Second Court of Appeals holds general law city has inherent power to require solid waste haulers to obtain a license

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Builder Recovery Services LLC v. The Town of Westlake, Texas, 02-20-00051-CV,  (Tex. App. – Fort Worth, Jan. 1, 2021)(mem. op.).

This is a declaratory judgment/ordinance invalidation suit brought by a solid waste collector where the Fort Worth Court of Appeals affirmed the Town’s power to require licenses. [Warning, this is a long opinion at 56 pages].

BRS contracts with home builders in the Town of Westlake to remove the temporary construction waste that the builders generate and place a dumpster on the property during construction. The dumpsters are towed to each site and place as much as 20,000 pounds of weight upon the Town’s roads, with as many as ten visits to each site during construction. BRS initially raised concerns that the Town’s regular solid waste hauler (Republic) could not be the sole hauler for temporary construction waste. The city council delegated the Town’s staff to meet with the builders to discuss amendments to the Town’s ordinances in order to address the issue. The Town eventually passed an ordinance allowing third-party haulers like BRS to obtain licenses for temporary construction waste services in imposed certain regulations on the license. BRS brought suit asserting, among other things, that the license fee was not tied to actual administrative costs, that the ordinance was preempted by state law, and challenging the Town’s authority to pass the ordinance. After a bench trial, the trial judge found largely in favor of the Town but did invalidate the license fee calculation. BRS appealed.

The court first went through a detailed analysis of the power distinctions between general law cities and home rule cities. While the Town is a general law city, the court held it has the power to regulate solid waste collection under §361.113 of the Texas Health and Safety Code. The court rejected BRS’ argument that the section does not empower the Town to issue licenses as a license is an inherent part of the regulatory power.  Licenses are one means for a governmental agency to regulate activities that the Town is empowered to regulate. The court analyzed the various powers of the Town, including inherent powers and noted the power to regulate carries with it all means to accomplish the regulation, including licensing. Further, BRS failed to establish the ordinance was invalid because it failed to negate all conditions which would warrant the ordinance.  Further, such rules do not conflict with the franchise section of the same subtitle of the statute. Franchises and licenses are separate creatures. The court analyzed the wording of the various health and safety code sections and determined the power to license is not preempted by any other portion of the code. It held a “dumpster” is not the same as a “container” as that term is defined under the Solid Waste Disposal Act. The court determined the license fee issue was moot due to an amended ordinance.  However, due to an outstanding issue of attorney’s fees, the court remanded to the trial court for disposition.

If you would like to read this opinion click here. Panel consists of Justice Bassel, Justice Womack and Justice Wallach.  Memorandum opinion by Justice Bassell.

The Tenth Court of Appeals held immunity waived for airport lease based on improvements made by tenant

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Special contributing author Laura Mueller, City Attorney for Dripping Springs

City of Cleburne v. RT General, LLC, No. 10-20-00037-CV (Tex. App.—Waco  December 16, 2020) (mem. op.).

This is an interlocutory appeal from a trial court denial of the city’s plea to the jurisdiction on a breach of contract and related claims regarding an airport lease. The Waco Court of Appeals affirmed the denial.

The plaintiff sued the city after the city attempted to evict the plaintiff from the city’s airport under a lease agreement with the plaintiff.  The city and plaintiff entered into a lease agreement for airport facilities where the plaintiff could use the airport facilities at no charge for ten years because the plaintiff had expended over $300,000 in repairing the city’s airport facilities.  After the first ten years, the plaintiff was required to pay rent for use of the facilities.   Three years into the lease, the city sent a letter of eviction to the plaintiff, and the plaintiff sued the city for breach of contract, inverse condemnation, declaratory judgment, and fraud.  The city argued it had immunity from suit because the airport operation is a governmental function and the contract was missing an essential term, the rental payments for the first ten years.  The trial court denied the city’s plea to the jurisdiction.

Immunity is based on whether a function on which liability is based is a governmental or proprietary function.  Wasson Interests, Ltd. v. City of Jacksonville, 559 S.W.3d 142, 146 (Tex. 2018).  Operation of an airport is a governmental function.  Tex. Transp. Code § 22.021(a)(2).  Immunity from a governmental function can be waived by a contract claim if the contract falls within the provisions of Chapter 271 of the Local Government Code including stating the essential terms of the contract.  Tex. Loc. Gov’t Code § 271.152.  While price is an essential term of an agreement, the court of appeals held that past consideration could meet this requirement.  The court of appeals also held that claims for declaratory judgment and inverse condemnation can move forward on the same set of facts because immunity is waived under breach of contract.

