Court Opinion

ID: 6329561
Source: CourtListenerOpinion
Date Created: 2022-04-04 18:00:27.590338+00
Date Added: 2024-06-11T09:22:52.427442
License: Public Domain

Case: 21-40321     Document: 00516265723          Page: 1     Date Filed: 04/04/2022

              United States Court of Appeals
                   for the Fifth Circuit                         United States Court of Appeals
                                                                          Fifth Circuit

                                                                        FILED
                                                                     April 4, 2022
                                   No. 21-40321                    Lyle W. Cayce
                                                                        Clerk

   Coral Beach, Independent Executrix of the Estate of
   Joseph John "Joe" Murphy; Yoram Ben-Amram; Galtex
   Development, L.L.C.,

                                                            Plaintiffs—Appellants,

                                       versus

   The City of Galveston, Texas,

                                                            Defendant—Appellee.

                  Appeal from the United States District Court
                      for the Southern District of Texas
                            USDC No. 3:12-CV-167

   Before Barksdale, Stewart, and Dennis, Circuit Judges.
   Per Curiam:*
          Plaintiffs-Appellants appeal the district court’s dismissal of their
   federal takings claims for lack of subject matter jurisdiction. We
   AFFIRM.

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 21-40321        Document: 00516265723         Page: 2    Date Filed: 04/04/2022

                                     No. 21-40321

                 I.    Facts and Procedural History
          The property at issue consists of two buildings (collectively, the
   “Property”) located in the East End Historical District of the City of
   Galveston, Texas (the “City”), containing fourteen rental units in total.
   Yoram Ben-Amram d/b/a Galtex Development, L.L.C. purchased the
   Property in March 2007, subject to a mortgage held by Joe Murphy. Zoning
   standards in the Historical District prohibit multifamily dwellings, but the
   Property maintained a legally non-conforming or “grandfather” status as a
   multifamily dwelling because it pre-dated the existence of the Historical
   District and the zoning standards. To keep this grandfather status, zoning
   standards prohibited “a discontinuance of actual occupancy as a multiple-
   family use for any consecutive period of time of six (6) months or longer.”1
   The Property had always complied with this occupancy requirement until it
   was damaged by Hurricane Ike in September 2008. In January 2009, the City
   condemned the Property as unfit for human habitation and directed the
   tenants to vacate the buildings. The City informed Ben-Amram of the
   improvements needed to bring the Property back up to compliance with the
   International Property Maintenance Code, which the City had adopted. In
   response to the condemnation, Ben-Amram contacted the City and advised
   officials that he had already hired a construction company, and he obtained
   the required permits and began renovations. In January 2010, city inspectors
   indicated that the condemnation would be lifted if Ben-Amram completed
   certain additional repairs and submitted an engineer’s letter attesting to the
   Property’s safety. Ben-Amram never produced an engineer’s letter.

          1
              Galveston, Tex., Zoning Standards § 29-111(a)(4) (1991). The 1991
   Zoning Standards were replaced in 2015 by the Land Development Regulations of 2015
   after this action was filed in state court in 2012.

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           In May 2010, after the Property had been vacant for nearly fourteen
   months, the City informed Ben-Amram that the Property had lost its
   grandfather status and that he would have to get a Specific Use Permit
   (“SUP”) approved for the Property to operate as a multifamily dwelling
   again. Zoning standards permitted Ben-Amram to appeal the revocation of
   grandfather status to the Zoning Board of Adjustments,2 but he did not
   appeal. Ben-Amram applied for the SUP in December 2010. At the February
   2011 city council meeting where Ben-Amram’s request for the SUP was
   heard, the city council denied the SUP. However, multiple city council
   members encouraged Ben-Amram to make the necessary repairs and apply
   again, and the mayor confirmed that nothing would prevent him from
   reapplying.3 Ben-Amram did not reapply. Murphy foreclosed on the Property
   in October 2011.
           In April 2012, Plaintiffs-Appellants filed suit against the City in state
   court claiming that the City took their property without just compensation in
   violation of the Texas and United States constitutions. In June 2012, the City
   removed this case to federal court. In August 2013, the federal court
   remanded the state takings claims to state court and stayed the federal claims
   pending exhaustion of Plaintiffs-Appellants’ state court remedies. After
   Texas appellate courts ruled against Plaintiffs-Appellants,4 thus resolving the

