14th Court of Appeals holds waiver of immunity in TCEQ SOAH hearing need not be by express statutory language

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Hyde v Harrison County, 14-18-00628-CV (Tex. App. – Houston [14th Dist.], July 30, 2020)

Harrison County (the “County”) owns and operates underground storage tanks at its road and bridge department and at its airport. A Texas Commission on Environmental Quality (the “Commission”) investigator determined the County violated the Texas Water Code by not providing a release detection for the pressurized piping. The Commission initiated an administrative enforcement action against the County. The Commission sought an administrative penalty of $5,626 against the County. At the contested case hearing at the State Office of Administrative Hearings (“SOAH”) the SOAH judge assessed an administrative penalty against the County. The County timely filed a petition in district court and argued the SOAH judge did not have jurisdiction over the County. The trial court agreed with the County and vacated the SOAH order. The Commission appealed.

The Court first held no express statutory waiver of immunity exists for the administrative proceedings or penalties in the Water Code. However, the court noted that there are limited circumstances where waiver need not be statutorily expressed. The Water Code requires such tanks comply with Commission requirements for pressurized piping release detection equipment. When a statutory context in which a statute defines “person” to include governmental entities, a statute imposes liability on a “person,” and construing the statute not to waive immunity would make part of the statutory scheme meaningless, the court may find a waiver. The court further noted that  § 7.051 allows the Commission to lower a penalty if the owner contributes to supplemental projects, but notes non-governmental entities cannot use this option if the project is necessary to bring the owner into compliance.  The Commission is also required to develop a policy to prevent “regulated entities” from avoiding compliance through the use of such supplemental projects. These provisions would be useless if governmental entities were not subject to regulation and penalties. The court concluded “…that applying the statutory definition of ‘person’ from Government Code section 311.005 to Water Code section 7.051 shows clear legislative intent to waive governmental immunity against assessment of an administrative penalty under section 7.051 because the context of section 7.051 affords no other reasonable construction.” As a result, the trial court erred in vacating the SOAH order.

If you would like to read this opinion click here. Panel consists of Chief Justice Frost, Justices Wise and Hassan. Opinion by Chief Justice Frost.

 

U.S. 5th Circuit holds a board reprimand against an elected official for speech on a matter of public concern is an actionable First Amendment claim under § 1983.

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Wilson v. Houston Community College System, 19-20237 (U.S. 5th Cir. April 7, 2020)

This is a First Amendment/§1983 case where a former member of the board of trustees claimed the College censured him in violation of his First Amendment Rights. The U.S. Fifth Circuit Court of Appeals reinstated the plaintiff’s First Amendment claims but sustained the dismissal of his declaratory and injunction claim.

Houston Community College System (“HCC”) is a public college system in the Houston area. HCC is controlled by a board of nine publicly elected trustees, one of whom was Wilson. Wilson publicly chastised HCC on various occasions for its policy decisions and even filed multiple state court lawsuits including one to prohibit videoconferencing votes as being illegal under the bylaws and in excluding him from meetings. The Board of Trustees held a hearing and issued a censure resolution which  chastised Wilson for acting in a manner “not consistent with the best interests of the College or the Board, and in violation of the Board Bylaws Code of Conduct.” The censure, the Board emphasized, was the “highest level of sanction available,” as Wilson was elected and could not be removed. Once censured, Wilson brought §1983 claims under the First Amendment, including declaratory and injunctive relief. The trial court granted HCC’s motion to dismiss under Rule 12(b)(1) for lack of jurisdiction due to a non-distinct injury. In August 2019, Wilson resigned. He was not re-elected.

In the context of free speech, “the governmental action need not have a direct effect on the exercise of First Amendment rights . . . [but] must have caused or must threaten to cause a direct injury to the plaintiffs.” The trial court held the censure did not forbid Wilson from performing his official duties or speaking publicly. Disagreeing with the trial court, the 5th Circuit held  Wilson’s allegation of retaliatory censure is enough to establish an injury in fact.  Further, a free speech violation giving rise to a reputational injury is an injury in fact and properly states First Amendment standing. However, Wilson’s claims for declaratory and injunctive relief regarding the application of the Board’s censure and Code of Conduct are moot given they are no longer live controversies.

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

Dallas Court of Appeals holds comprehensive plan ordinance is subject to referendum petition

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Carruth, et al v Henderson, 05-19-01195-CV (Tex. App. – Dallas, July 22, 2020).

This is a mandamus action (and second interlocutory opinion) where the Dallas Court of Appeals issued a mandamus against the City Secretary of the City of Plano regarding a citizen’s referendum petition and granted summary judgment for the plaintiff citizens.

