Lone Star College System and Richard Carpenter v. Immigration Reform Coalition of Texas (IRCOT)

Affirmed and Substitute Majority Opinion and Concurring Opinion filed
November 26, 2013.
In The
Fourteenth Court of Appeals
NO. 14-12-00819-CV
LONE STAR COLLEGE SYSTEM AND RICHARD CARPENTER,
Appellants
V.
IMMIGRATION REFORM COALITION OF TEXAS (IRCOT), Appellee
On Appeal from the 281st District Court
Harris County, Texas
Trial Court Cause No. 2009-79110
SUBSTITUTE MAJORITY OPINION
Appellants, Lone Star College System (LSCS) and its chancellor, Richard
Carpenter, bring this interlocutory appeal from the trial court’s order denying, in
part, their Motion to Dismiss for Lack of Jurisdiction. Appellee, the Immigration
Reform Coalition of Texas (IRCOT), brought this state taxpayer lawsuit against
appellants, among other Texas governmental entities and officials, alleging that
state funds were being expended pursuant to state laws that are preempted by
federal law. IRCOT seeks declarations and injunctive relief under the Uniform
Declaratory Judgments Act (UDJA). On appeal, appellants contend that the trial
court and this court do not have subject-matter jurisdiction over IRCOT’s claims
because (1) appellants have governmental immunity, (2) IRCOT lacks standing,
and (3) the claims are not ripe.
We issued an opinion in this case on October 17, 2013, affirming the trial
court’s order. Appellants subsequently filed a motion for rehearing. Without
changing the disposition of the case, we deny the motion for rehearing, withdraw
our previous opinion, and issue this substitute opinion in its place.
I. Standard of Review
Whether a trial court has subject matter jurisdiction is a question of law we
review de novo. City of Houston v. Williams, 353 S.W.3d 128, 133–34 (Tex.
2011). Appellants’ Motion to Dismiss for Lack of Jurisdiction is effectively a plea
to the jurisdiction. See, e.g., Richardson Hosp. Auth. v. Duru, 387 S.W.3d 109,
112 (Tex. App.—Dallas 2012, no pet.); Dahl ex rel. Dahl v. State, 92 S.W.3d 856,
860 (Tex. App.—Houston [14th Dist.] 2002, no pet.). When considering a plea to
the jurisdiction, our analysis begins with the live pleadings. Heckman v.
Williamson Cnty., 369 S.W.3d 137, 150 (Tex. 2012). We first determine if the
pleader has alleged facts that affirmatively demonstrate the court’s jurisdiction to
hear the cause. Tex. Dep’t. of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226
(Tex. 2004). In doing so, we construe the pleadings liberally in favor of the
plaintiff, and unless challenged with evidence, we accept all allegations as true. Id.
at 226-27. We may also consider evidence submitted to negate the existence of
jurisdiction, and we must consider such evidence when necessary to resolve the
jurisdictional issues. Heckman, 369 S.W.3d at 150. We take as true all evidence
2
favorable to the nonmovant and indulge every reasonable inference and resolve
any doubts in favor of the nonmovant. Miranda, 133 S.W.3d at 228. The plea
must be granted if the plaintiff’s pleadings affirmatively negate the existence of
jurisdiction or if the defendant presents undisputed evidence that negates the
existence of the court’s jurisdiction. Heckman, 369 S.W.3d at 150. In ruling on
such a plea, a court should not consider the merits of the parties’ claims. E.g.,
County of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002); TAC Realty, Inc. v.
City of Bryan, 126 S.W.3d 558, 561 (Tex. App.—Houston [14th Dist.] 2003, pet.
granted, judgm’t vacated w.r.m.).
II. Proceedings in Trial Court
In its live pleadings, IRCOT alleges that appellants, among other Texas
entities and officials, have in the past and will continue in the future to provide
education grants to illegal aliens1 using Texas state funds in violation of federal
statutes.2 IRCOT asserts associational standing on behalf of its members, whom it
alleges include people who pay a variety of state taxes that go into the state’s
General Revenue Fund. The taxes IRCOT identifies include those placed on sales,
motor vehicles, fuel, franchises, oil and natural gas production, and occupation as
an attorney.
IRCOT specifically seeks declaratory judgment that “in Texas, an illegal
alien is not eligible for” state student financial aid and that provisions of Texas law
1
The parties choose different nomenclature to describe the students at issue in this case.
Because the federal statutes at issue, cited infra, employ the term “illegal aliens,” we will use
that term in this opinion.
2
IRCOT’s live pleadings include its First Amended Petition and two supplemental
petitions. IRCOT additionally named as defendants: the State of Texas and its comptroller,
Susan Combs, and the Texas Higher Education Coordinating Board and its commissioner,
Raymund Paredes. In its Original Petition, IRCOT also named as defendants the University of
Houston System, the Houston Community College System, and their respective chancellors.
