Department of Highways v. Southwestern Electric Power Co.
145 So. 2d 312, 243 La. 564 (1962)
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Rule of Law:
A state agency, acting under its police power, may not compel a privately-owned utility to remove and relocate its facilities from a public right-of-way at its own expense to accommodate a new highway project. Such an action constitutes a 'taking' or 'damaging' of the utility's franchise rights, which are considered property, and requires just compensation under the state constitution.
Facts:
- The City of Shreveport granted franchises to Southwestern Electric Power Company and Shreveport Transit Company, Inc. to erect poles, lines, and other equipment in the city's public streets and alleys.
- Pursuant to these franchises, the utility companies installed their electrical and trolley-related facilities within the designated public rights-of-way.
- The Louisiana Department of Highways began constructing Interstate 20, a new limited-access highway, which would traverse the City of Shreveport.
- The designated route for the new highway occupied the space formerly used by city streets and alleys where the utilities' facilities were located.
- The highway project required the complete removal and relocation of the utilities' poles, lines, and other equipment from the construction path.
- The Department of Highways, claiming to be exercising the state's police power, ordered the utility companies to remove and relocate their facilities at their own expense.
- The utility companies refused, arguing that the order was an expropriation of their property rights for which they were owed compensation for the substantial relocation costs involved.
- The City of Shreveport declined to compel the utilities to move their equipment, treating the dispute as a matter between the Department and the companies.
Procedural Posture:
- The Department of Highways sued Southwestern Electric Power Company and Shreveport Transit Company, Inc. in a Louisiana trial court, seeking to compel the removal of their facilities at their own expense.
- The trial court rendered a judgment adverse to the Department of Highways.
- The Department of Highways appealed to the Louisiana Court of Appeal, Second Circuit.
- The Court of Appeal affirmed the trial court's judgment.
- The Department of Highways petitioned the Louisiana Supreme Court for a writ of review, which was granted.
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Issue:
Does the Department of Highways' order requiring privately-owned utility companies to remove and relocate their facilities from public streets at their own expense to accommodate a new highway project constitute a taking or damaging of the utilities' franchise rights in violation of the constitutional requirement for just compensation?
Opinions:
Majority - Summers, Justice
Yes. The Department of Highways' order constitutes a taking or damaging of the utilities' property rights, for which just compensation is required. The franchises granted by the city are valuable property rights protected by the constitution. The Department's action is not a mere regulation under police power, which is meant to control harmful uses of property, but is rather a 'destruction' of the property right for a new public use. The legislature did not delegate police power to the Department to take property without compensation; it specifically authorized acquisition by methods like expropriation and purchase, which require payment. Distinguishing this from prior cases like New Orleans Gaslight, the court noted that this case involves the complete destruction of the streets and removal of facilities, not merely shifting them within the same street, making it a taking rather than a regulation.
Dissenting - McCaleb, Justice
No. The Department's order does not constitute a compensable taking or damaging of the utilities' property. The utilities' franchise right to occupy a specific street is contingent on the street's existence; once the City consented to the street's conversion into a highway, the right to occupy that particular space terminated. Even if their property were considered 'damaged,' the cost of removing personal property is a consequential injury (damnum absque injuria) and not compensable under Louisiana's expropriation law. The franchise was granted with the implied condition that it must yield to a future, necessary public use, and the Department has the right to clear obstructions from its right-of-way.
Dissenting - Hamlin, Justice
No. This case does not involve a 'taking' but rather an 'adjustment' of facilities, analogous to the non-compensable relocation required in New Orleans Gaslight Co. v. Drainage Commission. Since public highways are essential for public health, safety, and welfare, the utility companies, which have profited from the use of public land, should bear the cost of relocating their own facilities. Forcing the state to pay these costs would burden taxpayers and could slow down essential public works projects.
Analysis:
This decision establishes a critical distinction between a state's non-compensable police power to regulate and its power of eminent domain, which requires compensation. By classifying the forced relocation of utility infrastructure as a 'destruction' rather than a 'regulation' of a property right (the franchise), the court significantly strengthened protections for private property holders against state action. The ruling limits the ability of government agencies to shift the financial burden of public improvement projects onto private entities whose property is not inherently harmful but is merely in the way. This precedent requires a factual analysis of the government's action: if it functionally destroys a property right for a new public use, it is a compensable taking, regardless of whether it is labeled an exercise of police power.
