U.S. Supreme Court holds EEOC charge filing process is mandatory, but not jurisdictional

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Fort Bend County v Davis, 18-525, (U.S. June 3, 2019).

Lois M. Davis filed a charge against her employer, petitioner Fort Bend County. Davis alleged sexual harassment and retaliation for reporting the harassment. While her EEOC charge was pending, Fort Bend fired Davis because she failed to show up for work on a Sunday and went to a church event instead. Davis attempted to supplement her EEOC charge by handwriting “religion” on a form called an “intake questionnaire,” but she did not amend the formal charge document. Upon receiving a right-to-sue letter, Davis commenced suit in Federal District Court, alleging discrimination on account of religion and retaliation for reporting sexual harassment.  After several years of litigation, Fort Bend raised the issue of the trial court’s lack of jurisdiction over the religious discrimination claim because she did not properly file a charge with the EEOC. The trial court agreed and dismissed the claim. The 5th Circuit Court of Appeals reversed and the County appealed.

The U.S. Supreme Court held the word “jurisdictional” is generally reserved for prescriptions delineating the classes of cases a court may entertain (subject-matter jurisdiction) and the persons over whom the court may exercise adjudicatory authority (personal jurisdiction). A claim-processing rule requiring parties to take certain procedural steps in, or prior to, litigation, may be mandatory in the sense that a court must enforce the rule if timely raised. But not all mandatory rules are jurisdictional. Title VII’s charge-filing requirement is a non-jurisdictional claim-processing rule.

GINSBURG, J., delivered the opinion for a unanimous Court. If you would like to read this opinion click here.

El Paso Court of Appeals holds County is immune from claims woman was injured by closing elevator doors

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County of El Paso, Texas v. Janice Baker, 08-18-00012-CV (Tex. App. – El Paso, May 31, 2019)

This is an interlocutory appeal in a premise defect case where the El Paso Court of Appeals held the County was entitled to governmental immunity.

While entering and elevator in the El Paso County Courthouse, Baker claims the doors shut on her causing bodily injury. She reported the injury that day.  After Baker sued the County filed a plea to the jurisdiction, which was denied. The County appealed.

Under a premise defect theory, a landowner owes a duty not to “injure a licensee by willful, wanton or grossly negligent conduct, and that the owner use ordinary care either to warn a licensee of, or to make reasonably safe, a dangerous condition of which the owner is aware and the licensee is not.”  However, Baker’s petition asserts the County failed to inspect and failed to discover the malfunction in the doors. Such is applicable to an invitee status, not a licensee status. Baker filed four amended pleadings already and still was not able to properly plead the claims. Therefore, the court was not inclined to remand for a fifth opportunity. Under the licensee status, actual knowledge rather than constructive knowledge is required.  The County’s affidavit noted the last time the elevator had been inspected, that no notice of the defect was reported prior to Baker’s incident and no report has reoccurred. Baker’s evidence of a newspaper article that a woman got stuck in the elevator a year and a half later is insufficient to show the County had actual knowledge the doors were likely to close on Baker. Nor would the fact that the County knew that the elevators were “old” and should be replaced show the kind of knowledge required for a valid licensee-premises-liability claim. The plea should have been granted.

If you would like to read this opinion click here. Panel consists of Chief Justice McClure, Justice Rodriguez and Justice Palafox. Opinion by Chief Justice McClure. The attorneys listed for the County are Jo Anne Bernal and John Untereker.  The attorney listed for Baker is Milad Kaissar Farah

Eastland Court of Appeals holds erroneously calling the police is a discretionary act exempting employees from ultra vires claims

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The University of Texas of the Permian Basin et al. v. Michael Banzhoff, 11-17-00325-CV (Tex. App. – Eastland, May 31, 2019).

This is an ultra vires and abuse of process case where there Eastland Court of Appeals held the University of Texas at Permian Basin (UTPB) retained governmental immunity.

UTPB hired Banzhoff as a golf coach but terminated him within a year. He was issued a criminal trespass notice not to attend UTPB sporting events. Shortly after his termination, Banzhoff was arrested at the Odessa Country Club for criminal trespass.  Banzhoff sued UTPB, the athletic director (Aicinena) and the interim coach who replaced him (Newman) alleging seven different causes of action. Aicinena and Newman moved to be dismissed under §101.106(e) of the Texas Tort Claims Act (TTCA) and UTPB filed a plea to the jurisdiction. The trial court granted the dismissal as to Aicinena and Newman, and partially granted UTPB’s plea. The trial court allowed the abuse of process and ultra vires claims to proceed. UTPB filed this interlocutory appeal.

