Supreme Court of Texas

══════════

No. 20-0309

══════════

City of Baytown,

Petitioner,

v.

Alan Schrock, 

Respondent

═══════════════════════════════════════

On Petition for Review from the

Court of Appeals for the First District of Texas

═══════════════════════════════════════

Argued October 27, 2021

JUSTICE BLAND delivered the opinion of the Court.

JUSTICE YOUNG filed a concurring opinion, in which Justice 

Lehrmann, Justice Blacklock, and Justice Busby joined.

Our Constitutions require the government to compensate 

property owners when it takes their property for public use.1 This

1 The Fifth Amendment to the United States Constitution provides: “nor 

shall private property be taken for public use, without just compensation.” 

U.S. Const. amend. V. More broadly, the Texas Constitution provides that 

“[n]o person’s property shall be taken, damaged, or destroyed for or applied to 

public use without adequate compensation.” Tex. Const. art I, § 17(a).
2

constitutional right waives the government’s immunity from lawsuits—

immunity that otherwise often insulates the public treasury from claims 

for damages.

2 When government action falls short of a constitutional 

taking, immunity bars many such claims.3

In this dispute over unpaid utility bills, a landlord claims that the 

city government’s wrongful withholding of utility service to collect 

payment resulted in the loss of a tenant and the eventual disrepair of 

his property. He claims the city’s action is a taking in violation of the 

Texas or United States Constitution. The trial court found for the city, 

ruling that the landlord did not establish an intentional taking of 

private property for public use. The court of appeals reversed, holding 

that fact issues exist as to whether the city’s utility-enforcement actions 

resulted in a regulatory taking.

Our Court recently rejected a similar proposition in City of 

Houston v. Carlson.

4 Following Carlson, we hold that the landlord’s 

challenge to the city’s enforcement action fails to show the intentional 

taking or damage for public use necessary to establish a constitutional 

right to compensation. Accordingly, we reverse the court of appeals’ 

judgment and reinstate the trial court’s directed verdict.

I

In 1993, Alan Schrock purchased a lot in the City of Baytown for 

$21,000. He planned to lease out a mobile home on the property to earn 

2 Harris Cnty. Flood Control Dist. v. Kerr, 499 S.W.3d 793, 799 (Tex. 

2016). 

3 City of Houston v. Carlson, 451 S.W.3d 828, 830 (Tex. 2014).

4 Id. at 833.
3

rental income. At some point, utility bills for the City’s water service to 

the property went unpaid. Until 2011, the City required landlords to 

either guarantee payment for utility bills or to file a declaration with the 

City stating that the landlord would not guarantee its tenant’s utility 

payments.5 The City also had an ordinance prohibiting the connection 

of new utility service at properties encumbered by outstanding utility 

bills.6

Although Schrock had rented out the property, he did not file a 

rental declaration with the City until 2009, after the City had assessed 

Schrock $1,999.67 in past unpaid utility bills. Schrock contested the 

assessment, and after a hearing, the City reduced the amount he owed 

to $1,157.39. The City placed a lien in that amount against the property. 

In 2010, the City refused to connect utilities to the property when

one of Schrock’s tenants requested it, which caused the tenant to cancel 

the lease. The City’s refusal to connect service violated Texas Local 

Government Code section 552.0025.7 Section 552.0025 prohibits 

municipalities from conditioning utility service connections on payment 

5 Baytown, Tex., Code of Ordinances ch. 98, art. III, § 98-65(i) (1967)

(amended 1991). In 2011, the City amended Section 98-65 and repealed the 

provision requiring a landlord to submit a rental declaration. The amended 

version now provides that the City shall not impose liens for delinquent 

charges for services provided to residential renters. Baytown, Tex., Code of 

Ordinances ch. 98, art. III, § 98-65(d)(4) (2011).

