City possibly liable for flooding due to development

The City of Austin v GHI Investments, LLC f/k/a GHI Partners, LLC, 03-12-00189-CV (Tex. App. – Austin April 30, 2013).

This is an interlocutory appeal from the denial of the plea to the jurisdiction relating to inverse condemnation claims for flooding (takings and nuisance). The City approved a roadway widening project with bike lane and an HEB grocery store project which CHI alleges caused continuous flooding of its property. The City asserted that CHI did not alleged the city “intentionally” caused the flooding and did not take anything for a public purpose since CHI was alleging flooding was mostly caused by the HEB project. The trial court denied the plea and the City took this interlocutory appeal.

CHI attached city emails to its response to the plea where City employees noted a concern the existing drainage system could not handle its existing drainage much less additional water from the projects. The City still permitted the projects as designed since the engineers for the developments noted the runoff was still properly taken care of in the design. The City argued the emails were simply employees expressing concerns about a possible scenario or were differences of opinion which was not certain to occur and, at most, the City negligently relied upon assurances the drainage would not be a problem (which the City maintains immunity for).

The court first noted that a nuisance claim which is intertwined with a takings claim is held to the same standards as a taking, therefore when a nuisance rises to the level of a taking a waiver of immunity exists.  If a nuisance claim is not interrelated with a takings, immunity still applies. The court next determined that the only evidence presented was the employee’s emails and the City did not present evidence showing a difference of opinion after certain changes to the design were submitted.  The courted noted “[w]e express no opinion on the merits of GHI’s claims but conclude that GHI has sufficiently pleaded the intent element of a takings claim and that its evidence raises a fact issue with regard to the City’s intent.”

Finally, the court analyzed whether the HEB project was a public use. The parties stipulated that the other roadway alterations were a public use.  The court determined that since part of the HEB project included a new turn lane into the HEB project, such is sufficient at the pleadings stage to qualify as a public use.

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