the City of Austin and Marc A. Ott, in His Official Capacity as City Manager of the City of Austin v. Utility Associates, Inc. And Mr. v. Bruce Evans, a Resident of Austin, Texas, Individually ( 2016 )

ACCEPTED
03-16-00565-CV
13904579
THIRD COURT OF APPEALS
AUSTIN, TEXAS
11/21/2016 1:52:00 PM
JEFFREY D. KYLE
CLERK
No. 03-16-00565-CV
No. 03-16-00586-CV
FILED IN
3rd COURT OF APPEALS
AUSTIN, TEXAS
IN THE THIRD COURT OF APPEALS 11/21/2016 1:52:00 PM
AUSTIN, TEXAS JEFFREY D. KYLE
Clerk
City of Austin and Marc A. Ott, in his Official Capacity as the City Manager for
the City of Austin,
Defendants – Appellants
v.
Utility Associates, Inc., and Mr. V. Bruce Evans, a Resident of Austin, Texas,
Individually,
Plaintiffs - Appellees
On Appeal from the District Court of Travis County, 98th Judicial District
Cause No. D-1-GN-16-002931
REPLY BRIEF OF APPELLANT
Anne L. Morgan, City Attorney
Meghan L. Riley, Chief, Litigation
Matthew William Tynan, Assistant City Attorney
State Bar No. 24072489
City of Austin-Law Department
P. O. Box 1546
Austin, Texas 78767-1546
Telephone: (512) 974-2185
Facsimile: (512) 974-1311
matthew.tynan@austintexas.gov
COUNSEL FOR DEFENDANTS - APPELLANTS
ORAL ARGUMENT NOT REQUESTED
TABLE OF CONTENTS
TABLE OF CONTENTS .......................................................................................... ii
INDEX OF AUTHORITIES............................................................................... iii, iv
ARGUMENT .............................................................................................................1
I. Statutory Standing is an Exclusive Jurisdictional Requirement ........... 2
II. Utility is Not One of the Statutorily Defined Parties Who Can
Challenge Municipal Purchases Under Chapter 252 ............................5
III. Utility Cannot Obtain Statutory Standing Through Another Party to
This Litigation .......................................................................................7
IV. Appellees Cannot Use the UDJA to Create An Exception to the
Standing Requirements of §252.061 ...................................................10
CONCLUSION ........................................................................................................12
CERTIFICATE OF COMPLIANCE .......................................................................13
CERTIFICATE OF SERVICE ................................................................................14
ii
INDEX OF AUTHORITIES
Cases
Andrade v. NAACP of Austin,
345 S.W.3d 1 (Tex. 2011). ................................................................................8, 9
Barshop v. Medina Cnty. Underground Water Conservation Dist.,
925 S.W.2d 618 (Tex. 1996)................................................................................... 8
City of El Paso v. Waterblasting Technologies, Inc.,
491 S.W.3d 890 (Tex. App. – El Paso 2016)....................................................6, 10
City of Dallas v. TCI W. End, Inc,.
463 S.W.3d 53 (Tex. 2015).....................................................................................9
City of Round Rock v. Whiteaker.
