Note: Included cases are from October 11, 2016 through November 10, 2016.
Governmental Immunity: City of West Columbia v. Garcia, No. 01-16-00139-CV, 2016 WL 5940481 (Tex. App.—Houston [1st Dist.] Oct. 13, 2016) (mem. op.). The City of West Columbia appeals a denial by the trial court of a plea to the jurisdiction based on governmental immunity.
Marcelino Garcia was a construction worker for Matula & Matula Construction (M&M) which contracted with the city to provide construction work on a municipal water and sewer project. Garcia was at work when he felt a sharp pain in his arm. The M&M’s safety director drove Garcia to an occupational health care facility. However, Garcia’s condition worsened and he was eventually transported to the hospital where he remains paralyzed and in critical care. Garcia sued M&M and the city for intentional infliction of emotional distress, negligence, and premises liability, alleging that exposure to toxic substance at the job site caused his illness.
The city, in trial court, filed a plea to jurisdiction claiming governmental immunity from suit and liability. After the hearing, the trial court denied the plea. The city appealed claiming that the trial court erred because Garcia has not alleged a claim that falls within the limited waiver of immunity provided under the Texas Tort Claims Act (Act). The First Court of Appeals undertakes a de novo review of the trial court’s ruling. The court explains that, in determining a plea to the jurisdiction, a court “may consider evidence and must do so when necessary to resolve the jurisdictional issues raised.” Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 555 (Tex. 2000). However, the determination of subject matter jurisdiction might need to be made after a “fuller development of the merits of the case must be left largely to the trial court’s sound exercise of discretion.” Blue, 34 S.W.3d at 554.
The court looks at governmental immunity in four different situations: (1) intentional torts; (2) vicarious liability for negligence; (3) negligent use of motorized equipment; and (4) premises liability. As for intentional torts, the court states that Garcia’s claim of intention emotional distress was focused on M&M’s conduct, and only alleged the city’s liability on the element of foreseeability. The court finds the city was barred as a matter of law on the intention tort claim and that the trial court erred in denying the city’s plea to the jurisdiction on this claim.
As for vicarious liability for negligence, Garcia claims that the contractual relationship between the city and M&M imputed liability to the city for M&M’s failure to provide its employees with safety equipment through respondeat superior and agency theories. The court states that in order for the city’s immunity to be waived, a party would need to prove that the city had the right to control M&M’s employees based on the contract. Garcia alleged that the city had a duty to M&M’s employees to provide safety equipment for the job and control a water pump. The city did not negate these allegations, and the burden to meet the standard of a trial court’s lack of jurisdiction is on the party seeking the dismissal. See Mission Consol. Indep. Sch. Dist. v. Garcia, 372 S.W.3d 629, 635 (Tex. 2012). Thus, the court determined that the trial court did not err in exercising discretion to wait for more evidence before determining whether to grant the city’s plea to the jurisdiction in this situation.
The city claims that Garcia only alleged the non-use of the motor driven water pump and not the misuse of the pump as required for waiver of immunity under the Act. Construing Garcia’s allegations liberally in favor of jurisdiction and seeing evidence that water near the pump was moving, the court concludes that Garcia proved the “use” requirement and that the trial court did not err in denying the city’s plea to the jurisdiction on this claim.
Last, the court examines Garcia’s premise liability claim, alleging the city controlled the job site and that a dangerous condition existed on the premises. The pleadings did not allege a special defect, only a general premises defect which means the city only owed the duty of a private person to Garcia – a duty not to “injure a licensee by willful, wanton, or grossly negligent conduct, and [to] use ordinary care either to warn a licensee or, or to make reasonably safe, a dangerous condition of which the owner is aware and the licensee is not.” Texas Dep’t of Transp. v. Perches, 388 S.W.3d 652, 656 (Tex. 2012). The court concludes that Garcia’s petition does not make the allegation that the city engaged in any willful, wanton, or grossly negligent conduct and therefore, the trial court erred in denying the city’s plea to the jurisdiction on this claim.
