Jacksonville Port Authority Condemnation: Keystone Coal (Duval County, FL)

Jacksonville Port Authority Condemnation: Keystone Coal (Duval County, FL)

Mr. Brigham, as a partner in his predecessor firm of Brigham Moore, LLP, served as lead counsel and represented Tom Scholl of Keystone Coal Company in “slow-take” proceedings filed by the Jacksonville Port Authority (“Jaxport”).  Prior to the lawsuit, Mr. Scholl purchased 60 acres +/-  of waterfront property on the St. Johns River to construct an intramodal bulk terminal.  He was first in the marketplace to recognize that the property was the only suitable property between Charleston, S.C., and Mobile, AL with the originating railroad being Norfolk Southern, a strategic characteristic particularly for the import and export of coal.  Mr. Scholl’s purchase price was $8 million.

Jaxport’s intent was to use the power of eminent domain to take 110 acres +/- of property from Keystone and an adjacent owner and then lease the land to another coal company for $11 million per year. To apply pressure, Jaxport’s initial offer to Keystone was only $7 million while still holding Keystone liable for any environmental liability.  Although arguing that the taking lacked a constitutional public purpose, Keystone was not able to appeal the circuit court’s ruling upholding Jaxport’s authority to take without proceeding to a valuation jury trial.  In spite of an evidentiary ruling that Jaxport’s $11 million per year lease with the rival coal company was inadmissible, Mr. Brigham was still able to persuade a jury through a comparable sales approach to enter their verdict of  $67 million, the largest eminent domain verdict in Florida state court proceedings.

As a result of the jury verdict, Jaxport elected to abandon the taking.  While changing its mind on the acquisition, Jaxport could not walk away from its obligation to pay Keystone’s attorneys’ fees and costs.  In creative fashion, Mr. Brigham persuaded Jaxport to sell the balance of the 110 acres +/- acres to Keystone in exchange for Mr. Scholl assuming the obligation to pay attorneys’ fees and paying a premium to purchase the neighboring property.   Thus, with a bit of irony at the end of this condemnation, it was Keystone that ended up acquiring Jaxport’s property.

Today, Keystone has completed its development of a first-class, intramodal terminal.  The private port is now in operation as Keystone’s global gateway for a wide range of bulk cargos including coal, pet-coke, and stone.


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