Opposition Brief — Taub v. City of Deer Park

©

| BIBRED

No. 94-935

| DEC. 2 1 1894

IN OFFICE OF THE QUERK

Supreme Court Of The Anited States

OCTOBER TERM, 1994

HENRY J.N. TAUB,

Petitioner,

Vv a

CITY OF DEER PARK, TEXAS,

Respondent.

On Petition For Writ Of Certiorari To

The Supreme Court Of Texas

RESPONDENT'S BRIEF IN OPPOSITION

William A. Olson, Jr.

Olson & Olson

Three Allen Center, Suite 3485

333 Clay Street

Houston, Texas 77002

(713) 759-0696

Counsel of Record for Respondent

December 21, 1994

Alpha Law Brief Company © Houston, Texas © (713) 981-9000 © 1-800-981-9001

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TABLE OF CONTENTS

Page

pe FBS Bie er a eae i

TABLE OF AUTHORITIES .. = Tt re ee eee ii

STATERERNT GP THE CAG 6 icc oe cic eb cee |

REASONS WHY THE WRIT SHOULD

AR ee a OP Naar ei ae as 6

TABLE OF AUTHORITIES

Cases: Page

Agins v. City of Tiburon,

S67 U2. te, GD ce ceactv ar vesren 7,8

Armstrong v. United States,

ee U.S. Ge 2 e800 8a eae 7

First English Evangelical Lutheran Church

of Glendale v. City of Los Angeles,

Cae., GS UA Se ee nis ve ee ewes 7

Hadacheck v. Sebastian,

Rae a ee Ce 66 RN we ke dss 8

Keystone Bituminous Coal Ass’n v. DeBenedictis,

Cae SB. Grp Go heed eee ek 2D

Lucas v. South Carolina Coastal Council,

pame * ee S eeren ee 7

Penn Central Transportation Co. v. City

of New York, 438 U.S. 104 (1978) ....... 7,8

Pennsylvania Coal Co. v. Mahon,

Bee is ee en 6s Hb hee eae 7,8

Village of Euclid, Ohio v. Ambler Realty Co..,

See a a EE 4 Ree ee eR ee 8

No. 94-935

IN THE

Supreme Court of the United States

OCTOBER TERM, 1994

HENRY J.N. TAUB,

Petitioner,

Vv.

CITY OF DEER PARK, TEXAS,

Respondent.

On Petition For Writ Of Certiorari To

The Supreme Court Of Texas

RESPONDENT'S BRIEF IN OPPOSITION

Respondent, City of Deer Park, Texas, respectfully

requests that this Court deny the Petition for Writ of

Certiorari seeking review of the judgment in this case by the

Supreme Court of Texas. The opinion of the Supreme Court

of Texas is reported at 882 S.W. 2d 824 and is reprinted in

the appendices to the Petition for Writ of Certiorari.

STATEMENT OF THE CASE

Petitioner's statement of the case is misleading,

incomplete, and inaccurate. The following accurately reflects

the facts material to the Questions Presented in the petition.

Unless otherwise indicated, references are to the record in the

district (trial) court. "Tr." refers to the Transcript of the

record; "S.F." refers to the Statement of Facts; "Px.,"

"Dx.,” and "Jt. Ex.” refer to plaintiff's exhibits, defendant's

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exhibits, and joint exhibits, respectively. References to

"Pet." are to the Petition for Writ of Certiorari.

For clarity, Petitioner will be referred to as "Taub"

and Respondent will be referred to as "Deer Park" or "City."

The issue presented in this case is whether a Deer

Park zoning regulation restricting the use of Taub’s property

to single-family residential purposes constitutes an “economic

taking."

Taub was the owner of a 69.6684 acre tract of land

(hereinafter referred to as the "Tract") located within the

corporate limits of Deer Park. (S.F. Vol. 2, p. 106). His

family acquired the Tract in the 1930s. (S. F. Vol. 2,

p. 117). Taub acqvired his interest in the Tract through

inheritance. (S.F. Vol. 2, p. 106).

