City of El Paso v. Joseph C. Pickett ( 2022 )

COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
CITY OF EL PASO, § No. 08-21-00147-CV
Appellant, § Appeal from the
v. § 384th Judicial District Court
JOSEPH C. PICKETT, § of El Paso County, Texas
Appellee. § (TC# 2020DCV3514)
OPINION
Appellee Joseph C. Pickett petitioned for monetary and declaratory relief regarding a
proposed increase in the “Environmental Franchise Fee” (the Fee), collected by the City from
customers of El Paso Water. 1 The City filed a plea to the jurisdiction, which the trial court denied.
In two issues on appeal, the City challenges Pickett’s standing to file suit, and whether he had
established a valid waiver of governmental immunity. We affirm.
I. FACTUAL BACKGROUND
As a resident of the City of El Paso, Pickett pays taxes on his properties. He filed a claim
for declaratory relief against the City of El Paso pursuant to the Texas Uniform Declaratory
1
In the trial record, the Fee is referred to by a variety of names such as: “Environmental Franchise Fee,” “ESD Fee,”
“PSB Infrastructure Franchise Fee,” and “FRANCHISE FEE (NO TAX).”
Judgments Act and the Texas Constitution. See TEX. CONST. art. I, § 19; TEX. CIV. PRAC. & REM.
CODE ANN. § 37.004.
By his suit, Pickett alleged he received notice in his water bill that the “Environmental
Franchise Fee” charged to customers would increase 50% for residential customers, and 33% for
commercial customers. He alleged the insert failed to provide information on the specific use of
the Fee, or how it was calculated. At most, he claimed, the notice indicated the Fee would fund
public safety equipment and street maintenance. On his bill, the Fee appeared as the “ESD” fee.
He claims he continues to be assessed these fees on an ongoing basis for all his properties.
Picket further described that he learned additional information after he submitted a request
for information under the Public Information Act. He alleged the City’s response, which referred
to the Fee as the “PSB Infrastructure Franchise Fee,” was imposed by El Paso Water to compensate
for wear and tear on streets by the utility’s vehicles, and for the use of streets and rights of way for
utility pipelines. Pickett’s petition acknowledged he was uncertain as to whether the PSB fee is the
same as, or a part of, the ESD fee.
He further asserts the Fee was implemented by City of El Paso Ordinance 018829 (the
Ordinance), adopted on August 14, 2018, stating, in pertinent part:
The Department of Environmental Services shall be authorized to charge the
established fee as a related cost to providing the solid waste disposal utility to
service due to the wear and tear on the City’s rights-of-way caused by the use of
the City sanitation vehicles in providing the utility service, and that the reasonable
return generated by the franchise fee be transferred to the City general fund to be
appropriated by the City Council as deemed appropriate. 2
2
El Paso, Tex., Ordinance 018829 (Aug. 14, 2018).
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He claims the Ordinance was purportedly adopted pursuant to Section 364.034 of the Texas Health
and Safety Code. Picket further alleges the City’s fiscal year 2020 budget resolution, adopted in
August 2019, stated in pertinent part:
61. That the environmental service franchise fee will be used as follows:
$6,600,000 for residential street maintenance.
$2,700,000 for the purchase and acquisition of Fire Department replacement
vehicles.
$1,300,000 for Police Department major capital equipment.
By his petition, Pickett alleged the City was collecting the Fee for a purpose not permitted
by law. Specifically, he alleged:
Even if the City could actually[,] separately identify the costs of the ‘wear and tear
on City’s rights-of-way caused by the use of the City sanitation vehicles in
providing the utility service’ and somehow distinguish it from the costs of the wear
and tear on the City’s rights-of-way caused by all other users, and we do not believe
it can, it appears not to have even attempted to do so. Further, the City admits in its
budget document that $4 million of the approximately $10.6 million to be collected
annually through this fee will be used for purposes completely unrelated to the
statutory authority for the fee, which is only to be used for solid waste disposal
services, and that is only if Plaintiff accepts the City’s completely unsupported
number for ‘wear and tear costs’ of the solid waste disposal service as the rationale
for spending the balance on street maintenance.
Pursuant to the UDJA, Pickett sought a declaratory judgment construing the application of the
City’s ordinances to the facts alleged in his pleading. He contended the Ordinance and state law
had been improperly construed “to allow the City to obtain funds for street maintenance and fire
and police department equipment through what is supposed to be a fee for solid waste disposal
services.”
