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IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

WACO DIVISION

RAFAEL MARFIL, VERGE 

PRODUCTIONS LLC, ENRICO 

MARFIL, NAOMI MARFIL, KOREY 

RHOLACK, DANIEL OLVEDA, AND 

DOUGLAS WAYNE MATHES,

§

§

§

§

§

Plaintiffs, § Civil Action No. 6:20-cv-248

§

v. §

§

THE CITY OF NEW BRAUNFELS, 

TEXAS,

Defendant.

§

§

§

ORIGINAL COMPLAINT

I. Introduction

In a free society, people are not obliged to explain why they go places, how long 

they stay there, whom they stay with, and what they do in the privacy of homes they 

rent. There are a hundred reasons why people stay in a place for short periods, and why 

they might want to live temporarily in a home in a neighborhood instead of in a generic 

tilt-wall hotel on the highway. People reside temporarily in a place to be near loved ones 

in quarantine or under treatment; to be near a spouse at a job or on a duty rotation in 

the military; to help displaced people or to have a home while displaced; to have a home 

away from home between long-haul routes; to vacation: the explanations are as varied as 

people, and it is a fundamental aspect of American democracy none may be inquired into 

or restricted by the government without a rational basis.

In 2011, without any studies or data, the City of New Braunfels adopted an 

ordinance which classifies ordinary residences as businesses and nuisances if they are 

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leased for short terms of 30 days or less. Thus, while a homeowner who wishes to lease a 

home for 31 days has an unfettered right to lease without the City’s interference, a 

homeowner who wishes to lease a home for 29 days has no such right. The landlord of a 

short-term rental must obtain wholesale rezoning of the property as commercial in order 

to lease to ordinary people who wish to reside in New Braunfels temporarily. The City

then denies such rezoning requests, effectively banning short-term rentals (STR’s) for all 

residentially-zoned properties. 

The United States and Texas Constitutions forbid cities from making such 

arbitrary, irrational determinations and prohibitions. In addition, Texas law preempts 

the City’s new ban: the Texas Legislature comprehensively regulates leasing and has 

made short-term rentals a source of state revenue. A city ordinance which interferes with 

state regulation and bars the state from earning the very revenue it expressly targets is 

void. 

II. Parties & Service

1. Plaintiff Rafael Marfil, is a Texas resident residing at 19693 Bat Cave 

Road, Garden Ridge, TX 78266. Rafael Marfil owns 100% of Verge Productions, LLC, and 

Texas limited liability company which resides in Texas. 

2. Plaintiffs Enrico and Naomi Marfil, a married couple, are Texas residents 

residing at 129 Bristow Way, Boerne, TX 78006. 

3. Plaintiff Korey Rohlack is a Texas resident residing at 310 Main Street,

Martindale, TX 78655. 

4. Plaintiff Daniel Olveda is a Texas resident residing at 1267 E. Common 

Street, New Braunfels, TX 78130. 

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5. Plaintiff Douglas Wayne Mathes is a Texas resident residing at 7208 

Nubian Cove, Austin, TX 78739. 

6. Defendant City of New Braunfels, Texas (“City”) is a home-rule 

municipality with a council-manager structure headquartered in Comal County, Texas.

The City may be served with citation upon the Mayor, Clerk, Secretary, or 

Treasurer at 550 Landa St., New Braunfels, TX 78130. Phone: 830-221-4000. See 

Tex. Civ. Prac. & Rem. Code § 17.024(b).

7. The Attorney General of Texas must also be served with the complaint and 

is entitled to be heard because this is a constitutional challenge to a city ordinance. Tex. 

Civ. Prac. & Rem. Code § 37.006(b). Service of process upon the Attorney General 

may be made at 300 W. 15th Street, Austin, Texas 78701.

III. Jurisdiction & Venue

8. The court has jurisdiction over the lawsuit under 28 U.S.C. § 1331 because 

the suit arises under article 3 of the U.S. Constitution. Plaintiffs seek a declaratory 

judgment that a municipal ordinance is unconstitutional on its face and as applied. 

9. The court has supplemental jurisdiction over claims asserted under the 

Texas Constitution under 28 U.S.C. § 1367 because those claims are so related to the 

claims within the court’s original jurisdiction that they form part of the same case or 

controversy under article 3 of the U.S. Constitution. 

