Property owners lose federal lawsuit to compel S&WB to pay for drainage project damage

A federal judge has ruled against several Uptown home and business owners who asked the court to compel the Sewerage & Water Board to pay damages they were awarded in state court. They want the local utility to compensate them for repairs caused by heavy equipment and pile driving during five major drainage projects over the past two decades.

Multiple Orleans Civil District Court decisions have gone against the Sewerage & Water Board for repair costs stemming from the Southeast Louisiana (SELA) Urban Flood Control projects. Winning judgments have totaled more than $10 million, and another $1.2 million is owed to plaintiffs’ attorneys for their fees and costs.

U.S. District Court Judge Martin Feldman dismissed the federal lawsuit Wednesday. He ruled that the plaintiffs failed to prove the Sewerage & Water Board had violated the Fifth Amendment of the U.S. Constitution, which in part states private property shall not be taken for public use without just compensation.

“The court understands the plaintiffs’ frustrations, but this claim is legally baseless,” Feldman said in his decision. “Courts have consistently observed a distinction between a state’s taking of property without just compensation and its temporary retention of just compensation that has been fixed and awarded by a state court.”

Plaintiffs also argued that the Sewerage & Water Board’s process to settle claims for SELA project damage amounted to a declaratory judgment that violated their rights to due process. Feldman disagreed with that cause of action as well.

In 2015, the Sewerage & Water Board established a SELA damage claims process in partnership with the U.S. Army Corps of Engineers. Any money the Sewerage & Water Board paid out to claimants would be credited against what it owes the Corps for its $305 million share of the SELA projects.

One of the property owner lawsuits in state court found that engineering reports used to deny claims submitted through the SELA process were “not credible.” The largest settlement paid out was $130,735, according to the federal lawsuit property owners filed in March.

In his ruling, Feldman cited precedents that reaffirmed his finding that federal courts are reluctant to intervene in local matters.

“State courts can enforce their own judgements,” he wrote. “… The plaintiffs’ claims are dismissed with prejudice.”

Mike Whitaker, one of the plaintiffs’ attorneys, said a challenge to the U.S. 5th Circuit Court of Appeal will be pursued.

“Naturally we are disappointed and respectfully disagree with the court’s ruling,” Whitaker said in an email. “The SWB knew in advance that construction of the SELA Project would damage nearby homes, and agreed in advance to pay for the damage. Now it refuses to do so in spite of millions of dollars in judgments against it, and with more to come.”

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