Recent Texas Cases of Interest to Cities

Note: Included cases are from April 11 through May 10, 2019.

Red Light Cameras: Garcia v. City of Willis, No. 17-0713, 2019 WL 1967140 (Tex. May 3, 2019).  In this constitutional takings challenge to red light cameras, the Texas Supreme Court held the plaintiff was required to exhaust administrative remedies before bringing his claim.

Luis Garcia sued the City of Willis on behalf of himself and “others similarly situated” who paid a civil penalty for violating a city ordinance for red light infractions caught on camera. He sought the invalidation of the ordinance, a refund, or a takings claim. The city filed a plea to the jurisdiction, which was denied by the trial court, but granted by the court of appeals. On appeal to the Texas Supreme Court, the state filed an amicus brief arguing additional authority in support of the city.

While the city did not initially challenge Garcia’s standing to bring suit, the state’s amicus brief raised the issue and the court felt it was required to address it first. After receiving notice from the city of his red-light violation, Garcia paid the requisite civil fine. He had no outstanding fines and did not assert he planned to violate red light laws in the future. And for standing purposes the court “assume[s] that [plaintiffs] will conduct their activities within the law,” barring some stated intent otherwise. Because no pending charges exist, Garcia lacked standing for prospective injunctive relief and could not be a class member of others similarly situated who have not paid the fine. However, he did have standing to seek a refund of his past payment. In this context, immunity is waived only if Garcia paid the fine under duress. Here, Garcia chose to voluntarily pay a fine and forgo administrative remedies that would have entitled him to an automatic stay of the enforcement of his fine under the Transportation Code Section 707.014(a). 

Because Garcia could have invoked this automatic reprieve from payment and challenged the notice of violation administratively but chose not to, he cannot now claim he paid his fine under duress. Therefore, the city maintained its immunity. Garcia additionally argued the fine imposed on him constitutes an unconstitutional taking because the underlying ordinance was unconstitutional and because the city failed to conduct the statutorily required engineering study. He asserted he could not challenge the constitutionality of the fine in the administrative hearing. However, the fact remained that the hearing officer might have ruled in his favor for other reasons that would moot his constitutional arguments. As a result, he failed to exhaust his administrative remedies.*

Texas Tort Claims Act:  PHI, Inc. v. Texas Juvenile Justice Dep’t, No. 18-0099, 2019 WL 1873431 (Tex. Apr. 26, 2019).  This is an interlocutory appeal in a Texas Tort Claims Act (TTCA) case where the Texas Supreme Court held jurisdiction exists to determine whether the failure to engage an emergency brake is the “operation or use” of a motor vehicle.

PHI, Inc. owned a helicopter which was located at the bottom of an incline.  When the Texas Juvenile Justice Department parked a bus at the top of the hill and exited, the bus began to roll backwards.  It struck the helicopter causing significant damage. A local police officer investigated the accident. His report states that the accident occurred after the driver placed the vehicle in park and identified as a contributing factor the failure to engage parking brake.  The driver did not dispute the police officer’s finding but later asserted the brake had been broken. PHI sued.  The Department filed a plea to the jurisdiction.  The court of appeals held no jurisdiction existed. The Court granted review.

Under the TTCA, a waiver of immunity requires that the damage “arises from” the operation or use of the vehicle and the statute requires a nexus between the injury negligently caused by a governmental employee and the operation or use of a motor-driven vehicle. The evidence the brake was not engaged is a sufficient nexus. With regards to the terms “operation” or “use,” in general courts should strive to give simple words like “operation” and “use” a simple construction, rather than converting them into terms of art intelligible only to experts in the case law. The Court held “[i]n terms of the everyday experience of driving, we think it self-evident that ensuring your car will not roll away after you leave it, including engagement of the emergency brake when necessary, is an integral part of the ‘operation or use’ of a vehicle. It seems no less a part of driving than any other act by which the driver controls the vehicle.” The Court spent the remainder of the opinion explaining why this opinion is consistent with prior caselaw in order to avoid future confusion.*

Discovery Sanctions: Medina v. Zuniga, No. 17-0498, 2019 WL 1868012 (Tex. Apr. 26, 2019).  In this case, which will be primarily of interest to litigators, the Texas Supreme Court held the trial court abused its discretion when it awarded sanctions against a defendant who denied liability in discovery but conceded it during trial.

