Justia Government Contracts Opinion Summaries

Articles Posted in Supreme Court of Texas
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The Supreme Court held that the Expedited Declaratory Judgment Act (EDJA), Tex. Gov't Code ch. 1205, gave the trial court jurisdiction to declare whether contracts executed by the San Jacinto River Authority were legal and valid but not whether the Authority complied with the contracts in setting specific water rates.The Authority, which has contracts to sell water to cities and other customers and uses the revenue to pay off its bonds, filed suit seeking declarations under the EDJA regarding the contracts and the water rates set under those contracts. Several participants, including three cities (Cities) opted in as interested parties. The Cities filed pleas to the jurisdiction, arguing that the trial court lacked subject matter jurisdiction to adjudicate the Authority's claims. The trial court denied the pleas to the jurisdiction. The court of appeals held primarily for the Authority. The Supreme Court held (2) the EDJA permits the trial court to exercise jurisdiction over the Authority's claims as to the valid execution of the contracts, but it does not confer jurisdiction over whether the Authority complied with the contracts in setting specific water rates; and (2) the Cities' governmental immunity does not bar an EDJA claim, which is brought in rem to adjudicate interests in property. View "City of Conroe, Texas v. San Jacinto River Authority" on Justia Law

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The Supreme Court held that Lockheed Martin Corporation's receipts from the sales of F-16 fighter jets to the U.S. government were improperly sourced to Texas for purposes of calculating its Texas franchise tax, holding that Lockheed Martin demonstrated its entitlement to a refund of franchise taxes.The fighter jets at issue were manufactured in Fort Worth and destined for foreign-government buyers. In accordance with federal law, the foreign buyers contracted with the U.S. government to purchase the jets, and the U.S. government contracted with Lockheed Martin. Lockheed Martin filed for a refund of the portion of its franchise taxes for the tax years 2005 through 2007 attributable to the sales of the F-16 aircraft. The Comptroller denied the claim, and Lockheed Martin brought this suit. The trial court rendered judgment for the Comptroller, and the court of appeals affirmed. The Supreme Court reversed, holding (1) Lockheed Martin's "sale" of each F-16 was to the respective foreign-government "buyer" for whom the aircraft was manufactured, and the government's involvement had no bearing on whether to apportion the receipts from that sale to Texas; and (2) the F-16s were delivered to the "buyers" outside of Texas, and therefore, the receipts from the sales of those aircraft were not properly sourced to Texas. View "Lockheed Martin Corp. v. Hegar" on Justia Law

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In this construction contract dispute, the Supreme Court held that the San Antonio River Authority possessed the authority to agree to arbitrate claims under Texas Local Government Code Chapter 271 and exercised that authority in the contract and that the judiciary, rather than an arbitrator, retains the duty to decide whether a local government has waived its governmental immunity.The River Authority hired Austin Bridge and Road L.P. for a construction project. The parties agreed to submit any disputes about the contract to arbitration. Austin Bridge invoked the contract's arbitration provisions when disagreements about the scope of work and payment arose. After the arbitrator denied the River Authority's plea of governmental immunity, the River Authority sued Austin Bridge, arguing that it lacked the authority to agree to the contract's arbitration provisions. The trial court concluded that the arbitration provisions in the contract were enforceable. The court of appeals agreed that the River Authority had the authority to agree to arbitrate but concluded that a court, rather than an arbitrator, must decide whether the River Authority was immune from the claims against it. The Supreme Court affirmed, holding that chapter 271 waived the River Authority's immunity from suit for Austin Bridge's breach of contract claim. View "San Antonio River Authority v. Austin Bridge & Road, L.P." on Justia Law

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In this case concerning the scope of the Expedited Declaratory Judgment Act (EDJA), the Supreme Court held that the EDJA gives the trial court jurisdiction to declare whether the execution of contracts entered into by the San Jacinto River Authority to sell water to cities and other customers was legal and valid but not whether the Authority complied with the contracts in setting specific rates.The Authority, which used the revenue from the contracts to pay off its bonds, sought declarations regarding the contract and the specific water rates set forth pursuant to the contracts. Several cities filed pleas to the jurisdiction, arguing that the trial court lacked subject matter jurisdiction to adjudicate SJRA's claims under the EDJA. The trial court denied the pleas to the jurisdiction. On appeal, the court of appeals held primarily for the Authority. The Supreme Court reversed in part, holding (1) the trial court may exercise jurisdiction over the Authority's execution of the contracts - which met the statutory definition of "public security authorization" - but may not exercise jurisdiction over whether the Authority complied with the contracts in setting the water rates; and (2) the Cities' governmental immunity did not bar this EDJA suit, which was brought in rem to adjudicate interests in property. View "City of Conroe, Texas v. San Jacinto River Authority" on Justia Law

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The Supreme Court reversed the judgment of the court of appeals in part and rendered judgment dismissing Plaintiff's claims that a governmental entity breached a contractual promise to make a good faith effort to obtain authorization for a higher payment than the parties' written contract required the entity to make, holding that governmental immunity applied and that chapter 271 of the Texas Local Government Code did not waive the entity's immunity.Vizant Technologies sued the Dallas-Fort Worth International Airport Board for, inter alia, breach of contract, alleging in part that the Board failed to make a promised good-faith effort to authorize increased compensation than that set forth in the parties' contract. The Board filed a plea to the jurisdiction, asserting that governmental immunity barred Vizant's claims. The trial court denied the plea. The court of appeals affirmed the trial court's denial of the Board's plea against Vizant's breach of contract claim, holding that, while governmental immunity applied, chapter 271 of the Texas Local Government Code waived the Board's immunity against that claim. The Supreme Court reversed, holding that governmental immunity barred all of Vizant's claims against the Board and that chapter 271 did not waive that immunity. View "Dallas/Fort Worth International Airport Board v. Vizant Technologies, LLC" on Justia Law

