Originally published by Daniel Correa.
Subject-matter jurisdiction speaks to a court’s statutory or constitutional power to adjudicate a case. Various justiciability doctrines lie under the subject-matter jurisdiction umbrella, such as standing, mootness, ripeness, the political question doctrine, and prohibition against advisory opinions. Stated another way, these various justiciability doctrines implicate subject-matter jurisdiction.
The Texas Supreme Court recently brought into question the very nature of subject-matter jurisdiction, perhaps inadvertently, in Engelman Irrigation District v. Shields Brothers, Inc. There the Court held, in part, “Sovereign immunity implicates a court’s subject matter jurisdiction, but their contours are not coextensive.” There is a lot more to the court’s holding, but this brief article focuses on (1) what the court means by “sovereign immunity implicates a court’s subject matter jurisdiction,” and (2) how the answer to this question informs standing’s scope and contours. Fortunately, the Court’s ultimate holding and conclusion do not intimately depend on its standing analysis. The res judicata doctrine resolved this case.
The following theme drives the analysis herein: jurisdictional subject-matter jurisdiction concerns constitutional limits to judicial power; res judicata concerns judicial power necessary to act within constitutional limits.
Engelman Irrigation District v. Shields Brothers, Inc.
Background Facts
In 2010, Engelman Irrigation District (EID) brought suit against Shields Brothers, Inc., seeking a judgment declaring void a final judgment from a 1992 suit by Shields Brothers, Inc. against Engelman Irrigation District. EID raised a governmental immunity defense in the 1992 suit. The trial court denied the immunity defense and the court of appeals affirmed the denial. The Texas Supreme Court denied review in 1998. EID sought bankruptcy relief in 1999, but was ultimately denied authorized to file.
While EID funneled through the bankruptcy process, the Texas Supreme Court decided Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006), overruling an earlier opinion relied on by the trial court in the 1992 action, and by the court of appeals, wherein the Court held that statutory “sue and be sued” language waived sovereign immunity. See Missouri Pacific Railroad Co. v. Brownsville Navigation District, 453 S.W.2d 812, 813 (Tex. 1970). After Tooke, “sue and be sued,” or “plead and be impleaded” language in a statute alone does not waive governmental immunity. The Tooke decision applied retroactively.
EID’s 2010 declaratory action relied on the retroactive applicability of Tooke. Though a final judgment had been entered in the 1992 action, EID took the position that its collateral attack against the final judgment was not precluded by the res judicata doctrine because res judicata does not apply when the initial court lacked subject-matter jurisdiction.
The Court’s Analysis (with intermittent counter-analysis and criticism)
The Texas Supreme Court set forth the following issue: “Must courts equate sovereign immunity with a lack of subject-matter jurisdiction for all purposes? More specifically, does our decision in Tooke v. City of Mexia . . . apply narrowly only to judgments still being challenged on direct appeal or broadly to all prior judgments, thus permitting collateral attack of long-ago final judgments?”
The Court starts its analysis by pointing out that the res judicata doctrine generally bars relitigating issues that have been finally resolved by a judgment when the losing party exhausted all direct appeals. This is true even when a subsequent judicial opinion, if applied retroactively to the final judgment, would yield a different result on a finally-resolved issue. The res judicata doctrine underwrites “the stability of court decisions,” decisions which rely on the authority of courts to bind and make final, which both bolsters public confidence in the judiciary and enables courts to exercise their constitutional powers. See Permian Oil Co. v. Smith, 107 S.W.2d 564, 567 (Tex. 1937) (“Lacking this anchorage of finality a judicial system would be little more than a rule of fiat. . . . It must be borne in mind that the purpose of the law remains constant to prevent the failure of justice as a result of permitting the retrial between the same parties or their privies of a cause of action or of an issue which has been finally disposed of.”).