In 1978, Deer Park filed two eminent domain

proceedings to acquire certain portions of the Tract. The

City sought 2.4691 acres for street improvements and

another 14.5616 acres to construct a drainage ditch. Special

Commissioners were duly appointed, hearings were

conducted, and awards were made for the value of the

property taken and the damage to the remainder. Taub duly

filed objections to such awards and perfected an appeal.

(S.F. Vol. 3B, Jt. Ex. C).

Deer Park originally enacted a comprehensive plan

and zoning ordinance in 1963. In 1971, the City’s

comprehensive plan was updated and the current zoning

ordinance was enacted. The Tract is zoned single-family

residential under the provisions of such ordinance. (S.F.

Vol. 3B, Jt. Ex. A). The zoning classification of the Tract

remained single-family residential without dispute until 1980

when, prior to the trial of his appeal of the condemnation

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awards, Taub filed an application with the Planning and

Zoning Commission of Deer Park seeking to rezone the

Tract, including portions of the land sought to be condemned

by Deer Park, from single-family residential to multi-family

residential. (S.F. Vol. 4, Px. 7).

The Planning and Zoning Commission and City

Council timely conducted public hearings on Taub’s rezoning

application. In such hearings, Deer Park residents, as well

as City and school officials, strenuously objected to Taub’s

rezoning request. There was substantial testimony that

rezoning the Tract for multi-family residential use would

seriously impede Deer Park’s ability to provide adequate and

necessary City services. Directors of various City

departments agreed that multi-family housing on the Tract

would upset a well-planned comprehensive program for fire

and police protection, traffic control, water and sanitary

sewer services, and_ recreational facilities. The

superintendent of the Deer Park Independent School District

testified that the proposed rezoning would detrimentally alter

long-range planning for schools, building programs, bond

issues, and student education. Both the Planning and Zoning

Commission and the City Council voted unanimously to deny

Taub’s request. (S.F. Vol. 3B, Jt. Ex. B).

Taub then filed in district court his Original Petition

and Application for Temporary Restraining Order and

Temporary Injunction alleging that Deer Park’s refusal to

rezone his property from single-family residential to multi-

family residential was arbitrary, unreasonable, and

confiscatory because the restriction denied him the beneficial

use of his property, thus depriving him of such property

without due process of law and without just compensation.

(Tr. 6, 11). In such proceeding, Taub sought to enjoin the

filing of the awards in the condemnation proceedings,

thereby delaying the date of the taking until such time that

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the validity of the City’s denial of his rezoning request could

be determined. Taub asserted that if the denial of his

rezoning request were adjudged improper, he would be

entitled to valuation of a portion of the condemned tracts,

and any damage to the remainder, on the basis of their value

for multi-family residential purposes, which he alleged would

result in the Tract having a much higher value. (Tr. 10). The

condemnation proceedings filed by the City were transferred

to the district court and consolidated with Taub’s action.

(Tr. 71). The trial court found that rezoning the Tract from

single-family residential to multi-family residential would

seriously impede the City’s ability to provide necessary

services for the health, safety, and welfare of its citizens,

that Deer Park’s zoning regulations were not unreasonable or

arbitrary, that the City’s refusal to rezone the Tract was not

unreasonable or arbitrary, or confiscatory, and that the value

of the property condemned by Deer Park was $7,000 per

acre. (Tr. 166-169).

Taub does not challenge the legitimacy of the

governmental action in this case, nor does he contend that the

zoning regulation does not substantially advance legitimate

State interests. In fact, he admits that the City’s zoning

regulation was adopted to accomplish a legitimate goal and

that it is substantially related to public health, safety, and

general welfare. (Petitioner’s Application for Writ of Error

to the Supreme Court of Texas, p. 23). The gravamen of

Taub’s challenge is based on the argument that inclusion of

the Tract within the City’s single-family residential zoning

district is confiscatory and invalid because it denies him any

viable economic use of such property and therefore amounts

to an “economic taking."

In his Petition for Writ of Certiorari Taub represents,

as established fact, that the governmental action denied him

any viable economic use of the Tract. Neither the record in

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this case nor the findings of the courts below support this

representation.

