Sovereign immunity has it origins in English law and was carried to American jurisprudence. In modern use, it protects the state, its various arms, and agencies from being sued for both tort and breach of contract claims. In Texas, in order for an arm of the state to be subject to a lawsuit, sovereign immunity must be expressly waived by the Legislature.
In the construction world, most all claims contractors will have against a governmental entity are creatures of contract. If a contractor has entered into a construction contract with a city, county, or other local governmental entity, section 271.152 of the local government code contains an express waiver of immunity for such claims. Prior to the enactment of that statute, Texas’ sovereign immunity law was a creature of common law that had been shaped by the courts. The Legislatures involvement made the application of sovereign immunity uniform for all contractors in the state. To some degree, this waiver made the business relationship between local governmental owners and contractors more predictable and uniform. This uniformity allowed for easier assessment of risk by both parties to contracts on projects that involved a significant amount of risk shifting.
While section 271.152 of the local government code has been the law for a few years now, the Legislature has not enacted a similar statute for the state and its agencies. However, Representative Paul Workman has filed HB 586 in the current legislature that would expressly waive sovereign immunity for the state and its agencies. This bill contains similar language as that found in the local government code. It waives immunity for contract claims, contains certain limits of liability for the government, and expressly states the categories of damages that would be recoverable by a contractor.
Currently, state agencies like the Texas Facilities Commission have specific claims processes that are subject to adjudication in administrative courts, but those agencies are not subject to the jurisdiction of the district and appellate courts in most cases.
HB 586 would eliminate this uncertainty and place the state in the same position as any other project owner for construction projects in this state. The bill would allow contractors to bring suit if damages were incurred on a project as a result of the state’s actions. The bill would allow the adjudication of claims in state district courts as opposed to the administrative courts and would allow contractors to better assess the risks accepted on projects owned by the state.