This morning, the Third Court of Appeals issued an opinion clearly setting forth the extent to which a division of the state waives sovereign immunity when it sues a private party. In this case, the State of Texas sued a traffic light manufacturer for breach of contract, breach of warranty and quantum meruit. The traffic light company counterclaimed for business disparagement, and the State filed a plea to the jurisdiction with respect to the counterclaim, asserting sovereign immunity. The trial court (Judge Billy Ray Stubblefield in Williamson County) denied the plea, and this interlocutory appeal followed.
The State made a number of arguments as to why it should have immunity against counterclaims in a lawsuit it initiated, but ultimately they all failed. The bottom line, according to the Third Court of Appeals, is that when the State files a lawsuit, the defendant has the right to assert any and all germane defenses, even counterclaims. Since the company’s business disparagement tort claims involve the same issues as the State’s breach of contract claims, the state waived its immunity when it brought the contract claims.
The opinion, written by Justice Puryear, does a good job of laying out general sovereign immunity analysis and provides a thorough review of the cases on this specific issue, that is when and how the State waives immunity by filing suit.
State of Texas v. Precision Solar Controls, Inc., Cause No. 03-04-00632-CV
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