As published in a HillCo Client News Flash this week, Travis County District Judge Stephen Yelenosky agreed with an argument from LCRA that it was protected by sovereign immunity rules, which limits suits against governmental authorities including the suit from the San Antonio Water System (SAWS).
In response to the ruling, SAWS published the following statement on their website:
SAWS is deeply disappointed with the outcome of today’s hearing, which inserts confusion and uncertainty in contracts between governmental agencies and future efforts to address the state’s water needs. Unfortunately the merits of the case against LCRA have yet to be addressed and may never be considered without a costly and lengthy appeal of today’s decision.
Contracts and agreements between local governments throughout the state have been called into question by LCRA’s claim that they can’t be sued. Any governmental agency that currently has an agreement with LCRA should be highly concerned that it could fall victim to LCRA backing out of the agreement without any recourse.
Equally as important, Texas’ ability to plan regionally for numerous public policy issues is in jeopardy. LCRA’s claim of immunity places water planning efforts throughout the state at risk, and could make agreements between governmental agencies virtually impossible to enforce.
The SAWS Board of Trustees will evaluate the implications of the court’s decision.
In response to the ruling, LCRA published the following statement on their website:
A Travis County judge Monday dismissed a $1.23 billion lawsuit filed against the Lower Colorado River Authority by the City of San Antonio.
State District Judge Stephen Yelenosky ruled in favor of LCRA and against the San Antonio Water System. San Antonio had requested that the discussion of whether its suit was valid be delayed while it developed more legal information and depositions. SAWS said it wanted to interview state officials, county judges, more river authority Board and staff members and others. SAWS had already been given hundreds of thousands of pages of documents and e-mails by LCRA, but said it needed more time and information to prove its allegation that LCRA had defrauded the city.
LCRA, which has spent well over $800,000 on the lawsuit so far, said no more time or money should be spent because San Antonio could not sue a governmental agency except for money that was “due and owed” under the agreement. LCRA has never refused to pay what may be due and owed under the agreement it signed in 2002 and denied any fraud. If San Antonio cancels the contract now, LCRA could be responsible for half the study costs – estimated at $18 million.
San Antonio, however, had asked the court to award it $1.23 billion, which it said was the cost of desalinating seawater to replace water that SAWS claims LCRA had promised it in 2002. LCRA said it never promised to deliver water, only to study the feasibility of a water project that would help both the Colorado River basin and San Antonio. The studies, which cost nearly $38 million, showed last year that no water was available from the Colorado River basin for San Antonio.
“LCRA is pleased that it no longer has to spend public ratepayer dollars defending itself in such a wasteful lawsuit,” said General Manager Tom Mason. “We all would be much better off spending our time and money planning for future water needs.” Mason said the LCRA continues to stand by its contract with SAWS and to continue discussing possible water plans with San Antonio. “We never defaulted on the contract, and we continue to honor it.”