New Orleans & Gulf Coast Railway Company v. American Midstream (Louisiana Intrastate), L.L.C. and American Midstream Partnership, L.P.

NEW ORLEANS & GULF * NO. 2020-CA-0493
COAST RAILWAY COMPANY
* COURT OF APPEAL
VERSUS
* FOURTH CIRCUIT
AMERICAN MIDSTREAM
(LOUISIANA INTRASTATE), * STATE OF LOUISIANA
L.L.C. AND AMERICAN
MIDSTREAM PARTNERSHIP, *
L.P.
*
*******

SCJ

JENKINS, J., DISSENTS WITH REASONS

I would affirm the trial court’s January 13, 2020 judgment granting, in part,1

the defendant, American Midstream’s (“Pipeline”) motion for summary

judgement. I do not find that any genuine issues of material fact exist. I agree with

the trial court’s reasons for judgment2 that “the railroad does not point to any

language in its deed that purports to transfer fee ownership of the property at issue

to the Railroad.” I find no error in the trial court’s judgment dismissing New

Orleans & Gulf Coast Railway Company’s (“Railroad”) claims as to the tracts not

owned by the Railroad. The issues before the trial court were purely questions of

well-settled principles of property law, specifically the rights of a servitude owner.

STANDARD OF REVIEW

De Novo Review

same criteria district courts consider

1
I also agree with the trial court’s judgment to deny in part (Pipeline) American Midstream’ s
motion as it relates to the four tracts of land for which plaintiff specifically claims fee ownership.
2
This Court has adopted the “‘well-settled rule that the district court's oral or written reasons for
judgment form no part of the judgment, and that appellate courts review judgments, not reasons
for judgment.’” Bruno v. CDC Auto Transport, Inc., 2019-1065, p. 9, n. 11 (La. App. 4 Cir.
6/3/20), 302 So.3d 8, 13 (quoting Wooley v. Lucksinger, 2009-0571, 2009–0584, 2009–0585,
2009-0586, p. 77 (La. 4/1/11), 61 So.3d 507, 572). However, an appellate court may review the
trial court’s reasons for judgment for insight into the trial court’s judgment. Id. (internal citations
omitted).
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when determining if a summary judgment is proper.” Harris v. Boh Bros. Constr.

Co., LLC, 2020-0248, p. 4 (La. App. 4 Cir. 12/16/20), ---So.3d----, 2020 WL

8455801 at *2, writ granted, judgment rev'd sub nom, Harris v. Boh Bros. Constr.

Co., 2021-00084 (La. 3/16/21), 312 So.3d 565 (citing Madere v. Collins, 2017-

0723, p. 6 (La. App. 4 Cir. 3/28/18), 241 So. 3d 1143, 1147). In Regions Ins., Inc.

v. Alliance CAB Serv., LLC, 2019-0714, p. 4 (La. App. 4 Cir. 3/4/20), 293 So.3d

1218, 1221

Burden of Proof

Pursuant to La. C.C.P. art 966D(1), the burden of proof on a motion for

summary judgment rests with the mover; however, if the mover will not bear the

burden at trial and is able to point out the adverse party’s absence of factual

support for one or more elements essential to the claim, the burden shifts to the

adverse party. Despite the shifting burden of proof, our jurisprudence has

recognized that, “[t]he burden does not shift to the party opposing the summary

judgment until the moving party first presents a prima facie case showing that there

are no genuine issues of material fact.” Forstall v. City of New Orleans, 2017-

0414, p. 10 (La. App. 4 Cir. 1/17/18), 238 So.3d 465, 472 (citing Roadrunner

Transp. Sys. v. Brown, 2017-0040, p. 7, n. 4 (La. App. 4 Cir. 5/10/17), 219 So.3d

1265, 1270).

DISCUSSION

I find that the Pipeline, as the moving party, has presented a prima facie case

to show plaintiff’s absence of factual support to establish the Railroad’s ownership

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interest in the land on which the pipeline enjoys servitude rights. The burden,

therefore, then shifted to the Railroad to prove that it has ownership interest in the

land on which the pipeline is located.

Ownership interest is significant in this case because of the inherent rights of

an owner of immovable property versus the distinct rights of one who possesses a

servitude for right of way. Throughout the pleadings, the plaintiff asserts it had the

right to demand removal of the natural gas transmission pipeline at defendant’s

sole cost and expense; that it had the right to restore the property to the condition it

was in at the time of the construction of defendant’s natural gas transmission

pipeline, at defendant’s sole expense; and the defendant owes indemnity to

plaintiff for all costs and expenses incurred in the removal of the pipeline and

restoration of the property to plaintiff’s satisfaction, including court costs and

attorney’s fees.

Nothing in the record before the court today establishes that the plaintiff can

exercise the rights of an owner of immovable property, as the Railroad is merely an

entity which has been granted servitudes for right of ways.

