

Opinion issued May 12, 2011

In The
Court of
Appeals
For The
First District
of Texas
————————————
NO. 01-09-00946-CV
———————————
Garrett Operators,
Inc. and George Thomas Cox, Appellants
V.
The City of Houston, Appellee

 

 
On
Appeal from the County Civil Court at Law No. 4
Harris
County, Texas

Trial Court Case No. 930539
 

 
O P I
N I O N
Appellants Garrett Operators, Inc. and
George Thomas Cox appeal the trial court’s grant of appellee City of Houston’s
plea to the jurisdiction on all of appellants’ claims and of the City of
Houston’s objections to appellants’ discovery requests and deposition notice.  In five issues, appellants argue the trial
court erred by (1) dismissing Garrett Operators’ inverse condemnation claim; (2)
dismissing Garrett Operators’ declaratory judgment action; (3) dismissing
Garrett Operators’ and Cox’s section 1983 claims; (4) dismissing Garrett
Operators’ and Cox’s due course of law claims; (5) quashing Garrett Operators’
deposition of the City; and (6) sustaining the City of Houston’s objections to
39 of Garrett Operators’ requests for production.
We affirm.
                                                                                                                                                                
Background
Garrett Operators holds a lease on a small parcel of land
located in Houston, Texas.  The only
significant structure on this parcel of land is an advertising billboard.  George Thomas Cox is the sole owner of
Garrett Operators.
Cox met with Susan Luycx, division manager of the Houston Sign
Administration, in January 2008 to discuss Cox’s plans to install an LED
display on his billboard.  According to
Cox’s affidavit, Luycx informed Cox that it was “illegal in the City of Houston
for sign owners to use an LED display on a sign.”  Cox told Luycx that the Sign Code did not
mention LED lighting, to which Luycx responded that “we are likely to change
the sign code.”
Subsequently, Garrett Operators’ counsel sent a letter to
Luycx describing the proposed installation and asserting that the Sign Code
does not require a permit for the installation. 
Luycx responded, stating that “although your client has yet to formalize
his intentions with this office, and based solely on the information currently
available to us, your client’s proposal contravenes and would be in direct
violation of the City’s Sign Code.”
On July 12, 2008, Garrett Operators attempted to install
the LED display on his billboard.  Before
work began, however, Luycx appeared and issued a stop order on the work.  The basis given for the stop order was “No
permits on file.  No permits on
site.  Permits are required to chance
structure of sign.  (L.E.D. boards were
being added.)”
On December 5, 2008, Garrett Operators and Cox filed suit against
the City of Houston in a Harris County civil court at law.  They asserted claims for inverse
condemnation, declaratory judgment, violation of section 1983 of title 42 of
the United States Code, and violation of their state constitutional due course
of law rights.  On December 10, 2008, the
City of Houston enacted an ordinance that amended the Houston Sign Code to explicitly
prohibit “off-premise electronic signs,” a category into which Garrett
Operators’ sign falls.  Plaintiffs
subsequently amended their petition, including in their declaratory judgment
action a claim that the 2008 amendments to the Sign Code did not apply to them.
The City of Houston filed a plea to the jurisdiction
arguing, among other things, the inverse condemnation claim was not ripe and
that the other claims were outside the legislatively prescribed subject-matter
jurisdiction of the court.  The trial
court granted the plea to the jurisdiction on each of Plaintiffs’ claims,
dismissing the suit.  Prior to that,
however, the trial court quashed a deposition notice and sustained the City of
Houston’s objections to certain discovery requests.
                                                                                                                                           
Plea to the Jurisdiction
In their first four issues, Garrett Operators and Cox
argue that the trial court erred by granting the City of Houston’s plea to the
jurisdiction on all of their claims.
A.              
Standard of Review and Applicable Law
A plea to the jurisdiction challenges the trial court’s
subject-matter jurisdiction.  Tex. Dep’t of Parks & Wildlife v.
Miranda, 133 S.W.3d 217, 225–26 (Tex. 2004).  Because subject-matter jurisdiction is a
question of law, we review de novo a trial court’s ruling on a plea to the
jurisdiction.  State v. Holland, 221 S.W.3d 639, 642 (Tex. 2007).
The plaintiff bears the initial burden of alleging facts
that affirmatively demonstrate that the trial court has subject-matter
jurisdiction over a case.  Tex. Ass’n of Bus. v. Tex. Air Control Bd.,
852 S.W.2d 440, 446 (Tex. 1993).  When a
plea to the jurisdiction challenges the sufficiency of plaintiff’s pleadings to
confer jurisdiction, we determine whether the pleader has alleged facts that
affirmatively demonstrate the court’s jurisdiction to hear the cause.  See
Miranda, 133 S.W.3d at 226.  We
construe the pleadings liberally in favor of the plaintiff and look to the
pleader’s intent.  Id.  If the pleadings
affirmatively negate the existence of jurisdiction, then a plea to the
jurisdiction may be granted without allowing the plaintiff an opportunity to
amend its petition.  Id. at 227.  Otherwise, if
the pleadings do not affirmatively demonstrate the trial court’s jurisdiction,
the plaintiff should be afforded the opportunity to amend its petition.  Id.
at 226–27.
B.              
Analysis
Garrett Operators brought four causes of action against
the City of Houston: (1) an inverse condemnation claim; (2) a declaratory
judgment action; (3) a federal section 1983 claim; and (4) a state due course
of law claim.  Cox joined the federal
section 1983 and state due course of law claims but not the inverse condemnation
claim or the declaratory-judgment actions. 