Chief Justice Gray dissented by footnote stating that there was insufficient evidence that goods or services were provided to the city under the lease agreement.  Chief Justice Gray would also render judgment on the other claims as they are creative pleading efforts that should be dismissed as attempts to avoid the governmental immunity issue.

If you would like to read this opinion click here.   Panel consists of Chief Justice Gray and  Justices Davis and Neill. Opinion by John Neill and Chief Justice Gray dissenting by footnote within the opinion.

 

The Tenth Court of Appeals affirmed the trial court’s summary judgment against the plaintiff developer because it did not challenge all possible grounds supporting the summary judgment order

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Special contributing author Laura Mueller, City Attorney for Dripping Springs

David A. Bauer, et al. v. City of Waco, No. 10-19-00020-CV (Tex. App.—Waco  December 9, 2020) (mem. op.).

The Waco Court of Appeals affirmed a trial court’s judgment dismissing the plaintiff’s vested rights and takings claims on summary judgment.

The plaintiff developer sued the city after being required to provide an easement for a water line and meet other requirements in the city’s code prior to construction of its project.  The city required changes to various permit applications of the plaintiff prior to approval and required an easement for a previously placed waterline. The plaintiff developer sued the city for vested rights and takings, arguing the regulations were inapplicable due to the vesting of its original permit.  Among its summary judgment arguments, the City argued that a declaration of the plaintiff’s vested rights would not resolve the issue because the ordinance in place at the time of initial permit vesting would yield the same result.  As to the required easement, the City argued that the plaintiff did not seek a variance from the easement and could not claim a taking.  The trial court granted summary judgment in favor of the city but the order did not provide specific reasons.

To appeal a summary judgment, the appealing party has to prove that any or all bases for the summary judgment is error.  Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995); Lesher v. Coyel, 435 S.W.3d 423, 429 (Tex. App.—Dallas 2014, pet. denied). To establish a claim for vested rights under Chapter 245 of the Local Government Code the plaintiff needs to show that the city is required to review a permit application based on the regulations in effect at the time the original application is filed.  See Tex. Loc. Gov’t Code § 245.002; Milestone Potranco Dev., Ltd., v. City of San Antonio, 298 S.W.3d 242, 248 (Tex. App.—San Antonio 2009, pet. denied).  For a takings claim, the plaintiff needs to show that the action where the property was taken was done without consent of the property owner and that there has been a final decision regarding the application of the regulations to the property at issue. Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 929 (Tex. 1998). The court of appeals upheld the trial court’s judgment on both the vesting rights and takings claims because the plaintiff failed to disprove every basis for the summary judgment including that the ordinance in effect for vesting would not have changed the result and that the original property owner had given consent for the installation of the water line.

If you would like to read this opinion click here.   Panel consists of Chief Justice Gray and  Justices Davis and Neill. Opinion by Chief Justice Tom Gray.

 

Third Court of Appeals holds church’s motion for new trial in water rate EDJA case held valid given unique and troubling circumstances in case

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City of Magnolia v Magnolia Bible Church, et al., 03-19-00631-CV (Tex. App. – Austin, Dec. 18, 2020)

This is an interlocutory appeal from an order granting a new trial and denying a plea to the jurisdiction in a water rate case in which the Austin Court of Appeals affirmed the granting of new trial and the denial of the City’s plea.

This case involves the interplay between the provisions of the Expedited Declaratory Judgment Act (“EDJA”)(which deals with public securities), the Texas Rules of Civil Procedure, and the constitutional principles of due process. The City adopted an ordinance relating to the City’s water-system rates. In addition to residential and commercial accounts, the ordinance created a new category of water user, the “Institutional/Non-Profit/Tax-Exempt accounts,” which, among others, covered churches.  The Churches opposed the new category and surcharge as being discriminatory under the Tax Code and the Texas Religious Freedom Restoration Act (“TXRFRA”).  The City preemptively filed a validation suit under the EDJA to validate the bonds and rates tied to the bonds, but only notified the public through newspaper publications. It did not expressly notify the church of the suit. The trial court granted the City’s validation of the rates. The Church later filed a regular Uniform Declaratory Judgment Act (“UDJA”) claim asserting the rates were discriminatory. When the City informed the Church of the final judgment under the EDJA claim, the church filed a motion for new trial in the EDJA trial court (under Tex. R. Civ. P. 329). The City filed a plea to the jurisdiction asserting the trial court lost plenary power over the case.  The trial court denied the plea and granted the motion for new trial. The City appealed.

