You may have redress if a city misinterprets sign rules to get you to take down a sign.  Richard Rothfelder of Rothfelder and Falick talks here about City of Houston v. De Trapani, a successful takings case he litigated against the city of Houston.

Introduction

The City of Houston (the “City”) enacted new regulations and gave and gave sign owners notice of a deadline for sign removal.  The sign owners (“Plaintiffs”) relied on the City’s interpretation of its own new regulation and took down their signs.  Later, the Plaintiffs learned that the city misinterpreted the regulation and that removal of their signs was unnecessary.  The Plaintiffs sued the City for unconstitutionally taking their property and were awarded more than $500,000.

Summary

• The City passed regulations applicable to portable signs.  The City misinterpreted the new regulations and sent notice to the Plaintiffs of an impending deadline for sign removal.  The Plaintiffs removed their signs in accordance with the City’s notice and in reliance on the City’s interpretation.  After the deadline for erecting new signs had passed, both parties learned that the interpretation was incorrect and the removal of the plaintiffs’ signs was unnecessary.

• The City’s misinterpretation of their own regulation and the Plaintiffs’ subsequent removal of their signs resulted in a loss in Plaintiffs’ businesses.  Both the City and the Plaintiffs agreed that the City’s original interpretation was erroneous.  The City, however, refused to correct its mistake by allowing the signs to be replaced.  The Plaintiffs sued and a jury found in favor of the Plaintiffs.  The City appealed.

• On appeal, the City argued that it did not take any property, not did it commit a violation of Plaintiffs’ due process or equal protection guarantees.  The City argued the Plaintiffs lacked “a cognizable property interest,” and that even if they did, the City never took that interest and “the mere announcement of a taking is not a taking.”

• The court found that the Plaintiffs did have a property interest under state law, and that the City’s actions went “beyond pure announcement.”  Instead the City prompted the Plaintiffs “to take certain measures which could not be reversed.”

• The court next tackled the issue of whether the sign administrator qualified as a policymaker.  If the sign administrators conduct was not an execution of official policy the City would not be liable under the Civil Rights Act for his actions.  The City argued that only the City Council had the capacity to act on behalf of the City, and that the actions by the sign administrator were nothing more than actions of an employee.

• The court ruled that the acts of the sign administrator can “fairly be said to represent official policy.”  Additionally, the policy that the signs could not be reinstalled once removed was the policy that caused the injury to the Plaintiffs and was found by the court to be a final act – meaning that the sign administrator acted as a policymaker.
• The court upheld the jury’s award of $500,000 in lost revenue plus attorneys’ fees.

Takeaways

If a city improperly interprets a regulation and orders the removal of a sign a court may find that the city unconstitutionally took your property.  However, exercise caution if you decide challenge this taking.  if the city offers to allow replacement or other compensation, the act of improperly interpreting the regulation may be considered to not be an execution of official policy,  Additionally, if the city simply announces a future taking, a court may not consider that act to be a taking.

You can read the decision at City of Houston v De Trapani.

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