Mardi Gras World, L.L.C. et al v. Marquette Transportation Company Gulf-Inland, LLC et al
Filing
50
ORDER AND REASONS denying 32 Motion for Partial Summary Judgment. Signed by Judge Sarah S. Vance on 9/11/2019. (Reference: All Cases)(mm)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
MARDI GRAS WORLD, LLC, ET AL.
VERSUS
CIVIL ACTION
NO. 18-4745 C/W 18-5579
MARQUETTE TRANSPORTATION
CO., ET AL.
SECTION “R” (2)
ORDER AND REASONS
Before the Court is the motion for partial summary judgment from
defendants Marquette Transportation Company Gulf-Inland, LLC, and
Marquette Transportation Company, LLC (collectively, “Marquette”), on the
claims for economic loss damages from plaintiff Mardi Gras World, LLC
(“Mardi Gras World”).1 Because Mardi Gras World has a proprietary interest
in the damaged property, the defendants’ motion is denied.
I.
BACKGROUND
This case arises from an allision on the Mississippi River.2 On May 7,
2018, the M/V STEVE RICHOUX, the defendants’ towing vessel, allided with
1
2
R. Doc. 32 (Case No. 18-4745).
See R. Doc. 1 at 3 ¶ 11 (Case No. 18-4745).
the Robin Street Wharf on the Mississippi River’s left descending bank.3 The
municipal address for the wharf is 1380 Port of New Orleans Place, 4 and it is
owned by the Board of Commissioners for the Port of New Orleans (“the
Board”). 5 Mardi Gras World did not actually own any physical property
damaged in the allision.6 Rather, Mardi Gras World leases the Robin Street
Wharf from the Board,7 along with adjacent property from the Board and
other lessors.8
The parties entered into the lease in 2008 9 and can extend it through
2032.10 The agreement provides Mardi Gras World with an interest in a large
area of property along the Mississippi River. The lease includes the Robin
Street Wharf, which covers approximately 125,000 square feet of interior
space, including “built out office and shop space,” and approximately 25,000
square feet of exterior space “and underlying wharf substructure.” 11 The
leased premises also include approximately 270,000 square feet of the
R. Doc. 32-3 at 1 ¶ 1 (Case No. 18-4745). Mardi Gras World does not
contest Marquette’s statement of facts. See R. Doc. 41 at 4 (Case No. 184745).
4
R. Doc. 32-3 at 1 ¶ 1 (Case No. 18-4745).
5
Id. at 1 ¶ 2.
6
Id. at 2 ¶ 4.
7
Id. at 2 ¶ 3.
8
See, e.g., R. Doc. 32-6 at 27, 66-67 (Case No. 18-4745).
9
See id. at 51-52.
10
See id. at 15 ¶ 3(B).
11
See id. at 13 ¶ (c)1(A)(i).
2
3
Orange Street Wharf,12 and over five acres of land next to the wharves. 13
Mardi Gras World can use these premises for a “Mardi Gras Museum,
exhibition, office, catering, and meeting facility(ies),” as well for “minor
construction . . . related to artistic and creative activities.”14 But it must make
improvements to these premises, which “shall become the property of the
Board.”15 It also must pay taxes associated with the property. 16 It must
maintain property insurance at its “sole cost and expense . . . in favor of
Lessors.”17 And it must “at its own cost, risk and expense . . . repair, replace,
or restore any and all of the Leased Premises which may become the subject
of loss, damage or destruction.”18
Following the damage to these lease premises, Mardi Gras World 19
filed this action against Marquette.20 Mardi Gras World alleges that the
See id. at 13-14 ¶ (c)1(A)(ii).
See id. at 14 ¶ (c)1(B), 75-78.
14
R. Doc. 32-6 at 31 ¶ 5(A) (Case No. 18-4745).
15
Id. at 40 ¶ 12(D).
16
Id. at 45 ¶ 24.
17
Id. at 37 ¶ 10(E)(i).
18
Id. at 34 ¶ 9(B).