Chief Justice Rose held that due process does not require personal service in all circumstances, but any use of substituted notice in place of personal notice—e.g., notice by publication—must be “reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Notice by publication is insufficient when the name, address and interest are known.  The EDJA empowers an issuer of public securities to seek an expedited declaratory judgment concerning “the legality and validity of each public security authorization relating to the public securities,” including, as relevant here, the legality and validity of “the imposition of a rate, fee, charge, or toll.” Tex. Gov’t Code § 1205.021(2)(E). Ordinarily, notice by publication satisfies due process as to the parties bound by an EDJA judgment because the EDJA permits only in rem declarations concerning property rights and is notice to the public. However, in this case, the church challenged the application under religious freedom grounds.  Due process, therefore, requires more than notice by publication. Because notice to the Churches was constitutionally insufficient, the resulting judgment was void and can be challenged at any time. Justice Trianna took a slightly different approach, using the text of the EDJA and holding that it does not conflict with Rule 329 (allowing a new trial for persons who did not receive notice) and Rule 329 extends the plenary power of the court for a certain period of time.  Since the Church met the time periods under Rule 329, it was within the trial court’s discretion to grant or deny the motion or new trial.

Justice Baker’s dissent holds that such an interpretation undermines the intent of the EDJA which is to quickly decide the issue then preclude future claims from any other person who challenges the rate and bond applications.   He asserts Rule 329 only applies when a defendant (not an interested person) does not appear after service by publication.

If you would like to read the various opinions, Chief Justice Rose’s concurring opinion is here, Justice Trianna’s concurring opinion is here, and Justice Baker’s dissent is here.

El Paso Court of Appeals held Governor’s executive orders control over county judge order in the event of conflicts

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State of Texas, et al v. El Paso County, Texas, et al., 08-20-00226-CV (Tex. App. – El Paso, Nov. 13, 2020).

This is an interlocutory appeal from the denial of the temporary injunction involving a conflict between the county judge’s executive order and the Governor’s executive order.  The El Paso Court of Appeals reversed the denial.

The Governor’s executive order GA-32 allows bars and open with reduced capacity in October of 2020. After the County had a surge in COVID-19 cases, El Paso County Judge Ricardo Samaniego issued an executive order including a stay at home mandate and eliminating social gatherings not confined to a single household. While it listed several permitted essential services, bars were not included and restaurants could only allow curbside pickup.  The State and a collection of restaurants sued the County and the judge asserting the order was contrary to the Governor’s order. They sought a temporary injunction to prevent enforcement of the County Judge’s order, which the trial court denied. Plaintiffs appealed.

The court first wanted to make clear that it was not deciding on the wisdom of either order, only the statutory construction provision as to which controlled over the other. The Governor’s order contains a preemption clause countermanding any conflicting local government actions, but the County order states any conflict requires the stricter order to apply. County judges are deemed to be the “emergency management director” for their county. The Texas Disaster Act contemplates that a county judge or mayor may have to issue a local disaster declaration and has similar express powers to those issued to the Governor. However, a county judge is expressly referred to as the “agent” of the Governor, not as a separate principle. Further, even if the County judge had separate authorization, the Legislature has declared the Governor’s executive order has the force of law. State law will eclipse inconsistent local law. Additionally, the Act allows the Governor to suspend the provisions of any regulatory statute within an executive order, which would include the County order.  The court then analyzed the standards for a temporary injunction and held the trial court erred in denying the injunction.  Finally, the court concluded by stating how essential the role of a county judge is when managing disasters and emergencies and that their opinion should not be misunderstood. The Governor’s order only controls over conflicts, and any provision of the County order which can be read in harmony remains enforceable.

Justice Rodriguez’s dissent opined that the Governor exceeded the authority provided by the Disaster Act. In his view, “the Governor has taken a law that was meant to help him assist local authorities by sweeping away bureaucratic obstacles in Austin, and used it in reverse to treat local authorities as a bureaucratic obstacle to…”  a once-size-fits-all coronavirus response plan.

If you would like to read this opinion click here. The dissent by Justice Rodriguez is found here. Panel consists of Chief Justice Alley, Justice Rodriguez and Justice Palafox.  Opinion by Chief Justice Alley.

Austin Court of Appeals holds that under the Civil Service Act applied to police officers, a reinstatement list must factor in seniority in the position being demoted and not seniority in the department

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Bradley Perrin v. City of Temple, et al, 03-18-00736-CV, (Tex. App – Austin, Nov. 6, 2020)

This is an employment dispute in a civil service police department with crossclaims and a host of procedural matters. The Austin Court of Appeals ultimately held the Plaintiff was entitled to the promotional position of corporal.

