Ethio Exp. Shuttle Service, Inc. v. Houston

• Citation: 164 S.W.3d 751
• Decision Date: 09 June 2005
• Docket Number: No. 14-04-00937-CV.,14-04-00937-CV.
• Parties: ETHIO EXPRESS SHUTTLE SERVICE, INC. d/b/a Texans Super Shuttle, Appellant, v. CITY OF HOUSTON, Appellee.
• Court: Texas Supreme Court

Page 751

164 S.W.3d 751

ETHIO EXPRESS SHUTTLE SERVICE, INC. d/b/a Texans Super Shuttle, Appellant, v. CITY OF HOUSTON, Appellee.

No. 14-04-00937-CV.

Court of Appeals of Texas, Fourteenth District, Houston.

May 12, 2005.

Rehearing Overruled June 9, 2005.

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Richard N. Countiss, Houston, for appellants.

Bertrand L. Pourteau, II, Houston, for appellees.

Panel consists of Chief Justice HEDGES and Justices FOWLER and FROST.

OPINION

WANDA McKEE FOWLER, Justice.

Appellant, Ethio Express Shuttle Service, Inc., appeals the trial court's judgment dismissing its case for want of jurisdiction. On appeal, Ethio claims the trial court should not have granted the City's plea to the jurisdiction, arguing alternatively that either (1) the City was not engaged in a proprietary function and therefore did not enjoy sovereign immunity, or (2) the Texas Tort Claims Act waived immunity. We affirm because the City was engaged in a governmental function when it regulated transportation to and from airports and because the causes of action Ethio alleged do not fall within the Act's limited waiver of immunity.

Factual and Procedural Background

Ethio is a private bus shuttle service that operates in Houston, Texas. When Ethio initially asked the City for a ground transportation permit to provide shuttle service from two airports the City owned, the City denied the request, stating that its exclusive contract with Yellow Cab¹ prohibited it from allowing Ethio to provide a scheduled shuttle service for airport traffic. As a result, Ethio designed its proposed routes to operate in other areas. Later, however, the City informed Ethio that its Yellow Cab contract was not exclusive and that it should have granted Ethio the permit. By this point, Ethio already had expended a considerable amount of money redesigning its routes based on the City's earlier representation that Ethio would not be permitted to provide a private shuttle service from either of the City's airports.

Ethio then filed suit against the City, alleging negligent misrepresentation, fraud, conspiracy to commit fraud, business disparagement and slander, tortious interference with contract, conspiracy to tortiously interfere with contract, and conspiracy to engage in an unlawful restraint of trade.² The City specially excepted to Ethio's failure to plead a valid waiver of sovereign immunity. Ethio responded by filing its First Amended Petition in which it asserted the court had jurisdiction because the City was engaged in a proprietary function and, thus, enjoyed no sovereign immunity.³ The City then filed a plea to the trial court's jurisdiction, this time asserting it was not engaged in a proprietary activity and had not waived sovereign immunity. In response, Ethio urged that the trial court had jurisdiction, arguing alternatively that either the City was engaged in a proprietary activity or the Texas Tort Claims Act had waived the City's sovereign immunity. The trial court granted the City's plea and dismissed Ethio's claims against the City for want of jurisdiction.

On appeal, Ethio argues that the City's regulation of the private shuttle service from its airports is a proprietary activity for which the City does not enjoy governmental immunity. In the alternative, Ethio urges this court to find the City's immunity has been waived by the Texas Tort Claims Act. We first address Ethio's claim that the City was engaged in a proprietary activity.⁴

Standard of Review

The City's plea to the jurisdiction challenged the trial court's authority to determine the subject matter of Ethio's suit. See Metropolitan Transit Auth. v. Burks, 79 S.W.3d 254, 256 (Tex.App.-Houston [14th Dist.] 2002, no pet.) (citing Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex.2000)). Deciding whether the trial court had subject matter jurisdiction is a question of law, reviewed de novo. See id. (citing Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex.1998)). The burden is on Ethio, as the plaintiff in a suit against a sovereign entity, to establish the trial court's jurisdiction. See Reyes v. City of Houston, 4 S.W.3d 459, 461 (Tex.App.-Houston [1st Dist.] 1999, pet. denied). We examine a plaintiff's good faith factual allegations to determine whether the trial court had jurisdiction. See Metropolitan Transit Auth., 79 S.W.3d at 256 (citing Bland, 34 S.W.3d at 554). We must indulge every reasonable inference and resolve any doubts in Ethio's favor. See Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 228 (Tex.2004) (citing Science Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex.1997)).

Analysis

1. The regulation of a private shuttle service from the City's airports is a governmental function for which the City enjoys sovereign immunity.

