### T E X A S C O U R T O F A P P E A L S , T H I R D D I S T R I C T , A T A U S T I N

NO. 03-14-00109- CV NO. 03-14-00139- CV

Ge orge A lejos, Appellant

v.
The State of Texas and VIA Me tropolitan Transit Advan ced Transportation District , Appellees

F ROM TH E DISTRI CT COURT O F TRAVIS CO UNTY, 345 TH JUDICI AL DISTRICT NO. D-1 -GN-1 3-0 0423 0, H ONO RAB LE STEP HEN Y ELENOSK Y , JUDGE P RESIDING

O P I N I O N

These consolidated cause s are both expedited appea ls under chapte r 1205 of the
Gover nment Code, which cre ates a specia l proce eding wher eby “issuers” of “public secur ities” can
obtain a decla

ratory judgme nt—also expedited—as to the leg ality or validity of such secur ities and
rela ted officia l acts. I n Cause Number 03-14-00109- CV (the “Judgment Appea l”), Geor g e Alejos 1
seeks to appea l a final judgme nt validating the i ssuance of approx imately $33 milli on in sales tax

reve nue-ba cked bonds by t h e ap pellee, VI A Metropolitan Transit Advanc ed Transpor tation
District (the District). I n Cause Number 03-14-00139- CV (the “B ond Appe al ”), Alejos appea ls 2

a s u bsequent order conditioning his continued participa tion in the litigation on his posting of a

See Tex. Gov’t Code §§ 1205.001–.152; Hotze v. City of Houston , 339 S.W .3d 809, 1 814–15 (Tex. App.—Austin 2011, no pet.).

See Tex. Gov’t Code §§ 1205.065(a) (2) (direc ting trial court to rende r judgme nt), 2 .068(a) (2) ( providing for a ppeal of trial court’ s final judg ment).$3.6 milli on bond, t h e am o u n t t h e district court found to repr esent any damag e or cost that may

occur beca

use of the delay cause d by Alejos’s continued participa tion. For rea sons we will explain 3 shortly , we will reve rse the district court’s order that is the subject of the Bond Appea l and rema nd
for f urther pr ocee dings on tha t issue. I n the interim, the Judgment Appea l will remain pending

.

THE I SSUE S PR ESE NTED
The L eg islature has instructed us that expedited appea ls under chapte r 1205 are to be

even more expedited than the panoply of other expedited appea ls that Texas courts of appea ls handle
nowada y s, and thus we will cut to the chase of our analy sis without cra fting a compre hensive 4 explanation of the case ’s underly ing fac ts and proce dural history , with which we can assume the litigants and any other interested persons are familiar. We will simil arly assume that any rea ders are

conver sant wi t h t he basic proce dural fra mework presc ribed by chapte r 1205 and the standards
that g overn our revie w. Howeve r, we briefly note—bec ause it e ventually become s releva nt to our analy sis—that this litigation ar ises in the context of broader public policy

disputes conce rning the
use of public funds t o financ e the construction of transporta tion infrastruc t u re i n the S an Antonio

are a and, in pa

rticular, an ong oing initiative by the metropolitan transit authority serving that are a,
the VI A Metropolitan Transit Authority , to plan and construct a “mode rn s tree tcar ” sy stem. The leg al dispute is essentially about whether VI A can lawfully tap sales-ta x reve nues raised by the
District—a separ ate g overnme ntal body formed by VI A with vote r approva l, a nd with an identical

See id

. §§ 1205.068(a) (1) (allowing appea l of an order setting bond), .101 (allowing issuer 3 to seek bond fr om opposing pa rty ), .103 (amount of bond).
See id

. § 1205.068(e) (providing that appea l “take s priority over” ever y thing except writs of 4 habea s corpus and direc ti n g co u rt t o “re nder its final judgme nt order or judgme nt with the least possible delay ”).
2g overning board, that serve s as a means of fi n a n c ing cer tain “adva nced transporta tion” and “mobility
enhanc ement” projec ts throug h the imposit ion of an additional s ales tax within the City of
San Antonio —to construct “mul ti-modal” transporta tion “hubs” that may (or, acc ording to

5
opponents, are intended to) someda y serve as compone nts of the stree tcar sy stem.
The ke y events fr aming the leg al issues prese nted on appe al ar e these :

• The District resolved to issue a pproxi mately

$33 milli on in bonds, backe d by the s ales tax
reve nues it rec eives, to financ e projec ts that included two multi-modal transporta tion hubs. 6

• Be fore issuing the bonds, the District was require d to obta in le g al approva l ( also descr ibed as “precle ara

nce” ) from the Offic e of the Tex as Att orney Gene ral. The Attorney Gene ral 7 declined to approve the bonds, asser ting that such use of the sales-ta x reve nues raised by the District wou l d v i o l ate a binding commitment made by VI A at the time of the District’s formation that those re venues w ould not be used to financ e “lig ht rail projec ts.”

• The District filed suit under cha p t er 1 2 0 5 t o obtain a judicial decla ration validating the leg ality of the bonds. The Attorne y Gene ral a

nswere d and disputed the District’s c laim. 8 9

See generally Tex. Transp. Code §§ 451.701–.709 (“A dvance d Transpor tation District”). 5
The Distri ct reta ins one-ha lf of the sales-ta x reve nues to financ e its own “adva nced 6 transporta tion” and “mobility enhanc ement” projec ts, but must remit one-f ourth to any “par ticipating” g overnme ntal units (her e, solely the City of San Antonio) for use in their authorized projec ts and reta i n t h e rema ining one-f ourth in an acc ount for use as matching funds require d for obtaining state and fede ral g rants in connec tion with authorized projec ts. See id

. § 451.702(e)

. The bonds here are to be sec ured by reve nues fr om the District’s one- half shar e. See Tex. Gov’t Code § 1202.003; Tex. Transp. Code § 451.355(b). 7
See Tex. Gov’t Code § 1205.021. There is no dispute that the District is an “issuer” of 8 “public secur ities” who can bring such an action. See id

. § 1205.001(1)–( 2) (def ining both terms).
See id

. § 1205.063(a) (desc ribing Attorney Gene ral’s duties in public secur ity decla ratory 9 judgme nt actions).
3• These parties proce eded to trial, which was conclude d with a final judgme nt in the District’s

favor

. The Attorney Gene ral’s Offic e ultimately ag ree d to the final judgme nt and expressly

1 0 waived “ any

rig ht to appeal or

otherwise se ek re lief fr om this final judgment.”

