DM Arbor Court, Ltd. v. The City Of Houston
Filing
89
AMENDED MEMORANDUM OPINION AND ORDER - Arbor Court's motion to amend (Dkt. 61) is DENIED; the City's motion to dismiss (Dkt. 26) is GRANTED. The case is DISMISSED WITHOUT PREJUDICE. (Signed by Judge Gray H Miller) Parties notified.(rkonieczny, 4)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
DM ARBOR COURT, LTD.,
Plaintiff,
v.
THE CITY OF HOUSTON,
Defendant.
§
§
§
§
§
§
§
§
§
CIVIL ACTION H-18-1884
AMENDED MEMORANDUM OPINION & ORDER
Pending before the court is defendant City of Houston’s (“the City”) motion to dismiss
(Dkt. 26) plaintiff DM Arbor Court, Ltd.’s (“Arbor Court”) second amended complaint (Dkt. 22)
under Rule 12(b)(1) for lack of jurisdiction and Rule 12(b)(6) for failure to state a claim, Arbor
Court’s response in opposition (Dkt. 31), and the City’s reply (Dkt. 34). Also pending is Arbor
Court’s motion for leave to file third amended complaint (Dkt. 61) (“motion to amend”) and
appendix (Dkt. 62), the City’s amended response in opposition and appendix (Dkt. 67), and Arbor
Court’s reply and appendix (Dkt. 77).1
1
The court originally ruled on the pending motions (Dkt. 26, 61) on September 18, 2019.
Dkts. 69, 70. On October 15, 2019, Arbor Court filed a motion to alter or amend judgment, pointing
out that the court issued its ruling while a stay was in place, denying Arbor Court the opportunity to
reply to the City’s response to its motion to amend. Dkt. 72 ¶¶ 4, 5. Recognizing its error, the court
vacated its entry of judgment to allow Arbor Court the opportunity to file its reply. Dkt. 75. After
considering Arbor Court’s reply, the court found that its original judgment was correct, but amended
its opinion on November 13, 2019, to account for the arguments and facts raised in Arbor Court’s
reply. Dkt. 79. On November 22, 2019, the City filed a motion to correct pursuant to Federal Rule
of Civil Procedure 60(a). Dkt. 81. On November 25, 2019, Arbor Court filed a competing motion
to amend pursuant to Federal Rule of Civil Procedure 59(e). Dkt. 82. The court found that the City’s
motion (Dkt. 81) was properly construed as a motion to amend under Rule 59(e) and should be
granted, while Arbor Court’s motion should be denied. Dkt. 88. The court now issues this amended
memorandum opinion and order for the sole purpose of clarifying: (1) that the applicable version of
the City ordinance is that which was in effect on July 17, 2018, and (2) the final decision-making
authority with regard to Arbor Court’s permits is the City Council.
Having considered the motions, responses, and applicable law, the court finds that Arbor
Court’s motion to amend (Dkt. 61) should be DENIED as futile because the takings claims it seeks
to reintroduce are unripe, and the City’s motion to dismiss (Dkt. 26) should be GRANTED because
(1) Arbor Court’s other federal constitutional claims are also unripe; (2) the court declines to
exercise jurisdiction over Arbor Court’s supplemental state law claims pursuant to 28
U.S.C. § 1367(c)(3); and (3) Arbor Court’s request for injunctive relief must be dismissed because
all of the underlying claims fail to survive the motion.
I. BACKGROUND
A. Factual Background
Arbor Court is a 15-building, 232 unit, multi-family apartment community located at 802
Seminar Drive in Houston, Texas. Dkt. 22 ¶ 15; Dkt. 61-1 ¶ 17. The community operates as a
Section 8 housing property through a Housing Assistance Payment (“HAP”) contract with the United
States Department of Housing and Urban Development (“HUD”). Dkt. 22 ¶¶ 5, 27; Dkt. 61-1 ¶ 3.
Arbor Court’s first-floor units were damaged from flooding as a result of Hurricane Harvey in
August of 2017, causing some of Arbor Court’s residents to be displaced. Dkt. 22 ¶ 1; Dkt. 61-1 ¶ 2.
The parties agree that Arbor Court “is subject to the City’s municipal ordinances” (Dkt. 22 ¶ 15; Dkt.
61-1 ¶ 17), including Houston’s Floodplain Ordinance (Dkt. 26-4). See Houston, Tex. Rev.
Ordinances, ch. 19.2 The parties agree that the Floodplain Ordinance requires Arbor Court to apply
for repair permits, and that Arbor Court did in fact apply for permits to repair damage sustained
during Hurricane Harvey. Dkt. 22 ¶ 2; Dkt. 26 at 2; Dkt. 61-1 ¶ 4.
2
The court takes judicial notice of this ordinance, which the City attached to its motion to
dismiss. Dkt. 26-4. See Matter of Waller Creek, Ltd., 867 F.2d 228, 238 n.14 (5th Cir. 1989) (finding
it appropriate for a federal court to take notice of a municipal ordinance in Texas because Texas
courts “may take judicial notice of the ordinances of municipalities and counties of Texas”).
