The Implications of Subject-Matter Jurisdiction—Engelman Irrigation District v. Shields Brothers, Inc.

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. 

Whose Right is it Anyway? Speaker Discrimination in Texas’ Anti-SLAPP Scheme

Freedom of speech and thought lie at the core of liberty.  Though many philosophers, statesmen, and legal practitioners have opined on the value of free speech and thought, Justice Louis Brandies captured best the value of free speech and thought in our constitutional scheme:

Those who won our independence believed that the final end of the state was to make [people] free to develop their faculties, and that in its government the deliberative forces should prevail over the arbitrary. . . They believed that freedom to think as you will and speak as you think are means indispensable to the discovery and spread of political truth; that without free speech and assembly discussion would be futile; that with them, discussion affords ordinarily adequate protection against the dissemination of noxious doctrine; that the greatest menace to freedom is an inert people; that public discussion is a political duty; and that this should be a fundamental principle of American government.

Whitney v. California, 274 U.S. 357, 375 (1927) (Brandeis, J., concurring).

            Despite its central place in our constitutional scheme, the right to free speech is extremely fragile. Government imposed limitations to speech and thought sometimes elude detection, because government does not always directly regulate speech and, even when it does, the limitations are not always obvious. Notwithstanding the sometimes opaque nature of direct impositions, a major threat to speech and thought comes from indirect government impositions.

            SLAPP Suits as Indirect Government Impositions to Speech

            Strategic litigation against public participation (SLAPP) provides one example of an indirect governmentally-imposed limitation to speech and thought. These are suits brought by one party in an effort to silence another party against whom the suit is filed. The prototypical SLAPP suit involves a defamation claim against the defendant. Though government is not directly involved in chilling or silencing the defendant’s speech, the judicial system is the means by which the plaintiff chills or silences the defendant’s speech. The threat of a potential judgment looming over the defendant implicates the government in the plaintiff’s effort to chill or silence the defendant’s speech.

            Texas’ Anti-SLAPP Legislation

Texas enacted Anti-SLAPP legislation to curb litigants’ efforts to employ the judicial system as a means to silence or chill another’s speech. The Texas Citizens Participation Act (TCPA) provides pretrial procedural checks against litigation designed to chill a party’s right to free speech, among other first Amendment rights. See Tex. Civ. Prac. & Rem. Code §§ 27.001-011. The Act allows a party to file a motion to dismiss the case, with an award of attorney fees and costs to the party if successful on the motion. 

This procedure is available to any party, regardless of whether it is an individual or entity and regardless of whether the suit is against the person for an act committed in his or her individual capacity or in his or her capacity as a member of the electronic or print media. There are, however, four exemptions. Commercial speech falls outside the TCPA.  Suits for bodily injury, wrongful death, or survival also fall outside of the TCPA, as do insurance code suits or actions arising out of insurance contracts.  Enforcement actions by the state also do not fall within the TCPA. See Tex. Civ. Prac. & Rem. Code § 27.010(a)-(d).

The Act also provides pretrial appellate procedural checks against suspected SLAPP suits.  If the party alleging a First Amendment right violation is unsuccessful in their motion to dismiss, that party may take an automatic, accelerated interlocutory appeal on the trial court’s denial of the motion to dismiss. See Tex. Civ. Prac. & Rem. Code §§ 27.008, 51.014(a)(12). Again, this appellate procedure is available to any party asserting a violation of their right to free speech, association, or to petition government.

The Texas Civil Practice and Remedies Code provides an additional appellate procedure to members “of the electronic or print media, acting in such capacity, or a person whose communication appears in or is published by the electronic or print media.” Tex. Civ. Prac. & Rem. Code § 51.014(a)(6).  If a party falls into this select category, they may take an automatic, accelerated interlocutory appeal on a trial court’s denial of a motion for summary judgment based on a claim or defense arising under the free speech or press clause of the First Amendment. Id.

Speaker Favoritism in Texas’ Anti-SLAPP Appellate Procedure

The significance of this additional appellate procedure for members of the electronic or print media, and for a person whose article appears in electronic or print media, is that this select group gets two bites at the appellate apple by way of an automatic interlocutory appeal.  If, for example, a person is sued for defamation for his op-ed piece published on huffingtonpost.com, he may file a motion to dismiss and subsequently appeal the trial court’s denial without first seeking permission to take the issue on interlocutory appeal.  Even if he loses the first interlocutory appeal, he may then file a motion for summary judgment and subsequently appeal the trial court’s denial again without seeking permission to take the issue on interlocutory appeal.

Parties who do not fall within this select group get one-shot at an automatic, accelerated interlocutory appeal. Though TCPR section 51.014(a)(6) aims to keep free speech channels open, it only does so for a select group of speakers. All other speakers are directly excluded. So this raises the question, is section 51.014(a)(6) an example of unconstitutional speaker-based discrimination?

            The United States Supreme Court has held that it is “axiomatic that the government may not regulate speech based on its substantive content or the message it conveys.” Rosenberger v. Rector & Visitors of the Univ. of Va., 515 U.S. 819, 829 (1995). Following this precept, government “may not favor one speaker over another.” Id. Government action that discriminates against speech based on its message is presumed unconstitutional.  Id.  Viewpoint discrimination, however, is a more egregious form of content discrimination:  “When the government targets not subject matter, but particular views [or ideology, opinion, or perspective] taken by speakers on a subject, the violation of the First Amendment is all the more blatant.” Id.; see also R. A. V. v. St. Paul, 505 U.S. 377, 391 (1992).

