## IN THE SUPREME COURT O F TEX AS

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### C IT Y O F 

### H O U S T O N 

### , P E T IT IO N E R 

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### J A M E S 

### & E L IZ A B E T H 

### C A R L S O N 

### , E T A L 

### . , R E S P O N D E N T S

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O N P E T I T I O N F O R R E V I E W F R O M T H E C O U R T O F A P P E A L S F O R T H E F O U R T E E N T H D I S T R I C T O F T E X A S

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Argued Septem ber 18, 2014
J U S T I C E B R O W N delivere d the opinion of the Court. J U S T I C E W I L L E T T filed a c oncurr ing opinion, in which J U S T I C E D E V I N E joined.
A g roup of former condominium owner s bring s this inverse- condemna tion action ag ainst the City of Houston, alleg ing their p ro p er t y was taken when the city order ed residents to vaca te the condominium complex. The trial court sustained a plea to the jurisdiction afte r concluding the
owner s had not alleg ed a taking

. The court of appea ls reve rsed, and we g rante d the city ’s petition for revie w. Having considere d the rec ord and rele vant law, we ag ree with the trial court that the claim must be dismis sed.I

I n 2007, a private dispute arose among members of a h o m eo wners association. Park Memorial was a 108-unit condominium complex located in the Rice Milit ary are a of Houston. The compl ex was suffe ring from an incre asing number of cosmetic and structura l problems, and the condominium owner s disag ree d as to how best to addre ss those issues. A majority wanted to marke t the entire proper

ty for rede velopment, but a few ref used to se ll. I n J uly of 2008, one owner —in a n appar ent ef

fort to enc ourag e ac tion—informed the City of Houston of c erta in safety conce rns. The city ’s subsequent inves t i gat i on reve aled various alleg ed structura l, elec trical, and plumbing proble ms. Of prim ary conce rn was evidenc e that an underg round parking f acility might fail, posing serious risk to the dozens of units located a bove the g ara g e. Althoug h the re spondents fer vently deny that the condominiums wer e unsafe , the rec ord includes numerous photogr ap hs documenting various code violations. After revie wing the results of its investiga tion, the city d ec l ared the condominiums uninhabitable. Of

ficials posted the f

ollowing notice throug hout the complex: N O T I C E Public W orks & Eng ineer ing D epar tment / Code Enforce ment The City of Houston Building Code require s a Certifica te of Occ upancy to be posted in a conspicuous plac e on the pr emises of a ll commercia l buildings.

. . . . THI S NOTI CE WI L L AL L OW 10 BUSI NESS DAYS FOR YOU T O APPL Y FOR A CERTI FI CATE OF OCCUPANCY

. . . . F ail ure to com ply w it h th is not ic e m ay s ubje ct you to a m unic ipa l c ourt ci tat ion .

2The condominium owner s did not apply for an occupa ncy cer tificate and did not make the requisite repa irs. After a month passed without compliance , the city opted not to issue a citation. I nstead, the city order ed all residents to vacate the complex within thirty -one day s. See H O U S T O N , T E X ., B L D G . C O D E § 104.12 (2008) (authorizing officials to “orde r t he use discont i n ued im mediately ” where a structure “cr eate s a serious and immediate hazard” ). At the reque st of residents and owner s, the city conducte d an administrative hear ing, but then upheld the order to vacate. By Dec ember of 2008, all residents ha d vacated the complex. After extensive litigation, six teen prop er t y owner s—the same owner s appea ring as the responde nts here —ultimately obtained a p ermanent injunction in Marc h of 2011 when a district court c oncluded the owner s wer e not a ffor ded due proce ss of law. That court reve rsed the order to
vacate, and a court of appea ls aff irmed. See generally City of Houston v. Carlson , 393 S.W .3d 350 (Tex. App.—Houston [14t h Dist.] 2012, no pet.) (holding that the owner s had been denied adequate hear ing a nd that the city

had fa iled to f

ollow its own rules). The parties did not see k our re view of that decision. Once the order to vacate was lifted, the homeowner s association sold the complex for rede velopment. The g roup of owner s that filed the d u e - p r o c e s s claim later broug ht this inverse- condemna tion action, alleg ing that their proper ty was taken when residents wer e forc ed to vacate. They seek compensa tion for y ear s of lost use and for other unspecifie d damag es. The trial court sustained the cit y ’s p l ea t o t h e jurisdiction, concluding that the owner s had not alleg ed a taking

. The court of appea ls rever sed, and the city timely filed a pe tition for review

.

