In this case, the City of Houston maintains that it has governmental immunity from a suit by the Houston Municipal Employees Pension System. The trial court denied the City's plea to the jurisdiction, and the court of appeals affirmed in part and reversed in part. We agree with the trial court that the City's plea should be denied in full. Accordingly, we affirm the judgment of the court of appeals in part and reverse it in part.
I. Background
The appeal before us involves a relationship that is not working out well. The controversy concerns the City of Houston's creation of local government corporations to which it transferred some of its employees. Specifically at issue is the adoption of resolutions by the Houston Municipal Employees Pension System's Board of Trustees (the board) related to those employees, their status regarding the City's pension fund, and interpretation of the governing statute; and the Houston Municipal Employees Pension System's (the Pension System or System) attempts to enforce what it views as the City's obligation to make contributions to the pension fund. We begin with a brief review of the statute involved and a partial history of the conflict.
A. The Pension Statute
The Pension System was organized and operates under article 6243h of the Texas Revised Civil Statutes. It is a defined-benefit pension plan that provides retirement, survivor, and disability benefits for employees of the City. See TEX. REV. CIV. STAT. art. 6243h. Article 6243h applies only to cities with a population of greater than 2 million, id. § 1(4), and currently, Houston is the only city in Texas to which it
Article 6243h requires the City to provide information to the board so that it may administer the fund and provide benefits properly. See id. § 2(u). The board is granted broad authority to "interpret and construe" article 6243h. See id. § 2(x)(2). The statute includes an express mandate that "[t]he determination of any fact by the pension board's interpretation of this Act [is] final and binding on any interested party, including members, deferred participants, retirees, eligible survivors, beneficiaries, and the city." Id. § 2(y). The statute specifically allows the City and the Pension System to enter into a written meet-and-confer agreement (MCA) regarding pension issues and benefits. See id. § 3(n). The City and the Pension System entered into an MCA on July 1, 2011.
B. Prologue: Klumb v. The Pension System
Since its creation, the City's Convention and Entertainment Facilities Department has operated and maintained municipally owned properties such as theaters, convention centers, and parking lots. In May 2011, the City announced plans to transfer the Convention and Entertainment Facilities Department's 100 or so employees from the department into a local government corporation named the Houston First Corporation (HF Corporation). HF Corporation is city-controlled and tax-funded with a budget approved by the Houston City Council and a board appointed by the mayor. After the announcement, the Pension System's board adopted a resolution interpreting the definition of "employee" in article 6243h to include "a full-time employee of a Texas local government corporation ... controlled by the City, upon a determination by the External Affairs Committee of the Board of Trustees that such [local government corporation's] employees are Employees for purposes of the [Pension System] Plan." The External Affairs Committee is a standing committee of the board. The pension plan documents were amended to incorporate this construction of the term "employee."
The City then formed a nonprofit entity, the Houston First Foundation (HF Foundation), and notified the board that HF Foundation was to employ those employees originally set to be transferred to HF Corporation. The board shortly adopted another resolution restating its definition of "employee" and additionally providing that "employees of any entity controlled, directly or indirectly, by [the City] are considered Employees for purposes of membership in [the Pension System], unless the External Affairs Committee expressly determines otherwise." That resolution triggered action by the City to form a nonprofit corporation named Convention and Cultural Services, Inc. (CC Services), which was to operate in conjunction with the HF Foundation. HF Corporation was to provide convention and entertainment services to the City using CC Services employees, and who were in turn leased to HF Corporation. The City attorney explained
The transfer of services and employees proceeded as planned by the City. A few employees who were eligible to retire did so and sought full retirement benefits from the Pension System on the basis that their employment with the City had ended upon their transition to CC Services. A few employees sought to defer their retirement, yet stop the Pension System from taking deductions from their paychecks, asserting that their being transferred to CC Services effected a termination of their employment with the City. Per its previous resolution, the External Affairs Committee determined that the transfer did not cause a separation from municipal service. These employees (the Klumb plaintiffs) sued the Pension System, challenging its board's authority to take such actions. The suit eventually reached this Court. See Klumb v. Hous. Mun. Emps. Pension Sys. ,
In this Court, the Klumb plaintiffs alleged violations of the Texas Constitution and breach of contract as well as ultra vires claims against board members who voted in support of the resolution altering the definition of "employee" as set out in section 1(11) of the statute and authorizing the External Affairs Committee to determine who qualifies as an "employee." Involved in that appeal was the provision of the MCA by which the parties had agreed the City could pay a lesser contribution rate (27.36%) than that required by article 6243h, section 8. The MCA contained the following provision:
Except for meet and confer decisions and personnel decisions, no committee shall have authority to make final approvals, but shall only make recommendations to the full board.
