In the Courts

Water Cases

City of Ames v. City of Liberty, No. 09-22-00092-CV, 2023 WL 2180967 (Tex. App.—Beaumont Feb. 23, 2023, no pet. h.).

The City of Liberty (the “Plaintiff”) owns and operates a wastewater collection system and treatment plant. The Plaintiff and the City of Ames (the “Defendant”) have a wastewater disposal contract (the “Contract”) in which the Plaintiff receives and treats wastewater from the Defendant. The Contract requires the Defendant to operate its wastewater collection systems in accordance with the Plaintiff’s plumbing code and city ordinances, specifically requiring the Defendant prevent seepage and infiltration into the Plaintiff’s collection systems. In the case of excess volumes of wastewater, the Defendant is required to pay service charges to the Plaintiff.

The Plaintiff initiated this suit after several exceedances of the allowed wastewater volumes and repeated failure to pay the required service charges. The Defendant filed a Plea to the Jurisdiction, claiming governmental immunity that had not been waived. The trial court denied the Defendant’s Plea, and on appeal, Defendant argued that the trial court erred in denying the Plea to the Jurisdiction because the damages sought are an unenforceable penalty and the Contract is not subject to Chapter 271, Subchapter I of the Texas Local Government Code because it does not contain the essential terms of an agreement to which the Subchapter is applicable. This statute provides that immunity is only waived under the statute if the contract (1) is in writing, (2) states the essential terms of the agreement, (3) provides for goods or services (4) to the local governmental entity, and (5) is executed on behalf of the local governmental entity.

The Court held that the Contract contains the essential terms because it pertains to the flow of wastewater and sewage and is sufficiently definite to confirm both the Plaintiff and Defendant intended to be bound. The Court held that the Contract was for goods and services because the collection and treatment of wastewater is a service provided for the benefit of the Defendant, a local governmental entity. As the mayors of both cities signed the Contract, the Court held that the Contract was properly executed on behalf of the Defendant. Because the Contract met the requirements for a waiver of governmental immunity, the Court held that the Defendant’s plea to the jurisdiction was properly denied.

GateHouse Water LLC v. Lost Pines Groundwater Conservation District, No. 1:22-CV-00132-LY, 2023 WL 1424000 (W.D. Tex. Jan. 31, 2023).

GateHouse Water LLC (“GateHouse”) was developed with the plan to create a regional groundwater-based municipal water supply project. GateHouse has several operating and transport permits issued by the Lost Pines Groundwater Conservation District (the “District”). The operating permits include Special Condition 8, which requires the permittee to have a binding contract to “provide at least 12,000 acre-feet of water per year to one or more End Users.” If this provision is not met, the permit authorizes the District to reduce the aggregated annual withdrawal amount of groundwater. Shortly after renewing its operation permits, GateHouse submitted a contract between GateHouse and a water supply corporation (the “Contract”) that detailed the sale of 12,000 acre-feet during 2021. The Board of Directors of the District (the “Board”) evaluated the validity of the Contract and found that the Contract did not comply with Special Condition 8. The Board then reduced GateHouse’s permitted groundwater production to zero acre-feet per year. GateHouse initiated this suit against the District and the individual board members for allegedly acting beyond their authority as the governing body of the District.

The Board found that the Contract did not meet Special Condition 8 because it contained no obligation to accept delivery of the contracted water and stated that the title to the groundwater remained with the District until delivery. The Contract required the water supply corporation to pay a fee for the option to acquire the water. The Board found that the Contract was a non-binding option contract and an “unenforceable agreement to agree.” As such, the Board held that GateHouse failed to provide a binding contract that met Special Condition 8. Gatehouse subsequently appealed the Board’s decision.

At issue in this case is whether the District and Board acted beyond their authority in adjudicating the validity of the Contract. This opinion found that the Texas Local Government Code grants districts a broad authority to “manage, conserve, and protect groundwater,” including the issuance of permits and the making of determinations concerning such permits. GateHouse did not prove that Special Condition 8 is not reasonably related to the conservation or preservation of groundwater, nor did it prove that it is not a condition or restriction on the rate and amount of withdrawal of groundwater, which the District is allowed to enforce as part of the permitting process. Consequently, the court held that GateHouse did not prove that the District acted beyond its authority in adjudicating the Contract.

Litigation Cases

Rattray v. City of Brownsville, No. 20-0975, 2023 WL 2438952 (Tex. Mar. 10, 2023).

In Rattray, et al. v. City of Brownsville, No. 20-0975 (Tex. March 10, 2023), the Texas Supreme Court decided that the Texas Tort Claims Act’s (“TTCA’s”) waiver of immunity for motor-driven equipment applied to a City of Brownsville’s (the “City’s”) closure of a stormwater gate during a rainstorm, but acknowledged that upon remand, lower courts would need to address the issue of whether any of the TTCA’s exceptions to such waiver were applicable to the circumstances alleged. Thus, the question of whether the Courts had jurisdiction was left pending; however, the decision demonstrates that the decision to close or open a motorized stormwater gate can fall under the TTCA’s motor-driven equipment waiver of immunity.

