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Date: 09-13-2022
Case Style:
The State of Texas v. Cal-Maine Foods, Inc. dba Wharton; and Wharton County Foods, LLC
Case Number: 01-20-00641-CV
Judge: Peter Kelly
Court:
Court of Appeals For The First District of Texas
On appeal from 215th District Court
Harris County, Texas
Plaintiff's Attorney:
Pedro Perez Jr.
The Honorable Ken Paxton
Daniel Zwart
Defendant's Attorney:
Houston, TX - Best Business Litigation Lawyer Directory
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Description:
Houston, Texas – Business Litigation lawyer represented defendant with an interlocutory appeal concerning the sale of eggs during the beginning of the Covid-19 pandemic.
Cal-Maine Foods, Inc. is the largest producer and marketer of shell eggs in
the United States. The company is a conglomerate comprised of its own operations
as well as those of its subsidiaries, including Wharton County Foods, LLC (all
appellees hereinafter “Cal-Maine”). Cal-Maine maintains chicken flocks and
processes conventional fresh shell eggs for sale to wholesale purchasers, such as
national and regional grocery-store chains, club stores, and food-service
distributors. Cal-Maine produces most of the conventional shell eggs that it sells on
its own farms. It purchases about 16% of the shell eggs it sells on the open market.
The company sells two categories of shell eggs: specialty and non-specialty or
generic. Specialty eggs include cage-free, organic, and nationally branded eggs.
1 See TEX. BUS. & COM. CODE §§ 17.001–17.955.
3
Non-specialty eggs are generic, commodity, or store-branded eggs. This case
concerns only Cal-Maine’s generic shell eggs business.
On March 13, 2020, Governor Greg Abbott issued a statewide disaster
proclamation due to Covid-19. The governor renewed the disaster proclamation on
April 12, 2020. Texans, along with most people in the United States, were ordered
to stay home and shelter in place for an extended period of time. As a result,
demand for groceries increased dramatically. Egg producers, who had shrunk their
chicken flocks in the months preceding March 2020, could not respond
immediately to the increased demand because it takes months to raise hens to egglaying age.
The parties agree that during March and April 2020, the industry’s
commodity egg prices increased quickly due to a spike in demand. The spike in
demand also corresponded with the Easter holiday, when fresh shell egg prices are
typically at their highest each year. The State alleged that the price increase was
“squeezing consumers” and small and large businesses because the price of eggs
being sold to stores rose to $3.01 a dozen, compared to 94 cents earlier in March
2020. Cal-Maine’s prices also increased. The State alleged that Cal-Maine’s prices
in Texas exceeded the national trend. In April 2020, Cal-Maine delivered generic
eggs, charging $3.32 for a dozen generic jumbo eggs and $3.44 for a dozen generic
large brown eggs.
4
The United States Food and Drug Administration responded to the increased
demand for eggs by instituting a temporary policy in April 2020 that permitted
shell eggs, which were originally destined to be used in food service, to be sold to
retail customers instead. This temporary policy helped meet increased demand for
home consumption. Prices for generic eggs decreased to and below pre-Covid-19
levels.
On April 23, 2020, the State filed a Petition and Application for Temporary
and Permanent Injunctions, alleging that Cal-Maine violated the Texas Deceptive
Trade Practices Act. The petition claimed that Cal-Maine had impermissibly raised
prices on “non-specialty” or “generic” shell eggs during a declared disaster and
that Cal-Maine’s pricing and public statements about its pricing also violated the
DTPA.
The State alleged that because Cal-Maine is an integrated producer,
controlling the entire production process from raising the flocks of chickens who
produce eggs to selling the eggs to stores, Cal-Maine could choose the price at
which it sold eggs to the grocery stores. According to the State, because neither
production costs nor contractual obligations force Cal-Maine to charge a specific
price for eggs, it should have and could have charged a lower price. The State
alleged that Cal-Maine’s egg supply remained stable and that because Cal-Maine
stated that its facilities were fully operational without supply chain and delivery
5
disruptions, its pandemic egg pricing was not due to any increase in Cal-Maine’s
costs.
The State’s petition explains the egg market in general. It states that grocers,
food distributors, and food-service companies buy eggs on the spot market, at a
market price. Urner Barry, a company that publishes an industry newsletter and
maintains an accompanying website where it publishes various price indexes for
commodity foods, generates price indexes for the egg industry. During periods
when supply declines or demand increases, the spot price for eggs also increases
due to the inelasticity of supply. The State alleged that Cal-Maine’s average egg
prices aligned with the wholesale egg market pricing. According to the State, CalMaine’s egg pricing is normally about $1 per dozen. During the early pandemic,
Cal-Maine’s pricing increased to over $3 per dozen.
