Here’s one that’s coming up for the Supreme Court’s consideration at its conference next week, but which we haven’t noted until now. A Texas property owner has filed this cert petition asking the Court to review the Texas Supreme Court’s decision in Hearts Bluff Game Ranch, Inc. v. State of Texas, 381 S.W.3d 486 (Tex. 2012).
The Texas court held that the ranch did not make out an inverse condemnation claim against the State when it alleged that a state agency’s action resulted in a federal agency denying a federal permit. The petition contains a single Question Presented:
Whether state action that purposely prevents a permitted and beneficial use of land by its owner, but undertaken with the intent to reserve that land for a future beneficial State use, requires compensation under the takings clause of the Fifth Amendment.
The Texas Supreme Court held that “[i]t is not prudent to sanction a seventy million dollar demand against the State of Texas for an alleged taking of a property interest when 1) as acknowledged by all parties, the United States Army Corps of Engineers, not the State of Texas, exercised its exclusive authority to deny petitioner’s applicaiton for a federal mitigation banking permit on the land[,]” Slip op at. 1.
The short story is that the Ranch purchased land, which lies “within the bounds of the potential Marvin Nichols Reservoir.” “Potential” as is not now, but maybe in the future. When the Ranch sought a permit from the Corps, the Corps said no. Because the mitigation bank was located in the potential reservoir. Which resulted in our favorite passage in the court’s opinion:
The Corps’ stated reason for denying the application was that the mitigation bank would not exist in perpetuity if the Legislature chose to build the Reservoir. Hearts Bluff then applied for a limited-term mitigation bank permit, but the Corps denied this request because mitigation banks must be perpetual.
Slip op. at 6.
But to us, it seems the issue is not whether the Corps’ denial of the permit resulted in a taking, but whether the State’s action of creating a “potential” reservoir that encompasses the Ranch’s property was a taking. The Ranch was merely ripening its claim by applying for a permit, and once the Corps denied it, the claim against the State was ready. So it’s not really important to the State’s liability whether the Corps denied the permit or whether the State caused the Corps to do so, since the regulatory action that resulted in devaluing the Ranch’s property was the State’s designation of the “potential” reservoir.
The petition argues:
As this Court may have observed, state courts are now using a simple grammatical strategem to avoid even analyzing the substance of a property owner’s claims — they have simply narrowed the definition of “taking” to find in favor of the government. By narrowing the definition of a “taking,” state court have avoided engaging in the ad hoc analysis of government action that is constitutionally required by the decisions of this Court. It is no wonder landowners rarely, if ever, prevail on Penn Central claims.
Br. at 3.
Let’s see what the Court does next week.