Elec. Reliability Council of Tex., Inc. v. Panda Power Generation Infrastructure Fund, LLC (In re Panda Power Infrastructure Fund, LLC)

• Citation: 619 S.W.3d 628
• Decision Date: 19 March 2021
• Docket Number: No. 18-0792,No. 18-0781,18-0781
• Parties: ELECTRIC RELIABILITY COUNCIL OF TEXAS, INC., Petitioner, v. PANDA POWER GENERATION INFRASTRUCTURE FUND, LLC, d/b/a Panda Power Funds, et al., Respondents In re Panda Power Infrastructure Fund, LLC, d/b/a Panda Power Funds, et al., Relators
• Court: Supreme Court of Texas

619 S.W.3d 628

ELECTRIC RELIABILITY COUNCIL OF TEXAS, INC., Petitioner,

v.PANDA POWER GENERATION INFRASTRUCTURE FUND, LLC, d/b/a Panda Power Funds, et al., Respondents

In re Panda Power Infrastructure Fund, LLC, d/b/a Panda Power Funds, et al., Relators

No. 18-0781

No. 18-0792

Supreme Court of Texas.

Argued September 15, 2020

Opinion delivered: March 19, 2021

Sherine Elizabeth Thomas, Sharon Kay Talley, Austin, Andrew M. Williams, Houston, Delia Garza, for Amicus Curiae Travis County.

Andrew W. Guthrie, Dallas, Leslie Conant Thorne, Ben L. Mesches, Dallas, Roger D. Sanders, Sherman, David Merryman, Christopher Knight, Werner A. Powers, Dallas, for Respondents.

Nathan Myrick Bigbee, Nicholas B. Bacarisse, Rachel Anne Ekery, Houston, J. Hampton Skelton, Austin, Erika M. Kane, Chad Vann Seely, Brandon Duane Gleason, Wallace B. Jefferson, Austin, for Petitioner.

Jeffrey C. Mateer, Austin, Ryan Lee Bangert, Atty. Gen. W. Kenneth Paxton Jr., Bill Davis, Austin, Kyle D. Hawkins, John R. Hulme, Austin, for Amicus Curiae Public Utility Commission of Texas.

Justin Pfeiffer, Houston, for Amicus Curiae Fort Bend County.

Robert Ackermann, Jeffrey S. Levinger, Joseph Cecere, for Amici Curiae Beal Bank, a Texas State Savings Bank, Beal Bank USA, a Nevada Thrift.

Ricardo Rodriguez Jr., Victor Manuel Garza, Edinburg, Josephine Louise Ramirez, McAllen, for Amicus Curiae Hidalgo County.

Christian D. Menefee, Jonathan G. C. Fombonne, Tiffany S. Bingham, Courtney T. Carlson, for Amicus Curiae Harris County

Justice Boyd delivered the opinion of the Court, in which Justice Blacklock, Justice Busby, Justice Bland, and Justice Huddle joined.

These two petitions—one for writ of mandamus and the other for review—arise from a lawsuit several Panda Power companies¹ filed against the Electric Reliability Council of Texas, Inc. (ERCOT). The underlying suit involves allegations of fraud and fiduciary breach, but these petitions challenging the court of appeals' review of a trial court's interlocutory order present a medley of jurisdictional issues. We granted review and consolidated the two causes because these issues—which include whether the Texas Public Utility Commission has exclusive jurisdiction over Panda's claims and whether sovereign immunity applies to ERCOT and protects it from Panda's suit—are important to the parties and to our state's jurisprudence. But after the court of appeals rendered its decision, and before the parties asked us to review that decision, the trial court entered a final judgment in the underlying suit, and that judgment is now the subject of a separate appeal pending in the court of appeals. Because the trial court's interlocutory order merged into the final judgment and no longer exists, we cannot grant the relief the parties seek. As a result, any decision we might render would constitute an impermissible advisory opinion, and these consolidated causes are moot. However much we may desire to provide answers in these now-moot interlocutory proceedings, the constitution prohibits us from doing so, and we must respect that prohibition. We must therefore dismiss both the petition for writ of mandamus and the petition for review for want of jurisdiction.

I.Background

ERCOT serves as the independent system operator for the Texas power region.² Because ERCOT manages only intrastate transmission, it is generally not subject to federal law or to oversight by the Federal Energy Regulatory Commission.³ Instead, Texas law governs ERCOT and makes it "directly responsible and accountable to the" Public Utility Commission of Texas.⁴

Among its many other responsibilities, ERCOT is required to publish "resource adequacy reports," at least annually, providing a five-year forecast of the Texas power region's ability to generate and transmit sufficient electricity to meet projected demands.⁵ Fulfilling this duty, ERCOT publishes a "Report on Capacity, Demand, and Reserves" twice a year, in May and December.⁶ These "CDR Reports" provide predictions on future electricity demands within the Texas power region and the region's ability to supply sufficient electricity to meet those demands. Participants in the electric industry rely on ERCOT's CDR Reports when deciding, for example, whether to invest in new generation plants or transmission facilities.