But the board's resolutions regarding the definition of "employee" provided that the External Affairs Committee had final authority to determine employee eligibility. And while section 3(k) of the statute permitted the board to delegate authority in the manner provided for in the resolutions, the Klumb plaintiffs contended that the MCA amended the statute and divested the board of the ability to delegate final decision-making authority to a committee. The Klumb plaintiffs sought monetary damages and a declaration that they were no longer City employees as defined in article 6243h. The Pension System countered with a plea to the jurisdiction, arguing that the trial court lacked subject matter jurisdiction because (1) the constitutional claims were facially invalid, (2) governmental immunity barred the breach of contract claims regarding the MCA and could not serve as the basis of an ultra vires claim, and (3) article 6243h precludes judicial review because the board's interpretations of the statute and determination of the facts at hand were "final and binding." See TEX. REV. CIV. STAT. art. 6243h, § 2(y). The City joined as to the ultra vires claims, generally aligning itself with the Klumb plaintiffs and seeking similar injunctive and declaratory relief. The trial court granted the Pension System's plea to the jurisdiction and the court of appeals affirmed. Klumb v. Hous. Mun. Emps. Pension Sys. ,
to construe the statute, add language it deems necessary for the administration of the pension fund, and determine all eligibility questions and all other legal and factual matters pertaining to the fund's administration.
C. The Current Controversy
Klumb did not bring closure. Shortly after we issued our decision in Klumb in 2015, the Pension System sent a letter to the City's Finance Department and to the director of the City's Convention and Entertainment Facilities Department, who was additionally serving as president of HF Corporation, president of HF Foundation, and director of CC Services. The System requested various types of employee data and designation of a point person to provide employee and payroll information. This request and two additional requests went unanswered. Further, the City did not make contributions to fund the pension plan for employees of HF Corporation, HF Foundation, and CC Services (collectively, the corporations). In June 2015, the Pension System sued the City, seeking a writ of mandamus to compel the City to (1) provide the required and requested employee information now and in the future and (2) allocate funding in the current and all future proposed city budgets for retirement contributions and pick up payments owed for employees of the corporations. The Pension System argued that the board's definition of "employee" was final and binding on the City under article 6243h and Klumb ; therefore, the City acted ultra vires by failing to perform the purely ministerial functions of providing the required employee information and by failing to budget for the retirement contributions. The Pension System further alleged that the failure to provide the requested employee information violated the Texas Public Information Act (TPIA).
In response, the City filed a counterclaim against the Pension System and a third-party action against the board members, alleging that the Pension System breached the July 2011 MCA and violated article 6243h by attempting to alter the definition of "employee." In the alternative, the City requested declaratory and injunctive relief to prohibit the inverse condemnation that it claimed would occur if the Pension System was successful. Additionally, the City alleged that the Pension System and the board violated the Open Meetings Act. The City also filed a
Following a hearing, the trial court denied the City's plea to the jurisdiction. The City immediately appealed. The court of appeals affirmed in part, reversed in part, and rendered judgment in part.
In this Court, the City continues to argue that it is immune from suit. As to the Pension System's claim that the City acted ultra vires by failing to make the contributions and pick up payments, the City argues that the Pension System is now attempting to do what it opposed, and what this Court rejected, in Klumb : an ultra vires claim to enforce contractual duties contained within the MCA. And regarding the court of appeals' instructions to the trial court to permit the Pension System to replead its claim to assert that the City's failure to pay was an ultra vires act because it did not pay according to the statutory rate, the City contends that the MCA fully supplants the statute and therefore once an MCA has been entered into, neither party can assert an ultra vires claim based on the statutory provisions. The City also asserts that because the corporations' personnel are not "municipal employees" and therefore not members of the Pension System, the Pension System has no valid claims against the City.
