LAST MONTH, THIS COLUMN BEGAN a tale of politics and business in pre-Katrina Louisiana (“Bayou Bedfellows,” p. 12) The story involves a contract between would-be landfill operator River Birch Inc. (RB) and lobbyist Dan Robin for work to defeat legislative bills posing a threat to RB's proposed landfill business. After Robin accomplished his client's objective, RB reneged on the major portion of the compensation it promised to Robin, claiming that the contract was unenforceable. Robin sued.
The trial court rejected all of RB's defenses, upheld the contract and ordered the company to transfer a 4 percent interest in the landfill to Robin, as the agreement provided. On appeal, the Louisiana Court of Appeal affirmed the lower court's findings and legal conclusions, even adopting the trial judge's written reasons.
For starters, the appellate court found that Robin's failure to report RB as his lobbying client, although a “flagrant and intentional” violation of state law, did not invalidate the contract, which had a lawful purpose. “The Lobbying Act does not … govern contracts … between lobbyists and clients,” the court said.
RB also claimed that Robin misrepresented his qualifications and abilities by embellishing his relationship with John Alario, the speaker of the state house of representatives. Robin told RB's president, Albert Ward, that he and Alario were close friends and vacationed together and that he operated out of Alario's office and stayed in his apartment. Ward claimed that these misrepresentations caused him to hire Robin. However, the contract was never about the actual Robin/Alario relationship; it was about killing the legislation.
“Even if much of what Robin said was not correct … or an exaggeration, he was still able to accomplish the objective for which he was hired,” the opinion said.
But, as if to contradict himself, Ward stated that he believed the relationship between Robin and Alario actually was too close — that he was the victim of a conspiracy between the two men to hold his landfill hostage. Accordingly, Ward rationalized, he could sign a contract with a contingent provision giving a 4 percent landfill interest to Robin, but nevertheless remain free to disavow it.
Finally, Ward claimed he was under economic duress when he signed the contract. He said he agreed to a percentage ownership of the business only to ransom the hostage landfill. He stated that Robin implied the whole matter was a sham. After Robin got the ownership provisions into the contract, Alario was going to let the bill be defeated, Ward said. That way, Alario could still “look good” to his constituents.
The appeals court brushed aside this argument by noting that Ward was a sophisticated businessman who neither sought legal advice nor talked with other lobbyists. Moreover, Ward had bargained hard enough with Robin to reduce the landfill interest from 10 to 4 percent and exclude some of Alario's friends from the deal.
“It is not the province of the courts to relieve a party of a bad bargain, no matter how harsh,” the court said. “Ward obviously feels he made a bad bargain and does not want to comply. However, there is no reason he should not.”
[River Birch, Inc. v. Robin & Associates Inc., 906 S.2d 729 (La.App. 1 Cir., June 15, 2005)]
The legal editor welcomes comments from readers. Contact Barry Shanoff via e-mail: [email protected].
The columnist is a Rockville, Md., attorney and serves as general counsel of the Solid Waste Association of North America.