Link to the Engelman Opinion
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 subject-matter jurisdiction'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: 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
authorization 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 and subject-matter jurisdiction: “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 that 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 Rusk
that 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 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, 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 on its own, but no
precedence supports a court raising immunity on its own.
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 standing, and standing also implicates subject-matter
jurisdiction. 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. That the sovereign has power over itself within its own territory is obvious, 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. 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 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 justiciability 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). To use the Court's terminology, does standing equate to subject-matter jurisdiction for all purposes? How about mootness? Ripeness? The political question doctrine? The prohibition against advisory opinions? When the Court adopted the general rule in the Restatement (Second) of Judgment section 12, did it intend to adopt that rule to apply to all justiciability doctrines subject-matter jurisdiction is implicated?
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.