In RE THE STATE OF TEXAS v. the State of Texas

Supreme Court of Texas

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No. 24-0325

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In re The State of Texas,

Relator

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On Petition for Writ of Mandamus

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JUSTICE BLACKLOCK delivered the opinion of the Court.

Harris County intends to use federal funds to “provide

no-strings-attached $500 monthly cash payments to 1,928 Harris

County residents for 18 months.” 1 Recipients would be chosen by lottery

from among applicants with income below 200% of the federal poverty

line who live in certain zip codes, among other criteria. Harris County

has identified roughly 55,000 eligible applicants, which means the

likelihood of any particular entrant succeeding in the lottery is roughly

3.5%.

The State of Texas contends this arrangement is unconstitutional

in multiple ways, including that it violates the Texas Constitution’s bar

on “gratuitous payments to individuals.” Tex. Mun. League

1 Frequently Asked Questions, UPLIFT HARRIS,

https://uplift.harriscountytx.gov/FAQs (as of May 22, 2024). A screenshot of

this statement appears in the record, but the website has since been altered.

Intergovernmental Risk Pool v. Tex. Workers’ Comp. Comm’n, 74 S.W.3d

377, 383 (Tex. 2002); TEX. CONST. art. III, § 52(a). The State sued the

County, seeking an injunction blocking implementation of the proposed

program, which the County calls “Uplift Harris.” The State immediately

sought a temporary injunction, which the district court denied. The

State appealed the denial of the temporary injunction and asked the

court of appeals for a Rule 29.3 order staying payments under the Uplift

Harris program while its temporary-injunction appeal proceeds. See

TEX. R. APP. P. 29.3 (authorizing “temporary orders necessary to

preserve the parties’ rights”). The court of appeals denied that request,

and the State sought mandamus relief in this Court.

The State’s mandamus petition asks this Court to require the

court of appeals to issue a Rule 29.3 order staying all Uplift Harris

payments while the State’s temporary-injunction appeal proceeds.

Together with its mandamus petition, the State filed a motion for

temporary relief pursuant to Rule 52.10, seeking an immediate stay of

Uplift-Harris payments. See id. 52.10(b) (authorizing an appellate

court to “grant any just relief pending the court’s action on the

[mandamus] petition”). We administratively stayed 2 the payments,

without regard to the merits, pending our consideration of the State’s

2 “Administrative stays do not typically reflect the court’s consideration

of the merits of the stay application. Rather, they ‘freeze legal proceedings

until the court can rule on a party’s request for expedited relief.’” United States

v. Texas, 144 S. Ct. 797, 798 (2024) (Barrett, J., concurring in denial of

applications to vacate stay) (quoting Rachel Bayefsky, Administrative Stays:

Power and Procedure, 97 NOTRE DAME L. REV. 1941, 1942 (2022)).

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motion for temporary relief. See id. That motion, which Harris County

opposes, is now before this Court. For the following reasons, the motion

is granted, and all payments under the Uplift Harris program are

prohibited pending further order of this Court.

The State’s appeal of the denial of a temporary injunction remains

pending in the court of appeals, which we expect will proceed

expeditiously to a decision. That decision can, if desired, be appealed to

this Court. The State’s mandamus petition will remain pending in this

Court while its appeal proceeds below.

***

In a mandamus proceeding in the Supreme Court or a court of

appeals, “[t]he relator may file a motion to stay any underlying

proceeding or for any other temporary relief pending the court’s action

on the petition.” TEX. R. APP. P. 52.10(a). Whether in response to such

a motion by the relator, in response to a motion by any other party, or

“on its own initiative,” the court may “grant any just relief pending the

court’s action on the petition.” Id. 52.10(b). Absent a contrary order,

relief ordered under Rule 52.10 remains in effect “until the case is finally

decided.” Id.

In an appeal—as opposed to a mandamus proceeding—the closest

analogue to Rule 52.10 is Rule 29.3, which authorizes a court of appeals

to “make any temporary orders necessary to preserve the parties’ rights

until disposition of the appeal.” Id. 29.3. When a court of appeals grants

or denies a motion for temporary relief under Rule 29.3, the rules

provide no direct mechanism for immediate appeal of that ruling to this

Court. As we have recognized in past cases, however, a party may seek

mandamus relief in this Court challenging a court of appeals’ decision

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on Rule 29.3 temporary relief. See, e.g., In re State, No. 21-0873, 2021

WL 4785741 (Tex. Oct. 14, 2021). In so doing, the party may request

immediate temporary relief under Rule 52.10. Id. In this way, when

time is of the essence, a party may ask this Court to intervene to

determine the parties’ rights during the pendency of the underlying

appeal.

