Recent Texas Cases of Interest to Cities

Note: Included cases are from June 11, 2023, through July 10, 2023.

Immunity: CPS Energy v. Elec. Reliability Council of Tex., No. 22-0056, 2023 WL 4140460 (Tex. June 23, 2023). This case stems from claims against ERCOT related to Winter Storm Uri.

Action was brought in two separate proceedings against the Electric Reliability Council of Texas (ERCOT)—first by CPS Energy (CPS), a municipally owned electric utility, alleging breach of contract, negligence, gross negligence, negligence per se, breach of fiduciary duty, and violations of Texas Constitution, and second, by Panda Power Companies (Panda) for fraud, negligent misrepresentation, and breach of fiduciary duty—alleging that ERCOT’s electricity capacity, demand, and reserves reports misled the power company to invest $2.2 billion in building new power plants.

ERCOT filed a plea to the jurisdiction, arguing that the claims are barred by sovereign immunity and, alternatively, that the Public Utility Commission (PUC) has exclusive jurisdiction over the claim. The trial court denied the plea.  ERCOT appealed, asserting that it is a governmental unit entitled to an interlocutory appeal from the denial of a plea to the jurisdiction. ERCOT also sought review by petition for writ of mandamus in the event it is not entitled to an interlocutory appeal. After one court of appeals panel summarily denied mandamus relief, ERCOT filed its petition for writ of mandamus in the Supreme Court to continue the alternative path to review. A different court of appeals panel then held that ERCOT is a governmental unit entitled to take an interlocutory appeal, that the PUC has exclusive jurisdiction over CPS’s claims, and that CPS’s claims should be dismissed. The Supreme Court granted review.

The Supreme Court determined that: (1) ERCOT is a governmental unit as defined in the Texas Tort Claims Act and thereby entitled to pursue an interlocutory appeal from the denial of a plea to the jurisdiction; (2) the PUC has exclusive jurisdiction over the parties’ claims against ERCOT; and (3) ERCOT is entitled to sovereign immunity.  Accordingly, in the CPS case, the court affirmed the appellate court’s judgment, dismissing CPS’s motion to stay the trial court’s temporary restraining as moot.  In the case related to Panda, the court reversed the court of appeals’s judgement and dismissed the case for lack of jurisdiction.

Emergency Management: Abbott v. Harris Cnty., No. 22-0124, 2023 WL 4278763 (Tex. June 30, 2023).  This case addresses the scope and constitutionality of the governor’s authority under the Texas Disaster Act to prohibit local governments from imposing mask requirements. 

Harris County filed suit against the governor and attorney general, alleging that the governor exceeded his authority under the Texas Disaster Act by issuing an executive order that prohibited local governmental entities and officials from requiring face coverings as part of their COVID-19 mitigation efforts and purported to suspend several laws that county officials relied on to issue such face covering requirements.  The trial court denied the defendants’ plea to the jurisdiction and granted the county’s motion for temporary injunction.  On appeal, the Austin Court of Appeals affirmed. 

The Supreme Court of Texas granted the defendants’ petition for review, and held that: (1) the county had standing to bring seek injunctive relief against the attorney general; (2) the state’s appeal was not rendered moot by executive order’s expiration; (3) the county judge was governor’s designated agent under Disaster Act; (4) the executive orders were valid exercise of the governo’’s authority under Disaster Act; and (5) the county was not likely to succeed on merits of its claim that governor lacked authority to issue the executive orders.  The court vacated the judgment of the court of appeals, dissolved the temporary injunction, and remanded the case.

(The court reached the same conclusion in the following four separate cases related to the governor’s authority to prohibit local mask mandates:  Abbott v. Jenkins, No. 21-1080, 2023 WL 4278505 (Tex. June 30, 2023); Abbott v. City of San Antonio, No. 21-1079, 2023 WL 4278501 (Tex. June 30, 2023); Abbott v. La Joya Indep. Sch. Dist., No. 22-0328, 2023 WL 4278488 (Tex. June 30, 2023); and Abbott v. Fort Bend Cnty., No. 22-1056, 2023 WL 4278491 (Tex. June 30, 2023).)

