Recent Cases of Interest to Cities

Note:  With one exception, included cases are from May 11, 2016 through June 10, 2016.

Water:  United States Army Corp of Engineers v. Hawkes Co., Inc.,  No. 15–290, 2016 WL 3041052 (May 31, 2016).  In this case, the United States Supreme Court ruled unanimously that an approved jurisdictional determination that property contains “waters of the United States” may be immediately reviewed in court. Per the Clean Water Act, “waters of the United States” (WOTUS) are federally regulated. Property owners may seek an approved jurisdictional determination (JD) from the U.S. Army Corp of Engineers definitively stating whether such waters are present or absent on a particular parcel of land. Per the Administrative Procedures Act judicial review may be sought only from final agency actions. Per Bennett v. Spear, 520 U.S. 154 (1997), agency action is final when it marks the consummation of the agency’s decision making process and when legal consequences flow from the action. The Court concluded that an approved JD is a final agency action subject to court review because it meets both conditions laid out in Bennett. The Corp didn’t argue that an approved JD is tentative; its regulations describe approved JDs as “final agency action” valid for five years. Approved JDs give rise to “direct and appreciable legal consequences,” the Court reasoned, because the Corp and the EPA (through a long standing agreement) are bound by them for five years. So per an approved JD the two agencies authorized to bring civil enforcement proceedings under the Clean Water Act, practically speaking, grant or deny a property owner a five-year safe harbor from such proceedings.**

Asset Forfeiture:  State of Texas v. One (1) 2004 Lincoln Navigator, No. 14-0692, 2016 WL 3212490 (Tex. June, 10, 2016).  In this civil-forfeiture case, police officers arrested Miguel Herrera and seized his Lincoln Navigator. After finding drugs during an inventory search of the vehicle, the state filed a notice of seizure and intended forfeiture under Chapter 59 of the Code of Criminal Procedure, claiming that the vehicle was “contraband” under the statute.  Herrera argued that the stop leading up to the arrest was unlawful and therefore any evidence obtained pursuant to the subsequent search should be excluded in the civil-forfeiture proceeding. The trial court agreed, finding the vehicle search to be illegal and “denying the seizure.”

The court of appeals affirmed, holding that:  (1) Article 59.03(b), Code of Criminal Procedure, precludes the state from initiating a civil-forfeiture proceeding based on an illegal search; (2) the stop leading up to the arrest was unlawful because the officers did not have reasonable suspicion; and (3) Herrera was entitled to relief because, after exclusion of the evidence found in the vehicle, the state was left with no evidence that the vehicle was contraband.

The Texas Supreme Court granted review to decide whether an illegal seizure requires exclusion in a Chapter 59 civil-forfeiture proceeding. The court held that it does not and reversed and remanded the case back to the trial court. The court went through the Fourth Amendment, the Texas statute exclusionary law and the Texas constitutional exclusionary law and analyzed whether these laws impact Chapter 59 of the Code of Criminal Procedure.  The court stated that, based on case law, the exclusionary law only applies to criminal proceeding as deterrence in a way that bars the prosecution from introducing evidence obtained by way of a constitutional violation.  The civil forfeiture statute is a civil proceeding that the legislature intended to be remedial in nature and not a form of punishment. The civil forfeiture proceeding does not require a determination that a person committed a crime, but only requires that the state prove by a preponderance of the evidence that the property is contraband.

Also, the court stated that the civil forfeiture statute does not effectively import an exclusionary rule. Even though the Code of Criminal Procedure does contain an exclusionary rule, it only applies to criminal proceedings.  If the legislature intend for the exclusionary rule to apply to the civil forfeiture statute, the legislature could have done so. Therefore, the court held that neither the Fourth Amendment nor Chapter 59 of the Code of Criminal Procedure provides for exclusion in Chapter 59 civil forfeiture proceedings. Nor does Chapter 59 require the state show lawful seizure as a procedural prerequisite to commencing a Chapter 59 proceeding.

Extraterritorial Jurisdiction: Town of Lakewood Village v. Bizios, No. 15-0106, 2016 WL 3157476 (Tex. May 27, 2016) (mem.op.).  The Supreme Court of Texas was presented with the question of whether a type A general law city has authority under state law to impose building codes in the extraterritorial jurisdiction (ETJ). The court held that a general law city does not have the authority to require building permits in its ETJ.

The dispute centered on the construction of a home worth over $1 million in the town’s ETJ.  The owner refused to seek a permit from the town, and the town asked the court to force the owner and his builder to comply.  The Court’s refusal to uphold the town’s requirement is, like that of the appeals court, based on relatively simple logic:  the legislature has not expressly granted the authority to general law cities.

The Court stated that, because a general-law municipality only “possess[es] those powers and privileges that the State expressly confers upon [it]”…a general-law municipality cannot exercise its powers outside its corporate limits unless the Legislature expressly or necessarily grants it such authority. We cannot judicially confer authority on general-law municipalities, even if we believe there are compelling public policy reasons for doing so.”

Groundwater Leases: Coyote Lake Ranch, LLC v. City of Lubbock, No. 14-0572, 2016 WL 3176683 (Tex. May 27, 2016).  This case involved the City of Lubbock’s purchase of Coyote Lake Ranch’s (ranch) groundwater to help supply its residents with water. The city announced plans to increase the amount of water extracted from the ranch in 2012. The ranch objected to the proposed plan and sued to enjoin the city from proceeding with its plan.

The City of Lubbock argued that it had full rights under the deed to pursue its water extraction plan. Additionally, the city argued that the law imposes no duty on groundwater owners, as it does mineral owners, to accommodate the surface owner. The trial court granted the ranch’s temporary injunction order, which the city appealed.

