Taxpayer lacked standing to challenge Houston drainage fee ordinance despite charter election invalidity
Elizabeth C. Perez v. Sylvester Turner, et al., 01-16-00985-CV (Tex. App. – Hous. [1st Dist], Oct. 15, 2019)
This is a long standing/multi-opinion dispute challenging the City of Houston’s drainage fee ordinance. Prior summaries found here and here. In this substituted opinion (for an opinion issued in August of 2018), the First District affirmed the granting of the City’s plea to the jurisdiction.
Voters in the City of Houston adopted a dedicated charter amendment for a “Pay-As-You-Go Fund for Drainage and Streets.” It then adopted a regulatory ordinance. One source of funding was a charge imposed on properties directly benefitting from the drainage system. The ballot language for the charter amendment was originally held misleading and invalid. After several disputes from the subsequent ordinance occurred, Perez brought this ultra-vires claim and sought a judgment declaring the drainage fee ordinance invalid (yet again); an injunction against the assessment, collection, and expenditure of taxes and fees pursuant to the ordinance; and reimbursement, “on behalf of herself and all other similarly situated persons or entities,” of taxes and fees assessed and collected pursuant to the ordinance and paid “under duress.” The City filed a plea to the jurisdiction asserting Perez lacked standing because she had suffered no particularized injury separate from the public, which was granted. Perez appealed.
The prior judicial declaration that the Charter Amendment is void does not address the Drainage Fee Ordinance. Thus, to the extent that Perez’s claims are based on her allegations the prior opinions invalided the ordinance, such are misplaced. The charter amendment was only needed to shift a portion of ad valorem tax revenue from debt services and was not required for authority to pass a drainage fee ordinance. Local Government Code Chapter 552 provided independent authority for such an ordinance. Perez has pleaded that she paid “illegal” drainage fees, she has cited to no authority declaring illegal the Drainage Fee Ordinance. Further, Perez has to demonstrate she “suffered a particularized injury distinct from that suffered by the general public” by the drainage fees collected. The municipal fees were assessed to property owners across the City. The payment of municipal fees, like the drainage fees assessed against Perez’s properties here and numerous other properties in the City, does not constitute a particularized injury. Taxpayer standing is an exception to the “particularized injury” requirement. However, it is not enough for the plaintiff to establish that she is a taxpayer— the plaintiff “may maintain an action solely to challenge proposed illegal expenditures.” A litigant must prove that the government is actually expending money on the activity that the taxpayer challenges; merely demonstrating that tax dollars are spent on something related to the allegedly illegal conduct is not enough. Perez asserts the fees were collected illegally. However, she was unable to establish the City is actually making any “measurable, added expenditure” of funds on illegal, unconstitutional, or statutorily unauthorized activities. As a result, she is not entitled to taxpayer standing. The plea was properly granted.
If you would like to read this opinion click here. Panel consists of Justice Keyes, Justice Lloyd and Justice Kelly. The attorneys listed for the City are Collyn A. Peddie and Patricia L. Casey. The attorneys listed for Perez are Dylan Benjamen Russell, Andy Taylor and Joseph O. Slovacek.
