Murphy, et al. v. The City of Galveston, Texas
OPINION AND ORDER. DKT 54 Motion for Summary Judgment is GRANTED. This case is dismissed..(Signed by Magistrate Judge Andrew M Edison) Parties notified.(ltrevino, 3)
United States District Court
Southern District of Texas
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
JOE MURPHY, ET AL.,
CITY OF GALVESTON, TEXAS,
March 31, 2021
Nathan Ochsner, Clerk
§ CIVIL ACTION NO. 3:12-CV-00167
OPINION AND ORDER
This case has more twists and turns than a cheap garden hose. Plaintiffs Joe
Development, LLC (“Galtex”) (collectively, “Plaintiffs”) originally sued the City of
Galveston (the “City”) back in 2012, claiming that the City took their property
without just compensation in violation of the Texas and United States
Constitutions. The case started in state court, was removed to federal court,
remanded to state court where it bounced between the state district court and the
state appellate courts for a number of years, and now here it is. Back in federal
Pending before me is the City’s motion for summary judgment. See Dkt. 54.
The City argues that I lack subject matter jurisdiction over the case because
Plaintiffs’ takings claims under the United States Constitution are not ripe for
adjudication. Having reviewed the motion, responsive briefing, and applicable law,
The property at issue consists of two buildings—one built in 1910 and the
other built sometime between 1955 and 1965—located in Galveston, Texas, on
Sealy Street in the East End Historical District (the “Property”). Ben-Amram d/b/a
Galtex purchased the Property in March 2007, subject to a mortgage held by
Murphy. The Property contains 14 separate residential rental units.
Zoning standards in the East End Historical District prohibit multifamily
dwellings. Nevertheless, because the Property pre-dated the existence of the East
End Historical District and zoning standards, it enjoyed a “legally nonconforming” or “grandfather” status as a multifamily dwelling. To keep this status,
zoning standards prohibited the Property from remaining vacant for more than six
months. See GALVESTON, TEX., ZONING STANDARDS § 29-111(a)(4) (1991) (“A NONCONFORMING STATUS SHALL EXIST . . . [w]hen a multi-family residential use
in the Historic District was in existence at the time of adoption of these Zoning
Standards, . . . provided, that there has not been a discontinuance of actual
occupancy as a multiple-family use for any consecutive period of time of six (6)
months or longer.”).1 Up until the events relating to this lawsuit, the Property had
always complied with this occupancy requirement.
In September 2008, Hurricane Ike hit the City hard, causing significant
damage to the Property. Roughly five months later, in January 2009, the City
The City attached §§ 29-111 and 29-112 of the Galveston Zoning Standards to its motion.
See Dkt. 55-1 at 8–9.
condemned the Property as unfit for human habitation. At the City’s direction, the
tenants vacated the buildings. The City then informed Ben-Amram of those
improvements needed to comply with the International Property Maintenance
Code of the City. The improvements were grouped in seven categories: (1)
plumbing and base requirement and facilities; (2) exterior and interior; (3) light
and ventilation; (4) dwelling space requirements; (5) electrical systems; (6)
nuisances; and (7) sanitation. Ben-Amram indicated that he intended to bring the
Property up to code, and he pulled the required permits and began renovations.
In January 2010, City inspectors indicated that the condemnation would be
lifted if various code items were completed and Ben-Amram submitted a letter
from a certified engineer attesting to the Property’s safety. Over the next few
months, Ben-Amram and City officials met numerous times to discuss the
In May 2010, after the Property had been unoccupied for 16 months, a City
Code Enforcement Officer notified Ben-Amram that the Property had lost its
grandfather status because it had been unoccupied for more than six months. The
notice informed Ben-Amram that he could apply for a Special Use Permit (“SUP”)
to allow the Property to operate as a multifamily dwelling. The City’s zoning
standards also gave Ben-Amram the option to appeal the Code Enforcement
Officer’s decision to the Zoning Board of Adjustments (the “Board”). See ZONING
STANDARDS § 29-112(c) (“Appeals to the Board can be taken by any person
aggrieved or by an officer, department or board of the municipality affected by any
decision of the Building Official.”). Ben-Amram never exercised his right to appeal.
Ben-Amram did file an SUP application with the City in December 2010.