At the court of appeals, the City of Lubbock argued that its deed with the ranch gave it the right to proceed as planned, occupying the ranch, mowing the grass, and drilling wells, as necessary. The city further argued that the accommodation doctrine does not apply to groundwater owners. The court of appeals reversed the trial court’s decision and dissolved the temporary injunction. The Texas Supreme Court granted the ranch’s petition for review.

The Texas Supreme Court recognized that parties have the right to contract, which extends to a mineral owner’s use of land. However, the court pointed out that the city’s deed “leaves unclear whether the City can do everything necessary or incidental to drilling anywhere, as it claims, or only what is necessary or incidental to fully access the groundwater, as the Ranch argues.”

The court looked at mineral rights cases beginning with the 1862 decision in Cowan v. Hardeman noting that mineral and surface estates must exercise their respective rights with due regard for the other’s rights. The court stated that this principle underlies the accommodation doctrine that the court announced in 1971 in Getty Oil Co. v. Jones. Recognizing that the court has applied the doctrine only when mineral interests are involved, the court concluded the dispute over the city’s right to use the ranch was much the same as the disagreement between Getty Oil and Jones. The groundwater estate is dominant for the same reason the mineral state is: both are benefitted by an implied right to the reasonable use of the surface and the surface estate must allow the exercise of the implied right.

The similarities between mineral estates and groundwater estates led the court to extend the accommodation doctrine to resolve conflicts between a severed groundwater estate and the surface estate. The court affirmed the court of appeals’ reversal of the overly broad temporary injunction, though, and remanded the case to the trial court for further proceedings.

Importantly, the court distinguished that the accommodation doctrine applies to conflicts “that are not governed by the express terms of the parties’ agreement,” which seems to leave room for cities to contract around the application of the accommodation doctrine. Cities with current leases of groundwater rights will want to review these leases to ensure that the lease speaks to the rights of the city when accessing groundwater from a surface estate.

Condemnation: In re Lazy W District No. 1., No. 15-0117, 2016 WL 3157559 (Tex. May 27, 2016).  This original mandamus proceeding involves two governmental entities, one of which petitioned for condemnation of a water pipeline easement across the other’s land.

The Tarrant Regional Water District (water district) supplies water to some two million Texans across 11 counties. The water district and the City of Dallas agreed to build a 150-mile pipeline to transport water owned by the city in Lake Palestine. Lazy W District No. 1 (Lazy W) is a municipal utility district which owns land over which an easement is necessary to run the pipeline. Politics exist behind the scene which the court discussed but which is unnecessary for this summary. The water district petitioned for condemnation in the district court. The district court appointed three special commissioners to determine the value of the proposed easement. When the Lazy W learned of the order it filed a plea to the jurisdiction, asserting its immunity as a governmental entity and requesting that the appointments be vacated and the petition dismissed. Normally, the trial court is not to interfere in the commissioners’ proceedings and does not become involved again until the commissioners file their award.  The district court vacated its appointment and declined to proceed with anything else before hearing and ruling on the plea. The water district sought mandamus relief in the court of appeals. That court held that “the trial court was without jurisdiction to refuse to appoint special commissioners.” Lazy W appealed.

The Texas Supreme Court went through Chapter 21 of the Property Code regarding condemnation and the procedures, noting the administrative nature of the commission and the judicial appeal aspects of the court.  The water district contended that the trial court cannot rule on the Lazy W’s plea to the jurisdiction until the commissioners issue their award.  However, the court disagreed holding “Section 21.014 is certainly mandatory, but it is not restrictive. It requires the court to appoint commissioners, but it does not forbid any other action.” The court went through different instances where it is proper to challenge the jurisdiction of the trial court to appoint commissioners. “Courts always have jurisdiction to determine their own jurisdiction.”  “We have never held that a trial court in a condemnation case is powerless to determine its own subject matter jurisdiction before appointing commissioners.” “We do not hold that a trial court must make an early ruling in every situation, only that the trial court did not abuse its discretion in determining to do so here.”  However, the court was quick to add it expressed no view on whether the Lazy W is immune from suit and expressly declined to address that issue here.*

Animal Control:  Lira v. Greater Houston German Shepherd Dog Rescue, Inc., No. 14-0964, 2016 WL 1267745 (Tex. April 1, 2016).  This case involved a dog that escaped from its owner’s home with no collar or microchip.  The dog ended up in the City of Houston’s animal control facility.  After the “hold period” in the city’s ordinance, the dog was transferred to a rescue organization.  The organization then placed the dog within a foster home.

Sometime later, the original owner learned that the dog was in foster care, and asked the rescue organization to return the dog to her.  When the organization refused, she sued to get her dog back.

The court concluded that “[p]utting an animal down is arguably an act so inconsistent with the rights of the owner as to imply a divestment of ownership, but that…did not apply because [this dog] was picked up without tags and was not euthanized.”  Such a statement appears to indicate that the court may question the practice of euthanasia of stray animals in the custody of a city, especially absent clear ordinance language divesting the ownership rights to the animal.

Governmental Immunity: County of Galveston v. Triple B Services, LLP, No. 01-15-00565-CV, 2016 WL 3025261 (Tex. App.—Houston [1st Dist.] May 26, 2016). This is a contractual immunity case involving a road construction project where the First District Court of Appeals affirmed-in-part and reversed-in-part the denial of a plea to the jurisdiction.