19
This complaint also included as plaintiffs Blaine Kern’s Mardi Gras
World, Inc.; New Orleans Hotel Collection, L.L.C.; and Blaine Kern Artists,
Inc. See R. Doc. 1 at 1 (Case No. 18-4745). Both Blaine Kern’s Mardi Gras
World, Inc., and New Orleans Hotel Collection, L.L.C., have since voluntarily
dismissed their claims. See R. Doc. 30 (Case No. 18-4745); R. Doc. 31 (Case
No. 18-4745). Marquette does not assert the instant motion against Blaine
Kern Artists, Inc. See R. Doc. 32-1 at 1 n.1 (Case No. 18-4745).
20
R. Doc. 1 (Case No. 18-4745).
3
12
13
incident caused “increased and additional expenses, structural damage,
property damage, delayed production, lost production, increased overhead,
interruption of business, stigma, damaged reputation, loss of use, lost
profits, repair costs, and other physical and economic damages not yet
realized.”21 Marquette subsequently filed a limitation complaint, 22 and the
two complaints were consolidated. 23 AGCS Marine Insurance Company,
Mardi Gras World’s insurer, and the Board have separately intervened as
claimants.24
Marquette now moves for partial summary judgment on Mardi Gras
World’s claims for economic damages.25 Mardi Gras World opposes the
motion. 26
II.
LEGAL STANDARD
Summary judgment is warranted when “the movant shows that there
is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Celotex Corp. v.
21
22
23
24
25
26
Id. at 3 ¶ 12.
R. Doc. 1 (Case No. 18-5579).
R. Doc. 5 (Case No. 18-4745); R. Doc. 4 (Case No. 18-5579).
See R. Doc. 8 (Case No. 18-4745); R. Doc. 21 (Case No. 18-4745).
R. Doc. 32 (Case No. 18-4745).
R. Doc. 41 (Case No. 18-4745).
4
Catrett, 477 U.S. 317, 322-23 (1986); Little v. Liquid Air Corp., 37 F.3d 1069,
1075 (5th Cir. 1994) (en banc) (per curiam). “When assessing whether a
dispute to any material fact exists, [the Court] consider[s] all of the evidence
in the record but refrain[s] from making credibility determinations or
weighing the evidence.” Delta & Pine Land Co. v. Nationwide Agribusiness
Ins. Co., 530 F.3d 395, 398-99 (5th Cir. 2008). All reasonable inferences are
drawn in favor of the nonmoving party, but “unsupported allegations or
affidavits setting forth ‘ultimate or conclusory facts and conclusions of law’
are insufficient to either support or defeat a motion for summary judgment.”
Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985) (quoting
10A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure
§ 2738 (2d ed. 1983)); see also Little, 37 F.3d at 1075. “No genuine dispute
of fact exists if the record taken as a whole could not lead a rational trier of
fact to find for the nonmoving party.” EEOC v. Simbaki, Ltd., 767 F.3d 475,
481 (5th Cir. 2014).
If the dispositive issue is one on which the moving party will bear the
burden of proof at trial, the moving party “must come forward with evidence
which would ‘entitle it to a directed verdict if the evidence went
uncontroverted at trial.’” Int’l Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257,
1264-65 (5th Cir. 1991) (quoting Golden Rule Ins. Co. v. Lease, 755 F. Supp.
5
948, 951 (D. Colo. 1991)). “[T]he nonmoving party can defeat the motion” by
either countering with evidence sufficient to demonstrate the “existence of a
genuine dispute of material fact,” or by “showing that the moving party’s
evidence is so sheer that it may not persuade the reasonable fact-finder to
return a verdict in favor of the moving party.” Id. at 1265.
If the dispositive issue is one on which the nonmoving party will bear
the burden of proof at trial, the moving party may satisfy its burden by
pointing out that the evidence in the record is insufficient with respect to an
essential element of the nonmoving party’s claim. See Celotex, 477 U.S. at
325.
The burden then shifts to the nonmoving party, who must, by
submitting or referring to evidence, set out specific facts showing that a
genuine issue exists. See id. at 324. The nonmovant may not rest upon the
pleadings, but must identify specific facts that establish a genuine issue for
resolution. See, e.g., id.; Little, 37 F.3d at 1075 (“Rule 56 ‘mandates the entry
of summary judgment, after adequate time for discovery and upon motion,
against a party who fails to make a showing sufficient to establish the
existence of an element essential to that party’s case, and on which that party
will bear the burden of proof at trial.’” (quoting Celotex, 477 U.S. at 322
(emphasis added))).