• Although chapte r 1205-compli ant notice was provided of their opportunity to do so, no additional parties filed an answe r before t rial conclude d, nor otherwise attempted to participa te direc tly

in the proce eding s befor e the district cour t signe d the final judg ment. 1 1

• Howeve r, Geor g e Alejos, who falls within the mandatory class of “intere sted persons” who
are bound by the final judgme nt, timely fil ed a n o t i ce of appea l purporting to challeng e 1 2 that judgme nt. As p reviously indicated, we dockete d this appea l as Cause No. 03-14- 1 3 00109-CV, i.e., the Judgment Appe al.

• At the inception of its suit, the District had filed a motion invo k i n g ch ap t er 1205’s bond require ment as to any “opposing party or intervenor ” other than the Attorney Gene ral. 1 4 After Alejos filed h is notice of appea l, and while the district court still reta ined plenar y power over its judgme nt, the District filed a motion opposing what it char acte rized as an intervention by Alejos without the required leave of court and, alternatively , a m o t i o n to 1 5 set bond as a c ondition for his continued participa tion in the lit iga

tion.

• I n response to the District’s motion, Alejos insisted that he was not attempting to intervene in the proceeding befor e the district court and tha t he was not require d to do so in order to appea l the judgme nt. He simil arly contende d that he was not subject to chapte r 1205’s bond require ment beca

use it applied only

to persons who had answere d or interve ned in the suit prior to final judg ment.

• Stil l within its plenar y power , the district court hel d a telephonic hear ing and signe d an Orde r Setting Bond disposing of the District’s motions. I n its order , the court noted that

See id

. § 1205.065(a) (direc ting trial court to deter mine eac h leg al or fac tual question and 1 0 rende r final judg ment).

See id

. §§ 1205.041 (re quiring notice to inter ested persons), .044 (ef fec t of notice), .062 1 1 (providing that noticed per son may become “name d party ” by answe r or inter

vention).
See id . §§ 1205.041, .151(b) ( judgme nt is bindi ng ag ainst noticed per sons). 1 2
See id . § 1205.068(a) (2) (allowing any party to a ction to a ppeal trial court’s judg ment). 1 3
See id . §§ 1205.101–.105 (“Sec urity for I ssuer” ). 1 4
See id

. § 1205.062 (allowing “intere sted person” to become “name d party ” by either filing 1 5
answe r on or be fore trial date or “interve ning, w ith leave of court, a fter the trial date” ).
4Al ej o s h ad n o t filed a motion to intervene and that his counsel “both disavowed any

claim t hat M r. Alejos is an int erve nor and repr esente d to the court that he would not file a motion to intervene on behalf of Mr. Alejos.” “As neither a named party nor an intervenor ,” the district court continued, “Mr. Alejos and his counsel wer e not permitted to arg ue, make objection, or prese nt evidenc e reg arding the motion befor e the Court.” Howeve r, the court proce eded to g rant the District’s motion to set bond, hear d evidenc e from it on that issue, and set a bond in the amount of $3.6 milli on as a condition on Alejos’s continued participa tion in the litigation. 1 6

• I t is undisputed that Alejos did not post this bond by the statutory deadline eleve n day s there afte r. I nstead, he timely perf ecte d an appea l from the district co urt’s order setting 1 7 bond, which we dockete d as Cause N o. 03-14-00139- CV, i.e., the B ond Appea l. 1 8

Alejos bring s two issues on appea l, one addressed to eac h cause
. I n his first issue,
he urg es us to reve rse the district court’s Orde r Setting Bo n d b as ed on asser ted proce dural irreg ularities. I n his second issue, Alejos challeng es the district court’s final judgme nt on the merits.

I n addition to contesting Alejos’s appellate issues, the District has moved to dismiss the J udg ment Appea l on two jurisdictional g rounds: (1) Alejos is not among the “par ties” whom the L eg islature
has empower ed to appea l the final judgme nt; an d (2 ) Al ejos has not complied with the Orde r 1 9

S et t i n g Bo nd. I nasmuch as the District has questioned our jurisdiction, we should addre ss its
motion first.

See id . §§ 1205.101 (allowing issuer to reque st bond), .103 (amount of bond)

. 1 6
See id

. § 1205.104(a) (re quiring court to dismiss unless bond filed “bef ore 11th day afte r” 1 7 order setting bond a

mount).
See id . §§ 1205.068(a) (1) ( allowing appea l of bond order ), .105 (sa me). 1 8
See id . § 1205.068(a) (allowing “[a]ny party ” to appe al). 1 9
5“P ARTY” STATUS
The parties ag ree that, as a threshold matter, Alejos has the rig ht to bring his appea ls only if he satisfies section 1205.068 of chapte r 1205, wh i ch states that “[ a ] ny party to an action
under this chapte r may appea l to the appropr iate court of appea ls” “the judgme nt rende red by
the trial court ,” an order setting bond, or an order of dismiss al for failure to comply with an

o rd er s et t i ng bond. The L eg islature did not provide an expli cit definition of “par ty ” as used i n 2 0
section 1205.068, and a clea r-c ut “ordina

ry ” or “plain” meaning of that term is potentially elusive. 2 1

As then-Just ice Hec ht rec ently observe d in a differ ent statutory context, “the meaning of ‘par ty ’ in
the abstract” c an conc eivably rang e fr om persons who a ctually participa te personally in litigation,

to those named in pleading s but who are never served nor appea r, t o non-par

ticipants who are not

even named but a

re deeme d to be par

ties throug h the virtual-re prese ntation doc trine. But we are 2 2

to construe statutory lang uag e in context, and in doing so we observe that th e L eg islature uses 2 3 “par ty ” elsewhe re in chapte r 1205 to descr ibe sever al differ ent cate g ories of persons whom it views

as having an interest in proce eding s under that chapte r—indee d, virtually ever y ty pe of “par

ty ”
J ustice He cht identified:

