Petroplex International, LLC et al v. St. James Parish et al
Filing
157
ORDER AND REASONS DENYING 25 Motion for Preliminary Injunction. Signed by Judge Jane Triche Milazzo on 5/5/2016. (my)
.
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
PETROPLEX INTERNATIONAL ET AL
CIVIL ACTION
VERSUS
NO: 15-140
ST. JAMES PARISH ET AL
SECTION: “H”(4)
ORDER AND REASONS
Before the Court is Plaintiffs’ Motion for a Preliminary Injunction (Doc.
25). This matter came before the Court for evidentiary hearing on February 1,
2016. For the following reasons the Motion is DENIED.
BACKGROUND
This case arises out of the development of a proposed tank farm in St.
James Parish. Plaintiffs Mainline Energy Partners No. 2, LLC (“Mainline”)
and Homeplace Ventures No. 2 LLC (“Homeplace”) own adjoining tracts of land
1
fronting the west bank of the Mississippi River in St. James Parish (the
“Petroplex Property”). The property was leased to Plaintiff Petroplex
International, LLC (“Petroplex”).1
Plaintiffs have pursued the tank farm
project since they purchased the tract of land in 2007. In 2008, Plaintiffs
applied for and received permits from the Louisiana Department of
Environmental Quality. In 2011, Plaintiffs’ received a loan of approximately
$20,000,000 to develop the facility. On April 2, 2014, while Plaintiffs were
entering the final phases of planning, the Parish Council adopted Ordinance
14-03 to serve as a Master Land Use Plan for the Parish (the “Land Use
Ordinance”).
Under the Land Use Ordinance, the tank farm was not a
permissible use of the Petroplex Property. Plaintiffs thereafter applied to the
Council for approval of the use of the Petroplex Property as a tank farm. At
its May 7, 2014 meeting the Council adopted St. James Parish Resolution 1484 (the “Resolution”), which, subject to certain conditions, approved Petroplex’s
use of the property as a tank farm. The Resolution required, inter alia, that
Petroplex begin construction at the site no later than July 31, 2014.2
Plaintiffs contend that, in reliance on the resolution, they began
construction on the facility prior to July 31, 2014. Defendants dispute this
assertion, arguing instead that Plaintiffs were merely moving dirt around on
Mainline and Homeplace are the sole members of Petroplex.
The Resolution defines “construction” as “permanent on-site fabrication, erection,
or installation of a permitted facility (such as pile driving, installing structural supports
and foundations, laying underground pipework, or construction permanent storage
structures) that is continuously pursued with reasonable diligence to complete the
permitted facility within a reasonable time frame.”
1
2
2
the property to appear as though construction had commenced. Eventually the
Council requested that Petroplex provide information on the status of
construction, which it did at the November 5, 2014 Council meeting. At that
time, representatives from project investors provided an update on the project.
At the end of this meeting, Parish Attorney Victor Frankiewicz advised the
Council that, in his opinion, Plaintiffs were not in compliance with the
Resolution and that they had failed to acquire a required building permit from
the Parish. The Parish Council did not take any action at this meeting, and
urged Petroplex to proceed with construction without delay.
Petroplex
represented that it would have “steal on the ground” by January. On December
3, 2014 the Parish, acting through Parish President Timothy Roussel and
Permitting/Planning Supervisor Ryan Donadieu, issued a Stop Work Order.
Following the issuance of the Stop Work Order, Plaintiffs met with
parish officials on December 4, 2014, and provided additional information
regarding their purported compliance with the terms of the Resolution. On
December 8, 2014, Parish council advised that the Parish would not withdraw
the Stop Work Order. Plaintiffs then contacted Roussel and the Council and
requested a hearing before the Council and a new resolution authorizing
Petroplex to proceed with construction. Plaintiffs allege that, though they were
allowed to make a presentation at the January 7, 2015 Council meeting, they
were never afforded a hearing and the Stop Work Order remains in place to
this day.
3
Plaintiffs then filed the instant lawsuit and moved for a preliminary
injunction.
In this Motion, Plaintiffs request a preliminary injunction
precluding the Parish from enforcing the Land Use Ordinance, the Resolution,
and the Stop Work Order. Plaintiffs’ suit challenges the Land Use Ordinance
on the basis that it is unduly vague and arbitrary and capricious in violation
of substantive due process protections. Plaintiffs also allege that the Stop
Work Order was issued without notice and a hearing, in violation of procedural
due process protections.
