Untitled Texas Attorney General Opinion

The Attorney General of Texas

JIM MATTOX

Dr,cember23, 1985

Attorney General

Suprrme Court Building Honorable Bill Messer, Chairman Opinion No. JM-404

P. 0. BOX 12548 Calendars Committee

Austin, TX. 79711- 2548 Texas House of Representatives Re: Immmity of public officials

512/475.2501

P. 0. Box 2910 under the Texas Free Enterprise

-Telex 9101874-1367

Telecopier 5121475-0268

Austin, Texas 78769 and Antitrust Act of 1983

Dear Reoresentativ,eMesser:

714 Jackson. Suite 700

Dallas, TX. 75202-4503

You have rquested our opinion regarding the extent of the

2141742-8944

immunity granted I:O officers and employees of governmental entities

acting in their cfficial capacity under the Texas Free Enterprise and

4824 Alberta Ave.. Suit0 160 Antitrust Act of 1383.

El Paso. TX. 799012793

915/5333464 The Texas Free Enterprise and Antitrust Act of 1983 [hereinafter

the "Act"] broitdly prohibits anticompetitive conduct affecting

1001 Texas. Suite 700 trade and conmerc:e in the state of Texas. Tex. Bus. & Conrm. Code

Houstm, TX. 77W2G3111 $15.05(a)-(d). There are civil and criminal sanctions for violating

71312255880 the Act's prohibit:lons,and persons injured by a violation may sue for

injunctive relied' and damages. Id. 9915.20, 15.21, 15.22. Treble

damages may be awarded if theunlawful conduct was willful or

606 Broadway. Suite 312

Lubbock, TX. 79401-3479

flagrant. Id. IX.21. The purpose of the Act is to "maintain and

806/747-5238 promote econzc competition within this State." -Id. $15.04.

Section 15.21(a)(l) of the Act provides in part:

43~9 N. Tenth, Suite 6

McAlle”, TX. 78501-1685

512,882-4547 Any person or governmental entity, including

the State of Texas and any of its political sub-

divisioms or tax-supported institutions, whose

2w Main Plaza, Suite 400 business or property has been injured by reason of

sari Antonio, TX. 78205-2797

any conduct declared unlawful in Subsection (a),

51212254191

(b), or (c) of Section 15.05 of this Act may sue

any person, other than a municipal corporation, in

An Equal OppOrtUnitYI district court in any county of this state. . . .

Affirmative Action EmploW (Emphasis added).

The term "person" :Ls defined in section 15.03(3) which provides:

The tlerm'person' means a natural person, pro-

prietombip, partnership, corporation, municipal

corpora::ion.association, or any other public or

private group, however organized, but does not

p. 1849

Honorable Bill Messer - Page 2 ,(JM-404)

include the State of Texas, its departments, and

its administrativ{ agencies. (Emphasis added).

Thus, the Act's definition of "pcrsoa" expressly excludes the State of

Texas, its departments, and its administrative agencies, while

municipal corporations are expressly excepted from suit under section

15.21(a)(l). See also Tex. Bus. & Comm. Code §§15.20, 15.22 (enforce-

ment suits against "any person, other than a municipal corporation").

The term %uniciual coruoration'l is not defined in the Act.

However, the general meaning'of the term includes other political

subdivisions organized under state law. See Welch V. State, 148

S.W.2d 876 (Tex. Civ. App. -.Dallas 1941, wrrref'd); see also State

V. Texas Municipal Power Agency, 565 S.W.2d 258 (Tax. Civ. Apr

Houston tlst Dist.1 1978, D'Dwrit). In addition, the leaislature is

authorized to create municipal corporations other than those set out

in the constitution, such as counties, cities or school districts, or

those which are authorized under special provisions of the constitu-

tion, such as water districts or flood control districts. -- See Davis

V. City of Lubbock, 326 S.W.2d 699 (Tex. 1959). Accordingly, we

conclude that the immunity granted to municipal corporations under the

Act extends to all politic:L:lsubdivisions organized under the consti-

tution and statutes of this state.

The Act does not aidress the immunity of state and local

officials from personal liability under its provisions. Official

immunity is a common law doctrine developed by the courts so that

public officers could carrg out discretionary duties without fear of

personal liability for m3stak.a judgment. Campbell V. Jones, 264

S.W.2d 425 (Tex. 1954); R;~:;nsV. Simpson, 50 Tex. 495 (1878). The

doctrine of official immu~~:y is certainly not absolute. It does not

bar a suit to enjoin a public official's unauthorized act. --See Texas

Highway Commission V. Texas Association of Steel Importers, 372 S.W.2d

525 (Tex. 1963); Bullock v: Hardin. 578 S.W.2d 550 (Tex. Civ. App. -

Austin 1979. writ ref'd n7c.e.). Nor does it aoolv to ministerial

functions. -Rains V. Simpsc~n,5d ~Tex.~495 (1878);~'seealso Worsham V.

Votgsberger, 129 S.W. 157 (T'ex.Civ. App. 1910, no writ).

