Last week, a controversial land grab took center stage in the Louisiana Supreme Court when the court heard one of the most important property rights cases in the nation. For 40 years, privately owned Violet Dock Port serviced a wide variety of ships along its 1-mile stretch of the Mississippi River in St. Bernard Parish. But that came to an abrupt end in 2010 when St. Bernard Port, Harbor and Terminal District — its government-controlled competitor — used eminent domain to take the port for itself after Violet Dock Port refused to sell.
At issue before the Louisiana Supreme Court are the protections contained in the Louisiana Constitution, which states that “[n]o business enterprise or any of its assets shall be taken for the purpose of operating that enterprise or halting competition with a government enterprise.” This provision, the business enterprise clause, is unique to Louisiana’s Constitution. It was designed to prevent the government from taking over a business and operating it for itself, or to simply eliminate a private-sector competitor.
By taking over Violet Dock Port, St. Bernard used government power to take a competing, privately-owned port and immediately handed it over to a different private company named Associated Terminals. Court records reveal that three years before St. Bernard took over Violet Dock Port, one of Associated Terminal’s employees had expressed concerns about the emergence of competition from Violet Dock Port after having “snuck down” to the property to take photos.
When Violet Dock Port chose not to sell, St. Bernard took over Violet Dock Port’s property along the Mississippi, and Associated Terminals began operating the existing docks and business assets, just as Violet Dock Port had. What’s more, St. Bernard Port even took over Violet Dock Port’s contracts with the U.S. Navy and continued servicing those ships at the same docks.
For nearly seven years, Violet Dock’s owners have fought the government’s takeover in court. At the same time, Associated Terminals established a virtual monopoly over the operation of port sites within St. Bernard’s jurisdiction.
The Institute for Justice, the nation’s leading law firm for liberty, which defends property rights in courts across the country, filed two amicus briefs in the Louisiana Supreme Court in support of Violet Dock Port. After urging the court to take up the case, the institute weighed in again to explain why the Louisiana Constitution provides for stronger, more specific protections for property rights than does the federal constitution.
State constitutions became the primary bulwark protecting property rights against a growing number of private-use takings following the U.S. Supreme Court’s ruling in Kelo v. City of New London — a dramatic 5-to-4 loss for constitutional rights, with sweeping language that virtually removed federal constitutional protection of private property under the Takings Clause. But Louisiana stands out as one of the few states that have always enforced meaningful protections for property rights threatened by the power of eminent domain, even prior to Kelo.
For centuries, Louisianians, more than citizens of any other state, have been concerned with the possibility that a state could simply step into a business’s shoes and continue operating it, generating profits for itself and leaving the original owner penniless. Such an attitude is not at all surprising, given the number of governments that exerted control over Louisiana in the period between 1712 and 1864. Unsurprisingly, while the exact language of the business enterprise clause first appeared in the Louisiana Constitution in 1974, Louisiana’s previous constitutions contained similar language as far back as the Constitution of 1879.
The takeover of Violet Dock Port illustrates why the use of eminent domain for private gain is offensive to the charter of liberty that is the Louisiana Constitution. By taking Violet Dock Port’s case, the Louisiana Supreme Court should not only reject St. Bernard Port’s use of eminent domain, but reaffirm that no other state constitution places such extensive limitations on the power and authority of government to take private property.
Arif Panju and Anya Bidwell are attorneys in the Texas office of the Institute for Justice, a nonprofit law firm that promotes libertarian values.