Ownership Interest versus Personal Servitude Rights

The Railroad raises the same meritless “exclusive use of land” argument as

the railroad company in Faulk v. Union Pac. R.R. Co., 2014-1598 (La. 6/30/15),

172 So. 3d 1034. Faulk found its way to the Louisiana Supreme Court as a

certified question from the U.S. Fifth Circuit. The question posed to the court

queried, “whether LSA–R.S. 48:394 violates the Louisiana Constitution's

prohibition on takings.” Faulk v. Union Pac. R.R. Co., 2014-1598, p. 6, 172 So. 3d

at 1042. Prior to Faulk reaching the Louisiana Supreme Court, the “federal district

court concluded that the railroad has only a servitude over the plaintiffs' lands,

after considering the language of the pertinent deeds and the fact that the plaintiffs

and/or their ancestors-in-title had paid ad valorem taxes on these properties

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through the years.” Faulk, 2014-1598, p. 6, 172 So. 3d at 1041–42 (citing Faulk v.

Union Pacific Railroad Company, 2013 WL 1193069 (W.D.La.2013)

(unpublished)).

In resolving the constitutionality of the statute in question, the Faulk Court

first distinguished the difference between ownership interest and personal servitude

rights of the parties:

Union Pacific's contention that it is now entitled to exclusive use of
the land on which it only has a right of use servitude is clearly without
merit. A right of use, under Louisiana law, is a limited personal
servitude, not ownership.

Faulk, 2014-1598, p. 20, 172 So. 3d at 1051.

In this case, there is no evidence in the record that the landowners

transferred ownership interest of the land to the Railroad. Therefore, no exclusive

land use right exist for the railroad to grant a servitude or to prohibit additional

servitudes on the land where no ownership interest exist. A right of way granted to

a public railroad does not transfer ownership of the affected property under

Louisiana law, unless the deed itself evidences that the parties intended otherwise.

See Texas & Pac. Ry. Co. v. Ellerbe, 6 So.2d 556, 557 (La.1942); Bond v. Texas &

P.R. Co., 160 So. 406 (La.1935). A railroad's right of way is a “limited personal

servitude,” rather than a predial servitude. See Farrell v. Hodges Stock Yards, Inc.,

343 So.2d 1364, 1371 (La.1977); Parkway Development Corp. v. City of

Shreveport, 342 So.2d 151, 153–54 (La. 1977); Board of Commissioners of Port of

New Orleans v. Illinois Central Gulf Railroad Co., 379 So.2d 838, 841 (La. App. 4

Cir. 1980).

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Expiration of Encroachment Agreement

The Railroad mistakenly relies on the Longitudinal Pipeline Encroachment

Agreement entered into by the parties3 as granting it more rights than it legally had

as a party which simply possessed servitudes for right of ways.

A review of the Longitudinal Pipeline Encroachment Agreement reflects that

the parties entered into a fifteen year licensing agreement, whereby Creole paid a

$250,000.00 licensing fee to operate a pipeline parallel to the Railroad for

approximately 6.64 miles. At the end of the fifteen year period, the Pipeline had

the option to renew the agreement. Additionally, both parties possessed the right

to terminate the agreement. At the fifteen year termination date, the Pipeline, by

letter to the Railroad’s counsel, informed the railroad that the original agreement

was entered into for the purpose of providing their predecessor (Creole) the

necessary space for construction. The Pipeline further communicated that it no

longer required such space and will therefore allow the agreement to expire.

Only the fee owner of property can grant a servitude and has the exclusive

right as the owner of the property to grant additional servitudes, as long as the

additional servitudes do not interfere with the operation of the railroad. See

Inabnet v. Exxon Corp., 93-0681, p. 15 (La. 9/6/94), 642 So. 2d 1243, 1253. In

light of the allegations in the Railroad’s petition, the various pleadings filed, and

the legal arguments set forth, it appears that the Railroad is under the impression

that it has the legal authority to restrict and or prohibit the Pipeline’s use of their

own servitudes.

Prior to the expiration of the Longitudinal Pipeline Encroachment

Agreement, there were no complaints of obstruction or interference by the Pipeline

3
On December 6, 1999, the original agreement was entered into between the New Orleans &
Gulf Coast Company, Inc. and Creole Gas Pipeline Corporation, the predecessor to American,
Midstream.
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of the Railroad’s servitudes. The moment the Pipeline rejected the Railroad’s

demand to pay an additional $1,212,597.00 licensing fee and elected not to renew

the Longitudinal Pipeline Encroachment Agreement, the current suit ensued

requesting specific performance, demanding that the Pipeline be ordered to remove

the pipeline, and raising a claim of trespass. The Pipeline and the Railroad entered

into the Longitudinal Pipeline Encroachment Agreement in an effort to protect

their respective interests. Once that agreement expired, the limited contractual

relationship between the parties expired.

The Railroad does not possess the authority to dictate whether the Pipeline

can continue to enjoy its use of the servitude rights granted to it by the landowner.

The well-established body of law interpreting the Code of Civil Procedure Articles

of Book II, Things and the Different Modification of Ownership establish the

property rights for all parties involved in this litigation. Accordingly, the Railroad

fails to meet its burden to show the existence of genuine issues of material fact to

defeat the Pipeline’s motion for summary judgment.

For the reasons assigned, I respectfully dissent from the majority opinion.

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