In the vehicle accident case, Medina exited a parking lot without stopping or properly looking and struck Zuniga.  Zuniga sued for negligence and gross-negligence and served Medina with discovery. In admissions, the plaintiff essentially asked the defendant to concede his negligence in every possible respect and confess he was the sole cause of the accident at issue. The defendant predictably denied those requests. Relying on an exception to Rule 215.4’s applicability, Medina argued that when he denied Zuniga’s requests for admissions, he had a reasonable ground to believe he might ultimately prevail in showing he was not negligent.  The case proceeded to trial at which time, Medina made the strategic decision to concede ordinary negligence but contest the plaintiff’s gross-negligence claim. The jury found for Zuniga. After the trial, Zuniga’s attorney moved for sanctions for the failure to admit negligence during discovery and to collect attorney’s fees on having to establish the facts admitted at trial. The trial court granted the sanctions.

The Court started out by asserting “[r]equests for admission are a tool, not a trapdoor.”   They primarily serve “to simplify trials by eliminating matters about which there is no real controversy, but which may be difficult or expensive to prove.” They address uncontroverted matters or evidentiary ones like the authenticity or admissibility of documents. They were not intended to be used as a demand upon a plaintiff or defendant to admit that he had no cause of action or ground of defense.  Since the plaintiff has the burden of proof, it cannot follow that the defendant who puts the plaintiff to his/her burden should later face sanctions for not admitting what he/she was entitled to deny.  Due process limits the extent to which sanctions can attach to denials of those requests. Just as a defendant may answer the claims against him with a general denial, see TEX. R. CIV. P. 92, he may also deny a merits-preclusive request for admission for which the other party bears the burden of proof. The very nature of the request provides the respondent “good reason” for failing to admit. As a result, the trial court abused its discretion. Medina also challenged the jury’s gross-negligence finding, arguing no evidence supports a conclusion that his actions rose above ordinary negligence. The objective gross-negligence standard must remain functionally distinguishable from ordinary negligence. As to the objective component, an “extreme degree of risk” is “a threshold significantly higher than the objective ‘reasonable person’ test for negligence.”  Viewing the evidence in favor of the jury’s verdict, no doubt exists that Medina’s driving was thoughtless, careless, and risky. But any driver knows that our roads are replete with thoughtless, careless, and risky drivers. The Court found gross negligence can be supported only by an extreme degree of risk, which was not present here.*

Public Information Act: Texas Dep’t of Criminal Justice v. Levin, No. 17-0552, 2019 WL 1575407 (Tex. Apr. 12, 2019). This is a Public Information Act (PIA) case where the Texas Supreme Court held the PIA must yield to protecting information that, if released, would create a substantial threat of physical harm to the source’s employees and others.

The plaintiffs (Levin) represent capital defendants on death row. Concerned with the possibility of mismanaged executions by lethal injection, Levin made a PIA request of the Texas Department of Criminal Justice (department), which included a request for the list of drugs used for lethal injections and their source. The department did not release the specific identity of the pharmacy or pharmacist that compounded the drugs (i.e. source) and requested an attorney general (AG) opinion. The AG agreed with the department that the PIA has a common law exception regarding a release that would create a substantial risk of harm. Levin appealed. While on appeal, the legislature amended the PIA to create a statutory exception for the source of drugs used for executions.

