County cannot sue State for improper administration of grants says Austin Court of Appeals

The County of La Salle v. Joe Weber, et al, 03-14-00501-CV (Tex. App. – Austin, March 18, 2016).

This is largely an ultra vires suit where a County sued the state for improper administrative rules and implementation of grant eligibility requirements. The Austin Court of Appeals affirmed the granting of the State’s plea to the jurisdiction.

The County of La Salle sued officials at the Texas Department of Transportation  (“TxDOT”) and Texas Transportation Commission (“Commission”) in connection with the Department’s administration of the Transportation Infrastructure Fund (“TIF”) grant program. The TIF statute requires TxDOT to “develop policies and procedures to administer a grant program under this subchapter to make grants to counties for transportation infrastructure projects located in areas of the state affected by increased oil and gas production.” Any county seeking grant funds must provide certain documents to TxDOT, including the road condition report made by the county for the previous year and a copy of the order or resolution establishing a county energy transportation reinvestment zone (“ETR zone”).  TxDOT subsequently adopted rules for administration. The County applied for $158,507,765 but was only allocated $6,456,703. Dissatisfied with its award, the County brought suit complaining that the Department had refused to exclude any county that failed to meet the statutory eligibility requirements. The defendants filed a plea to the jurisdiction which the trial court granted. The County appealed.

To assert a valid ultra vires claim the plaintiff “must not complain of a government officer’s exercise of discretion.” Otherwise, the suit is an impermissible attempt to “control state action,” seeking to dictate the manner in which officials exercise their delegated authority.  The County claims that officials acted ultra vires by approving grants without first determining whether each applicant county was in fact eligible. Second, the County claims that Department officials acted ultra vires by failing to ensure that applicant counties complied with the TIF statute by submitting certain documents with their applications.  TxDOT testified it reviewed road condition reports only to confirm that they were current and reviewed ETR zone orders only to ensure that the orders indicated that the applicant county had created the zone, without regard to the substance within the documents. However, the State Defendants argue that nothing in the TIF statute requires TxDOT to independently verify, as a factual matter, whether an applicant county is “affected” or that the representations of the applicants are accurate. Further the State Defendants take issue with the County’s assumption that only those counties with actual oil and gas production qualify.

After analyzing the statute, the court held nothing in the law strictly limits grant eligibility to those counties that are experiencing actual increased oil and gas production within their own boundaries. Further, the Legislature has delegated broad authority to TxDOT to “develop policies and procedures to administer” the TIF grant program without limiting the methods available for doing so. No particular procedure or findings with respect to whether an applicant is “affected” or otherwise eligible to receive a TIF grant are required. Additionally, if such an interpretation were adopted the trial court would have to review the applications and supporting documentation to judicially determine which applicants were eligible under the statute. “This type of undertaking by the trial court would amount to a judicial review of each decision by the Department to award a grant to an applicant county.”  The Legislature did not authorize any judicial review of TxDOT decisions and the court found no justification to create one. Ultimately the court held sovereign immunity bars the County’s claims seeking to enjoin the grant application and distribution process and that there is no right to judicial review of the Department’s decisions concerning the award of TIF grants.

If you would like to read this opinion click here. Panel: Chief Justice Rose, Justice Goodwin and Justice Field. Memorandum Opinion by Justice Field. Attorneys for the County are listed as Donato D. Ramos Jr.,  Donato D. Ramos and Don Cruse. The attorneys listed for the Department of Transportation and Transportation Commission defendants are Matthew Harriger, Sarah Munson and Mr. Kristofer S. Monson.