Plaintiffs’ arguments regarding the Land Use
Ordinance and the Resolution were rendered moot by the Court’s ruling
granting summary judgment to Defendants on Plaintiffs’ claims regarding this
issue. Accordingly, the Court need only consider Plaintiffs’ due process claims
stemming from the issuance of the Stop Work Order. Defendants respond,
opposing the Motion for a Preliminary Injunction.
LEGAL STANDARD
An applicant for preliminary injunctive relief must show: (1) a
substantial likelihood that he will prevail on the merits; (2) a substantial
threat that he will suffer irreparable harm if the injunction is not granted; (3)
his threatened injury outweighs the threatened harm to the party whom he
seeks to enjoin; and (4) granting the preliminary injunction will not disserve
the public interest.3 A preliminary injunction is an extraordinary remedy. 4
3
4
Lake Charles Diesel, Inc. v. Gen. Motors Corp., 328 F.3d 192, 195–96 (5th Cir. 2003).
Miss. Power & Light Co. v. United Gas Pipe Line, Co., 760 F.2d 618, 621 (5th Cir.
1985).
4
Accordingly, a preliminary injunction which should only be granted when the
party seeking it has clearly carried the burden of persuasion on all four
requirements.5 In the end, a preliminary injunction is treated as an exception
rather than the rule.6
LAW AND ANALYSIS
The Court finds that Plaintiffs have not prevailed on any of the four
requirements needed for the issuance of a preliminary injunction. This Order
will address each in turn.
I. Plaintiffs are Unlikely to Prevail on the Merits
Plaintiffs contend that they are likely to prevail on the merits of their
claims. As the Court has already resolved Plaintiffs’ substantive due process
claims regarding the constitutionality of the Land Use Ordinance, it need only
focus on the due process claims stemming from the issuance of the Stop Work
Order and the propriety of whatever process, if any, was afforded Plaintiffs.
There are three interrelated issues in this analysis: First, whether the
Plaintiffs had a constitutionally protected property interest in proceeding with
construction of the tank farm; second, whether they were afforded sufficient
process before being deprived of this property interest; and third, whether the
Stop Work Order violates substantive due process protections. The Court will
address each in turn.
5
6
Id.
St. of Tex. v. Seatrain Int'l, S.A., 518 F.2d 175, 179 (5th Cir. 1975).
5
A. Whether Plaintiffs Have a Property Interest in the Resolution
Plaintiffs argue that they have a constitutionally protected property
interest to proceed with construction on the tank farm facility. To prevail on a
due process claim, a Plaintiff must first establish that he has a property right
to which due process protections apply.7 “To have a property interest in a
benefit, a person clearly must have more than an abstract need or desire for it.
He must have more than a unilateral expectation of it. He must, instead, have
a legitimate claim of entitlement to it.”8 Property interests are not created by
the constitution, “[r]ather they are created and their dimensions are defined
by existing rules or understandings that stem from an independent source such
as state law—rules or understandings that secure certain benefits and that
support claims of entitlement to those benefits.”9 As a legal matter, a permit,
once issued, may constitute a sufficient property interest to invoke due process
protections.10 This is especially the case where a plaintiff has expended large
amounts of money in reliance on the permit.11 Moreover, the holder of a permit
has a property right where an official’s discretion to terminate or suspend work
allowed by the permit is substantially limited.12
Blackburn v. City of Marshall, 42 F.3d 925, 936 (5th Cir. 1995).
Bd. of Regents of State Colleges v. Roth, 408 U.S. 564, 577 (1972).
9 Id. at 577.
10 See Bowlby v. City of Aberdeen, Miss., 681 F.3d 215, 220 (5th Cir. 2012).
11 St. Raymond v. City of New Orleans, 769 So. 2d 562, 564 (La. App. 4 Cir. 2000).
12 3883 Connecticut LLC v. District of Columbia, 336 F.3d 1068, 1072 (D.C. Cir.
7
8
2003).