2
On October 10, 2017, the City’s Floodplain Management Office (“FMO”) found that each
of Arbor Court’s buildings had been “substantially damaged” pursuant to FEMA cost estimation
guidelines. Dkt. 22 ¶ 19; Dkt. 61-1 ¶ 21. Arbor Court “used the FMO’s ‘Substantial Damage
Determination Appeal’ (‘SDDA’) form” to appeal the substantial damage determination. Dkt. 22
¶ 20; Dkt. 61-1 ¶ 22. On March 28, 2018, Arbor Court was notified by letter that its SDDA had been
successful for seven of the fifteen buildings. Dkt. 22 ¶ 21; Dkt. 61-1 ¶ 23.3 This letter stated that “the
hold that had been placed in the City of Houston building permit system on your address has been
removed,” and that “[i]f you have not already done so, you may now proceed with obtaining any City
of Houston permits you need to complete the repairs.” Dkt. 26-1 at 1–2. Arbor Court “continued to
protest the City’s substantial damage determination for the remaining eight Arbor Court buildings,”
and was notified via email on May 1, 2018, that “all buildings will be classified as non-substantial.”
Dkt. 22 ¶ 22; Dkt. 61-1 ¶ 24. At some unspecified later point in time, “Arbor Court learned that the
City was requiring either the Mayor’s Office or Director of Public Works for the City to approve the
issuance and release of any permits.” Dkt. 22 ¶ 23; see also Dkt. 61-1 ¶ 26.
On July 17, 2018, the City notified Arbor Court via letter that it had “concluded that Arbor
Court’s requests for permits should be denied” because the City Engineer had “concluded that there
3
This letter was first introduced into the record by Arbor Court as an attachment to its first
amended complaint. See Dkt. 14-1 (Ex. A). The City has attached this letter to its motion to dismiss
the second amended complaint. Dkt. 26-1. Although not attached to the second amended complaint,
the letter is referenced by Arbor Court in that pleading. Dkt. 22 ¶ 21. The court notes that in both the
first and second amended complaints, Arbor Court states that the letter is from Choyce Morrow.
Dkt. 14 ¶ 12; Dkt. 22 ¶ 21. However, in Arbor Court’s third amended complaint, the letter is
correctly identified as being from Jamila Johnson. Dkt. 61-1 ¶ 23. Because this letter, which was
originally introduced by Arbor Court, and is presently before the court as an attachment to the City’s
motion to dismiss, is “referred to in the plaintiff’s complaint and [is] central to [its] claim,” the court
considers it part of the pleadings. Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 499 (5th
Cir. 2000) (quoting Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir.
1993)).
3
is danger to both life and property due to flooding in the vicinity of the site.” Dkt. 26-3; Dkt 67-1 at
App. 09–10.4 That letter provided that Arbor Court could “apply for a variance from the
requirements of Chapter 19,” or it could “appeal the denial of permits to the General Appeals
Board.” Dkt. 67-1 at App. 09–10. From July 17, 2018 until October 14, 2019, Arbor Court did not
pursue a variance or an appeal to the General Appeals Board.
On October 9, 2018, an unspecified person from “the City called Arbor Court stating that it
had eight approved permits that Arbor Court needed to pick up or the City would cancel them out
of the system.” Dkt. 22 ¶ 25; see also Dkt. 61-1 ¶ 29. “On October 16, 2018, Arbor Court went to
retrieve those permits.” Dkt. 22 ¶ 25; see also Dkt. 61-1 ¶ 29. Upon arrival, an unspecified person
from “the City stated that the permits would not be released without supervisor approval.” Dkt. 22
¶ 25; Dkt. 61-1 ¶ 29. Arbor Court “returned the next day to seek such supervisor approval, and it was
4
The City has attached this letter to both its motion to dismiss (Dkt. 26-3) and its response
in opposition to Arbor Court’s motion to amend (Dkt. 67-1). This letter, like the March 28, 2018
letter, see supra n.3, was first introduced into the record by Arbor Court as an attachment to its first
amended complaint. Dkt. 14-3. However, Arbor Court dropped all mention of this letter and the
City’s denial of Arbor Court’s permit applications from its second amended complaint and its
proposed third amended complaint. The court is not obliged to ignore this letter simply because
Arbor Court omits reference to it. For the reasons explained below, this denial implicates the court’s
subject matter jurisdiction. See infra § II.B. Moreover, while Arbor Court omits any reference to this
letter in its second and third amended complaints, it nevertheless references this letter in its most
recent pleading with this court. See Dkt. 61 ¶ 6 (“On July 17, 2018, . . . the City’s Department of
Public Works Director confirmed that Plaintiff’s application for permits was denied for reasons
unrelated to the substantial damage determination dispute that had been the sole basis for
withholding permits.”). Because this denial letter is central to Arbor Court’s claims and this court’s
jurisdiction, and because Arbor Court’s most recent filing with this court acknowledges this letter,
which was originally introduced by Arbor Court, and its contents, the Court will consider this letter
as part of the pleadings. See Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001) (finding
that the court can resolve disputed facts when its subject matter jurisdiction is implicated); see also
Collins, 224 F.3d at 499 (documents that defendants attach to motions to dismiss may be considered
if referred to in plaintiff’s complaint and central to its claims).