Triple B Services, LLP, filed a lawsuit against Galveston County in a dispute over a road-expansion project. Under the contract, the county was responsible for moving certain utilities. Although Triple B’s plans for the construction project anticipated that the county would move the utilities by a particular date, the county did not move the utilities until almost a year later.  Triple B contends that it incurred additional costs to timely complete the project as a direct result of the county’s alleged delay in moving the utilities. After completing the expansion on time, Triple B sued the county for breach of contract. The county filed a plea to the jurisdiction which the trial court denied. The county appealed.

The legislature has provided a limited waiver of immunity for breach-of-construction-contract lawsuits against a county. Tex. Loc. Gov’t Code § 262.007. Although Triple B’s expert testified to costs that Triple B incurred “as a direct result of County-caused delays in completing utility adjustments,” he explicitly denied that the damages were “delay damages” as understood in construction law. He distinguished between “delay” damages and “disruption” damages. The county contends that the phrase “owner-caused delays” in Section 262.007(b)(1) of the Texas Local Government Code limits the statute’s application to “delay damages,” and, therefore, does not include “disruption damages.” And, because Triple B’s expert testified that Triple B was not seeking “delay damages,” the county asserts it remains immune. Further, the county asserts the damages Triple B alleges are consequential damages, for which immunity is not waived. However, the court disagreed and held Section 262.007 allows a claim for disruption damages against a county if the disruption damages directly result from the county’s delay in performing its contractual obligations. Based on the limited record, the court held the alleged damages could also be the “direct result” of the county’s failure to timely act. Further, the Texas Prompt Pay Act (PPA) applies solely to contracts between a vendor and a government entity. Based on the plain text of Section 262.007, a county may be sued for late payment and “interest as allowed by law.” The interest sought by Triple B is “interest allowed by law”—namely, allowed by the PPA—for which immunity is waived. Finally, while Chapter 262 waives immunity for attorney’s fees, Triple B failed to properly plead a basis for receiving such fees. The statute is a waiver of immunity and not a basis for a substantive claim for attorney’s fees. As such the plea should have been granted as to such fees.*

Zoning/Regulatory Taking: FLCT, Ltd. v. City of Frisco, No. 02-14-00335-CV, 2016 WL 3029514 (Tex. App.—Fort Worth May 26, 2016).  FLCT, Ltd. (FLCT) and Field Street Development I, Ltd. (Field) are two partnerships that own adjacent property in Frisco. FLCT’s tract is located on the corner; Field’s tract is located directly east of FLCT’s. In both 2006 and 2007, the city’s zoning ordinance permitted property owners in the C-1 district to sell beer and wine “by right.” However, no public school was located within three hundred feet.  After FLCT and Field submitted a preliminary site plan for an expanded facility, Frisco Independent School District (Frisco ISD) began negotiating with them to purchase the southernmost part of FLCT’s and Field’s tracts for an elementary school. Before they closed on the sale to Frisco ISD in 2009, they filed an amended preliminary site plan application with the city. The city council then amended the zoning ordinance. FLCT and Field (owners) then sold a portion of the property to 7-Eleven which conditioned the sale on the ability to obtain all permits (including selling beer and wine). The city asserted 7-Eleven could not sell alcohol at that location. The city then went through several ordinance amendments to adjust and prohibit alcohol sales near churches, schools, and hospitals. Eventually, 7-Eleven sued under Section 11.37(d), Texas Alcoholic Beverage Code, seeking an order requiring the city secretary to make the statutory certification. Tex. Alco. Bev. Code Ann. § 11.37(d). The city secretary certified the area was in a dry region. Owners submitted a vested rights petition to the city under Chapter 245 of the Texas Local Government Code asserting they began developing the property at a time when alcohol sales were permitted so their rights vested at that moment to forever be able to sell alcohol at that location. The trial court granted the city’s plea to the jurisdiction and the owners appealed.

First, the court held Chapter 245 provides the authority for a declaratory judgment action to enforce a landowner’s rights. Owners are seeking a determination of the existence and extent of their rights to develop and use the property.  As a result, the plea should not have been granted as to the Chapter 245 claims. Next, the court analyzed the Texas Alcoholic Beverage Code (Code) and held not only does it permit a city to enact distance regulations, it also allows the city to grant variances as to enforcement of those distance requirements. Accordingly, the code does not pre-empt the city’s enactment and enforcement of the distance requirements, which means the owners are not limited to the relief under the Alcoholic Beverage Code. Here, owners have raised both a constitutional claim and a vested property rights claim in the form of a declaratory judgment, which is specifically authorized by statute. They are not seeking to appeal any action by the Texas Alcoholic Beverage Commission or any action in connection with a pending permit, so again, no pre-emption. The Code does not provide the exclusive remedy for owners’ claims based on the city’s enforcement of the distance requirements with respect to the property. Next, the owners contend the city’s zoning changes are void as they did not provide individual notice to property owners. However, such notice is only applicable for changes in zoning classifications, not other types of zoning changes. The court analyzed the term “classification” and held the legislature intended that if a city (either through its zoning commission or city government) wishes to consider a zoning district or boundary change to a discrete piece of property, it is to ensure that owners of surrounding properties that would be affected by the change have notice and an opportunity to participate in any hearing regarding that change. Here, the city’s December 2012 zoning ordinance purported to place restrictions on the types and places where businesses could sell alcohol within five different districts where alcohol sales were then permitted. Thus, this was not a rezoning of classification applicable only to the property itself; the property was still included in the C-1 district after the passage of the ordinance. In other words, the city’s interpretation is correct and this was not a “classification” change requiring individual notice. Next, the city contended that it could not issue a “permit” for alcohol so no vested right applies to its sale. However, Chapter 245 also applies to certificates. The certificate required by the city secretary qualifies. Further, the owner’s claims are not predicated on the continued operation of a particular type of business but on use restrictions and, thus, they are not excluded on that basis from Section 245.001’s definition of project. The court agreed with owners’ contention that the amended ordinance affected the C-1 district by imposing additional restrictions on alcohol sales that had not previously been imposed. Accordingly, the owners’ pleadings and evidentiary facts show that the exemption in Section 245.004(2)(i.e. no vested right for certain zoning classifications) does not preclude their remaining Chapter 245 claims. Next the court concluded that the preliminary site plan originally applied for contained sufficient notice it intended to include alcohol sales. Further, a regulatory taking can occur when government action unreasonably interferes with a landowner’s use and enjoyment of the property. After analyzing the facts and a detailed analysis of the legal standards, the court held facts were sufficiently pled and established to confer jurisdiction for a regulatory taking claim. As a result, the trial court order granting the plea is affirmed-in-part, reversed-in-part and remanded.*