IRCOT has dropped these defendants from subsequent pleadings.
3
authorizing such aid are “preempted, void, and of no effect.” IRCOT further
“seeks an order enjoining the defendants from making, approving, or forwarding a
monetary grant to an illegal alien under the Texas Educational Opportunity Grant
Program, the Toward Excellence, Access, & Success [TEXAS] Grant Program, or
the Tuition Equalization Grant Program.” IRCOT also requests a declaration that
the section of the LSCS policy manual implementing certain portions of the Texas
Education Code are preempted by federal law. IRCOT asserts that illegal aliens
attending state-supported universities in Harris County receive grants under the
listed programs.3
According to IRCOT, the awarding of these grants to illegal aliens is facially
authorized under Texas statutes; however, IRCOT further contends that these
statutes are preempted by federal statutes. The specific state statutes IRCOT
contends are preempted include portions of the Texas Education Code defining
who can be considered a Texas resident for educational purposes as well as
sections of the code authorizing awards of grant funds to Texas residents. 4 IRCOT
urges that the following sections of Title 8 of the United States Code have
preemptive effect:
3
At one point in the proceedings, IRCOT also challenged the provision of discounted in-
state tuition to illegal aliens; however, in its current pleadings, IRCOT expressly disavows
seeking any relief on that basis.
4
See Tex. Educ. Code §§ 54.0501 (defining “residence”), 54.051(m) (indicating a citizen
of a foreign country may establish residency in Texas), 54.052 (defining who may be considered
a resident of Texas for purposes of that section of the code), 54.053 (specifying the information
required to establish resident status), 56.302 (naming the TEXAS grant program), 56.304 (stating
that to be eligible for a TEXAS grant a student must be a Texas resident), 56.402(a) (naming the
Texas Educational Opportunity Grant Program); 56.404(a)(1) (stating that to be eligible for a
grant from that program, a student must be a Texas resident), 61.221 (authorizing provision of
“tuition equalization grants” to Texas residents enrolled in Texas colleges and universities),
61.2251 (requiring that a recipient of a tuition equalization grant must be a Texas resident).
IRCOT also identifies specific sections of THECB’s administrative rules regarding residency
and educational grants as having been preempted. See 19 T.A.C. §§ 21.24(a)(1), 22.21-22.33,
22.225-22.240, 22.253-22.263.
4
• Section 1601(6), which states that: “It is a compelling government interest
to remove the incentive for illegal immigration provided by the availability
of public benefits.”
• Section 1621, which provides that, except for specifically defined classes
of aliens, aliens are generally ineligible for any State or locally provided
benefits, including postsecondary education benefits. However, it further
authorizes States to provide such benefits to illegal aliens through the
enactment of State laws after August 22, 1996.
• Section 1623, which states: “Notwithstanding any other provision of law,
an alien who is not lawfully present in the United States shall not be eligible
on the basis of residence within a State (or a political subdivision) for any
postsecondary education benefit unless a citizen or national of the United
States is eligible for such a benefit (in no less an amount, duration, and
scope) without regard to whether the citizen or national is such a resident.”
• Section 1625, which states: “A State or political subdivision of a State is
authorized to require an applicant for State and local public benefits (as
defined in section 1621(c) of this title) to provide proof of eligibility.”
8 U.S.C. §§1601(6), 1621, 1623, 1625.
After answering in the litigation, appellants filed their plea to the
jurisdiction, contending the trial court did not have jurisdiction in this case because
appellants have governmental immunity, IRCOT lacks standing, and the asserted
claims are not ripe. IRCOT filed a response, and the trial court denied the motion
in part and granted it in part. Appellants then filed a motion for reconsideration,
and the trial court entered an Order Regarding Jurisdiction. In this order, the court
specifically set forth its rulings, including, as relevant to this appeal: (1) IRCOT
does not have standing based on its members paying state sales, motor vehicle, or
fuel taxes5; (2) the record is insufficient to make a determination regarding
5
The court based this ruling on the Texas Supreme Court’s pronouncement in Williams v.
Lara that paying sales tax could not confer taxpayer standing because holding otherwise would
permit “even a person who makes incidental purchases while temporarily in the state [to]
maintain an action.” 52 S.W.3d 171, 180 (Tex. 2001). IRCOT does not challenge this holding
5
standing based on payment of the franchise, attorney occupation, and oil and gas
production taxes; (3) IRCOT met its pleading requirement for standing when it
alleged its members pay taxes that are expended on allegedly illegal activity; (4)
the UDJA waives governmental immunity for “relevant government entities” on
claims under the act which challenge the validity of ordinances or statutes; and (5)
IRCOT met its pleading requirement in regards to Chancellor Carpenter when it
alleged that he had authority under state law to comply with applicable federal
laws. On the basis of these holdings, the court granted appellants’ plea regarding
standing based on the payment of sales, motor vehicle, and fuel taxes.6 The court
otherwise denied the relief appellants sought.
