Copyright infringement does not qualify as a constitutional taking says Texas Supreme Court

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Jim Olive Photograph, D/B/A Photolive, Ince v University of Houston System, 19-0605 (Tex. June 18, 2021)

The Texas Supreme Court held that a governmental entity’s infringement on a copyright does not qualify as a taking under the federal or state constitution.

Jim Olive Photography d/b/a Photolive, Inc. (Olive) is a professional photographer who took a series of aerial photographs of the City of Houston in 2005 and displayed them on his website for purchase. Such photos were registered with the United States Copyright Office.  Olive asserts the University of Houston (“University”) downloaded a copy and removed all identifying copyright and attribution material and began displaying the photographic image on several web pages.  Olive sued the University for a taking without compensation. The University filed a plea to the jurisdiction which was denied. The University appealed. The court of appeals disagreed and dismissed Olive’s claims. Olive appealed.

A copyright is a form of intellectual property that subsists in works of authorship that are original and are fixed in a tangible medium of expression. For a term consisting of the author’s life plus seventy years, the owner of a copyright enjoys the five exclusive rights of reproduction, adaptation, distribution, and public performance and display. The Court assumed, without deciding, that a copyright is a protected property interest. However, a compensable taking does not arise whenever state action adversely affects private property interests. Governments interfere with private property rights every day. Some of those intrusions are compensable; most are not. “A taking is the acquisition, damage, or destruction of property via physical or regulatory means.” To determine whether a physical or regulatory interference with property constitutes a taking, a court ordinarily undertakes a “situation-specific factual inquiry.” Property is the bundle of rights that describe one’s relationship to a thing and not the thing itself. Infringement of a copyright, however, is different than a typical appropriation of tangible property where rights are more closely bound to the physical thing. An act of copyright infringement by the government does not take possession or control of, or occupy, the copyright. The government’s violation of the copyright owner’s rights does not destroy the right or property. The Copyright Act provides that no action by a governmental body to seize or appropriate such ownership shall be given any effect under the Act. Similarly, the government’s unauthorized use of a copy of the copyrighted work is not an “actual taking of possession and control” of the copyright. Copyright infringement not only lacks the key features of a per se taking; it also does not implicate the reasons for creating a per se rule in the first place. Although the Texas Constitution waives governmental immunity with respect to inverse condemnation claims, such a claim must still be “predicated on a viable allegation of taking.” Allegations of copyright infringement assert a violation of the owner’s copyright, but not its confiscation, and therefore factual allegations of an infringement do not alone allege a taking. The plea should have been granted.

The concurring opinion focused more on the need to be flexible with a broad range of harm to property. However, the concurring justices agreed that copyright infringement was too far outside the protection.

If you would like to read this opinion click here. JUSTICE DEVINE delivered the opinion of the Court. JUSTICE BUSBY filed a concurring opinion (found here) in which JUSTICE LEHRMANN joined and in which JUSTICE BLACKLOCK joined as to part II.

San Antonio Court of Appeals holds City’s “Paid Sick Leave” ordinance was preempted by state law

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Washington et al. v. Associated Builders & Contractors of South Texas, Inc., et al., 04-20-00004-CV (Tex. App.—San Antonio, March 10, 2021).

In this case, the Fourth Court of Appeals considered the legality of San Antonio’s paid sick leave (PSL) ordinance. The Court held the PSL ordinance was unconstitutional because it established a minimum wage and is inconsistent with Texas Minimum Wage Act (TMWA).

In 2018, various advocacy groups and non-profits initiated a petition to adopt what was labeled the “Paid Sick Leave Ordinance.”  One of the most critical components of the PSL ordinance was that it would require many San Antonio employers to provide paid leave to their employees for sick days, doctor appointments, and for other specifically enumerated reasons.  Under the ordinance, a business’s failure to comply with the provision of paid time off could result in fines.   Instead of sending the ordinance to the electorate under the city charter, the City Council decided to adopt the PSL ordinance verbatim as submitted in the petition. In response, multiple businesses and business associations sought and obtained temporary and permanent injunctions to prevent its enforcement.  The City appealed.

While there were numerous claims asserted the court’s primary focus was to analyze whether the PSL ordinance established a minimum wage, thereby causing the ordinance to be preempted by the TMWA and/or unconstitutional.  The court’s decision turned on whether paid sick leave constitutes a “wage” under the TMWA. The court relied on dictionary definitions and the common meaning of words within the ordinance.  Ultimately, the court held the PSL ordinance was in fact a “wage” and wage regulations are governed by the TMWA. The ordinance was therefore preempted.