Property Tax: Anheuser-Busch, L.L.C. v. Harris Cty. Tax Assessor-Collector, No. 01-15-00422-CV, 2016 WL 5920766 (Tex. App.—Houston [1st Dist.] Oct. 11, 2016). Harris County Tax Assessor-Collector (HCTAC) sent property tax notices out to Anheuser-Busch (Busch) in November 2012 concerning seven properties. Five of the bills were mailed to Busch’s authorized agents and two were mailed to Busch, but none were mailed to both Busch and the authorized agent. The Tax Code requires the tax-assessor-collector to “prepare and mail a tax bill to each person in whose name the property is listed on the tax roll and to the person’s authorized agent.” Tex. Tax Code § 31.01(a). Property taxes must be paid by February 1 in order to avoid penalties and fees for delinquent taxes. Id. § 31.02. However, if a tax bill is mailed after January 10, the default delinquency date is postponed for at least 21 days. Id. § 31.04(a).
Busch looked on the HCTAC’s website and determined the property tax amount due, and on January 23, 2013, mailed a check for the amount of the property tax. The check was received by HCTAC on January 28, but on February 5, 2013, Busch’s bank did not honor the check due to internal fraud prevention protocols. HCTAC assessed penalties and interest and sent a delinquent tax bill to Busch. On Feb. 21, 2013, Busch tendered another check for the property tax but without the penalties and fees. Instead, they sent a letter asking HCTAC to waive the penalties and fees. HCTAC refused to waive and Busch paid the penalties but stated that they were paying under protest and duress because they did not want to accrue more penalties. Busch filed suit. Both sides moved for summary judgment. The trial court denied Busch’s motion stating that HCTAC did not strictly comply with Section 31.01(a) of the Tax Code, but Busch had actual notice of the bill and tried to pay, and that legislative intent of this Tax Code section was to make sure the taxpayer received notice, not to create a loophole to allow taxpayers to avoid timely payment. Busch appealed.
The First Court of Appeals began by addressing HCTAC’s contention that the trial court did not have subject matter jurisdiction because Busch failed to establish a waiver of sovereign immunity. The court reviewed the immunity issue under a de novo standard. Previously, the court stated that where a claim of declaratory or injunctive relief is brought seeking a refund of illegally collected tax payments, governmental immunity does not apply if the tax payer alleges that the payments were made as a result of fraud, mutual mistake of fact, or duress, whether express or implied. Niven v. City of League City, 245 S.W.3d 470, 474 (Tex. App.—Houston [1st Dist.] 2007, pet. denied). The court determined that no legislative consent to sue was required for Busch’s declaratory judgment because Busch plead that they paid the penalties under duress because they did not want the penalties to continue to accrue.
Next, the court looked at the merits of the summary judgment. The court reviewed the trial court’s decision to grant or deny a summary judgment under a de novo standard. Because both parties filed motions of summary judgment on overlapping issues, the court will review the summary judgment evidence supporting both motions and “render the judgment that the trial court should have rendered.” Moers v. Harris Cty. Appraisal Dist., 469 S.W.3d 655, 660 (Tex. App. — Houston [1st Dist.] 2015, pet. denied).
The Court analyzed Section 31.01(a) of the Tax Code which stated that the tax bills must be mailed by January 10 to the property owner and its authorized agents. If the tax bill is mailed after January 10, then the delinquency deadline of February 1 would be postponed. Tex. Tax Code § 31.04. HCTAC argued substantial compliance with the statute was all they needed because they mailed the tax bills before January 10. The court disagreed because the statute did not demand only substantial compliance. Also, the legislature amended Section 31.01(a) to require the tax bills be mailed to the property owner and its authorized agent. The court stated that it was not empowered to rewrite the statute and allow for Section 31.04 of the Tax Code to be considered substantial compliance when the legislature made it clear what was required.
