Court Opinion

ID: 4127692
Source: CourtListenerOpinion
Date Created: 2017-02-18 00:32:13.113521+00
Date Added: 2024-06-11T14:32:16.930847
License: Public Domain

GREG
                                             0
                             ATTORNEY GENERAL OF TEXAS
                                                   ABBOTT

                                             April 28, 2014

The Honorable Linda Harper-Brown                   Opinion No. GA-1054
Chair, Committee on Government
   Efficiency and Reform                           Re: Whether state statutes that prohibit or
Texas House of Representatives                     void certain restrictive covenants affect
Post Office Box 2910                               covenants existing at the time the statutes are
Austin, Texas 78768-2910                           enacted (RQ-1161-GA)

Dear Representative Harper-Brown:

        You ask three questions concerning the Legislature's authority to enact legislation that
may impact property owners' association ("POA") covenants. 1 As background, you explain that
the Eighty-secopd Legislature enacted Property Code section 202.010, which, in relevant part,
prohibits a POA from including or enforcing "a provision in a dedicatory instrument that
prohibits or restricts a property owner from installing a solar energy device." TEX. PROP. CoDE
ANN. § 202.010(b) (West Supp. 2013); Request Letter at 1. You note that "[q]uestions have
been raised regarding what effect legislation like this has on existing POA covenants." Request
Letter at 1. Your request, however, does not ask specifically about this statute but instead
questions generally the effect that new legislation could have on existing contracts. See id.

         You first ask whether POA covenants "receive protection under various portions of both
state and federal constitutions ... , and if so [whether] the Texas Legislature [must] afford POAs
the same or greater protection than is given to these fundamental civil rights by the U.S . Supreme
Court." Id. Your third question relatedly asks whether article I, section 29 of the Texas
Constitution prohibits the Legislature from "pass[ing] legislation for the health, safety and
welfare of the public" when doing so interferes with "areas that are protected by the Bill of
Rights, specifically in reference to any legislation that may interfere with Article I, Section 16."
ld. at 2. Because these questions both concern the constitutional prohibition on the impairment
of contracts, we will answer them together.

      POA covenants are treated as "contracts between parties." Ostrowski v. Ivanhoe Prop.
Owners Improvement Ass'n, 38 S.W.3d 248, 252 (Tex. App.-Texarkana 2001, pet. denied).

        1
         See Letter from Hon. Linda Harper-Brown, House Comm. on Gov't Efficiency & Reform, to Hon. Greg
Abbott, Tex. Att'y Gen. at 1-2 (Oct. 28, 2013), http://www.texasattomeygeneral.gov/opin ("Request Letter").
The Honorable Linda Harper-Brown - Page 2             (GA-1054)

Article I section 16 of the Texas Constitution provides that "[n]o . . . law impairing the
obligation f contracts, shall be made. TEX. CONST. art. I, § 16; see also U.S. CaNST. art. I,
§ 10 cl. 1 ("No State sh all ... pass any . .. Law impairing the Obligation of Contracts"). Article
I, section 29 of lhe Texas Constitution further provides:

                To guard against transgressions of          the high powers herein
                delegated, we declare that everything      in this "Bill of Rights" is
                excepted out of the general powers         of government, and shall
                forever remain inviolate, and all laws     contrary thereto, or to the
                following provisions, shall be void.

TEX. CONST. art. I,§ 29.

        Both the Texas Supreme Court and the United States Supreme Court have determined
that the constitutional rule against impairment of contracts "may yield to statutes which are
necessary to safeguard the public safety and welfare." Barshop v. Medina Cnty. Underground
Water Conservation Dist., 925 S.W.2d 618, 635 (Tex. 1996) (upholding the Edwards Aquifer
Act against a challenge that it violated the Contract Clause of the Texas Constitution); Allied
Structural Steel Co. v. Spannaus, 438 U.S. 234, 241 (1978) ("[T]he Contract Clause does not
operate to obliterate the police power of the States."). In order to withstand a challenge under
the Contract Clause, a state law that substantially impairs a contractual relationship must serve a
"significant and legitimate public purpose," and the adjustment of the rights and responsibilities
of the contracting parties must be based upon reasonable conditions and of a character
appropriate to the public purpose justifying the adjustment. Liberty Mut. Ins. Co. v. Tex. Dep 't of
Ins., 187 S.W.3d 808, 824-25 (Tex. App.-Austin 2006, pet. denied). A court reviewing the
constitutionality of a statute challenged under the Contract Clause would begin with the
presumption that the statute is valid and that the Legislature has not acted unreasonably or
arbitrarily. See HL Farm C01p. v. Self, 877 S.W.2d 288, 290 (Tex. 1994). Whether any specific
statute can withstand this scrutiny such that it could lawfully affect the rights established by a
particular POA covenant will be for a court to determine.

