La. Dotd v. Kansas City Southern Rwy. Co.

846 So. 2d 734, 2003 WL 21152554
CourtSupreme Court of Louisiana
DecidedMay 20, 2003
Docket2002-C-2349
StatusPublished
Cited by34 cases

This text of 846 So. 2d 734 (La. Dotd v. Kansas City Southern Rwy. Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
La. Dotd v. Kansas City Southern Rwy. Co., 846 So. 2d 734, 2003 WL 21152554 (La. 2003).

Opinion

846 So.2d 734 (2003)

LOUISIANA DEPARTMENT OF TRANSPORTATION AND DEVELOPMENT
v.
KANSAS CITY SOUTHERN RAILWAY CO., et al.

No. 2002-C-2349.

Supreme Court of Louisiana.

May 20, 2003.

*735 Richard P. Ieyoub, Attorney General, James M. Bookter, Lawrence A. Durant, Baton Rouge, Lawrence E. Marino, William *736 M. Hudson, III, Lafayette, Counsel for Applicant.

Bobby S. Gilliam, Wilkinson, Carmody & Gilliam, Shreveport; Albert M. Hand, Jr., Cook, Yancey, King & Galloway, Shreveport; Osborne J. Dykes, III, John S. Stephens, Counsel for Respondent.

CALOGERO, Chief Justice.

Louisiana Department of Transportation and Development ("DOTD") expended several million dollars to remove environmental pollution at a construction site for Interstate 49 in Shreveport, Louisiana. The United States government, through the Federal Highway Administration ("FHWA"), thereafter reimbursed DOTD ninety percent of the remediation costs. DOTD sued, among other defendants, Kansas City Southern Railway Co. ("KCS") under the Louisiana Environmental Quality Act ("LEQA") to recover the clean-up costs, alleging that KCS polluted the site. The courts below held that DOTD's action was limited to the ten percent of clean-up costs it had actually incurred, and that DOTD could not recover the portion of the costs reimbursed to DOTD by the FHWA. We reverse the lower courts and conclude that DOTD may seek judgment against KCS for the full measure of damages caused by its pollution.

FACTS AND PROCEDURAL HISTORY

Each year, Congress appropriates billions of dollars to subsidize state highway construction projects, and the FHWA apportions these funds among the states. 23 U.S.C. §§ 104(b), 118. States become eligible for their allotted federal funds by obtaining FHWA approval for a project, signing a project agreement with the FHWA, paying the full cost of construction from state funds, and, finally, requesting reimbursement from the FHWA for the federal share of the cost, which is ninety percent on interstate projects. In completing these federally funded highway projects, states must closely adhere to FHWA standards and procedures.

On June 2, 1989, DOTD entered into a project agreement with FHWA to construct a segment of Interstate 49 in Shreveport. During construction, DOTD discovered environmental contamination at the site. FHWA apportioned a share of Louisiana's federal highway construction funds to remedy the polluted site preceding construction of the highway. In disbursing these funds, the parties followed the procedure applicable to highway construction. DOTD paid the full costs of clean-up from state funds, and was thereafter reimbursed by FHWA the ninety percent federal share. DOTD filed suit to recover the cost of eliminating the pollution, naming as defendants KCS, North Louisiana Goodwill Industries Rehabilitation, Inc., Steel Erectors, Inc., Crystal Gas Storage, Inc., and the insurance carriers for these entities. KCS is the only defendant remaining in this litigation.

In its petition, DOTD alleged that KCS's responsibility for the contamination arises out of a March 31, 1966 train derailment which occurred at or near the property in question. The contents of the derailed train cars were destroyed or disposed of at the scene of the accident. The train had allegedly been carrying hazardous materials, and the materials were buried at or near the site. DOTD brought its action under the LEQA, La.Rev.Stat. 30:2271, et seq., specifically citing La.Rev.Stat. 30:2276(G)(3), which provides that a party who has incurred remedial costs in responding to a discharge or disposal of a hazardous substance covered by the Act *737 may sue to recover such remedial costs.[1] In response to the allegation in the defendant Crystal's answer[2] that DOTD could not recover the portion of the clean-up costs reimbursed by FHWA, DOTD filed a Motion in Limine seeking to withhold from the jury evidence of FHWA's participation in DOTD's remediation.[3] In support of its Motion in Limine, DOTD argued that the collateral source rule prevented defendants from receiving a reduction in their liability simply because DOTD received funding for the remediation from an independent source. DOTD further stated that its relationship with FHWA was analogous to a partnership, giving DOTD authority to recover the full amount of damages on the partnership's behalf. DOTD pointed out that FHWA was paying, as well, ninety percent of the attorney's fees to pursue this action.

Crystal filed a Motion for Partial Summary Judgment, seeking dismissal of DOTD's claim as to the remediation costs paid from federal funds. Crystal argued that DOTD had no standing or other legal authority to recover on behalf of the FHWA the ninety percent of the damages reimbursed by FHWA. According to Crystal, allowing DOTD to seek the entire amount of incurred clean-up costs would constitute an impermissible double recovery by DOTD of the identical remediation costs. KCS joined Crystal's Motion for Partial Summary Judgment. In its Opposition, DOTD re-urged the applicability of *738 the collateral source rule. Alternatively, DOTD asserted that FHWA had specifically authorized DOTD to act on its behalf to recover the federal portion of the clean-up costs. DOTD relied on affidavits, as well as on four documents prepared by FHWA in an attempt to prove this agency relationship.[4]

The district court granted the defendants' Motion for Partial Summary Judgment. The court found that DOTD would receive a double recovery if it were allowed to recover the ninety percent federal share of the clean-up costs after having the same costs funded by the federal government. The trial court further found insufficient evidence to indicate that a partnership existed between DOTD and FHWA or that DOTD was specifically authorized by FHWA to recover the federal money expended. After the district court entered judgment, Crystal entered into a confidential settlement agreement with DOTD.

DOTD filed a Motion for New Trial, alleging that the federal share of any remediation costs recovered would belong to the FHWA, not DOTD. Thus, DOTD would not receive a windfall or double recovery. DOTD attached in support of its motion several affidavits which had not been previously considered by the district court.[5] The district court denied DOTD's Motion for New Trial, specifically finding that no genuine issues of material fact existed with regard to its earlier conclusion that DOTD could not recover remediation costs already reimbursed by FHWA, as this would constitute a prohibited double recovery. The district court found that, according to the pleadings, DOTD sued only in its own right, not in an agency capacity on behalf of FHWA. After the district court designated its judgment as final, DOTD appealed the grant of Crystal's Motion for Partial Summary Judgment.

The court of Appeal affirmed the district court's grant of partial summary judgment, finding that allowing DOTD to recover the entire amount of remediation costs incurred would constitute an impermissible double recovery. The court of appeal held that the collateral source rule was not applicable in this action under the LEQA.

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Cite This Page — Counsel Stack

Bluebook (online)
846 So. 2d 734, 2003 WL 21152554, Counsel Stack Legal Research, https://law.counselstack.com/opinion/la-dotd-v-kansas-city-southern-rwy-co-la-2003.