Austin Court of Appeals holds junior college could not withhold school transcripts of two employees under the Texas Public Information Act

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Del Mar College District v Ken Paxton, 03-19-00094-CV (Tex. App. – Austin, July 1, 2020)

This is a Texas Public Information Act (“PIA”) case where the Austin Court of Appeals affirmed an order requiring the release of certain information possessed by the college district.

The Del Mar College District (“District”), a junior college district,  received a request for the personnel files of two professors.  The files contained their college transcripts. The District timely requested an opinion from the Attorney General’s office. The AG opined certain information could be withheld, but determined other information must be released, including the college transcripts. The District filed suit against the AG and the trial court heard opposing summary judgment motions. The trial court granted the AG’s motion and ordered the release of the transcripts. The District appealed.

The court listed a narrow legal question – was the junior college a “public school” for purposes of the PIA exception under §552.102(b)(which exempts such transcripts). The court held the proper inquiry was into the meaning of the phrase “public school,” which has its own generally accepted meaning, referring to the elementary and secondary educational system funded by the state. Junior colleges, in contrast, are part of the higher education system and charge tuition to their students. See Tex. Educ. Code § 130.084(b). “Public Education,” governs the State’s free elementary and secondary schools, while “Higher Education,” governs the State’s university and college system. The court acknowledged that junior colleges have been held to be integral to the Texas education system and could be a public school for other purposes, but noted it was not a “free” public school. Section 552.102(b) is part of the Public Information Act, not the Education Code, and is not part of the “general law governing the establishment, management, and control of independent school districts.” So, while the District is a public entity and a school subject to the PIA, it is not a “public school” for purposes of Section 552.102(b).  As a result, the college transcripts must be released.

If you would like to read this opinion click here. Panel consists of Chief Justice Rose, Justices Triana and Smith. Opinion by Chief Justice Rose.

Austin Court of Appeals holds no vested rights for zoning changes related to square foot of use ratio

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River City Partners, Ltd. V City of Austin, 03-19-00253-CV (Tex. App. —  Austin, June 4, 2020).

This is a vested rights/Chapter 245 challenge suit where the Austin Court of Appeals affirmed the granting of the City’s plea to the jurisdiction.

In 1986, River City’s predecessor in title applied to rezone the property to the Community Commercial classification and the  City approved with some conditions.  In April 2003, the property owner applied to the City for approval to create an eight-lot commercial subdivision.  While the application was pending the City passed its zoning ordinance.  The City then approved the plat.  Fast forward to 2017, aware that its plans exceeded the zoning ordinance limits on use size in relation to the building, River City sought an exemption on the ground that the ordinance conflicted with the 1986 Covenants. When the City denied the request, River City Partners sued for declaratory and injunctive relief asserting the City must apply the regulations in effect at the time of the application. The City filed a plea to the jurisdiction which was granted.  River City Partners appealed.

Under Chapter 245 of the Texas Local Government Code, a vested right will attach to a project rather than a permit holder and follow any conveyances or transfers of rights related to the project. River City’s as-applied challenge is consistent with parts of Chapter 245 that apply on a project-by-project basis.  However, Chapter 245 “does not apply to,” municipal zoning regulations unless they affect certain categories, including building size.   Section 245.004 also does not employ similar language or even include the term “project” so the project-based analysis is not applicable. So, the question becomes does the restriction qualify as a zoning regulation on “building size.” The court interpreted the LDC provisions as they applied to the entire code and not simply in isolation.  The City’s LDC required that uses not exceed a certain ratio of gross floor area to gross site area. However, the LDC does not prohibit multiple uses within the same building and therefore River City failed to establish the LDC affected building size, only use size. Since Chapter 245 only waives immunity for applicable vested rights, and River City failed to establish a possible vested right, the trial court was without jurisdiction. The plea was properly granted.

If you would like to read this opinion click here. Panel consists of Chief Justice Rose, and Justices Triana and Smith.

BOA appeal deadline of 10 days applies to Open Meetings, declaratory judgment, and as-applied constitutional claims, holds Dallas Court of Appeals

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Tejas Motel, LLC v City of Mesquite, by and through its Board of Adjustment, 05-19-00667-CV (Tex. Civ. App. – Dallas, June 4, 2020).

This is an appeal from a Board of Adjustment decision regarding non-conforming status in which the Dallas Court of Appeals affirmed the granting of the City’s plea to the jurisdiction.