The Court then turns its attention to subject-matter jurisdiction. Res judicata applies to a final judgment rendered by a “court of competent jurisdiction.” Since subject-matter jurisdiction is necessary to a court’s power to adjudicate, res judicata does not generally apply to a final judgment rendered by a court that lacks subject matter jurisdiction.
Texas has long recognized that “sovereign immunity deprives a trial court of subject matter jurisdiction.” See Texas Department of Parks and Wildlife v. Miranda, 133 S.W.3d 217, 224 (Tex. 2004). The Court points out, though, that recent case law recasts the relationship between sovereign immunity: “We stated in these cases, quite deliberately, that sovereign immunity ‘implicates’ the trial court’s subject-matter jurisdiction. We did not hold that sovereign immunity equates to a lack of subject matter jurisdiction for all purposes or that sovereign immunity so implicates subject-matter jurisdiction that it allows collateral attack on a final judgment.” See e.g., Houston Belt & Terminal Railway Co. v. City of Houston, 487 S.W.3d 154 (Tex. 2016); Manbeck v. Austin Independent School District, 381 S.W.3d 528 (Tex. 2012); Rusk State Hospital v. Black, 392 S.W.3d 88 (Tex. 2012).
Interestingly, the Court contextualizes these recent cases in a manner that actually supports the opposite of the Court’s conclusion. Both Houston Belt and Miranda held a plea to the jurisdiction is the proper procedural vehicle through which to raise sovereign immunity, because it is a jurisdictional issue. And, the Court held in Manbeck and Ruskthat a governmental body may raise sovereign immunity for the first time on appeal because it “sufficiently implicates subject matter jurisdiction.” Manbeck, 381 S.W.3d at 530.
The Court makes too much of “implicates.” “Implicate” means that someone or something is involved in or affected by someone or something else. To say that sovereign immunity “implicates” subject-matter jurisdiction, means that sovereign immunity involves or affects the court’s the subject matter jurisdiction. The United States Supreme Court has also used the phrase “implicate subject-matter jurisdiction, i.e., the courts’ statutory or constitutional power to adjudicate the case.” Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 89 (1998). Unless “implicates” is a legal magic word in Texas that is capable of transforming the nature of subject-matter jurisdiction, the Engelman Court’s analysis is incredible.
But, according to the Court, to implicate subject-matter jurisdiction is not to equate to subject matter jurisdiction for all purposes. For one thing, the Court points out, that sovereign immunity does not only concern subject-matter jurisdiction, but also personal jurisdiction, so it is not perfectly identical to subject-matter jurisdiction. For another, as Then-Justice Hecht points out in his concurrence in Rusk, immunity from suit differs from lack of subject matter jurisdiction in some respect; for example, government can waive immunity from suit, but not subject-matter jurisdiction; and, a court may raise subject matter jurisdiction sua sponte; but no precedence supports a court raising immunity sua sponte.
These “differences,” however, are illusory. Sovereign immunity may raise both subject matter jurisdiction and personal jurisdiction concerns, and may not be identical to either in that regard, but the same is true with respect to core constitutional elements to subject matter jurisdiction. For example, the standing requirement that an injury be “fairly traceable” to the defendant’s conduct may raise both subject matter jurisdiction and personal jurisdiction concerns—the same conduct by a defendant may bear directly on how fairly traceable that conduct was to the purported injury as it may bear directly on how minimal the defendant’s contacts were with the forum. In that regard, the “fairly traceable” element may be identical to neither subject matter or personal jurisdiction in terms of analysis, but identical to both in terms of results—if a court lacks either subject matter or personal jurisdiction, it lacks power to bind the party to a judgment. Perhaps most important, trying to “equate” sovereign immunity to personal jurisdiction is odd when considering personal jurisdiction speaks to a sovereign’s power over persons within or affecting its territorial jurisdiction. Of course the sovereign has power over itself within its own territory, and the judiciary is part of that sovereign. But it is not at all odd to “equate,” if by “equate” the Court means to draw a meaningful comparison,” sovereign immunity to subject-matter jurisdiction, because each branch of government is limited to its specific spheres of power, determined by the Constitution. A court lacks the power to order the executive branch or legislative branches to an accounting absent subject-matter jurisdiction over an action involving the sovereign. And a sovereign cannot be sued, that is, a court cannot redress a wrong by a governmental entity, absent the sovereign’s consent to be sued.
