City of Austin v. Utility Associates, Inc.
517 S.W.3d 300
| Tex. App. | 2017Background
- The City of Austin awarded and executed a $12.2 million contract to Taser International for police body‑worn cameras after an RFP; Utility Associates, a losing bidder, and resident taxpayer V. Bruce Evans sued, alleging the procurement was manipulated in Taser’s favor.
- Plaintiffs sought (1) declarations that the award was unlawful/void and injunctions preventing City performance, and (2) injunctions and declarations directing the City to award the contract to Utility (or preventing the City from re‑awarding to anyone but Utility).
- The district court issued a temporary injunction (preserving the status quo): barred City from performing the Taser contract and from cancelling/terminating the RFP. The City appealed the injunction and filed pleas to the jurisdiction asserting governmental immunity.
- The district court dismissed Plaintiffs’ UDJA declaratory claims and attorney’s fees claims, but denied the plea as to Plaintiffs’ claim under Tex. Loc. Gov’t Code § 252.061 (which authorizes injunctions to enjoin performance of contracts made without compliance with Chapter 252).
- After appeal briefing, the City sought a smaller direct purchase contract via a cooperative; Plaintiffs obtained a TRO and sought relief from this Court, which issued a temporary stay to preserve jurisdiction.
- The appellate court reviews subject‑matter jurisdiction de novo and focuses on whether Plaintiffs’ claims fall within legislative waivers of governmental immunity (principally § 252.061) or qualify as ultra vires suits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court has jurisdiction over claims given governmental immunity | Plaintiffs: Chapter 252 and UDJA authorize relief; Evans (taxpayer) and Utility (bidder) can sue to enjoin an improperly procured contract | City: Governmental immunity bars claims except to the extent § 252.061 expressly waives it; UDJA does not expand immunity waivers | Held: Immunity bars most claims; jurisdiction exists only to the extent § 252.061 waives immunity for eligible plaintiffs and relief |
| Whether Plaintiffs’ claims qualify as ultra vires and escape immunity | Plaintiffs: City actors exceeded authority (violated mandatory RFP terms) and rigged scoring; ultra vires suit against City Manager permits relief | City: Allegations mainly challenge discretionary merits (who was the "responsible offeror") and are thus barred; ultra vires requires non‑discretionary/ministerial violation and prospective relief | Held: Many allegations merely contest discretionary judgments; only narrow ultra vires theory viable but retrospective relief (nullifying executed contract/re‑awarding) is barred by immunity |
| Scope of § 252.061 (who may sue and what relief it authorizes) | Plaintiffs: § 252.061 supports injunctions and declarations; one plaintiff’s standing suffices for co‑plaintiffs | City: § 252.061 authorizes only injunctions to enjoin performance, and only certain plaintiffs may sue | Held: § 252.061 waives immunity only to permit injunctive relief enjoining performance of an improperly procured contract, and only for resident taxpayers (Evans) or narrow bidders; Utility lacks standing under § 252.061 |
| Whether UDJA claims and requested attorney’s fees survive despite § 252.061 limits | Plaintiffs: UDJA provides declaratory relief and attorney’s fees incidental to such relief | City: UDJA cannot enlarge jurisdiction or create an independent waiver; declaratory claims are redundant of § 252.061 relief and attorney’s fees are unavailable | Held: UDJA cannot expand waiver; declaratory claims and attorney’s fees dismissed as redundant |
| Validity of temporary injunction portions preserving status quo re: awarding/revoking RFP | Plaintiffs: injunction necessary to preserve Utility’s runner‑up position and prevent circumvention by direct purchase | City: portions granting relief to Utility and preserving RFP status quo exceed court’s jurisdiction | Held: Portions of the injunction protecting Utility and barring cancellation/termination of the RFP are vacated; injunction enjoining City performance of the Taser contract as to Evans remains |
Key Cases Cited
- IT‑Davy v. Texas Indus. Traffic League, 74 S.W.3d 849 (Tex. 2002) (immunity and ultra vires principles; limits on suing government officers)
- Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006) (sovereign/governmental immunity principles)
- Heinrich v. Texas, 284 S.W.3d 366 (Tex. 2009) (ultra vires doctrine and prospective vs. retrospective relief)
- Hall v. McRaven, 508 S.W.3d 232 (Tex. 2017) (distinguishing discretionary misinterpretation from ultra vires duty breaches)
- W.D. Haden Co. v. Dodgen, 308 S.W.2d 838 (Tex. 1958) (historical rule that suits to nullify or enforce contracts against the state are suits against the state)
- Carowest Land, Ltd. v. City of New Braunfels, 432 S.W.3d 501 (Tex. App.—Austin 2014) (§ 252.061 recognizes limited waiver of immunity)