City of League City, Texas v. Jimmy Changas, Inc. ( 2023 )

Supreme Court of Texas
══════════
No. 21-0307
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City of League City, Texas,
Petitioner,
v.
Jimmy Changas, Inc.,
Respondent
═══════════════════════════════════════
On Petition for Review from the
Court of Appeals for the Fourteenth District of Texas
═══════════════════════════════════════
JUSTICE YOUNG, concurring.
It should not be so hard for a citizen of Texas to know the answer
to the following question: “If I make a contract with a city and it breaches
the contract, will the courts vindicate my claim?” The response, alas,
will often boil down to this: We won’t know until six or seven years after
the breach, at which point the courts will have balanced some factors
and parsed a statute limited to torts. At that point, either all will be
well, or else it will be a total loss. “But good luck,” a lawyer might tell a
client, “and here’s my bill.”
Such a conversation may well have happened in this case many
years ago when the contractual negotiations were underway—not so
long ago, but long enough that our leading immunity cases were not even
on the books. Those cases, as the Court today ably explains, require us
to determine whether a municipality’s challenged action was either
governmental or proprietary. In making that determination, we are
supposed to ask (1) whether the classifications listed in § 101.0215(a) of
the Texas Civil Practice & Remedies Code provide any “guidance,” and
if not, (2) whether the action otherwise meets the common-law definition
of “governmental function,” as expounded through the four Wasson
factors. No party has asked us to reassess our prior decisions, and I
agree with the Court that, under the rather meandering process that
those precedents compel, League City has failed to show that its contract
with Jimmy Changas satisfies either inquiry.
I suspect, however, that the City could not satisfy any reasonable
standard to immunize itself from Jimmy Changas’ claim. I thus write
separately because it is not clear to me that we are even asking the right
questions in this breach-of-contract context. This area of law has long
bedeviled us, and I do not propose to solve all of it today. Instead, my goal
is to discuss how we got here, propose a way to distinguish between
governmental and proprietary contracts that would simplify many cases,
and suggest that, in an appropriate future case, it is not too late for us
to systematically reconsider our precedents.
I
Many of the cases that the Court cites today were built on
substantial confusion and fundamental disagreement about the nature
of immunity and how it relates to breach-of-contract claims.
Unfortunately, but perhaps predictably, that confusion and disagreement
have grown into an analytical framework derived from two very different
2
legal standards—one from a statute and the other from common law. I
doubt the relevance of the former and the correctness of our current
understanding of the latter.
A
Start with the first step—the statutory one. There, our current
practice is to consult the Texas Tort Claims Act to determine whether a
municipality is entitled to immunity for contract claims. See Tex. Civ.
Prac. & Rem. Code § 101.0215(a)–(b).
Why would we do such a thing? Certainly not because the statute
commands it. To the contrary, we are fully aware that the Act’s “statutory
definitions and designations apply expressly to tort claims,” Wasson Ints.,
Ltd. v. City of Jacksonville (Wasson II), 559 S.W.3d 142, 146 (Tex. 2018),
“but not for claims for breach of contract,” ante at 6 (emphasis added).
The statute’s tort limitation is just the most obvious of several
reasons that make it problematic to apply its “governmental functions”
list in the contract context. I will start there by adding that the statutory
limitation was no accident. Since 1987, our Constitution has expressly
authorized the legislature to “define for all purposes those functions of a
municipality that are to be considered governmental and those that are
proprietary, including reclassifying a function’s classification assigned
under prior statute or common law.” Tex. Const. art. XI, § 13 (emphasis
added). Despite that broad “all purposes” authority, the legislature
cabined its definitions to tort claims that same year. See Act of Sept. 2,
1987, 70th Leg., 1st C.S., ch. 2, § 3.02, 1987 Tex. Gen. Laws 37, 47–48
(codified at Tex. Civ. Prac. & Rem. Code § 101.0215(a)).1
1 I readily accept for this case and in general that our precedent makes
3
To be clear, when the legislature acts in ways that displace the
common law—which is typically within its power and something our
Constitution specifically invites here—the courts’ duty is to follow the
legislative choice. Indeed, as a general matter, today’s judiciary should
be extremely cautious about using its common-law authority to innovate
in areas where the legislature has been particularly active. See
Elephant Ins. Co., LLC v. Kenyon, 644 S.W.3d 137, 157–59 (Tex. 2022)
(Young, J., concurring); Am. Nat’l Ins. Co. v. Arce, __ S.W.3d __, 2023
WL 3134718, at *17 (Tex. 2023) (Young, J., concurring).