III. Governmental Immunity7
Appellants first contend that the trial court and this court do not have
jurisdiction in this case based on application of the doctrine of governmental
immunity. Governmental immunity from suit defeats a trial court’s subject matter
jurisdiction and is therefore properly asserted in a plea to the jurisdiction. See
Miranda, 133 S.W.3d at 225–26. Absent a waiver of governmental immunity, a
on appeal.
6
While recognizing that IRCOT had expressly dropped its claims regarding discounted
tuition (in its First Supplemental Petition), the court stated in its order that IRCOT had no
taxpayer standing to challenge reduced tuition because no public funds were expended in
offering reduced tuition to aliens.
7
Appellants use the terms “sovereign immunity” and “governmental immunity”
interchangeably in their briefing, and Texas courts, including the Texas Supreme Court, have
used them interchangeably as well; nonetheless, they denote two distinct but greatly related
concepts. See Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 694 n.3 (Tex. 2003).
Sovereign immunity refers to the State’s immunity from suit and liability, and, in addition to the
State itself, it also protects its various divisions, such as agencies, boards, hospitals, and state
universities. Id. Governmental immunity protects political subdivisions of the State, including
counties, cities, and school districts. Id. The parties agree that as a junior college district
organized under Chapter 130 of the Texas Education Code, LSCS is a political subdivision of the
State. We will therefore use the term “governmental immunity” in this opinion.
6
state entity may not be sued. See Tex. Dep’t of Transp. v. Jones, 8 S.W.3d 636,
638 (Tex. 1999). Governmental immunity bars UDJA actions against the state and
its political subdivisions absent a legislative waiver. See Tex. Dep’t of Transp. v.
Sefzik, 355 S.W.3d 618, 621 (Tex. 2011). We review immunity issues under a de
novo standard. Id.
IRCOT alleged in its pleadings that the UDJA waived LSCS’s immunity and
that Carpenter was not immune because his actions were ultra vires, or outside his
authority. Appellants asserted in their plea to the jurisdiction that LSCS’s
immunity was not in fact waived and that IRCOT has not alleged any ultra vires
conduct by Carpenter. The trial court found in favor of IRCOT on both
propositions, specifically stating the UDJA waived immunity for LSCS and that
IRCOT sufficiently pleaded ultra vires claims against Carpenter. We concur with
both rulings.
A. Waiver of LSCS’s Immunity
Section 37.006(b) of the UDJA contains a waiver of immunity from suit.
Tex. Civ. Prac. & Rem. Code §37.006(b)8; City of El Paso v. Heinrich, 284 S.W.3d
366, 373 n.6 (Tex. 2009); Tex. Educ. Agency v. Leeper, 893 S.W.2d 432, 446 (Tex.
1994). Based on this statutory waiver, the Texas Supreme Court has declared that
when claims challenge the validity of ordinances or statutes, relevant governmental
entities must be made parties; thus, governmental immunity is waived for those
entities. Heinrich, 284 S.W.3d at 366, 373; see also Leeper, 893 S.W.2d at 446
8
Section 37.006(b) states as follows:
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.
Tex. Civ. Prac. & Rem. Code 37.006(b).
7
(“The DJA expressly provides that persons may challenge ordinances or statutes,
and that governmental entities must be joined or notified. Governmental entities
joined as parties may be bound by a court’s declaration on their ordinances or
statutes. The Act thus contemplates that governmental entities may be—indeed,
must be—joined in suits to construe their legislative pronouncements.”). The court
has further explained that because the UDJA “permits statutory challenges and
governmental entities may be bound by those challenges, the DJA contemplates
entities must be joined in those suits.” Tex. Lottery Comm’n v. First State Bank of
DeQueen, 325 S.W.3d 628, 634 (Tex. 2010) (discussing Leeper). Statutory
challenges include claims that a statute is invalid for constitutional or
nonconstitutional reasons and claims merely seeking interpretation or clarification
of a statute. See id. at 634-35; City of Elsa v. M.A.L., 226 S.W.3d 390, 391–92
(Tex. 2007); Town of Flower Mound v. Rembert Enters., 369 S.W.3d 465, 474
(Tex. App.—Fort Worth 2012, pet. denied); Gatesco Q.M., Ltd. v. City of Houston,
333 S.W.3d 338, 347-48 (Tex. App.—Houston [14th Dist.] 2010, no pet.).
As discussed above, IRCOT principally seeks a declaration that sections of
the Texas Education Code it contends authorize the award of education grants to
illegal aliens have been preempted by certain federal laws prohibiting such aid.