Cal-Maine moved to dismiss under Texas Rule of Civil Procedure 91a.2 CalMaine argued the affirmative defenses that the DTPA’s ban on excessive or
exorbitant pricing during a declared disaster is unconstitutional for three reasons:
(1) it is unconstitutionally vague; (2) it violates the Dormant Commerce Clause;
and (3) it constitutes a regulatory taking. Cal-Maine also argued that the State’s
pleadings were baseless in fact and in law because the State admitted that Cal2 Texas Rule of Civil Procedure 91a provides that a party “may move to dismiss a
cause of action on the grounds that it has no basis in law or fact.” TEX. R. CIV. P.
91a.1
6
Maine merely charged or offered market prices, which could not be excessive or
exorbitant as a matter of law.
According to Cal-Maine, the State was required to prove both that it took
advantage of a disaster and that it charged excessive or exorbitant prices during a
disaster. Because it followed industry pricing and did not change its practices or
pricing structure, Cal-Maine argued that the State could not prove that it took
advantage of the disaster, as required by the DTPA. Cal-Maine also argued that the
State’s misrepresentation claims were based on true statements. Finally, Cal-Maine
asserted that the transactions on which the State based its claims are exempt from
the DTPA because they exceed $500,000.
The trial court granted Cal-Maine’s motion and dismissed the State’s
petition with prejudice. The court did not articulate its reasoning. The State
appeals.
Applicable Law and Standard of Review
The DTPA’s underlying purposes “are to protect consumers against false,
misleading, and deceptive business practices, unconscionable actions, and breaches
of warranty and to provide efficient and economical procedures to secure such
protection.” TEX. BUS. & COM. CODE § 17.44(a). While one of the DTPA’s primary
purposes was to encourage consumers themselves to file complaints, the statute
also allows the attorney general to bring consumer protection actions. PPG Indus.,
7
Inc. v. JMB/Houston Ctrs. Partners Ltd. P’ship, 146 S.W.3d 79, 84 (Tex. 2004).
Section 17.46(a) of the DTPA declares that “[f]alse, misleading, or deceptive acts
or practices in the conduct of any trade or commerce are hereby declared unlawful
and are subject to action by the consumer protection division [of the Attorney
General’s office] under section[] 17.47 . . . of this code.” TEX. BUS. & COM. CODE
§ 17.46(a).
Texas Rule of Civil Procedure 91a authorizes a defendant to move for
dismissal of a cause of action that “has no basis in law or fact.” TEX. R. CIV. P.
91a.1; see City of Dall. v. Sanchez, 494 S.W.3d 722, 724–25 (Tex. 2016). The
motion must state that it is made pursuant to Rule 91a, identify each cause of
action to which it is addressed, and state specifically the reasons the cause of action
has no basis in law, in fact, or both. TEX. R. CIV. P. 91a.2.
A cause of action has no basis in law if “the allegations, taken as true,
together with inferences reasonably drawn from them, do not entitle the claimant to
the relief sought.” Id. 91a.1. Courts have concluded that a cause of action has no
basis in law under Rule 91a in at least two situations: (1) the petition alleges too
few facts to demonstrate a viable, legally cognizable right to relief or (2) the
petition alleges additional facts that, if true, bar recovery. Guillory v. Seaton, LLC,
470 S.W.3d 237, 240 (Tex. App.—Houston [1st Dist.] 2015, pet. denied) (“In
short, the plaintiff must plead sufficient facts to supply a legal basis for his claim
8
but not so much that he affirmatively negates his right to relief.”); see, e.g., DeVoll
v. Demonbreun, No. 04-14-00116-CV, 2014 WL 7440314, at *3 (Tex. App.—San
Antonio Dec. 31, 2014, no. pet.) (“Because [plaintiff] did not allege facts
demonstrating reliance or harm, his fraud claim has no basis in law.”); Drake v.
Chase Bank, No. 02-13-00340-CV, 2014 WL 6493411, at *1 (Tex. App.—Fort
Worth Nov. 20, 2014, no. pet.) (mem. op.) (“[Plaintiff] pleaded no underlying
claim or facts that would support an award of damages for harm to his credit . . . .