Judges, including justices of the peace, are immune from personal

liability for all acts cr omissions arising in the course of a

judicial proceezg over w'hich they have jurisdiction. Turner V.

Pruitt, 342 S.W.2d 422 (Tex. 1961). Cf. Pulliam V. Allen, 104 S.Ct.

1970 (1984); Stump V. Spar=, 435u.s. 349 (1978) (state judges

enjoy absolute immunity from damage liability in civil rights suits

under 42 U.S.C. section 19f'3but may be required to pay attorney fees

in successful suits for injunctive relief). Only when a judge clearly

acts without jurisdiction nay he be held personally liable in a damage

suit under the act. --

Turner V. Pruitt, supra. Similarly, legislators,

including city council members , are entitled to absolute immunity from

p. 1850

Honorable Bill Messer - Pa:r,e

3 ,(JM-404)

civil damage suits for am:ts taken in a legislative capacity. See

Affiliated Capital Corp. vL City of Houston, 735 F.Zd 1555, 1568 (5th

Cir. 1984). Other officers who perform discretionary functions have

only a qualified immunity ~E~:om

suit for personal liability. Harlow V.

Fitzgerald, 457 U.S. 800 #:1982) (presidential aides); Campbell V.

Jones, 264 S.W.2d 425 (Tm:. 1954) (school trustees); Sanders State

Bank V. Hawkins, 142 S.W. 84 (Tex. Civ. App. - Texarkana 1911, no

writ) (State Commissioner #of Insurance and Banking). Their discre-

tionary functions are described as "quasi-judicial" functions.

The Texas courts apply a different test from the federal courts

to determine whether an of,E:Lcer's

qualified immunity protects him from

personal liability. A quasi-judicial officer who acts within his

legal authority is not lirble for daamges, no matter what his motive

is. Sanders State Bank v.Jawkins, supra. Texas courts will find him

liable for mistaken judgmmt or unauthorized acts only when he has

acted willfully or malici~msly. Campbell V. Jones, supra; Stein V.

Highland Park Independent School District, 540 S.W.2d 551 (Tex. Civ.

APP. - Texarkana 1976) a,ff'd 574 S.W.2d 807 (Tax. Civ. App. -

Texarkana 1978, writ di&;L);anders State Bank V. Hawkins. supra.

As other Texas courts have formulated this test, a quasi-judicial

officer is entitled to immunity as long as actions taken in his

official capacity are in j:ood faith. Augustine V. Nusom, 671 S.W.2d

112 (Tex. App. - Houston l:1.4thDist.] 1984, writ ref'd n.r.e); Baker

V. Story, 621 S.W.2d 639 (:Tax.App. - San Antonio 1981, writ a

n.r.e.); Morris v. Nowotq, 323 S.W.2d 301 (Tex. Civ. App. - Austin

1959, writ ref'd n.r.e.), cert. denied 361 U.S. 889, 361 U.S. 921

(1959). The Texas test can be characterized as a subjective test,

because the officer's motivation for his unauthorized conduct controls

whether or not he is inmum from suit for damages.

The United States Su~lremeCourt has developed an objective test

for determining the qualj.fied immunity of officers. In Harlow V.

Fitzgerald, 457 U.S. 800 (,L982),the court held that

government offj,cials performing discretionary

functions, generally are shielded from liability

for civil damagw insofar as their conduct does

not violate clearly established statutory or

constitutional rQ:hts of which a reasonable person

would have known,

457 U.S. at 818. Under th:lstest, the officer's immunity depends upon

what "a reasonable person vould have known," and subjective intent for

the action is not considencd.

Prior decisions had developed a "good faith" standard, an

affirmative defense which the defendant official had to plead. The

"good faith" standard com:isted of both an objective and subjective

p. 1851

Honorable Bill Messer - PaE;e,

4 (JM-404)

aspect. 457 U.S. at 815; ---

me Wood V. Strickland, 420 U.S. 308 (1975).

Qualified imsamity vould be:defeated if the official

knew or reasonaLLy should have known that the

action he took within his sphere of official

responsibility would violate the constitutional

rights of the I:plaintiff],z if he took the

action with the-ealicious intention to cause a

deprivation of constitutioual rights or other

injury. . . . (Emphasis in original).

457 U.S. at 815 (quoting Wood V. Strickland). The Harlow court

rejected the subjective element of the good faith defense because it

raised a fact question which could not be resolved on suaxnaryjudgment

and thus frustrated the court's policy that insubstantial claims

should not proceed to trial. Therefore, in Barlow the court abandoned

the subjective element of the two part test for official immunity in

favor of the test quotetl above, which relies "on the objective

reasonableness of an offi~:ial's conduct, as measured by clearly

established law. . . ." 457 U.S. at 818.

The Texas courts have applied the malice test for decades, and we

believe they would apply Lt to questions of official immunity from

civil suits under the Texas Free Enterprise and Antitrust Act. See.

s, Augustine V. Nusom, iiw Sanders State Bank V. Hawkins, v

Wright v. Jones, 38 S.W. 249 (Tex. Civ. App. 1896, writ ref d).