In 2011 and 2012, ERCOT's CDR Reports projected a likelihood of severe energy shortfalls. Panda alleges it relied on these reports when it decided to invest $2.2 billion to build two new power plants in Temple and one in Sherman. After Panda began construction, however, ERCOT revised its forecasts and—instead of projecting a shortfall—now predicted an excess of generation capacity in the ERCOT region. Claiming that ERCOT's original CDR Reports misled it to invest in losing endeavors, Panda sued ERCOT and three of its officers for fraud, negligent misrepresentation, and breach of fiduciary duty.

ERCOT responded by filing a plea to the jurisdiction arguing that the Public Utility Commission has exclusive jurisdiction over Panda's claims. Although the Commission filed an amicus brief supporting ERCOT's plea, the trial court denied it. Soon thereafter, we explained in University of the Incarnate Word v. Redus that the issues of (1) whether a private entity qualifies as a "governmental unit" under the Texas Tort Claims Act and (2) whether sovereign immunity applies to and protects the private entity are "separate questions with separate analytical frameworks." 518 S.W.3d 905, 911 (Tex. 2017). Relying on Redus , ERCOT filed a motion for reconsideration and alternative amended jurisdictional plea, arguing that sovereign immunity applies and bars Panda's claims. The trial court denied ERCOT's motion and amended plea.

ERCOT appealed the trial court's denial order. As a general rule, subject only to "a few mostly statutory exceptions," parties may only appeal a final judgment. Bonsmara Nat. Beef Co. v. Hart of Tex. Cattle Feeders , 603 S.W.3d 385, 387 (Tex. 2020). ERCOT asserted, however, that the court of appeals had interlocutory jurisdiction because ERCOT qualifies as a "governmental unit" under the Tort Claims Act. See TEX. CIV. PRAC. & REM. CODE § 51.014(a)(8) (allowing interlocutory appeal from an order that "grants or denies a plea to the jurisdiction by a governmental unit as that term is defined" in the Tort Claims Act). At the same time, as an alternative, ERCOT filed a petition for writ of mandamus in the court of appeals, arguing that sovereign immunity bars Panda's claims even if ERCOT is not a governmental unit. After consolidating the two cases, the court of appeals held that ERCOT is not a governmental unit and dismissed ERCOT's interlocutory appeal for want of jurisdiction, but it granted ERCOT's mandamus petition, holding that sovereign immunity applies and bars Panda's claims. Elec. Reliability Council of Tex., Inc. v. Panda Power Generation Infrastructure Fund, LLC (Panda I ), 552 S.W.3d 297, 309, 320 (Tex. App.—Dallas 2018).

Based on its holding that sovereign immunity applies, the court of appeals entered judgment ordering the trial court to dismiss Panda's claims within thirty days. Panda filed a petition for writ of mandamus in this Court challenging the court of appeals' holding that sovereign immunity bars Panda's claims (No. 18-0792). ERCOT filed a conditional petition for review challenging the court of appeals' holding that ERCOT is not a governmental unit under the Tort Claims Act (No. 18-0781). We requested briefing in both cases, granted ERCOT's petition for review, and consolidated the causes for oral argument.

II.Mootness

On April 24, 2018—eight days after the court of appeals decided Panda I , four months before Panda filed its mandamus petition in this Court, and five months before ERCOT filed its conditional petition for review—the trial court entered a final judgment dismissing Panda's claims as the court of appeals had ordered.⁷ Three days later, on April 27, 2018, Panda filed an emergency motion in Panda I , asking the court of appeals to stay its mandamus order and require the trial court to set aside its final judgment. The court of appeals denied that motion on May 2, 2018. On May 23, 2018, twenty-nine days after the trial court entered its final judgment, Panda filed a notice of appeal from the final judgment, initiating a new proceeding in the court of appeals. See Panda Power Generation Infrastructure Fund, LLC, v. Elec. Reliability Council of Tex., Inc. (Panda II ), No. 05-18-00611-CV (Tex. App.—Dallas filed May 28, 2018).

A week later, on May 31, 2018, Panda filed a motion asking the court of appeals to rehear Panda I en banc. The court denied that motion on July 10, 2018. On August 15, 2018, Panda filed a motion to abate Panda II "in the interest of judicial economy" until this Court resolved Panda I. The court of appeals denied the abatement, requested briefs, and scheduled oral argument. On August 24, 2018, Panda filed its mandamus petition in this Court (No. 18-0792), challenging the court of appeals' order in Panda I , which addressed the trial court's interlocutory order. In a footnote, Panda's mandamus petition mentioned in passing that the trial court had dismissed Panda's suit as the court of appeals had ordered, and that Panda had filed a "protective appeal" from the dismissal.

On September 24, 2018, ERCOT filed its conditional petition for review (No. 18-0781). In its petition, ERCOT explained that the trial court had entered a final judgment, that Panda had appealed from that final judgment in a separate appellate proceeding, and that the trial court had lost plenary jurisdiction over the case. ERCOT suggested that this Court "may therefore lack jurisdiction over Panda's mandamus petition [in No. 18-0792] because it challenges an interlocutory trial-court order that has since been superseded by a final judgment." On January 4, 2019, ERCOT filed a response to Panda's mandamus petition, again suggesting that "this mandamus proceeding may be moot" beca...