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May|June 2005
The Brains Behind Blackmun By David J. Garrow
Readers Respond: Justice Blackmun
Unbecoming Justice Blackmun By William Saletan
A Measure Of Truth By Kermit Roosevelt
The Federalist Capers By Roderick M. Hills, Jr.
A Dirty Little Secret By Eric Redman
Justice on the Half Shell By Aaron Kuriloff
The Prince of Darknet By Joseph D. Lasica

Justice on the Half Shell

Louisiana's oyster farmers get a raw deal in court.

By Aaron Kuriloff

ON AN AUTUMN MORNING 13 YEARS AGO, KEN FOX, THEN 53, eased his 25-foot flatboat from the dock and headed down a winding bayou to inspect his oyster beds in Plaquemines Parish, La., near the mouth of the Mississippi River. Spread across wetlands the size of Manhattan, the beds lay beneath a brackish tide normally perfect for cultivating juvenile spat oysters that had always taken three years to grow into fat adults for delivery around the world. Yet after decades of healthy production for Fox and his predecessors in tending the beds, something had gone wrong.

Unfamiliar grasses were sprouting from the black silt and crushed-shell reefs, fouling the propeller of Fox's boat and the steel tongs of his harvesting dredges. Tiny mussels balled around the oysters, keeping them small and making them unfit for market. Still, nothing had prepared Fox for the oysters he pulled from the beds that morning.

"They were all dead," he said recently. "They were hanging out of their shells."

Natural freshets, prolonged infusions of freshwater from the rain or rivers, can kill oysters in a matter of weeks, and Fox suspected that something similar had destroyed his crop. But he believed that the water had not come naturally, that it had not fallen from the sky or drained from upstate, and that it would not wash out with the tide.

The year before, the United States Army Corps of Engineers constructed a $26.1 million gate in the Mississippi River levee near the tiny hamlet of Caernarvon, about 15 miles downriver from New Orleans and five miles above Fox's oyster beds. Freshwater was allowed to pass through the gate, to push back the excess saltwater that for decades had been intruding from the Gulf of Mexico and destroying oysters and marshland throughout the Breton Sound estuary to the south. The gate project worked well at first, but then property owners in the area persuaded the project's managers to turn up the flow so the water would deposit more silt on the dying marshes. Fox believed the wetlands had been flooded to such an extent that, rather than being protected from too much saltwater, oysters were being killed for miles around by too much freshwater.

Fox considered his options. State officials had all but ignored his request for help, and he wasn't eager to sue. To his mind, lawsuits wasted time and money and produced results that bore little relation to fairness. But the elected judges around Plaquemines Parish had, in previous cases, shown a soft spot for the oyster farmers, finding ways to rule in their favor whenever the chance arose. Surely, Fox thought, the courts would come through for them again. So he turned his flatboat around and headed home to call his lawyer.

LOUISIANA SITS ON A COASTAL PLAIN OF SEDIMENT deposited by the Mississippi River as it roamed from channel to channel over five millennia. Almost a quarter of the state lies along the river's terminus, where the waters spill into the Gulf of Mexico through a series of outlets that create what geologists call a bird's foot delta. The delta's waters nourish crab, shrimp, and fish in numbers greater than are found anywhere else in the lower 48 states. Louisiana's culinary reputation owes as much to this trove of seafood as it does to the creative seasonings of Cajun cuisine. Still, the delta's greatest edible prize are the wild oysters that lie on reefs along its muddy bottom.

Up through the 19th century, the reefs produced a huge commercial bounty. Harvesters equipped with little more than long rakes shipped millions of pounds of oysters upriver to the rest of the nation every year. But by the early 20th century, the once seemingly inexhaustible reefs were nearly depleted. Biologists blamed the turn on what ecologist Garrett Hardin called "The Tragedy of the Commons," a theory in which he contended that a resource readily available to everyone sometimes received the care of none. Faced with a dwindling supply of oysters, harvesters formed gangs and battled over the last unspoiled reefs.

To restore order, state officials adopted a radical solution: privatization. Though tidal lands had traditionally belonged to the public, allowing oystermen to lease the beds of state waters and to build private reefs might prompt them to become farmers instead of plunderers. In 1902, the Oyster Commission of Louisiana began to issue leases for all but the reefs offshore, which remained public. Demand for the leases grew quickly, and the program was a resounding success over much of the next century. "In the 30 years I've been working as a manager and biologist, I've never had to worry about an oyster reef," said Ron Dugas, former oyster manager for the Louisiana Department of Wildlife and Fisheries. Biologists in other states also credited the leasing system with turning Louisiana's coast into one of the world's leading producers of oysters. But the leases brought the farmers into direct conflict with the delta's other major industry: oil. Wildcatters had drilled Louisiana's first well in 1901, in Evangeline, the heart of Cajun country, the year before the leasing program started. With thousands of potential drilling sites in the vast wetlands, state officials allowed oyster farmers and oil companies to hold rights to the same properties. Oyster farmers caused oil spills by damaging pipelines with their dredges. Oil workers detonated seismic charges over reefs, dredged pipeline canals through productive grounds, and polluted oysters with waste.

