Category Archives: Preemption

Dallas Court of Appeals holds comprehensive plan ordinance is subject to referendum petition

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Carruth, et al v Henderson, 05-19-01195-CV (Tex. App. – Dallas, July 22, 2020).

This is a mandamus action (and second interlocutory opinion) where the Dallas Court of Appeals issued a mandamus against the City Secretary of the City of Plano regarding a citizen’s referendum petition and granted summary judgment for the plaintiff citizens.

The City of Plano, a home-rule municipality, has a comprehensive plan for land and use development under Chapter 213 of the Texas Local Government Code. The City of Plano’s charter permits qualified voters to submit a referendum petition seeking reconsideration of and a public vote on any ordinance, other than taxation ordinances. After the City passed an ordinance amending and adopting a new comprehensive plan, several citizens submitted a petition to the City Secretary for a referendum to repeal the new plan. The City Council held an executive session and was advised by outside legal counsel that the petition was not subject to a referendum vote. When no action was taken on the petition, the citizens filed suit to compel formal submission to the City Council and to have the City Council either take action or submit to a popular vote. The City Secretary filed a motion for summary judgment, which was granted. The citizens appealed.

The legislature may preempt municipal charters and ordinances. However, when preempting a home-rule charter, the language must be clear and compelling. The Plano City Charter itself excepts only ordinances and resolutions levying taxes from the referendum process. And while Chapter 213 of the Texas Local Government Code regulates the adoption of comprehensive plans, the mere fact that the legislature has enacted a law addressing comprehensive plans does not mean the subject matter is completely preempted (which would have foreclosed a referendum application). The City Secretary claims § 213.003 impliedly withdraws comprehensive development plans from the field of initiative and referendum by mandating procedural requirements, including a public hearing and review by the planning commission before cities can act on such plans. This argument ignores that the statute also allows a municipality to bypass the procedures set forth in subsection (a) and adopt other procedures in its charter or by ordinance. Tex. Loc. Gov’t Code § 213.003(b). Thus, the legislature did not limit the power of home-rule municipalities to adopt comprehensive plans. Further, comprehensive plans, while linked, are to be treated differently than zoning regulations. So, the cases cited by the City Secretary related to zoning referendums are not applicable. The order granting the City Secretary’s motion for summary judgment is reversed.  Because the original interlocutory opinion (summary found here) held the City Secretary has a ministerial duty to present the petition to the City Council, the law-of-the-case doctrine prevents the panel from holding otherwise. As a result, it must grant the citizen’s motion for summary judgment.

If you would like to read this opinion click here. Panel consists of Justices Schenck, Molberg, and Nowell. Opinion by Justice Schenck.  Docket page with attorney information found here.

1st District Court of Appeals holds section of Texas Water Code regarding sewer CCNs unconstitutional

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City of Tyler v. Liberty Utilities (Tall Timbers Sewer) Corp., 01-17-00745-CV (Tex. App. – Houston [1st Dist.], December 20, 2018)

This is a declaratory judgment case where the First District Court of Appeals in Houston held a provision of the Texas Water Code unconstitutional.

Liberty Utilities (Tall Timbers Sewer) Corporation provides retail sewer utility service in Smith County under a certificate of convenience and public necessity. The City of Tyler desired to provide sewer service in Liberty’s service areas. State law prohibited the dual service in the area, so the City went to the Legislature, which passed §13.2475 of the Texas Water Code.  This created an exception from the generally applicable law allowing the City to provide sewer service within its boundaries, even in Liberty’s service areas. Liberty then sued the City, successfully obtaining a declaratory judgment that §13.2475 is unconstitutional. The City appealed.

In this 21-page opinion, the court analyzed the constitutional prohibition against local laws under  Article III, Section 56 of the Texas Constitution. The court analyzed the legislative debate and the author’s stated intended purpose. The court determined the section was bracketed and intended to address Tyler and regulated its affairs as a local law. The court further determined none of the constitutional exceptions from the prohibition applied. “The City of Tyler’s legislative strategy to uniquely exempt itself from the operation of Water Code Section 13.247(a) was a violation of the Texas Constitution’s default preference for laws of general applicability and general prohibition of local laws.”  As a result, it held §13.2475 unconstitutional.

If you would like to read this opinion click here. Panel consists of Justice Keyes, Justice Bland, Justice Massengale. Opinion by Justice Massengale.

Home-rule city’s franchise contract and right-of-way ordinance trumps pro-forma provision in a tariff, so utility must bear costs of relocation

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City of Richardson v Oncor Electric Delivery Company, LLC, 15-1008 (Tex. February 2, 2018)

This case involves a dispute between a city and a utility over who must pay relocation costs to accommodate changes to public rights-of-way.

The City of Richardson (“City”) negotiated a franchise agreement with Oncor Electric Delivery Company LLC, (“Oncor”)  requiring Oncor to bear the costs of relocating its equipment and facilities to accommodate changes to public rights-of-way. Richardson later approved the widening of thirty-two public alleys. Oncor refused to pay for the relocation. While the relocation dispute was pending, Oncor filed an unrelated case with the Public Utility Commission (PUC), seeking to alter its rates. That dispute was resolved by settlement, but the settlement included Richardson passing a tariff ordinance. The Court had to decide whether a pro-forma provision in a tariff, which sets the rates and terms for a utility’s relationship with its retail customers, trumps a prior franchise agreement, which reflects the common law rule requiring utilities to pay public right-of-way relocation costs.