As to the Pension System's TPIA claim, the City argues that the waiver of immunity in the TPIA applies only to a municipality's public information officer and not the municipality itself. Further, the City contends that the TPIA does not require the City to obtain the information from separate governmental entities, such as the corporations, where (1) those entities are independently subject to the TPIA and (2) the information requested is confidential, sensitive information, which is excepted from the TPIA's disclosure requirements. Finally, the City argues that the Pension System lacks standing because article 6243h, section 3(g) only authorizes the board, and not the Pension System itself, to assert claims.
With regard to the TPIA claim, the Pension System asserts that the TPIA requires the City to produce the requested employee information, to which it has a right of access. The City has access to this information, and while independent TPIA actions could be brought against the corporations, that does not foreclose this action against the City. Finally, in response to the City's claim that it lacks standing, the Pension System asserts that article 6243h, section 3(g) does not prohibit it from bringing suit and that the board's broad authority permits delegation of its responsibilities.
II. Standard of Review
Sovereign immunity, or governmental immunity as it is called in relation to subdivisions of the State such as cities, defeats a trial court's subject matter jurisdiction unless the immunity has been waived. See Reata Constr. Corp. v. City of Dallas ,
III. Analysis
The issue before us is whether the trial court has jurisdiction over the Pension System's claims against the City. But as noted above, there are several ways in which the City poses its challenge. We address them serially, although not in the order asserted by the City.
A. The Board's Standing to Sue
Article 6243h, section 3(g) provides that "[t]he pension board may institute legal action in the name of the pension board on behalf of the pension system." TEX. REV. CIV. STAT. art. 6243h, § 3(g). The City argues that only the board, not the Pension System itself, enjoys the requisite standing to assert claims under article 6243h. However, the court of appeals is correct that while granting authority to the board, this section does not prohibit the Pension System itself from instituting or participating in litigation.
We next address the ultra vires issue.
B. Did the Pension System Bring Valid Ultra Vires Claims?
Cities, as political subdivisions of the State, have immunity from suits for damages unless the immunity has been waived. Reata Constr. Corp. ,
Even if a governmental entity's immunity has not been waived by the Legislature, a claim may be brought against a governmental official if the official engages in ultra vires conduct. Hall v. McRaven ,
Ultra vires suits are subject to certain qualifications. See Heinrich ,
In cases in which the alleged ultra vires conduct is governmental inaction, a court may issue a writ of mandamus compelling action to bring the official into conformance with the law. See Shamrock Psychiatric Clinic, P.A. v. Tex. Dep't of Health & Human Servs. ,
1. Are the Employees "Members" of the Pension System?
The City is required to make contributions only for "members" of the Pension System. See TEX. REV. CIV. STAT. art. 6243h §§ 1(11), 8, 8A. So, the City is correct that the Pension System's case turns on whether the corporations' personnel are "employees" and thus "members" of the Pension System under the statute.
The City argues that the corporations' personnel are not "members" of the Pension System and that contrary to the Pension System's claim, the Court in Klumb did not decide otherwise. According to the City, Klumb only addressed the Pension System's statutory authority. The City's argument is without merit. As we explained in Klumb :
The breadth of the pension board's authority under Article 6243h is inescapable. As it pertains to the matter at hand, the statute expressly authorizes the pension board to construe the statute, add language it deems necessary for the administration of the pension fund, and determine all eligibility questions and all other legal and factual matters pertaining to the fund's administration. Courts may not review the board's actions in doing so absent a manifest conflict with express statutory terms. That is not the case here because (1) the definition of "employee" is composed of essential terms that are undefined and (2) the supplemental language the board adopted neither inherently nor patently conflicts with the terms of the statute. We therefore conclude that, as a matter of law, the pension board did not act without legal authority in interpreting the term "employee" to include "a full-time employee of a Texas local government corporation ... controlled by the City, upon a determination by the External Affairs Committee of the Board of Trustees that such [local government corporation's] employees are Employees for purposes of the [Pension System] Plan." The board's additional explication of the definition as including "employees of any entity controlled, directly or indirectly, by [the City]" is also well within the board's discretionary authority. Absent a conspicuous and irreconcilable conflict, any further consideration of the matter would impermissibly encroach on the unreviewable, discretionary authority afforded to the board under Article 6243h.
