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Violet Dock Port Inc. LLC v. St. Bernard Port Harbor & Terminal District

Why We Fight:

Government may not use eminent domain to take private property for affirmatively anti-competitive purposes.   

Summary:

The Louisiana Supreme Court approved the forcible transfer of private commercial property to eliminate competition with a public enterprise—and for the benefit of another private entity.  In doing so, it blessed the use of eminent domain for anti-competitive purposes        that are antithetical to the public interest.  This concretely demonstrates the perverse implications of the Supreme Court’s regrettable and widely condemned decision in Kelo v. City New London, 545 U.S. 469 (2005).

Legal Question:

Whether the “Public Use Clause” of the Fifth Amendment prohibits government from taking a fully-functioning private facility with the intent to lease it to another private entity to operate, with the revenues earned from those operations to be shared by both the local government entity and its favored private actor?

Petitioner

Violet Dock Port, Inc., LLC  

Respondent

St. Bernard Port, Harbor, & Terminal District

Amici Curiae:

Mountain States Legal Foundation in association with the National Federation of Independent Business and others.

Court:

Supreme "court of the United States.

Violet Dock Port Inc., LLC has been operating at its dock for decades on the Mississippi River near New Orleans.  Violet had a significant revenue stream from Navy contracts (mainly from berthing and mooring vessels) and consistently reinvested its profits in improvements.  Most recently, Violet began preparing to expand its seventy-five acres of land into cargo operations. 

St. Bernard Port, Harbor & Terminal District (St. Bernard) is a local government entity that operates a public cargo port facility several miles upstream.  St. Bernard wanted to expand its business but found the cost of building a new dock prohibitive.  St. Bernard attempted to purchase Violet’s facility, but the parties could not reach a deal because Violet’s asking price was too high.  Violet’s expansion into cargo operations would have put it into direct competition with St. Bernard for a thriving cargo business in the area. 

Instead, St. Bernard hatched a scheme to acquire Violet’s port via eminent domain and lease the space to another private entity.  The plan was to purchase Violet’s facility, improve it with a cargo facility, and then lease it to a private company called Associated Terminals, which was involved in the plan from the outset.  St. Bernard then planned to use the revenues from the lease to make future improvements to the port. 

Violet fought the condemnation as an unconstitutional taking under the U.S. and Louisiana Constitutions.  St. Bernard claimed it was not condemning Violet’s dock to take over its existing Navy revenues and that it merely needed the property for expanding its cargo operations. 

The trial court made a factual determination that the taking constituted a “public use” because the expansion served a “public purpose” under Kelo v. New London.  Employing the highly deferential “manifestly erroneous” standard of review (which directly conflicts with decisions from four other state supreme courts), the Louisiana Supreme Court upheld the taking under both constitutions.  Thus, because the trial court had concluded from the facts that there was a “public purpose,” the Louisiana Supreme Court would not overturn that determination absent clear error.   

Violet filed a petition for writ of certiorari with the U.S. Supreme Court. 

MSLF joined the National Federation of Independent Business and other property rights groups in an amici curiae brief supporting the petitioner and asking the U.S. Supreme Court to overrule Kelo’s holding that transferring property from one private owner to another for the purpose of “economic development” is a public use justifying the exercise of eminent domain under the Fifth Amendment. 

No Status Updates
  • Mountain States Legal Foundation to U.S. Supreme Court: "Time to Overturn Kelo"

    Jul 13, 2018
    Mountain States Legal Foundation joined with the National Federation of Independent Business and other property rights groups across the country in an amici curiae brief asking the Supreme Court of the United States to reconsider its infamous 2005 decision in Kelo v. New London, which allows the government to take private property for “public use” as part of an “economic development plan” that condemns houses in low-income neighborhoods and turns them over to private corporations.


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