By nature, a franchise agreement represents the unique conditions a city requires of a utility in exchange for the utility’s right to operate within the city. Here, the Franchise Contract incorporated a conventional right-of-way ordinance (the “ROW Ordinance”) requiring the utility, upon written notice from Richardson, to remove or relocate “at its own expense” any facilities placed in public rights-of-way. The ROW Ordinance is typical of others throughout Texas. “Tariff” is defined as “the schedule of a utility . . . containing all rates and charges stated separately by type of service, the rules and regulations of the utility, and any contracts that affect rates, charges, terms or conditions of service.” 16 Tex. Admin. Code §25.5(131). A tariff filed with the PUC governs a utility’s relationship with its customers, and it is given the force and effect of law until suspended or set aside. However, the PUC’s rules also contain a “pro-forma tariff,” the provisions of which must be incorporated exactly as written into each utility’s tariff.  The City and Oncor sued each other over payment of the relocation costs, each citing the differences between the ROW Ordinance/Franchise Contract and pro-forma tariff. The trial court granted the City’s motion for summary judgment, but the court of appeals reversed and rendered judgment for Oncor.

Under the common law, a utility’s right to use a city’s public rights-of-way is permissive and is subordinate to the public use of such rights-of-way. The Texas Supreme Court has traced this principal back at least as far as 1913.  The Utilities Code mirrors the common law, but specifically apply to “streets.”   Oncor argues that the Legislature’s use of “street” and not “alley” is significant and precludes these statutes from applying to alleys. Under statutory construction principles, every word included and excluded by the Legislature has significance. Looking to the statutory scheme, the Court found particularly relevant the Legislature’s recognition of the broad authority afforded to home-rule cities. As a home-rule city, Richardson has “exclusive original jurisdiction over the rates, operations, and services of an electric utility in areas in the municipality.” Furthermore, the Court held that in the context of home-rule cities, the recognition of a specific power does not imply that the other powers are forbidden. The  Legislature did not intended to strip municipalities of their common law right to require utilities to bear relocation costs. The language in the Tariff does not unmistakably address the relocation costs. The Tariff addresses Oncor’s relationship with end-users, which, in this case, dose not include the City.  As a result, the City retains the power to address costs through its ROW Ordinance and its Franchise Contract. The Court reversed the judgment of the court of appeals and reinstated the judgment of the trial court.

If you would like to read this opinion click here. Justice Green delivered the opinion of the Court. The docket page with attorney information can be found here.

City plastic bag ban ordinance held preempted by Solid Waste Disposal Act

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Laredo Merchants Association v. City of Laredo, Texas, 04-15-00610-CV (Tex. App—San Antonio, August 17,2016)

This is a statutory construction case in the San Antonio Court of Appeals determined §361.0961 of the Solid Waste Disposal Act (“the Act”) preempts a checkout bag ordinance enacted by the City of Laredo.

The City implemented a strategic plan aimed at creating a “trash-free city.” As part of this strategic plan, the City adopted the Ordinance designed to “reduce litter from discarded plastic bags,” and makes it unlawful for commercial establishments to provide checkout bags to customers.  Merchants filed suit against the City, seeking declaratory and injunctive relief. The trial court granted the City’s motion for summary judgment and the Merchants appealed.

The Act governs the management and control of solid waste materials. Section 361.0961 of the Act states a local government may not adopt an ordinance that “prohibit[s] or restrict[s], for solid waste management purposes, the sale or use of a container or package in a manner not authorized by state law.” The court held the language of §361.0961 of the Act unmistakably expresses the Legislature’s desire to preempt any such ordinance. Under the rules of statutory construction, a plastic bag is a “container” for purposes of the Act. After analyzing the ordinance, the court held it was enacted for the purposes of solid waste management. Therefore, the ordinance is preempted. The City’s summary judgment was reversed and judgment is rendered for the Merchants. The case is remanded for a determination of attorney’s fees.

If you would like to read this opinion click here. The panel includes Chief Justice Marion, Justice Barnard, and Justice Chapa. Justice Barnard delivered the opinion of the court.  Attorneys listed for the Merchants are James B. Harris, Christopher C. Peterson, James K. Lehman, and Gabriel Gonzalez.  Attorneys listed for the City are Kristina Laurel- Hale and Raul Casso, IV.

Permanent injunction prohibiting city from holding election on red light cameras dissolved

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The City of Cleveland et al., v. Keep Cleveland Safe, 09-15-00076-CV (Tex. App—Beaumont, July28, 2016)

Plaintiff, Keep Cleveland Safe (“KCS”) filed a petition attempting to stop the City from placing an issue on the ballot for the May 2014 election regarding photographic traffic signal enforcement systems or red light cameras. The trial court permanently enjoined the City and the City appealed.

