989 F.3d 291
5th Cir.2021Background
- Dr. Lily Tercero was president of Texas Southmost College (TSC) and was removed following a termination hearing. She sued under 42 U.S.C. § 1983 for a Fourteenth Amendment procedural due‑process violation and brought Texas breach‑of‑contract claims.
- At trial a jury found for Tercero, awarding ~$674,879 on breach‑of‑contract claims and $12,500,000 on the due‑process claim; the district court also awarded attorneys’ fees.
- After judgment TSC moved to dismiss/digest post‑verdict: the district court dismissed the breach‑of‑contract claims for lack of jurisdiction (Eleventh Amendment immunity), reduced the due‑process damages to $1 (nominal damages), conditionally granted a new trial/remittitur, and vacated the attorneys’ fees award.
- On appeal the Fifth Circuit considered whether TSC (a Texas junior college district and political subdivision) is immune from suit on the breach‑of‑contract claims and whether Texas’s statutory restriction on federal forum defeats federal jurisdiction; it also reviewed the grant of JMOL reducing due‑process damages and the vacatur of fees.
- The Fifth Circuit reversed dismissal of the breach‑of‑contract claims (reinstating the jury verdict on those claims) and remanded; it affirmed the reduction of due‑process damages to $1; and it reversed the vacatur of the portion of attorneys’ fees tied to the breach‑of‑contract claims and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TSC is immune from breach‑of‑contract suit in federal court | Tercero: TSC waived governmental immunity under Tex. Loc. Gov’t Code § 271.152 and may be sued | TSC: governmental (Eleventh/sovereign) immunity bars suit; state statute forbids federal forum | Reversed dismissal: TSC is a political subdivision (no constitutional sovereign immunity); Texas waiver applies and the state cannot bar federal jurisdiction by statute; breach verdict reinstated and remanded |
| Whether Texas § 271.156 ("does not waive immunity to suit in federal court") can defeat federal courts’ supplemental jurisdiction | Tercero: state cannot condition waiver so as to deprive federal courts of jurisdiction over claims they otherwise can hear | TSC: § 271.156 bars federal suits, so district court lacked jurisdiction | Held for Tercero: state statute cannot limit federal jurisdiction; federal courts resolve jurisdiction under Article III and federal statutes |
| Whether JMOL reducing due‑process damages to nominal $1 was proper (causation of damages) | Tercero: sufficient evidence ties at least some compensable injuries to the pretermination hearing due‑process violation | TSC: injuries were caused by the termination itself/publicity, not by the procedural defect; therefore only nominal damages allowed | Affirmed: reasonable jury lacked legally sufficient evidence that the due‑process violation (the hearing defect) caused the claimed compensable injuries, so damages reduced to $1 |
| Whether attorneys’ fees award should be vacated because plaintiff did not ultimately prevail | Tercero: fees appropriate for work on breach‑of‑contract and due‑process; reversal of dismissal on breach claims should restore fees | TSC: prevailing post‑judgment rulings eliminate entitlement to fees | Mixed: vacatur of fees was an abuse of discretion as to breach‑of‑contract portion (because dismissal was erroneous); remanded to apportion and reconsider fees in light of due‑process nominal award and breach‑of‑contract reinstatement |
Key Cases Cited
- Franchise Tax Bd. of Calif. v. Hyatt, 139 S. Ct. 1485 (states’ sovereign immunity extends beyond the Eleventh Amendment)
- Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274 (Eleventh Amendment does not extend to counties and similar political subdivisions)
- Tooke v. City of Mexia, 197 S.W.3d 325 (Texas governmental‑immunity waiver must be clear and unambiguous)
- Morgan v. Plano Indep. Sch. Dist., 724 F.3d 579 (governmental immunity from suit defeats federal jurisdiction unless waived by legislature)
- United Disaster Response, LLC v. Omni Pinnacle, LLC, 511 F.3d 476 (state statute cannot defeat federal forum where immunity has been waived)
- Carey v. Piphus, 435 U.S. 247 (constitutional nominal damages are limited and may be $1)
- Univ. Computing Co. v. Mgmt. Sci. Am., Inc., 810 F.2d 1395 (opinion testimony that is speculative is insufficient to establish causation)
- Railway Co. v. Whitton’s Adm’r, 80 U.S. (13 Wall.) 270 (state laws cannot restrict federal courts’ jurisdiction over cases otherwise properly before them)