Perrin and Powell were serving as police officers for the City and took the written examination for promotional eligibility to the rank of corporal.  Five officers passed, including Perrin and Powell. The results were publicly posted on a certified list with Powell being third and Perrin being fifth. Then, the Director added seniority points, but made Perrin third and Powell fifth. The City Defendants and Powell contend that the Director erred in adding the seniority points and did so incorrectly. However, before the list expired, the City eliminated four corporal positions and created two new lieutenant and two new sergeant classifications. The Chief sent out a memo stating the sequence of events should have resulted in the promotion of Officers Mueller, Perrin, Powell and Hickman to corporal, and then the immediate demotion back to the rank of police officer, and placement on a Re-Instatement List for the period of one year. The reinstatement list listed Powel higher than Perrin due to seniority points being included. Perrin sued the City Defendants for a list status higher than Powell under declaratory judgment and ultra vires claims.  The City Defendants counterclaimed, seeking declaratory relief that Powell was entitled to the promotion and Powell intervened. The trial court issued an order denying Perrin’s plea to the jurisdiction and motion for summary judgment and granting the City Defendants’ and Powell’s motions for summary judgment. Perrin appealed.

The court first held the legislature waived immunity for dissatisfaction with the grading in §143.034(a) of the Texas Local Government Code, which permits an “eligible promotional candidate” who is “dissatisfied” with “the examination grading” to “appeal, within five business days, to the commission for review.” To the extent that Powell is relying on the UDJA to challenge “the examination grading” such is precluded due to the redundant remedy doctrine. Powell’s ultra vires claim is not dependent on the remedies so is permitted to move forward for prospective relief only, but since Powell sought a reevaluation of the promotion list, that is not prospective. The trial court erred in granting Powell’s summary judgment for retrospective relief to alter the list. conclude that the City Defendants’ counterclaim requesting declaratory relief did not rise to a justiciable level and therefore the district court lacked subject matter jurisdiction over the counterclaim. It is the promotional eligibility list that provided the rights and status of the parties as to their initial promotion to corporal. Whether Perrin was erroneously placed ahead of Powell on the promotional eligibility list does not affect the rights and status of the parties under that list because, on this record, there is no mechanism by which the expired list may be retroactively amended.  By providing a unilateral right of review only to officers, the Civil Service Act is not thereby permitting a declaratory judgment action through which the City Defendants may challenge the decision of the Director in making the list.  However, for the reinstatement list, the context of the statute makes clear that the reinstatement list is created by the demotion of officers who have “least seniority in a position” and that the list “shall” be “in order of seniority.” The court determined that “seniority” in section 143.085(a) refers to seniority in the corporal position, not seniority in the Department.  So, when multiple individuals are promoted to open vacancies from a promotional eligibility list at the same time and then demoted at the same time, “seniority” for the reinstatement list is determined by the order of the promotional eligibility list.

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

The U.S. Fifth Court of Appeals held plaintiffs had standing to challenge zombie law provision in charter despite the election being over.   

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Special contributing author Laura Mueller, City Attorney for Dripping Springs

Joe Richard Pool, III, et al. v. City of Houston, et al., No. 19-20828 (5th Cir.  October 23, 2020).

In this appeal from a trial court’s dismissal of an election case.   The U.S. Fifth Circuit reversed the trial court’s dismissal and held that the plaintiffs had standing to continue the suit for future petitions.

The plaintiffs are petition circulators who attempted to circulate a petition in the city where they are not registered voters.  The city stated that it had a charter provision that required petitions to be circulated or signed by registered voters, but that they were going to look into the issue.  While the city was researching the issue, the plaintiffs filed suit in federal district. The district court held that the charter provision was unconstitutional and granted the temporary restraining order preventing enforcement.  After the petition period was over, the trial court dismissed the case as moot. The plaintiffs appealed. During the litigation, the city added an “editor’s note” to its charter that it would accept petitions from anyone and had a link to a new form regarding such.  The city argues that it will not be enforcing the provision and has approved a form and notation to that effect which should preclude a permanent injunction case.

When laws are deemed unconstitutional they are not always updated or removed from documents.  These are called zombie laws.  The Houston Charter has a provision that limits petition signers to registered voters.  This type of law was deemed unconstitutional in 1999 but was not removed from the city’s charter.  See Buckley v. Am. Constitutional Law Found., Inc., 525 U.S. 182, 193–97 (1999).  In order to show standing to overturn such a zombie law, plaintiffs must show that they are “seriously interested in disobeying, and the defendant seriously intent on enforcing, the challenged measure.” Justice v. Hosemann, 771 F.3d 285, 291 (5th Cir. 2014).  The Fifth Circuit held that it was clear that the plaintiffs would continue to try to submit petitions despite not being registered voters and that the city’s notation and form were insufficient to prevent enforcement.  The court held that the plaintiffs have standing and could continue their suit against the city for future petitions.

If you would like to read this opinion click here.   Panel consists of  Justices Graves, Costa, and Engelhardt. Opinion by Circuit Judge Gregg Costa.

