STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
CA 08-162
CLECO POWER, LLC
VERSUS
BEAUREGARD ELECTRIC COOPERATIVE, INC., ET AL.
**********
APPEAL FROM THE THIRTIETH JUDICIAL DISTRICT COURT PARISH OF VERNON, NO. 70,079 HONORABLE LESTER P. KEES, DISTRICT JUDGE
JOHN D. SAUNDERS JUDGE
Court composed of Ulysses Gene Thibodeaux, Chief Judge, John D. Saunders, and Elizabeth A. Pickett, Judges.
AFFIRMED.
John Owen Shirley, Sr. Kyle Christian Marionneaux Phelps Dunbar, LLP 445 N. Blvd., Suite 701 Baton Rouge, LA 70802-5707 (225) 376-0274 Counsel for Plaintiff/Appellant: Cleco Power, LLC
John Malone Sharp John Michael Lamers Sharp Dobley, LLC 3888 S. Sherwood Forrest Blvd. Bldg. III, Ste. J Baton Rouge, LA 70816 (225) 291-9919 Counsel for Defendant/Appellee: Beauregard Electric Cooperative,Inc. SAUNDERS, Judge.
This case involves a dispute between two electric public utilities and an
electricity consumer regarding the proper designation of a provider of electricity to
a contiguous piece of property that overlaps the boundary demarcating the service
areas of two electricity franchise holders. For the following reasons, we affirm the
decision of the trial court in full.
FACTS:
MRM Partnership (hereinafter “MRM”) is the owner of a large parcel of
property in Vernon Parish, Louisiana, that straddles the corporate limits of the City
of Leesville (hereinafter “Leesville”) and the Town of New Llano (hereinafter “New
Llano”). Cleco Power LLC (hereinafter “Cleco”) enjoyed the sole franchise to supply
and sell electricity for light, heat, power, and other purposes to Leesville and its
inhabitants, while Beauregard Electric Cooperative, Inc. (hereinafter “BECI”), held
the sole franchise to provide the same to New Llano and its inhabitants.
During 2001, MRM began planning for the construction of a shopping mall on
the property in question. Upon learning of the respective franchises held by Cleco
and BECI, MRM chose to locate the meters and transformers for the shopping mall
on a portion of the property located in New Llano, thereby designating BECI as its
electricity provider. The structures actually built on MRM’s property at the time of
this suit were located entirely in Leesville.
PROCEDURAL HISTORY:
Cleco filed suit, pursuant to La.R.S. 42:76(1), against MRM and BECI on
January 2, 2003, alleging that BECI had usurped, intruded into, and unlawfully
infringed upon Cleco’s Leesville franchise. Accordingly, Cleco sought a declaratory
judgment, pursuant to La.Code Civ.P. art. 1871 and La.Code Civ.P. art. 1872, and a permanent injunction, pursuant to La.R.S. 42:77. Cleco also sought damages from
BECI, pursuant to La.R.S. 42:82, for unlawful usurpation.
After completion of discovery and agreement to the pertinent facts by all
parties, both Cleco and BECI filed motions for summary judgment. On October 18,
2006, the trial court conducted a hearing on both motions and rendered a judgment
granting BECI’s summary judgment motion and denying that of Cleco. Cleco now
appeals that ruling, asserting two assignments of error.
ASSIGNMENTS OF ERROR:
1. Was the trial court correct in ruling that an electricity consumer’s
constitutional property rights override the police power of a municipality to
ensure an adequate, dependable supply of electricity for its inhabitants?
2. Was the trial court correct in finding a material distinction between the present
matter and Town of Coushatta v. Valley Electric Membership Corp., 139 So.2d
822 (La.App. 2 Cir. 1961)?
STANDARD OF REVIEW:
In Champagne v. Ward, 03-3211 (La. 1/19/05), 893 So.2d 773, the supreme
court outlined the standard of review appropriate for summary judgment. There, the
court explained:
Appellate courts review grants of summary judgment de novo, using the same criteria that govern the trial court’s consideration of whether summary judgment is appropriate, i.e., whether there is a genuine issue of material fact and whether the mover is entitled to judgment as a matter of law. Ocean Energy, Inc. v. Plaquemines Parish Gov’t, 04-066 (La.7/6/04), 880 So.2d 1 . . . This court has recognized that a “genuine issue” is a “triable issue,” an issue in which reasonable persons could disagree. Jones v. Estate of Santiago, 03-1424 (La.4.14.04), 870 So.2d 1002, 1006 (citing Smith v. Our Lady of the Lake Hosp., 93-2512 (La.7/5/94), 639 So.2d 730, 751). Further, this court has defined a “material fact” to be one in which “its existence or nonexistence may be essential to plaintiff’s cause of action under the
2 applicable theory of recovery.” Id.