Klumb ,
The City asserts that even if the personnel at issue are members of the Pension System, the Pension System's ultra vires claims against it are barred by immunity because the Pension System (1) seeks to enforce contractual duties under the MCA, and noncompliance with a contract does not give rise to an ultra vires claim; (2) can maintain ultra vires claims only where there is no adequate remedy by law; (3) does not seek to impose duties imposed by law but complains only about discretionary matters; (4) seeks retrospective relief; and (5) made claims that are now moot because of recent statutory amendments prohibiting agreed deviations from statutory requirements regarding the City's contribution rate and amounts.
We address the above arguments next.
2. Are the Ultra Vires Claims for Breach of Contract?
The City asserts that the Pension System's ultra vires and mandamus claims are barred because they seek to enforce either contractual duties under the MCA or statutory duties that have been supplanted by the MCA. The City argues and the court of appeals held,
The Pension System argues that under Heinrich , "where a statute or the constitution requires that government contracts be made or performed in a certain way, leaving no room for discretion, a suit alleging a government official's violation of that law is not barred, even though it necessarily involves a contract." Heinrich ,
We disagree with the Pension System that under a statute providing a contract is "binding and enforceable," the contract must be "performed in a certain way" such that an ultra vires claim can be brought to enforce it. We have yet to expand on our statement in Heinrich regarding statutes requiring that a government contract be "performed in a certain way." But we disagree that because a statute authorizes a governmental entity to enter into contracts and that such contracts will be binding on it, the statute requires such contracts to be performed in a particular way. Such an approach would threaten to cause the exception in Heinrich -permitting an ultra vires claim where a statute or the constitution requires that government contracts be made or performed in a certain way-to swallow the rule in Klumb that noncompliance with a contract does not give rise to an ultra
However, the System also argues that even if it cannot seek ultra vires relief for the City's failure to comply with the MCA, the court of appeals' decision to remand for it to replead its claims was still erroneous. The Pension System posits that in remanding the case with instructions to allow it to replead, the court suggested that the System could seek contributions at the rate contained in the statute, but not the MCA. See
The City argues in response that Klumb held the statute provides MCAs as an "alternative mechanism[ ]" for resolving pension issues so the MCA has supplanted the statute. Klumb ,
Section 3(n) of the statute[, which provides for the execution of MCAs,] authorizes, but does not require, the pension board to enter into a written agreement with the City regarding pension and benefit issues. See TEX. REV. CIV. STAT. ANN. art. 6243h, § 3(n) ("[T]he pension board may enter into a written agreement with the city regarding pension issues and benefits." (emphasis added) ). Section 3(n) does not purport to constrain the board's authority under section 2(x) [to interpret article 6243h ]; it merely provides an alternative mechanism for the board to resolve pension issues. When the pension board and the City agree on a pension issue, the statute allows them to execute an enforceable contract to that effect. When they cannot agree, the statute makes the board's determinations of fact and statutory interpretations "final and binding."
Here, article 6243h provides, in pertinent part,
[T]he pension board may enter into a written agreement with the city regarding pension issues and benefits. The agreement must be approved by the pension board and the governing body of the city and signed by the mayor and by the pension board or the pension board's designee. The agreement is enforceable against and binding on the pension board, the city, and the pension system, including the pension system's members, retirees, deferred participants, beneficiaries, eligible survivors, and alternate payees. Any reference in this Act to an agreement between the city and the pension board or pension system is areference to an agreement entered under this subsection.
TEX. REV. CIV. STAT. art. 6243h, § 3(n).
