Opinion
Civil Action 7:02-CV-270-R.
October 5, 2004
MEMORANDUM OPINION AND ORDER
Before this Court is DEFENDANTS' MOTION TO DISMISS SEVENTH CLAIM FOR RELIEF (filed June 28, 2004). Defendants seek to dismiss Plaintiff's Seventh Claim for Relief-Breach of Contract under Fed.R.Civ.Pro. 12(b)(1) for lack of jurisdiction. Specifically, Defendants claim Plaintiff's Seventh Claim for Relief is jurisdictionally barred by Eleventh Amendment Immunity. For the reasons discussed herein, Defendants' motion is GRANTED.
I. BACKGROUND
Midwestern State University ("MSU") is a public university governed by its Board of Regents ("BOR") located in Wichita Falls, Texas. On June 3, 2000, MSU and the BOR offered Henry Moon ("Plaintiff" or "Moon") the positions of President of MSU and tenured professor. During the short course of Moon's presidency, an internal auditor submitted to the BOR a report documenting an informal audit. The informal audit had been conducted as a follow-up to complaints received regarding Moon. The report summarized incidents in which Moon allegedly failed to follow state and university policies with regard to hiring and spending, among other claims. Moon responded to the allegations in writing, and he submitted his response to the BOR. In August of 2001, the BOR removed Moon as president of MSU. At that time, the BOR decided to place Moon on administrative leave, to pay him a salary equivalent to that of a tenured professor of his experience level ($65,000), and to further investigate whether there existed grounds for termination of Plaintiff's tenured status.In June of 2002, the BOR informed Plaintiff that they had not properly awarded him tenure. Accordingly, the BOR informed Moon that his termination would become effective July 15, 2002. After a state district court vacated the BOR's initial decision due to their meeting's failure to comply with the Texas Open Meetings Act, the BOR met and renewed its decision to terminate Plaintiff's employment based upon its conclusion that he had not properly been awarded tenure. The BOR invited Moon to request a grievance process. Because the process outlined by the BOR failed to comply with that afforded a tenured professor, Moon declined to participate in it. The BOR contends that, because Moon was never a tenured faculty member, such procedures were inapplicable in his case. Rather than participate in a hearing by the BOR to review the BOR's decision, Moon filed suit under 42 U.S.C. § 1983 in state court. The suit subsequently was removed to federal court.
In response to Plaintiff's Second Amended Complaint (filed June 22, 2004), wherein Plaintiff added his Seventh Claim for Relief-Breach of Contract, Defendants filed the instant Motion to Dismiss Seventh Claim for Relief (filed June 28, 2004) on the grounds that Plaintiff's Breach of Contract claim is jurisdictionally barred by Eleventh Amendment Immunity.
II. ANALYSIS
A. Standard of ReviewIn considering Defendants' motion, this Court must accept all well-pleaded facts as true and view the facts in the light most favorable to Moon. See Campbell v. City of San Antonio, 43 F.3d 973, 975 (5th Cir. 1995). "[A] claim may not be dismissed unless it appears certain that the plaintiff cannot prove any set of facts in support of his claim that would entitle him to relief." Leffall v. Dallas Indep. Sch. Dist., 28 F.3d 521, 524 (5th Cir. 1994). "However, conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss." Fernandez-Montes v. Allied Pilots Ass'n, 987 F.2d 278, 284 (5th Cir. 1993).
B. Eleventh Amendment Immunity
In the absence of consent, the Eleventh Amendment bars federal lawsuits by a U.S. citizen against a state or against a state agency or department. Pennhurst State Sch. Hosp. v. Halderman, 465 U.S. 89, 100 (1984); Neuwirth v. Louisiana State Bd. of Dentistry, 845 F.2d 553, 555 (5th Cir. 1988); Okpalobi v. Foster, 244 F.3d 405, 411 (5th Cir. 2001) (en banc). Sovereign immunity under the Eleventh Amendment applies unless the State has expressly waived such protection. Atascadero v. Scanlon, 473 U.S. 234, 238 (1985). A court will find waiver of Eleventh Amendment immunity only where waiver is stated "by the most express language or by such overwhelming implications from the text as [will] leave no room for any other reasonable construction." Edelman v. Jordan, 415 U.S. 651, 675 (1974).
