TCAA, in conjunction with the Texas Municipal League, files amicus briefs and comments in support of cities on many issues. To keep up to date on the status of these issues, go to https://www.tml.org/p/AmicusBriefUpdate_091018.pdf.
Contractual Immunity: Hays Street Restoration Group v. City of San Antonio, No. 17-0423 in the Supreme Court of Texas. This is a contracts immunity case. At issue is whether the limited waiver of immunity in the Texas Local Government Contract Claims Act (Act), Texas Local Gov’t Code §§ 271.151–.159, waives immunity in suits seeking specific performance. Amici TML, the Texas Coalition of Cities for Utility Issues, and 164 additional Texas cities argue that it does not, except as expressly provided in the Act for suits arising from large-volume conveyances of reclaimed water for industrial purposes.
The case centers around the city’s alleged obligation to develop land near a restored bridge as a park. When it did not, a group formed to restore an adjacent historic bridge sued the city, seeking specific performance of the city’s alleged obligation.
In 2000, the group entered into discussions with the city about a bridge restoration project. According to the group, these discussions included conversations about not only restoring the bridge, but also developing the adjacent property into a park. The city, with the help of the group, applied for a Texas Department of Transportation (TxDOT) grant to restore the bridge. The application for the grant was approved, and the city received $2.89 million for the bridge restoration project, which funded eighty percent of the total project cost. Under the terms of the grant, the city was required to provide 20 percent of the total project cost—either in cash or in-kind contributions.
Before the city formally accepted the funding, the city and the group executed a written memorandum outlining the parties’ responsibilities with regard to fundraising for the remainder of the project. The memorandum provided that the group was responsible for “[c]ontinu[ing] to raise matching funds through grant applications and other private resources” and promptly transferring such funds to the city to cover its 20 percent match.
In exchange, the city was responsible for “[e]nsur[ing] that any funds generated by [the group] for the Hays Street Bridge go directly to the approved City of San Antonio budget, as authorized by TxDOT, for the Hays Street Bridge project costs via the San Antonio Area Foundation’s Hays Street Bridge Restoration Fund.”
Once the memorandum was executed, the group focused on raising funds—both in cash and in-kind contributions—to fulfill its obligation. Its efforts included obtaining the adjacent property for park use. In 2007, the city acquired that property and subsequently sold the property to Alamo Beer Company for commercial use. When the group discovered the property (which the city disputed was ever supposed to be used as a park) had been sold, the group sued, alleging the city breached its contract—the memorandum—by failing to develop the adjacent property into a park as part of the restoration project. It is undisputed that as damages, the group sought only specific performance.
The city filed a plea to the jurisdiction, asserting that to the extent the memorandum was a contract, its immunity from suit had not been waived because the Act does not provide for a waiver of immunity from suit for claims seeking specific performance. The trial court denied the plea, but the intermediate appellate court rendered judgment in favor of the city. The brief was filed on August 30, 2018.
Eminent Domain: KMS Retail Rowlett, LP f/k/a KMS Retail Huntsville v. City of Rowlett, No. 17-0850 in the Supreme Court of Texas. In this case, the City of Rowlett used eminent domain to acquire property for a public street. The owner of the property sued, alleging that the taking was for economic development purposes, which is prohibited by state law. Amici argued that Texas Government Code Section 2206.001 does indeed impose various limitations related to the use of eminent domain for economic development purposes. However, that section also provides that: “[t]his section does not affect the authority of an entity authorized by law to take private property through the use of eminent domain for…transportation projects, including, but not limited to, railroads, airports, or public roads or highways…” Those words are unambiguous. They completely remove a “public road or highway” from any other prohibitions imposed by the section. Because streets are listed in a “laundry list” of exceptions, the use of eminent domain for that purpose is not prohibited by state law. The Texas Association of Counties, Texas Conference of Urban Counties, Texas Pipeline Association, and Texas Civil Justice League joined TML and TCAA in the brief, which was filed on August 28, 2018.