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1st Circuit Remands White Lake Lawsuit for Trial

October 31, 2004 12:00 AM

The 1st Circuit Court of Appeals has ruled that Joe McPherson, in his capacities as both a taxpaying citizen and Louisiana state senator, has standing to bring a lawsuit challenging the legality of the White Lake land deal.  The 1st Circuit announced its decision on October 29, 2004, and remanded the suit for trial on the merits.

The 1st Circuit agreed with the lower court in upholding denial of standing to the Louisiana Wildlife Federation (LWF), but also ruled that it erred in dismissing the LWF's petition to intervene without allowing it the opportunity to file an amended petition for reconsideration.

Nineteenth Judicial District Trial Court Judge, William Morvant, granted LWF intervener status in April, 2003, but on August 4, 2003, he ruled that both McPherson and LWF did not have sufficient standing to bring the suit.  The plaintiff's appealed Morvant's decision to the 1st Circuit.

The 71,000-acre Vermilion Parish wildlife preserve known as the White Lake Property (Property) was donated to the State of Louisiana by BP America Production Company in July 2002.  The Governor and Commissioner of Administration, representing the State, agreed to vest management authority for the Property in a private corporation as a condition of the donation.  Primarily on constitutional grounds, the lawsuit contests the legality of the agreements effectuating the donation of the Property and the placement of the Property solely under the control and management of a private corporation.

Among arguments for the defense was the assertion that a new law, Act 613 of the 2004 Regular Session of the Louisiana Legislature, satisfied the plaintiff's concerns and therefore the lawsuit was moot.  The 1st Circuit judges disagreed noting that, although the provisions of Act 613 go into effect in January 2005, the law is not retroactive and therefore does not have the effect of  "undoing" the agreements contested by the lawsuit.  The appeals court further noted that the defendants have not expressed their intent to revise the agreements to conform with the provisions of Act 613.

According to LWF executive director, Randy Lanctot, Act 613 addresses most concerns the federation has with the White Lake land deal.  But he said that the law does not automatically reform the agreements contested by the suit.  He noted that the State would be subject to penalties for violating the terms of legal contracts if Act 613 superceded the existing agreements without concurrence of all parties thereto, including, if BP desired, the revocation of the White Lake Property donation.  

"Unless the court ultimately finds that the agreements contravene state law, and voids them, those agreements are legal contracts that must be honored," Lanctot said.  "Act 613 provides guidance for negotiations needed to bring the White Lake situation into conformity with the Act."

Lanctot said LWF intends to file an amended petition requesting reconsideration of its standing as intervener in the lawsuit.

A review of the contested issues associated with the White Lake land deal follows.

The White Lake Land Deal

Legal Issues:

(1) The State may have conveyed ownership of minerals on state water bottom to the donor of the Property via stipulations in the Act of Donation.
(2) The State authorized, without legislative approval as required by the Louisiana Constitution, a private entity to collect and expend state assets (i.e., the revenue derived from the use of and activities on state property, e.g., agricultural lease revenue, etc.)

Management/Organizational Issues
(1) A private corporation with a self-perpetuating board of directors was authorized to manage the White Lake Property which is state-owned wildlife conservation land.  Such lands are customarily managed and regulated by the Louisiana Department of Wildlife and Fisheries (LDWF) and the Louisiana Wildlife and Fisheries Commission.  These governmental entities were established by the Louisiana Constitution and state law to be responsible for and to carry out the stewardship functions for the state on state-owned wildlife conservation lands.  They are subject to legislative oversight and they must follow the administrative procedures established to protect the interests of the citizens of the State.
(2) The private corporation, White Lake Preservation, Inc., that has been given the management responsibility for the White Lake Property, is not subject to the State's open meetings law and is not required by law to accept public participation in decision making that affects a state asset.

Other pertinent considerations
The previous state administration gave two "official" reasons for turning over management of the White Lake Property to a private corporation.  One is that the donor required that it be handled that way.  The other is that the State, through the Louisiana Department of Wildlife and Fisheries, did not have the financial resources to maintain and manage the Property.

Another reason, stated by representatives of the donor of the Property, is that the donor intended to make financial contributions to support the management of the Property and there was concern that it could not trust state government to ensure that its contributions would be used solely for the intended purposes.

An issue relative to the potential for the LDWF to manage the Property is that the Act of Donation requires the maintenance of agricultural leases (which include private hunting privileges) on about 16,000 acres of the Property and LDWF does not normally allow private agricultural and hunting leases on the state-owned wildlife refuges and management areas it manages.

Representatives of BP, the donor of the Property, have stated BP's willingness to renegotiate the management arrangements for the Property if the State wants to do that, as long as the conservation requirements of the Act of Donation are sustained.

It is particularly important to realize that the contract the State has with the private corporation to manage the Property cannot be altered without the consent of the private corporation.  Further, any changes that the State might like to make regarding the management authority for the Property, the collection and appropriation of revenue generated by the Property, or other matters pertaining to the donation that do not comport with the original memorandum of understanding between the State and the donor, court-ordered or otherwise, would have to be approved by BP before the State proceeded with the changes, otherwise BP would have legal grounds for revoking the donation.  However, since BP has been able to reap a conservation tax credit of about $14 million for donating the property to the State and was the beneficiary of a $38 million royalty payment settlement with the State that occurred around the same time as (and some say related to) the donation, it would be a little bit of trouble, although still possible, for BP to reclaim the Property if the State violated any of the terms of the agreement. 

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