Next, HCTAC argued that Busch waived any complaints because of its attempt to pay the tax bill by the deadline. Waiver is defined as “the intentional relinquishment of a right actually known, or intentional conduct inconsistent with claiming that right.” Ulico Cas. Co. v. Allied Pilot Ass’n, 262 S.W.33 773, 778 (Tex. 2008). The court concluded that there was no evidence that Busch relinquished its right to avoid penalties and interest in attempting to pay the tax bill before February 1. Actually, the court thought Busch was doing the opposite by attempting to pay the tax bill to preserve its right to avoid penalties and interest. Then, HCTAC argued that the form used to designate authorized agents informs taxpayers that HCTAC does not have to send out duplicate copies and operates as a waiver of Section 31.01(a). The court did not agree with this either and stated the form, which is contrary to Section 31.01(a), did not explain the rights that Section 31.01(a) stated and that signing the form would waive those rights.
Last, HCTAC contended that the voluntary payment rule prevents Busch from complaining of the lack of notice because it issued a check before the deadline. Generally, “a tax voluntarily paid cannot be recovered, though it had not the semblance of legality.” City of Houston v. Feizer, 13 S.W. 266, 267 (Tex. 1890). The rule also operated to prevent a party from misleading his opponent into believing the controversy is resolved before later contesting the payment and seeking recovery. Highland Church of Christ v. Powell, 640 S.W.2d 235, 236 (Tex. 1982). And if the facts are undisputed, then the determination becomes a question of law. The court rejected HCTAC’s argument stating that Busch does not seek recovery of the taxes it attempted to pay, but of the penalties and interest, which it tendered under protest and duress. Therefore, the court reversed the trial court‘s rendition of summary judgment in favor of HCTAC for five of the seven properties since HCTAC did not send the tax bill to both Busch and its authorized agent. As for the remaining two properties, there was still a factual dispute concerning the appointment of authorized agents.
Appraisals: City of Austin v. Travis Cent. Appraisal Dist., No. 03-16-00038-CV, 2016 WL 6677937 (Tex. App.—Austin Nov. 10, 2016). This is an appraisal case involving vacant land and commercial real property where the city sought to declare parts of the Texas Tax Code unconstitutional. The Austin Court of Appeals affirmed the trial court’s dismissal of the suit.
The city filed a petition challenging the Travis Central Appraisal District’s appraisals for the 2015 tax year on certain categories of real property. The city challenged certain Tax Code provisions which “have incentivized taxpayer protests and led to widespread diminution of appraised property values to a ‘median value’ that is below market value.” According to the city, the reduction in appraised values to median values “has resulted in unequal taxation in violation of the Texas Constitution.” Tex. Const. art. VIII, § 1. Essentially, according to the city, the appraisal district’s application of Tax Code Sections 41.43(b)(3) and 42.26(a)(3) to resolve taxpayer protests has resulted in a reduction of property value making an unconstitutional and unequal tax. Several commercial and residential property owners intervened. The intervenors then moved to dismiss the city’s claims, which the trial court granted. The city appealed.
“[E]xcept for certain specifically circumscribed rights,” the Tax Code’s comprehensive legislative scheme generally excludes taxing units (like the city) from the appraisal process. Chapter 41, Subchapter A, of the Tax Code provides taxing units, like the city, with a mechanism for challenging certain actions by their local appraisal districts. Chapter 41 also provides property owners a mechanism for appealing appraisals. The Austin Court of Appeals analyzed the city’s standing to bring such a claim and ultimately determined the city failed to establish an injury sufficient to confer standing. Further, the Tax Code is a pervasive regulatory scheme, vesting appraisal review boards with exclusive jurisdiction to decide protests and challenges as permitted under chapters 41 and 42. The record reflects that even though the city attended the review board hearing, the city did not present a case on the merits of its challenge at the hearing and, in truth, requested the challenge be denied so it could pursue other avenues of attack. The city’s position that it sufficiently exhausted its administrative remedies because it was present at the administrative hearing and requested the denial of its own challenge, if accepted, would thwart the intent of the administrative process and of the exhaustion requirement. The court held that by affirmatively requesting the review board deny its challenge petition, the city failed to “appear,” as required under the law. The trial court did not error in dismissing the city’s case.*
Employment Discrimination: Lackey v. Lone Star Coll. Sys., No. 09-15-00399-CV, 2016 WL 6110700 (Tex. App—Beaumont Oct. 20, 2016) (mem. op.). This is an employment discrimination case where the Beaumont Court of Appeals affirmed the granting of the Lone Star College System’s plea to the jurisdiction.
