In City of Dallas v. Stewart, No. 09-0257 (Jan. 27, 2012), the Texas Supreme Court provided a good reminder of the importance of property rights and due process, even when protecting rights may inconvenience the government. In that case, the court held that a determination by a city agency that a home was a public nuisance and should be demolished, was not entitled to preclusive effect (that's "res judicata" to us Old Schoolers) in a subsequent takings lawsuit by the homeowner.
The facts of the case are pretty straightforward: Ms. Stewart abandoned her house and allowed it to fall into disrepair, and she ignored notices from the city. The Dallas Urban Rehabilitation Standards Board, the agency charged with enforcing the city's zoning ordinances, concluded that the house was a public nuisance and ordered it demolished. It rejected Stewart's request for a rehearing and obtained a judicial demolition warrant, after which it tore the house down.
Stewart's brought a claim against the city which included due process and takings claims. The trial court, applying the "substantial evidence" standard of review, affirmed the URSB's conclusion that the house was a nuisance. It severed the constitutional claims from Stewart's administrative claims, after which the jury concluded that the city was liable for $75k for the destruction of the house. The city appealed, arguing that the nuisance determination by the agency was res judicata. The court of appeals affirmed.
The Texas Supreme Court granted discretionary review, and affirmed. It concluded that it was not enough that the administrative process provided judicial review of the URSB's decision, since the reviewing court applied a very deferential "substantial evidence" standard of review. Thus, the agency's determination was not entitled to preclusive effect on Stewart's constutitonal claims, and she was entitled to have the jury determine those issues.
We won't detail the entire opinion, since it is well worth reading on your own. Here are some highlights:
- The court's discussion of inverse condemnation, beginning on page 6. The court concluded that an agency is unable to ultimately resolve such claims, which must be subject to judicial review. See slip op. at 9 ("We do not believe, however, that this matter of constitutional right may finally rest with a panel of citizens untrained in constitutional law.").
- The court acknowledged that the government's police power encompasses the city's power to abate nuisances. See slip op. at 10. However, even though the agency concluded that Stewart's house was a "nuisance" as defined by city ordinances, that does not obviate the need for more searching judicial review than the highly deferential "substantial evidence" standard. Slip op. at 11-12.
- The case was expressly decided under the takings and due process provisions of the Texas Constitution, thus insulating this case from further review, it appears. See slip op. at 17.
- The court recognized that a nuisance finding is a determination that a structure has no value, but asserted that like a board of commissioner's valuation determination in an eminent domain action, it should be reviewed under the de novo standard of review. Slip op. at 19-20 ("The nuisance finding is thus a value determination, like the value determination made by the board of commissioners in an eminent domain case. The board of commissioner’s value determination, of course, is subject to de novo review in a trial court; so, too, is the URSB’s value determination in this case.").
- The court rejected the city's request for rehearing, discounting the claims that its holding would open the floodgates to litigation and stop cities from abating nuisances. Slip op. at 26-28.
Here's the dissenting opinion of Justice Guzman. He argues that cities need the power of summary demolition to prevent blight and decay.
The briefs are posted here. Oral argument video here.
The San Antonio paper agreed with the dissent, as noted in its editorial "Court prizes property rights over common sense, " which argues "The court has overreached," even while acknowledging that, "[a]dmittedly, our own city has a fraught history of overzealous demolitions."