The circumstances before us today, however, are exactly the
opposite. The legislature had clear authority to displace the common
law and unambiguously exercised it, but only as to torts. We must credit
the legislature with acting purposefully, and as a “text-centric Court,”
Ojo v. Farmers Group, Inc., 356 S.W.3d 421, 441 (Tex. 2011) (Willett, J.,
concurring), I cannot help but think that we should draw a very different
lesson from the legislature’s choice: that it intended not to displace the
common law with respect to contract claims against municipalities. The
legislature could have made the Tort Claims Act list fully applicable in
any or every context, but instead unambiguously limited it. I would
the governmental-or-proprietary distinction dispositive. The Court is quite right
that this distinction is longstanding for tort claims. Ante at 7 n.3. But as I note
below, no comparable history undergirds its use in contract claims. We first
suggested it just seven years ago. See Wasson Ints., Ltd. v. City of Jacksonville,
489 S.W.3d 427, 439 (Tex. 2016) (“[W]e have never decided whether the
distinction between governmental and proprietary acts . . . applies to breach-of-
contract claims against municipalities.”). The ink is barely dry. Whether there
are additional grounds that might justify or require finding that governmental
immunity does not apply to a governmental unit in the contract context is an
interesting question that goes beyond the scope of my opinion today.
4
respect that limitation until the legislature says otherwise. A patient
should not take a pill with breakfast or lunch when the doctor prescribed
one at dinner; a court should not expand a law’s scope to an area its text
expressly refuses to reach. In neither context is more necessarily better.
A second reason to respect the textual limitation (although, in
truth, the first should be enough) is that the legislature’s choice to leave
the common-law process intact in the contract context is quite sound. A
laundry list of governmental (and thus immunized) functions for tort
claims—and only tort claims—makes eminently good sense.2
Tort and contract claims, after all, are fundamentally different.
Future tort liability is a matter of risk, not certainty. Whether a tort will
happen, how often it will happen, and the consequences of its happening
cannot truly be known—only feared. Governmental immunity for torts
removes at least most liability risks for activities and projects that the
legislature may wish to encourage—like city-funded “parks and zoos,”
“museums,” “recreational facilities,” “swimming pools,” “parking facilities,”
“firework displays,” Tex. Civ. Prac. & Rem. Code §§ 101.0215(a)(13), (14),
(23), (25), (27), and the like. Cities are more likely to undertake such
activities if the cost of doing so need not include (or at least may largely
discount) the uncertain future costs that ordinary tort liability would
bring. To take a (literal) concrete example: Building a swimming pool is
2 More specifically, the functions listed in § 101.0215(a), which are
deemed “governmental,” are brought within the Tort Claims Act, meaning that
immunity is also waived—if and to the extent the claim can survive the
gauntlet that the Tort Claims Act itself imposes. See Rattray v. City of
Brownsville, 662 S.W.3d 860, 865–69 (Tex. 2023) (describing many of the
manifold procedural and substantive requirements that burden Tort Claims
Act, but not ordinary, litigation).
5
a positive good for a community, but even responsibly done, the frequency
and consequences of injuries and accidents are unpredictable. A city with
limited resources may reasonably choose not to go forward when it is
faced with the prospect of sudden, substantial, repeated, and enduring
tort liability. That basis for hesitation, however, should be largely
obviated by the statutory classification in § 101.0215(a)(23), which
ensures that damages from a city swimming pool or other recreational
facility will be imposed only if and to the extent the Tort Claims Act
itself authorizes it.
