Opinion issued November 18, 2021

In The

Court of Appeals 

For The 

First District of Texas 

————————————

NO. 01-20-00071-CV

———————————

TITLEMAX OF TEXAS, INC., Appellant

V.

CITY OF AUSTIN AND RONDELLA HAWKINS, OFFICER, CITY OF 

AUSTIN OFFICE OF TELECOMMUNICATIONS AND REGULATORY 

AFFAIRS, IN HER OFFICIAL AND INDIVIDUAL CAPACITY, Appellees

On Appeal from the 353rd District Court1

Travis County, Texas

Trial Court Case No. D-1-GN-19-002613

1 The Texas Supreme Court transferred this appeal from the Third Court of Appeals 

to this Court pursuant to its docket equalization powers. See TEX. GOV’T CODE §

73.001.
2

O P I N I O N

Appellant, TitleMax of Texas, Inc. [“TitleMax”], sought declaratory and 

injunctive relief against appellee, the City of Austin [“the City”], relating to a city 

ordinance intended to regulate payday lending practices. The City filed a plea to the 

jurisdiction, asserting that, because the specific ordinance at issue was penal in 

nature, the civil district court lacked jurisdiction to declare it unconstitutional or to 

enjoin a prosecution filed thereunder. The trial court granted the City’s plea to the 

jurisdiction and dismissed TitleMax’s case. This appeal followed. We reverse and 

remand.

BACKGROUND

Before considering TitleMax’s issues on appeal, it is necessary to review the

ordinance at issue and documents filed in the case.

The Ordinances

The City of Austin has payday lending ordinances (“the Ordinances”), first 

enacted in 2011 and amended in 2015, which regulate credit access businesses such 

as TitleMax. The Ordinances provides as follows:

A credit services organization or credit access business that obtains for 

a consumer or advises or assists a consumer in obtaining an extension 

of consumer credit shall by the terms of the extension of consumer 

credit transaction:

(1) require payment of the total amount of the extension of 

consumer credit transaction, including any principal, interest, 
3

fees, valuable consideration, credit access business fees, and 

any other charges or costs, in four or fewer payments; and

(2) reduce by at least 25 percent per payment the total amount of 

the extension of consumer credit transaction, including any 

principal, interest, fees, valuable consideration, credit access 

business fees, and any other charges or costs.

Austin, Tex. Code § 4-12-22(D). The Ordinances further provide in relevant part:

(A) A person who violates any section of this chapter commits a Class 

C misdemeanor punishable by a fine not to exceed $500.

(B) Except as provided in Subsection (C), each day that a violation 

occurs is a separate offense.

(C) Each extension of consumer credit transaction is a separate offense 

if the extension of consumer credit transaction violates:

(1)Section 4-12-22 (Restrictions on Extensions of Consumer Credit 

Transactions)[.]

. . . .

(D)The penalties provided for in Subsection (A) are in addition to any 

other remedies available under City ordinance or state law.

(E) . . . [A] culpable mental state is not required for a violation of this 

chapter and need not be proved.

Austin, Tex. Code § 4-12-26.

In February 2019, the City audited two TitleMax stores in Austin for 

compliance and concluded that two loans (Loan No. 22289-148-35407272 and Loan 

No. 21189-1678-35508202) were made in violation of the above-referenced 

Ordinances.
4

Petition for Declaratory Relief and Application for Permanent Injunction

On May 10, 2019, TitleMax filed suit against the City, seeking a declaration 

that (1) the Ordinances do not apply to TitleMax’s activities, (2) section 4-12-22(D) 

of the Ordinances is preempted by section 393.062(b) of the Texas Finance Code, 

(3) section 4-12-26 is preempted by section 393.224 of the Texas Finance Code and 

§ 6.02 of the Texas Penal Code, and (4) the Ordinances are unconstitutionally void 

for vagueness and excessive fines. TitleMax’s petition also sought to permanently 

enjoin the City “from any attempts to seek criminal enforcement of the Ordinance 

and City Code Provisions against Plaintiff.” 

The City files Criminal Complaints Against TitleMax

On May 30, 2019, after TitleMax had filed its petition, the City filed two 

criminal complaints against TitleMax in Travis County Municipal Court, alleging 

that the two loans that it had previously identified during its February 2019 audit 

violated the section 4-12-22(D) by exceeding the number of installments permitted 

for such loans.