The City of Mesquite had two zoning categories of lodging facilities within the City and placed conditions on their uses — Limited Services and General Services, neither of which Tejas Motel (“Tejas”) qualified under. Although the Tejas Motel had been nonconforming since 1997, the City did not specifically address that nonconformance until 2018, when the City passed an ordinance changing the manner in which the City’s Board of Adjustment could amortize nonconforming properties. The BOA held public hearings and scheduled a date for all non-conforming properties to become compliant, including Tejas. The City introduced evidence that the nonconforming use would adversely affect nearby properties.  Tejas then announced an agreement for a May 1, 2019 compliance date and the BOA approved that as a compliance date. Tejas, however, denied receiving a written copy after the BOA decision, which the BOA insists was mailed. Tejas then sued the BOA to invalidate the compliance date. The City filed a plea to the jurisdiction, which was granted.

The requirement that one timely file a petition for writ of certiorari to challenge a zoning board decision is part of an administrative remedy, which is provided by the Texas Local Government Code and must be exhausted before board decisions may be challenged in court. Under Tex. Loc. Gov’t Code §211.011 Tejas had ten days from the date the decision was filed to challenge the decision. The Board’s July 31 written “Decision and Order” triggered the statutory deadline. Tejas did not file by the deadline, thereby precluding the court from obtaining jurisdiction. This included challenges brought under the Texas Open Meetings Act, declaratory judgment claim and as-applied constitutional challenges.  Tejas also failed to state any viable federal claims. Although a city is not immune from federal constitutional claims, a trial court may grant a plea to the jurisdiction if a constitutional claim is not viable. Tejas had no constitutionally protected, vested due process interest in continuing to use the property in violation of the city’s ordinances, especially when it acquired the property knowing the restrictions.  As a result, the plea was properly granted.

If you would like to read this opinion, click here. The panel consists of Justices Molberg, Carlyle, and Evans.  Memorandum Opinion by Justice Carlyle.

The Uniform Declaratory Judgment Act not allowed where plat does not show ownership interest to establish standing

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Korr, LLC. v. County of Gaines, No. 11-18-00130-CV (Tex.App.– Eastland May 29, 2020) (mem. op.).

[Special guest summary author Laura Mueller, City Attorney for Dripping Springs, Texas]

 The case involves a claim under the Uniform Declaratory Judgment Act (UDJA) for an interpretation of a county regulation dealing with plats.  The court of appeals held that the UDJA cannot be used if there is no ripe injury.

Korr, a land developer in the county,  filed suit against the county under the UDJA based on a county regulation that requires a bond to cover the cost of electrical infrastructure prior to a plat being reviewed.  Korr argued that the provision was preempted by the Public Utility Commission’s authority.  Korr presented a plat that had already been approved and indicated but did not state that Korr had an interest in this and other properties in the county. The County filed a plea to the jurisdiction, which was granted. Korr appealed.

Korr presented no proof of Korr’s land ownership in the county, no active plat applications before the county and the listed plat had not required such a bond.  Korr argued that despite having a ripe injury, the UDJA should still allow the suit, because it wished to develop property in the future. The court of appeals reviewed the requirements for standing in a UDJA claim, including the ripeness of a controversy.  The court held that a ripe controversy is still required and noted Korr’s arguments in the trial court were all based on “hypothetical” situations.  The court held that it could not issue an advisory decision and affirmed the trial court’s dismissal.

If you would like to read this opinion, click here. The panel consists of Chief Justice Bailey, Justices Stretcher and Wright.

Texas Supreme Court holds a lack of immunity for coronavirus is not a “disability” for purposes of mail-in election ballots

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In re State of Texas, 20-0394 (Tex. May 27, 2020)

This is a mail-in ballot case. The great folks at the Texas Municipal League already summarized this case, and I try not to duplicate any summaries they beat me to. Their summary is found here and was issued May 28, 2020.

However, since not everyone may have seen the summary and it affects multiple entities, I’ve included this condensed version.

Essentially, the Texas Attorney General filed the lawsuit directly with the Supreme Court, seeking to prevent clerks and other election officials from allowing mail-in ballots for those fearful of contracting the virus responsible for COVID-19. Under the Texas Election Code, qualified voters are eligible to vote by mail only in five specific circumstances, one being the voter is disabled by statutory definition. The Court emphasized that it takes no side in what is the best policy, as that is for the Legislature. Its job is to interpret the language of the Election Code. Based on the language provided, the Court held  “…a voter’s lack of immunity to COVID-19, without more, is not a ‘disability’ as defined by the Election Code. But the State acknowledges that election officials have no responsibility to question or investigate a ballot application that is valid on its face.”  As a result, it declined to issue a mandamus against any officials, noting the Court was confident they would comply with the law in good faith, now that the Court has clarified the statutory language.

If you would like to read this opinion, click here. Chief Justice Hecht delivered the opinion of the court. Justices Guzman, Boyd and Bland delivered separate concurring opinions.

Texas Supreme Court holds immunity waived for arbitration clauses, but only a court can decide the immunity question

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San Antonio River Authority v Austin Bridge & Road, L.P., 17-0905 (Tex. May 1, 2020)

In this construction contract dispute, the Texas Supreme Court held Chapter 271 of the Texas Local Government Code waives immunity for arbitration clauses.

