In a remarkable decision featuring something less than seamless harmony among the justices, the Louisiana Supreme Court recently considered the meaning of “component parts” of an immovable under Louisiana Civil Code Article 466, Component Parts of Buildings or Other Constructions. The issue in the case was whether nuclear cameras at a hospital had become “immobilized,” and thus not subject to local sales and use taxes. The decision carries far-reaching implications which have already stirred the Louisiana legislature into activity to deal with the potential fall-out from the decision.
In the majority opinion, Justice Weimer rejected the “societal expectations” analysis — essentially, divining “contemporary views as to conceptions of components in light of current house practices” — as an “elusive and nebulous” doctrine.
Instead, Justice Weimer held, one need determine if the thing in question falls under “plumbing, heating, cooling, electrical or other installations,” and then whether it could be removed without substantial damage to it or to the building. Justice Weimer concluded the cameras were “electrical or other installations.” The evidence in the case indicated that the nuclear cameras were placed on epoxy foundations and bolted to the floor. To remove the cameras and restore the building, one need only remove the bolts, disconnect the wiring, conduct “minor” repairs to the sheetrock, and replace some floor tile. Justice Weimer concluded this did not constitute substantial damage; thus, the cameras were not component parts.
Justice Weimer then noted that under Article 465, a component part could also be that which is “incorporated into…a building, so as to become an integral part of it…” He decided that to become an “integral part” a thing has to lose its identity as a separate movable and become part of the building. For example, in the movie Star Wars, Hans Solo, frozen in carbonite, would not be deemed a component part of Jaba the Hutt’s palace under Article 465 — at least, not for several millennia. Justice Weimer concluded that nuclear cameras did not become such “integral parts” either.
A chorus of dissent arose from four other justices.
Justice Kimball believes the “societal expectations” test should be retained. As she noted, “A residential purchaser would likely expect the front door to be included in his purchase of a house.” Since society would expect a hospital to have nuclear cameras, they are component parts, and there is no need to examine whether their removal would cause “substantial damage.”
Justice Johnson eschewed wearisome doctrinal discussion and tersely noted “In my mind, the cameras are ‘permanently installed’ and have become component parts of the hospital building.”
Justice Traylor felt that the concept of “substantial damage” required consideration of the extent to which the part of the building housing the thing in question had been specially built or designed to accommodate or support the use of that object. Thus, the removal of a toilet, leaving gaping and useless open pipes, would constitute “substantial damage” even though the actual damage associated with the removal itself would be nominal. Justice Traylor felt the hospital room in question would not have been built except to house the cameras, and thus believed they should be characterized as component parts.
Justice Knoll concurred in the result, but would retain the societal expectations test.
Justice Weimer returned to the fray with additional reasons, essentially stating that Article 466 says what it says, and anyone who allowed themselves to be seduced by the siren call of “societal expectations” should have tied themselves to the mast of heeding the language of the statute itself.
You can click here to read the decision.
In a post tomorrow, the legislature bestirs itself to address what it perceives to be the fall-out from this decision.