           2
            Id. § 29-112(c) (“Appeals to the Board can be taken by any person aggrieved or
   by an officer, department or board of the municipality affected by any decision of the
   Building Official.”) (now codified at Article 14 of the Unified Development Code).
           3
               Galveston City Council Regular Meeting Excerpt at 78–85 (Feb. 10, 2011).
           4
              See City of Galveston v. Murphy, 533 S.W.3d 355, 365 (Tex. App.—Houston [14th
   Dist.] 2015, pet. denied) (holding that trial court lacked subject matter jurisdiction over
   Plaintiffs’ regulatory taking claims regarding the denial of the SUP); Murphy v. City of
   Galveston, 557 S.W.3d 235, 244–45 (Tex. App.—Houston [14th Dist.] 2018, pet. denied)
   (affirming trial court’s order dismissing Plaintiffs’ Texas takings claims regarding the loss

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   state takings claims, this case was reinstated on the federal docket in January
   2020 for the district court to hear Plaintiffs-Appellants’ claims under the
   United States Constitution, through 42 U.S.C. § 1983, for taking of property
   without just compensation. The City moved for summary judgment arguing
   that the district court lacked subject matter jurisdiction over the federal
   takings claims. The district court construed the summary judgment motion
   as a Rule 12(b)(1) motion and granted it on grounds that the claims were not
   ripe for judicial review because Plaintiffs-Appellants failed to establish that
   the City’s decisions were final.
          The issue on appeal is whether the district court erred by dismissing
   Plaintiffs-Appellants’ regulatory takings claims for lack of subject matter
   jurisdiction.
                        II.     Standard of Review
          “Ripeness is a question of law that implicates this court’s subject
   matter jurisdiction, which we review de novo.” Urb. Devs. LLC v. City of
   Jackson, 468 F.3d 281, 292 (5th Cir. 2006). The district court construed the
   City’s motion for summary judgment as a motion to dismiss under Fed. R.
   Civ. P. 12(b)(1). A motion filed under Rule 12(b)(1) “allow[s] a party to
   challenge the subject matter jurisdiction of the district court to hear a case.”
   Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001) (citing FED. R.
   CIV. P. 12(b)(1)). The district court can dismiss for lack of subject matter
   jurisdiction based on any one of the following three bases: “(1) the complaint
   alone; (2) the complaint supplemented by undisputed facts evidenced in the
   record; or (3) the complaint supplemented by undisputed facts plus the
   court’s resolution of disputed facts.” Id. (citing Barrera–Montenegro v. United
   States, 74 F.3d 657, 659 (5th Cir. 1996)). The party asserting jurisdiction in

   of grandfather protection because the Plaintiffs failed to exhaust their administrative
   remedies).

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   opposition to a Rule 12(b)(1) motion bears the burden of proof, thus the
   plaintiff usually bears the burden of proving that jurisdiction exists. Id.
   (citations omitted).
          Courts distinguish between 12(b)(1) motions that base the lack of
   jurisdiction on the face of the complaint and 12(b)(1) motions that attack the
   existence of subject matter jurisdiction in fact. See Williamson v. Tucker, 645
   F.2d 404, 412–13 (5th Cir. 1981). The City attacks the existence of subject
   matter jurisdiction in fact. In a factual attack, “no presumptive truthfulness
   attaches to plaintiff’s allegations, and the existence of disputed material facts
   will not preclude the trial court from evaluating for itself the merits of
   jurisdictional claims.” Id. at 413.
                             III.    Discussion
          Plaintiffs-Appellants argue that the district court erred in holding that
   it lacked subject matter jurisdiction because Plaintiffs-Appellants’ takings
   claims were not ripe. We disagree.
          The Takings Clause of the Fifth Amendment, made applicable to the
   states through the Fourteenth Amendment, prohibits the taking of private
   property for public use without just compensation. Urb. Devs. LLC, 468 F.3d
   at 292. The Supreme Court has held that “[w]hen a plaintiff alleges a
   regulatory taking in violation of the Fifth Amendment, a federal court should
   not consider the claim before the government has reached a ‘final’ decision.”
   Pakdel v. City & Cnty. of San Francisco, 141 S. Ct. 2226, 2228 (2021). Under
   the finality requirement, “a plaintiff must show that ‘there [is] no question
   . . . about how the “regulations at issue apply to the particular [property] in
   question.”’” Id. at 2230 (quoting Suitum v. Tahoe Reg’l Plan. Agency, 520
   U.S. 725, 739 (1997)). While a plaintiff is no longer required to exhaust state
   remedies in order to pursue “a takings claim when the government has
   reached a conclusive position,” “a plaintiff ’s failure to properly pursue
   administrative procedures may render a claim unripe if avenues still remain

