JIM MATTOX Attorney General 

# The Attorney General of Texas

Dr,cember

23, 1985

Suprrme Court Building P. 0. BOX 12548 Austin, TX. 79711- 2548 512/475.2501 -Telex 9101874-1367 Telecopier 5121475-0268 Honorable BillMesser, Chairman CalendarsCommittee Texas House of Representatives P. 0. Box 2910 Austin, Texas 78769 OpinionNo. JM-404

Re: Immmity of public officials under the Texas Free Enterprise and AntitrustAct of 1983

714Jackson. Suite 700 Dallas, TX. 75202-4503 2141742-8944 Dear Reoresentativ,e Messer:

4824Alberta Ave.. Suit0 160 El Paso. TX. 799012793 915/5333464 You have rquested our opinion regarding the extent of the immunity granted I:O officers and employees of governmental entities acting in their cfficial capacityunder the Texas Free Enterprise and AntitrustAct of 1383.

1001 Texas. Suite 700 Houstm, TX. 77W2G3111 71312255880

606 Broadway. Suite 312 Lubbock, TX. 79401-3479 806/747-5238

43~9N. Tenth, Suite 6 McAlle”, TX. 78501-1685 512,882-4547

2w Main Plaza, Suite 400 sari Antonio, TX. 78205-2797 51212254191

An Equal OppOrtUnitYI Affirmative Action EmploW The Texas Free Enterprise and AntitrustAct of 1983 [hereinafter the "Act"] broitdly prohibits anticompetitive conduct affecting trade and conmerc:ein the state of Texas. Tex. Bus. & Conrm.Code $15.05(a)-(d). There are civil and criminal sanctions for violating theAct's prohibit:lons, and persons injuredby a violationmay sue for injunctive relied'and damages. Id. 9915.20, 15.21, 15.22. Treble damages may be awarded if theunlawful conduct was willful or flagrant. Id. IX.21. The purpose of the Act is to "maintain and promote econzc competitionwithin this State." Id. $15.04. - Section 15.21(a)(l)of theAct provides in part:

Any person or governmen tal entity, including the State of Texas and any of its political subdivisioms or tax-supported institutions, whose business or propertyhas been injuredby reason of any conduct declared unlawful in Subsection (a), (b), or (c) of Section 15.05 of this Act may sue any person, other than a municipal corporation, in district court in any county of this state.

. . . (Emphasisadded).

The term "person" : Lsdefined in section 15.03(3)which provides:

The tlerm'person'means a natural person, proprietombip, partnership, corporation, municipal corpora::ion.

association, or any other public or private group, however organized, but does not

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include the State of Texas, its departments, and its administrativ{agencies. (Emphasisadded).
Thus, theAct's definitionof "pcrsoa" expresslyexcludes the State of Texas, its departments, and its administrative agencies, while municipal corporationsare expressly excepted from suit under section 15.21(a)(l). See alsoTex. Bus. & Comm. Code §§15.20, 15.22 (enforcement suitsagainst "any person, other than a municipal corporation").

The term %uniciual coruoration'lis not defined in the Act. However, the general meaning'of the term includes other political subdivisions organized under state law. See Welch V. State, 148 S.W.2d 876 (Tex.Civ. App. -.Dallas 1941,wrrref'd); see also State V. Texas Municipal Power Agency, 565 S.W.2d 258 (Tax. Civ. Apr Houston tlstDist.1 1978, D'D writ). In addition, the leaislature is authorized to create municipal corporations other than those set out in the constitution,such as counties, cities or school districts, or those which are authorized under special provisions of the constitution, such as water districts or flood control districts. See Davis -- V. City of Lubbock, 326 S.W.2d 699 (Tex. 1959). Accordingly, we conclude that the immunity granted tomunicipal corporationsunder the Act extends to all politic:L:l subdivisionsorganizedunder the constitution and statutesof this state.

The Act does not aidress the immunity of state and local officials from personal liability under its provisions. Official immunity is a common law doctrine developed by the courts so that public officers could carrg out discretionary duties without fear of personal liability for m3stak.a judgment. Campbell V. Jones, 264 S.W.2d 425 (Tex. 1954); R;~:;ns V. Simpson, 50 Tex. 495 (1878). The doctrine of official immu~~:y is certainlynot absolute. It does not bar a suit to enjoin a public official'sunauthorized act. See Texas -- Highway CommissionV. Texas Association of Steel Importers, 372 S.W.2d 525 (Tex. 1963);Bullock v: Hardin. 578 S.W.2d 550 (Tex. Civ. App. - Austin 1979. writ ref'd n7c.e.). Nor does it aoolv to ministerial functions. -RainsV. Simpsc~n,5d~Tex.~ 495 (1878);~'see

alsoWorsham V. Votgsberger, 129 S.W. 157 (T'ex. Civ.App. 1910,no writ).
Judges, including justices of the peace, are immune from personal liability for all acts cr omissions arising in the course of a judicial proceezg over w'hichthey have jurisdiction. Turner V. Pruitt, 342 S.W.2d 422 (Tex. 1961). Cf. Pulliam V. Allen, 104 S.Ct. 1970 (1984); Stump V. Spar=, 435u.s. 349 (1978) (state judges enjoy absolute immunity from damage liability in civil rights suits under 42 U.S.C. section 19f'3 but may be required to pay attorney fees in successful suits for injunctiverelief). Only when a judge clearly actswithout jurisdictionnay he be held personally liable in a damage suitunder the act. TurnerV. Pruitt,supra. Similarly, legislators, -- includingcity council members , are entitled to absolute immunity from