During the time the United States Supreme Court applied the two part

"good faith" test for official immunity, the Texas courts continued to

apply the traditional test based on malicious or willful conduct. See

Baker V. Stop, supra; St'ain V. Highland Park Independent School

District, supra; see also%lcedo V. Diax, 647 S.W.2d 51 (Tex. App. -

El Paso 1983). writ ref'd ;r.e. in part, granted in part, 650 S.W.2d

67 (Tex. 1983), rev'd 659 lj.W.2d 30 (Tex. 1983). The Texas courts

have adhered to the long--established Texas common law test for

qualified official immunity and have not adopted or been influenced by

recent developments in the :Eederalcommon law test. In our opinion,

the Texas courts would apply the traditional malice standard to

determine official immunit.]~from liability for civil suits under the

Texas Free Enterprise and Antitrust Act.

The legislature, in ou'c opinion, did not change the common law

rule on official immunity by enacting the antitrust law. Section

15.04 does provide:

The purpose cf this Act is to maintain and

promote economic competition in trade and commerce

occurring wholly or partly within the State of

Texas and to provide the benefits of that competi-

tion to consumers in the state. The provisioas of

p. 1852

Honorable Bill Messer - PaL;e5 (JM-404)

this Act shall be construed to accomplish this

purpose and shah be construed in harmony with

federal judicia:: interpretations of comparable

federal antitrur~, statutes to the extent con-

sistent with thirrpurpose. (Emphasis added).

The Fifth Circuit has applied the Barlow objective.test in a lawsuit

brought under the Sherman Act. SeeAffiliated Capital Corp. V. City

of Houston, 735 F.2d 1555 (5th C% 1984). In following Barlow, the

Fifth Circuit did not interpret any word or provision of the federal

antitrust statute. It instead applied a common law concept which

exists outside of any statute to determine whether it could exercise

judicial power over a partLcular public officer. Cf. Director of the

Department of Agriculture 1~ Printing Industries Association of Texas,

600 S.W.2d 264 (Tex. 1980) (sovereign immuuity from injunction suit).

The Harlow standard defines the federal court's power to hold

quasi-judicial officers pec:sonallyliable in damages for mistakes of

law; it does not construe the language of the Sherman Act. Section

15.04 does not require the Texas courts to adopt the Fifth Circuit

ruling on official immuni~:y in Affiliated Capital Corp. V. City of

Houston.

The legislature has nade the state liable for actual damages,

court costs and attorney fees adjudged against a state officer or

employee sued for an act ,XC omission in the scope of his office or

employment if

(1) the damaS,esarise out of a cause of action

for negligence. ,Eccept a willful or wrongful act

or an act of groez negligence; or

(2) the damages arise out of a cause of action

for deprivation cf a right, privilege, or immunity

secured by the constitution or laws of this state

or the United States, except when the court in its

udgment or the jury in its verdict finds that the

officer, contrack, or employee acted in bad

faith. (Emphasis-added).

V.T.C.S. art. 6252-26, 91. The legislature has used the subjective

test for official immunity to separate the officers whose damages and

legal expenses the state will pay from those whom it will leave to

their own resources. It is unlikely that the legislature which

finances the defense of public officers for acts of ordinary

negligence or good faith v:.olationsof legal rights would also intend

an officer to be civilly liable under the antitrust act if his conduct

violated statutorv riahts "of which a reasonable nerson would have

known." Harlow ;. Fitsger,ald, 457 U.S. at 818.~ See also V.T.C.S.

art. 6252-19b, 02(a) (policE1 subdivisions may pay actual damages,

p. 1853

Honorable Bill Messer - Page 6 (JM-404)

court costs, and attorney jieesin negligence suits against officers).

In our opinion, the Texas 'P:eeeEnterprise and Antitrust Act does not

change the Texas common law standard for qualified immunity of public

officials. Under this st~ldard, public officials will be personally

liable for quasi-judicial s.ctionsin violation of the Act if they act

willfully or maliciously.

SUMMARY

Judges and legislators are entitled to absolute

immunity from civil damage suits under the Texas

Free Enterprise and Antitrust Act of 1983,

codified as sectllms 15.01 through 15.26 of the

Texas Business ~vi Coarmerce Code. No such suit

may be maintained against a judge or legislator

for acts or violations taken as part of the

judicial or lg!g;islative process. Executive

officials with discretionary duties are entitled

to qualified immmity from civil damage suits

under the Texas antitrust laws. Such public

officials are ilmune from such suits for un-

authorized acts wcthin the scope of their official

duties unless theg have acted willfully or malici-

ously. Any public official may be sued to enjoin

unauthorized acts or omissions.

JIM MATTOX

Attorney General of Texas

JACXHIGHTOWER

First Assistant Attorney Gesaral

NARY KELLER

Executive Assistant Attorncr General

ROBERT GRAY

Special Assistant Attorney 'Zenera

RICX GILPIN

Chairman, Opinion Committee

Prepared by Susan L. Garrism

Assistant Attorney General

p. 1854