3I I

A municipal g overnme nt enjoy s immuni ty from suit unless its im munity has bee n waived. Reata Constr. Corp. v. City of Dallas , 197 S.W .3d 371, 374 (Tex. 2006) (citation omitted). Wit hout this waiver , courts have no jurisdiction to adjudicate any claim ag ainst the municipality

. Id

. I t is well settled that the T ex as Constit ution waives g overnme nt immunit y with respe ct to inversecondemna tion claims. City of Dallas v. VSC, LLC , 347 S.W .3d 231, 236 (Tex. 2011). Neve rtheless, such a claim is predic ated upon a viable alleg ation of taking

. Hearts Bluff Game Ranch, Inc. v. State , 381 S.W .3d 468, 476 (Tex. 2012) (citation omitted). “I n the absenc e of a proper ly pled taking s claim, the state re tains immuni ty .” Id. (citation omitted). Under such circ umstances, a

court must sust ain

a proper ly raised plea to the jurisdiction. See id. at 491–92 (dismissing case for lack of jurisdiction afte r concluding plaintiff had not alleg ed a taking ). Wit h respe ct to this case , the trial court and court of appeals di sag ree as to whethe r t he respondents have alleg ed any taking of property

. We revie w jurisdiction and sufficie ncy of the plea dings de novo . See id. at 476. The rig ht to acquir e and maintain private proper ty is among our most cher ished liberties. As L ock e ex p l ai n ed , the value of private proper ty lies not only in its objective util ity , but also in any per s o n al investment there in. See J O H N L O C K E , T W O T R E A T I S E S O F G O V E R N M E N T 134 (Thomas I
. Cook ed., Haf

ner Press 1947) (1689). Acc ording ly , the rig ht to undisturbed enjoy ment of residential proper ty is all the more sacr ed. The unique importance of the home is ref lected in our Bill of Rights,

w h ic h p r o te cts us from uncompensa ted dispossession, unwar

rante d sear ch, and unwante d g u e s ts
. S e e U.S. C O N S T . amends. I I I , I V, V. This Court, in particula r, has long rec og nized the undisturbed

4enjoy

ment of private proper

ty as “a foundational liberty , not a conting ent privileg e.” Tex. Rice Land Partners, Ltd. v. Denbury G reen Pipe line-Texas , LLC , 363 S.W .3d 192, 204 n.34 (Tex. 2012). The prese rvation of these proper ty rig hts i s “o n e o f the most important purposes of g overnme nt.” Eg

g em eye r v. Eggeme

yer , 554 S.W .2d 137, 140 (Tex. 1977). But g overnme nt has other obliga ti o n s as well, including ensuring the safe ty and secur ity of its citizenry

. See Kelley v. Johnson , 425 U.S. 238, 247 (1976) (re fer ring to “saf

ety of p ersons and proper ty ”). To satisfy its responsibilities, g overnme nt often imposes restric tion s o n th e u s e of private proper ty
. See Penn Cent. Transp. Co. v. C ity of New Y ork , 438 U.S. 104, 125 (1978) (rec og nizi ng that regul at i o ns are used to pro m o t e “h ealth, safe ty , morals, [and] g ener al welfa re” ) (citation omitted). Although these restric tions sometimes result i n inconvenienc e to owner s, g overnme nt is not g ener ally require d to compensa te an owner for associate d loss. “Gove rnment hardly could g o on if to some extent values incident to proper

ty could not be diminis hed without pay ing for ever y such chang e . . . .” Id. at 124 (quoting Penn. Coal Co. v. Mahon , 260 U.S. 393, 413 (1922)). Neve rtheless, when reg u la ti o n o f p r iva

te proper ty “re ache s a cer

tain mag nitude

. . . there must be an exercise of eminent domain and compensa tion to sustain the act.” Mahon , 260 U.S. at 413; see also U.S. C O N S T . amend. V (re quiring “just compensa tion”); T E X . C O N S T . art. I , § 17 (re quiring “adeq u at e compensa tion”); Hearts Bluff , 381 S.W .3d at 477 (explaining that Texas taking s jurisprudenc e is “consistent wi t h fede ral jurisprudenc e”)