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civil damage suits for am:tstaken in a legislative capacity. See Affiliated Capital Corp. vL City of Houston, 735 F.Zd 1555, 1568 (5th Cir. 1984). Other officerswho perform discretionary functions have only a qualified immunity~E~:om suit forpersonal liability. HarlowV. Fitzgerald, 457 U.S. 800 #:1982)(presidential aides); Campbell V. Jones, 264 S.W.2d 425 (Tm:. 1954) (school trustees); Sanders State Bank V. Hawkins, 142 S.W. 84 (Tex. Civ. App. - Texarkana 1911, no writ) (State Commissioner #ofInsurance and Banking). Their discretionary functionsare describedas "quasi-judicial"functions.

The Texas courts apply a different test from the federal courts to determinewhether an of,E:Lcer's qualified immunityprotectshim from personal liability. A quasi-judicial officer who acts within his legal authority is not lirble for daamges, no matter what his motive is. Sanders State Bankv.Jawkins, supra. Texas courtswill findhim liable for mistaken judgmmt or unauthorized acts only when he has acted willfully or malici~msly. Campbell V. Highland Park Independent School District, Jones, supra; Stein V. 540 S.W.2d 551 (Tex. Civ. APP. - Texarkana 1976) a,ff'd 574 S.W.2d 807 (Tax. Civ. App. - Texarkana 1978, writ di&;L);anders State Bank V. Hawkins. supra. As other Texas courts have formulated this test, a quasi-judicial officer is entitled to immunity as long as actions taken in his official capacity are in j:oodfaith. AugustineV. Nusom, 671 S.W.2d 112 (Tex.App. - Houston l:1.4th Dist.] 1984,writ ref'd n.r.e); Baker V. Story, 621 S.W.2d 639 (:Tax. App. - San Antonio 1981, writ a n.r.e.); Morris v. Nowotq, 323 S.W.2d 301 (Tex. Civ. App. - Austin 1959, writ ref'd n.r.e.), cert. denied 361 U.S. 889, 361 U.S. 921 (1959). The Texas test can be characterized as a subjective test, because the officer'smotivation forhis unauthorized conduct controls whether or not he is inmum from suit for damages.

The United States Su~lremeCourt has developed an objective test for determining the qualj.fiedimmunity of officers. In Harlow V. Fitzgerald,457U.S. 800 (,L982), the courtheld that

government offj,cials performing discretionary functions, generally are shielded from liability for civil damagw insofar as their conduct does not violate clearly established statutory or constitutionalrQ:hts ofwhich a reasonableperson would have known,

457 U.S. at 818. Under th:lstest, the officer's immunitydependsupon what "a reasonablepersonvould have known," and subjectiveintent for the action is not considencd.

Prior decisions had developed a "good faith" standard, an affirmative defense which the defendant official had to plead. The "good faith" standard com:isted of both an objective and subjective

p. 1851HonorableBillMesser - PaE;e, 4 (JM-404)

aspect. 457 U.S. at 815; me Wood V. Strickland,420 U.S. 308 (1975). --- Qualified imsamityvould be:defeated if the official

knew or reasonaLLy should have known that the action he took within his sphere of official responsibility would violate the constitutional rights of the I:plaintiff],z if he took the action with the-ealicious intention to cause a deprivation of constitutioual rights or other injury.

. . . (Emphasisin original).

457 U.S. at 815 (quoting Wood V. Strickland). The Harlow court rejected the subjective element of the good faith defense because it raised a fact questionwhich couldnot be resolved on suaxnary judgment and thus frustrated the court's policy that insubstantial claims shouldnot proceed to trial. Therefore, inBarlow the court abandoned the subjective element of the two part test for official immunity in favor of the test quotetlabove, which relies "on the objective reasonableness of an offi~:ial'sconduct, as measured by clearly established law.

. . ." 457U.S. at 818.