6
In reviewing the Resolution and the evidence introduced at the hearing,
the Court concludes that the Resolution conferred a property right on Plaintiffs
to construct the tank farm as outlined therein. On its face the Resolution
provides Petroplex with approval to construct the tank farm. The Parish’s
ability to rescind this approval was limited. Based on the evidence introduced
at the hearing, it is clear that the Parish led Plaintiffs to believe that they could
start construction with no further permitting. Indeed, Plaintiffs were not told
that they needed further permits until November, despite the fact that the
Parish was continually monitoring activity at the site. The Parish argues that
the Resolution’s conditional approval terminated automatically because the
terms of the Resolution were not met.
Due process protections require,
however, that a hearing be held to make such a determination.
B. Procedural Due Process
Having found that Plaintiffs’ had a property right in the Resolution, the
Court turns to the question of whether they were deprived of this right without
notice and a hearing in violation of procedural due process protections.
Plaintiffs claim that their procedural due process rights were violated by the
summary issuance of a stop work order without notice or a hearing. “The
fundamental requirement of due process is the opportunity to be heard at a
meaningful time and in a meaningful manner” before final deprivation of a
constitutionally protected property interest.13 The Court must weight three
factors in determining what process is due: “[f]irst, the private interest that
13
Mathews v. Eldridge, 424 U.S. 319 (1976).
7
will be affected by the official action; second, the risk of an erroneous
deprivation of such interest through the procedures used, and the probable
value, if any, of additional or substitute procedural safeguards; and finally, the
Government's interest, including the function involved and the fiscal and
administrative burdens that the additional or substitute procedural
requirement would entail.”14
Plaintiffs contend that they were afforded no process associated with the
issuance of the Stop Work Order. Defendants dispute this assertion, arguing
that the Parish in fact provided sufficient process as requested by Plaintiffs.
Defendants argue that Plaintiff’s simply failed to take advantage of postissuance protections that were available to them.15 They further argue that
the Parish administration received and considered Petroplex’s evidence of
compliance with the resolution and considered its request for a new
construction deadline.
The Court need not resolve the issue of whether Plaintiffs were afforded
adequate process at this juncture because it finds that, even if Plaintiffs had
been afforded process, they are unlikely to prevail on the merits of their
procedural due process claims. Plaintiffs were not in compliance with the
terms of the Resolution, nor were they in a position to timely correct any
deficiencies. The remedy for a procedural due process violation is determined
Id. at 335.
Defendants specifically point to St. James Parish Ordinance Section 18-12, which
allows for an appeal process of a determination made by the building official.
14
15
8
by the injury resulting from the denial of constitutionally required process. 16
Accordingly, if Plaintiffs were neither in compliance with the Resolution nor in
a position to cure their noncompliance, they are not entitled to injunctive relief
allowing them to proceed with construction.17
The Resolution defines “construction” as “permanent on-site fabrication,
erection, or installation of a permitted facility (such as pile driving, installing
structural supports and foundations, laying underground pipework, or
construction permanent storage structures) that is continuously pursued with
reasonable diligence to complete the permitted facility within a reasonable
time frame.” Plaintiffs allege that they timely began “dirt work” at the site
when a bulldozer was delivered on July 30, 2014. The Court finds, however,
that the “work” being done with this bulldozer was not permanent construction
as defined by the Resolution, and that Plaintiffs were not prepared to
commence meaningful construction at the site by the July 31 deadline or at
any time thereafter. Indeed, the Court finds that, despite their assertions at
the November council meeting, Plaintiffs were in no position to have “steel on
the ground” in January of 2015.
Even if the Court considers the Parish
Council’s actions at the November Council meeting to constitute a tacit
acknowledgement that it would consider “steel on the ground” in January 2015
as “compliance” with the Resolution, Petroplex would still have been unable to
timely comply. Specifically, Plaintiffs did not have final architectural plans or
16
17
Carey v. Piphus, 435 U.S. 247, 263 (1978).
See Hopkins v. Saunders, 199 F.3d 968, 979 (8th Cir. 1999).
9
construction documents to support their construction activity. The drawings
submitted to the Parish were identified on their faces to be preliminary, and
they did not bear the stamp of a licensed design professional. Of particular
significance, the geotechnical report issued by Eustis Engineering was
preliminary, and specifically notes that further analysis would be required
before construction began.
conducted.