The plaintiffs were homeowners in a Brownsville subdivision, who alleged that the overflow of a former channel of the Rio Grande flooded their homes and caused extensive property damage. According to their petition, the overflow would not have occurred but for the City’s decision to close a stormwater gate during a severe rainstorm. The City’s decision to close the gate was made to trap abnormal waterflow in the channel and prevent flooding downstream; however, the trapped water overflowed behind the gate and allegedly damaged the plaintiffs’ properties. The plaintiffs claimed that the City and its employees should have known that abnormal waterflow at the flood gate was only “temporary,” that closing the gate would trap the water, and that its resulting accumulation would cause the channel to overflow and flood their neighborhood.

The plaintiffs brought tort claims against the City. The City responded with a plea to the jurisdiction on the grounds of governmental immunity. The plaintiffs argued the City’s governmental immunity had been waived under TTCA’s “use of motor-driven equipment” waiver. The trial court denied the City’s plea. A divided Court of Appeals reversed. 647 S.W.3d 710 (Tex. App.—Corpus Christi—Edinburg 2020). The Supreme Court granted the plaintiffs’ petition for review, and largely affirmed the trial court’s decision.

Under Section 101.021(1)(A) of TTCA, a governmental unit waives immunity for property damage arising from the “operation or use” of “motor-driven equipment.” The Court acknowledged that it was not sufficient to merely demonstrate that governmental action met the criteria of Section 101.021(1)(A); a plaintiff must also demonstrate that none of the many exceptions to 101.021(1)(A) are applicable. The Court made clear that the issue it was deciding was solely on the grounds considered by the Court of Appeals: the applicability of Section 101.021(1)(A) of TTCA. The Court remanded the case for the lower courts to determine whether any of the exceptions applied to the circumstances alleged. Therefore, the Court’s decision did not hold that there is jurisdiction, but instead merely decided that the City’s actions met the elements of Section 101.021(1)(A).

In briefing the issue of the applicability of the motor-driven equipment waiver, the parties did not dispute that the gate had a motor. Instead, the parties disagreed as to whether the statutory phrase “operation or use” encompassed the allegations, and if so, whether the plaintiffs’ property damage “arose from” that operation.

Operation or Use. The plaintiffs alleged that the City operated or used the gate by closing it to block water. The City, on the other hand, argued that what the plaintiffs truly allege is nonuse: the City’s failure to later open the floodgate and thus relieve the accumulated overflow. Under Texas law, the distinction between use and nonuse is critical to the determination of whether the waiver of governmental immunity applies—nonuse will not satisfy the “operation or use” element of Section 101.021(1)(A). The Court decided that the fact that City employees had closed the gate during the rainstorm and the flooding of the plaintiffs’ properties happened soon after the closure supported the plaintiffs’ characterization of the closing of the gate as the impetus of the subsequent flooding damage. Therefore, the Court held the “operation or use” element of Section 101.021(1)(A) was satisfied.

Arose From. The City argued that the causation requirement under Section 101.021(1)(A) had not been met, as the plaintiffs had not sufficiently tied the City’s act of closing the flood gates to their property damage. The Court disagreed, holding that the temporal and geographic links were “both tight.” Temporally, the flooding of the plaintiffs’ properties came closely after the closing of the floodgates. Likewise, the City did not suggest that there was any significant geographical attenuation between the gate and the plaintiffs’ properties. In fact, the gate was fairly close and “immediately downstream” of the subdivision. Thus, the Court found that the facts alleged were sufficient to create a connection between the closing of the gates and the property damage alleged.

The City asserted two further arguments to counter the plaintiffs’ theories of causation: 1) it was the rainstorm, not the mere act of opening and closing the gate, that caused the damage; and 2) the flooding of the subdivision would have occurred regardless of whether the gate had been closed. As to the first issue, the Court stated that the TTCA allowed for claims that the act at issue was a substantial factor in causing damages to fall under the TTCA’s waiver of immunity. That is, the plaintiffs could still establish causation if the rainstorm was necessary but not sufficient for the flooding of the subdivision. As to the second issue, the Court determined that the plaintiffs had sufficiently met their burden of putting forth sufficient evidence to show that the closure of the gate proximately caused their property damages. The Court cited both testimony from the City’s Public Works Director, Santana Torres, and plaintiffs’ expert witness, Lawrence Dunbar, who each opined that closing the North Laredo Gate had the effect of trapping water, which is what allowed the water to accumulate and overflow into the plaintiffs’ properties. The Court stated that, although far from dispositive, this evidence was enough for the plaintiffs to meet their burden of showing that the City’s theory of causation (or lack thereof) cannot yet be deemed established as a matter of law.