6
III. DISCUSSION
Marquette argues that, pursuant to Robins Dry Dock & Repair Co. v.
Flint, 275 U.S. 303 (1927), Mardi Gras World cannot recover economic
damages. 27 In Robins Dry Dock, the Supreme Court stated a rule limiting
tort liability: “[N]o authority need be cited to show that, as a general rule, at
least, a tort to the person or property of one man does not make the tortfeasor liable to another merely because the injured person was under a
contract with that other unknown to the doer of the wrong.” 275 U.S. at 309.
The Fifth Circuit has “interpreted Robins Dry Dock to mean that there can
be no recovery for economic losses caused by an unintentional maritime tort
absent physical damage to property in which the victim has a proprietary
interest.” Amoco Transp. Co. v. S/S MASON LYKES, 768 F.2d 659, 666 (5th
Cir. 1985).28
Here, Mardi Gras World seeks to recover, among other things,
economic losses caused by an unintentional maritime tort. 29 To proceed,
therefore, Mardi Gras World must have suffered (a) “physical damage” to (b)
See, e.g., R. Doc. 32-1 at 13 (Case No. 18-4745).
According to the Fifth Circuit, this rule serves as a “pragmatic
limitation imposed by the Court upon the tort doctrine of foreseeability.”
State of La. ex rel. Guste v. M/V TESTBANK, 752 F.2d 1019, 1023 (5th Cir.
1985) (en banc). That is, under Robins Dry Dock, a harm may be foreseeable
but nevertheless not cognizable.
29
See R. Doc. 1 at 3 ¶ 12 (Case No. 18-4745).
7
27
28
property in which it has a “proprietary interest.” The parties do not dispute
that physical damage occurred. 30 The wharf that suffered physical damage,
though, was owned by the Board and leased to Mardi Gras World. 31 At issue,
therefore, is whether Mardi Gras World had a “proprietary interest” in this
wharf. The Court finds that Mardi Gras World’s leasehold constitutes a
sufficient proprietary interest to allow it to seek recovery under Robins Dry
Dock for economic loss.
A.
Mardi Gras World’s “Proprietary Interest” Under Its
Lease
A plaintiff need not own property outright to have a “proprietary
interest” in it.
See State of Veracruz v. BP, P.L.C. (In re Deepwater
Horizon), 784 F.3d 1019, 1026 (5th Cir. 2015) (“The Robins Dry Dock Court
itself, however, intimated that something perhaps just shy of outright
ownership might suffice to show the requisite proprietary interest.”). If the
plaintiff is not the actual owner of the property, though, he must be
“‘tantamount’ to an owner” to recover. Plains Pipeline, L.P. v. Great Lakes
Dredge & Dock Co., 620 Fed. App’x 281, 285 (5th Cir. 2015) (quoting
Veracruz, 784 F.3d at 1026).
30
31
R. Doc. 32-3 at 1 ¶ 2 (Case No. 18-4745).
Id. at 1 ¶¶ 1-2, 2 ¶ 3.
8
To identify whether a plaintiff’s interest in property is tantamount to
ownership, courts consider whether the plaintiff’s rights in the property
exhibit “incidents of ownership.” See Veracruz, 784 F.3d at 1026 (quoting
Louisville & Nashville R.R. Co. v. M/V Bayou Lacombe, 597 F.2d 469, 474
(5th Cir.1979)). Specifically, the Fifth Circuit looks to three main factors:
(1) “responsibility for repair,” (2) “responsibility for maintenance,” and
(3) “actual possession or control.” Tex. E. Transmission Corp. v. McMoRan
Offshore Expl. Co., 877 F.2d 1214, 1225 (5th Cir. 1989) (citing Bayou
Lacombe, 597 F.2d at 474). Here, Mardi Gras World’s interest in the wharf,
as established by its lease with the Board, exhibits all three factors.