241 S.W.3d 609 (Tex. App. – Austin 2007). .......................................................... 4
Crown Life Ins. Co. v. Casteel,
22 S.W.3d 378 (Tex. 2000) ..................................................................................11
Dallas County v. Cedar Springs Investments, L.L.C.,
375 S.W.3d 317 (Tex. App. – Dallas 2012). ........................................................10
Estate of Teal,
135 S.W.3d 87 (Tex. App.-Corpus Christi 2002) .................................................11
Everett v. TK–Taito, L.L.C.,
178 S.W.3d 844 (Tex. App. – Fort Worth 2005). ................................................. 2
Firemen's Ins. Co. v. Burch,
442 S.W.2d 331 (Tex.1968). ...............................................................................11
Hunt v. Bass,
664 S.W.2d 323 (Tex.1984) ....................................................................................2
In re Griffith,
485 S.W.3d 529 (Tex. App. – Houston [14th Dist.] 2015); .................................10
iii
NME Hosps., Inc. v. Rennels,
994 S.W.2d 142 (Tex. 1999).................................................................................11
Patel v. Texas Dep't of Licensing and Regulation,
469 S.W.3d 69 (Tex. 2015).................................................................................8, 9
Phillips v. Beaber,
995 S.W.2d 655 (Tex.1999). ...................................................................................5
Rush v. Barrios,
56 S.W.3d 88 (Tex. App. – Houston [14th Dist.] 2001); .....................................10
S. Tex. Water Auth. v. Lomas,
S.W.3d 304 (Tex. 2007) ..........................................................................................4
Texas Ass’n of Bus. v. Tex. Air Control Bd.,
852 S.W.2d 440 (Tex. 1993). ..........................................................................4, 10
Tex. Dep't of Protective and Regulatory Servs. v. Sherry,
46 S.W.3d 857 (Tex.2001). ....................................................................................5
Urban Electric v. Brownwood Independent School Dist.,
852 S.W.2d 676 (Tex. App. – Eastland 1993). ..................................................... 5
Will. v. Lara,
52 S.W.3d 171 (Tex.2001). ..................................................................................3
Statutes
TEXAS CIVIL PRACTICE AND REMEDIES CODE § 37.001- 37.011 ............................... 1
TEXAS GOVERMENT CODE § 311.002 ......................................................................... 5
TEXAS LOCAL GOVERNMENT CODE § 252.061 ..................................................passim
iv
ARGUMENT
The Appellants have argued that the trial court ruled in error when it
determined that Plaintiff Utility Associates, Inc. (“Utility”) had jurisdictional
standing to pursue litigation in this matter. The Appellants’ brief presented
detailed support that the enforcement provision contained in Chapter 252 of the
Texas Local Government Code provides the exclusive definition of parties who
have standing to challenge municipal procurements. 1 Appellees filed their brief
with the Court arguing; 1) Statutory standing under the controlling statute is not the
exclusive means to establish this jurisdictional requirement; 2) Utility need not
satisfy the requirements of statutory standing because they have established
“general standing”; 3) Utility can establish statutory standing as a losing bidder as
a result of the standing afforded a taxpayer under §252.061, and 4) The Appellees’
ultra vires claims create an exception to exclusive statutory criteria so as to provide
jurisdictional standing under the Uniform Declaratory Judgment Act (“UDAJ”),
§37.001 – 37.011 of the Texas Civil Practices and Remedies Code.2
Pursuant to Texas Rule of Appellate Procedure 38.3, Appellants present this
reply brief to address these arguments levied by the Appellees. As shown below,
1
The trial court has determined that Section Chapter 252 of the Loc. Gov’t. Code applies to the
challenges presented in this matter. The Appellees have conceded this point and this
determination has not been appealed (RR2: 11, 80, 127, 134 & Supp. RR2 26).
2
Appellees insist that they have argued this position before but only point to a claim of “inherent
jurisdiction” (1 C.R. 171), references to the inapplicable Texas Government Code (1 C.R. 398),
and that the Taxpayer has statutory standing (2 R.R. 125-133).
1
the Appellees arguments regarding standing are without sufficient legal support
and should be considered inadequate by this Court to overcome the well-defined
argument and authority presented in the Appellants’ Brief.3
I. Statutory Standing is an Exclusive Jurisdictional Requirement
On page 16 of the Appellees’ Brief they introduce the notion that Utility is a
proper party to this litigation because they have established “general standing”.
They insist that this standard is applicable to the matter at hand because the
statutory basis provided under Chapter 252 does not represent the exclusive criteria
to determine who may challenge municipal purchases. The Appellees’ argument
must fail because it is a well-settled rule that statutory standing serves as the
exclusive metric for ascertaining on whom the legislature intended to confer
standing when specific criteria for the jurisdictional prerequisite are included as
part of the statutory language.
