McFarland PLLC

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Suing the Government

by | Apr 4, 2022 | Blog |

Suing the government is hard. In fact, unlike suing anyone or anything else, suing the government is usually prevented outright by a handy little feature from the English common law called sovereign immunity. As Alexander Hamilton explained it, “[i]t is inherent in the nature of sovereignty not to be amenable to the suit of an individual without its consent.” In our legal system, the term “sovereign immunity” properly applies to the immunity of federal and state governments, along with their divisions, while “governmental immunity” refers to the protections available to local governmental entities, which derive from sovereign immunity.

Because of this, every legal action brought against the government must overcome the hurdle of the government’s immunity, which takes two forms: immunity from suit and immunity from liability. Luckily, this is a non-issue in a typical statutory condemnation case. Not only is the case law exceedingly clear that the takings clause of the Texas Constitution waives sovereign immunity for condemnation, but in a statutory case, the government is bringing the suit and admitting that compensation is due. In general, it’s much easier to sue the government if the government sues you first, as filing suit constitutes a waiver of immunity for any claims connected with and properly defensive to the government’s claims.

Things get more complicated for inverse condemnation or any other claim against a governmental entity. Because the case law specifies that the constitution only waives sovereign immunity for “properly pleaded” takings claims, an inverse case is almost always met with a plea to the jurisdiction rooted in sovereign immunity that implicates the merits of the case.

When filing any other original claim against a governmental entity, a plaintiff should first consider whether the action can nevertheless be characterized as something other than an action against the sovereign. There are two primary categories of cases against the government where governmental immunity does not apply. The first encompasses lawsuits against governmental officials acting “ultra vires”, that is, acting without legal authority or failing to perform a ministerial act. This exception to governmental immunity allows for injunctive relief to remedy a wide range of statutory and constitutional violations. While these suits take the form of actions against government officials, the courts have recognized that many are functionally suits against the governmental entity itself.

The second exception to governmental immunity is where a local government is acting in its “proprietary function,” as opposed to its “governmental function.”  Because governmental immunity derives from the State’s sovereign powers, a local government’s “proprietary function” is any act outside of the local government’s authority as an “arm of the state.” Distinguishing between the two functions can be a complex inquiry, but in short, mandatory functions delegated to the local government by the State for the benefit of the general public are governmental, while discretionary acts to benefit the inhabitants of the local jurisdiction are proprietary.

Beyond these two exceptions, would-be-plaintiffs generally must look to statutes for a legislative waiver of immunity—and “sue and be sued” provisions definitely don’t count. For breach of contract actions, one important waiver is found in Chapter 271 of the Texas Local Government Code, which waives immunity for breach of contract actions for the provision of goods or services to local governmental entities. Chapter 271 limits damages to the contract balance (including change orders), attorneys’ fees, and interest, and contains somewhat unclear language regarding the possibility of specific performance or other injunctive relief. Thankfully, the Texas Supreme Court clarified in 2019 that Chapter 271 does waive governmental immunity for suits seeking equitable remedies. Hays St. Bridge Restoration Grp. v. City of San Antonio, 570 S.W.3d 697, 708 (Tex. 2019). Chapter 271’s waiver for breach of contract actions, however, has not been interpreted as a waiver for declaratory judgment actions. See, e.g., Lower Colorado River Auth. v. City of Boerne, 422 S.W.3d 60 (Tex. App.—San Antonio 2014, pet. dism’d).

A more significant limitation of Chapter 271 is that some courts have taken a strict view of what constitutes provision of goods or services to a governmental entity. A development agreement that primarily benefits the developer, for example, may not make the cut. See, e.g., City of San Antonio v. Campbellton Rd., Ltd., No. 04-20-00569-CV, 2022 Tex. App. LEXIS 535, at *14-15 (Tex. App.—San Antonio Jan. 26, 2022, no pet h.). Chapter 271 is nice work if you can get it. Luckily, if not, the proprietary function exception is still available, as arguments that Chapter 271 was intended to replace the common law rule have been roundly rejected. See Wasson Interests, Ltd. v. City of Jacksonville, 489 S.W.3d 427, 438 (Tex. 2016).