When considering such a request in the past, we have described

our exercise of authority under Rule 52.10 as a way to “preserve the

status quo” while the appeal proceeds. Id. at *1. While “preservation of

the status quo” has long been a valid consideration when courts are

asked to issue temporary relief, the terminology is not without its

drawbacks. Identifying the status quo is not always a straightforward

undertaking, after all. In this case, for instance, Harris County claims

the status quo is its previously unchallenged freedom to implement the

Uplift Harris program as it sees fit. From that perspective, the State’s

motion seeks to alter the status quo. On the other hand, the State claims

the status quo is that the funds have not yet been disbursed. If that is

right, then the State’s motion seeks to preserve the status quo. Such

debates about how to define the status quo can descend quickly into

lawyerly word-play, offering little help to a court tasked with providing

“just relief.” TEX. R. APP. P. 52.10(b).

Rather than describe the purpose of relief under Rule 52.10 as

“preservation of the status quo,” we find Rule 29.3’s analogous

formulation more helpful. An appellate court asked to decide whether

to stay a lower court’s ruling pending appeal or to stay a party’s actions

while an appeal proceeds should seek “to preserve the parties’ rights

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until disposition of the appeal.” Id. 29.3. The equitable authority we

exercise today, under Rule 52.10, serves the same purpose—

preservation of the parties’ rights while the appeal proceeds. A stay

pending appeal is, of course, a kind of injunction, so the familiar

considerations governing injunctive relief in other contexts will

generally apply in this context as well. See, e.g., TEX. CIV. PRAC. & REM.

CODE § 65.011 (listing requisites for writs of injunction); Pike v. Tex.

EMC Mgmt., LLC, 610 S.W.3d 763, 792 (Tex. 2020) (listing requisites

for permanent injunctive relief).

To begin with, an appellate court can hardly endeavor to preserve

the parties’ rights pending appeal without making a preliminary inquiry

into what those rights are. Thus, the likely merits of the parties’

respective legal positions are always an important consideration when

a court is asked to issue an order determining the parties’ legal rights

pending appeal. There is little justice in allowing a party who will very

likely lose on the merits to interfere with the legal rights of the opposing

party during the appeal, if this can be avoided. Likewise, it may often

be unjust to require a party who is very likely to succeed on the merits

to wait for the lengthy appellate process to play out before exercising his

legal rights.

Consideration of the merits of the parties’ legal positions

commonly informs a court’s assessment of the advisability of injunctive

relief. See TEX. CIV. PRAC. & REM. CODE § 65.011(1) (asking whether “the

applicant is entitled to the relief demanded”); Pike, 610 S.W.3d at 792

(requiring showing of “a wrongful act”). The relevance of the merits to

requests for injunctive relief does not vanish when courts must rule

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expeditiously. To the contrary, trial courts asked to issue temporary

injunctions or temporary restraining orders commonly must consider

the likely merits of the parties’ positions. See Abbott v. Harris County,

672 S.W.3d 1, 8 (Tex. 2023) (temporary injunction); In re Abbott, 628

S.W.3d 288, 291 (Tex. 2021) (temporary restraining order). In a similar

way, appellate courts asked to issue temporary relief pending appeal

should make a preliminary inquiry into the likely merits of the parties’

legal positions. The merits need not—and often should not—be

definitively determined at this preliminary stage, but “just relief” that

“preserve[s] the parties’ rights” cannot be afforded without some

consideration of the merits.

