Big questions unanswered in court ruling
Mayor Mitch Landrieu won the first round in his legal battle with the heirs of Edward Wisner, a fight over the millions of dollars in proceeds coming from a stretch of south Louisiana wetlands that Wisner donated nearly a century ago.
But even if it survives appeal, the Civil District Court ruling that came down in the mayor’s favor last week may leave the most important questions about the donation unresolved.
Among those questions: Should Wisner’s heirs be getting money from the land in the first place, as they have for decades? And what happens to the land next year, after the 100-year trust Wisner drew up to govern its proceeds ends?
Since the 1930s, New Orleans and the Wisners have split money from what’s known as the Wisner Donation between themselves, with smaller portions also benefiting Tulane University, Charity Hospital and the Salvation Army. Last year, a combination of royalties from oil and gas production and the rent from Port Fourchon, a busy hub for vessels serving offshore rigs, brought in more than $8 million.
But Landrieu and Wisner’s heirs have come to blows over how to manage the proceeds and what should happen when the original 100-year term of the trust runs out.
In a ruling signed Oct. 11, Judge Melvin Zeno gave Landrieu at least a partial victory. He agreed with the mayor that the trust should end next August when the 100-year term expires; Wisner’s heirs want the existing arrangement, which gives them a 40 percent cut of the land and its proceeds, to last forever.
Zeno also ruled that Landrieu does not have to seek approval from the land’s other beneficiaries before spending the city’s portion of the money. Until Landrieu took office, a five-person committee including representatives from each beneficiary organization approved the “Wisner grants” doled out each year by the city.
Finally, Zeno — who was filling in for Judge Lloyd Medley — agreed with Landrieu in deciding the Wisner trust is a public rather than a private entity, meaning the committee must hold open public meetings.
However, the judge did not rule on what might have been the most consequential argument: whether the trust should be declared null in the first place. In legal filings over the past year, Landrieu has argued that a 1928 agreement between the city and Wisner’s wife and daughters violated state law by allowing his heirs to benefit from a charitable trust. That’s significant because cutting the heirs out would more than double the city’s share of the land.
In his opinion, the judge declined to weigh in on that point, though even a broader ruling might have left unresolved questions about what happens next year.
The Landrieu administration has never spelled out exactly what it thinks should happen to the Wisner Donation once the trust is dissolved. The head of Port Fourchon has acknowledged that Landrieu’s former executive counsel, Michael Sherman, approached him about buying the property earlier this year, but it’s not clear how a sale would be negotiated.
Had the judge sided with Landrieu, the city would have controlled almost 75 percent of the Wisner land and its proceeds, a stake that would presumably have given the mayor’s office greater leverage to decide what happens next.
As it is, the Wisner heirs may still hold their 40 percent stake even after the trust dissolves, and they have already signaled their opposition to a sale.
LSU, which inherited Charity Hospital’s 12 percent stake in the land after Hurricane Katrina, added another legal wrinkle to the case in a court filing last month. The university sided with Wisner’s heirs and argued even if the trust does dissolve, the original language of the donation stipulates that the mayor should continue spending the proceeds on the same charitable causes.
“Clearly, it was Mr. Wisner’s intent from the very beginning that the proceeds from the property would be used for all time for the purposes set forth in the 1914 act of donation,” the filing reads, “ including for the benefit of Charity Hospital.”
Landrieu spokesman Tyler Gamble declined to say whether the city has an opinion on exactly what will happen next August, and Daniel Lund, an attorney for the Wisner heirs, did not immediately return a message seeking comment.
“We are pleased that the court confirmed what we have said from the very beginning,” Landrieu said in a written statement. “The advisory committee is a public entity and in the interest of accountability and transparency, it must be operated in accordance with open meetings law. In addition, the city has the right to allocate its portion of Wisner funding without the approval of the Wisner committee.”
One Wisner heir, who is not an official party to the litigation and declined to be named because he did not have permission to speak, said the family will likely take the case to the 4th Circuit Court of Appeals.