. Where a proper ty owner believes compensa tion is d u e, he may seek redr ess via an inverse- condemna tion claim. State v. Hale , 146 S.W .2d 731, 735 (Tex. 1941). To plead inverse condemna tion, a plaintiff must alleg e an intentional g overnme nt act that resulted in the uncompensated t aking of private proper ty
. See Cit

y of Abilene
5v. Burk Royalty Co. , 470 S.W .2d 643, 647 (Tex. 1971) (listing elements of inverse condemna tion);

Hale , 146 S.W .2d at 736 (re quiring intent). A taking is the acquisit ion, damag e, or destruction of proper ty via phy sical or reg ulatory means. See Mayhe w v. Town of Sunnyvale , 964 S.W .2d 922, 933 (Tex. 1998); Hale , 146 S.W .2d at 736. Although the responde nts insist they have suf fer ed a reg ulatory taking , their alleg ations do

n ot support that claim. A reg ulatory taking is a condition of use “so onerous that its ef fe ct i s tant am o u nt to a direc t appropr iation or ouster.” Lingle v. Chevron U.S.A. Inc ., 544 U.S. 528, 537 (2005) (citation omitted). Yet the responde nts do not contest an y o f Houston’s proper ty -use restric tions. They do not arg ue that it is unrea sonable to require multi-family residential fac iliti es to obtain occupa

ncy cer tificates. They do not challeng e the ci t y ’s elec trical, plumbing, or structura l standards. Nor do t hey sug g est that these standards are so burdensome as to interfe re with the us e of their proper

ty
. I n fac t, the responde nts’ petition never once ref ers to the standards imposed by the city ’s building c ode. I nstead, the responde nts object only to the penalty imposed and the manner in which the city enfo rce d its standards. The responde nts complain, for example, that the city did not specify the alleg ed violations and that the punishment was excessive. They arg ue that the safe ty r e g ulations wer e misapplied vis-à-vis their proper ty
. They further insist—and the courts ultimately confirme d—that the city ’s proce dure failed to aff ord t h e co n d o m inium owner s constitutionally adequate notice or hear ing. Although these are troubling asser tions, they do not implicate any proper ty -use restric tion. The only reg ulation challeng ed is a proce dural on e. S ee H O U S T O N , T E X ., B L D G . C O D E § 104.12

6(2008) (authorizing order s to vacate). Acc o rd i n gly , even acc epting all pleade d fac ts as true, the

responde nts have not alleg ed a ta king. The responde nts appea

r to sug g est that a civil-enfor ceme nt proce dure alone can serve as the basis of a reg ulatory -taking s claim. They have i d en t i fi ed no authority for such a proposition. Historically , taking s compensa tion was aff orded only wher e the g overnme nt phy sically acquir ed or destroy ed private proper

ty
. The U.S. Supreme Court did not rec og nize reg ulatory taking s until 1922, when a newly enac ted Pennsy lvania statute prohibited any coal mining that might cause subsidence of cer tain surfa ce structure s. Mahon , 260 U.S. at 412–13. The Mahon Court found the statute to be

a permissible exercise of the state’s authority

. Id

. at 414. Neve rtheless, the Court require d the state to compensa te m i n er al o wn ers for any loss, rea soning that the use restric tion was equivalent to “appr opriating or destroy ing [t he coal].” Id. at 414–15. I n so holding, the Court emphasized both the reg ulatory context and the narr owness of the decision’s rea ch. See id. at 415 (“[W] hile property may be reg ulated to a ce rt ai n ex t ent, if reg ulation g oes too far , it will be rec og nized as a taking .”) (empha sis added) , 416 (esc hewing “g ener al propositions” and differ entiating other circ umstances)

. I n the interven i n g d ecades, the Court has applied reg ulatory taking s analy sis only to reg ulation of proper

ty
. See, e.g. , Penn Cent. , 438 U.S. at 125 (limiti ng its discussion to “land- use reg ulations”). To our knowledg e, neither the U.S. Supreme Court nor this Court has ever rec og nized a purely proce dural reg ulatory taking

. Gra nted, t he respondents o ff

er a host of cases as ostensible support for their

position. The c ases a

re ina pposite. I n eac h of those disputes, the ag g rieve d party 1

S e e F i r s t E n g l i s h E v a n g e l i c a l L u t h e r a n C h u r c h o f G l e n d a l e v . L