The Amended Petitions

On July 12, 2019, TitleMax filed its First Amended Petition, which added a 

cause of action seeking a temporary injunction to “prohibit[] the City from any 

attempts to seek criminal enforcement of the Ordinance and City Code Provisions 

against Plaintiff pending trial of this matter.”
5

On September 10, 2019, TitleMax filed its Second Amended Petition, which 

added claims against Anne Morgan, Austin’s City Attorney, and Rondella Hawkins,

of the City’s Office of Telecommunications and Regulatory Affairs.2

Pleas to the Jurisdiction

On September 20, 2019, the City filed a Plea to the Jurisdiction, alleging that, 

because the Ordinances are penal in nature, a civil equity court has no jurisdiction 

to declare them invalid or to enjoin a prosecution arising therefrom unless “(1) there 

is evidence that the statute at issue is unconstitutionally applied by a rule, policy, or 

other noncriminal means subject to a civil court’s equity powers and irreparable 

injury to property or personal rights is threatened; or (2) the enforcement of an 

unconstitutional statute threatens irreparable injury to vested property rights.”

On September 30, 2019, Hawkins also filed a Plea to the Jurisdiction, alleging 

that she acted “well within her discretion in enforcing the Ordinance against 

Plaintiff, which defeats Plaintiff’s ultra vires allegation against her and deprives [the 

trial court] of subject-matter jurisdiction.”

Both the City and Hawkins requested that the claims against them be 

dismissed; the City further requested that “because Plaintiff cannot cure the 

2 All claims against Morgan, the City Attorney, have been nonsuited and are not a 

part of this appeal.
6

[jurisdictional] defect through amendment, the City asks that [TitleMax’s live 

pleading] be dismissed without leave to amend.”

The Trial Court’s Ruling

After a two-day hearing, the trial court, on November 27, 2019, signed an 

Order Granting Pleas to the Jurisdiction, stating as follows:

Defendant City of Austin’s Plea to the Jurisdiction is GRANTED. The 

City has initiated two Municipal Court prosecutions. Plaintiff may 

argue that the underlying ordinance is unconstitutional in the criminal 

proceedings. The Court also notes that plaintiff is not a small local 

business.

Defendants Anne Morgan’s and Rondella Hawkins’s First Amendment 

Pleas to the Jurisdiction is [sic] GRANTED. Defendant Morgan is 

protected by absolute immunity. As discussed above, this Court has no 

jurisdiction to determine the meaning and validity of this penal 

ordinance on this procedural record. This Court should not, therefore, 

exercise jurisdiction to determine the scope of Defendant Hawkins’ 

authority under the ordinance and whether she acted outside the bounds 

of her granted authority.

This is a final order disposing of all claims and all parties and is 

appealable.

Findings of Fact and Conclusions of Law

Upon TitleMax’s request, the trial court made the following findings of fact, 

which are relevant to this appeal:

TitleMax of Texas, Inc. is not a small, local business. It is part of the 

TMX Finance Family of Companies, which collectively do business in 

at least 16 different states. TitleMax has nearly 275 locations across 

Texas, including nine locations in Austin.
7

The City of Austin audited two TitleMax stores in February 2019 for 

compliance with the Ordinance. Two loans were referred for 

prosecution: Loan No. 2289-1948-3540272 (“7272 loan”) and Loan 

No. 21189-1678-35508202 (“8202 Loan”). These prosecutions are 

currently pending in Municipal Court.

TitleMax has not shown that it is currently facing a threat of irreparable 

injury to vested property rights, or that such a threat is reasonably 

foreseeable.

The Supreme Court of Texas found a threat of irreparable injury to 

vested property rights when an ordinance “imposes a substantial per 

violation fine that effectively precludes small local businesses from 

testing the ban’s constitutionality in defense to a criminal prosecution.” 

City of Laredo v. Laredo Merchants Association, 550 S.W.3d 586, 592 

fn. 28 (Tex. 2018). While the Ordinance here arguably could impose 

substantial fines, TitleMax is not a small local business that is 

effectively precluded from testing the Ordinance’s constitutionality in 

defense to a criminal prosecution.

The trial court also made the following conclusions of law:

The Ordinance is a penal ordinance.

Civil courts have jurisdiction to enjoin or declare void an 

unconstitutional penal ordinance when there is a threat of irreparable 

injury to vested property rights.

