Court Opinion

ID: 9699741
Source: CourtListenerOpinion
Date Created: 2023-08-25 20:49:51.117255+00
Date Added: 2024-06-11T18:20:56.496349
License: Public Domain

Justice ENOCH,
dissenting.
Surely, when the State authorizes its various agencies to contract with private parties, it intends those contracts to be binding and enforceable. Otherwise, of course, there is no contract.1 Thus, by authorizing its agencies to enter into contracts, the State waives its immunity from both liability and suit for breach of contract claims.2 There is no other sensible way to read statutes permitting state agencies to contract. This reasoning is every bit as apt as it was in Kerrville State Hospital v. Fernandez and City of La Porte v. Barfield, where we concluded that sovereign immunity has been waived for state and municipal entities with respect to the Anti Retaliation Law of the Texas Labor Code.3
But in Federal Sign v. Texas Southern University, the Court presumed sovereign immunity had not been waived and “deferred” to the Legislature’s inaction with respect to sovereign immunity in breach of contract suits.4 Now, the Court chooses to further defer to the Legislature’s enactment of chapter 2260 of the Government Code in declining to recognize a waiver of sovereign immunity.5
Chapter 2260 itself says only that it doesn’t waive sovereign immunity;6 it says nothing about the circumstances in which immunity would be waived. By its own terms, the statute only applies to suits in which legislative permission to sue under chapter 107 of the Civil Practice and Remedies Code is required.7 But no such permission is required when immunity has already been waived. The Court concludes there is no waiver here because chapter 2260 forecloses a waiver-by-conduct theory.8 But the waiver occurred long before Little-Tex and DalMac performed under their contracts. The waiver occurred when the Legislature authorized the General Services Commission and Texas A & M University to enter into con*603tracts with private parties that were intended to be binding.9
While the State can offer an administrative avenue for resolving breach of contract claims, it cannot by doing so deprive a private party of the right to sue for breach. Under chapter 2260, the State still need not respond at all to its contractual obligations if it is required to pay more than $250,000. But if the State can accept property or labor without being made to pay under its contract, there may be a taking or a due process violation under the state or federal constitution.10 The Court rejects DalMac’s takings claim on the grounds that this is purely a contract dispute.11 But it is no answer to say there is no taking because a private party consents to the delivery of goods or services by voluntarily contracting with a state entity.12 DalMae only built a multimillion dollar building for Texas A & M because it expected to be paid under its contract. It defies logic to contend that DalMae continues to consent to Texas A & M retaining the benefits of its labor if Texas A & M refuses to pay and DalMae cannot compel the University to honor its contract.
True, many cases state that a takings claim is inappropriate to determine the rights of the parties created by contract.13 But these statements are made in two contexts: where the plaintiff alleges a takings claim as an alternative to a contract claim,14 or where the plaintiff alleges that the state’s breach amounts to a constitutional deprivation in violation of 42 U.S.C. § 1983.15 None of these cases suggests that sovereign immunity bars a breach of contract claim. The point of those cases is, rather, that a contract claim is the appropriate route. As such, those cases don’t tell us whether there is a taking if the government both keeps your property and withholds the right to sue.
In rejecting both contract suits and constitutional claims, the Court allows the State to present a “heads I win, tails you lose” deal to the parties it contracts with. On the one hand, the State is sovereign, so it can’t be sued for a contract breach. On the other hand, the State is acting simply as a private party to a contract, so it can’t be sued for a taking. The Court acknowledges that the State “wears two hats” when contracting with private parties, but it refuses to address the consequences of that position .16
The Court offers no rationale for retaining sovereign immunity beyond invoking the propriety of deference to the Legislature. Elsewhere, a variety of policy concerns has been suggested to support the doctrine.17 But, as I have said before, these concerns can be dealt with during *604the legislative appropriations process.18 Indeed, that is by far the preferable place to deal with them. The Legislature should not be able to rely on policy concerns to decide whether to comply with contractual obligations already incurred.
I would hold that the Legislature waived both immunity from suit and immunity from liability when it enacted statutes permitting the General Services Commission and Texas A & M to enter into contracts with private parties. Because sovereign immunity was already waived, chapter 2260 doesn’t apply. Thus, I would hold that the trial courts had jurisdiction in these cases, and I would affirm the court of appeals. Because the Court does not, I respectfully dissent.

. See Federal Sign v. Texas Southern Univ., 951 S.W.2d 401, 418 (Enoch, J., dissenting).

. Id.

. Kerrville State Hosp. v. Fernandez, 28 S.W.3d 1, 7 (Tex.2000); City of LaPorte v. Barfield, 898 S.W.2d 288, 296-97 (Tex.1995).

. Federal Sign, 951 S.W.2d at 412.

. 39 S.W.3d at 600.

. Tex. Gov’t Code § 2260.006.

. Id. § 2260.005.

. 39 S.W.3d at 600.

. See Tex. Gov’t Code § 2155.061 (authorizing General Services Commission to acquire goods and services for state agencies); Tex. Educ.Code § 85.23(a) (authorizing Texas A & M board to contract for the purchase, acquisition or construction of permanent improvements); see also Federal Sign, 951 S.W.2d at 418 (Enoch, J., dissenting).

. See Smith v. State, 289 N.C. 303, 222 S.E.2d 412, 423 (1976); Wiecking v. Allied Med. Supply Corp., 239 Va. 548, 391 S.E.2d 258, 260 (1990).

. 39 S.W.3d at 600.

. Id. (citing State v. Steck Co., 236 S.W.2d 866, 869 (Tex.Civ.App.—Austin 1951, writ ref’d)).

. Id., 951 S.W.2d at 417 (Enoch, J., dissenting).

. See, e.g., Sun Oil Co. v. U.S., 215 Ct.Cl. 716, 572 F.2d 786, 818 (Cl.Ct.1978); Consolidation Coal Co. v. U.S., 60 Ct.Cl. 608, 626 (1925); see also Medical Laundry Service v. Board of Trustees, 840 F.2d 840, 843 (11th Cir.1988) (Roney, C.J., dissenting) (collecting cases).

. See, e.g., Sun Oil Co., 572 F.2d at 792, 818; Allenfield Assocs. v. U.S., 40 Fed. Cl. 471, 488 (1998) (finding both breach of contract and takings, but noting damages would be based on breach).

. See Med. Laundry Serv., 840 F.2d at 843.

. 39 S.W.3d at 599.

. See Federal Sign, 951 S.W.2d at 413-15 (Hecht, J., concurring).