IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 15-11035

REPUBLIC WASTE SERVICES OF TEXAS, LIMITED, 

 Plaintiff - Appellant

v.

TEXAS DISPOSAL SYSTEMS, INCORPORATED, 

 Defendant - Appellee

Appeal from the United States District Court

for the Northern District of Texas

Before STEWART, Chief Judge, and CLEMENT and HAYNES, Circuit 

Judges.

CARL E. STEWART, Chief Judge:

This case involves a dispute between two waste disposal service entities,

Plaintiff-Appellant Republic Waste Services of Texas, Ltd. (“Republic”) and 

Defendant-Appellee Texas Disposal Systems, Inc. (“Texas Disposal”). At issue 

is a purported conflict between the Texas Health and Safety Code (“the Code”) 

and an exclusive contract for solid waste disposal services entered into by 

Republic and the city of San Angelo, Texas (“the City”). After a hearing, the 

district court granted Texas Disposal’s Rule 12(b)(6) motion to dismiss the suit 

and denied as moot Republic’s motion for partial summary judgment. For the 

following reasons, we reverse the part of the district court’s order granting 

Texas Disposal’s motion to dismiss, vacate the part of the order denying as 

United States Court of Appeals

Fifth Circuit

FILED

December 15, 2016

Lyle W. Cayce

Clerk
No. 15-11035

2

moot Republic’s motion for partial summary judgment, and remand for further 

proceedings. 

I. Facts & Procedural History

In July 2013, the City issued Texas Disposal a “Solid Waste Hauling 

Permit,” allowing it to transport and dispose of garbage, trash, and debris 

within city limits, and to render “any service that is allowed by state law or 

city ordinance that does not conflict with the City’s contract with Republic . . . 

and the exclusive rights granted by that contract[.]”1 Then, in July 2014,

pursuant to a city ordinance,2 Republic and the City entered into an agreement 

titled “Special Exclusive Contract for Solid Waste Collection and Disposal 

Services,” with an effective date of August 1, 2014. Under the terms of the 

contract, Republic was given the exclusive right to collect, transport, and 

dispose of all residential and non-residential solid waste, including temporary 

construction and demolition waste. The contract also contained a provision 

indicating that Republic, not the City, was responsible for enforcing its 

exclusivity in the event of legal proceedings. 

At some point after the contract between the City and Republic went into 

effect, Texas Disposal began to contract for and provide solid waste disposal 

services to various construction projects in the City. Consequently, Republic 

sent Texas Disposal a cease-and-desist letter stating that its own contract with 

the City precluded Texas Disposal from entering into construction waste 

disposal contracts with the City’s residents and businesses. In response, Texas 

Disposal acknowledged the contract between Republic and the City but 

contended that its terms concerning solid waste management services for 

 

1 Although the City issued the permit to Texas Disposal in 2013—a year prior to 

entering into a contract with Republic in 2014—the terms of the permit nevertheless prohibit 

Texas Disposal from rendering services that conflict with the City’s contract with Republic. 

2 San Angelo, Tex., Code of Ordinances ch. 11, art. 11.04.003(d).
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construction projects were unenforceable due to a conflict with Section 

364.034(h) of the Code.3 

Republic disagreed and sued Texas Disposal in federal district court 

advancing a state law claim for tortious interference with an existing contract. 

Republic also sought: (1) a declaratory judgment as to the validity of its 

exclusive contract with the City, (2) an injunction against Texas Disposal’s 

continued waste disposal servicing of construction projects, and (3) money 

damages. In lieu of an answer, Texas Disposal filed a Rule 12(b)(6) motion to 

dismiss, arguing that Section 364.034(h) of the Code precluded the City from 

entering into exclusive contracts for temporary construction solid waste 

disposal services. See Fed. R. Civ. P. 12(b)(6). Republic then filed a motion for 

partial summary judgment on its declaratory judgment claim and as to liability 

on its tortious interference claim. 