Id. at 776-777. Thus, if we are to uphold the ruling of the trial court, we must find
that the record compels a judgment in favor of BECI as a matter of law.
ASSIGNMENT OF ERROR #1:
In its first assignment of error, Cleco argues that the trial court erred in ruling
that an electricity consumer’s constitutional property rights override the police power
of a municipality to ensure an adequate, dependable supply of electricity for its
inhabitants. We find that Cleco’s framing of its assignment of error in this way is a
drastic misstatement of the trial court’s ruling, and as such we disagree.
Louisiana Constitution Article 1, § 4 states: “Every person has the right to
acquire, own, control, use, enjoy, protect, and dispose of private property. The right
is subject to reasonable statutory restrictions and the reasonable exercise of police
power.”
Cleco contends that the trial court proclaimed Leesville’s police power to be
subordinate in the case at bar to MRM’s individual property rights, yet that is not the
gravamen of the trial court’s ruling at all. Rather than a contest between MRM’s
property rights and Leesville’s police power, the case at bar represents a competition
between two municipalities—Leesville and New Llano—which both have equally
colorable arguments for the reasonable application of their police power to the
property in question. In ruling that MRM had the constitutional right, as the owner
of property straddling the corporate limits of both municipalities, to choose from the
electric service providers associated with these municipalities via the placement of
its electric meters, the trial court merely held that where property is subject to the
equally valid, equally reasonable exercise of police power from two competing
3 entities, the constitutional grant of reasonable police power cannot be used to justify
the extension of dominion to one municipality and not the other. We agree. Within
this context, the trial court’s ruling actually does nothing to discredit the power of a
municipality to ensure an adequate, dependable supply of electricity to its inhabitants.
Where one piece of property is subject to the police power of two municipalities, the
constitutional right as owner of that property to use and enjoy it however one sees fit
must prevail. Thus, we find this assignment of error to be without merit.
ASSIGNMENT OF ERROR #2:
In its second assignment of error, Cleco argues that the trial court erred in
finding a material distinction between the instant case and Coushatta, 139 So.2d 822.
We disagree.
In Coushatta, the second circuit was asked to evaluate whether a lower court
erred in granting an injunction prohibiting a non-franchise holding electric service
provider from constructing transmission lines and extending its electrical service
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STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
CA 08-162
CLECO POWER, LLC
VERSUS
BEAUREGARD ELECTRIC COOPERATIVE, INC., ET AL.
**********
APPEAL FROM THE THIRTIETH JUDICIAL DISTRICT COURT PARISH OF VERNON, NO. 70,079 HONORABLE LESTER P. KEES, DISTRICT JUDGE
JOHN D. SAUNDERS JUDGE
Court composed of Ulysses Gene Thibodeaux, Chief Judge, John D. Saunders, and Elizabeth A. Pickett, Judges.
AFFIRMED.
John Owen Shirley, Sr. Kyle Christian Marionneaux Phelps Dunbar, LLP 445 N. Blvd., Suite 701 Baton Rouge, LA 70802-5707 (225) 376-0274 Counsel for Plaintiff/Appellant: Cleco Power, LLC
John Malone Sharp John Michael Lamers Sharp Dobley, LLC 3888 S. Sherwood Forrest Blvd. Bldg. III, Ste. J Baton Rouge, LA 70816 (225) 291-9919 Counsel for Defendant/Appellee: Beauregard Electric Cooperative,Inc. SAUNDERS, Judge.
This case involves a dispute between two electric public utilities and an
electricity consumer regarding the proper designation of a provider of electricity to
a contiguous piece of property that overlaps the boundary demarcating the service
areas of two electricity franchise holders. For the following reasons, we affirm the
decision of the trial court in full.