The construction of a statute is a legal question for courts, subject to de novo review. City of Rockwall v. Hughes ,
Although the Pension System cannot bring an ultra vires claim to enforce the MCA, we agree with the Pension System that the court of appeals erred by requiring it to replead. In its pleadings, the System sought a writ of mandamus "compelling Defendants to allocate funding in the current and all future proposed City budgets to include contributions owed for [the corporations'] employees' salaries." It further pled that " Article 6243h... requires the City to make periodic payments to the pension fund in an amount that is based on the combined salaries of [the Pension System's] 'members,' who have been judicially confirmed to include all [the corporations'] employees," and that "[b]y failing to perform these purely ministerial acts required by Article 6243h, Defendants are acting ultra vires ."
The Pension System pled a valid ultra vires action for the City's failure to comply with article 6243h. The statute requires the City to make payments to the pension fund. Even though it requested a writ of mandamus compelling the City to provide the payments at the lower rate provided for in the MCA, the System was not required to seek the maximum amount allowed by the statute. Nor did the MCA relieve the City from its statutory obligation to make payments.
3. Does the Pension System Have Another Adequate Alternate Remedy?
As an extraordinary remedy, mandamus is available only in limited circumstances. Walker ,
The City argues that the Pension System's ultra vires claims seeking mandamus relief are barred because the System has another adequate remedy by law: a breach of contract claim for the City's violation of the MCA. See In re Essex Ins. ,
We give credence to the City's trial court pleadings. The question thus becomes whether a breach of contract claim by the Pension System, which the City maintained in its trial court pleadings would be barred by immunity, constitutes an adequate remedy for purposes of mandamus relief in an ultra vires suit.
The City's position, substantively, is: (1) if the Pension System had refused to attempt to work out its conflict with the City by entering into the MCA and the City then failed to abide by article 6243h and make payments to the pension fund, the Pension System could have sued the City on an ultra vires claim and obtained relief if it prevailed; (2) but because the Pension System worked with the City to try to resolve their conflicts and entered into an MCA, then the Pension System can no longer assert an ultra vires claim for the City's failure to comply and its only remedy is a breach of contract claim; (3) yet, a breach of contract claim, according to the City's pleadings in the trial court, which it did not disown at oral argument, is barred by immunity. If the Pension System were to be frustrated with the City's litigation conduct, its frustration would be understandable.
The Legislature specifically provided that the City and the Pension System can enter into MCAs but did not require them to do so. See TEX. REV. CIV. STAT. art. 6243h, § 3(n) (stating that "the pension board may enter into a written agreement with the city regarding pension issues and benefits" (emphasis added) ). If we were to hold, as the City invites us to, that entering into an MCA leaves the System with no remedy to enforce its terms, no MCAs would follow in the future. We cannot conceive of the Legislature intending such a nonsensical result. We conclude, contrary to the City's position, that under these circumstances, the Pension System does not have an adequate remedy by law.
4. Do the Claims Involve Discretionary Matters?
The City next asserts that the Pension System's ultra vires claims are barred because they do not seek to enforce ministerial duties, but rather, the claims are as to discretionary matters. See Heinrich ,
The Pension System's position, with which the court of appeals agreed, is that article 6243h requires the City to provide pension payments, which is a ministerial as opposed to a discretionary duty.
We agree with the Pension System and the court of appeals that the System is not seeking relief regarding how the payments must be made, but, rather, whether the payments must be made. And the statute mandates that contribution payments must be made by the City. Article 6243h states that the City "shall provide full and timely information" to the Pension System and "shall make contributions" to the Pension System. TEX. REV. CIV. STAT. art. 6243h, §§ 2(u), 8A(a). "Use of the word 'shall' " in a statute "evidences the mandatory nature of the duty imposed." Emmett ,
The controversy here is not about how the City must make the payments, only whether it must. See Tex. Dep't of Parks & Wildlife v. Miranda ,
5. Is the Pension System Seeking Retrospective Relief?
The City next challenges the holding of the court of appeals that the Pension System sought prospective, not retrospective relief. See Heinrich ,
[a] writ of mandamus compelling [the City] to allocate funding in the current City budget to provide the statutorily required payments of 27.36% of the payroll of the [corporations'] employees, to make such payments to [the Pension System] in accordance with the allocation, to include in all future proposed City budgets the contributions owed for [the corporations'] employees' salaries as members of [the Pension System], and to pick up and pay any biweekly contributions made on their behalf.