6 Id. § 98-65(g) (1967) (amended 1991). 

7 See Tex. Loc. Gov’t Code § 552.0025(a) (“A municipality may not 

require a customer to pay for utility service previously furnished to another 

customer at the same service connection as a condition of connecting or 

continuing service.”).
4

of outstanding utility bills incurred by other customers residing at the 

same address.8 

Later that year, Schrock attempted to tender payment, but the 

City refused to accept his check. Schrock returned to the City offices to 

make payment in cash but ultimately refused to pay. In the years that 

followed, Schrock neither paid the assessment nor attempted to sell or 

lease the property. It fell into disrepair and was vandalized. 

In 2012, Schrock sued the City for inverse condemnation and 

other claims, primarily alleging that the City’s refusal to reconnect his 

utility service violated section 552.0025 and caused damage to his 

property. The City filed a plea to the jurisdiction, claiming that it is 

immune from Schrock’s claims. After a lengthy procedural history in 

state and federal court, only Schrock’s regulatory takings claim 

remained for trial.9

During trial, Schrock testified about his attempts to resolve the 

lien and to the property’s deterioration, which he attributed to the City’s 

wrongful refusal to connect utilities to the property. The assistant city 

manager testified about the City’s efforts to collect payment for the 

outstanding bills. 

8 Id.

9 See Schrock v. City of Baytown, No. 4:12-cv-02455 (S.D. Tex. Mar. 11, 

2013) (dismissing Schrock’s federal takings claim, substantive due process

claim, and declaratory judgment claim as unripe, finding limitations an 

alternative ground for dismissal of the declaratory judgment and substantive 

due process claims, and remanding Schrock’s state law inverse condemnation 

claim and other state law claims); Schrock v. City of Baytown, No. 01-13-00618-

CV, 2015 WL 8486504 (Tex. App.—Houston [1st Dist.] Dec. 10, 2015, pet. 

denied) (mem. op.) (remanding regulatory takings claim).
5

After Schrock rested his case, the trial court directed a verdict for 

the City, concluding that Schrock had failed to adduce evidence of a 

taking. 

The court of appeals reversed.10 Relying on the Supreme Court’s 

decision in Penn Central Transportation Company v. City of New York,

11

the court concluded that fact issues existed as to whether the City had 

interfered in bad faith with Schrock’s investment-backed expectations, 

which, in turn, presented some evidence of a regulatory taking.12 The 

court of appeals did not address our Court’s recent decision in Carlson. 

We granted review.

II

We review a trial court’s grant of directed verdict de novo,13 using 

the legal sufficiency standard appellate courts apply to no-evidence 

summary judgments.14 A trial court properly grants a directed verdict 

10 623 S.W.3d 394, 425 (Tex. App.—Houston [1st Dist.] 2019).

11 438 U.S. 104, 124 (1978). We have described the Penn Central factors

as: “‘(1) the economic impact of the regulation on the claimant’; ‘(2) the extent 

to which the regulation has interfered with distinct investment-backed 

expectations’; and (3) ‘the character of the governmental action.’” Sheffield 

Dev. Co. v. City of Glenn Heights, 140 S.W.3d 660, 672 (Tex. 2004) (quoting 

Connolly v. Pension Benefits Guar. Corp., 475 U.S. 211, 225 (1986)). 

12 623 S.W.3d at 411, 420.

13 See City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005)

(“Judgment without or against a jury verdict is proper at any course of the 

proceedings only when the law does not allow reasonable jurors to decide 

otherwise.”); see also JPMorgan Chase Bank, N.A. v. Orca Assets G.P., L.L.C., 

546 S.W.3d 648, 653 (Tex. 2018) (noting that de novo review applies to orders 

deciding questions of law as to which “reasonable minds cannot differ on the 

outcome,” including summary judgments and directed verdicts).