The San Antonio River Authority (“Authority”) hired Austin Bridge and Road L.P. (“ABR”) to perform repairs of the Medina Lake Dam.  Disagreements about scope of work and payment arose. ABR triggered the arbitration provision in the contract. When the arbitrator denied the Authority’s assertion it was immune, it sued ABR in district court seeking a declaration the Authority lacked the ability to waive immunity for arbitration. The trial court denied the Authority’s summary judgment. The court of appeals reversed in part, holding that while the arbitration provision was enforceable, only a court could determine immunity was waived. The Authority appealed.

Until the waiver in Chapter 271 existed, governmental immunity shielded a local government from enforcement of its contract obligations. Currently, § 271.154 expressly provides that arbitration agreements are enforceable. The term “Adjudication” in Chapter 271 means “the bringing of a civil suit and prosecution to final judgment . . . and includes the bringing of an authorized arbitration proceeding…”  Further, an arbitration is an “adjudication procedure” under the plain meaning of the statute. However, immunity is waived only to the extent authorized by Chapter 271. As a result, the Authority was authorized to agree to arbitrate disputes arising from its contract with Austin Bridge, within Chapter 271’s expressed limits.  However, the Court agreed with the court of appeals and held only the judiciary has a non-delegable duty to determine whether immunity has been waived. Because immunity bears on the trial court’s jurisdiction to stay or compel arbitration, and to enforce an arbitration award in a judgment against a local government, a court must decide whether governmental immunity is waived. An agreement to arbitrate is unenforceable against a local government to the extent it purports to submit immunity questions to an arbitrator. The Court then analyzed the contract and determined that while the contract was for the benefit of the River District, it also provided a benefit to the Authority, and the Authority is the entity that entered into the contract. As a result, in this situation, the Authority’s immunity is waived.  The Court held the decision of whether ABR is seeking actual damage or consequential damages is not factually developed; however, ABR at last pled some possibility the damages sought are actual damages.

If you would like to read this opinion, click here. Justice Bland delivered the opinion of the Court. Dissent filed by Justice Boyd, joined by Chief Justice Hecht and Justices Guzman and Devine.

U.S. 5th Circuit adopts 1st Amendment unbridled discretion/prior-restraint standards in federal suit against Texas Governor

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Freedom from Religion Foundation, Inc. v. Greg Abbott Governor of the State of Texas, 18-50610, (5th Cir – April 3, 2020)

This is a First Amendment case regarding immunity and viewpoint discrimination where the U.S. 5th Circuit adopted a specific prior restraint test.

The Texas State Preservation Board (“the Board”) is a state agency that preserves and maintains the Texas Capitol and its grounds. Governor Abbott is the chairman of the Board, which allows private citizens to display exhibits within the Texas Capitol building. Such displays must have a public purpose. FFRF is a non-profit organization that advocates for the separation of church and state and educates on matters of nontheism. FFRF learned that a Christian nativity scene had been approved by the Board and displayed in the Texas State Capitol. FFRF submitted an application to the Board regarding a Bill of Rights nativity exhibit, which was also approved. FFRF’s depiction was displayed, but the day before its final display date, Governor Abbott sent a letter to then Executive Director of the Board, Mr. Welch, urging him to “remove this display from the Capitol immediately.” The letter explained that the exhibit was inappropriate for display because “[s]ubjecting an image held sacred by millions of Texans to the Foundation’s tasteless sarcasm does nothing to promote the morals and the general welfare,” “the exhibit promotes ignorance and falsehood insofar as it suggests that George Washington, Benjamin Franklin, and Thomas Jefferson worshipped (or would worship) the bill of rights in the place of Jesus[.]”  This letter resulted in the removal of the FFRF display prior to its scheduled removal date. When FFRF submitted another application for the same display, it was told the display did not promote a public purpose. FFRF sued for declaratory and injunctive relief.  The district court granted FFRF summary judgment on certain grounds and denied it on others.  The parties appealed/cross-appealed.