The City of Cleveland is a home-rule municipality which passed an ordinance authorizing and implementing a photographic traffic signal enforcement program. The City received a petition to ban all red light cameras from another group of citizens. The City Council accepted the Red Light Ban Petition and placed the measure on the ballot as part of a charter amendment. KCS filed this lawsuit in response. KCS argued the Texas Transportation Code vests exclusive control over red light cameras with the “governing body,” making the subject outside the scope of permissible referendums and initiatives. After a bench trial the trial court issued a permanent injunction prohibiting the City from ever considering an initiative or referendum on red light cameras.

The Legislature may remove by general law a subject matter from the initiatory process. However, the claims cannot be moot at the time of trial or appeal. The City asserts even though the May 2014 election has passed, the injunction prohibits it from ever holding such an election. KCS asserts the claim is not moot because others can still submit another initiative to ban the cameras and the subject could evade judicial review.  However, the court held the mere possibility someone else could bring an initiative on the same grounds does not mean the matter is excepted from the mootness doctrine. KCS failed to demonstrate how there is a reasonable expectation that the City will be subjected to the same action again. Additionally, even if the matter was not moot, there is no justiciable question.  “It is well settled that separation of powers and the judiciary’s deference to the legislative branch require that judicial power not be invoked to interfere with the elective process.” The trial court lacked subject matter jurisdiction to issue a permanent injunction that enjoined the election process. “Being lawfully clothed with legislative power, the City should be allowed to exercise that power and to the dictates of its legislative judgment, regardless of whether or not any particular enactment may be valid or invalid.”  Finally, a court should not “declare rights on facts which have not arisen or adjudicate matters which are contingent, uncertain, or rest in the future.”  As a result, the court dissolved the permanent injunction and dismissed the case.

If you would like to read this opinion click here.  The Panel includes chief Justice McKeithen, Justice Kreger, and Justice Johnson. Justice Johnson delivered the opinion of the court. If you would like to see the attorneys for the parties, click here.

If you have a case involving Chapter 245 vested rights, zoning changes, and distance restrictions on alcohol sales read this 71 page opinion

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FLCT, Ltd. and Field Street Development I, Ltd. v. City of Frisco, Texas, 02-14-00335-CV (Tex. App.- Fort Worth, May 26th 2016)

Owners are two partnerships that own adjacent property in Frisco. FLCT’s tract is located on the actual corner; Field’s tract is located directly east of FLCT’s. In both 2006 and 2007, the City’s zoning ordinance permitted property owners in the C-1 district to sell beer and wine “by right.” However, no public school was located within three hundred feet.  After Owners submitted a preliminary site plan for an expanded facility, Frisco ISD began negotiating with Owners to purchase the southernmost part of FLCT’s and Field’s tracts for an elementary school. Before Owners closed on the sale to Frisco ISD in 2009, they filed an amended preliminary site plan application with the City. The City Council then amended the zoning ordinance. Owners then sold a portion of the property to 7-Eleven which conditioned the sale on the ability to obtain all permits (including selling beer and wine). The City asserted 7-Eleven could not sell alcohol at that location. The City then went through several ordinance amendments to adjust and prohibit alcohol sales near churches, schools, and hospitals. 7-Eleven eventually sued under §11.37(d) of the alcoholic beverage code seeking an order requiring the City Secretary to make the statutory certification. Tex. Alco. Bev. Code Ann. § 11.37(d) (West Supp. 2015). However, the City Secretary certified the area was in a dry region. Owners submitted a vested rights petition to the City under Chapter 245 of the Texas Local Government Code asserting they began developing the property at time alcohol sales were permitted so their rights vested at that moment to forever be able to sell alcohol at that location. The trial court granted the City’s plea to the jurisdiction and the Owners appealed.

First, the court held Chapter 245 provides the authority for a declaratory judgment action to enforce a landowner’s rights. Owners are seeking a determination of the existence and extent of their rights to develop and use the Property.  As a result, the plea should not have been granted as to the Chapter 245 claims. Next the court analyzed the Texas Alcoholic Beverage Code and held not only does it permit a city to enact distance regulations it also allows the city to grant variances as to enforcement of those distance requirements. Accordingly, the code does not pre-empt the City’s enactment and enforcement of the distance requirements, which means the Owners are not limited to the relief under the TABC. Here, Owners have raised both a constitutional claim and a vested property rights claim in the form of a declaratory judgment, which is specifically authorized by statute. They are not seeking to appeal any action by the TABC or any action in connection with a pending permit, so again, no pre-emption. The TABC does not provide the exclusive remedy for Owners’ claims based on the City’s enforcement of the distance requirements with respect to the Property. Next, the Owners contend the City’s zoning changes are void as they did not provide individual notice to property owners. However, such notice is only applicable for changes in zoning classifications, not other types of zoning changes. The court analyzed the term “classification” and held the legislature intended that if a city (either through its zoning commission or city government) wishes to consider a zoning district or boundary change to a discrete piece of property, it is to ensure that owners of surrounding properties that would be affected by the change have notice and an opportunity to participate in any hearing regarding that change. Here, the City’s December 2012 zoning ordinance purported to place restrictions on the types and places where businesses could sell alcohol within five different districts where alcohol sales were then permitted. Thus, this was not a rezoning of classification applicable only to the Property itself; the Property was still included in the C-1 district after the passage of the ordinance. In other words, the City’s interpretation is correct and this was not a “classification” change requiring individual notice. Next, the City contended that it could not issue a “permit” for alcohol so no vested right applies to its sale. However, Chapter 245 also applies to certificates. The certificate required by the City Secretary qualifies. Further, the Owner’s claims are not predicated on the continued operation of a particular type of business but on use restrictions and, thus, they are not excluded on that basis from §245.001’s definition of project. The court agreed with Owners’ contention that the amended ordinance affected the C-1 district by imposing additional restrictions on alcohol sales that had not previously been imposed. Accordingly, the Owners’ pleadings and evidentiary facts show that the exemption in §245.004(2)(i.e. no vested right for certain zoning classifications) does not preclude their remaining Chapter 245 claims. Next the court concluded that the preliminary site plan originally applied for contained sufficient notice it intended to include alcohol sales. Further, a regulatory taking can occur when government action unreasonably interferes with a landowner’s use and enjoyment of the property. After analyzing the facts and a detailed analysis of the legal standards, the court held facts were sufficiently pled and established to confer jurisdiction for a regulatory taking claim. As a result, the trial court order granting the plea is affirmed-in-part, reversed-in-part and remanded.

