United States Court of Appeals
Fifth Circuit
F I L E D
REVISED MARCH 27, 2003
March 24, 2003
UNITED STATES COURT OF APPEALS
For the Fifth Circuit Charles R. Fulbruge III
Clerk
No. 02-50420
SANDY CREEK INVESTORS, LTD,
Plaintiff-Appellant-Cross Appellee,
VERSUS
THE CITY OF JONESTOWN, TEXAS; ET AL,
Defendants,
THE CITY OF JONESTOWN, TEXAS,
Defendant-Appellee-Cross Appellant.
Appeals from the United States District Court
For the Western District of Texas, Austin
Before JONES, WIENER, and DeMOSS, Circuit Judges.
DeMOSS, Circuit Judge:
Sandy Creek Investors, Ltd. ("Sandy Creek"), a Texas limited
partnership, is the owner of real property located in a portion of
Travis County, Texas, known as North Lake Hills Subdivision
(hereinafter referred to as "the Property"). Sandy Creek acquired
the Property as well as other surrounding real property in December
1996 with the intent to develop a marina on the Property. The
Property was not located within the boundary limits of the City of
Jonestown ("the City") at the time it was acquired by Sandy Creek.
According to Sandy Creek, it voluntarily submitted to annexation
based on the representation of the City's representatives that the
City would approve the necessary zoning and related development
permits to allow Sandy Creek to develop the Property, as a master
planned community, including residential, commercial and multi-
family sections including a marina and related facilities and
improvements.
The City annexed the Property and additional real property
owned by Sandy Creek pursuant to city ordinances that became
effective on May 30, 1997 ("May 1997 ordinance"), and November 7,
1997 ("November 1997 ordinance"). The May 1997 ordinance covered
two tracts (Tract One and Tract Two) comprising Section One of
North Lake Hills Subdivision. Tract One began at an iron pipe and
described an area abutting the southern right-of-way of Reed Park
Road. Tract Two began at the same iron pipe and then describes an
area that crosses Reed Park Road and then abuts the northern right-
of-way. Reed Park Road was not owned by the City when the May 1997
ordinance was passed. Sandy Creek admits that Tract Two is
adjacent to the City. The contiguity and adjacency of Tract One is
contested.
The November 1997 ordinance covered Section Two of North Lake
Hills Subdivision. The property subject to this ordinance was
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contiguous to Tract Two, Section One of North Lake Hills
Subdivision. The City subsequently annexed several other tracts
that are contiguous to Section Two of North Lake Hills Subdivision.
In January 1998, the City Counsel approved the zoning designation
of the property as "Commercial B-2," which allows various types of
commercial development. At that time, the City did not have any
specific zoning ordinances or regulations for a marina development.
In July 1999, Sandy Creek applied to the City for a Land
Development permit, which the City did not approve. The City then
enacted a special use ordinance preventing Sandy Creek from
developing a marina as it had intended.
As a result, Sandy Creek filed suit against the City and
certain City officials (hereinafter collectively referred to as
"the defendants") on December 27, 1999, in the District Court for
Travis County, Texas, 261st Judicial District, seeking a
declaratory judgment that the annexations of the Property were void
because they included property that was neither contiguous nor
adjacent to the City as required by applicable Texas law. In the
alternative, Sandy Creek requested that the court find the City's
B-2 zoning sufficient for the construction and operation of a
marina and that the land permit Sandy Creek applied for be approved
as a matter of law. In addition, Sandy Creek requested that the
court issue an injunction restraining the defendants from revoking
the zoning designation previously obtained and from taking any
action that would further postpone, delay or frustrate the
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development of a marina. Also requested of the court was a
mandatory injunction requiring the City to issue all necessary
permits to allow the development of a marina.