 

U.S. 5th Circuit holds Plaintiff students established standing to assert University’s student speech policies on harassments and rudeness are unconstitutional

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Speech First, Inc. v. Fenves, 19-50529 (5th Cir. Oct. 28, 2020)

This is a First and Fourteenth Amendment free speech case in a university setting. The U.S. 5th Circuit Court of Appeals reversed the dismissal of the plaintiffs’ claims and reinstated the case.

Speech First, Inc., (“Speech First”) is an organization of free-speech advocates which brought suit on behalf of students at the University of Texas at Austin (“University”) challenging seven policies of the University. The policies prohibited obscenity, defamation, rude statements, “verbal harassment of another” with a very broad definition, a requirement that if a person demands the student to stop communicating with them the student must oblige,  and several others. The Dean of Students (Fenves) has primary authority and responsibility for the administration of student discipline. The trial court dismissed the claims due to a lack of standing. The Plaintiffs appealed.

In general, “‘a defendant’s voluntary cessation of a challenged practice does not deprive a federal court of its power to determine the legality of the practice,’” so the fact the University amended its policies does not preclude the court from analyzing the original policies. Further, some of the definitions were not amended, thereby leaving the controversy live. Next, Because Speech First seeks a preliminary injunction on behalf of its members, it must clearly show that it likely has associational standing to bring its case on the merits.  Speech First has standing if any of its members have standing. The gravamen of Speech First’s claims is that its student-members wish to engage in robust debate on timely and controversial political topics from a contrarian point of view. Because their views do not mirror those of many on campus, their speech may be deemed “harassment,” “rude,” “uncivil,” or “offensive,” as those terms are defined in the University’s policies. The court has repeatedly held, in the pre-enforcement context, that “[c]hilling a plaintiff’s speech is a constitutional harm adequate to satisfy the injury-in-fact requirement.” Evidence supported that students “are afraid to voice their views out of fear that their speech” may violate University policies.  Further, terms like “harassment,” “intimidation,” “rude,” “incivility,” and “bias” beg for clarification as they are too broad and not sufficiently prescriptive. The prong requiring substantial threat of future enforcement to confer standing does not necessarily apply for a facial challenge, only an “as-applied” challenge. The dismissal is reversed and the case remanded to the district court for a reassessment of the preliminary injunction.   The court finally cautioned that “In our current national condition, however, in which ‘institutional leaders, in a spirit of panicked damage control, are delivering hasty and disproportionate punishment instead of considered reforms,’ courts must be especially vigilant against assaults on speech in the Constitution’s care.”

If you would like to read this opinion click here. Panel consists of Justices King, Jones and Costa. Opinion by Justice Jones.

Property owner failed to allege Ch. 211 or 245 claims for zoning change; failure-to-exhaust-remedies bar applied to inverse-condemnation claim

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City of Dickinson v Stefan, 14-18-00778-CV, (Tex. App. – Houston [14th Dis.], Oct. 27, 2020)

Stefan operated his home computer business in a residential zone, but allowed his church group to host events, including weddings on the property.  The City changed later changed the zoning code and created a registration process for non-conforming uses. The registration allows a property owner to continue the same nonconforming use after the City adopted the change but the owner cannot expand the nonconforming use. Stefan registered his home computer business but did not list any church activities. Stefan did not write “events,” “wedding venue,” “event center,” or anything else that would indicate he had been using the Property for events.  Neither party produced evidence the City approved the request. Stefan was later cited for operating a special event center against the zoning code without a special use permit. Stefan appealed to the Board of Appeals, which denied his request to operate special events. Stefan then sued the City for declaratory relief claimed inverse-condemnation.  The city filed a plea to the jurisdiction, which was denied. The City appealed.

The Court first held that Stefan failed to allege a vested right determination under chapter 245 or a board of adjustment appeal under chapter 211 of the Texas Local Government Code. The operation of an ongoing business is not a “project” within the meaning of chapter 245. Rights to which a permit applicant is entitled under chapter 245 accrue on the filing of an original application or plan for development or plat application that gives the regulatory agency fair notice of the project and the nature of the permit sought.  Stefan’s pleadings do not mention chapter 245 or a vested right. Stefan does not cite § 211.011 or seek a writ of certiorari for a BOA appeal. He sued the City, not the BOA. As a result, he failed to seek judicial review of the BOA decision. The City challenged jurisdiction for the declaratory judgment and takings claims for failure to timely appeal the City Board of Adjustment determination and that Stefan did not exhaust his administrative remedies regarding nonconforming uses. Even under a liberal construction of the pleadings, the court cannot create a claim Stefan’s pleading did not contain, and it could not conclude that Stefan sought judicial review of the BOA decision under chapter 211. The exhaustion-of-administrative-remedies rule requires that a plaintiff pursue all available remedies within the administrative process before seeking judicial relief. Chapter  211 must be exhausted before a party may seek judicial review of a determination made by an administrative official. As a result, the trial court lacked jurisdiction over his declaratory claims and inverse-condemnation claims.