After reviewing the SUP application in public meetings, both the Landmark
Commission and the Planning Commission recommended that the SUP
application be denied. Taking the opposite side, City staff recommended that the
SUP be approved, subject to Ben-Amram satisfying specified conditions, including
meeting all compliance requirements necessary to lift the condemnation, repairing
the compromised exterior siding, and providing more parking spaces or requesting
Ben-Amram’s request for an SUP came before the Galveston City Council on
February 10, 2011. During the meeting, City Council heard from Ben-Amram,
various neighbors who were opposed to granting an SUP, and Ron Penn (“Penn”),
the field supervisor in the City’s Code Enforcement Division. Penn confirmed that
the Property did not conform to the applicable codes, that there were ongoing
safety concerns associated with the Property, and that Ben-Amram had not
produced the requested engineer’s letter certifying that the building was
structurally sound and safe.2 After discussion, City Council denied the SUP
As of the City Council hearing, the Property still had multiple problems that could pose
a health and safety hazard to intended occupants, including no smoke detectors in second
floor rooms, untreated mold in the walls, broken windows, a flooded breaker panel, a
carport ceiling that was falling down, disintegrating interior paneling, cracked and falling
exterior brick work, rotten wood in the walls and columns, and exposed electrical wires.
application. Despite the vote, various City Council members encouraged BenAmran to complete the necessary repairs, obtain the engineer’s letter, and re-apply
for the SUP after working with the City’s Planning Department to bring the
Property up to code. Mayor Joe Jaworski pointed out to Ben-Amram that there was
no prohibition against him reapplying for an SUP “with even a slight tweak.” Dkt.
55-3 at 84. Ben-Amram did not take this advice. He never re-applied for the SUP.
He also never produced the engineer’s report certifying the structural safety of the
building. Murphy foreclosed on the Property in October 2011.
In April 2012, Plaintiffs filed suit against the City in state court, alleging that
the City took their property without just compensation in violation of the Texas
and United States Constitutions. In June 2012, the City removed the case to federal
court. In August 2013, the federal court remanded Plaintiffs’ state taking claims to
state court for determination and stayed the federal claims pending exhaustion of
Plaintiffs’ state court remedies. It took a while, but Plaintiffs pursued their state
takings claims to conclusion in Texas courts. See City of Galveston v. Murphy, 533
S.W.3d 355, 365 (Tex. App.—Houston [14th Dist.] 2015, pet. denied) (holding that
trial court lacked subject matter jurisdiction over Plaintiffs’ regulatory taking
claims regarding the denial of the SUP); Murphy v. City of Galveston, 557 S.W.3d
235, 245 (Tex. App.—Houston [14th Dist.] 2018, pet. denied) (affirming trial
court’s order dismissing Plaintiffs’ Texas takings claim regarding the loss of
grandfather protection because the Plaintiffs failed to exhaust their administrative
With the state takings claims resolved in their entirety, this case was
reinstated on the active federal docket in January 2020 so that the federal takings
claims could be addressed.3 Soon thereafter, the City moved for summary
judgment, arguing that this Court lacks subject matter jurisdiction over Plaintiffs’
federal takings claims.
The proper vehicle to challenge a court’s subject matter jurisdiction is a Rule
12(b)(1) motion to dismiss, not a Rule 56 motion for summary judgment. See
Stanley v. Cent. Intel. Agency, 639 F.2d 1146, 1157 (5th Cir. 1981). Although the
City filed a motion for summary judgment in this case, I am permitted to construe
that motion as a Rule 12(b)(1) motion to dismiss for lack of subject matter
jurisdiction. See United States v. One 1988 Dodge Pickup, 959 F.2d 37, 39 (5th Cir.
1992) (“[I]t is clear that the proper characterization of the motion for these
purposes is not determined by the label that the motion bears.”); Ysleta Del Sur
Pueblo v. City of El Paso, 433 F. Supp. 3d 1020, 1023–24 (W.D. Tex. 2020)
(construing a motion for summary judgment as a motion to dismiss for lack of
subject matter jurisdiction); Med. Components, Inc. v. Osiris Med., Inc., 226 F.
Supp. 3d 753, 760 (W.D. Tex. 2016) (same).
