Amite River Basin Commission Trial
Monday, March 24, 2014 - Wednesday, April 2, 2014
An interesting civil trial transpired in Judge Wilson's
Fields' 19th JDC Courtroom. Though estimates varied, had the plaintiffs
prevailed, about one taxpayer in
five in the Greater Baton Rouge area may have eventually wound up with a surprise
check in the mail.
The trial entailed a group of taxpayers, represented as
a class, who sued the Amite River Basin Commission (ARBC) entailing what
they contended were vastly overpaid property taxes covering construction of the
Comite River Diversion Canal. The
project was originally envisioned after the massive 1983 flood which resulted in
significant backwater flooding long after rains had stopped.
The concept behind the project entails providing a sort of relief valve
(the Canal) to divert water from the Comite River into the Mississippi River.
By lowering the water level of the Comite River, water levels would also
be lowered in the Amite River basin in flood-prone areas such as Port Vincent
and French Settlement.
What was in dispute was the amount of funding for which the
ARBC (through local property owners) is responsible.
The original estimate of the project’s construction costs was
approximately $120 million (the current estimate is $210 - $225 million).
Of that $120 million, the Army Corps of Engineers (through the Federal
government) was to be responsible for 70% of the construction costs, or $84
million. The remaining $36 million
cost was originally designated to be $30 million to the State of Louisiana, and
$6 million to the ARBC.
Plaintiffs’ attorneys submitted evidence into
trial, most notably the original House of Representative Bill authorizing the
project, which indicated that $6 million was the full extent of the construction
costs for which the ARBC was responsible.
To date, by way of a 3-mill property tax approved by voters in the
District in 2000, combined with a renewal (at 2.65 mills) of that tax in 2010,
plaintiff attorneys, led by Donna Grodner, Joel Porter, Ashly Earl, and Steve
Irving, alleged that the actual collections on the tax through December 31, 2013 approximated a
$24.9 million. The suit
sought a refund of the alleged $18.9 million overpayment.
Defense attorneys, led by Larry S. Bankston, Jenna Linn, Daniel
Collarini, and Wayne Maldonado, contended that there never was any intent to cap
the ARBC’s contribution to construction costs at $6 million.
They asserted, in sharp contrast to plaintiffs’ attorneys, that the Canal
project remains viable and is fully ongoing.
For a civil trial, plenty of fireworks exploded. They began in opening arguments when Joel Porter, attorney for the plaintiffs, argued that taxpayers in the District have been “bamboozled,” that they’ve been “hoodwinked,” and that the ARBC has engaged in “taxation by misrepresentation.” At various stages in the trial, all four of the plaintiffs’ attorneys accused ARBC Executive Director Deitmar Rietschier of varying degrees of financial mismanagement and deceiving voters in order to “keep a project alive that is on life support.” The attorneys argued that Mr. Rietschier has an ulterior motive for vastly over collecting on the tax in order to fund his own $93,000+ annual salary along with his executive secretary's $44,000 salary. The executive secretary, Ms. Toni Guitrau, also serves as the Mayor of the Village of French Settlement, a position which pays only $500/month. To buttress their arguments of mismanagement and deceit, plaintiffs' attorneys presented evidence at trial and quizzed ARBC board members, Mr. Rietschier, and Ms. Guitrau in asserting the following points before the jury:
Neither President Obama nor Gov. Bobby Jindal has
agreed to appropriate a dime to the project since either has taken office.
Mr. Rietschier admitted on the witness stand, "we have had some funding
problems."
The last year the Federal government appropriated funds
for the Canal project was in 2006.
Mr. Rietschier wrote checks for $800,000 and $1 million
to the Louisiana Department of Transportation and Development (DOTD) without
any ARBC board resolutions authorizing him to do so.