10. Governmental immunity does not apply because it does not shield a city

from viable claims for relief from unconstitutional acts. See Patel v. Texas Dep't of 

Licensing & Regulation, 469 S.W.3d 69, 75 (Tex. 2015); Zaatari v. City of Austin, No. 03-

17-00812-CV, 2019 WL 6336186, at *5 (Tex. App. – Austin Nov. 27, 2019, no pet. h.).

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11. Venue is proper in the Western District of Texas under 28 U.S.C. 

§1391(b)(2) because a substantial part of the events or omissions giving rise to the claim 

occurred in the Western District of Texas. No local rule mandates the filing of suit in a 

particular division of the Western District of Texas. 

IV. Facts

A. Short-Term rentals are a historically protected, residential use.

12. Private property ownership is a fundamental right in the United States. 

Hearts Bluff Game Ranch, Inc. v. State, 381 S.W.3d 468, 476 (Tex. 2012). “The right of 

property is the right to use and enjoy, or dispose of the same, in a lawful manner and for 

a lawful purpose.” City of Wink v. Griffith Amusement Co., 129 Tex. 40, 100 S.W.2d 695, 

700 (1936) (citation omitted).

13. The ability to lease property is a fundamental privilege of property 

ownership. See Terrace v. Thompson, 263 U.S. 197, 215, 44 S.Ct. 15, 68 L.Ed. 255 (1923) 

(noting that “essential attributes of property” include “the right to use, lease and dispose 

of it for lawful purposes”).

14. Texas common law enshrines leasing as a basic, sacrosanct property right. 

The “right to acquire and own property, and to deal with it and use it as the owner 

chooses, so long as the use harms nobody, is a natural right.” Spann v. City of Dallas, 111 

Tex. 350, 356 (Tex. 1921); see also Barber v. Texas Dep't of Transp., 49 S.W.3d 12, 18 

(Tex. App.—Austin 2001), rev’d on other grounds, 111 S.W.3d 86 (Tex. 2003); see also 

French v. Chevron U.S.A. Inc., 896 S.W.2d 795, 797 (Tex. 1995) (right to lease out 

property part of the bundle of sticks usually conveyed with title.); Calcasieu Lumber Co. 

v. Harris, 13 S.W. 453, 454 (1890) (“the right to lease [property] to others, and therefore 

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derive profit, is an incident of [fee] ownership.”); Markley v. Martin, 204 S.W. 123, 125 

(Tex. Civ. App.—San Antonio 1918, writ ref’d) (“An owner has the “absolute right to lease 

her property and collect the rents.”)

15. The rental of property on a short-term basis is likewise an established 

practice and historically-allowable use. Zaatari, 2019 WL 6336186, at *9.

16. The fact that a lease is for a short duration does not mean that the use of 

the property is commercial in nature, any more than it would mean that a longer-term 

lease is commercial. See Tarr v. Timberwood Park Owners Ass'n, Inc., 556 S.W.3d 274, 

291 (Tex. 2018) (declining to interpret “residential” as prohibiting short-term rentals); 

see also Vera Lee Angel Revocable Tr. v. Jim O'Bryant & Kay O'Bryant Joint Revocable 

Tr., 2018 Ark. 38, 8, 537 S.W.3d 254, 258 (2018) (same); Slaby v. Mountain River Estates 

Residential Ass'n, Inc., 100 So. 3d 569, 578 (Ala. Civ. App. 2012) (same). Nor does the 

fact that the owner may not live in the rental property matter: “[A] ban on [non-owneroccupied] short-term rentals does not advance a zoning interest because both short-term 

rentals and owner-occupied homes are residential in nature.” Zaatari, 2019 WL 6336186, 

at *9.

17. What determines whether a use is residential or commercial is what the 

occupants are doing on the land. See generally, Tarr, Slaby, id. A short-term rental

(“STR”) is just an ordinary home lease but with a term less than a year and usually less 

than a month. Short-term rentals are usually fully-furnished homes where the owner 

may or may not also use the home when renters are not present. See, e.g., Boatner v. 

Reitz, No. 03-16-00817-CV, 2017 WL 3902614, at *1 (Tex. App. – Austin 2017, no pet.)

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(owners of vacation home who rented out the home when not using it themselves were 

not engaged in a “business use” of the home).

18. There is no agreed-upon definition for the dividing line between a “shortterm” and “long-term” lease. See generally Tarr, 2018 WL 2372594 (rejecting arguments 

that rentals of some minimum duration are a business use, abrogating cases setting 

various time limits). That said, State of Texas and local governmental units such as 

municipalities impose a tax for occupancy periods of less than 30 days; these are usually 

called a “hotel tax.” The Texas Hotel Tax was amended in 2015 to add the renting of 

ordinary homes all over the state, no matter how zoned. See Tex. Tax Code § 156.001(b); 

§ 156.101 (applicability to rentals of less than 30 days). 