The only evidence offered by Taub that the City’s

actions deprived him of any viable economic use of the Tract

consisted of an engineering study (S.F. Vol. 4, Px. 1) which

assumed Taub’s property would be developed into a

subdivision with a specified lot size, lot price, home size,

and home price range. The study concluded, based on such

assumption, that a single-family residential development on

the Tract would not be profitable. The study did not

consider alternative schemes for single-family residential

development, nor did it consider future prospects of

profitable development for such purposes. In other words,

the study was limited to a single development scenario from

a snapshot in time.

Additional evidence contradicts Taub’s assertion that

the City’s zoning restriction denied him any viable economic

use of the Tract. That evidence relates to the market value

of the Tract. It is uncontroverted that the Tract has

substantial market value. Taub testified that, in his opinion,

the Tract’s value for single-family residential purposes was

about $15,000 per acre. (S.F. Vol. 2, p. 112). Taub’s own

expert appraiser testified that the Tract had a fair market

value of $7,000 per acre. (S.F. Vol. 2, p. 84; S.F. Vol 4,

Px. 4). This valuation took into consideration the highest

and best use of the Tract as restricted by its single-family

residential zoning. (S.F. Vol. 4, Px. 4, p. 1-2). The

appraiser could not have determined such value without

concluding that the Tract could be profitably developed or

that its profitable development was anticipated.

Taub testified that he, and his family before him, held

the Tract simply as an investment. (S.F. Vol. 2, p. 130,

132). There is no evidence that he was in the real estate

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development business or that he had any intent or desire to

develop the Tract. It appears that he was interested in

rezoning the Tract to a multi-family residential classification

because of the potential increase in its market value, an

increase which would affect both the award in the

condemnation proceedings and the proceeds from any future

sale of the property.

The uncontroverted evidence in this case clearly

establishes, and the courts below found, that: (1) the City’s

land use regulation advances a legitimate state interest which

has a substantial relationship to public health, safety, morals,

and general welfare; and (2) the impact of the regulation did

not render Taub’s land useless or deprive him of all

economically beneficial use thereof. After weighing the

public and private interests involved, the Supreme Court of

Texas correctly concluded that Taub had failed to show a

sufficiently severe economic impact to establish an

"economic taking." (Pet. A-4).

REASONS WHY THE PETITION SHOULD BE DENIED

The Supreme Court of Texas followed the standards

promulgated by this Court in determining whether Deer

Park’s single-family residential zoning classification of the

Tract constitutes an “economic taking."

No "set formula” has been established to determine

whether or not a particular governmental regulation results

in an economic taking. Instead, this Court has preferred to

engage in essentially ad hoc, factual inquiries. Several

factors have particular significance in the determination of an

economic taking case: (1) the economic impact of the

regulation on the claimant and, particularly, the extent to

which the regulation has interfered with distinct investment-

backed expectations; and (2) the character of the

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governmental action. Penn Central Transportation Co. v.

City of New York, 438 U.S. 104 (1978).

The first inquiry should examine the extent of

economic impact on the claimant resulting from the

regulation and the legitimacy of the state interest. Generally,

if a zoning ordinance denies an owner all economically viable

use of his property, or does not substantially advance

legitimate state interests, it effects a taking. Lucas v. South

Carolina Coastal Council, U.S. _,112 S.Ct. 2886, 2894

(1992); Agins v. City of Tiburon, 447 U.S. 255, 260 (1980).

The leading cases which have held that takings

occurred as a result of economic impact have been based on

findings that the properties in issue were rendered wholly

useless or their values totally destroyed, thus denying all

economically beneficial or productive use of such properties.

Lucas; First English Evangelical Lutheran Church of

Glendale v. City of Los Angeles, Cal., 482 U.S. 304 (1987);

Armstrong v. United States, 364 U.S. 40 (1960);

Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922).

Property is rendered wholly useless when the governmental

regulation prohibits any use of the property or the regulation

is so burdensome that it has the effect of rendering the

property valueless. In Lucas and First English, the

governmental regulation actually prohibited any meaningful

use of the property. In Armstrong, the total value of the

property was destroyed. In Pennsylvania Coal, the

governmental regulation made use of the properties

impractical to the extent they were rendered useless for the

investment backed expectations of the owners.