3 Although Plaintiffs’ original 2012 lawsuit contained both federal takings claims and state
takings claims, Plaintiffs readily acknowledge that the state law takings claims have been
resolved through the appellate proceedings in the state court system. As such, I need not
address the state law takings claims in this opinion.
In considering a Rule 12(b)(1) motion, I must keep in mind that “[f]ederal
courts are courts of limited jurisdiction” that “possess only that power authorized
by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S.
375, 377 (1994). Thus, under Rule 12(b)(1), “[a] case is properly dismissed for lack
of subject matter jurisdiction when the court lacks the statutory or constitutional
power to adjudicate the case.” Home Builders Ass’n of Miss., Inc. v. City of
Madison, 143 F.3d 1006, 1010 (5th Cir. 1998) (quotation omitted).
When subject matter jurisdiction is challenged, “the trial court is free to
weigh the evidence and resolve factual disputes in order to satisfy itself that it has
the power to hear the case.” Montez v. Dep’t of Navy, 392 F.3d 147, 149 (5th Cir.
2004). The party asserting jurisdiction always bears the burden of proof that
jurisdiction does in fact exist. See Ramming v. United States, 281 F.3d 158, 161
(5th Cir. 2001).
The Takings Clause of the Fifth Amendment provides that no “private
property [shall] be taken for public use, without just compensation.” U.S. CONST.
amend. V. That prohibition against unlawful government takings is applicable to
the states by virtue of the Fourteenth Amendment. See Chicago, B & Q. R. Co. v.
City of Chicago, 166 U.S. 226, 235–42 (1897). Before addressing the merits of a
takings claim, a federal court must determine whether the claim is ripe for judicial
review. See Urban Devs. LLC v. City of Jackson, 468 F.3d 281, 292 (5th Cir. 2006).
If the claim is not ripe, it must be dismissed for lack of subject matter jurisdiction.
See id. (“Ripeness is a question of law that implicates this court’s subject matter
jurisdiction.”); Lopez v. City of Houston, 617 F.3d 336, 341 (5th Cir. 2010)
(“Ripeness is a component of subject matter jurisdiction, because a court has no
power to decide disputes that are not yet justiciable.”).
In Williamson County, the Supreme Court established a two-prong test for
evaluating ripeness under the Fifth Amendment’s Takings Clause, explaining that
such claims are not ripe until: (1) the relevant governmental unit has reached a
final decision as to what will be done with the property; and (2) the property owner
has sought compensation for the alleged taking through whatever adequate
procedures the state provides. See Williamson Cnty. Reg’l Plan. Comm’n v.
Hamilton Bank of Johnson City, 473 U.S. 172, 195 (1985). Two years ago, the
Supreme Court overruled Williamson County’s second prong, the state-exhaustion
requirement. See Knick v. Twp. of Scott, 139 S. Ct. 2162, 2167–68 (2019).
Important here, the Knick court noted that it “does not question the validity of
th[e] finality requirement.” Id. at 2169. Thus, a federal regulatory taking claim is
ripe for judicial review in federal court only if the challenged governmental conduct
is a final decision. See DM Arbor Ct. Ltd. v. City of Houston, 988 F.3d 215, 218 n.2
(5th Cir. 2021) (recognizing that although Knick eliminated the state-exhaustion
requirement, “it did not alter the requirement for a final decision from the
regulator before any litigation is commenced”); Wheelahan v. City of New
Orleans, No. CV 19-11720, 2020 WL 1503560, at *9 (E.D. La. Mar. 30, 2020) (“[A]
Takings Clause claim is ripe for judicial review when the governmental unit has
reached a final decision.”). Governmental conduct is final if it demonstrates “a
final, definitive position regarding how [the government] will apply the regulations
at issue to the particular land in question.” Urban Devs., 468 F.3d at 293 (quoting
Williamson Cnty., 473 U.S. at 191).
“[T]he finality requirement is concerned with whether the initial
decisionmaker has arrived at a definitive position on the issue that inflicts an
actual, concrete injury.” Williamson Cnty., 473 U.S. at 193. The Fifth Circuit has
declared that “whenever the property owner has ignored or abandoned some
relevant form of review or relief, such that the takings decision cannot be said to
be final, the takings claim should be dismissed as unripe.” Urban Devs., 468 F.3d
at 293. As detailed below, Plaintiffs have failed to establish that the City arrived at
a final, definitive position with respect to the SUP application and the revocation
of the Property’s protected grandfather status. Because Plaintiffs have failed to
demonstrate finality, their claims are not ripe for judicial review. This case must
be dismissed for a lack of subject matter jurisdiction.