This claim both seeks an interpretation and asserts the invalidity of Texas statutes.
LSCS, however, argues that it is not a “relevant government entity” under the
UDJA, Heinrich, or Leeper because it is a local, rather than state, governmental
unit. Tex. Civ. Prac. & Rem. Code §37.006(b); Heinrich, 284 S.W.3d at 373 n.6;
Leeper, 893 S.W.2d at 446.
LSCS, though a local political subdivision of the State, is a proper defendant
because governmental entities that may be bound by statutory challenges must be
joined in such suits, and LSCS would be bound by the trial court’s decision here.
8
See Tex. Lottery Comm’n, 325 S.W.3d at 634; see also McKinney v. Blankenship,
154 Tex. 632, 282 S.W.2d 691, 694-98 (Tex. 1955) (holding local school officials
were proper defendants in action concerning validity of state statute); Brennan v.
City of Willow Park, 376 S.W.3d 910, 924 (Tex. App.—Fort Worth 2012, pet.
denied) (holding local government entities were proper defendants in declaratory
judgment action seeking construction of state statute to which local entity may be
bound). Under the terms of the grant statutes and governing regulations, LSCS
serves as an agent and administrator of the programs and was a recipient of grant
funds.9 The trial court did not err in holding that governmental immunity was not
waived for these claims against LSCS.
B. Ultra Vires Acts by Carpenter
As stated, the court’s jurisdiction over the claims against Carpenter turn on
whether IRCOT sufficiently raised ultra vires claims against him. A suit asserting
that a government officer acted without legal authority or seeking to compel a
governmental official to comply with statutory or constitutional provisions is
an ultra vires suit and is not subject to pleas of governmental immunity. See
9
See, e.g., Tex. Educ. Code §§ 56.303(a) (providing officers of eligible institutions a role
in developing rules for implementing TEXAS grant program), (e) (authorizing eligible
institutions along with coordinating board to determine who should receive a TEXAS grant and
authorizing eligible institutions to determine financial need of students), and (f) (authorizing
eligible institutions to make awards to students); 56.403(a) (providing officers of eligible
institutions a role in developing rules for implementing Texas Educational Opportunity Grant
Program) and (d) (authorizing eligible institutions along with coordinating board to determine
who should receive a grant based on financial need); 56.406 (authorizing eligible institutions to
disburse grant funds to students); 56.407(f) (placing restrictions on institutions’ administration of
funds); 61.2251(c) (providing eligible institutions with authority to determine whether recipient
of a tuition equalization grant is making satisfactory progress toward a degree); 61.227
(governing institutions’ administration of such grants); see also 19 T.A.C. §§ 22.23 (providing
for administration of tuition equalization grant program by institutions of higher learning);
22.227 (providing for administration of TEXAS grant program by institutions of higher
learning); 22.236 (providing for disbursement of program funds to the institutions); 22.255
(providing for administration of Texas Educational Opportunity Grant Program by institutions of
higher learning), 22.262 (providing for disbursement of program funds to the institutions).
9
Heinrich, 284 S.W.3d at 372. Such a suit, in effect, does not seek to alter
government policy; it seeks to enforce existing policy. Id. Because these suits are
not considered to be suits against the state, they must be brought against the
allegedly responsible state actors in their official capacities, as IRCOT has done
here. See id. at 373; Tex. Dep’t of Ins. v. Reconveyance Servs., Inc., 306 S.W.2d
256, 258 (Tex. 2010). To fall within the ultra vires exception to governmental
immunity, a plaintiff may not complain about a government officer’s exercise of
discretion, but rather must allege, and ultimately prove, that the officer acted
without legal authority or failed to perform a purely ministerial act. Heinrich, 284
S.W.3d at 372. The exception permits only prospective declaratory or injunctive
relief restraining ultra vires conduct, as opposed to retroactive relief. Id. at 374–
77.
Appellants’ position is that while IRCOT alleges ultra vires acts are being
committed, i.e., that someone at LSCS is acting without authority in providing
grants to illegal aliens, IRCOT has not alleged that Carpenter himself has acted in
any way without authority. We agree with appellants that IRCOT has raised ultra
vires claims but disagree that Carpenter, in his official capacity, is not implicated.
IRCOT’s ultra vires claims essentially allege that, as chancellor, Carpenter has the
authority to ensure that LSCS complies prospectively with applicable federal laws.