B. The State of Texas Regulates and Taxes STR’s

19. The State of Texas already regulates leasing. Within the broad commonlaw leasing right, the Legislature has enacted residential leasing regulation in Chapter 

92 of the Property Code. Chapter 92 applies “to the relationship between landlords and 

tenants of residential real property.” See Tex. Prop. Code § 92.002.

20. Chapter 92 does not restrict or bar STR’s. See Tex. Prop. Code § 92.001 

(general definitions refer to “permanent residence”). Strikingly, it does not even subject 

them to the maximum occupancy limitations of § 92.010. That is not an oversight; it is 

deliberate. For example, § 92.152, which regulates security devices, refers to both 

“transient housing” and “temporary residential tenancy.” Section 92.010, the statewide 

maximum lease occupancy statute, allows persons “seeking temporary sanctuary” to 

remain at a leasehold premises for 30 days even if the maximum occupancy cap is 

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exceeded. The Legislature plainly understood the concept of temporary leasing and chose 

not to restrict it in any meaningful way. 

21. Even more recently, in 2015 the Legislature added language to the state 

hotel occupancy tax which expressly makes STR’s a source of state revenue: the shortterm rental of a homes was included in the statutory definition of “hotel.” See Tex. Tax 

Code § 156.001(b) (2015); § 156.101 (1991) (applicability to rentals of less than 30 days). 

Thus, while the Legislature understood the concept of STR’s and even went out of its way 

to get revenue from them, it also left them almost completely unregulated, indicating a 

deliberate desire to allow them. 

22. Separately, the state allows cities to impose their own local hotel tax, just 

as New Braunfels did pursuant to that statutory grant. See Tex. Tax Code Ch. 351; City 

of New Braunfels Code of Ordinances §§ 122-26 et seq. The City defines “hotel” broadly 

to encompass homes just as the state hotel occupancy tax does. Id. 

C. New Braunfels bans STR’s by labelling them as “non-residential” and 

presuming them nuisances and safety risks.

23. Central New Braunfels has a recreational riverfront and a huge, everexpanding commercial waterpark, Schlitterbahn. According to the Schlitterbahn website, 

“Schlitterbahn is woven into the fabric of Historic New Braunfels.” Schlitterbahn 

reportedly has more than a million guests each summer.

24. As recreation and tourism have increased in central New Braunfels, more 

and more people wish to stay in the center of town conveniently near the recreational 

amenities. However, because of residential zoning restrictions, the central part of town 

has remained largely older, single-family dwellings.

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25. In approximately 2011, the City announced plans to restrict short-term 

rentals and allowed a short period during which property owners could obtain special 

permits or rights to continue renting for short terms, effectively creating a small pool of 

owners with special rights. Later owners would not be allowed those rights. 

26. Later in 2011, the City banned the short-term renting of these homes so 

that property owners could not take advantage of the economic growth and rise in 

property values the City was promoting all around their homes. The City adopted a new 

zoning ordinance at subsection 5.17 of Chapter 144, the main zoning ordinance. The heart 

of the new ordinance is a ban on STR’s in residentially-zoned districts, with adverse 

evidentiary inferences based on what cars are parked at a house and severe money 

penalties at a minimum:

5.17-2. Definitions.

. . .

Short term rental means the rental for compensation of one- or two-family 

dwellings, as defined in the IRC (International Residential Code), for the 

purpose of overnight lodging for a period of not less than one night and not 

more than 30 days other than ongoing month-to-month tenancy granted to 

the same renter for the same unit. This is not applicable to hotels, motels, 

bed and breakfasts, resort properties as defined in this chapter or resort 

condominiums.

. . .

5.17-3. Applicability.

(a) Short term rental within residential districts is prohibited.

. . .

5.17-7. Enforcement/penalty. 

. . .

(e) The provisions of this subsection are in addition to and not in lieu of any 

criminal prosecution or penalties as provided by city ordinances or county 

or state law. 

(f) Proof. Prima facie proof of occupancy of a dwelling is established in any 

prosecution for violation of this section if it is shown that vehicles with 

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registrations to persons having different surnames and addresses were 

parked overnight at the dwelling. Establishment of a prima facie level of 

proof in this subsection does not preclude a showing of illegal "occupancy" 

of a dwelling by a person in any other manner. 