FACTS:
MRM Partnership (hereinafter “MRM”) is the owner of a large parcel of
property in Vernon Parish, Louisiana, that straddles the corporate limits of the City
of Leesville (hereinafter “Leesville”) and the Town of New Llano (hereinafter “New
Llano”). Cleco Power LLC (hereinafter “Cleco”) enjoyed the sole franchise to supply
and sell electricity for light, heat, power, and other purposes to Leesville and its
inhabitants, while Beauregard Electric Cooperative, Inc. (hereinafter “BECI”), held
the sole franchise to provide the same to New Llano and its inhabitants.
During 2001, MRM began planning for the construction of a shopping mall on
the property in question. Upon learning of the respective franchises held by Cleco
and BECI, MRM chose to locate the meters and transformers for the shopping mall
on a portion of the property located in New Llano, thereby designating BECI as its
electricity provider. The structures actually built on MRM’s property at the time of
this suit were located entirely in Leesville.
PROCEDURAL HISTORY:
Cleco filed suit, pursuant to La.R.S. 42:76(1), against MRM and BECI on
January 2, 2003, alleging that BECI had usurped, intruded into, and unlawfully
infringed upon Cleco’s Leesville franchise. Accordingly, Cleco sought a declaratory
judgment, pursuant to La.Code Civ.P. art. 1871 and La.Code Civ.P. art. 1872, and a permanent injunction, pursuant to La.R.S. 42:77. Cleco also sought damages from
BECI, pursuant to La.R.S. 42:82, for unlawful usurpation.
After completion of discovery and agreement to the pertinent facts by all
parties, both Cleco and BECI filed motions for summary judgment. On October 18,
2006, the trial court conducted a hearing on both motions and rendered a judgment
granting BECI’s summary judgment motion and denying that of Cleco. Cleco now
appeals that ruling, asserting two assignments of error.
ASSIGNMENTS OF ERROR:
1. Was the trial court correct in ruling that an electricity consumer’s
constitutional property rights override the police power of a municipality to
ensure an adequate, dependable supply of electricity for its inhabitants?
2. Was the trial court correct in finding a material distinction between the present
matter and Town of Coushatta v. Valley Electric Membership Corp., 139 So.2d
822 (La.App. 2 Cir. 1961)?
STANDARD OF REVIEW:
In Champagne v. Ward, 03-3211 (La. 1/19/05), 893 So.2d 773, the supreme
court outlined the standard of review appropriate for summary judgment. There, the
court explained:
Appellate courts review grants of summary judgment de novo, using the same criteria that govern the trial court’s consideration of whether summary judgment is appropriate, i.e., whether there is a genuine issue of material fact and whether the mover is entitled to judgment as a matter of law. Ocean Energy, Inc. v. Plaquemines Parish Gov’t, 04-066 (La.7/6/04), 880 So.2d 1 . . . This court has recognized that a “genuine issue” is a “triable issue,” an issue in which reasonable persons could disagree. Jones v. Estate of Santiago, 03-1424 (La.4.14.04), 870 So.2d 1002, 1006 (citing Smith v. Our Lady of the Lake Hosp., 93-2512 (La.7/5/94), 639 So.2d 730, 751). Further, this court has defined a “material fact” to be one in which “its existence or nonexistence may be essential to plaintiff’s cause of action under the
2 applicable theory of recovery.” Id.
Id. at 776-777. Thus, if we are to uphold the ruling of the trial court, we must find
that the record compels a judgment in favor of BECI as a matter of law.
ASSIGNMENT OF ERROR #1:
In its first assignment of error, Cleco argues that the trial court erred in ruling
that an electricity consumer’s constitutional property rights override the police power
of a municipality to ensure an adequate, dependable supply of electricity for its
inhabitants. We find that Cleco’s framing of its assignment of error in this way is a
drastic misstatement of the trial court’s ruling, and as such we disagree.
Louisiana Constitution Article 1, § 4 states: “Every person has the right to
acquire, own, control, use, enjoy, protect, and dispose of private property. The right
is subject to reasonable statutory restrictions and the reasonable exercise of police
power.”
Cleco contends that the trial court proclaimed Leesville’s police power to be
subordinate in the case at bar to MRM’s individual property rights, yet that is not the
gravamen of the trial court’s ruling at all. Rather than a contest between MRM’s
property rights and Leesville’s police power, the case at bar represents a competition
between two municipalities—Leesville and New Llano—which both have equally
colorable arguments for the reasonable application of their police power to the
property in question. In ruling that MRM had the constitutional right, as the owner
of property straddling the corporate limits of both municipalities, to choose from the
electric service providers associated with these municipalities via the placement of
its electric meters, the trial court merely held that where property is subject to the
equally valid, equally reasonable exercise of police power from two competing
3 entities, the constitutional grant of reasonable police power cannot be used to justify
the extension of dominion to one municipality and not the other. We agree. Within
this context, the trial court’s ruling actually does nothing to discredit the power of a
municipality to ensure an adequate, dependable supply of electricity to its inhabitants.