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   for the government to clarify or change its decision.” Id. at 2231; see also
   Knick v. Twp. of Scott, 139 S. Ct. 2162, 2167 (2019) (“[T]he settled rule is that
   ‘exhaustion of state remedies “is not a prerequisite to an action under [42
   U.S.C.] § 1983.”’”).
           Here, because two such avenues remained available, the district court
   properly concluded that Plaintiffs-Appellants’ claims were not ripe for
   judicial review. First, when Ben-Amram was notified that the City had
   revoked the Property’s grandfather status because the Property had been
   unoccupied for more than six months, he could have appealed the City’s
   decision to the Board of Adjustments.5 To the extent that Plaintiffs-
   Appellants contest the City’s interpretation of “occupancy” under zoning
   standard § 29-111(a)(4), appealing to the Board of Adjustments offered a
   relevant form of review, but Plaintiffs-Appellants never filed an appeal with
   the Board. Second, nothing prevented Ben-Amram from reapplying for an
   SUP after the city council denied his first application, yet he failed to reapply.
           This court has held that “whenever the property owner has ignored
   or abandoned some relevant form of review or relief, such that the takings
   decision cannot be said to be final, the takings claim should be dismissed as
   unripe.” Urb. Devs. LLC, 468 F.3d at 293 (citing Hidden Oaks Ltd. v. City of
   Austin, 138 F.3d 1036, 1041 (5th Cir. 1998)). In Urban Developers LLC v. City
   of Jackson, the plaintiff asserted a regulatory takings claim against the city
   alleging that the city deprived it of economic use of its land by applying a

           5
             Plaintiffs-Appellants argue that an appeal to the Board of Adjustments would have
   been futile because the City could appeal the Board’s ruling and has a track record of doing
   so. The futility exception excuses a property owner “from obtaining a final decision if
   pursuing an appeal to a zoning board of appeals . . . would be futile.” Murphy v. New Milford
   Zoning Comm’n, 402 F.3d 342, 349 (2d Cir. 2005). Because Plaintiffs-Appellants’ futility
   argument relied on speculation rather than a conclusive showing that further attempts to
   secure relief would have been fruitless, the district court held that the futility doctrine
   offered them no relief. We agree with the district court’s resolution of this issue.

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                                     No. 21-40321

   flood-zone ordinance that prevented rehabilitation and repairs to its
   apartments. Id. at 292. However, after the city rejected the plaintiff’s
   building plans due to non-compliance with the ordinance, the plaintiffs did
   not apply for a flood-zone development permit, pursue mandamus against
   the city’s community development officer, or undertake the appeal process
   set forth in the city’s municipal code. Id. at 293. Thus, this court dismissed
   the plaintiff’s regulatory takings claims as unripe because the plaintiff had not
   satisfied the finality requirement. Id. at 294.
          Similarly, here, because Plaintiffs-Appellants ignored relevant forms
   of relief, we hold that they failed to satisfy the finality requirement, and the
   district court properly dismissed their federal takings claims as unripe.
                            IV.      Conclusion
          For the foregoing reasons, the district court’s dismissal of Plaintiffs-
   Appellants’ federal takings claims is AFFIRMED.

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