(g) Offense. It is an offense for the property owner, any agent of the property 

owner, or the occupant(s) to directly occupy or indirectly allow, permit, 

cause, or fail to prohibit an occupancy in violation of this section 144-5.17.

Each day that a unit is occupied in violation of this ordinance shall be 

considered a separate offense, and, upon conviction, shall be subject to a 

minimum fine of $500.00 to a maximum fine of $2,000.00 per violation. 

(h) Each day of violation of said standards and provisions of this section 

constitutes a separate offense and is separately punishable, but may be 

joined in a single prosecution.

27. However, the owners of homes located in commercial districts are entitled 

to seek a permit. Ordinances § 144-5.17-3(c). Thus, the manner in which the City banned 

STR’s amounts to a declaration or finding that ordinary residential leasing is not

residential if the lease term is less than 31 days.

28. There is next to no legislative history supporting or explaining the 2011 

STR Ban. The documents for the May 9, 2011 council meeting at which the STR Ban was 

approved references “several workshops” and the “protection of residential 

neighborhoods.” However, there are no legislative findings, reports, or data supporting 

the STR ban or the principle that short-term leases are not residential in nature. 

29. Other parts of the STR Ordinance indicate that the City was motivated in 

part by concerns that short durations of rental cause problems that longer durations of 

rental do not. Thus, owners of homes in non-residential areas can obtain a permit to rent 

for short terms, but subject to elaborate regulations governing noise, sleeping, postings 

and signage, safety protocols, trash, and other factors. See Ordinances § 144-5.17-4. None 

of these regulations apply to longer-term rentals. Thus, the City equates duration of use

(long or short) with the character of use (residential or commercial), the conduct of 

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occupants (bad or good), and the condition of the premises (safe or unsafe). According to 

the City of New Braunfels, short-term = commercial, bad, and unsafe, whereas long-term

= residential, good, and safe. 

D. The Homeowners seek to exercise their historical, 

fundamental property rights to lease for any duration

but are denied that right. 

30. The plaintiff Homeowners all own homes in the City of New Braunfels and 

are therefore subject to the City’s ordinances. 

31. Each of the Homeowners purchased, acquired, improved, and invested 

money in New Braunfels homes in reliance on U.S. and Texas citizens’ historical right to 

rent out homes for ordinary residential use for any duration of occupancy.

32. The income from short-term rentals can be significantly greater, calculated 

on a daily basis, than that afforded by long-term rentals, but that is not the sole reason 

owners seek to rent for short terms. An individual owner might make no more annually 

from STR’s than a long-term lease would afford because the owner has important 

freedoms and liberties he or she wishes to exercise. STR’s afford owners far more 

flexibility in the use and occupancy of their homes. An owner can occupy the home part 

of the time while renting it out at other times. An owner can use STR income to offset 

carrying costs or even afford to own the home in the first place. Some owners have 

personal reasons for wishing to rent out their homes for short terms, such as meeting 

people from around the world or welcoming people to their community. People stay in 

STR’s to immerse themselves in new places and to decide whether to move to the places 

they stay. 

33. The Homeowners in this case illustrate a range of individual experiences

and rationales for renting for short terms:

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a. Rafael Marfil was born in New Braunfels and later wished to own 

property there that he and his family could use. However, he would need 

rental income to afford a home there. He purchased 415 Union Street, 

which lies directly in front of the entrance to Schlitterbahn but is zoned 

residential; the property is titled in the name of Verge Productions, 

LLC. Rafael Marfil invested more than $50,000 to improve the property.

However, because of that location, the property is not well suited to 

long-term rental, and in any event, its highest potential rental income 

is from short-term rentals. 

Marfil sought rezoning to commercial status with the City but was 

denied after exhausting administrative remedies through to the end of 

City Council appeal.