To read the opinion click here. Panel consists of Chief Justice Livingston, Justice Walker and Justice Sudderth. Opinion issued by Chief Justice Livingston. Attorney for FLCT, Ltd. Is Arthur J. Anderson. Attorney for City of Frisco is Richard Abernathy and Field Street Development I, Ltd. is represented by Arthur J. Anderson.

 

Texas Supreme Court holds City’s air-quality ordinance preempted by Clear Air Act

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BCCA APPEAL GROUP, INC. v. CITY OF HOUSTON, 13-0768 (Tex. April 29, 2016)

This is essentially a preemption case where the Court determined whether the Texas Clean Air Act and the Act’s enforcement mechanisms in the Texas Water Code preempts a Houston air-quality ordinance.  The Court held the City ordinance invalid.

The Texas Clear Air Act (“Act”) is found within Texas Health and Safety Code Chapter 382. In 1992, the City of Houston enacted an air-quality ordinance to regulate air pollution from facilities that were not already regulated under the Act. Initially, the City contracted and cooperated with the TCEQ to ensure that TCEQ-permitted emissions sources within the City’s borders complied with state law. The City’s contract with the TCEQ ended in 2005, as did its cooperative arrangement with the TCEQ, because the City desired to enforce the Act and TCEQ rules on its own “due to what it perceive[d] to be TCEQ’s lax enforcement efforts.” In 2007, the City amended the 1992 ordinance to establish its own air-quality regulatory-compliance program and adopted a fee schedule to fund the program. BCCA Appeal Group members operate integrated chemical manufacturing plants and refineries in the Houston area. Those plants are extensively regulated by the TCEQ pursuant to the Act. BCCA filed suit to declare the ordinance (and its amendments) invalid.  The trial court granted BCCA’s motion for summary judgment holding the ordinance void but the court of appeals reversed and rendered judgment for the City.  BCCA appealed.

The Court first noted the Ordinance has a severability clause, so any sections which are preempted do not affect the remainder. BCCA Appeal Group argues that the Ordinance is expressly preempted by §382.113(b) of the Act and are implicitly preempted by the comprehensive structure of the Act and its Water Code enforcement provisions.  The Court analyzed the comprehensive structure of the Act and went through all the enforcement variations possible under the Act including the TCEQ’s policy of first seeking voluntary compliance, seeking criminal penalties, civil penalties, and the authority to decline to enforce even after a violation is found. The statute mandates administrative and civil remedies whenever possible, and the TCEQ is charged with the discretion to make that determination before any criminal proceeding may move forward. The Act limits a City’s power to enact any ordinance only to those subjects which are consistent with the Act and limited the City’s ability to enforce air-quality standards criminally. The way the Ordinance is written, any enforcement of the Ordinance violations is also subject to enforcement under state law. However, Water Code §7.203 requires that a permit-holder’s alleged violation must be reported in writing to the TCEQ before referral to a prosecuting attorney for criminal prosecution. The statute grants the TCEQ forty-five days to determine whether a violation actually exists and whether administrative or civil remedies would be adequate which the Ordinance countermines. Further, prosecution under the Ordinance results in a “criminal conviction, which require[s] the prosecutor to prove a culpable mental state,” therefore escalating the violation to a “major violation” in the site’s compliance history even when the violation is not listed as “major” by the TCEQ. The Legislature expressed its clear intent to have the TCEQ determine the appropriate remedy in every case. Further, the City’s requirement that a facility must register to operate lawfully effectively moots the effect of a TCEQ permit that has been issued and allows a facility to operate lawfully.  Given the Act’s very specific limitation on a City’s ability to regulate only certain portions of air-quality control, this registration requirement is inconsistent with the Act. The Ordinance is therefore preempted.