Lackey is a 43 year-old Caucasian female who was employed by the Lone Star College System (LSCS) as a human resource manager. Lackey pleaded that a shooting and then a stabbing occurred at LSCS’s campuses and afterwards LSCS opened its employee assistance program (EAP) to all employees; the EAP had previously only been available for full-time employees. When an adjunct professor asserted he was suffering from post-traumatic stress disorder and wanted to use the EAP, Lackey allowed it. She asserted she double-checked the policy change before offering the EAP. LSCS leadership asserted she did not follow the policy correctly and terminated her. Lackey asserts a non-Caucasian Hispanic employee also violated the same policy but was not terminated. Lackey asserted causes of action for disparate treatment and replacement under the Texas Commission on Human Rights Act (TCHRA). LSCS filed a plea to the jurisdiction which the trial court granted. Lackey appealed.
A plaintiff must make a prima facie case showing that a waiver of immunity exists. The waiver of governmental immunity contained in the TCHRA only applies if the plaintiff alleges a violation within the scope of the statute. For Lackey to establish a prima facie case as to both of the causes of action (discrimination and discriminatory replacement) she must first establish that she was qualified for her position. LSCS attached a great deal of evidence indicating Lackey was incompetent to perform her position and, in one instance, caused LSCS to become $4 million behind in employee retirement payments. After analyzing the evidence and instances of incompetence and reviewing Lackey’s responses, the court concluded “LSCS’s evidence demonstrated that Lackey was not performing her job at a level that met LSCS’s legitimate expectations, and Lackey was therefore not qualified for her job.” Because Lackey did not establish that she was qualified, she failed to demonstrate a prima facie case under the TCHRA; therefore, LSCS’s governmental immunity is not waived. The plea was properly granted.*
Criminal Trespass: Wilson v. State, No. 09-15-00412-CR, 2016 WL 6110712 (Tex. App.—Beaumont Oct. 19, 2016). This is a case where the Beaumont Court of Appeals affirms the trial court’s conviction of criminal trespass.
On July 2, 2015, Wilson was given an oral and written warning by a city police officer that he could not return to the City of Dayton community center. The warning was issued on the request of the city manager. Wilson was arrested when he returned to the community center on July 8. Wilson was convicted by a jury of criminal trespass, a Class B misdemeanor.
Wilson appealed the conviction, arguing that: (1) he did not received procedural due process because the city’s unwritten building-use policy allowed the city manager to exercise discretion in prohibiting individuals from entering the community center; (2) the city’s unwritten policy was vague and unenforceable; (3) the city’s unwritten policy was enforced in an arbitrary and irrational manner; and (4) the evidence before the jury didn’t support his conviction.
The court characterizes Wilson’s complaints about the unwritten policy as a civil matter that should be taken up with the city council. Alternatively, Wilson could have sought to enjoin the city from enforcing the city manager’s decision if he could prove that the decision to ban him was irrational or arbitrary. When focused on the elements of the criminal-trespass statute, the court concludes that the statute does not require prior notice of the type of conduct that could result in losing the right to enter the premises. It only requires that a person be warned by someone with authority to do so that they can no longer enter the owner’s property. (To the extent that the Texarkana Court of Appeals’ decision in Anthony v. State, 209 S.W.3d 296 (Tex. App.—Texarkana 2006, no pet.) implies that constructive notice of a building-use policy is an element of the criminal-trespass offense, the Beaumont Court of Appeals disagrees.) The court concludes that the evidence showed that the city had authorized the city manager to exclude Wilson from the community center and that Wilson’s use of the facility was inconsistent with its purpose. Issues one, two, and three are overruled.
