Opposition Brief — Rischon Development Development Development Corp. v. City of Keller, Texas (No. 08-291)

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IN THE FFICE OF TH

Supreme Court of the United States

RISCHON DEVELOPMENT CORPORATION,

Petitioner,

v,

CITY OF KELLER, TEXAS,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

Court oF APPEALS FOR THE SECOND District oF TEXAS

AT Fort Worth, TEXAS

BRIEF IN OPPOSITION

L. STANTON Lowry S.G. JOHNDROE III,

Douc tas H. Connor, III Counsel of Record

MICHAEL K. KALLas Scott A. FREDRICKS

Boye & Lowry, L.L.P Mary H. BARKLEY

4201 Wingren CaNnTEY HanceR LLP

Suite 108 600 West 6“ Street

Irving, Texas 75062 Suite 300

(972) 650-7100 Fort Worth, Texas 76102

(817) 877-2800

Attorneys for Respondent

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COUNSEL PRESS

(800) 274-3321 + (800) 359-6559

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TABLE OF CONTENTS

Page

TABLE OF CITED AUTHORITIES ......... ii

STATEMENT OF JURISDICTION .......... 1

STATEMENT OF THE CASE ............... 2

REASONS FOR DENYING THE PETITION

A. Rischon failed to present or preserve the

federal questions raised by its petition for

I er EE hha sek che ese teen cdan 5

B. There is no “safe-harbor” in conflict with

this Court’s decisions in Nollan and

Dolan created by the Fort Worth Court

ME PE GR, oon k's cass vacwccccss 7

C. The Fort Worth Court of Appeals did not

modify or reverse the trial court’s

conclusions of law but simply and

permissibly construed the findings and

conclusions to be in harmony with the

EA rr any et ee 11

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TABLE OF CITED AUTHORITIES

Page

Cases:

Adams v. Robertson,

520 U.S. 8B (1997) 2... cence Poor ere 5

Bd. of Dirs. of Rotary Intl

v. Rotary Club of Duarte,

481 Uh Ge re eee baw dads ivess 5

BMC Software Belgium, N.V. v. Marchand,

83S. W.SG THD CHM: MD cece sce venccceces 13

Brown v. Frontier Theatres, Inc.,

SB9 S. WZ ZO CHOR. BOO) occa ceccccencsess 12

Dolan v. City of Tigard,

SiS Ue: FIG Gee ea Saba ceavisees 4, 7,9, 14

In re Humphreys,

88 S.W.2d 402 (Tex. 1994), cert. denied,

SiS Uo a ee he oi ee es ccesis. 13

Lone Star Cement Corp. v. Fair,

467 S. WB GE Cees BOTE) bai wise cecsccasss 12

Loretto v. Teleprompter Manhattan CATV Corp.,

456 U.S. GED Gomer aw eae kh Cha eck incense. 9, 10

Mayhew v. Town of Sunnyvale,

964 S.W.2d 922 (Tex. 1998), cert. denied,

52GB U.S. LEGG Cie awk whe Sk w a cece cacess 13

ii

Cited Authorities

Page

Nollan v. California Coastal Comm'n,

DE Sr eer eee re 7,9,14

Rischon Dev. Corp. v. City of Keller,

242 S.W.3d 161 (Tex. App. — Fort Worth 2007,

EE te Css vi wwaNenakows ens 1, 3, 6, 7, 9,12

Suburu of Am., Inc.

v. David McDavid Nissan, Inc.,

BG TS, Weed Bim CLO, DOU) on ccc cc sccccsccses 13

Webb v. Webb,

Se ED 2s 6 o's.0 esos uencasnekmewas 5

Statutes:

ee irc coy ue nk i anee sauna eben l

Constitutional Provisions:

Re, SI Ee ig wk uk seaeec exekees 2,8

United States Constitution:

en i eck cckanek 1, 2, 3, 10

Fourteenth Amendment ........ 1, 3, 10, 11, 18, 14

]

STATEMENT OF JURISDICTION

The United States Supreme Court lacks jurisdiction

over this proceeding under 28 U.S.C. § 1257(a) because

Rischon failed to raise or preserve any rights under the

United States Constitution. As noted by the Fort Worth

Court of Appeals:

Although Rischon contends in its first and

second issue statements that it established a

taking “under federal law,” nowhere in its brief

does it cite or even mention the federal

constitution; nor did it allege a taking under

the federal constitution in its trial court

pleadings. And in a trial court brief, Rischon

specifically stated, “(W]e are in fact litigating

based upon the Texas Constitution ... .”

