Thanks to Professor Patty Salkin for forwarding a recent $17 million inverse condemnation judgment from the Texas Court of Appeals. Trail Enterprises, Inc. v. City of Houston, No. 10-05-00382-CV (Nov. 21, 2007). It’s a short opinion without much background, so we don’t know what actions by the city resulted in Trail bringing suit, but it’s Houston, so it’s a safe bet that the case involves oil. Apparently, the city passed an ordinance that prohibited or restricted Trail’s ability to drill. The trial court held there was a taking, a jury determined compensation, but the court granted the city’s post-trial motion to dismiss for ripeness.
The issue on appeal was whether Trail’s claims were ripe since it challenged the regulation without first applying — and being denied — a drilling permit or a variance from the prohibition. “Ripeness” in this context usually requires that a property owner file, and be denied, a use permit, since without such an application, there is no way to establish the degree of diminution of value that is claimed to be a taking. However, when the regulation prohibits the very use the property owner intends to make, it is ripe for challenge upon its enactment. Trail also claimed that to seek a permit would have been futile, and that the ordinance did not provide any variance process. The court of appeals agreed, and held that the claims were ripe.