Red Stick Studio Development, L.L.C. VS State of Louisiana Through the Department of Economic Development, State of Louisiana Through the Division of Administration and State of Louisiana Through the Office of Entertainment Industries Development
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STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT NO 2009 CA 1347 RED STICK STUDIO DEVELOPMENT L L C VERSUS STATE OF LOUISIANA BY AND THROUGH THE DEPARTMENT OF ECONOMIC DEVELOPMENT STATE OF LOUISIANA BY AND THROUGH THE DIVISION OF ADMINISTRATION STATE OF LOUISIANA BY AND THROUGH THE OFFICE OF ENTERTAINMENT INDUSTRIES DEVELOPMENT rendered December 23 2009 Judgment Appealed from the 19th Judicial District Court In and for the Parish of East Baton Rouge Louisiana Trial Court No 572 608 Honorable Janice Clark MARY OliVE PIERSON Judge ATTORNEYS FOR AND PLAINTIFF APPELLEE V THOMAS CLARK JR RED STICK STUDIO MICHAEL J DEVELOPMENT LLc BUSADA BATON ROUGE LA W SCOTT KEATY ATTORNEYS FOR PAUL H SPAHT DEFENDANTS APPELLANTS AND STATE OF LOUISIANA THROUGH LEU ANNE LESTER GRECO DMSION OF ADMINISTRATION STEPHANIE GRAY laGRANGE STATE OF LOUISIANA THROUGH AND DEPARTMENT OF ECONOMIC CARLOSA ROMANACH DEVELOPMENT PAMELA MILLER PERKINS LOUISIANA THROUGH OFRCE BATON ROUGE LA OFENTERTMNMENTINDUSTRY DEVELOPMENT BEFORE CARTER C l GUIDRY AND PETTIGREW ll STATE OF PETTIGREW l Defendants Administration the appellants the of State of State through Louisiana the through Louisiana the Division of Department of Economic Development and the State of Louisiana through the Office of Entertainment Industries the Development over the proper Session of the Section 3 C an the judgment s Red Stick Act 456 amended La concerns grandfathered or infrastructure initial certification portion of Act 456 is commonly referred to reasons court in a in suit favor of involving a RS which 47 6007 picture investor tax credits for both productions and infrastructure of Act 456 This trial Development L L c Act 456 application for pre certification 2007 the interpretation of Section 3 C of Act 456 of the 2007 Regular Legislature motion concerns appeal from Red Stick Studio plaintiff appellee dispute State that follow we was as projects projects for which filed on or before August 1 the Grandfather Clause For affirm PERTINENT FACTS AND RULING OF THE LOWER COURT According to the record on February 27 2007 Red Stick submitted picture investor credits for for motion in La RS 47 6007B 12 12 as State certified a State certified infrastructure an project application as defined follows infrastructure project shall mean a film video television and digital production and postproduction facility and movable and immovable property and equipment related thereto or any other facility which supports and is a necessary component of such proposed state certified infrastructure project all as determined and approved by the office the secretary of the Department of Economic Development and the division of administration authorized by this Section include movie theaters Red Stick s to 2 The term infrastructure project as are shall not other commercial exhibition facilities application and application fee requirements of La regard or under such terms and conditions 5 R 47 6007D 2 a were submitted in accordance with ii and D 2 b ii which provide as follows with applying for motion picture investor credits Application An applicant for the motion picture investor credit shall an application for initial certification to the office and the secretary of the Department of Economic Development and in the case of infrastructure projects to the office the secretary and the division of administration that includes the following information a submit 2 the ii For state certified infrastructure projects the application shall include description of the infrastructure project A preliminary budget cc A complete detailed business plan and market analysis dd Estimated start and completion dates aa A detailed bb application is incomplete additional information may be requested prior to further action by the office or the secretary of the Department of Economic Development or in the case of infrastructure projects the office the secretary and the division of administration An application fee shall be submitted with the application based on the b If the following i 0 2 percent times the estimated total incentive tax credits ii The minimum application fee is two hundred dollars maximum application fee is five thousand dollars On and the August 27 2008 the State made the determination that Red Stick s project with estimated expenditures of 665 500 00 Initial Certification Letter The letter met all of the criteria for the issuance of the provided as follows opinion of the Department of Economic Development DED and the Office of Entertainment Industries Development OEID as approved by the DOA Louisiana Division of Administration certain descriptions of the outlined in your submission dated February 27 2007 referenced project above as supplemented by additional information provided by you appear to meet the criteria of an infrastructure project under the Louisiana Motion Picture Incentive Act You may proceed as a State Certified Infrastructure Project in the meaning of RS 47 6007 B 12 as of the effective date of the statute July 1 2005 provided that expenditures are made for infrastructure as provided by law and determined by the State In the Although your project appears to meet the criteria of a State Certified Infrastructure Project you should be aware that the administrative rules implementing the procedures and guidelines on the tax credit program for state certified infrastructure projects are in the process of promulgation in