A sharply divided state Supreme Court has found that St. Bernard Parish port officials did not abuse Louisiana's eminent-domain law when they seized a privately run port along a mile of Mississippi River frontage in 2010.
But in a victory for the plaintiffs, the court found that the $16 million compensation the port provided for the property was unjustly low.
Tuesday's 4-3 ruling by Chief Justice Bernette Johnson and Justices Scott Crichton, James Genovese and Marcus Clark upheld the actions of St. Bernard's port authority, which took the facility away from a firm called Violet Dock Port and then leased it to a competitor.
Justices John Weimer, Greg Guidry and Jefferson Hughes III dissented in the high-stakes and high-dollar court battle that was widely viewed as a key test of the state government's power to take private property.
Weimer and Johnson are Democrats, while the other five justices are Republicans.
Violet Dock Port's lead attorney, Randy Smith, said his side would ask the high court to rehear the case, hoping that one of the justices in the majority can be swayed to change their vote.
"The government should not be allowed to take private property and an existing business for the purpose of operating that business or turning it over to another private company," Smith said in a statement.
The statement did thank the high court for ordering an appellate court to recalculate the level of compensation, and Smith said he will pursue that avenue along with the appeal.
The high court did not say what it believes the property is worth, but Violet's owners have said it’s worth at least $41 million.
The task of assigning a new value will fall to the appellate court, subject to the high court's review.
"We are pleased that the majority of the court agreed with us on the key constitutional issues that will allow ports and other public entities to properly and constitutionally further the interest of the people of Louisiana,” said James Garner, the St. Bernard port's lead attorney.
The Louisiana Supreme Court heard oral arguments Monday over whether St. Bernard Parish port officials trampled on Louisiana's eminent-domain …
The case centered on the port's use of $16 million in state funds to take Violet's riverfront land and five deepwater berths it had developed there over decades.
Violet serviced U.S. Navy ships at the facility and was gearing up to accommodate bulk cargo operations. After the seizure, the parish port authority leased the facility to the firm Associated Terminals, which also runs other facilities in Chalmette owned by the port.
During a seven-year legal battle with potentially millions of dollars at stake, Smith contended port officials planned all along to take over Violet's lucrative business at a bargain price and hand it to a rival. Smith argued that the publicly owned port did little if anything to change the facility or how it was used after taking it over.
The process, he said, violated a state law saying that "no business enterprise or any of its assets shall be taken for the purpose of operating that enterprise or halting competition with a government enterprise."
The port authority countered that ports and airports are exempt from that restriction because they serve a "public purpose" — facilitating the transport of goods or people in domestic or international commerce — that justifies eminent domain.
Garner contended that the facility takeover met that test and dismissed Violet's bulk cargo expansion plans as speculative at best.
Judge Jacques Sanborn of St. Bernard's 34th Judicial District Court ultimately ruled in the port's favor and set the $16 million price tag. State 4th Circuit Court of Appeal Judges Roland Belsome and Terri Love then voted to uphold Sanborn's decision, despite a sharply dissent from Judge Joy Cossich Lobrano.
That split decision set the stage for the Supreme Court's hearing of the case.
The majority opinion, written by Crichton, said public port authorities enjoy "broad exceptions" from the restrictions on seizure of private property. It added that the port's expropriation action was for the valid public purpose of boosting the commercial transportation of goods or people on water and "not for the constitutionally prohibited purpose of operating Violet’s enterprise or halting competition with a government enterprise."
But Weimer's dissenting opinion said that stance "eviscerates the long, significant history the citizens of Louisiana have embodied within (the state Constitution) to protect private business from takeover by the government."
Guidry added in his own dissenting opinion that allowing St. Bernard's seizure of the Violet facility to stand violated the well-established legal principle that expropriation proceedings are "strictly construed against the expropriating authority."
Hughes adopted the reasons of Weimer and Guidry.
The case drew wide attention, and a raft of "friend of the court" briefs, because of its potential to set precedent in an important and disputed area of law.
For years, at its mile-long facility fronting the Mississippi River in St. Bernard Parish, the Violet Dock Port company moored and serviced U.…
Violet's arguments drew support from national groups such as the libertarian Institute for Justice and the Pacific Legal Foundation, a pro-property-rights group, as well as the Louisiana Association of Business and Industry.
The parish port authority's arguments gained backing from other government agencies.