Decisions sustaining land use regulations which are

reasonably related to the preservation and promotion of

general welfare uniformly reject the proposition that

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diminution in property value, standing alone, can establish a

taking. Penn Central, 438 U.S. at 131. See also Village of

Euclid, Ohio v. Ambler Realty Co., 272 U.S. 365 (1926)

(75% diminution in value) and Hadacheck v. Sebastian, 239

U.S. 394 (1915) (92.5% diminution in value). Absent a

finding that the governmental regulation does not

substantially advance legitimate state interests or that it

denies an owner all economically viable use of his property,

the question of whether the governmental action constitutes

a taking requires a weighing of public and private interests.

In those situations where a zoning regulation substantially

advances legitimate governmental goals, the benefits to the

public must be considered along with any diminution in

market value that the property owner might suffer. Agins,

447 U.S. at 261-262. The determination of whether a taking

occurs requires an ad hoc, factual inquiry into the character

and legitimacy of the governmental action weighed against

the extent of diminution in value. Agins; Penn Central;

Pennsylania Coal. Such a balancing is required in this case.

These standards for review in an economic taking

case are precisely the standards followed by the Supreme

Court of Texas in rendering its decision in this case. The

court recognized that "[A]n act short of actual physical

invasion, appropriation, or occupancy can amount to a

compensable taking when a government agency has imposed

restrictions that constitute an unreasonable interference with

the landowner’s right to use and enjoy the property.". (Pet.

A-3). The court’s first inquiry examined the extent of

economic impact Deer Park’s zoning regulation had on

Taub’s Tract. It recognized the importance of the

consideration of whether Taub’s property had been rendered

wholly useless or whether its value had been totally

destroyed, noting that total destruction by the government of

all value is a taking. (Pet. A-3). However, the court found

that “Taub’s land is not rendered completely useless or

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deprived of all economically beneficial use."' (Pet. A-4).

The court then properly weighed the character of the

governmental action and its uncontested legitimacy against

the economic impact of such action cn Taub’s Tract. It’s

conclusion was that Taub failed to show, under the

circumstances of this case, a sufficiently severe economic

impact to constitute a taking (Pet. A-4).

In this case, Taub failed to show any deprivation

significant enough to Satisfy the heavy burden placed upon

one alleging a regulatory taking. Keystone Bituminous Coal

Ass'n v. DeBenedictis, 480 U.S. 470 (1987).

The hypothesis of Taub’s argument that the holdings

of the Supreme Court of Texas conflict with applicable

standards established by this Court, and that such holdings

were in error, is predicated on the assumption that Deer

Park’s zoning ordinance denies him all economically

beneficial use of his property. Taub’s assumption is contrary

to the evidence presented in this case and to the findings of

the courts below.

The only evidence presented by Taub regarding the

economic impact of the City’s zoning restriction was an

engineering study. The Study was limited in scope, and its

opinion regarding profitability was drawn from a narrowly

defined scheme of single-family residential development

which considered only economic conditions existing at the

point in time of such study. The study failed to consider

both future prospects for profitable development of the Tract

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for single-family residential purposes or alternative single-

family development schemes.

The determination of economic impact must include

time as a factor; it cannot be validly judged from a snapshot

in time. If such were the case, the impact of each and every

zoning action would be measured by temporary economic

conditions only, without regard to factors realistically

affecting profitability which are totally unrelated to the

zoning regulation. With or without zoning, temporary

market conditions frequently make property unsuitable for

immediate development. Surely there are thousands of zoned

tracts of land in this country which are not subject to

profitable development at this moment; however, each may

have substantial value based upon reasonably anticipated

changes in economic conditions or other market factors.

Such anticipated changes might include simple upward turns

in the local or national economies or something more

definite, such as the extension of roadway or drainage

systems, or water or sewer facilities, the development of

adjacent or neighboring properties, or demand resulting from

the influx of population. Under such circumstances the

properties maintain substantial value because of the

reasonable anticipation of their future profitable development.

In addition, Taub offered no evidence of profitability

using alternative development schemes.? The demand for

housing is not fixed to a particular lot size or price range.