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In this contract dispute over whether a municipally created economic development corporation is entitled to immunity from suit as if it were a political subdivision of the state, the Supreme Court affirmed the court of appeals’ judgment denying an economic development corporation’s plea to the jurisdiction, holding that economic development corporations are not governmental entities in their own right and, therefore, are not entitled to governmental immunity.Rosenberg Development Corporation (RDC), an economic development corporation created by the City of Rosenberg under the authority of the Development Corporation Act, executed a contract with Imperial Performing Arts, a nonprofit organization, to renovate a historic theater. When RDC refused to extend the deadline to complete the theater’s renovation, Imperial ceased work on the theater project. This dispute followed. The immunity issue on appeal was limited to Imperial’s breach of contract and declaratory judgment claims. The trial court denied RDC’s plea to the jurisdiction, and the court of appeals affirmed. The Supreme Court affirmed, holding that economic development corporations are not governmental entities immune from suit. View "Rosenburg Development Corp. v. Imperial Performing Arts, Inc." on Justia Law

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At issue was whether the district court correctly dismissed the claim that because of negligent training and handling by private military contractors, a dog that protects soldiers and others by sniffing out enemy improvised explosive devices (IEDs) bit Plaintiff on a United States Army base in Afghanistan.Defendant, which contracted with the Department of Defense to provide teams of working dogs and handlers to the Armed Services, claimed in defense that the incident was caused by the Army’s use and prescribed manner of quartering the dog. Defendant filed a plea to the jurisdiction asserting that Plaintiff’s claims were nonjusticiable under the political question doctrine because they required an assessment of the Army’s involvement in causing her alleged injuries. The trial court granted the motion and dismissed the case. The court of appeals reversed, thus rejecting the application of the political question doctrine. the Supreme Court reversed, holding that this case is nonjusticiable due to the presence of an inextricable political question. View "American K-9 Detection Services, LLC v. Freeman" on Justia Law

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At issue in this statutory-construction case was the damages-cap and election-of-remedies provisions of the Texas Tort Claims Act (TTCA) with respect to independent contractors performing essential governmental functions.Plaintiff, the daughter of a pedestrian who was struck and killed by a public bus in Fort Worth, brought claims under the TTCA against the Fort Worth Transportation Authority (FWTA), its two independent contractors, and the bus driver. The Supreme Court held (1) the TTCA’s damages cap applies cumulatively when, as in this case, an independent contractor performed essential governmental functions of a transportation authority; (2) the TTCA’s election-of-remedies provision extends to cover an employee of an independent contractor performing essential governmental functions; and (3) the transit defendants in this case were not entitled to attorney’s fees arising out of interpleader. Accordingly, the Supreme Court reversed the court of appeals’ judgment and reinstated the trial court’s judgment in favor of FWTA with respect to issues one and two, and affirmed the denial of attorney’s fees and remand to the trial court for further proceedings. View "Fort Worth Transportation Authority v. Rodriguez" on Justia Law

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The pro-forma provision in the tariff in this case, which set the rates and terms for a utility’s relationship with its retail customers, did not conflict with a prior franchise agreement, which reflected the common law rule requiring utilities to pay public right-of-way relocation costs, or the common law, and the franchise agreement controlled as to the relocation costs at issue.At issue was whether the City of Richardson or Oncor Electric Delivery Company must pay relocation costs to accommodate changes to public rights-of-way. The City negotiated a franchise agreement with Oncor requiring Oncor to bear the costs of relocating its equipment and facilities to accommodate changes to public rights-of-way, but Oncor refused to pay such costs. While the relocation dispute was pending, Oncor filed a case with the Public Utility Commission (PUC) seeking to alter its rates. The case was settled, and the resulting rate change was filed as a tariff with the PUC. The City enacted an ordinance consistent with the tariff, which included the pro-forma provision at issue. The Supreme Court held that the provision in the tariff did not conflict with the franchise contract’s requirement that Oncor pay the right-of-way relocation costs at issue. View "City of Richardson v. Oncor Electric Delivery Co." on Justia Law

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This case involved a contract dispute between a local governmental entity that oversaw federal funded rebuilding projects in areas of Texas that were struck by Hurricane Ike and a construction contractor. After a dispute arose between the governmental entity and the contractor regarding the quality of the contractor’s work and payment due under the contracts, the contractor filed suit against the governmental entity for payments allegedly due. The governmental entity filed a plea to the jurisdiction, alleging governmental immunity. The trial court denied the plea, concluding that immunity had been waived by chapter 271 of the Local Government Code, which waives immunity if the contract provides “goods or services to the local governmental entity.” The court of appeals reversed. The Supreme Court reversed, holding that that the chapter 271 immunity waiver applied in this case. View "Byrdson Services, LLC v. South East Texas Regional Planning Commission" on Justia Law