TCAA NEWS
(Volume 3, Issue 7 – August 2008)
“Your Source for Information About the Texas City Attorneys Association”
News and Updates

TCAA to Fill Board Position on October 30, 2008: Those interested in applying for a place on the board should fill out an application and return it via e-mail to Scott Houston at legalgovt@tml.org. Application forms are available on the front page of TCAA’s Web site at www.texascityattorneys.org, and must be received by 5:00 p.m. on October 10, 2008. Pursuant to the TCAA Constitution, the TCAA president has appointed a three-member nominating committee to make a recommendation to the membership on the applications. The members of that committee are: (1) Tyrone Cooper, City Attorney, Beaumont (Chair); (2) Diane Wetherbee, City Attorney, Plano; and (3) Ignacio Ramirez, City Attorney, Baytown.

The TCAA Fall Conference will be held in conjunction with the TML Annual Conference on October 30, 2008, at the Henry B. Gonzalez Convention Center in San Antonio. Special thanks to our sponsor:

Nichols, Jackson, Dillard, Hager & Smith, LLP

Topics will include (1) recent state and federal cases; (2) key construction law issues for city attorneys; (3) sign law; (4) cutting edge economic development tools; (5) ethics; and (6) legislative forecast. Attorneys can earn up to 4.75 MCLE hours, including 1 ethics hour.

The City of San Antonio and Denton, Navarro, Rocha & Bernal, P.C., will host a pre-conference reception on the evening of Wednesday, October 29, 2008. The reception will be held from 4:30 – 6:30 p.m. at the Henry B. Gonzalez Convention Center in the Grotto on the River Level (River Level Room 007).

CLICK HERE FOR MORE INFORMATION OR TO REGISTER. (Note: The exact schedule for the TCAA event is available under "Affiliate Programs," and most attorneys who will not be attending the entire TML Annual Conference will want to choose the “one-day registration” option.)

Municipal Attorney Job Openings: For the most recent Texas Municipal League classifieds postings, please click here.

Recent Texas Cases of Interest to Cities
Note: Included cases are from the period beginning on the 10th of the previous month through the 10th of the current month.

Employment: City of Waco v. Robert Lopez, No. 06-0089 (Tex. July 11, 2008). Based on complaints about Lopez’s attitude, the city transferred him from his position as chief plumbing inspector to a position in the plumbing code enforcement division. Lopez filed a grievance with the city’s equal employment opportunity (EEO) officer. The grievance complained that the transfer was based on his age and race in violation of the city’s EEO policy. Although he was transferred back to his original position, the city later terminated his employment for taking a city vehicle from Waco to Austin without prior approval from the city. Lopez proceeded to sue the city under the Whistleblower Act, claiming the termination of his employment was a prohibited retaliation.

The Whistleblower Act prohibits a city from taking an adverse employment action against an employee who “in good faith reports a violation of law by the employing [city] or another public employee to an appropriate law enforcement authority.” Tex. Gov’t Code § 554.002. The Whistleblower Act waives sovereign immunity for cities in causes of action arising out of claims by public employees whose employment was allegedly terminated for reporting illegal conduct. Id. § 554.0035. The Whistleblower Act requires an employee to make a good faith report of a violation of law by the employing governmental entity or another public employee to an appropriate law enforcement authority. Id. § 554.002. The “appropriate law enforcement official” is a federal, state, or local governmental authority that the employee believes has authority to regulate or enforce the violated provision. An employee who is allegedly “retaliated” against for reporting a violation of law is entitled to sue for: (1) injunctive relief; (2) actual damages; (3) court costs; and (4) reasonable attorney fees.

The city filed a plea to the jurisdiction, arguing that the Texas Commission of Human Rights Act (TCHRA) was the exclusive remedy for Lopez’s retaliatory discharge claim, that he did not meet the Whistleblower Act’s requirements because the EEO policy did not constitute a “law;” and that he did not report the alleged violation to the “appropriate law enforcement authority.” Lopez countered that: (1) the Whistleblower Act is the only statute that afforded him any protection for having reported the EEO policy violation because he never filed a TCHRA complaint or otherwise invoked the TCHRA; (2) the EEO policy qualifies as a “law” under the Whistleblower Act because it was adopted by the city through a resolution; and (3) the EEO officer was the appropriate law enforcement authority to which to report an alleged violation of the EEO policy. The district court denied the city’s plea to the jurisdiction and the court of appeals affirmed that decision.

The TCHRA makes it unlawful for an employer to retaliate “against a person who, under this chapter: (1) opposes a discriminatory practice; (2) makes or files a charge; (3) files a complaint; or (4) testifies, assists, or participates in any manner or in an investigation, proceeding, or hearing.” Tex. Lab. Code § 21.055. City employees are covered by the TCHRA. The discriminatory practices made unlawful under the TCHRA include adverse employment decisions based on race, color, disability, religion, sex, national origin, or age. Id. § 21.051.