As to the abuse of process claim, no waiver of governmental immunity exists for such a tort. To fall within the ultra vires exception, “a suit must not complain of a government officer’s exercise of discretion, but rather must allege, and ultimately prove, that the officer acted without legal authority or failed to perform a purely ministerial act.”  Suits complaining of ultra vires actions must be brought against government officials in their official capacity and may seek only prospective injunctive remedies. In this case, UTPB—a governmental entity—is not a proper defendant to Banzhoff’s ultra vires claim. As to the individuals, the general allegations in the pleadings are insufficient to plead an ultra vires claim against Aicinena or Newman.  Further, Banzhoff failed to plead any facts that support a finding that Aicinena or Newman exceeded any delegated authority, did not perform a ministerial duty, or violated Banzhoff’s constitutional rights.  The court expressly noted the criminal trespass notice in the record was not issued by either Aicinena or Newman and that there was no specific allegation either man called the police regarding Banzhoff’s presence at the Odessa Country Club. However, even if the court were to take Banzhoff’s allegations as true, “he fails to explain how issuing a criminal trespass notice or calling the police—even if done erroneously—are anything but discretionary actions by Aicinena or Newman.”  As a result, the plea should have been granted in its entirety.

If you would like to read this opinion click here. Panel consists of Chief Justice Bailey, Justice Willson and Wright, Senior Justice.   Memorandum Opinion by Chief Justice Bailey.  The attorneys listed for Banzhoff are Gerald K. Fugit and M. Michele Greene.  The attorneys listed for UTPB are Enrique M. Varela and Eric Hudson.

Texas Supreme Court holds County still retains immunity from liability after inmate fell using broken chair

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Tarrant County v Roderick Bonner, 18-0431 (Tex. May 24, 2019)

This is an inmate Texas Tort Claims Act (TTCA) claim where the Texas Supreme Court held Tarrant County (County) was immune from liability for a defective chair while treating an inmate for his medical condition.

A deputy accidently damaged the leg of a chair while working at the jail where Bonner was housed. The deputy notified his supervisor of the damaged chair, who instructed the deputy to place the chair in the multipurpose room before filling out a report. Bonner, an inmate, had diabetes and entered the multipurpose room for treatment.  When he attempted to use the chair, it collapsed. Bonner sued for injuries under the TTCA asserting the negligent use of personal property.  At the summary judgment stage, the County argued despite the waiver under the TTCA, it retained immunity under the Texas Code of Criminal Procedure (TCCP) and Texas Government Code. The trial court granted the motion, the court of appeals reversed, and the County filed a petition for review.

Under the TCCP article 42.20, certain individuals and governmental entities are not liable for damages arising from action or inaction in connection with an inmate activity, including treatment activities, if the action or inaction was performed in an official capacity and was not performed with conscious indifference. Similarly, under the Texas Government Code § 497.096 a county and sheriff’s department employees are not liable for damages arising from action or inaction in connection with an inmate or offender treatment activity if the action or inaction was not intentional, willfully negligent or performed with conscious indifference or reckless disregard. After analyzing the statutory sections, the Court held Bonner’s allegations are more than simply the County failed to warn of the broken chair, it was the use of the chair during treatment which caused his injury. The two statutes immunize negligent acts and omissions that are reasonably related to the covered programs or activities, even when the relationship is indirect. As a practical matter, this includes acts or omissions, which give rise to damages during covered programs and activities. The Court recognized the statutes only immunize the County from liability to the extent its corporate actions or omissions were not performed with conscious indifference or reckless disregard for the safety of others. As a result, it was an immunity to liability only, not an immunity from suit. The County must assert it qualifies for the conditions, thereby placing the burden on the County. Once the defendant establishes that those conditions exist, the burden falls on the plaintiff to establish the statute’s exception to that defense, which is expressed as a heightened liability standard. The Court referred to this as a form of statutory immunity. Under this heightened standard, a defendant must have actual subjective knowledge of an extreme risk of serious harm.  Based on the record, the Court concluded no evidence exists of conscious indifference towards Bonner. As a result, the trial court’s granting of the summary judgment was proper.

Justice Boyd concurred in the judgment, but wrote separately as he disagreed (1) conscious indifference is “the same as” gross negligence or (2) a person cannot be consciously indifferent to a risk that is less than “extreme.”

If you would like to read this opinion click here.  Opinion by Justice Devine.  Justice Boyd wrote a concurring opinion found here. The docket page with attorney information can be found here.

Texas Supreme Court holds “good faith” efforts clause to seek future Board approval in contract is unenforceable. Also, damages would be consequential so Board retains immunity

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Dallas/Fort Worth International Airport Board v Vizant Technologies, 18-0059, (Tex. May 17, 2019).

This is a governmental immunity defense in a breach of contract case where the Texas Supreme Court held Chapter 271 of the Texas Local Government Code did not waive immunity for the specific relief required under the contract.