Given its analysis outlined above, the Court determined that the plaintiffs’ allegations concern the “operation or use” of the floodgate, and there was sufficient evidence for a factfinder to infer that the property damage “arose from” the gate’s closure. The Court held that the action satisfied Section 101.021 of TTCA, remanding the case to lower Courts to determine whether any of the TTCA’s exceptions applied to the plaintiffs’ alleged claims.

Fraley v. Tex. A&M Univ. Sys., No. 21-0784, 2023 WL 2618532 (Tex. Mar. 24, 2024).

In Fraley v. Tex. A&M Univ. Sys., No. 21-0784, (Tex. Mar. 24, 2024), the Texas Supreme Court decided that the Texas Tort Claims Act (“TTCA”) does not waive a governmental unit’s judicial immunity for its discretionary design decisions, including the decision not to install safety features, if the decision results in an ordinary premises defect.

While driving on Texas A&M University (“University”) property, the plaintiff drove through a T-shaped intersection, leaving the roadway and crashing into a ditch on the opposite end of the intersection. The plaintiff claimed that governmental immunity was waived under the TTCA because the unlit, unbarricaded intersection constituted an unreasonably dangerous condition of real property which had caused the plaintiffs’ injuries. See Tex. Civ. Prac. & Rem. Code § 101.021. The trial court denied the University’s plea to the jurisdiction. The Court of Appeals reversed, holding that the complained-of condition was not a special defect and that the discretionary-function exception shielded the University from liability for its decision not to install safety features. The Supreme Court granted the plaintiff’s petition for review.

As in any claim of a premises defect, the Court began by determining the nature of the duty owed by the University to the plaintiff. This duty depends on the legal determination of the alleged condition: for an ordinary premises liability claim, the governmental entity owes the duty of a private person to a licensee—the duty to warn of a known dangerous condition or to make the known condition reasonably safe; in contrast, when a plaintiff alleges a special defect, the governmental entity owes the duty of a private person to an invitee—the duty to warn of an unreasonable risk of harm that the premises condition creates when the government owner knows or reasonably should know of that condition.

The Court held that the complained-of condition was not a special defect. The TTCA describes special defects as being akin to obstructions or excavations on the road. The Court held that the ditch adjacent to the roadway was not a special defect because it posed no danger to an ordinary user, who is expected to remain on the paved surface of the road. Thus, the claim presented an ordinary premises liability claim, and the University owed the plaintiff only the duty a private person owes to a licensee.

The Court then held that the plaintiff’s complaint about the intersection’s lack of lights, barricades, and warning signs fell squarely within the discretionary-function exception for which the University retained immunity. As stated by the Court, the design of any public work, such as a roadway, is a discretionary function. “This retention of immunity for discretionary design decisions extends to decisions about the installation of safety features.”

The Supreme Court therefore affirmed the decision of the Court of Appeals, holding that Texas A&M University was immune from suit and the Court thereby lacked jurisdiction to hear the claim.

Air and Waste Cases

El Paso v. Ramirez, 633 S.W.3d 246 (Ct. App. – El Paso, 2021, pet. denied).

The case of El Paso v. Ramirez involved an inverse condemnation action in which property owners downstream of the City of El Paso’s Clint Landfill sued the City after a heavy rain event, alleging that the City committed a compensable taking. The property owners asserted that the City’s continued operation and maintenance of the Clint Landfill caused flood damage to their properties. The trial court found that the City knew that specific property damage was substantially certain to result from its continued operation and maintenance of the Clint Landfill. The trial court also found that the property owners had shown that remedial measures taken by the City were inadequate. On appeal, the City asserted that the City could not have known its continued operation and maintenance of the Clint Landfill was substantially certain to flood the properties because an expert certified that the drainage structures met all TCEQ requirements. The Court of Appeals still considered the downstream flooding a taking. A petition for review was filed on November 30, 2021, and the Texas Supreme Court requested full merits briefing on June 3, 2022. On January 27, 2023, the Court denied review of the petition, allowing the decision of the trial court and Court of Appeals to stand.

“In the Courts” is prepared by Lora Naismith in the Firm’s Water Practice Group; Wyatt Conoly in the Firm’s Litigation Practice Group; Mattie Isturiz in the Firm’s Air and Waste Practice Group, and Samantha Miller in the Firm’s Energy and Utility Practice Group. If you would like additional information or have questions related to these cases or other matters, please contact Lora at 512.322.5850 or lnaismith@lglawfirm.com, or Wyatt at 512.322.5805 or wconoly@lglawfirm.com, or Mattie at 512.322.5804 or misturiz@lglawfirm.com, or Samantha at 512.322.5808 or smiller@lglawfirm.com.