Next the Court analyzed whether the language in the non-preempted sections (dealing with adopting TCEQ Rules) is unconstitutional simply because it references an automatic adoption of any TCEQ Rule future amendments. BCCA argues the auto-adoption language unconstitutionally delegates core lawmaking from the City Council to the TCEQ. However, a home-rule city’s power comes from the Texas Constitution. No statutory or constitutional provision limits the City’s power to incorporate TCEQ Rules. Therefore, when the City adopted the TCEQ rules as they currently exist and as they may be amended, the Ordinance complied with the Act’s mandate that any ordinance must not be inconsistent with the TCEQ’s rules and ensured that consistency be maintained on an ongoing basis.

The dissent argued the majority deviated from precedent noting it should attempt reasonable construction to allow two laws to co-exist without preemption. Chiding the majority for not specifying the language noting the Ordinance “provides only for criminal prosecution without TCEQ involvement..” Justice Boyd used statutory construction principles to conclude the Ordinance does incorporate TCEQ involvement prior to prosecution. However, the majority disagreed with that analysis.

If you would like to read this opinion click here. JUSTICE GREEN delivered the opinion of the Court, in which CHIEF JUSTICE HECHT,JUSTICE JOHNSON,JUSTICE WILLETT,JUSTICE GUZMAN,JUSTICE LEHRMANN,JUSTICE DEVINE, and JUSTICE BROWN joined, and in which Justice Boyd joined as to Parts III(B) and IV but his dissent in part is found here.  The docket page with attorney information is found here.

City’s towing ordinance not preempted since it still centers on public safety

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Houston Professional Towing Assn. v. City of Houston No. 15-20117 (5th Cir. February 3, 2016).

Houston Professional Towing Association (“HPTA”) brings its third lawsuit challenging SafeClear, the freeway towing program run by the City of Houston. In 2004, the city contracted with eleven towing companies to patrol various freeways around the clock and to remove wrecked and disabled vehicles. In 2005, HPTA, which represents tow operators in the Houston area (none of which was awarded a SafeClear contract), sued in federal court asserting the ordinance was preempted by federal law.  The City amended the ordinance to bring it into compliance with federal regulations on motor carriers. In 2006, HPTA sued again asserting the ordinance infringed upon commercial speech. Federal courts issued an opinion the ordinance was not preempted. In May 2011, the City again amended the SafeClear program to required vehicle owners to pay for the SafeClear tows of vehicles stalled on the shoulder; previously the city had paid for those tows.  HPTA brought this suit saying the change was preempted. The trial court issued a summary judgment in the City’s favor and HPTA appealed.

Federal law 49 U.S.C. §14501 prohibits a state from regulating the price, quote, or services of certain motor carriers transporting property, but has a public safety exception.  This exception for public safety is what allowed the prior suits to be dismissed in the City’s favor and sustain the ordinance.  In this third suit, the change in who pays does not affect the public safety elements of the ordinance. No significant changes to the ordinance occurred which would take it outside the realm of the public safety exception.  To adopt HPTA’s argument would mean that if a government program is modified to cut costs, it is impossible for it to fulfill its original purpose. “Although the goal of the 2011 amendments may have been to cut costs (and to make SafeClear fiscally sustainable over the long term), there is no doubt that the continuing purpose of the program is to promote safety by expeditiously clearing stalled and wrecked vehicles.”  After going through the various claims raised by HPTA, the 5th Circuit affirmed the order granting the City’s summary judgment.

If you would like to read this opinion click here. Panel: JONES and SMITH, Circuit Judges, and FITZWATER, District Judge.  Opinion by Judge Smith.

City can sue for damages to property values due to nuisance for acts occurring outside ETJ says Amarillo Court of Appeals.

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Town of DISH, et al v. Enbridge Gathering (North Texas) L.P., et al.,  07-13-00391-CV (Tex. App. – Amarillo, June 1, 2015)

This is a consolidation of three separate cases with multiple parties and multiple defendants with certain procedural complexities. For the government lawyer, the important thing to take away from the case is the ability of the City to sue for damages (lost tax values) due to nuisance and trespass.

Eighteen property owners and the City of DISH sued six different energy production companies (“Energy Defendants”) alleging noise, light, odors and chemical particulates emanating from the facilities constituted trespass and a nuisance and a decrease in property value. Essentially, the facilities were natural gas pipeline compressor stations near the outskirts of DISH. There appears to be no dispute the Energy Defendants were operating within federal and state regulations for production and emissions. Nevertheless, the City and property owners sued due to the damage in property values and loss of enjoyment of property. The trial court granted various motions ultimately dismissing the claims and the City and property owners appealed.

The Amarillo Court of Appeals spent considerable time explaining why odors and particles can constitute trespass and a nuisance. The court then explained that simply because the Energy Defendants complied with regulations on emissions, does not mean they are immune from the consequences those emissions may cause. “Stated another way, just because you are allowed by law to do something, does not mean that you are free from the consequences of your action. … Regulatory compliance or licensure is not a license to damage the property interests of others.”  However the court also held that diminution in future value or a damage of $1,000 per day is more akin to a penalty or future regulation which is preempted by federal and state law. One Energy Defendant argued the City lacked authority to sue for actions taken outside of its extra-territorial jurisdiction (“ETJ”).  The court first noted the City has authority to sue for damages.  That is different than suit to enforce regulations or to attempt to regulate outside of its boundaries. “Here, DISH does not seek to regulate or abate any of Enterprise’s operations but, instead, seeks to recover damages allegedly resulting from lost tax revenues occasioned by the diminution in value of its tax base…” which is permissible. The court made other holdings which were specific to the property owner claims and are not addressed here.

