Jarreau v. South LaFourche Levee District

Just compensation includes business losses in appropriate circumstances

Cases > Property Rights > Jarreau v. South LaFourche Levee District
Active: Litigation is ongoing
Case Court: U.S. Supreme Court

A Louisiana levee district condemned land containing an ongoing soil excavation business so it could use the soil for a levee. But the district shortchanged the landowner of his just compensation by paying only for the land, and not its value as a soil excavation and hauling business. Worse, the district demanded that the owner pay the district for soil that the owner had excavated before the taking. The Louisiana Supreme Court agreed that there are circumstances where business losses would be compensable, but declined to award any business losses to Chad Jarreau. Jarreau petitioned the U.S. Supreme Court to review the case.

Chad Jarreau owns a 17-acre parcel of mixed-use residential and commercial property located next to an industrial water canal. He and his wife live in a home on the front of the property and use the remaining land for a soil excavation and hauling business. In 2011, the Board of Commissions of the South Lafourche Levee District adopted a resolution “appropriating” a levee servitude along the west bank of Bayou Lafourche, including a 1-acre portion of Jarreau’s commercial land. The District offered Jarreau $1,326 as “compensation” and demanded he stop excavating dirt, even though he had to continue excavating to fulfill existing commercial obligations. The District sued to enjoin Jarreau’s business operations and Jarreau counterclaimed for just compensation, including the value of his business.

The trial court awarded Jarreau nearly $12,000 for the land and $167,705 for business losses. The Court of Appeals overturned the award for business losses, concluding that “just compensation” does not permit such recovery. The Louisiana Supreme Court held that businesses losses may be recoverable in some cases, but not this one. Jarreau is asking the Supreme Court to review his case. PLF supported Jarreau in the Louisiana Supreme Court as amicus curiae and filed an amicus brief in the Supreme Court urging the High Court to grant the petition for a writ of certiorari.

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What’s at stake?

  • The Louisiana Supreme Court’s adoption of a categorical rule barring recovery of economic damages frustrates the purpose of the Fifth Amendment’s Just Compensation Clause, which is to provide dispossessed owners with “the full monetary equivalent of the property taken.”
  • There can be no per se formula regarding the composition of compensation awards applicable to all condemnation cases – there will be circumstances where recovery of business losses is a necessary component of just compensation.

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