Recent Texas Cases of Interest to Cities

Note: Included cases are from September 11 through October 10, 2019.

Red Light Cameras: Watson v. City of Southlake, No. 02-18-00143-CV, 2019 WL 4509047 (Tex. App.—Fort Worth Sept. 19, 2019). This is an interlocutory appeal of the granting of multiple pleas to the jurisdiction filed on behalf of multiple cities and the State of Texas for claims relating to red light cameras. The Second Court of Appeals found that Watson’s prospective claims failed for lack of standing, his claims for reimbursement were barred by immunity, and his takings claim failed because Watson failed to exhaust his administrative remedies. 

Watson was a resident of Louisiana who was cited by the City of Southlake for violating its red-light-camera ordinance. He did not take advantage of his administrative remedies. He sued all cities in Texas who had red light cameras on behalf of all others who had been affected by the red-light-camera laws. He also sued the company that administered the city’s red-light-camera program as well as other similar companies who administered other cities’ red-light-camera programs. Finally, he sued the State of Texas. He alleged claims for (1) unconstitutional takings; (2) reimbursement of the civil fines; (3) an injunction prohibiting the government defendants from enforcing their red-light-camera laws; (4) declaratory judgment that the red-light-camera laws were unconstitutional; and (5) common law misrepresentation and deceptive trade practices violations. 

The Second Court of Appeals found that Watson lacked standing to sue all of the defendants for prospective relief.  Like in Garcia v. City of Willis, No. 17-0713, 2019 WL 1967140 (Tex. May 3, 2019), Watson’s claims for prospective relief were too speculative for him to have standing. He had paid the fine, which put any imminent threat of injury in the past. 

Watson likewise lacked standing to sue cities other than the City of Southlake and their private administrators for retrospective relief because he had not been harmed by the other cities.  Additionally, although he sued on behalf of a class, he had not certified a class, and therefore, could not maintain claims based on a jurisdictional link. The court also determined that the trial court did not err in severing his claims against the other cities and administrators from his claims against the City of Southlake, the City of Southlake’s red-light-camera-program administrator, and the State of Texas. 

The court concluded the State of Texas and the city had immunity from suit for the reimbursement claims and Watson did not pay the fines under duress.  Finally, as in Garcia, Watson had failed to exhaust his administrative remedies for his unconstitutional takings claim against the City of Southlake and the State of Texas because a hearing officer could have rendered his claims moot. Therefore, the trial court properly dismissed Watson’s claims.

Immunity: Stegall v. TML Multistate Intergovernmental Emp. Benefits Pool, Inc., No. 05-18-00239-CV, 2019 WL 4855226 (Tex. App.—Austin Oct. 2, 2019) (mem. op.). This is an appeal challenging the trial court’s order finding that the TML Multistate Intergovernmental Employee Benefits Pool, Inc. (TML) and UMR, Inc., one of TML’s

third-party health benefits administrators, have governmental immunity in a health benefits coverage dispute.

Joe Stegall was the chief financial officer for the City of Royse and was a participant in the city’s health benefits program provided by TML, an intergovernmental self-insurance risk pool. Stegall was diagnosed with bile cancer and liver cancer, and following an initial round of chemotherapy, his oncologist prescribed Nexavar, an FDA-approved drug designed to increase survival rates and life expectancy for patients with advanced liver cancer. TML and UMR initially denied coverage for the drug, but eventually reversed course and agreed to provide coverage for Nexavar. Stegall died several weeks later. Stegall’s spouse sued TML and UMR for wrongful denial of medical benefits and additional acts of interference with the decedent’s access to prescribed chemotherapy under tort and contract theories. TML and UMR filed general denials, and with respect to the tort claims, both filed pleas to the jurisdiction on the grounds of governmental immunity.  The trial court, after separate hearings, granted both pleas to the jurisdiction leaving only Stegall’s breach of contract claim against TML.  Stegall voluntarily nonsuited her breach of contract claim, and filed a motion for new trial.  Her motion for a new trial was overruled by operation of law, and she appealed asserting that TML did not have governmental immunity because it was engaged in proprietary functions.