Standing to sue may be predicated upon either statutory or common law
authority. Everett v. TK–Taito, L.L.C., 178 S.W.3d 844, 850 (Tex. App. – Fort
Worth 2005). The common law standing rules apply except where standing is
statutorily conferred. Id. (emphasis added); see also Hunt v. Bass, 664 S.W.2d
323, 324 (Tex.1984). When standing has been statutorily conferred, the statute
itself serves as the proper framework for a standing analysis. Everett, 178 S.W.3d
3
Appellants only address the standing arguments presented in Appellees’ Brief. Appellees
present no new argument regarding the impermissible scope of injunctive relief in their reply.
2
at 850; see also Williams v. Lara, 52 S.W.3d 171, 178 (Tex.2001). It is undisputed
that the framework for challenging municipal purchases arises under the
enforcement provision of Chapter 252 (§252.061 of the Loc. Gov’t Code).
However, the Appellees now suggest that the statute does not serve as the
exclusive means for establishing standing to sue under the Chapter. Specifically,
they argue that a party with “general standing” may pursue statutory remedies even
if they are not a party specifically identified under the statute in question.
Appellees’ Brief, pg. 16. To support this notion the Appellees begin by arguing
that underlying procurement process was unfair because Utility was not awarded
the contract. Appellees’ Brief, pg. 17. This alleged unfairness, according to the
Appellees, presents the only reason why Utility was an unsuccessful bidder and
serves as the basis for their speculative and illusory injury. 4 Appellees position is
that this “injury” gives Utility standing to be a party to this suit as an exception to
the mandatory nature of the standing requirements under §252.061.
To establish the validity of their exception, Appellees suggest a new
standard for Texas law, one that would remove any ability for the legislature to
develop, identify, and limit statutorily conferred standing to parties suing under
specific statutes. In support of this new standard they offer a description of
4
Plaintiff Utility has repeatedly misrepresented the position that they were due to be awarded the
contract that arose from this procurement despite the evaluations and determination of the City
Purchasing Department, Police Department, and Austin City Council. The trial court
disregarded this self-serving conclusion at hearings for the Temporary Injunction and on the
Defendant’s Plea to the Jurisdiction.
3
“general standing” considered by this Court in City of Round Rock v. Whiteaker.
241 S.W.3d 609 (Tex. App. – Austin 2007). However, in Whiteaker the Court did
no more than reference a “general test for standing”, as articulated in the Texas
Ass’n of Bus. decision and did not develop or define any position that parties can
maintain “general standing” as an exception to statutorily defined criteria. 5 In
addition, Appellees offer the Texas Supreme Court’s decision in S. Tex. Water
Auth. v. Lomas as additional support. S.W.3d 304, 307 (Tex. 2007). Appellants’
fail to see how Appellees could conclude that the Lomas decision provides any
support to their argument that the “general standing” test trumps the statutory
standing requirements of Chapter 252 as it never references such an exception.
The Appellees’ argument that this “general standing” test can be used as an
alternative or an exception to statutorily conferred standing is unpersuasive. They
fail to offer any instance of case law support for this disfavored concept and go no
further than to suggest that their chosen relief (injunction), as an available remedy
under the statute, provides recourse to any losing bidder despite statutory language
5
This case discusses the difference between the general test for standing in Texas and the
absence of a particular test for organizations. Texas Ass’n of Bus. v. Tex. Air Control Bd., 852
S.W.2d 440, 446-447 (Tex. 1993). This case did not consider a situation where standing is
statutorily conferred and has not been adopted to say otherwise.
4
to the contrary. 6 Appellees’ Brief, pg. 18. This response argument to the
Appellants’ Brief should not be considered meritorious.