This equally applies to lawsuits brought against Texas state universities such as MSU as well as each regent and administrator defendant as they assume the identity of MSU. Lewis v. Midwestern State University, 837 F.2d 197, 198-99 (5th Cir. 1988); Hafer v. Melo, 502 U.S. 21, 25-26 (1991) (citing Kentucky v. Graham, 473 U.S. 159, 167 (1985)).
The Texas Supreme Court has been unambiguous in laying out the means required for a party to bring suit against a state entity for breach of contract claims:
There is but one route to the courthouse for breach-of-contract claims against the State, and that route is through the Legislature.Gen. Services Comm'n v. Little-Tex Insulation Co., Inc., 39 S.W.3d 591, 597 (Tex. 2001). Two chapters of the Texas code are relevant to this discussion and imperative on the determination of a party's legal right to bring suit against a state entity. Chapter 107 of the Tex. Civ. Prac. Rem Code outlines the process required for a party to gain permission to sue the state. Tex. Civ. Prac. Rem Code Ann. § 107 (2004). In 1999, the Texas Legislature enacted Chapter 2260 of the Tex. Gov't Code which, while retaining sovereign immunity from suit in breach of contract cases, provides an administrative process to resolve such claims against the State. Tex. Gov't Code Ann. § 2260 (2004). Chapter 2260 expressly provides that its procedures are a required prerequisite to suit under Chapter 107. Tex. Gov't Code Ann. § 2260.005 (2004).
For a detailed summary of how Chapter 2260 operates, See Little-Tex, 39 S.W.3d at 595-6.
At issue between the parties is the affect of Chapter 2260 and whether a state entity may waive immunity to suit by its conduct. Plaintiff postures that while it is well settled in Texas that the entry of the State into a contract waives its immunity as to damages, the same is not true as to suit. Plaintiff argues that a judicially created waiver-by-conduct doctrine exists allowing him to detour the administrative procedures established by Chapter 2260 in regards to prayers for equitable relief. Plaintiff claims that prior performance of the employment relationship establishes a waiver of immunity by conduct on equitable issues and that accordingly, he has the right to seek court construction and declaration of his rights under the contract.
The Texas Supreme Court, in Texas Natural Resource Conservation Commission v. IT-Davy, unequivocally reaffirmed the settled law in Texas that "it is the Legislature's sole province to waive or abrogate sovereign immunity." Texas Natural Res. Conservation Comm'n v. IT-Davy, 74 S.W.3d 849, 853 (Tex. 2002) (citing Federal Sign v. Texas S. Univ., 951 S.W.2d 401, 409 (Tex. 1997)). In that case, IT-Davy, a general contractor, sued the Texas Natural Resource Conservation Commission ("TNRCC"), a Texas state agency, for claims arising out of the agency's alleged breach of contract. IT-Davy claimed that while it fully performed under the contract, TNRCC did not fully pay for the accepted contracted services. IT-Davy argued that TNRCC waived its sovereign immunity from suit through its conduct, namely by accepting full contractual benefits, and that as such, IT-Davy was not required to obtain legislative consent to sue. Id. at 851.
As a preliminary point to its analysis, the Texas Supreme Court reiterated its 2001 holding that Chapter 2260's administrative remedy foreclosed a waiver-by-conduct exception to sovereign immunity in breach-of-contract cases. Id. at 856 (citing Little-Tex, 39 S.W.3d at 597). The IT-Davy court went on to explain that because the contract in IT-Davy was executed prior to August 30, 1999, Chapter 2260 did not apply. Id. Had the contract been executed on or after August 30, 1999, Chapter 2260 would have applied, and under the Texas Supreme Court's holding in Little-Tex, the court would have needed to go no further to deny IT-Davy's waiver-by-conduct argument and dismiss its claims due to the state agency's sovereign immunity.