The district court conducted a hearing on both motions and rendered an 

order granting Texas Disposal’s motion to dismiss and denying as moot 

Republic’s motion for partial summary judgment. In its order, the district 

court reasoned that the plain wording of Section 364.034(h) conveyed the 

legislature’s “clear intent to take away the City’s inherent authority to grant 

exclusive [contract rights] in the specific instance of ‘contracts to provide 

temporary solid waste disposal services to a construction project.’” Republic 

filed this appeal.

 

3 Under Section 364.034(a) of the Code, a public agency—which is defined to include 

municipalities—may enter into an exclusive contract for solid waste disposal services. Tex. 

Health & Safety Code Ann. § 364.034(a) (“A public agency or a county may: (1) offer solid 

waste disposal service to persons in its territory; (2) require the use of the service by those 

persons; (3) charge fees for the service; and (4) establish the service as a utility separate from 

other utilities in its territory.”). Subsection (h) states that “[t]his section does not apply to a 

private entity that contracts to provide temporary solid waste disposal services to a 

construction project.” Id. § 364.034(h). 
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II. Standard of Review

“This court reviews a district court’s dismissal under Federal Rule of 

Civil Procedure 12(b)(6) de novo, accepting all well-pleaded facts as true and 

viewing those facts in the light most favorable to the plaintiff.” Harris Cty. v.

MERSCORP Inc., 791 F.3d 545, 551 (5th Cir. 2015) (internal quotation marks 

omitted) (citing Toy v. Holder, 714 F.3d 881, 883 (5th Cir. 2013)). A district 

court’s Rule 12(b)(6) dismissal may be affirmed on any grounds raised below 

and supported by the record. Harris Cty., 791 F.3d at 551.

We also conduct a de novo review of a district court’s denial of summary 

judgment, applying the same standard as the district court. Robinson v. Orient 

Marine Co., 505 F.3d 364, 365 (5th Cir. 2007). Summary judgment is 

appropriate if the record evidence shows that there is no genuine issue of 

material fact and that the moving party is entitled to judgment as a matter of 

law. Id. at 366; Fed. R. Civ. P. 56(a).

III. Discussion

“Home-rule” cities in Texas, such as San Angelo, derive their authority 

from the Texas constitution. See Tex. Const. art. XI, § 5. As the Texas Supreme 

Court has consistently acknowledged, “[h]ome-rule cities have the full power 

of self-government and look to the Legislature, not for grants of power, but only 

for limitations on their powers.” S. Crushed Concrete, LLC v. City of Hous., 

398 S.W.3d 676, 678 (Tex. 2013) (citing Lower Colo. River Auth. v. City of San 

Marcos, 523 S.W.2d 641, 643 (Tex. 1975)). “An ordinance of a home-rule city 

that attempts to regulate a subject matter preempted by a state statute is 

unenforceable to the extent it conflicts with the state statute.” Dall. Merch.’s 

& Concessionaire’s Ass’n v. City of Dall., 852 S.W.2d 489, 491 (Tex. 1993). Still, 

the mere fact that the legislature has enacted a law addressing a subject does 

not mean the subject matter is entirely preempted. Id. Rather, “[a] general 

law and a city ordinance will not be held repugnant to each other if any other 
No. 15-11035

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reasonable construction leaving both in effect can be reached.” Id. Thus, “if 

the Legislature decides to preempt a subject matter normally within a homerule city’s broad powers, it must do so with ‘unmistakable clarity.’” S. Crushed 

Concrete, 398 S.W.3d. at 678 (citing In re Sanchez, 81 S.W.3d 794, 796 (Tex.

2002)). Further, “if the limitations arise by implication, the provisions of the 

law must be ‘clear and compelling to that end.’” City of Coll. Station v. Turtle 

Rock Corp., 680 S.W.2d 802, 807 (Tex. 1984) (providing that a statutory 

enumeration of powers is not to “be construed as an implied limitation on home 

rule powers”). 