Id

. (empha sis added) ; see id

. §§ 1205

. 103–.104 (providing for amount of bond and 2 0 dismiss al for f

ailure to file bond a

mount).
See Texas Lottery Comm’n v. First S t a t e B a n k o f DeQue en , 325 S.W .3d 628, 635 2 1 (Tex. 2010) (“We rely on the pl ain m eaning o f t h e t ex t , unless a differe nt meaning is supplied by leg islative definition or is appar ent from context, or unless s uch a construction leads to absurd results.”).
Zanchi v. Lane , 408 S.W .3d 373, 381 (Tex. 2013) (He cht, J ., concur ring ). 2 2
See Railroad Comm’n v. Texas Citi zens for a Safe Future & Cl ea n W ater , 336 S.W .3d 2 3 619, 628 (Tex. 2011) (“We g ener ally avoid construing individual provisions of a statute in isolation from the statute a s a whole.” ).
6• One “par ty ” the L eg islature identifies is the Attorney Gene ral, who g ener ally must be serve d persona lly with the peti t i o n and who “shall examine” the petition and “ra ise appropr iate 2 4 defe nses.” 2 5

• Another cate g ory of “par ty ” consists of a class wh o m t h e L eg islature considers to be “intere sted” in the validation petition and judgme nt. The L egi s l ature has specifie d that a suit under chapter 1205 is “a proce eding in rem” —a phrase that would ordinarily denote 2 6 adjudication of the leg al status of the secur ities themselves and not mere ly the persona l rig hts of specific parties befor e the court —and a “cla ss action binding on all persons who: 2 7 (A) reside in the territory of the issuer; (B ) own proper ty located within the boundarie s of the issuer; (C) are taxpay ers of the issuer; or (D ) h ave or claim a rig ht, title, or interest in any proper ty or money to be aff

ecte d by the public secur ity authorization or the issuance of public
secur ities.” The L eg i slature terms this class of persons “intere sted parties” and require s

2 8 they be g iven notice by publication of the trial setting and the opportunity to be hear d there

. 2 9 I t has furthe r provided tha t the eff ect of this notice, importantly , is that eac h class member is deeme d “a party to the action” an d t h at t h e court is deeme d to possess “jurisdiction
over eac h person to the same extent as if that person wer e individually named and persona lly
serve d in t h e ac t i o n.” Such “par ties” are likewise deeme d to be bound by the final 3 0 judgme nt. 3 1

See Tex. Gov’t Code § 1205.042. 2 4
Id

. § 1205.063(a ); s ee id

. §§ 1205.063(b) (if Attorney Gene ral “does not question” the 2 5
secur ities, he may “state that belief” and, “on a finding by the court to that eff ect, be dismiss ed as
a party ”), .101(a) (bond require ment ma d e a p p li cable to “any opposing party or intervenor , other than the attorne y

g ener al”)

. Id . § 1205.023(1). 2 6
See Black’

s Law Dictionary 864 (9th ed. 2009) (def ining “in rem” as “involving or 2 7 deter mining the status of a thing, and there fore the rights of persons g ener ally with respe ct t o that thing” ). Tex. Gov’t Code § 1205.023(2).

2 8
Id . §§ 1205.041 (notice) , .043 (by publication). 2 9
Id . § 1205.044 (ef

fec t of notice by

publication). 3 0
See id

. § 1205.151(b)( 4) (judg ment is “binding and conclusive” ag ainst “any party to the 3 1 action, whethe r (A ) n amed and serve d with the notice of the proce eding s; or (B ) descr ibed by Section 1205.041(a) ”).
7• A third cate g ory of “par ties” contemp l ated by the L eg islature consists of class members who opt to be come “name d parties.” A class member ma y “bec ome a na med par

ty ” either by (1) filing an answe r to t h e p et i t i on at or befor e the time set for trial in the notice; or (2) “ intervening , with leave of court, a fter the trial date.” 3 2

• A final permutation in the L eg islature’s use of “par ty ” within chapte r 1205 appea rs in the provisions rela ting to the bond require ment, contained in subchapte r E

. The bond require ment imposes conditions on the continued persona l participation in the litigation of “any opposing party or intervenor , other than the attorney g ener al.” Subchapter E further 3 3 require s that not i ce an d a mot ion to set bond be personally serve d on “the opposing party , the intervenor , o r t h e party ’s attorney ,” which would seem to confirm both that “par ty ” 3 4 i n cl udes both “opposing parties” and intervenor s and that an “opposing party ” would n o t include an “intere sted party ” class member who has been entirely absent from the litigation.

T h e g r a v a men of the District’s dismiss al motion is that the L e g is la tu r e s u r e ly in te n d e d “par ty ” in t h e context of section 1205.068’s appea l rig ht to mean only persons who persona lly participa te i n the t rial court proce eding s—i.e., with respe ct t o members of the class o f “intere sted parties,” only those who file answe rs or intervene so as to become “name d parties” —and not c lass
members like Alejos who, while deeme d a “par ty ” under chapte r 1205 in the sense of being bound by the proce eding s, have rema ined mere specta tors throug h final judgme nt. The District first relies

on backg round decisional law, of which courts can presume the L eg islature was awa re in cra fting chapte r 1205 and its statutory prede cessor s. The District emphasizes the g ener al rule that an appea l 3 5

Id . § 1205.062. 3 2
Id . § 1205.101(a)

. 3 3
Id . § 1205.101(b). 3 4
See Shook v. W

alden , 304 S.W .3d 910, 917 (Tex

. Ap p
. — Au s t i n 2010, no pet.) (“[W] e 3 5
assume that when enac ting a statute, the leg islature was awa re of the backg round law and acte d with ref ere nce to it.”) (citing Ack er v. Tex as W

ater Comm’n , 790 S.W .2d 299, 301 (Tex. 1990)).
8can be broug ht only by a named party to a suit. To the extent unname d class members have been 3 6 permitted to appea l under Texas law, the District further sug g ests, that rig ht has derive d from some unique injury to the particula r member with respe ct to which the member prese rved err or befor e the trial court, suc h as by

timely objecting to a class se ttlement. 3 7 Alejos counter s that the District is attempting to rea d limit ations i n t o “par ty ”
under section 1205.068 that the L eg islature did not itself choose to include. He emphasizes that the

L eg islature u s ed “any party ” to descr ibe the class of potential appellants in section 1205.068,

not “ named party

” or “par ty ” with some other qualifica tion or limit ation, but just “par ty .” This phrase ology , Alejos rea sons, ref lects unambig uous leg islative intent to include any and all “par ties” under chapter 1205 in the class of potential appellants unde r sec tion 1205.068, including all other
members of the class of “intere sted parties” —eac h of whom, ag ain, the L eg islature expli citly deems
“a party to the action” —not just those who file answe rs or intervene so as to become “name d 3 8 parties.” Fur

ther, while maintaining that chapte r 1205 is sui generis , Alejos points out that Texas 3 9
virtual-re prese ntation conce pts have sometimes been applied to allow unnamed parties to formally

en t er the litigation for the first time on appea l in circ umstances wher e the named party forme rl y
repr esenting their interests settles or the interests otherwise diverg e. What th e T ex as S upreme 4 0