The City filed a plea to the jurisdiction objecting to the trial court’s exercise of subject
matter jurisdiction over the cause of action. First, the City asserted that Pickett lacked standing
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because he did not plead a particularized injury. Second, the City maintained Pickett had failed to
properly plead a waiver of the City’s governmental immunity. Third and finally, the City
contended there was no cause of action for state constitutional claims. After hearing argument, the
trial court denied the City’s plea to the jurisdiction by written order. This interlocutory appeal
followed.
II. STANDARD OF REVIEW
Sovereign immunity from suit defeats a trial court’s subject matter jurisdiction unless the
state expressly consents to suit. Tex. Dep’t of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex. 1999).
Like sovereign immunity, governmental immunity operates to afford similar protection to cities
and other subdivisions of the State. Harris Cnty. v. Sykes, 136 S.W.3d 635, 638 (Tex. 2004). The
UDJA generally permits a person who is interested in a deed, or whose rights, status, or other legal
relations are affected by a statute, to obtain a declaration of rights, status, or other legal relations
thereunder. Tex. Transp. Comm’n v. City of Jersey Village, 478 S.W.3d 869, 876 (Tex. App.—
Houston [14th Dist.] 2015, pet. denied). “While the [U]DJA waives sovereign immunity for certain
claims, it is not a general waiver of sovereign immunity.” Tex. Parks & Wildlife Dept. v. Sawyer
Trust, 354 S.W.3d 384, 388-89 (Tex. 2011). “Consequently, sovereign immunity will bar an
otherwise proper [U]DJA claim that has the effect of establishing a right to relief against the State
for which the Legislature has not waived sovereign immunity.” Id.A plea to the jurisdiction is a dilatory plea that seeks dismissal of a case for lack of subject
matter jurisdiction. Harris County v. Sykes, 136 S.W.3d 635, 638 (Tex. 2004); Bland Indep. Sch.
Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). Whether a court has subject matter jurisdiction is a
question of law. Texas Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004).
The determination of whether a trial court has subject matter jurisdiction begins with the pleadings.
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Id. The plaintiff’s pleadings must “allege facts that affirmatively demonstrate the court’s
jurisdiction to hear the cause.” Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446
(Tex. 1993). Whether a party has met its initial pleading burden is a question of law reviewed de
novo. Turner v. Robinson, 534 S.W.3d 115, 122 (Tex. App.—Houston [14th Dist.] 2017, pet.
denied) (citing Miranda, 133 S.W.3d at 226).
We must construe the pleadings liberally in favor of the plaintiff and look to the pleader’s
intent. Miranda, 133 S.W.3d at 226. If the pleadings do not contain sufficient facts to affirmatively
demonstrate the trial court’s jurisdiction but do not affirmatively demonstrate incurable defects in
jurisdiction, the issue is one of pleading sufficiency and the plaintiff should be afforded the
opportunity to amend. Id. at 226–27. If the pleadings affirmatively negate the existence of
jurisdiction, then a plea to the jurisdiction may be granted without allowing the plaintiff an
opportunity to amend. Id. at 227.
III. STANDING
In its first issue, the City asserts Pickett does not have standing to sue to the City. Standing
is a constitutional prerequisite to maintaining suit, which is determined at the time suit is filed in
the trial court. Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993). As a
component of subject matter jurisdiction, we review a claimant’s standing de novo. Id. “As a
general rule of Texas law, to have standing, unless it is conferred by statute, a plaintiff must
demonstrate that he or she possesses an interest in a conflict distinct from that of the general public,
such that the defendant’s actions have caused the plaintiff some particular injury.” Williams v.
Lara, 52 S.W.3d 171, 178 (Tex. 2001).
Generally, taxpayers do not have a right to bring suit to contest government decision-
making because “[g]overnments cannot operate if every citizen who concludes that a public
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official has abused his discretion is granted the right to come into court and bring such official’s
public acts under judicial review.” Bland, 34 S.W.3d at 555 (quoting Osborne v. Keith, 177 S.W.2d
198, 200 (Tex. 1944)). But Texas law has a long-established exception to this general rule.
Williams, 52 S.W.3d at 179–80. In Texas, taxpayers generally have standing to enjoin the illegal
expenditure of public funds, and otherwise need not demonstrate a particularized injury. Id.; Bland,
34 S.W.3d at 556. “To have standing as a taxpayer to challenge government expenditures, a
plaintiff must show two things: (1) that the plaintiff is a taxpayer; and (2) that the public funds are
expended on . . . allegedly illegal activity.” Jones v. Turner, 646 S.W.3d 319, 323 (Tex. 2022)
[Internal quotation marks omitted]. A taxpayer may maintain an action solely to challenge
proposed illegal expenditures; he or she may not sue to recover funds previously expended or
challenge expenditures that are merely “unwise or indiscreet.” Williams, 52 S.W.3d at 180.
