Opinion
No. 05-10-00443-CV
Opinion issued January 12, 2011.
On Appeal from the 116th District Court, Dallas County, Texas, Trial Court Cause No. 09-16415-F.
Before Justices BRIDGES, FITZGERALD, and FILLMORE.
MEMORANDUM OPINION
Dallas County, Texas, and GTSI Corp. appeal the trial court's denial of the County's plea to the jurisdiction. In five issues, the County argues the trial court erred in denying the County's plea to the jurisdiction because there is no express waiver of sovereign immunity for the procedures the County used to procure the contract at issue and appellees lack standing to challenge the contract; appellees did not adequately plead a waiver of sovereign immunity; the trial court erred in effectively substituting its opinion for that of the commissioners court; and appellees' claims are barred by the doctrine of laches. In their cross-appeal, appellees assert the trial court erred in admitting an affidavit into evidence and considering section 271.102 of the local government code, section 791.025 of the government code, and laches in conducting its jurisdictional inquiry. Because appellees do not have standing to challenge the procurement of the contract, we reverse the trial court's judgment denying the County's plea to the jurisdiction and render judgment dismissing appellees' claims against the County.
Although GTSI is included in the style of the case in the County's notice of appeal and brief, GTSI did not file a notice of appeal or a brief on its own behalf. Accordingly, we address only the County's claims.
In April 2009, Dallas County commissioners approved a contract between the County and GTSI under which GTSI would duplicate County books and records so they would be preserved if the originals were destroyed. The money to pay for the book preservation effort came exclusively from filing fees attached to every record filed with the County clerk's office. Appellees learned of the contract between the County and GTSI, and Sonny Oates, owner of appellees, obtained a hearing before the Dallas County Commissioners Court. At the hearing, Oates stated the "no-bid" contract with GTSI "should not have been." Although one commissioner made a motion to cancel the contract with GTSI, the motion failed for lack of a second.
In November 2009, appellee Cedar Springs Investments, L.L.C. purchased property in Dallas County and paid $22,000 in taxes. In December 2009, appellees filed suit seeking declaratory judgment that the books and records preservation contract between GTSI and the County violated the Texas Government Code's competitive bidding requirements and an injunction preventing performance under the contract. The County filed a plea to the jurisdiction asserting it was immune from suit. The trial court ultimately denied the County's plea to the jurisdiction and granted a temporary injunction restraining further performance of the contract. This appeal followed.
We first address the County's second issue in which it argues the trial court erred in denying its plea to the jurisdiction because appellees lacked standing. In the trial court, the County asserted Business Resources Corporation and Brown's River Marotti Co. did not have standing because they are not property tax paying citizens of the County. The County did not raise the issue of Cedar Springs Investments' standing. Appellees assert the County therefore waived the issue of whether Cedar Springs Investments has standing. However, the standing component of subject matter jurisdiction cannot be waived and may be raised for the first time on appeal. See Waco Indep. Sch. Dist. v. Gibson, 22 S.W.3d 849, 851 (Tex. 2000). Appellees urge this Court to adopt the dissenting and concurring opinions in Texas Association of Business v. Texas Air Control Board, 852 S.W.2d 440 (Tex. 1993) as a basis for changing the law regarding waiver of standing. We decline to do so.
In City of Dallas v. First Trade Union Sav. Bank, 133 S.W.3d 680, 687-88 (Tex. App.-Dallas 2003, pet. denied) and City of Dallas v. Heard, 252 S.W.3d 98, 103-04 (Tex. App.-Dallas 2008, pet. denied), we concluded we did not have jurisdiction over an issue raised in the interlocutory appeal of the trial court's ruling on a plea to the jurisdiction that was not raised in the trial court. However, neither First Trade Union nor Heart involved the issue of standing and, therefore, are not dispositive of this appeal. See First Trade, 133 S.W.3d at 687 (City failed to argue in its plea to the jurisdiction that Bank's claims were barred by governmental immunity and could not raise issue for first time on appeal); Heard, 252 S.W.3d at 104 (City could not argue for first time on appeal that recreational use statute applied to case).
As a general rule, to have standing to challenge a government action, an individual must demonstrate a particularized interest in a conflict distinct from that sustained by the public at large. S. Tex. Water Auth. v. Lomas, 223 S.W.3d 304, 307 (Tex. 2007). Taxpayers in Texas have standing to enjoin the illegal expenditure of public funds, and need not demonstrate a particularized injury. Williams v. Lara, 52 S.W.3d 171, 179 (Tex. 2001). Implicit in this rule are two requirements: (1) that the plaintiff is a taxpayer and (2) that public funds are expended on the allegedly illegal activity. Id. The local government code provides that any property tax paying citizen of the county may enjoin performance under a contract made by a county in violation of the subchapter relating to county purchasing and contracting. Tex. Local Gov't Code Ann. § 262.033 (West 2005). Because neither Business Resources Corporation nor Brown's River Marotti Co. own property in Dallas County, they do not have statutory standing to challenge the contract. It is undisputed, however, that Cedar Springs Investments is a property tax paying citizen of the County. The County argues no public funds are expended in connection with its contract with GTSI and, therefore, Cedar Springs Investments does not have standing to challenge the contract. Relying on Scott v. Board of Adjustment, 405 S.W.2d 55, 57 (Tex. 1966), appellees argue Cedar Springs Investments' taxpayer status is the only statutory requirement for standing to sue the County under the local government code. Scott involved the claim that the City of Corpus Christi's approval of a variance regarding the size of a billboard was illegal. The controlling statute permitted (1) any persons aggrieved, (2) "any taxpayer," or (3) any officer, deparment, board or bureau of the municipality to appeal "any decision of the Board of Adjustment" setting forth that the decision was illegal. Id. at 56. The court concluded that, because the parties were suing as taxpayers, not as "persons aggrieved," it was not necessary for them to prove they had suffered particular damage. Id. at 57.
Scott did not involve the use of government funds, and we do not read it as dispositive of appellees' standing in this case. In Houston Natural Gas Corporation v. Wyatt, 359 S.W.2d 257, 259-60 (Tex. Civ. App.-Eastland 1962, no writ), the court held that a taxpayer with statutory standing did not have standing to seek to enjoin a contract paid for with something other than taxes. In South Texas Water Authority v. Lomas, 223 S.W.3d 304, 308 (Tex. 2007), the court cited Wyatt to support its conclusion that a taxpayer did not have standing to challenge a water-supply contract because the funds paid under the contract did not derive from taxes. Similarly, here the book preservation effort was to be funded exclusively by filing fees from every record filed with the County clerk's office. Because the book preservation effort in this case was not funded by taxes, we conclude Cedar Springs Investments lacks standing to seek to enjoin the contract between GTSI and the County. See Lomas, 223 S.W.3d at 308; Wyatt, 359 S.W.2d at 259-60. We sustain the County's second issue. Because of our disposition of the County's second issue, we need not address the remaining issues.
We reverse the trial court's judgment denying the County's plea to the jurisdiction and render judgment dismissing appellees' claims against the County.