4
denied, as the supervisor confirmed the City would never release any permits to Arbor Court.”
Dkt. 22 ¶ 25; see also Dkt. 61-1 ¶ 29.
To date, Arbor Court has never received any permits. Dkt. 31 at 4. Yet throughout this time
period, “the City has provided permits to similarly situated apartment complexes that allowed them
to rebuild,” and the “only material difference between those complexes and Arbor Court is that
Arbor Court is a Section 8 property, and those complexes are not.” Dkt. 22 ¶ 26; see also Dkt. 61-1
¶ 30.
On October 14, 2019, following this court’s original September 18, 2019 ruling on the
pending motions (Dkts. 69, 70), Arbor Court “submitted an appeal to the Houston General Appeals
Board through Houston’s permitting office . . ., which includes both variance requests and a direct
appeal of the City’s denial of rebuilding permits.” Dkt. 77 ¶ 4; see also Dkt. 77-1 at 22. On October
16, 2019, Arbor Court amended its appeal. Dkt. 77-1 at 1–14. As of November 12, 2019, that appeal
is still pending. Id. at 15.5
B. Procedural Background
On June 8, 2018, Arbor Court filed suit against the City alleging four causes of action: a
takings claim, a due process claim, a Section 1983 claim, and a request for injunctive relief. See
Dkt. 1. The City moved to dismiss on July 16, 2018. See Dkt. 7. That motion was mooted on October
5
The court notes that Arbor Court’s counsel represented to the City that it had submitted its
appeal “as ordered by the U.S. District Court.” Dkt. 77-1 at 18. This court has issued no such order.
Nor has this court “referred the case back to the City of Houston.” Dkt. 72 ¶ 7. As noted passim, the
ability to file a variance or appeal has been within Arbor Court’s control since July 17, 2018. Arbor
Court did not require (nor did it receive) an order from this court to pursue a variance or appeal.
Arbor Court is incorrect to construe or represent this court’s holding—that a case or controversy over
which this court might have jurisdiction simply does not exist until the City Council has issued a
final decision—as a command or requirement to undertake a course of action that Arbor Court could
have pursued at any point in the 454 days between July 17, 2018 and October 14, 2019, when it
finally decided to pursue relief from the General Appeals Board in the first instance.
5
1, 2018, when Arbor Court filed its first amended complaint, alleging the same causes of action, but
notifying the court of a related case against Arbor Court: Jackson et al v. U.S. Dep’t of Hous. &
Urban Dev. et al, Civil Action No. H-18-2468 (S.D. Tex.). See Dkt. 14. The City moved to dismiss
the first amended complaint on October 15, 2018. See Dkt. 16. On October 16, 2018, the court issued
its scheduling order, setting the deadline for amended pleadings as October 31, 2018. Dkt. 17. On
October 31, 2018, the City’s second motion to dismiss was mooted when Arbor Court again
amended its complaint. See Dkt. 22. In its second amended complaint, Arbor Court dropped its
takings claim and added constitutional claims for violations of procedural and substantive due
process, equal protection, and the Contracts Clause of the U.S. Constitution, in addition to new state
law claims for violations of substantive due process and equal protection, tortious interference, and
violation of vested rights. See id. Arbor Court retained its Section 1983 claim and request for
injunctive relief. See id. The City moved to dismiss the second amended complaint on November
14, 2018. See Dkt. 26. On June 27, 2019, Arbor Court moved for leave to file its third amended
complaint, seeking to update facts and reinsert the takings claim it dropped from its second amended
complaint. Dkt. 61 at 2. On July 23, 2019, deadlines in this case were stayed pending a ruling in
Civil Action H-18-2468. Dkt. 68. On August 15, 2019, Arbor Court was dismissed from Jackson.
See Civil Action No. H-18-2468, slip op. at 1 (S.D. Tex. Aug. 15, 2019) (granting plaintiff’s motion
to dismiss Arbor Court as a defendant).6
II. RIPENESS
Ripeness questions pervade both motions, and the court must consider jurisdictional attacks
before attacks on the merits. Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001).
6
See supra n.1 for a discussion of the case’s history following the Jackson ruling.
6
With regard to the motion to amend (Dkt. 61), the City argues that the takings claim that
Arbor Court seeks to reintroduce to this litigation is not ripe because Arbor Court has not pursued
any formal appeals, meaning that it is without a final decision—a prerequisite to a ripe takings claim.