In support, appellants cite portions of the LSCS Policy Manual which state that
“[t]he Chancellor is the Chief Executive Officer of the System, interpreter of
policy adopted by the Board, and the only employee reporting directly to the
Board. Operating under a line and staff form of organization, appropriate reporting
lines are defined by the Chancellor.” Thus, even though Carpenter may not be the
LSCS representative who actually distributes grant funds to illegal aliens, IRCOT
alleges he has the authority to direct the work of the LSCS employees who will
10
distribute the grants. He is an allegedly responsible government actor in his
official capacity under these circumstances. See, e.g., De Los Santos v. City of
Robstown, No. 13-11-00278-CV, 2012 WL 6706780, at *8 (Tex. App.—Corpus
Christi Dec. 13, 2012, no pet.) (mem. op.) (holding governmental immunity did not
bar ultra vires claims against mayor of city and president of improvement district).
C. Statutory Challenge and Ultra Vires Claims in Same Lawsuit
Although not specifically raised by appellants, some of their arguments
suggest the proposition that it is not permissible to have both a statutory challenge
and ultra vires claims in the same lawsuit. Appellants cite no authority supporting
such a proposition, and we have found none. Appellants here, in fact, both assert
the invalidity of certain statutes and ultra vires acts, i.e., actions outside the named
official’s authority; both sets of claims are based on preemption of state law by
federal law. IRCOT effectively argues Carpenter was acting under color of state
law, which IRCOT claims was preempted. So, IRCOT raises both a challenge to
the validity of the state law—alleging preemption—and an ultra vires claim—
alleging Carpenter acted without authority (because the authority he may have
thought he was following had been preempted).
Although the supreme court in Heinrich did not expressly sanction the
combining of both types of claims in the same lawsuit, the court did mention the
fact that the plaintiff in that case was not challenging the validity of the local
entities’ bylaws or the governing statute but was instead challenging the officials’
actions under them. 284 S.W.3d at 373 n.6; see also De Los Santos, 2012 WL
6706780, at *3-8 (finding jurisdiction over both claims challenging validity of city
ordinance and ultra vires claims against city officials in same lawsuit). Seeing no
legal or policy reason for not finding jurisdiction on both sets of claims, we
11
overrule appellants’ first issue.10
IV. IRCOT’s Standing
In their second issue, appellants assert that IRCOT lacks standing to bring
the claims it has raised in this case. Standing is a constitutional prerequisite to
suit. Heckman, 369 S.W.3d at 150. A court has no jurisdiction over a claim made
by a plaintiff who lacks standing to assert it. Id. If a plaintiff lacks standing to
assert a claim, the court lacks jurisdiction over that claim and must dismiss it, and
if the plaintiff lacks standing to bring any of its claims, the court must dismiss the
whole action for want of jurisdiction. Id. at 150-51.
A. State Taxpayer Standing
IRCOT asserted in its pleadings that it has associational standing for its
members who are state taxpayers.11 “In general, taxpayers do not have a right to
bring suit to contest government decision-making because . . . governments cannot
operate if every citizen who concludes that a public official has abused his
discretion is granted the right to come into court and bring such official’s public
10
One rationale for permitting both types of claims to continue in the same lawsuit is that
jurisdictional issues typically arise early in the litigation process, often before the true nature of
the plaintiff’s claims have crystallized through discovery and motions practice. Indeed,
alternative pleading is a very common occurrence for this very reason. There may be a myriad
of ways in which one or the other type of claim becomes removed from the lawsuit, and it would
not be fair to require a plaintiff to only assert one of the potential claims.
11
IRCOT specifically alleges in its First Supplemental Petition that its members have
paid several specific state taxes that contribute to the state’s general fund and that the grant
programs at issue in this lawsuit are financed from the general fund. In their motion for
rehearing, appellants assert that they challenged these allegations in the trial court with evidence
and, thus, IRCOT was required to present controverting proof that such taxes were paid yet
failed to do so. Appellants, however, offer no citation to any place in the record where they
raised this issue in the trial court or where they offered evidence showing IRCOT members did
not pay these taxes. Instead, appellants conceded to the trial court that the taxes IRCOT named
do in fact help fund the programs at issue (through the general fund). As will be discussed in this
section of the opinion, appellants argued below that the taxes allegedly paid were too attenuated
to the challenged programs to confer standing on the taxpayers.
12
acts under review.” Bland I.S.D. v. Blue, 34 S.W.3d 547, 555 (Tex. 2000) (quoting
Osborne v. Keith, 142 Tex. 262, 177 S.W.2d 198, 200 (Tex. 1944)). Generally, to
have standing, unless it is conferred by statute, taxpayers must show that they have
suffered a particularized injury distinct from that suffered by the general public.