Contracts are an entirely different matter. Unlike tort liability,
contract liability can be more readily foreseen. Opening a swimming
pool to the public poses a wildly different kind of liability risk than
entering into a contract to install one. A city can do the latter with far
more certainty and awareness of the attendant risks and potential
liability. Indeed, just like any private party, a city can negotiate a
contract’s terms and conditions up front—and, importantly here, define
or limit the remedies available to each party in the event of a breach.
See Tooke v. City of Mexia, 197 S.W.3d 325, 332 (Tex. 2006) (“By entering
into a contract, a governmental entity . . . voluntarily bind[s] itself like
any other party to the terms of the agreement . . . .”); Charles Fried,
Contract as Promise: A Theory of Contractual Obligation 1 (1981) (“The
promise principle . . . is that principle by which persons may impose on
themselves obligations where none existed.”). Analyzing a city’s
entitlement to immunity for contract claims, in other words, is an
inherently different endeavor than analyzing one based in tort. The
incentives, mental states, foreseeability, and remedies will often differ.
6
See, e.g., Sw. Bell Tel. Co. v. DeLanney, 809 S.W.2d 493, 494–95 (Tex.
1991); Formosa Plastics Corp. USA v. Presidio Eng’rs and Contractors,
Inc., 960 S.W.2d 41, 44–45 (Tex. 1998).
For these reasons, I am not puzzled by the legislature’s express
limitation of its “governmental-versus-proprietary” list to suits “under
this chapter”—that is, the Tort Claims Act. Tex. Civ. Prac. & Rem. Code
§ 101.0215(a). For the same reasons, it is not obvious to me that the
Tort Claims Act can even “aid our inquiry” all that much for breach-of-
contract claims. Wasson Ints., Ltd. v. City of Jacksonville (Wasson I),
489 S.W.3d 427, 439 (Tex. 2016). Whatever their similarities, their
differences are greater. The former cannot safely inform the latter, just
as a chef unfamiliar with Texas chili should not consult his bouillabaisse
recipe for guidance on the ground that both are stews.
B
Happily, the potential misdirection the Tort Claims Act can create
when it is conscripted into service for contract cases is at least limited
in its scope. As this case demonstrates, if the statute’s definitions or one
of its thirty-six enumerated functions cannot provide us any “guidance,”
we move to the second step: applying the common law.
Here, the problem is not so much whether the common law applies
but how we have come to apply it.3 To determine whether a
municipality’s action is governmental (and thus immunized), our cases
direct us to apply a four-factor test, asking (1) whether the city’s act was
mandatory or discretionary, (2) whether it was for the benefit of the
3 The recognition of sovereign immunity is within the proper common-
law domain of the courts. See Wasson I, 489 S.W.3d at 432. If the courts
recognize immunity, then it is up to the legislature to waive it or not.
7
general public or only its residents, (3) whether the city was acting on
its own behalf or the State’s, and (4) whether the city’s act, if otherwise
proprietary, was sufficiently related to a governmental function.
Wasson II, 559 S.W.3d at 150–54.
Today’s case, fortunately, serves as a fairly straightforward
example of how a city can flunk each factor. But that does not mean it
will always be so easy. As with most multifactored tests, the Wasson
factors can point us in different directions,4 and I am unsure how to
measure one against the other in the event of a conflict. Cf. Bendix
Autolite Corp. v. Midwesco Enters., Inc., 486 U.S. 888, 897 (1988) (Scalia,
J., concurring in judgment) (likening balancing tests to “judging whether
a particular line is longer than a particular rock is heavy”); National
Pork Producers Council v. Ross, 143 S. Ct. 1142, 1160 (2023) (opinion of
Gorsuch, J.) (questioning how courts can weigh economic and
noneconomic costs and benefits under the Pike balancing test in a
dormant Commerce Clause analysis and concluding that such a balance
is “insusceptible to resolution by reference to any juridical principle”).