Another essential consideration attendant on any request for

injunctive relief, including in this posture, is the injury that will befall

either party depending on the court’s decision. As in the underlying

temporary-injunction context, the applicant for a stay pending appeal

should be expected to show that he will suffer irreparable harm if relief

is not granted. Courts must likewise consider the harm that other

parties or the public will suffer if relief is granted—as well as any

potential injury to non-parties caused by granting or denying relief. The

equitable balancing of these harms is a required aspect of a court’s effort

to preserve the parties’ rights pending appeal. See Huynh v. Blanchard,

___ S.W.3d ___, 2024 WL 2869423, at *24–25 (Tex. June 7, 2024).

While the likely merits and the balance of harms are two required

considerations in every case in this posture, we do not foreclose

consideration of other matters, depending on the circumstances. A stay

pending appeal is a creature of equity, and a court asked to issue one

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may take into account other case-specific equitable considerations that

bear on its exercise of discretion. 3

***

Applying this standard here, we conclude that the State’s motion

for temporary relief should be granted. Although we make no definitive

statement about the merits, the State has raised serious doubt about the

constitutionality of the Uplift Harris program, and this potential

violation of the Texas Constitution could not be remedied or undone if

payments were to commence while the underlying appeal proceeds.

Article III, section 52(a) of the Texas Constitution provides that

“the Legislature shall have no power to authorize any county, city, town

or other political corporation or subdivision of the State to lend its credit

or to grant public money or thing of value in aid of, or to any individual,

association or corporation whatsoever.” The Constitution contains other

similar statements. See TEX. CONST. art. III, §§ 50 (prohibiting the

giving or lending of credit of the State to persons and entities), 51

(prohibiting grants of public money to individuals and others); id.

art. XI, §3 (prohibiting local governments from making “any

appropriation or donation” to private entities); id. art. XVI, § 6(a)

(prohibiting any “appropriation for private or individual purposes”).

3 “The principles governing courts of equity govern injunction

proceedings if not in conflict with this chapter or other law.” TEX. CIV. PRAC.

& REM. CODE § 65.001; see also In re Prudential Ins. Co. of Am., 148 S.W.3d

124, 136, 138 (Tex. 2004) (noting that mandamus review is “largely controlled

by equitable principles” and hence it “resists categorization,” requires

“flexibility that is the remedy’s principal virtue,” and includes considerations

that “implicate both public and private interests”); In re Gamble, 71 S.W.3d

313, 317 (Tex. 2002) (noting that courts exercising equity jurisdiction must

“among other things, balance competing equities”).

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Under this Court’s precedent interpreting these provisions, a

government in Texas that desires to dole out public funds must, among

other things, “retain public control over the funds to ensure that the

public purpose is accomplished and to protect the public’s investment.”

Tex. Mun. League, 74 S.W.3d at 384.

The record indicates that Uplift Harris has advertised a “no

strings attached” stipend to those lucky enough to win its lottery. It

appears there will be no public control over the funds after they are

disbursed. It likewise appears there will be no monitoring of the

recipients’ day-to-day purchases, so it is unlikely the County will know

how recipients spend the money and whether any legitimate public

purpose was achieved thereby. The application states that funds must

not be used for terrorism, fraud, or other nefarious activities, but we are

given no indication that the County intends to, or even could,

meaningfully enforce these restrictions or truly monitor the recipients’

expenditures. Indeed, a County official testified that the program is not

designed “to monitor what people do with the things they buy.”

This is quite unlike a food-stamp program, a housing voucher, or

a medical-care program, in which the public funds can only be directed

to their intended purpose. It appears that, for all practical purposes,

there truly are “no strings attached,” and we are directed to no precedent

indicating that a government in Texas may make such payments

without running afoul of our Constitution’s restrictions. At this

preliminary stage, the State has raised serious doubt that the Uplift

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Harris program can satisfy the “public control” requirement of this

Court’s Gift Clause precedent.

The County argues, in the alternative, that the Uplift Harris

program qualifies as “economic development” and is therefore

separately authorized by article III, section 52-a of the Texas

Constitution—even if the program otherwise violates the Gift Clauses.

Under section 52-a, “the legislature may provide for the creation of

programs and the making of loans and grants of public money . . . for

the public purposes of development and diversification of the economy

of the state.” TEX. CONST. art. III, § 52-a. We have not previously

decided a case involving section 52-a. Without foreclosing further

development of the County’s argument, we are skeptical of the County’s

position at this preliminary stage.