Dkt. 67 ¶¶ 21–25.7 In support of this argument, the City has attached various evidentiary materials,
including the July 17, 2018 denial letter, which informed Arbor Court of the “process to apply for
a variance,” or its right to “appeal the denial of permits to the General Appeals Board.” Dkt. 67-1
at App. 09. Arbor Court contends that there are no ripeness or jurisdictional issues because its
“successful [substantial damage determination] appeal did not result in Plaintiff receiving any repair
permits.” Dkt. 61 at 9. Arbor Court also contends that “nothing about [its now-filed] appeal . . . will
remedy the compensable temporary taking that already has occurred, because there is nothing about
the [appeal or variance process] that addresses or deals with the question of compensation due to
Plaintiff for the loss of its beneficial use of the property already suffered.” Dkt. 77 ¶ 6.
With regard to the second amended complaint (Dkt. 22), the City argues that Arbor Court’s
claims are unripe for the same reason: Arbor Court’s failure to pursue any formal appeal. Dkt. 26
at 10–11. The City attached various evidentiary materials in support of this argument as well,
including the July 17, 2018 letter. See Dkt. 26-3. Arbor Court contends that the second amended
complaint “details final decisions by the City and compliance with any appeal processes required or
applicable under the circumstances,” and that the City’s “arguments about failure to exhaust
remedies is an improper merits-based argument about disputed issues of fact, and has no bearing on
the Court’s Rule 12(b)(1) and 12(b)(6) inquiries.” Dkt. 31 at 2 n.1.
7
Although Arbor Court has initiated a variance request and appeal since the City first made
this argument, see supra at 5, the outcome of that appeal is still pending.
7
A. Legal Standard
“[R]ipeness inquires as to ‘whether the harm asserted has matured sufficiently to warrant
judicial intervention.’” Contender Farms, L.L.P. v. U.S. Dep’t of Agric., 779 F.3d 258, 267 (5th Cir.
2015) (quoting Miss. State Democratic Party v. Barbour, 529 F.3d 538, 544–45 (5th Cir. 2008)).
“[R]ipeness is a constitutional prerequisite to the exercise of jurisdiction.” Shields v. Norton, 289
F.3d 832, 835 (5th Cir. 2002) (citing Abbott Labs. v. Gardner, 387 U.S. 136, 148–49, 87 S.Ct. 1507,
18 L. Ed. 2d 681 (1967)). In determining whether a case is ripe, the court relies on two
considerations: “‘the fitness of the issues for judicial resolution and the hardship to the parties of
withholding court consideration.’” TOTAL Gas & Power N. Am., Inc. v. Fed. Energy Regulatory
Comm’n, 859 F.3d 325, 333 (5th Cir. 2017) (quoting New Orleans Pub. Serv., Inc. v. Council of New
Orleans, 833 F.2d 583, 586 (5th Cir. 1987)). “A case is generally ripe if any remaining questions are
purely legal ones; conversely, a case is not ripe if further factual development is required.” New
Orleans Pub. Serv., 833 F.2d at 587 (citing Thomas v. Union Carbide Agric. Prods. Co., 473 U.S.
568, 105 S.Ct. 3325, 3333, 87 L.E.2d 409 (1985)).
B. Analysis
1. Motion to Amend
The court will not grant Arbor Court’s motion to amend—which seeks to reintroduce its
previously abandoned regulatory takings claim—if doing so would be futile. Villarreal v. Wells
Fargo Bank, N.A., 814 F.3d 763, 766 (5th Cir. 2016) (“A district court may deny a proposed
amendment for futility . . . .” (citing Stripling v. Jordan Prod. Co., LLC, 234 F.3d 863, 872–73 (5th
Cir. 2000)). “[A] claim that the application of government regulations effects a taking of a property
interest 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.”
8
Williamson Cty. Reg’l Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172, 186, 105
S.Ct. 3108, 87 L. Ed. 2d 126 (1985), overruled on other grounds by Knick v. Twp. of Scott, Pa., -U.S. -- , 139 S.Ct. 2162, 204 L. Ed. 2d 558 (2019).8 Thus, a decision is not final where a formal
process of appeal is available and remains untested by the claimant. See, e.g., Hidden Oaks Ltd. v.
City of Austin, 138 F.3d 1036, 1041 (5th Cir. 1998) (affirming dismissal of apartment complex’s
takings claim for lack of jurisdiction where plaintiff’s“failure to follow through with any formal
process of appeal” constituted a lack of finality).9
Here, Arbor Court’s amendment would be futile because the General Appeals Board has not
decided in the first instance whether to grant a variance or to overturn the denial of Arbor Court’s
permits. Moreover, the final decision-making authority on the denial of Arbor Court’s permits is the
City Council. See infra at 11. Arbor Court previously contended that it “satisfied any prudential
prerequisite ripeness issues” because:
(1) Plaintiff sought repair permits from the City; (2) the City denied Plaintiff’s
request for repair permits; (3) Plaintiff appealed, pursuant to the City’s designated
appeal process; (4) Plaintiff’s successful appeal did not result in Plaintiff receiving
any repair permits; and (5) Plaintiff filed this lawsuit after the refusal of the City to
release any repair permits after its successful appeal.