Id. at 555–56. However, Texas has long recognized an exception whereby a
taxpayer may sue to enjoin the illegal expenditure of public funds without
demonstrating a distinct injury. Id.12 The exception, “strictly limited, provides
important protection to the public from the illegal expenditure of public funds
without hampering too severely the workings of the government.” Id. (refusing to
apply taxpayer exception where contract sought to be enjoined had already been
performed and suit was, therefore, moot, and concluding that potential for
disruption of government operations was too great to allow taxpayer with no
special injury distinct from general public to sue to prohibit government from
paying for goods and services already received). In short, to establish taxpayer
standing to enjoin the illegal expenditure of public funds, a plaintiff must show:
(1) the plaintiff is a taxpayer, and (2) public funds are expended on the allegedly
illegal activity. Andrade v. Venable, 372 S.W.3d 134, 137 (Tex. 2012).
As discussed above, IRCOT alleged state taxpayer standing based on its
members’ payment of state taxes assessed against franchises, oil and natural gas
production, and attorney occupation.13 IRCOT further asserted that funds collected
12
In Terrell v. Middleton, the court held that a state taxpayer had standing to sue the state
comptroller to enjoin the illegal expenditure of public funds to privately benefit the governor.
187 S.W.367, 369 (Tex. Civ. App. 1916), writ ref’d, 108 Tex. 14, 191 S.W. 1138 (1917); see
also Calvert v. Hull, 475 S.W.2d 907, 908 (Tex. 1972) (following Terrell and holding that state
taxpayers had standing to bring action to enjoin disbursement of funds appropriated for
establishment of new university when prerequisites for such disbursement allegedly had not
occurred). “The diversion of the taxes after collection from legal purposes would be equally as
injurious to the taxpayer as the collection of illegal taxes.” Terrell, 187 S.W. at 369.
13
Citing Lara, the trial court determined in its order that IRCOT does not have standing
based on payment of sales, motor vehicle, or fuel taxes. 52 S.W.3d at 180. IRCOT has not
13
at least in part through these taxes were expended illegally through the provision of
educational grants to illegal aliens in violation of federal law.14 In its order, the
trial court stated that the record was not sufficiently developed to make a
determination regarding standing based on payment of these taxes.
B. Appellants’ Arguments on Standing
In support of their no-standing position, appellants make a number of
arguments, including that IRCOT failed to allege or prove (1) any actual or
threatened injury or unconstitutional restriction on its members’ rights or (2) that
local taxes were used by LSCS to fund the grants. Appellants further assert that
because (3) the federal statutes in question do not provide a private right of action
and (4) all of the money for the grants came from the State not LSCS, IRCOT does
not have standing to sue LSCS.
We begin with appellants’ arguments that IRCOT failed to allege or prove
certain circumstances. First, as discussed above, it is not required to allege or
prove a distinct injury or restriction in order to establish standing under the
exception for taxpayer suits to enjoin illegal expenditures. See, e.g., Andrade, 372
S.W.3d at 137.15 Furthermore, IRCOT was not required to allege or demonstrate
that local taxes were used by LSCS to fund the educational grants to support its
claim of state taxpayer standing. IRCOT alleged that its members paid certain
appealed that finding.
14
Indeed, appellants do not appear to contest that the listed taxes all contributed to the
State’s general fund and that amounts from the general fund went to the educational grants in
question.
15
Appellants cite a property rights case, Barshop v. Medina Underground Water
Conservation District, 925 S.W.2d 618, 626 (Tex. 1996), in support of their argument that, to have
standing (presumably for its request for declaratory relief), IRCOT must show the statute
unconstitutionally restricts IRCOT members’ rights; however, appellants do not demonstrate why the
taxpayer exception to standing requirements does not apply to IRCOT’s request for a declaration that the
Texas statute that arguably allows illegal expenditures is preempted.
14
specific state taxes that were identified as among the sources of the funding for
grants.
Next, we turn to appellants’ standing argument based on the proposition that
the federal statutes, which IRCOT alleges have preemptive effect, do not provide
for a private right of action. See 8 U.S.C. §§1601(6), 1621, 1623, 1625. Although
appellants argue this point at length, we need touch on it only briefly. IRCOT does
not allege standing under the federal provisions; it raises a state taxpayer action to
enjoin the illegal expenditure of funds. Appellants essentially maintain that
IRCOT’s state law claims are preempted by the enforcement mechanisms
contained within the federal statutes. That an action is preempted by federal law is
a defensive matter and not a question of standing or jurisdiction. See Mills v.
Warner Lambert Co., 157 S.W.3d 424, 427 (Tex. 2005); Edwards v. Blue Cross
Blue Shield of Tex., 273 S.W.3d 461, 466-67 (Tex. App.—Dallas 2008, pet.
denied), cert. denied, 558 U.S. 1111 (2010). Also, resolution of this dispute is
fact-intensive; accordingly, it is not properly raised or considered as a matter of
law in a plea to the jurisdiction. See Webre v. Sneed, 358 S.W.3d 322, 335 (Tex.
App.—Houston [1st Dist.] 2011, pet. filed).