If you would like to read this opinion click here. Panel: Chief Justice Quinn, Justice Hancock and Justice Pirtle. Memorandum Opinion by Justice Pirtle.  The docket page with attorney information can be found here.

 

 

Town’s ETJ subdivision law on lot size violates state law says Fort Worth Court of Appeals

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The Town of Annetta South, Texas, et al v. Seadrift Development, L.P., 02-12-00171-CV (Tex. App. – Fort Worth, September 25, 2014)

This is an ordinance challenge case where the Fort Worth Court of Appeals affirmed the granting of partial summary judgment for the developer invalidating a lot restriction within the Town’s extraterritorial jurisdiction (“ETJ”).

The Town of Annnetta South denied Seadrift Development’s preliminary subdivision plat citing a city ordinance requiring all lots to be at least two acres in size. Seadrift requested the Town certify the reasons for the denial pursuant to Tex. Loc. Gov’t Code Ann. § 212.009(e) (West 2008). Seadrift sought a declaration the ordinance violated Tex. Loc. Gov’t Code Ann §212.003(a)(4) (which prohibits regulating the number of residential units per acre in the ETJ) and the trial court granted Seadrifts partial summary judgment motion invalidating the ordinance. The Town appealed.

The court first went through several statutory construction principles and determined that the lot size restriction, as worded, did regulate the residential units per acre because it did not allow the sale of any lot subdivided in less than the two acre minimum. Citing the ordinance as circular and confusing, the court noted “although multiple duplexes, triplexes, and apartment complexes may technically be built on a single two-acre lot in the Town’s ETJ, they can never be individually sold. The result is that the entirety of each two-acre lot is required to share common ownership.”  A city cannot regulate in the ETJ unless given express authority and any such authority must be strictly construed against the city. As a result, the ordinance violates state law and is void to the extent it regulates in the ETJ. Based on the certified answer for the denial, the court concluded the City denied the plat because the lot size was not at least two acres. An interesting analysis, however, is the denial of the mandamus to require the approval of the plat. The court reasoned that the ministerial duty to approve the plat did not arise until after the court granted Seadrift’s declaratory judgment summary motion. So, the mandamus claim may be refiled after the County refuses to comply with the ministerial duty resulting from this opinion.

The dissent believes the legislature knows how to say “density” when it means density and it chose to use different wording in §212.003(a)(4), so it meant something different. Also, the ordinance does not limit the number of units in the ETJ, only the size of lots which can contained multiple units. Justice Dauphonot disagreed with the majority’s emphasis on buyers as opposed to residents and believed the ordinance conformed to state law.

If you would like to read this opinion click here. Panel: Justice Dauphinot, Justice Walker and Justice Meier. Opinion by Justice Walker. Dissenting Opinion by Justice Dauphinot found here. The attorney listed for the Town is Fredrick ‘Fritz’ Quast.  The attorneys listed for Seadrift are James B. Harris and John E. Westhoff.

Association has standing to challenge use of funds for illegal aliens says 14th District Court of Appeals.

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Lone Star College System and Richard Carpenter v. Immigration Reform Coalition of Texas (IRCOT), 14-12-00819-CV (Tex. App. – Houston [14th Dist.], November 26, 2013).

This is a preemption case with jurisdictional underpinnings which appeared before the court interlocutory after the denial of a plea to the jurisdiction. Immigration Reform Coalition of Texas (IRCOT), brought this state taxpayer lawsuit alleging state funds were being expended pursuant to state laws that are preempted by federal law. Specifically, IRCOT alleges the College provides education grants to illegal aliens using Texas state funds in violation of federal statutes.  All governmental entities who deal with the political issues of regulations involving illegal aliens should probably read the case.

IRCOT alleged 8 U.S.C. §§1601(6), 1621, 1623, 1625 preclude the expenditure of state funds on illegal aliens, especially for secondary education purposes. Lone Star filed a plea asserting it has governmental immunity, IRCOT lacks standing, and the asserted claims were not ripe. The trial court held IRCOT lacked standing based on the payment of sales, motor vehicle, and fuel taxes, however, it could have standing by establishing it paid taxes that were allegedly illegally expended on the specific activity. Lone Star appealed.

The court first analyzed Lone Star’s governmental/sovereign immunity assertions.  However immunity is waived under the Uniform Declaratory Judgment Act for a challenge to an ordinance or statute.  To the extent IRCOT asserts the Texas Education Code provisions authorizing the expenditures are preempted, immunity is waived. Since Lone Star serves as an agent and administrator for the state grants, it is a proper party, even though it is a local entity and the challenge is to a state statute. [Comment: the court did admit it was unusual to file a state taxpayer suit against a local entity, but it was the interconnectedness of the grants which provided authority].  IRCOT further alleges that someone at Lone Star is acting without authority by providing the funds and therefore suing the chancellor of the college is proper since he has the authority to ensure the college complies prospectively with applicable federal laws. Thus, even though the chancellor may not be the employee who actually distributes grant funds to illegal aliens, he is the one to sue for prospective insurance of compliance. The court then analyzed IRCOT’s standing and asserted the pleadings were sufficient to plead standing and the record was not developed enough to eliminate the pleading assertion. Further, the allegations, when read liberally, note the claims are ripe.