Because there is no jurisdiction for the Court to hear TitleMax’s claims 

against the City, the Court declines to exercise jurisdiction to determine 

TitleMax’s ultra vires claims against Rondella Hawkins.

TitleMax timely appealed the trial court’s granting of the City’s and 

Hawkins’s pleas to the jurisdiction and judgment dismissing its claims against both.
8

PROPRIETY OF ORDER GRANTING PLEAS TO THE JURISDICTION

In its sole issue on appeal, TitleMax contends that “[t]he district court erred 

in granting the City’s and Hawkins’s pleas to the jurisdiction.” Specifically, 

TitleMax argues that, “[t]hrough the guise of a preempted and unconstitutional 

Ordinance, the City seeks to regulate TitleMax and similarly situated businesses 

despite licensing requirements and comprehensive statutory and regulatory 

requirements already imposed by the State of Texas” and that, because TitleMax has 

shown a threat of irreparable injury to vested property rights, the civil district court 

has jurisdiction to enjoin or declare void the Ordinance at issue in this case.

Standard of Review

Subject-matter jurisdiction is essential to a court’s power to decide a 

case. Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443 (Tex. 1993). 

The plaintiff bears the burden of affirmatively demonstrating that the trial court has 

subject-matter jurisdiction over its case. Heckman v. Williamson Cty., 369 S.W.3d 

137, 150 (Tex. 2012); Tex. Ass’n of Bus., 852 S.W.2d at 446. A plea to 

the jurisdiction is a dilatory plea that seeks dismissal of a case for lack of subjectmatter jurisdiction. Harris Cty. v. Sykes, 136 S.W.3d 635, 638 (Tex. 

2004); Villarreal v. Harris Cty., 226 S.W.3d 537, 541 (Tex. App.—Houston [1st 

Dist.] 2006, no pet.). We review a trial court’s ruling on a plea to the jurisdiction de 

novo. See Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Tex. Political 
9

Subdivs. Prop./Cas. Joint Self-Ins. Fund, 212 S.W.3d 320, 323 (Tex. 2006); City of 

Houston v. Vallejo, 371 S.W.3d 499, 501 (Tex. App.—Houston [1st Dist.] 2012, pet. 

denied). A defendant may use a plea to the jurisdiction to challenge whether the 

plaintiff has met its burden of alleging jurisdictional facts or to challenge the 

existence of jurisdictional facts. See Tex. Dep’t of Parks & Wildlife v. Miranda, 133 

S.W.3d 217, 226–27 (Tex. 2004).

When a plea to the jurisdiction challenges the pleadings, we determine 

whether the pleader has alleged facts that affirmatively demonstrate the trial court’s 

jurisdiction. Id. at 226. We construe the pleadings liberally in favor of the pleader, 

accept all factual allegations as true, and look to the pleader’s intent. Heckman, 369 

S.W.3d at 150. If the pleadings are insufficient, the court should afford an 

opportunity to replead if the defects are potentially curable but may dismiss if the 

pleadings affirmatively negate the existence of jurisdiction. City of Houston v. 

Guthrie, 332 S.W.3d 578, 586–87 (Tex. App.—Houston [1st Dist.] 2009, pet. 

denied).

Review of a plea challenging the existence of jurisdictional facts mirrors that 

of a matter-of-law summary-judgment motion. Mission Consol. Indep. Sch. Dist. v. 

Garcia, 372 S.W.3d 629, 635 (Tex. 2012); Miranda, 133 S.W.3d at 228 (“[T]his 

standard generally mirrors that of a summary judgment under Texas Rule of Civil 

Procedure 166a(c). . . . By requiring the [S]tate to meet the summary judgment 
10

standard of proof . . . , we protect the plaintiff[ ] from having to put on [its] case 

simply to establish jurisdiction.”) (internal quotations and citations omitted); see 

also TEX. R. CIV. P. 166a(c). “[A] court deciding a plea to the jurisdiction . . . may 

consider evidence and must do so when necessary to resolve the jurisdictional issues 

raised.” Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 555 (Tex. 2000). And a 

court may consider evidence as necessary to resolve a dispute over the jurisdictional 

facts even if the evidence “implicates both the subject[-]matter jurisdiction of the 

court and the merits of the case.” Miranda, 133 S.W.3d at 226.