Governor Abbott and Mr. Welsh argue that the district court’s declaratory judgment is retrospective and therefore barred by sovereign immunity (including 11th  Amendment immunity). They further asserted no prospective relief was proper because the dispute is not ongoing. A litigant may sue a state official in his official capacity in federal court as long as the lawsuit seeks prospective relief to redress an ongoing violation of federal law. FFRF alleged constitutional violations against Abbott and Welsh in their official capacities. Further, they established an ongoing violation and Abbott and Welsh did not technically appeal the viewpoint discrimination finding. Speech cannot be prohibited on the basis of offensiveness, and the defendants have only presented arguments through counsel that their behavior will change.  The district court had jurisdiction to entertain the suit, and the controversy is ongoing.  The district court did not, however, have jurisdiction to award FFRF purely retrospective relief.  The declaration that FFRF’s rights were violated in the past is prohibited to the extent it is an individual claim. The U.S. 5th Circuit remanded for the trial court to determine proper prospective relief.  Next, the court analyzed the unbridled discretion arguments regarding public purpose determinations (i.e. prior restraint arguments). Unbridled discretion runs afoul of the First Amendment because it risks self-censorship and creates proof problems in as-applied challenges. Even in limited and nonpublic forums, investing governmental officials with boundless discretion over access to the forum violates the First Amendment. However, in situations such as where space is limited, certain discretion should be afforded. Because discretionary access is a defining characteristic of a limited public forum, the government should be afforded more discretion to use prior restraints on speech in limited public forums than in traditional public forums. The possibility (including imposed checks and balances) of viewpoint discrimination is key to deciding unbridled discretion claims in the context of limited or nonpublic forums. A reasonableness test would be insufficient, by itself.  In a matter of first impression for the 5th Circuit, the court held that prior restraints on speech in limited public forums must contain neutral criteria sufficient to prevent (1) censorship that is unreasonable in light of the purpose served by the forum and (2) viewpoint-based censorship. Because the district court only considered whether the public purpose criteria at issue in this case was reasonable, the issue was remanded.

If you would like to read this opinion click here. Panel consists of Davis, Graves, and Higginson, Circuit Judges. Vacated and Remanded in part; Reversed and Remanded in part. Memorandum Opinion by Higginson, Circuit Judge. Attorney for Appellant is Kyle Douglas Hawkins, of Austin, Texas. Attorney for Appellee is Samuel Troxell Grover, of Madison, Wisconsin.

 

PIA case remanded because mayor and city secretary did not do a search of personal emails or phones for public business

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James E. Horton v. Ron Welch, Individually and Ron Welch, as Mayor of the City of Caney City, Texas, 12-19-00381-CV, (Tex. App – Tyler, April 8, 2020)

This is a Public Information Act (“PIA”) case where the Tyler Court of Appeals overruled an order granting the City and mayor’s summary judgment. [Comment: this case was filed prior to the recent PIA statutory changes creating temporary custodians.]

Horton sent two separate requests for numerous records to the City and Mayor Welch (seeking txts, emails, etc.). After Horton paid the required fees, the City, through Welch, gave him what it claims is all the requested records. Horton filed a suit asserting that Welch (as custodian) did not fully comply with his request and asking the trial court to issue a writ of mandamus. Welch filed a no-evidence motion for summary judgment arguing that he provided Horton with all requested records and documents and Horton has no evidence to the contrary. Welch also filed a traditional motion for summary judgment.  The trial court granted Welch’s motions and Horton appealed.

The PIA provides a statutory remedy of mandamus to a requestor when the governmental body refuses to supply public information or information that the attorney general has determined is public information that is not excepted from disclosure. The traditional MSJ was accompanied by an affidavit the city secretary performed a “painstaking investigation” and review of the City’s files and produced all responsive records. The City asserts it is not in possession of any additional records. However, the testimony established the city secretary and mayor did not examine personal accounts upon which council members could have utilized. Under the PIA “is not dependent on whether the requested records are in the possession of an individual or whether a governmental body has a particular policy or procedure that establishes a governmental body’s access to the information.” The PIA provides no guidance regarding the efforts a governmental body must take to locate, secure, or make available the public information requested. However, since the testimony established the mayor and city secretary did not look in private accounts which could have contained such information, a fact issue exists regarding whether or not all responsive information was provided.

If you would like to read this opinion click here. Panel consists of Chief Justice Worthen, and Justices Hoyle and Neeley. Reversed and Remanded. Memorandum Opinion by Justice Hoyle. Docket page with attorney information can be found here.

 

Public entities which issue bonds can utilize Expedited Declaratory Judgment Act for validation of contract execution, but not compliance says Texas Supreme Court

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City of Controe, et al, v San Jacinto River Authority, et al, 18-0989, (Tex. March 27, 2020)

This is a case brought under the Expedited Declaratory Judgment Act (EDJA) involving proper compliance by the local government with bond requirements. The EDJA provides an “issuer” of “public securities” an expedited declaratory procedure to establish the “legality and validity” of public securities and “public security authorizations.” Tex. Gov’t Code § 1205.021.