1.                
Inverse Condemnation Claim
Garrett Operators brought an inverse condemnation claim
based on a regulatory taking under the Texas Constitution.  See
Tex. Const. art I, § 17.  County civil courts at law in Harris County
have exclusive jurisdiction over eminent domain proceedings, including claims
for inverse condemnation.  Tex. Gov’t Code Ann. § 25.1032(c)
(Vernon 2004).
The City of Houston argued in its plea to the jurisdiction
that Garrett Operators failed to allege any element of a regulatory takings
claim.  The City of Houston also argued
that the trial court lacks subject-matter jurisdiction because Garrett
Operators’ inverse condemnation claim is not ripe.  
We first address the City of Houston’s ripeness
claim.  The City of Houston argues that Garrett
Operators’ inverse condemnation claim is not ripe due to Garrett Operators’ alleged
failure to obtain a final decision.  Ripeness is a threshold
issue that implicates subject-matter jurisdiction.  Patterson v. Planned Parenthood of Houston
& SE Tex., Inc., 971 S.W.2d 439, 442 (Tex. 1998).  While the jurisdictional issue of standing
focuses on who may bring an action, ripeness focuses on when that action may be
brought.  Waco Indep. Sch. Dist. v.
Gibson, 22 S.W.3d 849, 851 (Tex. 2000).
The City of Houston relies on the Texas Supreme Court’s
opinion in Mayhew in support of its
ripeness claim.  See Mayhew v. Town of Sunnyvale, 964 S.W.2d 922 (Tex. 1998).  In Mayhew,
the Texas Supreme Court held, “in order for a regulatory takings claim to be
ripe, there must be a final decision regarding the application of the regulations
to the property at issue.”  Id. at 929.  In that case, the takings claim concerned
zoning restrictions.  Id. at 926.  The court held, for zoning takings claims,
“futile variance requests or re-applications are not required.”  Id.
at 929.  The City of Houston argues that,
because Garrett Operators did not appeal “the issuance of the Stop Order to the
City’s General Appeals Board and then to City Council,” it has failed to
exhaust its administrative remedies.
The requirement of a final decision and the question of
exhaustion of administrative remedies, however, are distinct and separate
inquiries.  Maguire Oil Co. v. City of Houston, 243 S.W.3d 714, 718–19 (Tex.
App.—Houston [14th Dist.] 2007, pet. denied). 
The requirement of a final decision, in context of an inverse
condemnation case, concerns whether the governmental entity charged with
implementing the regulation that allegedly caused the taking has fixed some
legal relationship between the parties.  Texas-New Mexico Power Co. v. Tex. Indust. Energy
Consumers, 806 S.W.2d 230, 232 (Tex. 1991). 
In contrast, exhaustion of administrative remedies concerns whether an
agency has exclusive jurisdiction in making an initial determination on the
matter in question and whether the plaintiff has exhausted all required
administrative remedies before filing a claim in the trial court.  See In
re Entergy Corp., 142 S.W.3d 316, 321–22 (Tex. 2004).
We determine first, then, whether there is a final
decision by the City of Houston.  While
there is no single rule that controls all questions of finality, at the very
least, a decision by an agency is final if it is (1) definitive; (2)
promulgated in a formal manner; and (3) one with which the agency expects
compliance.  Texas-New Mexico Power Co., 806 S.W.2d at 232.  Otherwise, “[a]dministrative orders are
generally final and appealable if ‘they impose an obligation, deny a right or
fix some legal relationship as a consummation of the administrative
process.’”  Id. (quoting Sierra Club v.
United States Nuclear Regulatory Comm’n, 862 F.2d 222, 224 (9th Cir.
1988)).
To determine whether there has been a final decision, we
must compare the complaints presented by Garrett Operators to actions taken by
the City of Houston to determine whether the City of Houston has made a final
decision concerning Garrett Operators’ complaints.  The arguments underlying both Garrett
Operators’ inverse condemnation claim and declaratory judgment action are (1)
the Sign Code permitted installation of the LED display on its billboard; (2) a
permit was not required for the installation; and (3) if it is not allowed to
install the LED display, the restriction constitutes a regulatory taking for
which it has not been paid.  
Cox met with Luycx, division manager of the Houston Sign Administration,
in January 2008 to discuss Cox’s plans to install the LED display.  According to Cox’s affidavit, Luycx informed
Cox that it was “illegal in the City of Houston for sign owners to use an LED
display on a sign.”  Cox told Luycx that
the Sign Code did not mention LED lighting, to which Luycx responded that “we
are likely to change the sign code.”
Subsequently, Garrett Operators’ counsel sent a letter to Luycx
describing the proposed installation and asserting that the Sign Code does not
