Appeals court rules on West Cameron Port lawsuit - KPLC 7 News, Lake Charles, Louisiana

Appeals court rules on West Cameron Port lawsuit

The following is a news release from the Port of Lake Charles:

In litigation filed by the West Cameron Port in December 2005, the Louisiana Court of Appeal, Third Circuit, reversed a lower court decision in Cameron Parish which had invalidated the purchase and lease of 200 acres of property in Cameron Parish for the construction and operation of $1 billion liquefied natural gas (LNG) terminal owned and operated by Sempra Energy, Inc. and its subsidiary, Cameron LNG.

The Court of Appeal ruled that the purchase by the Lake Charles Port of the property and its lease for the development of the LNG terminal was proper and valid and the decision of the lower court was reversed.

"The Port of Lake Charles is pleased with this favorable decision and the Port looks forward to a final conclusion of this litigation. The Lake Charles Port will continue to offer its assistance and help to Cameron Parish and the West Cameron Port, as it has in the past, and will continue working to assist Cameron Parish in every way possible." said Kay Barnett, President of the Board of Commissioners of the Lake Charles Harbor and Terminal District.

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The following is a news release from West Cameron Port Authority:

The Louisiana Third Circuit Court of Appeal handed down a 3-2 opinion where the majority (3) voted to reverse the decision of Judge Fontenot on very limited and specific factual grounds – (1) the amendments to the lease did not require LCP to engage in port, harbor or terminal activities unrelated to channel maintenance in Cameron Parish, and (2) the amendment did not fundamentally change the nature of the lessee's operations.  With this ruling, three judges have ruled that the actions of Lake Charles Port ("LC Port") are legal and three judges have ruled that the actions of LC Port are illegal.  The Court's majority opinion was 19 pages while the dissenting opinion was 24 pages.  The majority and dissenting opinions can be found on the Courts website - www.la3circuit.org.

While all five Judges on the panel agreed with District Judge H. Ward Fontenot that the enabling statutes of the LC Port do not allow the acquisition of land by LC Port outside of its territorial boundaries, the majority of the Third Circuit panel ruled, based upon a very narrow fact conclusion that "LCP had authority as a Local Sponsor to amend the lease subject to which it bought the land outside its territorial bounds, given (1) that the amendment did not require LCP to conduct port, harbor and terminal activities in Cameron Parish, and (2) the amendment did not fundamentally change Cameron LNG's operations so as to, in effect constitute a new lease."  A review of the majority opinion shows very little support from the record for such conclusions.

The dissenting opinion aptly provides that "our difference lies in the majority's ultimate finding that LCP, though adrift at sea on all of its arguments, is saved by the facts of the case as the majority sees them."  The dissent then goes on to point out the substantial evidence in the record showing that LC Port is in fact conducting port activities in Cameron Parish and that there was absolutely no basis in law or fact to find that the multiple amendments to the lease did not change the nature of Cameron LNG's and LC Port's operations at the site and in Cameron Parish. 

The majority opinion correctly noted that "(T)his is a case of first impression." Both ports have always recognized that this is a case that will need to be decided by the Louisiana Supreme Court.  It appears that this matter will reach the Louisiana Supreme Court in a 3-3 tie and the final result will turn on an interpretation of facts which are all in the record – whether such facts (1) indicated that the conduct of LC Port in amending the lease constituted port harbor and terminal activities which were not related to its Local Sponsor activities in maintaining the Channel and (2) whether the changes to the lease were in fact substantial.

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To view the documents issued by the Court of Appeals:

click here to view the majority opinion

click here to view the dissenting opinion

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