DAWN NETTLES, PETITIONER, v.
No. 17-1010 | No. 18-0159
IN THE SUPREME COURT OF TEXAS
June 12, 2020
ON PETITION FOR REVIEW FROM
~ consolidated with ~
ON PETITION FOR REVIEW FROM THE COURT OF APPEALS FOR THE THIRD DISTRICT OF TEXAS
BOYD, J., concurring in part and dissenting in part.
Immunity protects the government. An independent contractor is not the government. Therefore, immunity does not protect an independent contractor. That
This Court recently flirted with the notion that derivative sovereign immunity could protect private companies against suits based on conduct performed pursuant to a contract with the government. See Brown & Gay, 461 S.W.3d at 123. The Court declined to decide that issue, however, concluding instead that even assuming we recognized such derivative sovereign immunity from suit, it would not have protected the private contractor in that case because the government exercised “no control” over that contractor‘s work. Id. at 126 (“We need not establish today whether some degree of control by the government would extend its immunity protection to a private party; we hold only that no control is determinative.“).
Today the Court reaches nearly the same result. As in Brown & Gay, the Court concludes that it “need not decide” whеther to recognize a “doctrine of derivative sovereign immunity for contractors” or what standard to apply to determine the scope of any such immunity. Ante at __. Yet it explains that, were it to “recognize[] derivative sovereign
For the sake of other government contractors and those with claims against them—not to mention the trial and appellate courts that must resolve those claims—I would eliminate the uncertainty and decide the issue the Court has been avoiding. And I would reach the simple,
To be clear, I have no problem with the idea that sovereign immunity from suit protects entities that are designed and created with
Nor do I have any problem recognizing that a form of “qualified immunity” may protect individuals who act in good faith as аgents of the government, even if they are not technically government employees. See, e.g., Filarsky v. Delia, 566 U.S. 377, 393–94 (2012) (extending “qualified immunity” to individuals who contract to act as government agents just as to those who are government employees); Incarnate Word, 2020 WL 2601602, at *9, ___ S.W.3d at ___ (discussing official immunity). And I have no problem recognizing a type of “government-contractor defense” against liability on the merits, to protect a private party from liability for non-negligent conduct performed in compliance with а government contract and under the government‘s direction and control. See Torrington Co. v. Stutzman, 46 S.W.3d 829, 846 (Tex. 2000).2
But treating private entities as a sovereign entity simply because they contract with the government is another matter altogether. Private entities that are neither designed nor created by the sovereign to act as or on behalf of the sovereign do not possess the sovereignty that justifies sovereign immunity from suit—even if they are regulated or controlled by the sovereign and are sued for conduct that fulfills a public purpose. See, e.g., Incarnate Word, 2020 WL 2601602, at *10, ___ S.W.3d at — (holding a private university is not an arm of the state protected by sovereign immunity from suit against claims arising from the conduct of its statutorily authorized police department); Rosenberg, 571 S.W.3d at 751 (holding governmental immunity does not protect municipally created economic development corporations because they are not governmental entities “in their own right“). Granting sovereign immunity from suit to a non-sovereign entity distorts the very meaning of sovereign immunity,3 even if the entity promotes public purposes under a contract with the sovereign. The entity‘s conduct may promote the sovereign‘s objectives, but its own nature, purposes,
Sovereign immunity (or governmental immunity, when referring to political subdivisions) protects sovereign entities against both lawsuits and legal liabilities. Hillman v. Nueces County, 579 S.W.3d 354, 357 (Tex. 2019). We first recognized sovereign immunity as a principle of Texas common law over 170 years ago, but it has existеd for more than 600 years and is now a well-established doctrine across the globe. Id. at 361.4 Sovereign immunity includes both immunity from liability—which protects governmental entities from liability on judgments against them—and immunity from suit, which protects them from “the burdens of litigation altogether.” Tarrant County. v. Bonner, 574 S.W.3d 893, 900 (Tex. 2019). Sovereign immunity is a common-law doctrine; only this Court can declare its existence and scope. But we defer to the legislature, as the policy-making branch of government, to decide whether and when to waive it. Hillman, 579 S.W.3d at 361.
Two fundamental characteristics of sovereign immunity simply preclude its application to non-sovereign entities. First, just as its name indicates, sovereign immunity exists because it is “inherent in the state‘s sovereignty.” Dall./Fort Worth Int‘l Airport Bd. v. Vizant Techs., LLC, 576 S.W.3d 362, 366 (Tex. 2019); Wasson Interests, Ltd. v. City of Jacksonville, 559 S.W.3d 142, 146 (Tex. 2018). As Alexander Hamilton explained long ago, “It is inherent in the nature of sovereignty not to be amenable to the suit of an individual WITHOUT ITS CONSENT.”