Thus, [plaintiff’s] harm-to-credit claim has no basis in law . . . .”); Dailey v.
Thorpe, 445 S.W.3d 785, 789 (Tex. App.—Houston [1st Dist.] 2014, no pet.)
(holding that breach-of-fiduciary-duty claim had no basis in law because pleaded
facts affirmatively demonstrated that alleged breach occurred after fiduciary
relationship ceased).
A cause of action has no basis in fact if “no reasonable person could believe
the facts pleaded.” TEX. R. CIV. P. 91a.1; see, e.g., Salazar v. HEB Grocery Co.,
LP, No. 04-16-00734-CV, 2018 WL 1610942, at *5 (Tex. App.—San Antonio
Apr. 4, 2018, pet. denied) (mem. op.) (holding that plaintiff’s civil-conspiracy
claim had no basis in fact because no reasonable person could believe that grocery
stores and retailers conspired together to harm plaintiff); Drake, 2014 WL
6493411, at *2 (holding that plaintiff’s claim for intentional infliction of emotional
distress had no basis in fact because “no reasonable person could believe that
9
[defendant] engaged in extreme and outrageous conduct by merely reporting
information on [plaintiff’s] credit . . . .”).
We review a trial court’s decision on a Rule 91a motion de novo. City of
Dall., 494 S.W.3d at 724. We construe the pleadings liberally in favor of the
plaintiff, look to the pleader’s intent, and accept as true the factual allegations in
the pleadings to determine if the cause of action has a basis in law or fact. Wooley
v. Schaffer, 447 S.W.3d 71, 76 (Tex. App.—Houston [14th Dist.] 2014, pet.
denied). We look solely to the pleadings and any attachments to determine whether
the dismissal standard is satisfied. Cooper v. Trent, 551 S.W.3d 325, 329 (Tex.
App.—Houston [14th Dist.] 2018, pet. denied). A court may consider the
defendant’s pleadings if doing so is necessary to make the legal determination of
whether an affirmative defense is properly before the court. Bethel v. Quilling,
Selander, Lownds, Winslett & Moser, P.C., 595 S.W.3d 651, 656 (Tex. 2020).
Discussion
On appeal, the State contends that the trial court erred by granting the
motion to dismiss under Rule 91a. We agree that the trial court erred because it
cannot be said that the State’s claims are completely baseless in fact or in law. We
also hold that Cal-Maine asserted colorable constitutional claims as affirmative
defenses. The trial court erred in dismissing the case at this stage of the litigation.
10
A. Disaster price gouging claim
The State argues that the trial court erred in dismissing its claims because the
State alleged sufficient facts to show that Cal-Maine’s pricing was excessive or
exorbitant during a disaster because it charged more for eggs during the disaster
when it had no need to do so. Cal-Maine argues that the State’s claims under
DTPA section 17.46(b)(27) have no basis in fact or law because compared to
average egg pricing at the time, its prices were not exorbitant or excessive. CalMaine also argues that the State’s allegations are baseless because the facts do not
show that it took advantage of the disaster declaration.
The DTPA prohibits false, misleading, or deceptive acts in the conduct of
trade or commerce. TEX. BUS. & COM. CODE § 17.46(a). The DTPA includes a
disaster price-gouging provision. See id. § 17.46(b)(27). That section prohibits
(27) subject to Section 17.4625, taking advantage of a
disaster declared by the governor under Chapter 418,
Government Code, or by the president of the United
States by:
(A) selling or leasing fuel, food, medicine, lodging,
building materials, construction tools, or another
necessity at an exorbitant or excessive price; or
(B) demanding an exorbitant or excessive price in
connection with the sale or lease of fuel, food,
medicine, lodging, building materials, construction
tools, or another necessity.
11
TEX. BUS. & COM. CODE § 17.46(b)(27). To establish a cause of action against CalMaine for violation of the DTPA’s disaster price gouging statute, the State was
required to allege that Cal-Maine took advantage of a disaster declared by the
governor by selling food at an “exorbitant or excessive price” or “demanding an
exorbitant or excessive price” in connection with the sale of food. See id.
Our review finds no prior cases interpreting section 17.46(b)(27) of the
DTPA. This is a case of first impression. We must interpret the contours of section
17.46(b)(27)’s prohibition of exorbitant or excessive pricing during a declared
disaster. In order to determine if the pleading alleges facts to show that exorbitant
or excessive prices were charged for eggs, we must determine what “exorbitant”
and “excessive” mean.