The concurrence believed Stefan’s failure to allege 211 should not preclude consideration, but then held Stefan abandoned that consideration in his briefing.

If you would like to read this opinion click here. Panel consists of Chief Justice Frost and Justices Wise and Hassan (Hassan, J. concurring – opinion found here).

First District holds county attorney could not bring suit against commissioner’s court for budget policies

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Hobbs, Williamson County Attorney v. Dan A. Gattis, et. al., 01-19-00025-CV (Tex. App. – Houston [1st Dist.], Oct. 15, 2020).

This is a declaratory judgment case where the First District Court of Appeals affirmed the dismissal of the County Attorney’s challenge to a commissioner court policy regarding the budget.

Hobbs, acting in his official capacity as the Williamson County Attorney, sued the Williamson County Judge and Williamson County Commissioners, all in their official capacities, seeking a declaratory judgment that certain policies and orders were void for exceeding the power of the Commissioners Court.  The County defendants filed a plea to the jurisdiction which was granted. Hobbs appealed.

Hobbs challenged a policy that appeared to limit the salaries of his employees, even though the budget allocated for his office had sufficient funds.  The County’s plea challenged the pleadings only and were taken as true. The County defendants argued that Hobbs had no authority to bring suit in his official capacity.  Since Hobbs was only complaining about budgetary issues, the defendants did not invade his elected sphere of control. However, the funds had been budgeted for the County Attorney’s office and Hobbs complained of the policies imposed on how those funds were spent (specifically regarding hiring and salary aspects of assistant county attorneys). A commissioner’s court has broad discretion on budgetary decisions, and such decisions are ordinarily protected from judicial scrutiny by the separation of powers doctrine. But it is limited by certain judicial controls. A commissioner’s court and county officers may not interfere with or usurp the duties delegated by the Texas Constitution and by statutes to independent county officials and their employees.  However, the live pleadings did not list a controversy where potential employees did not accept employment due to the limits or that any other employees were affected. Alleging the policies could hamper Hobb’s office is an allegation of an uncertain or contingent future controversy, not an allegation of a live controversy.  Further, the live pleadings do not show Hobbs, in his official capacity, suffered a distinct and individualized injury. Hobbs acknowledged in his pleading that the county attorney has no individual stake differing from that of other Williamson County elected officials since he is suing in his official capacity only.  A district court has certain constitutional supervisory controls of the commissioner’s court; however, those require an act that is illegal, unreasonable or arbitrary. The challenged policy does not necessarily reduce any employee salary as compared to the amount adopted in the budget. Given the broad budgetary discretion of the commissioner’s court, Hobbs failed to allege facts triggering the district court’s constitutional supervisory control. The plea was properly granted.

If you would like to read this opinion click here. Panel consists of Justices Kelly, Goodman, and Countiss.  Opinion by Justice Kelly.

San Antonio Court of Appeals holds forfeited councilmember can only seek reinstatement through quo warranto proceeding

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City of Leon Valley v. Benny Martinez, 04-19-00879-CV (Tex. App. – San Antonio, August 19, 2020, no pet. h.)

This is a council forfeiture case which the San Antonio Court of Appeals held could only be brought in a quo warranto proceeding.

Section 3.12 of the city charter describes the procedures for council investigations. Benny Martinez was a sitting city council member. After several complaints were filed against him for alleged charter violations the city council held §3.12 hearings. The city council ultimately declared he forfeited his place on the council and removed him. Martinez sued, alleging the procedures used to remove him from office violated his due process rights. He sought a declaratory judgment “to determine [his] right to be reinstated following his removal [from Place 4].”  The city filed a plea to the jurisdiction, which was denied. The city filed this interlocutory appeal.

A writ of quo warranto is an extraordinary remedy available to determine disputed questions about the proper person entitled to hold a public office and exercise its functions. See generally Tex. Civ. Prac. & Rem. Code § 66.001. The purpose of a quo warranto action involving officeholders is to determine disputed questions concerning who may hold such office. The court held the plain and unambiguous language of the quo warranto statute confers standing exclusively on the State, not a private litigant. While Martinez asserted his removal was void (thereby trying to fall within an exception to the exclusivity), the court held none of Martinez’s factual allegations allege void acts, only voidable acts if proven. The plea should have been granted.