In prior court and AG opinions, a threat to a specific party was required in order to take advantage of the common law exception. Here, no one but the department and the pharmacy itself knows the identity of the source that supplies the lethal injection drugs to the State of Texas. There is no evidence of a history of specific threats to that particular pharmacist or pharmacy because the source’s identity has been kept confidential. The court noted, however, the word “substantial” as used in prior opinions does not refer to the degree to which harm is likely to occur, but rather, the degree of the potential threat of harm itself. Courts should focus on the connection between the requested information, on the one hand, and the potential threat and magnitude of such harm, on the other. The court found, based on the summary judgment evidence, the department properly established release of the information would create a potential substantial physical harm which does not currently focus on an identified person, including evidence of what happened to other pharmacies when release of similar information became public (Note: some but not all of the evidence was considered relevant). As a result, the department must withhold the information requested.*

Texas Tort Claims Act: Tarrant Reg’l Water Dist. v. Johnson, No. 17-0095, 2019 WL 1575591 (Tex. Apr. 12, 2019).  This is a Texas Tort Claims Act (TTCA) case where the Texas Supreme Court held no waiver of immunity exists for the wrongful death action against the Tarrant Regional Water District (District).

Brandy Johnson, while five months pregnant, attempted to cross the Trinity River by walking across Dam #2. She slipped, fell into the river, and drowned.  The District built, then demolished and rebuilt a series of dams as part of an effort to channelize part of the Trinity River to help with flood control.  The parents brought a wrongful death action against the District asserting it maintained the Dam #2. The District filed a plea to the jurisdiction which was denied and the District appealed.

The District’s Director of Operations testified that rather than filling in the eroded area below the dams and raising the depth to the level existing when the dams were constructed, the dam design engineer for the rebuild decided the deeper river bottom should remain in place to prevent kayakers and tubers from injuring themselves when passing through the chute.  The Plaintiffs alleged that the kayak chute was slippery and the current running through it was deceptively dangerous. However, section 101.056 of the Tort Claims Act (discretionary functions) allows an entity to retain immunity if the negligent acts complained of were discretionary in nature. The Plaintiffs alleged the claims relating to the deeper river bed (and hydraulic boil) were not related to the original design but a failure to maintain that design, which is not discretionary.  The Court disagreed. The design versus maintenance “test” is simply the policy-level versus operational-level test applied to public works. However, the Court noted neither “design” nor “maintenance” appears in the text of section101.056. For that matter, neither do the terms “policy-level” or “operational-level.” Those terms are useful guides for interpretation, but are not part of the statute. The interpretational rubrics are only useful to the extent they yield results faithful to the statute’s textual distinction between discretionary and non-discretionary government decisions, which the Court recognized as a difficult task. The Court noted the statute’s focus is on preservation of the government’s discretionary decision-making authority, rather than on the often-useful but extratextual distinction between design and maintenance.  The District’s decisions related to the depth of the river at the base of the dam are discretionary design decisions, even at the rebuild level. Further, the Court emphasized the “public work” the District is alleged to have improperly maintained is the natural bed of a flowing river. Analyzing the riverbed as if it were a structural public work already stretches credulity. The notion that the District had a legal obligation to keep this natural “public work” at a constant depth beneath an opaque and running body of water is unsupportable. The Court held the District was immune from suit.*

Texas Tort Claims Act:  University of Texas MD Anderson Cancer Ctr. v. Contreras, No. 01-18-01046-CV, 2019 WL 1996813 (Tex. App.—Houston [1st Dist.] May 7, 2019).  In this Texas Tort Claims Act (TTCA) case the First District Court of Appeals holds a medical facility does not waive its sovereign immunity by providing, furnishing, or allowing a patient to use tangible personal property.

Roger Contreras went to MD Anderson’s barbershop with the assistance of a nurse, a walker, and a rolling IV pole.  The nurse departed and left the IV pole but took the walker. She informed Contreras he could use the IV pole as an assisting device and did not need the walker. Contreras got up to go to the shampoo station after his haircut, his knee buckled causing him to fall, but when he tried to use the IV pole to catch himself, the pole rolled away. He hit the floor and was injured. Contreras’s medical expert opined that an IV pole is not a proper walking aid.  Contreras sued.  MD Anderson filed a plea to the jurisdiction, which was denied. MD Anderson appealed.