First, Mardi Gras World has responsibility for repair of the wharf. The
lease agreement between Mardi Gras World and the Board states: “Lessee
[Mardi Gras World] agrees that it shall at its own cost, risk and expense
promptly and with due diligence repair, replace, or restore any and all of the
Leased Premises [property including the Robin Street Wharf] which may
become the subject of loss, damage or destruction.” 32
Marquette
acknowledges that Mardi Gras World “has broad responsibility to repair
32
R. Doc. 32-6 at 34 ¶ 9(B) (Case No. 18-4745) (emphasis added).
9
damages to the leased premises.”33 Indeed, Marquette explicitly “does not
challenge” Mardi Gras World’s “claim for repair costs.”34
Second, Mardi Gras World has responsibility for maintenance of the
wharf. According to the terms of the lease, “Lessee shall be responsible for
and shall at its own cost, risk and expense perform and pay all costs of
maintenance and repairs.” 35 Indeed, “[d]uring the Term of the Lease,
Lessors shall have no responsibility whatsoever to perform any
construction, maintenance or repair work on the Leased Premises.”36 The
lease does require Mardi Gras World to “obtain prior written approval from
the Board for any maintenance, repairs, [or] dredging.” 37 But the adjacent
provisions make clear that the Board’s ministerial function does not divest
Mardi Gras World of the responsibility for maintaining the wharf. Indeed,
the same requirement of approval for maintenance also applies to repairs,
which—as noted above—Marquette does not appear to challenge.
Third, Mardi Gras World has actual possession or control of the wharf.
Black’s Law Dictionary defines “actual possession” as “[p]hysical occupancy
or control over property. Cf. constructive possession.” Actual Possession,
33
34
35
36
37
R. Doc. 32-1 at 8 (Case No. 18-4745).
Id. at 12.
R. Doc. 32-6 at 33 ¶ 7(A) (Case No. 18-4745) (emphasis added).
Id. (emphasis added).
Id.
10
Black’s Law Dictionary (11th ed. 2019) (first emphasis added); accord Tex.
E., 877 F.2d at 1225 (when discussing three-part proprietary interest test,
examining whether company had “functional possession or control” over
property (emphasis added)). Mardi Gras World’s use of the property has
both “an attraction component and . . . an event venue component.” 38 As an
attraction, Mardi Gras World operates tours that allow the public “to see how
the floats and props are constructed for Mardi Gras.”39 As an event venue,
Mardi Gras World primarily rents the premises for corporate functions. 40
Overall, these activities suggest that Mardi Gras World has physical
occupancy of the property. Indeed, the lease describes Mardi Gras World as
“occup[ying]” the wharf.41 And Marquette’s stipulations also identify Mardi
Gras World as an “occupant[] of the Robin Street Wharf.” 42 Mardi Gras
World, therefore, actually possesses the property.
The Fifth Circuit has stated this element of the test in the disjunctive—
actual possession or control. Arguably a finding that Mardi Gras World
R. Doc. 41-3 at 2:11-12 (Case No. 18-4745).
Id. at 2:12-15.
40
Id. at 2:15-19.
41
R. Doc. 32-6 at 33 ¶ 8(B) (Case No. 18-4745) (“Lessee, from the time of
its occupancy and until the Leased Premises are vacated by Lessee, shall
assume sole liability for the condition of the Leased Premises . . . .” (emphasis
added)). As the contract establishes a lease of real property, any occupancy
would be “physical.”
42
R. Doc. 32-7 at 1 (Case No. 18-4745).
11
38
39
actually possesses the wharf should satisfy this prong. Nevertheless, the
Court finds that the level of control Mardi Gras World exercises over the
property also satisfies a conjunctive test. 43
Specifically, the lease states that Mardi Gras World has “complete
control or ‘GARDE’ over the Leased Premises.”44 It “exercise[s] complete
control or ‘Garde’ over . . . access.” 45
And it has “sole liability for the
condition of the Leased Premises as well as of any constructions, utilities and
other improvements.”46 Although limits on use exist, the limiting language
broadly describes the purpose for which Mardi Gras World leases the
property, rather than purporting to circumscribe how Mardi Gras World
runs its business. For example, the lease restricts Mardi Gras World’s use of
the wharf to that of “a Mardi Gras Museum, exhibition, office, catering, and
Consequently, Mardi Gras World would also satisfy a conjunctive
reading of the definition of “actual possession,” which itself already
incorporates the concept of control. See Actual Possession, Black’s Law
Dictionary (11th ed. 2019) (defining “actual possession” as “[p]hysical
occupancy or control” (emphasis added)).
