Court has jurisdiction in case asserting public works director performed ultra vires acts of assessing fees

 

City of Houston et al. v. Little Nell Apartments, 14-12-01157-CV (Tex. App. – Houston [14th Dist.], January 23, 2014).

This is an interlocutory appeal from the denial of a plea to the jurisdiction involving a City of Houston director’s actions which the Plaintiff asserts were ultra vires by subjecting them to improper drainage fees. The director, Krueger, was sued in his official capacity. The Houston Court of Appeals (14th) affirmed the denial.

In 2011 the City enacted a specific ordinance referred to as the “drainage fee ordinance.”  It created a municipal drainage utility which charged a fee to recover costs of service and are used exclusively for defined purposes. Fees are calculated based on square foot of impervious cover of a benefitted property.  The Plaintiff asserts that some of its properties are not part of the city’s drainage system so should not be subject to the ordinance or charged the fee. After exhausting the administrative process under the ordinance (which yielded no change in the fees) the Plaintiffs sued the City and the director of public works, Krueger, for a declaration the ordinance is invalid and for ultra vires acts of imposing the fee by the director. The Defendants filed a plea to the jurisdiction. After an evidentiary hearing the court granted the plea in part (mainly to the claims for monetary damages) but denied it as to declaratory claims involving ultra vires acts of Krueger. The Defendants filed this interlocutory appeal.

The 14th Court of Appeals first determined if it had appellate jurisdiction over Krueger’s appeal since the original notice of appeal was only on behalf of the City (although it was amended later).  The court concluded the City and Krueger made a bona fide attempt to appeal and based on Supreme Court precedent, an appellate court has jurisdiction over an appeal, even if the notice of appeal has some defects.  The City and Krueger insist that the drainage fee ordinance grants Krueger the authority and discretion to assess drainage charges after making the threshold determination as to service area. The Plaintiffs assert the question is not his authority to assess fees, but whether their properties fall under the ordinance at all since they are not within the service area. The court went through a lengthy analysis (39 page opinion) of the text of the drainage fee ordinance, analyzing various definitions and grants of authority. In the end, the court concluded that, under the plain language of the drainage fee ordinance, a property must be a ―benefitted property to be subjected to drainage charges. The ordinance, while granting the director authority to asses fees, does not give him authority to determine which properties are benefitted properties.  So imposing fees on properties which are not benefitted properties is an ultra vires act. After examining the apparently large amount of evidence presented at the hearing (including proof of the properties locations, service areas, permits, etc. – i.e. a mini-trial) the court concluded the pleadings and evidence establish the court has jurisdiction to determine if the director exceeded his authority by applying charges to the Plaintiff’s properties. It affirmed the denial.

The court spent a lot of time determining what authority the ordinance does not grant.  So be careful of wording within an ordinance.    As a result, the opinion provides guidance to governmental attorneys as to what types of words they should put into ordinances in order to properly grant full authority to accomplish a particular purpose. That just needs to be balances with avoiding an “unbridled discretion” problem.

If you would like to read this opinion click here.  Before Justices Christopher, Donovan, and Brown.  Opinion by Justice Brown. The attorneys listed for the City of Houston are Judith Lee Ramsey and John B. Wallace.  The attorney listed for the Plaintiff is Brandon Barchus.