Governmental Immunity: City of Justin v. Wesolak, No. 02-15-00379-CV, 2016 WL 2989568 (Tex. App. Fort Worth—May 19, 2016) (mem. op.). This is a declaratory judgment and takings claim case where the Fort Worth Court of Appeals reversed the denial of the city’s plea to the jurisdiction and dismissed the claims.

Wesolak owns two adjoining tracts of land in the city, and built a fence that crossed both. Due to platting and ordinance restrictions the city opposed the fence. Wesolak built the fence anyway. The city issued eight citations, primarily asserting the fence was a “building” and in a prohibited location. Wesolak ultimately pled no contest to the citations and paid $6,528.00 in fines. Wesolak sued for a declaratory judgment that the fence did not violate any ordinances and brought a takings claim. The city filed a plea to the jurisdiction which was denied. The city appealed.

The court first determined that since no party was challenging the constitutionality of an ordinance or statute, the Texas Attorney General was not required to be served under Texas Civil Practice and Remedies Code Section 37.006(b).  Wesolak was not seeking to hold the ordinance unconstitutional, but was instead arguing the fence is not a “building” under the code definition. Next, under a declaratory judgment action, it is “…not enough for a litigant to challenge the actions of a governmental entity under a statute, ordinance, contract, or franchise; the validity of the statute, ordinance, contract, or franchise itself must be challenged for governmental immunity to be waived.”  Since Wesolak’s true intent was to have the city follow a certain definition under the ordinance, he should have brought an ultra vires suit against an official. The city remains immune. Additionally, in a footnote, the court holds the officials could not be sued either since Wesolak pled guilty to the criminal charges. “A civil court simply has no jurisdiction to render naked declarations of rights, status, or other legal relationships arising under a penal ordinance.” As to the takings claim, Wesolak’s takings-claim paragraph fails to allege that the city intentionally performed any acts in the exercise of lawful authority or that the city’s alleged taking was for public use.  “To the contrary, Wesolak contends that the City was acting outside of its lawful authority and that the City’s taking led to a private—i.e., not public—easement being imposed on his land.” Such pleadings negate jurisdiction. The plea should have been granted.*

Utilities: Railroad Comm’n of Texas v. Gulf Coast Coalition of Cities, No. 03-14-00302-CV, 2016 WL 3136897 (Tex. App.—Austin May 31, 2016) (mem. op.).  This is an appeal by the Texas Railroad Commission (Commission) and CenterPoint Energy (CenterPoint) following the district court’s decision to reverse and remand the Commission’s final order, significantly reducing Gulf Coast Coalition of Cities’ (Coalition) rate-case expenses. The Coalition is comprised of cities that exercise original jurisdiction over the rates and charges of retail gas utilities, including CenterPoint.

The case arises out of CenterPoint’s 2011 COSA-2 (Cost of Service Adjustment tariff) filings. Centerpoint is required, per an agreement with the Coalition, to annually propose adjustments to its customer charges for natural-gas distribution services in the Texas Coast Division by making calculations according to the COSA-2 tariff. The Commission approved CenterPoint’s 2011 proposed adjustments to the rates, a system-wide increase in revenue of over $800,000. The new COSA-2 rate became effective August 1, 2011 for areas under the Commission’s original jurisdiction.

The Coalition denied CenterPoint’s 2011 proposed adjustments. CenterPoint filed a petition for review with the Commission, which has appellate jurisdiction over the orders and ordinances of cities exercising original jurisdiction. In its final order, the Commission approved CenterPoint’s requested COSA-2 adjustments and awarded rate-case expenses to both CenterPoint and the Coalition.

The Commission reduced the Coalition’s requested rate-case expenses based on its determination that 40% of the adjustments to CenterPoint’s 2011 request, proposed by the Coalition, were “irrelevant” and “unnecessary.” The Commission found that the Coalition had presented ten issues that required an adjustment and that four were unnecessary because CenterPoint’s cost-of-service calculation no longer included costs associated with those issues. The Commission used three different ways to calculate unnecessary expenses; all three indicated that 40% of time spent by the Coalition’s attorneys was on issues no longer relevant to the proceeding. Accordingly, the Commission reduced the Coalition’s rate-case expenses by 40% of the Coalition’s total actual expenses.

The Commission found that CenterPoint incurred 20% of its expenses in litigating the four irrelevant issues. Accordingly, the Commission also reduced the Coalition’s rate-case expenses by 20% of CenterPoint’s total actual expenses.