Contreras maintained that MD Anderson’s negligent use of a rolling IV pole as a mobility-assistance device (i.e. negligent use of personal property) caused his injuries. He argued that a nurse took his walker away and told him to use the IV pole to get around.  A governmental unit does not use personal property merely by providing, furnishing, or allowing another to use it.  An exception applies when personal property is provided that lacks an integral safety component. However, the exception applies solely when the component is entirely missing; the failure to provide a more effective safety feature does not trigger the exception. Otherwise, for purposes of Section 101.021(2), a governmental unit uses tangible personal property if and only if the governmental unit itself is the user of the property. An allegation that the government enabled, authorized, or approved another’s use of the property is not enough. Non-use is not use. The court then held MD Anderson’s alleged defects in the plea are immaterial because the questions are jurisdictional. As a result, the plea should have been granted.*

Employment: Smith v. Harris Cty., No. 01-18-00247-CV, 2019 WL 1716418 (Tex. App.—Houston [1st Dist.] Apr. 18, 2019) (mem. op.).  This is an employment case where Smith alleges retaliation under the Texas Commission on Human Rights Act.  The First Court of Appeals affirmed the trial court’s grant of summary judgment on the grounds that Smith failed to show a prima facie case for retaliation.

Smith filed charges of discrimination in 2008 and 2012 with the Equal Employment Opportunity Commission (EEOC). He also filed a lawsuit as a result of the later EEOC charge. He claimed in June 2015 that Harris County retaliated against him when it did not promote him to intake supervisor because he had filed claims of discrimination with the EEOC. Harris County asserted that Smith had failed to show: (1) he had engaged in a protected activity, (2) he suffered an adverse employment action, and (3) a causal link existed between his protected activity and the adverse employment action. Smith argued on appeal that he had established a causal link.  Although the First Court of Appeals noted that a causal link can be established by circumstantial evidence, the evidence presented by Harris County established that there was no link. 

First, the court found that Harris County complied with its hiring policies despite Smith’s claims to the contrary. The court also determined that Smith was not similarly situated to those he claimed to be; thus, there was no discriminatory treatment compared to those similarly situated. Smith was not similarly situated with the applicant Harris County hired because she had leadership experience, had the trust and respect of her fellow officers, and went above and beyond her normal duties. Smith did not have any of those attributes. The two did not hold the same leadership position and were, therefore, not similarly situated.

The court found that Smith’s argument that the stated reason for the adverse employment decision was false and meritless. Smith’s only evidence was his subjective belief that the applicant who was hired was significantly less qualified than him.  However, all of the evidence demonstrated the opposite.

The court next determined the time between the protected conduct and the adverse act were insufficient to raise a fact issue. The court also found that Smith failed to raise a fact issue regarding his claims that two of the individuals who were on the hiring committee were aware of his EEOC claims and lawsuit because the evidence presented was insufficient to establish causation between the protected activity and adverse employment decision.

The First Court of Appeals affirmed summary judgment in favor of Harris County because Smith failed to present any evidence to create a fact issue for his prima facie case of retaliation.

Reasonable Accommodation: Texas Dep’t of Transp. v. Lara, No. 03-18-00153-CV, 2019 WL 2052930 (Tex. App.—Austin May 9, 2019). This case stems from a suit by Albert Lara, Jr. (Lara) against the Texas Department of Transportation (department) for terminating his employment after he took extended leave to recover from surgery. 

Lara exhausted his paid sick leave, vacation time, and compensatory time after he was diagnosed with an illness that required him to have surgery. Thereafter, he requested extended paid leave from hours donated by co-workers through the department’s sick-leave pool (SLP leave). Because his physician indicated that he did not suffer from a catastrophic illness, the department denied him paid SLP leave. However, the department granted him unpaid leave under the Family and Medical Leave Act.  Following complications from surgery, Lara updated his leave request and included a physician’s statement that Lara would need multiple treatments, did not expect to return until a certain date, and could not perform work of any kind. The physician’s revised statements lead the department to designate him as an employee with a catastrophic condition and to offer him SLP leave sufficient to compensate for the time off work.  Lara subsequently filed another request for SLP leave with a new estimated return date of October 21. The physician reported that Lara could not work in any capacity and would require one or more follow-up procedures upon recovery. The department granted him additional SLP leave, bringing the total award to its maximum of 720 hours.  The department also explained that the leave would expire on September 16, and no further leave would be available. Lara then began contacting various staff members in hopes of obtaining additional leave. One week before his leave expired, the department sent Lara written notice of termination if he could not return to work by September 16.  He did not do so and was terminated. 

