Incentive-Based Greening: A Primer for Promoting Sustainable Design Policies for Localities

By Cameron Miller, Issue Editor


Buildings are gluttonous consumers of natural resources: constructing buildings creates vast amounts of waste material and operating buildings contributes significantly to global pollution.[1] Most reports indicate that on a worldwide basis, nearly 40% of all primary energy[2] is used on buildings.[3] Particularly in the United States, buildings are responsible for approximately 62% of electricity consumption, over 36% of primary energy consumption, and 30% of greenhouse gas emissions.[4] Thus, it is critical that all actors involved in the development process—government officials, private developers, property owners, and the general public—understand what sustainable building and green policies are and why sustainability goals are so important in the development industry.

Sustainable, or “green,” building practices represent a critically important component of the broader environmental movement. Rather than tackle a full-scale review of the legal aspects surrounding the implementation of pro-sustainability development practices, this comment focuses on a subset of green building policy implementation: incentivizing green building practices at the local government level. The first sections provide a brief overview of what sustainable building practices are and why they are environmentally important. Next, the comment looks to how pro-sustainability policies are implemented; this section compares green building policies mandated by various levels of government, as well as green building standards promulgated by private groups. Finally, this comment presents a survey of policy measures that local governments can undertake to promote green building practices in their communities.


What is Green Building?

“Green building” can be defined as the practice of increasing the efficiency with which buildings and their sites use energy, water, and materials and reducing the (potentially negative) impacts buildings have on human health and the environment through better siting, design, construction, operation, maintenance, and removal.[5] Sustainable buildings seek to limit resource consumption and environmental impacts over the life of buildings—from initial resource extraction to waste disposal—while simultaneously providing building occupants an optimized environment.[6] To accomplish this, sustainable buildings have many design features that are either newly developed technology or otherwise not standard in most construction projects.[7]

Why Build Green?

Building construction, operation, maintenance, repair, and demolition have an enormous impact on the environment.[8] Buildings are a primary factor contributing to greenhouse gas emissions, water and air pollution, excessive energy consumption, solid waste generation, and other critical problems.[9] In the United States alone, there are over 300 billion square feet of building space, which includes over 111 million housing units and almost 5 million commercial buildings.[10] Buildings also account for staggering quantities of storm water runoff, and the indoor air quality of buildings is often substantially more polluted than outdoor air.[11]

With the substantial external effects of buildings in mind, proponents of green building strategies cite a variety of benefits associated with constructing sustainable buildings. Chief among these is a considerable decrease in energy costs over the life of the building, typically achieved through the lower cost of utilities.[12] Proponents of green buildings often point to these cost reductions over the life of green buildings as a justification of building green in the first place.[13] Pro-sustainable building advocates also point to increased indoor air quality and improved overall comfort within green buildings, which could lead to increased productivity in such buildings.[14] Taken together, these positive aspects of green buildings on the micro level have significant environmental effects at the macro level in terms of reducing carbon emissions from buildings, decreasing buildings’ contributions to urban heat islands, and reducing the materials expended in constructing and maintaining buildings.

Governmental v. Private Action?

In the United States, the federal government has not adopted any sweeping mandates for sustainable building. Some federal agencies have, however, established green building mandates for any construction that takes place within its respective department or agency.[15] In this absence of federal regulation, many states have passed legislation either mandating or encouraging entities to incorporate Leadership in Energy and Environmental Design (“LEED”) standards in new construction.[16] While state mandates typically only apply to public projects, many states have passed regulations seeking to incentivize private developers to build green.[17]

By far the most common practice, however, is for cities and local governments to implement regulations relating to sustainable building practices.[18] Unlike state legislation regarding green building policies, some localities have actually mandated sustainable building practices in the private sector, as well as the public sector.[19] Still, the most common practice is for local governments to promote green building practices in the private sector through legislation implementing incentives for sustainable building.[20] Promoting these practices is usually accomplished by tying the receipt of any incentives to developers and builders meeting certain levels of certification under a privately promulgated green building rating system, generally the LEED rating system of the United States Green Building Council (“USGBC”) discussed below.[21]

Currently, there is no universal regulatory system to promote and standardize sustainable building practices in either the public or private sector.[22] Instead, a handful of green building standards have served as guidelines for green building both for governmental and private actors.[23] The most prominent of these such guidelines is the USGBC’s LEED Green Building Rating System, which was created to “bring uniformity to the American green building movement by establishing a common standard of measurement for green building elements, promoting integrated, whole-building design practices, recognizing environmental leadership in the building industry, stimulating green competition, raising consumer awareness of green building benefits, and transforming the building market.”[24]

The LEED Rating System operates as a checklist, with projects seeking certification under the program incorporating various green building components into their designs in an effort to receive credits towards LEED certification.[25] For projects seeking LEED certification, points are awarded in seven categories of human and environmental health, as well as one regional priority category that varies by state or locality.[26] Within each of these categories, there are a given number of “credits.”[27] A certain number of points are available within each credit; thus, it is up to the developer to determine what mix of credits—and the number of points under each credit—he or she wants to satisfy to add up to a certain number of points required for a given level of certification.[28] There are currently four levels of LEED certification: Certified, Silver, Gold, and Platinum.[29] Each successive level of higher certification is achieved by scoring more points on LEED’s rating checklist.


Incentive Strategies for Promoting Sustainable Development

This section reviews five programs commonly used by municipalities to promote green building practices in their private development sectors. The strategies outlined here are green building tax incentives, density bonuses and green TDRs, expedited permitting for green projects, pro-sustainability grant programs, and green design assistance programs. These policies and programs are not an exhaustive list; rather, they represent some of the most frequently adopted strategies for incentivizing green development. Other viable strategies certainly exist, and it is critical that a community hoping to stimulate greater use of green building practices tailor any pro-sustainable building program to the specific objectives and needs of that community.

