A lawsuit that began in 1994 between three Southern pipeline companies and the Louisiana Assessors Association (L.A.A.) was finally settled last month, leaving a balance of $762,000 in escrow to be distributed among several Morehouse Parish entities.
The pipeline companies - A & R, Southern Natural Gas and Tennessee Gas Pipelining - all felt their constitutional rights were being violated when they disagreed with the assessment amount placed on their properties by the Louisiana Tax Commission. The LTC categorized the properties as public service properties.
They are assessed at 25 percent of their market value, which is the amount agreed upon by a willing seller and buyer. Other properties that fall into this category consist of large corporations such as utility companies.
Smaller corporations, or mom and pop businesses, are considered personal properties, and are assessed at 15 percent of their market value.
In 1994, the three companies filed a suit against the L.A.A., contending they should be valued at 15 percent instead of 25.
“There are some companies assessed at 15 percent because they’re located in only Morehouse Parish,” said Morehouse Parish Assessor John Hill. “These three pipeline companies crossed Louisiana state boundaries so they were considered public service properties.”
Hill said because the companies felt they were “being treated unfairly,” they paid their taxes under protest. This meant they paid their taxes that were owed, but only the amount they felt was fair went to the tax assessors’ office.
The additional amount was held in escrow.
Hill said although the suit was initially filed in 1994, it didn’t go to court until 2005. He said a judge in Baton Rouge ruled in favor of the pipeline companies, but their was an unexpected twist to the outcome.
“He ruled that the companies be valued by the local accessors’ office [rather than the state office,]” he said. “When they did the numbers, they found out they would be paying a good bit more. They won, but they lost.”
Hill said even though the companies won their lawsuit, they appealed the ruling to the Louisiana Supreme Court.
When the suit was originally filed, the three companies were each individually owned. Since 1994, they’ve been sold twice to different owners. This year, they were all three purchased by one owner - Kinder Morgan.
“The new owner didn’t want any more litigation,” Hill said. “He was ready for everything to be settled.”
The suit finally ended on Oct. 29. The new ruling states that everything falls back to the way it was in 1994, before litigation began. The money that had been protested was to now be released from escrow.
“Today, the properties are valued by the Louisiana Tax Commission at 25 percent,” he said. “All of this was pretty much for nothing.”
Page 2 of 2 - Hill said the main person who’ll gain from the lawsuit is their attorney [Brian Eddington.] Eddington has represented the L.A.A. since the case began in 1994 “for nothing, up until this point.”
“The legal fees will come out of the millions of dollars tied up,” Hill said. “He’ll get over $116,000 from Morehouse Parish alone. And there are 33 other parishes involved in the suit, some who’ve accumulated much more than we have.”
Jeff Winnon, Morehouse Parish Sheriff’s Office Chief Civil Deputy, said the money that has been tied up in escrow in Morehouse Parish will be distributed within the next two weeks. It will be divided among entities such as the police jury, school board and sheriff’s office.
Winnon said in 2001, the money that had accumulated in escrow was distributed to these entities.
“Everyone understood if the lawsuit was lost, the money would be owed back,” he said.
Now that the lawsuit has ended, the money that remains in escrow since 2001 totals $762,329.37. The total of the amount protested was $1,197,466.54.
Hill said once it is divided among all the entities, it won’t be a significant amount.
“It has to be split up so many different ways that it won’t be that much,” he said. “This is a standard procedure.”