The City argues the Pension System's pleadings are broad enough to be construed as requesting both payments and allocations of amounts allegedly owed for past periods, which would necessarily include all past periods before the then-current fiscal year.
The System responds that it is seeking payments for what it is owed on the date of judgment and in the future.
Under Heinrich , prospective relief is permissible so that statutes specifically directing payment can "be judicially enforced going forward."
The City argues that jurisdiction has been lost, if it ever existed, because the System's claims are now moot due to 2017 amendments to Article 6243h. One of the amendments brought the City's unfunded liability current to July 1, 2016. See TEX. REV. CIV. STAT. art. 6243h, §§ 1(11-g), 8. Under the amendments, any "unfunded actuarial accrued liability" for the fiscal year ending June 30, 2016, or for each subsequent year is treated as part of the City's "legacy liability."
The City first argues that all payments for periods before the amendment's effective date constitute retrospective relief. However, as explained above, we disagree that the Pension System seeks retrospective relief by asking that the City be directed to comply with its current obligations and seeking that the statute be enforced as of the date of judgment.
The City next argues that the Pension System's suit is moot because any payments for future periods based on the contribution rate found in the MCA are barred because the statute prohibits the parties from altering the statutory contribution rate. Although the City may be correct that the amendments no longer allow a lower contribution rate under an MCA, as we held above, the Pension System is entitled to sue to enforce the statute for the City's failure to make contributions under article 6243h. The amended statute still provides that the City "shall make contributions to the pension system,"
C. The Public Information Act Claim
Finally, we turn to the City's assertion that the Pension System's claims for information pursuant to the TPIA are barred because (1) the TPIA only allows a suit against the City's public information officer and not the City itself, (2) the TPIA does not require the City to obtain information from another entity that is subject to the TPIA, and (3) the requested information is excepted from disclosure.
Inherent and necessary to the proper and effective administration of the Pension System is access to relevant employee and payroll data. See
The City argues that according to A & T Consultants, Inc. v. Sharp , its public records officer, not the City itself, is the proper defendant.
In Sharp , we concluded that the comptroller was "the proper party" against whom mandamus relief should be sought under section 552.321 because the comptroller had the legal obligation to produce the public records for the governmental body. Sharp ,
We agree with the court of appeals that the identity of the respondent in this case does not matter for jurisdictional purposes.
We also disagree with the City's argument that the TPIA's reference to a "governmental body," which includes a "municipal governing body," does not include the municipality itself. See TEX. GOV'T CODE §§ 552.003(1)(A)(iii), .321(a). The City cites no support for its position and we have previously recognized cities as governmental bodies under the TPIA. See, e.g. , Kallinen v. City of Houston ,
The City's additional arguments do not alter our foregoing analysis. While we agree that the corporations are themselves subject to the TPIA, the Pension System is not precluded from seeking the requested information from the City. Neither the TPIA nor article 6243h, section 2(u) contain any requirement that where multiple governmental entities possess the requested information, the suit must be brought against one entity in particular. And the System is correct that where the City has a right of access to the corporations' information, the City's TPIA obligations extend to that information.
Finally, the City asserts that the Pension System seeks confidential information that is excepted from disclosure. The TPIA contains a process for asserting
The City does not claim to have either requested a decision from the attorney general or provided the information; therefore, the Pension System's TPIA suit is proper. However, we further agree with the court of appeals that the System's suit is proper only as to the City and not as to the additional named defendants. The TPIA mandamus actions may not be maintained against defendants beyond the governmental body and its public records officer.
IV. Conclusion
We affirm in part and reverse in part. We reverse the court of appeals' judgment to the extent it reversed the trial court's order as to the Pension System's ultra vires claims related to the City's contribution failures. We affirm the court of appeals' judgment with respect to all other issues. We remand the case to the trial court for further proceedings.