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Emf Swiss Avenue LLC v. City of Dallas

United States District Court, N.D. Texas, Dallas Division

November 8, 2017

EMF SWISS AVENUE LLC, Plaintiff,
v.
CITY OF DALLAS, Defendant.

          MEMORANDUM OPINION AND ORDER

          SAM A. LINDSAY UNITED STATES DISTRICT JUDGE

         Before the court is Plaintiff EMF Swiss Avenue, LLC's Application for Temporary Restraining Order (Doc. 1), filed October 30, 2017. After considering the motion, pleadings, evidence, and applicable law, the court, sua sponte, dismisses this action without prejudice for lack of subject matter jurisdiction.

         I. Background

         Plaintiff EMF Swiss Avenue, LLC (“Plaintiff” or “EMF”) filed this action on October 30, 2017, against Defendant City of Dallas (“Defendant” or “City”), asserting claims for (1) inverse condemnation and impermissible takings in violation of the Fifth and Fourteenth Amendments to the United States Constitution and Article I, Section 17 of the Texas Constitution; and (2) promissory estoppel. With respect to this court's subject matter jurisdiction, EMF contends that this court “has federal question jurisdiction pursuant to 28 U.S.C. § 1331 because this suit concerns the federal question of whether the City of Dallas has committed a taking against EMF under the Fifth and Fourteenth Amendments to the United States Constitution.” Complaint and Application for TRO ¶ 3. EMF asserts the court has supplemental jurisdiction pursuant to 28 U.S.C. § 1367 over its promissory estoppel claim. For relief, EMF seeks to recover direct and consequential damages, attorney's fees, and costs of suit. EMF also seeks injunctive relief in the form of a temporary restraining order, preliminary injunction, and permanent injunction enjoining the City from enforcing a “Stop Work Order” that stopped all construction by EMF on a multi-million dollar development project (“Project”) on property located in Dallas County and owned by EMF. The relevant allegations and evidence, drawn from the Complaint and appendix filed in support, are as follows:

EMF is in the process of constructing a five-story, 253-unit multifamily dwelling at 4217 Swiss Avenue (the “Property”). Prior to commencing construction, EMF received the required approval and permits from the City. EMF began work on the project and invested more than $13.9 million in the project. Non-party Peaks Addition Home Owner's Association (“HOA”) filed a complaint concerning the validity of the permits issued by the City, claiming they should not have been issued because they did not require the Project to conform to the City's ordinance addressing residential proximity slopes (“RPS”) that emanate from other properties located in Dallas Planned Development District 298. The Director of Sustainable Development and Construction for the City (“Director”) concluded that no RPS applied to the Project or the Property and, thus, the permits issued to EMF do not require EMF to conform to RPS. The HOA appealed this decision to the Board of Adjustment for the City (the “Board”), which upheld the Director's decision.

         In March 2017, five months after the construction began, the HOA filed a lawsuit against the City and the Board seeking a writ of certiorari and judicial review of the Board's decision. See Peaks Addition Homeowners Association v. City of Dallas, et al., Cause No. DC-17-02532, in the 134th Judicial District Court, Dallas County, Texas (the “State Court Action”). The HOA moved for summary judgment in the State Court Action, and the City filed a cross-motion for summary judgment. EMF intervened in the matter on September 8, 2017. On September 11, 2017, the judge in the State Court Action granted final summary judgment for the HOA and ruled against the City.

         Following issuance of the Final Judgment in favor of the HOA, on September 1, 2017, the City issued a “Stop Work Order” halting all construction on the Property. EMF responded by filing an Emergency Motion to Stay Enforcement of the September 11, 2017 Final Judgment. On September 18, 2017, the judge in the State Court Action, following a hearing, denied EMF's motion. EMF has appealed this adverse decision to the Fifth District Court of Appeals at Dallas, Texas, where it is pending.

         On September 19, 2017, EMF filed a Motion to Determine Supersedeas Security in the State Court Action, asking the court to set the type and amount of supersedeas security in order for EMF to post adequate security and suspend enforcement of the court's final judgment during the appellate process. The motion was denied without explanation. EMF appealed the decision, and that appeal is also pending.

         On October 30, 2017, EMF filed this lawsuit and in support of its Application for TRO contends:

This lawsuit seeks relief narrowly-tailored in scope and of the highest urgency. The [City] has, sua sponte and prematurely issued, a Stop Work Order precluding all construction of any kind on a multi-million dollar development Property located in Dallas County. The preclusive effects of this Stop Work Order are disastrous and have caused and will continue to cause irreparable harm to EMF and the construction project on its Property through indefinite construction delays, dispersal of the construction workforce, potential lender defaults, and lost construction capital and pricing. The need for injunctive relief, therefore, is immediate and necessary to enjoin the City's impermissible taking of EMF's Property in violation of EMF's rights under Texas law and the United States Constitution.

         Complaint and Appl. for TRO ¶ 6.

         II. Subject Matter Jurisdiction

         A federal court has subject matter jurisdiction over civil cases “arising under the Constitution, laws, or treaties of the United States, ” or over civil cases in which the amount in controversy exceeds $75, 000, exclusive of interest and costs, and in which diversity of citizenship exists between the parties. 28 U.S.C. §§ 1331, 1332. Federal courts are courts of limited jurisdiction and must have statutory or constitutional power to adjudicate a claim. Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994) (citations omitted); Home Builders Ass'n of Miss., Inc. v. City of Madison, 143 F.3d 1006, 1010 (5th Cir. 1998). Absent jurisdiction conferred by statute or the Constitution, they lack the power to adjudicate claims and must dismiss an action if subject matter jurisdiction is lacking. Id.; Stockman v. Federal Election Comm'n, 138 F.3d 144, 151 (5th Cir. 1998) (citing Veldhoen v. United States Coast Guard, 35 F.3d 222, 225 (5th Cir. 1994)). A federal court must presume that an action lies outside its limited jurisdiction, and the burden of establishing that the court has subject matter jurisdiction to entertain an action rests with the party asserting jurisdiction. Kokkonen, 511 U.S. at 377 (citations omitted). “[S]ubject-matter jurisdiction cannot be created by waiver or consent.” Howery v. Allstate Ins. Co., 243 F.3d 912, 919 (5th Cir. 2001).

         Federal courts may also exercise subject matter jurisdiction over a civil action removed from a state court. Unless Congress provides otherwise, a “civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or defendants, to the district court of the United States for ...


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