  1. Tax Policies and Incentives

Tax abatements and incentives are often the most flexible programs because states and municipalities have the ability to approve a multitude of sustainable performance standards and allocate those abatements or incentives to any taxing jurisdiction.[30] It is critical to note that developers and property owners have different priorities depending on whether they are small- or large-scale developers, short- or long-term owners or investors, developers looking to maintain equity investments in multiple properties, or corporate or residential building tenants.[31] Given the diversity of these parties and their differing interests and needs, tax incentives should be used to entice each group.[32]

While the additional cost of designing and constructing sustainable buildings are borne by the developer up front, the benefits gained from reduced energy costs accrue over the life of the building.[33] As such, a short-term investor or developer may never obtain any tangible benefits from building a green building, thus reducing the incentive to build green. Additionally, building owners who lease their properties may never realize these utilities savings and might prefer to spread those benefits over multiple years.[34] Transferable tax credits can encourage developers to build green, and tax abatements can be used to help defray the additional expenses often incurred by a sustainable design.[35]

  1. Bonus Density and TDRs

Some jurisdictions have implemented floor/area ratio (“FAR”) bonuses, height bonuses, reduced landscaping requirements, and counting green roof space as landscaping and open space in return for including sustainable design components or achieving certain green building ratings.[36] Other jurisdictions sanction transfers of development rights (“TDRs”), whereby property owners sever the ability to develop their typically more rural property and sell those rights to developers seeking to increase densities on prospective projects in more urban locales. Programs like this have the benefit of protecting rural lands from developments by placing conservation easements on rural properties that have transferred their development rights, as well as promoting growth in urban centers. When municipalities have capacity shortfalls, these bonus density programs can be particularly enticing to both developers and building owners. These types of programs also help alleviate the timing problem highlighted above regarding who in the development and occupancy process ultimately obtains the benefits of green building incentives.[37]

Bonus density and TDR programs help developers and building owners realize increased profits by allowing developers to increase floor space on prospective projects, which can enhance a project’s overall viability.[38] It is important, however, that this incentive remain exclusive. That is, as green building becomes more common, more prospective projects might attempt to utilize this incentive.[39] Thus, it is critical that municipalities maintain comprehensive sustainability metrics as prerequisites for obtaining these incentives and reexamine the stringency of those requirements as green building develops.[40]

  1. Expedited Review and Permitting

Streamlining the permitting and approval process for building, plan, and site permits can save green developers considerable time and money.[41] This strategy can be difficult to implement, as it typically involves reorganization of a community’s planning staff. However, over time, it can lead to substantial cost savings, both for the municipality, as well as for developers and architects.[42] Thus, one of the major benefits of expedited review and permitting process incentives is that once the structural changes in planning departments take place, these programs require little to no additional financial investment—they simply require a shift in permitting priority.[43]

Expediting the permitting and review processes affords a municipality the ability to increase tax revenues while also providing the development community with a valuable incentive.[44] However, to successfully implement these programs, local planning staffs must include planners or inspectors with particular expertise in sustainable design and building; namely, it is critical that staffs include personnel who are well versed in LEED or any other green rating system the community uses.[45] As cities improve in this area, they will also experience increased revenues, as projects that move more quickly to completion provide increased tax revenues earlier for the community.[46]

  1. Grant Programs and Fee Subsidization

Municipalities should also consider direct grant programs to help offset some of the additional costs sustainable design and building projects present.[47] These types of incentives are generally awarded as a single monetary contribution. They also offer municipalities the opportunity and flexibility to promote the use of specific features like photovoltaic systems, HVAC systems, or water systems in green projects that are of particular import to that community. Additionally, should the community choose to promote LEED certification, these types of grants can be utilized by municipalities to defray those costs, as certification with the USGBC can be quite expensive.[48]

  1. Technical Design Assistance Programs

Even as demand for sustainable design and building increases, there are still questions regarding what sustainable design and building techniques are most effective.[49] Communities must provide technical expertise to those looking to implement sustainable design components in future developments. As the development community continues to embrace the growing trend of green building, it is important for local governments to keep up by providing quality services from training planners and building inspectors. By keeping accredited officials on planning staffs, communities have the ability to develop better master plans and provide better oversight of proposed green projects. By promoting a culture of sustainability, local planning commissions can also further educate the community on the benefits that sustainable design and building provide.[50]


The impact that buildings have on people cannot be overstated. We spend the majority of our time inside of them, they provide us shelter, and they represent the idea of home for so many people throughout the world. However, the impact that our buildings have on the earth is also of great magnitude. Thus, it is critical that humans create ways to build responsibly to protect our future on this planet, and incorporating sustainable design features in our environment represents just one small part in the broader environmentalism movement. While this comment reviews but a sliver of how that goal might be reached, it hopefully serves as a starting point for how local communities across the country might endeavor to solve this global issue.



[1] Carl J. Circo, Using Mandates and Incentives to Promote Sustainable Construction and Green Building Projects in the Private Sector: A Call for More State Land Use Policy Initiatives, 112 Penn. St. L. Rev. 731, 733 (2008).

[2] Primary energy is an “energy found in nature that has not been subjected to any conversion or transformation process. It is energy contained in raw fuels as well as other forms of energy received as input to a system.” Primary Energy, Real Return Environment, content&view= article&id=49&Itemid=110 [] (last visited Feb. 21, 2017).

[3] Id.

[4] Stephen T. Del Percio, Comment, The Skyscraper, Green Design, & the LEED Green Building Rating System: The Creation of Uniform Sustainable Standards for the 21st Century or the Perpetuation of an Architectural Fiction?, 28 Environs Envtl. L. & Pol’y J. 117, 125 (2004).

