Court Opinion

ID: 4640049
Source: CourtListenerOpinion
Date Created: 2020-12-07 08:19:25.157305+00
Date Added: 2024-06-11T08:00:10.843222
License: Public Domain

Reversed and Rendered and Opinion filed December 3, 2020.

                                         In The

                      Fourteenth Court of Appeals

                                NO. 14-19-00989-CV

                   SYLVESTER TURNER, ET AL., Appellants

                                             V.
                  JAMES ROBERT JONES, ET AL., Appellees

                     On Appeal from the 281st District Court
                             Harris County, Texas
                       Trial Court Cause No. 2019-76931

                                      OPINION

      In this interlocutory appeal from an order denying a plea to the jurisdiction,
the threshold question is whether the plaintiffs have standing to challenge an alleged
level of underfunding within the city’s budget. Because the plaintiffs have neither
asserted a particularized injury nor sought to enjoin the illegal expenditure of public
funds, we conclude that the plaintiffs lack standing to assert their challenge. We
therefore reverse the trial court’s order and render judgment dismissing the
plaintiffs’ case for want of jurisdiction.
                                 BACKGROUND

      The Dedicated Drainage and Street Renewal Fund (the “Drainage Fund”) was
established to change the way that the city of Houston finances its public drainage
projects. The city’s former practice was to issue bonds and incur new debts, but with
the initiation of the Drainage Fund, the city has shifted to a “pay-as-you go source
of funding” that relies on developer impact fees, drainage charges, third party grants,
and property taxes.

      This last source of funding is the focus of the current dispute. Under the terms
of the city charter, the city council must approve an annual budget that allocates to
the Drainage Fund “an amount equivalent to proceeds from $0.118 of the City’s ad
valorem tax levy minus an amount equivalent to debt service for drainage and streets
for any outstanding bonds or notes issued prior to December 31, 2011, and bonds or
notes issued to refund them.”

      For Fiscal Year 2020, the city council determined that this charter provision
required an allocation of approximately $47 million in property tax revenues to the
Drainage Fund. The city council approved a budget with that allocation.

      That budget prompted a challenge from the two plaintiffs below, both of
whom are property owners residing within the city’s limits (the “Residents”).
Relying on the same charter provision but apparently using a different numerical
calculation, the Residents believed that the city council should have budgeted an
allocation of more than $91 million in property tax revenues to the Drainage Fund.
The Residents sued the mayor and members of city council (collectively, the
“Officials”), seeking a declaration that the Officials must fund the Drainage Fund
according to the formula stated in the charter. The Residents also sought injunctive
and mandamus relief against the Officials, insofar as the Officials were allegedly
underfunding the Drainage Fund.
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      The Officials challenged the Residents’ standing in their original answer. The
Officials also filed a separate plea to the jurisdiction, in which they argued that they
had not underfunded the Drainage Fund and that the Residents had failed to plead
an ultra vires claim.

      The trial court denied the plea to the jurisdiction, and the Officials brought
this interlocutory appeal raising several issues in their brief. We focus on just the
standing issue because it is dispositive.

                                     STANDING

      Standing is a prerequisite to maintaining a suit because, without it, the trial
court is deprived of subject-matter jurisdiction. See Tex. Ass’n of Bus. v. Tex. Air
Control Bd., 852 S.W.2d 440, 444–45 (Tex. 1993). We are “duty-bound” to
determine whether standing exists, even when that issue has not been questioned by
any of the parties. See Garcia v. City of Willis, 593 S.W.3d 201, 206 (Tex. 2019).
Standing has been questioned here, and our review of that question is de novo. See
Farmers Tex. Cnty. Mutual Ins. Co. v. Beasley, 598 S.W.3d 237, 240 (Tex. 2020).

      Unless standing is conferred by statute, a plaintiff must usually show that he
has suffered a particularized injury distinct from the general public. See Bland Indep.
Sch. Dist. v. Blue, 34 S.W.3d 547, 555–56 (Tex. 2000). The Residents did not plead
a particularized injury in the trial court, and during oral argument in our court, they
conceded that they do not have a particularized injury.

      Nevertheless, the Residents assert that they have standing under a narrow,
judicially-created exception to the particularized-injury rule. This exception
provides that a taxpayer may sue “to enjoin the illegal expenditure of public funds,
and need not demonstrate a particularized injury.” See Williams v. Lara, 52 S.W.3d
171, 179 (Tex. 2001). Implicit in this exception are two requirements: first, that the

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plaintiff is a taxpayer; and second, that public funds are expended on the allegedly
illegal activity. Id.