We review statutory construction de novo. Crosstex Energy Servs., L.P. v.
Pro Plus, Inc., 430 S.W.3d 384, 389 (Tex. 2014). If the statute is clear and
unambiguous, we must read the language according to its common meaning
“without resort to rules of construction or extrinsic aids.” State v. Shumake, 199
S.W.3d 279, 284 (Tex. 2006). We rely on the plain meaning as an expression of
legislative intent unless a different meaning is supplied or is apparent from the
context, or the plain meaning leads to absurd results. Crosstex, 430 S.W.3d at 389–
90 (citing Tex. Lottery Comm’n v. First State Bank of DeQueen, 325 S.W.3d 628,
635 (Tex. 2010)). Words and phrases “shall be read in context and construed
12
according to the rules of grammar and common usage.” TEX. GOV’T CODE
§ 311.011. We presume the Legislature chose statutory language deliberately and
purposefully. See Tex. Lottery Comm’n, 325 S.W.3d at 635. We must not interpret
the statute “in a manner that renders any part of the statute meaningless or
superfluous.” Crosstex, 430 S.W.3d at 390 (citing Columbia Med. Ctr. of Las
Colinas, Inc. v. Hogue, 271 S.W.3d 238, 256 (Tex. 2008)).
The parties agree that in order to determine an “exorbitant” or “excessive”
price, a comparison must be made to “what is usual, proper, necessary, or normal”
or to what is “customary.” The parties disagree on the time period for defining the
necessary, normal, or customary price.
The State argues that the eggs were exorbitantly priced because they were
priced higher than the time period immediately preceding the disaster. Cal-Maine
argues that the claim is baseless because the State did not allege that Cal-Maine
charged prices in excess of the normal, customary price for shell eggs during the
disaster. Cal-Maine also argues that the State failed to allege facts to show that
Cal-Maine took advantage of a disaster. Cal-Maine maintains that it charged
industry pricing, and many of its prices were dictated by existing contractual
obligations. These contractual obligations are not in the record.
At this stage of the litigation, we need not fully decide the merits of the
underlying claim. Under either interpretation of section 17.46(b)(27), we cannot
13
say that there is “no basis in law or fact” for the State’s DTPA price-gouging claim
against Cal-Maine. See TEX. R. CIV. P. 91(a). In its live pleading, the State alleged
that Cal-Maine’s prices were excessive or exorbitant because (1) the cost of
generic eggs was more than $2 higher than the cost during the 2015 avian flu
pandemic; (2) the cost of generic eggs exceeded the cost of specialty eggs; and (3)
Cal-Maine did not experience any supply chain difficulties that would justify
increasing prices. Cal-Maine responds that its pricing was governed by existing
contracts related to the Urner Barry index and that its prices were not exorbitant or
excessive because the prices aligned with increased industry-standard pricing at the
time.
Without the benefit of further discovery, and construing the pleadings
liberally in favor of the State, as we must, we cannot say that the State’s allegations
have no basis in law or that no reasonable person could believe the facts as
pleaded. Contra Malik v. GEICO Adv. Ins. Co., Inc., No. 01-19-00489-CV, 2021
WL 1414275, at *8 (Tex. App.—Houston [1st Dist.] Apr. 15, 2021, pet. denied)
(mem. op.) (stating that DTPA unconscionable action claim was without factual
basis because no reasonable person could believe an insurer would overpay claim
to secure higher future premiums from insured); Guillory, 470 S.W.3d at 241–42,
(holding that contract did not provide legal basis for negligent-undertaking claim
14
arising from services rendered). We conclude that the trial court erred to the extent
it dismissed this cause of action.
B. Misrepresentation claims
The State argues that the trial court erred in dismissing its DTPA claims for
misrepresentation of goods under sections 17.46(b)(5) and 17.46(b)(24). Section
17.46(b)(5) prohibits “representing that goods or services have sponsorship,
approval, characteristics, ingredients, uses, benefits, or quantities, which they do
not have or that a person has a sponsorship, approval, status, affiliation, or
connection which the person does not.” TEX. BUS. & COM. CODE § 17.46(b)(5).
Section 17.46(b)(24) prohibits “failing to disclose information concerning goods or
services which was known at the time of the transaction if such failure to disclose
such information was intended to induce the consumer into a transaction into
which the consumer would not have entered had the information been disclosed.”
Id. § 17.46(b)(24).
