City of Houston v. Maguire Oil Co.
342 S.W.3d 726
Tex. App.2011Background
- Lake Houston created by City flood control project; 1965 ordinance limiting pollution and, in 1967, restricting wells within 1,000 feet of Lake Houston in the Lake Houston control area.
- 1977 definitional shift redefined control area to the City's extraterritorial jurisdiction; 1997 amendment expanded control area but 1977 version governs this dispute.
- Maguire Oil Co. held leases near Lake Houston (Scanlan Deep Prospect) and sought to drill Wheless No. 1 inside city limits in 1991; permit granted May 7, 1991 and later revoked as allegedly within the 1,000-foot setback.
- City Inspector stop-work order issued October 31, 1991; deputy director Hulbert directed halt; Kristaponis issued letter revoking permit, asserting ordinance prohibited drilling within 1,000 feet.
- Maguire sued for inverse condemnation, alleging regulatory taking and related claims; litigation progressed through state and federal courts, culminating in a trial court finding a compensable taking and $2 million damages.
- Trial court findings and conclusions tied the taking to the City’s enforcement of the ordinance against Maguire’s surface location, despite later rulings that the ordinance did not apply to Maguire’s site in 1991.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Regulatory taking based on Penn Central/Sheffield factors? | Maguire: enforcement of the inapplicable ordinance unreasonably interfered with mineral rights. | City: unauthorized acts and lack of intent negate taking; enforcement of inapplicable ordinance cannot support takings. | Taking supported under Penn Central/Sheffield framework. |
| Did unauthorized acts by City employees bar the taking claim? | Maguire: no bar; taking arises from final enforcement action. | City: unauthorized acts prevent taking claim. | Unauthorized acts argument rejected; factors support taking. |
| Was there sufficient intent to take Maguire's mineral interests? | Maguire: City's intentional enforcement of the ordinance shows intent to take. | City: no specific intent to take; enforcement was based on ordinance misreading. | Intent satisfied by final decision-maker to enforce the ordinance, even if misapplied. |
Key Cases Cited
- Sheffield Dev. Co. v. City of Glenn Heights, 140 S.W.3d 660 (Tex. 2004) (regulatory takings framework under Penn Central)
- Mayhew v. Town of Sunnyvale, 964 S.W.2d 922 (Tex. 1998) (Penn Central guideposts for regulatory takings)
- Lingle v. Chevron U.S.A. Inc., 544 U.S. 528 (U.S. 2005) (per se and balancing takings considerations; no-cookbook approach)
- Penn Cent. Transp. Co. v. New York City, 438 U.S. 104 (U.S. 1978) (centralPenn Central test for regulatory taking (economic impact, investment-backed expectations, character of government action))
- City of San Antonio v. El Dorado Amusement Co., 195 S.W.3d 238 (Tex.App.-San Antonio 2006) (intent in physical vs regulatory takings contexts; limits of applying physical-taking intent to regulatory takings)
- De Trapani, City of Houston v. De Trapani, 771 S.W.2d 703 (Tex.App.-Houston [14th Dist.] 1989) (intentional but erroneous enforcement giving rise to inverse condemnation)