       As the plaintiffs below, the Residents had the burden of alleging facts that
satisfied these two requirements, which are necessary to affirmatively demonstrate
that the trial court has subject-matter jurisdiction over their case. See Tex. Dep’t of
Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004).

       There is no dispute that the Residents met their burden with regards to the first
requirement. They alleged that they own real property in the city of Houston and that
they pay ad valorem taxes. Thus, the Residents have sufficiently pleaded that they
are taxpayers.

       But the Residents have not satisfied their burden with regards to the second
requirement because they have not sought to enjoin the expenditure of any funds at
all. Rather, they have only sought to enjoin the Officials from allegedly
underfunding the Drainage Fund.

       In an attempt to recharacterize their case, the Residents argue that they seek
to enjoin the expenditure of public funds that have been illegally diverted away from
the Drainage Fund and spent on services “other than drainage and streets.” This
argument fails because the Residents have not identified any specific expenditures
that should be enjoined, or even whether the expenditures are illegal, which was their
burden. See Andrade v. Venable, 372 S.W.3d 134, 138 (Tex. 2012) (per curiam) (“In
order to establish taxpayer standing a plaintiff must plead facts showing that the
government is actually spending money on the allegedly illegal activity—not on a
related legal activity.”).

       The Residents also argue that they have taxpayer standing under Hendee v.
Dewhurst, 228 S.W.3d 354 (Tex. App.—Austin 2007, pet. denied). But that case is

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distinguishable on the facts because the plaintiffs there sought to enjoin the
expenditure of public funds that violated a constitutional cap on appropriations. Id.
at 359. The Residents have not similarly sought to enjoin the expenditure of any
public funds, which is an essential requirement of taxpayer standing.

      The Residents further rely on Turner v. Robinson, 534 S.W.3d 115 (Tex.
App.—Houston [14th Dist.] 2017, pet. denied). But that case is also distinguishable
because the plaintiffs there sought to enjoin the expenditure of public funds that were
illegally collected as taxes. Id. at 124. By contrast, the thrust of the Residents’ case
is that there should be more expenditures, not less.

       Underfunding can provide a basis for standing when the plaintiff has pleaded
that the underfunding has resulted in a particularized injury. E.g., Hunt v. Bass, 664
S.W.2d 323, 324 (Tex. 1984) (concluding that the plaintiffs had standing to
challenge a county’s failure to appropriate sufficient funds to operate the local courts
because the plaintiffs had other cases pending in the courts that were being delayed
on account of the underfunding). But we are not aware of any comparable authority
that recognizes taxpayer standing when the plaintiff has complained of underfunding
without a particularized injury. Because taxpayer standing is a “narrow” exception
to the particularized-injury rule and the Residents’ underfunding claim does not
satisfy its second requirement, we conclude that the Residents have not established
that they have taxpayer standing in this case. Cf. Teneyuca v. Bexar Cnty. Performing
Arts Ctr. Found., No. 04-11-00488-CV, 2012 WL 2053534, at *3 (Tex. App.—San
Antonio June 6, 2012, no pet.) (mem. op.) (declining to extend taxpayer standing in
a case where the plaintiffs paid “visitor” taxes because taxpayer standing is a limited
exception to the particularized-injury rule and any extension “is best left to the Texas
Supreme Court”).

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      When standing has not been alleged or shown, the plaintiff must be given an
opportunity to amend his pleadings and develop a record relating to jurisdiction,
unless the pleadings and record otherwise demonstrate an incurable jurisdictional
defect. See RSL Funding, LLC v. Pippins, 499 S.W.3d 423, 429 (Tex. 2016) (per
curiam). In this case, there are no jurisdictional facts that the Residents could plead
if given the opportunity to do so because the Residents have disclaimed a
particularized injury and because the exception for taxpayer standing does not
extend to the type of claim that the Residents have asserted. Therefore, the
appropriate remedy is dismissal.

                                   CONCLUSION

      The trial court’s order denying the Officials’ plea to the jurisdiction is reversed
and judgment is rendered dismissing the Residents’ case for want of jurisdiction.

                                        /s/       Tracy Christopher
                                                  Justice

Panel consists of Justices Christopher, Wise, and Hassan.

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