Disability Discrimination: Tex. Tech Univ. Health Scis. Ctr. – El Paso v. Niehay, No. 22-0179, 2023 WL 4278585 (Tex. June 30, 2023).  This is a case of first impression in which the court determines whether morbid obesity, without an underlying physiological disorder or condition, is an impairment under the Texas Commission on Human Rights Act (TCHRA).

Following her dismissal from medical residency program administered by Texas State University’s medical school, the medical resident filed suit against the university, asserting that she was terminated because her morbid obesity was regarded as an impairment, and alleging a claim for unlawful disability discrimination in violation of the TCHRA. The trial court denied the university’s plea to the jurisdiction and motion for summary judgment. On appeal, the court of appeal’s affirmed, and the Supreme Court granted the university’s petition for review.

The Supreme Court determined that (1) the resident’s morbid obesity was not an impairment for purposes of her TCHRA disability discrimination claim; (2) morbid obesity does not qualify as an impairment under the TCHRA absent an underlying physiological disorder or condition; and (3) there was no evidence that the resident had a disability as defined by the TCHRA.

Tort Claims Act: City of Houston v. Green, No. 22-0295, 2023 WL 4278246 (Tex. June 30, 2023). The primary issue in this case is whether the record contains evidence that a city police officer was driving “with reckless disregard for the safety of others” at the time of the accident.

A motorist brought an action against the city seeking to hold it vicariously liable for a police officer’s alleged negligence and independently liable for negligently hiring, training, and supervising the officer following a motor vehicle accident involving the officer while he was responding to an emergency call.

The Supreme Court held that the officer did not act with reckless disregard when the accident occurred, and thus, the emergency exception to waiver of governmental immunity under the Tort Claims Act applied.

Texas Medical Liability Act: City of Alvin v. Fields, No. 01-22-00572-CV, 2023 WL 4003522 (Tex. App.—Houston [1st Dist.] June 15, 2023) (mem. op.). Fields was injured when the ambulance in which she was being transported was struck by a truck at an intersection after the ambulance driver entered the intersection at a yellow light to avoid jostling Fields. Fields sued the city, claiming the city’s governmental immunity had been waived under the Texas Tort Claims Act. The city filed a plea to the jurisdiction claiming governmental immunity and a motion to dismiss under the Texas Medical Liability Act. The trial court denied both, and the city appealed.

The appellate court affirmed the trial court’s denial of the city’s plea to the jurisdiction, holding that because Fields stated she was experiencing whiplash immediately after the accident, a fact issue existed as to whether the city had actual knowledge of Fields’s claim. The appellate court reversed the trial court’s denial of the city’s motion to dismiss, holding that because the accident occurred while Fields was in an ambulance receiving care, the Texas Medical Liability Act applied to the claim, and therefore Fields would have had to file an expert report addressing standard of care, breach, and causation.

Texas Citizens Protection Act: Conrad v. Joiner, No. 01-22-00450-CV, 2023 WL 4356187 (Tex. App.—Houston [1st Dist.] July 6, 2023) (mem. op.). Joiner, mayor of Kemah, Texas, sued Conrad for defamation based on a series of critical Facebook posts, billboards, and posted signs alleging that Joiner had abused power, violated the Texas Open Meetings Act, acted ultra vires as mayor, and engaged in criminal activity. Conrad moved to dismiss the suit under the Texas Citizens Protection Act and the trial court denied the motion.

The appellate court reversed, holding that because Joiner’s claims were in reaction to Conrad’s exercise of free speech, the burden then shifted to Joiner to present evidence to show a prima facie case of defamation. Joiner had not presented evidence to show actual malice, so Conrad was entitled to dismissal of the claims against him under the TCPA.

Employment: Beebe v. City of San Antonio by & through CPS Energy, No. 04-22-00033-CV, 2023 WL 3985171 (Tex. App.—San Antonio June 14, 2023). A former employee of city-owned CPS Energy (CPS) sued CPS alleging discrimination based on race and disability, retaliation for reporting discriminatory treatment, and harassment based on national origin and disability. CPS filed a plea to the jurisdiction, which the trial court granted.

The appellate court found that: (1) the plaintiff failed to establish disparate treatment because he failed to show an example of a similarly situated coworker not being similarly fired for sexual harassment; (2) the plaintiff presented sufficient evidence to establish a prima facie case for retaliation; (3) CPS presented sufficient evidence for a legitimate, non-discriminatory explanation for the plaintiff’s termination; and (4) there was some evidence of a legitimate reason for plaintiff’s termination rather than pretext for discriminatory intent. Based on the findings, the appellate court affirmed the trial court’s order granting the plea to the jurisdiction.

