Vulcan Materials Co. v. City of Tehuacana

• Citation: 369 F.3d 882
• Decision Date: 21 May 2004
• Docket Number: No. 02-51182.,02-51182.
• Parties: VULCAN MATERIALS COMPANY, Plaintiff-Appellant, v. The CITY OF TEHUACANA, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

369 F.3d 882

VULCAN MATERIALS COMPANY, Plaintiff-Appellant, v. The CITY OF TEHUACANA, Defendant-Appellee.

No. 02-51182.

United States Court of Appeals, Fifth Circuit.

May 21, 2004.

Angus E. McSwain (argued), Donald K. Dorsett, Fulbright, Winniford & Marable, Waco, TX, Deborah Pearce Reggio, New Orleans, LA, for Plaintiff-Appellant.

Charles D. Olson (argued), Charles Alfred Mackenzie, Michael W. Dixon, Haley & Davis, Waco, TX, for Defendant-Appellee.

Scott N. Houston, Texas Municipal League, Austin, TX, for Texas Municipal League and Texas City Attorneys' Ass'n, Amici Curiae.

Appeals from the United States District Court for the Western District of Texas.

Before JOLLY and WIENER, Circuit Judges, and WALTER, District Judge.¹

E. GRADY JOLLY, Circuit Judge:

Vulcan Materials Company ("Vulcan") owns a land lease with the right to mine limestone. The problem is that a substantial part of the land and the mining is within the boundaries of the City of Tehuacana ("the City") in Limestone County, Texas. The City passed an Ordinance in 1998 forbidding quarrying or mining activities within the City limits. Vulcan contends that the Ordinance constitutes a public taking and violates its rights under both the United States and Texas Constitutions. All that remains to be decided in this appeal, however, is the propriety of the district court's grant of the City's Motion for Summary Judgment dismissing Vulcan's takings claim under the Texas Constitution. We ultimately hold that the case turns on whether the quarry mining constitutes a public nuisance and consequently remand for a jury determination on this issue.

I

The City of Tehuacana has a population of approximately 300 to 350 people and occupies a small geographical area in Limestone County, Texas.

In 1993, Smith Crushed Stone, Inc. ("SCS") leased limestone quarry rights on three contiguous tracts of land (Tracts 1-3) adjacent to Tehuacana's City limits and also leased four additional contiguous tracts of land within the City limits. It did no mining, however, on these tracts. In October 1997, Vulcan purchased the assets of SCS in Limestone County, including the limestone quarry rights leased by SCS. This leasehold interest allows Vulcan to prospect, explore, mine, operate for and produce "by strip mining or open pit mining all rock, stone, limestone and similar rock like materials" and grants Vulcan the right to exclude all other uses of the Tracts as necessary to enable the quarrying.

Before its acquisition of SCS's assets, Vulcan hired local attorney Bobby Reed to determine whether any ordinances would prevent Vulcan from quarrying, including those tracts located within the City. Reed attested that both the Mayor and City Secretary advised him that no ordinances existed nor were in the planning stages that would prevent Vulcan from pursuing quarrying operations within the City.

The leases cover land both within and outside the Tehuacana City limits. Vulcan sought to mine approximately 48 acres located inside City limits, described as Tracts 4-7. This property is 2/3 to 3/4 of a mile wide and abutted by several public roads that access several homes, some of which are located just across the street from the property. Outside Tehuacana City limits, Vulcan currently mines and operates a rock crushing facility on an approximate additional 250 acres of land located immediately adjacent to Tracts 4-7.

In early 1998, Vulcan began planning active quarrying on Tracts 4-7. Vulcan determined access points and ramp sites, determined where in that area it wanted to quarry, cleared land, stripped overburden, and otherwise prepared the tracts for physical use. There has been no recent mining on these tracts.

In October 1998, Vulcan sought and obtained permission from the Texas Railroad Commission to construct berms on Tracts 4-7. Vulcan also prepared the quarry floor and removed overburden on Tract 6 to prepare for a blast ("shot") to loosen limestone in the quarry. The City residents began to express opposition to the proposed operations and soon the City Council began to consider adopting an ordinance to regulate Vulcan's quarrying activities.

Vulcan conducted a test shot on Tract 6 on October 25, 1998, in an abandoned pit. Another shot and similar preparatory activities were conducted on Tract 6 on November 25 and 26, 1998. Although approximately 400-500 tons of limestone were processed through Vulcan's plant as a result of these two blasts, this amount was only a small percentage of what Vulcan normally retrieved and processed during one day in its regular operations. Some of the finished product was tested, and some was put into inventory and sold in the ordinary course of business.