During a period of cash-flow difficulties, the ARBC
pledged future tax collections to Sabine Bank, an act for which plaintiffs attorney
Donna Grodner contended the agency lacked proper authority to do. The pledging
resulted in a $3.6 million loan from Sabine Bank (evidenced by certificates
of indebtedness issued by ARBC) in order to, in the
words of Ms. Grodner, "keep this whole project afloat."
That no source of funds from the State of Louisiana
have been provided to fund the ARBC's administrative operations aside from a $200,000
appropriation over a decade ago and $150,000 around the same time with that
$150,000 designated for river water gauge installation and maintenance.
That in the minutes of the ARBC dated May 16, 2006, the
ARBC discussed the fact that the Army Corps of Engineers made a
determination that the costs of the project overtook its expected benefits and was in
grave danger of termination. Plaintiff attorney Steve Irving, in cross
examination of Executive Secretary Guitrau, pointed out that a board
resolution was adopted by the ARBC calling for a $4 million repayment to the
Commission "to avoid default" on the project. He also asked of Ms.
Guitrau if she felt voters had a right to know the "dire straits" of the
project and the Corps cost/benefit assessment before casting ballots for the
2010 renewal. Ms. Guitrau responded, "I don't know." She was
repeatedly asked if the whole project was "on life support," to which she
repeatedly responded, "no, sir."
Defense attorneys, largely led by Mr. Bankston, who posed 90%+ of witness questions, argued that the most expensive phase of the project is the Lilly Bayou project along U. S. Hwy 61 and LA Hwy 964. According to testimony by Bobby Duplantier, an Engineer with the Army Corps of Engineers in New Orleans, both phases of the Lilly Bayou segment of the project are 95% complete. Mr. Duplantier also testified that $4 million of the project's funds were diverted in 2011 to assist with alleviating the high-water levels on the Mississippi River. Mr. Duplantier did testify that, Lilly Bayou near-completion status notwithstanding, that phase of the project experienced funding shortfalls which caused the Army Corps of Engineers to strongly consider a "Termination for Convenience," which entails the exercising of a clause to terminate the construction contract through no fault of the other party and without financial implications on the terminating party.
Defense attorneys also demonstrated the minimal impact of the annual tax on a typical homeowner's tax bill. During cross examination of Mr. Terry Campbell, who was the lead plaintiff in the class action suit, Mr. Bankston presented Mr. Campbell's tax bill to him, and it showed the ARBC portion of his annual taxes to be $5.16. Mr. Campbell responded, "that's a big deal to me, sir. That's a meal. It's something to eat." Mr. Bankston asked Mr. Campbell if he supported the project, and he responded that he did. When asked if he voted for the tax or the renewal, however, he said that he did not and volunteered that he votes "against all taxes." Plaintiff attorney Ashly Earl, upon redirect of Mr. Campbell, inquired, "Mr. Campbell, you don't make hundreds of thousands of dollars a year like the defense attorneys sitting at that table, do you?" Mr. Campbell responded that he did not and relayed that he was on "fixed income." Mr. Bankston emphasized to the jury in closing arguments, in an obvious throwback to Mr. Campbell's responses to his questions on the tax that "everyone wants the benefits the Canal project will bring but they just don't want to pay for it. Well, we all hate paying taxes."
The plaintiffs' attorneys had one apparent serious blunder for which the jury may have extracted a huge price. Plaintiff attorney Steve Irving asked ARBC Executive Secretary Toni Guitrau, "don't you think your (then) $38,000 salary is excessive given that you don't have anything more than a high school education?" Several jurors may have potentially taken that particular line of questioning by Mr. Irving as potentially condescending and chauvinistic. In anticipation of any such potential perception of that nature by the jury, defense attorney Larry S. Bankston pounced on that one question (out of literally hundreds of questions) in his closing arguments. Mr. Bankston relayed to the jury that he was "offended and insulted" by Mr. Irving's line of questioning and openly asked of the jury, "why should Ms. Guitrau not have the right to advance herself?"
The verdict of the 8-female, 4-male jury? 11-1 in favor of defendants.