KMS Retail Rowlett, LP f/k/a KMS Retail Huntsville, LP v. City of Rowlett, Texas

Summary

The Supreme Court of Texas considered whether the City of Rowlett’s condemnation of KMS Retail’s private-road easement violated the Texas Constitution’s public-use requirement or Government Code chapter 2206. The Court held that chapter 2206 did not apply because the taking was for a transportation project—a public road—and concluded that the taking was necessary for a constitutional public use. The Court also held that KMS failed to raise a fact issue showing that the taking was fraudulent, in bad faith, or arbitrary and capricious, and affirmed the judgment below.

Holdings

1. Government Code section 2206.001(c)(1) creates an exception for takings for transportation projects, including public roads. Because KMS's easement was taken to facilitate construction of a public road, chapter 2206's additional limitations on takings for private parties or economic-development purposes did not apply.
2. The condemnation was for a constitutional public use and was necessary, at least on the undisputed record, to provide public cross-access, traffic circulation, and emergency-vehicle access between commercial areas. The possibility that Briarwood and Sprouts also benefited did not deprive the use of its public character.
3. KMS failed to raise a fact issue that the City's taking was fraudulent, in bad faith, or arbitrary and capricious. Alleged private benefits or an additional private motive do not invalidate a taking when the taking also serves an otherwise valid public use; fraud in this context requires that the taking actually confer only a private benefit contrary to the ostensible public use.

Questions Presented

1. Whether Texas Government Code section 2206.001 applies to a condemnation for a public road that is also connected to an economic-development agreement.
2. Whether the City's condemnation of KMS's easement was for a constitutional public use and was necessary to advance that use.
3. Whether KMS raised a genuine issue of material fact that the condemnation was fraudulent, in bad faith, or arbitrary and capricious.
4. Whether summary judgment was proper on the City's and KMS's competing traditional and no-evidence motions.

Disposition

affirmed