Avenal v. State

After historic flooding in 1927, the United States Army Corps of Engineers (the corps) expanded the Mississippi levee system to prevent major floods. The expanded levee system negatively affected oyster cultivation in Louisiana by keeping fresh water out of wetlands surrounding the river, raising the water’s salinity, and destroying oyster habitats that require a mix of fresh and salt water. In the 1950s, federal and state officials planned to reintroduce fresh water to impacted areas through diversion structures. As land continued to erode and zones favorable to oyster growth shifted over the next two decades, state officials and the corps identified locations for freshwater-conversion structures. In 1982, the state announced construction of the Caernarvon Freshwater Diversion Structure in the Breton Basin (the Caernarvon project). In anticipation of the Caernarvon project, in 1989, the Louisiana Department of Wildlife and Fisheries (DWF) inserted an indemnification clause in oyster leases for state-owned water bottoms, requiring the state to be held harmless for claims related to coastal restoration (the hold-harmless clause). The Caernarvon project was completed and operational in 1991. In 1994, a group of Brenton Sound oyster leaseholders (the oyster leaseholders) (plaintiff) filed a class-action lawsuit against the state (defendant), alleging that the Caernarvon project’s destruction of Breton Sound oyster cultivation through altered salinity levels constituted an unlawful taking under the Louisiana Constitution. A jury found in favor of the oyster leaseholders, and the court awarded damages totaling over one billion dollars to class members. On appeal, the appellate court found that the hold-harmless clause was invalid and affirmed the trial-court judgment. The state subsequently appealed.