Recent Texas Cases of Interest to Cities

Note: Included cases are from March 11, 2021 through April 10, 2021.

MOU Electric Rates: Data Foundry, Inc. v. City of Austin, No. 19-0475, 2021 WL 1323405 (Tex. 2021). The City of Austin, through its city council, sets the rates that Austin Energy, an electric utility owned by the city, charges to city residents for retail electric services. Data Foundry, Inc., an internet service provider, purchases electricity from Austin Energy for its facilities in the city. Data Foundry filed suit against the city alleging that the rates charged by the city were illegal.

The court of appeals concluded Data Foundry suffered a particularized injury sufficient to confer standing but affirmed the dismissal of Data Foundry’s claims in part on other grounds. The Texas Supreme Court concluded that Data Foundry has standing to bring its claims, and remanded the case to the trial court.

Data Foundry satisfied the standing requirement of a particularized injury by alleging it was required to pay a rate for electric services to Austin Energy that was unreasonable, excessive, discriminatory, and confiscatory. But the most interesting discussion in the opinion relates to the city’s request that the Texas Supreme Court conclude that, by enacting the Public Utility Regulatory Act (PURA), the legislature intended that city residents such as Data Foundry no longer have any judicial remedy when a municipally owned utility charges a rate that is alleged to be unreasonable or discriminatory. Essentially, the city argued that PURA has preempted the common law and precludes Data Foundry’s requested judicial remedy. Before PURA’s enactment, the court had recognized that, while the setting of utility rates is strictly a legislative function, courts may review challenges to those rates to determine if they are unreasonable or discriminatory. However, the city argued that: (1) PURA created a pervasive regulatory scheme that preempts the common law on this issue; and (2) with respect to municipally owned utilities, the legislature created a specific procedure for an administrative appeal to the Public Utility Commission by non-city residents, but – because it provided no such procedure for an administrative appeal by city residents – the legislature intended that city residents would have no judicial recourse.

The court declined the city’s invitation to address whether the trial court could have properly dismissed Data Foundry’s claims based on PURA preemption, and expressed no opinion on this issue. But, the court provided that “our decision does not preclude the city from raising this argument in the trial court on remand.”

Governmental Immunity: White v. City of Houston, No. 01-20-00415-CV, 2021 WL 1133152 (Tex. App.—Houston [1st Dist.] Mar. 25, 2021). Nathan White sued the city to recover damages for personal injuries that were allegedly sustained when an unsecured firehose from one of the city’s firetrucks became entangled in the rear axle of the vehicle he was in, causing the car to be dragged for 30 feet. The trial court granted the city’s plea to the jurisdiction. The appellate court affirmed the trial court’s judgment holding that, although White’s alleged claim was legally sufficient to invoke the Texas Tort Claims Act’s waiver of governmental immunity for injuries caused by condition or use of tangible personal property, the emergency exception to waiver of governmental immunity applied in this case.*

Appellate Procedure: Franco v. State, No. 01-20-00633-CR, 2021 WL 922394 (Tex. App.—Houston [1st Dist.] Mar. 11, 2021) (mem. op.). Carmen Franco appealed the county criminal court’s dismissal of an untimely filed appeal from a municipal court for the conviction of a moving violation. The appellate court dismissed the appeal for lack of jurisdiction because the county court’s record contained no motion for a new trial and the Franco’s notice of appeal was not filed with a motion for extension of time in compliance with Rule 10.5(b) of the Texas Rule of Appellate Procedure. The time for filing a notice of appeal may be extended if the notice is filed within 15 days after the deadline and a motion for extension of time complying with Rule 10.5(b) is filed. The Court of Criminal Appeals has interpreted Rule 26.3 similarly to the Texas Supreme Court in regard to amending a defective notice of appeal, but it has not held that an extension is implied when a notice of appeal is filed within the 15-day period after it is due. Therefore, to extend the time to file a notice of appeal, the appellant must file a motion for extension.

Standing/Takings: Ellis v. Wildcat Creek Wind Farm LLC, No. 02-20-00050-CV, 2021 WL 1134416 (Tex. App.—Fort Worth Mar. 25, 2021) (mem. op.). A group of property owners in Cooke County sought to challenge the creation of a reinvestment zone created pursuant to Chapter 312 of the Texas Tax Code. The purpose of the reinvestment zone was to create tax incentives for Wildcat Creek Wind Farm LLC in order to build a wind power plant or “wind farm” in Cooke County. The trial court granted the property owners’ dispositive motions for unjust enrichment and regulatory estoppel claims, but denied or dismissed the property owners’ pleas to the jurisdiction as to the mandamus and inverse condemnation claims. The appellate court vacated the trial court’s judgement and dismissed the case as the property owners did not establish standing and ripeness to bring forth their claims.