The Coalition sued for judicial review of the Commission’s final order regarding the reduction in the Coalition’s rate-case expenses alleging that the Commission acted arbitrarily and capriciously by reducing the Coalition’s rate-case expenses.

The district court found that the Commission acted within its authority to disallow the Coalition’s rate-case expenses. But the court reversed and remanded the issue of the amount of the disallowance to the Commission for further proceedings.

The Commission and CenterPoint appealed, contending that that Commission acted within its discretion to disallow expenses for duplicative issues that were irrelevant and unnecessary and that evidence supports the Commission’s decision to reduce the Coalition’s rate-case expenses by the amount determined in its original, final order.

The Austin Court of Appeals stated the Commission, as an administrative agency, has broad discretion. The court presumes that the Commission makes decisions supported by substantial evidence. So, the Coalition has the burden of proving otherwise, a very heavy burden that the Coalition did not meet. The Commission has promulgated a rule that addresses its evaluation of rate-case expenses. The court concluded that the Commission followed its rule, reviewed the evidence on both sides, and made a determination that the Coalition incurred expenses unnecessary and irrelevant to the proceeding. The Commission further provided substantial evidence supporting the Commission’s reduction in the Coalition’s rate-case expenses by an exact percentage.

The court concluded that the Commission acted within its discretion by disallowing 40% of the Coalition’s rate-case expenses. Accordingly, the appellate court reversed the district court’s judgment on the rate-case-expense issue and rendered judgment reinstating the Commission’s full final order.

Tort Claims Act: City of Austin v. Frame, No. 03-15-00292-CV, 2016 WL 3068379 (Tex. App.―Austin May 27, 2016) (mem. op.). This is a recreational use personal injury case where the court of appeals reversed the denial of the city’s plea to the jurisdiction and dismissed the case.

Rosales jumped the curb and drove onto a hike-and-bike trail. In so doing, his vehicle and debris struck and killed Colonel Griffith and injured Pulido. The appellees (the estate and Pulido) sued the city for, among other things, failure to construct a guardrail or barrier for a known danger, which was allegedly a failure to carry out a ministerial act. The city filed a plea to the jurisdiction, which was denied. The city appealed.

The sole issue on appeal is whether the appellees’ allegations concern discretionary roadway design, as the city contends, or a negligent failure to implement a previously formulated policy, as the appellees contend. Texas courts have generally found that actions and decisions implicating social, economic, or political considerations are discretionary while those that do not involve these concerns are operational- or maintenance-level. The court analyzed the facts and policies alleged. It held that even if the city had a policy to fix identified hazards, “. . . it does not necessarily follow that the City’s failure to address this particular hazard was negligent policy implementation for which immunity is waived. The policy that the appellees describe does not mandate the construction of a guardrail or barrier with sufficient precision to make that action nondiscretionary. . . . Rather, it requires the City to balance social and economic concerns and devise a plan to address each specific identified hazard. This demands a level of judgment . . .” which equates to discretionary actions.  Further, even if the city had made a specific decision to modify the area, “. . . immunity does not vanish where a governmental entity has decided to change the design of a public work but has not yet implemented that change.”  The plea should have been granted.*

Civil Service: Gish v. City of Austin, No. 03-14-00017-CV, 2016 WL 2907918 (Tex. App.―Austin May 11, 2016) (mem. op.). This is a Civil Service Act case where the Third Court of Appeals reversed the granting of the city’s plea to the jurisdiction and remanded the case.

Michelle Gish was indefinitely suspended from her job with the City of Austin Police Department (APD). She was one of several officers who secured a suspect to a gurney following a chase and struggle. The suspect spat on Gish, she slapped the suspect, and APD officer Jose Robledo pulled Gish away. She was suspended after an inquiry. Robledo was also suspended for being untruthful during the investigation into Gish.  She appealed that decision to a hearing examiner.  The examiner issued an opinion in Robledo’s case after Gish’s hearing (but before issuing an opinion), and the city discussed and attached the Robledo opinion to its post-submission brief for the hearing examiner in Gish’s case.  The hearing examiner then affirmed Gish’s suspension. She appealed to the district court, which granted the City of Austin’s plea to the jurisdiction and dismissed her case.

By choosing a hearing examiner, Gish waived her right to appeal to the judicial system unless the hearing examiner “was without jurisdiction or exceeded [his] jurisdiction or [] the order was procured by fraud, collusion, or other unlawful means.” The Third Court of Appeals has determined that a hearing examiner or commission’s consideration or acceptance of evidence outside of the hearing shows procurement of the decision by “unlawful means.” Steubing v. City of Killeen, 298 S.W.3d 673, 674-75 (Tex. App.—Austin 2009, pet. denied).  The court held that “[a]ny evidence received outside the bounds set by the statute is illegal, and destroys any presumption that the commission’s order is valid.” The city contends the Robledo opinion was presented to the examiner as legal precedent or authority, not as evidence. However, the city recounted testimony citing the treatment of Robledo and did so “to rebut evidence that Gish received disparate treatment, not simply as legal precedent.” Further, the failure of Gish to object to the submission of the Robledo opinion during the hearing did not resolve any controversy over its post-hearing submission, so the issue is not moot.  By submitting the Robledo opinion in a post-submission brief to the hearing examiner, the city created a fact issue on whether the examiner’s opinion was obtained through unlawful means.  This fact issue renders the granting of the plea invalid. The case is remanded for further proceedings.*

Employment Law: McEnery v. City of San Antonio, No. 04-15-00097-CV, 2016 WL 3085923 (Tex. App.―San Antonio June 1, 2016) (mem. op.). This is an appeal from a trial court’s order confirming an arbitration award that denied McEnery’s grievance against the City of San Antonio. The court determined the matter was moot.