If you would like to read this opinion click here. Panel consists of Justice Martinez, Justice Alvarez and Justice Rios. Opinion by Justice Alvarez.

 

 

The Thirteenth Court of Appeals held trial court must use substantial evidence standard when reviewing SOB permit denials

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Special contributing author Laura Mueller, City Attorney for Dripping Springs

Larry Mark Polsky, esq. v. Sheriff Omar Lucio and Cameron County, No. 13-19-00062-CV (Tex. App.—Corpus Christi September 24, 2020) (mem. op.).

In this sexually-oriented business case, the 13th Court of Appeals reversed the grant of a dismissal order in favor of the County and Sheriff.

The plaintiff filed an application for a permit with the County to open a sexually oriented business near a public beach in Cameron County.  The Sheriff denied the permit on the basis that the public beach was a “public park” as defined by the County.  The plaintiff appealed to the governing body of the County which held a hearing. The County upheld the denial of the permit.  The plaintiff appealed to the trial court, who used the “abuse of discretion” standard to uphold the County’s decision.  The plaintiff then appealed to the Court of Appeals.

Counties have the authority to regulate sexually oriented business locations under Chapter 243 of the Texas Local Government Code.   This County had a regulation prohibiting a sexually oriented business from opening within 1500 feet of a public park.  The County interpreted the regulation to mean that a public beach is a public park.  The Court of Appeals held “[c]ontrary to the County’s position when cities and counties undertake the regulation of SOBs, they do so in an administrative capacity, and as such, the denial of an SOB permit is reviewed under the substantial evidence rule.”  Under the substantial evidence rule, the analysis is whether substantial evidence supports the government’s decision.  This is in contrast to the abuse of discretion standard which allows a court to overturn a decision only if the government abused its discretion in making the decision.

The Court of Appeals held that the trial court used the wrong standard and remanded the case back to the trial court.

If you would like to read this opinion click here.   The panel consists of Justices Benavides, Longoria, and Perkes. Opinion by Justice Perkes.

Amarillo Court of Appeals holds findings of fact and conclusions of law improper for plea to the jurisdiction and remanded annexation case for trial

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Hill, et al. v City of Fair Oaks Ranch, 07-19-00037-CV (Tex. App. – Amarillo, Sep. 16, 2020)(mem. Op).

This is an annexation dispute where the Amarillo Court of Appeals reversed the grant of the City’s plea to the jurisdiction and remanded for trial.

In 2015 and 2016, the City was a general-law municipality and it did not annex any properties during those years. In 2017 it became a home-rule city and later that year adopted eleven annexation ordinances. Property owners challenged five of the ordinances. The five annexations added 20% to the City’s geographic area. The property owners challenge one annexation for violating the 1000-ft width requirement, and all five asserting they exceeded the maximum amount allowed by law for annexations. The City filed a plea to the jurisdiction, which the trial court granted. The owners appealed.

Chapter 43 of the Texas Local Government Code (dealing with annexation) waives immunity in limited circumstances. The issue is therefore only one of standing where owners have standing to challenge void ordinances but not procedural irregularities in the adoption process. Here, the landowners challenged the City’s involuntary annexation of the five contested areas as being void ab initio.  While the court acknowledged the owners did not properly brief the 1000-ft arguments, they did properly allege the annexations exceeded the area allowed within a given year under § 43.055.  Those allegations, if proven, would establish that the City’s annexation ordinances are void, not merely voidable.  The court determined that because the plea must be analyzed “under the rubric of a summary judgment” findings of fact and conclusions of law are not proper because there has been no conventional trial on the merits and are superfluous.  In closing, the court noted the parties “would have this court drift into the merits by engaging in statutory construction of the relevant statutes and determining whether the City violated those statutes. Such an analysis would be premature and beyond the scope of a de novo review…”  As a result, the order granting the plea was reversed and the case remanded for trial.

If you would like to read this opinion click here. Panel consists of Justices Pirtle, Parker and Doss.

The Third Court of Appeals held that no implied authority exists for actions of a state agency without a showing that the implied authority is required to effectively perform a statutorily expressed responsibility.   

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Special contributing author Laura Mueller, City Attorney for Dripping Springs

University of Texas at Austin President Jay Hartzell, et al. v. S.O., et al., No. 03-19-00131-CV (Tex. App.—Austin September 4, 2020).

In this ultra virus University case, the plaintiff sued University officials for exceeding their authority in attempting to revoke her Ph.D after she had already graduated from the University.    The Court of Appeals held that the University did exceed its authority in attempting to revoke her earned degree because they do not have specific statutory authority to revoke degrees and the authority to revoke degrees is not essential to its statutory authority to award degrees.