Housing Authority Evictions: Ledezma v. Laredo Hous. Auth., No. 04-19-00563-CV, 2021 WL 1199043 (Tex. App.—San Antonio Mar. 31, 2021) (mem. op.). For over fifteen years, Miriam Ledezma has lived at the Ana Maria Lozano complex, a federally-subsidized housing project operated by Laredo Housing Authority (LHA). In February 2017, Ledezma received a notice of termination of lease, in which she was accused of “repeatedly threatening the rights of other tenants to the peaceful enjoyment of their community facilities and the social environment of their Housing Project, as called for by Section IX (l) and (m) of the Lease.” In October 2017, Ledezma received another notice of termination stating that, because “the reason for the proposed eviction involve[d] a threat to the health, safety and rights of peaceful enjoyment of the premises by [her] neighbors,” she was not entitled to a grievance hearing. The notice further stated that LHA would “file proceedings in state court to evict [her] from the premises.” In April 2018, Ledezma was sued for forcible entry and detainer. The justice of the peace court ordered her to vacate her housing unit. Ledezma appealed, and the trial court found that Ledezma breached Sections IX(l) and (m) of her lease agreement by threatening the rights of other tenants to the peaceful enjoyment of their community facilities and the social environment of their housing project.

Ledezma argued the trial court lacked subject-matter jurisdiction because the LHA did not comply with federal regulations related to notice in proceeding with the eviction suit. The court of appeals concluded that the notice letter did not comply with the specific notice requirements of 24 C.F.R. § 966.4(l)(3)(v). The court then turned to whether the record showed Ledezma was harmed by the inadequate notice, and ultimately held that she was, resulting in the case being remanded back to the trial court.

Premises Defect: City of San Antonio v. Realme, No. 04-20-00119-CV, 2021 WL 1009330 (Tex. App.—San Antonio Mar. 17, 2021) (mem. op.). Nadine Realme paid to participate in a 5K run/walk that took place on the City of San Antonio’s streets and sidewalks. The event itself was sponsored by private entities and Realme’s participation fee was directed to the private entities. She followed the pre-designated route and, along that route, between the sidewalk and the street, she tripped on a metal object protruding from the ground, causing bodily injury. She sued the city. The city filed a plea to the jurisdiction and argued that Realme was not an invitee, but rather a licensee, under premise defect standards. The trial court denied the city’s plea to the jurisdiction.

The specific Texas Tort Claims Act provision that the court of appeals focused upon states that the city owes to Realme “only the duty that a private person owes to a licensee on private property unless the claimant pays for the use of the premises.” After analyzing the plain language of that provision, the court of appeals concluded that the language makes no distinction between who received payment for use of the premises or even whether the payment was for the exclusive use of the premises. In construing Realme’s pleadings in her favor and considering the evidence admitted, the court of appeals found there was a material fact issue on the question of immunity, affirmed the denial, and remanded the case to the trial court for further proceedings.*

Employment: Herczeg v. City of Dallas, No. 05-19-01023-CV, 2021 WL 1169396 (Tex. App.—Dallas Mar. 29, 2021) (mem. op.). Herczeg was a police officer who sued the city, alleging gender discrimination, wrongful termination, retaliation, and aiding and abetting retaliation. The city filed a plea to the jurisdiction, attacking the merits of the plaintiff’s claims, and asserting that the plaintiff did not timely present them to the Texas Workforce Commission and that she failed to exhaust her administrative remedies. The trial court granted the plea without specifying the grounds and the plaintiff appealed.

The city argued that the appellate court must affirm because the plaintiff did not address all of the city’s independent arguments on appeal. The appellate court affirmed because the plaintiff did not address the city’s arguments of untimeliness or failure to exhaust grounds, both of which were separate and independent grounds for the trial court to grant the plea.

Contracts: City of Carrollton v. Weir Bros. Contracting, LLC, No. 05-20-00714-CV, 2021 WL 1084554 (Tex. App.—Dallas Mar. 22, 2021) (mem. op.). The city appealed the trial court’s denial of its plea to the jurisdiction against plaintiff’s breach of contract claims for grading work the plaintiff performed for a sports complex on land owned by the city but leased to another entity. On appeal, the city claimed the trial court erred in denying its plea because plaintiff’s claims are based on the lease of land for recreational purposes, which is a governmental function. The appellate court concluded the plaintiff’s claims for breach of contract for performance of grading were based on a proprietary function because the right to operate, manage, and control the sports complex belonged to the entity leasing the land for the sports complex, not the city.

