Hallco Texas Inc. v. McMullen County – Case Brief Summary (Texas)

In Hallco Texas Inc. v. McMullen County, 221 S.W.3d 50 (Tex. 2006), Hallco purchased property near a reservoir with the intent of operating a non-hazardous industrial waste landfill, which required a permit from the Texas Commission on Environmental Quality. 221 S.W.3d at 52.

Shortly after Hallco purchased the property, the McMullen County Commissioners Court adopted a resolution expressing opposition to the proposed use as a potential hazard to local water supplies. Id. at 53.

Despite the opposition, Hallco filed its application with TCEQ. Id. McMullen County subsequently passed an ordinance banning the disposal of solid waste within three miles of the reservoir but allowed disposal in other areas provided applicable state requirements were satisfied. Id.

Hallco challenged the ordinance by filing suit in federal district court and it filed a parallel proceeding in state court. Id. at 53-54.

The federal court dismissed without prejudice Hallco's claim alleging an unconstitutional taking in violation of the Fifth Amendment to the United States Constitution, holding that to ripen its federal takings claim, Hallco first had to seek compensation through procedures the state had established. Id. at 54.

A week after the federal court's dismissal, the County moved for summary judgment in state court on various grounds. Id.

The court of appeals affirmed the trial court's judgment, holding that Hallco's takings claim failed because it did not have a cognizable property interest of which the government could deprive it. Id.

Hallco did not appeal that decision. Id. at 55. More than two years later, Hallco submitted a request for a variance to the McMullen County Commissioners Court but offered no changes to its proposed landfill. Id. The commissioners heard a presentation on the variance request, but did not take any action. Id.

Two months later, Hallco filed suit alleging that the county's denial of the variance request constituted a taking under Article 1, Section 17 of the Texas Constitution. Id.

The county moved for summary judgment on all of Hallco's claims on various grounds, including that all of Hallco's claims were barred by res judicata because they were or could have been raised in the first state lawsuit. Id.

The trial court again granted the county's motion without specifying the grounds, and the court of appeals affirmed. Id. at 55-56.

To avoid the County's res judicata argument, Hallco argued that its takings claim was not ripe in Hallco I. Id. at 58-59. The Supreme Court addressed the ripeness argument in Section IIIA of its opinion, but only four of the justices joined this part of the opinion. Id. at 58.

The court found that the ordinance at issue was not subject to discretionary application or variance and it prohibited precisely the use Hallco intended to make of the property. Id. at 60.

Thus, Hallco's taking claim was ripe upon enactment of the ordinance and res judicata applied. Id.