AUSTIN - The Texas Supreme Court on Friday held that a pre-suit mediation agreement does not apply to San Jacinto River Authority’s claims in a dispute over fees and rates.
SJRA and two Texas cities, Conroe and Magnolia, are parties to water sales contracts.
When a dispute over fees and rates arose, the cities stopped paying their complete balances, and the authority sued the cities to recover those amounts, according to the high court’s opinion.
“Unlike a typical contract dispute, all the parties here are government entities with immunity from suit,” the opinion states. “So far, their taxpayers and ratepayers have been funding only procedural and jurisdictional skirmishes distantly related to the merits of the dispute.”
The “legal skirmish” before the high court concerned the scope of the statutory waiver of immunity for contractual claims against local government entities.
Court records show the trial court granted the cities’ plea to the jurisdiction, and a court of appeals affirmed on the ground that SJRA did not engage in pre-suit mediation as the contracts required.
The Supreme Court reversed, finding that the agreement to mediate does not apply to SJRA’s claims.
Justices also held that the Local Government Contract Claims Act waived the cities’ immunity when they entered into groundwater reduction plan contracts.
Supreme Court case No. 22-0649