Ad Valorem Tax: NMF P’ship v. City of Dallas, No. 05-19-01578-CV, 2021 WL 1015862 (Tex. App.—Dallas Mar. 17, 2021) (mem. op.). NMF Partnership (NMF) lost a lawsuit for delinquent ad valorem taxes in the 1990s where the trial court ordered the sale of NMF’s property as part of the judgment. More than five months later, the same trial court signed an order to void the sheriff’s sale and deed (Post Judgment Order). In 2016, NMF sued and sought to have the court declare the Post Judgment Order void. The trial court denied the relief and NMF appealed. The appellate court determined that the trial court did not have plenary jurisdiction or any jurisdiction to issue the Post Judgment Order. It reversed the trial court’s order denying all relief requested by the plaintiff, rendered judgment in favor of the plaintiff declaring as void the Post Judgment Order, and remanded the issue of the award of attorneys’ fees to NMF.

Abortion Funding: Zimmerman v. City of Austin, No. 08-20-00039-CV, 2021 WL 1016443 (Tex. App.—El Paso Mar. 17, 2021). As part of its Fiscal Year 2019-2020 budget, the City of Austin allocated $150,000 for “abortion access logistical support services” and directed the city’s health department to disperse the funds to qualified organizations through a competitive bidding process. Don Zimmerman filed a lawsuit against the city and its city manager, in which he sought a declaration that the proposed expenditure violates state law for two distinct reasons: (1) it conflicts with various Texas statutes that make it a crime to aid and abet the procurement of an abortion, which he alleges are still viable even after the Supreme Court of the United States found them unconstitutional; and (2) the expenditure of these funds violates the prohibition in the Texas Constitution against providing “gifts” of public money to private individuals or associations. For different reasons, the trial court granted the city’s plea to the jurisdiction, dismissed Zimmerman’s first cause of action with prejudice, and dismissed the second cause of action without prejudice. Zimmerman appealed.

The court of appeals concluded that the criminal abortion statutes upon which Zimmerman’s first claim is premised are ineffective to impose a duty on the city as it is an attempt to enforce a criminal statute, albeit in a civil context. Additionally, the court of appeals concluded that the highest criminal court in the state had concluded that the statutes were no longer in force and effect, and the court of appeals was unable to find any instance where the Texas abortion statutes have been substantively applied in any criminal case for the almost 47 years since the Supreme Court found them unconstitutional.

With regard to the allegations of an unconstitutional gift, the court of appeals concluded that the claim was not ripe because the city had yet to bid out the contract under which these funds could be expended. Accordingly, unless and until the city enters into a contract obligating it to disperse funds to an abortion-assistance organization, any decision would be an advisory opinion, which would not only violate the Texas Constitution, but would be an unpractical and unwise use of judicial resources.

Public Information: San Jacinto River Auth. v. Yollick, No. 09-19-00064-CV, 2021 WL 1031679 (Tex. App.—Beaumont Mar. 18, 2021). Eric Yollick sued the San Jacinto River Authority (SJRA) claiming it failed to handle his request for information in accordance with its duties under the Public Information Act (PIA). The trial court agreed with Yollick and signed a judgment that requires the SJRA to disclose most of the information in the SJRA’s Emergency Action Plan (the Plan). SJRA appealed.

SJRA asserted the evidence shows it received a request seeking the Plan a week before it received Yollick’s request from Bradford Laney, who asked the SJRA for access to the Plan. The SJRA referred Laney’s request to the Office of Attorney General (OAG) asserting exceptions in the PIA that authorized the SJRA to withhold the Plan when responding to Laney’s request. The SJRA argued the trial court misinterpreted the PIA by requiring it to prove the OAG decided the Plan is subject to the PIA’s exceptions before October 11, 2017, the day it refused to comply with Yollick’s request. The appellate court affirmed the trial court’s decision. The SJRA was not excused from referring Yollick’s request to the OAG because it did not have a previous determination at the time it refused Yollick’s request.

In-Person Court Appearances: In re Donalson, No. 12-21-00040-CV, 2021 WL 1054438 (Tex. App.—Tyler Mar. 19, 2021) (mem. op.). The Supreme Court of Texas on March 5, 2021 issued an emergency order allowing in-person hearings, but if a participant could show good cause, they could be permitted to participate remotely. Donalson, because of his concerns related to COVID-19 infection, argued that the lower court abused its discretion by ordering an in-person hearing. The trial court in this case had adopted health protocols requiring temperature screenings, face coverings, social distancing, and courtroom capacity restrictions in line with CDC recommendations. Donalson was unable to establish “good cause” to show that these precautions would be insufficient to protect him from infection or reinfection, and the lower court’s requirement of an in-person hearing was upheld over his objections.