44
R. Doc. 32-6 at 33 ¶ 8(B) (Case No. 18-4745). “The Louisiana Supreme
Court’s definition of custody is based on the French legal concept of garde.”
Royer v. Citgo Petroleum Corp., 53 F.3d 116, 118-19 (5th Cir. 1995).
Generally, “[t]he things in one’s garde are ‘those things to which one bears
such a relationship as to have the right of direction and control over them,
and to draw some kind of benefit from them.’” Haas v. Atl. Richfield, 799
F.2d 1011, 1014 (5th Cir. 1986) (quoting Loescher v. Parr, 324 So. 2d 441,
449 n.7 (La. 1975)).
45
R. Doc. 32-6 at 19 ¶ 17(A) (Case No. 18-4745).
46
Id. at 33 ¶ 8(B).
12
43
meeting facility(ies),” as well as to “minor construction . . . related to artistic
and creative activities.”47
The lease also establishes safety practices
consistent with these very activities. For example, “Lessee shall not use the
Leased Premises for any heavy construction or any activity involving welding
or use of an open flame or toxic material.” 48
Such reasonable restrictions do not prevent Mardi Gras World from
exercising control over the wharf. Even an outright owner could encounter
analogous zoning or environmental regulations circumscribing its use of
property. And restrictions are not uncommon in commercial leases in
general, see, e.g., 5 Alan M. Weinberger, Thompson on Real Property
§ 44.03 (Thomas ed. 2019), or the Board’s leases in particular. 49 Overall,
therefore, and when viewed in light of Mardi Gras World’s possession of the
property, the Court finds the level of control accorded to Mardi Gras World
in the lease sufficient to qualify as an incident of ownership.
Id. at 31 ¶ 5(A). Similarly, the lease qualifies Mardi Gras World’s ability
to use the wharf as a berthing facility. See id. at 32 ¶ 5(D) (“Lessee shall not
dock or berth any vessel at the Leased Premises without prior written
approval of the Board. The Board reserves the right to levy and collect any
and all charges for the berthing of any vessels at the Leased Premises.”).
48
Id. at 31 ¶ 5(A).
49
See R. Doc. 41-2 at 1 ¶ 5 (“The limited restrictions on use by Mardi Gras
World of the Robin Street Wharf included in the Agreement are typical and
customary in lease agreements between the Board and its lessees.”).
13
47
In addition to the Texas Eastern factors, some courts have looked to
the original distinction drawn in Robins Dry Dock—that between a time
charterer of a ship and a demise charterer—to illustrate the concept of a
proprietary interest. See, e.g., Veracruz, 784 F.3d at 1031. Specifically, the
Robins Dry Dock Court found that a time charter did not confer a sufficient
property interest50 to permit recovery for economic loss. See 275 U.S. at 30708. But “[t]he Court left open the possibility that a ‘demise’ agreement might
satisfy the proprietary interest requirement even if the ‘time charter’ at issue
in that case did not.” Veracruz, 784 F.3d at 1026 (citing Robins Dry Dock,
275 U.S. at 308).
The Fifth Circuit has elaborated on the distinction between a time
charter and a demise charter. Under a time charter, “the owner’s people
continue to navigate and manage the vessel, but her carrying capacity is
taken by the charterer for a fixed time for the carriage of goods.” Bayou
Lacombe, 597 F.2d at 473 n.3 (quoting G. Gilmore & C. Black, The Law of
Admiralty § 4-1 (2d ed. 1975) [hereinafter Gilmore & Black]). Under a
demise charter, on the other hand, “the charterer takes over the ship, lock,
stock and barrel, and mans her with his own people.”
Id. (emphasis
The Robins Dry Dock Court referred to “property right[s].” See 275
U.S. at 308. The “proprietary interest” test, the touchstone in this Circuit,
satisfies the Supreme Court requirement. See, e.g., Guste, 752 F.2d at 1021.
14
50
removed) (quoting Gilmore & Black § 4-1). Under this analogy, possessing a
proprietary interest sufficient to satisfy the Robins Dry Dock rule requires
having “the incidents of ownership attributable to the demise-charterer.” See
Bayou Lacombe, 597 F.2d at 474.
