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Click here for the full text of this decision FACTS:In 1993, Smith Crushed Stone leased limestone quarry rights on three tracts of land in Limestone County and four more contiguous tracts within the City of Tehuacana’s borders, but it did no mining. Vulcan Materials bought Smith’s assets in 1997. The leases allowed Vulcan to prospect, explore, mine or use strip mining or open pit mining for all rock, stone, limestone and similar rock-like materials. Before the purchase, a local attorney told Vulcan that there was no local rule or ordinance that would prevent Vulcan from quarrying, even within Tehuacana’s city limits. In early 1998, Vulcan began plans for active quarrying on the four tracts within Tehuacana, which abut several public roads used to access several homes. It determined ramp access points, it cleared land and otherwise prepared the tracts for physical use. Upon learning that Vulcan planned a blast to loosen limestone in the area, the city considered adopting an ordinance to regulate Vulcan’s quarrying activity. Vulcan conducted two blasts (“shots”) on Nov. 25 and Nov. 26, 1998, which produced nearly 500 tons of limestone, but which was still below what Vulcan normally retrieved and processed during a regular day of operations. The Tehuacana government held hearings about Vulcan, and several citizens complained about the company’s operations both within city limits and those taking place on the adjacent property in Limestone County. They complained that Vulcan’s activities caused houses to shake, furniture to move and windows to rattle; it interfered with their use and enjoyment of their property; wells and springs were drying up; and the blasts exposed them to flying rocks. One incident of a errant rock � a 500-pound boulder that landed in a neighbor’s yard had already been reported. The city passed an ordinance prohibiting quarrying or blasting operations within the city limits. Vulcan immediately filed suit in district court alleging that the ordinance amounted to a taking under the Texas Constitution. The district court granted Tehuacana’s motion for summary judgment. The district court determined that there had not been a taking because the ordinance prohibited only quarrying through blasting; other means of quarrying would presumably still be allowed. Neither high explosives or heavy equipment “were required to extract the stone used to build the pyramids,” the court district court said. Also, Vulcan’s activities would constitute a nuisance under Texas law. HOLDING:Vacated and remanded. First, the court dismisses Tehuacana’s argument that it has authority to pass the ordinance under its inherent power to pass rules to protect its citizens health and safety. The following factors are relevant in determining if the Ordinance has “gone too far” and effected a taking of Vulcan’s property: “(1) whether the property was rendered wholly useless; (2) whether the governmental burden created a disproportionate diminution in economic value or caused a total destruction of the value; and (3) whether the government’s action against an economic interest of an owner was for its own advantage.” The court concludes this ordinance goes too far to be justified by the city’s police power, in part because it was adopted to completely prohibit Vulcan from mining on the tracts within Tehuacana’s city limits; Vulcan’s only right in those tracts was the right to mine limestone. The court next turns to whether the ordinance amounts to a taking of Vulcan’s leasehold interest. A regulatory taking can occur when the regulation does not substantially advance legitimate state interests, or when the regulation either denies the owner of all economically viable use of his property (a categorical taking), or unreasonably interferes with a property owner’s rights to use and enjoy his property (a partial taking). Even if the city’s ordinance substantially advances Tehuacana’s legitimate interests, there can still be a taking if the ordinance denies Vulcan all economically viable use of its property or unreasonably interferes with its right to use and enjoy the property. In measuring Vulcan’s continued use and enjoyment of its property, a court may consider the economic impact of the regulation, as well as the landowner’s investment-backed expectation of the property. “Given the facts of this case and the limited nature of Vulcan’s property interest, i.e., a lease for the sole purpose of mining limestone, it is clear that the ‘denial of all economically viable use’ inquiry will be dispositive,” the court writes. For instance, the court continues, there is no Texas or federal authority for the city’s proposition that property outside the city’s limits (i.e., in Limestone County) be included when measuring economically viable use. Only the affect on the land within Tehuacana’s borders can be considered. The ordinance in this case effectively prohibits all mining of limestone on the tracts within the city, which deprives Vulcan of all value of its property interest. Thus, the court holds that the ordinance constitutes a categorical taking that renders Vulcan’s leasehold interest valueless. Despite its holding above, the court finds that if the Texas Supreme Court were to face a similar case, it would also ask if there was an exception to the impermissible taking because of a public nuisance. The only way Tehuacana could avoid paying the city just compensation for the taking is under the nuisance exception, and Vulcan’s activities must constitute a nuisance in fact. Generally, a lawful business is not a nuisance per se. The court acknowledges much of the evidence that the mining is a nuisance: noise, dust, vibration, flying rocks, depletion of groundwater, etc. However, Vulcan has evidence that the 500-pound boulder incident actually occurred when Smith was in control, not after Vulcan took over. The company further asserts that it has taken proactive measures to alleviate adverse effects to local residents. “As compelling as the City’s evidence of nuisance may seem to be, the fact of a nuisance was also contradicted by Vulcan’s proffer. Accordingly, a jury question was presented on whether Vulcan’s quarrying activities [in Tehuacana] constitute a nuisance under Texas law.” OPINION:E. Grady Jolly, J.; Jolly, Wiener and Walter, JJ.

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