Therefore, we construe Rischon’s claims to

allege a taking under the Texas constitution

only.

Rischon Dev. Corp. v. City of Keller, 242 S.W.3d 161,

167 n.2 (Tex. App.—Fort Worth 2007, pet. denied). Quite

simply, Rischon never pursued claims under the United

States Constitution and none of the state courts

rendered any judgment or opinion on any question of

federal law. The Fifth and Fourteenth Amendments of

the United States Constitution are conspicuously absent

from the trial and appellate pleadings filed by Rischon

prior to its petition for writ of certiorari to this Court.

BS

2

STATEMENT OF THE CASE

This inverse condemnation case was decided under

the Texas Constitution’s provision that “[nJo person’s

property shall be taken . . . unless by the consent of

such person.” Tex. Const. art. I, § 17. Rischon attempts

for the first time at this stage to make this a “federal

case.” Rischon, who desired to develop a 19 acre tract

within the City of Keller, Texas, brought this suit

challenging the application of the City’s development

regulations under Texas law. The trial court and Court

of Appeals determined that Rischon consented to the

regulations and therefore was not entitled to

compensation. Rischon’s statement of the case misstates

and omits key portions of the factual and procedural

record of this case.

First, Rischon states that its Fifth Amendment

arguments were “discussed extensively at the trial court

level” (Petition at 15) and in its appellate briefs (Petition

at 15-18). This is a misstatement of the record. Rischon’s

live pleadings in the trial court simply challenged the

City of Keller’s development regulations as being “in

violation of the laws of Texas and the Texas

Constitution.” (CR 39; Rischon’s First Amended Original

Petition, p. 11.) Rejecting Rischon’s attempt to inject a

federal question for the first time at the appellate level,

the Court of Appeals stated:

{[N]jowhere in its brief does it cite or even

mention the federal constitution; nor did it

allege a taking under the federal constitution

in its trial court pleadings. And in a trial

court brief, Rischon specifically stated,

3

“(We are in fact litigating based upon the Texas

Constitution. . . .”

Rischon Dev. Corp. v. City of Keller, 242 S.W3d 161, 167

n.2 (Tex. App.—Fort Worth 2007, pet. denied). Accordingly,

neither the trial court nor the Court of Appeals considered

the Fifth or Fourteenth Amendment issues presented to

this Court. Rather, the judgment of the trial court and

opinion of the Court of Appeals rest entirely on the

interpretation and application of the takings clause of the

Texas Constitution.

Second, Rischon omits mentioning in its petition that

the trial court made extensive factual findings that Rischon

“proposed,” “consented to,” “did not object to,” and

“agreed” to each of the complained of requirements.

(Pet. App. 1; Supp. CR 4; Trial Court’s Findings of Fact

Nos. 8, 9, 10, 11, 14, 17, 26; Concls. of Law Nos. 5, 6.) See

Rischon Dev. Corp., 242 S.W.3d at 163-166. Rischon chose

not to challenge a single one of these factual findings of

consent and agreement made by the trial court. Rischon

Dew. Corp., 242 S.W.3d at 166 and 169. Accordingly, the

Court of Appeals concluded that “by proposing, adopting

without objection, or agreeing in the Developer’s

Agreement without objection to all of the Rolling Wood

‘requirements,’ Rischon consented to those requirements.”

Id. at 169.

Rischon also omits the fact that it did not even

purchase the property until after six of the eight so-called

“requirements/exactions” had already been imposed on

the property at its request or agreement. The Court of

Appeals recognized that this defect could deprive Rischon

of standing to challenge these particular requirements.

Rischon Dev. Corp., 242 S.W.3d at 166.n.1.

4

Finally, Rischon ignores the evidence presented to

the trial court establishing that each requirement

satisfied both the “essential nexus” and “rough

proportionality” requirements of the very federal cases

it invokes. In fact, Rischon did not even appeal the trial

court’s conclusion that each of the requirements

substantially advanced legitimate government interests.