Second, sovereign immunity from suit implicates the courts’ subject-matter jurisdiction over suits against the sovereign, see Vizant Techs., 576 S.W.3d at 367, and thus “bars suit against the entity altogether,” Tooke v. City of Mexia, 197 S.W.3d 325, 332 (Tex. 2006). This means the courts have no power over claims against the entity, “without regard to whether the claims asserted have merit,” Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000), “even if the State acknowledges liability on a claim,” Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 696 (Tex. 2003), and when “the sovereign‘s liability is not disputed,” Rosenberg, 571 S.W.3d at 746.
As a result, “just аs immunity is inherent to sovereignty, unfairness is inherent to immunity,” City of Galveston v. State, 217 S.W.3d 466, 480 n.38 (Tex. 2007) (Willett, J., dissenting). Sovereign immunity from suit “allows the ‘improvident actions’ of the government to go unredressed,” Hall v. McRaven, 508 S.W.3d 232, 243 (Tex. 2017), and thus “places the burden of shouldering” the “costs and consequences” of those actions “on injured individuals,” rather than on the entity that caused those consequences, Brown & Gay, 461 S.W.3d at 121. Even though the sovereign acted negligently, violated a legal standard, or
Recognizing that sovereign immunity derives solely from sovereignty, divests courts of their constitutional powers, and defends the sovereign even when it wrongfully harms one of the sovereign‘s citizens, I see no reason why sovereign immunity from suit should ever apply to protect a non-sovereign entity—even those that contractually agree to allow the sovereign to control their actions.
Extending sovereign immunity to such еntities is not only inconsistent with the very nature of sovereign immunity, it does nothing to support the purposes for which we have continued to recognize sovereign immunity. Initially, courts recognized sovereign immunity under the theory that “the king can do no wrong,” Tooke, 197 S.W.3d at 331, but we have rejected that “feudal fiction” under our democratic form of government, Rosenberg, 571 S.W.3d at 740–41. Nevertheless, we continue to recognize sovereign immunity because of its “political, pecuniary, and pragmatic” purposеs. Id. at 740.
Politically, we continue to recognize sovereign immunity because it “preserves separation-of-powers principles by preventing the judiciary from interfering with the Legislature‘s prerogative to allocate tax dollars.” Brown & Gay, 461 S.W.3d at 121. By preserving the common-law doctrine of sovereign immunity, the courts maintain an “equilibrium among the branches of government” by allowing the legislature to decide, as a policy matter, when to “allow tax resources to be shifted ‘аway from their intended purposes toward defending lawsuits and paying judgments.‘” Rosenberg, 571 S.W.3d at 740–41 (quoting Brown & Gay, 461 S.W.3d at 121). In short, sovereign immunity prevents the courts from “intruding into” the policy-making branch‘s role of managing and appropriating the public‘s funds. Hughes, 573 S.W.3d at 218.
By requiring a legislative decision to make tax dollars available to pay the costs of litigation and judgments, Chambers-Liberty Ctys. Navigation Dist. v. State, 575 S.W.3d 339, 347 (Tex. 2019), sovereign immunity serves the pecuniary purpose of ensuring “that the taxes the public pays are used ‘for their intended purposes.‘” Hillman, 579 S.W.3d at 361 (quoting Reata Const. Corp. v. City of Dallas, 197 S.W.3d 371, 375 (Tex. 2006)). It “protect[s] the public treasury,” Wichita Falls State Hosp., 106 S.W.3d at 695, by “shield[ing] the public from the cоsts and consequences of improvident actions of their governments,” Tooke, 197 S.W.3d at 332.
And pragmatically, sovereign immunity “serves to prevent governmental paralysis” by protecting “the State and its political subdivisions from endless litigation,” Hughes, 573 S.W.3d at 218, which “hamper[s] government functions.” Ben Bolt, 212 S.W.3d at 326. It safeguards “the public as a whole” by protecting its governmental agencies from both the “distraction” of lawsuits and the risks that litigants could control government action through the courts instead of through the political process. Hays St. Bridge Restoration Grp. v. City of San Antonio, 570 S.W.3d 697, 703–04 (Tex. 2019) (quotation and citation omitted).