The fourth issue is also overruled. The court concludes that the evidence showed that: the community center was built and managed by the city, the city manager was in charge of the property, the city manager had the right to prohibit Wilson from being on the property, Wilson was informed that he could not return to the community center, and Wilson did return.
A dissenting justice finds the reasoning in Anthony persuasive and concludes that the conviction should be reversed and that the city’s unwritten policy is unconstitutionally vague.
SOB Ordinance: Ex parte Sedigas, Nos. 10-16-00157-CR & 10-16-00189-CR, 2016 WL 5944788 (Tex. App.—Waco Oct. 12, 2016) (mem. op.). This is a case where the Tenth Court of Appeals affirms the trial court’s finding that the city’s “no touch” ordinance is constitutional.
Rebekah Sedigas and Erika Hollaway (appellants) were charged with a Class A misdemeanor for violating the City of Waco ordinance which, in part, prohibits employees who appear nude or semi-nude in a sexually oriented business (SOB) from knowingly or intentionally touching customers and the clothing of customers. Appellants filed pre-trial applications for writ of habeas corpus arguing the ordinance is facially unconstitutional in that it: (1) violates the First Amendment because it is overbroad and encompasses lawful conduct; and (2) violates the Eighth Amendment because the punishment is disproportionate to the offense. The trial court denied the applications, finding the ordinance constitutional. Appellants appealed.
Appellants, relying on Blue Movies, Inc. v. Louisville/Jefferson Cty. Metro Gov’t, 317 S.W.3d 23 (Ky. 2010), argue that the ordinance is overbroad because it applies to a dancer even when not in a state of nudity or performing and that it applies to employees who are fully clothed but regularly appear nude or semi-nude at a SOB. The appellate court concludes that the City of Waco ordinance is different than that in Blue Movies. Examining the plain language of the ordinance, the court finds that the City of Waco ordinance only applies at the time that the employee is nude or semi-nude on the premises of a SOB and touches a customer. The first issue is overruled.
As to the type of disproportionate punishment argument raised in the second issue, a court considers the following: (1) whether there is a national consensus against imposing the punishment for the offense; (2) the moral culpability of the offender at issue in light of their crimes and characteristics; (3) the severity of the punishment; and (4) whether the punishment serves legitimate penological goals. The court relies on the reasoning in Rivera v. State, 363 S.W.3d 660 (Tex. App.—Houston [1st Dist.] 2011, no pet.) to conclude that prosecuting the “no touch” ordinance as a Class A misdemeanor is justified to deter continuing violations of the ordinance that the city council has determined leads to greater criminal activities (such as prostitution). The second issue is overruled.
Tort Claims Act: Bay City v. McFarland, No. 13-15-00122-CV, 2016 WL 5941891 (Tex. App—Corpus Christi Oct. 13, 2016) (mem. op.). This is a Texas Tort Claims Act case involving an automobile accident where the Corpus Christi Court of Appeals affirmed the denial of the city’s plea to the jurisdiction.
Officer Kunz was dispatched to the scene of a residence where two siblings had been reported fighting with deadly weapons. While in route, Officer Kunz collided with a motorcycle driven by McFarland. The evidence is undisputed that Officer Kunz proceeded through the intersection without stopping at a stop sign. McFarland sued the city alleging it was vicariously liable for Officer Kunz’s negligence and for negligently hiring him. The city filed a plea to the jurisdiction asserting (1) the emergency responder defense; and (2) that Officer Kunz had official immunity. In response, McFarland’s expert testified the dash cam contradicted Kunz’s affidavit testimony regarding her slowing before entering the intersection. The expert concluded that the operation of her vehicle was reckless and that no reasonably prudent officer could believe that her conduct was necessary. The trial court denied the plea and the city appealed.