14 City of Keller, 610 S.W.3d at 810.
6

when no evidence supports a vital fact or the evidence fails to state a 

claim as a matter of law.15 We consider the evidence in a light favorable 

to the party suffering an adverse judgment, crediting all reasonable 

inferences and disregarding evidence and inferences to the contrary.16 

A city is immune from suit unless its immunity is waived.17 

Under our constitutions, waiver occurs when the government refuses to 

acknowledge its intentional taking of private property for public use. A

suit based on this waiver is known as an “inverse condemnation” claim.18 

To establish an inverse condemnation claim, a plaintiff must show that 

the government intended to or was substantially certain that its actions 

would take or damage the property for public use; otherwise, the 

doctrine of governmental immunity bars the claim.19

A

The parties dispute whether a claim of economic harm to property

resulting from the improper enforcement of a municipal collection 

ordinance alleges a regulatory taking.

The City contends that Schrock’s evidence fails to show that the 

City took or damaged his property for public use. Relying on Carlson, 

the City argues that the enforcement of municipal ordinances that do 

15 Id. at 810–11, 814–16.

16 Exxon Corp. v. Emerald Oil & Gas Co., L.C., 348 S.W.3d 194, 215, 217

(Tex. 2011).

17 Carlson, 451 S.W.3d at 830.

18 Id. An inverse condemnation claim must allege an intentional 

government act that caused the uncompensated taking of private property. Id. 

at 831.

19 Harris Cnty. Flood Control Dist., 499 S.W.3d at 799.
7

not themselves regulate property use cannot constitute a regulatory 

taking, even when such enforcement was improper as a matter of state 

law. According to the City, the ordinance in this case was not a propertyuse regulation; instead, the ordinance was a means to collect 

outstanding bills for utility services provided to the property. Further, 

the City argues, it did not deprive Schrock of the use of his property, 

even though it indirectly caused the property to be without utility 

service and temporarily placed a lien against it.

Schrock responds that the City’s improper actions caused a loss 

in his rental income and a diminution in the property’s value even if its

collection ordinance is not a land-use regulation. Thus, he argues, the 

court of appeals correctly applied the Penn Central factors to conclude 

that some evidence of a regulatory taking exists. He alternatively 

contends that the City’s actions constitute either a physical taking or an 

exaction, entitling him to compensation. Schrock attempts to 

distinguish Carlson, which he suggests involved a flawed administrative 

process, arguing that in this case, in contrast, the effect of the City’s 

ordinance was so onerous that it constitutes a taking.

B

The right to own, use, and enjoy one’s private property is a 

fundamental right.20 When the government takes, damages, or destroys 

private property for public use, it must provide compensation.21 The 

Texas Constitution requires compensation in more circumstances than 

20 Hearts Bluff Game Ranch, Inc. v. State, 381 S.W.3d 468, 476 (Tex. 

2012).

21 TEX. CONST. art. I, § 17(a).
8

the United States Constitution—the federal requiring compensation for 

“taken” property, and the state for “taken, damaged, or destroyed” 

property—but both provide a means of redress against the 

government.22 

A regulatory takings claim is one in which “the plaintiff complains 

that the government through regulation so burdened his property as to 

deny him its economic value or unreasonably interfere with its use and 

enjoyment.”23 Our Court observed in Carlson that courts historically 

have limited regulatory takings claims to those arising directly from 

land-use restrictions.24 In that case, the City of Houston ordered several 

condominium owners to vacate their property because they failed to 

make mandated repairs.25 The owners sued, claiming a regulatory 

taking based on Houston’s improper application of its regulations.26 

In holding that the owners failed to state a regulatory taking, we 

contrasted between an ordinance that directly regulates land use and 

22 See Steele v. City of Houston, 603 S.W.2d 786, 789–90 (Tex. 1980)

(reviewing history of Texas Constitution’s takings clause). Despite the

Constitutions’ textual differences, the Court typically has evaluated federal 

and state takings claims using the same analysis. See, e.g., Mayhew v. Town 

of Sunnyvale, 964 S.W.2d 922, 935–36 (Tex. 1998) (analyzing plaintiff’s state 

takings claim under federal takings caselaw); see also Jim Olive Photography

v. Univ. of Hous. Sys., 624 S.W.3d 764, 780 (Tex. 2021) (Busby, J., concurring)

(noting the distinctions). Schrock does not distinguish between the two. 

