As previously reported on October 20, 2010, Coach Mike Leach (“Leach”) and Texas Tech University (“Tech”) argued on appeal before the Court of Appeals in Amarillo, Texas relating to his discharge as head football coach at Tech.  Leach appealed the dismissal of his claims including his whistleblower claim, constitutional claims, and dismissal of individual defendants and Tech appealed the trial court’s denial of its defense of sovereign immunity for Leach’s breach of contract claim.  On January 20, 2011, the Court of Appeals issued its opinion and found that Leach’s claims should be in all things dismissed (other than equitable relief) and Tech is immune from Leach’s breach of contract claim.

The law of sovereign immunity is tricky and some would say applied inappropriately to shield the State from liability.  In Texas, the State can lose its immunity from liability, but remains protected from being forced into litigation by and through a lawsuit.  In sum, the State must perform like any other party when it contracts and is responsible for its failure to perform, but it cannot be sued for damages without its permission if it opts to forego performance.  Historically, the Supreme Court of Texas has found that the State is immune from suit and has consistently deferred to the Legislature to effectuate waiver of immunity.  The Texas Supreme Court, however, has left open the possibility that the State can waive sovereign immunity by conduct, but the Texas Supreme Court has never ruled in such manner.

In this matter, Leach argued that Tech waived immunity by conduct and set forth the following arguments:

1.            The authority granted by the Legislature for Tech to operate the university coupled with Tech’s operating policy and procedures waived immunity.

                A.            The Court disagreed with Leach’s characterization of the operating policy and procedures by stating 1) there is not an explicit waiver of immunity in the operating policy and procedures; 2) although Tech’s legal counsel, chancellor, or president thought Leach could prosecute his claims in a court of law, such opinions have no bearing on the Court; and 3) the operating policy and procedures do not clearly and unambiguously waive immunity and do not qualify as an explicit or implicit reference to immunity.

2.            The trial court erred in dismissing Leach’s whistleblower claims.

                A.            Claims set forth under the Whistleblower Act are not barred by sovereign immunity and those that are damaged enjoy the freedom to file suit.  However, the Court concluded that Leach failed to meet the requirements of the statute by failing to make a “report” to an appropriate law enforcement authority as required by Section 554.002(a) of the Texas Government Code.  As such, the Court found that Leach’s whistleblower claim was rightfully dismissed.

3.            The trial court erred in dismissing Leach’s constitutional claims.

                A.            Leach argued that Tech violated the takings clause of the Article 1, Section 17 of the Texas Constitution by removing him from his position as head coach of the Tech football team.  The Court concluded that Article 1, Section 17 of the Texas Constitution does not apply to contractual disputes and the present matter is nothing more than a contractual dispute, thus Tech’s purported acts to withhold compensation were not actionable.

                B.            Leach argued that Tech denied him due course of law by denying his property rights of 1) continuing employment for a term of years and 2) specific compensation accruing while so employed.  The Court found that sovereign immunity bars a trial court from adjudicating lawsuits for monetary damages, but does not prohibit Leach from seeking declaratory relief.  Therefore, Leach cannot seek damages for Tech’s alleged acts, but can seek legal relief and a declaration that Leach was denied due course of law.

Tech also set forth an appeal relating to Leach’s breach of contract claim.  The trial court allowed Leach to pursue a breach of contract claim against Tech and, therefore, Tech appealed based on a plea of jurisdiction.  The Court simply and summarily disposed of Leach’s claim for breach of contract by stating his argument that Tech accepted benefits from the contract and, thus, waived immunity is unfounded.  The Court of Appeals punted on the issue and chose to have the matter decided by the Texas Supreme Court or Texas Legislature by following General Services Commission v. Little-Tex Insulation Company.

The Court of Appeals properly pointed out that its sister court, 1^st District Court of Appeals in Houston, found in favor of waiver by conduct in Texas Southern University v. State Street Bank & Trust Company.  As  a result of the split of the Court of Appeals and the media coverage of this litigation, it is highly likely that this matter will be decided by the Texas Supreme Court.  Leach has indicated he intends to appeal the decision.  It is not over yet.

For any questions, feel free to contact Christian Dennie at cdennie@bgsfirm.com.