The Texas courtshave applied themalice test for decades, andwe believe they would apply Lt to questions of official immunity from civil suits under the Texas Free Enterprise and Antitrust Act. See. s, AugustineV. Nusom, iiw Sanders State BankV. Hawkins,v Wright v. Jones, 38 S.W. 249 (Tex. Civ. App. 1896, writ ref d). During the time the United States Supreme Court applied the two part "good faith" test for official immunity,the Texas courts continued to apply the traditionaltestbased onmalicious orwillful conduct. See Baker V. Stop, supra; St'ainV. Highland Park Independent School District,supra; see also%lcedo V. Diax, 647 S.W.2d 51 (Tex.App. - El Paso 1983).writ ref'd ;r.e. in part, granted in part, 650 S.W.2d 67 (Tex. 1983), rev'd 659 lj.W.2d30 (Tex. 1983). The Texas courts have adhered to the long--establishedTexas common law test for qualified official immunity andhave not adoptedor been influencedby recent developments in the :Eederalcommon law test. In our opinion, the Texas courts would apply the traditional malice standard to determine official immunit.]~ from liability for civil suits under the Texas Free Enterprise and AntitrustAct.

The legislature, in ou'copinion, did not change the common law rule on official immunity by enacting the antitrust law. Section 15.04doesprovide:

The purpose cf this Act is to maintain and promote economic competitionin trade and commerce occurring wholly or partly within the State of Texas and to provide thebenefits of that competition to consumers in the state. The provisioas of

p. 1852HonorableBillMesser - PaL;e5 (JM-404)

this Act shall be construed to accomplish this purpose and shah be construed in harmony with federal judicia:: interpretations of comparable federal antitrur~,statutes to the extent consistentwith thirrpurpose. (Emphasisadded).

The Fifth Circuit has applied the Barlow objective.test in a lawsuit brought under the Sherman Act. SeeAffiliated Capital Corp. V. City of Houston, 735 F.2d 1555 (5th C% 1984). In followingBarlow, the Fifth Circuit did not interpret any word or provision of the federal antitrust statute. It instead applied a common law concept which exists outside of any statute to determinewhether it could exercise judicial power over a partLcularpublic officer. Cf. Director of the Department of Agriculture1~ Printing IndustriesAssociationof Texas, 600 S.W.2d 264 (Tex. 1980) (sovereignimmuuity from injunction suit). The Harlow standard defines the federal court's power to hold quasi-judicial officers pec:sonallyliable in damages for mistakes of law; it does not construe the language of the Sherman Act. Section 15.04 does not require the Texas courts to adopt the Fifth Circuit ruling on official immuni~:yin Affiliated Capital Corp. V. City of Houston.

The legislature has nade the state liable for actual damages, court costs and attorney fees adjudged against a state officer or employee sued for an act ,XComission in the scope of his office or employmentif
(1) the damaS,es arise out of a cause of action for negligence. ,Eccepta willful or wrongful act
or an act of groeznegligence; or
(2) the damages arise out of a cause of action for deprivationcf a right,privilege, or immunity securedby the constitutionor laws of this state
or the United States, exceptwhen the court in its udgment or the jury in itsverdict finds that the officer, contrack, or employee acted in bad faith. (Emphasis-added).

V.T.C.S. art. 6252-26, 91. The legislature has used the subjective test for official immunity to separate the officerswhose damages and legal expenses the state will pay from those whom it will leave to their own resources. It is unlikely that the legislature which finances the defense of public officers for acts of ordinary negligence or good faithv:.olations of legal rightswould also intend
an officer tobe civilly liableunder the antitrustact ifhis conduct violated statutorv riahts "of which a reasonable nerson would have known." Harlow ;. Fitsger,ald,457 U.S. at 818.~ See also V.T.C.S. art. 6252-19b, 02(a) (policE1 subdivisionsmay pay actual damages,

p. 1853HonorableBillMesser - Page 6 (JM-404)

court costs, and attorney jieesin negligence suits against officers). In our opinion, the Texas 'P:eee Enterprise and Antitrust Act does not change the Texas common law standard for qualified immunity of public officials. Under this st~ldard, public officials will be personally liable for quasi-judicials.ctionsin violation of the Act if they act willfully ormaliciously.

SUMMARY

Judges and legislatorsare entitled to absolute immunity from civil damage suits under the Texas Free Enterprise and Antitrust Act of 1983, codified as sectllms 15.01 through 15.26 of the Texas Business ~vi CoarmerceCode. No such suit may be maintained against a judge or legislator for acts or violations taken as part of the judicial or lg!g;islativeprocess. Executive officials with discretionary duties are entitled to qualified immmity from civil damage suits under the Texas antitrust laws. Such public officials are ilmune from such suits for unauthorizedactswcthin the scope of their official duties unless theghave actedwillfully ormaliciously. Any public officialmay be sued to enjoin unauthorizedacts or omissions.

JIM MATTOX Attorney General of Texas

JACXHIGHTOWER FirstAssistantAttorney Gesaral

NARY KELLER ExecutiveAssistantAttorncr General

ROBERT GRAY SpecialAssistantAttorney 'Zenera

RICX GILPIN Chairman,Opinion Committee
Preparedby SusanL. Garrism AssistantAttorney General

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