Library’s suit is really one attempting to control discretionary governmental functions for which no waiver of sovereign immunity exists says 13th Court of Appeals

Texas Music Library and Research Center v. Texas Department of Transportation and Phil Wilson, Executive Director, Cause No. 13-13-00600-CV (Tex. App.- Corpus Christi, July 31, 2014)

This is mainly an agency dispute over the providing of grants. However, the important piece for local governments to get out of this opinion relate to the arguments an individual cannot sue to control governmental body functions through declaratory judgment or injunction.

TxDOT approved a project from the Texas Music Library and Research Center (“Library”) for funding to build a Music History Museum consistent with legislative directives. After the Library expended funds as part of preparing the project, TxDOT changed its mind and advised it intended to divert the funds elsewhere. The Library sued under a variety of claims, but mainly sought to stop TxDOT’s divergence of funds and to force it to change its allocations. TxDOT filed a plea to the jurisdiction which was granted and the Library appealed.

The 13th Court of Appeals first held that the Library’s claims under the Administrative Procedures Act allow it to challenge a rule of the agency; however, that is not what it is doing in this case. The Library is challenging a decision to divert funds or do away with a project which has not been finally approved. As such, issuing an opinion on TxDOT’s rules does not resolve their dispute and therefore they lack standing to bring such a challenge. This claim is “one involving a government officer’s action or inaction.” To succeed under its declaratory judgment claims the Library must establish TxDOT’s executive director “acted without legal authority or failed to perform a purely ministerial act.” Even assuming the Library’s assertions were true—that TxDOT’s director has no authority to withhold funds—it would not establish that TxDOT’s executive director has an obligation to make federal funds available to the Library. The relief requested by the Library would not resolve the actual controversy between the parties because it would not establish whether the Library has a statutory or constitutional entitlement to payment.  Further, nothing in the record shows TxDOT received the federal funds. The alleged duty not to divert federal funds away from the Library’s project is not actual, but rather, hypothetical and contingent and not proper for declaratory relief. The Library has no right to receive federal funds or recoup “sunk costs that were voluntarily incurred in pursuit of governmental funding.” The fact the Library voluntarily prepared the proposal, spent funds on it, and submitted “trade secret” information to TxDOT in order to obtain the funding does not entitle it to any due process or taking claims. Finally, TxDOT’s director has no ministerial duty to fund the project so no mandamus action is proper. The court held that in its view, the “real substance” of the Library’s suit “is an attempt to control state action by seeking to establish the existence and validity of a contract between TxDOT and the FHWA for the Library’s project, enforce performance thereunder, and thereby impose liability on the state.” No waiver of immunity exists.  In a single paragraph the court also notes that to the extent TxDOT made inducing representations, there is no waiver of immunity by conduct.

If you would like to read this opinion, click here. Opinion by Justice Longoria. Attorneys for Appellees Texas Dept. of Transportation and Executive Director Phil Wilson are Betsy Johnson and Richard Farrer. Attorney for Appellant Texas Music Library and Research Center is Jennifer Riggs.