Accordingly, we do not differentiate between the two Constitutions for 

purposes of his appeal.

23 Harris Cnty. Flood Control Dist., 499 S.W.3d at 800–01.

24 451 S.W.3d at 832. 

25 Id. at 830.

26 Id. at 832.
9

one that does not—even though it could impair use of the property as a 

result of its enforcement.27 The property owners in Carlson failed to 

show a taking because the repair ordinance there did “not implicate any 

property-use restriction.”28

Like Houston’s ordinance in Carlson, the Baytown ordinance in 

this case did not regulate land use. The ordinance permitted the City to 

refuse to connect utility service to the property until outstanding utility 

bills associated with the property were satisfied. The City’s provision of 

utilities to the property was a service; its regulation of that service was 

not a regulation of the property itself.

As with the claims in Carlson, the true nature of Schrock’s claim 

lies in the City’s wrongful enforcement of its ordinance, not in an 

intentional taking or damage of his property for public use. In Carlson, 

the plaintiffs similarly alleged that Houston wrongfully applied its 

regulations. We reiterated there that governments generally are 

immune from such claims.29 Schrock’s challenge is no different from the 

challenge in Carlson to the city’s alleged misapplication of its building 

ordinance.30 In both cases, the alleged injury arises from a 

27 Id.

28 Id.

29 Id. at 833 (“Even assuming the city made a mistake, the respondents’ 

allegations would ‘amount to nothing more than a claim of negligence on the 

part of [the city], for which [it] is immune under the Texas Tort Claims Act.’”

(quoting Dalon v. City of DeSoto, 852 S.W.2d 530, 538 (Tex. App.—Dallas 1992, 

writ denied))).

30 Like Schrock, the plaintiffs in Carlson claimed a taking based on “the 

penalty imposed and the manner in which the city enforced its standards.” Id.

at 832. We characterized the claim as a colorable due process claim, rejecting 
10

municipality’s wrongful action unrelated to a taking of private property 

for public use.

While we do not foreclose the possibility that enforcement of an 

ordinance that does not directly regulate land use could amount to a 

taking, this one does not. A regulation with “a condition of use ‘so 

onerous that its effect is tantamount to a direct appropriation or 

ouster’”31 may impair a property “so restrictively, or intrude on property 

rights so extensively, that it effectively ‘takes’ the property.”32 However, 

“nearly every civil-enforcement action results in a property loss of some 

kind.”33 Property damage due to civil enforcement of an ordinance 

unrelated to land use, standing on its own, is not enough to sustain a 

regulatory takings claim. 

In Carlson, the order requiring owners to repair their property 

was not an interference that was tantamount to ouster.34 Similarly, the 

City’s lien, which Schrock could have paid or further challenged, was not 

“so onerous that its effect [was] tantamount to ouster.”35 Instead, it was 

a conditional restriction. Schrock reasonably could have avoided the 

the notion that the takings claim arose from the improper enforcement of the

ordinance. Id. at 832–33. Schrock’s allegations are not materially 

distinguishable from the owners’ allegations in Carlson.

31 Id. at 831 (citing Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 537 

(2005)).

32 Jim Olive Photography, 624 S.W.3d at 771–72 (citing Murr v. 

Wisconsin, 137 S. Ct. 1933, 1942 (2017)).

33 Carlson, 451 S.W.3d at 832–33.

34 Id. at 832.

35 See Lingle, 544 U.S. at 537.
11

City’s interference with his property by seeking review of the ordinance’s 

improper application and a refund.36 An enforcement action that causes 

an economic loss to a property owner but allows for the reversal of that 

loss is not a constitutional taking.37 Because the City’s enforcement 

actions against the property were conditional and did not result in

permanent ouster, they were not a regulatory taking.38

Such is the conclusion under Penn Central as well, which answers 

whether a government’s interference with property rights constitutes a 

regulatory taking by considering: (1) the regulation’s economic impact 

on the property owner; (2) the extent to which the regulation interferes 

with the property owner’s investment-backed expectations; and (3) the 

character of the government’s action.39 In this case, Schrock could have 

reversed the City’s lien and disruption of utility service through the 

appeal process or payment. Thus, under Penn Central, Schrock did not 

show that the economic impact of the City’s ordinance so interfered with 

36 Baytown, Tex., Code of Ordinances ch. 98, art. III, § 98-62(i)(5). The 

ordinance had an appeals process, in which Schrock participated. 