II. Utility is Not One of the Statutorily Defined Parties Who Can Challenge
Municipal Purchases Under Chapter 252
In statutory standing cases, such as the matter currently before the Court, the
relevant analysis is a straight construction evaluation of the statute to determine
upon whom the Texas Legislature intended to confer standing and whether the
claimant in question falls in that category. See Tex. Dep't of Protective and
Regulatory Servs. v. Sherry, 46 S.W.3d 857, 859–61 (Tex.2001). This evaluation
begins with the terms of the Code Construction Act (“CCA”). Tex. Gov't Code §
311.02. The CCA requires that when construing the meaning of a statute, a
presumption must exist that a statute was enacted in compliance with both the
United States and Texas Constitutions, that the entire statute is intended to be
effective, and that a just and reasonable result is intended. Id. Texas Supreme
Court has emphasized that the objective when interpreting and applying a statute is
to determine and give effect to the Legislature's intent. Phillips v. Beaber, 995
S.W.2d 655, 658 (Tex.1999).
Here, the legislature has drafted the enforcement provision of Chapter 252 to
read as follows:
6
Appellees offer Urban Electric v. Brownwood Independent School Dist., 852 S.W.2d 676 (Tex.
App. – Eastland 1993). This matter involved Chapter 271 of the Loc. Gov’t Code which does
not include the same statutory restrictions on standing as are included in Chapter 252.
5
“If the contract is made without compliance with this chapter, it is
void and the performance of the contract, including the payment of
any money under the contract, may be enjoined by: (1) any property
tax paying resident of the municipality; or (2) a person who submitted
a bid for a contract for which the competitive sealed bidding
requirement applies, regardless of residency, if the contract is for the
construction of public works.” Tex. Loc. Gov’t Code §252.061.
This provides standing to seek the available remedies under this statute for
two (2) distinct parties; taxpayers and losing bidders in contracts for the
construction of public works. Appellees have repeatedly conceded that the
contract in question does not relate to public works. As a result, the only thing that
the Court need be concerned with is whether the parties seeking to challenge the
procurement are “taxpayers” as defined by the statute. The Appellants have not
challenged Evans status as a taxpayer for the City of Austin and the Appellees
have offered no argument that Utility is qualified as a taxpayer for the purposes of
litigation under the statute.
When a losing bidder sues a municipality under Chapter 252 but the
procurement is not one for the construction of public works and the bidder cannot
establish themselves as a taxpayer, the bidder lacks standing and the Court does
not possess jurisdiction over their claims. City of El Paso v. Waterblasting
Technologies, Inc., 491 S.W.3d 890, 901-903 (Tex. App. – El Paso 2016). When
this is the case, the appropriate action is to dismiss the losing bidder for lack of
jurisdiction for want of standing. Id. This is the applicable standard even where
6
other parties may have established jurisdictional standing in the same action. Id. at
903 (losing bidder dismissed for lack of standing under §252.061 when a taxpayer
had established standing to pursue statutory remedies). There simply is no support
for the conclusion that Utility may avoid dismissal on jurisdictional grounds
because of the taxpayer’s involvement.
III. Utility Cannot Obtain Statutory Standing Through Another Party To
The Litigation
As an alternative to their argument that the statute does not control standing
in this matter, Appellees pivot to their aggregate standing argument that was
presented to the trial court. This position insists that Utility may be considered to
have statutory standing because the taxpayer, V. Bruce Evans (“Evans”) is a
statutorily permissible party under §252.061. The Appellees ask the Court to
uphold the trial court’s erroneous determination that one party, specifically
excluded from the statutory language, may nevertheless clear this jurisdictional
hurdle when another party has satisfied the applicable requirements. Appellees
suggest that this position is palatable because the Plaintiffs in this matter were
seeking the same relief and such an aggregation is supported by case law. As
previously argued by the Appellants in their original brief, this argument must fail
and the trial court’s decision should be reversed. The case law cited by the
appellees, and referencing an aggregation of standing, does not involve matters
where standing is statutorily conferred. Nor do these cases address situations
7
where the parties are distinctly situated and seeking dissimilar relief. Finally, for
this Court to adopt the determination of the trial court, and the argument of
Appellees, would be to render the precise standing language of §252.061
irrelevant.
