It's a good day. You win your takings case in the Texas Supreme Court. True, it's a narrow 5-4 victory, and it merely reverses summary judgment against you, which means only that you live to fight another day. But a win is a win, we always say. The decision is based on the Texas Constitution, which also means that your win is insulated from U.S. Supreme Court review.
So it's game over, right?
Not so fast. Under Texas appellate procedure, a win in that court isn't necessarily the end of the process. You need to get by a motion for rehearing as well. In our (non-Texas) experience, these things are usually exercises in futility for the moving party, at least if the goal is to get the court to change its mind on the critical issue decided. Yes, we've seen recon and rehearing motions granted from time to time, but only to make minor tweaks to the judgment or the opinion, not to change the result from 5-to-4 to 4-to-5.
But that's exactly what happened in Harris County Flood Control Dist. v. Kerr, No. 13-0303 (June 17, 2016). A 5-to-4 property owner victory from 2015 got revised to a 5-to-4 government win today, after the Flood Control District sought and was granted rehearing with the support of a jillion government amicus briefs claiming the opinion was a mistake, and Justice Eva Guzman switched her vote.
So now, instead of a reversal of summary judgment for the District and a remand for determination of what it knew and when it knew it (about flooding that might occur after it approved other development), we now have a dismissal of the inverse condemnation action:
This long-running dispute poses a question of constitutional law: whether governmental entities that engage in flood-control efforts are liable to homeowners who suffer flood damage, on the theory that the governments effected a taking of the homeowners’ property by approving private because development without fully implementing a previously approved flood-control plan. Under the circumstances presented, we answer no.
Slip op. at 1-2.
The (new) majority concluded that "the County never harbored a desire to cause flooding anywhere," and that "[i]ts motive was the opposite." Slip op. at 8. And merely approving private development -- even where there might be some awareness of a risk of increased flooding -- does not give rise to an inverse condemnation claim. There were "other causes: heavy rainfall, and, according to the homeowners themselves, the failure to fully implement the flood-control measures of the Pate Plan. The confluence of these circumstances, in our view, does not give rise to a takings claim." Slip op. at 8.
The (new) majority opinion walks through exactly the same territory which the (former) dissenting opinion did, and we won't go through it in detail. But the aforementioned government amici briefs certainly swayed the court, convincing it that:
The homeowners’ theory of takings liability would vastly and unwisely expand the liability of governmental entities, a view shared by the many public and private amicus curiae who have urged rehearing of this cause.61--------------61 Amicus curiae urging rehearing include the National Association of Counties, City of Houston, Port of Houston Authority, Harris County Metropolitan Transit Authority, West Houston Association, Greater Houston Builders Association, Houston Real Estate Council, Fort Bend County, Texas Conference of Urban Counties, Texas Association of Counties, Texas Municipal League, County Judges and Commissioners Association of Texas, Texas Water Conservation Association, North Texas Tollway Authority, Jeff Davis County, El Paso County, City of Austin, Texas Department of Counties, Texas Department of Transportation, and City of San Antonio. The Houston Property Rights Association opposed rehearing.
Slip op. at 24 & n.61. The majority used the next few pages of the opinion to illustrate with hypotheticals (some provided by the amici briefs) how the rule adopted by the former majority/now dissenting opinion was unwise and unworkable.
We're not sure why that rule was unworkable, since in our view it simply held that the property owners had alleged enough of a factual dispute to move forward and prove it. Something they will not now have a chance to do. See dissenting op. at 1 (Devine, J., dissenting) ("Of course, government entities do not have a duty to prevent all flooding. But, because the homeowners here presented evidence that the government entities knew unmitigated development would lead to flooding, that they approved development without appropriately mitigating it, and that this caused the flooding, I believe that the homeowners have raised a fact issue as to their takings claim.").
There's some silver lining, however, for Texas property owners generally (but not the Kerrs). As before, it appears that a majority of the Texas Supreme Court approves of the idea that an inverse condemnation plaintiff need not show that the taking was for public use. Until now, it has been unclear under Texas law whether an inverse or regulatory taking could be excused because it was for private use. A weird theory to be sure, but one that has found traction with other courts. This leads to the odd result that, as Justice Lehrmann put it in her concurring opinion, "[d]eclaring that a private-use taking is not compensable would create a perverse set of incentives for State actors by encouraging takings that do not serve a public use. In turn, a public shield against improper government action would be converted into a sword to enable that same improper action. Put simply, it makes no sense to say that a property owner is entitled to compensation if the government does the right thing but not if it does the wrong thing." Kerr, concurring op. at 6 (Lehrmann, J., concurring) (footnote omitted).