37 City of Dallas v. VSC, LLC, 347 S.W.3d 231, 235–36 (Tex. 2011) 

(holding that police property seizure was not a taking because the procedure 

permitted owner to regain possession). Thus, “[w]hen there exists provision 

for compensation—or, as here, for the property’s return—a constitutional claim 

is necessarily premature.” Id. at 236. The City removed the property lien after 

Schrock challenged it.

38 The redemptive right through compliance with the enforcement 

process differentiates this case from a regulatory taking. See id. at 235–37.

When return of the property is available, it is a constraint on the government’s 

permanent deprivation of property. See id. (observing that takings claims are 

premature when the owner may apply for the return of his property).

39 Sheffield, 140 S.W.3d at 672. 
12

his property rights that its actions appropriated the property from 

him.40 

C

Finally, Schrock did not present evidence in the trial court of the 

alternative takings claims he raises in this Court. He did not claim a 

physical taking. Instead, in the trial court, he claimed that the City’s 

actions denied him all economically viable use of the property and 

unreasonably interfered with his enjoyment of it. His testimony to the 

property’s eventual state of disrepair was evidence of the degree of the 

City’s alleged interference, not offered to prove that the City physically 

acquired, occupied, or possessed his property. Schrock also did not raise 

an exaction claim in the trial court. That is, he did not claim or offer 

evidence that the City conditioned his right to develop or use his 

40 See Lingle, 544 U.S. at 537 (defining a regulatory taking as a 

condition of use “so onerous that its effect is tantamount to a direct 

appropriation or ouster”). The Supreme Court has limited the examination of 

the government’s purposes to “the severity of the burden that government 

imposes upon private property rights,” rather than an examination of the 

government’s allegedly improper motives. See id. at 539; id. at 542 (holding 

that determination of whether government’s action properly advances a 

legitimate interest “is tethered neither to the text of the Takings Clause nor to 

the basic justification for allowing regulatory actions to be challenged under 

the Clause”). This is because “the Takings Clause presupposes that the 

government has acted in pursuit of a valid public purpose.” Id. at 543. The

court of appeals here heavily relied on the City’s improper motives to find that 

Schrock raised a fact issue under Penn Central. But the Supreme Court in 

Lingle held that courts must focus on the challenged regulation’s effect on 

private property, not on the propriety of the government’s action. Our Court 

acknowledged this limitation in VSC. 347 S.W.3d at 238 (holding that statute’s 

failure to provide for proper notice is a due process challenge, not a takings 

challenge, because “[t]he Takings Clause guarantees compensation ‘in the 

event of otherwise proper interference amounting to a taking’” (quoting Lingle, 

544 U.S. at 543)).
13

property on granting the City a property interest or upon fulfilling a 

property improvement condition.41 These alternative grounds are not 

preserved for our review.

* * *

We hold that the City’s utility enforcement actions do not 

establish a regulatory taking of private property as a matter of law. The 

trial court therefore properly directed a verdict for the City on Schrock’s 

inverse condemnation claim. We reverse the judgment of the court of 

appeals and reinstate the judgment of the trial court. 

Jane N. Bland

Justice

OPINION DELIVERED: May 13, 2022

41 See Town of Flower Mound v. Stafford Ests. Ltd. P’ship, 135 S.W.3d 

620, 645 (Tex. 2004) (holding that a compensable taking occurred when the 

town conditioned development approval on the developer’s rebuilding and 

improving of a public street); see also Dolan v. City of Tigard, 512 U.S. 374 

(1994); Nollan v. Cal. Coastal Comm’n, 483 U.S. 825 (1987).