The Dallas/Fort Worth International Airport Board (“Board”) retained Vizant Technologies (“Visant”) by contract to provide recommendations on how the airport could reduce payment-processing costs. The contract contained provisions where the Board would pay Vizant a percentage of savings and/or refunds based on its advice. The contract stated the cap on payments shall not exceed $50,000. The Court commented in a footnote the appearance this was done to avoid competitive bidding limits or authorizations by delegation to staff without Board approval. However, the contract also contained a provision that in the event Vizant’s fee exceeds this cap the Board “will make a good faith effort to receive board authorization to increase the compensation,” and “if approved,” the parties would amend the contract to reflect the higher amount. The Board’s staff paid the $50,000 and ultimately asked the Board to approve an increase to $330,000, but the Board denied that request. Vizant sued.  Vizant asserts its fees should have exceeded $300,000, but the airport failed to use a good faith effort to obtain Board approval. The Board filed a plea to the jurisdiction which was denied, but the court of appeals reversed and dismissed. Vizant filed its petition for review.

The Court first held the Board was acting in a governmental not proprietary capacity. the legislature has unambiguously declared that the “maintenance, operation, [and] regulation” of an airport and the “exercise of any other power granted” for that purpose, whether exercised “severally or jointly” by local governments, “are public and governmental functions, exercised for a public purpose, and matters of public necessity.”  As a result, the Board is immune absent a waiver.

Contract waivers are primarily found in Chapter 271 of the Texas Local Government Code. While it has a waiver of immunity, it has limiting language as to the types of damages allowed and contractual approvals which apply. The “good faith” effort language becomes pivotal for this analysis. A contractual duty to act in good faith does not create a new obligation or independent cause of action; instead, it merely governs the conduct by which the party must fulfill the contractual obligation to which it applies. Under the written terms of the contract, read literally, the Board promised to make a good-faith effort to obtain its own authorization for the higher payments. The parties agreed the Board’s staff negotiated based on delegated authority and executed the contract on the Board’s behalf, with the Board’s authority but without the Board’s express approval. Under these circumstances, the Court held it was reasonable to construe the clause as a promise by the Board’s staff to make a good-faith effort to obtain the Board’s authorization for any higher payment. The staff had no authority to contractually obligate the Board to pay anything more than $50,000. To the extent the staff agreed to make a good-faith effort, that promise is not enforceable against the Board—and even if it were, the remedy could never be to require the Board to pay more than it authorized to staff to negotiate. To the extent the Board made any form of agreement, the Board merely promised to make an effort to agree to the higher payment, but to do so in good faith. “In this sense, its promise was the equivalent of a promise to negotiate towards a future bargain in good faith.”  Agreements to negotiate toward a future contract are not legally enforceable.  However, even if such were enforceable, the listed measure of damages constitutes consequential damages incurred as a result of the defendant’s failure to act in good faith, not as a result of the defendant’s failure to perform under the anticipated contract. And since §271.153 expressly excludes this type of consequential damages, the Board retains immunity.

If you would like to read this opinion click here.  Opinion by Justice Boyd.  The docket page with attorney information can be found here.

Texas Supreme Court holds navigation district retains immunity from suit by State, but ultra-vires claims against commissioners can proceed to trial

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Chambers-Liberty Counties Navigation District, et al. vs. State of Texas, 17-0365 (Tex. May 10, 2019)

This is an interlocutory appeal in a sovereign immunity/regulatory control case where the Texas Supreme Court held the Chambers-Liberty Counties Navigation District (“District”) retained immunity from suit against the claims brought by the State of Texas. However, the District’s commissioners were not immune from the ultra-vires claims.

The District leased part of a navigation stream to Sustainable Texas Oyster Resource Management, LLC (“STORM”) for specific oyster production. The Texas Parks and Wildlife Department (“Department”) asserted the Department had exclusive authority to regulate oyster production in Texas and sued the District to invalidate a lease issued to STORM.  In the 1950s, the State of Texas conveyed more than 23,000 acres submerged land to the District, which as become prime for oyster cultivation. After the lease was issued to STORM, the company sent no-trespass notices to holders of any oyster-production permits. These permits authorize a holder to “plant oysters and make private beds in public waters.”  STORM claimed exclusive use of the leased submerged land. While the District agrees the water above the submerged land belongs to the State, it asserts it owns the fee simple in the land and can lease its exclusive use. The Department sued the District to invalidate the lease and individual District commissioners for ultra-vires acts associated with the lease. The Department also sought monetary damages for “restitution.” The District and commissioners filed a plea to the jurisdiction, which was partially denied.

