified as an

expert in appraisals, Steven Villavaso, who was

qualified as an expert in the field of zoning and land use,

and Councilmen for the City of Thibodaux, who

included Chad Mire, Gene Richard, Jimmy Winston,

Jerome "Dee" Richard and Norman Swanner. Also

testifying for the City of Thibodaux was Clay Braud.

All of the councilmen and Clay Brand testified that the

reason they denied the plaintiffs’ request to re-zone the

portion of the R1 residential district which ran from 711

East First Street to 629 East First Street to a C ]

commercial zone was their belief that it would create a

"spot zone" of commercial zoning Inside a residential

area. All of the councilmen testified that that particular

zone has one ot the highest restrictions. They further

testified that they had received numerous complaints

19a

from residents tin that zone that they were opposed to

the change.

The Court would note that Intervenor #1 titled

"Petition in Opposition of Rezoning" reflects the

Signatures of various residents who live within the

immediate vicinity of the proposed re-zoning who

signed the petition in opposition to the reclassification.

Cornel Martin testified that he purchased the 629 East

first Street property from his wife's family because the

bank was preparing to foreclose on the property. He

testified that the property in question had been used as

a commercial rental space for retail shops selling

flowers, a blood donation center, beauty shop and a

cake shop. He further testified that he was approached

by several persons to operate various businesses Such

as a Coffee Shop, Dress Shop, Dance Studio and Labor

Service Office, but was unsuccessful in attracting the

tenants. Mr. Martin believed that the issues with

zoning was the reason none of the other businesses

rented from him.

When questioned on whether his property could be

used as a residence, Mr. Martin advised that to convert

to a residence would be cost prohibitive and questioned

whether anyone would want to live within twenty (20)

feet of a major highway since the building in located in

very close proximity to the highway.

Tony Lafaso testified that he and his father purchased

the 711 East First Street property after the previous

owner, the Delaunes, came into financial difficulties.

Mr. Lataso testified that he knew of the zoning issues at

20a

the time of the purchase but believed that the station

could be easily converted into a convenience store.

Mr. Lafaso testified that he approached the City of

Thibodoux with twelve (12) different zoning options in

aneffort to justify revitalizIng the filling station which

had not been updated in quite sometime.

One issue Mr. Lafaso addressed is the limitation of

zoning which limits a land holder to improvements of

only 10% of the total value of the property. He advised

that to install "“pay-at-the-gas dispensers alone cost

more than the 10% limitation oil improvements.

The Court also heard from Dr. Christopher Cox, a

Nichols State University professor who was qualified

aS an expert in market analysis. He testified that the

traditional "filling stations" of old are no longer viable in

today's market. He went on to state that the market

today is geared owards convenient stores and "pay at

the pump" gas distribution. He advised that though Mr.

Lafaso may be paying his bills, he will never be able to

make a profit and afford the improvements necessary to

stay competitive.

The defendants also offered Steve Villavaso as an

expert in zoning and land use. Mr. Villavaso testified

that he reviewed the City of Thibodaux's zoning plan

and acknowledged that the current zone tor the

properties in question is R- | residential, the most

restrictive zone possible. He explained that there are

several ways to divide areas into zones such as the use

of natural boundaries, such as bayous and other

boundaries such as roads and highways.

2la

In Mr. Villavaso's opinion, Louisiana Highway 1 forms

«a boundary between the core residential area of the

zone and the properties in question. Also he advised

that Bayou Lafourche forms a natural boundary to

isolate the properties in question. This unique isolation

of the properties in question, prevents "spot zoning"

from occurring in his opinion.

When specifically questioned about the 711 East First

Street property's ability to conform with the R-1

residential zone, Mr. Villavaso stated emphatically that

he “can't figure out how to make it residential". He

explained that with the set back requirements of the R-

1 zone and the property in its current configuration it

would be impossible to conform this property to the R-1

residential zone without a major loss in the property's

value.

This position is supported with the documents offered

by the defendants in exhibit A-5 "Letter to City

Council" which contains an appraisal and expected

expense for demolition. In exhibit A-5 an appraisal by

Brett Broussard of the expected value of the vacant lot

after the demolition of tile existing structure was

$45,000.00.