The City of Plano, a home-rule municipality, has a comprehensive plan for land and use development under Chapter 213 of the Texas Local Government Code. The City of Plano’s charter permits qualified voters to submit a referendum petition seeking reconsideration of and a public vote on any ordinance, other than taxation ordinances. After the City passed an ordinance amending and adopting a new comprehensive plan, several citizens submitted a petition to the City Secretary for a referendum to repeal the new plan. The City Council held an executive session and was advised by outside legal counsel that the petition was not subject to a referendum vote. When no action was taken on the petition, the citizens filed suit to compel formal submission to the City Council and to have the City Council either take action or submit to a popular vote. The City Secretary filed a motion for summary judgment, which was granted. The citizens appealed.

The legislature may preempt municipal charters and ordinances. However, when preempting a home-rule charter, the language must be clear and compelling. The Plano City Charter itself excepts only ordinances and resolutions levying taxes from the referendum process. And while Chapter 213 of the Texas Local Government Code regulates the adoption of comprehensive plans, the mere fact that the legislature has enacted a law addressing comprehensive plans does not mean the subject matter is completely preempted (which would have foreclosed a referendum application). The City Secretary claims § 213.003 impliedly withdraws comprehensive development plans from the field of initiative and referendum by mandating procedural requirements, including a public hearing and review by the planning commission before cities can act on such plans. This argument ignores that the statute also allows a municipality to bypass the procedures set forth in subsection (a) and adopt other procedures in its charter or by ordinance. Tex. Loc. Gov’t Code § 213.003(b). Thus, the legislature did not limit the power of home-rule municipalities to adopt comprehensive plans. Further, comprehensive plans, while linked, are to be treated differently than zoning regulations. So, the cases cited by the City Secretary related to zoning referendums are not applicable. The order granting the City Secretary’s motion for summary judgment is reversed.  Because the original interlocutory opinion (summary found here) held the City Secretary has a ministerial duty to present the petition to the City Council, the law-of-the-case doctrine prevents the panel from holding otherwise. As a result, it must grant the citizen’s motion for summary judgment.

If you would like to read this opinion click here. Panel consists of Justices Schenck, Molberg, and Nowell. Opinion by Justice Schenck.  Docket page with attorney information found here.

Fort Worth Court of Appeals analyzes the law-of-the-case doctrine and determines private property owners did not establish claims against a city regarding fee simple land ownership

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City of Mansfield, et al., v Saverings, et al, 02-19-00174-CV (Tex. App. – Fort Worth, July 16, 2020)

In this lengthy opinion, the Fort Worth Court of Appeals holds certain private property owners did not establish a right to declaratory relief regarding fee-simple ownership of lots over which the City exercised some regulatory control, asserting they were public paths.

A developer filed a final plat in Tarrant County, creating a planned housing development—The Arbors of Creekwood – Gated Community (the Development) located in the City, but which had two HOAs. An amended plat divided the lots into R1 and R2 lots. All R2 lots were in the floodplain, which was governed by City ordinance. The developer created a lake and connected jogging paths ending at the lake. The developer testified the paths were for public use.  The boundary line for the R2 lots abutting the lake was to the north of the lake; thus, the lake was not included within the boundaries of these R2 lots. The developer executed a declaration of covenants, conditions, and restrictions (the Declaration) for the Development and filed them in Tarrant County. The Declaration stated the HOAs owned fee-simple title to private streets in the Development and “common properties” which had a complicated definition. In 1997, the Arbors HOA forfeited its right to do business and became a terminated entity. The surviving HOA asserted the Arbors HOA property lots (R2) automatically transferred to it. In January 2012, the City began planning for a “possible future trail connection” to the jogging path. Construction on the bridge began in 2013 and opened on January 25, 2014. Some owners of R1 lots noticed an increase in people using the jogging path and trespassing on the R1 lots. The R1 owners sued seeking a declaration they owned the R2 lots as common properties, and seeking to quiet title The Court of Appeals issued an interlocutory opinion in review of a temporary injunction noting the R2 lots were included in the definition of “common properties.” The R1 Owners also raised claims against the City Defendants for trespass and inverse condemnation.  The City Defendants filed a traditional and no-evidence motion for summary judgment, including arguments that the facts and law had substantially changed since the interlocutory order. They argued the R1 owners did not have a right to possess the R2 lots (which were originally owned by the defunct HOA) and that they did not have a private right to enforce a city ordinance on floodplain development. The trial court denied the City Defendants’ motions and granted the partial summary judgment of the R1 owners. The City Defendants appealed.