Potentially worse, counting the factors for and against could give
the mistaken impression that the immunity analysis is reducible to
simple arithmetic. Three against one or one against three provides only
an illusion of being closer to the correct answer. These factors are, by
their nature, incommensurable—a fact enjoyed perhaps only by the
4 See Wasson II, 559 S.W.3d at 154; see also Hayes St. Bridge Restoration
Grp. v. City of San Antonio, 570 S.W.3d 697, 705–06 (noting that one factor
supported a “proprietary” classification while the other three supported a
“governmental” classification). Indeed, if a multifactored test were incapable
of pointing in different directions, there would seem be to be no point in having
more than one factor.
8
equivocating law student on exam day, but not by any judge, litigant, or
member of the public who seeks more clarity in the law.5
To be sure, Wasson II instructs that when “some factors . . . point
to one result while others point to the opposite result,” we “should
consider immunity’s nature and purpose and the derivative nature of a
city’s access to that protection.” 559 S.W.3d at 154. I must confess,
however, that I do not quite know what that statement means or what
rule of decision it provides for our trial judges, who must make the legal
call in the first instance. More importantly, I doubt that a Texan about
to form a contract with a city (or a Texan who already did so and now
finds that city in breach) will be able to know with much confidence
whether immunity applies or not.
Similarly lacking, I am afraid, is any confidence we may have in
the potential answers the Wasson factors could produce. It seems entirely
possible that even when the factors all point in the same direction, it
could be the same wrong direction. Consider, for instance, a city’s
decision to create a police force. Jurists and laymen alike would
intuitively (and rightly) regard that decision to be quintessentially
governmental. The Wasson factors, though, might deem such an act
proprietary. A city is not mandated to create a police force (factor 1); the
police force would primarily benefit city residents by virtue of its limited
jurisdiction, which is why the city’s residents pay for it (factor 2); and
5 As Justice Blacklock eloquently puts it, “When the factors themselves
become the inquiry—as seems to have happened—the underlying concepts
recede into the mist, and we lose sight of what we are really asking and why we
are asking it.” Post at 5–6 (BLACKLOCK, J., dissenting). This comment applies
here and to so many other areas of the law that currently rely on balancing tests.
9
that primary responsibility for funding its own police force, as well as
its local chain of command, shows that the city would primarily be acting
on its own behalf, not the State’s (factor 3).6
One could perhaps argue (under factor 4) that a police force is
“sufficiently related” to a governmental function. Relying on that escape
hatch, though, only illustrates my point. It would be strange indeed to
say that something is “sufficiently related” to a governmental function
after it fails the first three factors of a test purporting to suss out
whether it is “governmental.” Relying on the last factor, in other words,
is essentially circular: it openly depends on already knowing what is
“governmental” to determine whether something is “governmental.”7
I have a sneaking suspicion that the “four-factor” test turns out
to be a one-factor test and that—voila!—the paramount fourth “factor”
6 To be sure, this particular example assumes that I have understood
factor 3 correctly. Based on our precedent, it is also unclear to me whether this
factor requires us to look at the municipality’s intentions or the effects of its
decisions. Compare Wasson II, 559 S.W.3d at 151 (considering whether
nonresidents benefitted from a city’s decision) with id. (looking to the record to
determine the city’s “primary objective”).
7 One can easily imagine other examples where the factors mislead more
than facilitate the ultimate governmental-or-proprietary inquiry. How about
another classic governmental function: levying property taxes. Because the
State opts not to levy such taxes, doing so is a municipal choice (factor 1). Those
taxes fund municipal entities and primarily benefit their own residents, as with
schools and streets (factor 2). In levying such taxes, a city could not claim to do
so on behalf of the State, which does not assess property taxes, and the collected
taxes do not go to the State’s fisc (other than temporarily, in some cases) (factor
3). Maybe, again, the fourth factor could bat clean-up, but if so, what work do
the first three achieve? How much weight should they receive in such instances?