Dkt. 61 at 9. At the time of its motion, the only appeals process that Arbor Court claimed to have
8
See also Knick, 139 S.Ct. at 2169 (“First, the developer still had an opportunity to seek a
variance from the appeals board, so any taking was therefore not final. . . . Knick does not question
the validity of this finality requirement, which is not at issue here.”); Campbell v. United States, 932
F.3d 1331, 1340 n.5 (Fed. Cir. 2019) (noting that “[t]his aspect of Williamson remains good law
under Knick ”).
9
Texas courts similarly require a final decision before a takings claim is ripe under the Texas
Constitution. See Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 929 (Tex. 1998) (holding that “in
order for a regulatory takings claim to be ripe, there must be a final decision”); see also City of
Carrollton v. HEB Parkway S., Ltd., 317 S.W.3d 787, 796–99 (Tex. App. 2010) (holding regulatory
takings claims under federal and state constitutions unripe where the ordinance at issue allowed for
a variance and plaintiff never asked for one).
9
participated in was the SDDA. Dkt. 61-1 ¶ 22. But the removal of a substantial damage
determination is antecedent to the approval of any permits. See Floodplain Ordinance, Houston, Tex.
Rev. Ordinances, ch. 19, § 19-43(a)(2) (Dec. 14, 2011) (“Except as may be otherwise provided in
this chapter, no permit shall hereafter be issued for a development to be located in any floodway, or
any special flood hazard area for which a floodway has not been designated, if that development
provides for . . . substantial improvement of any structure within the floodway, or the special flood
hazard area if no floodway has been designated.”).10 Arbor Court attempts to recast the denial of its
permit applications as revocation without process. Dkt. 61-1 ¶ 28 (“Instead, the City unilaterally,
arbitrarily, and capriciously revoked permits it agree to release in March of 2018 and again on May
1, 2018 . . . .”). However, Arbor Court makes only three allegations that postdate the July 17, 2018
denial letter.
First, it alleges that on October 9, 2018, the City called about “eight approved permits that
needed to be picked up or the City would cancel them out of the system.” Dkt. 61-1 ¶ 29. The
complaint is conspicuously silent as to which department within the City this call came from, or
whether the permits in question were floodplain repair permits or some other kind of permit. Id.
Second, Arbor Court alleges that these permits were not released when it went to retrieve them on
October 16, 2018, because supervisor approval was required. Id. Third, Arbor Court alleges that
when it sought this approval the next day, approval was denied. Id.
The court accepts these allegations as true; but accepting them as true does not change the
fact that “the government entity charged with implementing the regulations” about floodplain repair
permits has not made a final decision. Williamson Cty., 473 U.S. at 186. The unspecified person that
10
This is the version of the ordinance in place at the time of the July 17, 2018 denial letter.
10
called Arbor Court on October 9, 2018, and the unspecified supervisor that denied approval on
October 17, 2018, are not the City Council, which is the only entity with “final” decision-making
authority regarding Arbor Court’s permits. Floodplain Ordinance, § 19-23(g) (May 13, 2009) (“The
denial of a permit or the revocation . . . of a permit may be appealed to the city council pursuant to
Rule 12 of section 2-2 of this Code and upon the filing of a written application therefor with the city
secretary within ten days after the board’s written order is rendered.”).
In its response to the City’s motion to dismiss, Arbor Court claims that it “has now clearly
‘controverted’ any prior ‘admission’ that all of the permits were simply denied, rather than granted
and revoked,” and that “any prior ‘evidentiary admission’ creates a disputed fact issue which cannot
be appropriately resolved via a motion to dismiss.” Dkt. 31 at 4. This is wrong on both counts. The
court need “not accept as true conclusory allegations or unwarranted deductions of fact.” Tuchman
v. DSC Comms. Corp., 14 F.3d 1061, 1067 (5th Cir. 1994).11 Where, as here, the court’s subject
matter jurisdiction is implicated, the court is empowered to resolve disputed facts. Ramming, 281
F.3d at 161 (“Lack of subject matter jurisdiction may be found in any one of three instances: (1) the
complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3)
the complaint supplemented by undisputed facts plus the court’s resolution of disputed facts (quoting
Barrera–Montenegro v. United States, 74 F.3d 657, 659 (5th Cir. 1996) (emphasis added)). The
“party asserting jurisdiction ‘constantly bears the burden of proof that jurisdiction does in fact
exist.’” Morris v. Thompson, 852 F.3d 416, 419 (5th Cir. 2017) (citing Ramming, 281 F.3d at 161).
11
Arbor Court cites Tuchman for the proposition that “[f]actual allegations may be based on
information and belief.” Dkt. 31 at 2. This is only true where “the facts pleaded in a complaint are
peculiarly within the opposing party’s knowledge.” Tuchman, 14 F.3d at 1068. Moreover, “this
luxury ‘must not be mistaken for license to base claims of fraud on speculation and conclusory
allegations.’” Id. (citing Wexner v. First Manhattan Co., 902 F.2d 169, 172 (2d. Cir. 1990)).