In the recent case of Laredo Merchants Ass’n v. City of Laredo, a Texas 

appellate court addressed the unmistakable clarity rule in the context of a 

home-rule city ordinance that purportedly conflicted with part of the Solid 

Waste Disposal Act. No. 04-15-00610-CV, 2016 WL 4376627 (Tex. App.—San 

Antonio Aug. 17, 2016). There, the court was tasked with deciding whether 

Section 361.0961 of the Code preempted a checkout bag ordinance enacted by 

the home-rule city of Laredo that prohibited merchants in commercial 

establishments from providing paper or plastic “one-time-use” checkout bags 

to customers. Id. at *1. Section 361.0961 provides:

(a) A local government or other political subdivision may not adopt 

an ordinance, rule, or regulation to:

(1) prohibit or restrict, for solid waste management 

purposes, the sale or use of a container or package in a 

manner not authorized by state law[.]

Tex. Health & Safety Code Ann. § 361.0961. In considering this statutory 

language to be unmistakably clear, the court explained: 

By its plain language, section 361.0961 specifically addresses a 

particular subject matter—the sale or use of containers or 

packages for solid waste management purposes—and is 

unmistakably aimed at prohibiting local governments from 
No. 15-11035

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enacting certain ordinances. By prohibiting the adoption of an 

ordinance prohibiting or restricting that particular subject matter, 

section 361.0961 unmistakably limits a local government’s police 

powers[.]

Laredo Merchs., 2016 WL 4376627, at *5 (alterations, citations, and internal 

quotation marks omitted). The court concluded that the language in Section 

361.0961 clearly preempted the checkout bag ordinance. Id. at *5, *7 (“[W]e 

hold the Ordinance is inconsistent with section 361.0961 of the Act and 

therefore unenforceable as a matter of law.” (citation omitted)).

Here, Republic argues that the district court erred in similarly

concluding that the language in Section 364.034(h) of the Code conveyed the 

legislature’s clear intent to abrogate the City’s home-rule authority to enter 

into an exclusive contract for solid waste disposal services to a construction 

project. We agree. 

Neither party disputes that San Angelo is a home-rule city deriving its 

broad powers of self-government from the Texas constitution, and thus, any

limitation by the legislature on those powers must be imposed with 

unmistakable clarity. Tex. Const. art. XI, § 5; S. Crushed Concrete, 398 S.W.3d. 

at 678. It is true that Section 364.034(a) of the Code provides that a “public 

agency”4 or county may enter into an exclusive contract for solid waste disposal 

services and, further, that subsection (h) limits the scope of subsection (a) by 

indicating that it does not apply to construction projects. Tex. Health & Safety 

Code Ann. § 364.034(a),(h). However, because the City’s home-rule authority 

to enter into an exclusive contract for waste disposal services is inherent, and 

 

4 Section 364.003(3) provides: “Public agency means a district, municipality, regional 

planning commission created under Chapter 391, Local Government Code, or other political 

subdivision or state agency authorized to own and operate a solid waste collection, 

transportation, or disposal facility or system.” Tex. Health & Safety Code Ann. § 364.003(3).
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not derived from Chapter 364 or any other part of the Code,5 the language in 

subsection (h) limiting the scope of the general grant of authority conferred by 

subsection (a) is immaterial. Id. At most, the City’s inherent authority to enter 

into exclusive contracts of this kind is merely supplemented by subsection (a)’s 

language providing the same authority to public agencies and counties and

remains intact regardless of subsection (h)’s limiting language. Id. This is not 

to say that the legislature could not limit the City’s home-rule authority to 

enter into an exclusive contract for the disposal of construction waste if it chose

to do so with unmistakable clarity. But if the legislature were to limit the

City’s authority in this respect, it would do so independently of any general 

grants of authority bestowed by the Code since a home-rule city does not look 

to the Code or other legislative acts for grants of power, only for limitations on

its power. S. Crushed Concrete, 398 S.W.3d at 678. 