Governmental Immunity: City of Victoria v. Redburn, No. 13-20-00213-CV, 2021 WL 1217349 (Tex. App.—Corpus Christi Apr. 1, 2021) (mem. op.). The City of Victoria intervened in a lawsuit to seek a declaration that it held a prescriptive drainage easement across the surface of a portion of Redburn’s property. Redburn filed, among other things, a counterclaim for injunctive relief against the city, seeking an injunction ordering the city to extend underground drainage pipes under his property rather than using the surface for drainage. The city filed a plea to the jurisdiction in response to the claim for injunctive relief. At trial, the court affirmed the city’s easement claims but denied its plea to the jurisdiction. The court analyzed the city’s immunity claim through the lens of the abrogation of immunity rule set out in Reata Const. Corp. v. City of Dallas, 197 S.W.3d 371 (Tex. 2006). The purpose of immunity is to protect public funds. Governmental immunity can be abrogated when claims against public funds are offset by governmental claims for monetary relief. The city’s claim of an easement and Redburn’s claim for an injunction to require construction of subterranean drainage facilities, while logically linked, do not offset, because Redburn’s claims involve a significant expenditure of public funds to build the facilities requested. For this reason, Redburn’s claim does not fall within the scope of Reata, and the city’s plea to the jurisdiction was sustained.

Governmental Immunity: Cameron Appraisal Dist. v. Alfaro, No. 13-19-00198-CV, 2021 WL 1134315 (Tex. App.—Corpus Christi Mar. 25, 2021) (mem. op.). In a suit to quiet title to real property filed in 2016, Alfaro claimed that Cameron County and the Rio Hondo Independent School District had wrongfully dispossessed her of real property through a tax foreclosure in 2012. Cameron Appraisal District (CAD) filed a plea to the jurisdiction asserting that the trial court did not have jurisdiction because: (1) Alfaro failed to exhaust administrative remedies related to the tax sale; (2) Alfaro failed to plead a waiver of governmental immunity; and (3) the claim was time barred. The trial court denied CAD’s plea on the grounds that CAD may have acted fraudulently in its earlier interactions with Alfaro. CAD filed an interlocutory appeal challenging the court’s denial order. The court of appeals found that the record reflected that Alfaro failed to exhaust her administrative remedies and reversed the trial court’s judgement. The court of appeals did not consider the questions of pleading waiver or statute of limitations.

Employment: San Benito Consol. Indep. Sch. Dist. v. Cruz, No. 13-20-00310-CV, 2021 WL 921793 (Tex. App.—Corpus Christi Mar. 11, 2021) (mem. op.). Maria Cruz filed an employment retaliation and age discrimination case against her former employer, San Benito Consolidated Independent School District (SBCISD), and in response, SBCISD filed a plea to the jurisdiction and motions for summary judgment. The trial court granted summary judgement on the retaliation claim but denied judgement for SBCISD for the discrimination claim. SBCISD appealed. Cruz was able to present a prima facie case of age discrimination, which shifted the burden to SBCISD to prove a legitimate, non-discriminatory reason for Cruz’s demotion. The court detailed the history of Cruz’s performance with SBCISD as shown through the lower court’s evidentiary record, and ultimately found evidence that SBCISD’s non-discriminatory reasons for terminating Cruz could be a pretext for discrimination. The court affirmed the lower court’s denial of SBCISD’s plea to the jurisdiction.

Governmental Immunity: City of Houston v. Manning, No. 14-20-00051-CV, 2021 WL 1257295 (Tex. App.—Houston [14th Dist.] Apr. 6, 2021) (mem. op.). A City of Houston fire truck was involved in a collision with appellees. Appellees filed a negligence suit, and the city sought dismissal through summary judgment on immunity grounds, which the trial court denied.

The city brought two points of appeal: (1) that the city is immune, because the fire truck’s driver has official immunity; and (2) that the trial court has no jurisdiction over the claims for negligent training, retention, and supervision. The appellate court overruled the city’s first issue. Under an official immunity defense, the driver could be immune from suit arising from actions taken in the performance of his employment, if the discretionary duties are done in good faith within the scope of the employee’s authority. The evidence establishing the driver’s “good faith” is in dispute, so the city is not entitled to a judgment as a matter of law. The court sustained the city’s second point of appeal, because negligent hiring, retention, training, and supervision of employees do not involve the operation of a motor vehicle, and thus are not cognizable claims under the Texas Tort Claims Act.

*Indicates case summaries taken largely from the work of the Law Offices of Ryan Henry, PLLC, and reprinted with permission from Ryan Henry. To sign up for the firm’s blog, go to