As for the rough proportionality test of Dolan v. City of

Tigard, 512 U.S. 374, 391 (1994), the trial court heard

testimony from numerous witnesses of the impact the

proposed development would have on city parks, city

roads, city utility lines, and public safety thereby

necessitating each of the requirements essential for

Rischon’s development. The trial court concluded that

the City cleared the constitutional hurdle set forth in

this Court’s decisions as adopted into the takings '

jurisprudence of the Texas Constitution.

The opinion of the Court of Appeals sets forth in

more detail the factual and procedural background and

is hereby incorporated by reference.

5

REASONS FOR DENYING THE PETITION

A. Rischon failed to present or preserve the federal

questions raised by its petition for writ of

certiorari.

The jurisdiction of this Court to re-examine the final

judgment of a state court can arise only if the record as

a whole shows either expressly or by clear implication

that the federal claim was adequately presented in the

state system. Webb v. Webb, 451 U.S. 493, 496 (1981). At

a minimum, there should be no doubt from the record

that a claim under a federal statute or the Federal

Constitution was presented in the state courts and that

those courts were apprised of the nature or substance

of the federal claim at the time and in the manner

required by the state law. Jd. at 501. The mere citation

to federal case law in a state court petition or brief is

insufficient to inform a state court that it has been

presented with a claim subject to this Court’s appellate

jurisdiction. Bd. of Dirs. of Rotary Int'l v. Rotary Club

of Duarte, 481 U.S. 537, 550 n.9 (1987). Moreover, when

the highest state court is silent on the federal question

brought to this Court, this Court assumes that the issue

was not properly presented, and the aggrieved party

bears the burden of defeating this assumption by

demonstrating that the state court had a fair opportunity

to address the federal question that is sought to be

presented here. Adams v. Robertson, 520 U.S. 83, 86-

87 (1997).

Rischon’s petition to the trial court sought

determination of only the validity of the City’s

requirements under the Texas Constitution. (CR 39;

» li tk Oe ee eee ee

6

Rischon’s First Amended Original Petition.) It is telling

that the only trial court document Rischon can point to

that even obliquely refers to federal constitutional

precedents is the trial brief submitted to the trial court

on the eve of trial. Notably, that document discusses

these federal precedents in the context of attempting

to convince the trial court to apply the federal analysis

to the Texas Constitution. Rischon’s trial brief admits

as much:

In this case, because we are in fact litigating

based upon the Texas Constitution it would

seem only logical that the standard to be

imposed is that of a strict correlation between

the requirements rather than a rough

proportionality since the lesser guarantees of

the Federal Constitution were what triggered

the protections of Dolan and were acted upon

in the Flower Mound case.

(Pet. App. 3, p. 7) (emphasis added); see also Rischon

Dev. Corp., 242 $.W.3d at 167 n.2. Moreover, the actual

live pleading upon which the case was tried to the bench

only alleged a “taking of value in property in violation

of the requirements of the laws of Texas and the Texas

Constitution.” (CR 49; Rischon’s First Amended Original

Petition, p. 11)

Further evidence that the trial court was never

presented with or considered a federal constitutional

claim ca ©e gleaned from that court’s conclusions of

law fron. “<iich any mention of the federal constitution

is missing. On the other hand, the trial court issued a

7

clear and unequivocal holding concerning the Texas

Constitution:

10. The City’s zoning regulations and

ordinances at issue and in effect at all times

material to this lawsuit and the City’s actions

do not constitute a taking under Texas

Constitution, Article I, § 17.

(Pet. App. 1; Supp. CR 12; Concl. of Law No. 10.)

Even on appeal, though it crafted two issue

statements referring to “federal law”, it never cited or

mentioned any provisions of the Federal Constitution,

leaving the Court of Appeals to conclude that Rischon

claimed a taking under the Texas Constitution only.

Rischon Dev. Corp., 242 S.W.3d at 167 n.2.

Accordingly, because Rischon failed to present the

federal constitutional issue to the trial court for

determination in the first instance, that question.is not

properly before this Court.

B. There is no “safe-harbor” in conflict with this

? Court’s decisions in Nollan and Dolan created by

the Fort Worth Court of Appeals’ decision.