The parties in IT-Davy executed their contract in 1990.
As the alleged contract at issue in the case presently before this Court was entered into in 2001, Chapter 2260 certainly applies to this contract. Then, under the holding of Little-Tex, reiterated in IT-Davy, any argument as to a waiver-by-conduct exception to sovereign immunity fail. In Little-Tex, the Texas Supreme Court specifically addressed the issue left open in Federal Sign, namely whether a State may waive its immunity by conduct. Little-Tex, 39 S.W.3d at 597. Noting that the state legislature adopted Chapter 2260 following Federal Sign, the court concluded that the legislature intended Chapter 2260 be the sole method available for resolving breach of contract claims against the State. Id.
Plaintiff rested his waiver-by-conduct argument to maintain suit against the Defendant by citing three cases; Federal Sign, 951 S.W.2d 401 (Tex. 1997); Cobb v. Harrington, 190 S.W.2d 709 (Tex. 1945); and, Texas Workforce Commission v. Midwest Bank, 40 S.W.3d 690 (Tex.App.-Austin 2001 pet. denied). Such reliance is misplaced as Chapter 2260 did not apply in any of these three cases. Federal Sign and Cobb were decided in 1997 and 1945, respectively, both prior to the enactment of Chapter 2260. Asto Texas Workforce Commission v. Midwest Bank, in that case "there was no contractual relationship" between the parties. Texas Workforce Comm'n, 40 S.W.3d at 696 (Tex.App.-Austin 2001 pet. denied). The Plaintiff was not seeking a declaratory judgment of his rights in the context of a breach of contract claim; rather, the cause of action therein arose under the Declaratory Judgments Act. Id. at 695. However, even if this had been a breach of contract case, the facts of that case occurred during 1995 and 1996, again, prior to the enactment of Chapter 2660. Id. at 692-693.
In its Response, Defendant specifically challenges the validity of Plaintiffs' reliance on Federal Sign. Defendant's argument therein is relevant only to the extent Plaintiff was relying on the footnote wherein the court recognized that there may be circumstances "where the State may waive its immunity by conduct other than simply executing a contract" Federal Sign, 951 S.W.2d at 408 n. 1. As Defendant points out in its Response, in IT-Davy, the court made clear that footnotes, such as the one in Federal Sign, alluding to the possibility of a waiver-by-conduct exception to the sovereign-immunity rule are not sufficient for the court to fashion such an exception into law. IT-Davy, 74 S.W.3d at 857.
In sum, the procedures contained in Tex. Gov't Code Chapter 2260 are exclusive and required prerequisites to suit. See Tex. Gov't Code Ann. § 2260.051 (2004). "Absent special statutory consent to sue, a party may not pursue a breach-of-contract claim against the State without participating in Chapter 2260's administrative process." Little-Tex, 39 S.W.3d at 598. Time and again, the Texas courts have reiterated that, "there is but one route to the courthouse for breach-of-contract claims against the state, and that route is through the Legislature." Id. at 597 (referring to Tex. Civ. Prac. Rem. Code ch. 107, to which Tex. Gov't Code ch. 2260 is a prerequisite). As Moon has not obtained legislative permission under Chapter 107 to sue MSU for breach of contract, let alone exhausted the prerequisite procedures under Chapter 2260, Defendants' sovereign immunity bars Plaintiff from bringing his breach of contract claim. Accordingly, this Court must grant Defendants' Motion to Dismiss Plaintiff's Seventh Claim for Relief.
CONCLUSION
For the foregoing reasons, Defendant's Motion to Dismiss Plaintiff's Seventh Claim for Relief is GRANTED.