The Court first addressed the Department’s claim for monetary damages. It held that Under §311.034 of the Government Code (Texas Code Construction Act), the use of the term “person” in a statute does not waive immunity.  And while the Parks and Wildlife Code allows the Department certain rule making authority, the Department cannot waive immunity by rule which is not contained within the statute.  Since nothing in the applicable Parks and Wildlife Code waives immunity, no waiver for declaratory and monetary claims exists. The Department cannot circumvent the immunity by labeling a claim for monetary damages as “restitution.”    Next, the Court held an ultra-vires claim cannot be brought against the District. However, it can be brought against the commissioners. The Court held the Department properly pled the commissioners acted beyond their lawful authority by entering into the lease. The statute creating the District provided it “rights, privileges and functions” but only those conferred by law. Unlike a home-rule municipality which gets its power from the Texas Constitution, the District is a creature of statute and must look to the Legislature for its authority. Considering the entire regulatory system as a whole, the Court held the powers of the District are limited to navigation. While the statute allows the District to lease land and regulate marine commerce, the question of whether  oyster cultivation qualifies may be precluded when comparing the exclusive power granted to the Department. The Department shall regulate the taking and conservation of fish, oysters, and other marine life. The ultra-vires claims against the commissioners to prospectively enjoin the lease are permitted to go forward.  However, the Court was careful to explain that its holding only allows the State’s claims to go to trial, not whether the State will ultimately win on the present facts.

If you would like to read this opinion click here.  Opinion by Justice Blacklock. The docket page with attorney information can be found here.

First District Court of Appeals holds proving patient tangible personal property does not waive immunity

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The University of Texas MD Anderson Cancer Center v. Roger Contreras, 01-18-01046-CV (Tex. App – Houston [1st Dist.], May 7, 2019).

In this Texas Tort Claims Act (TTCA) case the First District Court of Appeals held a medical facility does not waive its sovereign immunity by providing, furnishing, or allowing a patient to use tangible personal property.

Roger Contreras went to MD Anderson’s barbershop with the assistance of a nurse, a walker, and a rolling IV pole.  The nurse departed and left the IV pole but took the walker. She informed Contreras he could use the IV pole as an assisting device and did not need the walker. Contreras got up to go to the shampoo station after his haircut, his knee buckled causing him to fall, but when he tried to use the IV pole to catch himself, the pole rolled away. He hit the floor and was injured. Contreras’s medical expert opined that a IV pole is not a proper walking aid.  Contreras sued.  MD Anderson filed a plea to the jurisdiction, which was denied. MD Anderson appealed.

Contreras maintains that MD Anderson’s negligent use of a rolling IV pole as a mobility-assistance device (i.e. negligent use of personal property) caused his injuries. He argues that a nurse took his walker away and told him to use the IV pole to get around.  A governmental unit does not use personal property merely by providing, furnishing, or allowing another to use it.  An exception applies when personal property is provided that lacks an integral safety component. However, the exception applies solely when the component is entirely missing; the failure to provide a more effective safety feature does not trigger the exception. Otherwise, for purposes of section 101.021(2), a governmental unit uses tangible personal property if and only if the governmental unit itself is the user of the property. An allegation that the government enabled, authorized, or approved another’s use of the property is not enough.  Non-use is not use.  The court then held MD Anderson’s alleged defects in the plea are immaterial because the questions are jurisdictional. As a result, the plea should have been granted.

If you would like to read this opinion click here. Panel consists of Chief Justice Radack, Justice Goodman and Justice Countiss. Opinion by Justice Goodman. Council for MD Anderson are listed as Joshua Wilson and Kevin D. Molina. The attorney listed for Contreras is Joseph “Joe” Melugin.

Texas Supreme Court holds sanctions not applicable when a defendant is asked to deny a merit-preclusive RFA that the other party bears the burden of proof.

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Medina v Zuniga, 17-0498 (Tex. April 26, 2019)

In this case, which will be primarily of interest to litigators, the Texas Supreme Court held the trial court abused its discretion when it awarded sanctions against a defendant who denied liability in discovery but conceded during trial.

In the vehicle accident case, Medina exited a parking lot without stopping or properly looking and struck Zuniga.  Zuniga sued for negligence and gross-negligence and served Medina with discovery. In admissions the plaintiff essentially asked the defendant to concede his negligence in every possible respect and confess he was the sole cause of the accident at issue. The defendant predictably denied those requests. Relying on an exception to Rule 215.4’s applicability, Medina argued that when he denied Zuniga’s requests for admissions, he had a reasonable ground to believe he might ultimately prevail in showing he was not negligent.  The case proceeded to trial at which time, Medina made the strategic decision to concede ordinary negligence but contest the plaintiff’s gross-negligence claim. The jury found for Zuniga. After the trial, Zuniga’s attorney moved for sanctions for the failure to admit negligence during discovery and to collect attorney’s fees on having to establish the facts admitted at trial. The trial court granted the sanctions.