Is the fourth one doing anything other than stating “yes, this is governmental”—
easy for taxes or police, but harder in other cases? If we cannot trust the first
three factors in “easy” cases, why should we trust them in hard ones?
10
is revealed as just another disguise for our ancient nemesis: Ye Olde
Know-It-When-I-See-It Test.
C
My thoughts thus far are admittedly rather pessimistic, but I
proceed mindful of Chesterton’s fence. The benefit of raising these issues
in today’s case is that we can explore them without any risk of tearing
down a fence that was built for a good but unknown or forgotten reason.
Nonetheless, I doubt that the status quo reflects our best ability
to distinguish between governmental and proprietary in the contract
context. That governmental-or-proprietary distinction, I acknowledge,
has a long historical pedigree with respect to tort claims. See City of
Galveston v. Posnainsky, 62 Tex. 118, 130–31 (1884). But it is of
surprisingly recent vintage with respect to contract claims. See Wasson I,
489 S.W.3d at 439. Indeed, it was only nineteen years before Wasson I
that this Court appears to have first endorsed the antecedent premise
that governmental units are entitled to immunity for contract claims just
as they are for tort claims. See Fed. Sign v. Tex. S. Univ., 951 S.W.2d
401 (1997). I mention this not to challenge the use of the dichotomy—
our precedent, as fresh as it may be, prescribes its use. Instead, while I
accept it as our current precedent, I think that it probably is too early to
conclude that the only way that immunity might be lacking in a contract
case is if entering into it qualifies as a city’s “proprietary” action.8
8 This is not to mention, of course, that the legislature has already waived
any local-government immunity for certain classes of contract claims. See Tex.
Loc. Gov’t Code §§ 271.151(2), .152 (waiving, for example, such immunity for
contracts involving the provision of goods or services). In 2005, when the
legislature enacted Chapter 271, it was unclear what immunity (if any)
municipalities had for breach-of-contract claims, so the waiver avoided any
11
But for today, I proceed on the premise that the governmental-or-
proprietary question will be dispositive. Given that principle, we should
at least ensure that the nature of the claim does not become ultimately
obscured by labels. In other words, when we begin classifying a
municipality’s acts as either “governmental” or “proprietary,” we ought to
still account for the inherent differences between tort and contract claims.
Perhaps one way to improve our current approach, as Justice
Blacklock suggests, is to jettison the Wasson factors and simply deploy
our “good judgment and practical knowledge” while applying the
governmental–proprietary dichotomy. Post at 6. Indeed, as he sees it,
regaining “a coherent theory” in this area of the law will require a more
“firmly grounded” understanding of “the concepts conveyed by the words
‘governmental’ and ‘proprietary’” and applying them accordingly. Post
at 4. And perhaps building a common-law basis for this distinction in a
series of cases will generate rules, not mere factors, that will provide the
requisite clarity and predictability that the citizens and cities of Texas
all deserve. I would welcome the endeavor.
That said, I cannot shake the notion that any rule or set of rules
would characterize League City’s contract with Jimmy Changas as a
decidedly proprietary action. And so I propose a different rule: that a
contract is proprietary if it asks a market participant to do the very kind
of thing it could contractually bind itself to do with non-governmental
market participants. The contract in this case—memorializing financial
incentives to build a restaurant—reflects no material difference from a
consequences of the confusion. See H. Rsch. Org., Bill Analysis, H.B. 2039
(April 20, 2005).
12
potential contract between similarly situated private parties.