The market for housing may include a wide range of

? Taub’s statement in footnote 6 on page 6 of his Petition that "[A]ll other

possibilities were considered and rejected as being even less productive"

is inaccurate. There was no evidence presented at trial to that effect nor

was there any evidence presented which would support the conclusion

that no alternative single-family residential development scenario would

be profitable.

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development schemes, with innumerable alternatives. No

evidence of the profitability of any other market than that

contained in the limited engineering study was offered.

When undeveloped Property is involved, a precise

indicator of the economic impact of a land use restriction is

its effect on the property’s fair market value. In this case,

there was no value established before the imposition of the

zoning restriction. There is, however, proof as to the

Tract’s value at the time of the alleged taking. That proof is

the uncontroverted evidence that Taub’s Tract has a

substantial value. Taub’s own expert appraiser testified that

the Tract had a fair market value of $7,000 per acre. His

valuation of the Tract took into consideration that its use was

restricted by Deer Park’s zoning ordinance to single-family

residential purposes. In arriving at such value, the appraiser

had to conclude that it could either be profitably developed

or that its profitable development was reasonably anticipated.

Clearly, this evidence establishes that Taub’s Tract has a

substantial economically beneficial use.

Taub’s proof regarding the profitability of

development of the Tract for single-family residential

Purposes was inadequate to establish that such zoning denied

him all economically beneficial use of his property. Such

was the holding in the courts below.

There was no finding of fact by the trial court that the

Tract could not be profitably developed as single-family

residential, nor was there a finding that the City’s zoning

Classification, or refusal to rezone, denied Taub all

economically beneficial use of the Tract. (Tr. 161). To the

contrary, the trial court found that Taub’s Tract was suitable

for use as single-family residential, that the City’s zoning

ordinance was not unreasonable or arbitrary, and that the

refusal to rezone the Tract to multi-family residential was not

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confiscatory. (Tr. 168-169; Pet. D-4). The Texas Court of

Appeals concluded that Taub’s evidence was insufficient to

prove, as a matter of law, that any single-family residential

development would not be economically feasible (Pet. B-4),

and the Supreme Court of Texas concluded that Taub had not

been deprived of all economically beneficial use of his

property. (Pet. A-4).

The evidence is clear and uncontroverted that Taub

held the Tract for investment purposes, and that under a

single-family zoning classification it had a substantial value

of at least $7,000 per acre. Considering Taub’s investment-

backed expectations, and the character and legitimacy of the

governmental action involved, the economic impact of the

City’s single-family residential zoning classification clearly

does not reach the threshold necessary to establish an

economic taking.

Neither the decision below nor the record of this case

raise the Questions Presented in the petition. The standards

for review of an economic taking case established by this

Court are the standards precisely followed by the Supreme

Court of Texas in this case. The record clearly establishes

that the City’s zoning regulation was adopted to accomplish

a legitimate goal and that it is substantially related to public

health, safety, and general welfare. It is equally clear that

Deer Park’s zoning regulation has not denied Taub the

economically beneficial use of his property. To the contrary,

the undisputed evidence establishes that Taub’s Tract has

substantial value and, considering his expected use of it as an

investment, a substantial economically beneficial use. The

Supreme Court of Texas weighed the character of the

governmental action, and the economic impact of such action

on the property affected, and correctly concluded under the

circumstances of this case that Taub had failed to establish a

sufficiently severe economic impact to establish a taking.

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The application of standards Clearly established by

this Court to the record in this case results in the

unmistakable conclusion that Deer Park’s zoning regulations

do not effect an " econom’- taking" of Taub’s Tract. The

opinion of the Supreme Court of Texas is clearly in harmony

with the jurisprudence of this Court. This case presents no

issue of law undecided by this Court.

CONCLUSION

For the foregoing reasons, the petition for writ of

certiorari should be denied.

Respectfully Submitted,

William A. Olson, Jr.

Olson & Olson

Three Allen Center, Suite 3485

333 Clay Street

Houston, Texas 77002

Telephone: (713) 759-0696

Counsel of Record for Respondent