The City’s Denial of the SUP was Not Final Because Plaintiffs
Could Have Re-applied for the SUP.
The City argues that Plaintiffs never obtained a final, conclusive decision
from the appropriate regulatory authority because the Plaintiffs could have
corrected problems identified by City Officials and reapplied for the SUP.4 I agree.
The City also argues that this takings claim is unripe because Plaintiffs neglected to
pursue viable alternative uses of the Property. Because I find that Plaintiffs’ takings claim
based on the denial of the SUP is unripe due to Plaintiffs’ failure to reapply, I need not
Without a final decision, the Plaintiffs’ takings claim is not ripe, and I do not have
The record is crystal clear. The City never reached an official and final
decision as to whether it would issue an SUP to Plaintiffs. At the time City Council
initially voted down the SUP application, City officials pointed out numerous
issues they had with the Property that Plaintiffs could have resolved before
reapplying for the SUP. The transcript of the City Council hearing reveals that City
officials encouraged Ben-Amram to bring the Property up to code, acquire the
engineer’s letter, and then reapply for the SUP. Several City Council members
stated that they were denying the SUP over concerns about the safety of the
building and the health of its future occupants, suggesting that an SUP would be
granted were it not for those concerns.5 After the City rejected the SUP application,
Plaintiffs chose to bring this lawsuit instead of bringing the Property into
compliance with applicable code and then resubmitting an SUP application
reflecting completion of the repairs.
reach the question of whether Plaintiffs could have pursued alternative uses for the
Multiple councilmembers expressed particular reservations with granting the SUP.
Councilmember Gonzales cited public safety concerns and the Property’s failure to meet
code requirements. Councilmember Colbert also cited public safety concerns, code
violations, and the lack of the engineer’s letter. Councilmember Greenberg indicated there
were too many things wrong with the Property for him to support the SUP, including
infrastructure and engineering concerns. Councilmembers Gonzales and Greenberg both
discussed reconsidering the SUP application when all or substantially all of the repairs to
the Property were completed.
Plaintiffs complain that the City “insist[ed] on diminished occupancy—
destroying units to provide parking or ‘green space’—as the price for” obtaining an
SUP. Dkt. 59 at 56. As an initial point, the City takes issue with Plaintiffs’
characterization of the parking state of affairs, noting that the City never required
Ben-Amram to obtain additional parking to obtain an SUP. City staff originally
recommended that Ben-Amram’s request for an SUP be approved on the condition
that he “provide 16 off-street parking spaces . . . or seek a variance from the
[Board].” See Dkt. 55-2 at 68 (emphasis added). If Plaintiffs wish to rely on the
parking issue to prove their federal takings claim, they must first show that BenAmram requested a variance that the City denied. See Palazzolo v. Rhode Island,
533 U.S. 606, 620–21 (2001) (A landowner cannot bring a regulatory takings claim
without “first having followed reasonable and necessary steps to allow regulatory
agencies to exercise their full discretion in considering development plans for the
property, including the opportunity to grant any variances or waivers allowed by
law.”). That request was never made.
Truth be told, Plaintiffs gave up too soon. Although the City initially rejected
Plaintiffs’ request for an SUP, there was a real possibility that a subsequent SUP
application would have been successful if Ben-Amram had applied for a variance
with the Board concerning the parking issue, repaired the Property so that it
satisfied the code requirements, and provided an engineer’s letter. Plaintiffs failed
to actively seek a final decision from the City, and that dooms their claim. See
Williamson Cnty., 473 U.S. at 193–94 (holding that the governmental unit had not
arrived at a final, definitive decision because the plaintiff had not followed the
procedure for obtaining variances, “leav[ing] open the possibility that [the
plaintiff] may [have acquired relief] after obtaining the variances”). Without a final
decision from the City, Plaintiffs’ claim for the denial of the SUP claim is not ripe
for judicial review. See Agins v. Tiburon, 447 U.S. 255, 260 (1980) (“Because the
appellants have not submitted a plan for development of their property as the
ordinances permit, there is as yet no concrete controversy regarding the
application of the specific zoning provisions.”).
