Purdin v. Copperas Cove Economic Develop.

• Decision Date: 21 July 2004
• Docket Number: No. 10-02-00331-CV.,10-02-00331-CV.
• Citation: 143 S.W.3d 290
• Parties: Cheryl L. PURDIN, Appellant v. COPPERAS COVE ECONOMIC DEVELOPMENT CORPORATION, Appellee.
• Court: Texas Court of Appeals

143 S.W.3d 290

Cheryl L. PURDIN, Appellant v. COPPERAS COVE ECONOMIC DEVELOPMENT CORPORATION, Appellee.

No. 10-02-00331-CV.

Court of Appeals of Texas, Waco.

July 21, 2004.

Appeal from the 52nd District Court, Coryell County, Phillip H. Zeigler, J David R. Schleicher, Law Office of David R. Schleicher, Waco, for Appellant.

Regina C. Williams, Thompson & Knight, L.L.P., Austin, Bryan P. Neal, Thompson & Knight, L.L.P., Dallas, for Appellee.

Before Chief Justice GRAY, Justice VANCE, and Justice REYNA.^*

OPINION

BILL VANCE, Justice.

We must decide whether an economic development corporation organized under article 5190.6, section 4A is an "employer" for purposes of application of the Texas Commission on Human Rights Act.

The Copperas Cove Economic Development Corporation ("CCEDC") was created in 1990 under the Development Corporation Act of 1979 ("Act"). Tex.Rev.Civ. Stat. Ann. art. 5190.6, § 4A (Vernon Supp.2004). The Articles of Incorporation express its purpose:

The Corporation is organized exclusively for the purposes of benefitting and accomplishing public purposes of, and to act on behalf of, the City of Copperas Cove, Texas, may issue bonds on behalf of the City of Copperas Cove, Texas and receives, secures, and disburses tax proceeds from the half cent sales tax for economic development, and the specific purposes for which the Corporation is organized are the promotion and development of commercial, industrial and manufacturing enterprises to promote and encourage employment and the public welfare, pursuant to, Sections 4(a) and 4A of the Development Corporation Act of 1979, as amended.

Cheryl Purdin was an employee of CCEDC. She claimed that her supervisor, James Johnson, made unwelcome comments to and contact with her of a sexual nature. Furthermore, she claimed that Johnson retaliated against her after she complained to the CCEDC board of directors. In April 1998, she sued Johnson, the City of Copperas Cove, and CCEDC on various claims including sexual harassment and retaliation. Purdin non-suited the City in February 2000, and the trial court, on Purdin's motion, dismissed Johnson from the suit in April 2001.

By amended and supplemental pleadings, Purdin asserted claims against CCEDC solely under the Texas Commission on Human Rights Act (CHRA). TEX. LAB.CODE ANN. ch. 21 (Vernon 1996 & Supp.2004).¹ A trial in March 2002 resulted in a hung jury. In August 2002, CCEDC filed a plea to the jurisdiction claiming that the trial court lacked subject-matter jurisdiction of Purdin's CHRA claims because CCEDC was not an "employer" to which the CHRA applied. The trial court granted the plea in September 2002 and dismissed Purdin's claims. She appeals.

THE ISSUE ON APPEAL

The sole question on appeal is one of statutory interpretation: whether CCEDC is a "state instrumentality" under the CHRA.² This appears to be an issue of first impression.

The CHRA specifies which employers are subject to its provisions:

(8) "Employer" means:

(A) a person who is engaged in an industry affecting commerce and who has 15 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year;

(B) an agent of a person described by Paragraph (A);

(C) an individual elected to public office in this state or a political subdivision of this state; or

(D) a county, municipality, state agency, or state instrumentality, regardless of the number of individuals employed.

Tex. Lab.Code Ann. § 21.002(8) (Vernon Supp.2004). The word "person" used in subsections "A" and "B" includes a "corporation, organization, government, or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity." Tex. Gov't Code Ann. § 311.005(2) (Vernon 1998).

Purdin asserts that CCEDC is a "state instrumentality" under "D."³ CCEDC counters that a local, non-profit development corporation created by a city was never intended by the Legislature to be a "state instrumentality."

We review a trial court's ruling on a plea to the jurisdiction de novo. Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex.1998).

