Galovelho LLC v. Abbott

1

GALOVELHO LLC, Appellant v. GREG ABBOTT, IN HIS OFFICIAL CAPACITY AS GOVERNOR OF THE STATE OF TEXAS; COLLIN COUNTY, TEXAS; AND CITY OF FRISCO, TEXAS, Appellees

No. 05-21-00965-CV

Court of Appeals of Texas, Fifth District, Dallas

August 29, 2023

On Appeal from the 219th Judicial District Court Collin County Texas Trial Court Cause No. 219-02595-2020

Before Justices Pedersen, III, Goldstein, and Rosenberg^[1]

MEMORANDUM OPINION

BILL PEDERSEN, III JUSTICE.

Galovelho LLC appeals the trial court's September 21, 2021 Order and Final Judgment, which dismissed all of Galovelho's claims with prejudice after granting appellees' original and supplemental pleas to the jurisdiction. In seven issues Galovelho challenges the trial court's jurisdictional rulings on its claims for takings and for equitable relief and the trial court's earlier order requiring leave of court before Galovelho further amended its pleadings. We affirm the trial court's Order and Final Judgment.

Background

In the Spring of 2020, when the Covid-19 virus spread throughout the State of Texas, appellant Galovelho was operating EG Steak, a dine-in full-service restaurant in Frisco, Texas. On March 13, 2020, due to the imminent threat posed by Covid-19, appellee Governor Greg Abbott declared a state of disaster pursuant to the Texas Disaster Act. Days later, on March 19, Abbott issued executive order GA-08, which in relevant part stated:

In accordance with the Guidelines from the President and the CDC, people shall avoid eating or drinking at bars, restaurants, and food courts, . . . provided, however, that the use of drive-thru, pickup, or delivery options is allowed and highly encouraged throughout the limited duration of this executive order.

GA-08. During the course of the disaster declaration, Abbott issued a series of additional executive orders that permitted indoor dining in varying percentages of a restaurant's capacity. None of these orders required restaurants to close; none prohibited owners from using their property.

In similar fashion, on March 16, 2020, Collin County Judge Chris Hill issued a proclamation after the Commissioner's Court declared a state of disaster in Collin County. The county issued its own executive order, inter alia, incorporating Abbott's GA-08 and stating that "persons shall avoid eating or drinking at bars, restaurants, and food courts . . . However, the use of drive-thru, pickup, or delivery options for bars, restaurants, and food courts is allowed and highly encouraged throughout the limited duration of [Abbott's] Executive Order." Second Executive Order.

And in March 2020, the City of Frisco likewise issued its Declaration of Local Disaster for Public Health Emergency. Frisco passed an ordinance stating, "In accordance with the Guidelines from the President, the Governor and the CDC, people shall avoid eating or drinking at bars [and] restaurants." Ordinance No. 2020-03-12. That provision was clarified to add: "Restaurants and beverage bars with or without drive in or drive-through services . . . may only provide take out, delivery or drive-through services as allowed by law." Ordinance No. 2020-03-13.

We will collectively describe these state, county, and municipal limitations on restaurants, which began in March 2020 and extended to varying degrees for approximately one year, as the Emergency Orders.

On May 22, 2020, Galovelho filed suit against Abbott, Collin County, and Frisco. He alleged that the Emergency Orders had effected a taking of its property, and he sought $2 million in damages. In June 2020, all three defendants filed pleas to the jurisdiction alleging that the court lacked subject matter jurisdiction over the takings claims. Galovelho filed an omnibus response, clarifying that its claims for regulatory takings should be analyzed as categorical takings under Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1019 (1992), or alternatively, as traditional takings pursuant to Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978).

Following a hearing, the trial court granted all three pleas to the jurisdiction. Galovelho perfected an interlocutory appeal of those orders.

However, the day after filing its omnibus response, Galovelho also filed its Second Amended Petition, which added allegations that the Emergency Orders were "invalid because they are unconstitutional and illegal under Texas Law." The pleading alleged equitable claims based on the Emergency Orders, including claims for both injunctive and declaratory relief. Galovelho pleaded that he was denied due process rights to notice and a hearing before the Emergency Orders took effect and that restaurants were being denied equal protection of the law without a rational basis for the deprivation. He prayed that appellees be permanently enjoined from enforcing the provisions of the Emergency Orders and that the court enter judgment declaring the various Emergency Orders unconstitutional and invalid.