See, e.g. , Gunn v. Cavanaugh , 391 S.W .2d 723, 724 (Tex. 1965). 3 6
See City of San Benito v. Rio Grande Valley Gas Co. , 109 S.W .3d 750, 754–56 3 7 (Tex. 2003) (citing Dev lin v. Scardelletti , 536 U.S. 1, 8–11 (2002)).
See Tex. Gov’t Code § 1205.044. 3 8
See id . § 1205.062. 3 9 See, e.g. , In re Lumbermens Mut. Cas. Co. , 184 S.W .3d 718, 723–29 (Tex. 2006); Motor 4 0 Vehicle Bd. v. El Paso Inde p. Auto. Dealers Ass’n , 1 S.W .3d 108, 110–11 (Tex. 1999).

9Court has termed the “most important consideration” in this analy sis, Alejos observe s, “is whether

the appellant is bound by the judgme nt,” and that is cer tainly true for him h er e. I n short, 4 1 4 2 Alejos sug g ests that if virtual repr esenta tion conce pts are rele vant to our construction of “par ty ” in
section 1205.068, they confirm that the notion of an “intere sted party ” class member being allowed

to persona lly participa te in the litigation for the first time on appea l is hardly unknown to Texas law or bey ond the conc eivable intent of the L eg islature.

I n reply , the Dis t ri ct p osits that even if “par ty ” under section 1205.068 would
otherwise unambig uously include class m em b er “par ties” like Alejos who did not participa te

persona lly in the trial court proceed i n gs, the sheer number of individuals who could be potential appellants under this construction reve al it to be an “absur d result” that the L eg islature could not
have intended. Wit h respe ct to the bonds it seeks to issue here , the District observe s, the class of 4 3
“intere sted parties” (and potential appellants) would include over one milli on San Antonio residents
and proper

ty owner s, not to mention any one else who pay s sales taxes to the District (e.g ., the many

4 4
out-of-town visitors to the Alamo or Sea World who make purcha ses there ). The District urg es that 4 5

c o n s tr u ing the “par

ties” who can appea l under section 1205.068 to include any one (and, conce ivab ly ,

City of San Benito , 109 S.W .3d at 755. 4 1
See Tex. Gov’t Code § 1205.151(b)(4) (B ) (binding noticed par ties). 4 2
See J ose Carreras, M.D., P.A. v. Marroquin , 339 S.W .3d 68, 73 (Tex. 2011) (dec lining 4 3 to interpre t statute in manner that would lead to absurd results) (citing City of Rock wall v. Hughes , 246 S.W .3d 621, 625–26 (Tex. 2008) (“[W] e construe the statute’s wor ds acc ording to their plain and common mea

ning . . . unle ss such a c onstruction leads to absur d results.”))

. See Tex. Gov’t Code § 1205.023(2)( A) (“r eside in the territory of the issuer”) , (B ) (“ow n 4 4 proper ty located w ithin the boundaries of the issuer”)

. See id . § 1205.023(2)( C) (“ta x pay ers of the issuer” ). 4 5
10ever

y one) in this vast class, even those who had never previously participa ted persona lly in the litigation, would subvert a fundame ntal public policy long rec og nized as underly ing chapter 1205

as a whole—to “quickly and eff iciently ” resolve controve rsies reg arding the leg al validity of public

secur ities and rela ted officia l acts, controve rsies whose mere exis te n c e a r e ta n ta mo unt to temporar

y 4 6 injunctions barr ing s u ch s ec u rities’ issuance. I n addition to urg ing that this potential perc eived 4 7

para de-of -horr ibles demonstrates an “absur d result,” the District sug g ests that “par ty ” m ay b e ambig uous and that we should construe it in line with these re co gn i z ed l egislative policy g oals. 4 8 Alejos responds that the District is instead inviting u s to s e cond-g uess the leg islative policy decisions
ref lected in the una

mbiguous statutory

text

. We ag ree with Alejos for at least three rela ted rea sons. The first—and m o s t
critica l—is the unambiguous statutory text

. As Alejos emphasizes, the L eg islature quit e plainly 4 9
allowed “ any party to an action under this ch ap t er ” to appea l under section 1205.068—not just
“name d parties” who participa te persona lly in t h e t ri al-leve l proce eding s—and elsewhe re it unequivoca lly stated that eac h member of the “intere sted party ” cla ss, however multit udinous that

See, e. g

. , Ho t

ze , 339 S.W .3d at 814 (citing Rio Grande Valley Sugar Growers, Inc. 4 6 v. Attorney G en. of Tex. , 670 S.W .2d 399, 401 (Tex. App.—Austin 1984, writ ref’ d n.r.e.) ).

S ee Buck holts Indep. Sch. Dist. v. Glaser , 632 S.W .2d 146, 149 (Tex. 1982). I n t h i s 4 7 respe ct, as succinc tly observe d by Chief J ustice Pope (evide ntly quoting the Glaser trial judge , the late Don Humble), the statute was intended “to stop ‘the ag e old pr actice allowing one disgr untled taxpay er to stop the entire bond issue by simply filing suit.’” Id .; see generally Glaser v. Buck holts Indep. Sc h. Dist ., 625 S.W .2d 419 (Tex. Civ. App.—Austin 1981), rev’ d , 632 S.W .2d 146.

Cf. Entergy Gulf States, Inc. v. Summers , 282 S.W .3d 433, 442–43 (ac knowledg ing that 4 8 leg islative history may inform statute’s meaning , but declining to consider leg islative history wher e statute at issue wa s unambig uous).

