holding that “state-created immunities [such as Texas’ state-law sovereign or governmental immunity from suit] do not and cannot limit the jurisdiction of federal courts,” and so “must be treated as non-jurisdictional, merits-based defenses”
How later courts described this case
- holding that “state-created immunities [such as Texas’ state-law sovereign or governmental immunity from suit] do not and cannot limit the jurisdiction of federal courts,” and so “must be treated as non-jurisdictional, merits-based defenses”
- “state-law immunities . . . must be treated as non-jurisdictional merits-based defenses”
- state sovereign immunity which provides federal-law immunity is jurisdictional
- “[S]tate-created immunities do not and cannot limit the jurisdiction of federal courts. If these state-law immunities apply at all in federal court under the Erie doctrine, they must be treated as non-jurisdictional, merits-based defenses.”
Written by the judges who cited it.
The opinion
Case: 24-10630 Document: 62-1 Page: 1 Date Filed: 05/02/2025
United States Court of Appeals
for the Fifth Circuit
____________ United States Court of Appeals
Fifth Circuit
No. 24-10630
FILED
May 2, 2025
____________
Lyle W. Cayce
Anthology, Incorporated, Clerk
Plaintiff—Appellant,
versus
Tarrant County College District,
Defendant—Appellee.
______________________________
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 4:24-CV-279
______________________________
Before King, Jones, and Oldham, Circuit Judges.
Andrew S. Oldham, Circuit Judge:
Anthology, Inc. sued Tarrant County College District for breach of
contract. The district court held that it lacked jurisdiction because the Dis-
trict was entitled to a state-law immunity from suit. That was erroneous.
States cannot limit the jurisdiction of federal courts. And because the District
raised two defenses that actually do implicate jurisdiction, we vacate and re-
mand for those to be considered first.
Case: 24-10630 Document: 62-1 Page: 2 Date Filed: 05/02/2025
No. 24-10630
I
Anthology, Inc. provides higher education software solutions. Tarrant
County College District (“TCCD”) is a junior college district located in
Tarrant County, Texas.
In June 2022, the parties entered a 10-year contract. Under that agree-
ment, Anthology was obligated to provide TCCD with Enterprise Resource
Planning products and services. TCCD agreed to pay Anthology about $42
million for the project, as well as substantial annual fees.
In October 2023, TCCD terminated the contract without cause un-
der Section 8.2 of the contract. That section permitted TCCD to terminate
early without cause, so long as it provided 60 days’ written notice and paid a
termination fee, unless a court held that fee unlawful. TCCD refused to pay
the early termination fee and demanded that Anthology refund approxi-
mately $1.7 million that TCCD had already paid under the contract.
Anthology sued TCCD in the United States District Court for the
Northern District of Texas, seeking a declaratory judgment and damages for
breach of contract. TCCD moved to dismiss under Federal Rules 12(b)(1)
and 12(b)(6), raising four separate grounds for dismissal. First, TCCD ar-
gued that it was entitled to immunity from suit under Texas law. Second, it
argued that it was entitled to state sovereign immunity—that is, the federal
doctrine protecting unconsenting States from private suits. Third, it argued
that because it is an arm of the State, the district court lacked diversity juris-
diction. Fourth and finally, it argued that Anthology is statutorily barred from
recovering damages under Texas law.
The district court granted TCCD’s Rule 12(b)(1) motion and dis-
missed Anthology’s claims without prejudice. The court held that it lacked
jurisdiction because TCCD was entitled to immunity from suit under Texas
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No. 24-10630
law. It did not address the other bases for dismissal. Anthology timely
appealed.
II
We (A) begin with a brief overview of the oft-confused immunities im-
plicated in this case. Then we (B) explain that because a state-law immunity
cannot limit federal jurisdiction, the district court erred in addressing this
issue before assessing its jurisdiction.
A
Under the state sovereign immunity doctrine, States are entitled to a
federal-law immunity from suit. State sovereign immunity derives from the
federal Constitution itself. Alden v. Maine, 527 U.S. 706, 728 (1999). The doc-
trine provides that “an unconsenting State is immune from” private suits.
Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 100 (1984) (quota-
tion omitted). This immunity places “constitutional limitations” on “federal
jurisdiction.” Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 73 (1996). See also
Cutrer v. Tarrant Cnty. Loc. Workforce Dev. Bd., 943 F.3d 265, 269–70 (5th
Cir. 2019) (distinguishing state sovereign immunity and Eleventh Amend-
ment immunity and holding neither extends to Tarrant County).
