CITY OF DALLAS V. STEWART:
TEXAS SUPREME COURT ISSUES NEW OPINION

On January 27, the Texas Supreme Court issued a new opinion in the substandard building case of City of Dallas v. Stewart.  In response to a motion by the City of Dallas for a rehearing (a request that the court reconsider its first opinion), the Texas Supreme Court withdrew its original opinion (meaning that it is no longer legal authority) and substituted this new opinion.  The Court essentially confirmed its original opinion:

Today we hold that a system that permits constitutional issues of this importance to be decided by an administrative board, whose decisions are essentially conclusive, does not correctly balance the need to abate nuisances against the rights accorded to property owners under our constitution. In the context of a property owner’s appeal of an administrative nuisance determination, independent court review is a constitutional necessity.

The lawsuit started when Stewart’s house fell into disrepair, had been inhabited by vagrants, and suffered from numerous code violations.   The city building standards board determined that the house was a nuisance and ordered its demolition. Before the demolition, the owner appealed the board’s decision to district court.  (The appeal did not stay the demolition, and the house was demolished.) 

After the demolition, the owner added a takings claim to her suit. A jury decided that the home was not a public nuisance, that the demolition worked a “taking” by the city of the property, and awarded the owner damages.  The city appealed the issue of whether the board’s decision that the house was a public nuisance precluded a finding of a taking, and the Court concluded that an appointed board’s decision is not entitled to deference by a court. 

The City of Dallas sought a rehearing of the case, and the League provided amicus support in that effort.  In addition, numerous cities and the International Municipal Lawyers Association filed briefs in support of the city.

In its second opinion, the Court attempted to soften the blow of the case by stating that “property owners rarely invoke the right to appeal.”  It further stated that a takings “review is required only when a nuisance determination is appealed…Thus, the city need not institute court proceedings to abate every nuisance. Rather, the city must defend appeals of nuisance determinations and takings claims asserted in court by property owners who lost before the agency.”  Those things may be true, but they are probably of little comfort to cities that could now incur liability for takings damages when they demolish a substandard building.

The potentially good news in the second opinion is that the Court recognized that state law provides a “narrow thirty-day window for seeking review.”  This may mean that a city could continue to use the city council or building and standards commission abatement process, and simply wait until the time for appeal has passed before demolishing a structure.  However, not all city attorneys are in agreement that such is the case.  The League has prepared a detailed question-and-answer memo to explain the processes a city can use to deal with substandard structures, with analysis of the impact of the Stewart case where appropriate.  The Q&A is available at:

http://www.tml.org/legal_pdf/SubstandardBuildingQA.pdf

City officials should consult with their city attorney regarding how to best implement substandard building abatement in their city.


TML member cities may use the material herein for any purpose. No other person or entity may reproduce, duplicate, or distribute any part of this document without the written authorization of the Texas Municipal League.

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