Federal Sign v. Texas Southern University – Case Brief Summary (Texas)

Federal Sign v. Texas Southern University, 951 S.W.2d 401, 405, 40 Tex. Sup. Ct. J. 676 (Tex. 1997) dealt with a waiver of immunity from suit in a breach of contract case. The appellants in Federal Sign sued Texas Southern University for violations of the competitive bidding on contracts statute in the education code and for breach of contract. Id. at 404

On appeal to the supreme court, the sign maker contended that it did not need legislative consent to sue the university because its claims included allegations that the university violated state law. Fed. Sign, 951 S.W.2d at 404.

The supreme court noted, however, that allegations of the potential state law violations did not dispense with the necessity that the appellant obtain legislative consent to sue for breach of contract. Id. at 404-05.

The court stated that the State's consent to suit must be by either statute or legislative resolution, but that the consent must be by "clear and unambiguous language." Id. at 405.

Throughout its opinion, the court cited Missouri Pacific and briefly discussed its holding. Id. at 405-08. The Federal Sign court stated that in Missouri Pacific it held that the statute providing that the navigation district could "sue and be sued" met the legislative permission requirement to waive of immunity from suit. Id. at 408.

The court in Federal Sign drew the following conclusions:

(1) when the State contracts with private citizens, it waives only immunity from liability;

(2) legislative consent is still required in order for a private citizen to sue the State on a breach of contract claim;

(3) the act of contracting alone does not waive the State's immunity from suit. See id.

The appellant relied solely upon the state law allegations and the conduct of the university in arguing that sovereign immunity does not apply when the State enters into a contract with a private citizen. Id. at 404-12. The court ultimately determined the university, a state institution, did not consent to suit merely by entering into the contract. Id.

A footnote in the majority opinion noted:

"We hasten to observe that neither this case nor the ones on which it relies should be read too broadly. We do not attempt to decide this issue in any other circumstances other than the one before us today. 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." Id. at 408 n.1.