Where one piece of property is subject to the police power of two municipalities, the
constitutional right as owner of that property to use and enjoy it however one sees fit
must prevail. Thus, we find this assignment of error to be without merit.
ASSIGNMENT OF ERROR #2:
In its second assignment of error, Cleco argues that the trial court erred in
finding a material distinction between the instant case and Coushatta, 139 So.2d 822.
We disagree.
In Coushatta, the second circuit was asked to evaluate whether a lower court
erred in granting an injunction prohibiting a non-franchise holding electric service
provider from constructing transmission lines and extending its electrical service
within the corporate limits of the Town of Coushatta. In holding that the trial court
ruled correctly, the Coushatta court proclaimed:
The municipality, of course, has the authority to grant other franchises if it deems such action would benefit the public. The town, however, has not seen fit, in the public interest and in the exercise of a discretion vested in it alone, to grant other franchises. Therefore, the conclusion is inescapable that the defendant has no right or authority, without a franchise, to enter into and transmit and sell electricity to the inhabitants of the municipality.
Id. at 828. The court went on to reason: “Nor do we think the defendant can
successfully circumvent the law and, by such action, acquire the right of a franchise
holder by merely moving its meter beyond the corporate limits and continuing to
serve electricity within the corporate limits of the town.” Id. at 829.
4 Cleco contends that the facts of the instant case present no material difference
from Coushatta, yet in reality the question presented here is vastly different from that
posed by Coushatta. In Coushatta, the dispositive issue was whether or not property
that had been annexed into the Town of Coushatta was subject to the electricity
franchise which that town had brokered to one electricity provider or, in the
alternative, to the franchise that Red River Parish had granted to another electricity
provider. In ruling that the property under dispute was properly considered to be
located within the Town of Coushatta, the second circuit settled that case by benefit
of a circumstance that is absent in this case—namely, the property’s existence inside
one of two mutually exclusive service areas. Here, by contrast, the property at issue
is a single, contiguous tract of land that overlaps the service areas of two competing
providers. Furthermore, notwithstanding the irrelevance of Coushatta’s holding to
the facts at issue here, whatever persuasive effect that case may have otherwise had
was negated when the second circuit vacated its opinion and replaced it with a terse,
three-paragraph judgment upon rehearing: “For the reasons stated the judgment
appealed from and our previous judgment is hereby set aside and same is now recast
to read as follows . . . .” Id. at 831. As such, Coushatta is all but inapplicable to the
res nova question we must now consider: at what point does the transaction between
an electricity provider and a consumer take place? If it is at the point of connection
to a meter, then BECI is the proper provider of MRM’s electricity. If it is at the point
of electricity consumption, then Cleco is the proper provider, and we must find this
assignment of error to be meritorious.
BECI contends that the provider/consumer transaction takes place at the point
of connection to a meter. We agree. Where, as here, property overlaps more than one
5 invisible boundary designating the service areas of competing electricity franchise
owners, the inappropriateness of compelling property owners to obtain electrical
services from both providers dictates that only one of these providers must prevail.
Cleco cites several authorities from a wide range of jurisdictions for the proposition
that the point of electric consumption or use, and not the point of connection to a
meter, should determine which electricity provider provides service. While that may
be the case in the jurisdictions subject to those courts’ authority, Cleco does not cite
nor are we aware of any controlling statute or regulatory authority mandating such a
rule in Louisiana. Cleco makes a vigorous argument that the industry and the public
would be better served with a point of consumption rather than a point of connection
rule and invites the court to confect such a rule. We decline this invitation, noting
that our civilian principles require that we defer to the Legislature and/or the proper
regulatory authority the very precise decision presently before us. Until one of these
bodies acts to the contrary, the general property law of the state must be controlling.
As such, we find this assignment of error to be without merit.
CONCLUSION:
For the reasons discussed above, we affirm the decision of the trial court in full.
Costs are to be taxed to Cleco.