The court first went through a detailed analysis of the evidence submitted, objections to the evidence, and what constituted judicial admissions. The court held the law-of-the-case doctrine only applied to claims fully litigated and determined in a prior interlocutory appeal; it did not apply to claims that have not been fully litigated. The law-of-the-case doctrine is flexible and directs the exercise of court discretion in the interest of consistency but does not limit its power.  The interlocutory opinion (which was a complicating obstacle) did not address the R1 Owners’ UDJA claim regarding title to the R2 lots, only a probable right of relief for trespass claims based on an undeveloped record. The court noted they were substantially different arguments, issues, law, and review standards. [Comment: For a good analysis of the doctrine and its boundaries, read this section of the case.]  The City argued the R2 lots owned by the defunct HOA could be distributed only under the terms of the articles of incorporation and could not pass to the live HOA automatically. The court agreed with the City that the R1 owners did not establish a proper conveyance under the articles.

Next the court turned to the floodplain ordinance, where the R1 owners asserted the City failed to follow its own ordinance by obtaining studies before constructing structures in the floodplain connecting the jogging paths. The City Defendants’ argument no private cause of action to enforce the ordinance exists is one of standing. The R1 Owners did not challenge the validity of the ordinance but rather asserted that they wanted a construction of the ordinance and enforcement of it against the City Defendants. The R1 Owners did not have a right to enforce the ordinance through a UDJA claim, which only waives immunity for ordinance invalidation.  Alternatively, under the record, the R1 owners did not establish the City violated the ordinance. The City Defendants proffered summary-judgment evidence raising a fact issue on their substantial compliance.  Finally, since the court held the R1 owners could not bring a UDJA claim, the attorney’s fee award was reversed.

If you would like to read this opinion click here. Panel consists of Chief Justice Sudderth, Justices Gabriel and Kerr.  Opinion by Justice Gabriel.

San Antonio Court of Appeals affirms county’s jurisdictional challenge and award of sanctions against property owner

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Kehoe v Kendall County, 04-19-00825-CV (Tex. App. – San Antonio, July 15, 2020).

This is a declaratory judgment case involving a private property easement where the San Antonio Court of Appeals affirmed the City’s plea to the jurisdiction and awarded sanctions against the Plaintiff.

Kehoe asserts Kendall County improperly accepted a 40-foot easement across her property and sought a declaration no easement exists. She brought suit under the Uniform Declaratory Judgment Act (“UDJA”) and the Texas Private Real Property Rights Preservation Act (“PRPRPA”). The County filed a plea to the jurisdiction, which was granted, and sought sanctions asserting Kehoe previously sued over the easement and lost. The trial court granted sanctions and Kehoe appealed.

The court first held that Kehoes’ arguments in her brief, even broadly construed, do not address the trial court’s jurisdictional dismissal. The briefings consist solely of bare assertions of error, without citations to applicable authority or the record. Since nothing was properly briefed for review, the plea to the jurisdiction remains properly granted. Likewise, Kehoe does not address the standards for sanctions and so they are likewise affirmed.

If you would like to read this opinion click here. The panel consists of Justices Martinez, Rios, and Watkins.  Opinion by Justice Watkins.

Company failed to establish how release of records held by City would cause it competitive harm under PIA

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Genuine Parts  Company v Ken Paxton, 03-19-00441-CV (Tex. App. – Austin, July 10, 2020)

This is a Texas Public Information Act (“PIA”) case where the Austin Court of Appeals denied a third-party’s claim to keep its information held by the City of Houston excepted from release.

An attorney in Virginia filed a PIA request for a settlement agreement entered into between Genuine Parts Company (“Genuine”) and the City. In response to a third-party notice letter, Genuine filed an opinion request with the Texas Attorney General’s office asserting the agreement contained information that would give advantages to its competitors if disclosed. The Attorney General opined the agreement must be released. Genuine filed suit. The Attorney General filed a motion for summary judgment, which was granted. Genuine appealed.

Genuine Parts bears the burden of establishing that this exception to public disclosure applies to the Settlement Agreement.  The proper test is whether disclosure of the information would provide a competitor or bidder with an advantage, albeit not necessarily a decisive one.  Genuine provided examples of how competitors, in the past, had used the PIA to gain advantages in bids to which Genuine was also applying. While that could potentially be true, the key issue is whether the Settlement Agreement actually contains such harmful information. The Settlement Agreement identifies the parties and generally describes their dispute, the details of which are contained in publicly available federal court filings. The Settlement Agreement sets forth the total amount of a payment to be made by one party to the other along with the manner and timing of the payment. The Settlement Agreement references a lump sum amount relating to inventory. There is no description of the nature of the inventory or its pricing, and there is nothing that could be construed to constitute “performance figures.” Genuine also failed to explain how the contents of the Settlement Agreement might give a competitive advantage. As a result, the evidence in the record fails to demonstrate that the Settlement Agreement contains information that “if released would give advantage to a competitor or bidder.” The trial court properly granted the AG’s summary judgment.

If you would like to read this opinion click here. Panel consists of Justices Goodwin, Baker, and Kelly.  Opinions by Justice Baker.

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.