Before it passed the contested ordinance, the City held public hearings. Numerous citizens complained about Vulcan's operations outside the City as well as the two blasts conducted inside the City limits. Specifically, the citizens complained that Vulcan's activities caused shaking of houses, lifting furniture off the floor, rattling windows, shaking and jostling people in their homes, noise, dust, smoke, property damage, fear, interference with enjoyment of property and life, interference with the use of public roads and streets, and exposure to fly and throw rock. The City, and the district court, cite one flyrock incident in particular that had occurred when SCS was conducting quarrying activities on the tracts outside of the City in which a 500-pound boulder was propelled into a Tehuacana resident's yard. Residents also complained that the mining activities caused springs and wells in the area to dry up.

On December 8, 1998, the City Council passed the "Ordinance Forbidding Quarrying or Blasting Operations within the City Limits" (the "1998 Ordinance") and on December 15, 1998, Vulcan filed its complaint in federal district court, under both the United States and Texas Constitutions.² As mentioned above, the only claim remaining in this appeal is Vulcan's takings claim under the Texas Constitution.

In its September 25, 2002 Memorandum Opinion and Order, the district court granted the City's Motion for Summary Judgment, holding that the 1998 Ordinance is not an unconstitutional taking or an inverse condemnation under Texas law. The district court held, as a matter of law, that the 1998 Ordinance substantially advances a legitimate state interest. The court also made the following determinations with regard to Vulcan's regulatory takings claims:

[T]he activities the 1998 Ordinance seeks to regulate constitute a nuisance under Texas law. The 1998 Ordinance therefore restricts no legitimately owned property right. Even if the Court were to assume that the 1998 Ordinance did somehow restrict a recognized property right, a taking under Texas law would not occur because Vulcan has not been deprived of all economically viable use of its property. Only a small portion of its property is affected by the Ordinance, and the property still has an economically viable use. Although Vulcan argues that high explosives and heavy equipment are required to extract the limestone from the ground, the Court notes that neither were required to extract the stone used to build the pyramids. Obviously, while extraction of the limestone without explosives and heavy equipment may be more expensive and labor intensive, it is not impossible to operate such a quarry without violating the 1998 Ordinance. Accordingly, judgment will be entered to the effect that the 1981 Ordinance does not prohibit quarrying, and that the 1998 Ordinance is not an unconstitutional taking or an inverse condemnation under Texas law.

Mem. Opin., p. 20. Vulcan appeals. We vacate the district court's grant of summary judgment to the City and remand.

II

This Court reviews the granting of summary judgment de novo, applying the same standards used by the district court. Thomas v. Barton Lodge II, Ltd., 174 F.3d 636, 644 (5th Cir.1999); Norman v. Apache Corp., 19 F.3d 1017, 1021 (5th Cir.1994). Summary judgment is proper when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. FED.R.CIV.P. 56(c). Summary judgment is only appropriate if no reasonable jury could differ in weighing the evidence. Peel & Co. v. Rug Mkt., 238 F.3d 391, 398 n. 37 (5th Cir.2001). The Court views the evidence in the light most favorable to the nonmoving party. Gillis v. Louisiana, 294 F.3d 755, 758 (5th Cir.2002).

Under Texas law, although determining whether a property regulation is unconstitutional requires consideration of a number of factual issues, the ultimate question of whether there has been a regulatory taking is a question of law. Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 932-33 n. 3 (Tex.1998).

III

Before we evaluate whether the Ordinance constitutes a taking under the Texas Constitution, we must first address the City's arguments that the Ordinance is not a land use regulation. Instead, the City contends that the Ordinance is a health and safety regulation that redresses an activity under its police power and is not subject to the public takings law of Texas.³ The district court was obviously unpersuaded by the City's argument because it addressed the takings issue presented in this case.

No one doubts that a municipality may enact reasonable regulations to promote the health, safety, and general welfare of its people. College Station v. Turtle Rock Corp., 680 S.W.2d 802, 805 (Tex.1984)(citing Ellis v. City of West University Place, 141 Tex. 608, 175 S.W.2d 396 (1943)). However, "if a governing body, in the exercise of its police power, enacts a regulation that goes too far in the regulation of private property, that governing body may be held to have taken the property, thus requiring it to pay compensation to the owner." 32 TEX. JUR.3D Eminent Domain § 9 (1998). The following factors are relevant in determining if the Ordinance has "gone too far" and effected a taking of Vulcan's...