Appellees argue that Utility can satisfy the requirements of statutory
standing under §252.061 because Evans, 1) has standing under the statute; and 2)
Utility is seeking the same relief as Evans in the lawsuit. For direct support of this
conclusion the Appellees offer the decision in Andrade v. NAACP of Austin. 345
S.W.3d 1 (Tex. 2011); Appellee’s Brief, pg. 18. Appellees provide language from
the opinion that incorporates the determination that claims of equal protection may
be pursue by all aggrieved voters when all of the voters are seeking the same relief
and at least one voter has established standing to pursue the relief in question. 7 Id.
at 6. Appellees follow up by providing Patel v. Tx. Dep’t of Licensing & Reg. as an
affirmation of the Andrade decision by this Court. 464 S.W.3d 369, 377 (Tex.
App. – Austin 2012).
Neither of the cases offered by the Appellees should be considered
persuasive. This is initially because both the Andrade case and the Patel matter
involved common law constitutional standing – not standing that has been
7
Appellees do not cite to the portion of the 2011 Andrade case from which they draw the quoted
language but it appears that this was pulled from page 6 of the opinion, quoting Barshop v.
Medina Cnty. Underground Water Conservation Dist. 925 S.W.2d 618, 627 (Tex. 1996).
8
statutorily conferred. Both cases are devoid of any suggestion that one party
establishing statutory standing could open this jurisdictional door for any party
with similar claims (but who failed the statutory standing test). In addition, and
dissimilar from the Court’s consideration in Andrade or Patel, the parties in this
matter are not identically situation nor do they seek the same relief. While both
Evans and Utility seek categorical relief that can be described as injunctive and
declaratory, the scope and implication of their positions are unique. Evans seeks to
have the contract declared void while Utility seeks to have the court waive
procedural requirements of the RFP and award the contract to them directly.
Evans has emphasized that the relief sought by Utility is not the same as the relief
sought by the taxpayer or reflective of his position in this case. (RR2: 129, Supp.
RR2: 44). Finally, the Appellees proposed application of aggregate standing
cannot stand because such a conclusion would render an entire portion of clear
legislative direction irrelevant. Proper consideration of legislative intent requires
the reviewer to give meaning to all provisions within the statute when possible, and
not to render any provisions meaningless. See City of Dallas v. TCI W. End, Inc.,
463 S.W.3d 53, 55–56 (Tex. 2015). Allowing the Appellees to create standing
through aggregation would eviscerate the legislative purpose and intent of the
enforcement provision of Chapter 252 and render the standing requirements of
252.061 useless. The Court simply cannot permit this result and find that, while
9
Evans has established standing under the statute, Utility has not and is due to be
dismissed from the litigation.8
IV. Appellees Cannot Use the UDJA to Create an Exception to the Standing
Requirements of §252.061
Appellees make one final attempt to convince this Court that they have
found an exception to the rules regarding statutory standing when they suggest that
their (now dismissed) claims under the UDJA allow them to change the rules of
standing as applied to this case. 9 Appellees fail to cite a single case that has
permitted this type of extra-statutory standing and the Court should reach the
determination that Appellees’ suggestion is without merit.
The UDJA is “merely a procedural device for deciding cases already within
a court's jurisdiction rather than a legislative enlargement of a court's
power.” Texas Ass'n of Business v. Texas Air Control Bd.,852 S.W.2d 440, 444
(Tex.1993). The Act does not enlarge the jurisdiction of Texas courts nor does it
confer additional jurisdiction outside of the underlying statutory cause of
action. See In re Griffith, 485 S.W.3d 529, 537 (Tex. App. – Houston [14th Dist.]
2015); Rush v. Barrios, 56 S.W.3d 88, 105 (Tex. App. – Houston [14th Dist.]
8
Dismissing a losing bidder without standing, when a taxpayer has established standing in the
same case, has been the determination in the previously referenced City of El Paso v.
Waterblasting as well as in Dallas County v. Cedar Springs Investments, L.L.C. 375 S.W.3d 317,
320 (Tex. App. – Dallas 2012).
9
The Appellees’ UDJA claims were dismissed by the trial court in response to the Appellants’
Plea to the Jurisdiction. These claims are part of a consolidated portion of this appellate matter.