While the evidence is undisputed Officer Kunz was responding to an emergency call and had her lights and siren on, the evidence before the trial court contained a material fact issue as to whether she slowed before entering the intersection, so the plea was properly denied as to the emergency responder defense. Additionally, the issue regarding whether Officer Kunz slowed down is material to the third “need-factor” under the official immunity defense concerning whether a safer alternative course of action was available. As a result, the plea was properly denied as to the official immunity defense.*
Charter Amendment Election: City of Galena Park v. Ponder, No. 14-15-00708-CV, 2016 WL 6238390 (Tex. App—Houston [14th Dist.] Oct. 25, 2016). In this suit to compel a charter amendment election, the Fourteenth Court of Appeals reversed the granting of a summary judgment which favored the election.
Barry Ponder delivered a set of papers to the City of Galena Park City Secretary, Mayra Gonzales, purporting to be a petition in support of city charter amendments proposed by a local group. The amendments concerned, respectively: (1) the creation of four new commissioner positions to act as liaisons between the city commission and certain city departments; (2) the appointment and duties of fire chief, fire marshal, and police chief; (3) the procedures for voter initiative, referendum, and recall petitions; and (4) changes to the general powers of the mayor and the commission. According to the city secretary, there were no proposed charter amendments attached to the signature pages. She reviewed the signature pages to determine the validity of the signatures. The number of valid signatures exceeded the charter requirements. However, the city attorney asserted the petition did not constitute a proper petition primarily because: (1) the signature pages did not include the text or a description of any proposed amendment to the charter so there was no way to tell what amendments were being presented; (2) there were no amendments attached to the signature pages as referenced; and (3) the proposed amendments covered multiple subjects, which he asserts is not permitted under the law. The city refused to call the election and Ponder filed suit. Both sides filed motions for summary judgment and the trial court ruled for Ponder. The city appealed.
The court first analyzed Ponder’s summary judgment and determined that enough qualified voters signed the petition. However, that does not mean the petition itself is proper. The gap in Ponder’s logic is that the papers do not conclusively establish that the four amendments presented are the actual amendments that the signatories were demanding be placed on the ballot. Further, the city secretary’s letter only stated that the number of signatures exceeded the required number for an amendment petition, but was not an acceptance of the rest of the petition. The trial court erred in granting Ponder’s motion.
The court then considered the city’s motion. The court narrowed the issues by listing several city issues as abandoned or not preserved. The court then determined that, while Ponder did not conclusively establish entitlement to summary judgment, the city’s arguments on the form of the petition did not establish the charter section (Local Government Code Section 9.004) was not met. Further, nothing in the text of Local Government Code Section 9.004 expressly prohibits an election petition from proposing more than one amendment. Further, proposed changes to a city charter may seek broader schematic changes to city government that may make sense only as an all-or-nothing proposition. In other words, broad categories for amendments are fine. Thus, the city did not establish entitlement to summary judgment. The case is remanded back to the trial court.*
City Fees: Gatesco Q.M. Ltd. v. City of Houston, No. 14-14-01017-CV, 2016 WL 6134455 (Tex. App—Houston [14th Dist.] Oct. 20, 2016). In this case, the Fourteenth Court of Appeals affirmed-in-part and reversed-in-part the granting of the city’s summary judgment motion in regard to a constitutional challenge to the city utility charging late fees and shutting off a customer’s water service. The case is good analysis of constitutional ordinance challenges and the new Patel due-course-of-law test.