The Court state out by asserting “[r]equests for admission are a tool, not a trapdoor.”   They primarily serve “to simplify trials by eliminating matters about which there is no real controversy, but which may be difficult or expensive to prove.” They address uncontroverted matters or evidentiary ones like the authenticity or admissibility of documents. They were not intended to be used as a demand upon a plaintiff or defendant to admit that he had no cause of action or ground of defense.  Since the plaintiff ahs the burden of proof, it cannot follow that the defendant who puts the plaintiff to his/her burden should later face sanctions for not admitting what he/she was entitled to deny.  Due process limits the extent to which sanctions can attach to denials of those requests. Just as a defendant may answer the claims against him with a general denial, see TEX. R. CIV. P. 92, he may also deny a merits-preclusive request for admission for which the other party bears the burden of proof. The very nature of the request provides the respondent “good reason” for failing to admit. As a result, the trial court abused its discretion. Medina also challenged the jury’s gross-negligence finding, arguing no evidence supports a conclusion that his actions rose above ordinary negligence. The objective gross-negligence standard must remain functionally distinguishable from ordinary negligence. As to the objective component, an “extreme degree of risk” is “a threshold significantly higher than the objective ‘reasonable person’ test for negligence.”  Viewing the evidence in favor of the jury’s verdict, no doubt exists that Medina’s driving was thoughtless, careless, and risky. But any driver knows that our roads are replete with thoughtless, careless, and risky drivers. Gross negligence can be supported only by an extreme degree of risk, which is not present here.

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

Texas Supreme Court holds plaintiff in red-light challenge lawsuit was required to exhaust administrative remedies before filing for injunctive relief

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Garcia v City of Willis, et al., 17-0713 (Tex. May 3, 2019)

In this constitutional challenge to red-light camera case, the Texas Supreme Court held the Plaintiff was required to exhaust administrative remedies before bringing his constitutional-takings claim.

Luis Garcia sued the City of Willis on behalf of himself and “others similarly situated” who paid a civil penalty for violating a city ordinance for red-light infractions caught on camera. He sought the invalidation of the ordinance, a refund, or a takings claim. The City filed a plea to the jurisdiction, which was denied by the trial court, but granted by the court of appeals. On appeal to the Supreme Court the State filed an amicus brief arguing additional authority in support of the City.

While the City did not initially challenge Garcia’s standing to bring suit, the State’s amicus brief raised the issue and the Court felt it was required to address it first. After receiving notice from the City of his red-light violation, Garcia paid the requisite civil fine. He has no outstanding fines and does not assert he plans to violate red-light laws in the future. And for standing purposes we “assume that [plaintiffs] will conduct their activities within the law,” barring some stated intent otherwise. Because no pending charges exist, Garcia lacks standing for prospective injunctive relief and could not be a class member of others similarly situated who have not paid the fine.  However, he does have standing to seek a refund of his past payment. In this context, immunity is waived only if Garcia paid the fine under duress.  Here, Garcia chose to voluntarily pay a fine and forgo administrative remedies that would have entitled him to an automatic stay of the enforcement of his fine under TEX. TRANSP. CODE § 707.014(a).  Because Garcia could have invoked this automatic reprieve from payment and challenged the notice of violation administratively but chose not to, he cannot now claim he paid his fine under duress.  Therefore, the City maintains its immunity.   Garcia additionally argues the fine imposed on him amounts to an unconstitutional taking because the underlying is unconstitutional and because the City failed to conduct the statutorily required engineering study.  He asserts he could not challenge the constitutionality of the fine in the administrative hearing. However, the fact remains that the hearing officer might have ruled in his favor for other reasons that would moot his constitutional arguments. As a result, he failed to exhaust his administrative remedies.

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

Texas Supreme Court holds failure to engage a parking brake is the negligent “operation or use” of a vehicle under TTCA

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Phi, Inc. v Texas Juvenile Justice Dept., 18-0099 (April 26, 2019)

This is an interlocutory appeal in a Texas Tort Claims Act (TTCA) case where the Texas Supreme Court held jurisdiction exists to determine whether the failure to engage an emergency brake is the “operation or use” of a motor vehicle.

Phi, Inc. owed a helicopter which was located at the bottom of an incline.  When the Texas Juvenile Justice Department parked a bus at the top of the hill and exited, the bus began to roll backwards.  It struck the helicopter causing significant damage. A local police officer investigated the accident. His report states that the accident occurred after the driver placed the vehicle in park and identified as a contributing factor the failure to engage parking brake.  The driver did not dispute the police officer’s finding but later asserted the brake had been broken.

Phi sued.  The Department filed a plea to the jurisdiction.  The court of appeals held no jurisdiction existed. The Court granted review.