[5] White Paper on Sustainability: A Report on the Green Building Movement, Bldg. Design & Constr. Nov. 2013, at 4, [] [hereinafter White Paper] (quoting Office of Fed. Envtl. Exec., The Federal Commitment to Green Building: Experiences and Expectations (2013)).

[6] Benjamin S. Kingsley, Note, Making It Easy To Be Green: Using Impact Fees To Encourage Green Building, 83 N.Y.U. L. Rev. 532, 534 (2008).

[7] Id.

[8] Trip Pollard, Building Greener Communities: Smarter Growth and Green Building, 27 Va. Envtl. L.J. 125, 126 (2009).

[9] Id. at 125.

[10] Id. at 126.

[11] Circo, supra note 1, at 733.

[12] Id. at 737.

[13] Id.

[14] Id.

[15] A. Paige Reber, Note, Taking the “LEED”: Determining the Appropriate Amount of Government Regulation in Green Building Projects, 98 Ky. L.J. 573, 577 (2009).

[16] Id.

[17] Id. at 577–78.

[18] Id. at 579.

[19] Id.

[20] Id.

[21] Sarah B. Schindler, Following Industry’s LEED®: Municipal Adoption of Private Green Building Standards, 62 Fla. L. Rev. 285, 291 (2010).

[22] Reber, supra note 15, at 575.

[23] Id.

[24] Id. at 575–76 (citing Del Percio, supra note 4, at 121).

[25] For an in-depth discussion on how the LEED certification process operates see About LEED, U.S. Green Building Council (Jul. 1, 2015), [].

[26] See Checklist: LEED v4 for Building Design and Construction, U.S. Green Building Council (Apr. 5, 2016), []

[27] Id.

[28] Id.

[29] See About LEED, supra note 25.

[30] Am. Inst. of Architects, Local Leaders in Sustainability: State and Local Green Building Incentives 7 (2011), [].

[31] Id.

[32] Id.

[33] Id.

[34] Id.

[35] Id.

[36] Id. at 8.

[37] Id.

[38] Id.

[39] Id.

[40] Id.

[41] Id. at 9.

[42] Id. at 10.

[43] Green Building Incentive Strategies, U.S. Green Building Council, [] (last visited Feb. 7, 2017).

[44] Id.

[45] Am. Inst. of Architects, supra note 30, at 10.

[46] Id.

[47] Id. at 12.

[48] Id.

[49] Id. at 14.

[50] Id.

Pork Barrel Legislating: The Separation of Powers Restoration Act

By Ian Simrod, Senior Associate

Again, Congress has proposed a piece of legislation titled the “Separation of Powers Restoration Act” (“SOPRA”), which is Title II of the larger Regulatory Accountability Act.[1] SOPRA sets out to repeal the landmark Supreme Court decision Chevron U.S.A. v. NRDC by amending Section 706 of the Administrative Procedure Act.[2] In Chevron, the Court held that reviewing courts should defer to agencies’ interpretations of an ambiguous statute.[3] The main provision of SOPRA details that a reviewing court shall “decide de novo all relevant questions of law, including the interpretation of constitutional and statutory provisions, and rules made by agencies.”[4] When a court hears a case de novo, it decides the issues without a reference to assumptions and legal conclusions made by any previous court that heard the case.[5]

The Clean Air Act tasked the Environmental Protection Agency (“EPA”) with regulating “stationary sources.”[6] The issue before the Supreme Court in Chevron centered on how to interpret the term “stationary sources.”[7] Under the “bubble theory,” multiple smokestacks at one site were treated as one stationary source.[8] The opposing theory treated each smokestack as a separate stationary source, meaning that one single plant would have multiple stationary sources being regulated.[9] The energy industry wanted the EPA to utilize the bubble theory, as it would give the industry flexibility to compensate for high polluting smokestacks in its bubbles.[10] The EPA permitted the bubble approach insofar as allowing the states to define a stationary source as an entire plant for purposes of developing a state implementation plan to decrease air pollution.[11]

Justice Stevens, using the Chevron framework and writing for the Court, held that the EPA’s interpretation was reasonable.[12] When a court reviews an agency’s construction of a statute, it needs to address two questions.[13] Chevron first directs a court to determine whether Congress has spoken directly to the precise question at issue.[14] If the congressional intent is clear, there is no issue for the court to decide, and the congressional intent must be followed.[15] Essentially, the court determines whether the statute is ambiguous. If it is not ambiguous, the judicial analysis ends.[16] To determine if there is ambiguity, the Court states that the finder of law should use “traditional tools of statutory construction.”[17] If a court finds that there is ambiguity within the statute, the second step of the framework requires the court to determine whether the agency’s action under the statute is based on a permissible construction of the statute.[18] To determine what is permissible, the Court states, “The court need not conclude that the agency construction was the only one it permissibly could have adopted to uphold the construction, or even the reading the court would have reached if the question initially had arisen in a judicial proceeding.”[19] Broadly speaking, the first step of the framework asks whether the statute creates a zone of ambiguity, and the second step asks whether the agency’s interpretation is within this zone.[20]

Advocates for the repeal of Chevron believe its prescribed deference circumvents principles of separation of powers by giving the judiciary the option to avoid its role of reviewing the legality of various regulations and rules promulgated by administrative agencies and to avoid striking down arbitrary agency actions.[21] Furthermore, these advocates believe that judicial deference creates a lack of incentive for Congress to draft clear statutes.[22]

In contrast, supporters of Chevron believe agencies are more expert and more politically accountable than courts and are therefore better suited for the task of administrative statutory interpretation.[23] Chevron deference also helps reduce judicial overload and produce judicial efficiency.[24]

