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Click here for the full text of this decision FACTS:In 2002, VSC LLC operated a licensed vehicle storage facility, which authorized it under Texas Occupations Code ��2303.001-.303 to receive and store vehicles towed without the consent of their owners. VSC alleged that Dallas police officers, with the approval, authorization and direction of the city’s policy makers, came onto VSC’s property at various times and seized 277 vehicles. The officers asserted the vehicles either had been reported stolen, had altered serial numbers or were involved in other felony offenses. VSC, however, alleged that the vehicles were not part of any criminal action or investigation when they were towed, when they arrived at VSC’s storage facility or when the police seized them. VSC alleged the city disposed of these vehicles without notifying VSC and that the city retained all funds collected from the disposition of the seized vehicles. VSC alleged that it had a legitimate and recognized property interest in the seized vehicles that the city destroyed through the disposition of the vehicles without notice to VSC. VSC sued the city in state court alleging several state and federal causes of action. The city removed the case to federal district court. At VSC’s request, the federal court remanded three of the causes of action to the state court and abated the remaining federal claims until disposition of the state-court litigation. Two of the causes of action alleged the city’s seizure and subsequent disposition of the vehicles without notice to VSC was a constitutional taking of VSC’s property interest in the vehicles and violated VSC’s right to just compensation under the Texas Constitution and the Fifth and 14th Amendments to the U.S. Constitution. The third cause of action sought a declaratory judgment that: 1. VSC is entitled to towing and storage fees for vehicles lawfully towed and stored at VSC’s licensed storage facility even if the vehicles are reported stolen; 2. the city lacks authority to seize vehicles as stolen when VSC is entitled to towing and storage fees for those vehicles; and 3. even if the city is authorized to seize the vehicles from VSC’s licensed storage facility, VSC is entitled to notice and a hearing under Chapter 47 of the Texas Code of Criminal Procedure before the city disposes of the vehicles. The city filed a plea to the jurisdiction asserting the trial court lacked jurisdiction over VSC’s claims. The trial court denied the plea to the jurisdiction. The city then brought an interlocutory appeal. HOLDING:Affirmed in part, reversed and dismissed in part. The city contended that its seizure of the vehicles was not a taking under Texas Constitution Art. 1, �17, because the vehicles were seized pursuant to the city’s police power, not its eminent domain power. The city asserted that the damage or destruction of property that occurs when the government exercises its police power is not compensable under the Texas Constitution. The city argued that the police had the power to seize stolen vehicles and vehicles with altered serial numbers. The court concluded that whether the city took, damaged or destroyed property pursuant to its police power and not its eminent domain power had no effect on VSC’s takings claim. Next, the city asked: “Does VSC, as a non-consent vehicle storage facility, have a lien or vested property interest in vehicles towed without consent?” Absent a cognizable property interest, the court stated, a claimant is not entitled to compensation under Art. 1, �17. VSC, the court stated, argued that the city destroyed its possessory liens when the city seized the vehicles. VSC argued that it has garageman’s liens as described in Texas Property Code �70.003(c): “A garageman with whom a motor vehicle . . . is left for care has a lien on the motor vehicle . . . for the amount of the charges for the care, including reasonable charges for towing the motor vehicle . . . to the garageman’s place of business.” The city argued that no lien existed, because the Vehicle Storage Facility Act, which authorizes the storage of vehicles towed without consent, does not contain a provision creating a lien. But the court stated that the absence from the Vehicle Storage Facility Act of a provision creating a lien does not mean no lien exists. The city next argued that a valid lien is dependent on a valid debt, and that VSC could not have a valid debt for towing and storage because “[a]ll of the vehicles were stolen.” The court disagreed for several reasons, including its finding that the owner of a vehicle impliedly consents to the towing and storage of his vehicle when authorized by law. The city also found that liens were property that could be taken under Art. 1, �17. Thus, the court concluded that the city failed to establish that VSC had no property interest subject to being taken by the city. Accordingly, the court held that the trial court did not err in denying the city’s plea to the jurisdiction as to that cause of action. The court, however, held that the trial court abused its discretion in denying the plea to the jurisdiction to VSC’s claim for damages under Art. 1, �17, based on allegations that the city took, damaged or destroyed VSC’s property � its alleged liens on the vehicles in question � for a private purpose. As for VSC’s declaratory judgment claim, the court held that “[t]he fact that the City may prevail on the declaratory judgment claim does not establish that the trial court lacked jurisdiction over the claim.” OPINION:FitzGerald, J.; Moseley, FitzGerald and Francis, JJ.

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