accordance with law Application of these rules will govern the expenditures that are qualifying investment and may ultimately limit or apportion the amount of your proposed investments that will qualify for the tax credits authorized by the Act Subject to this limitation to the extent that the actual expenditures are in conformance with the rules then the expenditures for the infrastructure project you describe qualify for the following credits described in RS 47 6007 Section 3 B as follows ii Since this application was filed on applicant shall have until January 1 2010 project In response to this letter Red Stick filed a or earn August 1 2007 the tax credits on this petition for mandamus arguing that the language contained in the paragraph numbered ii 3 before to in the August 27 2008 Initial Certification Letter was not found prayed for the issuance of anywhere in La RS 47 6007 writ of mandamus a or in Act 456 directing the State to requirements contained in paragraph ii and either not replace them the language taken directly from the Section 3 C of Act 456 amended its petition for mandamus requesting meaning of La RS 47 6007 as amended On November 24 2008 who advised the court that that replace Red Stick the them with subsequently declaratory judgment concerning the by Act 456 petition for mandamus argued by the parties was stipulation had been reached wherein the parties agreed a language from Section 3 C of Act 456 parties Red Stick reserved its right to proceed declaratory judgment action and the parties agreed that the request for mandamus would be dismissed with on prejudice The stipulation was agreed a writ of to by all December 3 2008 Trial a remove paragraph ii of the Initial Certification Letter dated August 27 2008 be replaced with the with a the a or Red Stick on the petition for declaratory judgment was held on March 10 16 2009 In judgment signed March 25 2009 the trial court found in favor of Red Stick declaring that Section 3 C means that an minimum of 20 of Act 456 is clear and percent Thereafter the life of the previously term qualify for application must receive its Initial Certification Letter and spend or 10 million of the total base investment Initial Certification Letter that is 2010 unambiguous and that the project provided for in the unique to film production infrastructure before January 1 application may earn 40 percent infrastructure tax credits for the The trial court also ordered that the December 3 entered into 2008 stipulation by the parties be made the judgment of the court This appeal by the State followed ASSIGNMENTS OF ERROR 1 The trial court erred in concluding that Section 3 C was clear words unambiguous qualify for mean that an application must receive i its initial certification letter and ii spend a or 10 million of the total base investment provided for minimum of 20 in the initial certification letter that is unique to film production infrastructure before January 1 2010 if it does so it may earn tax credits after January 1 2010 until the project is finished and a and that the 4 The trial court erred allowing the testimony of supposed including post legislative intent by legislators enactment statements by legislators concerning the meaning of Section 3 C evidence of private communications with legislators concerning supposed legislative intent and the opinions of numerous non legislators concerning their interpretation of Section 3 C during the five day trial 2 in evidence of statements The trial court erred in 3 legislative history of Act 4 456 of 2007 The trial court erred in that means failing to consider the contemporaneous an application filed to conclude that Section 3 C failing on or before August 1 2007 shall have twenty four months in which to make expenditures for which tax credits are sought Expenditures made after January 1 2010 may not earn tax credits DISCUSSION The proper novo 287 CDI interpretation of Corp v a statute is 2008 0218 Hough p 7 question of law which La App 1 Cir 3 27 09 we a statute p 6 that when La a 2 4 05 894 So 2d 325 law is clear and consequences it shall be art begins with the language of the statute itself Springs Economic Development Dist as All Taxpayers 330 written and The Denham Property Owners 2004 application does not lead to absurd no further interpretation may be made La Civ Code art art 9 legislature 2 Louisiana Civil Code article 9 instructs and its unambiguous applied in search of the intent of the v review de 9 So 3d 282 Legislation is the solemn expression of legislative will La Civ Code interpretation of 1674 a Denham Springs 2004 1674 at 6 7 894 SO 2d at 330 331 However when the must be interpreted as language of State Farm Mut Auto Ins Co App 1 Cir 929 So 2d 1288 an absurd or 934 So 2d 745 When a 95 1425 statute is unreasonable result the statute construed to Inc p 7 statute is susceptible of different meanings it having the meaning that best conforms to the purpose of the law 3 24 06 a U S 747 748 ambiguous Agencies L L C writ denied or the letter must produce La 7 2 96 v a 2006 0933 La when its literal construction 16 6 06 produces give way to the spirit of the law and reasonable result 676 So 2d 557 562 5 2005 0728 p 4 La Fontenot v Chevron U S A In reasons in favor of Red Stick the trial court issued the ruling for following detailed oral judgment that the law is clear and unambiguous To I t appears to this court qualify for that means to meet the condition to this court The conditions It appears that the being A B and C Thereafter you move forward Legislature in their infinitive wisdom made a determination and wrote a going in they knew they had the votes passed what they wanted to pass in lighting fashion as they typically