So far, lower courts have only obliquely grazed this issue. In Main v. Royall, for example, the Dallas Court of Appeals had to decide whether book authors and publishers fell within section 51.014(a)(6)’s scope, i.e., whether they could be construed as members of the electronic or print media. 348 S.W.3d 381 (Tex. App.–Dallas 2011, no pet.). The court focused on the legislative purpose driving section 51.014(a)(6)—“to provide members of the media with a mechanism to obtain immediate appellate review . . . of issues arising under the free speech and free press clause [to] avoid[] the time and expense of a trial when the defendant may be entitled to a constitutional or statutory privilege precluding liability”— and held that book authors and publishers comfortably fit into the forms of media protected by the statute. Id. at 386-87.

The court dismissed the plaintiff’s argument that applying the statute to book authors would require future courts to apply the statute to anyone “with a computer, typewriter, or printer” and exclude only those persons writing by pen and pencil.  Id.  This latter issue was one the court did not have to decide to dispose of the matter. Id.  But it is an issue that the courts must, at some point, confront.

Perhaps a court may construe section 51.014(a)(6) to apply to any person writing by way of computer, or typewriter, and, perhaps a court may construe the statute to reach people writing with a pen or pencil. The statute clearly excludes oral communications made outside of the presence of cameras, computers, or other media. The statute would also likely not apply to any communication between persons by way of text message.

Selective procedural protection under section 51.014(a)(6) raises three related problems: First, affording media personnel and outlets additional First Amendment protection over ordinary citizens raises the specter of favored viewpoints, which is odious to the First Amendment. Perhaps more people value an opinion piece published on CNN.com over a competing opinion posted on a neighbor’s personal blog. The value in securing an equal opportunity for your neighbor publically to voice his opinions and concerns lies in part in the act itself, an act of civic engagement; and in part on the content itself, which promotes the search for truth and contributes to the market place of ideas; and, finally, in part on its secondary function, as a means through which ordinary citizens can improve journalistic rigor—an often neglected value in the age of “fake news”—and political governance. 

Second, and related to the importance of civic engagement, affording “media” outlets and personnel greater First Amendment protection than ordinary citizens adds to civil discord and distrust. Even before, but far more after the Supreme Court decided Citizens United v. Federal Election Commission, there has been public clamor over corporate influence in government and money-backed interests potentially undermining our democratic processes. That The Dallas Morning News is part of the press and, thereby, explicitly protected by the First Amendment should not veil the fact that The Dallas Morning News is a for profit corporate body, owned by A. H. Belo Corporation. And, tellingly, section 51.014(a)(6) was enacted to afford extra First Amendment protection to media outlets eighteen (18) years before similar, though not the same, protection was afforded to every other person in section 27. Freedom of the press, freedom of speech, and the right to petition the government are inseparable rights, entitled to equal constitutional protection, not one greater than the other. See McDonald v. Smith, 472 U.S. 479, 482-485 (1985).

Third, and related to the second, section 51.014(a)(6) provides less protection to the people who often need the most protection from baseless suits designed to silence them. It was not lost on the legislature when it passed section 51.014 that litigation costs alone are speech prohibitive. See House research Org., Bill Analysis, Tex. S.B. 76, 73^rd Leg., R.S. (41) (stating that the purpose of the section is “to allow a newspaper, radio station or television station that was sued for libel to make an immediate appeal of a judge’s refusal to grant a summary judgment” so that an appellate court may “sort out unmeritorious libel cases before a case enters the time-consuming and expensive trial phase.”). Although section 27.003 affords every person similar protection to section 51.014(a)(6), only media parties have the option to allow the sixty-day deadline to file a motion to dismiss to pass and, instead, opt into some discovery to file an informed summary judgment motion, leveraging an automatic and accelerated appeal against both the non-movant and the trial judge.  If an ordinary citizen loses on a section 27 motion to dismiss and loses on an automatic interlocutory appeal, he must bear the cost of further litigation, all the way to trial if he does not settle or win on summary judgment.

Conclusion

Texas’ Anti-SLAPP scheme provides a great and necessary check against indirect government impositions to free speech, a free press, and the right to petition the government. Though its direct statutory measures in section 27 afford equal constitutional protection to all parties whose First Amendment rights are threatened by a SLAPP suit, its direct statutory measure in section 51.014(a)(6) favors media speakers over ordinary speakers.  Inherent in the right to speak is the recipient’s right to listen, a right to receive information; likewise, inherent in the right to publish is a right to collect information. See Richmond Newspapers v. Va., 448 U.S. 555, 599 n.15 (1980). When government decides who may speak, it also decides what one may hear; when government decides who may publish and by what means, it also decides what information one may collect to inform his or her understanding of this limited life he or she has. The right to freedom of speech is indeed a very fragile right; one must be on guard to detect subtle impositions to it—indeed, these impositions may sometimes come in the guise of protecting the very right it diminishes.