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. S
. 3 0 4 ( 1 9 8 7 ) ; K o p p l o w 1 D e v . , I n c . v . C i t y o f S a n A n t o n i o , 3 9 9 S
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. 3 d 5 3 2 ( T e x . 2 0 1 3 ) ; S t e e l e v . C i t y o f H o u s t o n , 6 0 3 S
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y , 3 3 8 S
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. 3 d 1 1 4 ( T e x . A p p . — H o u s t o n [ 1 4 t h D i s t
. ] 2 0 1 1 , n o 7raised a direc t challeng e to a phy sical taking or land-use restric tion. I n addition, that party also

objected to the proce dure used to fac ilitate the disputed action. Her e, the ag g rieve d party challeng es the latter but not the former

. So while the responde nts may be corr ect that “numer ous case s involve both due-proc ess violations and a taking s claim,” this case is not among the m. We do not doubt, and the city does not deny , that the order to vacate interfe red with the use of the responde nts’ proper ty
. Yet near ly ever

y civil-enfor ceme nt action results in a proper ty loss of
some kind. The very nature of the action dictates as much. Neve rtheless, that proper ty is not “take n for public use” within the meaning of the Constit ution. Acc ording ly , wher e a party objects only to 2 t h e “infirmity of the proce ss,” no taking has been alleg ed. Nasierowski Bros. Inv. Co. v. C i t y o f Sterling Heights , 949 F.2d 890, 893–94 (6 t h Cir. 1991) (quoting Hammond v. Baldwin , 866 F.2d 172, 176 (6th Cir. 1989)) (other citations om itted). Fur ther, it is immaterial that the city may have been mistaken reg arding the actua l sa fety of the complex. Even assuming the city made a mistake, the responde nts’ alleg ations would “amount to nothing more than a claim of neg lige nce on the part of [t he city ], for which [i t] is immune under the Texas T ort Claims Ac t.” Dalon v. City of DeSoto , 852 S.W .2d 530, 538 (Tex. App.—Dallas 1992, writ denied)

. So while the fac ts alleg ed here might support a due-pr ocess action or perha ps a colora

ble claim under 42 U.S.C. § 1983, those alleg ations do not give rise to the taking s claim nec essar y to establish a viable inver se-c ondemnation ca se.

p e t
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.

S e e G o n z á l e z - Á l v a r e z v . R i v e r o - C u b a n o , 4 2 6 F
. 3 d 4 2 2 , 4 3 0 ( 1 s t C i r . 2 0 0 5 ) ( “ T h e q u o t a c a n c e l l a t i o n w a s a 2 s a n c t i o n [ , ]
. . . n o t a t a k i n g o f p r i v a t e p r o p e r t y f o r p u b l i c u s e . . . . W e f a i l t o s e e h o w t h e c a n c e l l a t i o n . . . i s d i f f e r e n t f r o m a n y o t h e r f

i n e o r f o r f e i t u r e i m p o s e d u n d e r s t a t e l a w c o n s e q u e n t t o e n g a g i n g i n s o m e h a r m f u l a c t i v i t y . ” ) ( e m p h a s i s o m i t t e d )

. 8* * *

I n emphasizing the proce dural nature of the dispute befor e us, we do not mean to sug g est that due-pr ocess claims and taking s claims are mutually exclusive. The city insists as much, and asks us to hold that an inverse- condemna tion claim presumes due proce ss of law. W e decline the city ’s invitation to do so, as we need not consider the arg ument. As the U.S. Supreme Court has explained,

a due-pr ocess inquiry “is logic ally prior to and distinct from the question whether a reg ulation eff ects
a taking .” Lingle , 544 U.S. at 543. Consequently , the responde nts’ inverse- condemna tion claim fails not beca use they have a lrea dy

preva iled on a due- proce ss claim, but beca use they simply have not alleg ed a taking

. The city there fore reta ins its immunit y from suit. Hearts Bluff , 381 S.W .3d at 476. Acc ording ly , we r ever se the c ourt of appe als and dismiss this case for wa nt of jurisdiction.

_______________________________ J eff rey V. B rown J ustice OPI NI ON DEL I VERED: Dec ember 19, 2014

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