If you would like to read this opinion, click here. Opinion by Justice Alvarez. Panel consists of Justices Alvarez, Rios, and Watkins. For more information on San Antonio’s Sick & Safe Leave ordinance and other related items, click here.

 

Amarillo Court of Appeals holds Texas Attorney General immune from County’s claims regarding conceal handgun signs

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Ken Paxton, Texas Attorney General v. Waller County Texas; et al, 07-20-00297-CV, (Tex. App – Amarillo, March 4, 2021)

This is a conceal/carry notice case where the Amarillo Court of Appeals reversed the denial of the Texas Attorney General’s plea to the jurisdiction and dismissed the case.

The Waller County Courthouse has a sign noting a person cannot carry any weapons, including knives and guns, in the courthouse. Section 411.209 of the Government Code prohibits a political subdivision from posting notices barring entry to armed concealed-handgun license holders unless entry is barred by statute.  Terry Holcomb filed a complaint with the County regarding the sign. The County did not remove the sign and instead sued the Texas Attorney General seeking a declaration the signs do not violate §411.209, which was resolved in a prior case. Separate from the declaratory judgment action, the Texas Attorney General brought a mandamus action against Willer County and various county officials. Waller County filed counterclaims seeking declarations. The AG filed a plea to the jurisdiction as to the counterclaims which was denied. The AG appealed.

The Uniform Declaratory Judgments Act (“UDJA”) is not a grant of jurisdiction, but rather is a procedural device for deciding cases already within a court’s jurisdiction. The UDJA does not allow “interpretation” claims against a governmental entity or official.  The County’s counterclaims seek interpretation of §411.209, not its invalidation. The UDJA does not waive sovereign immunity for “bare statutory construction” claims. To sue the AG for ultra vires claims, the AG must not be exercising his discretion. Because the AG has discretion to bring or not bring an enforcement claim, no ultra vires action is possible.  Section 411.209 of the Government Code authorizes the Attorney General to investigate alleged violations of the statute and decide whether further legal action is warranted. When an official is granted discretion to interpret the law, an act is not ultra vires merely because it is erroneous; “[o]nly when these improvident actions are unauthorized does an official shed the cloak of the sovereign and act ultra vires.” As a result, the counterclaims should be dismissed.

If you would like to read this opinion click here. Panel consists of Chief Justice Quinn, and Justice Pirtle and Parker. Reversed and Remanded to Trial Court. Opinion by Justice Parker. Docket page with attorney information found here.

Dallas Court of Appeals holds City waived immunity in lease agreement for use of soccer fields in exchange for upgrades and maintenance

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City of McKinney, Texas v. KLA International Sports Management, LLC, 05-20-00659-CV, (Tex. App – Dallas, Feb. 4, 2021)

This is a contractual immunity case where the Dallas Court of Appeals held the City’s immunity was waived.

KLA, a private sports management company and the City signed a non-exclusive revocable license agreement on December 18, 2018, giving KLA “recreational use” of three fields at the city-owned park. By an amendment, KLA agreed to replace two existing artificial turf soccer fields (Fields 1 and 2) and rehabilitate a grass field. The work, once commenced, was required to be completed within 180 days.  In exchange, the City granted KLA a priority 30-year license entitling it to use the improved fields for only soccer practice and soccer games in accordance with an agreed annual use calendar.  The City later issued a notice of default to KLA, alleging construction and timeliness deficiencies and other breaches. Ultimately the City terminated the contract under a theory of breach. KLA sued the City for breach of contract seeking specific performance, damages, attorney’s fees, and injunctive relief. The City filed a plea to the jurisdiction, which was denied. The City appealed.

The court first stated the standards from Wasson II relating to the governmental/proprietary dichotomy does not apply if the function is listed as governmental in a statute. The court determined the City’s license contract constituted a governmental function.  Section 271.152 of the Texas Local Government Code provides a “limited waiver of immunity for local governmental entities that enter into certain contracts.” Chapter 271 does not define “services,” but the Texas Supreme Court has interpreted the term in this context as “broad enough to encompass a wide array of activities.” The agreement to provide services need not be the primary purpose of the agreement. “When a party has no right under a contract to receive services, the mere fact that it may receive services as a result of the contract is insufficient to invoke chapter 271’s waiver of immunity.” However, the license here required KLA to (1) improve or rehabilitate the three fields to a standard that reasonably equated to a FIFA-certified playing surface using industry-standard components and materials from a FIFA-approved turf manufacturer and (2) to provide year-round maintenance services on those fields. Thus, the City’s license agreement provided for both goods and services and provided more than indirect benefits to the City. The City need not pay currency in order to constitute proper consideration. Improving, rehabilitating, and maintaining the soccer fields was proper consideration for nonexclusive use of the fields and satisfies the requirements of Chapter 271.  The plea was properly denied.