do the last day of the session knowing they could pass it but also knowing that it s subject to a gubernatorial veto if the executive branch doesn t want it This court is firmly of the So it could have easily have been vetoed that this is a clear and unambiguous statute Therefore the court opinion does not need to go looking for a legislative intent and it will apply it so that it does not reach any absurd consequences Having said that if the court were going to look for legislative intent certainly it however is embodied in the testimony of the House and Ways Chairman Taylor Townsend who clearly and unequivocally and even unabashedly testified to exactly what goes on down at the Legislature Now the Legislature is the most plenary of the three branches the most powerful of the three branches because it represents the exercise of the people to govern themselves by their Legislators Closest to the people is the House of The Senate being the upper chamber yields to the Representatives House from time to time but it s supposed to exercise more reason than had the votes statute the house Be that all appointed the unanimous once over it may but once the committee has been and this particular one was conference committee as they made their decision the ball carrier gets the ball to the House and that votes lined nuances up without because it was court will hold as a s what happened here Mr Townsend had his respect to merits and without respect to the a clear understanding going in Therefore the matter of law that this statute is clear and Red Stick qualified when it reached condition number unambiguous It has from that point until it three and got that pre certification letter finishes the project to claim the forty percent tax credit Judgment to be signed accordingly After finding a thorough review of the record in this that Section 3 C of Act 456 is clear and not lead to absurd consequences case we unambiguous Section 3 C of Act 456 C An agree with the trial court and its provides as application does follows application for an infrastructure project filed on or before August 1 2007 shall have twenty four months from the date of approval of the rules or January 1 2008 whichever is earlier in which to qualify for the forty percent tax credits earned on expenditures Tax credits on infrastructure projects shall be considered earned in the year in which expenditures are made provided that a minimum of twenty percent or ten million dollars of the total base investment provided for in the initial certification that is unique to film production infrastructure shall be expended before infrastructure tax credits can be earned on expenditures The payment of tax credits may extend beyond or be made after the year expenditures are made Emphasis added 6 s We agree with the trial court used in Section 3 C 1 determination that the words s that mean an application filed on or qualify for before 10 or million of the base total investment they are August 1 2007 must apply for and receive its Initial Certification Letter and 2 spend percent as a minimum of 20 provided for in the Initial Certification Letter that is unique to film production infrastructure before January 1 2010 Thereafter it is of the project to earn 40 qualified The law is to be in search of the intent of the applied legislature 1 percent infrastructure tax credits for the life as written with no further interpretation made La Civ Code art 9 DECREE Accordingly we costs in the amount of of Louisiana through affirm the 4 721 10 judgment of the trial court in all respects are assessed Appeal against defendants appellants the State the Division of Administration the State of Louisiana through the Department of Economic Development and the State of Louisiana through the Office of Entertainment Industries We Development accordance with Uniform Rules Courts of Appeal issue this memorandum opinion in Rule 2 16 1B AFFIRMED 1 that if we were to look past the language of Legislature our conclusion would remain the same i e that the Legislature passed Act 456 with no deadline for incurring expenditures Rather the Legislature established a minimum expenditure of 20 percent or for grandfathered projects 10 million of the total base investment to be expended within the twenty four month time period before a project is able to earn any tax credits The record is replete with testimony to support such a finding Thus although we need not look for additional evidence of legislative intent in the instant case a complete record was made below by the trial court Moreover we find no error in the trial court s decision to allow numerous We note as did the trial court in its oral reasons for judgment Act 456 and consider other evidence of record in search of the intent of the including legislators witnesses 3 C to testify during the five day trial concerning their interpretation of Section provides as follows with regard to the admissibility of evidence to Louisiana Revised Statutes 24 177 determine legislative B 2 1 intent The text of a law is the best evidence of intent necessity for the law the circumstances under which it concepts of reasonableness and contemporaneous legislative history may considered in determining legislative intent a The occasion and enacted be legislative The statute also enumerates what was also shall not constitute proof or indicia of legislative intent but as n Red Stick in brief absent is a prohibition on the use of trial testimony correctly pointed by otably of legislators or members of the executive branch or the prohibition on the examination and use of the prior versions of what was ultimately enacted by the legislature out 7
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