Houston Belt & Terminal Ry. Co. v. City of Hous.
| Decision Date | 24 April 2014 |
| Docket Number | No. 14–13–00273–CV.,14–13–00273–CV. |
| Citation | 424 S.W.3d 663 |
| Court | Texas Court of Appeals |
| Parties | HOUSTON BELT & TERMINAL RAILWAY COMPANY, BNSF Railway Company, and Union Pacific Railroad Company, Appellants v. The CITY OF HOUSTON, Texas, and Daniel Krueger, In His Official Capacity as Director of Public Works and Engineering, Appellees. |
OPINION TEXT STARTS HERE
James B. Harris, Richard Barrett Phillips Jr., Dallas, Robert Lawton Paddock, Houston, for Appellants.
Judith Lee Ramsey, David M. Feldman, John B. Wallace, Houston, for Appellees.
Panel consists of Justices CHRISTOPHER, DONOVAN, and BROWN.
Appellants, Houston Belt & Terminal Railway Co., BNSF Railway Co., and Union Pacific Railroad Co., (collectively, the “Railroads”) present this accelerated appeal from the trial court's order partially sustaining the plea to the jurisdiction filed by appellees, the City of Houston, Texas (the “City”), and Daniel Krueger, in his official capacity as Director of Public Works and Engineering, based on governmental immunity in a declaratory judgmentaction. The trial court sustained the City and Krueger's plea to the jurisdiction with regard to, and dismissed for want of jurisdiction, the Railroads' ultra vires causes of action. We reverse in part with regard to the Railroads' claims that Krueger has violated or exceeded his legal authority under chapter 47, article XIV, of the City's Code of Ordinances (the “drainage fee ordinance”) by imposing drainage charges on certain of the Railroads' properties that are not “benefitted properties.” We affirm in part as to the Railroads' claims that Krueger has violated or exceeded his legal authority under the drainage fee ordinance with regard to the amount of fees imposed on the Railroads' properties subject to drainage charges. We remand for proceedings consistent with this opinion.
In April 2011, the City enacted Ordinance No. 2011–254, the drainage fee ordinance. See Houston, Tex., Code of Ordinances, ch. 47, art. XIV (“Code of Ordinances”). The drainage fee ordinance created a municipal drainage utility, a public utility, “[i]n the interest of public health and safety and a more efficient and economic operation of drainage facilities of the city.” Code of Ordinances, § 47–803. Under the drainage fee ordinance, the City shall “establish a schedule of drainage charges against all real property in the city subject to such charges”; provide drainage “for all real property in the city on payment of drainage charges unless the property is exempt from such payment”; and “offer drainage service on nondiscriminatory, reasonable and equitable terms.” Id. § 47–801. The drainage charges are imposed “[t]o recover the city's cost of service to provide drainage to benefitted properties” and are to be used exclusively for various expenses “associated with the cost of service to provide drainage services within the service area.” Id. §§ 47–821, 47–822(a). Drainage charges are calculated based on the specified rate (either residential or non-residential, and if residential, whether curb-and-gutter or open-ditch) per “square foot of impervious surface of a benefitted property.” Id. § 47–822(b), (c). The drainage fee ordinance provides for various categories of exemptions from the imposition of a drainage charge. Id. § 47–822(f). The director of the City's department of public works and engineering “shall be responsible for the administration of this article [XIV. Municipal Drainage Utility System].” Id. § 47–805. The drainage fee ordinance provides that the director “shall establish and implement a system of verification and correction of drainage charges for each property subject to the drainage charges.” Id. § 47–824(a).
In May 2011, the Railroads received notice of proposed drainage charges Krueger had determined for each of the hundreds of parcels of property that the Railroads own in the City based on each property's impervious square footage. The Railroads submitted requests for verification and correction of their initial drainage charges, specifically indicating which of their properties were not “benefitted properties” subject to charges—those not discharging stormwater runoff to the City's drainage utility system. See id. § 47–824(b). The Railroads also requested verification and correction of areas of their properties they claimed Krueger had incorrectly determined as impervious. See id. After these requests were denied, the Railroads requested an appeal. See id. § 47–824(e). The hearing examiner made no material changes to the Railroads' assessed drainage charges. The Railroads then appealed this decision to a three-member panel of hearing examiners. The panel upheld the hearing examiner's decision.