While Congress looks to remedy what it perceives as a problem, it has overlooked the judicial remedy that already exists. This remedy is the doctrine known as the “major question exception,” which was introduced in Food & Drug Administration v. Brown & Williamson Tobacco Corporation.[25] The doctrine essentially states that Chevron deference does not apply when major economic and political repercussions would result from statutory interpretation.[26]

In Brown & Williamson, the Food and Drug Administration (“FDA”) interpreted a statute giving it authority to regulate drugs—defined as “articles (other than food) intended to affect the structure or any function of the body”—as encompassing the authority to control nicotine as a drug through the regulation of tobacco products.[27] Justice O’Connor, writing for the Court, held that Congress did not authorize this assertion of authority over the regulation of tobacco.[28] She first noted that, with the FDA’s support, Congress had enacted six statutes regarding tobacco, premised on the view that the FDA lacked jurisdiction.[29] Justice O’Connor wrote, “Under these circumstances, it is clear that Congress’ tobacco-specific legislation has effectively ratified the FDA’s previous position that it lacks jurisdiction to regulate tobacco.”[30] She then stated that allowing the FDA to assert jurisdiction over a large part of the American economy would be a major transition.[31] Finally, she stated, “As in MCI,[32] we are confident that Congress could not have intended to delegate a decision of such economic and political significance to an agency in so cryptic a fashion.”[33] The Court essentially stated that when addressing major questions of economic and political significance, it is not enough to say that Congress could step in to correct the issue; the burden, instead, should be on Congress to issue a clear statement.[34] Fifteen years after its introduction, the major question exception was addressed and confirmed in King v. Burwell.[35]

The underlying issue in King v. Burwell was whether an Internal Revenue Service (“IRS”) regulation that extended tax credits to federal exchanges, authorized by the Affordable Care Act (“ACA”), exceeded the agency’s statutory authority.[36] The ACA required each state to establish an “exchange” so that people could purchase health insurance coverage, and if the state refused to establish an exchange, the federal government would establish one.[37] The ACA also required people to obtain minimum essential coverage, unless a person fell within a low-income exemption, or else the person would have to pay a penalty.[38] To limit the number of people falling under the exemption, the ACA provided tax credits.[39] Critically, the language of the ACA pertaining to these tax credits only referred to “state-based” exchanges.[40] Although only the state-based exchanges were mentioned, the IRS created a regulation that made the tax credits available to those enrolled in the federal exchanges.[41]

The Court held that Congress did not delegate authority to the IRS to determine whether the tax credits should be available to those enrolled in both the state and federal exchanges.[42] The language of the statute unambiguously provides that Congress intended for the tax credits to be available through both exchanges.[43] The Court refused to apply the Chevron deference framework and officially confirmed the major question exception by stating that, when there are major consequences to the interpretation of statutory language, Chevron deference does not apply.[44] Although the major question exception became official in this case, there is still ambiguity concerning what specific consequences would qualify as “major” to be an exception.

Overall, the Supreme Court has found a balance and solution to the issues of Chevron deference with the major question exception, which allows for judicial efficiency while respecting the principles of separation of powers. Judicial efficiency will remain because courts can defer to agencies on more trivial and less far-reaching policies while tackling regulations that have major political significance and economic impact. This doctrine also remedies the lack of incentive for Congress to draft clear statutes concerning major regulations because courts are now empowered to scrutinize these regulations. SOPRA is pork barrel legislating, insofar as the legislation is wasteful, because the Supreme Court has already foreseen the issues with Chevron deference and provided a solution for the doctrine’s inconsistencies.


[1] Separation of Powers Restoration Act of 2017, H.R. 76, 115th Cong. (2017).

[2] Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984).

[3] See id.

[4] H.R. 76.

[5] De Novo, LII: Wex Legal Dictionary, [] (last visited Feb. 9, 2017).

[6] See Chevron, 467 U.S. 837.

[7] Id. at 842.

[8] Id.

[9] Id.

[10] See id.

[11] William Fox, Understanding Administrative Law 19 (6th ed. 2012).

[12] Chevron, 467 U.S. at 845.

[13] Id. at 842.

[14] Id.

[15] Id. at 842–43.

[16] See id. at 843.

[17] Id. at 843 n.9.

[18] Id. at 843.

[19] Id. at 843 n.11.

[20] See id. at 843.

[21] Jordan Rodriguez, Chevron Deference and the Proposed “Separation of Powers Restoration Act of 2017, JDSupra (Feb. 2, 2017), [].

[22] Id.

[23] Id.

[24] Id.

[25] 529 U.S. 120 (2000).

[26] See King v. Burwell, 135 S. Ct. 2480 (2015).

[27] 529 U.S. 120, 126 (2000) (citing 21 U.S.C. § 321(g)(1)(C)).

[28] See id. at 161.

[29] Id. at 122.

[30] Id. at 156.

[31] See id. at 159–60.

[32] MCI Telecomm. Corp. v. Am. Tel. & Tel. Co., 512 U.S. 218 (1994).

[33] 529 U.S. at 160.

[34] See id.

[35] King v. Burwell, 135 S. Ct. 2480 (2015).

[36] See id.

[37] King v. Burwell, Oyez, [] (last visited Feb. 9, 2017).

[38] Id.

[39] Id.

[40] Id.

[41] Id.

[42] See King v. Burwell, 135 S. Ct. 2480 (2015).

[43] Id. at 2492.

[44] Id. at 2488–89.

Mail Order Mineral Rights Legislation: Is It Too Onerous?