11
The court finds that Arbor Court has not clearly controverted the July 17, 2018 denial of permits. It
strains logic to credit Arbor Court’s allegation that the City revoked permits that Arbor Court admits
it has never physically received, and that by Arbor Court’s own admission, the City had already
“denied for reasons unrelated to the substantial damage determination” on July 17, 2018. Dkt. 61 ¶ 6.
There is no hardship to Arbor Court in finding that this dispute is not ripe. For 454 days,
Arbor Court had the ability to seek a variance from or appeal the July 17, 2018 denial of its permits
to the General Appeals Board in the first instance. Arbor Court does not dispute its ability to seek
such a variance, or to appeal the denial of its permits to the General Appeals Board in the first
instance, nor does it argue why such processes would be futile.12 Indeed, the City Engineer testified
that it was not futile:
It is not futile. I don’t know if it’s futile. I can’t answer that question. Seeking
a variance from me, I might have an opinion on it, just like I offered an opinion here.
But there is an appeals board, general appeals board, that is totally
independent of this office, independent of me, independent of . . .
So this could have very well been brought forward, and they can make an
independent decision.
Dkt. 77-1 at 25–26 (emphasis added). Accordingly, this issue is not fit for judicial resolution so long
as “a different government unit with express authority to grant that relief” has not had the
opportunity to render a decision. City of Carrollton, 317 S.W.3d at 799. Because further factual
development—an initial decision from the General Appeals Board and, if necessary, a final decision
12
Arbor Court asserts that “[a]ny appeal . . . would indeed be futile” because the City’s
Director of Public Works “has testified that the hold on permits requested by Plaintiff can only be
lifted by her decision, after Mayoral approval.” Dkt. 61 at 10. Taking this allegation as true, it still
does not explain why a variance application or appeal to the General Appeals Board in the first
instance (or a final appeal to the City Council), would be futile as neither the Mayor nor the Director
of Public Works speaks for the General Appeals Board or the City Council, nor does Arbor Court
allege as much.
12
from the City Council—is needed, this dispute is not ripe. Accordingly, any amendment to add Arbor
Court’s takings claims would be futile, meaning Arbor Court’s motion to amend should be denied.
See Bombardier Aerospace Corp. v. United States, 831 F.3d 268, 284 (5th Cir. 2016) (“Considering
the late timing of the motion and that, as evidenced by our previous analysis, any amendment would
be futile, the district court did not abuse its discretion in denying the motion.”).
The court denies Arbor Court’s motion to amend for the additional reason that Arbor Court
has failed to establish “good cause.” Arbor Court incorrectly argues that its motion to amend is
governed by the permissive standard of Federal Rule of Civil Procedure 15(a)(2). Dkt. 61 at 7. The
deadline for amending pleadings in this case was October 31, 2018. Dkt. 17. Arbor Court filed its
motion to amend nearly eight months after that deadline. “Federal Rule of Civil Procedure 16(b)
governs amendment of pleadings after a scheduling order’s deadline to amend has expired.” Fahim
v. Marriott Hotel Servs., Inc., 551 F.3d 344, 348 (5th Cir. 2008) (citing S&W Enters., LLC v.
Southtrust Bank of Ala., NA, 315 F.3d 533, 535 (5th Cir. 2003)). “Four factors are relevant to good
cause: ‘(1) the explanation for the failure to timely move for leave to amend; (2) the importance of
the amendment; (3) potential prejudice in allowing the amendment; and (4) the availability of a
continuance to cure such prejudice.’” Id. (quoting Sw. Bell Tel. Co. v. City of El Paso, 346 F.3d 541,
546 (5th Cir. 2003)).
Arbor Court claims the loss of its ability to operate the property “as an affordable HUD
subsidized residential apartment community” constitutes a taking that is ripe for review. Dkt. 77
¶¶ 6–7. However, according to its correspondence with the City, Arbor Court was aware of this loss
since at least May 22, 2019. See Dkt. 62 at 40. Yet Arbor Court waited until June 27, 2019 to move
to amend. Dkt. 61. Arbor Court fails to explain this delay, despite “ha[ving] the benefit of the
Court’s initial decision denying the Motion [to amend]” (Dkt. 77 ¶ 1), including the standard
13
articulated in the preceding paragraph. Arbor Court further argues that “[g]ood cause exists to allow
the amendment, particularly if the Court opts to stay or abate this case pending the determination of
the Plaintiff’s pending appeal.” Dkt. 77 ¶ 10.13 But the court will not stay this case to permit the
determination of an appeal that Arbor Court inexplicably failed to pursue for 454 days. Because
Arbor Court fails to establish “good cause,” its motion to amend should be denied.
2. Motion to Dismiss for Lack of Subject Matter Jurisdiction
Arbor Court’s federal claims for violations of substantive and procedural due process, equal
protection, and the Contracts Clause are no more fit for judicial resolution than Arbor Court’s
proposed takings claim. At the outset the court notes that Arbor Court purports to bring each of these
claims directly under the Constitution, in addition to under Section 1983. Dkt. 22 ¶¶ 30–65.