        In your second question you ask whether "Texas Property Code 202.006 [is] a bill of
attainder" such that it is unconstitutional under "state and federal constitutions." Request Letter
at 1. Section 202.006 of the Property Code provides:

                (a) A property owners' association shall file all dedicatory
                    instruments in the real property records of each county in
                    which the property to which the dedicatory instruments relate
                    is located.

                (b) A dedicatory instrument has no effect until the instrument is
                    filed in accordance with this section.

TEX. PROP. CODE ANN. § 202.006 (West Supp. 2013). Both the Texas and United States
Constitutions provide that "[n]o bill of attainder ... shall be made" by the Legislature. TEX.
CONST. art. I, § 16; see U.S. CONST. art. I, § 9, cl. 3 ("No bill of attainder . . . shall be passed.").
The Honorable Linda Harper-Brown - Page 3          (GA-1054)

Texas and federal courts define a bill of attainder as "a legislative act that applies to a named
individual or to an easily identified member of a group in such a way as to inflict punishment
without a trial." Johnson v. Davis, 178 S.W.3d 230, 240 (Tex. App.-Houston [14th Dist.]
2005, pet. denied) (citing United States v. Lovett, 328 U.S. 303,315 (1946)).

        "The proscription against bills of attainder reaches only statutes that inflict punishment
on the specified individual or group." Selective Serv. Sys. v. Minn. Pub. Interest Research Grp.,
468 U.S. 841, 851 (1984). Three inquiries are used to determine whether a statute inflicts
punishment: "(1) whether the challenged statute falls within the historical meaning of legislative
punishment; (2) whether the statute, viewed in terms of the type and severity of burdens
imposed, reasonably can be said to further nonpunitive legislative purposes; and (3) whether the
legislative record evinces a congressional intent to punish." In re Commitment of Miller, 262
S.W.3d 877, 888 (Tex. App.-Beaumont 2008, pet. denied) (cert. denied) (quoting Selective
Serv. Sys., 468 U.S. at 852) (citation and internal quotation marks omitted).

        With regard to the first inquiry, courts have recognized that a burden placed on citizens
by a governmental authority does not necessarily equate to punishment. See Nixon v. Adm 'r of
Gen. Servs., 433 U.S. 425, 470 (1977). Historically, the list of punishments forbidden by the Bill
of Attainder Clause has been limited to imprisonment, banishment, punitive confiscation of
property and legislative bars to participation by individuals or groups in specific employments or
professions. Selective Serv. Sys., 468 U.S. at 852. Section 202.006 imposes none of the burdens
historically associated with "punishment." With regard to the second inquiry, the burden
imposed by section 202.006 requires property owners' associations to file all dedicatory
instruments with the county in order to make them effective. TEX. PROP. CODE ANN.
§ 202.006(a) (West Supp. 2013). A court would likely conclude that this burden on property
owners' associations furthers a nonpunitive purpose of ensuring that purchasers of real property
have notice of the legal restrictions placed on that property prior to purchasing. Third, you have
not directed us to, and we have not independently found, any suggestion that the Legislature
intended to punish property owners' associations by enactment of section 202.006. Because it
appears that none of the three punishment inquiries are met, a court would likely conclude that
Texas Property Code section 202.006 is not a bill of attainder prohibited by the Texas or United
States Constitutions.
The Honorable Linda Harper-Brown - Page 4        (GA-1054)

                                     SUMMARY

                      Property owners' association covenants are treated as
              contracts between parties under Texas law and are therefore
              protected by the Contract Clauses of both the Texas and United
              States Constitutions. Both the Texas Supreme Court and the
              United States Supreme Court have determined that the
              constitutional rule against impairment of contracts may yield to
              statutes that serve a significant and legitimate public purpose.

                      A court would likely conclude that Property Code section
              202.006 is not a bill of attainder prohibited by the Texas or United
              States Constitutions.

                                            Very truly yours,

                                                       ~Q:c;j'
                                                      ABBOTT
                                            Attorney General of Texas

DANIEL T. HODGE
First Assistant Attorney General

JAMES D. BLACKLOCK
Deputy Attorney General for Legal Counsel

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

Virginia K. Hoelscher
Assistant Attorney General, Opinion Committee