The Lone Star Groundwater Conservation District was created to address concerns about inhabitance of an area and their reliance on groundwater drawn from the Gulf Coast Aquifer. In 2008, the Conservation District required all large-volume groundwater users—including the Cities—to develop and implement plans for reducing their usage substantially. Mandatory groundwater usage cutbacks took effect in January 2016. Respondent San Jacinto River Authority (SJRA) is a legislatively created conservation and reclamation district developed a Groundwater Reduction Plan (GRP) to draw surface water from Lake Conroe, treat the water, and sell it to large-volume users. SJRA issued seven series of bonds between 2009 and 2016 that had an outstanding principal balance of approximately $520 million. SJRA entered into bilateral GRP contracts with about 80 water-system operators. Although SJRA  can set, the GRP rates are governed entirely by contract. Several cities sued the Conservation District, which suit expanded to include SJRA. Several cities asserted they would not pay. SJRA filed suit   under the EDJA seeking a declaration regarding the contracts and rates. The cities opted into the suit, but then filed pleas to the jurisdiction alleging SJRA did not seek a declaration as to “the legality and validity” of a “public security authorization,” but instead seek to litigate what are substantively suits on contracts that properly lie outside the statute.  The trial court denied the pleas and the cities appealed. The intermediary court of appeals held primarily for SJRA and the cities appealed to the Texas Supreme Court.

The EDJA was enacted to “stop ‘the age old practice allowing one disgruntled taxpayer to stop the entire bond issue simply by filing suit.’”  The Court went through an analysis of the EDJA and its purpose in considering jurisdiction and definitions. SJRA and the Attorney General contend the GRP contracts, rate order, and rates themselves are public security authorizations because they are all connected to the bonds SJRA issued to finance the GRP Project.  The Court first held the Authority Declaration concerns the legality and validity of SJRA’s contracts with GRP Participants, as GRP rate orders and rates are creatures of the contracts.  As a result, the EDJA permits the trial court to exercise jurisdiction over this declaration.  However, the Court held the rate orders and rates lacked a proper connection with the bonds. Even though the rate order and rates may affect the amount SJRA is paid under the contracts, neither has an authorizing connection with the public securities. The EDJA treats execution of a contract to be connected but does not treat compliance with a contract as a public security authorization. As a result, SJRA can seek a declaration the contract was validly executed, but not whether it complied with the contract. As a result, the EDJA confers jurisdiction to declare whether the GRP contracts (as public security authorizations) are legal and valid, but it does not extend to declaring whether a specific rate amount set in a particular rate order is valid as it is controlled by the contract.  SJRA may not obtain EDJA declarations concerning the Cities’ in personam rights and liabilities. The EDJA permits only in rem declarations concerning property rights.

If you would like to read this opinion click here. Opinion by Justice Busby. The court docket page with attorney information is found here.

Texas Supreme Court holds 1949 utility easements with “reconstruction” language means easements are general with no fixed width

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Southwestern Electric Power Company v. Kenneth Lynch, Tommy Batchelor, and Twant Wilson, Texas, 18-0768, (Tex. – Feb. 28, 2020)

This is a property/easement dispute where the Texas Supreme Court held a set of utility easements were general, with no fixed width, regardless of the historic use.

In 1949, Southwestern Gas & Electric Company (Southwestern) acquired a number of easements over a stretch of land in northeast Texas to construct a transmission line. Southwestern constructed wooden poles at the time. Southwestern Electric Power Company (SWEPCO) later acquired these easements. The easements authorize SWEPCO “to erect towers, poles and anchors along” a set course on a right-of-way that traverses several privately owned properties and SWEPCO historically used only 30 feet of easement area. In 2014 and 2015, SWEPCO undertook a modernization project to replace the transmission lines.  SWEPCO offer to set a width of 100 feet to individual property owners. Some owners accepted, but the Landowners in this case did not. After the project was completed, the Landowners filed suit seeking a declaratory judgment fixing SWEPCO’s easements to a thirty-foot width, fifteen feet on each side of the transmission line. They asserted the offer of 100 feet meant SWEPCO intended to exceed the 30 feet in the future.  SWEPCO filed two pleas to the jurisdiction, which were denied, and counterclaims for trespass and breach of contract. The trial court held a bench trial and held for the Landowners. The judgment was affirmed by the court of appeals.

The Court first determined SWEPCO’s pleas were properly denied as a ripe controversy existed regarding the scope of the easement, regardless of whether SWEPCO ever utilized more than 30 feet. While acknowledging many of the Landowner’s assertions were hypotheticals, it noted their claims are inextricably tethered to a disagreement of present scope. Regarding that scope, the easements do not state a specific maximum width of the right-of-way, nor do the easements specify how much of the land SWEPCO is entitled to access. Instead of construing the easements as general easements that intentionally omitted a defined width, the courts below incorrectly held the easements became “fixed and certain” once the transmission lines were constructed. The plain language of the easements stated they allowed for reconstruction and alteration, which contemplates future construction and installation of new poles and additional lines. The Court has recognized the existence of general easements that do not require a fixed width.  As a result, they are general easements with no fixed widths. However, the  Court noted a holder of a general easement must utilize the land in a reasonable manner and only to an extent that is reasonably necessary.  If at some point in the future SWEPCO utilizes the easements in a way that the Landowners believe is unreasonable and not reasonably necessary, or in a way that violates the express terms of the easements, the Landowners could at that point bring suit to enjoin SWEPCO’s use of the easements.

