Though the dismissal did not decide the question of whether the takeover was legal, it bars any other state court from considering the case, the justices' ruling said.
"We have no hesitation in concluding that a dismissal based on [unexplained delay] is a judgment on the merits ... and thus preclusive in Utah courts," the ruling said.
The opinion denies every one of the FLDS claims, calling some arguments "sour grapes" and "suspect."
A final decision on the trust's ultimate fate, however, rests with the federal 10th Circuit Court of Appeals in Denver, where the Utah attorney general appealed a federal court ruling last year handing the trust back to the sect.
In that landmark decision, U.S. District Judge Dee Benson ruled the takeover violated the separation of church and state and the trust should immediately go back to the sect.
After a legal showdown between Benson and the state court judge who had been overseeing the case, the 10th Circuit put on hold any return of the trust until it makes a decision.
The appeals court then asked the Utah Supreme Court to decide whether the 2010 dismissal should bar another judge, such as Benson, from ruling in the case. Tuesday's opinion is the answer to that question. The case now goes back to the 10th Circuit.
Though the case isn't over, the opinion is "the shot in the arm we've been waiting for," said Utah Solicitor General Bridget Romano.
Court-appointed trust administrator Bruce Wisan said he's "very pleased" with the decision. If the 10th Circuit does decide to keep the trust with the state, he said he's aiming to follow through with a plan started before the FLDS filed suit in 2008 to break up the communal property trust and distribute the assets to individuals. He would also sell off some property to repay $5.6 million in taxpayer money the state will provide to help pay past-due bills associated with running the trust.
"Certainly there are some complications and issues with that," he said. But, ultimately, "I would like to distribute and get out of Dodge."
As for the sect, FLDS attorney Rod Parker said the group's argument that the takeover violated the constitutional separation of church and state could still gain traction at the 10th Circuit as it did with Benson.
"We're going to meet with the leaders of the community," Parker said, "and decide what steps to take next."
The Polygamy Blog: www.sltrib.com/blogs/polygblog