On August 14, 2020, the trial court issued an order purporting to support resolution of jurisdictional issues in an efficient manner. The order required Galovelho to seek leave of court before further amending its pleadings. Shortly after, Galovelho's interlocutory appeal was voluntarily dismissed and remanded to the trial court. Galovelho, LLC v. Abbott, No. 05-20-00784-CV, 2020 WL 6156014 (Tex. App.-Dallas Oct. 21, 2020, no pet.).

On March 2, 2021, Abbott issued an order stating that "there are no Covid-19-related operating limits for any business or other establishment [in Texas]." GA- 34.^[2] Shortly after, appellees filed their joint Supplemental Plea to the Jurisdiction, arguing that the trial court lacked jurisdiction over Galovelho's equitable claims because the claims had become moot following GA-34. Appellees also argued that Galovelho lacked standing for a number of its claims and that some claims were barred by sovereign immunity. Galovelho responded, and after hearing, the trial court granted the supplemental plea and dismissed all of Galovelho's claims with prejudice.

This appeal followed.^[3]

The Trial Court's Jurisdictional Rulings

Whether a court has subject matter jurisdiction is a question of law. Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). A court's lack of subject matter jurisdiction is properly asserted in a plea to the jurisdiction. Id. at 225- 26. In this case, the trial court concluded that it lacked subject matter jurisdiction to decide Galovelho's claims on a number of grounds. The court concluded broadly that Galovelho's claims were barred by sovereign or governmental immunity and that it lacked standing to bring suit against appellees. The court concluded specifically that Galovelho did not have a viable takings claim under the Texas constitution. And finally, the court concluded that Galovelho's due process and equal protection claims for equitable relief were moot. We review the trial court's rulings on these pleas to the jurisdiction de novo. See Miranda, 133 S.W.3d at 226 ("Whether a pleader has alleged facts that affirmatively demonstrate a trial court's subject matter jurisdiction is a question of law reviewed de novo.").^[4]

Galovelho's Takings Claims

In its Original and First Amended Petitions, Galovelho pleaded that the Emergency Orders effected an unlawful taking of its property under the Texas constitution. The fundamental rule of article I, section 17 prevents the government's taking, damaging, or destroying a person's property for public use without either the consent of the person or adequate compensation's being made. Tex. Const. art. I, § 17(a).^[5] This clause is self-executing and waives any claim of immunity by governmental actors, whether sovereign or governmental, when a takings claim is properly pled. See City of Dallas v. Stewart, 361 S.W.3d 562, 568 (Tex. 2012) (clause is self-executing); see also Hearts Bluff Game Ranch, Inc. v. State, 381 S.W.3d 468, 476 (Tex. 2012) ("In the absence of a properly pled takings claim, the state retains immunity."). We review the trial court's grant of a plea to the jurisdiction to determine "whether the plaintiff's pleadings, construed in favor of the plaintiff, allege sufficient facts affirmatively demonstrating the court's jurisdiction to hear the case." Hearts Bluff Game Ranch, Inc., 381 S.W.3d at 476.

Galovelho pled two types of regulatory takings claims against the appellees: a categorical taking pursuant to Lucas, 505 U.S. at 1019 and a traditional taking pursuant to Penn Central, 438 U.S. at 124.

The Lucas Takings Claim

Galovelho's first claim alleged a categorical or per se taking, which occurs "when the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good, that is, to leave his property economically idle." Lucas, 505 U.S. at 1019 (emphasis in original). The Supreme Court identified this categorical taking claim in Lucas, but limited it to "the extraordinary circumstance when no productive or economically beneficial use of land is permitted." Id. at 1017 (emphasis in original). The Lucas Court's use of emphasis underscores that a categorical taking occurs only when the government's action destroys all economic value of the property at issue.^[6] That principle was subsequently confirmed, when the Court wrote that "[a]nything less than a 'complete elimination of value,' or a 'total loss'" would prevent such a taking claim. Tahoe-Sierra Pres. Council, Inc., 535 U.S. at 330.

Galovelho pleaded: "The economic impact of the regulations was total and failed to allow any economic or beneficial use of the property as a full-service restaurant." But the Lucas requirement of a "complete elimination of value" or a "total...