913 F. Supp. 2d 305
S.D. Tex.2012Background
- EEISD moved to dismiss Nationwide’s claims; court grants in part, with one exception for counterclaims from the consolidated case.
- Nationwide contracted to obtain public adjusting services for EEISD’s Hurricane Dolly/FEMA disaster-relief claims; relationship deteriorated and Nationwide sued EEISD.
- EEISD’s related state-court filing led to removal and consolidation with other cases; court treats motion to dismiss as if not consolidated for purposes of the ruling.
- Court holds RICO claims cannot lie against a governmental entity; EEISD, a school district, is not a proper RICO defendant.
- Court finds EEISD entitled to governmental immunity from Nationwide’s state-law claims; Nationwide failed to show a waiver of immunity.
- Court allows EEISD and Nationwide/Greene to amend pleadings by set deadlines and reserves ruling on arbitration issues pending amendment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| RICO claims against EEISD viable? | Nationwide argues EEISD liable under RICO. | EEISD cannot be a RICO defendant as a governmental entity. | RICO claims against EEISD dismissed. |
| State-law claims and immunity? | Nationwide argues immunity should be waived by statute or conduct. | EEISD asserts governmental immunity; no waiver. | State-law claims dismissed due to governmental immunity. |
| Waiver under Texas Local Government Code § 271.152? | § 271.152 would waive immunity for contract claims. | § 271.156 limits waiver in federal court; § 271.152 not applicable here. | § 271.152 does not waive immunity in federal court. |
| Waiver by conduct for breach-of-contract context? | Nationwide suggests waiver by conduct may apply. | Texas Supreme Court rejects waiver-by-conduct for breach of contract. | Waiver by conduct not recognized; immunity stands. |
Key Cases Cited
- Pedrina v. Chun, 97 F.3d 1296 (9th Cir.1996) (government entities not liable under RICO)
- Genty v. Resolution Trust Corp., 937 F.2d 899 (3d Cir.1991) (civil RICO liability not available to municipal entities)
- Braun v. Trs. of Victoria Indep. Sch. Dist., 114 S.W.2d 947 (Tex.Civ.App.-San Antonio 1938) (school districts are governmental; no proprietary functions)
- Dallas Area Rapid Transit v. Whitley, 104 S.W.3d 540 (Tex.2003) (sovereign/governmental immunity framework in Texas)
- Tooke v. City of Mexia, 197 S.W.3d 325 (Tex.2006) (waiver considerations under immunity doctrine)
- City of Dallas v. Albert, 354 S.W.3d 368 (Tex.2011) (immunity and waiver principles in Texas; relevant to federal claims)