New Orleans Mayor Mitch Landrieu’s administration and the heirs of Edward Wisner traded their first blows in court Tuesday in a civil trial that will decide who controls the bulk of a lucrative piece of Louisiana coastline that Wisner donated to the city nearly 100 years ago.
Arguments centered on two basic questions: Whether the arcane language of legal documents from 1914 and 1928 gives the mayor unrestricted rights in deciding how to hand out the city’s income from the donated land to charitable causes and whether a trust governing the land should continue as it is after its original 100-year term expires in August.
A lot of money rides on the answers. Last year, the Wisner Donation threw off more than $8 million in revenue, most of it from oil and gas leases and the rent from Port Fourchon, a hub for offshore rigs.
Landrieu argues the trust should dissolve next year, which would leave his administration with the option of selling the land outright.
Wisner’s heirs, who have been collecting a portion of the land’s income since the 1930s, want the existing arrangement to continue in perpetuity.
It could be months or years before the case is resolved, though. Visiting Judge Melvin Zeno, filling in for Civil District Court Judge Lloyd Medley, heard close to four hours of testimony on Tuesday but did not issue a ruling. Zeno said he would try to come back with a decision quickly, but he noted that his ruling would have to deal with numerous points of dispute. And any decision he makes is likely to draw an appeal from the losing side.
As they have in court filings over the past few months, Wisner’s heirs argued a 1928 settlement between their family and the city stipulated the mayor of New Orleans would dole out money from the land only with the “advice and consent” of a committee made up of representatives from the land’s other beneficiaries.
Along with the heirs and the city, Tulane University, Charity Hospital and The Salvation Army all get a cut of whatever revenue the Wisner land generates. And all of those parties have a representative on an advisory committee that manages the land. Until Landrieu took office, that committee also signed off on whichever grant recipients the mayor chose to receive grants from the city’s share.
Cathy Norman, who served as the committee’s secretary-treasurer for nearly two decades, took the stand Tuesday and described how Landrieu’s administration ignored the committee, handed out grants without its knowledge and stopped giving it monthly financial statements about how the money was spent.
The city disputed none of that.
Erica Beck, Landrieu’s executive counsel who serves as the mayor’s representative on the committee, testified Landrieu set up a separate, in-house committee made up mostly of his own appointees to review applications for grants.
Landrieu’s attorneys argued nothing in the trust agreement prohibits the mayor from doing so. City Attorney Sharonda Williams said the “advice and consent” language in the 1928 settlement should apply to decisions about the trust itself, not to distribution of the city’s share of the proceeds.
None of the other beneficiaries, the city pointed out, has to answer any questions about how they spend their portions.
Donald Lund, the attorney for the heirs, could not explain for the judge why the 1928 agreement would single out the city’s portion of the proceeds for greater scrutiny, but he argued it does. He pointed out not just the “advice and consent” language but specific stipulations attached to the original 1914 donations calling for the city to spend the money on various charitable causes.
As to why the trust should go on indefinitely, even after the 100-year term expires next year, Lund focused his argument on a state law passed in 1920 that made all charitable trusts perpetual unless they include explicit language to the contrary.
“This trust was made perpetual under the clear language of that act,” he said.
Adam Swensek, another attorney for the city, countered by saying the 100-year expiration date on the trust itself should be explicit enough. Lund argued the wording of the statute would require not just an expiration date but also a clear provision allowing whoever donated the land to dissolve the trust “midstream.” Without such a provision, he said, any existing charitable trust at the time became perpetual.
Swensek disagreed, noting that even Wisner’s heirs have acknowledged that they’ve been working since the 1980s to reach an agreement with the various other parties involved on extending the trust’s lifespan. He said they wouldn’t have bothered with that if they thought the 100-year trust was meant to continue forever.
What the heirs are trying to do now, Swensek said, is “retroactively transform the clear and unambiguous language of these documents.”