See DeQue en , 325 S.W .3d at 638–39 (re ly ing solely on st at u tory text and declining to 4 9 consider c anons of c onstruction in interpreting statute wher e statute a t issue was unambig uous).
11class might be, is deeme d “a party to the action.” When construing statutes, we presume t hat the

L eg islature chose its lang uag e with c are , with e ach word included (or omitted) purposef ully , and 5 0

we can only conclu d e fr o m the L eg islature’s chosen lang uag e in chapte r 1205 that it intended to
include eac h m em ber of the “intere sted party ” class among the “par ties” who may bring appea ls
under section 1205.068. I n this reg ard, we note that the First Court of Appea ls—appare ntly the only

court to have addre ssed such an issue previously —rea ched the same conclusion, albeit in a slightly
differ ent proce dural context. The appellant, who was among the class of “intere sted parties” but 5 1
had not participa ted persona lly in the proce eding s befor e the trial court, soug ht to bring a restric ted

appea l to challeng e the trial court judgme nt, a rg uing in pa

rt that he was constitutionally entitled to
the restric ted-a

ppeal reme dy beca

use the expedited appea l under chapte r 1205 was available solely

to “name d parties.” I n reje cting that co n t ention, the First Court deter mined that, despite not 5 2 having participa ted persona lly at trial, the appellant had been elig ible to bring the acc eler ated appea l authorized by

chapte r 1205, and ha d failed to do so. I ts reasoning was similar to our own:

[The appellant’ s] arg ument is contra ry to [chapter 1 2 0 5 ’s ] plain lang uag e, which expressly makes tax pay ers (like [t he appellant] ), t o whom the required publi cation notice is g iven, class members in these actions; expressly makes them parties to the action afte r the require d notice is g iven, so that the court “has jurisdiction over eac h person to the sa me extent as if that person were individually named a nd persona lly
serve d in the action”; and rende rs judgme nts in these actions binding and conclusive
on these individuals, whether or not th ey wer e actua lly named in the proce eding

.

In re M.N. , 262 S.W .3d 799, 8 0 2 (T ex
. 2008) (noting presumption that “L eg islature 5 0 included eac h word in the statute for a purpose” and that “the words not included wer e purposef ully omitted”).
See N

a r ma h v. W

aller Indep. Sch. Dist. , 257 S.W .3d 267, 275 (Tex. App.—Houston 5 1 [1st Dist.] 2008, no pet.).

See id

. 5 2
12Although parties to whom the require d publication notice is g iven may answ er

o r i n t erve ne, they do not have to do so for the above eff ects to occur
. Finally , [chapter 1205] allows “[a]ny party to an ac t i on under this chapte r” to appea l the judgme nt—and, as we have explained above, “a party ” includes a statutory class member to whom the require d notice was g iven, even if that person was not individually

named, did not answe r, or did not intervene

. [The a ppellant] wa s thus elig ible to have taken an acc eler ated appea l from the final judgme nt under the authority of sec tion 1205.068. 5 3

Second, we cannot conclude that this construction of “par ty ” under section 1205.068
eff ects the sort of “a bsurd result” that would belie the leg islative intent otherwise ref lected in
the statute’s una mbiguous wor ds. As Alejos sug g ests, the “a bsurd re sults” conce pt is not an open
invitation for courts to second- g uess leg islative policy decisions in the g uise o f “construing ” statutes,
but a chec k ag ainst blindly narr ow an d out-of-c ontext rea dings of statutory lang uag e that the

L eg is l at u re co u l d not possibly have meant. For example, we rec ently applied the conce pt in 5 4 concluding that the L eg islature could not possibly have intended a prohibition ag ainst expenditures of publ ic funds for “political purposes” to mean “political” i n the s ense of rela ting to g overnme nt

or the conduct of g overnme nt, as that would amount to a mandate that state ag encie s cea se
all activity

. That is not the sort of situation we have here . I nstead, the L eg islature’s inclusion of

5 5
“intere sted party ” class members in the “par ties” who may appea l under section 1205.068, reg ardle ss
of whether they become “name d parties” during the trial-leve l proce eding s, is consistent wi t h a

Id . (interna l citations omit ted). 5 3
See T.C.R

. v. B ell Cnty. Dist. Attorney’s Office , 305 S.W .3d 661, 671–72 5 4 ( T e x. A p p
. —Austin 2009, no pet.) (dec lining to “sec ond-g uess” L eg islature’s policy judg me n t u n d e r “absur d-re s u l t s ” p ri nciple); see also J

. Woodfin J ones, The Absurd-Results Principle of Statutory Construction i n Texas , 15 Rev. L itig. 81 (1996) (discussing history of this principle).
See Texans Uniting for Freedom & Reform v. Saenz , 319 S.W .3d 914, 923–29 5 5 (Tex. App.—Austin 2010, pet. denied).
13deter

mined policy choice betwee n tw o al terna tive sets of litigation incentives for those class
members who are inclined to take an active role in opposing the issuer’s petition : (1 ) allowing 5 6
those class members to rema in “on the sidelines” so long as t h ey perc eive their interests are adequately repr esented by parties participa ting persona lly in the proce eding s (i.e., the Attorney
Gene ral or a named party ), with the option of enter ing the fra y , i n cl u d i n g bring ing an appea l, if
and when those parties cea se to do so (which is t h e co n s eq uence of our construction); versus (2) requiring eac h class member inclined to active participa tion to become a named party or
ris k fo regoing any rig ht to seek appellate relief in the event the Attorney Gene ral or some
oth er n amed party eventua lly elec ts not to pursue such relief (which is the conseque nce of
the District’s construc tion). The L eg islature could well have concluded tha t the former approa ch,
which enc ourag es re liance on vir tual repr esenta tion instea d of incentivizing prophy lactic pe rsonal participa tion, is a pref

era ble means of advanc ing chapte r 1205’s overa rching g oals of “quickly and
eff iciently ” re solving the litig ation and re lated leg al unce rtainties. I t is not an “absurd r esult.”

Finally , construing chapte r 1205 as a who le , w e find confirma tion that the L eg islature

o p t ed t o addre ss the potential draw backs of cre ating larg e classes of potential litigants through a

means other than limit ing the rang e of “par ti es” who can file answe rs, intervene , or appea l—the
bond require ment imposed in subchapter E. And, as we explain below, we conc lude that Alejos 5 7
is su bject to this require ment to the same extent as if he had become a “name d party ” prior to final judg ment.