STATUTORY CONSTRUCTION RULES

We must determine what the Legislature intended by the term "state instrumentality." The traditional rules of statutory construction apply. Statutory construction issues are legal questions reviewed de novo. Johnson v. City of Fort Worth, 774 S.W.2d 653, 656 (Tex.1989). In construing a statute, the reviewing court should determine and give effect to the Legislature's intent. National Liab. & Fire Ins. Co. v. Allen, 15 S.W.3d 525, 527 (Tex.2000); Liberty Mut. Ins. Co. v. Garrison Contractors, Inc., 966 S.W.2d 482, 484 (Tex.1998). The court must first look at the statute's plain and common meaning. Allen, 15 S.W.3d at 527; Fitzgerald v. Advanced Spine Fixation, 996 S.W.2d 864, 865 (Tex.1999). The court presumes that the Legislature intended the plain meaning of the words it used. Allen, 15 S.W.3d at 527. And words, unless used as a term of art or connected with a particular trade or subject matter, are given their ordinary meaning. In re BACALA, 982 S.W.2d 371, 380 (Tex.1998); Tex. Gov't Code Ann. § 312.002(a) (Vernon 1998). If the statute is unambiguous, the reviewing court typically adopts the interpretation supported by the plain meaning of the statute's words; rules of construction and extrinsic aids should not be applied, nor extraneous matters inquired into. Id. (extraneous matters); Fitzgerald, 996 S.W.2d at 865-66 (rules of construction and extrinsic aids).

But if the statute is ambiguous, i.e., the intent of the Legislature is not clear, the reviewing court then turns to the legislative history of the statute, the nature and object to be obtained by the statute, and the consequences that would follow from alternative constructions. In re BACALA, 982 S.W.2d at 380. Also, the court should consider the entire act when construing a portion of it, e.g., the meaning and use of a term throughout the act. Jones v. Fowler, 969 S.W.2d 429, 432 (Tex.1998).

The Code Construction Act provides the factors the court may consider:

In construing a statute, whether or not the statute is considered ambiguous on its face, a court may consider among other matters the:

(1) object sought to be attained;

(2) circumstances under which the statute was enacted;

(3) legislative history;

(4) common law or former statutory provisions, including laws on the same or similar subjects;

(5) consequences of a particular construction;

(6) administrative construction of the statute; and

(7) title (caption), preamble, and emergency provision.

Tex. Gov't Code Ann. § 311.023 (Vernon 1998).

THE PARTIES' ARGUMENTS

The Legislature has not defined "instrumentality" or "state instrumentality." To support their positions about what the words mean, the parties have not conducted an analysis under the rules of statutory construction. Rather they rely on inferences from statutes, case law, and the Federal Constitution.

Purdin's Arguments

Purdin refers to section 22 of the Act, a section on the corporation's bond-issuing powers. The section is entitled: "Bonds not debt of state or political subdivision; corporation as constituted authority and instrumentality but not political subdivision or corporation." (Emphasis added). It says, in part:

The corporation when established and created pursuant to the terms of the Act shall be a constituted authority and an instrumentality (within the meaning of those terms in the regulations of the treasury and the rulings of the Internal Revenue Service prescribed and promulgated pursuant to Section 103 of the Internal Revenue Code of 1954, as amended) and shall be authorized to act on behalf of the unit under whose auspices it is created for the specific public purpose or purposes authorized by such unit....

Tex.Rev.Civ. Stat. Ann. art. 5190.6, § 22 (Vernon Supp.2004) (emphasis added). Apparently, the regulations of the Treasury Department and the rulings of the Internal Revenue Service use the terms "constituted authority" and "instrumentality" when discussing tax implications for certain governmental entities, and the Legislature, by using the terms in section 22, indicated its intention that development corporations come under those regulations and rulings. Purdin points out that a development corporation is called an "instrumentality" in the title to section 22 and, in the body of the section, is designated an "instrumentality" for IRS purposes. Purdin contends, without authority, that "instrumentality" means the same in the Act as it does in the CHRA.

Purdin also relies on Tarrant County Hosp. Dist. v. Henry, 52 S.W.3d 434 (Tex.App.-Fort Worth 2001, no pet.). Henry sued a hospital district under the CHRA. Id. at 434. The Fort Worth court held that the district was a "state instrumentality" under section 21.002(8)(D). Id. at 446. The court relied on the definition of "instrumentality" in Black's Dictionary — "[a] means or agency through which a function of another entity is accomplished, such as a branch of a governing body" — and concluded that a hospital district came within the definition. Id. at 445-46; BLACK'S LAW DICTIONARY 802 (7th ed.1999). The court noted that it is inconsistent to find that a hospital district is not a branch of the State when (a) it has been created under the authority of the Texas Constitution and the Legislature, and (b) it has sovereign immunity. Id. at 446. Similarly, development corporations have been created under the authority of the Legislature and have sovereign immunity. Tex.Rev.Civ. Stat. Ann. art. 5190.6, § 4A(j); Rayl v. Borger Economic Development Corp., 963 S.W.2d 109, 114 (Tex.App.-Amarillo 1998, no pet.). Thus, arguing from Henry, Purdin contends they are also "state instrumentalities" under the CHRA.

Purdin also cites our holding in Crow v. Rockett Special Utility Dist., in which we found that a special utility district was a "state instrumentality"...