IMMUNITY - TEXAS

City of League City v. Jimmy Changas, Inc.

Supreme Court of Texas - June 9, 2023 - S.W.3d - 2023 WL 3909986

Restaurant developer sued city for breach of contract for nonpayment of reimbursements for certain expenditures made in connection with construction and operation of a restaurant within city limits.

The District Court denied city’s plea to the jurisdiction. City brought interlocutory appeal. The Houston Court of Appeals affirmed. City petitioned for review, which was granted.

The Supreme Court held that:

City’s activity of entering into agreement with restaurant developer as an economic-development activity and not as a community-development or urban-renewal activity was not included in statutory list of governmental functions protected by sovereign immunity under Tort Claims Act, for purposes of deciding city’s plea to the jurisdiction in developer’s breach of contract action against city for nonpayment of reimbursement of expenditures in constructing and operating restaurant in city; purpose of agreement was to stimulate business and commercial activity, create local jobs, and increase state sales tax revenue, not to undertake urban renewal activities; disapproving CHW-Lattas Creek, L.P. v. City of Alice, 565 S.W.3d 779.



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