To test this view, suppose that Jimmy Changas’ counterparty was
not a governmental entity but instead a commercial developer. Such a
developer might offer incentives to Jimmy Changas to build a restaurant
in its development. Why? To increase the desirability and thus the value
of its homes and commercial spaces, to attract other commercial tenants
to a shopping plaza, to serve as an amenity for employees that would help
entice companies to open an office, or for other similar reasons. I would
think that such an offer (if accepted) would be a standard commercial
agreement. If Jimmy Changas performed and the private developer
refused to do so, we would treat the dispute as an ordinary breach-of-
contract action. We would not tell Jimmy Changas that the contract was
illusory and that its dedication of resources to this project rather than
others that it might otherwise have preferred was for nothing.9
My dissenting colleague, on the other hand, reaches the opposite
conclusion and makes a strong argument that Jimmy Changas is no more
than a “participant in a government-benefits program” and a “beneficiary
of government largesse, not a counterparty in a commercial exchange”
“in which private parties might engage for their mutual benefit.” Post
at 7–8. As with so much else in Justice Blacklock’s opinion, I largely
agree with this insight, but in my view, the inquiry he describes is
antecedent to the one on which I focus.
9Like other legal rules, future cases may be required to refine this one,
were the Court ever to adopt it. For example, determining the proper level of
generality to assess whether a contract with a city is analogous to one that
could be made with a private counterparty might require further elaboration.
But I doubt that any such difficulty would appear in this case, and maybe not
in many others, either.
13
Specifically, if we determine that a “contract,” despite its name, is
nothing but an exercise of public spending or “largesse,” that would end
our inquiry. We would never reach the immunity question at all because
such a relationship, even if dressed up in contractual garb, would not
truly be contractual. Whatever arguments a beneficiary of “largesse”
might make if the munificence were to dry up, those arguments would not
sound in contract if there was no true contractual relationship. In such
a case, as Justice Blacklock notes, we would first turn to the public law
creating the government program. Post at 8. Other areas of law, such as
the procedural due-process jurisprudence on government benefits, might
well apply, too.10
But if we pass that antecedent step, it becomes a contract case.
Here, substituting the developer in my hypothetical for League City
suggests to me that Jimmy Changas was not the beneficiary of “largesse”
but was engaged in commercial activity. The focus on the contractual
counterparty—who will bear all the risk if a city is able to slip out of its
deal—is proper. To a city, everything it does will seem governmental; to
10 There is substantial disagreement about whether (or the extent to
which) the government must follow the strictures of due process when it makes
a decision regarding benefits that it is under no duty to provide—benefits that
“are sometimes referred to as government largesse.” John E. Nowak & Ronald
D. Rotunda, Constitutional Law 540 (5th ed. 1995). The key question in such
cases is whether these benefits constitute “property”—a question I briefly
address in Part II, infra. For purposes of answering that question in the due-
process context, the U.S. Supreme Court has circled around the concept of
“entitlement,” e.g., Bd. of Regents v. Roth, 408 U.S. 564, 577–78 (1972), what
some could easily transpose as a contractual promise, e.g., Nowak & Rotunda,
supra, at 542 (“[An] entitlement also may come from statutory law [or] formal
contract terms . . . .”). If such entitlements can be characterized as contracts
at all, it is probable that they are situated quite differently for immunity
purposes from “contracts” of the traditional sort.
14
a hammer, everything seems like a nail. But it will not seem that way
to a business entering into a contract (just as my thumb does not feel
like a nail when my hammer strikes it).
That said, Justice Blacklock is surely correct that “[g]overnment-
sponsored ‘economic development’ programs are no stranger to political
controversy” and that newly elected officials may not want to be bound
by their predecessors’ policy decisions as reflected in the contracts that
arise from such programs. Post at 3. But I disagree that the promises
made and memorialized in writing by a municipality can just be undone
by nothing more than the whims of the political process. The law has
other ways to mitigate the profligacy of poor leadership without heaping
all the consequences of a poor choice on the contractual counterparty. 11
In one statutory waiver of immunity for contract claims, for example, the
legislature has chosen to enact limitations on the damages recoverable
from a municipality. See, e.g., Tex. Loc. Gov’t Code § 271.153(a)(4)–(b)(2).