Plaintiffs acknowledge that they could have submitted another SUP
application to the City, but they argue that such efforts would have been futile.
Under the futility exception, a plaintiff in a takings case may avoid dismissal on
ripeness grounds by establishing the futility of pursuing administrative remedies.
See Murphy v. New Milford Zoning Comm’n, 402 F.3d 342, 349 (2d Cir. 2005)
(“A property owner, for example, will be excused from obtaining a final decision if
pursuing an appeal to a zoning board of appeals or seeking a variance would be
futile.”); S&R Dev. Ests., LLC v. Bass, 588 F. Supp. 2d 452, 463–64 (S.D.N.Y.
2008) (“The futility exception was created to protect property owners from being
required to submit multiple applications when the manner in which the first
application was rejected makes it clear that no project will be approved.”
(quotation omitted)). Although the ripeness doctrine does not require “a futile
gesture as a prerequisite for adjudication in federal court,” Williams v. Lambert,
46 F.3d 1275, 1280 (2d Cir. 1995), conclusory or unsupported allegations of futility
will not suffice. See 15 Corporations, Inc. v. Denver’s Prosecutor’s Off., No. 13-cv0251-WJM-MJW, 2013 WL 5781161, at *9 (D. Colo. Oct. 25, 2013) (compiling cases
holding that plaintiffs must make a “clear and positive showing of futility”
(quotation omitted)). Application of the futility exception is rare, with most courts
narrowly limiting the circumstances in which the exception can be applied.
While the ripeness doctrine does not require litigants to engage in
futile gestures such as to jump through a series of hoops, the last of
which is certain to find obstructed by a brick wall, the presence of that
brick wall must be all but certain for the futility exception to apply.
There must be evidence that the relevant government body has no
discretion to grant an exemption, or that it has dug in its heels and
made clear that all such applications will be denied.
Country View Ests. @ Ridge LLC v. Town of Brookhaven, 452 F. Supp. 2d 142,
150 (E.D.N.Y. 2006) (cleaned up). I can’t say whether Plaintiffs encountered a
brick wall because they didn’t even attempt to jump through the hoop. Plaintiffs
never pursued another SUP application, and they haven’t shown that filing one
would have been pointless. Cf. Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1012
n.3 (1992) (finding a ripe claim because the governmental entity stipulated that a
building permit would not have issued “application or no application”). Plaintiffs
assert that the SUP would not have been issued upon reapplication, but they have
presented no evidence backing up this wild accusation. To the contrary, plenty of
evidence suggests that the City was open to issuing a SUP once repairs had been
completed so that the Property satisfied all code requirements. As already noted,
City Council members encouraged Plaintiffs to reapply once they addressed safety
concerns and obtained the engineer’s letter certifying the structural integrity of the
buildings. The futility argument fails.
A Fifth Amendment takings claim is not ripe until the relevant governmental
unit has reached a final decision. Plaintiffs never obtained a final decision
regarding the SUP application, and they have not shown that re-applying for the
SUP would have been futile. Their Fifth Amendment takings claim regarding the
SUP must be dismissed for lack of subject matter jurisdiction.
Revoking the Property’s Grandfather Status was not Final
Because Plaintiffs Could Have Appealed the Decision.
As mentioned previously, the City Code Enforcement Officer revoked the
Property’s grandfather status in May 2010. Plaintiffs claim that this amounted to
an unlawful taking under the Fifth Amendment. The City argues that Plaintiffs’
claim is not ripe for judicial review because Plaintiffs could have appealed the City
Code Enforcement Officer’s May 2010 decision to the Board. I agree.
Chapter 211 of the Texas Local Government Code and the City’s zoning
standards expressly provide that any “person aggrieved” by a decision made by an
administrative officer may pursue an administrative appeal to the Board. TEX. LOC.
GOV’T CODE § 211.010; GALVESTON, TEX., ZONING STANDARDS § 29-112(c). The
appeal must be taken within a reasonable time after the decision is rendered by the
administrative officer. Here, it is undisputed that Plaintiffs never appealed the
Code Enforcement Officer’s decision to revoke the Property’s grandfather status.