The disputes between the oil and oyster industries eventually landed in court, where oyster farmers won their biggest legal victory. In 1944, the Louisiana Supreme Court ordered the Texas Oil Company to pay damages to oysterman Ludwig Doucet for dumping chemical waste on his leased property. The ruling established that an oyster leaseholder had a "valuable property right" in his reef, and the court gave him the right to sue for damages. The Doucet ruling led to years of courtroom defeats for oil companies that had to defend themselves before judges and jurors who blamed them for damaging the coastal environment. Most farmers didn't even have to sue to collect damages. Rather than spend money in court, oil companies bought out the leases in the path of their operations.

BUT A THIRD FORCE, MOTHER NATURE, SOON THREATENED the farmers' fortunes. Since the 1930s, levees built along the Mississippi had protected thousands of square miles from flooding but also deprived the delta of freshwater. In its absence, saltwater from the Gulf was able to penetrate through bays and bayous and 30,000 miles of man-made canals. The salt killed grasses, trees, and other vegetation that held the marsh's soil in place. Over the past half-century, as if the coast has been sliding into the water, land has been engulfed at a rate that now exceeds one acre every 38 minutes. Over 75 years, Louisiana has lost to the sea more than 1,900 square miles, an area the size of Delaware.

The disappearing landscape created a serious economic problem for Fox, whose oyster farm had, over close to 40 years, developed into a seafood business that included a fleet of a dozen vessels, a processing plant, and annual revenues of more than $2 million. So he and other oyster harvesters proposed a solution: push back the saltwater by diverting freshwater from the river into the marsh. After more than 13 years of lobbying by the oyster industry, Congress appropriated money for the diversion at Caernarvon. But as the Army Corps of Engineers neared completion of the structure, Fox realized that the solution might be worse than the problem.

A group of powerful landowners wanted to let more water through the diversion so that more sediment could be deposited on their vanishing property. They had already won important political support from local councilman Henry "Junior" Rodriguez Jr., who announced at the structure's dedication ceremony, "This is not some tool for the benefit of the oyster fishermen. This is a tool for the benefit of everyone."

Fox and his allies protested that increasing the flow would destroy the oyster business. But they later backed off, Fox said, because State Senator Sammy Nunez promised to help if they suffered any losses. A measure passed authorizing the increased flow. Less than seven months later, Nunez said he did not remember making the promise. Not long after, Fox encountered his dead oysters and sued the Corps of Engineers and assorted federal officials for damages.

In August 1995, Judge Christine Miller of the U.S. Court of Federal Claims dismissed the suit, ruling that a clause in the leases prohibited the oyster farmers from recovering damages caused by operation of the project. Fox appealed, but the U.S. Court of Appeals for the Federal Circuit denied him a rehearing.

Fox, though, had also filed suit in state court against the Louisiana Department of Natural Resources, the operator of the project. The case was assigned to Judge William Roe, who had spent his career as a lawyer representing fishermen and oyster poachers. He owed his position on the bench to a Plaquemines Parish electorate dominated by commercial fishermen, and, while campaigning, Roe had rarely passed up a chance to criticize state authorities for how they smothered the fishing industry with regulations. Fox's lawyer, a renowned New Orleans native named Wendell Gauthier, had calculated that Fox's claims would receive a more sympathetic hearing in state rather than federal court, and Roe did not disappoint him.

The judge refused the state's request to move the case to Baton Rouge, despite a law requiring that all suits against state agencies be heard in the state capital. When Andrew Wilson, the state's lead attorney, subpoenaed receipts that could prove seafood dealers had been buying oysters from reefs that had supposedly been destroyed, Roe quashed the subpoenas, ruling that they were an unfair imposition on local businesses. When Wilson tried to introduce a survey indicating that many of the leased properties had never produced oysters, Roe disallowed the evidence because, he said, the method used to produce the survey was unreliable. When Wilson asked Roe to dismiss jurors with ties to the seafood industry, the judge chose not to. The panel ultimately included fishermen, their relatives, employees of seafood companies, and two people who had done business with the oyster farmers and their lawyers. Finally, Roe prohibited jurors from considering the lease clauses that shielded the state from liability for the diversion's operations—the clauses that had sunk Fox's case in federal court.