Lastly, appellants suggest that because all of the funds for the grants came
from the State and not LSCS’s own funds, IRCOT does not have standing to sue
appellants.16 It is admittedly somewhat unusual for a state taxpayer lawsuit to be
filed against a local government entity17; however, given the interconnectedness
16
Although at first blush this issue may not appear to impact standing, it must be
remembered that to fit within the illegal–expenditure exception for taxpayer standing, IRCOT
had to show that its members were taxpayers, see Andrade, 372 S.W.3d at 137; thus, the question
is raised as to whether paying State taxes can be sufficient to confer standing to sue a local
governmental entity.
17
A rare but not unheard of type of lawsuit. See, e.g., McKinney, 282 S.W.2d 691
(holding local school board members were proper defendants in action concerning validity of
15
that often occurs between governmental entities at different levels when, as
occurred here, the State authorizes and funds a program and a political subdivision
of the State administers it and receives and distributes the funds, it can be difficult
to determine exactly on what entity the legal action should focus. 18 The actual
allegedly preempted action here was the awarding of State grant funds to illegal
aliens. IRCOT has alleged that this transaction occurred, at least in part, at the
local level. Cf. McKinney, 282 S.W.2d at 694-98 (holding local school board
members were proper defendants in action concerning validity of state statute
allocating or expending state school funds but that State Commissioner of
Education and State Comptroller were not proper parties because their certification
and transmittal of the funds were “purely ministerial and mandatory” duties).19
IRCOT’s pleading was sufficient to show standing. Appellants have offered no
evidence to contradict IRCOT’s allegations.
C. Application of Williams v. Lara
An issue of some importance not specifically raised by appellants is whether
the taxes at issue satisfy Williams v. Lara, 52 S.W.3d 171 (Tex. 2001). There, the
Texas Supreme Court held that merely paying sales tax (in that case, local sales tax
was at issue) was not sufficient to confer taxpayer standing because holding
otherwise would permit “even a person who makes incidental purchases while
state statute allocating or expending state school funds); Dallas County v. McCombs, 135 Tex.
272, 140 S.W.2d 1109 (Tex. 1940) (holding in taxpayer action brought against county entities
and officials that statute providing for state tax revenues to be granted and donated to several
counties was unconstitutional); cf. Fletcher v. Howard, 120 Tex. 298, 39 S.W.2d 32 (Tex. 1931)
(holding that State highway commission was properly enjoined from expending proceeds of
county bonds for use on a different highway than the one for which the funds were originally
designated).
18
See n.8 infra listing statutes and administrative code sections demonstrating LSCS’s
administration of the grant programs.
19
Under Bland I.S.D., it is the taxpayer’s interest in restraining the illegal expenditure of
tax money that supports his or her standing in such an action. 34 S.W.3d at 556.
16
temporarily in the state [to] maintain an action.” Id. at 180. The court further
expressed concern about extending the right to sue to people “with virtually no
personal stake in how public funds are expended.” Id. In the same case, the court
indicated that there was no question that another plaintiff, who paid property taxes
on property he owned in the jurisdiction, had satisfied the “taxpayer” requirement.
Id. The court, therefore, was clearly attempting to draw a line between different
types of taxes, a line based to some degree on how invested an individual taxpayer
was in the jurisdiction in which he paid taxes. See Teneyuca v. Bexar County
Performing Arts Ctr. Found., No. 04-11-00488-CV, 2012 WL 2053534, at *3
(Tex. App.—San Antonio June 6, 2012, no pet.) (holding payment of short-term
motor vehicle rental tax was insufficient to confer standing because to hold
otherwise, as the Lara court found with sales tax, would allow a person with
virtually no personal stake to bring the government’s actions under review).
Here, the trial court individually analyzed the taxes IRCOT relied upon in its
pleadings. Specifically, the court found that payment of sales, motor vehicle, or
fuel taxes did not provide standing, apparently because they are too transitory in
nature and do not evidence a personal stake in how public funds are expended in
Texas. IRCOT does not challenge this holding on appeal. The trial court further
stated that the record was not developed sufficiently to determine whether payment
of franchise, oil and natural gas production, and attorney occupation taxes would
be sufficient, but the court ultimately found IRCOT at least met its pleading
requirements. These taxes are each on business activities conducted in Texas and
exhibit a much greater stake in the affairs of the State than the mere payment of
sales tax. See Tex. Tax Code §§ 171.001(a) (imposing franchise tax “on each
taxable entity that does business in this state or that is chartered or organized in this
state”), 191.142 (imposing attorney occupation tax on all attorneys licensed in the
17
state), 201.051-.052 (imposing tax on natural gas producers in Texas); 202.051-
.052 (imposing tax on oil production in Texas). We hold that allegations of
payment of these taxes are sufficient to support state taxpayer standing.20 Because
we find IRCOT properly pleaded standing and appellants do not point to any
evidence in the record as negating IRCOT’s standing in this case, we overrule
appellants’ second issue.