Of course, any party to a contract may negotiate for such limitations of
liability. If cities do not do so as a matter of course, nothing stops the
legislature from enacting such a blanket term, whether as a default or
as mandatory, for these kinds of contracts. Nor is it clear that the
11 The justification for municipal power to restrict individual rights by
force of law is that municipal corporations reflect local self-government. That
self-government premise renders quite doubtful any wholesale immunization of
municipal corporations for their leaders’ improvident contractual undertakings.
On the contrary, if unwise decisions generate no real consequences, the
incentives for rigorous self-government cannot help but diminish. And, little
by little, wise exercises of self-government will be punished, too; all local
governments will have to pay more for a contract if some of them can renege.
After all, how will a business be able to distinguish honorable municipalities
whose word is their bond from those who will abandon agreements when short-
term political or fiscal agendas make doing so convenient?
15
common law of government contracts would not have similar effects,
allowing both parties to negotiate in the light of the law.
The upshot of all this is that if we abandon the Wasson factors but
keep the governmental–proprietary distinction, as Justice Blacklock
and I both propose, the application will look much different for contracts
cases. And because many if not most of the contracts that municipalities
enter into will be ones that private parties can similarly make, like the
one between League City and Jimmy Changas here, those contracts will
be correctly deemed proprietary and no immunity will attach. Cf. Gates
v. City of Dall., 704 S.W.2d 737, 739 (Tex. 1986) (noting that “proprietary
functions have subjected municipal corporations to the same duties and
liabilities as those incurred by private persons and corporations”). It is
one thing to diffuse public goods and common resources; it is quite
another to make bargained-for promises to specific entities.
Differentiating between the two, I think, would be an example of “good
judgment and practical knowledge of how the world works.” Post at 6.
II
Many additional pages could illustrate with much more detail how
governmental immunity in the breach-of-contract context is far from
settled (if not unsettling). Reasonable minds can and will differ on what
immunity (if any) municipalities can claim in such cases. Opinions from
Justices of this Court have run the gamut, ranging from a categorical
immunity rule, to no immunity at all, to someplace in between.12 I cannot
12See, e.g., Tex. Nat. Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d
849, 857 (Tex. 2002) (categorical immunity rule); Fed. Sign, 951 S.W.2d at 418(Enoch, J., dissenting) (no immunity at all); id. at 412 (Hecht, J., concurring)
(some place in between).
16
say which is right without further consideration and briefing on the issue,
of course, but given the inability of our current factor-ridden framework
to generate consistent and predictable results, I doubt stare decisis will
stand as an insurmountable barrier to a thorough recalibration of our
approach. Thus, to the extent a future case asks us to reconsider our
precedents, I offer a few tentative observations, intended not as any
great effort to plumb the depths of this contentious and cacophonous
area of the law, but instead as a modest offer of potential points of
consideration if and when the occasion calls for it.
First, the fact that we are dealing with a municipal corporation
might simplify our analysis. As a learned colleague on the federal bench
recently opined, “at common law, both in England and the early American
Republic, incorporated entities were not entitled to sovereign immunity.”
Springboards to Educ., Inc. v. McAllen Indep. Sch. Dist., 62 F.4th 174,
191 (5th Cir. 2023) (Oldham, J., concurring).13 Whatever the support for
that (some might say) proposed federal common-law rule,14 I find the
13 Coincidentally, the full Springboards panel also expressed frustration
with precedent that mandated—you guessed it—a multifactor-balancing test
for immunity. Compare id., at 179 (noting that the immunity factors derived
from Clark v. Tarrant Cny., 798 F.2d 736 (5th Cir 2019), have been “fairly
described as having all the precision of a blunderbuss”) (internal quotations
and citations omitted), with id. at 187 (Oldham, J., concurring) (calling the
factors “cumbersome” and proposing “a new single-factor test: Was the entity
asserting state sovereign immunity considered ‘the State’ in 1789?”).