Taxpayer standing is divided into three categories—federal, state, and municipal—with municipal
taxpayer standing involving a more lenient test. See id. (“Municipal taxpayers need only establish
that they pay taxes to the relevant entity, and that public funds are expended on the allegedly
unconstitutional activity.”).
We begin with the first element. Pickett alleged he owns property in the City of El Paso
and is a taxpayer. The City does not dispute that Pickett pays taxes on the properties he owns. 3
Accordingly, we conclude Pickett met the first requirement of taxpayer standing. See Williams, 52
S.W.3d at 180.
3
The City argues for the first time in its reply brief that Pickett “is not a taxpayer” because he did not allege the
challenged fee was a tax. Pickett filed a motion to strike this new argument. We carried the motion to consider with
the merits of the appeal. New or additional issues raised in a reply brief are untimely and will not be considered absent
express permission from the appellate court allowing the new or additional issues. See Collin Cnty. v. Hixon Family
P’ship, Ltd., 365 S.W.3d 860, 877 (Tex. App.–Dallas 2012, pet. denied); Rogers v. City of Fort Worth, 89 S.W.3d
265, 284 (Tex. App.–Fort Worth 2002, no pet.); TEX. R. APP. P. 38.7. Thus, we grant Pickett’s motion and we do not
consider the City’s newer argument.
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Turning to Pickett’s suit, he seeks declaratory relief that the City’s ordinance and state law
were improperly construed to allow the imposition of an illegal fee and prevention of the future
application of the fees. Pickett alleges the ordinance was improperly construed to “allow the City
to obtain funds for street maintenance and fire and police department equipment through what is
supposed to be a fee for solid waste disposal services.” The City’s plea suggested Pickett must
allege a particularized injury to have standing to challenge the fees. Although it is true plaintiffs
who seek the judicial invalidation of a city ordinance generally must allege a particularized injury,
taxpayer standing is an exception to this usual requirement. See Bland, 34 S.W.3d at 555–56; Perez
v. Turner, 653 S.W.3d 191, 200 (Tex. 2022). When a taxpayer requests an injunction against the
expenditure of an illegally collected tax, the court may or may not be required to decide if the
ordinance is invalid. Perez, 653 S.W.3d at 200. Therefore, we look to the gravamen of the claim
and to whether “[t]he rationale underlying taxpayer standing applies” to such claims. Jones, 646
S.W.3d at 324.
Here, Pickett’s claim is that the City’s expenditure of the charged fee is outside the scope
of the statutory authority granted by the Texas Health and Safety Code. See TEX. HEALTH &
SAFETY CODE ANN. § 364.034. Pickett alleges the Texas Health and Safety code only provides that
a public agency may charge a fee for offering solid waste disposal service. According to Pickett,
the collected funds are being spent in accordance with the City’s 2022 Budget Resolution, which
permitted the purchase and acquisition of Fire Department replacement vehicles and Police
Department capital equipment. Pickett’s suit pursues the prevention of future application of the
fee. He seeks declaratory relief regarding the future improper expenditure. Jones, 646 S.W.3d at
324 (“But when the law requires that a certain amount of money be directed to a specific service,
and the plaintiff alleges that it is being directed and spent elsewhere, the taxpayer has alleged an
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illegal expenditure sufficient to confer taxpayer standing.”); Perez, 653 S.W.3d at 201 (“We
required the plaintiffs to show that measurable, significant public funds that would not otherwise
have been spent were truly at stake in order to assert taxpayer standing. But we did not require the
plaintiffs, as a prerequisite to standing, to demonstrate that the allegedly illegal activity was
actually illegal.”).
The City asserts that because Pickett alleged the charged fee is inconsistent with the
statutory authority for the fee, he failed to establish standing. The City argues Pickett’s lawsuit
mirrors a case arising out of our sister court in Fort Worth. See City of Arlington v. Scalf, 117
S.W.3d 345, 346 (Tex. App.—Fort Worth 2003, pet. denied). There, a resident of the city filed suit
alleging the street maintenance fee was unlawful because it was a tax that the city was unauthorized
to impose. Id. at 346-47. The resident contended the city had violated his due process rights, sought
an injunction to prohibit the collection of the fee, and asked for a refund of the fees collected. Id.On appeal, the Fort Worth court of appeals held the resident did not have standing to sue the city
because he failed to show how he suffered any unique harm different from that suffered by the
thousands of other city property owners—who were all customers of the city’s water utility and
were charged the same street maintenance fee. Id. at 348. We conclude, however, that Scalf is
distinguishable. Here, Pickett does not challenge the City’s ability to charge such a fee, but rather,
he alleges the City is not permitted to expend the collected fees in the manner it intends.
