Houston Belt & Terminal Railway Co. v. City of Houston
424 S.W.3d 663
Tex. App.2014Background
- In 2011 Houston enacted a drainage fee ordinance creating a municipal drainage utility and authorizing drainage charges based on impervious surface of "benefitted properties."
- The director of Public Works (Krueger) was given authority to administer the ordinance, determine impervious area using digital map or other reliable data, verify/adjust calculations, and implement a verification/correction/appeal process.
- The Railroads received proposed drainage charges for hundreds of parcels, requested verification and appeals asserting (a) some parcels are not "benefitted properties" because they do not use the City drainage system and (b) parts of parcels (track structure) are not "impervious surface."
- Administrative appeals and a three‑member panel upheld Krueger’s determinations; Railroads then sued the City and Krueger (official capacity) for declaratory and injunctive relief alleging ultra vires acts.
- The trial court sustained a plea to the jurisdiction dismissing the Railroads’ ultra vires claims; the court of appeals reversed in part (fees imposed on non‑benefitted properties) and affirmed in part (impervious‑surface calculations), remanding for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether imposing charges on properties that are not "benefitted properties" is ultra vires | Railroads: Krueger lacked authority to charge parcels that do not discharge to the City drainage utility | City/Krueger: director has authority/discretion to assess charges after threshold service‑area determination | Court: Allegations that certain parcels are not benefitted properties state ultra vires claim; plea improperly sustained as to these parcels (reversed) |
| Whether classifying track structure as "impervious surface" is ultra vires | Railroads: ordinance fixes a factually determinable rule; director exceeded authority by treating track as impervious | City/Krueger: statute grants director discretion to determine impervious area and methods/data used | Court: Determination of impervious surface involves discretion; allegations of misclassification are within director's authority and barred by sovereign immunity (affirmed) |
| Standard for ultra vires exception to governmental immunity | Railroads: contend the ordinance leaves no room for discretion on these definitions | City/Krueger: contend ordinance grants discretion on data, methods, and adjustments | Court: Ultra vires exception applies only where officer acted without legal authority or failed to perform ministerial duty; ordinance shows discretion for impervious area calculations |
| Whether municipal proprietary function or TTCA/UDJA waives immunity for declaratory relief | Railroads: utility operation is proprietary and waives immunity; seek declaratory relief under UDJA | City/Krueger: UDJA does not waive immunity for ordinances; proprietary/governmental distinction not controlling for declaratory ultra vires suits | Court: UDJA does not waive immunity here; proprietary argument does not avoid sovereign immunity for the declaratory/ultra vires claims asserted |
Key Cases Cited
- Rusk State Hosp. v. Black, 392 S.W.3d 88 (Tex. 2012) (governmental immunity defeats subject‑matter jurisdiction)
- Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217 (Tex. 2004) (standards for plea to the jurisdiction reviewing pleadings and jurisdictional facts)
- City of El Paso v. Heinrich, 284 S.W.3d 366 (Tex. 2009) (ultra vires suits not barred by governmental immunity but limited to prospective relief and acts beyond legal authority)
- Tex. Lottery Comm’n v. First State Bank of DeQueen, 325 S.W.3d 628 (Tex. 2010) (rules for statutory/ordinance construction and presumption that enacting body chose wording with care)
- McLane Co. v. Strayhorn, 148 S.W.3d 644 (Tex. App.—Austin 2004, pet. denied) (discretionary statutory language can bar ultra vires claim and preserve sovereign immunity)