McEnery took a civil service promotional exam for district chief that consisted of a written exam and practical exam. McEnery passed the written examination but only part of the practical. McEnery filed a grievance, alleging the assessment center portion of the exam was not given in accordance with Chapters 143 and 174 of the Texas Local Government Code and the collective bargaining agreement (CBA). Thereafter, McEnery’s grievance was arbitrated and the arbitrator denied McEnery’s relief, finding “there was no convincing evidence or testimony that the test given was faulty or flawed. . . .”  McEnery then filed suit.  After a bench trial, the trial court rendered judgment denying all of McEnery’s relief.

The San Antonio Court of Appeals held a case is moot when a court’s action on the matter would not have any practical legal effect on the controversy. McEnery asked the trial court to vacate the arbitration award and order of the city to permit him to retake the assessment center portion of the exam. However, it is undisputed McEnery was promoted to district chief during the pendency of this suit.  McEnery’s case no longer presents a live controversy as a result of his promotion. McEnery argued his promotion to district chief does not moot the appeal because his request to allow his colleagues to retake the exam and his request for back-pay are still pending and justiciable.  However, a review of the record demonstrated that neither were sought by McEnery during arbitration. Those were added in the litigation. The limited scope of the judicial review does not permit such relief. The case is therefore moot.*

Building Permits: City of Helotes v. Continental Homes of Texas, LP, No. 04-15-00571-CV, 2016 WL 3085924 (Tex. App.—San Antonio June 1, 2016) (mem op.).  Continental Homes (Continental) purchased a tract of land in order to develop a subdivision (Wildhorse Subdivision). The land was within the City of San Antonio’s extraterritorial jurisdiction (ETJ). San Antonio released a portion of its ETJ to the City of Helotes. The City of Helotes then adopted and codified Section 18-1 of its Building Code, titled “Applicability of Building Regulations in Extraterritorial Jurisdiction.” In this section, Ordinance 503A, enacted April 2013, it provides that the City of Helotes may enforce its building regulations within its ETJ. Ordinance 505, enacted June 2013, expanded the ETJ boundary of the City of Helotes to include the land released by San Antonio which encompassed Wildhorse Subdivision. Following the adoption of these city ordinances, the city demanded that Continental obtain and pay for building permits and inspections of any construction. Continental complied under protest and then filed suit against the city on November 5, 2013.

Under state law, a city’s ETJ can be up to one mile from the city’s corporate boundary. The city’s ordinance attempted to include portions of Continental’s property that was more than one mile from the city’s corporate limits. The trial court rendered this ordinance void and ordered the city to immediately cease and desist from enforcing or attempting to enforce any city regulations (including building regulations) within the portions of property more than one mile from the city’s corporate limits. The court ordered the city to return to Continental over $200,000 in fees improperly collected for building permits and inspections.

Continental alleged that, under state law, a city’s authority to regulate property development in its ETJ is limited to the platting and subdivision of land which does not include the payment of fees and permits and inspections. The trial court granted Continental’s multiple-ground motion for summary judgment on its remaining requested declaratory and injunctive relief and denied the multiple-ground motion for summary judgment filed by the city. The trial court’s final judgment did not specify the reasons or grounds upon which it granted Continental’s motion nor did the court supply grounds for denying the city’s motion. The court ordered the city to pay Continental’s specified attorney’s fees and litigation expenses and awarded injunctive relief precluding the city from enforcing its building code regulations against Continental’s property.

The city’s appeal contends that Section 51.003 of the Local Government Code bars Continental’s suit regarding Ordinance 503A and 505 because they were amendments to Ordinances 83 and 83A, enacted more than 20 years ago. The validation statute acts as a statute of limitation to the filing of a suit challenging the validity of a city ordinance if the ordinance has been in effect for three years and a lawsuit has not yet been filed challenging the ordinance. The San Antonio Court of Appeals concluded that the validation statute does not bar Continental’s suit because Ordinance 503A was enacted in April 2013, Ordinance 505 was enacted in June 2013, and the suit was filed November 5, 2013, within the three year limit. The city did not provide any support to its assertion that challenges to an ordinance relate back to the enactment of the originating ordinance, thereby prohibiting challenges to an amendment that occur after three years.

The city argued that Continental failed to meet its burden of proof to satisfy summary judgment because it did not show the court that its attorney’s fees were equitable and just. The court of appeals overruled the city’s challenge to the trial court’s final judgment regarding attorney’s fees because the city failed to preserve the complaint for appellate review. The city did not challenge the trial court’s award as inequitable and unjust, nor did it present this challenge in its post-judgment motion, the city only argued that Continental was not entitled to attorney’s fees because its arguments lacked merit.

The city did not challenge the trial court’s finding that Ordinance 505 was invalid. The court of appeals was therefore bound by and followed the trial court’s ruling that Ordinance 505, extending the city’s ETJ further than one mile from its corporate boundary, was void.

The court of appeals did not determine the issue of the city’s statutory authority to enforce its building regulations within its ETJ. Due to the trial court’s determination that the ETJ can only extend one mile from a city’s corporate boundary, and because the city did not challenge this determination, Continental Homes no longer has any property within the ETJ of the city. Therefore, the court of appeals ruled the city’s statutory authority to enforce its building ordinances within its ETJ was an issue that no longer existed between the parties and overruled the issue as moot.