Gatesco owns an apartment complex known as the Quail Meadows Apartments. The only available supplier of water for the apartments comes from the city. Gatesco, a longtime water customer, paid its water bill to the city one day late. The city assessed a ten-percent late fee of $1,020.03 pursuant to an adopted ordinance. Gatesco did not want to pay the late fee and challenged it in an administrative proceeding. Though unsuccessful in this proceeding, Gatesco still did not pay the late fee. To avoid having its water shut off, Gatesco obtained a temporary restraining order but the trial court denied Gatesco’s request for temporary injunction. Within two hours, Gatesco paid the late fee, although the city claimed Gatesco paid the fee at the wrong location. The city shut off the water to the entire complex 17 minutes after Gatesco paid the fee, but turned the water on later that afternoon. But, because the water had been turned off, the city required a cash security deposit of $35,200.00, an estimate of three months of water bills to turn it back on. After the case went up and back to the court of appeals on a plea to the jurisdiction, the trial court granted the city’s summary judgment motions. Gatesco appealed.
Gatesco first sought a declaratory judgment that the late fee is an excessive fine under the Texas Constitution. Whether the constitutional prohibition has been violated is a question for the court to decide under the facts of each particular case. Generally, prescribing fines is a matter within the city’s discretion. A fine is not unconstitutionally excessive “except in extraordinary cases, where it becomes so manifestly violative of the constitutional inhibition as to shock the sense of mankind.” This ordinance applies a bright-line, ten-percent late charge to all people paying late, subject to a few exceptions. The charge is proportional to the unpaid amount owed and is thus proportional to the amount of water and sewer services consumed. The city has discretion to prescribe fees to be assessed for late payment for the city’s water and sewer services with the object of incentivizing timely payment for these services. There are no “extraordinary circumstances” here to justify an excessive fee under the Texas Constitution, so the summary judgment is affirmed in that regard. Gatesco also asserts the city’s ordinance is an unconstitutional tax. In order to determine whether the late fee is a regulatory charge or a tax, the court applied the “primary purpose” test. Under this test, the court does not examine the specific regulatory costs incurred by the city as to this one delinquent payment by Gatesco; instead, its looks at whether the aggregate late fees collected exceed the amount reasonably needed for regulation. The court examined the regulation as a whole to determine whether the late fees imposed are intended to raise revenue or compensate the reasonable costs for regulation. In analyzing the facts and admissions, the court held whether the city incurred any collection costs before charging Gatesco the late fee is not material. The record does not show the fees were unreasonable in relation to overall costs of the system. As a result, the trial court did not err in granting summary judgment on this question. As to Gatesco’s equal protection claims, Gatesco bears the burden of showing that it has been treated differently from others similarly situated and that the treatment is not rationally related to a legitimate governmental interest. The summary-judgment evidence does not address how the city treated similarly situated customers, so the trial court did not error in grating summary judgment. Next, the city violated federal substantive due process if it exercised its power in an arbitrary and unreasonable way. Since no suspect class or fundamental right is involved, the analysis is under the rational basis test. The summary judgment evidence does not raise a genuine fact issue as to whether it is not at least fairly debatable that each component of the challenged conduct was rationally related to a legitimate governmental interest. The trial court did not error in granting summary judgment on this issue.
The court, however, utilized a different standard for the substantive-due-course-of-law violation under the Texas Constitution. The court analyzed the Supreme Court’s holding in Patel v. Texas Dep’t of Licensing and Regulation, 469 S.W.3d 69 (Tex. 2015). In Patel, the court held that the proponent of an as-applied challenge to an economic regulation statute under Article I, Section 19’s substantive-due-course-of-law protections must demonstrate that either: (1) the statute’s purpose could not arguably be rationally related to a legitimate governmental interest; or (2) when considered as a whole, the statute’s actual, real-world effect as applied to the challenging party could not arguably be rationally related to, or is so burdensome as to be oppressive in light of, the governmental interest. However, since the Patel opinion is so new, the city’s no-evidence summary judgment evidence did not address or incorporate the “oppressive” arguments or elements, which are essential to a no-evidence determination. Accordingly, the court reversed the trial court’s judgment as to these claims and remanded. Since the substantive-due-course-of-law claims are remanded, so too must the claim for injunctive relief and attorney’s fees.*
*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.