If you would like to read this opinion click here. Opinion by Justice Green. Justice Bland did not participate. Docket page with attorney information can be found here.

Under PIA common-law privacy only applies to a person’s private affairs, not events related to discrimination charges

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Stetson Roane v. Ken Paxton, Attorney General of Texas; and Seguin Independent School District, 14-18-00264-CV, (Tex App – Hou [14th dist.], Jan 28, 2020)

This is a Public Information Act (“PIA”) lawsuit where the Fourteenth Court of Appeals agreed with the Attorney General that certain records must be released.

Roane served as superintendent of the Seguin Independent School District (“the District”) who had a sexual harassment charge filed against him.  After he had left the District, it received several PIA requests which included information on the complaint. Roane was notified he could file a third-party objection, which he did asserting common law privacy to withhold the information. While the Attorney General (“AG”) allowed the District to withhold other responsive information, it opined the complaint information was subject to release. Roane filed suit to prevent the release and filed a motion for summary judgment. The AG also filed a motion for summary judgment. The trial court granted the AG’s motion and denied Roane’s motion. Roane appealed.

The common-law right to privacy protects information from disclosure when “(1) the information contains highly intimate or embarrassing facts the publication of which would be highly objectionable to a reasonable person, and (2) the information is not of legitimate concern to the public.” However, the highly intimate or embarrassing facts must be “about a person’s private affairs.”  The summary judgment record failed to demonstrate that the information involved matters relating to Roane’s “private affairs.” Matters of workplace harassment, discrimination, and policy violations in a governmental body are, by their very nature, generally do not qualify. The court noted the complainant’s name and other individuals’ names have been redacted from the information ordered to be disclosed by the AG’s opinion.  As a result, all that remains are public matters. Therefore, the trial court ruled properly regarding the competing motions.

If you would like to read this opinion click here. Panel consists of Justices Wise, Zimmerer, and Spain. Affirmed. Memorandum Opinion by Justice Zimmerer. Docket page with attorney information found here.

Fort Worth Court of Appeals holds no waiver of immunity for declaratory judgment relief against county for competitive bidding violation

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Tarrant County, Texas v. Jeffrey D. Lerner, 02-19-00330-CV, (Tex. App – Fort Worth, Jan. 9, 2020)

This is a declaratory judgment/immunity case where the Fort Worth Court of Appeals held the County retained immunity for declaratory claims alleging violations of the competitive bidding statute.

The County had a contract with Dispute Resolution Services of North Texas (DRS) to manage the County’s alternative dispute-resolution services and was valued at over $400,000 per year. When renewing the contract, Tarrant County did not seek competitive bids for the contract. A competitor, Lerner, sued asserting after the last renewal the contract was invalid due to the lack of bidding. The County filed a plea to the jurisdiction which was denied.

The immunity waiver contained in the competitive bidding statute is specific and narrowly drawn – “Any property tax paying citizen of the county may enjoin performance under a contract made by a county in violation of [the Act].” Tex. Loc. Gov’t Code Ann. § 262.033. The court held the Legislature intended to waive immunity for injunctive-relief claims arising from violations of the statute. However, that does not waive immunity for attorney’s fees or any other form of relief. As a result, the court found the County retained immunity for Lerner’s declaratory judgment claims. The plea should have been granted.

If you would like to read this opinion click here. Panel consists of Chief Justice Sudderth, Justices Gabriel, and Kerr. Memorandum Opinion by Justice Gabriel. Docket page with attorney information found here.

No waiver of immunity when non-profit sues to invalidate transfer of real property to city

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City of Houston and Keith W. Wade v. Hope for Families, Inc, 01-18-00795-CV, (Tex. App – Houston [1st Dist.], Jan. 9, 2020)

This is a governmental immunity case where the First  Court of Appeals held the contracting non-profit did not establish a waiver of immunity.

Hope for Families, Inc. (HFF) acquired the property for a community development project financed by the City which fell through.  HFF negotiated a transfer of the property to the City in exchange for debt forgiveness. HFF later sued to invalidate the transfer alleging the City’s negotiator, Wade, committed fraud when negotiating. The City filed a plea to the jurisdiction which was denied and the City appealed.

HFF asserts “A corporation may convey real property of the corporation when authorized by appropriate resolution of the board of directors or members.” Tex. Bus. Org. Code § 22.255, which it did not do. However, that provision does not grant HFF the right to sue to invalidate a transfer and does not waive immunity. HFF also sued Wade as an individual. While Wade is immune individually (as fraud is an intentional tort), the court held HFF should have the opportunity to replead an ultra vires claim.

