Court rejects AT&T’s attempt to circumvent sovereign immunity in line relocation case

Southwestern  Bell Telephone, D/B/A AT&T Texas v City of Houston et al, NO. 14-11-01115-CV, (Tex. Civ. App. Houston [14th  Dist.] May 9, 2013).

This is a dispute on who must bear the cost of relocating AT&T’s telecommunication lines in the public right-of-way over bridges.  In this case there was a project to demolish the existing City-owned bridges and replace them with longer, wider ones as part of a project.  The City told AT&T to relocate the lines on the bridge and AT&T responded it would comply only if compensated for the costs of relocation. AT&T sued the City, County, Flood Control District and all agents and officials for declaratory and injunctive relief to force the City to pay the cost, citing to §49.223 of the Texas Water Code provision which attributes costs to the Flood Control District.

The legal arguments are extremely interesting given AT&T was asserting entitlement to prospective injunctive relief and not direct payment of costs (i.e., equitable relief and not money damages to circumvent sovereign immunity). For those who follow the Heinrich line of cases (holding individuals can sue public officials, individually,  to prevent ultra vires acts even if money payments result), the back and forth analysis can be useful in developing conditions which retain immunity. An important moral to take away from this case is to pay close attention to interlocal agreements with other entities when dealing with joint projects, including the roles of individual officials.

The Fourteenth Court of Appeals rejected AT&T’s attempt to circumvent sovereign immunity defenses by characterizing matters as ulta vires acts of public officials. AT&T’s “ultimate aim” was to establish “an entitlement to payment” for relocation, which therefore requires a strict construction standard of §49.223. An over-simplified summary of the analysis is that that since it was the City which ordered the relocation (due to an interlocal agreement as part of the project) and not the District the Water Code does not apply.  The common law standard that a utility must bear the costs of relocation is therefore applicable. As a result, the trial court properly granted the individual officials Plea to the Jurisdiction and the City and County’s summary judgment motions. In short, AT&T loses and must pay relocation costs.

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