Which, we would observe , would rar ely include, e.g ., the entire population of San Antonio 5 6 and its visitors who spend money there

. Howeve r, we acknow ledg e that a particula rly controve rsial bond issue in a locality

could potentially

attrac t a consider able c rowd of a ctive opponents.
See Tex. Gov’t Code §§ 1205.101–.105 (provisions of subcha pter E)

. 5 7
14I n a final rejoinder , the District sug g ests that our construction of section 1205.068

would confe r jurisdiction on this Court bey ond the constitutional l i m i t at i o n s on judicial power
ref lected in standing doctrine. Standing under the Texas Constit ution require s “a concr ete injury to
the plaintiff and a rea l controve rsy betwee n the parties that will be resolved by the court,” and 5 8

am o n g other components of these require ments is an injury that is particula rized, not mere l y

common to the “g ener al public.” I n these way s and others, standing require ments serve to maintain 5 9
the proper s ep ara tion of g overnme ntal power s both by preve nting courts from issuing advisory opinions and, with reg ard to challeng es to g overnme ntal action in particula r, by preve nting judicial
incursions into abstrac t or g ener alized public policy disputes that are proper ly resolved in the other
branc hes. They also “re flec t in many way s the rule that neither citizens nor taxpay ers can appea r 6 0
in c ourt simply to insist that the g overnme nt a nd its off icials adher e to the require ments of law

. . . beca use ‘[g]overnments cannot opera te if ever y citi z en wh o co n cludes that a public officia l has
abused his discretion is g rante d the rig ht to come into court and bring such officia l’s public acts under judicia l review .’” 6 1

Hec kman v. W

illiamson Cnty ., 369 S.W .3d 137, 154 (Tex. 2012) (citing DaimlerChrysler 5 8 Corp. v. Inman , 252 S.W .3d 299, 304, 307 (Tex. 2008); Neeley v. W est Orange-Cov e Consol. Indep. Sch. Dist. , 176 S.W .3d 746, 774 (Tex. 2005); Brown v. Todd , 53 S.W .3d 297, 305 (Tex. 2001)).
See H eck man , 369 S.W .3d at 154–55. 5 9
Bacon v. Texas Historical Comm’n , 411 S.W .3d 161, 174 (Tex. App.—Austin 2013, 6 0
no pet.) (citing Lujan v. Defenders of W ildlif e , 504 U.S. 555, 560, 576–78 (1992); Texas A s s ’n of Bus. v. Texas Air Control Bd. , 852 S.W .2d 440, 446 (Tex. 1993)).
Id

. at 174–75 (quoting Andrade v. Venable , 372 S.W .3d 134, 136–37 (Tex. 2012) (quoting 6 1 Andrade v. NAACP of Austin , 345 S.W .3d 1, 7 (Tex. 2011)); see B l a n d In dep

. Sch. Dist. v. Blue , 34 S.W .3d 547, 555 (Tex. 2000).
15The District questions whether Alejos would possess any particula rized injury from
the district court’s judgme nt when he has not participa ted persona lly in the proce ed i n gs b el o w

or prese rved any err or unique to himself. Wit hout suc h participa tion, the District sug g ests, Alejos

possesses mere ly the same interest share d in common with over one m i llion of his fellow San Antonio residents (a

nd still more fe llow pay ers of the sales taxes that fund the District) . Nor,
the District sug g ests, could Alejos come within the exception to the partic u la r iz e d in jur y require ment permitting “taxpay ers” to sue to enjoin alleg edly illega l g overnme ntal expenditures—i.e., “taxpay er standing ” —beca

use the expenditures at issue here are fu n d ed by the sales taxes the District 6 2

rec eives. As the District observe s, the Texas Supreme Court has held that one’s status as a pay er of
sales taxes is an interest insufficient to g ive rise to taxpay er standing

. At bottom, the District asks 6 3

us to classify Alejos as mere ly an outspoken political opponent of VI A’s streetc ar initiative and the
District’s bond issue, but not one possessing an interest s u ff i cient to invoke the jurisdiction of 6 4
the judiciary to resolve these disputes. Alejos’s complaints instead belong in the other g overnme ntal
branc hes, the District sug g ests.

Al ejos responds that he possesses a justiciable interest in his appeal b ec au s e chapte r 1205 bind s h i m (l ike other “intere sted party ” class members) to the district court’s

See W illiams v. Lara , 52 S.W .3d 171, 179 (Tex. 2001) (“Ta x pay ers in Texas have standing 6 2 to enjoin the illega l expenditure of public funds, and need not demonstrate a particula rized injury .”) (citing Bland , 34 S.W .3d at 556).

Id. at 179–80 (holding that “pay ing sa les tax does not confer ta x pay er standing ”). 6 3
I n this reg ard, the District emphasizes that Alejos, a San Antonio civic leade r, has been 6 4 quite prominent in political and public-re lations eff orts to op p o s e the District’s bond issue and VI A’s streetc ar initiative, further insinuating that his attempted appea l is mere ly a stratag em in that broade r policy conflict.
16judgme nt. But this asser tion mere ly beg s the q u es t i o n as to whether Alejos possesses any 6 5 constitutionally cog nizable inter est in the subject matter of the judgme nt, a nd it is t he existence of
such an interest that the District disputes. But if the District is corr ect that Alejos for these rea sons
lacks standing to prosec ute his appea l, the same would also have been true of his participa tion in the
trial court proce eding s, and it would also imply more broadly that chapte r 1205’s rang e of “par ties”
who can participa te persona lly in bond-validation litigation, whether at the trial or appellate levels,
will fre quently encompa ss persons lacking constitutional standing to litigate the dispute i n co u rt, potentially confe rring jurisdiction on the courts bey ond our constitutional limit ations. But we do 6 6
not unde rstand the District to be making this sort of broade r challeng e to c hapter 1205 here ; to the

contra ry , it arg ues that Alejos, despite the District’s view that he lacks standing , should nonetheless
have answe red or intervene d in the trial-leve l proce eding s. I n short, the substance of the District’s

arg uments reg arding Alejos’s standing ultimately g o n o t to the proper construction of “par ties”
who may persona lly participa te in litigation un der chapte r 1205, but to whether constitutional standing require ments independe ntly bar him from bring ing an app ea l t hat section 1205.068
otherwise a

uthorizes.

We nee d n o t decide this question of Alejos’s constitutional standing , let alone any
broade r implications of the District’s arg ument, beca use the L eg islature has imposed a separ ate

See Tex. Gov’t Code § 1205.151(b)(4)

. 6 5
See Finance C o mm ’n v. Norwood , 418 S.W .3d 566, 582 n.83 (Tex. 2013) (noting that 6 6 L eg islature cannot enlar g e courts’ constitutional jurisdiction by statute) (citing In re Allcat Claims Serv., L.P. , 356 S.W .3d 455, 462 (Tex. 2011)). Nor would the class-a ction fea tures of chapte r 1205
nece ssarily

resolve suc h a proble m. See H eck man , 369 S.W .3d at 150–51.
17statutory limit ation on our jurisdiction that we should consider first —chapte r 1205’s bond 6 7 require ment.

