The Tennessee Court of Appeals Friday reversed Chancellor Walter Evans‘ ruling and injunction against the city of Memphis and Shelby County in the NBA arena lawsuit.

The decision of the three-judge panel, which heard oral arguments Monday, is a victory for the city and county and a defeat for lawyer Duncan Ragsdale, who filed the original lawsuit. Ragsdale could still appeal to the Tennessee Supreme Court.

The appeals court said the city and county properly complied with legislation creating a sports authority and that a new arena is a valid public purpose.

”We conclude that the resolutions of the governmental entities and the contracts executed pursuant thereto are for a public purpose as construed by the Tennessee court and the decisions of courts in other states,” the judges said in a 21-page ruling.

Evans ruled in July in Ragsdale’s favor in a strongly worded ruling that took the city and county and even Ragsdale by surprise. The chancellor said there would have to be a referendum with 75 percent approval for the project as funded to proceed.

“There is every indication that the legislature intended for activities encompassed by the Sports Authority Act to be identified as a public purpose,” says the appeals court ruling. “Courts are not authorized to consider whether legislation is unwise or inequitable; thus, we cannot consider the wisdom or necessity of the legislature’s policy decisions.”

The court said legislators are entitled to “great deference” and that “the court should not substitute its judgment for that of the legislative body