13
Arbor Court also implies that this court has invoked the doctrine of primary jurisdiction.
See Dkt. 77 ¶ 10. See also Dkt. 72 at 6–8 (arguing that the court “has jurisdiction over all of
Plaintiff’s claims . . . and the court is authorized to stay or abate the case pending completion of the
administrative appeals process it has required Plaintiff to complete as condition to litigating those
claims”) (emphasis in original). As an initial matter the court reiterates that it has not ordered or
required Arbor Court to pursue any appeals. See supra n.5. The court merely finds that this issue is
not fit for judicial resolution so long as “a different government unit with express authority to grant
that relief” has not had the opportunity to render a final decision. City of Carrollton, 317 S.W.3d at
799. Whether Arbor Court wishes to pursue relief with that government unit—here, the General
Appeals Board in the first instance, and finally, the City Council—is a matter that is and has been
within Arbor Court’s discretion since July 17, 2018.
Moreover, the doctrine of primary jurisdiction “allows courts to defer consideration of issues
and causes of action which fall within the special knowledge or expertise of a federal administrative
agency until the administrative agency has been afforded an opportunity to act.” Maritrend, Inc. v.
Galveston Wharves, 152 F.R.D. 543, 554 (S.D. Tex. 1993) (emphasis added) (citing United States
v. General Dynamics Corp., 828 F.2d 1356 (9th Cir. 1987)). Furthermore, “the doctrine of primary
jurisdiction ‘is not related to the subject matter jurisdiction of the district court over the underlying
action.’” Elam v. Kansas City S. Ry. Co., 635 F.3d 796, 809 (5th Cir. 2011) (emphasis in original)
(quoting S. New Eng. Tel. Co. v. Global NAPs Inc., 624 F.3d 123, 136 (2d Cir. 2010)). Unlike cases
where the primary jurisdiction doctrine is invoked, this court does not have concurrent jurisdiction
with the General Appeals Board or the City Council. Only the General Appeals Board can grant a
variance or appeal in the first instance; and only the City Council has the final say on the denial of
permits. Until there is a decision by the final decision-making authority, there simply is no case or
controversy over which this court has jurisdiction.
14
However, “federal courts, and this Circuit in particular, have been hesitant to find causes of action
arising directly from the Constitution.” Hearth, Inc. v. Dep’t of Public Welfare, 617 F.2d 381, 382
(5th Cir. 1980) (per curiam). Direct constitutional violations are duplicative where a statutory
mechanism like Section 1983 is available to the plaintiff. See Burns-Toole v. Byrne, 11 F.3d 1270,
1273 n.3 (5th Cir. 1994) (holding dismissal of direct constitutional torts proper because “the proper
vehicle for these allegations is § 1983”). Accordingly, the court considers these claims through the
lens of Section 1983.14
Municipalities face liability under § 1983 only if “action pursuant to official municipal policy
of some nature caused a constitutional tort.” Monell v. Dep’t of Soc. Servs. of New York, 436 U.S.
658, 691, 98 S.Ct. 2018, 56 L. Ed. 2d 611 (1978) (rejecting respondeat superior liability). “To
establish municipal liability under § 1983, a plaintiff must show that (1) an official policy (2)
promulgated by the municipal policymaker (3) was the moving force behind the violation of a
constitutional right.” Peterson v. City of Fort Worth, 588 F.3d 838, 847 (5th Cir. 2009). “A policy
or custom is official only ‘when it results from the decision or acquiescence of the municipal officer
or body with ‘final policymaking authority’ over the subject matter of the offending policy.’” Id.
(quoting Jett v. Dallas Indep. Sch. Dist., 491 U.S. 701, 737, 109 S.Ct. 2702, 105 L. Ed. 2d 598
(1989)). “‘[W]hether a particular official has ‘final policymaking authority’ is a question of state
14
Whether a Contracts Clause violation gives rise to a cause of action under Section 1983
is unresolved in the Fifth Circuit. See Dennis Melancon, Inc. v. City of New Orleans, 703 F.3d 262,
279 n.14 (5th Cir. 2012). However, the court need not resolve this issue. The Contracts Clause’s
prohibition against the impairment of contracts is aimed “not at the decisions of its courts, or the acts
of administrative or executive boards or officers, or the doings of corporations or individuals,” but
“at the legislative power of the state.” New Orleans Waterworks Co. v. Louisiana Sugar-Ref. Co.,
125 U.S. 18, 30, 8 S. Ct. 741, 31 L. Ed. 607 (1888). Here, Arbor Court does not attack the
Floodplain Ordinance itself, it attacks only how the ordinance has been applied to Arbor Court.
Absent some showing of how such an application is an exercise of legislative power, this claim is
unripe whether brought directly under the U.S. Constitution or Section 1983.
15
law.’” Jett, 491 U.S. at 737 (emphasis in original) (quoting St. Louis v. Praprotnik, 485 U.S. 112,
123, 108 S.Ct. 915, 99 L. Ed. 2d 107 (1988) (plurality opinion)).
