Opinion
NO. 03-20-00376-CV
07-31-2020
Texas General Land Office, and George P. Bush, named in his Official Capacity as Texas Land Commissioner, Appellants v. City of Houston, Appellee
FROM THE 53RD DISTRICT COURT OF TRAVIS COUNTY
NO. D-1-GN-20-003520 , THE HONORABLE TIM SULAK, JUDGE PRESIDING ORDER
PER CURIAM
Appellants, the Texas General Land Office (GLO) and George P. Bush, in his official capacity as Texas Land Commissioner, have appealed from the trial court's two July 22, 2020 orders. One of the July 22, 2020 orders denied their plea to the jurisdiction, and the other order granted appellee City of Houston's request for a temporary injunction. The underlying case relates to Hurricane Harvey disaster-relief funds awarded to the State of Texas by the United States Department of Housing and Urban Development (HUD), pursuant to its Community Development Block Grant Disaster Recovery program ("CDBG-DR Award"), and in particular, to the money allocated for use in the City of Houston. The GLO is the State agency generally responsible for the administration of the CDBG-DR Award. The City and the GLO entered into a contract through which the City, as subrecipient of the money allocated for the City, was issued a subaward of $1,175,954,338.00 (later amended to $1,275,878,041.00). The money is payable from the GLO to the City as reimbursement of allowable expenses for disaster-relief programs administered by the City, as set forth in the contract. Use of the CDBG-DR Award in the City is further governed by the State of Texas Plan for Disaster Recovery: Hurricane Harvey - Round 1 ("Action Plan").
In April 2020, the Commissioner advised the City that due to the GLO's concerns regarding the City's performance of the administration of its programs, the GLO was drafting an amendment to the Action Plan ("Action Plan Amendment 7"), which, if approved by HUD, would eliminate all funding to the City under the contract and transfer all responsibility for administering disaster assistance to City residents to the GLO. The Commissioner further advised the City that the GLO had begun implementation of its own agency-administered housing efforts within the City. On June 1, 2020, the GLO published Action Plan Amendment 7, and according to the GLO, now that the required 30-day public-comment period has passed, Action Plan Amendment 7 is ready to be sent to HUD for approval.
On July 8, 2020, the City sued the State appellants, asserting breach-of-contract and ultra vires claims. The City sought declaratory and injunctive relief against the State appellants, seeking among other things, to stop them from submitting Action Plan Amendment 7 to HUD for approval and from operating their own parallel programs in the City. After an evidentiary hearing, the trial court granted the City's request for a temporary injunction and made findings that the City is likely to succeed on the merits on its claims, is likely to suffer irreparable harm, and that the public interest and the balance of equities favor issuing the temporary injunction. The trial court ordered that the State appellants and the GLO's officers, commissioners, agents, employees, and attorneys, etc., are enjoined from:
1. Submitting the proposed Action Plan Amendment 7, which modifies any of the City of Houston's obligations, benefits, programs or funding to HUD for approval.
2. Continuing to process additional applications from residents of the City of Houston who are seeking relief under the Community Block Grant Disaster Relief 17 used for disaster relief efforts related to Hurricane Harvey that do not comply with the provisions of section 5.3 of the HUD Action Plan Amendment number five. Nothing in this order will interfere with GLO continuing to proceed with the following categories of applicants in accordance with the state-run Homeowner Assistance Program: (a) 7 homes identified at the hearing as currently under construction, meaning that a builder notice to proceed has been issued and permit requested; (b) 230 program files that were identified at the hearing as complete; (c) 696 applicants identified at the hearing who are finalizing necessary documents for application approval.
Upon the filing of the State appellants' notice of appeal, because the State appellants are a state agency and the head of a state agency, the temporary injunction was superseded by operation of law and is not subject to being counter-superseded. See Tex. R. App. P. 24.2(a)(3) ("When the judgment debtor is the state, a department of this state, or the head of a department of this state, the trial court must permit a judgment to be superseded except in a matter arising from a contested case in an administrative enforcement action." (emphasis added)); see also Tex. Gov't Code § 22.004(i). The City filed an emergency motion for temporary orders under Texas Rule of Appellate Procedure 29.3, seeking a temporary order reinstating the temporary injunction during the pendency of the appeal.
The City argues that if we reinstate the temporary injunction during the appeal, we will prevent it from suffering the probable, imminent, and irreparable injury that it alleges it will suffer if the State appellants submit Action Plan Amendment 7 to HUD and HUD approves it and if the State appellants continue to operate their parallel programs within the City (beyond completing applications and projects that are currently in process, which were specifically excepted in the temporary injunction). The State appellants respond that we should deny the request for a temporary order based on their assertions that we lack jurisdiction over the City's breach-of-contract claims and that the City cannot show that the Commissioner has acted without legal authority, essentially opposing the reinstatement of the temporary injunction because they believe they will win on appeal. However, at this preliminary stage, our task is to determine whether a temporary order will best "preserve the parties' rights until the disposition of the appeal," not to determine the merits of the appeal. See Tex. R. App. P. 29.3. Here, both parties claim that they have contractual rights to provide aid to the residents of the City of Houston, but in the absence of the temporary injunction remaining in place while we consider those competing claims, only the City faces a potentially irrevocable loss of its ability to provide aid to the residents of the City. Accordingly, we exercise our inherent authority, as embodied in Rule 29.3, "to make any temporary orders necessary to preserve the parties' rights until the disposition of the appeal," and we grant the City's motion and reinstate the temporary injunction, pending further order of this Court. Tex. R. App. 29.3; see also Texas Educ. Agency v. Houston Indep. Sch. Dist., No. 03-20-00025-CV, 2020 WL 1966314, at *5 (Tex. App.—Austin Apr. 24, 2020, order) (mand. pending). We note that this order should not delay the administration of relief funds because the City can continue to process new applications and administer disaster-relief programs during the pendency of the appeal, and the State can proceed with existing applications under the temporary injunction.
While we make no comments on the merits at this early stage of the proceeding, we recognize the need for a speedy resolution of this appeal. Therefore, pursuant to Rule 38.6, "in the interests of justice," we will shorten the time for filing briefs in the case. See Tex. R. App. P. 38.6; see also id. R. 2. We order the State appellants to file their opening brief on or before August 10, 2020; the City to file its response on or before August 20, 2020; and the State appellants to file any reply brief on or before August 27, 2020. Requests for extension of time will be highly disfavored.
It is ordered on July 31, 2020. Before Chief Justice Rose, Justices Baker and Kelly
Dissenting Opinion by Chief Justice Rose