City Lawsuit Damages: Consequential? Punitive? Necessary?
Two legislative ideas recently considered—one a Senate floor amendment and the other a House bill heard in committee—would have subjected Texas cities to essentially unlimited money damages in court and, more importantly, would have done so needlessly.
A floor amendment offered by Senator Brian Birdwell (R – Granbury) to a firearms regulation bill would have allowed a person “adversely affected” by a city firearms regulation to sue the city for three times the person’s actual damages, as well as for “consequential” damages. Two interesting points about the amendment:
- According to the amendment’s author, “we haven’t seen widespread violations of the general state firearms preemption law in Texas to-date….” In other words, cities aren’t currently regulating firearms in improper ways. Presumably, the amendment was just in case cities one day decide to do so.
- Second, the bill to which the amendment was offered (S.B. 987 by Senator Glenn Hegar) would already permit the attorney general to bring an injunctive lawsuit to stop any improper firearms regulation by cities (of which, again, there are little or none).
The other bad idea is H.B. 3088 by Representative Paul Workman (R – Austin), which was heard in the House Committee on Land and Resource Management on April 8. The bill would provide that a city may be liable for actual and consequential damages if a court finds that the city has improperly applied a new regulation in violation of Chapter 245 of the Local Government Code (the “permit vesting statute”). The hearing focused on the actions of one particular city, but the bill would apply to all cities.
Again, a couple of points about this proposal:
- Like the firearms bill above, violations of the vested rights statute can readily be addressed through injunctive relief (i.e., a court order). It is unclear why money damages are necessary on top of an injunction; in fact, the author pointed to only one city that had supposedly flaunted the permit vesting statute, and that city had recently repealed its regulations following an unfavorable attorney general opinion and court decision.
- Consequential damages are actually a breach of contract remedy, and thus aren’t even legally appropriate in a suit challenging a city ordinance. The more appropriate legal term would probably be “punitive damages.” A simple desire to punish cities, in other words.
A ray of sunshine: the Senate floor amendment was quickly withdrawn, and the House bill hasn’t been voted out of committee yet (now would be a good time for city officials to express their opposition to H.B. 3088). But the question remains: why the rush to subject cities to unlimited money damages for problems that don’t really exist?