In Other Words
Immunity from suit for breach of contract.
Sovereign immunity is the doctrine that one cannot sue the government without the government’s permission or consent. This long-recognized principle protects the State, its agencies, and its officials from lawsuits for damages. The doctrine of sovereign immunity embraces two separate principles—immunity from liability and immunity from suit. Immunity from suit is a jurisdictional bar that essentially prohibits a court from hearing a claim against a governmental entity unless the government, through the Legislature, has expressly given its consent to be sued. The Legislature’s waiver of immunity must be “clear and unambiguous.” Conversely, immunity from liability is an affirmative defense that may be raised to avoid judgment even if consent to suit has been granted.
Prior to 1997, Texas courts were split on the question of whether the State’s act of entering into a contract waived both immunity from liability and immunity from suit. The Texas Supreme Court, in Federal Sign v. Texas Southern University, 951 S.W.2d 402 (Tex. 1997), resolved the split of authority explaining that the State’s act of entering into a contract waives only its immunity from liability, and the mere act of contracting alone does not waive the State’s immunity from suit. Federal Sign v. Tex. S. Univ., 951 S.W.2d 402 (Tex. 1997)
In 2005, the Texas Legislature passed HB 2039, which enacted Texas Local Government Code sections 271.151-.160. The new subchapter expressly states that a local governmental entity, which includes school districts, that enters into a written contract waives sovereign immunity from suit for a claim of breach of contract subject to the limitations in the statute. The waiver only applies to written contracts for goods and services that are properly executed by the governmental entity and damages are limited to the balance due and owed under the contract and may not include consequential or exemplary damages. In the years since HB 2039 was enacted, many lawsuits, including several in which LAF has provided amicus assistance, have tested the boundaries and limitations of the statute's limited waiver of immunity from suit for breach of contract.