Such follow-up analysis was, however, never
Furthermore, the work being done was off the footprint as
permitted by the LADEQ. No geotechnical engineers were on site to monitor
the putative preloading activities.
No Louisiana licensed contractor was
working the project until October of 2014, and at that time was only
supervising the dirt movement. Accordingly, the Court finds based on the
evidence introduced at the hearing that Plaintiffs failed to timely commence
construction on July 31, 2014, as required by the Resolution, and that they
were unable to remedy any deficiencies within any reasonable time frame. At
no time before or since the July 31 deadline or the issuance of the Stop Work
Order have Plaintiffs been prepared to immediately commence construction,
despite their multiple assertions to the contrary. Accordingly, injunctive relief
is precluded.
C. Substantive Due Process
Assuming that they had a property interest in developing the tank farm
facility, Plaintiffs aver that the issuance of the Stop Work Order was arbitrary
and capricious in violation of substantive due process protections. To prevail
on a substantive due process claim, a plaintiff must show both that they had a
10
constitutionally protected property right to which due process protection
applied and that the right was infringed upon by government action that was
not rationally related to a legitimate government interest.18
Defendants
contend that the issuance of the Stop Work Order was far from arbitrary and
capricious, but rather was warranted by Plaintiffs’ deceitful activities on the
property aimed at feigning construction. Having determined that Plaintiffs
did not commence work as required by the Resolution, this Court agrees.
Defendants issuance of a Stop Work Order was rationally related to a
legitimate government interest—namely, halting construction that was not
permitted by the Resolution. Accordingly, Plaintiffs are unlikely to prevail on
the merits of their substantive due process claims.
II. Plaintiffs Have Not Shown Irreparable Injury
In general, a harm is irreparable where there is no adequate remedy at
law, such as monetary damages.19 Plaintiffs rely on an isolated quote from a
Northern District of Mississippi case in arguing that violations of
constitutional rights constitutes irreparable harm as a matter of law. 20 They
do not cite to any binding precedent in support of this broad rule. Other
circuits have noted that such a rule is confined only to First Amendment and
Fourth Amendment right to privacy jurisprudence.21 Accordingly, the Court
Energy Mgmt. Corp v. City of Shreveport, 467 F.3d 471, 481 (5th Cir. 2006).
Janvey v. Alguire, 647 F.3d 585, 600 (5th Cir. 2011).
20 Cohen v. Coahoma County, Miss., 805 F. Supp. 398, 406 (N.D. Miss. 1992).
21 Ne. Florida Chapter of Ass’n of Gen. Contractors of Am. V. City of Jacksonville,
Fla., 896 F.2d 1283, 1285 (11th Cir. 1990).
18
19
11
will not apply such a far-reaching rule here. Defendants argue that the harms
claimed by Plaintiffs are economic in nature and could be fully compensated
with a money judgment. This Court agrees. Plaintiffs’ alleged harms include
lost investors, inability to repay loans, and loss of their property through
foreclosure. These harms are all economic in nature and would be properly
compensable with monetary damages. Accordingly, a preliminary injunction
is not appropriate.
III. Threatened Injury Does Not Outweigh the Threatened Harm to the
Party Enjoined and Granting the Injunction Would Disserve the
Public Interest
Plaintiffs claim Defendants can show no meaningful harm arising from
the inability to enforce the Stop Work Order. The Court disagrees. Should the
Parish be enjoined from enforcing the Stop Work Order, Plaintiffs would be
allowed to begin construction without a final determination on the merits. If
the Parish ultimately prevails in this matter, construction would halt and the
Parish would be saddled with an incomplete industrial facility. A large swath
of undeveloped land would be taken out of commerce. Additionally, enjoining
the Parish in this fashion would undercut its ability to apply and enforce its
own land use laws. The public interest would be disserved by an injunction for
many of the same reasons, as such a situation would result in a major
disruption in the community. Accordingly, the Court finds that the threatened
harm to the party enjoined would be great and that an injunction would
disserve the public interest.
12
CONCLUSION
For the foregoing reasons, Plaintiffs’ Motion for a Preliminary Injunction
is DENIED.
5th
New Orleans, Louisiana this ___ day of May, 2016.
____________________________________
JANE TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE
13
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?