THE B OND REQUIREMENT

Chapter 1205’s bond provisions—subchapter E—state t hat an issuer may file, “[ b]efore the entry of final judgme nt,” a motion seeking an order “that any opposing party o r
i n t ervenor, other than t he attorney g ener al,” be dismiss ed unless that person posts a bond pay able

to the issuer in the event the issuer ultimately preva ils to cover “any damag e or cost that may occur
beca use of the d el ay cause d by the continued participa tion of the opposing party or intervenor .” 6 8 Upon receipt of such a mot ion, the court shall issue an order, which shall be personally serve d on
the “opposing party o r i n t er v enor” with a copy of the motion, requiring the “opposing party or
intervenor ” to appea

r at a time specifie d by the court (which must be at least five and not more than

ten day s hence ) and “show cause why the motion should not be g rante d.” The court “shall g rant” 6 9
the m otion “unless, at the hearing on the m otion, the oppos ing pa rty or interve nor establishes that
the person is entitled to a temporar y injunction ag ainst the issuance of the public secur ities.” I f the 7 0

court g rants the motion, it must also set the bond “in an amount deter min ed by the court to be
sufficie nt to cover any damag e or cost, including an an t i ci p at ed incre ase in interest rate s or in a

See VanDev ender v. W

oods , 222 S.W .3d 430, 432 (Tex. 2007) (“Judicial restra int cautions 6 7 that when a case may be decide d on a non-constitutional g round, we should rest our decision on that g round and not wa de into ancillar y constitutional questions.”). Tex. Gov’t Code § 1205.101(a)

. 6 8
Id . § 1205.101(b). 6 9
Id . § 1205.102. 7 0
18construction or financ ing cost, that may occur beca use of the delay cause d by th e continued participa tion o f t h e opposing party or intervenor

. . . if the issuer finally preva ils and obtains

s u bstantially the judgme nt reque sted in its petition.” There afte r, “[t] he court shall dismiss an 7 1 opposing party or intervenor who does not file a require d bond befor e the 11th day afte r the date of
the entry of the order setting the amount of the bond,” and “[n] o court has further jurisdiction over 7 2

any action to the extent that action involves any issue that was or could have been raised in the action
under this cha

pter,” subject to a limitation not applicable her e. 7 3 Although the district court issued a Fe bruar y 25, 2014 “Order Setting Bond” in purported compliance with these require ments, and it is undisputed that Alejos did not comply with
the order within ten day s there afte r—and still has not complied—the district c ourt did not proce ed

to dismiss Alejos, evidently in the view that this would interfe re with our jurisdiction over Alejos’s

ear lier J udg ment Appea l. But Alejos’s noncompliance with the bond order potentially implicates

our jurisdiction nonetheless, inasmuch as the L eg islature has also provided in subchapte r E that (s u b j ect to an exception not applicable here ) “no court has further jurisdiction over any action

to the extent it involves an issue that was or cou l d h ave been raised in the action under this chapte r” if the “opposing party or i nterve nor” fails to comply within ten day s afte r t h e d at e of t he
court’s order setting bond. Fur ther, while Alejos has appea led the district court’s bond order , the 7 4

Id . § 1205.103(b). 7 1
Id . § 1205.104(a)

. 7 2
Id . § 1205.104(c)

. 7 3
Id

. § 1205.105(c) ; see Hotze , 339 S.W .3d at 820 (i n re l i an ce on section 1205.105(c) , 7 4 dismiss ing appea ls under chapte r 1205 for failure to post bond within ten day s of trial court’s order setting bond)

. 19L e g is la

tu r e

— c o nsistent with its overa rching intent to expedite proce eding s under chapte r 1 2 0 5

— h a s provided that such appeals do not chang e the opera tion and effec t of the orig inal ten-da y deadline
for posting bond unless (1) we rende r judgme nt modify ing the district court’s order setting bond, in
which case the ten-da

y deadline for Alejos to post bond would run from the date of the modified
order ; or (2) we re v er s e the order setting bond outrig ht. Consequently , unless we gr ant Alejos

7 5 7 6

one of these forms of relief in reg ard to the Bond Appea l, we must immediately dismiss his

J udg ment Appea l for wa

nt of jurisdiction. 7 7

I n his Bond Appea l, Alejos complains of two sets of asser ted proce dural irreg

ularities underly ing the Orde r Setting B ond. The fir st boils down to a contention that Alejos is not subj ect

to the bond require ment beca use he did not participa te p ersonally in the litigation until afte r
final judgme nt. I n Hotze v. City of Houston , we re j ec t ed the notion that a bond order ed under chapte r 1205 is intended to protec t the issuer only throug h trial, holding that the “sec urity -bond provisions apply to both trial and appellate proce eding s.” W e re as o n ed that while issuers are 7 8 require d to file a motion to file a secur ity bon d p ri o r t o entry of final judgme nt, “nothing in [chapter 1205] sugg ests that the sec urity bond is applicable only befor e trial,” a nd that the cha

pter imp l i ed the contra

ry in ty ing the bond amount to “whe ther the issuer ‘ finally preva ils,’ which

See Glaser , 632 S.W .2d at 150–51 (“We construe ‘the appropr iate order ’ t o m ea n 7 5 the trial court’s bond order unless it is modified or reve rsed on appea l. I f the bond order is modified

. . . then contestants have 10 day s from that order as the ‘appr opriate order ’ to post the require d bond or suffe r dismissal.”).
See id

. 7 6
See H otze , 339 S.W .3d at 820. 7 7
Id . at 816. 7 8
20sug g ests that the bond is intended to be effec tive throug h appea l.” We further observe d that if a 7 9 require d bond is not timely filed, chapte r 1205 mandated that “‘no court’ has further jurisdiction over
any issue that could have been raised in the suit,”a ph ra s e t h at “w o u ld be superf luous at best and meaning less at worst” if the bond require ment did not apply to any post-trial matters. Alejos urg es 8 0
that Hotze is disti ng uishable bec ause the litigants there had become “named parties” prior to final judgmen t and befor e perf ecting their appea l, wher eas he did not participa te persona lly in the 8 1 litigation until filing his notice of appea l. He further insists that chapte r 1205 does not contemplate
that the bond require ments will be applied to persons who wer e not “name d parties” in the trial court. We disag ree
. As previously explained, subchapte r E’s bond require ments play an essential role in ensuring that chapte r 1205 as a w hole ac hieves its intended purpose s. As we concluded in Hotze , the L eg islature intended these require ments to opera te at both the trial and appellate levels. Whil e Alejos is corr ect in observing that Hotze itself involved litigants who had become “name d parties”
in the trial-leve l proce eding s, our logic would ext end equally to any litigants who, like Alejos,
choose to enter the fra

y for the first time on appea l. But even more signific antly , there is additional

text ual support for this conclusion in subchapte r E that we did not have occa sion to addre ss in Hotze

.