We take as true all evidence favorable to the non-movant and we indulge 

every reasonable inference and resolve any doubts in the non-movant’s favor. Id. at 

228. If the defendant meets its burden to establish that the trial court lacks 

jurisdiction, the plaintiff is then required to show that there is a material fact question 

regarding the jurisdictional issue. Id. at 227–28. If the evidence raises a fact issue 

about jurisdiction, the plea cannot be granted, and a fact finder must resolve the 

issue. Id. On the other hand, if the evidence is undisputed or fails to raise a fact issue, 

the plea must be determined as a matter of law. Id. at 228; Garcia, 372 S.W.3d at 

635.

Cases Predating Texas Propane Gas Association v. City of Houston

Both parties agree that the issue in this case—whether the civil district court 

has subject-matter jurisdiction to interpret or enjoin the City’s Ordinances—is 
11

governed by the recent Texas Supreme Court decision in Texas Propane Gas 

Association v. The City of Houston, 622 S.W.3d 791 (Tex. 2021). However, the 

parties disagree with how the holding in Texas Propane should be applied in the 

current case. Before analyzing Texas Propane, it is appropriate to discuss several 

cases predating it on which the supreme court relied or distinguished in reaching its 

decision.

In City of Austin v. Austin City Cemetery Association, the cemetery 

association challenged a city ordinance prohibiting burials within certain geographic 

limits of the City of Austin. 28 S.W. 528 (Tex. 1894). The supreme court 

acknowledged that, “as a general rule, the aid of a court of equity cannot be invoked 

to enjoin criminal prosecutions” and that “anyone prosecuted under its provisions 

may have it [] declared [void], either in the original criminal action, or by suing out 

a writ of habeas corpus.” Id. at 336. But, the court noted that “[a] criminal 

prosecution is unpleasant to all people who have due respect for the law, and almost 

necessarily involves inconvenience and expense.” Id. The very existence of the

statute, as long as it remains undisturbed, “acts in terrorem, and practically 

accomplishes” its goal. Id. at 336–37. The court noted that no one would be willing 

to purchase a cemetery plot for fear that it could not be used for its intended purpose 

without violating the ordinance, thus “result[ing] in a total destruction of the value 

of [the cemetery association’s property] for the purpose for which it was acquired.” 
12

Id. at 336. Given the threat that a business in the locality might be “effectually

destroyed” by the ordinance, the court concluded that the business “should have the 

right to . . . enjoin its enforcement.” Id. at 337.

In State v. Morales, the trial court found the State’s sodomy statute 

unconstitutional and enjoined its enforcement. 869 S.W.2d 941, 942 (Tex. 1994). 

The State appealed, arguing “that civil courts under these circumstances have no 

power to grant either injunctive or declaratory relief based on the unconstitutionality 

of a criminal statute.” Id. at 943. The court agreed, noting that when a criminal 

statute is enforced and the charged party is being prosecuted or the threat of 

prosecution is imminent, the constitutionality of the criminal statute should be 

determined by courts exercising criminal jurisdiction “unless the statute is 

unconstitutional and there is the threat of irreparable injury to vested property 

rights.” Id. at 945. However, if there is no actual or threatened enforcement of the 

penal statute and no complaint of specific conduct remediable by injunction, “[a] 

civil court simply has no jurisdiction to render naked declarations of ‘rights, status 

or other legal relationships arising under a penal statute.’” Id. at 947 (citing Malone 

v. City of Hous., 278 S.W.2d 204, 206 (Tex. Civ. App.—Galveston 1955, writ ref’d 

n.r.e.)). Because no property rights were involved, and there was no prosecution or 

threatened prosecution, the supreme court held that the civil district court had no 
13

jurisdiction to declare the sodomy statute unconstitutional or to enjoin its 

enforcement. Id. at 947.

Finally, in City of Laredo v. Laredo Merchants Association, a merchants 

association sued the city seeking a declaration that an ordinance prohibiting the use 

of plastic or paper “checkout bags” was unconstitutional and enjoining its 

enforcement. 550 S.W.3d 586, 591 (Tex. 2018). The City of Houston, as amicus 

curiae, argued that the civil court lacked jurisdiction because the ordinance was 

penal in nature, not civil, and could only be challenged as a defense to a criminal 

prosecution for violating it. Id. at 592 n.28. The supreme court disagreed, noting 

that “civil courts have jurisdiction to enjoy or declare void an unconstitutional penal 

ordinance when ‘there is the threat of irreparable injury to vested property rights.’” 

