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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2008

## Text

, 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

17a
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.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_0222%3A1. Public record. Not legal advice.