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Louisiana Department of Transportation & Development v. Kansas City Southern8/8/2002
This appeal arose out of a dispute over the efforts of the State of Louisiana, Department of Transportation and Development (DOTD) to be paid by previous property owners for the costs of removal of allegedly hazardous material discovered during the construction of Interstate 49 in Shreveport. DOTD appealed the partial summary judgment in favor of Crystal Gas Storage, Inc. (Crystal) and Kansas City Southern Railway Company (KCS) which had joined Crystal's motion for partial summary judgment. Specifically, the trial court ruled that DOTD could not recover from the defendants any sums for which DOTD had received reimbursement from the federal government. The judgment of the trial court is affirmed.
BACKGROUND
The record, briefs and argument of counsel reveal the framework of this litigation. Congress recognized the national interest in building a nationwide set of highways using a single set of standards. Due to the massive costs, Congress chose to pay a large part of the costs for constructing the roads. Each year Congress appropriated billions of dollars to subsidize national highway construction. The Federal Highway Administration (FHWA) administered and apportioned those funds among Louisiana and the other states for construction of highway projects approved by FHWA. When a state and the FHWA signed a project agreement, the federal government became contractually obligated to pay the federal share of a project. As the work progressed, federal funds were disbursed to the states pursuant to appropriation vouchers. DOTD and FHWA executed a project agreement for the segment of Interstate 49 through Shreveport at Pierremont Road. Therefore, FHWA was obligated to pay the federal share of the costs of the project.
PLEADINGS, ARGUMENTS AND SUBMISSIONS RELATED TO MOTION FOR PARTIAL SUMMARY JUDGMENT
DOTD's Petition
In its second supplemental, amended and restated petition filed June 16, 2000, DOTD declared that it was the state agency charged with constructing and maintaining highways within Louisiana and, also, a political entity with capacity to sue and be sued. DOTD named these defendants: (1) KCS; (2) North Louisiana Goodwill Industries Rehabilitation Center, Inc. (Goodwill); (3) Steel Erectors, Inc. (Steel) and (4) Crystal. In addition, the insurance carriers for the defendants were made defendants.
DOTD based Crystal's liability on the following allegations: In 1926 a predecessor company owned the property upon which Caddo Oil & Refining Company had operated an oil refinery in 1911 which leaked hazardous material. Although the site was already contaminated at the time of Crystal's 1926 purchase, Crystal operated an oil refinery or barrel topping facility at which Crystal generated and disposed of additional hazardous material at the site. In 1935, Crystal sold the contaminated property to Eugene F. Griswold who, in turn, transferred the site to Griswold Refineries which in 1942 sold the property to M. L. Grogan whose heirs later owned the property. DOTD alleged that the City of Shreveport purchased a portion of the contaminated property from the Grogan heirs for the construction of a section of Pierremont Avenue. DOTD's petition detailed ownership history of other portions of the tract including that of Steel and Goodwill, all of which were alleged to have been contaminated by the actions of Crystal (or its predecessor companies) and/or KCS.
As to KCS, DOTD alleged that KCS's responsibility for the contamination arose out of a train derailment which occurred on March 31, 1966 at or near the property in question. At least eleven train cars caught fire, eight of which were completely destroyed. The contents of six cars were
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