Instead, Plaintiffs filed the SUP application, which they ultimately failed to pursue
to conclusion. Had Plaintiffs appealed the decision of the Code Enforcement
Officer, the Board might have decided that the non-conforming use could continue.
But we will never know. Plaintiffs eliminated this possibility by failing to pursue
their appellate remedies. Under the finality requirement, a takings claim is “not
ripe until the government entity charged with implementing the regulations has
reached a final decision regarding the application of the regulations to the property
at issue.” Williamson Cnty., 473 U.S. at 186. Because Plaintiffs failed to appeal the
administrative decision to the Board, there was no final decision on the matter,
and Plaintiffs’ claim is not ripe for judicial review. Thus, I have no jurisdiction to
hear this claim.
Caught between a rock and a hard place, Plaintiffs argue that their failure to
appeal to the Board should be excused because the City did not inform them of
their right to appeal. While technically true that the City did not expressly tell
Plaintiffs that they could exercise appellate rights, the right to appeal is plainly
provided in the City’s zoning standards. Moreover, it is well-established that
ignorance of the law is no excuse. See Greater Hous. Transp. Co. v. Phillips, 801
S.W.2d 523, 525 n.3 (Tex. 1990) (“In Texas, the law recognizes that there is no duty
to inform others of the requirements of the law because all persons are presumed
to know the law.” (collecting cases)); Poole v. Karnack Indep. Sch. Dist., 344
S.W.3d 440, 444 (Tex. App.—Austin 2011, no pet.) (“Ignorance of the law . . . does
not constitute good cause for failure to timely request relief provided by statute.”
(collecting cases)). Plaintiffs respond that the presumption that they should know
the law does not apply here because applying it would somehow violate Plaintiffs’
right to due process. Plaintiffs place a lot of emphasis on United States v.
Henderson, 707 F.2d 853 (5th Cir. 1983), a case which dealt with a notice
affirmatively misrepresenting the applicable law governing the discharge of a
debtor’s obligations. But that situation is radically different from the facts of this
case. Here, there is no evidence that the City made any misrepresentations. Cf. id.
at 856–57. The City informed Ben-Amram of his right to apply for an SUP but
made no mention one way or the other whether he enjoyed a right to appeal the
administrative decision. “Persons residing in, or having dealings with, a city are
presumed to know its ordinances,” and “persons living within the limits of an
incorporated city are charged with notice of its ordinances.” Bd. of Adjustment of
San Antonio v. Nelson, 577 S.W.2d 783, 786 (Tex. Civ. App.—San Antonio 1979,
writ ref’d n.r.e.). Thus, the City’s failure to inform Ben-Amram of his right to appeal
did not violate his due process rights.
In one final push, Plaintiffs argue that they should be excused from filing an
appeal to the Board on the grandfather status issue because such an effort would
have been futile. As noted, the futility exception requires Plaintiffs to conclusively
show that any further attempts to secure relief from the governmental unit would
have been fruitless. See Palazzolo, 533 U.S. at 625–26. Plaintiffs have made no
such showing. Instead, Plaintiffs’ arguments rest on pure, unadorned speculation.
See Dkt. 59 at 60 (arguing that appealing to the Board would have resulted in
intolerable delay because, “[e]ven if the [Board] ruled in favor of Ben Amram, the
City itself or any ‘person aggrieved’ could appeal the [Board] to the District Court”
(emphasis added)). The futility doctrine offers Plaintiffs no relief. Plaintiffs’
takings claim for the loss of grandfather status is not ripe, and it must be dismissed.
See Williamson Cnty., 473 U.S. 172, 188 (finding that the takings claim based on
the application of a zoning ordinance was not ripe because there was “no evidence
that respondent applied to the Board of Zoning Appeals for variances from the
For the reasons explained above, this Court lacks subject matter jurisdiction
over Plaintiffs’ takings claims. Accordingly, the City’s motion for summary
judgment (Dkt. 54), which I am construing as a Rule 12(b)(1) motion, is
GRANTED. This case is dismissed.
SIGNED this 31st day of March 2021
ANDREW M. EDISON
UNITED STATES MAGISTRATE JUDGE
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