The City of Houston v. Fireworks

• Decision Date: 31 December 2009
• Docket Number: No. 01–08–00712–CV.,01–08–00712–CV.
• Parties: The CITY OF HOUSTON, Texas, Harris County Municipal Utility District 132, Harris County Municipal District 157, and Harris County Municipal Utility District 152, Appellants,v.Joel GUTHRIE d/b/a Sarges Fireworks, Fireworks Center 50, LLC, Paul Dewey Jones d/b/a Freedom 2000 Fireworks, Metro Church, and Gulf Coast Avenue C, LLC, Appellees.
• Court: Texas Court of Appeals

332 S.W.3d 578

The CITY OF HOUSTON, Texas, Harris County Municipal Utility District 132, Harris County Municipal District 157, and Harris County Municipal Utility District 152, Appellants,

v.Joel GUTHRIE d/b/a Sarges Fireworks, Fireworks Center 50, LLC, Paul Dewey Jones d/b/a Freedom 2000 Fireworks, Metro Church, and Gulf Coast Avenue C, LLC, Appellees.

No. 01–08–00712–CV.

Court of Appeals of Texas, Houston (1st Dist.).

Dec. 31, 2009.Rehearing Overruled April 8, 2010.

Britton B. Harris, Harris, Hilburn & Sherer, L.L.P., Denise L. Miller, Assistant City Attorney, John J. Hightower, Scott Bounds, Olson & Olson, L.L.P., Randy L. Pourteau II, Senior Assistant City Attorney, Houston, TX, for Appellants.Denice Smith, Law Office of Denice Smith, James V. Pianelli, Pianelli Law Firm, Houston, TX, for Appellees.Panel consists of Justices ALCALA, HANKS and WILSON.^*

OPINION

GEORGE C. HANKS, JR., Justice.

This is an accelerated interlocutory appeal pursuant to Section 51.014(a)(8) of the Texas Civil Practice and Remedies Code, filed by Appellants, The City of Houston, Texas (“the City”), Harris County Municipal Utility District 152 (“MUD 152”), and Harris County Municipal Utility District 157, and Harris County Municipal Utility 132 (“MUDs 157 and 132”). Appellants complain the trial court wrongly denied their pleas to the jurisdiction. Appellees Sarges Fireworks, Fireworks Center 50, LLC, and Freedom 2000 Fireworks (“Fireworks Operators”) own and operate fireworks stands outside the City's limits. Appellees Metro Church and Gulf Coast Avenue C, LLC (“Property Owners”),¹ are the owners of the real property leased to these businesses. Fireworks Operators and Property Owners filed this suit challenging the City's and MUDs' use of certain strategic partnership agreements and the Houston City Fire Code to ban the sale of fireworks outside the City's limits where the businesses and the real property are located. We reverse, in part, and affirm, in part, the trial court's denial of the pleas to the jurisdiction. We remand this cause to the trial courts for proceedings consistent with this opinion.

BACKGROUND

In 2008, the City entered into strategic partnerships with MUD 152, and MUDs 157 and 132. These strategic partnerships allowed the City to annex, via a Limited Purpose Annexation (“LPA”), certain areas within those MUDs. The City annexed roadways along which Property Owners' real property was located, but did not annex the actual parcels of property. This arrangement allowed the City to collect a two percent sales tax from these areas, and allowed the MUDS to benefit from certain services provided by the City. One of the services provided by the City in these areas is the enforcement of the City's Fire Code, including the ban on possession of fireworks in the Fire Code.

Fireworks Operators and Property Owners filed suit against the City and MUDs 135, 157 and 132, alleging the LPAs unlawfully extended the City's ordinances regarding fireworks to areas outside of the City's limits. Fireworks Operators and Property Owners allege the City intends to stop motorists traveling on the annexed roadways (along which Property Owners' real property is located), so police officers might search vehicles for fireworks and issue citations for violating the City's Fire Code if motorists are found in possession of fireworks. Fireworks Operators allege they are “engaged in interstate and intrastate commerce in their purchase, distribution and sale of fireworks” and these City actions will prevent them from “moving their lawful products, stocking their legal locations and lawfully selling to [their] long-time customers.” Fireworks Operators and Property Owners argue the enforcement of the City's Fire Code, and the search of vehicles for fireworks along the specific roadways upon which the businesses are located, will “place absolute bars to access or exit” on the businesses. Fireworks Operators and Property Owners allege this enforcement threatens to substantially impair the operations, profits and goodwill accrued by the businesses and will damage the commercial interest of Property Owners by reducing the commercial value of the property they lease to Fireworks Operators.