Extending sovereign immunity from suit to non-sovereign entities merely because they contract with the sovereign does nothing to promote these purposes. Requiring private entities to defend suits alleging they engaged in harmful conduct poses no threat to the separation of powers because the legislature does not fund private entities through tax appropriations
Nor do these purposes justify the Court‘s decision today to extend sovereign immunity from suit to private entities that are sued on derivative claims like conspiracy and aiding and abetting. See ante at __. The Court suggests that imposing “derivative liability” on GTECH based on the Commission‘s decisions and actions “implicate[s]” sovereign immunity‘s purposes by requiring courts to interfere with the Commission‘s “policymaking responsibilities” and controlling its “сhoices regarding the use of public funds.” Ante at __. But it does no such thing. Courts can easily resolve such claims against private entities without having to exercise any control over the governmental entity, its policy choices, or its use of tax dollars. And if, as the Court suggests, a private entity cannot be “derivatively liable” for conspiring with or abetting a governmental entity, courts can simply dispose of such derivative claims on summary judgment, or even on the pleadings under
Finally, extending sovereign immunity from suit to non-sovereign government contractors would make Texas an outliеr among other U.S. jurisdictions. Although other jurisdictions have recognized liability defenses for government contractors, and even referred to such defenses as a form of derivative or acquired immunity, they
The United States Supreme Court first recognized derivative protection for government contractors in Yearsley but acknowledged only a protection against “liability“—not “immunity” and not against “suit“—and even then оnly if the contractor acted under and within a validly conferred authority. 309 U.S. at 20–21. More recently, the Court explained that this protection does not offer contractors an “unqualified immunity,” even “from liability,” and the contractor‘s protection, “unlike the sovereign‘s, is not absolute.” Campbell-Ewald Co. v. Gomez, — U.S. —, 136 S. Ct. 663, 672 (2016) (emphasis added). Instead of “acquir[ing] the Government‘s embracive immunity,” the contractor enjoys no protection when it “violates both federal law and the Government‘s explicit instructiоns.” Id. As one commentator has observed, the protection the Supreme Court has extended to government contractors might qualify as a form of “derivative immunity,” but it is not “derivative sovereign immunity,” and certainly not derivative sovereign immunity from suit. Jason Malone, Derivative Immunity: The Impact of Campbell-Ewald Co. v. Gomez, 50 CREIGHTON L. REV. 87, 88 n.6, 124 (2016).
Similarly, the federal circuits have generally refused to recognize a derivative sovereign immunity from suit that both deprives the courts of jurisdiction and protects private government contractors even against their own wrongful conduct. Some circuits have expressly rejected a derivative immunity that deprives the courts of jurisdiction, holding instead that the protection for government contractors merely provides a form of “qualified immunity” that must “be reviewed on the merits rather than for jurisdiction.” Adkisson v. Jacobs Eng‘g Grp., Inc., 790 F.3d 641, 647 (6th Cir. 2015); see also Ackerson v. Bean Dredging LLC, 589 F.3d 196, 207–08 (5th Cir. 2009) (holding that protection for contractors under Yearsley is not “shared” sovereign immunity and “does not deny the court of subject-matter jurisdiction“); U.S. ex rel. Ali v. Daniel, Mann, Johnson & Mendenhall, 355 F.3d 1140, 1146–47 (9th Cir. 2004) (holding that the government contractor defense does not confer sovereign immunity on contractors).
While other federal circuits have extended Yearsley to provide what they called “jurisdictional” protection, they too acknowledged that it is not true “sovereign immunity” because it applies only if the contractor “adhered to the terms of its contract with the government” and engaged in no negligence or other misconduct. See McMahon v. Presidential Airways, Inc., 502 F.3d 1331, 1345 (11th Cir. 2007) (“[J]ust as in the area of official immunity, the immunity of a common law agent must be affirmatively justified.“); Myers v. United States, 323 F.2d 580, 583 (9th Cir. 1963) (recognizing protection against “liаbility” for contractors, but only to the extent they performed their work “in conformity with the terms of said contract“).6
In the same way, none of the states have extended true sovereign immunity from suit to private government contractors. Some states have expressly rejected any form of derivative sovereign immunity
to the protection as a form of “immunity,” but their analyses and holdings make clear that it is not sovereign immunity from suit because it applies only if the contractor was not negligent and did not otherwise engage in wrongful conduct.9
Opinion delivered: June 12, 2020
Jeffrey S. Boyd
Justice
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