Lara filed suit alleging that the department failed to provide him with the reasonable accommodation required by the Texas Commission on Human Rights Act (the Act) and retaliated against him for exercising his rights under the Act. The department responded with a defense of undue hardship. It then filed a combined motion for summary judgement and plea to the jurisdiction. The trial court denied the motion and overruled the plea, and the department filed an appeal. 

The court first looked at whether Lara was a qualified individual with a disability. The court concluded that the determination of whether an employee is a qualified individual is based on the facts as they existed at the time the request for accommodation is accepted or rejected. Thus, the court concluded that the evidence might allow a reasonable juror to conclude that the requested accommodation for additional leave rendered Lara qualified for his position at the time his request for additional leave was rejected. 

The court then addressed whether Lara requested for a reasonable accommodation.  The department argued that it could not have denied Lara an accommodation because Lara never filed a formal application for unpaid leave. Lara provided evidence indicating that he began asking for an accommodation as soon as he understood the expiration date of his SLP leave, he repeatedly asked if he might be afforded additional leave and what steps he might take to keep his position, and he was initially told that he had received the maximum leave, and then told additional leave would be available at the discretion of his supervisor. The court rejected the department’s characterization of Lara’s request for leave as somewhat insufficient to constitute a request for accommodation and concluded that Lara had satisfied his burden to generate a genuine question of fact on the issue. 

The court next addressed the department’s affirmative defense of undue hardship.  The department produced an affidavit by Lara’s supervisor indicating that Lara’s absence was placing a mounting strain on operations and taking a toll on the office. However, the supervisor also indicated that two other employees had left employment during Lara’s absence and that these vacancies hurt even more than Lara’s absence, but did not explain why the department could not have filled those two vacancies to alleviate the strain while granting Lara’s request for a few more weeks of leave. Additionally, the department failed to produce any comments reflecting strain caused by Lara’s leave or revealing co-worker opposition to his request for additional time off. In turn, Lara produced evidence that included emails and texts from his co-workers that showed they were understanding and supportive of him. The court concluded that the record presents genuine questions of fact as the reasonableness of Lara’s requested accommodation and the undue hardship alleged by the department, and the trial court did not err in denying the department’s motion for summary judgement. 

In his claim for retaliation, Lara asserted that a request for a reasonable accommodation is a protected activity, and asked the court to follow the federal courts in holding an accommodation request is a protected activity under the Act for purposes of establishing a prima facie retaliation claim. The court declined to extend such federal interpretation to the Act and concluded that because Lara’s only claim of retaliation was his filing of a discrimination complaint, he was not able to establish the causation element of his claim. Accordingly, the court dismissed the retaliation claim.

Whistleblower: Walck v. City of Lubbock, No. 07-17-00096-CV, 2019 WL 1716781 (Tex. App.—Amarillo Apr. 17, 2019) (mem. op.). Lazaro Walck (Walck) was a police officer for the City of Lubbock. He submitted two grievances under the city’s grievance procedure, complaining of the suspension of his outside work permit and the issuance of a letter of reprimand. Subsequently, Walck filed a Whistleblowers Act suit against the city alleging that the actions he complained were retaliation for his report of a violation of law that he sent to the chain of command. The city filed a plea to the jurisdiction that was denied by the trial court. The city brought an interlocutory appeal in which the Seventh Court of Appeals (Court) found the Walck’s Whistleblower Act complaint was not timely concerning the loss of his outside work permit and that the city had not established that Walck failed to properly initiate the city’s grievance procedure as to the letter of reprimand. The Court remanded the case concerning the letter of reprimand back to the trial court. The Supreme Court denied discretionary review and the case was returned to the trial court. After the remand, the city amended its plea to the jurisdiction which was granted by the trial court and the remainder of Walck’s case was dismissed.