Marfil and his family and friends are regularly harassed by neighbors 

when they stay at 415 Union Street because they are not full-time 

owner-occupants. 

b. Enrico and Naomi Marfil bought 435 S. Union Street in 2018. Enrico, 

like his brother Rafael, wished to replant roots in New Braunfels and 

invest in the community. He and his family wished to both use and enjoy 

the property themselves and also share the house with others and show 

off his city by renting the house out for short terms. A long-term rental 

would shut out the possibility of his own use and deny him the rental 

income which helps offset the carrying costs of the house. 

c. Korey Rohlack bought an unimproved lot on 1265 E. Common Street in 

2017 in order to develop it for use as his own residence and as a shortterm rental. It sits across the street from commercially-zoned 

properties. He is from the area and works as an airline pilot, which 

means he is regularly away from home for days at a time. He planned 

to build a house on the property in order to live in it himself and then

rent it out at other times. Rent income would allow him to cover and 

defray the carrying costs of the property (such as the mortgage and 

property taxes) and also supplement his income to help support his 

elderly parents who reside nearby. Rohlack grew up in a bed-andbreakfast operated by his parents and enjoys welcoming new people to 

his home and community. He learned from other experiences with 

different properties owned by his family that long-term renters were 

more troublesome and damaging to property than short-term renters.

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Rohlack sought commercial zoning for his lot, but the City Council killed 

the Planning & Zoning Commission’s approval, at the cost of thousands 

of dollars which Rohlack sunk in the process. Rohlack’s building plans 

and construction loan remain unsettled and in limbo, threatened by his 

inability to rent out for short terms any home he might build.

d. Daniel Olveda owns E. 1267 Common Street, next door to Plaintiff 

Rohlack and likewise across the street from commercially-zoned 

properties. He bought the property in 2017. After he moved in, realizing 

he was near Schlitterbahn and the historic town of Gruene, he decided 

to pursue short-term renting. Unaware of the New Braunfels STR ban, 

the City soon required him to cease and desist or else face prosecution

and ruinous fines. On the advice of City officials, he sought a zoning 

change from residential to commercial and allied with several neighbors 

around him, including Rohlack, in the effort. Olveda spent thousands of 

dollars in the effort. The City did various studies confirming that the 

several properties should be zoned commercial, and the Planning & 

Zoning Commission approved the plan. The City Council then killed it. 

e. Douglas Wayne Mathes owns both 185 Cross River Street and 590 

Washington Avenue. He bought 185 Cross River in 2011 in order to rent 

it out for short terms and earn sufficient income to buy a permanent 

home for his family. The home is next door to a short-term rental 

property and also sits approximately 50’ from the entrance to 

Schlitterbahn. Long-term rentals would earn no more than half the 

rental income of short-term rentals. After he purchased, he discovered 

that not only would he have to seek rezoning of the property to 

commercial, but that some of his neighbors were vigorously opposed to 

STR’s and would seek to block him. Some of these people had previously

been grandfathered into STR rights by the City and therefore opposed 

any new competitors. Some of these persons actively harassed him and 

his family and friends by surveilling the property and taking 

photographs of people’s comings and goings. He ultimately determined, 

after witnessing City Council hearings at which rezoning for STR’s was 

being sought by others, that seeking rezoning from the City would be

futile. 

34. The Homeowners all desire to rent out the entirety of their properties at 

any given time, conveying sole and exclusive possession to tenants in the manner of an 

ordinary home rental. None of the Homeowners intend to rent out individual rooms, or 

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have employees staff their rental properties, or maintain a front desk or concierge there, 

or otherwise operate an ongoing business concern upon their rental properties. They do

not intend to allow anyone to operate businesses at the properties.

V. CLAIMS FOR RELIEF

A. Declaratory Judgment

1. The New Braunfels STR Ordinance deprives the Homeowners of equal 

protection under the U.S. and Texas Constitutions

35. The foregoing paragraphs are realleged and incorporated herein by 

reference.

36. The Fourteenth Amendment to the United States Constitution provides 

that equal protection of the laws shall not be denied to any citizen of the United States. 

37. Article 1, Section 3 of the Texas Constitution guarantees that “[a]ll free 

men, when they form a social compact, have equal rights, and no man, or set of men, is 

entitled to exclusive separate public emoluments, or privileges, but in consideration of 

public services.”

38. “Texas cases echo federal standards when determining whether a statute 

violates equal protection under either provision.” Rose v. Doctors Hosp., 801 S.W.2d 841, 

846 (Tex. 1990).

39. To prevail on an equal protection claim, a plaintiff must establish that the 

government treated that plaintiff differently than similarly situated parties without a 

rational basis for doing so. Downs v. State, 244 S.W.3d 511, 518 (Tex. App. – Fort Worth 

2007) (citing City of Cleburne, Tex. v. Cleburne Living Ctr., 473 U.S. 432, 440, 105 S. Ct. 

3249, 3254, 87 L. Ed. 2d 313 (1985)). Economic regulations, such as zoning decisions, 

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have traditionally been afforded such “rational relation” scrutiny. Mayhew v. Town of 

Sunnyvale, 964 S.W.2d 922, 939 (Tex. 1998) (citing City of Cleburne).

