Originally Published by The Houston Chronicle
Oyster-fishing businesses have brought their battle with a Galveston Bay navigation district to federal court, alleging that the governmental body violated their constitutional rights by issuing a 23,000-acre oyster-bed lease to a single fishing company.
“It was nothing but a corrupt power play to corner the oyster market,” said Cristen D. Feldman, whose firm represents four oyster companies that own overlapping state-issued leases to the reefs.
Those companies – Hannah Reef; Shrimps R Us; Michael Ivic, the owner of Misho’s Oyster Co.; and Ivo Slabic, the owner of Duba Seafood – say the Chambers-Liberty Counties Navigation District and five commissioners denied them equal protection and violated their rights.
The lawsuit, at least the third in a dispute that has raged since 2014, alleges the district issued the lease for the underwater oyster beds to one company and failed to give other oyster companies notice or an opportunity to compete.
Navigation district officials and their lawyers at the Lloyd Gosselink firm in Austin declined comment.
The navigation district’s role is to raise money to improve and administer waterways and commerce, but it doesn’t normally oversee the cultivation and harvesting of oysters, mussels and clams in state waters, Feldman said. That authority falls to the Texas Department of Parks and Wildlife, which had issued the leases for the reefs.
The federal lawsuit accuses district commissioners of holding closed-door meetings and brokering a “novel” deal in 2014 with Ben Nelson, owner of Jeri’s Seafood, and his son-in-law, Chambers County Justice of the Peace Tracy Woody.
Nelson died of heart failure in April, and Woody now has control of the company they jointly created, Sustainable Oysters Resource Management (STORM).
Woody objected to Feldman’s portrayal, saying that if his lease were executed in violation of the state’s open meetings act, why did the group of fishermen withdraw their open-meetings lawsuit?
Oyster-reef bed leases in Galveston Bay are valued at $40,000 to $70,000 per acre, said Raz Halili, a co-owner of Hannah Reef. But STORM bought each acre from the navigation district for $1.50, according to Halili’s lawyers.
STORM fishermen began issuing “trespassing” notices to boats that crossed into its waters, depriving the other companies of access to their own leases, they say.
STORM owners attempted unsuccessfully to persuade state legislators last session to pass a bill authorizing navigation districts to take over Texas Parks and Wildlife’s authority to regulate oyster beds.
Woody portrayed himself as a protector of the oyster beds and small oyster fishermen against the companies suing the navigation district.
He said the lease for his company, STORM, does not create a monopoly. He disputed the price per acre, saying it is $1.50 while the oysters are cultivating and will go up to $3 per acre once they’re ready to harvest.
In September, state District Judge Lonnie Cox in Galveston invalidated the navigation district’s 23,000-acre lease to STORM, which the oyster fishing companies said illegally monopolized the industry and kept a valuable part of the bay from other oystermen. The case is awaiting a trial that will decide damages.
A state appellate court already has ruled in a separate case that the navigation district lacks authority to lease oyster beds.