Federal Sign v. Texas S. Univ

In Federal Sign v. Texas S. Univ., 951 S.W.2d 401, 405 (Tex. 1997), Texas Southern University ("TSU") accepted Federal Sign's bid to construct and deliver basketball scoreboards to TSU. See Federal Sign, 951 S.W.2d at 403. After accepting Federal Sign's bid for the construction and installation of the scoreboards, TSU instructed Federal Sign to begin work immediately so that the scoreboards would be finished as soon as possible. Seven months later, before the scoreboards were delivered, TSU advised Federal Sign that it had decided to secure the scoreboards from another source. Later, TSU contracted with another company for the scoreboards. Federal Sign sued for breach of contract, asserting damages for lost profits and expenses. After a jury trial, the trial court rendered judgment in favor of Federal Sign. On appeal, the supreme court concluded that the suit was barred by sovereign immunity. Starting from the premise that "sovereign immunity, unless waived, protects the State of Texas, its agencies and its officials from lawsuits for damages, absent legislative consent to sue the State," Federal Sign, 951 S.W.2d at 405, Justice Baker, writing for the majority of the court, stated: "A private citizen must have legislative consent to sue the State on a breach of contract claim. The act of contracting does not waive the State's immunity from suit." Federal Sign, 951 S.W.2d at 408. Deferring instead to the legislature, the court concluded that "it is the Legislature's province to modify sovereign immunity if it is inclined to do so and therefore we refuse Federal Sign's invitation to undertake the task." Federal Sign, 951 S.W.2d at 409. The court held "that sovereign immunity from suit without legislative consent applies to contract claims against the State." Federal Sign, 951 S.W.2d at 412. In an oft-cited footnote, however, the court further observed that "there may be other circumstances where the State may waive its immunity by conduct other than simply executing a contract so that it is not always immune from suit when it contracts." Federal Sign, 951 S.W.2d at 408 n.1.