Although Lopez never pled a TCHRA claim, he claimed that his internal grievance with the city complaining of age and race discrimination and his related retaliation claim indisputably implicate the TCHRA’s anti-retaliation provision (Section 21.055 of the Labor Code). In addition, Lopez contended that the TCHRA is not an impediment to his claim under the Whistleblower Act, according to Tex. Gov’t Code § 554.0029(a). The Whistleblower Act and the TCHRA have different procedural requirements and provide incompatible remedies. Because of this – and the fact that the TCHRA is focused precisely on combating the discrimination-rooted retaliation of which Lopez complains – Lopez claimed that the more specific and comprehensive anti-retaliation remedy in the TCHRA forecloses relief under the more general Whistleblower Act.

The Supreme Court of Texas held that Lopez’s claim for retaliation falls squarely under the TCHRA, which is the exclusive state statutory remedy. Because the Court found that the TCHRA is the exclusive remedy and that Lopez failed to plead a cause of action under the TCHRA, the Court declined to address whether Lopez had an actionable claim under the Whistleblower Act. The Supreme Court reversed the court of appeal’s judgment and dismissed the case.

Sales Tax: Gallagher Headquarters Ranch Dev. Ltd., Christopher Hill, and Julie Hooper v. City of San Antonio, No. 04-07-00325-CV (Tex. App.—San Antonio July 23, 2008). This case involves a venue tax adopted to fund the city’s purchase of land for use as parks. Venue taxes are a series of different taxes that a city is authorized to levy within the city to fund “a venue project,” such as a park, under Chapter 334 of the Local Government Code. In this case, the venue tax was a sales and use tax of one-eighth of one percent. Like all venue taxes, this tax was adopted through an election. The city used the funds from the tax to acquire land for use as parks. The issues in the case arose when the city granted an easement to an electric company to place an electrical transmission line across the venue project park land. Christopher Hill and others sued the city after the city granted the easement, arguing that the city breached its “contract with the voters” by allowing a use that was inconsistent with the venue project the voters approved.

The “contract with the voters” doctrine has two parts: (1) spending tax funds for a particular purpose; and (2) the continued use of the project for the approved purpose. The “contract with the voters” doctrine begins with Article I, Section 16, of the Texas Constitution, which prohibits laws impairing the obligation of contracts. TEX. CONST. art. I, sec. 16. The contractual obligation doctrine was extended to tax elections by the Supreme Court of Texas in San Saba County v. McCraw¸ 108 s.W.2d 200 (1937). In San Saba County, the court held that “the vital conditions and safeguards surrounding the tax voted at the time of the election” became part of the election and the “contract with the voters.” Any law that violates those voters’ rights would violate the constitutional contractual obligation provision. The Texas attorney general has also recognized this doctrine. See Tex. Att’y Gen. Op. Nos. GA-0156 (2004); GA-0049 (2003); JC-0400 (2001).

Mr. Hill lost in the trial court and was forced to pay attorneys’ fees to the city. On appeal, he continued to argue that the city breached its contract with the voters by misusing the property. The city argued that even if it had allowed a use that was inconsistent with its “contract with the voters,” it had the authority under Texas Local Government Code § 334.041(b) to grant an easement for the electrical company to place transmission lines over the park property. Section 334.041(b) states that a city:

may acquire, sell, lease, convey, or otherwise properly dispose of property or an interest in property, including an approved venue project, under terms and conditions determined by the municipality.

TEX. LOC. GOV’T CODE § 334.041(b). The city argued that this provision gave them authority to convey the property and that this statute supersedes any Article I, Section 16, “contract with the voters” claim. Mr. Hill argued that Chapter 334 is “subject to” the common law constitutional claim. The court held that the plain language of Section 334.041 gives the city the broad authority to make decisions regarding the use of venue project land and that:

If the legislature had intended to restrict a municipality’s broad grant of power to dispose of an interest in a venue project by making it ‘subject to’ the continuous use of the project for the dedicated purpose, it could have easily so provided.

The court affirmed the trial court’s summary judgment in favor of the city.

Sovereign Immunity - Tort: Patricia Ann Powers v. City of Conroe and Conroe Animal Control, No. 09-07-591 CV (Tex. App.—Beaumont July 31, 2008) (mem. op.). The city has sovereign immunity under the Texas Tort Claims Act because animal control is a governmental function.

Public Utility Commission: Tex. Mun. Power Ag.; City of Denton; City of Garland; and City of Greenville v. Pub. Util. Comm’n and City of Bryan; and Tex. Mun. Power Ag.; City of Denton; City of Garland; and GEUS (Greenville Elec. Util. Sys.) v. Pub. Util. Comm’n; City of Bryan; and City of Weatherford, Nos. 03-02-00644-CV, 03-02-00701-CV (Tex. App—Austin July 24, 2008). The claims brought by the Texas Municipal Power Agency were redundant of their claims under the Administrative Procedure Act and therefore were properly dismissed.