40. An ordinance is not rationally related to a legitimate state interest if it 

creates a distinction between two similarly-situated classes which bears no relationship 

to the alleged objective. City of Cleburne, 473 U.S. at 440. 

41. The New Braunfels STR Ban treats similarly-situated owners of ordinary 

residentially-zoned homes differently. There are two varieties of equal protection 

violations:

a. Owners in residentially-zoned areas who rent for more than 30 days 

have an all-but unfettered right to rent out their homes. Owners in 

residentially-zoned areas who rent for 30 days or less are outright 

banned from doing so. 

b. Owners as of 2006 obtained short-term rental rights to the exclusion of 

everyone who purchased properties later. 

42. This distinction between short-term landlords and long-term landlords

lacks any rational basis and bears no relationship to the supposed objectives of the STR 

Ban:

a. The City has no rational basis for concluding that renting out a home for short 

terms renders the home itself a “business,” any more than renting out a home 

for long terms does. A property owner may well be in the leasing business, 

broadly speaking, but that fact does not render the owner’s leased property a 

business; if it did, all leased homes would be businesses. A home is a “business,” 

no matter who occupies it or if no one occupies it, if commercial activities occur 

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on the premises. The earning of rent is irrelevant, as is the duration of the 

rental. See Tarr, 556 S.W.3d at 288.

b. The City has no rational basis for concluding that homes rented out for short 

terms cause more, worse, or different noise, trash, traffic, parking, or nuisancetype problems than homes rented out for long terms. By definition, if a home 

is rented out to tenants, it is occupied by people who come and go, laugh and 

love, eat and drink, drive and park, party and play, just like any other 

occupants of a home, whether owners, guests, or tenants. See Zaatari, 2019 

WL 6336186, at * 8 (misconduct concerns about STR’s are already addressed 

by ordinances and laws addressed specifically to such misconduct). 

c. The City has no rational basis for allowing owners of properties in 

residentially-zoned areas as of 2006 to rent out their homes for short terms, 

while owners who purchased residentially-zoned properties after that date 

were frozen out. 

43. Accordingly, the City’s classification of homeowners whom it prosecutes 

based on the duration of the homeowner’s rental lacks any rational basis and should be 

declared a violation of the constitutional guarantee of equal protection under either or 

both the U.S. and Texas Constitutions. 

2. The New Braunfels STR Ordinance deprives the Homeowners 

of due process under the U.S. and Texas Constitutions. 

44. The foregoing paragraphs are realleged and incorporated herein by 

reference.

45. The Fourteenth Amendment to the United States Constitution that no 

person shall be “depriv[ed] of life, liberty, or property, without due process of law.”

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46. Article I, § 19 of the Texas Constitution provides: “No citizen of this State 

shall be deprived of life, liberty, property, privileges or immunities, or in any manner 

disfranchised, except by the due course of the law of the land.”

47. A law may be declared a violation of due process because it takes away a 

vested or fundamental property right not expressly mentioned in the U.S. or Texas 

Constitutions. See generally Klumb v. Houston Mun. Employees Pension Sys., 458 S.W.3d 

1, 15 (Tex. 2015). This is known as “substantive” due process, as contrasted with 

“procedural” due process. 

48. The right to lease, and for any duration, is a fundamental property right

for the reasons set forth in foregoing paragraphs. The City has taken that right away 

from Plaintiffs because they are prohibited from renting for durations of less than 30 

days. 

49. A substantive due process challenge based on such a deprivation of 

substantive due process can be facial or as-applied. “A facial challenge is an attack on a 

statute itself as opposed to a particular application.” City of Los Angeles v. Patel, 576 U.S. 

––––, 135 S. Ct. 2443, 2449, 192 L.Ed.2d 435 (2015). In order to successfully mount a 

facial challenge, a party must establish that no set of circumstances exists under which 

that statute would be valid. See United States v. Salerno, 481 U.S. 739, 745, 107 S.Ct. 

2095, 95 L.Ed.2d 697 (1987). 

50. By contrast, “[w]hen a party makes an ‘as applied’ challenge to a statute, 

the essence of the challenge asserts that the statute, although generally constitutional, 

is unconstitutional when applied to the challenging party's particular circumstances. Ex 

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parte Moon, No. 01-18-01014-CR, 2020 WL 827424, at *9 (Tex. App. – Houston [1st Dist] 

Feb. 20, 2020, no pet. h.).