The court concluded that TML’s “nature, purposes, and powers” demonstrate legislative intent that TML is a distinct governmental entity entitled to assert immunity in its own right, and that the Legislature intended for self-insurance pools to perform governmental functions and services.  As a result, the court declined to extend the governmental/proprietary distinction to TML concluding that immunity had not been waived.  The court also concluded that UMR, as TML’s third-party administrator, has the same governmental immunity as TML. Accordingly, the court affirmed the trial court’s order granting the pleas to the jurisdiction.

Employment: Fratus v. City of Beaumont, No. 09-18-00294-CV, 2019 WL 5076241 (Tex. App.—Beaumont Oct. 10, 2019) (mem. op.). This is an interlocutory appeal in a firefighter termination case where the Beaumont Court of Appeals affirmed the granting of the City of Beaumont’s plea to the jurisdiction.

Fratus filed a petition seeking damages, declaratory relief and injunctive relief against the city based on discriminatory employment practices and his termination as a firefighter. The city filed a plea to the jurisdiction claiming governmental immunity and seeking dismissal of the claims. Fratus appealed arguing the trial court erred in granting the city’s plea to the jurisdiction on: (1) his claim for declaratory and equitable relief from the city’s retaliation against Fratus because of his exercise of protected speech under Article I, Section 8 of the Texas Constitution; (2) his claim for discriminatory employment action by the city because he is Hispanic or in retaliation for him having opposed the fire chief’s sexual harassment of another employee; and (3) his claim that that the 2015-2019 Collective Bargaining Agreement (CBA) is void because the city failed to post the negotiations in compliance with the Texas Open Meetings Act (TOMA).

Because Fratus’s claim for declaratory relief is based on harms that have already occurred, he has not pleaded a claim that overcomes the city’s immunity. Fratus’s claim for equitable relief for constitutional violations is not a claim against a city official at all and does not defeat the city’s plea to the jurisdiction. Fratus failed to plead a prima facie free speech claim because he failed to show that the speech he engaged in was primarily as a citizen involving a matter of public concern. His first issue is overruled.

Fratus failed to plead an adverse employment action that would support a Texas Commission on Human Rights Act (TCHRA) claim. While Fratus was terminated, he appealed that termination under the CBA and does not dispute that he was reinstated. And his other complaints do not rise to the level of material adversity necessary to show an adverse employment action under the TCHRA. His second issue is overruled.

Fratus’s TOMA claim “does not meet briefing requirements because it lacks citations to the record or to applicable authority and therefore presents nothing for” the court to review. Without a pleading to support the claim, the city’s immunity is not waived. His third issue is overruled.

Employment: Nix v. City of Beaumont, No. 09-18-00407-CV, 2019 WL 4891704 (Tex. App.—Beaumont Oct. 3, 2019) (mem. op.). This is an interlocutory appeal in a firefighter suspension case where the Beaumont Court of Appeals affirmed the granting of the City of Beaumont’s plea to the jurisdiction.

Nix filed a petition seeking declaratory and equitable relief against the city based on his indefinite suspension from his position as a firefighter. He asserted the Collective Bargaining Agreement (CBA) was invalid because the city allegedly failed to comply with the Texas Open Meeting Act (TOMA) requirements when the CBA was negotiated.  He also asserted the “last chance” agreement he entered into with the fire chief was invalid. Nix’s last-chance agreement probated part of the suspension, but noted he could be terminated if he violated any terms of the agreement. Nix’s suspension in 2015 resulted in the last-chance agreement and the chief determined he violated the sick leave policy in 2017 resulting in an indefinite suspension. Nix asserted in the absence of a valid contract, the suspensions were invalid, depriving him of due process of law and a protected property interest. The city filed a plea to the jurisdiction, which was granted.  Nix appealed.