The State asserts that Cal-Maine misled customers by stating on its website
that “wholesale shell egg market prices . . . are outside of our control.” The State
alleges that Cal-Maine’s statement is misleading because, as a vertically integrated
company, Cal-Maine controlled its own pricing. The State also alleges that CalMaine misled its customers by stating in financial documents that pricing is based
on “independently quoted wholesale market prices” and “market quotations.”
15
According to the State, these statements imply there is a regulated “market” like
the stock market, where one can observe actual prices paid by commodity
purchasers.
In its response to Cal-Maine’s Rule 91a motion, the State alleges that CalMaine violated this section of the DTPA by intentionally not disclosing that when
it used the term “market,” it was not referring to a regulated market but instead a
price report. The State alleges that Cal-Maine referred to a market price without
disclosing that it was referring to the Urner Barry price report or data.
Without further discovery, we cannot say that the allegations, taken as true,
together with inferences reasonably drawn from them, do not entitle the State to
the relief sought. See TEX. R. CIV. P. 91a. At this stage of the litigation, we do not
have full information regarding Cal-Maine’s business, costs, margins, or other
information that could explain its pricing structure as a vertically integrated
operation. Similarly, while it is possible that Cal-Maine will be able to show that it
did not fail to disclose information to the public, or if it did, that it was not done to
induce and did not induce a consumer into a transaction he otherwise would not
have completed, we cannot say that this claim is wholly without basis in law or
fact. Contra Salazar, 2018 WL 1610942, at *5 (holding that plaintiff’s civil
conspiracy claim had no basis in fact because no reasonable person could believe
that grocery stores and retailers conspired together to harm plaintiff); Drake, 2014
16
WL 6493411, at *1 (“[Plaintiff] pleaded no underlying claim or facts that would
support an award of damages for harm to his credit . . . . Thus, [plaintiff’s] harmto-credit claim has no basis in law . . . .”).
The trial court erred in dismissing the State’s DTPA misrepresentation
claims against Cal-Maine under Rule 91a.
C. Affirmative defenses
Cal-Maine asserts three constitutional grounds as affirmative defenses.3 CalMaine argues that section 17.46(b)(27) is void for vagueness both facially and as
applied because it prohibits “exorbitant or excessive” pricing without any guidance
as to what the terms mean. Cal-Maine also asserts that section 17.46(b)(27)
violates the Dormant Commerce Clause because the section’s extraterritorial
effects unreasonably interfere with interstate commerce. And finally, Cal-Maine
argues that the State’s theories would result in unconstitutional takings from CalMaine. We hold that the trial court erred to the extent it granted the Rule 91a
motion based on these affirmative defenses.
3 We address the affirmative defenses because the trial court did not specify the
grounds on which it dismissed the State’s petition.
“Rule 91a permits motions to dismiss based on affirmative defenses ‘if the
allegations, taken as true, together with inferences reasonably drawn from them,
do not entitle the claimant to the relief sought.’” Bethel v. Quilling, Selander,
Lownds, Winslett & Moser, P.C., 595 S.W.3d 651, 656 (Tex. 2020) (quoting TEX.
R. CIV. P. 91a).
17
1. Vagueness challenge
Cal-Maine asserts that section 17.46(b)(27), the price gouging provision, is
unconstitutionally vague on its face and as applied to Cal-Maine’s conduct. It is a
basic principle of due process that a statute is void for vagueness if “it fails to give
a person of ordinary intelligence a reasonable opportunity to know what conduct is
prohibited.” Ex parte Wheeler, 478 S.W.3d 89, 94 (Tex. App.—Houston [1st Dist.]
2015, pet. ref’d). Although the vagueness standard applies most frequently to penal
statutes, a civil statute may also be so vague that it violates due process. See A. B.
Small Co. v. Am. Sugar Refin. Co., 267 U.S. 233, 239–40 (1925). The degree of
vagueness that the Constitution tolerates, as well as the relative importance of fair
notice and fair enforcement, depends in part on the nature of the enactment. Vill. of
Hoffman Ests. v. The Flipside, Hoffman Ests., Inc., 455 U.S. 489, 498 (1982).
“Perfect clarity” and “precise guidance” are not required, and “[a] statute is not
unconstitutionally vague merely because the words or terms used are not
specifically defined.” Wagner v. State, 539 S.W.3d 298, 314 (Tex. Crim. App.
2018) (internal quotations and citations removed).