51. In either case, the standard is whether there is a rational relationship 

between the ordinance and its purpose: 

A court should not set aside a zoning determination for a substantive due 

process violation unless the action “has no foundation in reason and is a 

mere arbitrary or irrational exercise of power having no substantial 

relation to the public health, the public morals, the public safety or the 

public welfare in its proper sense.”

A generally applicable zoning ordinance will survive a substantive due 

process challenge if it is designed to accomplish an objective within the 

government's police power and if a rational relationship exists between the 

ordinance and its purpose. This deferential inquiry does not focus on the 

ultimate effectiveness of the ordinance, but on whether the enacting body 

could have rationally believed at the time of enactment that the ordinance 

would promote its objective. If it is at least fairly debatable that the decision 

was rationally related to legitimate government interests, the decision 

must be upheld. The ordinance will violate substantive due process only if 

it is clearly arbitrary and unreasonable. 

Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 938 (Tex. 1998) (internal citations 

omitted).

52. While the Texas due course of law protections generally align with those of 

the United States, the Texas Constitution has additional protections for individuals 

asserting an as-applied challenge:

[T]he standard of review for as-applied substantive due course challenges 

to economic regulation statutes includes an accompanying consideration . . 

. : whether the statute's effect as a whole is so unreasonably burdensome 

that it becomes oppressive in relation to the underlying governmental 

interest.

Patel v. Texas Dep't of Licensing & Regulation, 469 S.W.3d 69, 86 (Tex. 2015); see also 

Barshop v. Medina Cnty. Underground Water Conservation Dist., 925 S.W.2d 618, 626–

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27 (Tex.1996) (same, as applied to zoning in a substantive due process and equal 

protection case).

53. Furthermore, while ordinances generally are presumed constitutional, 

zoning ordinances are construed more strictly. See City of Kermit v. Spruill, 328 S.W.2d 

219, 223 (Tex. Civ. App. 1959, writ refused n.r.e.). “Any regulation of land use is in 

derogation of the common law.” Town of Annetta S. v. Seadrift Dev., L.P., 446 S.W.3d 

823, 830 (Tex. App. – Fort Worth 2014) (citing Thomas v. Zoning Bd. of Adjustment, 241 

S.W.2d 955, 957 (Tex.Civ.App.-Eastland 1951, no writ) and Bryan v. Darlington, 207 

S.W.2d 681, 683 (Tex.Civ.App.-San Antonio 1947, writ ref'd n.r.e.) (“All restrictions of the 

free use of land are in derogation of the common law right to use land for all lawful 

purposes that go with the title and possession, and are to be construed strictly against 

the person creating or attempting to enforce such restrictions.”)).

54. The New Braunfels STR Ordinance is facially invalid. In prohibiting shortterm leasing within residential districts while allowing it in commercial districts, it 

equates the duration of rental with commercial use. There is no sense in which duration 

relates to the character of the use. Character of use is determined by what human beings 

actually do upon the land, and if all they do is engage in the ordinary incidents of residing 

in a place, any governmental determination that they are engaging in a trade or business 

has no foundation in reason and is arbitrary and irrational. 

55. The New Braunfels STR Ordinance is also invalid as applied. The City 

requires owners to seek re-zoning to commercial in order to obtain the right to rent for 

short terms. There is no rational basis for this requirement because duration of use does 

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not determine the character of the use, so forcing owners to seek commercial zoning is 

clearly arbitrary and unreasonable. 

56. The City also denies rezoning for no reason when property owners seek it 

in order to rent for short terms. The plaintiffs in this case were approved by a City 

commission based on studies and data only to have the City Council summarily kill that 

approval with no rationale. The City’s manner of applying the STR Ban was clearly 

arbitrary and unreasonable.

57. Finally, the City has no rational basis for concluding that the duration of 

use, in and of itself, equates to or causes misconduct such as nuisance, trash, noise, or 

parking violations, which are purported bases for the City’s adoption of the STR Ban. 

There is no reason to believe that any given home has more use, occupancy, or traffic just 

because it is rented for short durations. People come and go from homes freely at all 

times, as do their guests, friends, and other invitees. At any given snapshot in time, the 

occupants of a home are those, whether owners or tenants, who have a valid possessory 

interest or invitee status from those in possession. The City already has ordinances 

addressing misconduct as well as safety standards, so there is no need for duplicative 

regulation of properties rented for short durations. Thus, City’s regulation of conduct in 

STR’s over and above what existing use, occupancy, and traffic laws already allow is not 

even a rational reason to ban STR’s if those allegations are true.