Rischon argues that the Court of Appeals’ opinion

below creates an “unfettered safe-harbor” within which

local governments may “require consent” from

developers to otherwise unconstitutional exactions. A

clear reading of the trial court judgment and opinion of

the Court of Appeals does not compel such a conclusion.

8

First, as shown above, the trial court judgment and

Court of Appeals’ opinion both are founded solely upon

an analysis of the consent clause of article I, section 17

of the Texas Constitution: “No person’s property shall

be taken, damaged or destroyed for, or applied to public

use without adequate compensation being made, unless

by the consent of such person.” (emphasis added). At

no point before any other court has Rischon challenged

the federal constitutionality of this provision of the

Texas Constitution, but Rischon implies such a challenge

for the first time here.

Second, Rishcon’s argument rests on a factual

premise of coercion that was rejected by the trial court

and Court of Appeals. The trial court made numerous

explicit findings that “Rischon proposed” or “Rischon

consented to” or “Rischon did not object” or “Rischon

agreed” to each of the now-complained-of development

obligations. (Pet. App. 1; Supp. CR 4; Findings of Fact

Nos. 8, 9, 10, 11, 14, 17, 26; Concls. of Law Nos. 5, 6.)

The trial court concluded that “{aJll of the provisions of

PD-938 or the Rolling Wood development were proposed

or adopted by Rischon without objection.” (Pet. App. 1;

Supp. CR 11; Concl. of Law No. 5.) Notably, Rischon did

not challenge any of these factual findings on appeal

and the Court of Appeals reached the same conclusion:

We hold that by proposing, adopting without

objection, or agreeing in the Developer’s

Agreement without objection to all of the

Rolling Wood “requirements,” Rischon

consented to those requirements. Therefore,

9

the trial court did not err by rendering a take

nothing judgment on Rischon’s claims.

Rischon Dev. Corp., 242 S.W.3d at 169. Rischon omits

what the trial court and Court of Appeals recognized —

Rischon only complained after Rischon had consented

to the planned development zoning ordinance and freely

entered into a developer’s agreement with the City.

Id. at 168. The real question posed by Rischon’s conduct

and claim is not whether a city may coerce consent from

a developer, but whether a city is open to after-the-fact

takings challenges to zoning and development

agreements it makes with developers. Here, the state

courts considered the matter and determined that the

City had not coerced Rischon and had acted within the

bounds of the Texas Constitution. Where the property

owners in Nollan and Dolan challenged the local

government’s development requirements from the

moment they were imposed, Rischon proposed and

agreed to all of the requirements until it later found

them economically disadvantageous. Compare Nollan

v. California Coastal Comm’n, 483 U.S. 825, 828-29

(1987) and Dolan, 512 U.S. at 380-82 with Rischon Dev.

Corp., 242 S.W.3d at 168.

The opinion of the Texas appellate court does not

create a “safe-harbor” or other exception to this Court’s

holdings in Nollan and Dolan - first because it is founded

on a clause of the Texas Constitution, and second because

its opinion is based upon a radically different set of facts.

Rischon cites only one case in support of its

argument that the City’s actions required Rischon to

consent to the City’s regulations: Loretto v.

Teleprompter Manhattan CATV Corp., 458 U.S. 419

(1982). However, that case did not address any “consent”

10

issue. The only issue in Loretto was “whether a minor

but permanent physica] occupation of an owner’s

property authorized by government constitutes a

‘taking’ of property for which just compensation is due

under the Fifth and Fourteenth Amendments of the

Constitution.” Jd. at 421. New York law provided that

landlords could not interfere with installation of cable

television facilities upon the landlord’s property. Jd. at

423. This Court held that a “permanent physical

occupation authorized by government is a taking. .. .”

Id. at 426. Accordingly, this Court held that there was a

compensable taking, but emphasized that the holding

applies only to physical takings:

Our holding today is very narrow. We affirm the

traditional rule that a permanent physical

occupation of property is a taking. In such a case,

the property owner entertains a historically

rooted expectation of compensation, and the

character of the invasion is qualitatively more

intrusive than perhaps any other category of

property regulation. We do not, however,

question the equally substantial authority

upholding a State’s broad power to impose

appropriate restrictions upon an owner’s use

of his property.

Id. at 441. The Loretto holding is not applicable in the

present case where a physical taking was not alleged

and all of the requirements were agreed to or proposed

by Rischon.