Under the TTCA a waiver of immunity requires that the damage “arises from” the operation or use of the vehicle and the statute requires a nexus between the injury negligently caused by a governmental employee and the operation or use of a motor-driven vehicle. The evidence the brake was not engaged is a sufficient nexus. With regards to the terms “operation” or “use,” in general courts should strive to give simple words like “operation” and “use” a simple construction, rather than converting them into terms of art intelligible only to experts in the case law. The Court held “In terms of the everyday experience of driving, we think it self-evident that ensuring your car will not roll away after you leave it, including engagement of the emergency brake when necessary, is an integral part of the ‘operation or use’ of a vehicle. It seems no less a part of driving than any other act by which the driver controls the vehicle.” The Court spent the remainder of the opinion explaining why this opinion is consistent with prior caselaw in order to avoid future confusion.

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

 

Texas Supreme Court holds decision to allow erosion of riverbed to remain is discretionary, thereby preserving immunity under TTCA

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Tarrant Regional Water District v Johnson, et al., 17-0095 (Tex. April 12, 2019)

This is a Texas Tort Claims Act (TTCA) case where the Texas Supreme Court held no waiver of immunity exists for the wrongful death action against the Tarrant Regional Water District (District).

Brandy Johnson, while five months pregnant, attempted to cross the Trinity River by walking across Dam #2. She slipped, fell into the river, and drowned.  The District built, then demolished and rebuilt a series of dams as part of an effort to channelize part of the Trinity River to help with flood control.  The parents brought a wrongful death action against the District asserting it maintained the Dam #2. The District filed a plea to the jurisdiction which was denied and the District appealed.

The District’s Director of Operations, testified that rather than filling in the eroded area below the dams and raising the depth to the level existing when the dams were constructed, the dam design engineer for the rebuild decided the deeper river bottom should remain in place to prevent kayakers and tubers from injuring themselves when passing through the chute.  The Plaintiffs alleged that the kayak chute was slippery and that the current running through it was deceptively dangerous. However, § 101.056 of the Tort Claims Act (discretionary functions) allows an entity to retain immunity if the negligent acts complained of were discretionary in nature. The Plaintiffs alleged the claims relating to the deeper river bed (and hydraulic boil) were not related to the original design but a failure to maintain that design, which is not discretionary.  The Court disagreed. The design versus maintenance “test” is simply the policy-level versus operational-level test applied to public works. However, the Court noted neither “design” nor “maintenance” appears in the text of §101.056. For that matter, neither do the terms “policy-level” or “operational-level.” Those terms are useful guides for interpretation, but are not part of the statute. The interpretational rubrics are only useful to the extent they yield results faithful to the statute’s textual distinction between discretionary and non-discretionary government decisions, which the Court recognized as a difficult task. The Court noted the statute’s focus is on preservation of the government’s discretionary decision-making authority, rather than on the often-useful but extratextual distinction between design and maintenance.  The District’s decisions related to the depth of the river at the base of the dam are discretionary design decisions, even at the rebuild level. Further, the Court emphasized the “public work” the District is alleged to have improperly maintained is the natural bed of a flowing river. Analyzing the riverbed as if it were a structural public work already stretches credulity. The notion that the District had a legal obligation to keep this natural “public work” at a constant depth beneath an opaque and running body of water is unsupportable. The Court held the District was immune from suit.

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

13th Court of Appeals holds building and standards commission order was final, so could not be collaterally attacked under TOMA

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Harker Heights Condominiums, LLC v. City of Harker Heights, Texas, 13-17-00234-CV (Tex. App. – Corpus Christi, March 28, 2019).

In this case the 13th Court of Appeals affirmed the granting of the City of Harker Heights’ plea to the jurisdiction dismissing a claim for injunctive relief to prevent the demolition of a building.

Harker Heights Condominiums (HHC) owns property on which thirty-three condominium units sit and that are leased to low income residents in need of housing. The City inspected the property, found defects and ordered repair.  The inspector found substandard conditions rising to such a level as to pose substantial danger to life, health and property.  The City’s Building and Standards Commission ordered certain properties repaired within ninety days or be demolished. HHC was able to bring one unit up to code, but was not able to timely repair the remaining units. After the City awarded a demolition contract, HHC sued to prevent destruction of the units. An initial temporary injunction was granted. After HHC added a claim for violating the Texas Open Meetings Act (TOMA) the City filed a plea to the jurisdiction which was granted. HHC appealed.

Texas law permits municipalities to establish commissions to consider violations of ordinances related to public safety. The local government code provides for judicial review of any decision of a building and standards commission panel, but the “district court’s review shall be limited to a hearing under the substantial evidence rule.” To appeal an order of a building and standards commission, an aggrieved party must file a verified petition in district court within thirty days of the commission’s order.  HHC waited eighty days. HHC asserted the “decision” was actually the City Council decision to award the demolition contract, not the Commission’s decision. However, the City’s award was merely the granting of a contract, not an order outlined in Chapter 214 of the Local Government Code. The court noted that even if the HHC injunctive relief were interpreted to be a proper petition for review under Chapter 214, it was nonetheless untimely. This untimely filing also means HHC’s TOMA suit is untimely as holding otherwise would subject the commission order to impermissible collateral attack. The plea was properly granted.