58. Accordingly, the Court should declare that the City’s STR ban violates the 

substantive due course of law and due process rights of the plaintiff Homeowners. 

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3. The New Braunfels STR Ban Is Constitutionally Preempted

59. The foregoing paragraphs are realleged and incorporated herein by 

reference.

60. In addition or in the alternative, the court should declare that Texas Tax 

Code Chapter 156, in combination with Texas Property Code Chapter 92, preempts the 

New Braunfels STR ban.

61. Preemption is also grounded in constitutional law. Article XI, Section 5(a) 

of the Texas Constitution provides that home-rule city ordinances shall not “contain any 

provision inconsistent with the Constitution of the State, or of the general laws enacted 

by the Legislature of this State.” See generally City of Laredo v. Laredo Merchants Ass'n, 

550 S.W.3d 586, 592 (Tex. 2018) (in express preemption case, city could not ban plastic 

trash bags); City of Fort Worth v. Rylie, No. 02-17-00185-CV, 2018 WL 4782291, at *8 

(Tex. App. – Fort Worth Oct. 4, 2018, no pet. h.) (similar). 

62. This case involves implied preemption, where the standard is as follows:

The mere entry of the state into a field of legislation does not automatically 

preempt that field from city regulation. Rather, local regulation, ancillary 

to and in harmony with the general scope and purpose of the state 

enactment, is acceptable. Absent an express limitation, if the general law 

and local regulation can coexist peacefully without stepping on each other’s 

toes, both will be given effect or the latter will be invalid only to the extent 

of any inconsistency.

Id. at 593 (cleaned up). Further, as quoted approvingly in City of Laredo: 

a general law and a city ordinance will not be held repugnant to each other 

if any other reasonable construction leaving both in effect can be reached. 

In other words, both will be enforced if that be possible under any 

reasonable construction, just as one general statute will not be held 

repugnant to another unless that is the only reasonable construction.

City of Beaumont v. Fall, 116 Tex. 314, 291 S.W. 202, 205–206 (1927).

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63. There appears to be no reported Texas case in which a city has outright 

banned an activity which the state has expressly taxed.1 It is hard to see how a city can 

completely undermine Legislative intent in that way. The general run of cases involve 

cities regulating in the interstices of statutes, such as taxing or further regulating a 

subject matter addressed by statute. Even municipal smoking ordinances don’t 

completely take away someone’s right to smoke in their own home. Yet the New 

Braunfels STR ban forbids precisely what the Legislature has taxed and bans human 

activity in a private home. 

64. In this case, the Legislature expressly began taxing STR’s in 2015 as part 

of the state hotel occupancy tax. The intent to raise revenue from that source is plain. At 

the same time, the Legislature declined to change the existing regime of residential 

leasing at Chapter 92 of the Property Code, which, given express references to 

“transient”-type stays in that statute, the Legislature plainly would have done had the 

Legislature intended to restrict such rentals. Allowing cities to ban STR’s would 

undermine the Legislature’s intent to generate revenue and subject STR’s to a ban 

inconsistent with the Legislature’s desire to allow such rentals without restriction. The 

Grapevine STR ban stands in direct conflict with the state’s revenue goals and 

comprehensive regulation of leasing generally and is thus preempted. The court should 

declare as much. 

1 However, in the City of Beaumont case, a municipal ordinance which thwarted the Legislature’s 

determination that the statute of limitations was not a valid defense in a tax suit was held 

impliedly preempted. Id. at 205-206.

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VI. PRAYER

WHEREFORE, PREMISES CONSIDERED, Plaintiffs Rafael Marfil, Verge 

Productions LLC, Enrico Marfil, Naomi Marfil, Korey Rholack, Daniel Olveda, and Doug 

Wayne Mathes respectfully pray that judgment be entered for Plaintiffs against 

Defendant for a declaratory judgment that the New Braunfels STR Ban be held and 

declared unconstitutional and therefore unenforceable for the reasons set forth herein, 

along with such other and further relief to which Plaintiffs may be entitled at law or in 

equity.

Respectfully submitted,

/s/ J. Patrick Sutton

J. Patrick Sutton

Texas Bar No. 24058143

1505 W. 6th Street

Austin, Texas 78703

Tel. (512) 417-5903 

jpatricksutton@jpatricksuttonlaw.com

Attorney for Plaintiffs

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