Public Utility Commission: CenterPoint Energy Houston Electric, LLC v. Gulf Coast Coalition of Cities, No. 03-06-00285-CV (Tex. App.—Austin July 25, 2008). The court affirmed the Public Utility Commission’s order authorizing CenterPoint to recover some costs through a competition transition charge because the commission was within its statutory authority to assess the charge.

Civil Service: City of Houston v. Joseph A. Buttitta, No. 01-07-00323-CV (Tex. App.—Houston [1st Dist.] July 17, 2008). A city may not appeal a decision of the Police Officers’ Civil Service Commission under Chapter 143 of the Local Government Code.

Land Use: City of Seguin v. Robert L. Worth, No. 04-06-00551-CV (Tex. App.—San Antonio July 23, 2008) (mem. op). Under the Supreme Court of Texas’ opinion in City of Rockwall v. Hughes, an individual has no private right to object to an annexation proceeding so long as the city acts on the individual’s request for arbitration.

Civil Service: Anthony Jackson and James Nunez v. City of Texas City, No. 01-07-00026-CV (Tex. App.—Houston [1st Dist.] July 24, 2008). If the terms of the Civil Service Act do not apply to a termination, the city’s civil service commission is not required to hold a hearing, and the terminated employees do not have a justiciable claim.

Employment: City of San Antonio v. Michael Cancel, No. 07-07-0285-CV (Tex. App.—Amarillo July 28, 2008). The court recognized a cause of action for same sex sexual harassment, but held that the employee had failed to prove a hostile work environment based on one alleged incidence of sexual harassment.

Civil Service: City of Athens v. James MacAvoy, No. 12-07-00434-CV (Tex.App.—Tyler, July 31, 2008). The court held that a police hearing examiner has the authority to review and apply Section 614.023(b) of the Government Code, and any error in construction of the statute does not give the court jurisdiction to hear the case.

Sovereign Immunity -Tort: Rosa Hernandez v. City of McAllen, No. 13-06-00377-CV (Tex. App.—Corpus Christi-Edinburg July 31, 2008) (mem. op.). The court held that immunity was not waived in this tort suit under the Tort Claims Act because the design and implementation of a drainage box cover in the roadway was a discretionary act.

Attorney General Opinions of Interest to Cities
Note: Included opinions are from the period beginning on the 10th of the previous month through the 10th of the current month.

Opinion No. GA-0648 (Subdivisions in the Extraterritorial Jurisdiction): concludes that Chapter 212 of the Local Government Code authorizes cities to regulate subdivisions and plats within their boundaries and their extraterritorial jurisdiction. Chapter 232 authorizes counties to regulate subdivisions and plats within the unincorporated area of the county. Unless otherwise authorized by state law, counties and cities may not adopt subdivision or plat regulations applicable to a city's extraterritorial jurisdiction that regulate: (1) the use of any building or property for business, industrial, residential, or other purposes; (2) the bulk, height, or number of buildings constructed on a particular tract of land; (3) the size of a building that can be constructed on a particular tract of land, including without limitation any restriction on the ratio of building floor space to the land square footage; or (4) the number of residential units that can be built per acre of land. Certain city regulations and county regulations addressed in the opinion appear to be facially inconsistent with the Local Government Code restrictions on lot size and residential unit density, but some of these regulations are claimed to actually protect water supply. However, because interpreting regulations requires the investigation and resolution of fact questions, their validity under Local Government Code Chapters 212 and 232 cannot be determined as a matter of law in an attorney general opinion.

Opinion No. GA-0653 (Sales Tax – Regional Transportation Authority): concludes that the Texas Constitution, Article VIII, Section 1(a), requires that all taxation be equal and uniform. Article VIII, section 1(a), authorizes the classification of persons and property for taxation when the tax classification is not unreasonable, arbitrary, or capricious and when the tax operates equally on all persons or property within the class. Chapter 452 of the Transportation Code authorizes a Regional Transportation Authority (RTA) consisting of more than one subregion to collect a sales and use tax at different rates in the different subregions. For any RTA organized under Chapter 452 that has more than one subregion and that collects the sales and use tax at different rates from the different subregions, the difference in tax rates could be upheld under Article VIII, Section 1(a), if the tax falls equally on people and property within each subregion and the different tax treatment by each subregion is reasonable.

You can view attorney general opinions at www.oag.state.tx.us. On the same site, you can also sign up to receive e-mail updates of opinion requests and newly released opinions.

As a supplement to TCAA News, please check the TML Legislative Update Newsletter and TML’s Connect News Service .
Please contact Scott Houston, TCAA General Counsel, with your news, questions, and/or comments by e-mail at legalgovt@tml.org or by phone at 512-231-7400.
TCAA members may use the information herein for any purpose. No other person may reproduce, duplicate, or distribute any part of this document without the written authorization of the Texas City Attorneys Association.
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