Substandard Structure:  Wedgeworth v. City of Amarillo, No. 07-15-00301-CV, 2016 WL 2941123 (Tex. App.—Amarillo May 17, 2016) (mem. op.).  This is a structural standards case where the Amarillo Court of Appeals reversed the trial court’s granting of a plea to the jurisdiction.

Wedgeworth owned a house damaged by fire. The property was vacated and two years later the city informed Wedgeworth she had two months to repair the structure. The city posted the property for condemnation.  The city council conducted a hearing (at which Wedgeworth appeared) and declared the structure a public nuisance. The city demolished the structure three months later. After demolition, Wedgworth sued alleging a takings claim. The city filed a plea to the jurisdiction asserting Wedgeworth did not appeal the demolition resolution to district court within 30 days as she was entitled to, therefore she did not exhaust her administrative remedies. The trial court granted the city’s plea and Wedgeworth appealed.

The court of appeals first determined its own jurisdiction, noting that the city was served but not all defendants were served. This gives the appearance the order was interlocutory. However, the court held there was no indication (other than the petition) that Wedgeworth intended to proceed against the unserved individuals, so the court treated those claims as abandoned. Therefore, the order granting the plea is final and appealable. Next, even under a takings claim, immunity from suit is not waived by a governmental unit until a claimant complies with all statutory prerequisites to suit. See Tex. Gov’t Code § 311.034. However, the 30 day window to file suit and challenge the council’s determination is created by ordinance and does not qualify as a statutory prerequisite. Therefore, the trial court was not deprived of its jurisdiction and the plea should not have been granted as to those defendants who had entered an appearance.*

Utilities:  Amarillo v. Railroad Comm’n of Texas, No. 08-14-00193-CV, 2016 WL 3020304 (Tex. App.—El Paso May 25, 2016).  In this case, the Cities of Amarillo, Channing, Dalhart, and Lubbock (Lubbock and Amarillo) sought judicial review of the Texas Railroad Commission’s (commission) decision to set gas rates on a system-wide basis.

Atmos Energy sells gas to various cities in the Texas Panhandle; Atmos refers to the areas as its “West Texas Division.”  In 2012, Atmos sought a rate increase.  The commission preemptively decided that it would set rates on a system-wide basis rather than to set them in three smaller rate jurisdictions (subsets of the West Texas Division), as the commission had historically done.

Once the commission issued a final order, Lubbock and Amarillo appealed on three issues:  (1) whether the commission violated the Administrative Procedures Act in denying them the right to present evidence on a contested issue (the issue of setting rates on system-wide basis); (2) whether the finding made by the commission germane to system-wide rates was supported by substantial evidence; and (3) whether the commission must (but failed to) provide a reasoned basis for changing its prior practice of allocating costs to the three smaller rate jurisdictions. The commission and other interested parties argue Lubbock and Amarillo have no standing to pursue the appeal.

The court concludes that it cannot set a gas utility’s rate, nor ultimately decide whether system-wide rates are, or are not, appropriate.  It could only reverse the decision below and remand the matter back to the commission for a new hearing before the commission.  However, settlement agreements reached by the interested parties would preclude any charge back for past revenues and future revenue based on agreed rates.  These settlement agreements, along with ordinances adopted by Amarillo and Lubbock approving a new rate structure, rendered the dispute moot.  The court held that the exception to the mootness doctrine that this is a “claim capable of repetition yet evading review” did not apply.  In addition, the court held that the issues are not ripe because any decision the court reaches on the procedural fairness of the rate design in the final order would only be relevant to a future rate case, and only if the case was handled in the same fashion as here.  Finally, without the potential for prospective relief, the court held that Amarillo and Lubbock lacked standing to assert their claims.  All three issues were dismissed for want of jurisdiction.

Public Information Act:  Okwo v. Harris Cnty. Dist. Attorney, No. 14-15-00289-CV, 2016 WL 2974443 (Tex. App.—Houston [14th Dist.] May 19, 2016) (mem. op.). This is a Public Information Act (PIA) case involving the Harris County District Attorney’s Office (DA).

Okwo was charged and pled guilty to assault.  After he completed his deferred adjudication, he made an oral request to the DA’s office for the prosecutor’s file. The DA produced non-privileged information. Okwo later called, then sent an email, asking why statements from the complainant were not present.  He was told the notes taken regarding meetings with the complainant were prosecutor work product and confidential. No other statements exist. Five months later, Okwo submitted a written PIA request for the complainant’s statement along with some other information. The DA called, then wrote, Okwo seeking a clarification as to whether he was seeking additional information from his original oral request. Okwo responded he was seeking the same information but wanted to require the DA to seek an attorney general’s (AG) opinion. The DA submitted an opinion request. The AG opined the witness notes were prosecutor work product and protected from disclosure. Okwo brought this mandamus action to compel production. Both sides submitted summary judgment motions. The trial court ruled for the DA.

The court first determined the oral request did not trigger the PIA. Okwo asserted the oral request did not trigger the requirements but the DA’s voluntary response brought it under the PIA. The court disagreed. Next, Okwo asserted the DA did not seek clarification in good faith but for delay purposes. The court analyzed all of the communication and uncontroverted evidence and determined the DA made a good faith request for clarification.  Therefore, the 10-day deadline for the district attorney to seek an opinion from the attorney general started to run from receipt of Okwo’s clarification.  Next, the court analyzed the information and determined the notes were prosecutor work product and protected from disclosure.  As a result, the trial court properly ruled the information was excepted from disclosure.*

Immunity: William Marsh Rice Univ. v. Refaey, No. 14-13-00235-CV, 2016 WL 2935729 (Tex. App.—Houston [14th Dist.] May 17, 2016). A man arrested by a private-university peace officer sued the officer and the university asserting various tort claims, but the court of appeals determined the officer (and by extension the university) established entitlement to official immunity.