require a permit for the installation.  Luycx
responded, stating that “although your client has yet to formalize his
intentions with this office, and based solely on the information currently
available to us, your client’s proposal contravenes and would be in direct
violation of the City’s Sign Code.”
On July 12, 2008, Garrett Operators attempted to install
the LED display on his sign.  Before work
began, however, Luycx appeared and issued a stop order on the work.  The basis given for the stop order was “No
permits on file.  No permits on
site.  Permits are required to chance
structure of sign.  (L.E.D. boards were
being added.)”
We do not consider Cox’s meeting with Luycx to be a “final
decision.”  Nothing was promulgated in a
formal manner and there is no indication that the agency expected compliance
after the conversation.  See Texas-New Mexico Power Co., 806
S.W.2d at 232.  Similarly, there is no
indication that the conversation fixed a legal relationship between the
parties.  See id.  
The subsequent letter from Luycx explicitly stated that
Garrett Operators had not “formalize[d] his intentions with” the Sign
Administration and that it was basing its decision only on the facts as they
had been presented in an earlier letter. 
We interpret this language as specifically excluding a final decision by
the Sign Administration.  It was,
instead, responding to an informal inquiry based on a hypothetical set of
facts.
On, July 12, 2008, however, Luycx appeared and issued a
stop order preventing Garrett Operators from installing the LED display.  The reason given was that Garrett Operators
had not obtained a permit.  This is a
final decision for the question of whether Garrett Operators was required to
obtain a permit to install the LED display. 
The stop order is (1) definitive; (2) promulgated in a formal manner;
and (3) one with which the Sign Administration expects compliance.  See id.  It is not a final decision, however, for the
question of whether an LED display could be installed at all—that is, whether the
LED display could be installed upon proper application for a permit.  Accordingly, nothing in the record reflects
that there has been a final decision regarding whether an LED display could be
installed at all.
We do not need to address whether Garrett Operators was
required to exhaust his administrative remedies before bringing suit on the
stop order because, even without such a requirement, Garrett Operators cannot
maintain a takings claim based on the argument that he has suffered a
regulatory taking simply because he is not allowed to take a certain action
without a permit.  See Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Planning Agency,
535 U.S. 302, 337, 122 S. Ct. 1465, 1486 (2002) (excluding “normal delays
associated with processing permits” from takings claims).  When a plaintiff does not allege a valid
inverse condemnation claim, governmental immunity applies, and the trial court
should grant a plea to the jurisdiction. 
TCI West End, Inc. v. City of
Dallas, 274 S.W.3d 913, 916 (Tex. App.—Dallas 2008, no pet.).  We hold, viewing the facts asserted by Garrett
Operators in its petition in the light most favorable to it, Garrett Operators
cannot maintain a takings claim against the City of Houston based on the claim
that the City of Houston prohibited installation of an LED display without a
permit.[1]
We overrule appellants’ first issue.
2.                
Plaintiffs’ other causes of action
Garrett Operators seeks a declaratory judgment that nothing
in the Sign Code, as it existed at the time that Garrett Operators sought to
install the LED display and at the time that Garrett Operators brought suit, “allowed
the City to interfere with Garrett’s upgrading its existing,
lawfully-permitted, off-premise Sign with LED lighting.”  In conjunction, Garrett Operators also seeks a
declaration from the trial court that the amendments to the Sign Code that were
approved after suit was filed do not retroactively apply to Garrett or in any
other way affect his claimed then-existing right to install the LED display.
Appellants’ primary argument for why the county court has
jurisdiction over their remaining causes of action is their claim that Harris
County civil courts at law have jurisdiction over claims that are inherently
intertwined in an eminent domain proceeding, citing Taub v. Aquila SW Pipeline Corp., 93 S.W.3d 451, 458 (Tex.
App.—Houston [14th Dist.] 2002, no pet.). 
Because we have affirmed the dismissal of Garrett Operators’ takings
claim, this argument is no longer available to Appellants.
In West, the
owner of a beauty shop brought a declaratory judgment action in a county court
at law asserting that a certain statutory act requiring special compensation
applied to the City of Beaumont’s intended condemnation of a portion of her
property.  City of Beaumont v. West, 484 S.W.2d 789, 790–91 (Tex.