TOMA has a limited waiver of immunity. An action taken in violation of TOMA is voidable, not void. When a department head suspends a firefighter for violating a civil service rule, the suspension may be for a reasonable period not to exceed fifteen calendar days or for an indefinite period. Tex. Loc. Gov’t Code § 143.052(b). The firefighter may accept the suspension or appeal to the civil service commission. If the firefighter disagrees with the commission, the employee may file suit in district court. The question of whether the city posted the CBA 2012-2015 negotiations in accordance with TOMA is not relevant because it is the CBA 2015-2020 that is applicable to his underlying challenge to his indefinite suspension in 2017.  The city provided evidence showing proper postings for the negotiation of the 2015-2020 CBA.  When Nix accepted the last-chance agreement in 2015, he had the opportunity to refuse the chief’s offer and appeal his suspension to the commission; however, Nix agreed to waive his right to appeal, including the right to appeal the chief’s 2017 decision determining that Nix had violated the agreement. Nix waived all rights he may have to file suit against the city as to any issue directly or indirectly related to the last-chance agreement or to his indefinite suspension.  As a result, the trial court properly granted the plea.*

Texas Tort Claims Act: City of Brownsville v. Brownsville GMS, Ltd., No. 13-19-00467-CV, 2019 WL 4741730 (Tex. App.—Corpus Christi September 27, 2019) (mem. op.). This is a governmental immunity/contract case where a temporary injunction was sought. The court held the trial court’s failure to rule on the city’s plea to the jurisdiction was not a denial of the city’s plea because a simultaneous separate interlocutory appeal was filed staying the proceedings.

Brownsville GMS, Ltd. (GMS) sued the City of Brownsville, the mayor, and the city commission members complaining of the manner in which the city awarded its waste disposal contract. GMS obtained a temporary injunction to preclude the city from acting on the award and an order for expedited discovery. The individuals filed motions to dismiss based on Texas Civil Practice and Remedies Code Section 101.06(e). The city also filed two pleas to the jurisdiction asserting immunity. The trial court scheduled multiple motions to be heard on August 13, 2019. The trial court denied the motions to dismiss during the hearing. The individuals filed an interlocutory appeal during the hearing for the denial. The trial court did not rule on any other motions during the hearing as the proceedings were stayed.

The city also appealed and argued that the trial court’s refusal to rule on its pleas to the jurisdiction invokes the implicit ruling doctrine and cites Thomas v. Long, 207 S.W.3d 334 (Tex. 2006). In Thomas, the implicit ruling was predicated on the trial court’s grant of affirmative relief to Long while at the same time failing to rule on Thomas’s plea to the jurisdiction. The trial court did not have authority to grant the relief Long sought unless it affirmatively determined that it had jurisdiction. Here, the trial court became aware that DeLeon filed an instantaneous interlocutory appeal, thereby staying all proceedings. The trial court correctly recognized it did not have the power to rule on the pleas and adjourned the hearing. Because the trial court had no authority to rule on the pleas it did not implicitly deny the pleas. The appellate court therefore lacks jurisdiction to hear the city’s appeal.*

Contractual Immunity: Naismith Engineering, Inc. v. City of Aransas Pass, No. 13-18-00402-CV, 2019 WL 4493699 (Tex. App.—Corpus Christi September 19, 2019) (mem. op.). This is a governmental immunity/contract case where the court affirmed the granting of the city’s plea to the jurisdiction.

The city manager, with council approval, entered into a contract with Naismith Engineering, Inc. (NEI) to design improvements to the boat-ramp area of the city’s Conn Brown Harbor (CBH project). The city sued NEI and its surety alleging there were deficiencies related to the CBH project. NEI subsequently counterclaimed to recover outstanding fees for “general work” performed. NEI alleged that “[NEI] performed work ranging from general project services to general harbor engineering and planning and services for waterline extension….” The city filed a plea to the jurisdiction as to the counter-claim, which was granted. NEI appealed.

The court declined to “apply the common law of contracts to a governmental immunity question” and held no contract existed for “general services” between the city and NEI. Therefore, no waiver of immunity existed. NEI attempted to argue its counter-claim included unpaid fees for the CBH project; however, the evidence and statements of counsel made it clear the counter-claim was for other work which was simply near and around the boat ramp. A governmental entity retains immunity from suit as to those claims for monetary damages that are not germane to, connected with, and properly defensive to the entity’s claim. The counterclaim does not arise from the same transaction or occurrence that is the subject matter of the city’s claim and therefore no immunity is waived. The plea was properly granted.*

*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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