In October 2012, the Railroads sued both the City and Krueger in his official capacity. The Railroads sought declarations with respect to the validity of the drainage fee ordinance and, if valid, whether Krueger acted in violation of the ordinance by imposing drainage charges on their non-“benefitted properties” and in determining the amount of drainage charges imposed on their properties. The City and Krueger filed a plea to the jurisdiction based on governmental immunity. The Railroads responded in opposition.
After a non-evidentiary hearing, the trial court sustained the plea to the jurisdiction only as to the Railroads' ultra vires claims against Krueger. The Railroads moved for clarification and for an opportunity to amend their petition to cure any jurisdictional defects. The trial court denied the motion. This timely appeal followed.
The parties acknowledge that the sole issue on appeal is whether the trial court erred in sustaining the City and Krueger's plea to the jurisdiction as to the ultra vires claims alleged against Krueger by the Railroads. The parties did not submit evidence with their respective plea and response; nor did the trial court hold an evidentiary hearing on the plea. The City and Krueger argue the real substance of the facts actually pleaded by the Railroads confirms that the alleged ultra vires claims are barred by governmental immunity. We conclude that the trial court erred in part.
If a governmental unit has immunity from a pending claim, a trial court lacks subject matter jurisdiction as to that claim. Rusk State Hosp. v. Black, 392 S.W.3d 88, 95 (Tex.2012). A challenge to a trial court's subject matter jurisdiction may be asserted by a plea to the jurisdiction. Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225–26 (Tex.2004). We review a trial court's ruling on a plea to the jurisdiction de novo. Id. at 228. In a plea to the jurisdiction, a party may challenge the pleadings, the existence of jurisdictional facts, or both. Id. at 226–27.
When a plea to the jurisdiction challenges the pleadings, we determine if the plaintiff has alleged facts affirmatively demonstrating the court's jurisdiction. Id. at 226 (citing Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex.1993)). “We construe the pleadings liberally in favor of the plaintiffs and look to the pleaders' intent.” Id. If the pleadings do not contain sufficient facts to affirmatively demonstrate jurisdiction but do not reveal incurable defects, the issue is one of pleading sufficiency and the plaintiffs should be afforded the opportunity to amend. Id. at 226–27. If the pleadings affirmatively negate the existence of jurisdiction, then a plea to the jurisdiction may be granted without allowing the plaintiffs an opportunity to amend. Id. at 227.
The Railroads have attempted to plead ultra vires claims against Krueger in his official capacity, alleging that Krueger is acting outside of his authority under the drainage fee ordinance, first, by imposing drainage charges on certain of the Railroads' properties at all and, second, by determining that the Railroads should pay approximately $3 million in drainage charges per year based on their properties' impervious surface area. They contend that Krueger exceeded his authority because their properties are not “benefitted properties,” and because the “track structure” on their properties is in fact pervious. The City and Krueger argue that the Railroads merely complain of Krueger's exercise of authority and discretion, which he did not exceed, and therefore their claims are barred by immunity.
A suit asserting that a government officer acted without legal authority or seeking to compel him to comply with statutory or constitutional provisions is an ultra vires suit and is not subject to pleas of governmental immunity. See City of El Paso v. Heinrich, 284 S.W.3d 366, 371–72 (Tex.2009). Such a suit, in effect, does not seek to alter government policy; it seeks to reassert the control of and enforce existing policy of the governmental entity. Id. at 372. Because these suits are not considered to be suits against the governmental entity, they must be brought against the allegedly responsible government actors in their official capacities, as the Railroads have done here against Krueger. See id. at 373. 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. Id. at 372. The exception permits only prospective declaratory or injunctive relief restraining ultra vires conduct, as opposed to retroactive relief. Id. at 374–77 ().
The parties agree that this court will need to construe the ordinance in our review of the trial court's ruling in order to determine whether the...
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