14Compare Ann Woolhandler, Interstate Sovereign Immunity, Sup. Ct.
Rev. 249, 261 (2006) (“[T]he [U.S. Supreme] Court might have treated the
immunities as matters of federal constitutional or federal common law.”), with
Caleb Nelson, Sovereign Immunity as a Doctrine of Personal Jurisdiction, 115
Harv. L. Rev. 1559, 1565–66 (2002) (positing that state sovereign immunity is
a “concept . . . relevant to personal jurisdiction”); William Baude, Sovereign
Immunity and the Constitutional Text, 103 Va. L. Rev. 1, 8–22 (2017) (arguing
17
general principle to be helpful at least as a rebuttable presumption.
Municipal corporations are not remotely sovereign, of course, even as a
matter of Texas common law. But just like individual human beings,
corporations could be treated as such when performing roles delegated to
them by the State. In such instances, if the presumption against being
“the State” is rebutted, immunity would apply in the ordinary course.
Second, aside from what we have said, perhaps we should consider
what the People have said about when the government (including the
State itself) must compensate private parties: “No person’s property
shall be taken . . . without adequate compensation.” Tex. Const. art. I,
§ 17. And as we have observed before, the Texas Takings Clause itself
“waives immunity for suits,” City of Dallas v. VSC, LLC, 347 S.W.3d
231, 236 (Tex. 2011), and applies to all property (real or personal), Gulf,
C. & S.F. Ry. Co. v. Fuller, 63 Tex. 467, 469 (1885). Thus, when a
municipality accepts property under a contract and refuses to pay for
them, such an action might amount to a raw, compensable taking.15
Third, and finally, sprinkled about our immunity opinions are
various appeals to pragmatism, including that immunity should shield
that sovereign immunity is a “constitutional backdrop” and thus a form of
common law that “can’t be changed because of the properly limited nature of
Articles I and III”).
15 Cf. Fed. Sign, 951 S.W.2d at 415 (Hecht, J., concurring) (“The State
may not take property without compensation, but it may determine how its
Branches will participate in deciding its contractual disputes.”); John
Echeverria, Public Takings of Public Contracts, 36 Vt. L. Rev. 517, 530 (2012)
(“[I]f the government has not only impaired the contract interest but deprived
the party of her contract remedy, then the party’s protected interests have been
destroyed and allowing the takings claim to go forward is necessary to protect
those interests.”).
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the public from the costs of their government’s “improvident actions.” If
“improvidence” typifies actions sounding in ordinary negligence, this
rationale may make sense for torts. But as I noted above, I doubt it
applies as much to a governmental entity’s breach of contract. 16 A deal
may turn out to be less good than hoped, but negotiated contracts can
always have adequate foresight. A momentary lapse in judgment
resulting in a tort is unlike the conscious, studied decision to make a
promise—or, for that matter, to break one. Granting immunity to obviate
the consequences of “improvident” governmental actions, then, cannot be
the only answer. The public—whom we have sought to “shield”—always
retains the option of not electing improvident officials. Judicially
relieving those officials’ improvidence, by contrast, means that the only
party to suffer any consequences is the one who entered into the contract.
No governmental unit—especially in Texas, where promises really
matter—should be able to evade its obligations so capriciously.
* * *
With these observations, I respectfully concur and await another
case in which the Court may appropriately revisit the principles of
immunity as they apply to contract claims against municipalities.
Evan A. Young
Justice
OPINION FILED: June 9, 2023
16 We have used such reasoning several times in suits against
governmental entities for breach of contract. E.g., Tooke, 197 S.W.3d at 332;
City of Houston v. Williams, 353 S.W.3d 128, 134 (Tex. 2011); Zachry Const.
Corp. v. Port of Houston Auth. of Harris Cnty., 449 S.W.3d 98, 121 (Tex. 2014)
(Boyd, J., dissenting); Wasson I, 489 S.W.3d at 432.
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