By Steven Cheatham, Senior Associate 


The 2016 Louisiana legislative session will long be remembered for the budget crisis that faced the state and its newly elected governor. While most of the activity in Baton Rouge during the spring of 2016 related to debates on how to resolve those budget woes, non-budget related bills were also passed. Among those was Act 179.  Act 179 (“the Act”) provides for sweeping regulation of the sale of mineral rights through mail solicitation.[1]  This regulation provides safeguards for the seller of mineral rights by mail that are far more robust than other consumer protection laws found in the Civil Code or Revised Statutes. This comment will discuss the effects of the Act, highlighting the extraordinary protections provided in several areas of the Act that are not typically provided for in Louisiana law.

Revised Statutes 9:2991.1 et seq.

The Act was enacted as Louisiana Revised Statutes 9:2991.1 through 9:2991.11.  These statutes provide a definition of the sale of mineral rights by mail solicitation, which serves as a limitation on the scope of the legislation.[2] These statutes only apply to transfers of mineral rights that are contracted “pursuant to an offer that is received by the transferor through the mail or by common carrier and is accompanied by any form of payment.”[3] Mail solicitations that occur after prior personal contact or meaningful exchanges of the parties are excluded from the application of the statute.[4] Sales of mineral rights procured through mail solicitation must be in the form of an authentic act or act under private signature, and must be signed by the transferor.[5] The statutes require each mail solicitation to contain a disclaimer in large font that explains clearly the consequences of the execution of the document.[6]  Furthermore, the solicitation must include a form notice of cancellation, which can be executed by the transferor within 60 days of the transfer of the mineral rights.[7]  If the mail solicitation does not include a notice of cancellation, the seller has a three-year peremptive period to rescind the agreement.[8] The statutes also define the form requirements of the rescission of a sale, its effects on third persons, and the effects of rescission on the parties.[9] Finally, the statutes provide several prohibited terms that cannot be included in a mail solicitation or the contract becomes absolutely null.  Among these are forum selection clauses that move the jurisdiction out of the state of Louisiana, indemnification clauses, the waiver of rights created by these statutes, and the prohibition of any “provision [that] authorizes the transferee to act as a mandatary of the transferor.”[10]


The new statutes regulating the sale of mineral rights by mail solicitation are sweeping and provide rights and safeguards that are not typically found in the Civil Code or Revised Statutes. The question arises as to why there is a need for expansive regulation of such a particularized segment of the economy. No epidemic of deceptive mail solicitation in the state has been found.  There is  only anecdotal evidence of situations when sellers have been abused by these practices.[11] Furthermore, the bulk of these practices has been isolated to two specific companies.[12] In an environment where mineral rights purchasers are often required to locate and contract with numerous parties to secure the mineral rights on a particular piece of property, mail solicitation appears to be an economical method to procure those rights.[13]

Even if there was a substantial need for specific regulation of mail order solicitation, two particular provisions of the statutes are contrary to long-standing Louisiana law. First is the requirement that the transferor must sign the act of sale for it to be valid.  Second is the right of rescission that is created as a matter of law. It is unclear why these particular provisions are required to make this new statutory scheme effective.

Why do I have to sign it?

It is a long held principle of Louisiana contract law that an act under private signature does not require the signature of both parties. Comment (b) to Louisiana Civil Code article 1837 cites six cases that stand for the proposition that only one party must sign an act under private signature.[14]  Historically, a single signature validates an act when the party that does not sign has availed himself to the contract.[15] However, new Louisiana Revised Statute 9:2991.4 requires that the transferor of mineral rights by mail solicitation sign the contract for it to be valid.[16] This statute is written to combat a practice of mail solicitors who include checks with a solicitation.[17] Unknowing or confused transferors will sometimes validate a mail solicitation by cashing the check without ever having read the solicitation.  This is particularly a problem for holders of numerous mineral rights over multiple tracks of land with several different owners who may unwittingly cash a check believed to be a royalty payment from a preexisting lease.[18] A strict reading of Louisiana Civil Code article 1837 could hold that the cashing of a check is availing oneself to a contract, thereby validating a contract that had never been read or signed. This new legislation prevents this possibility.

I Changed My Mind and the Law Said I Could

In situations where the transferor signs the solicitation and mails it back to the solicitor, the transferor is always afforded an opportunity to rescind the contract. There is a 60-day rescission period if the solicitation contains a notice of cancellation, and a three-year period within which to rescind if the notice of cancellation is not included.[19] The right of rescission, or as the comments to Revised Statute 9:2991.6 call it, a “cooling off period,” is not something normally granted as a matter of law in Louisiana.[20] Typically, a rescission period is only granted when reserved by the parties to the contract. There is specialized legislation in Louisiana, such as the Louisiana Unfair Trade Practices Act (“LUTPA”), which sometimes provides similar safeguards.

There are, however, substantive differences between LUTPA and a similar application to mineral rights that are hard to reconcile. First, the new mineral rights law explicitly protects sellers. Courts have historically held that LUTPA claims are limited to plaintiffs that are consumers, business competitors, and potential business competitors—not sellers.[22] In this case, the mail solicitation is made to the party that is the eventual seller of the item. It is debatable whether LUTPA, when applied to a similar non-mineral circumstance, would protect a similarly situated seller. Second, LUPTA has historically only applied to movables.[23] Mineral rights are defined by the Mineral Code as incorporeal immovables.[24] It appears as though the legislature has tried to protect a class of persons and goods not historically protected by Louisiana consumer protection laws.

So why do we need this law?

As the Louisiana general law of contracts and specific consumer protection laws do not provide similar safeguards to other sellers of immovables, the need for this particular legislation is curious. The potential to create a three-year peremptive period of rescission on a technicality seems onerous when instituted for protection against a theoretical or “anecdotal” problem. Since there are practical applications of mail solicitation of mineral rights, the legislature may have created overly aggressive regulation with this legislation.


[1] 2016 La. Acts 179.

[2] La. Rev. Stat. § 9:2991.2 (2016).

[3] Id.