Attorney’s Fees: Suarez v. Silvas, No. 04-22-00540-CV, 2023 WL 4337717 (Tex. App.—San Antonio July 5, 2023) (mem. op.). This is the third appeal in the case where the city removed councilmember Silvas for violating a charter provision and Silvas sued the city and city employees. The city and city employees filed a plea to the jurisdiction on remand the second time, claiming the trial court should dismiss all of Silvas’s claims for attorney’s fees and costs under the Texas Tort Claims Act (TTCA) against the city employee defendants and that Silavas did not have a proper Uniform Declaratory Judgment Act (UDJA) claim because her ultra vires claims were moot. The trial court denied the plea and the city and city employees appealed.

On appeal, the appellate court affirmed the denial of the plea and held that: (1) while the city is immune from Silvas’s ultra vires claim, the city employees were not because they were acting in their official capacities and therefore were not immune from attorney’s fees under the TTCA; and (2) the decision to award attorney’s fees under the UDJA is at the discretion of the trial court.

Variances/Land Use: City of Live Oak v. Lee, No. 04-23-00022-CV, 2023 WL 4338957 (Tex. App.—San Antonio July 5, 2023) (mem. op.). The city erroneously issued a building permit to a homeowner to build in violation of the city’s setback requirements. When the city received notice from the plaintiffs of the error, the board of adjustment issued a variance for the homeowner and the plaintiffs sued. The city filed a plea to the jurisdiction and the trial court denied it. The city appealed.

The appellate court found that: (1) the plaintiffs did not need to obtain a writ of certiorari because they filed their petition within ten days after the date the board granted the variance request; (2) the city was not a proper party; and (3) the city failed to raise the issue of whether attorney’s fees were proper in the plea. The appellate court affirmed the plea but the appellate court remanded to the trial court to dismiss the city.

Variances/Land Use: City of Dallas v. PDT Holdings, Inc., No. 05-22-00730-CV, 2023 WL 4042598 (Tex. App.—Dallas June 16, 2023).  In this case, PDT Holdings, Inc. (PDT) sought to build a duplex on its property in Dallas. After submitting plans showing the building heights and being issued permits to build, PDT was later cited by a city inspector and issued a stop work order because the duplex’s parapet height exceeded the city’s 36-foot building height restriction. After correcting the violation, the city approved PDT’s amended building plans but later issued a second stop work order because the duplex’s overall height did not comply with city’s Residential Proximity Slope (RPS) ordinance which limited the height to 26 feet. PDT later applied for a variance from the Board of Adjustment on three separate occasions but was denied. Ultimately, the trial court ruled in favor of PDT barring the city’s enforcement of the RPS ordinance on the basis of the equitable estoppel doctrine. The city appealed thereafter.

Reversing the trial court, the court of appeals held that the case did not meet the threshold of “an exceptional case where manifest justice demanded departure from the general rule precluding estoppel against a municipality.” Although there were factors that weighed in favor of estoppel, PDT failed to establish the doctrine’s essential elements including a showing of affirmative misrepresentation on the part of the city and reasonable reliance by PDT on the misrepresentation. The court concluded that nothing in the record suggested the city deliberately calculated to induce PDT’s reliance. Rather, the city only mistakenly issued the building permits, and PDT’s reliance on those permits was not reasonable because PDT was responsible for reviewing all applicable ordinances, including the RPS ordinance, when it first applied for a building permit. As a result, the court reversed the trial court’s judgment and held that PDT was not entitled to relief on the basis of the equitable estoppel doctrine.

Tort Claims Act: Barker v. Sam Houston State Univ., No. 06-22-00076-CV, 2023 WL 4113275 (Tex. App.—Texarkana June 22, 2023). Plaintiff filed a suit against her employer when she was injured by a vehicle driven by another employee. The university filed a plea to the jurisdiction and the plaintiff appealed. The appellate court found that although the plaintiff was going to lunch or running an errand when injured and not on the company’s clock, her actions were so closely connected to her employment to render it an incident thereto. Therefore, her exclusive remedy was workers’ compensation and she could not sue under the Texas Tort Claims Act. The appellate court affirmed the trial court’s judgment.