Id. (quoting Morales, 869 S.W.2d at 945). The supreme court held that this “rule 

applies here, where the ordinance prohibits the complaining vendors from using 

noncompliant bags and, if they do, imposes a substantial per-violation fine that 

effectively precludes small local businesses from testing the ban’s constitutionality 

in defense to a criminal prosecution.” Id. Thus, the civil court had jurisdiction over 

the case. Id.

Texas Propane Gas Association v. City of Houston

The Texas Supreme Court has again addressed the issue of when a civil court 

may declare a penal statute unconstitutional and enjoin its enforcement in Texas
14

Propane Gas Association. v. City of Houston, 622 S.W.3d 791 (Tex. 2021). In Texas 

Propane, the gas association sued the city for a declaratory judgment that its 

ordinances regulating the liquefied petroleum gas [“LPG”] industry were 

unconstitutional because they were preempted by state law. Id. at 793. One of those 

ordinances imposed monetary penalties for a violation that ranged from $500 to 

$2,000 per day. Id. at 794. The city argued that “civil courts lack subject-matter 

jurisdiction to enforce the [gas association’s] preemption claim because the local 

regulations it challenges carry criminal penalties.” Id. at 793. The city argued that 

the case was controlled by Morales, and that City of Laredo and Austin City 

Cemetery should not be followed. Id. at 797. Specifically, the city argued that City 

of Laredo should not be followed because, in Austin City Cemetery, the ordinance 

threatened “the total destruction of the value of the challenger’s property,” whereas

in City of Laredo, the “regulations posed much less of a threat to the [challengers’]

property[.]” Id. at 798. Thus, the city would have had the civil jurisdiction limited to 

cases in which the criminal ordinance would “totally destroy” the value of the 

challenger’s property. The supreme court rejected this argument, holding that “the 

threat of prosecution and the fines imposed in [both City of Laredo and Texas 

Propane] were similar.” Id. Following City of Laredo and not Morales, the supreme 

court concluded that “just as in City of Laredo, the City’s LPG regulations threaten 

irreparable injury to vested property rights.” Id. at 798.
15

However, the supreme court did not stop after finding irreparable injury to the 

challengers’ vested property rights—the court further concluded that the gas 

association’s lawsuit was “not a ‘criminal matter’ outside a Texas civil court’s 

subject-matter jurisdiction.” Id. at 798. The court held that “to determine the 

boundary between civil and criminal jurisdiction, courts ‘must look to the essence 

of the case to determine whether the issues it entails are more substantively criminal 

or civil.’” Id. (citing Heckman, 369 S.W.3d at 146).

Disputes arising over the enforcement of statutes governed by the Texas 

Code of Criminal Procedure or as a result of or incident to a criminal 

prosecution are usually criminal law matters. But the mere existence 

of some criminal law question, characteristic, or contest will not 

transform a dispute that is fundamentally civil into a criminal law 

matter.

Id. (citations and internal punction omitted). The court noted that the “essence test” 

from Heckman “requires a holistic, common-sense analysis” and concluded that the 

essence of the gas association’s case was “a dispute over the City’s legal authority 

to regulate a specific category of commercial activity, the LPG industry.” Id. at 798.

In so holding, the supreme court stated:

Though violating the City’s LPG regulations may result in a criminal 

proceeding or monetary penalty, that fact is merely incidental to the 

legal issue TPGA raises. Accepting the City’s argument would allow a 

political subdivision to evade a preemption challenge by cloaking its 

commercial regulations with criminal features. And it would result in 

the anomaly of civil courts having jurisdiction to adjudicate the validity 

of local LPG regulations that do not carry criminal penalties but no 

jurisdiction to adjudicate local regulations that do.
16

Both Morales and City of Laredo repeated the rule that a civil court has 

jurisdiction to declare a criminal statute invalid only when irreparable 

injury to vested property rights is threatened. Viewed in the context of 

our case law as a whole, the rule is but a corollary to the ultimate test 

articulated in Heckman: looking to the essence of the case, are the 

issues presented more substantively civil or criminal? Protection of 

property rights is a core civil-law function. In a suit challenging the 

constitutionality of a criminal statute, the threat of irreparable injury to 

property rights may tip the scales in favor of the matter being a civil 

one.

The essence of this case is civil, as was the essence of City of

Laredo. Accordingly, this case is within the trial court’s subject-matter 

jurisdiction.