[4] Id. § 9:2991.3.

[5] Id. § 9:2991.4.

[6] Id. § 9:2991.5.

[7] Id.

[8] Id. § 9:2991.6.

[9] Id. § 9:2991.7, § 9:2991.9.

[10] Id. § 9:2991.10.

[11] Melissa Lonegrass, La. State Law Inst., Notes from the Reporter: Mineral Law-Unsolicited Offers Committee 4 (2013).

[12] Id. at 7.

[13] Id. at 5.

[14] La. Civ. Code art. 1837 cmt. b (2016).

[15] Id.

[16] La. Rev. Stat. § 9:2991.4 (2016).

[17] Lonegrass, supra note 11, at 3–4.

[18] Id. at 4.

[19] La. Rev. Stat. § 9:2991.6.

[20] La. Civ. Code art. 1919 reserves the right to plead rescission to a person without the legal capacity to make a contract. La. Rev. Stat. § 9:2043 allows for the rescission of an onerous disposition in trust.

[21] La. Rev. Stat. §51:1401–26.

[22] See Reporter’s Memorandum from the Mineral Law – Unsolicited Offers Comm. 7 (Jul. 11, 2014) (on file with the Louisiana Law Review) (citing Quality Environmental Processes, Inc. v. I.P. Petroleum Co., 2014 WL 1800081 (La. May 7, 2014) (quoting Cheramie Servs., Inc. v. Shell Deepwater Prod., 35 So. 3d 1053, 1059 (La. 2010))); see also Alexander M. McIntyre, Jr. et al., Standing Under the LUTPA—The Circuit Split Widens, 54 La. B.J. 362 (2007) (discussing the discrepancy among the Louisiana courts of appeal as to who may bring a private cause of action under LUTPA).

[23] Id. at 6.

[24] La. Rev. Stat. § 31:18.


Armies of One: The Battle Over the Validity of Class Action and Arbitration Waivers in the Federal Circuits

By Gus Laggner, Senior Associate


One of the most important Congressional acts of the previous century is the National Labor Relations Act (“NLRA”).[1] It was enacted in 1935 to protect the rights of American employees and employers, curtail harmful workplace management practices, and promote collective bargaining.[2] Before the NLRA, “a single employee was helpless in dealing with an employer,” and thus a “union was essential to give laborers opportunity” to deal equally with their employers.[3] In other words, the NLRA attempted to put employers and employees on equal footing when negotiating labor conditions.

Although the NLRA has drawn both ire and praise from every conceivable source, this comment highlights a recent decision in the Seventh Circuit Court of Appeals that demonstrates how two skilled minds may arrive at different conclusions when applying the laws of Congress to labor disputes. In Lewis v. Epic Systems Corp., the Seventh Circuit held that an arbitration agreement requiring employees to waive the right to bring collective actions for federal wage-and-hour violations in favor of individual arbitration was a violation of the NLRA.[4] Surprisingly, the Seventh Circuit decided this case in express contravention[5] of the Fifth Circuit’s earlier opinion in D.R. Horton, Inc. v. NLRB, in which the court found that such a clause did not violate the NLRA and enforced the agreement.[6] This circuit split may well end up on the steps of the U.S. Supreme Court, and this comment addresses the tribunals’ difference of opinion.

The Fifth Circuit: D.R. Horton, Inc. v. NLRB

            In 2006, D.R. Horton, Inc., began requiring all its employees to sign a “Mutual Arbitration Agreement.[7] The agreement required all wage-and-hour disputes to be resolved by individual arbitration, regardless of whether the alleged violation was occurring simultaneously with multiple employees.[8] In 2008, Michael Cuda, a Horton employee, along with a nationwide class of similarly situated Horton employees, sought to initiate collective arbitration on the grounds that Horton had misclassified some of its employees as exempt from overtime pay under the Fair Labor Standards Act (“FLSA”).[9] Horton asserted that the Mutual Arbitration Agreement barred such a collective proceeding and instead required the employees to initiate individual arbitration.[10] Cuda then filed an unfair labor practice charge with the NLRB, alleging that the waiver violated the NLRA.[11]

The NLRB found that the Mutual Arbitration Agreement violated the substantive rights granted to employees under section 7 of the NLRA, which provides that employees have the right to engage in “concerted activities for the purpose of collective bargaining or other mutual aid or protection.[12] By prohibiting collective action under the Mutual Arbitration Agreement, the NLRB held that Horton committed an unfair labor practice by requiring employees not to act “in concert” in the pursuit of their claims.[13]

The Fifth Circuit disagreed with the NLRB. The Fifth Circuit held that the Federal Arbitration Act (“FAA”) mandated enforcement of the agreement.[14]  The FAA, which was enacted in 1926 in response to judicial hostility to arbitration, “establishes a liberal federal policy favoring arbitration agreements.”[15] Under the FAA, arbitration agreements must be enforced according to their terms, [16] except “upon such grounds as exist at law or in equity for the revocation of any contract.”[17]

The Fifth Circuit then held that because the “overarching purpose of the FAA . . . is to ensure the enforcement of arbitration agreements according to their terms so as to facilitate streamlined proceedings,” mandating the availability of classwide arbitration procedures “interferes with fundamental attributes of arbitration” and “creates a scheme inconsistent with the FAA.”[18] The court found that the effect of the NLRB’s interpretation of the NLRA as prohibiting class action waivers was to disfavor arbitration by sacrificing “the principal advantage of arbitration—its informality—and mak[ing] the process slower, more costly, and more likely to generate procedural morass than final judgment.”[19] The court held the NLRB’s interpretation of the NLRA to be in conflict with the FAA and ultimately enforced the Mutual Arbitration Agreement per the FAA’s general mandate of enforceability.[20]

The Seventh Circuit: Lewis v. Epic Systems Corp.