If you would like to read this opinion click here.

 

 

City’s fair notice ordinance to establish vested rights deemed preempted says 4th Court of Appeals.

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City of San Antonio v. Greater San Antonio Builders Association and Indian Springs LTD, 04-13-00013-CV (Tex. App. – San Antonio, November 20, 2013).

This is a vested rights case under Chapter 245 of the Texas Local Government Code. The City of San Antonio appealed from a declaratory judgment invalidating its fair notice ordinance and the San Antonio Court of Appeals affirmed.

In relation to permits for development, the City passed an ordinance requiring the applicant to fill out a specific City form which flags the permit for the City to recognize vested rights. The purpose is “to provide standard procedures for an applicant to accrue rights under Chapter 245 of the Texas Local Government Code.”  The Plaintiffs are organizations whose members include individuals and entities who are concerned with issues affecting the real estate industry in the greater San Antonio area or who own real property in the City. In a separate interlocutory appeal, the Plaintiff’s standing was affirmed and they were permitted to proceed at the trial court level. The Plaintiffs filed traditional summary judgment motions (2 of them on different issues) which the trial court granted. The City appealed.

The City asserted the fair notice ordinance ensures it will have enough information about a project to determine whether the project has changed and, therefore, is subject to current development regulations. GSABA and Indian Springs countered that the fair notice ordinance allows the City to prevent owners from obtaining or utilizing vested rights that have already been authorized by the legislature under Chapter 245. The City conceded it would not recognize a vested right without the fair notice form since its absence makes an application incomplete.  However, the court held that Chapter 245 expressly defines the documents and information that cause the accrual of a vested right. Tex. Loc. Gov’t Code. § 245.002(b)(West 2011). The City’s form requires additional information beyond what is recognized in the statute and therefore fails to recognize rights which vest under state law. Unfortunately, the court then held that since the City did not present the severance clause argument in response to the summary judgment, they could not do so on appeal. The entire ordinance is therefore invalid.  This seems a little extreme since the law is the law and whatever provision may be invalid, the presence of a severance clause separates it as an operation of law.  But the 4th Court did not see it that way and invalidated the entire ordinance.

If you would like to read this opinion click here.

9th Court interprets elections after Voting Rights Act declared unconstitutional by U.S. Supreme Court.

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Rodriguez, et al.  v. Beaumont Independent School District, et al.,  No. 09-13-00434-CV (Tex. App. – Beaumont, October 17, 2013)

In this case the Beaumont Court of Appeals was asked to see how the recent U.S. Supreme Court declaration that portions of the federal Voting Rights Act are unconstitutional affects a local election.  This is a 24 page opinion out of an interlocutory appeal from a temporary injunction order.

Prior to the 2010 census, all seven BISD trustees were elected from single-member districts.  In May 2011 the voters changed the system to a five single-member and two at-large districts (a 5-2 plan).  Rodriquez and company are 3 individuals who filed to run in the aborted May 2013 election (moved to November by Legislature to be federally compliant) and were denied a placed on the ballot (separate federal suit). BISD failed to obtain preclearance.  The trial court held the 5-2 plan was not capable of being approved in federal court so allowed the Board to conduct its election under a seven single-member district plan with no at-large districts and on a non-statutory election date (based on a 1985 federal order).

The 9th Court of Appeals disapproved of the trial court’s reasoning as federal law no longer requires BISD to obtain preclearance and it must now comply with state law. After the U.S. Supreme Court’s holding in Shelby Cnty., Ala. v. Holder, 133 S.Ct. 2612, 2631 (2013), the federal district court dismissed BISD’s preclearance lawsuit (noted above). In dismissing the federal suit, the U.S. District Court expressly recognized that the matter was now purely an issue of state court law. Both parties asked the 172nd District Court to solve a problem that resulted from the federal court’s imposing preclearance requirements on an election authorized by a statute whose preclearance requirements have now been rendered unenforceable as a collateral consequence of the Supreme Court’s decision.

However, the plans proposed by both BISD and the putative trustees are each inconsistent with the 5-2 manner of electing trustees adopted by BISD’s voters. BISD wanted the defunct 7 single-member districts and the putative trustees argued that since the May election did not happen when it should have, they should be automatically seated as trustees.  The 9th Court held BISD has no authority to conduct an election on a date inconsistent with state law. And now, under federal law, the U.S. Department of Justice bears the burden of proof (not merely the ability to object) that an election map is racially discriminatory and must bring suit under the surviving sections of the Act. BISD retains the power to manage the logistics of an election which is consistent with Texas law but that must include the voter’s choice for a 5-2 plan. In other words, both parties won part and lost part. But since this was an interlocutory order, the final resolution must be decided by the trial court after a trial on the merits.

