3rd Court continues split in circuits regarding proprietary/governmental distinction in contract holdings

The City of Austin d/b/a Austin Energy v. MET Center, 03-11-00662-CV (Tex. App. – Austin, February 6, 2014).

This is an interlocutory appeal from the denial of a plea to the jurisdiction in a breach of contract dispute involving an electric utility. Consistent with its prior opinions separating it from the San Antonio Court of Appeals, the Austin Court held the City does not have immunity for proprietary functions in a contract context.

The City of Austin entered into a contract with MET Center whereby MET Center constructed a specialized conduit system known as an “underground duct bank system” to carry high levels of electric service required by technology-based users. Disputes subsequently arose over the use of the duct bank, and MET Center sued the City alleging breach of contract. The City filed a plea to the jurisdiction which the trial court denied and the City appeals.

After briefly referencing its opinion in City of Georgetown v. Lower Colo. River Auth., 413 S.W.3d 803, 808–09 (Tex. App.—Austin 2013, pet. filed) the Austin Court of Appeals simply stated that the City does not retain immunity for proprietary functions performed in contracts. As a result, the trial court properly denied the plea.

If you would like to read this opinion click here. Panel Justices Puryear, Henson, and Goodwin; Justice Henson not participating. Opinion by Justice Goodwin. The attorney listed for the City is Mr. Christopher Coppola.  The attorneys listed for MET Center are Mr. Michael J. Whellan, Ms. Kathryn E. Allen, and Ms. Mary A. Keeney.