As for then-Justice Hecht’s “distinction,” while it is true that a party may not waive subject-matter jurisdiction, and, generally, a party may waive an immunity defense, sovereign immunity is quite different. Government may waive immunity from suit only when Government consents to be sued by statute or some other act of consent. If, but only if, Government consents to be sued, it has waived immunity from suit. Unlike non-government parties, however, as the Court held in Rusk, a government does not waive sovereign immunity by failing to raise it below as an affirmative defense.
Also, while it is true that a court a court is obligated to raise subject matter jurisdiction on its own but will not raise an immunity defense on its own when the government is sued, the comparison does not necessarily support a difference between sovereign immunity and lack of subject-matter jurisdiction. The court must remain impartial between parties and should avoid any appearance of impropriety; since the judiciary constitutes another branch of government, a court’s impartiality would be impugned if it voluntarily and on its own came to the aid of Government every time a governmental entity was sued, especially since the court must be mindful of the sovereign’s absolute right to consent to suit, which the governmental body may do by allowing the litigation to move forward without objection.
The real reason driving the Court’s analysis and conclusion is found in Justice Lehrmann’s concurring opinion in Rusk: “If sovereign immunity deprives the courts of subject matter jurisdiction, governmental entitles could attack years-old judgments by asserting sovereign immunity because without subject matter jurisdiction, the judgments would be void.” 381 S.W.3d at 108. Relying on the Restatement (Second) of Judgments, the Engelman Court adopted the general rule that a final judgment, especially from a general jurisdiction court, precludes any party from litigating the original tribunal’s subject matter jurisdiction in subsequent litigation. Restatement (Second) of Judgments § 12. EID’s collateral attack against the final judgment issued by the trial court in the 1992 action, as a result, could not stand.
Conclusion
Judicial decision-making implicates a rational process, but it is not equal to a rational process for all purposes. The Engleman decision should dispel any belief to the contrary. Though the court’s subject-matter jurisdiction analysis is logically deficient, whether an opinion is logical or not does not alone determine whether the conclusion is right or wrong. As Judge Richard Posner puts it, “logic the destroyer is not logic the creator.” The Engelman Court reached the right conclusion. If the opinion only included the res judicata analysis, the conclusion would have been supported by ample and sound reason.
The Engelman Court’s subject-matter jurisdiction analysis complicates jurisdictional analyses generally. Sovereign immunity is just one justiciability doctrine among many. Each of the other justiciabiilty doctrines implicates a court’s subject-matter jurisdiction. The question now is, “to what degree is the court’s subject matter jurisdiction affected?” It appears the answer to that will turn on the purposes that underlie the justiciability doctrine itself, rather than on the constitutional mandate behind subject-matter jurisdiction (a result Justice Lehrmann desired in the Rusk case).
Engelman, in other words, threatens to turn subject-matter jurisdiction on its head. The result would not be stated so drastically had the Court created constitutionally imposed jurisdictional requirements and prudential jurisdictional concerns. This is something that courts have done with respect to “standing.” The distinction between jurisdictional and prudential requirements is not without its own problems. See Valley Forge Christian College v. Americans United for Separation of Church & State, 454 U.S. 464, 475 (1982) (“We need not mince words when we say that the concept of Art. III standing has not been defined with complete consistency in all of the various cases decided by this Court.”). But the distinction would have the virtue of supporting the conclusion with some reason other than reaching a desired result.
Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.
from Texas Bar Today http://ift.tt/2o14Tcb
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