Posted by: Patricia Salkin | January 31, 2015

TX Appeals Court Finds Property Owners’ Takings Claims Were Not Ripe for Judicial Review

Joe Murphy, Yoram Ben–Amram, and Galtex Development, LLC sued the City of Galveston claiming that the City unconstitutionally took their property without just compensation through inverse condemnation. The City filed this interlocutory appeal, asserting that the trial court lacked subject-matter jurisdiction because the Property Owners’ claims were not ripe for review. Article I, section 17, of the Texas Constitution, the “takings clause,” mandates that “[n]o person’s property shall be taken, damaged, or destroyed for or applied to public use without adequate compensation being made, unless by the consent of such person.”

The court first discussed that a regulatory takings claim ordinarily is not ripe until there has been a “final and authoritative determination” by the governmental entity applying the regulations at issue to the property. A final decision usually requires both a rejected development plan and the denial of a variance from the controlling regulations. The Property Owners argued that their case is ripe because the record contradicted the City’s position that the SUP application was denied due to safety concerns. The Property Owners also argued that the City Council hearing was a “sham” designed to wear them down into acquiescing to demands for density reduction, and that “any efforts by Ben-Amram to make further applications of any kind would be futile.”

Although the Property Owners insisted the parking requirement was “only a subterfuge to achieve a reduction in ‘density,’ ” Ben–Amram testified that he never applied for a variance with the Zoning Board. The record therefore reflected that the Property Owners never isolated the essential question of density for the City’s reconsideration. Therefore, the court found that there was no reasonable “degree” of certainty that the City only would grant a SUP if the Property Owners agreed to remove four or more apartments. Despite this, The evidence in the record as to ripeness was focused on Ben–Amram’s lack of SUP reapplication or application for a parking variance with regard to the City’s denial of the SUP, not any alleged failure to obtain a final decision as to the City’s removal of the property’s grandfathered non-conforming status. Accordingly, the court found the City has not met its burden to establish that its revocation decision was not final and authoritative, and dismissed the Property Owners’ takings claims with regard to the City’s denial of the SUP application.

City of Galveston, TX v Murphy, 2015 WL 167178 (TX App. 1/13/2015)

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