10
2001); Firemen's Ins. Co. v. Burch, 442 S.W.2d 331, 333 (Tex.1968). The
underlying controversy in this matter arises from Chapter 252 and the included
enforcement provision (§252.061). This statute confers subject matter jurisdiction
for the court over the claims of the two (2) previously described parties and its
application to this matter is not in dispute. The Appellees would have this court
revive their claims under the UDJA as a way to circumvent the strict legislative
restrictions on standing that were provided by the statute governing municipal
procurements. They ask this extraordinary step from the Court despite the
admission that their UDJA claims, though currently dismissed, are presented to the
Court under the very statute that they claim does not control standing. Appellee’s
Brief, pg. 27. To allow circumvention of a clear statutory directive and selective
application of Chapter 252 would create an absurd result and undermine the
lawmakers clear intent. This conclusion is amply supported as Texas courts have
repeatedly applied similar standing restrictions under numerous other statutes. See,
e.g., Tex. Dep't of Protective & Regulatory Servs. v. Sherry, 46 S.W.3d 857, 861-
62 (Tex. 2001) (standing to sue under Texas Family Code governed by statute);
Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 384-85 (Tex. 2000) (standing to
sue under Texas Insurance Code governed by statute); NME Hosps., Inc. v.
Rennels, 994 S.W.2d 142, 147 (Tex. 1999) (standing to sue under Texas Labor
Code governed by statute); Estate of Teal, 135 S.W.3d 87 (Tex. App.-Corpus
11
Christi 2002) (standing to sue under Texas Probate Code governed by statute);
Pittsburgh Corning Corp. v. Walters, 1 S.W.3d 759, 766-68 (Tex. App.-Corpus
Christi 1999) (standing to sue under Texas Civil Practice and Remedies Code
limited to parties as defined in statute).
CONCLUSION
For the reasons set forth herein, Appellees have failed to contradict the
Appellants’ arguments that the trial court erred in determining that Utility had
standing to pursue claims and relief under §252.061 of the Local Government
Code. The Appellants incorporate the request for relief including in their initial
brief and reiterate that the trial court’s determination of standing should be
reversed and Utility should be dismissed from this litigation with this matter
remanded to the trial court for further proceedings consistent with this conclusion.
RESPECTFULLY SUBMITTED,
ANNE L. MORGAN, CITY ATTORNEY
MEGHAN L. RILEY, CHIEF, LITIGATION
/s/ Matthew William Tynan
MATTHEW WILLIAM TYNAN
State Bar No. 24072489
Matthew.Tynan@austintexas.gov
City of Austin – Law Department
P. O. Box 1088
Austin, Texas 78767-1088
Telephone: (512) 974-2918
Facsimile: (512) 974-1311
COUNSEL FOR APPELLANTS
12
CERTIFICATE OF COMPLIANCE
I certify that the foregoing document contains 2966 words, in compliance
with Rule 9.4 of the Texas Rules of Appellate Procedure.
\s\ Matthew William Tynan
Matthew William Tynan
Counsel for Appellants
13
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of foregoing instrument has been
served, on this the 21st day of November, 2016 to the following:
Via E-Service:
Peter B. Barlow
pbarlow@sgrlaw.com
SMITH GAMBRELL & RUSSELL, LLP
100 Congress Avenue
Suite 2000
Austin, Texas 78701
Telephone: (512) 498-7617
Facsimile: (512) 879-5032
ATTORNEY FOR UTILTY ASSOCIATES, INC.
Shelby A. Jordan
sjordan@jhwclaw.com
JORDAN, HYDEN, WOMBLE, CULBRETH & HOLZER, P.C.
1250 S. Capital of Texas Hwy
Suite 330
Austin, Texas 78746
Telephone: (361) 884-5678
Facsimile: (361) 888-5555
ATTORNEYS FOR MR. V. BRUCE EVANS
/s/ Matthew W. Tynan
MATTHEW W. TYNAN
14