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

Property owner not entitled to de novo review of nuisance determination says Austin Court of Appeals

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Mark Groba v. The City of Taylor, Texas, 03-19-00365-CV (Tex. App. – Austin, Feb. 3, 2021)

In this nuisance abatement case, the Austin Court of Appeals affirmed the granting of the City’s plea to the jurisdiction.

Groba, a real property owner, was subject to an enforcement action in the Municipal Court of Taylor, acting in an administrative capacity.  The court conducted a hearing and issued an order granting the City’s application to declare Groba’s property a nuisance under chapter 214 of the Texas Local Government Code. The municipal court later issued an order declaring that Groba failed to comply with its original order to clean up the nuisance. The City then filed a Chapter 54 lawsuit to enforce it’s ordinances and the orders in district court. The City sought injunctive relief related to its nuisance determination, including authorizing the City to demolish the building and charge the costs for doing so to Groba. The City also sought civil penalties.  The trial court issued an injunction order allowing the City to demolish the building, which the City did.  The day after the demolition, Groba filed a counterclaim for declaratory judgment and trespass, arguing that he was entitled to a jury trial on the nuisance determination. The City filed a plea to the jurisdiction, which the trial court granted. Groba appealed.

After receiving a copy of the municipal court order, Groba did not appeal and, thus, did not comply with the jurisdictional prerequisites for judicial review of the nuisance determination.  Groba asserted he was entitled to de novo review of the City’s nuisance determination, and even if he had failed to timely appeal the nuisance determination, the City is estopped from asserting a jurisdictional challenge to his request for a jury trial because the City “misled” him by filing “multiple proceedings” and by dismissing the criminal municipal-court case after he had requested a jury trial. A property owner aggrieved by a municipality’s order under § 214.001 may seek judicial review of that decision by filing a verified petition in district court within thirty days of receipt of the order. A court cannot acquire subject-matter jurisdiction by estoppel. The City’s enforcement of an ordinance may be estopped, but only in exceptional circumstances that are not present. But subject-matter jurisdiction is still not conferred through estoppel.  Further, contrary to Croba’s assertions, the Texas Supreme Court’s opinion in City of Dallas v. Stewart, 361 S.W.3d 562 (Tex. 2012) does not give him an unconditional right to de novo review of a nuisance determination. A de novo review is required only when a nuisance determination is appealed, which Croba did not perform.

If you would like to read this opinion click here. Panel consists of Chief Justice Byrne, Justice Baker and Justice Triana. Memorandum Opinion by Chief Justice Byrne.

Texas Supreme Court holds Texas Board of Chiropractic Examiners’ rules are valid even over objection of the Texas Medical Association

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Texas Board of Chiropractic Examiners v Texas Medical Association, 18-1223 (Tex. Jan. 29, 2021)

This case centers on the tension between chiropractors and physicians and several Texas Board of Chiropractic Examiners’ rules. The Texas Supreme Court held the Board’s rules were valid.  The analysis is beneficial for government lawyers as 1) it discusses the presumptions of validity and statutory construction and 2) for any lawyers defending personal injury or involved in worker’s compensation systems the scope of the rules can be important.

The line between practicing medicine and practice in the chiropractic profession is not always clear. The Texas Chiropractic Act (the Act) draws part of that line by defining the practice of chiropractic to include evaluating the musculoskeletal system and improving the subluxation complex. The Texas Board of Chiropractic Examiners (the Board) has issued rules defining both terms as involving nerves in addition to muscles and bones. Another Board rule authorizes chiropractors to perform an eye-movement test for neurological problems that is known by the acronym VONT. The Texas Medical Association (TMA) asserts that only physicians may perform VONT. The Legislature passed the Medical Practice Act (the MPA) to regulate physicians.  It empowers the Texas Medical Board “to regulate the practice of medicine” in Texas. The Court went through a detailed history of the Act and MPA and the Board and the TMA. The Board adopted what is now Rule 78.1 defining chiropractic practice to include diagnosing and treating neuromusculoskeletal conditions causing an alteration in the biomechanical and/or neuro-physiological reflections. In comments to the Board, TMA opposed the definition of the musculoskeletal system which would include the nervous system and brain.  The Board also allowed chiropractors to perform vestibular-ocular-nystagmus testing or VONT. TMA sued to invalidate the rules as exceeding the scope of chiropractic practice prescribed by the Act. After a bench trial, the court issued findings of fact and conclusions of law, holding that the challenged rules are invalid because they exceed the statutory scope of chiropractic practice. The Board appealed. The court of appeals affirmed in part.

