La. Supreme Court Reaffirms Public‑Use Limits on Expropriation
Authors: Liz Lambert and Olivia Maynard
The Louisiana Supreme Court recently reaffirmed that under the Louisiana Constitution a public entity may expropriate private property only when the taking is for a genuine public use or purpose – – not to confer a primarily (and quite clearly) private benefit.
In Plaquemines Port Harbor & Terminal District v. Nguyen, the Court emphasized that “to meet the constitutional definition of public purpose, dedicated use as a public port is essential.” In this case, the Plaquemines Port, Harbor & Terminal District (“the Port”) filed a quick-take expropriation suit to acquire approximately twenty-nine acres of undeveloped property owned by landowner Tuan Nguyen (“Nguyen”). Nguyen’s land lies within the larger footprint of the Delta LNG Project (“the Project”), a planned liquified natural gas and container port facility in Plaquemines Parish. As part of this Project, the Port intended to lease acquired property to Venture Global LNG (“Venture Global”) for the development of processing facilities, storage tanks, power systems, docking infrastructure, and the like. Key to this Project, the Port needed to expropriate Nguyen’s land. In support of expropriation, the Port argued that the taking served a public purpose, emphasizing economic development, job creation, energy security, and its statutory mission to facilitate commerce in the Parish.
Nguyen, an aggrieved landowner, challenged the Port’s actions by filing a Motion to Dismiss under La. R.S. 19:147, arguing the taking was not for a valid public use but instead solely to generate lease revenue from a private company, namely Venture Global. Specifically, Nguyen contended that leasing his land to Venture Global does not constitute a port-related activity that facilitates public transportation of goods. The Port opposed Nguyen’s motion, maintaining that the acquisition was part of legitimate port expansion and industrial development tied to the LNG project.
After a contradictory hearing, the trial court granted Nguyen’s Motion, finding the Port’s primary purpose was to acquire the land for lease to Venture Global, which would exclusively operate the LNG facilities. Because the Port itself would not directly conduct transportation or processing activities, the court concluded the taking was unconstitutional for lack of a valid public purpose. The Port applied for a writ of certiorari to the Louisiana Supreme Court, which was granted.
Just as the trial court found, so too, did the Louisiana Supreme Court find that the Port’s purpose in taking Nguyen’s land did not satisfy the threshold requirement of public purpose for expropriation. Article I, section 4(B)(2)(b)(vi) of the Louisiana Constitution limits the definition of “public purpose” for expropriation to “[c]ontinuous public ownership of property dedicated to one or more of the following objectives and uses,” one of which is “[p]ublic ports . . . to facilitate the transport of goods or persons in domestic or international commerce.” (Emphasis added.) Using statutory interpretation, the Court found that the Port “[was] not seeking ownership of the property for dedicated use as a public port[,]” rather it was “a taking by a public port authority for its lessee to use as a private port” – – an act that is prohibited under the both the Louisiana Constitution and the United States Supreme Court’s decision in Kelo v. City of New London, 545 U.S. 469 (2005).
The Court recognized that it would be one thing if the taking of Nguyen’s land was to use the property as a public port; and in that case, the Port’s arguments might have some traction. But here, “it is undisputed that Plaquemines Port’s expropriation of Nguyen’s property is for the sole purpose of leasing it to a private company to facilitate transportation of the private company’s own goods.” And as aptly stated in Judge Callum’s concurrence: “[a] purported public purpose cannot be speculative or pretextual[,] [i]t must be genuine, and demonstrable.” Certainly then, the Port’s leasing the land to Venture Global did not fit that definition.
The takeaway is that even where a public entity asserts a taking claim, it will fail if the property is effectively dedicated to a private party’s operations rather than a true public use by that public entity. For port authorities and other political subdivisions, this case serves as a cautionary tale: leasing expropriated property to a single private entity – – without genuine, demonstrable public use – – does not satisfy the constitutional requirement of public purpose.