Id. at 799 (citations omitted).

Analysis

The City contends that we are not compelled to follow Texas Propane because 

it is distinguishable. Specifically, the City contends that Texas Propane is 

distinguishable because the “essence” of the case here is criminal, not civil. We will 

address several points the City raises to support this assertion.

First, the City argues that, because there are pending criminal proceedings, the 

“only issues in this case are the viability of TitleMax’s defenses to active criminal 

prosecution” and that “[t]he procedural posture of the criminal enforcement actions” 

makes the present case distinguishable.

We begin by noting that, at the time TitleMax filed suit in civil district court, 

there was no criminal prosecution, which was initiated after TitleMax first sought 

declaratory and injunctive relief. The issue is not whether the municipal court
17

criminal proceeding served to usurp the civil district court’s subject-matter 

jurisdiction, but whether the civil district court had subject-matter jurisdiction at the 

time TitleMax’s suit was filed. See Tex. Ass’n of Bus., 852 S.W.2d at 446 n.9 (noting 

that because standing—in terms of a party’s right to initiate a lawsuit and the trial 

court’s power to hear it—is determined when suit is filed, subsequent events do not 

deprive the court of subject-matter jurisdiction); see also Bell v. Moores, 832 S.W.2d 

749, 754 (Tex. App.—Houston [14th Dist.] 1992, writ denied) (“A trial court 

determines its jurisdiction at the time a suit is filed. At that time, the court either has 

jurisdiction or it does not.”). That there are now criminal prosecutions pending is

certainly a factor to consider in conducting the “holistic, common-sense” analysis 

required for the Texas Propane “essence” test, but the existence of subsequently 

filed prosecutions is not outcome determinative.

Instead, we must determine if “the issues presented [in the case are] more 

substantively civil or criminal’? See Texas Propane, 622 S.W.3d at 799. In Texas 

Propane, the supreme court held that “[t]he essence of this case is a dispute over the 

city’s legal authority to regulate a specific category of commercial activity, the LPG 

industry.” Id. at 798. The supreme court noted that the gas association’s substantive 

claims were (1) that a civil statute forbade the city from regulating any aspect of the 

industry without the Railroad Commission’s permission, and that (2) the city’s 

regulations were preempted by other regulations promulgated by the State pursuant 
18

to a civil statute. See id. at 799. Because adjudicating the merits of the gas 

association’s claims would turn on the scope of a civil statute, the court concluded 

that the “essence” of the case in Texas Propane was civil. Id.

In this case, TitleMax’s petition alleges that the City’s Ordinance, which 

requires repayment of the total amount of the loan transaction—including credit 

access business fees—in no more than four 25% installments, conflicts with section 

393.602(b) of the Texas Finance Code, which provides that a credit access business 

fee may be calculated “daily, biweekly, monthly, or another periodic basis.” See

TEX. FIN. CODE § 393.602(b). TitleMax also asserts that the Ordinance, by 

eliminating any mens rea, conflicts with Texas Finance Code section 393.224 and 

Texas Penal Code section 6.02(a) & (b), both of which require a showing of a 

culpable mental state. See TEX. FIN. CODE § 393.224 (imposing administrative 

penalties for “knowingly and willfully violating Chapter 393 or a rule adopted under 

it and making such violation a Class B misdemeanor) and TEX. PENAL CODE §

6.02(a), (b) (requiring culpable mental state for Class B misdemeanors); see also

TEX. FIN.CODE § 224.501 (imposing criminal penalties for violations of Chapter 393 

and classifying such violations as Class B misdemeanors). Additionally, TitleMax 

claims that the Ordinances are unconstitutionally vague and impose excessive fines.

We believe that the “essence” of TitleMax’s claims, like the challenged

ordinance in Texas Propane, is essentially civil in nature and that the imposition of 
19

the criminal monetary penalty is “merely incidental” to the issues TitleMax raises.