But States may also recognize their own “state-law immunity from
suit,” which “derives from a State’s ‘sole control’ of ‘its own courts.’”
PennEast Pipeline Co. v. New Jersey, 594 U.S. 482, 509 n.1 (2021) (Gorsuch,
J., dissenting) (quoting Alden, 527 U.S. at 740, 749). Texas law has estab-
lished at least two immunities from suit: state-law sovereign immunity and
governmental immunity. Although the two are “often” used “interchangea-
bly with no substantive distinction,” Texas law sometimes distinguishes be-
tween them. 42 James Buchwalter et al., Texas Jurispru-
dence, Sovereign & Governmental Immunity § 1 (3d ed.
2025). When so distinguished, “sovereign immunity protects the state and
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No. 24-10630
its various divisions, such as agencies and boards, from suit and liability,”
while “governmental immunity provides similar protection to the political
subdivisions of the state, such as counties, cities, and school districts.” Ibid.
(cleaned up).
As just noted, these Texas state-law immunities include two distinct
components: immunity from liability and immunity from suit. Tex. Dep’t of
Parks & Wildlife v. Miranda, 133 S.W.3d 217, 224 (Tex. 2004) (sovereign im-
munity); see also Tooke v. City of Mexia, 197 S.W.3d 325, 332 (Tex. 2006) (gov-
ernmental immunity). Immunity from liability is a merits-based “affirmative
defense” in Texas courts. Brown & Gay Eng’g, Inc. v. Olivares, 461 S.W.3d
117, 121 (Tex. 2015) (sovereign immunity and governmental immunity). But
“immunity from suit deprives” state courts of “subject matter jurisdiction.”
Miranda, 133 S.W.3d at 224 (sovereign immunity); see also Dohlen v. City of
San Antonio, 643 S.W.3d 387, 392 (Tex. 2022) (governmental immunity).
Only immunity from suit is at issue on appeal.
B
No matter how Texas courts treat their own state-law immunities,
these doctrines cannot limit the jurisdiction of federal courts. Only Congress
and the Constitution define—and thus can limit—the jurisdiction of federal
courts. See, e.g., Sheldon v. Sill, 49 U.S. (8 How.) 441, 449 (1850); Tercero v.
Tex. Southmost Coll. Dist., 989 F.3d 291, 298 (5th Cir. 2021) (“In determining
jurisdiction, federal courts must look to the sources of their power, Article III
of the United States Constitution and congressional statutory grants of juris-
diction, not to the acts of state legislatures.”). Texas has “no power directly
to enlarge or contract federal jurisdiction.” Tercero, 989 F.3d at 298 (quota-
tion omitted). So state-law sovereign immunity and governmental immunity
cannot have jurisdictional effect in federal court.
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No. 24-10630
The district court thus made two errors. First, the district court held
that Texas’s state-law immunity from suit deprived it of subject matter juris-
diction. But state-created immunities do not and cannot limit the jurisdiction
of federal courts. If these state-law immunities apply at all in federal court
under the Erie doctrine, cf. PennEast Pipeline, 594 U.S. at 509 n.1 (Gorsuch,
J., dissenting), they must be treated as non-jurisdictional, merits-based de-
fenses. Cf. Odom v. Penske Truck Leasing Co., 893 F.3d 739, 742–43 (10th Cir.
2018) (concluding that state jurisdictional rules cannot limit the jurisdiction
of federal courts, though such rules still apply in federal court under the Erie
doctrine).
The second error flows directly from the first. The district court dis-
missed for lack of jurisdiction—without addressing the two other bases for
dismissal that really do implicate subject matter jurisdiction. State sovereign
immunity and the absence of complete diversity—unlike state-law immuni-
ties—are jurisdictional defects. And either of the former two problems would
require a without-prejudice jurisdictional dismissal. Such jurisdictional prob-
lems must be addressed first, before the district court considers any merits-
based defenses. See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94–95
(1998) (explaining that it is a fundamental “requirement that jurisdiction be
established as a threshold matter” before reaching the merits (citing Mans-
field, C. & L.M. Ry. Co. v. Swan, 111 U.S. 379, 382 (1884))).
* * *
A state-law immunity cannot limit the jurisdiction of federal courts.
So the district court should not have considered that issue first. Accordingly,
we VACATE the district court’s judgment and REMAND for further
proceedings consistent with this opinion.
5