If you would like to read this opinion click here. Panel consists of Chief Justice Contreras, Justice Hinojosa and Visiting Judge Dorsey. Memorandum Opinion by Visiting Judge Dorsey. The attorneys listed for the City are Charles D. Olson, Charles Alfred Mackenzie and Burk A. Roberts.  The attorneys listed for HHC are Brandy Wingate Voss,  Ryan D. V. Greene and  G. Alan Waldrop.

Texas Supreme Court holds Type B economic development corporations are not entitled to immunity for breach of contract claims

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Rosenberg Development Corp. v. Imperial Performing Arts, Inc., No. 17-0660 (Tex. – March 9, 2019).

The Texas Supreme Court holds Type -B EDCs are not entitled to governmental immunity in breach of contract cases.

Rosenberg Development Corporation (RDC) is a Type B economic development corporation created by the City of Rosenberg. RDC executed a contract with Imperial Performing Arts, Inc. (Imperial), a nonprofit organization for performance and visual art activities, including reopening a local arts center and theater. However, the reopening and renovations exceed the agreed amounts by over ten fold. RDC and Imperial filed suit and counterclaims. The immunity issue addressed the breach of contract claims. RDC filed a plea to the jurisdiction, which was denied as to Imperial’s contract claim, and was affirmed by the court of appeals. RDC filed for discretionary review.

The threshold issue for the Court was whether RDC—a municipality’s statutorily authorized corporate creation—is immune from suit under the common law even though RDC is neither a sovereign entity nor a political subdivision of the state. The Development Corporation Act (Title 12, Subtitle C1 of the Local Government Code) authorizes municipalities to create such EDC corporations. The Court analyzed the Act, its purpose, and its language. The Court noted that for the purpose of interlocutory appeals, the RDC qualifies given the specific definition in the Texas Tort Claims Act.  The Court then noted the Development Corporation Act does not speak to governmental immunity directly, but in §505.106, the Legislature has declared that (1) a Type B corporation is “not liable for damages arising from the performance of a governmental function of a Type B corporation or the authorizing municipality,” and (2) “[f]or purposes of Chapter 101, Civil Practice and Remedies Code, a Type B corporation is a governmental unit and the corporation’s actions are governmental functions.” Notably, however, an economic development corporation “is not a political subdivision or a political corporation for purposes of the laws of this state …” and the Legislature has forbidden authorizing municipalities from bestowing on the corporation any “attributes of sovereignty.”   As to the RDC’s argument it obtains statutory immunity from suit and liability, the Court held “[b]ecause section 505.106 merely purports to limit the remedies available when economic development corporations perform governmental functions, we need not consider whether the Legislature can confer immunity by statute or only waive it.”  Where the governing statutory authority demonstrates legislative intent to grant an entity the “nature, purposes, and powers” of an “arm of the State government,” that entity is a government unit unto itself and is entitled to assert immunity in its own right. The Court analyzed cases where governmental self-insurance risk pools have been determined to be governmental entities and determined what is required to qualify as a governmental unit unto itself. While promoting and developing business enterprises and job training is a public purpose merely engaging in such an act does not, ipso facto, make the actor a governmental unit. The common-law rule of immunity is exclusively for the judiciary to define, and in doing so, the Court does not just consider whether the entity performs governmental functions, but also the “nature and purposes of immunity.” Granting immunity to an EDC is not necessary to satisfy the political, pecuniary, and pragmatic policies underlying our immunity doctrines. Further, the Legislature simply did not grant these entities “powers of government” to perform essential governmental functions or activities. Also, since the Act already limits liability and damage’s exposure, the fiscal analysis used to determine if an entity is governmental is not applicable. Ultimately, the Court held “that the Legislature did not authorize municipalities to create economic development corporations as distinct governmental entities entitled to assert immunity in their own right.”

Chief Justice Hecht wrote separately only to point out the highly unusual features of a Type B municipally-created economic development corporation. While he agreed an EDC is not a governmental unit by itself, an EDC is not liable for damages arising from the performance of its governmental functions for purposes of the Texas Tort Claims Act. Since the TTCA only waives immunity, he opines an EDC has immunity from suit and liability for tort claims. In dicta, the Chief Justice noted that since an EDC’s expenditures must be approved by its municipality, a judgment against an EDC in any circumstance may not be enforceable.

If you would like to read this opinion click here. Justice Guzman delivered the opinion of the court.  Chief Justice Hecht filed a concurring opinion, found here.  The docket page with attorney information can be found here.

Texas Supreme Court holds attorney-client privilege applies even when client acts as its own expert

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In Re: City of Dickinson, 17-0020 (Tex. February 15, 2019)

This is a mandamus action of primary interest to litigators where the Texas Supreme Court held the attorney/client privilege protects expert testimony when the client is also the expert.

