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Montechino v. The City of Lago Vista

United States District Court, W.D. Texas, Austin Division

May 18, 2017




         BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and specifically Plaintiff Villa Montechino, L.P. (Plaintiff's Motion to Remand [#7], Defendant City of Lago Vista (City)'s Response [#11] in opposition, and Plaintiffs Reply [#12] in support. Having reviewed the documents, the governing law, and the file as a whole, the Court now enters the following opinion and orders.


         In this case, Plaintiff alleges the City engaged in a wrongful "taking" of Plaintiffs property without just compensation. According to the First Amended Original Petition (Amended Petition), Plaintiff owns a subdivision in Lago Vista, Texas, and had an agreement with the City to develop the subdivision. Mot. Remand [#1-1] Ex. A (Am. Pet.) ¶¶ 10-11. Plaintiff alleges the City required it to improve certain aspects of the subdivision, including the construction of lift stations, a water tower, a stop light, a detention pond, and other road and utility improvements. Id. Plaintiff claims "[t]he City refused to let the development move forward if [Plaintiff] did not agree [to the improvements] and [the City] continued to shut down the subdivision, denied further approvals, refused to release lines of credit and continued to red tag the subdivision until [Plaintiff] gave in and agreed" to make the improvements. Id. ¶¶ 13-17. Plaintiff argues these actions constitute a regulatory taking. Id. Plaintiff also claims the City has physically taken and damaged certain utility improvements by "extending and hooking other lines up to these utilities to divert water to serve other members of the public and the Lago Vista Independent School District" without compensating Plaintiff. Id. ¶ 14.

         On June 9, 2016, Plaintiff filed its Original Petition in the 200th Judicial District Court, Travis County, Texas. Not. Removal [#1-1] Ex. A (Original Pet.). In the Original Petition, Plaintiff brings four causes of action: a claim for declaratory relief under the Texas Declaratory Judgment Act, including a request that the court declare that the City's use of utility improvements constitutes an unconstitutional taking under the Texas Constitution; a claim for inverse condemnation based on the City's alleged unconstitutional taking under the Texas Constitution; a claim for trespass; and a claim to quiet title. Id. ¶¶ 12-24.

         On March 15, 2017, Plaintiff filed its Amended Petition bringing claims for declaratory relief, inverse condemnation, and negligence and gross negligence. Am. Pet. ¶¶ 18-37. In its amended declaratory action, Plaintiff seeks "a declaration of its rights, status and legal relations with respect to the scope and constitutionality of Ordinance 09-05-21-02 [. . . and] Ordinance No. 0-29-14" (Ordinances), and requests the court declare both Ordinances "unconstitutional as applied in this case." Id. ¶¶ 19-20. Further, in the amended inverse condemnation claim, Plaintiff states the City's "taking, using, altering and connecting to the subject privately built utility improvements and related income and profits is an unconstitutional taking under the Texas Constitution, Article I, Section 17, and alternatively under U.S. Constitution, Amendment V should a recovery not be had under the Texas Constitution." Id. ¶ 23; see also Id. ¶ 27 ("All the above acts of the [C]ity referred to herein constitute a use, taking damaging, or destroying of Plaintiff['s] property interest for public use without adequate compensation having been paid, in violation of Section 17 of Article I of the Constitution of the State of Texas and alternatively, in violation of the Fifth and Fourteenth Amendments to the U.S. Constitution.").

         On April 4, 2017, the City timely removed the case to this Court, claiming Plaintiffs takings claim under the Fifth Amendment and request that the Court declare the Ordinances unconstitutional established federal question jurisdiction. Not. Removal [#1] ¶ 3. Now Plaintiff moves to remand the case, arguing this Court does not have subject matter jurisdiction because Plaintiffs claims are not ripe. Mot. Remand [#7].


         I. Legal Standard

         A. Removal

         A defendant may remove a civil action from state court to federal court if the action originally could have been brought in federal court. See 28 U.S.C. § 1441(a). Federal courts have federal question jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States." Id. § 1331. "The removing party bears the burden of showing that federal jurisdiction exists and that removal was proper." Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002).

         B. Ripeness

         To exercise jurisdiction under Article III of the U.S. Constitution, a case must be ripe. United Tramp. Union v. Foster, 205 F.3d 851, 857 (5th Cir. 2000). The ripeness doctrine is "drawn both from Article III limitations on judicial power and from prudential reasons for refusing to exercise jurisdiction . . . ." Reno v. Catholic Soc. Servs., Inc., 509 U.S. 43, 57 n.18 (1993). The Supreme Court has outlined a two-prong ripeness test for claims involving government takings of property. Williamson Cty Reg'l Planning Comm'n v. Hamilton Bank, 473 U.S. 172, 194 (1985); Roman Catholic Bishop of Springfield v. City of Springfield, 724 F.3d 78, 92 (1st Cir. 2013) (stating "[a] special category of ripeness doctrine" applies to Takings Clause claims) (quoting 13B Wright & Miller, Federal Practice & Procedure § 3532.1.1). Under Williamson County, a federal takings claim is not ripe until: (1) the regulating agency "has reached a final decision regarding the application of the regulations to the property at issue, " and (2) the plaintiff has sought compensation for the taking through the procedures provided by the state. 473 U.S. at 186, 194. The second prong constitutes the so-called state litigation rule, which prohibits a plaintiff from "simultaneously bring[ing] a claim for compensation under state law and a claim under the Takings Clause in federal court; rather the plaintiff must first pursue his state-law claim for compensation." Sansotta v. Town of Nags Head, 724 F.3d 533, 544 (4th Cir. 2013).

         II. ...

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