Under the County’s permissive reading of section 52-a, nearly any

direct gift of public money that will likely be spent by the recipient could

qualify as “economic development”—on the theory that any boost in

overall consumer spending is good for the economy. If this is right, then

section 52-a comes close to repealing the Gift Clauses’ ban on “gratuitous

payments to individuals.” Tex. Mun. League, 74 S.W.3d at 383. Such

payments could nearly always be portrayed as good for the economy in

some sense.

Without resolving the issue, we think it more likely that by

authorizing “grants of public money . . . for the public purposes of

development and diversification of the economy of the state,”

section 52-a removed doubt about the constitutionality of conventional

economic-development grants, by which governments promote business

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growth and job creation through grant agreements designed to ensure

that the recipient of public funds spends them in a way that has an

economic benefit for the wider community. In other words, section 52-a

appears designed to clarify that “development and diversification of the

economy of the state” qualify as “public purposes.” We remain skeptical

of the County’s argument that a program of unmonitored, “no strings

attached” cash payments to individuals serves “the public purposes of

development and diversification of the economy of the state” as

envisioned by section 52-a.

Turning to the balance of harms, we have recognized that “ultra

vires conduct” by local officials “automatically results in harm to the

sovereign as a matter of law.” State v. Hollins, 620 S.W.3d 400, 410

(Tex. 2020). Indeed, the violation of duly enacted state law by local

government officials “clearly inflicts irreparable harm on the State.”

Tex. Ass’n of Bus. v. City of Austin, 565 S.W.3d 425, 441 (Tex. App.—

Austin 2018, pet. denied) (quoting Abbott v. Perez, 585 U.S. 579, 602 n.17

(2018)). We have likewise recognized that the State has a “justiciable

interest in its sovereign capacity in the maintenance and operation of

its municipal corporations in accordance with law,” and that “[a]s a

sovereign entity, the State has an intrinsic right to . . . enforce its own

laws.” Hollins, 620 S.W.3d at 410 (quoting Yett v. Cook, 281 S.W. 837,

842 (Tex. 1926) and State v. Naylor, 466 S.W.3d 783, 790 (Tex. 2015)). 4

The harm alleged here is irreparable in an additional sense as

well. Once the funds are distributed to individuals, they cannot feasibly

4 To the extent the County challenges the State’s standing to bring this

suit, our recognition in Hollins and elsewhere that the State has a justiciable

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be recouped if it is later determined they were paid in violation of the

Texas Constitution. The parties do not seem to disagree on this reality.

As for injury to other parties, the County itself will suffer no

cognizable injury unless its legal rights are incorrectly circumscribed

during the pendency of the appeal. The County is not harmed by being

required to follow the Texas Constitution. Again, it remains possible

the County will ultimately succeed on the merits. But we must judge

the likely harm to the County’s legal rights in light of our preliminary

assessment of the merits, which does not favor the County.

As for harm to the public, in general the citizens of Harris County

are not harmed by requiring the County to abide by the Texas

Constitution. A very small percentage of Harris County citizens will

temporarily be denied receipt of the disputed payments if a stay is

granted. But if those payments would have been illegal, then the

temporary denial of them is not a harm that can tip the scales in the

County’s favor. Requiring the government to follow the law benefits

everyone. Temporarily preventing expenditure of these funds while the

State’s appeal proceeds ensures public funds are not irrecoverably spent

in violation of the Texas Constitution. Whether Harris County’s

proposal would actually violate the Texas Constitution remains an open

question at this early stage of the litigation.

***

For these reasons, the State’s Rule 52.10 motion is granted.

Harris County is ordered to refrain from distributing funds under the

interest in assuring that its political subdivisions comply with Texas law

sufficiently establishes the State’s standing at this juncture.

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Uplift Harris program until further order of this Court. 5 The court of

appeals should proceed to decide the temporary-injunction appeal now

pending before it. The State’s petition for writ of mandamus remains

pending in this Court.

James D. Blacklock

Justice

OPINION DELIVERED: June 14, 2024

5 The County states that, under federal requirements, it must spend the

funds by September 30, 2026, but it must “commit” funds to Uplift Harris by

December 31, 2024. The precise nature of what constitutes “committing” funds

is not entirely clear, but the State does not ask us to prevent the County from

earmarking or assigning federal funds to the program. Today’s stay prevents

the County from disbursing the funds to individual recipients or to third-party

intermediaries until further order of this Court.

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