Also contained in exhibit A-5 was a proposal for

demolition of the structure by Drake Construction

Company for a price of $74,900.00. Therefore, the

plaintiff produced uncontradicted evidence to show that

to make the property at 711 East First Street conform

with the R-1 residential zone would result in a $29,900

loss to Mr. Lafaso.

22a

However, Mr. Villavaso also state that with the

properties located so close to Bayou Lafourche there

could be environmental concerns and "green space"

concerns. Also, when questioned by the defendants

about a in municipality's right to control the sale of

alcohol, Mr. Vilavaso deferred the issue to the City.

When finally pinned down on these issues by counsel

For the defendants Mr. Villavoso stated that it was a

"judgment call".

Finally, the Court heard from Martin Glynn, an expert

in real estate appraisal who has worked in the

Hounia/Thibodaux area for over thirty (30) years. He

explained that Louisiana Highway where the

properties sit is one of the most heavily traveled roads

in the Thibodaux area. He also advised that for 4.1 mile

distance there are no houses on the batture and that

the properties in question are best suited for C-1

commercial use.

LAW

The controlling case law on the issue of zoning can be

found in two Louisiana Supreme Court cases, Four

States Realty Co., Inc., v. City of Baton Rouge, 309

So2d 659 (La 1975) and Palermo Land Co., Ine. v.

Planning Commission of Caleasiu Parish, 56 So 2d 482

(La 19900)

The law as laid out in Four States Realty supra

provides:

The authority to enact zoning regulations flows from

the police power of the various governmental bodies;

zoning is a legislative function. State ex rel. Civello v.

23a

City of New Orleans, 154 La. 271, 97 So 440 (1923),

state ex rel. Dema Realty Co. v. McDonald, 168 La 172,

121 So. 613 (1921).; Meyers v. City, of Baton Rouge, 185

So 2d 278 (La.App.1st Cir. 1966) Smith v. City of Baton

Rouge, 233 So2d 569 (La App Ist Cir. 1970. Courts will

not and cannot substitute their wisdom for that of a

legislative body or other zoning authority except when

there is an abuse of discretion or an excessive use of

power. However, the exercise of a police power in

zoning cannot be made without substantial relation to

the health, safety and general welfare of the public.

City of Shreveport v. Conrad, 212 La. 737, 33 So2d 503

(1947)]. City of Shreveport v. Bayse, 166 La 689., 117 So

775 (1928). All ordinances are presumed valid; whoever

attacks the constitutionality of an ordinance bears tile

burden of proving his allegation. City of New Orleans v.

Beck, 139 La. 595, 71 So 883 (1916), Ward v. Leche, 189

La. 118, 179 So 52 (1938). However, rezoning on a

piecemeal or spot basis is highly suspect. Generally,

property owners may rely upon the previous exercise

of police power in zoning, expecting that changes in

zoning will only be made so as to affect vested property

interests when the change is required to assure public

welfare. A city purporting to act under its police

powers cannot create in a large area of property zoned

in one classification an island of one parcel of land

relegated to another zoning classification when no

rational reason exists for such a separate classification.

51 A.L.R.2d 311, Reynolds v. Barrett (19358), 12 Cal.2d

244, 8&3 P.2d 29.

The Supreme Court of Louisiana continued its position

stated in Four States Realty, supra and went on to

State:

24a

As early as 1923, this court set forth the proper scope of

Judicial review of zoning decisions. In State ex rel

Civello, 154La 271, 97 So 440 (1923) this court stated:

It is not necessary, for the validity of the ordinance in

question, that we should deem the ordinance justified

by considerations of public health, safety, comfort, or

the general welfare. It is sufficient that the municipal

council could reasonably have had such considerations

in mind. If such considerations could have justified the

ordinances, we must assume that they did justify them.

It is not the province of the courts to take issue with

the council. We have nothing to do with the question of

the wisdom or good policy of municipal ordinances. If

they are not satisfying to a majority of the citizens,

their recourse is to the ballot-not the Courts.