            Shortly after Horton was decided, in 2014, Epic Systems Corp. emailed some of its employees an agreement stipulating that wage-and-hour claims could be brought only through individual arbitration and that the employees waived the right to participate in or receive relief from any other class proceeding.[21] Epic required the employees to accept the terms of the agreement if they wanted to keep their jobs.[22] Jacob Lewis, an employee at Epic, accepted this agreement by clicking the appropriate computer prompts.[23]

Thereafter, Lewis had a dispute with Epic and filed suit in federal court alleging that Epic misclassified Lewis and other technical writers as exempt from overtime in violation of the Fair Labor Standards Act.[24] Epic moved to dismiss and to compel arbitration, citing the agreement between Epic and its employees.[25] Lewis argued that the arbitration provision violated the NLRA by interfering with employees’ right to engage in concerted activity for mutual aid or protection.[26]

The Seventh Circuit agreed with Lewis and held the clause unenforceable. As mentioned, the NLRA protects the rights of employees to self-organize and collectively bargain for their mutual benefit.[27] The court cited longstanding NLRB decisions holding that employer-imposed, individual agreements that purport to restrict NLRA rights are unlawful and may be declared unenforceable by the NLRB.[28] In the first step of its analysis, the court held that imposing a waiver on all class remedies for labor disputes violated section 7 of the NLRA.[29]

As in Horton, the Seventh Circuit was required to take its analysis a step further and determine the applicability of the FAA. The Seventh Circuit diverged significantly from the Fifth Circuit in this step.[30] Instead of holding that the FAA required the enforcement of collective action waivers, the Seventh Circuit found that the FAA’s exception—the “saving clause”—applied to the enforceability of the agreement.[31] The saving clause allows for exceptions to the general rule of enforcing arbitration agreements “upon such grounds as exist at law or in equity for the revocation of any contract.”[32] Because the saving clause affords employers and employees the same defenses to arbitration contracts as any other contract and illegality is a standard contract defense, the court’s finding that the arbitration agreement violated the NLRA meant that the agreement was illegal and therefore unenforceable via the saving clause of the FAA.[33] The Seventh Circuit struck down the waiver.[34]


The only effective solution to a federal circuit split is for the Supreme Court to hear the issue and declare the law of the land. Given the current political climate and the current eight-justice Court, whether this split will be resolved in the near future is uncertain. Supreme Court justices, much like federal circuits, sometimes reach different conclusions when presented with the same law and facts. Therefore, the U.S. needs that ninth black robe back to resolve this significant circuit split. Writs have been filed.[35] Time will tell.

[1] 29 U.S.C. § 151–69 (2012).

[2] See 29 U.S.C. § 151.

[3] NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 33 (1937); see also NLRB v. City Disposal Systems Inc., 465 U.S. 822, 835 (1984) (stating that in enacting the NLRA, “Congress sought generally to equalize the bargaining power of the employee with that of his employer by allowing employees to band together in confronting an employer regarding the terms and conditions of their employment”).

[4] Lewis v. Epic Systems Corp., 823 F.3d 1147, 1151 (7th Cir. 2016).

[5] Id. at 1157.

[6] D.R. Horton, Inc. v. NLRB, 737 F.3d 344, 357 (5th Cir. 2013).

[7] Id. at 348.

[8] Id..

[9] Id. at 349.

[10] Id.

[11] Id.

[12] Id. at 355; 29 U.S.C. § 157 (2012).

[13] D.R. Horton, 737 F.3d at 355.

[14] 9 U.S.C. §§ 1–16 .

[15] CompuCredit Corp. v. Greenwood, 132 S. Ct. 665, 668–69 (2012).

[16] D.R. Horton, 737 F.3d at 358.

[17] 9 U.S.C. § 2; D.R. Horton, 737 F.3d at 358.

[18] D.R. Horton, 737 F.3d at 359 (citing AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 344 (2011) (holding that a California statute requiring the availability of class action proceedings in both judicial and arbitral forums was not an exception to the FAA’s enforcement requirement)).

[19] Id.

[20] Id. at 364. The court additionally analyzed whether the NLRA contained any congressional command such that the FAA would be precluded. Because the Seventh Circuit did not reach this issue, it has been omitted from this comment.

[21] Lewis v. Epic Systems Corp., 823 F.3d 1147, 1151 (7th Cir. 2016).

[22] Id. at 1151

[23] Id.

[24] Id.

[25] Id.

[26] Id.

[27] See 29 U.S.C. § 157 (2012).

[28] Lewis, 823 F.3d at 1152.

[29] Id. at 1154.

[30] The Seventh Circuit acknowledged the split created by its decision and asserted arguments as to why the Fifth Circuit’s decision was incorrect. For further reading see id. at 1158–61.

[31] Id. at 1159.

[32] 9 U.S.C. § 2; Lewis, 823 F.3d at 1157.

[33] Lewis, 823 F.3d at 1157.

[34] Id. at 1161.

[35] Lewis v. Epic Systems Corp., 823 F.3d 1147 (7th Cir. 2016), petition for cert. filed, (No. 16-285) (U.S. Sept. 2, 2016).

Too Poor for Freedom: Sex Offender Registry and the Fourteenth Amendment

By Gabriel Loupe, Senior Associate

October 11, 2016


If a school mandated uniforms and suspended a child too poor to afford them, there would be an uproar. Media would excoriate the school for denying the impoverished an education due to their financial circumstances. Many would wonder at the cost of a uniform relative to the school’s budget, suggesting that the school simply offer the child a simple uniform. As ever, our instinctive notions of justice and fair play seem to end at criminal court. In the state of Louisiana, a person required to register as a sex offender who cannot afford to do so, even if he or she turns himself or herself in to the police and asks for help, will be tried, found guilty, and sentenced to prison.[1] Inability to pay will not protect the sex offender from incarceration, nor will informing law enforcement and requesting aid. Under the current regulatory scheme, indigent sex offenders who have served their time have only prison in their future.