Lastly, Sandy Creek sought relief under Article I, Section 3
of the Texas Constitution, the Fourteenth Amendment to the United
States Constitution, and 42 U.S.C. § 1983. According to Sandy
Creek, the defendants ignored state law and applicable City
ordinances when they refused to approve the land development permit
despite the fact that the permit met all requirements. Sandy Creek
argued that the defendants' actions were arbitrary, unreasonable,
capricious, and lacking a substantial relation to any valid
legislative/governmental objective, which denied Sandy Creek its
rights to use and develop the Property. Sandy Creek, therefore,
requested damages equal to the value of the Property due to the
City's alleged unconstitutional taking.
Because Sandy Creek's original and amended complaints included
a federal takings issue, the defendants removed the case to the
United States District Court for the Western District of Texas in
January 2000. Sandy Creek did not file a motion to remand and
there is no diversity of citizenship between the parties. On
August 2, 2000, Sandy Creek filed a Motion for Summary Judgment,
asking the district court to declare the May 1997 ordinance void ab
initio, because a portion of the property annexed by the May 1997
ordinance was not contiguous to the City. The defendants filed a
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Verified Motion for Summary Judgment on August 3, 2000, and a
Supplemental Motion for Summary Judgment on August 10, 2000,
seeking judgment against Sandy Creek on all of its claims. The
parties then reached a tentative settlement agreement that was
subject to approval by the City's City Council. The case was
abated pending consideration of that settlement. The settlement
was not approved and the abatement was lifted in January 2001.
The district court entered an order granting Sandy Creek's
Motion for Summary Judgment in part and denying the motion of the
defendants on March 26, 2001. However, the judgment inadvertently
reflected that the summary judgment order disposed of all claims
involved in the cause. Therefore, on March 25, 2002, the district
court granted Sandy Creek's Motion for Entry of Judgment Nunc Pro
Tunc on the competing summary judgment motions, and entered an
order authorizing the voluntary dismissal of Sandy Creek's
remaining claims, and a Final Judgment that rendered the summary
judgment order final and appealable.
We need not make any decisions concerning the substantive
issues in this case. "[I]f parties do not raise the issue of
jurisdiction, or even if they contend that the Court of Appeals has
jurisdiction we still must determine, sua sponte, whether we have
jurisdiction in a particular case." United States v. Lipscomb, 299
F.3d 303, 358 (5th Cir. 2002). Having reviewed the record in this
case, we hold that the district court never had jurisdiction over
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this case. As noted above, the removal of this case from the state
court to federal court was based on the federal takings claim made
in Sandy Creek's original and amended complaints. However, that
issue was not ripe when the case was removed.
A takings claim is 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 plaintiff has sought
compensation through whatever adequate procedures the state
provides. See Williamson County Reg'l Planning Comm'n v. Hamilton
Bank, 473 U.S. 172, 194-95 (1985); Hidden Oaks Ltd. v. The City of
Austin, 138 F.3d 1036, 1041 (5th Cir. 1998); Samaad v. City of
Dallas, 940 F.2d 925, 933-34 (5th Cir. 1991). Here, Sandy Creek
has not exhausted its administrative or state court remedies as
required by the second prong of Williamson County.
Although "substantive due process claims alleging deprivations
of property are not necessarily subsumed under the Takings Clause,"
Sandy Creek's complaint that the City violated its Fourteenth
Amendment to the United States Constitution was framed only as a
takings claim. Simi Investment Co., Inc. v. Harris County, Tex.,
236 F.3d 240, 248 (5th Cir. 2000) (citing John Corp. v. City of
Houston, 214 F.3d 573, 582 (5th Cir. 2000)). Therefore, there were
no other due process claims that the district court could have
properly considered. We further note that Sandy Creek's § 1983
claim also was not properly before the district court: "Because a
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violation of the Takings Clause does not occur until just
compensation has been denied, . . . Appellants must use available
state procedures to seek such compensation before they may bring a
§ 1983 takings claim to federal court." John Corp., 214 F.3d at
581 (citation omitted).
We therefore hold that the district court lacked jurisdiction
to consider this case because the federal takings claim was not
ripe. We VACATE the district court's Order and Final Judgment and
REMAND with instructions for the district court to REMAND the case
to the District Court for Travis County, Texas, 261st Judicial
District, from which it was removed.
VACATED and REMANDED with instructions.
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