Id. 97 So, at 444. See Village of Euclid v. Amber Realty

Co., 272 U.S. 365, 47 S.Ct. 114, 71 L.Ed. 303 (1926), in

which Civello is cited with approval and quoted. See

also, Hernandez v. City of Lafayette, 3899 Sold 1179,

1182 (La.App 38 Or. 1981), wherein the Third Circuit

correctly noted, "even where no competent evidence to

support a *492 zoning decision was adduced in front of

the governing body, the resulting legislation will

nevertheless be upheld if the result is supported by

evidence adduced at trial." Td. At 1182

A challenge to a zoning decision in Louisiana is a de

novo proceeding in which the issue is whether the

result of the legislation is arbitrary and capricious, and

therefore a taking of property without due process of

25a

law. Hernandez v. City of Lafayette, supra; Westside

Lumber & Supply v. Parish of Jefferson, 357 So2d 1384

(La.App. 4 Or. 1978). Whether an ordinance bears the

requisite relationship to the health, safety and welfare

of the public is a factual question which must be

determined from the evidence in the record. If it

appears appropriate and well founded concerns for the

public could have been the motivation for the zoning

ordinance, it will be upheld.

The difference needs of each parish, according to its

size, population, level of industrial and commercial

development, and the rapidity of growth of such

development, will naturally result in difference

planning and zoning regulations in each parish. The

need for change through rezoning decisions are

properly left to those officials who are most familiar

with the needs of each community. Judicial review of

zoning decisions acts merely as a check on this

legislative power granted to parish officials to ensure

that there is no abuse of the power. Courts will not and

cannot substitute their judgment for that of the

legislative authority. Four States Realty, supra, and

cases cited therein.

The Supreme Court in Palermo, supra also stated that,

"Whenever the propriety of a zoning decision is

debatable it will be upheld." page 4938. The Palermo,

Court also held that;

Those with zoning authority are elected officials, and as

such, they represent the interest of those who elected

them The interest of the public are of the heart of the

welfare of a community. Thus the concerns and desires

of the electorate are all appropriate consideration in the

26a

decision-making process which exists for their benefit.

As this court pointed out in Civello, supra if a majority

of the citizens are dissatisfied with the decision of the

zoning authority "Their recourse is to the ballot not the

court”. Pages 494, 495.

Another case which is pertinent to the issues in this

case is Sanchez vs. Board of Zoll Adjustments of the

City of New Orleans, 488 Sold 1277 (La. App. 4th Cir.

1986).

In Sanchez, supra the 4th Circuit Court of Appeal

stated:

A person who purchases land with the knowledge,

actual or constructive, of the zoning restrictions which

are in effect at the time of such purchase, is said to have

created for himself whatever hardship such restrictions

entail. Paye 1279.

In applying to the law to the facts development at trial

the court factually finds that the properties in question

are destined to fail. Both properties were initially

commercial locations and were grandfathered into a

very restrictive R- | residential zone. The landowners

are no doubt limited in their ability to maximize the use

of their land and would suffer financial loss to conform

their property to fit the R-1] residential setting.

However, this Court must also find that both

landowners purchased their properties while the R-l

zone Was in effect and knew of its effect on the

property. The fact that each landowner purchased the

property from a relative or a tmend who was in a

financial hardship does not change this finding

27a

The issue of whether these properties in question

should be maintained in their current zone or allowed to

flourish in a less restrictive zone is clearly a debatable

issue. The members of tne City Council listened to both

sides and sided with the persons who signed the

petition against the change. Whether this Court would

have reached the same decision is of no moment, I

cannot fault the members of the Council or Board for

reaching their own decisions.

Therefore, this Court cannot find that the City of

Thibodaux, the Council or the Board was arbitrary or

capricious in their decisions and must dismiss the

plaintiff's suit at their costs. Thibodaux, Louisiana, this

29th day of January, 2007.

28a

COURT OF APPEAL, FIRST CIRCUIT

STATE OF LOUISIANA

RE: DOCKET NUMBER 2007-ca-0664

17TH JUDICIAL DISTRICT COURT

CASE #: 101760

PARISH OF LAFOURCHE

EAST FIRST STREET, L.L.C., M & BRENTALS OF

AMERICA, L.L.C.

VERSUS

BOARD OF ADJUSTMENTS AND CITY OF

THIBODAUX

On application for Rehearing filed 6/19/2008 Rehearing

denied.