Walck appealed this case to the Court on three issues. Walck’s first issue contended that the trial court erred by sustaining, after the remand, the city’s plea to the jurisdiction on his Whistleblower Act claim. He argued that the city’s amended plea to the jurisdiction was precluded by the law of the case doctrine. The law of the case doctrine is a question of law decided on appeal to a court of last resort that governs the case throughout its subsequent stages. The Court disagreed stating that the law of the case doctrine does not limit its consideration of issues presented in this appeal since the doctrine may not apply when issues or facts have changed through amended pleadings. Since the city’s amended plea to the jurisdiction addressed an issue that was not briefed or addressed in the previous interlocutory appeal, the Court disagreed with Walck about the application of the law of the case doctrine and overruled his first issue.

Walck’s second issue contended that the trial court erred in granting the city’s amended plea to the jurisdiction since the parties’ stipulated facts did show that the rescinded letter of reprimand was an adverse personnel action that was retaliation under the Whistleblower Act. For a personnel action to be considered adverse within the meaning of the Whistleblower Act, the court must apply an objective standard of material adversity meaning the personnel action must be material, and thus likely to deter a reasonable, similarly situated employee from reporting a violation of the law. Based on the stipulated facts, the Court did not find the rescinded letter of reprimand was adverse since the reprimand did not cause Walck any job-related consequences. Walck was not demoted because of the letter of reprimand, nor had he been denied a promotion or raise. Walck’s subjective reaction to the letter of reprimand, such as stress and loss of sleep, does not make the personnel action adverse under the Whistleblower Act, and therefore the Court overruled the second issue. As for Walck’s third issue concerning reporting a violation of law to the appropriate law enforcement agency, the Court found it unnecessary to the disposition of the appeal since it had already found that the letter of reprimand was not an adverse personnel action.

Overruling all of Walck’s issues, the Court affirmed the order of the trial court and did not remand the case for repleading since a Whistleblower Act violation could not be shown based on the stipulated facts.

MOU Electric Rates: Data Foundry, Inc. v. City of Austin, No. 14-18-00071-CV, 2019 WL 1768615 (Tex. App.—Houston [14th Dist.] Apr. 23, 2019). Data Foundry, Inc. sued the City of Austin over its pricing of electricity, claiming the city’s retail rates were illegal, unenforceable, excessive, and discriminatory. The trial court granted the city’s motion to dismiss the suit due to a lack of standing. Data Foundry appealed.

Reviewing Data Foundry’s claims de novo, the court of appeals first addressed claims that the city’s rates were excessive. Data Foundry’s primary argument was that the city unlawfully included recovery of wholesale power-generation costs and a return on power-generation assets in its calculation of retail electricity rates. Pursuant to Texas Utilities Code Section 40.055(a)(2), a municipally-owned utility has exclusive jurisdiction to determine whether to unbundle any energy-related activities. The court affirmed that the trial court lacked jurisdiction to grant declaratory and injunctive relief, as requiring the city to separate recovery of wholesale costs from its calculation of retail rates would be to functionally unbundle its wholesale business activities from its retail business activities. The court affirmed the trial court on all of Data Foundry’s claims that sought to prohibit the city from continuing to bundle wholesale power-generation costs and a return on power-generation assets into its calculation of retail rates.

Data Foundry also brought claims that the city’s retail rates were unlawfully high and not based on the city’s inclusion of power-generation costs and a return on power-generation assets. Included is the claim that city retail rates were excessive because the city transfers 12 percent of its average base-rate revenue to its general fund, and the city’s debt-service coverage ratio is 2.36 times the amount of the city’s electric utility bonds. On this point, the court held that Data Foundry alleged a particularized injury, namely, that the city required it to pay unlawful charges and Data Foundry has a cognizable property interest in its own money. Further, the Public Utility Regulatory Act is silent on the question of whether judicial review is available to a ratepayer who takes service inside the city limits. The court reversed the portion of the judgment dismissing those claims for lack of standing.  

*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 www.rshlawfirm.com.

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