The plaintiff was awarded a Ph.D in 2008.  In 2012, the University conducted an investigation and attempted to revoke her Ph.D for academic misconduct in 2014.  The plaintiff sued the University stating that her due process rights were violated by the University’s procedure.  The University undid its revocation and instituted a different procedure to investigate the possibility of revoking the plaintiff’s degree again.  In response to the University’s renewed efforts, the plaintiff sued the University in this suit as an ultra vires claim.  The University defendants filed a plea to the jurisdiction arguing they had the authority to revoke the degree because its rules allowed it and because the authority to revoke degrees is implied with the authority to award degrees.  This case has been through the appellate process once on the issue of ripeness.  The appellate court held that her complaint was ripe and the case was sent back to the trial court.  Upon return, the trial court granted-in-part and denied-in-part the plea.  In this appeal, the issue is whether the University has the authority to revoke degrees, the basis of the plaintiff’s ultra vires claim.

An ultra vires claim waives immunity if the plaintiff can show that an official’s conduct exceeded their granted authority.  Houston Belt & Terminal Ry. Co. v. City of Houston, 487 S.W.3d 154, 158 (Tex. 2016).  State agencies, like the University, only have the authority that they are given by statute and may only adopt rules pursuant to their statutory authority.  Pruett v. Harris Cnty. Bail Bond Bd., 249 S.W.3d 447, 452 (Tex. 2008).  State law gives a University the authority to “award” a degree, but not to revoke one.  Tex. Educ. Code § 65.31(b).  Authority can be implied if the agency needs the power in order to allow the agency to effectively carry out the functions necessary for its expressed authority.  Tex. Mun. Power Agency v. Pub. Util. Comm’n, 253 S.W.3d 184, 192-93 (Tex. 2007).   The Court of Appeals held that the authority to award degrees does not require the authority to revoked degrees, and therefore revoking a degree after a student has earned it and graduated is an ultra vires act waiving sovereign immunity.

The Court also affirmed the trial court’s denial of attorney’s fees from the plaintiff.  Even though the plaintiff prevailed, the legal questions were ones that needed to be decided and an appellate court gives a trial court wide discretion in determining attorney’s fees so long there is no abuse of discretion.

Justice Kelly issued a concurring and dissenting opinion stating that the University does have the authority to revoke a student’s degree, but that the claims are not ripe.

If you would like to read this opinion click here.   Panel consists of Justices Goodwin, Baker, and Kelly. Opinion by Justice Thomas Baker.  Concurring/dissenting opinion by Justice Kelly can be found here.

Dallas Court of Appeals holds property owners failed to establish jurisdiction in annexation case where City was prevented from holding first reading of annexation ordinance

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City of Terrell, Texas, et al. v. Frederick George Edmonds, et al., 05-19-01248-CV  and 05-19-01382-CV  (Tex. App. – Dallas, September 8, 2020)

These are consolidated appeals from the case where several property owners sought to prevent annexation of a 1,000-foot wide strip of land. The Dallas Court of Appeals reversed the injunction order and dismissed the claims.

The City is surrounded by four major entryways and sought to annex 1,000-foot strips along each highway. The areas were divided into discrete subsections for annexation. The City’s Home Rule Charter requires that a proposed ordinance must be considered at two separate meetings for the ordinance to be effective. The agenda designated the proposed annexation areas into 10 individual ordinances, intending to annex separate phases over time.  However, before the first ordinance reading could occur, the plaintiffs obtained a temporary restraining order against the City. Plaintiff’s sought declaratory relief under the Texas Open Meetings Act (“TOMA”), Chapter 43 of the Texas Local Government Code (which regulates annexations) and injunction relief. The City filed a plea to the jurisdiction. However, the trial court conducted a temporary injunctive hearing and granted the temporary relief. The City appealed the injunction order.  Approximately thirty days after the injunction order, the trial court denied the City’s plea to the jurisdiction. The City filed a separate appeal.

As to the temporary injunction order, the City argued the issue was not yet ripe as the first reading of an ordinance is not the passage of an ordinance subjecting the plaintiffs to a likely injury. After analyzing the record, the panel held the City had taken no action to violate either (i) the City Charter or (ii) the Texas Local Government Code because the City had made no final decision regarding the proposed annexation ordinances.  The trial court lacked subject-matter jurisdiction to grant the TRO and injunction. Further, quo warranto is the only means to challenge annexation proceedings which are not void from the start. As a result, the plaintiffs cannot circumvent the quo warranto doctrine by bringing a TOMA claim. The court reversed the granting of the injunction and dismissed the plaintiffs’ claims based on a lack of jurisdiction.

If you would like to read this opinion click here.  Panel consists of Justice Schenck,
Justice Osborne and Justice Pedersen.