Fireworks Operators and Property Owners claim the City's actions constitute an unconstitutional taking, as well as an unconstitutional exercise of police power. They allege claims under the Texas Private Real Property Rights Preservation Act (“PRPRPA”) for unlawful government taking of property and proprietary rights without just and due compensation. Fireworks Operators and Property Owners also claim the City and MUD's actions are an unconstitutional taking of property under the United States Constitution, exceed governmental authority, are ultra vires acts, and constitute tortious interference, deprivations of “equal rights under the law,” and interference with the liberty interest of Harris County citizens to travel freely in unincorporated areas. Accordingly, Fireworks Operators and Property Owners sought a temporary injunction and declaratory judgments in their favor.

Fireworks Operators and Property Owners allege the City's and MUDs' sovereign immunity to this action has been waived by statute and because they asserted claims for the unconstitutional taking of their property, for which the City and the MUDs do not have sovereign immunity.

The trial court granted a temporary injunction regarding one of the Fireworks Operators, prohibiting the City and MUD 157 from “imposing a ban on the possession of fireworks on FM 529 in the vicinity of Fireworks 50, LLC.” The City filed a motion to dissolve the temporary injunction. The trial court denied the City's motion to dissolve the temporary injunction.

The City and MUDs filed pleas to the jurisdiction. The trial court denied the pleas to the jurisdiction.

This appeal followed. In this appeal, the City and MUDs complain the trial court erred by denying their pleas to the jurisdiction. The City also complains the trial court erred by denying its motion to dissolve the temporary injunction.

PLEAS TO THE JURISDICTION

We first address the jurisdictional issues raised by the City and the MUDs. The City and MUDs complain the trial court erred by denying their pleas to the jurisdiction. Specifically, the City and MUDs complain the trial court lacked jurisdiction to consider the claims because Fireworks Operators and Property Owners failed to properly plead jurisdictional facts and actions by the City and the MUDs within a valid legislative waiver of immunity from suit under PRPRPA, the United States and Texas Constitutions, or the Texas Torts Claims Act. They also contend Fireworks Operators and Property Owners failed to plead facts essential to the subject-matter jurisdiction of the trial court to consider their requests for declaratory or injunctive relief.

This court has appellate jurisdiction to consider an interlocutory order denying a governmental unit's plea to the jurisdiction. Tex. Civ. Prac. & Rem.Code § 51.014(a)(8) (Vernon Supp. 2007).

I. Standard of Review

A plea to the jurisdiction based on governmental immunity challenges a trial court's subject matter jurisdiction. State v. Holland, 221 S.W.3d 639, 642 (Tex.2007); Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex.2000). Subject matter jurisdiction is essential for a court to have authority to decide a case; it is never presumed and cannot be waived. Alfonso v. Skadden, 251 S.W.3d 52, 55 (Tex.2008) (per curiam) (subject matter jurisdiction cannot be waived and can be raised at any time); Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443–44 (Tex.1993).² “Not only may an issue of subject matter jurisdiction be raised for the first time on appeal by the parties or by the court, a court is obliged to ascertain that subject matter jurisdiction exists regardless of whether the parties have questioned it.” Univ. of Tex. Sw. Med. Ctr. at Dallas v. Loutzenhiser, 140 S.W.3d 351, 358 (Tex.2004). Fireworks Operators and Property Owners do not dispute that the actions at issue are governmental functions by governmental entities, which would generally entitle these entities to sovereign immunity.³

We review the trial court's ruling on a plea to the jurisdiction under a de novo standard. Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 228 (Tex.2004). If the plea challenges the sufficiency of the claimant's pleadings, the trial court must construe the pleadings liberally in the claimant's favor and deny the plea if the claimant has alleged facts affirmatively demonstrating jurisdiction to hear the case. If the pleadings are insufficient, the court should afford an opportunity to replead if the defects are potentially curable but may dismiss if the pleadings affirmatively negate the existence of jurisdiction. Id. at 226–27; see also Texas A & M Univ. Sys. v. Koseoglu, 233 S.W.3d 835, 839–40 (Tex.2007) (“[A] plaintiff may stand on his pleadings in the face of a plea to the jurisdiction unless and until a court determines that the plea is meritorious .... [t]hereafter ... the plaintiff must be given a reasonable opportunity to amend his pleadings to attempt to cure the jurisdictional defects found unless the pleadings are incurably defective.”).

If the plea to the jurisdiction challenges the existence of jurisdictional facts, the trial court must consider relevant evidence submitted by the parties. Id. at 227. If the evidence creates a fact question regarding jurisdiction, then the trial court cannot grant the plea to the jurisdiction, and the fact issue will be resolved by the fact-finder. But if the relevant evidence is undisputed or fails to raise a fact question on the jurisdictional issue, the trial court rules on the plea to the jurisdiction as a matter of law. Id. at 227–28. In reviewing the evidence presented in support of the plea to the jurisdiction, we take as true all evidence favorable to the nonmovant. Id. at 228. We...