If you would like to read this opinion click here. Panel consists of Justices Keys, Kelly, and Goodman.  Memorandum Opinion by Justice Goodman. Docket page with attorney information found here.

Texas Supreme Court holds no-evidence MSJ proper to challenge jurisdiction; TOMA waiver of immunity does not include declaratory judgment claims

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Town of Shady Shores v Swanson, 18-0413 (Tex. Dec. 13, 2019)

This is an employment case, but the focus on the opinion is a procedural one.  Importantly, the Texas Supreme Court held 1) a no-evidence motion for summary judgment was proper to raise a jurisdictional challenge and 2) the Texas Open Meetings Act (TOMA) did not waive immunity for declaratory relief, only mandamus and injunctive relief.

Swanson was the former Town Secretary for Shady Shores. She brought claims asserting she was wrongfully discharged. The Town filed a plea to the jurisdiction which was granted as to the Sabine Pilot and Whistleblower claims. The  Town later filed traditional and no-evidence summary judgment motions (on immunity grounds) as to the Texas Open Meetings Act declaratory judgment claims, which the trial court denied.  The Town took an interlocutory appeal, but Swanson kept filing motions. The trial court granted Swanson leave to file a motion for a permissive interlocutory appeal as Swanson asserted she filed her notice of appeal (for the plea to the jurisdiction) within 14 days of the Town’s notice of appeal for the summary judgments. When Swanson attempted to hold further proceedings and obtain an order on the permissive appeal the Town filed a separate mandamus action (which was consolidated for purposes of appeal). The court of appeals declined to issue the mandamus noting the trial court did not actually sign any orders and noted Swanson did not timely file an appeal and was not granted a permissive appeal. Court of appeals summary found here.

The court of appeals held allowing a jurisdictional challenge on immunity grounds via a no-evidence motion would improperly shift a plaintiff’s initial burden by requiring a plaintiff to “marshal evidence showing jurisdiction” before the governmental entity has produced evidence negating it.  It also held the entity must negate the existence of jurisdictional facts. After recognizing a split in the appellate courts, the Texas Supreme Court rejected the reasoning noting in both traditional and no-evidence motions, the court views the evidence in the light most favorable to the nonmovant.  Because the plaintiff must establish jurisdiction, the court could “see no reason to allow jurisdictional challenges via traditional motions for summary judgment but to foreclose such challenges via no-evidence motions.”  Thus, when a challenge to jurisdiction that implicates the merits is properly made and supported, whether by a plea to the jurisdiction or by a traditional or no-evidence motion for summary judgment, the plaintiff will be required to present sufficient evidence on the merits of her claims to create a genuine issue of material fact.  Such a challenge is proper using a no-evidence summary judgment motion.  Next, the Court held  the UDJA does not contain a general waiver of immunity, providing only a limited waiver for challenges to the validity of an ordinance or statute.  UDJA claims requesting other types of declaratory relief are barred absent a legislative waiver of immunity with respect to the underlying action. Under  TOMA, immunity is waived only “to the express relief provided” therein—injunctive and mandamus relief—and the scope does not extend to the declaratory relief sought. Thus, TOMA’s clear and unambiguous waiver of immunity does not extend to suits for declaratory relief against the entity. However, Swanson did seek mandamus and injunctive relief as well, which were not addressed by the court of appeals, even though argued by the Town. As a result, such claims are remanded to the court of appeals to address.

If you would like to read this opinion click here. Justice Lehrmann delivered the opinion of the Court. The docket page with attorney information is found here.

Austin Court of Appeals holds Austin’s short-term rental regulations unconstitutional (assembly clause also declared fundamental right entitled to strict scrutiny)

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Ahmad Zaatari v City of Austin, 03-17-00812-CV (Tex. App. —  Austin, Nov. 27, 2019).

This is a dispute regarding the City of Austin’s regulation on short-term rental properties. The Austin Court of Appeals reversed-in-part and affirmed-in-part the City’s plea to the jurisdiction. [Comment: This is a 43-page opinion and 18-page dissent. So, the summary is a bit longer than normal]

In 2012, Austin adopted an ordinance amending its zoning and land-development codes to regulate Austinites’ ability to rent their properties as short-term rentals.  Several other amendments occurred at different times adjusting the definitions and scope of the codes until, in 2016, Property Owners sued the City for declaratory and injunctive relief to declare the regulations unconstitutional. The Property Owners (which also included the State of Texas as a party) moved for summary judgment while the City filed a plea to the jurisdiction and a no-evidence motion for summary judgment. The trial court denied the Property Owner’s MSJ, denied the City’s plea, but granted the City’s summary judgment.  Everyone appealed.