Additionally, Pickett asserted standing through the taxpayer exception and did not contend he
suffered individualized harm as did the plaintiff in Scalf. Id. Accordingly, we determine the City
has failed to show Pickett did not properly allege taxpayer standing. 4
4
The City’s brief also asserts an argument that Pickett failed to establish standing under Article I, Section 19 of the
Texas Constitution. However, Pickett did not assert standing under the Texas Constitution but under the taxpayer
exception. For this reason, we do not further address the City’s arguments.
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We overrule the City’s first issue.
IV. WAIVER OF IMMUNITY
In its second issue, the City asserts Pickett failed to properly plead or show any waiver of
governmental immunity. In Pickett’s petition, he asserts the City is not immune from suit because
sovereign immunity is waived under the Uniform Declaratory Judgments Act (UDJA). The Act
expressly allows for a “person . . . whose rights, status, or other legal relations are affected by a . .
. municipal ordinance . . . [to] have determined any question of construction or validity arising
under the . . . ordinance . . . and obtain a declaration of rights, status, or other legal relations
thereunder.” TEX. CIV. PRAC. & REM. CODE ANN. § 37.004(a). Thus, among other relief, a party
may seek a declaratory judgment regarding the construction or validity of an ordinance. See id.
When declaratory relief is sought, all “persons” who have or claim any interest that would be
affected by the declaration must be made parties. See id. § 37.006(a). A person “means an
individual, partnership, joint-stock company, unincorporated association or society, or municipal
or other corporation of any character.” Id. § 37.001.
The UDJA provides:
In any proceeding that involves the validity of a municipal ordinance or franchise,
the municipality must be made a party and is entitled to be heard, and if the statute,
ordinance, or franchise is alleged to be unconstitutional, the attorney general of the
state must also be served with a copy of the proceeding and is entitled to be heard.
Id. § 37.006(b). The UDJA clearly and unambiguously waives the governmental immunity of
municipalities in any action for declaratory judgment that involves the validity of a municipal
ordinance. See id. But, the Act does not grant a trial court’s subject matter jurisdiction—it is
“merely a procedural device for deciding cases already within a court’s jurisdiction[.]” Texas Ass’n
of Bus., 852 S.W.2d at 444; see also Tabrizi v. City of Austin, 551 S.W.3d 290, 297 (Tex. App.—
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El Paso 2018, no pet.). Accordingly, the Act does not act as a general waiver of sovereign
immunity, rather it only waives immunity for certain claims. Tabrizi, 551 S.W.3d at 297.
The City urges that this Court is required to determine if the substance of Pickett’s claim
“falls under the limited legislative waivers of immunity provided for in the Tort claims Act or any
other legal authority for that claimed waiver.” However, Pickett asserted a waiver of governmental
immunity through the express provision of the UDJA, not the Tort Claims Act. The basis of
Pickett’s suit seeks to declare that the City’s ordinance imposed illegal fees that were not in
accordance with state law. Additionally, Pickett plead the unconstitutionality of the City’s
ordinance under Section 19 of the Texas Constitution. 5
While Pickett challenges the City’s actions under the ordinance by its expenditures, he also
seeks a declaration as to the ordinance’s validity. A provision of the UDJA expressly waives a
municipalities’ immunity for a declaratory judgment action involving the validity of a municipal
ordinance. See TEX. CIV. PRAC. & REM. CODE ANN. § 37.004(a); see also Tex. Dep’t of Transp. v.
Sefzik, 355 S.W.3d 618, 622 (Tex. 2011) (“[T]he state may be a proper party to a declaratory
judgment action that challenges the validity of a statute.”). Construing the pleadings liberally, as
we must, we conclude Pickett has alleged claims that are not automatically barred by governmental
immunity.
We overrule the City’s second issue.
V. CONCLUSION
We affirm.
5
In its reply brief, the City argues Pickett failed to establish a waiver of immunity under Article I, Section 9 of the
Texas Constitution. However, having concluded that Pickett alleged a waiver of governmental immunity through the
UDJA, it is unnecessary for us to reach this alternative argument. TEX. R. APP. P. 47.1
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GINA M. PALAFOX, Justice
December 28, 2022
Before Rodriguez, C.J., Palafox, and Alley, JJ.
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