Crescent Towing & Salvage Co. v. Ormet Corp.

694 So. 2d 1121, 96 La.App. 1 Cir. 1333, 1997 La. App. LEXIS 1426, 1997 WL 236259
CourtLouisiana Court of Appeal
DecidedMay 9, 1997
DocketNo. 96 CA 1333
StatusPublished
Cited by1 cases

This text of 694 So. 2d 1121 (Crescent Towing & Salvage Co. v. Ormet Corp.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Crescent Towing & Salvage Co. v. Ormet Corp., 694 So. 2d 1121, 96 La.App. 1 Cir. 1333, 1997 La. App. LEXIS 1426, 1997 WL 236259 (La. Ct. App. 1997).

Opinion

JaLOTTINGER, Chief Judge.

In this action, various towing companies seek to enjoin the port commission and the lessee of its terminal from requiring ships calling at the terminal to utilize in-house tugboat services provided by a competitor. Following the district court’s denial of their request for preliminary and permanent injunctions, the towing companies have appealed.

FACTS

The Greater Baton Rouge Port Commission (hereinafter, “Port Commission”), a named defendant herein, owns a bulk cargo terminal situated on the east bank of the Mississippi River at Burnside, Louisiana. The Burnside terminal was constructed in the late 1950’s by Olin Matheson Chemical Corporation (hereinafter, “Olin Matheson”). Upon its completion, Olin Matheson sold the terminal to the Port Commission which financed its acquisition through the issuance of general obligation bonds. Following its purchase of the Burnside terminal, the Port Commission leased this facility to Olin Matheson for use in connection with its adjacent plant facility.

The Burnside terminal is a public marine terminal designed to assist shippers of bulk cargo in the loading and off-loading of their goods to and from ships and barges. For a fee, the terminal provides various services including line handling, cargo stevedoring, and fresh water and barge shifting. Under the terms of the lease agreement, the terminal lessee may use and operate the terminal primarily for its own business requirements as well as those of its subsidiaries. To the extent the terminal is not required for the lessee’s business purposes, it is available for use by others “without undue discrimination.” The current lessee of the Burnside terminal is defendant, Ormet Corporation (hereinafter, “Ormet”), an assignee of Olin [1123]*1123Matheson.1 Ormet also operates an adjoining alumina plant.

Approximately fifteen ships a month call at the Burnside terminal. Generally, each of these ships require two or more tugs to assist them from the middle of the river to a berth at the dock, and a similar number upon their departure. Traditionally, the selection of a tug company was left to the ship’s owner or his agent. Due to the highly competitive market for tug services, it was not uncommon for a ship owner or agent to obtain, through negotiation, a discounted rate 13from the tug company’s published tariff rates. The ship or its charterer would thereafter be billed directly by the tug company, who would generally extend credit terms of sixty days or more. Four tug companies, namely, plaintiff-appellants, Crescent Towing & Salvage Co., Inc. (hereinafter, “Crescent”) and E.N. Bisso & Son, Inc. (hereinafter, “ENB”); intervenor-appellant, River Parishes Company, Inc. (hereinafter, “RivCo”); and defendant-appellee, Bisso Towboat Co. (hereinafter, “Bisso.”) heretofore competed for the business of docking and undocking ships calling at the Burnside terminal.

The present dispute arose when Ormet, the present lessee of the Burnside terminal, in a letter to ship owners and agents dated April 19, 1995, advised that effective May 1, 1995, all vessels calling at the Burnside terminal must arrange to use its tug service when docking, undocking or performing any other activity requiring tug service. Because Ormet does not own any tugs, it entered into a “non-exclusive” contract2 with Bisso to provide tug services to ships calling at the Burnside terminal.

Under the system implemented by Ormet, Ormet books the tug service directly with the ship owner or his agent, and retains for itself a portion of the non-negotiable tug fee. Additionally, Ormet now bills for tug services in advance. As a result of this contract, Bisso, which by its own admission, previously enjoyed only 20-25% of the tug service at Burnside, has dramatically increased its share of the market through the exclusion of its competitors. Bisso now bills Ormet directly for the tug services rendered, and receives payment within forty-five days.

After implementation of the contract and approximately one month before plaintiff-appellants instituted the present action, representatives of Crescent, ENB and RivCo, together with a representative of the New Orleans Steamship Association, presented their objections and arguments at a meeting of the Executive Committee of the Port Commission. A representative of Ormet was also present and explained the company’s contract with Bisso. The commission, after seeking the advice of its counsel, decided that Ormet was not in violation of its lease, and decided to table further consideration of the issues.

JjACTION OF THE DISTRICT COURT

Crescent and ENB filed this action for injunctive relief alleging that Ormet’s contractual relationship with Bisso has deprived them of access to Burnside’s public terminal, and caused them irreparable harm including the loss of customers, profit and goodwill. Through a subsequently filed intervention, RivCo joined with Crescent and ENB in their effort to have Ormet’s contract with Bisso declared illegal and contrary to public policy. Following a three day hearing, the district court, while expressing concern over what it found to be “about as exclusive an arrangement as I can imagine,” declined to issue a preliminary injunction. Following the denial of their request for a preliminary injunction, the parties stipulated to the entry of a judgment as to plaintiff-appellants’ entitlement to permanent injunctive relief based upon the transcript and other testimony adduced at the preliminary injunction hearing. The request for a permanent injunction was denied. From these judgments, plaintiffs [1124]*1124and intervenor (hereinafter collectively referred to as “appellants”) have appealed.3

ISSUES RAISED ON APPEAL

On appeal, appellants argue that the district court erred in the following respects:

1. In holding that, as a matter of law, Bisso was not a “carrier” within the meaning of La. R.S. 34:1223(E), which prohibits the grant of exclusive franchises to “carriers;”
2. In holding that the Port Commission had not impermissibly delegated its authority to Ormet;
3. In holding that the exclusive franchise did not violate state and federal navigational servitudes;
4. In concluding, as a matter of law, that the Burnside terminal is not a “public utility” that is prohibited from tying the unrelated terminal and harbor tug services together;
5. In concluding, as a matter of law, that the exclusive franchise granted by Or-met to Bisso with the Port Commission’s tacit approval did not violate the federal Commerce Clause.

DISCUSSION

1. Is Bisso A Carrier?

| sin their first assignment of error, appellants assert that the trial court erred in failing to hold that Bisso was a carrier within the meaning of La. R.S. 34:1223(E). That statute, which relates to the rights and powers of the Port Commission, provides:

E.

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Related

Crescent Towing & Salvage Co. v. Ormet Corp.
720 So. 2d 628 (Supreme Court of Louisiana, 1998)

Cite This Page — Counsel Stack

Bluebook (online)
694 So. 2d 1121, 96 La.App. 1 Cir. 1333, 1997 La. App. LEXIS 1426, 1997 WL 236259, Counsel Stack Legal Research, https://law.counselstack.com/opinion/crescent-towing-salvage-co-v-ormet-corp-lactapp-1997.