The importance of the governmental-proprietary distinction.

Ethio alleges that the City is engaging in a proprietary function when it regulates traffic to its airports and therefore it is not immune from liability. Because the principles underlying Ethio's claim are true — that a city enjoys no immunity when it engages in a proprietary function — that issue is the first question we must answer. Tex. Civ. Prac. & Rem.Code § 101.0215(b); Gates, 704 S.W.2d at 739; Cranford v. City of Pasadena, 917 S.W.2d 484, 487 (Tex.App.-Houston [14th Dist.] 1996, no writ) ("[I]f the municipality engaged in a proprietary act, a plaintiff could sue under common law as before.") (citing Turvey v. City of Houston, 602 S.W.2d 517, 519 (Tex.1980)). Only if we decide that the City's regulation was a governmental function would we decide whether Ethio pleaded a valid waiver of sovereign immunity. City of Houston v Southwest Concrete Constr., Inc., 835 S.W.2d 728, 731 (Tex.App.-Houston [14th Dist.] 1992, writ denied) ("In this [governmental functions] capacity, a municipality is afforded the state's sovereign immunity except to the extent the state has waived its immunity under the Texas Tort Claims Act.") (citing Tex. Civ. Prac. & Rem.Code § 101.001 et seq.). For the following reasons, we hold the Texas Tort Claims Act classifies this activity as a governmental function.⁵

Determining if a function is governmental or proprietary.

Before the 1987 amendments to the Texas Tort Claims Act, the Act did not define which activities were proprietary and which were governmental. During this time, Texas courts, guided by the language of the Act, decided whether a particular activity was proprietary or governmental. Southwest Concrete, 835 S.W.2d at 731 n. 2 ("Prior to the 1987 amendments ... [t]he definition of what actions constituted proprietary or governmental functions was left to the judiciary."). As part of tort reform, however, the Legislature exerted more control over the designation of an activity as proprietary or governmental by amending the Texas Tort Claims Act and adding definitions of governmental and proprietary functions. See id.; Tex. Civ. Prac. & Rem.Code § 101.0215(a), (b). Under these amendments, a governmental function is one that is "enjoined on a municipality by law and given to it by the state as part of the state's sovereignty, to be exercised by the sovereignty in the interest of the general public," id. at § 101.0215(a); a proprietary function is one that "a municipality may, in its discretion, perform in the interest of the inhabitants of the municipality...." Id. at § 101.0215(b).

As part of the amendments, the Legislature, in section 101.0215(a), included a nonexclusive list of activities categorized as governmental functions. Id. at § 101.0215(a)(1)-(36).⁶ If a function is included in this nonexclusive list of governmental functions, it has been deemed governmental in nature by the Legislature and we have no discretion or authority to hold otherwise. See Tex. Civ. Prac. & Rem.Code § 101.0215(c) ("The proprietary functions of a municipality do not include those governmental activities listed under Subsection (a)."); Texas River Barges v. City of San Antonio, 21 S.W.3d 347, 357 (Tex.App.-San Antonio 2000, pet. denied) ("Because the City's actions were encompassed within the governmental functions listed in the Act, we have no discretion to declare the actions proprietary....") (citing Herschbach v. City of Corpus Christi, 883 S.W.2d 720, 730 (Tex.App.-Corpus Christi 1994, writ denied); Mitchell v. City of Dallas, 855 S.W.2d 741, 744 (Tex.App.-Dallas 1993), aff'd, 870 S.W.2d 21 (Tex.1994)).

The regulation of private shuttle services from the City's airports.

The list in section 101.0215(a) is rather specific in its description of functions; for example, some of the categories are `maintenance of traffic signals, signs and hazards,' `parking facilities,' and `fireworks displays.' Continuing in this vein of specificity, three of the activities included in the list directly relate to the activities involved in this case: airports, regulation of traffic, and transportation systems. Id. at § 101.0215(a)(10), (21), (22). These three categories cover precisely the three aspects of this case because Ethio is a transportation system transporting travelers to the City's airports and the City regulates its business. We would be remiss to hold that the City's activities are proprietary in a case in which they are so well aligned with the functions the Legislature has designated as governmental.

Although no case is directly on point, certainly we find much guidance from Texas River Barges, Inc. v. City of San Antonio, 21 S.W.3d at 347. There, the City of San Antonio entered into an exclusive contract with Yanaguana Cruises, Inc. to operate barges on the San Antonio river. Id. at 350. Texas River Barges, another barge-operating company, filed suit against the city when the city removed its barge for operating on the river without the city's consent. Id. at 351. The San Antonio Court of Appeals held that the regulation of barges on the city's waterways was a governmental function because, as in this case, it touched...