Contrary t o what Alejos sug g ests, the L eg islature in subchapte r E made the bond require ments applicable not to “named pa rties”—i.e., me mbers of the class of “intere sted parties”

Id . (quoting , with added e mphasis, Tex. Gov’t Code § 1205.103(b)). 7 9
Id . (quoting Tex. Gov’t Code § 1205.105(c) ). 8 0
See id . at 813. 8 1
21who fi le an answe r prior to the trial date or intervene befor e the final judgme nt —but used a 8 2
differ ent phrase : “ opposing party or intervenor

. ” W e p re s u m e that the L eg islature intended the

same exactitude in using “opposing p ar t y ” i n subchapte r E as it did in its other uses of “par ty ” in chapte r 1205, so its use of “ opposing ” party here , as opposed to “ named ” party , is po t en t i all y signific ant. As we have previously observe d, subchapte r E’s require ment that an “opposing party ”

8 3

or its attorney be serve d persona lly with notice of the bond hear ing would imply that an “opposing 8 4
party ” mu s t be an “intere sted party ” class member who has beg un to participa te persona lly in
the litigation. As for how a class member must participa te in order to become an “opposing party ,”
the most obvious answe r would be any proce dural means thr o u gh wh ich the member could litigate ag ainst the issuer’s petition under chapte r 1205. We have conclude d there are three —filing
an answer before the t rial date, intervening prior to final judg ment, or filing a n appea l. Whil e the
first two methods would make the memb er a “name d party ” under chapte r 1205, the L eg islature
made all “opposing parties” subject to the bond require ment, and this would include appellants, in

our view. I n short, Alejos is subject to subchapte r E’s bond require ment to the same extent as if he
had bec ome a na

med par ty

. 8 5

See Tex. Gov’t Code § 1205.062. 8 2
See I n re M.N. , 262 S.W .3d at 802 (noting presumption that “L eg islature included eac h 8 3 word in the statute f

or a pur pose”)

. See Tex. Gov’t Code § 1205.101(b). 8 4 Alejos also sug g ests that the Dis trict failed to i n v oke the bond require ment by filing its 8 5 motion “[b] efor e final judgme nt.” See id

. § 1205.101(a)

. To the contra ry , as p reviously noted, the Di s t ri ct fi l ed a motion at the inception of its case to set bond ag ainst any “opposing party or intervenor .” I n reply , Alejos insists that this motion did not survive the district court’s fin al judgme nt and that the District must rely s o l ely upon the post-judgme nt motion reg arding bond
22Alejos’s second set of asser ted proce dural irreg ularities are that the district court
did not aff

ord h i m the opportunity for notice and a hear ing that subchapte r E require s. Alejos is

corr ect—in fac t, in its Orde r Setting Bond, the district court acknow ledg es that “Mr. Alejos and his
counsel wer e not permitted to arg ue, make objection, or prese nt evidenc e reg arding th e m o t i o n ” seeking to se t bond ag ainst him. As the Orde r also ref lects, this wa s a product of understanda ble 8 6
confusion reg arding Alejos’s “par ty ” status. Nonethele ss, having conclude d that Alejos is a “par ty ”
entitled to appeal and who is subject to subchapte r E’s bond require ments to the same extent as
“name d parties,” we are compelled to ag ree with Alejos that he was entitled to the notice and hear ing

proce dures that subchapte r E require s befor e setting a bond. As such, the Orde r Setting Bond must
be re verse d. To this ex tent, we sustain his first issue.

T h e District does not seriously dispute that the Orde r Setting Bond was, in thes e
respe cts, p ro ce d u ra lly flawe d, but urg es us to proce ed to the merits of Alejos’s J udg ment Appea l
nonetheless and aff

irm the final judgme nt. We conclude we should not do so, as the L eg islature has
conditioned our jurisdiction to rea ch those merit s o n Alejos’s compliance with subchapte r E’s
bond require ment, and that issue has y et to b e re s olved. Unless and until our jurisdiction over 8 7
the J udg ment Appea l is firmly established, we should not “jump ahea d” t o t h e m er i t s of that

appea l—espec ially wher e the merits involve quite signific ant and complex questions reg arding the

that responde d to Alejos’s notice of appeal

. We conclude that the District’s orig inal motion was sufficie nt to preser

ve its rig ht to bond under subcha pter E. Cf. id

. §§ 1205.101(b) (court mus t order opposing p ar t y t o ap pear and show cause why 8 6 motion should not be g rante d), .102 (standar d for g ranting bond motion), .103 (dete rmination of bond amount).
Id

. § 1205.105(c) (providing that “no court has further jurisdiction over any action” if bond 8 7 is not ti mely

posted).
23District’s leg al authority rela tive t o i t s taxpay ers—lest we exceed our proper role within the

constitutional separa tion of powers.

CONCLUSION

I n the Bond Appea l, we reve rse the Orde r Setting Bond and rema nd that issue to the
district court for a new bond hear ing. Consist ent with the statutory g oals of chapte r 1205, we reque st
that the parties and the district court conduct a hear i n g as s o o n as possible in compliance with chapte r 1 2 0 5 and immediately forwa rd any further order of the district court to this Court. I n the meantime, the Judgment Appe al and the D istrict’s motion to di smiss wil l remain pe nding.

__________________________________________ Bob Pembe rton, J ustice

Be fore Chief J ustice Jones, J ustices Pemberton a nd Rose
03-14-00109- CV Remains pending
03-14-00139- CV Reverse d and Remande d Filed: Apr il 2, 2014

24