App.—Beaumont 1972, writ ref’d n.r.e.). 
As a part of her suit, the trial court granted her injunction
prohibiting the City of Beaumont from bringing a condemnation proceeding until
after her declaratory judgment action had been resolved.  Id.
at 790.  The Beaumont Court of Appeals
noted that the county court at law would have had jurisdiction over the
condemnation proceeding.  Id. at 792.  The court held, however, that this “potential
jurisdiction” was not sufficient to confer jurisdiction on the county court at
law for the declaratory judgment action. 
Id.  at 792–93.
We agree with the analysis in West.  Accordingly, we hold
that, because the trial court properly dismissed Garrett Operators’ inverse
condemnation claim for lack of subject-matter jurisdiction, the county court at
law’s jurisdiction could not be invoked over the remaining claims by being
“inherently intertwined” with the inverse condemnation claim.
The Declaratory Judgment Act does not itself confer
jurisdiction.  Tex. Natural Res. Conservation Comm’n v. IT–Davy, 74 S.W.3d 849,
855 (Tex. 2002).  Garrett Operators
argues that the Texas legislature has expressly allowed disputes over statutory
construction of city regulations to be resolved in a declaratory judgment
action.  See Tex. Loc. Gov’t Code
Ann. §§ 245.002(a), .006(a) (Vernon 2005).  Assuming without deciding that this is a correct
interpretation of the relevant statutes, this still does not confer
jurisdiction on the county court at law. 
County courts at law are courts of limited jurisdiction.  United
Servs. Auto. Ass’n v. Brite, 215 S.W.3d 400, 401 (Tex. 2007).  Declaratory judgment actions are not generally
within the jurisdiction of Harris County civil courts at law, absent some proof
that the subject matter of the declaratory judgment action is one within the court’s
jurisdictional limits.  See Medina v. Benkiser, 262 S.W.3d 25,
28 (Tex. App.—Houston [1st Dist.] 2008, no pet.) (affirming dismissal when
petition did not demonstrate declaratory judgment action was within county
court’s jurisdiction); West, 484
S.W.2d at 793 (same).  That proof is
lacking here.
Appellants brought a section 1983 claim against the City
of Houston, asserting that they had been damaged in the amount of
$5,000,000.  This claim alone is well
outside the county court’s jurisdictional limits based on the amount in
controversy.  See Tex. Gov’t Code Ann.
§ 25.0003(c)(1) (Vernon Supp. 2011) (providing jurisdictional limits for
statutory county courts at law based on amount in controversy).
Finally, Appellants brought a due course of law claim,
asserting $69,000,000 in damages.  The
trial court ruled that monetary damages are not available for this claim, and
Appellants concede this point on appeal. 
Appellants argue, however, that they did plead a request for injunctive
relief and claim that this is a permissible remedy under their claim.  Assuming without deciding that Appellants’
request for injunctive relief included relief for their due course of law
claim, this still does not confer jurisdiction on the county court.  The statute conferring jurisdiction on
statutory county courts at law based on amount in controversy has both a
minimum and maximum limit.  Id. 
This cause of action suffers from the same problem as Garrett Operators’
declaratory judgment action: the claim is outside the county court’s
jurisdictional limits based on amount in controversy—because there is no amount
in controversy—and no other statutory provision confers jurisdiction for due
course of law claims on Harris County civil courts at law.  See Medina,
262 S.W.3d at 28; West, 484 S.W.2d at
793.
We overrule Appellants’ second, third, and fourth issues.[2]
                                                                                                                                                                   
Conclusion
We affirm the judgment of the trial court.
 
                                                                   Laura
C. Higley
                                                                   Justice

 
Panel consists of Justices Jennings, Higley, and Brown.
 




[1]           To be clear, we make no determination in this holding on
Garrett Operators’ claim in its declaratory judgment action that it was not
required to obtain a permit.  Garrett
Operators’ inverse condemnation was pleaded in the alternative to the
declaratory judgment action and, accordingly, presumes that he was required to
obtain a permit.  We hold only that this
alternative takings claim cannot be maintained.


[2]           Plaintiffs correctly acknowledge that their last issue on
appeal, concerning the trial court’s rulings on certain discovery related
matters, can only be reached if the trial court had jurisdiction over any of
their claims.  Because we have held that
the trial court lacked jurisdiction over any of Plaintiffs’ claims, we overrule
their last issue.