Gary Spears is a licensed law enforcement officer.  On the night in question, Spears was on duty working for the university as a police officer.  Spears saw two cars, one behind the other, one block from campus.  Rasheed Refaey was in the driver’s seat of the second vehicle. Officer Spears believed that the vehicles were obstructing the roadway because the lane in which the vehicles were stopped was impassable. When Spears approached, the traffic light facing Refaey’s car turned green, but Refaey did not depart. Spears initiated a traffic stop, but that is when Refaey drove onto Main Street. According to Refaey, about one mile into this drive, he realized that the police officer was following him.  Nonetheless, Refaey did not pull over. Refaey’s position is that since the university is private, their police have no business pulling him over, especially since he was never technically on university property. When Refaey finally did pull over he had a heated debate with Spears. During this argument, Officer Spears noticed Refaey’s eyes were red and watery and that he had a strong odor of alcohol on his breath. Officer Spears placed Refaey in handcuffs and arrested him on suspicion of having committed the offenses of evading arrest and driving while intoxicated. Later, all charges against Refaey were dropped.  He sued the university and Spears asserting negligence, false-imprisonment, assault, and intentional-infliction-of-emotional-distress claims based on his allegedly unlawful arrest and detention. Officer Spears and the university (the Rice Parties) moved for summary judgment based on official immunity. The trial court denied the motion, and the Rice Parties appealed.

This case originally went up to the Texas Supreme Court which held licensed police officers could be entitled to official immunity while working for private universities, and remanded the case for a determination if it should apply in this case. The Fourteenth Court of Appeals first determined that private universities may employ state licensed police officers under the Texas Education Code. The summary-judgment evidence proves as a matter of law Officer Spears was performing duties assigned to him by the university and that these duties were performed in Harris County, Texas, a county in which the university has land. To be entitled to official immunity, such actions, however, must be consistent with the university’s educational mission. The statute does not require that the duties assigned be “consistent with the mission statement of the institution,” nor does the statute require that the duties be “listed in the mission statement of the institution.”  It is uncontested the university’s mission statement does not address patrolling on public streets. However, the university submitted testimony that when one of its officers investigates possible traffic violations the officer is ensuring the health and welfare of the students, faculty, staff, and visitors on campus, which furthers the university’s educational mission. Refaey’s car was stopped across the street from part of the campus. Refaey did not submit any evidence to contradict that such patrols and investigations were contrary to the university’s educational mission. Further, after analyzing the testimony, the court held the evidence proves that a reasonably prudent officer, under the same or similar circumstances, could have believed that Spears’s conduct was justified based on the information Spears had at the time. As a result, Spears established entitlement to official immunity. The university, by extension, also established immunity. The summary judgment should have been granted.*

Takings:  Sumner v. Board of Adjustment of City of Spring Valley Village, No. 14-15-00149-CV, 2016 WL 2935881 (Tex. App.—Houston [14th Dist.] May 17, 2016) (mem. op.). This is a board of adjustment and takings case where the Fourteenth Court of Appeals affirmed the dismissal of all of plaintiff’s claims.

Spring Valley Village adopted a zoning ordinance which states “[i]t shall be the responsibility of each owner . . . to maintain the drainage patterns of adjacent property owners or landowners caused either by direct diversion of water on the land or by failure to adequately accommodate new or changed drainage patterns . . . .” Sumner owns a home in Spring Valley. Sumner asserts Prichard bought the adjoining property with the intent to build a new house. The plans called for the elevation of Prichard’s property and changed the drainage.  Sumner believed Prichard’s plans would change the natural flow of surface water onto his property in violation of the zoning ordinance. The city’s building official issued a permit for an irrigation system to Prichard consistent with the site plans. Sumner filed an application with the board of adjustment (BOA) relating to the building official’s permit. The BOA unanimously rejected Sumner’s protest. Sumner sued the building inspector and the city. The trial court signed a single order dismissing all claims against the building inspector, dismissing Sumner’s petition for writ of certiorari, and granting the city’s motion for summary judgment. The trial court granted the severance to separate the city defendant’s from Prichard, making its order final.  Sumner appealed.

The court of appeals first held the trial court did not abuse its discretion in granting the severance. The claims could have been asserted as an independent lawsuit and they are not so interwoven that they involve identical facts and issues. Next, the court held Sumner did not exhaust his administrative remedies regarding the building inspector because the pleadings show Sumner was complaining about a certificate of occupancy, not an irrigation permit. Since Sumner did not timely challenge the certificate with the BOA, the trial court was without jurisdiction to consider it. Regarding the takings claim, although district courts typically are courts of general jurisdiction, the legislature has vested exclusive jurisdiction over inverse condemnation claims in the Harris County Courts at Law for this particular area of the state. Tex. Gov’t Code Ann. §25.1032(c).  The court next held Sumner did not properly allege an ultra vires claim under his pleadings. Sumner claims monetary damages for past acts which is not allowed. He further seeks control of future actions, however, such claims are not ripe as there is no indication Prichard intends or will submit any future plans. As a result, the trial court properly dismissed all claims, although the mechanism it uses was adjusted by the court of appeals (i.e. certain claims should have been dismissed under the plea, not the motion for summary judgment).*

*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 www.rshlawfirm.com.

**Case summary taken largely from the work of Lisa Soronen, Executive Director, State and Local Legal Center, and reprinted with permission from Lisa Soronen.

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