Here, the nature of Mardi Gras World’s interest in the wharf resembles
that of a demise charterer’s interest in a ship. 51 Mardi Gras World has
“take[n] over” the wharf and “man[ned] her with [its] own people,” Bayou
Lacombe, 597 F.2d at 473 n.3 (emphasis removed) (quoting Gilmore & Black
§ 4-1). Indeed, Mardi Gras World is liable for the damage caused to the
wharf. 52 And although Mardi Gras World cannot use the wharf entirely
without restriction, “restrictions on use” also “typically” occur in demise
contracts. See 2 Thomas J. Schoenbaum, Admiralty & Maritime Law § 11:3
(6th ed. Oct. 2018 update); see also, e.g., Limon v. Berryco Barge Lines,
L.L.C., No. G-07-0274, 2011 WL 835832, at *7 (S.D. Tex. Mar. 7, 2011)
(finding that a demise charter can have “restrictions on use” that are “not
inconsistent with possession and control”). But see Bayou Lacombe, 597
The Fifth Circuit has observed that the demise charter comparison may
“perhaps [be] less onerous” than its subsequently developed tests. See
Veracruz, 784 F.3d at 1031. Consequently, an interest that exhibits all the
Texas Eastern factors would also likely complete the original Robins Dry
Dock analogy.
52
See R. Doc. 32-6 at 34 ¶ 9(B) (Case No. 18-4745).
15
51
F.2d at 474 (noting that under a demise charter, “the shipowner retains
merely a right of reversion”).
Indeed, “the demise charterer is analogous” to “the lessee of a house
and lot.” Id. at 473 n.3 (emphasis removed) (quoting Gilmore & Black § 41). “Put differently, if [the plaintiff] shows that it has interests in the
[property] similar to the interests it would acquire in a vessel from a demise
charter or in real estate from a lease, then it can satisfy the requirements of
Robins Dry Dock.” Nexen Petroleum U.S.A., Inc. v. Sea Mar Div. of Pool
Well Servs. Co., 497 F. Supp. 2d 787, 796 (E.D. La. 2007) (Vance, J.)
(emphasis added). Here, Mardi Gras World has a lease on real estate.
Consequently, to the extent such a lease mirrors the demise charter, it also
should satisfy the Robins Dry Dock rule. Overall, therefore, whether viewed
in terms of the three-factor Texas Eastern test, or in terms of the original
Robins Dry Dock analogy that these factors attempted to illustrate, Mardi
Gras World has a proprietary interest that permits it to sue for economic loss.
Significantly, the facts of this case differ materially from those of other
cases in which the Fifth Circuit found that a proprietary interest did not exist.
In Texas Eastern itself, for instance, the plaintiff attempted to recover
economic damages following the rupture by an anchor of a pipeline carrying
natural gas. See 877 F.2d at 1219, 1223. But there, in addition to not owning
16
the pipeline, the plaintiff neither “possess[ed] the exclusive right to use” the
property, nor had “any responsibility to perform repairs” following its
damage. See id. at 1224-25. Rather, the plaintiff’s responsibility was largely
limited to “routine maintenance, consisting of the painting, cleaning, and
inspecting” of some of the pipeline’s “appurtenances.” See id. at 1225. Here,
by contrast, Mardi Gras World’s rights and responsibilities under its lease
are of an entirely different order. Mardi Gras World leases an expansive
property53 for a variety of its own business functions,54 over which it has
extensive improvement,55 insurance,56 tax, 57 repair,58 and maintenance
responsibilities. 59
Similarly, in Bayou Lacombe, which the Texas Eastern court analyzed,
a railroad company with a “contractual right to use [a] bridge” could not
recover economic damages after a vessel damaged the bridge, preventing
trains from crossing. See 597 F.2d at 470. But the railroad never possessed
or controlled the bridge, or contributed to its upkeep. See id. at 474. Again,
by contrast, Mardi Gras World exhibits a wholly different relationship with
53
54
55
56
57
58
59
See R. Doc. 32-6 at 13-14 ¶ (c)1 (Case No. 18-4745).
See id. at 31 ¶ 5(A).
See id. at 40 ¶ 12(D).
See id. at 37 ¶ 10(E)(i).
See id. at 45 ¶ 24.
See id. at 34 ¶ 9(B).
See R. Doc. 32-6 at 33 ¶ 7(A) (Case No. 18-4745).