The Court first held the TMA had proper authority to sue to invalidate the Board rules because the MPA recognizes that “the practice of medicine is a privilege” reserved to licensed physicians. Obtaining and maintaining the privilege imposes economic costs, and allowing nonphysicians to practice medicine outside the MPA’s control would impair—or at least threaten to impair—that privilege.  The Board rules are presumed valid. Using the principles of statutory construction and this presumption as the starting point, the Court found the trial court failed to afford Rule 78.1 a presumption of validity. TMA argues that the rule’s references to nerves authorize chiropractors to diagnose any neurological condition, which is the practice of medicine. However, the rule’s words cannot be read beyond their context. Nothing in Rule 78.1 suggests that chiropractic practice extends beyond the evaluation and treatment of the musculoskeletal system. The rule merely acknowledges the reality that chiropractors cannot ignore the presence and effect of associated nerves that help shape the musculoskeletal system and allow it to move. The Board’s definition of the musculoskeletal system only includes those nerves “associated” with the muscles, tendons, ligaments, bones, joints, and tissues “that move the body and maintain its form.” Because chiropractic is carved out of the comprehensive regulation of the practice of medicine under the MPA, its scope under the Act must be limited. Rule 78.1 acknowledges and respects the Act’s boundaries. As a result, TMA has not overcome the definitions’ presumption of validity. With regards to the VONT rule, it is a neurological test that a medical doctor may use to diagnose a problem of the brain, inner ear, or eyes, none of which is a part of the spine. However, the Board also presented evidence that VONT can be used to facilitate chiropractic treatment. A reading of all the Board’s rules together makes it clear that a chiropractor’s proper use of VONT is not for treating a neurological condition, which is certainly outside the scope of chiropractic, but rather for the limited purpose of determining whether and how to treat a patient’s musculoskeletal system.  As a result, both rules retain their presumption of validity.

If you would like to read this opinion click here. Chief Justice Hecht delivered the opinion of the Court, in which Justice Guzman, Justice Lehrmann, Justice Devine, Justice Blacklock, and Justice Busby joined in full, and in which Justice Boyd and Justice Bland joined except with respect to Part III(D).

Austin Court of Appeals holds temporary injunction order need not set a specific trial date, but must place the case for trial on the court’s calendar, otherwise the order is void

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Hegar, Comptroller of Public Accounts of State of Texas, et al., v Zertuche Construction, LLC, 03-19-00238-CV (Tex. App. – Austin, Jan. 22, 2021).

This is a tax collection case, but the main thrust is the procedural ruling on injunctions where the Austin Court of Appeals held that Zertuche Construction’s temporary injunction order was void due to a lack of trial setting.

The Comptroller audited Zertuche’s sales-and-use tax report, determined it owed additional taxes, and imposed penalties and interest. After a decision upholding an assessment of approximately $2.6 million, Zertuche submitted a written protest letter and followed the procedural steps for challenging the holding. Zertuche filed suit challenging the assessment and seeking an injunction to prohibit the Comptroller from taking action to collect the taxes owed under the assessment. The Comptroller responded by filing a plea to the jurisdiction. The trial court conducted a combined hearing on the Comptroller’s plea to the jurisdiction and Zertuche’s application for a temporary injunction to enjoin tax collection. The trial court issued a temporary injunction order prohibiting tax collection, but did not rule on the plea. The Comptroller and AG appealed.

Rule 683, dealing with temporary injunction orders,  requires that an order granting a temporary injunction state the reasons for its issuance and set “the cause for trial on the merits with respect to the ultimate relief sought.” See Tex. R. Civ. P. 683. The trial court’s order stated “[t]he parties will set this matter for trial as soon as possible after the resolution of EBS Solutions [case pending in Texas Supreme Court] if Defendants’ Plea to the Jurisdiction and Motion to Dismiss for Lack of Jurisdiction is denied by this Court.” Thus, rather than set a date for trial, the order provides that the parties will set the matter for trial. Although a specific trial date need not be set in the order, the order must “set the cause for trial on the merits” and that “rule 683 implicitly requires the injunction to order the cause be calendared on the trial court’s docket.” Because the temporary injunction order does not set the cause for trial on the merits the Court of Appeals determined the order was void.

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

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 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.

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.