The City’s plea to the jurisdiction challenges the State’s standing to intervene in this dispute, the Property Owners’ standing to bring claims on behalf of tenants, and the ripeness of the underlying claims. The court held  the State’s standing to intervene in this matter is  unambiguously conferred by the Uniform Declaratory Judgment Act which states when the validity of a statute or ordinance is brought, the attorney general of the state must also be served with a copy of the proceeding and is entitled to be heard. Tex. Civ. Prac. & Rem. Code § 37.006(b).  The court next held the underlying matters were ripe because some provisions of the 2016 ordinance took effect immediately, while others were not effective until 2022. Facial challenges to ordinances are “ripe upon enactment because at that moment the ‘permissible uses of the property [were] known to a reasonable degree of certainty.’” The court held  the City’s alleged constitutional overreach itself is an injury from which the Property Owners and the State seek relief.  Further, governmental immunity does not shield the City from viable claims for relief from unconstitutional acts. As a result, the plea was properly denied.

The court next determined the trial court erred in several evidentiary rulings, which mainly deal with the public dispute over short-term rentals. The State and the Property Owners filed traditional motions for summary judgment on their claims regarding the constitutionality of the ordinance. The Texas Constitution prohibits retroactive laws. The State contends that the ordinance provision terminating all type-2 operating licenses is retroactive because it “tak[es] away th[e] fundamental and settled property right” to lease one’s real estate under the most desirable terms. While disagreeing on the effect, the City conceded the ordinance retroactively cancels existing leases. Not all retroactive laws are unconstitutional. The Court held the regulation operates to eliminate well-established and settled property rights that existed before the ordinance’s adoption.  Upon reviewing the record the court held the City made no findings to justify the ordinance’s ban on type-2 rentals and its stated public interest was slight. Nothing in the record demonstrates this ban would address or prevent any listed concerns, including preventing strangers in the neighborhood, noise complaints, and illegal parking. In fact, many of the concerns cited by the City are the types of problems that can be and already are prohibited by state law or by City ordinances banning such practices. Further, for four years the City did not issue a single citation to a licensed short-term rental owner or guest for violating the City’s noise, trash, or parking ordinances. The purported public interest served by the ordinance’s ban on type-2 short-term rentals cannot be considered compelling. Private property ownership is a fundamental right. The ability to lease property is a fundamental privilege of property ownership. Granted, the right to lease property for a profit can be subject to restriction or regulation under certain circumstances, but the right to lease is nevertheless plainly an established one.  Based on the practices performed in Austin over the years, short-term rentals have a settled interest and place in the City. The City’s ordinance eliminates the right to rent property short term if the property owner does not occupy the property. As a result, the regulations are unconstitutionally retroactive.

The court then addressed the Property Owner’s claim the regulations violated their right to assembly under the Texas Constitution. After a lengthy analysis, the court held the Texas Constitution’s assembly clause is not limited to protecting only petition-related assemblies and the judicially created “right of association” does not subsume the Texas Constitution’s assembly clause in its entirety.  The right is a “fundamental right” for constitutional analysis purposes and must be examined under a strict scrutiny analysis. The regulation sections challenged limited the number of persons at a rental at any one time, the hours of the day a rental could be used,  number of permitted leaseholders, and various other congregation related activities. The City already has various nuisance ordinances in place to address the negative effects of short-term rentals on neighbors. As a result, the City failed to establish a compelling interest that justifies a different ordinance which is not narrowly tailored. The City has not provided any evidence of a serious burden on neighboring properties sufficient to justify the additional regulations, which therefore violate the assembly clause of the Texas Constitution.

The court reversed that part of the district court’s judgment granting the City’s no-evidence motion for summary judgment and denying the Property Owners’ and the State’s motions for summary judgment. It rendered judgment declaring specific sections of the City Code void.

Justice Kelly  dissented asserting 1) the sections were not unconstitutionally retroactive (with analysis), 2) the Assembly Clause assures Texans the fundamental right to peaceably gather for purposes of meaningful civic discourse without fear of retribution – not to have short-term rentals (which are assembly-neutral zoning regulations that have a rational basis), 3) loud noise, obstructing infrastructure, flouting law enforcement, public disturbances, threats to public safety- all these may make an assembly non-peaceable and can be regulated, and 4) the majority opinion is also out of step with Texas “fundamental right” precedent (i.e. declaring rights fundamental, and thus beyond ordinary democratic give-and-take, is a weighty matter, unjustified in this case).

If you would like to read this opinion click here. Panel consists of Chief Justice Rose, Justices Goodwin and Kelly.  Opinion by Chief Justice Rose.  Dissenting Opinion by Justice Kelly found here. Docket page with attorney information found here.