17
the wharf: Mardi Gras World’s rights are far more sweeping than the “right
of [a] user in the nature of an easement.” Id. at 473.
Other cases likewise reveal that Mardi Gras World’s interest in the
wharf is dissimilar to circumstances where the Fifth Circuit has barred
recovery of economic losses under Robins Dry Dock. See, e.g., In re Bertucci
Contracting Co., L.L.C., 712 F.3d 245, 246 (5th Cir. 2013) (disallowing
economic damages to residents of community affected by bridge closure
following vessel allision); Dick Meyers Towing Serv., Inc. v. United States,
577 F.2d 1023, 1024 (5th Cir. 1978) (per curiam) (disallowing economic
damages to boat operator following delays caused by lock failure). Indeed,
the Court has found no case where Robins Dry Dock barred the economic
loss claims of a plaintiff with interests of the same character as Mardi Gras
World’s.
When other courts have analyzed facts similar to those here, though,
they have reached the same conclusion as this Court. Specifically, the weight
of the district court authority supports finding a proprietary interest arising
from such a lease. See Dixie Marine, Inc. v. Q Jake M/V, No. 16-12415, 2017
WL 3600574, at *1, *8 (E.D. La. Aug. 22, 2017) (concluding that a plaintiff
operating under a similar lease with the Board met all three factors and
18
therefore had a proprietary interest in a wharf); 60 Diversified Grp., LLC v.
La. Carriers, Inc., No. 12-1161, 2013 WL 2147547, at *4 (E.D. La. May 15,
2013) (concluding that “Dixie Marine has a proprietary interest in the
wharf”); In re Complaint of Clearsky Shipping Corp., No. 96-4099, 1999 WL
705553, at *4-5, *7-8 (E.D. La. Sept. 8, 1999) (finding evidence of retailers’
proprietary interest in spaces leased at the Riverwalk made summary
judgment improper); New Orleans Steamboat Co. v. M/V JAMES E.
WRIGHT, Nos. 87-4437, 88-1236, 1990 WL 128212, at *1, *8, *10 (E.D. La.
Aug. 23, 1990) (finding “excursion boat enterprise” had proprietary interest
in wharf based on a “Preferential Assignment Agreement” with the Board).
B.
The Effect of Louisiana Statutes on Mardi Gras World’s
“Proprietary Interest”
Marquette contends that, in addition to the restrictions created by
Mardi Gras World’s lease, restrictions created by the Louisiana statutes that
govern riparian property rights also prevent Mardi Gras World from having
a sufficient interest to recover. The lease, though, references these statutes,61
and does not transfer a greater interest than they permit. Consequently,
See also R. Doc. 41-1 (Case No. 18-4745).
See R. Doc. 32-6 at 28 (Case No. 18-4745) (“[T]he Parties acknowledge
that this Lease is made pursuant to the authority granted in Louisiana
Revised Statutes 9:1102.1 and 9:1102.2.”).
19
60
61
consideration of these laws does not alter the Court’s finding that Mardi Gras
World has a proprietary interest in the wharf.
Louisiana’s statutory provisions do not prevent the lease at issue from
satisfying the Texas Eastern test. First, the statutes do not remove Mardi
Gras World’s responsibility for repairing the dock. Indeed, the statutes make
no reference to “repair.” See La. R.S. 9:1102.1, 1102.2. Second, the statutes
do not divest Mardi Gras World of responsibility for maintaining the wharf.
They do provide that “wharves . . . shall remain subject to the administration
and control of the governing authorities with respect to their maintenance.”
La. R.S. 9:1102.1(A); see also id. 9:1102.2(A)(1)(e), 34:22. The lease, though,
specifies the nature of this administration and control: the Board must
provide written approval for Mardi Gras World’s maintenance. 62 Written
approval by the Board does not reduce Mardi Gras World’s responsibility to
finance and carry out the maintenance.
Finally, the limits imposed by statute do not substantively alter the
nature of Mardi Gras World’s actual possession or control under the lease.
With regard to actual possession, the statutes do emphasize the state’s right
to retake possession of the property. See La. R.S. 9:1102.1, 9:1102.2. This
right, however, does not dispossess Mardi Gras World of its actual
62
See R. Doc. 32-6 at 33 ¶ 7(A) (Case No. 18-4745).