Moreover, as Republic points out, subsection (f)—which employs very 

different language from subsection (h)—does indicate an unmistakably clear 

legislative intent to limit the City’s home-rule authority. There, the statutory 

language clearly and unmistakably limits the City’s home-rule authority to 

restrict the rights of other entities to contract for the removal of grease, grit, 

lint, and sand trap waste. Tex. Health & Safety Code Ann. § 364.034(f) 

(“Notwithstanding the other provisions of this section . . . a county or a 

municipality [] may not restrict the right of an entity to contract with a licensed 

waste hauler for the collection and removal of domestic septage or of grease 

trap waste, grit trap waste, lint trap waste, or sand trap waste.”). Unlike the 

language in subsection (h), the language in subsection (f) operates 

 

5 Chapter 363 of the Code is short-titled the “Comprehensive Municipal Solid Waste 

Management, Resource Recovery, and Conservation Act” and also provides municipalities 

and counties with the authority to contract for solid waste disposal services. Id. §§ 363.001,

363.117(4). 
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independently of any general grant of authority conferred by the Code and 

reads similarly to the language construed as unmistakably clear legislative 

intent in Laredo Merchants. See Laredo Merchs., 2016 WL 4376627, at *5

(citing Tex. Health & Safety Code Ann. § 361.0961) (“A local government . . . 

may not adopt an ordinance . . . to . . . prohibit or restrict, for solid waste 

management purposes, the sale or use of a container or package in a manner 

not authorized by state law[.]”); S. Crushed Concrete, 398 S.W.3d at 679 

(holding that a statute stating that “a city ordinance ‘may not make unlawful 

a condition or act approved or authorized under [the Act] or the [C]ommission’s 

rules or orders’” was unmistakably clear); cf. Quick v. City of Austin, 7 S.W.3d 

109, 122–23 (Tex. 1998) (reasoning that silence will not be construed as 

unmistakably clear legislative intent to limit a home-rule city’s authority on 

an issue). In contrast, the language in subsection (h) is not unmistakably clear 

in this regard and, at best, appears to only define the limitations of the section 

itself—as opposed to the City’s limitations. See Tex. Health & Safety Code 

Ann. § 364.034(h) (“This section does not apply to a private entity that contracts

to provide temporary solid waste disposal services to a construction project.”

(emphasis added)).6

In light of these reasons, we hold that the language in Section 364.034(h)

fails to indicate with unmistakable clarity that the legislature intended to 

 

6 The record reveals that the district court and both parties—with good reason—

indicated uncertainty as to what effect, if any, subsection (e) has on subsection (h). See Tex. 

Health & Safety Code Ann. § 364.034(e). Subsection (e) provides in relevant part that 

“[n]othing in this section shall limit the authority of a public agency, including a county or a 

municipality, to enforce its grant of a franchise or contract for solid waste collection and 

transportation services within its territory.” Id. It is unclear if all or only part of subsection 

(e) is removed from the purview of subsection (h). Id. However, because the effect of 

subsection (e) on subsection (h) is not dispositive to our holding on appeal, we decline to decide 

the issue today. Id.
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restrict a home-rule city’s authority to enter into an exclusive contract for solid 

waste disposal services to a construction project. See S. Crushed Concrete, 398 

S.W.3d at 678. Accordingly, we hold that the district court erred in granting 

Texas Disposal’s Rule 12(b)(6) motion to dismiss.

IV. CONCLUSION

The part of the district court’s order granting Defendant-Appellee’s Rule 

12(b)(6) motion to dismiss is reversed and the part of the order denying as moot 

Plaintiff-Appellant’s motion for summary judgment is vacated. The case is 

remanded for further proceedings consistent with this opinion.