The City of Dickinson purchased a commercial windstorm policy from Texas Windstorm Insurance Association. In the underlying litigation, the City alleges that Texas Windstorm has not paid all it owes under the policy and sued. In the motion for summary judgment Texas Windstorm included the affidavit of its corporate representative and senior claims examiner, Paul Strickland. Strickland’s affidavit provided both factual and expert opinion testimony on Texas Windstorm’s behalf. Strickland’s affidavit had been revised in a series of emails between Strickland and Texas Windstorm’s counsel and the City sought the drafts in discovery. Texas Windstorm asserted the communications were privileged while the City asserted, as a testifying expert, the communications were not privileged. The trial court ordered Windstorm to produce the communications. The court of appeals conditionally granted a writ of mandamus. The Texas Supreme Court heard the mandamus filed by the City.

Texas Windstorm responds that the expert-disclosure rules do not override the attorney–client privilege and do not require a party to choose between defending itself and maintaining its privileges. It asserted the attorney–client privilege is substantively distinct from the work-product doctrine.  There was no dispute the communications at issue were encompassed within the attorney/client privilege.  The Court declined to create any new privileges in the opinion and confined its analysis to the rules of discovery already in place. Because the discovery rules are part of a cohesive whole, the Court considered them in context rather than as isolated provisions.  While Texas Rule of Civil Procedure 192.3 states a party may discover expert information, it does not expressly permit discovery when the information is protected by the attorney/client privilege. In fact, Rule 192.3(a) expressly contains the phrase “absent some specific provision otherwise” which the Court interpreted to include the attorney/client privilege.  Further, Rule 194.2 permits a party to seek a disclosure on expert information, but such is permissive, not mandatory and is subject to privileged communications. Additionally, the official comments to Rule 194 explain that a responding party may assert any privilege to a Rule 194.2 request except work product. The City’s supporting cases were largely based in the work-product privilege, not the attorney/client privilege. As a result, they are inapplicable. The Court reemphasized some of its more recent opinions holding the attorney/client privilege is a “quintessentially imperative” to our legal system. A lawyer’s candid advice and counseling is no less important when a client also testifies as an expert. As a result, it upheld the mandamus and allowed Texas Windstorm to withhold the communications.

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

14th Court of Appeals holds immunity is waived for refund of penalties and interest paid on delinquent taxes only if taxpayer requested waiver within 180 days

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Harris County, et al. v. Falcon Hunter, LLC, 14-18-00247-CV (Tex. App. – Houston [14th Dist.], February 7, 2019).

This is a delinquent tax case where the taxpayer company, Falcon Hunter, LLC. (Falcon), sued for a refund of penalties and interest paid.  The 14th Court of Appeals reversed the denial of the taxing entities plea to the jurisdiction and dismissed the case.

After the taxing units sent the tax bill to an incorrect address, Falcon, failed to pay property taxes. When it discovered it was listed as delinquent, Falcon paid the taxes including penalties and interest. Three years later, Falcon applied for a refund of the penalties and interest, but did not seek a refund of any property taxes paid. When Falcon did not receive a response, it sued for the amount in penalties and interest, plus collection fees and attorney’s fees. The taxing units filed a plea to the jurisdiction, which was denied. The units appealed.

Taking Falcon’s pleadings as true for purposes of the analysis, the Texas Tax Code §31.11(k) states that after a request for refund has been denied, the taxpayer may file suit against the taxing unit in district court to compel the payment of the refund within 60 days. However, it applies when a tax bill is returned to the taxing unit by the post office under certain conditions. To secure the benefit the taxpayer must submit a request for waiver of penalties and interest under the code. The request must be made before the 181st day after the delinquency date. Since Falcon waited almost three years, it did not timely request a waiver and did not exhaust their administrative remedies.  Section 31.11 waived immunity for a refund of “taxes.”  However, the legislature took care to clearly distinguish the terms “penalty” and “interest” from the term “tax.”  A taxpayer has three years to seek a refund of the tax. However, if a taxpayer wants penalties and interest on a delinquent tax waived, the taxpayer has, as relevant here, 180 days from the delinquency date to request the waiver in writing. Falcon sought a refund of penalties and interest, not the tax. As a result, no waiver of immunity exists for a refund of penalties/interest outside the 180-day limitation. The plea should have been granted.

If you would like to read this opinion click here. Panel consists of Justice Wise, Justice Jewell and Justice Poissant. Memorandum Opinion by Justice Jewell. The attorneys listed for the Appellants are Stephen A. Smith, Mary Lucille Anderson and Patrick Nagorski.  The attorneys listed for Falcon are Kory Ryan,  John Brusniak JR. and Tracy Turner