20
possession of the wharf—that is, its “functional possession,” Tex. E., 877 F.2d
at 1225, or “[p]hysical occupancy,” Actual Possession, Black’s Law
Dictionary (11th ed. 2019).
Nor do these statutory provisions add
substantively to the limitations on control already outlined in the lease.
Indeed, the existence of these statutory provisions has not foreclosed
recovery under Robins Dry Dock in the district court decisions rendered
after their enactment.
See Dixie Marine, 2017 WL 3600574, at *8;
Diversified Grp., 2013 WL 2147547, at *4; Clearsky, 1999 WL 705553, at *45, *7-8; New Orleans Steamboat Co., 1990 WL 128212, at *8, *10.
Marquette argues that the Fifth Circuit’s holding in Veracruz suggests
that these statutes prevent Mardi Gras World from having a proprietary
interest. But Veracruz does not change the fundamentals of the Robins Dry
Dock analysis. In Veracruz, the Fifth Circuit had to determine whether,
under Robins Dry Dock, Mexican states could bring a claim for economic
loss attributable to property allegedly damaged in the BP oil spill. See 784
F.3d at 1022-23. Specifically, the court had to decide whether the group of
Mexican states or the Mexican federal government was the “true owner” of
the Mexican property. See 784 F.3d at 1022, 1027. The court concluded that
while the states had a “role . . . in managing some of the country’s property,”
21
they did not have the “crucial proprietary interest for purposes of Robins Dry
Dock.” Id. at 1031.
The Mexican states do not present a close analogy to Mardi Gras
World. As an initial matter, the Fifth Circuit in Veracruz had to adjudicate
between two governments that both claimed ownership of national assets.
See, e.g., id. at 1027-28.
Indeed, the court prefaced its reasoning by
“recogniz[ing] that the Robins Dry Dock analytical framework does not
easily map on to an intragovernmental relationship.” Id. at 1030. Here, by
contrast, the nature of Mardi Gras World’s interest in the wharf more clearly
maps onto that of an “owner pro hac vice,” id. at 1031 (quoting Bayou
Lacombe, 597 F.2d at 473 n.3), a proprietary interest countenanced by
Robins Dry Dock.
Furthermore, the Veracruz court found “essentially decisive,” id. at
1027, a constitutional provision interpreted to mean that “Mexico’s public
domain over these assets is inalienable and cannot be taken away from the
federal government by adverse possession, by either Mexican nationals or
foreigners,” id. (quoting Jorge A. Vargas, Mexican Law: A Treatise for Legal
Practitioners and International Investors § 34.4 (2001) (emphasis added)).
Here, by contrast, the statutes do not purport to endow the Board with a
similar level of supremacy. Rather, the statutes envision a more limited
22
sphere of power where, for example, “wharves . . . shall remain subject to the
administration and control of the governing authorities with respect to their
maintenance and to the fees and charges to be exacted for their use by the
public,” La. R.S. 9:1102.1(A).
Similarly, when looking outside the Mexican constitution, the
Veracruz court concluded that “[Mexican] federal law places the bulk of the
power . . . in the hands of the federal government.” 784 F.3d at 1031. Here,
though, the Texas Eastern analysis suggests that Mardi Gras World wields
sufficient power with respect to the wharf to have a proprietary interest in it.
And, while the Veracruz court confirmed that Texas Eastern did not
“sanction[] recovery for something less than ownership,” it at no point
repudiated the Texas Eastern factors. See id. at 1026. Indeed, Judge
Barbier—who authored the district court opinion affirmed in Veracruz—
subsequently applied the Texas Eastern test to find that a company leasing
a wharf from the Port of New Orleans had “a sufficient proprietary interest
to recover economic loss.” Dixie Marine, 2017 WL 3600574, at *8. That
lease is substantially similar to the one at issue here.63
Thus, neither
Louisiana statute nor the holding of Veracruz requires the Court to find that
63
See R. Doc. 41-1 (Case No. 18-4745).
23
Louisiana law prevents Mardi Gras World from having a proprietary interest
in the wharf.
IV.
CONCLUSION
For the foregoing reasons, the Court DENIES Marquette’s motion for
partial summary judgment.
11th
New Orleans, Louisiana, this _____ day of September, 2019.
_____________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE
24
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