While Cal-Maine may have a colorable claim against the constitutionality of
the statute, we do not reach that decision yet. “[S]ome affirmative defenses will not
be conclusively established by the facts in a plaintiff’s petition. Because Rule 91a
does not allow consideration of evidence, such defenses are not a proper basis for a
18
motion to dismiss.” Bethel, 595 S.W.3d at 656. Reviewing only the pleadings and
attached documents, as we must in reviewing a Rule 91a motion, we cannot
conclusively hold that the statute, by not defining “exorbitant or excessive”
pricing, is unconstitutionally vague either facially or as applied. TEX. R. CIV. P.
91a.6. The trial court erred to the extent it granted the Rule 91a motion based on
this affirmative defense.
2. Commerce Clause challenge
Cal-Maine also asserts the affirmative defense that the price gouging
provision violates the Dormant Commerce Clause of the United States Constitution
by unduly burdening interstate commerce. See U.S. CONST. art. I, § 8. Cal-Maine
argues that Texas’s price gouging statute would require executing contracts
differently in Texas than in other states.
The Supreme Court of the United States established a balancing test to
determine whether the burden on interstate commerce imposed by a regulation is
excessive in relation to putative local benefits. Ex parte Wheeler, 478 S.W.3d at
97; see Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970). “Where the statute
regulates evenhandedly to effectuate a legitimate local public interest, and its
effects on interstate commerce are only incidental, it will be upheld unless the
burden imposed on such commerce is clearly excessive in relation to the putative
local benefits.” Wheeler, 478 S.W.3d at 97. If a legitimate local purpose is found,
19
then the question becomes one of degree. Id. The extent of the burden that will be
tolerated depends on the nature of the local interest involved and whether it could
be promoted as well with a lesser impact on interstate activities. Id.
Cal-Maine may have a colorable claim that DTPA section 17.46(b)(27)
imposes an impermissible burden on interstate commerce. Relying only on the
pleadings at this stage of the litigation, we cannot conclusively balance the
extraterritorial effects with the local interest involved in the statute. TEX. R. CIV. P.
91a.6; Bethel, 595 S.W.3d at 656 (stating that some affirmative defenses are not
conclusively established by facts in petition and cannot be proper basis for Rule
91a motion to dismiss). The trial court erred to the extent it granted the Rule 91a
motion based on this affirmative defense.
3. Takings challenge
Finally, Cal-Maine argues that section 17.46(b)(27) constitutes a regulatory
taking. Cal-Maine asserts that the State’s enforcement against it is an
impermissible attempt to force Cal-Maine to sell eggs (1) below their fair market
value or the value Cal-Maine contracted to sell them to stores and (2) for a lower
price than Cal-Maine paid on the open spot market. In effect, Cal-Maine argues
that the State seeks to take property without just compensation in violation of the
Takings Clause of the Fifth Amendment.
20
The Takings Clause of the Fifth Amendment to the United States
Constitution, applied to the states through the Fourteenth Amendment, prohibits
“private property” from being “taken for public use, without just compensation.”
U.S. CONST. amend. V, XIV; see also TEX. CONST. art. I, § 17. The clause prohibits
both physical takings and regulatory takings. Lingle v. Chevron U.S.A. Inc., 544
U.S. 528, 537–38 (2005).
Cal-Maine alleges that section 17.46(b)(27) constitutes a regulatory taking,
which occurs when the government imposes restrictions that either deny a person
all economically viable use of his property or unreasonably interferes with the
person’s right to use and enjoy the property. Mayhew v. Town of Sunnyvale, 964
S.W.2d 922, 935 (Tex. 1998); City of Hous. v. Commons at Lake Hous., Ltd., 587
S.W.3d 494, 499 (Tex. App.—Houston [14th Dist.] 2019, no pet.). There is
insufficient information at this stage of the litigation to determine the extent of the
alleged interference into Cal-Maine’s business ventures. While Cal-Maine may
have a colorable constitutional argument, we cannot appropriately weigh the
validity of the constitutional challenge at this stage of the proceedings.
Without further discovery, we cannot decide whether the State’s action
constitutes a regulatory taking. The trial court erred to the extent it granted the
Rule 91a motion based on this affirmative defense.
Outcome: We cannot hold that there is absolutely no basis in law or fact for the State’s
claims or Cal-Maine’s affirmative defenses. See TEX. R. CIV. P. 91.a.1. The trial
court erred in dismissing the cause with prejudice under Rule 91a.
We reverse the judgment of the trial court and remand for further
proceedings
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