For you litigators out there, the court also went into some detail about the standards for temporary injunctions and what it means to go “far beyond” preserving the status quo and rendering a decision on the merits after only an injunction hearing.  If you are not a litigator, just ignore that part.

If you would like to read this opinion click here.

Air quality ordinance is constitution; no preemption says 1st Court of Appeals

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City of Houston v. BCCA Appeal Group, Inc., No. 01-11-00332-CV (Tex. App. – Houston [1st Dist.], August 29, 2013)

The Houston Court of Appeals was asked to determine the constitutionality of ordinances regulating air pollution (preemption). The ordinances were challenged by a group of business owners operating industrial facilities. The trial court granted BCCA’s summary judgment and denied the City’s; the City appealed. In this 34 page opinion the First District Court of Appeals reversed and granted the City’s motion dismissing the case.  In other words, the ordinances are constitutional and not preempted.

The City of Houston created an air quality program which, among other things, required facilities to register with the City and pay a registration fee. The City also criminalized the operation without such registration, which enforcement occurred in municipal court. The ordinances provided an affirmative defense if a facility can show it received a permit from the TCEQ. The ordinances incorporated TCEQ regulations by reference (ensuring that changes to TAC codes were automatically incorporated) and authorized the health inspector to carry out enforcement.

BCCA asserts the ordinances are preempted by state law since the Legislature granted such regulatory powers exclusively to the Texas Commission on Environmental Quality (“TCEQ”) in the Texas Clean Air Act (“TCAA”) and the provisions of the Texas Water Code (TWC) that govern enforcement of the TCAA. The TCEQ has the sole authority to authorize air emissions and issue permits. However, the TCAA also states municipalities retain power to abate nuisances and air pollution as long as such abatement does not prohibit something authorized by a TCEQ permit.

The court held preemption must be made with unmistakable clarity. State law grants the TCEQ power but does not expressly make it exclusive. To the contrary, the TCAA acknowledges a city’s retained power. And simply because a state law addresses a subject does not mean it implicitly precludes local governments for regulating the same subject as long as it’s consistent. The registration permit is not preempted. The fees are not preempted as long as there is a reasonable relationship with the administrative costs (where there are in this case since they are the same as TCEQ’s). Enforcement of the substantive quality provisions and incorporate TCEQ regulations are proper. (The court noted they could not be inconsistent unless the TCEQ regs were inconsistent with themselves). The City has the ability to enact and enforce its own ordinances which are consistent with state law.

At the risk of this summary being toooooo long, I would like to point out the BCCA made an interesting argument which was shot down, but was still interesting. It asserted that by incorporating by reference the TCEQ regulations, it unconstitutionally delegated to the TCEQ the ability to amend a City ordinance. The court noted it was unable to find any case law on this subject of incorporation by reference and all future references (so this is a first impression holding).  Luckily, the court held the ongoing “amendment” of the ordinance is meant to ensure the ordinance remains consistent with state law and not invalidated by a TCEQ amendment. As a result, it is permissible.  The end result of this opinion is the City can regulate air-quality consistent with state law and can require registrations.

If you would like to read this opinion click here.

 

 

City’s immigration ordinance held preempted by 5th Circuit.

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Villas at Parkside Partners v. City of Farmers Branch, Texas No. 10-10751 (5th Cir. July 22, 2013)

This is a consolidated appeal heard en banc with the central issue being whether municipal ordinances restricting rental housing based on immigration status is preempted by federal law.  In this 122 page opinion, the U.S. Court of Appeals for the Fifth Circuit held the ordinances are preempted.

The City of Farmers Branch passed Ordinance 2952 which regulated non-citizens who reside in the United’s States illegally. Farmers Branch sought to “prevent” such persons from renting housing in the city. The district court concluded, inter alia, that the Ordinance was conflict preempted under federal law and the City appealed.

Ordinance 2952 sets forth licensing provisions and criminal sanctions. The factual details and court analysis is very detailed and far beyond what can be summarized here. However, the main points are that the Ordinance requires individuals to obtain a license before occupying a rented apartment or single-family residence. The Ordinance’s criminal provisions prohibit persons from occupying a rented apartment or single-family residence without first obtaining a valid license and making a false statement of fact on a license application. For persons not declaring themselves citizens or nationals of the United States, no license shall be given.  Landlords who disagree with a revocation can appeal to state court.

Based on the U.S. Supreme Court’s analysis in Arizona v. United States, 132 S. Ct. 2492, 2498-99 (2012) the Fifth Circuit held Farmers Branch’s establishment of new criminal offenses based on the housing of non-citizens “disrupt[s] the federal [immigration] framework,” both by interfering with federal anti-harboring law and by allowing state officers to “hold[] aliens in custody for possible unlawful presence without federal direction and supervision.” The federal government is the principle charged with the removal process and since Class C misdemeanors can authorize arrest (just not confinement), such interferes with the federal government’s removal authority. The federal government also is the sole body to determine alien classifications. So, landlord appeals on revocation interferes with federal classification processes.

For any city with immigration ordinances containing criminal provisions or state law appeal provisions, this case is an exhausting but helpful read in determining ordinance viability.

If you would like to read this opinion click here.