Here, the municipal body with “final policymaking authority” over the denial of repair
permits under the Floodplain Ordinance is the City Council. See Floodplain Ordinance, Houston,
Tex., Code of Ordinances ch. 19, § 19-23(g) (May 13, 2009). Assuming Arbor Court is correct that
“one or both of the Mayor’s Office and the Director of Public Works” have “directed” the denial of
Arbor Court’s permits (Dkt. 22 ¶ 33), that does not change the fact that the Mayor and the Director
of Public Works are not the City Council—they are not the officials or entities with final decisionmaking authority over repair permits. See Peterson, 588 F.3d at 847. See also supra at 11–12
(quoting the City Engineer’s testimony about the General Appeals Board’s independence).
Arbor Court’s attempts to establish the ripeness of its dispute with the City by analogizing
itself to the plaintiff in Bowlby v. City of Aberdeen, Miss., 681 F.3d 215 (5th Cir. 2012), are
inapposite. Dkt. 34 at 11. In Bowlby, “the Board granted Bowlby the requested permits and told her
to proceed with her business plan.” 681 F.3d at 218. Indeed, Bowlby was in business for over a
month before the Board revoked her permits. Id. Here, by Arbor Court’s own admission in its most
recent filing with this court, “Plaintiff’s application for permits was denied for reasons unrelated to
the substantial damage determination dispute.” Dkt. 61 ¶ 6. And unlike the plaintiff in Bowlby, Arbor
Court “has conceded it never received” the permits. Dkt. 31 at 4.
Arbor Court attempts to nullify the fact that its permits were denied, and that it has never
received any permits, by straining the meaning of “issued.” Dkt. 31 at 4–5. Even assuming that Arbor
Court is correct that receipt of permits is not required because “issued” means “put forth,” “send
out,” or “circulated or published” (see id.), the most recent document the City put forth, sent out, or
otherwise circulated or published to Arbor Court concerning its permits is the July 17, 2018 denial
16
letter. Moreover, Arbor Court’s argument that the permits were actually issued and revoked are
belied by Arbor Court’s most recent filing with this court, which states that Arbor Court’s efforts
were futile “because of an official decision that no permits would issue.” Dkt. 61 ¶ 5.
So long as there is outstanding factual development—what the General Appeals Board would
say about the denial of Arbor Court’s permits or whether it would grant a variance in the first
instance, followed by a final decision of the City Council, if necessary—this issue remains unfit for
judicial resolution. See, e.g., John Corp. v. City of Houston, 214 F.3d 573, 584 (5th Cir. 2000) (“If
the Court considered the claim to be a due process, rather than a takings claim, the absence of a final
decision still made that claim unripe.” (citing Williamson Cty., 473 U.S. at 197–200)). Arbor Court
is not prejudiced by the court’s refusal to entertain such a dispute where the ability to procure such
a decision has been within Arbor Court’s control since July 17, 2018. Accordingly, Arbor Court’s
Section 1983 claims—for violations of its rights to substantive and procedural due process, equal
protection, and against the impairment of contracts—should be dismissed for lack of federal
jurisdiction because they are unripe.
III. SUPPLEMENTAL JURISDICTION
Because none of Arbor Court’s federal claims survives the motion to dismiss, the court
declines to exercise supplemental jurisdiction over Arbor Court’s state law claims (see Dkt. 22
¶¶ 66–79) for violations of the due process and equal protection provisions of the Texas
Constitution, tortious interference, and violation of vested rights. See Moore v. Willis Indep. Sch.
Dist., 233 F.3d 871, 876 (5th Cir. 2000) (affirming dismissal of plaintiff’s Section 1983 claims and
declining to exercise jurisdiction under 28 U.S.C. § 1367(c)(3) over the supplemental state law
claims).
17
IV. REQUEST FOR PRELIMINARY AND PERMANENT INJUNCTIVE RELIEF
Arbor Court requests preliminary and permanent injunctive relief. See Dkt. 22 ¶¶ 80–91.
“This count of the complaint fails to state a claim because after dismissal of the substantive claims
there is no underlying legal action upon which [the] Plaintiff may receive . . . injunctive relief. . . .
A claim for injunctive relief does not stand alone, but requires a viable underlying legal claim.”
Horne v. Time Warner Operations, Inc., 119 F. Supp. 2d 624, 630 (S.D. Miss. 1999), aff’d sub nom.
Horne v. Time Warner Operations, 228 F.3d 408 (5th Cir. 2000) (per curiam). Because all of Arbor
Court’s underlying claims have been dismissed, Arbor Court’s request for injunctive relief must also
be dismissed.
V. CONCLUSION
For the reasons stated above, Arbor Court’s motion to amend (Dkt. 61) is DENIED; the
City’s motion to dismiss (Dkt. 26) is GRANTED. The case is DISMISSED WITHOUT
PREJUDICE.
Signed at Houston, Texas on February 11, 2020.
___________________________________
Gray H. Miller
Senior United States District Judge
18
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?