V. Ripeness
In their third issue, appellants contend that IRCOT’s claims in this lawsuit
are not ripe for adjudication. Ripeness is a component of subject-matter
jurisdiction. Robinson v. Parker, 353 S.W.3d 753, 755 (Tex. 2011). Although a
claim need not be fully ripened at the time suit is filed, the facts must be developed
sufficiently for the court to determine that an injury has occurred or is likely to
occur. Id. “[I]f a party cannot demonstrate a reasonable likelihood that the claim
will soon ripen, the case must be dismissed.” Id. The ripeness requirement applies
even if the party is seeking only a declaratory judgment. Riner v. City of Hunters
Creek, 403 S.W.3d 919, 922 (Tex. App.—Houston [14th Dist.] 2013, no pet.). The
UDJA “gives the court no power to pass upon hypothetical or contingent
situations, or determine questions not then essential to the decision of an actual
controversy, although such questions may in the future require adjudication.”
Firemen’s Ins. Co. of Newark, N.J. v. Burch, 442 S.W.2d 331, 333 (Tex.
1968), superseded on other grounds by constitutional amendment, as recognized in
Farmers Tex. Cnty. Mut. Ins. Co. v. Griffin, 955 S.W.2d 81 (Tex. 1997); Riner, 403
S.W.3d at 922.
20
The attorney occupation tax is only $200 annually. Tex. Tax Code § 191.142. The
Texas Supreme Court has not addressed whether the amount of taxes paid is evidence of a
significant “personal stake in how public funds are expended.” See Lara, 52 S.W.3d at 180.
There is no evidence in the record regarding the amount paid on the other taxes.
18
In their argument, appellants characterize IRCOT’s lawsuit as being based
on a “theoretical dispute which might hypothetically take place in the future.”
Appellants further assert that there is no allegation or proof IRCOT suffered any
concrete injury and that IRCOT’s claims “depend[] on contingent or hypothetical
facts, or on events that have not happened . . . are not yet mature[ and] are subject
to change, and immediate litigation is not unavoidable.”
As discussed above, IRCOT alleges in its pleadings, among other things,
that appellants have in the past and will continue in the future to provide grants
using Texas state funds, accumulated from taxes paid by IRCOT members, to
illegal aliens in violation of federal statutes. IRCOT further alleges that sections of
the LSCS policy manual that implement the grant programs violate, and thus are
preempted by, federal law and that illegal aliens attending state-supported
universities in Harris County, which includes LSCS in part, receive grants under
the listed programs in violation of federal law. Construing IRCOT’s pleadings
liberally—as we are required to do under Miranda, 133 S.W.3d at 226-27—the
allegations contained therein are sufficient to demonstrate that an actual
controversy exists, that harm (in the form of alleged illegal expenditures of
IRCOT’s members’ tax dollars) has occurred, is occurring, or is imminent, and that
IRCOT’s claims as pleaded are ripe for adjudication. See Robinson, 353 S.W.3d at
755 (explaining that although a claim need not be fully ripened at the time suit is
filed, facts must have developed sufficiently to determine that an injury has
occurred or is likely to occur); see also Tex. Gen. Land Office v. Porretto, 369
S.W.3d 276, 289 (Tex. App.—Houston [1st Dist.] 2011, pet. granted) (holding that
a threat of harm is sufficient to constitute a concrete injury if the threat is “direct
and immediate,” quoting Patterson v. Planned Parenthood of Houston, 971
S.W.2d 439, 442 (Tex. 1998)). Appellants point to no undisputed evidence in the
19
record negating the existence of jurisdiction over these claims. See Heckman, 369
S.W.3d at 150 (explaining that a plea to the jurisdiction must be granted if the
defendant presents undisputed evidence that negates the existence of the court’s
jurisdiction). Accordingly, we overrule appellant’s third issue.21
VI. Conclusion
Finding no error in the trial court’s denial of appellant’s plea to the
jurisdiction, we affirm the trial court’s order.
/s/ Martha Hill Jamison
Justice
Panel consists of Justices Christopher, Jamison, and McCally (Christopher, J.,
concurring) (McCally, J., joins in the Majority Opinion and in the Concurring
Opinion).
21
At one point in their arguments, appellants discuss the possibility that one of IRCOT’s
members might pay local taxes to LSCS in the future; however, as discussed above, this case
involves state taxpayer claims, not claims based on payment of local taxes. These arguments are
therefore inapposite. Appellants also include under issue three a contention that no injunctive
relief should issue under the facts of this case. Such a merits-based argument is not relevant in
an interlocutory appeal from the denial of a plea to the jurisdiction.
20