11

C. The Fort Worth Court of Appeals did not modify

or reverse the trial court’s conclusions of law but

simply and permissibly construed the findings

and conclusions to be in harmony with the

judgment.

Rischon never cited or claimed the Fourteenth

Amendment of the United States Constitution as a

ground for relief in the state courts below. Specifically,

Rischon’s petition for review to the Texas Supreme

Court does not cite the Fourteenth Amendment or even

include the phrase “equal protection.” As shown above,

Rischon has not preserved this issue for consideration

by this Court.

Nevertheless, Rischon charges the Court of Appeals

with violating Texas appellate procedure by modifying

or reversing the trial court’s conclusions of law as they

pertain to whether or not the City of Keller met its

burden in establishing consent under the Texas

Constitution. Of course, one will search in vain for any

such modification or reversal in the opinion of the Court

of Appeals. Rather, the Court of Appeals undertook the

unsurprising task of construing the trial court’s findings

of fact and conclusions of law to determine whether they

supported the judgment of the trial court that a violation

of the Texas Constitution’s takings provision had not

occurred:

While the only conclusion [of law] containing

the word “consent” is the one dealing with the

roadway impact fees and the park fees, the

trial court also concluded that Rischon

proposed or adopted without objection all of

12

the Rolling Wood requirements. In this case,

in light of the trial court’s unchallenged

findings of fact, “proposed or adopted without

objection” is indistinguishable from

“consented.”

Rischon Dev. Corp., 242 S.W.3d at 169. As one might

expect, such construction or interpretation of a trial

court’s findings and conclusions is well within the

authority of a Texas intermediate appellate court. In

Texas the same rules of interpretation apply in

construing the meaning of a court order or judgment

as in ascertaining the meaning of other written

instruments. Lone Star Cement Corp. v. Fair, 467S.W.2d

402, 404-405 (Tex. 1971). Accordingly, the entire contents

of the instrument and record are to be considered and

read as a whole. Jd. at 405. More specifically, findings of

fact and conclusions of law are to be construed together

and if the findings of fact are susceptible of different

construction, they will be construed, if possible, to be in

harmony with the judgment and to support it. Brown v.

Frontier Theatres, Inc., 369 S.W.2d 299, 301 (Tex. 1963).

It is not surprising then that the Court of Appeals in

the instant case reviewed the findings and conclusions

together and determined that it was possible to construe

them in support of the trial court judgment that an

uncompensated taking under the Texas Constitution

had not occurred.

13

When a trial court’s conclusions of law are

challenged, the proper standard of review is de novo.

See Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928

(Tex. 1998), cert. denied, 526 U.S. 1144 (1999); In re

Humphreys, 88 S.W.2d 402, 404 (Tex. 1994), cert. denied,

513 U.S. 964 (1994). In such a review, the reviewing court

exercises its own judgment, redetermines each legal

issue, and will uphold the conclusions on appeal if the

judgment can be sustained on any legal theory

supported by the evidence. Suburu of Am., Inc. v. David

McDavid Nissan, Inc., 84 S.W.3d 212, 222 (Tex. 2002).

Incorrect conclusions of law will not require reversal if

the controlling findings of fact support a correct legal

theory. BMC Software Belgium, N.V. v. Marchand, 83

S.W.3d 789, 794 (Tex. 2002). In following these standards,

the Court of Appeals did not violate the Fourteenth

Amendment of the United States Constitution.

14

CONCLUSION

A federal constitutional taking claim was not

presented below. Nor does the decision below create an

exception to this Court’s holdings in Nollan and Dolan

or violate the Equal Protection Clause of the Fourteenth

Amendment in its application of Texas appellate

procedure. Accordingly, the Court should deny the

Petition for Writ of Certiorari.

Respectfully submitted,

S.G. JOHNDROE III,

Counsel of Record

Scott A. FREDRICKS

Mary H. BARKLEY

CANTEY HANGER LLP

600 West 6" Street

Suite 300

Fort Worth, Texas 76102

(817) 877-2800

L. STANTON LOwry

Douc Las H. Connor, III

MICHAEL K. KALLas

Boye & Lowry, L.L.P

4201 Wingren

Suite 108

Irving, Texas 75062

(972) 650-7100

Attorneys for Respondent