Takings: ATI Jet Sales, LLC v. City of El Paso, No. 08-21-00208-CV, 2023 WL 4370471 (Tex. App.—El Paso July 5, 2023). The City of El Paso filed an original application for a tax warrant against ATI Jet Sales in July 2020 due to tax delinquency for the years 2017 to 2019, amounting to $487,271.67. Consequently, Aircraft N277AL was seized. The city voluntarily returned Aircraft N277AL and moved to nonsuit ATI Jet Sales from the warrant case. In April 2021, ATI Jet Sales filed a lawsuit against the city alleging an unlawful taking and seeking a declaratory judgment that the seizure was unlawful, and the city filed a plea to the jurisdiction. The trial court dismissed the case due to lack of jurisdiction. ATI Jet Sales appealed, challenging the city’s plea to the jurisdiction regarding the collection of taxes, which ATI Jet Sales claimed amounted to an unlawful taking by the city. ATI Jet Sales also argued that the city exceeded its statutory authority, thereby waiving its governmental immunity. The crux of the appeal was jurisdictional, centering on whether the city acted lawfully in its tax collection practices, alleging that the city illegally seized property owned by one taxpayer, the entity ATI Jet West, in satisfaction of delinquent taxes owed by another taxpayer, ATI Jet Sales. The court disagreed, finding that inaccuracies on the appraisal roll did not absolve ATI Jet Sales of its tax liability and that the city acted within the bounds of its taxing authority. Additionally, the court found that ATI Jet Sales failed to raise a fact issue as to whether the city acted lawfully in the collection of taxes, which defeated its takings claim and its governmental-immunity waiver.

Tort Claims Act: City of Houston v. Flores-Garcia, No. 14-21-00680-CV, 2023 WL 4196541 (Tex. App.—Houston [14th Dist.] June 27, 2023) (mem. op.). Kevin Lancaster, a Senior Plant Operator at the Houston Public Works Department, ran a stop sign while driving a city-owned car, and hit Flores-Garcia’s vehicle. On the day of the accident, Lancaster stopped at a convenience store near the collision site for unknown reasons, but stated that it was not related to his job duties. He also could not recall his destination after leaving the store when the accident occurred. Flores-Garcia sued the city for negligence, alleging that Lancaster failed in a number of respects concerning safe driving and that the city’s immunity was waived under the Texas Tort Claims Act (TTCA) due to Lancaster acting within the scope of his employment during the collision. The city contested the claim, arguing through a motion for summary judgment that the limited waiver of governmental immunity under the Texas Tort Claims Act did not apply, because Lancaster was not acting within the scope of his employment when the accident happened. The trial court denied the city’s motion, and the city appealed.

A governmental unit is typically not liable for the torts of their agents, unless there is a constitutional or statutory waiver of immunity. The TTCA provides such a waiver, allowing for a governmental unit’s immunity to be waived in cases of personal injury arising from the negligent use of a motor vehicle by an employee acting within the scope of their employment and when the employee would be personally liable under Texas law. The determination of whether a person is acting within the scope of their employment depends on whether the act causing the injury was in furtherance of the employer’s business and for the accomplishment of the objective for which the employee was employed. In cases where a vehicle involved in a collision is owned by the driver’s employer, it is generally presumed that the driver was acting within the scope of their employment; however, evidence of the driver being on a personal errand at the time of the accident can rebut this presumption. An action is considered to be outside the scope of employment if it occurs as part of an independent course of conduct not intended by the employee to serve any purpose of the employer. Nonetheless, mixed motives do not necessarily exclude an action from being within the scope of employment if the action also serves a purpose for the employer. In the current case, Lancaster’s regular work duties included driving a city-owned vehicle to inspect water complaints and flush hydrants. The city wanted the court to infer that Lancaster was still deviating from his duties after leaving the convenience store, but the court pointed out that they must resolve any doubts in favor of the nonmovant during a motion for summary judgment. The court concluded that the evidence did not definitively establish that Lancaster was on a personal errand at the time of the accident. As such, the court rejected the city’s sole issue on appeal, upholding the trial court’s decision to deny the city’s motion for summary judgment.