The town of Port Royal was dropped from a lawsuit this week related to rights to the former railroad bed south of Ribaut Road.
The case could continue to affect the sale of the state-owned former port property along Battery Creek.
Property owners along the rail line sued the town and S.C. Ports Authority in December 2015. Rights to the railroad property fell to the adjoining property owners when the railroad was abandoned in 2009, their complaint said.
They also argued that plans to build the Spanish Moss Trail on the property amount to an inverse condemnation — when government intrudes on private property without paying for it.
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The town said it had not entered any agreements related to the Spanish Moss Trail and that the route for the trail was undecided.
Port Royal was dismissed from the lawsuit Monday, according to Beaufort County court records.
“This lawsuit has no basis in reality,” town manager Van Willis told the Town Council in March. “It's just utterly ridiculous, and we've made that very clear.”
The Ports Authority remains as a defendant in the lawsuit. The case could affect the value of the state-owned property, which is bring appraised part of the ongoing attempt to sell the Port of Port Royal.
The agency said in its response earlier this year it retained rights to the property when the railroad was abandoned. The Ports Authority said it is further protected from claims of trespassing and inverse condemnation by state tort law and the statute of limitations.
Beaufort attorney Grady Brown and Kansas City attorneys Tom Stewart and Elizabeth McCulley represent the property owners in the right-of-way lawsuit.
Stewart was the lead attorney on a past case involving the railroad line from Port Royal north of Ribaut Road to Yemassee. Property owners in that case earned a $33 million settlement from the federal government in 2013 after arguing easements should have been returned to them when the railroad was abandoned.