Nothing to do with the case, beyond the owner's name.
But c'mon, its ABBA.
Ms. Money and her spouse own a home in San Marcos, Texas. That home is in a historic district.
But it turns out that some of that history isn't pretty: one of the previous owners was "notoriously associated with the Ku Klux Klan." Yikes. And to make it worse, that owner, a certain Frank Zimmerman, branded the home by installing a Juliet balcony with a big ol' wrought iron "Z" on the front of the house.
Very understandably, once they found out this detail (after they purchased the home), Ms. Money and her spouse wanted the Z gone. First the good news: although the home is in a historic district, the structure itself isn't historic. So there's that. But game not over, because even though it isn't historic, the home nonetheless is in the historic district, meaning that the city's code prohibits removing things like the "Z" without the city's permission, even where that Z was put there by a Klan guy .
So Money asked. No, sorry, said the city's Historic Preservation Commission: Klan guy or not, that Z is historic, and you can't take it down. Don't like that? Then you can appeal from the Commission to the Zoning Board of Adjustment under the city's code.
But "the Moneys concluded that an appeal would be futile." So they sued, asserting facial and as-applied physical takings claims under both the U.S. and Texas Constitutions. The city sought dismissal, on the grounds that the takings claim was not ripe because the city had not made a final decision; Money could appeal the Commission's denial to the ZBA. Seems like a legit argument, at least if you buy the theory that even though the Supreme Court has emphasized that you don't need to exhaust administrative remedies to ripen a federal takings claim, the government must have made a "final decision." Emphasis on the "final." The District Court agreed with the city and dismissed, and sua sponte threw in a 12(b)(6) dismissal for failure to state a claim for good measure.
In Money v. City of San Marcos, No. 24-50187 (Feb. 7, 2025), the U.S. Court of Appeals for the Fifth Circuit reversed. As the court framed it, the district court held the claim unripe because "these per se takings claims are not ripe because the Moneys did not appeal the Commission's denial to the Zoning Board, and therefore did not receive a final decision." Slip op. at 4-5. (Note: in the Fifth Circuit, the "final decision" requirement applies to all takings claims, physical and regulatory, unlike other circuits where the requirement does not apply to physical takings claims; the court here noted that rule makes little sense, but concluded in essence, "it's circuit precedent, so what the hell.")
This physical takings claim is ripe, held the court. The requirement is for finality, not exhaustion:
As for the as-applied challenge, the district court seems to have conflated finality with exhaustion. The Moneys received written notice that their “request for a Certificate of Appropriateness to allow the removal of the wrought iron Juliette balcony on the second story of the front façade was denied by the Historic Preservation Commission on May 4, 2023.” The notice informed them that applicants “may appeal a final decision of the Historic Preservation Commission on an application for a certificate of appropriateness to the Zoning Board of Adjustments within ten (10) days of the Historic Preservation Commission’s action on the application.” It also included instructions on how to submit this appeal. The Commission’s denial satisfied the finality requirement. The Moneys were not obligated to exhaust their remedies by filing an appeal. Their as-applied takings claim is also prudentially ripe.
Slip op. at 6.
The court declined to decide whether exhaustion is required to ripen a Texas constitutional takings claim. See slip op. at 7 ("Because appealing the Commission’s denial would not have mooted the Moneys’ Texas Constitution claims, we need not decide whether the caselaw requiring exhaustion would otherwise apply.").
As for the district court's sua sponte 12(b)(6) of the Money's federal physical takings claim? That went down too. The complaint alleged that by refusing to allow removal of the offensive "Z," the city required the Moneys to endure an unwanted physical occupation of their land. Relying as you might expect on Loretto, the court compared the situation there, and concluded this one is pretty much the same in all relevant aspects:
Here, the district court dismissed the Moneys’ as-applied per se takings claim after concluding that the alleged facts are governed by Penn Central, not Loretto. We disagree. We see no meaningful distinction between the allegations in the Moneys’ complaint and Loretto. Both here and there, a government ordinance prohibited a building owner from removing an object that was already attached to the exterior of his building when he purchased it. Likewise, both the Z and the cable equipment were installed at a former owner’s discretion, not pursuant to government action or regulation, but subsequently enacted public ordinances prohibited removal. The district court erred by sua sponte dismissing this claim under Rule 12(b)(6).
Slip op. at 10 (footnote omitted).
About the only thing about this opinion that we don't care for is that it is unpublished.
Too bad, it is worthy of being precedential.
Money v. City of San Marcos, No. 24-50187 (5th Cir. Feb. 7, 2025) (unpub.)
