Supreme Court Update: El Dorado Land Company

The Texas Supreme Court has granted the petition for review in an inverse-condemnation case from the Dallas Court of Appeals.  In El Dorado Land Co., L.P. v. City of McKinney, the court of appeals affirmed the trial court’s determination that the plaintiff had failed to plead a compensable interest in a deed restriction for a piece of real property.  El Dorado had sold the property to the city on the condition that it only be used for a community park, but ten years later the city built a library on it instead.  According to the court of appeals, El Dorado could not sue for condemnation because it did not have a vested interest in the property at the time of the taking, despite a contractual option to repurchase the property if the city ever breached the deed restriction.  That was so, the court of appeals held, because “a claim for inverse condemnation under article I, section 17 of the Texas Constitution has traditionally involved interests in real property and not the alleged taking of property interests created under contract.”  The Supreme Court will now have the opportunity to determine whether a contractual option to purchase is a sufficient interest in property to support a takings claim.  The case is set for oral argument on January 9, 2012.

You can find the parties’ briefs here.