City-Parish Councilman Brandon Shelvin told The Advocate that Waste Facilities of Lafayette and the company it contracted with made demands for $17 million in damages, an amount the council member calls "pretty outlandish."
Waste Facilities of Lafayette, which had the rug pulled from under it last year when the City-Parish Council voted unanimously to revoke its permit for a waste transfer facility in unincorporated Lafayette Parish, told Lafayette Consolidated Government officials in a recent executive session that claims for damages total about $17 million, according to City-Parish Councilman Brandon Shelvin. Shelvin apparently divulged the amount that had been discussed privately to The Advocate for its March 26 story.
The Independent was able to confirm independently that demand letters from Waste Facilities and the company it contracted with, IESI La Corporation, did estimate damages at $17 million. However, Waste Facilities' much-expected March 25 federal lawsuit against LCG does not specify a dollar figure it is seeking to recover.
IESI thus far has not filed suit.
In its suit, Waste Facilities asserts that the case belongs in federal court, which has both original and supplemental jurisdiction over state law claims. Federal courts sometimes hear takings disputes arising from the actions of state and local governments, and at least one lawyer contacted for this story believes the case will stay in federal court. That's significant because, unlike what happens in state courts (which can't force governments to cough up judgments), it won't be up to LCG on whether it will pay any potential judgment or how it will pay. The feds can even seize local government property to satisfy monetary judgments - "a hell of a stick for the plaintiff to wield," says the attorney, who asked not to be identified.
(Readers might recall that in 2007 six bank accounts belonging to the Orleans Parish District Attorney's Office were frozen by a federal court order seeking payment for the $3.4 million judgment resulting from former DA Eddie Jordan's firing of numerous white employees in 2003.)
But before the first nickel is paid out, it's sure to be a long, drawn-out process as settlement talks are likely to commence before Waste Facilities attempts to prove its case in court.
The Advocated reported that in July 2011 Waste Facilities paid almost $400,000 for the property, a 16.38-acre site at 340 Sunbeam Lane that was to be used as a transfer station and waste hauling facility. A month before that purchase, in June of 2011, Waste Facilities and IESI La Corporation signed a lease agreement giving IESI an option to purchase the facility.
Waste Facilities then hired a contractor to prepare the site and construct the facility at a cost of $2.57 million, according to the suit. Two change orders after construction commenced - one a $774,000 commitment from IESI La Corporation - added another $787,000 to the project.
Waste Facilities was granted its construction permit Sept. 19, but when neighbors who were unaware that the facility had been permitted began complaining, Shelvin introduced an ordinance to block it, in essence revoking Waste Facilities' permit. Before the council's vote, however, City-Parish Attorney Mike Hebert issued an urgent warning to council members about the potential repercussions of the ordinance. Hebert said none of the permits or approvals had been issued by mistake or error and that all complied with state and local laws, ordinance and regulations. "If Waste Facilities has acquired a vested property right to its building permit, a withdrawal of that permit would likely be held a ‘taking' of property obligating LCG to pay compensation to Waste Facilities," Hebert wrote the council.
Hebert said potential damages could extend into the millions of dollars and might also include relocation costs and economic damages such as loss of profits.
Despite the warning, the council voted unanimously for Shelvin's ordinance just days before the October election. It became law after City-Parish President Joey Durel refused to sign it.
Waste Facilities is seeking to recover the cost of the property and construction, real estate and leasing commissions, claims by contractors and subs, claims of IESI La Corporation, lost rental proceeds, lost profits, lost opportunities, attorneys fees, court costs, and all expensed associated with investigating its claim.
IESI spokesman Dave Clabo did not immediately respond to a request for comment.