At the two-week trial, Fox's testimony struck a sympathetic chord with the jurors. He talked about how he'd built his grandfather's business into a thriving enterprise and how State Senator Nunez had betrayed him and the other oyster farmers. He brought dead oysters to show the jury and demonstrated how the silt and the mussels had killed them. He talked about being forced to lay off his own daughter in 1993. In December 2000, the jurors reached a unanimous verdict. To no one's surprise, they decided that the state had taken the oyster farmers' property without just compensation. But they also issued an award that, by any measure, far exceeded the value of the farmers' property and lost profits. For every acre listed in the suit, the oyster farmers received $21,345, a figure 20 times greater than the highest price any of them had paid for a lease. The total award came to $1.3 billion, more than Louisiana spends annually on public safety or social services or transportation, more than the value of every oyster ever sold in the state.

Fox's share was more than $20 million, an amount that provoked him to feel regret rather than joy. "I was shocked when they came out with that figure," he said. "It's not justifiable." He thought that $2,000 an acre, which would have given him $3.4 million, would have been more than enough, and he worried that the jury's award would only lead to trouble. Even Judge Roe said the plaintiffs deserved a "much, much lower figure," though he added that he could find no legal basis to change the jury's award. Instead, he offered a warning: "It brings to mind the adage, that you better be careful what you wish for."

The state appealed the verdict while taking steps to protect itself against further liability. It shut down the Caernarvon diversion and delayed opening a second diversion west of New Orleans. It issued a moratorium on all oyster leasing. Most significantly, it stopped construction on 15 other projects that represented the initial stage of a $14 billion, comprehensive effort to save the coast from erosion. Without the projects, hurricanes and floods would pose an even greater danger for New Orleans, which lies below sea level, for the nation's oil and gas industry (a third of whose infrastructure is concentrated along the Louisiana coast), and for several other major ports along the Gulf.

To take advantage of public outrage over the verdict, the state also proposed an amendment to the Louisiana Constitution. The amendment would retroactively prohibit a property owner from recovering more than the "fair market value" of any of his holdings damaged by a public project designed to restore the state's coast.

The proposal was, in effect, a referendum on Fox's case, because it would reduce his award, though that aspect of the amendment was unlikely to survive a legal challenge. In October 2003, however, voters approved the amendment by a 20-percent margin. Even though many voters in coastal regions worked in the seafood industry, their concerns about the loss of land overshadowed their sympathy for Fox's cause and resulted in their passing the amendment by a 30-percent margin.

Then state officials set out to make sure Fox and his fellow oystermen didn't get a dime. Although a divided state court of appeals upheld the verdict in October 2003 by a 3-to-2 margin, two governors (there was a change of leadership, but not of outlook) swore they wouldn't settle the cases, no matter how much the uncertainty might harm the state's finances and bond rating. An appeal was filed with the Louisiana Supreme Court, and when Kathleen Blanco—the third governor to serve during the Fox case saga—took office in 2004, she rejected a settlement offer from the oystermen of $160 million, or 12 cents on each dollar of the jury's award. "I want to make clear that I have not and will not consider using hundreds of millions in taxpayer dollars to settle these lawsuits," she said.

Oyster farmers were fast becoming public enemy number one, a development that Fox believed was profoundly unfair. "We offered to settle for $15 million before we ever went to trial," he said. "The governor laughed at us, said 'We ain't giving y'all a nickel.' A jury, an appeals court found the state wrong. All of these people couldn't have been wrong through all the court system."

IN OCTOBER 2004, AS WORD LEAKED OUT that a decision by the state supreme court was imminent, Fox joined his lawyers, state's attorney Wilson, and a small group of reporters outside the century-old state courthouse on Royal Street in New Orleans. Fox was prepared for a setback. The award had never been real to him, because he knew better than anyone that no acre of oyster beds was worth $21,345. Still, he had lost 60 percent of his business to the ravages of freshwater, and he figured the court would reduce the award to an amount that would compensate him for his losses.

Fox was not prepared for the opinion that the clerk handed to him. In a unanimous decision, the seven justices ruled the oyster-bed lease clause that shielded the state from liability—the clause that was Fox's downfall in federal court—was valid in 192 of the 204 leases at issue. The holders of the 12 leases in which the clause was not valid could sue for damages to their business, the court said, but not on the basis that there had been a taking of their property. "The state owns the waters," wrote the justices. "The state owns the oysters. Thus, the state could not take its own property." More centrally, Fox and hundreds of other oyster farmers would recover nothing.

Fox was crushed. For a decade, he and his family had poured time and money into maintaining properties whose value had suddenly dropped. Under the state supreme court's reasoning, Louisiana could build levees, redirect rivers, and flood oyster beds with little consideration for the economic interests of Fox and his fellow farmers.

For his failed attempt at legal recourse, Fox was branded a troublemaker by many Louisianians, including some who worked in the oyster industry. Fox felt even worse for his son, who had taken over the family operation and would have to suffer the consequences of the court's ruling. It was a safe bet that the industry would never be the same. Because the state could take away oyster beds almost at will, a business once based on the rhythm of the tides and seasons would now answer to the whims of politicians in Baton Rouge.

Aaron Kuriloff is a New York-based writer who has written extensively about fisheries and coastal issues.

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