This comment argues that imprisonment and fines subsequent to a failure to register, when the offender cannot afford to pay registration costs, are unconstitutional under a substantive due process analysis, as per Bearden v. Georgia.[2] It explains the negative policy implications of the current system. Finally, the comment proposes a legislative solution—the Louisiana Legislature should establish a fund to cover the cost of registry for indigent sexual offenders.

Bearden v. Georgia and Imprisoning Good-faith Indigents

In 1983, the United States Supreme Court decided Bearden v. Georgia.[3] In Bearden, the Court held that the automatic revocation of probation because a probationer could not pay his fine violated due process.[4] In its due process analysis, the Court considered “the nature of the individual interest affected, the extent to which it is affected, the rationality of the connection between legislative means and purpose, and the existence of alternative means for effectuating the purpose.”[5] The Court noted as critical the distinction between an indigent probationer who cannot afford to pay and one who “has willfully refused to pay . . . when he has the means [or has failed] to make sufficient bona fide efforts to seek . . . [means] to pay the fine or restitution.”[6] Although the Court acknowledged the state’s interests in revoking parole, it nevertheless ordered that, should a sentencing court find that a “probationer could not pay despite sufficient bona fide efforts to acquire the resources to do so, the court must consider alternative measures of punishment other than imprisonment.”[7]

Sex Offender Registry in Louisiana and its Problems Under Bearden

The cost of registry and notification is best described as “death by a thousand cuts.” A person convicted of a crime requiring registry must provide “notice of the crime for which he was convicted, his name, residential address, a description of his physical characteristics . . . and a photograph or copy thereof”[8] to various superintendents of various city services and, most importantly, “at least one person in every residence or business within a one-mile radius in a rural area and a three-tenths of a mile radius in an urban or suburban area of the address of the residence where the offender will reside.”[9] This notification must be repeated every five years and every time a person subject to the registry changes address.[10] Further, any person subject to the registry must, depending on the nature of his underlying offense, update his registration every three months, six months, or annually.[11]

Louisiana Revised Statute 15:542.1.4 provides that a person who fails to register, on first conviction, “shall . . . be . . . imprisoned with hard labor for not less than two years, nor more than ten years without benefit of parole, probation, or suspension of sentence.”[12] This imprisonment is an automatic denial of liberty similar to the revocation of probation at issue in Bearden and implicates issues of fair treatment under the Fourteenth Amendment.

Louisiana courts have largely refrained from addressing Bearden in this context. However, in State v. Jones, a recent case from Louisiana’s Fifth Circuit, Judge Wicker penned a particularly cogent dissent, arguing that Bearden should govern failure to register cases in which a defendant made a bona fide attempt to register, but could not due to indigence.[13] Unfortunately, the majority opinion made no mention of either Bearden or the Fourteenth Amendment, leaving readers to their own devices when ascertaining the court’s reasoning on this matter.[14]

A Failure of Policy

The current law does not provide any mitigation for people who make bona fide attempts to register. Nor does it provide mitigation for those who, knowing that they cannot register, contact the relevant authorities in order to inform them of their whereabouts. No state fund exists to pay for registration. This circumstances illustrate a failure of policy on multiple grounds. By not providing mitigation, the state fails to incentivize attempts to register. Those opposing mitigation may point out that the threat of incarceration is such an incentive. However, this argument fails when considering the benefit of sex offenders remaining in contact with relevant authorities. If sex offenders know that they will be arrested by informing police officers that they are trying and failing to register, the offenders will be more likely to evade the authorities. This increases the risk of recidivism and the risk to the community, because the state will no longer know the whereabouts of the offender.

The current law costs the state money. In her Jones dissent, Judge Wicker calculated “the cost of incarcerating Mr. Jones for his failure to fully pay a $580.00 community notification fee [at] $7,121.88.”[15] This calculation did not take into account the cost of prosecution or appeal; the total cost of Mr. Jones’ interaction with the criminal justice system was therefore even higher than Judge Wicker’s estimate.[16]

A Simple Solution

While the cost of registry and notification is insurmountable to the indigent, it is trivial to the state. The establishment of a program to help indigent offenders pay for their registry and notification would eliminate the need for any litigation on the matter. It would incentivize indigent sex offenders to maintain contact with law enforcement. It would also save the state money. Many legal questions have difficult solutions; this is not such a question. The Louisiana Legislature should take immediate action to rectify the situation and spare the state the future costs of expensive litigation and incarceration.

[1] See La. Rev. Stat. Ann. § 15:542.1.4.

[2] 461 U.S. 660 (1983).

[3] Id.

[4] Id. at 661–62.

[5] Id. at 666–67 (citing Williams v. Illinois, 399 U.S. 235, 260 (1970)).

[6] Id. at 668.

[7] Id. at 672.

[8] La. Rev. Stat. Ann. § 15:542.1 (2016).

[9] La. Rev. Stat. Ann. § 15:542.1(A)(1)(a) (2016).

[10] Id. § 15:542.1(A)(2)(b).

[11] La. Rev. Stat. Ann. § 15:542.1.1(A)(1)–(3) (2016).

[12] La. Rev. Stat. Ann. § 15.542.1.4(A)(1) (2016).

[13] State v. Jones, 182 So.3d 1218 (La. Ct. App. 2015) (Wicker, J., dissenting).

[14] See generally State v. Jones, 182 So.3d 1218 (majority opinion).

[15] Id. at 1225–26 (Wicker, J., dissenting).

[16] Id. at 1226.