LINCOLN — A federal appeals court on Wednesday dealt a potentially crippling blow to Nebraska’s corporate farming ban, declaring it unconstitutional in a decision that continues a court trend against such bans.

A three-judge panel of the 8th U.S. Circuit Court of Appeals ruled that the nearly 25-year-old ban, considered the toughest of its kind in the country, violated interstate commerce.

The lead attorney for the plaintiffs in the case, Steve Grasz, declared: “This is likely the final chapter in (the ban’s) story.”

“This ruling by the 8th Circuit has effectively put Nebraska’s farms and ranches on a level playing field, with the same opportunities as those in other states,” added David Bracht, an attorney who helped build the plaintiffs’ case.

Supporters of the ban say that if the decision is not overturned, Nebraska agriculture could become infiltrated by out-of-state corporate interests at the expense of family farms.

The case stems from a lawsuit filed by ranchers who argued that the ban prevented them from setting up corporations to keep their operations within their family or from combining resources with neighbors to control costs, among other things.

Passed by voters in 1982, the constitutional amendment generally prohibits corporations and certain other business entities from owning farmland or engaging in agricultural activity, although there are numerous exceptions.

Whether the state plans to appeal the decision was not immediately known, but officials may face obstacles in the legal avenues available. In 2004, the U.S. Supreme Court refused to hear an appeal of a decision declaring South Dakota’s ban on corporate farming unconstitutional. That ruling, also from the 8th U.S. Circuit Court of Appeals, said South Dakota’s Amendment E was unconstitutional because it interfered with interstate commerce.

Nebraska could choose to ask for another hearing before the full appeals court, or could ask the U.S. Supreme Court to consider the case, said Grasz, who described the chances of either happening as “remote.”

But Nebraska Farmer’s Union President John Hansen was confident the issue of corporate farming bans would eventually land in the lap of the high court and said his group will work with Attorney General Jon Bruning to review legal options. Bruning could not immediately be reached for comment.

If the ban remains dead, Hansen said agriculture in the state is at risk of becoming a concentrated, industrialized sector that pushes out family farms.

“This was a big victory for corporations and a serious blow to state’s rights — not just in Nebraska, but nationally,” Hansen said.

In the absence of a ruling in favor of the state, Hansen had hoped the court would order the case go to trial.

“It is very troubling when the court undermines the will of the people in this fashion without even giving the proponents of this constitutional provision the opportunity to have a full court process to ascertain the validity of the charges and counter-charges,” he said.

The decision Wednesday follows a similar ruling late last year by U.S. District Judge Laurie Smith-Camp that led to the state’s appeal. Smith-Camp declared the ban unconstitutional because it violated the U.S. Constitution’s commerce clause. She also said the ban violates the Americans With Disabilities Act, but the appeals court did not address that issue.

Two of the six plaintiffs cited physical disabilities and said portions of Initiative 300 discriminate against them because a family member must be involved in day-to-day management of farm holdings to qualify as a family farm corporation.

“Initiative 300 is discriminatory on its face because it affords differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter,” Judge Morris Arnold wrote for the 8th U.S. Circuit Court of Appeals.

“In addition to possessing discriminatory effects, the initiative is also unconstitutional because it was adopted with a discriminatory intent and purpose.

“Nebraska failed to meet its burden of showing that the state could not advance a legitimate local interest without discriminating against nonresident farm corporations and limited partnerships,” Arnold said.

The commerce clause of the U.S. Constitution prevents states from enacting laws that disrupt interstate commerce.

Gov. Dave Heineman said he would not comment until he had a chance to review the decision.