See Texas Propane, 622 S.W.2d at 799. Resolving TitleMax’s claims hinges on the 

proper interpretation of state civil statutes and whether those state civil statutes

preempt the actions taken by the City in enacting the Ordinances. Like the ordinance 

in Texas Propane, “[t]he ‘essence’ of this case is a dispute over the City’s legal 

authority to regulate a specific category of commercial activity.” Id. In Texas 

Propane, the supreme court rejected using the existence of criminal penalties as a 

litmus test in determining whether an action was essentially civil or criminal:

Though violating the City’s LPG regulations may result in a criminal 

proceeding or monetary penalty, that fact is merely incidental to the 

legal issue [the gas association] raises. Accepting the City’s argument 

would allow a political subdivision to evade a preemption challenge by 

cloaking its commercial regulation with criminal features. And it 

would result in the anomaly of civil courts having jurisdiction to 

adjudicate the validity of local LPG regulations that do not carry 

criminal penalties but no jurisdiction to adjudicate local regulations that 

do.

Id. 

We agree that the civil district court’s jurisdiction does not hinge upon 

whether there is a criminal penalty attached to the statute; the issue is whether the 

City had the authority to enact the statute in the first place, an issue that requires the 

interpretation of state civil statutes.

This leads us to consider the State’s second argument, i.e., that TitleMax has 

no threatened “vested property interest” justifying its invocation of the civil court’s 
20

equity jurisdiction. Specifically, the City cites Texas Propane to argue that only a 

“substantial per-violation fine that effectively preclude[s] small local businesses 

from testing the ban’s constitutionality in defense to a criminal prosecution” is a 

violation that threatens vested property rights. See id. at 797 (citing City of Laredo,

550 S.W.3d at 592, n.28). Indeed, the trial court premised its ruling on this basis, 

noting that the “plaintiff is not a small local business” and that it “has nearly 275 

locations across Texas, including nine locations in Austin.”

While it is true that Texas Propane quotes City of Laredo’s holding that, in 

that case, a “substantial per-violation fine that effectively precludes small local 

businesses from testing the ban’s constitutionality” was a threatened irreparable 

injury to vested property rights, nothing in either opinion suggests that only small 

local businesses can seek declaratory or injunctive relief from ordinances with 

statutory penalties that threaten irreparable injury to their vested property rights. To 

determine which plaintiffs have standing to bring such a challenge in civil district 

court based simply on the size of their business is nonsensical. Either the civil district 

court has jurisdiction to determine cases that threaten irreparable injury to vested 

property rights or it does not. Indeed, the ordinance involved in City of Laredo

applied to any “commercial establishment” that used plastic or paper “checkout 

bags.” 550 S.W.3d at 590. Presumably not all the merchants in the Laredo Merchants 

Association were small local businesses in that the ordinance applied to any 
21

“commercial establishment.” And, the gas association in Texas Propane was a trade 

association composed of “300 members statewide,” whose members included 

“producers, wholesalers, propane retailers, manufacturers, fabricators, distributors, 

service providers, engineers, plumbers, RV parks, associations and other involved 

in the propane industry.” 622 S.W.3d at 793 n.5. Again, nothing suggests that all 

members of the merchant’s association were “small local businesses” or that such a 

status was a lynchpin for standing.

In both City of Laredo and Texas Propane, the supreme court focused on the 

“threat of prosecution and the fines imposed.” Id. at 798. In City of Laredo, the 

challenged ordinance imposed monetary penalties of up to $2,000 per violation plus 

court costs and expenses. Id. at 796 n.23. In Texas Propane, the challenged 

ordinances imposed monetary penalties for a violation that ranged from $500 to 

$2,000 per day. Id. at 794. In both cases, the supreme court concluded that these 

“substantial per-violation” fines threatened irreparable injury to the challengers’ 

vested property rights. Similarly, in this case the challenged ordinance imposes a 

fine not to exceed $500 and provides that each day that a violation occurs is a 

separate offense. Austin, Tex. Code § 4-12-26. Thus, following both City of Laredo

and Texas Propane, we conclude that TitleMax has shown a threatened irreparable 

injury to its vested property rights. 
22

In sum, we conclude that City of Laredo and Texas Propane are 

indistinguishable. Because TitleMax has shown a threatened irreparable injury to its 

vested property rights and because the “essence” of its claims is not a “criminal law 

matter” outside a Texas civil court’s subject-matter jurisdiction, we hold that the trial 

court erred in granting the City’s Plea to the Jurisdiction and dismissing TitleMax’s 

claims.

CONCLUSION

Because the civil district court has subject-matter jurisdiction, we reverse the 

trial court’s order dismissing TitleMax’s claims and remand the case for further 

proceedings.

Sherry Radack

Chief Justice

Panel consists of Chief Justice Radack and Justices Rivas-Molloy and Guerra.